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 period ended ~~February~~August 2831, 2025

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

For the transition period from __________ to ______________

Commission File Number: 000-52365

PREAXIA HEALTH CARE PAYMENT SYSTEMS INC.

(Exact name of registrant as specified in its charter)

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

PO Box ~~34075 Westbrook PO~~368, ~~1610-37th~~Dunedin ~~Street~~FL ~~S.W.Calgary, Alberta T3C 3W2~~34698

(Address of principal executive offices) (Zip Code)

(403) 850-4120

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

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

Common Stock, $0.001 par value
(Title of class)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ _]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes [X] No [ _]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ _] Accelerated filer [ _] Non-accelerated filer [X] Smaller reporting company [X] Emerging growth company [ _]

1If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [_]

IfIndicate ~~an emerging growth company, indicate~~ by check mark if whether the registrant ~~has~~is ~~elected~~a ~~not~~shell tocompany ~~use the extended transition period for complying with any new or revised financial accounting standards~~(as ~~provided~~defined ~~pursuant~~in toRule ~~Section~~12b-2 ~~13(a)~~ of the Exchange Act. ~~[ ]~~)

~~Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.)~~ Yes [ _] No [X]

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

Yes [ _] No [ _]

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

As of ~~June~~October 1615, 2025 the registrant had 19,767,698 outstanding shares of Common Stock.

PREAXIA HEALTH CARE PAYMENT SYSTEMS INC.

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION 41 ITEM 1. FINANCIAL STATEMENTS 41 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 52 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 96 ITEM 4. CONTROLS AND PROCEDURES 106 PART II – OTHER INFORMATION 106 ITEM 1. LEGAL PROCEEDINGS 106 ITEM 1A. RISK FACTORS 106 ITEM 1C CYBER SECURITY 6 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 106 ITEM 3. DEFAULTS UPON SENIOR SECURITIES 106 ITEM 4. MINE SAFETY DISCLOSURES 106 ITEM 5. OTHER INFORMATION 106 ITEM 6. EXHIBITS 117 SIGNATURES 128

3 1

PART I –- FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Article 210 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. All such adjustments are of a normal recurring nature. Operating results for the ~~nine~~ three-month period ended ~~February~~August 2831, 2025 are not necessarily indicative of the results that may be expected for the fiscal year ended May 31, ~~2025~~2026. For further information refer to the consolidated financial statements and footnotes thereto included in PreAxia’'s Annual Report on Form 10-K for the year ended May 31, ~~2024~~2025.

	Page
Unaudited Condensed Consolidated Financial Statements
Condensed Consolidated Balance Sheets as of February 28, 2025 (unaudited) and May 31, 2024	F-1
Condensed Consolidated Balance Sheets as of August 31, 2025 (unaudited) and May 31, 2025	F-1
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended February 28, 2025 and February 29, 2024	F-2
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss for the three months ended August 31, 2025 and 2024	F-2
Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Deficit for the three and nine months ended February 28, 2025 and February 29, 2024	F-3
Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Deficit for the three months ended August 31, 2025 and 2024	F-3
Unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended February 28, 2025 and February 29, 2024	F-4
Unaudited Condensed Consolidated Statements of Cash Flows for the three months ended August 31, 2025 and 2024	F-4
Notes to Unaudited Condensed Consolidated Financial Statements	F-5

4F-1

~~PREAXIA~~PreAxia ~~HEALTHCARE~~Health ~~PAYMENT~~Care ~~SYSTEMS~~Payment ~~INC.~~Systems ~~CONDENSED CONSOLIDATED BALANCE SHEETS~~Inc.

		February 28, 2025			May 31, 2024
		(Unaudited)
ASSETS
Current assets
Cash	$	3		$	14
Total current assets		3			14
Total assets	$	3		$	14
LIABILITIES
Current liabilities
Bank indebtedness	$	—		$	398
Accounts payable and accrued liabilities		175,057			166,909
Accounts payable and accrued liabilities - related party		300,000			300,000
Advances - related party		101,182			77,187
Loans payable - shareholders		191,330			191,330
Liability for unissued shares		134,792			134,792
Promissory note - related party		466,817			466,817
Convertible note payable - related party		1,058,760			1,058,760
Total current liabilities		2,427,938			2,396,193
Total liabilities		2,427,938			2,396,193
Commitments and Contingencies		—			—
STOCKHOLDERS' DEFICIT
Common Stock, $0.001 par value, 75,000,000 shares authorized 19,767,698 shares issued and outstanding		19,768			19,768
Additional paid-in capital		2,655,236			2,655,236
Accumulated other comprehensive income		57,197			57,197
Accumulated deficit		(5,160,136	)		(5,128,380	)
Total stockholders' deficit		(2,427,935	)		(2,396,179	)
Total liabilities and stockholders' deficit	$	3		$	14
See Accompanying Notes to the Unaudited Condensed Consolidated Financial Statements

Condensed Consolidated Balance Sheets

~~F-1~~As of August 31, 2025, and May 31, 2025

PREAXIA HEALTHCARE PAYMENT SYSTEMS INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS FOR THE THREE AND NINE MONTHS ENDED FEBRUARY 28, 2025 AND FEBRUARY 29, 2024 (Unaudited)


		August 31, 2025			May 31, 2025
Assets		(Unaudited)
Current assets
Cash and cash equivalents	$	130,285		$	—
Prepaid expense		360,000			—
Current assets		490,285			—

Prepaid expense long-term		660,000			—

Total assets	$	1,150,285		$	—

Liabilities and Shareholders' Equity or Deficit
Current liabilities
Accounts payable and accruals	$	31,354		$	43,683
Accruals and other current liabilities - related party		501,387			468,725
Related party loans		100,438			1,627,421
Bank indebtedness		—			10
Short-term loans payable		89,784			201,330
Current liabilities		722,963			2,341,169

Total liabilities		722,963			2,341,169

Commitments and Contingencies (Note 9)		—			—

Shareholders' Equity or Deficit
Common stock, 75,000,000 shares authorized, $0.001 par value,19,767,698 issued and outstanding at August 31, 2025 and May 31, 2025, respectively		19,768			19,768
Additional paid in capital		2,782,203			2,782,203
Stock subscription		3,651,222			7,825
Accumulated deficit		(6,085,524	)		(5,210,390	)
Accumulated other comprehensive income		59,653			59,425
Total shareholders' equity or deficit		427,322			(2,341,169	)

Total liabilities and shareholders' equity or deficit	$	1,150,285		$	—

	Three months ended						Nine months ended
		February 28, 2025			February 29, 2024			February 28, 2025			February 29, 2024
Revenue	$	—		$	—		$	—		$	—
Operating expenses
Consulting		—			—			—			60,000
Professional		8,921			3,472			23,704			15,623
Office and administration		4,542			2,902			8,052			13,079
Research and development		—			2,436			—			6,136
Total operating expenses		13,463			8,810			31,756			94,838
Net loss before income tax		(13,463	)		(8,810	)		(31,756	)		(94,838	)
Income tax		—			—			—			—
Net loss and comprehensive loss	$	(13,463	)	$	(8,810	)	$	(31,756	)	$	(94,838	)
Net loss per share - basic and diluted	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)
Weighted average number of common shares outstanding - basic and diluted		19,767,698			19,767,698			19,767,698			19,767,698
See Accompanying Notes to the Unaudited Condensed Consolidated Financial Statements

See Accompanying Notes to the Unaudited Condensed Consolidated Financial Statements

F-2

~~PREAXIA~~PreAxia ~~HEALTHCARE~~Health ~~PAYMENT~~Care ~~SYSTEMS~~Payment Systems ~~INC~~Inc. ~~CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT FOR THE THREE AND NINE MONTHS ENDED FEBRUARY 28, 2025 AND FEBRUARY 29, 2024 (Unaudited)~~

	Common Stock				Additional Paid-in		Accumulated Other Comprehensive		Accumulated			Total Stockholders'
	Shares		Amount		Capital		Income		Deficit			Deficit
Balance, November 30, 2024	19,767,698	$	19,768	$	2,655,236	$	57,197	$	(5,146,673	)	$	(2,414,472	)
Net loss and comprehensive loss	—		—		—		—		(13,463	)		(13,463	)
Balance, February 28, 2025	19,767,698	$	19,768	$	2,655,236	$	57,197	$	(5,160,136	)	$	(2,427,935	)
	Common Stock				Additional Paid-in		Accumulated Other Comprehensive		Accumulated			Total Stockholders'
	Shares		Amount		Capital		Income		Deficit			Deficit
Balance, May 31, 2024	19,767,698	$	19,768	$	2,655,236	$	57,197	$	(5,128,380	)	$	(2,396,179	)
Net loss and comprehensive loss	—		—		—		—		(31,756	)		(31,756	)
Balance, February 28, 2025	19,767,698	$	19,768	$	2,655,236	$	57,197	$	(5,160,136	)	$	(2,427,935	)
	Common Stock				Additional Paid-in		Accumulated Other Comprehensive		Accumulated			Total Stockholders'
	Shares		Amount		Capital		Income		Deficit			Deficit
Balance, November 30, 2023	19,767,698	$	19,768	$	2,655,236	$	57,197	$	(5,114,959	)	$	(2,382,758	)
Net loss and comprehensive loss	—		—		—		—		(8,810	)		(8,810	)
Balance, February 29, 2024	19,767,698	$	19,768	$	2,655,236	$	57,197	$	(5,123,769	)	$	(2,391,568	)
	Common Stock				Additional Paid-in		Accumulated Other Comprehensive		Accumulated			Total Stockholders'
	Shares		Amount		Capital		Income		Deficit			Deficit
Balance, May 31, 2023	19,767,698	$	19,768	$	2,655,236	$	57,197	$	(5,028,931	)	$	(2,296,730	)
Net loss and comprehensive loss	—		—		—		—		(94,838	)		(94,838	)
Balance, February 29, 2024	19,767,698	$	19,768	$	2,655,236	$	57,197	$	(5,123,769	)	$	(2,391,568	)
See Accompanying Notes to the Unaudited Condensed Consolidated Financial Statements

Condensed Consolidated Statements of Operations and Comprehensive Loss

~~F-3~~Three Months Ended August 31, 2025, and 2024

~~PREAXIA HEALTHCARE PAYMENT SYSTEMS INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED FEBRUARY 28, 2025 AND FEBRUARY 29, 2024~~ (Unaudited)

		Nine months ended
		August 31, 2025			August 31, 2024
		February 28, 2025			February 29, 2024
Revenues	$	—		$	—
Cash flows from operating activities
General and administrative expenses
Net loss	$	(31,756	)	$	(94,838	)
Consulting		65,000
Change in operating assets and liabilities
Research and development		391,263			—
Increase in accounts payable and accrued liabilities - related party		—			60,000
Management and labor		387,500			—
Increase in accounts payable and accrued liabilities		8,148			7,585
Professional fees		23,200			2,500
Advances - related party		24,030			11,764
General and administration		8,240			2,127
Repayment of advances - related party		(35	)		(1,585	)
Total operating expenses		875,203			4,627
Cash flows provided by (used in) operating activities		387			(17,074	)
Operating loss		(875,203	)		(4,627	)
Cash flows from investing activities		—			—
Other income and (expenses)
Cash flows from financing activities
Interest - net		69			—
Bank indebtedness		(398	)		—
Net loss before income taxes		(875,134	)		(4,627	)
Advances - loans payable - shareholders		—			18,262
Less Income tax expense		—			—
Net cash provided by (used in) financing activities		(398	)		18,262
Net loss		(875,134	)		(4,627	)
Net change in cash		(11	)		1,188
Other comprehensive income		228			—
Cash, beginning of the period		14			6
Net comprehensive loss	$	(874,906	)	$	(4,627	)
Cash, end of the period	$	3		$	1,194
Weighted average shares		19,767,698			19,767,698
Supplemental Disclosure:
Earnings per share - basic and diluted	$	(0.04	)	$	(0.00	)
Cash paid for income taxes	$	—		$	—
Cash paid for interest	$	—		$	—
See Accompanying Notes to the Unaudited Condensed Consolidated Financial Statements

~~F-4~~See Accompanying Notes to the Unaudited Condensed Consolidated Financial Statements

~~PREAXIA HEALTH CARE PAYMENT SYSTEMS INC.~~F-3

~~NOTES~~PreAxia TOHealth ~~THE~~Care ~~UNAUDITED~~Payment Systems ~~CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~Inc.

~~For~~Condensed Consolidated ~~the~~Statement ~~Nine~~of ~~months~~Changes ~~ended~~in ~~February~~Members' ~~28,~~and ~~2025~~Shareholders’ ~~(unaudited)~~Equity or Deficit

~~Note~~For 1the –Three ~~Organization~~Months ~~and~~Ended ~~Description~~August ~~of Business~~31, 2025, and 2024

~~PreAxia Health Care Payment Systems Inc.~~ (~~the “Company” or “PreAxia”~~Unaudited) was incorporated on April 3, 2000 in the State of Nevada. On May 31, 2005, the Company acquired all of the outstanding stock of Tiempo de Mexico Ltd. (“Tiempo”) in exchange for 5,000,000 shares of the common stock of the Company with a par value of $0.001. The Company had no operations prior to the date of the aforementioned acquisition.

The business objective of the Company is the development, distribution, marketing and sale of health care payment processing services and products. The Company has realized only nominal revenues from its planned operations.


	Number of shares		Common stock		Additional Paid in Capital		Subscription for Stock to be Issued		Accumulated Other Comprehensive Income		Accumulated Deficit			Total
Balance, May 31, 2024	19,767,698	$	19,768	$	2,655,236	$	—	$	57,197	$	(5,128,380	)	$	(2,396,179	)
Net comprehensive loss	—		—		—		—		—		(4,627	)		(4,627	)
Balance, August 31, 2024	19,767,698	$	19,768	$	2,655,236	$	—	$	57,197	$	(5,133,007	)	$	(2,400,806	)

Balance, May 31, 2025	19,767,698	$	19,768	$	2,782,203	$	7,825	$	59,425	$	(5,210,390	)	$	(2,341,169	)
Stock subscription issued for cash	—		—		—		200,000		—		—			200,000
Stock subscription issued for services	—		—		—		1,800,000		—		—			1,800,000
Stock subscription issued for debt	—		—		—		1,643,397		—		—			1,643,397
Net comprehensive loss	—		—		—				228		(875,134	)		(874,906	)
Balance, August 31, 2025	19,767,698	$	19,768	$	2,782,203	$	3,651,222	$	59,653	$	(6,085,524	)	$	427,322

~~The operations of the Company are expected to be primarily~~See ~~undertaken~~Accompanying byNotes ~~its wholly owned subsidiary, PreAxia Health Care Payment Ltd. (“PreAxia Payment”), incorporated pursuant~~ to ~~the~~ ~~laws of~~ the ~~Province~~Unaudited ofCondensed ~~Alberta~~Consolidated onFinancial ~~November 26, 2015.~~Statements

~~PreAxia Payment is in the process of developing an online access system creating a health spending account that will facilitate card payment and processing services to third~~F-~~party administrators, insurance companies and others.~~4

~~Note~~PreAxia 2Health –Care ~~Summary~~Payment Systems ~~of Significant Accounting Policies~~Inc.

~~Basis~~Condensed Consolidated Statement of ~~presentation~~Cash Flows

~~The~~For ~~unaudited condensed consolidated financial statements of~~ the ~~Company~~Three ~~for~~Months ~~the nine months~~ ended ~~February~~August 2831, 2025 ~~and February 29~~, ~~2024 have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information~~ and pursuant to the requirements for reporting on Form 10-Q and Regulation S-K. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. However, such information reflects all adjustments (consisting solely of normal recurring adjustments), which are, in the opinion of management, necessary for the fair presentation of the financial position and the results of operations. Results shown for interim periods are not necessarily indicative of the results to be obtained for the full fiscal year. The balance sheet information as of May 31, 2024 was derived from the audited financial statements included in the Company's financial statements as of and for the fiscal year ended May 31, 2024 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on October 10, 2024. These financial statements should be read in conjunction with that report.

Principles of Consolidation


		August 31, 2025			August 31, 2024
Cash used in Operating activities
Net loss		(875,134	)		(4,627	)
Adjustments to reconcile net loss to net cash used by operating activities:
Subscriptions issued for services		780,000			—
Changes in operating assets and liabilities:
Accounts payable		(12,329	)		2,231
Other current liabilities - related parties		32,662
Net cash flows used by operating activities		(74,801	)		(2,396	)

Investing activities
Net cash flows from investing activities		—			—

Financing activities
Bank overdrafts		(10	)		169
Proceeds from long term debt		12,628			—
Proceeds from long term debt		(6,354	)		—
Proceeds from related parties		—			2,214
Repayments to related parties		(1,406	)		—
Subscriptions for stock to be issued		200,000			—
Net cash flows from financing activities		204,858			2,383

Foreign currency change		228			—

Increase (decrease) in cash during the year		130,285			(13	)
Cash, beginning of the period		—			14
Cash, end of the period	$	130,285		$	1
		—
Supplemental disclosures
Cash paid for income taxes	$	—		$	—
Cash paid for interest	$	13		$	—

Noncash Investing and Financing Activities
Stock subscription issued for debt	$	1,643,397		$	—
Stock subscriptions issued for prepaid assets	$	1,650,000		$	—

~~The consolidated financial statements include the~~See ~~accounts~~Accompanying ofNotes ~~the Company and its wholly-owned subsidiaries (i) PreAxia Health Care Payment Systems Inc., incorporated pursuant~~ to the ~~laws of~~Unaudited ~~the~~Condensed ~~Province~~Consolidated ofFinancial Alberta on January 28, 2008 (ii) PreAxia Canada Inc., incorporated pursuant to the laws of the Province of Alberta on January 28, 2008 and (iii) PreAxia Health Care Payment Ltd., incorporated pursuant to the laws of the Province of Alberta on November 26, 2015 (collectively, the “Subsidiaries”). All inter-company accounts and transactions have been eliminated in consolidation.Statements

~~Going Concern~~F-5

~~The accompanying consolidated financial statements~~PREAXIA ~~have~~HEALTH ~~been~~CARE ~~prepared~~PAYMENT ~~assuming~~SYSTEMS ~~the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business~~INC. During the nine months ended February 28, 2025, the Company incurred a net loss of $31,756 and provided cash from operating activities of $387, and as of February 28, 2025, had a stockholders’ deficit of $2,427,935 and an accumulated deficit of $5,160,136. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that the consolidated financial statements are issued. The Company’s consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty should we be unable to continue as a going concern.

~~F-5~~NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~The Company’s ability to continue as a going~~For ~~concern is dependent upon its ability to develop additional sources of capital and to ultimately achieve profitable operations. Currently,~~ the ~~Company~~three ~~does~~months ~~not have significant cash or other material assets, nor does it have operations or a source of revenue sufficient to~~ended ~~cover~~August ~~its operating costs and allow it to continue as a going concern. The Company’s officers or principal shareholders are committed to making advances or loans to pay for certain legal~~31, ~~accounting, and administrative costs.~~2025

The Company hopes to be able to attract suitable investors for our business plan, which will not require us to use our cash. There can be no assurance that the Company will be successful in this situation. Even if the Company is able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing, or cause substantial dilution for our stockholders, in the case of equity financing.(Unaudited)

~~Cash~~Note 1 - Organization and ~~Cash~~Description ~~Equivalents~~of Business

~~The~~PreAxia Health Care Payment Systems Inc. (the "Company" ~~considers~~or "PreAxia") ~~all~~was ~~highly~~incorporated ~~liquid~~on ~~debt~~April ~~instruments~~3, 2000, in the State of Nevada. On May 31, 2005, the Company acquired all of the outstanding ~~with~~stock anof ~~original~~Tiempo ~~maturity~~de Mexico Ltd. ("Tiempo") in exchange for 5,000,000 shares of ~~three~~the ~~months~~common orstock ~~less~~of the Company with a par value of $0.001. The Company had no operations prior to bethe ~~cash~~date ~~equivalents~~of the aforementioned acquisition.

~~Use~~The business objective of ~~Estimates~~the Company is the development, distribution, marketing and sale of health care payment processing services and personal financial management applications, websites, and products. The Company’s products are in the development stage.

The ~~preparation~~operations of the Company’s ~~consolidated financial~~are ~~statements~~expected into ~~conformity~~be ~~with~~primarily ~~accounting~~undertaken by ~~principles~~its ~~generally~~wholly ~~accepted~~owned insubsidiary, ~~the~~PreAxia ~~United~~Health ~~States~~Care ~~requires~~Payment ~~management~~Ltd. to("PreAxia ~~make~~Payment"), ~~estimates and~~incorporated ~~assumptions~~pursuant ~~that~~to ~~affect~~ the ~~amounts~~laws ~~reported~~of ~~in these consolidated financial statements and accompanying notes. Although these estimates~~the ~~are~~Province ~~based on management’s knowledge~~ of ~~current~~Alberta ~~events~~on ~~and~~November ~~actions that our company may undertake in the future~~26, ~~actual results could differ from those estimates~~2015.

~~Foreign~~On ~~Currency~~May ~~Translation~~23, 2025, the Company created a wholly owned subsidiary in Alberta Canada, named Zane Inc. CA. This subsidiary will develop and market the personal financial management products and perfect the health care payment processing services. Zane Inc had no operations before June 30, 2025.

~~The~~On ~~functional~~September ~~currency~~10, of2025, the Company iscreated ~~the~~a ~~United States~~wholly ~~dollar.~~owned ~~The~~subsidiary in ~~functional~~Nevada, ~~currency~~named ofZane ~~the~~Inc ~~Subsidiaries~~US. isThis ~~the~~subsidiary ~~Canadian~~will ~~dollar.~~develop ~~Assets~~ and ~~liabilities~~market in the ~~accompanying~~personal ~~consolidated~~ financial ~~statements~~management ~~are~~products ~~translated~~and ~~into~~perfect ~~United States dollars at~~ the ~~exchange rate in effect at the balance sheet date and capital accounts~~health ~~are~~care ~~translated~~payment atprocessing ~~historical rates~~services. ~~Income~~Zane ~~statement~~Inc ~~accounts~~had ~~are~~no ~~translated~~operations atbefore ~~the~~October ~~average~~20, ~~rates of exchange prevailing during the period~~2025. ~~Translation adjustments arising from the use of differing exchange rates from period to period are included in the accumulated other comprehensive income (loss) account in stockholders’ deficit.~~

~~Transactions~~Note ~~undertaken~~2 in- ~~currencies~~Summary ~~other than the functional currency~~ of ~~the~~Significant ~~entity~~Accounting ~~are translated using the exchange rate in effect as of the transaction date. Any transaction exchange~~Policies ~~gains and losses are included in the consolidated statements of operations and comprehensive loss.~~

~~The Company's reporting currency is the U.S. dollar.~~Basis ~~All transactions initiated in Canadian Dollars are translated into U.S. dollars in accordance with Accounting Standards Codification ("ASC") 830-30, "Translation~~ of ~~Financial Statements”.~~presentation

~~Fair~~The ~~Value~~unaudited condensed consolidated financial statements of ~~Financial~~the ~~Instruments~~Company for the three months ended August 31, 2025, and 2024 have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Regulation S-K. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. However, such information reflects all adjustments (consisting solely of normal recurring adjustments), which are, in the opinion of management, necessary for the fair presentation of the financial position and the results of operations. Results shown for interim periods are not necessarily indicative of the results to be obtained for a full fiscal year. The balance sheet information as of May 31, 2025 was derived from the audited financial statements included in the Company's financial statements as of and for the fiscal year ended May 31, 2025 included in the Company's Annual Report on Form I0-K filed with the Securities and Exchange Commission (the "SEC") on September 30, 2025. These financial statements should be read in conjunction with that report.

~~The~~Principles Company defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Management uses a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:Consolidation

☐The ~~Level~~consolidated 1financial -statements ~~Unadjusted~~include ~~quoted~~the ~~prices~~accounts inof ~~active~~PreAxia Health ~~markets~~Care ~~that~~Systems ~~are~~Inc ~~accessible~~and atits ~~the~~wholly ~~measurement~~owned ~~date~~subsidiaries ~~for~~(i) ~~identical~~PreAxia Health Care Payment Ltd., ~~unrestricted~~(ii) ~~assets~~Zane orInc ~~liabilities~~CA, and (iii) Zane Inc. US. All inter-company accounts and transactions have been eliminated in consolidation.

~~F-6~~Going Concern

☐The ~~Level~~accompanying 2consolidated -financial ~~Inputs~~statements ~~other~~have ~~than~~been ~~quoted~~prepared assuming ~~prices~~the ~~included~~Company ~~within~~will ~~Level~~continue 1as ~~that~~a ~~are~~going ~~observable~~concern, ~~for~~which contemplates the ~~asset~~realization orof ~~liability,~~assets ~~either~~and ~~directly~~satisfaction orof ~~indirectly,~~liabilities ~~including~~in the ~~quoted~~normal ~~prices~~course ~~for~~of ~~similar~~business. ~~assets~~During orthe ~~liabilities~~three inmonths ~~active~~ended ~~markets;~~August ~~quoted~~31, ~~prices~~2025, ~~for~~the ~~identical~~Company orincurred ~~similar~~a ~~assets~~net orcomprehensive ~~liabilities~~loss of $874,906 and used cash in ~~markets~~operating ~~that~~activities ~~are~~of ~~not~~$74,801, ~~active;~~and ~~inputs~~as ~~other~~of ~~than~~August ~~quoted~~31, ~~prices~~2025, ~~that~~had ~~are~~a ~~observable~~shareholders' ~~for~~equity ~~the~~of ~~asset~~$427,322 orand ~~liability~~an (eaccumulated deficit of $6,085,524.g. These factors, ~~interest~~among ~~rates);~~others, ~~and~~raise ~~inputs~~substantial doubt about the Company's ability to continue as a going concern within one year of the date that the consolidated financial statements are ~~derived~~issued. ~~principally~~The Company's consolidated financial statements do not include any adjustments that might result from orthe ~~corroborated~~outcome byof ~~observable~~this ~~market~~uncertainty ~~data~~should bywe ~~correlation~~be orunable ~~other~~to ~~means~~continue as a going concern.

~~☐ Level 3~~ F- ~~Inputs that are both significant to the fair value measurement and unobservable.~~6

The ~~fair~~Company's ~~value~~ability ~~estimates~~to ~~discussed~~continue ~~herein~~as ~~are~~a ~~based~~going concern is dependent upon ~~certain~~its ~~market~~ability ~~assumptions~~to ~~and~~develop ~~pertinent~~additional ~~information~~sources ~~available~~of capital and to ~~management~~ultimately asachieve ofprofitable ~~February~~operations. 28Currently, ~~2025~~the Company ~~and~~does ~~May~~not 31have significant cash or other material assets, ~~2024.~~nor ~~The~~does ~~carrying amounts~~it have operations or a source of ~~current~~revenue ~~assets~~sufficient to cover its operating costs and ~~current~~allow ~~liabilities~~it ~~approximate~~to ~~their~~continue ~~fair~~as ~~value~~a ~~because~~going ofconcern. ~~the~~The ~~relatively~~Company's ~~short~~officers ~~period~~or ofprincipal ~~time~~shareholders ~~between~~are committed to making ~~the~~advances ~~origination~~or ofloans ~~these~~to ~~instruments~~pay ~~and~~certain ~~their~~legal, ~~expected~~accounting, ~~realization~~and administrative costs.

~~Research~~The ~~and~~Company ~~Development~~hopes ~~Costs~~to be able to attract suitable investors for our business plan, which will not require us to use our cash. There can be no assurance that the Company will be successful in this situation. Even if the Company is able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing, or cause substantial dilution for our shareholders, in the case of equity financing.

~~The~~Cash ~~Company expenses research~~ and ~~development~~Cash costs as incurred in accordance with FASB ASC 730 “Research and Development.” During the nine months ended February 28, 2025 and February 29, 2024, we incurred $0 and $6,136, respectively, in research and development expenses.Equivalents

~~Software~~The ~~Development~~Company ~~Costs~~considers all highly liquid debt instruments with an original maturity of three months or less to be cash equivalents.

~~The Company accounts for software development costs in accordance with several accounting pronouncements, including FASB ASC 730, “Research and Development,” FASB ASC 350-40, “Internal-~~Use ~~Software,” FASB 985-20, “Costs~~ of ~~Computer Software to be Sold, Leased, or Marketed” and FASB ASC 350-50, “Website Development Costs”.~~ Estimates

~~Costs~~The ~~incurred~~preparation ~~during~~of the ~~period~~Company's ofconsolidated financial ~~planning~~statements ~~and~~in ~~design, prior~~conformity towith ~~the~~accounting ~~period~~principles ~~determining~~generally ~~technological~~accepted ~~feasibility,~~in ~~for~~the ~~all~~United ~~software~~States ~~developed~~requires ~~for~~management ~~use~~to ~~internal~~make estimates and ~~external,~~assumptions ~~has~~that ~~been~~affect ~~charged to~~the ~~operations~~amounts reported in ~~the~~these ~~period~~consolidated ~~incurred~~financial asstatements ~~research~~ and ~~development~~accompanying ~~costs~~notes. ~~Additionally,~~ ~~costs~~Although ~~incurred~~these ~~after~~estimates are ~~determination~~based on management's knowledge of ~~readiness for~~current ~~market~~events ~~have~~and ~~been~~actions ~~expensed~~that asour ~~research~~company ~~and~~may ~~development~~undertake in the future, actual results could differ from those estimates.

~~The~~Foreign ~~Company~~Currency will capitalize certain costs in the development of our proprietary software (computer software to be sold, leased or licensed) for the period after technological feasibility was determined and prior to our marketing and initial sales.Translation

~~Website~~The ~~development~~functional ~~costs~~currency of the Company is the United States dollar. The functional currency of the Subsidiaries is the Canadian dollar. Assets and liabilities in the accompanying consolidated financial statements are ~~capitalized~~translated ~~under~~into United States dollars at the exchange rate in effect at the balance sheet date and capital accounts ~~same~~are ~~criteria~~translated asat ~~our~~historical ~~marketed~~rates. ~~software~~Income statement accounts are translated at the average rates of exchange prevailing during the period. Translation adjustments arising from the use of differing exchange rates from period to period are included in the accumulated other comprehensive income (loss) account in shareholders' deficit.

~~Impairment~~Transactions undertaken in currencies other than the functional currency of ~~Long-lived~~the ~~Assets~~entity are translated using the exchange rate in effect as of the transaction date. Any transaction exchange gains and losses are included in the statement of operations and comprehensive loss.

~~Long-lived~~The ~~assets~~Company's ~~such~~reporting ascurrency ~~property,~~is ~~equipment and identifiable intangibles are reviewed for impairment whenever facts and circumstances indicate that~~ the ~~carrying~~U.S. ~~value may not be recoverable~~dollar. ~~When~~ ~~required,~~All ~~impairment~~transactions ~~losses~~initiated onin ~~assets~~Canadian toDollars ~~be held and used~~ are ~~recognized~~translated ~~based~~into ~~on the fair value of the asset~~U. ~~The~~S. ~~fair~~dollars ~~value is~~in ~~determined~~accordance ~~based~~with onAccounting ~~estimates~~Standards ofCodification ~~future cash flows, market value of similar assets, if available, or independent appraisals, if required. If~~("ASC") ~~the carrying amount of the long~~830-~~lived asset is not recoverable from its undiscounted cash flows~~30, an"Translation ~~impairment loss is recognized for the difference between the carrying amount and fair value~~ of ~~the~~Financial ~~asset. When fair values are not available~~Statements," ~~the~~as Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risk associated with the recovery of the assets. We did not recognize any impairment losses for any periods presented.follows:

~~Commitments~~i) assets and ~~Contingencies~~liabilities are translated at the closing rate at the date of the balance sheet of 1.00 US Dollar =l.3715 Canadian Dollars (August 31, 2025), 1.00 USD Dollar =0.7914 GBP, and 1.00 US Dollar =l.3605 Canadian Dollars (May 31, 2025), 1.00 USD Dollar =0.593 GBP;

~~The~~ii) ~~Company~~income ~~follows~~and ~~subtopic~~expenses ~~450-20~~are oftranslated ~~the~~at ~~FASB~~average ~~Accounting Standards~~exchange ~~Codification~~rates ~~to report accounting~~ for ~~contingencies. Liabilities~~the ~~for~~three ~~loss~~months ~~contingencies~~ended ~~arising~~August ~~from claims~~31, ~~assessments~~2025, ~~litigation,~~ ~~fines~~of ~~and~~1.00 ~~penalties~~US ~~and~~Dollar ~~other~~= ~~sources~~1.3722 ~~are~~Canadian ~~recorded~~Dollars ~~when~~and it1.00 isUS ~~probable~~Dollar ~~that~~= a1.3285 ~~liability~~Canadian ~~has~~Dollars ~~been~~(February ~~incurred~~28, ~~and the amount of the assessment can be reasonably estimated.~~2023);

~~F-7~~iii) all resulting exchange differences are recognized as other comprehensive income, a separate component of equity. The exchange differences during the three months ended August 31, 2025 and August 31, 2024 were $228 and $0, respectively.

~~Revenue Recognition~~ F-7

InFair ~~accordance~~Value ~~with ASC 606, “Revenue from Contracts with Customers,” revenue is recognized when a customer obtains control~~ of ~~promised~~Financial goods or services. The amount of revenue recognized reflects the consideration to which we expect to be entitled to receive in exchange for these goods or services. ASC 606 requires us to apply the following steps: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, we satisfy the performance obligation.Instruments

~~Gross~~The ~~Versus~~Company ~~Net~~defines ~~Revenue~~fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Management uses a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity's own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level l) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

~~ASC 606 provides guidance on proper recognition of~~Level ~~principal~~l ~~versus~~- ~~agent~~Unadjusted ~~considerations~~quoted ~~which~~prices is used to determine gross versus net revenue recognition. Under ASC 606, the core objective of the guidance on gross versus net revenue recognition is to help determine whether an entity is a principal or an agent in aactive ~~transaction. In~~markets ~~general,~~that the primary difference between these two is the performance obligation being satisfied. The principal has a performance obligation to provide the desired goods or services to the end customer, whereas the agent arranges for the principal to provide the desired goods or services. Additionally, a fundamental characteristic of a principal in a transaction is control. A principal substantively controls the goods and services before they are ~~transferred~~accessible toat the ~~customer~~measurement asdate ~~well as controlling the price of the good or service being provided. An agent normally receives a commission or fee~~ for ~~these activities. In addition to control~~identical, ~~the~~unrestricted ~~level~~assets ~~at which an entity controls the price of the good~~ or ~~service being transferred determines principal versus agent status~~liabilities. The more discretion over setting price a company has in providing the good or service, the more likely they are considered a principal rather than an agent. Under the guidance when another party is involved in providing a good or service to a customer, an entity is a principal if the entity obtains control of the asset or right to a service performed by the other party.

~~The~~Level 2 ~~Company~~- ~~provides~~Inputs ~~administrative~~other ~~services~~than ~~for~~quoted ~~Health Spending~~prices ~~Accounts~~included ~~sponsored~~within byLevel ~~employers~~l (that are observable for the ~~“customer”).~~asset ~~The~~or ~~Company~~liability, ~~does~~either ~~not~~directly ~~take~~or ~~possession~~indirectly, including ofquoted ~~goods~~prices for similar assets or ~~control~~liabilities ~~the~~in ~~services provided~~active asmarkets; ~~the~~quoted ~~employees~~prices offor ~~the~~identical ~~customer~~or ~~are~~similar ~~free~~assets toor ~~determine~~liabilities in ~~their~~markets ~~health~~that ~~care~~are ~~provider.~~not Asactive; ~~such,~~inputs ~~the~~other ~~Company~~than ~~records~~quoted ~~revenue~~prices ~~net~~that ~~of reimbursements~~are toobservable ~~employees~~for the asset or liability (e.g., ~~The~~interest ~~Company’s~~rates); and ~~services~~inputs tothat ~~the~~are ~~customer~~derived ~~consist~~principally offrom ~~reviewing~~or ~~medical~~corroborated ~~costs~~by ~~for~~observable ~~eligibility~~market ~~and~~data ~~reimbursing employees~~by ~~for~~correlation ~~eligible~~or ~~costs~~other means.

~~During~~Level 3 ~~the~~- ~~periods~~Inputs ~~ended~~that ~~February~~are ~~28,~~both ~~2025~~significant ~~and~~to ~~February 29, 2024,~~ the ~~Company~~fair ~~had~~value ~~revenue~~measurement ~~of $0~~ and ~~$0, respectively~~unobservable. ~~The Company earns a 10% commission on amounts reimbursed for eligible expenses.~~

~~Income~~The ~~Taxes~~fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of August 31, 2025, and May 31, 2025. The carrying amounts of current assets and current liabilities approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization.

~~The~~Net Company follows Section 740-10-30 of the FASB Accounting Standards Codification, which requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the fiscal year in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the Statements of Income ~~and~~(Loss) ~~Comprehensive~~Per ~~Income in the period that includes the enactment date.~~Share

~~The~~Net ~~Company~~loss ~~follows~~per ~~section~~share ~~740-10-25~~ of ~~the~~common ~~FASB Accounting~~stock ~~Standards~~is ~~Codification~~computed by ~~(“Section~~dividing ~~740-10-25”)~~the ~~with~~net ~~regards~~loss toby ~~uncertain~~the ~~income~~weighted ~~tax~~average ~~positions. Section~~number ~~740-10-25 addresses the determination~~ of ~~whether~~common ~~tax~~shares ~~benefits~~outstanding ~~claimed~~during ~~or expected to be claimed on a tax return should be recorded in~~ the ~~financial statements~~period. ~~Under~~The ~~Section 740-10-25, the~~ Company ~~may~~has ~~recognize the tax benefit from an uncertain tax position only if it is more likely~~34,527,007 ~~than~~ ~~not~~shares ~~that~~of ~~the~~potential ~~tax~~common ~~position~~stock ~~will~~equivalents bein ~~sustained~~stock onsubscriptions ~~examination~~for byconvertible ~~the~~notes ~~taxing~~payable ~~authorities,~~- ~~based~~related onparty ~~the~~and ~~technical merits of the position.~~short-term, ~~The~~services ~~tax~~and ~~benefits~~cash ~~recognized~~outstanding induring the ~~financial~~period ~~statements~~ended ~~from~~August ~~such~~31, a2025, ~~position~~which ~~should~~have bebeen ~~measured~~excluded ~~based~~from on the ~~largest~~loss ~~benefit~~per ~~that has~~share acomputation ~~greater~~as their ~~than~~effect ~~fifty~~would ~~percent~~have ~~(50%)~~been ~~likelihood of being realized upon ultimate settlement. Section 740~~anti-~~10-25~~dilutive ~~also~~due ~~provides~~to ~~guidance on~~net ~~de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures~~losses.

~~F-8~~Research and Development Costs

~~Per~~The ~~Share~~Company ~~Data~~expenses research and development costs as incurred in accordance with FASB ASC 730 "Research and Development." During the three months ended August 31, 2025, and August 31, 2024, we incurred $391,263 and $0, respectively, in research and development expenses. The Company is in the process of developing personal financial management tools for internet access.

~~Net~~During ~~loss~~the ~~per~~three ~~common~~months ~~share~~ended isAugust ~~computed~~31, ~~by dividing~~2025, ~~net loss by~~ the ~~weighted~~Company ~~average~~reclassified ~~common~~contract ~~shares~~labor, ~~outstanding~~office ~~during the period as defined by Financial Accounting Standards~~expenses, ~~ASC~~and ~~Topic 260~~$367, ~~"Earnings~~500 ~~per Share". Basic earnings per common share (“EPS”) calculations are determined by dividing net income by the weighted average number~~ of ~~shares~~a ofmanagement ~~common~~contract ~~stock~~as ~~outstanding~~research ~~during~~and ~~the~~development ~~year. Diluted earnings per common share calculations are~~expenses ~~determined by dividing net income by the weighted average number of common shares~~ and ~~dilutive~~$0 ~~common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-dilutive they are not considered~~ in the ~~computation.~~three ~~For the nine~~ months ended ~~February~~ ~~28,~~August ~~2025 and February 29~~31, 2024, we excluded the common stock issuable upon conversion of Convertible Note Payable – Related Party of 10,587,600 shares and 10,587,600 shares, respectively, as their effect would have been anti-dilutive.

~~Liability~~Software ~~for~~Development ~~unissued shares~~Costs

~~Liability~~The Company accounts for ~~unissued~~software ~~shares~~development costs ~~represents~~in ~~funds~~accordance ~~received~~with several accounting pronouncements, including FASB ASC 730, "Research and Development," FASB ASC 350-40, in"Internal-Use ~~advance~~Software," ~~for~~FASB ~~shares~~985-20, ~~that~~"Costs ~~have~~of ~~not~~Computer ~~yet~~Software ~~been~~to ~~issued~~be Sold, Leased, or Marketed" and FASB ASC 350-50, "Website Development Costs."

~~Note~~Costs 3incurred –during ~~Recent~~the ~~Accounting~~period ~~Pronouncements~~of planning and design, prior to the period determining technological feasibility, for all software developed for use internal and external, has been charged to operations in the period incurred as research and development costs. Additionally, costs incurred after determination of readiness for market have been expensed as research and development.

The Company ~~reviews~~will ~~new~~capitalize ~~accounting~~certain ~~standards~~costs asin ~~issued~~the ordevelopment ~~updated.~~of Noour ~~new~~proprietary ~~standards~~software or(computer ~~updates~~software ~~had any material effect on these consolidated financial statements. The accounting pronouncements issued subsequent~~ to ~~the~~be ~~date~~sold, ofleased ~~these~~or ~~consolidated~~licensed) ~~financial statements that were considered significant by management were evaluated~~ for the ~~potential~~period ~~effect~~after ontechnological ~~these consolidated financial statements. Management does not believe any of the subsequent pronouncements~~feasibility ~~will~~was ~~have~~determined aand ~~material~~prior ~~effect~~to onour ~~these~~marketing ~~consolidated~~and ~~financial~~initial ~~statements as presented~~sales.

~~Note~~Website 4development –costs ~~Related~~are ~~Party~~capitalized ~~Transactions~~under the same criteria as our marketed software.

~~Accounts Payable and Accrued Liabilities~~ F- ~~Related Party~~8

AsImpairment of ~~February~~Long-lived 28, 2025 and May 31, 2024, accounts payable and accrued liabilities – related party due to Tom Zapatinas (Chief Executive Officer and a Director of the Company) totaled $300,000 and $300,000, respectively. During the nine months ended February 28, 2025 and February 29, 2024, Tom Zapatinas, earned $0 and $60,000, respectively, for consulting services provided to the Company.Assets

~~Advances~~Long-lived –assets ~~Related~~such ~~Party~~as property, equipment and identifiable intangibles are reviewed for impairment whenever facts and circumstances indicate that the carrying value may not be recoverable. When required, impairment losses on assets to be held and used are recognized based on the fair value of the asset. The fair value is determined based on estimates of future cash flows, market value of similar assets, if available, or independent appraisals, if required. If the carrying amount of the long-lived asset is not recoverable from its undiscounted cash flows, an impairment loss is recognized for the difference between the carrying amount and fair value of the asset. When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risk associated with the recovery of the assets. We did not recognize any impairment losses for any periods presented.

AsCommitments ~~of February 28, 2025~~ and May 31, 2024, advances payable due to Tom Zapatinas totaled $101,182 and $77,187, respectively. Advances are non-interest bearing, unsecured and payable on demand. During the nine months ended February 28, 2025 and February 29, 2024, Tom Zapatinas, the Chief Executive Officer and a Director of the Company, advanced the Company $24,030 and $11,764, respectively, in cash and was repaid $35 and $1,585 respectively, in cash.Contingencies

~~Loans~~The ~~Payable~~Company –follows ~~Shareholders~~subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.

AsRevenue of February 28, 2025 and May 31, 2024, loans payable - shareholders are $191,330 and $191,330, respectively. Loans payable – shareholders are unsecured, non-interest bearing and due on demand. During the nine months ended February 28, 2025 and February 29, 2024, the Company was advanced $0 and $18,262, respectively, and did not repay any of the advanced amounts during either comparable period.Recognition

~~Promissory~~In ~~Note~~accordance –with ~~Related~~ASC ~~Party~~606, "Revenue from Contracts with Customers," revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which we expect to be entitled to receive in exchange for these goods or services. ASC 606 requires us to apply the following steps: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, we satisfy the performance obligation.

AsGross ofVersus ~~February~~Net 28, 2025 and May 31, 2024, promissory note - related party of $466,817 and $466,817, respectively, is due to Tom Zapatinas, the Chief Executive Officer and a Director of the Company. The Note is non-interest bearing, unsecured and payable on demand.Revenue

~~F-9~~ASC 606 provides guidance on proper recognition of principal versus agent considerations which is used to determine gross versus net revenue recognition. Under ASC 606, the core objective of the guidance on gross versus net revenue recognition is to help determine whether an entity is a principal or an agent in a transaction. In general, the primary difference between these two is the performance obligation being satisfied. The principal has a performance obligation to provide the desired goods or services to the end customer, whereas the agent arranges for the principal to provide the desired goods or services. Additionally, a fundamental characteristic of a principal in a transaction is control. A principal substantively controls the goods and services before they are transferred to the customer as well as controlling the price of the good or service being provided. An agent normally receives a commission or fee for these activities. In addition to control, the level at which an entity controls the price of the good or service being transferred determines principal versus agent status. The more discretion over setting price a company has in providing the good or service, the more likely they are considered a principal rather than an agent. Under the guidance when another party is involved in providing a good or service to a customer, an entity is a principal if the entity obtains control of the asset or right to a service performed by the other party.

~~Convertible~~During ~~Note~~the ~~Payable~~three –and ~~Related~~three ~~Party~~months ended August 31, 2025, and 2024, the Company had revenue of $0 and $0, respectively.

AsStock of February 28, 2025 and May 31, 2024, convertible note payable - related party of $1,058,760 is due to Tom Zapatinas, the Chief Executive Officer and a Director of the Company. The Note is non-interest bearing, unsecured, payable on demand and convertible in whole or in part into shares of common stock of the Company at a conversion price of $0.10 per share, which equates to 10,587,600 shares.awards

~~Note~~The 5Company –follows ~~Stockholders’~~Section ~~Deficit~~718 of the FASB Accounting Standards Codification, which states that stock awards are valued at the grant date. Those awards issued for compensation are deducted as expenses based on the vesting schedule of the award.

~~Common~~On ~~Stock~~June 30, 2025, the Company issued a stock subscription for 16,500,000 shares of common stock at $0.10 per share for an Independent Contractor Agreement. This award vests 40% on the grant date and 20% at the end of the next three years.

~~Common~~Also, ~~Stock~~on June 30, ~~par~~2025, ~~value~~the ofCompany ~~$0.001~~issued ~~per~~stock ~~share;~~subscriptions 75for 1,~~000~~500,000 shares ~~authorized:~~of ~~19,767,698~~common ~~shares~~stock ~~issued~~at ~~and~~$0.10 ~~outstanding~~per onshare ~~February~~for ~~28,~~consulting ~~2025~~services. ~~and~~These awards ~~May~~vest ~~31,~~40% ~~2024.~~on ~~Holders~~the ofgrant ~~Common~~date ~~Stock~~and ~~have~~20% ~~one~~at ~~vote per~~the ~~share~~end of ~~Common~~the ~~Stock~~next ~~held~~three years.

~~Note~~Income ~~6 – Contingencies and Commitments~~Taxes

~~From~~The ~~time~~Company tofollows ~~time~~Section 740-10-30 of the ~~Company~~FASB Accounting ~~may~~Standards beCodification, awhich ~~party~~requires torecognition ~~litigation~~of deferred tax assets and liabilities for the expected future tax consequences ~~matters~~of ~~involving~~events ~~claims~~that ~~against~~have been included in the ~~Company~~financial statements or tax returns. ~~Management~~ ~~believes~~Under ~~that~~this ~~there~~method, deferred tax assets and liabilities are based noon ~~current~~the ~~matters~~differences ~~that~~between ~~would~~the ~~have~~financial astatement ~~material~~and tax bases of assets and liabilities using enacted tax rates in effect for onthe fiscal year in which the ~~Company’s~~differences ~~financial~~are ~~position~~expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the fiscal years in which those temporary differences are expected to be recovered or ~~results~~settled. The effect on deferred tax assets and liabilities of ~~operations~~a change in tax rates is recognized in the Statements of income and Comprehensive Income in the period that includes the enactment date.

~~The Company does not have long~~F-~~term commitments for equipment purchases or leases. The Company does not lease office space as the CEO operates the business from his personal residence.~~9

~~Note~~The 7Company –follows ~~Subsequent~~section ~~Events~~740-10-25 of the FASB Accounting Standards Codification ("Section 740-10-25") with regards to uncertain income tax positions. Section 740-10-25 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under Section 740-10-25, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Section 740-10-25 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures.

~~The~~Per ~~Company~~Share ~~has evaluated all subsequent events through the date these financial statements were issued, and no subsequent events occurred that required disclosure.~~Data

FNet loss per common share is computed by dividing net loss by the weighted average common shares outstanding during the period as defined by Financial Accounting Standards, ASC Topic 260, "Earnings per Share". Basic earnings per common share ("EPS") calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti-10dilutive they are not considered in the computation.

Note 3 - Recent Accounting Pronouncements

The Company reviews new accounting standards as issued or updated. No new standards or updates had any material effect on these consolidated financial statements. The accounting pronouncements issued subsequent to the date of these consolidated financial statements that were considered significant by management were evaluated for the potential effect on these consolidated financial statements. Management does not believe any of the subsequent pronouncements will have a material effect on these consolidated financial statements as presented.

Note 4 – Prepaid expenses

The Company issued stock subscriptions for consulting and management services worth $1,800,000 in July 2025. These subscriptions vest at 40% on the grant date and 20% at the end of the next three (3) years. The Company recognized stock-based compensation of $60,000 for consulting, $330,000 for research and development, and $330,000 for management services on the grant date. The remaining 60% of the subscriptions are recorded as prepaid expenses are being recognized over the next 36 months from July 1, 2025.

The Company has recorded the following prepaid expenses:

Schedule of prepaid expenses
	August 31, 2025		May 31, 2025

Prepaid consulting, short-term	$	30,000	$	—
Prepaid management – short-term		330,000		—
Total prepaid expenses short-term	$	360,000	$	—

Prepaid consulting, long-term	$	55,000	$	—
Prepaid management – long-term		605,000		—
Total prepaid expenses long-term	$	660,000	$	—

Recognition of prepaid consulting expense recorded for the three months ended August 31, 2025, and 2024 were $5,000 and $0, respectively.

Recognition of prepaid management expense recorded for the three months ended August 31, 2025, and 2024 were $55,000 and $0, respectively.

F-10

Note 5 – Intangibles, net

The Company has recorded the following intangible assets:

Schedule of intangible asset
	August 31, 2025			May 31, 2025

Software acquisition costs	$	102,151		$	102,151
Less accumulated amortization		(102,151	)		(102,151	)
Net intangible assets	$	—		$	—

Amortization expense recorded for the three months ended August 31, 2025, and 2024 were $0 and $0, respectively.

Note 6 – Short term loans payable

Short-term loans payable consists of a number of loans from friends of the Company. The loans are normally on open accounts bearing no interest. On August 31, 2025, and May 31, 2025, the short-term loans totaled $89,784 and $201,330, respectively.

In October 2025, the Board of Directors negotiated with several loan holders and agreed to convert several loans to PreAxia common stock. Three holders agreed to convert $117,820 in debt to 491,314 shares of common stock. In anticipation of the conversion, the $117,820 in debt was reclassified to stock subscriptions as of August 31, 2025.

Note 7 - Related Party Transactions

On June 30, 2025, Pavel Bondarev became a director, shareholder, and a related party.

Accruals and other liabilities

Both Tom Zapatinas and Pavel Bondarev have employment agreements with the Company.

As of August 31, 2025, and May 31, 2025, accruals and other current liabilities - related party included accrued officer compensation due to Tom Zapatinas (Chief Executive Officer and a Director of the Company) totaling $420,000 and $400,000, respectively, and related payroll taxes and deductions totaling $68,725 and $68,725, respectively. As of August 31, 2025, and May 31, 2025, accruals and other current liabilities - related party included accrued officer compensation due to Pavel Bondarev (CEO of Zane Inc and Director of PreAxia) totaling $12,661 and $0, respectively. The accrued officers’ compensation is non-interest bearing and payable or convertible on demand.

During the three months ended August 31, 2025, and 2024, Tom Zapatinas, earned $30,000 and $0, respectively, for consulting services provided to the Company and Pavel Bondarev earned $20,000 and $0, respectively for management services provided to the Company.

F-11

Related party loans

As of August 31, 2025, and May 31, 2025, the related party loans included advances payable due to Tom Zapatinas totaled $100,438 and $101,844, respectively. During the three months ended August 31, 2025, and 2024, Tom Zapatinas, received $1,406 from the Company and provided $2,214, respectively, in cash. The related party loans also included two loans outlined below:

As of August 31, 2025, and May 31, 2025, promissory note - related party of $0 and $466,817, respectively, due to Tom Zapatinas. On June 30, 2025, the Note was converted to a stock subscription at $0.10 per share for 4,668,170 shares

As of August 31, 2025, and May 31, 2025, convertible note payable - related party of $0 and $1,058,760, respectively, due to Tom Zapatinas. On June 30, 2025, the Note was converted to a stock subscription at $0.10 per share for 10,587,600 shares.

Intercompany loans have been eliminated.

Note 8 - Shareholders' Equity or Deficit

Common Stock

Common Stock, par value of $0.001 per share; 75,000,000 shares authorized: 19,767,698 shares issued and outstanding on August 31, 2025, and May 31, 2025. Holders of Common Stock have one vote per share of Common Stock held.

On June 30, 2025, the Company issued a stock subscription for 16,500,000 shares of common stock at $0.10 per share to acquire an exclusive contract with a vendor. The Independent Contractor Agreement was valued at $1,650,000. Forty percent (40%) was recognized as of the grant date and sixty percent (60%) of the stock subscription is held as prepaid expenses and will vest and be recognized over the next three (3) years.

Also on June 30, 2025, stock subscriptions for 1,500,000 shares of common stock at $0.10 per share were issued to contractors for services. Forty percent (40%) was recognized as of the grant date as consulting expenses and sixty percent (60%) of the stock subscription is held as prepaid expenses and will vest and be recognized over the next three (3) years.

Stock subscriptions on August 31, 2025, include of $1,643,397 in debt, cash and services pending conversion.

All the stock listed in the transactions above were not formally issued until October 2025. The total value of all the subscriptions above was recognized as of the grant date. The value of 40% of the subscriptions was expensed as of the grant date and value of 60% of the subscriptions were held as prepaid expenses and will be amortized quarterly over the three years. See note 4. When issued, the shares waiting to vest, will be held by PreAxia for the benefit of the contractors and will be released upon satisfaction of the service terms outlined in the agreements.

In August 2025, the Company received $200,000 from the sale of 800,000 shares of common stock in a private placement. These shares were issued in October 2025.

Note 9 - Contingencies and Commitments

From time to time the Company may be a party to litigation matters involving claims against the Company. Management believes that there are no current matters that would have a material effect on the Company's financial position or results of operations.

The Company does not have long-term commitments for equipment purchases or leases. The Company does not lease office space as the CEO operates the business from his personal residence.

Note 10 - Segment reporting

FASB ASU 2023-07 requires all public entities to expand segment reporting on all significant segments and to report significant segment expenses when the chief operating decision maker uses this information to make decisions about resource allocation. The president and CEO of PreAxia was the chief operating decision maker during the three months, August 31, 2025, and 2024

The Company has been focused on developing Health Savings Account software. During the three months ended August 31, 2025, and 2024, management determined the Company is only operating in one segment but two locations. There are no revenues, and the expenses are split between a Canadian office and the US Holding company. The basic information on segments is as follows:

Schedule of segment reporting
	August 31, 2025			August 31, 2024			$ diff			% diff
Canadian revenues	$	—		$	—		$	—			—
Canadian expenses		(403,208	)		(2,127	)		(401,081	)		18,857	%
		(403,208	)		(2,127	)		(401,081	)		18,857	%

US revenues		—			—			—			—
US expenses		(471,698	)		(2,500	)		(469,198	)		18,768	%
Net		(471,698	)		(2,500	)		(469,198	)		18,768	%

Combined net loss	$	(874,906	)	$	(4,627	)	$	(870,279	)		18,809	%

F-12

Note 11 - Subsequent Events

The Company has evaluated all subsequent events through the date these financial statements were issued, and no other subsequent events occurred that required disclosure, except:

In September 2025, the Company established a new subsidiary, Zane Inc US, to market mobile banking and personal finance management platforms in the United States. Pavel Bondarev will run both Zane subsidiaries.

In September 2025, the Board of Directors decided to start doing business as PreAxia-Zane Financial.

On October 3, 2025, the Board of Directors negotiated with several loan holders and agreed to convert several loans to PreAxia common stock. Three holders agreed to convert $117,820 in debt to 491,314 shares of common stock. In anticipation of the conversion, the $117,820 in debt was reclassified to stock subscriptions as of August 31, 2025.

As of October 15, 2025, 34,527,007 shares of stock were issued to settle the stock subscriptions issued in the last quarter.

F-13

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

This quarterly report contains forward-looking ~~statements~~ statements relating to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “"may,”" “"should,”" “"intends,”" “"expects,”" “"plans,”" “"anticipates,”" “"believes,”" “"estimates,”" “"predicts,”" “"potential,”" or “"continue”" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors which may cause our or our industry's actual results, levels of activity or performance to be materially different from any future results, levels of activity or performance expressed or implied by these forward-looking statements.

Such factors include, among others, the following: international, national and local general economic and market conditions; demographic changes; the ability of PreAxia to sustain, manage or forecast its growth; the ability of PreAxia to successfully make and integrate acquisitions; raw material costs and availability; new product development and introduction; existing government regulations and changes in, or failure to comply with government regulations; adverse publicity; competition; the loss of significant customers or suppliers; fluctuations and difficulty in forecasting operating results; changes in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; and other factors referenced in this and previous filings.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity or performance. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Given these uncertainties, readers of this Form 10-Q and investors are cautioned not to place undue reliance on such forward-looking statements. PreAxia disclaims any obligation to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements contained herein to reflect future events or developments, except as required by applicable law, including the securities laws of the United States.

All amounts stated herein are in US dollars unless otherwise indicated.

The management’'s discussion and analysis of ~~our~~ our financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“"GAAP”"). The following ~~discussion~~ discussion of our financial condition and results of operations should be read in conjunction with our audited consolidated financial ~~statements~~ statements for the year ended May 31, ~~2024~~2025, together with notes thereto. As used in this quarterly report, the terms “"we,~~” “~~" "us,~~” “~~" "our,”" “"PreAxia”" and the “"Company”" means PreAxia Health Care Payment Systems Inc. and its wholly-owned subsidiaries, unless the context clearly requires otherwise.

General Overview

Corporate Overview

PreAxia Health Care Payment Systems Inc. (the “"Company”" or “"PreAxia”") was incorporated on April 3, 2000, in the State of Nevada. On May 31, 2005, the Company acquired all of the outstanding stock of Tiempo de Mexico Ltd. ("Tiempo") in exchange for 5,000,000 shares of the common stock of the Company with a par value of $0.001. The Company had no operations prior to the date of the aforementioned acquisition.

The ~~Company~~business ~~primarily~~objective ~~undertakes~~of ~~its~~the ~~operations through~~Company ~~its~~is ~~wholly~~the ~~owned subsidiary~~development, distribution, ~~PreAxia~~marketing ~~Health~~and ~~Care~~sale ~~Payment~~of ~~Limited~~health ~~(“PreAxia~~care ~~Payment”).~~payment ~~PreAxia~~processing ~~Payment~~services ~~was~~and ~~incorporated pursuant~~personal tofinancial ~~the~~management ~~laws~~applications, ofwebsites, and ~~the~~products. ~~Province~~The ofCompany’s ~~Alberta~~products onare ~~November~~in ~~26,~~the ~~2015~~development stage.

The operations of the Company are expected to be primarily undertaken by its wholly owned subsidiary, PreAxia Health Care Payment Ltd. ("PreAxia Payment"), incorporated pursuant to the laws of the Province of Alberta on November 26, 2015.

On May 23, 2025, the Company created a wholly owned subsidiary in Alberta Canada, named Zane Inc. CA. This subsidiary will develop and market the personal financial management products and perfect the health care payment processing services. Zane Inc had no operations before June 30, 2025.

General Overview

PreAxia Payment is a company which intends to deliver a comprehensive suite of solutions and services directed at the emerging health payment market, specifically the opportunities tied to the growth of health spending accounts (“HSA”). There is a rapid shift in healthcare traditional payment models to consumer-directed healthcare that is creating significant opportunities for financial services and insurance industries to deliver new dynamic products to this emerging market.

Spawned by the need to address escalating health care costs, changes in the regulatory environment and the growing consumer desire for greater participation in the management of their health benefits, the boundaries between health care and the financial services industries are becoming increasingly blurred. With the trend towards self-directed health payment solutions and the growing demand for faster, easier and more convenient benefit services, the insurance and benefits industries are banking on HSA medical payments being their next big growth conduit. Studies suggest that HSAs in the US reached $~~123~~122.38 billion in assets in 2023 and 3733.49 million consumers in ~~2023~~2022, an increase of more than 1811% of assets over the prior year. This coupled with the continued growth of the Canadian group insurance industry illustrates the emerging opportunity for innovative health payment services. We intend to initially launch our products in Canada. We believe that Canadian businesses are embracing a new healthcare financing vehicle to provide greater value to employees, increase profitability and get more return from their investment. We intend to provide them with services to capture this market opportunity.

Plan of Operation

Over the next twelve months, we plan to:

(a) Raise additional capital to execute our business plans; (b) Penetrate the health care processing markets in Canada, the United States and worldwide, by continuing to develop innovative health care processing products and services; (c) Build up a network of strategic alliances with several types of health insurance companies, governments and other alliances in various vertical markets, and; (d) Fill the positions of senior management sales, administrative and engineering positions.

6(b) Penetrate the health care processing markets in Canada, the United States and worldwide, by continuing to develop innovative health care processing products and services;

(c)

Build up a network of strategic alliances with several types of health insurance companies, governments and other alliances in various vertical markets, and;

(d)

Fill the positions of senior management sales, administrative and engineering positions.

Liquidity and Capital Resources

As of ~~February~~August 2831, 2025, PreAxia’'s cash balance was $3130,285 compared to $140 as of May 31, ~~2024~~2025. Our Company will be required to raise capital to fund our operations. PreAxia had a working capital deficit of ($2232,~~427,935~~678) as of ~~February~~August 2831, 2025, compared with a working capital deficit of ($2,~~396~~341,~~179~~169) as of May 31, ~~2024~~ 2025.

Our net cash ~~provided by (~~ used in) operating activities for the ~~nine~~three months ended ~~February~~August 2831, 2025, and ~~February 29,~~ 2024 is ($~~387~~74,801) and ($172,~~074~~396), respectively. Our net loss for the ~~nine~~three months ended ~~February~~August 2831, 2025, of ($31875,~~756~~134) was primarily offset bysubscriptions ~~the~~offered ~~Advances~~for -services ~~related party~~ of $24780,~~030~~000 toand ~~show~~other minor achanges in liabilities for cash ~~provided~~used by operating activities of ($~~387~~74,801). Our net loss for the ~~nine~~three months ended ~~February~~August 2931, 2024 of ~~$94~~(4,~~838~~627) was primary offset by the increase in accounts payable ~~and accrued liabilities – related party~~ of $602,~~000~~231 to show a cash used in operating activities of ($172,~~074~~396).

Our net cash provided by investing activities for ~~the~~ ~~nine~~three months ended ~~February~~August 2831, 2025, and ~~February 29,~~ 2024 is $0 and $0 respectively.

Our net cash ~~(used in)~~ provided by financing activities for the ~~nine~~three months ended ~~February~~August 2831, 2025, and ~~February 29,~~ 2024 is ($~~398)~~204,858 and $182,~~262~~383, respectively. Cash provided from financing activities came from a stock subscription for $200,000 ~~mainly~~and ~~due~~proceeds tofor ~~advances~~short-term ~~– loan~~and ~~payable~~related –party ~~shareholders~~loans of $4,868.

Our ability to meet our financial liabilities ~~and~~ and commitments is primarily dependent upon the continued issuance of equity to new ~~stockholders~~shareholders and our ability to achieve and maintain ~~profitable~~ profitable operations. PreAxia's cash and cash equivalents will not be sufficient to meet its working capital requirements for the next twelve-month period. We will not initially have any cash flow from operating activities as we are in the startup stage. We project that we will require an estimated $1,000,000 over the next twelve-month period to pay our arms-length creditors approximately $300,000 plus an additional $700,000 to complete our business plan. The Company plans to raise the capital required to satisfy our immediate short-term needs and additional capital required to meet our estimated funding requirements for the next twelve months primarily through the private placement of our equity securities or by way of loans or such other means as PreAxia may determine.

There are no assurances that we will be able to obtain the funds required for our continued operations. There can be no assurance that additional financing will be available to us when needed or, if available, that it can be obtained on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, we will not be able to meet our other obligations as they become due, and we will be forced to scale down or perhaps even cease the operation of our business.

There is substantial doubt about our ability to ~~continue~~ continue as a going concern as the continuation of our business is dependent upon obtaining further long-term financing, successful and ~~sufficient~~ sufficient market acceptance of our products and achieving a profitable level of operations. The Company hopes to be able to attract suitable investors for our business plan, which will not require us to use our cash. There can be no assurance that the Company will be successful in this situation. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current ~~stockholders~~shareholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.

~~Our working capital (deficit) as of February 28, 2025 and May 31, 2024 is summarized as follows:~~3

~~Working~~Our ~~Capital~~working capital deficit as of August 31, 2025, and May 31, 2025, is summarized as follows:

	February 28, 2025			May 31, 2024
Working Capital
Current Assets	$	3		$	14
	August 31, 2025			May 31, 2025
Current Liabilities		(2,427,938	)		(2,396,193	)
Current Assets	$	490,285		$	—
Working Capital Deficit	$	(2,427,935	)	$	(2,396,179	)
Current Liabilities		(722,963	)		(2,341,169	)
Working Capital Deficit	$	(232,678	)	$	(2,341,169	)

7The increase in our working capital of $2,108,491 was primarily due to the conversion of debt, the sale of stock for cash, and stock subscription for services.

The increase in our working capital deficit of $31,756 was primarily due to an increase in accounts payable and accrued liabilities of $8,148 and an increase in advance – related party of $23,995.

Off-balance Sheet Arrangements

We have no off-balance sheet arrangements that ~~have~~ have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to ~~stockholders~~shareholders.

Results of Operations –- Three Months ended ~~February~~August 2831, 2025, and ~~February~~August 2931, 2024

~~For~~The following summary of our results of operations should be read in conjunction with our condensed consolidated financial statements for the three months ended ~~February~~August 2831, 2025, and ~~February~~ ~~29,~~ 2024.

~~Our~~For ~~operating results for~~ the three months ended ~~February 28~~August 31, 2025 ~~compared to the three months ended February 29~~, and 2024 ~~are described below:~~

Our operating results for the three months ended August 31, 2025, compared to the three months ended August 31, 2024, are described below:

Revenue

During the three months ended ~~February 28~~August 31, 2025 , and ~~February 29,~~ 2024, the Company had revenue of $0 and $0, respectively. ~~The Company earns a 10% commission on amounts reimbursed for eligible expenses.~~

Expenses

Our total expenses for the three months ended ~~February~~ 28August 31, 2025, were $13875,~~463~~203 compared to $84,~~810~~627 for the three months ended ~~February~~August 2931, 2024. The ~~increase~~decrease in total expenses of ($4870,~~653~~ 576) for the three months ~~ending~~ended ~~February~~August 2831, 2025, is due to an increase in ~~professional~~consulting ~~expense~~fees of $565,~~449~~000, an increase of $1391,~~640~~263 in ~~office~~research and ~~administration~~ development, an increase of $387,500 in management costs, an increase of $23,200 in professional fees, and aan ~~decrease~~increase in ~~research~~office and ~~development~~administration fees of $26,~~436~~113.

~~Research~~Management and ~~Development~~labor

~~Research~~During ~~and~~each ~~development expenses~~of ~~during~~ the three months ended ~~February~~August 2831, 2025, ~~was~~and $0August 31, ~~as compared~~2024, toTom $2Zapatinas,~~436~~ ~~during~~ the ~~three~~Chief ~~months~~Executive ~~ended~~Officer ~~February~~and 29Director of the Company, ~~2024.~~earned ~~The~~$30,000 ~~decrease~~and is$0, ~~due~~respectively, for consulting services provided to athe ~~decrease~~Company, which is included in ~~software~~accounts ~~lease~~payable ~~expenses~~and ~~from Microsoft~~accrued liabilities - related party.

~~Office~~Pavel Bondarez, a director and ~~Administration~~CEO of Zane Inc CA and Zane Inc US, earned $20,000 for management services and received a stock subscription worth $660,000. His compensation was split between management and research and development during the three months ended August 31, 2025. He received $0 in the three months ended August 31, 2024.

Office and administration expenses increased by $1,640 for the three months ended February 28, 2025 due to an increase in office supply expense and filing fees.

Professional Fees

Professional fees during the three months ended ~~February~~ 28August 31, 2025, increased by $520,~~449~~700 to $823,~~921~~200, as compared to $32,~~472~~500 during the three months ended ~~February~~August 2931, 2024., ~~Professional~~mostly ~~fees increased~~ due ~~the~~to ~~annual financial statement~~ audit ~~being~~fees ~~completed~~and inOTC ~~the~~market ~~second quarter of fiscal 2025~~fees. ~~Typically, the audit is completed in the first quarter.~~

Interest Expense

Interest expense is $0 for the three months ended February 28, 2025 and February 29, 2024 because accounts payable and accrued liabilities – related party, convertible note payable – related party and loans payable – shareholders are non-interest bearing.

Results of Operations – Nine months ended February 28, 2025 and February 29, 2024

For the nine months ended February 28, 2025 and February 29, 2024

Our operating results for the nine months ended February 28, 2025 compared to the nine months ended February 29, 2024 are described below:

Revenue

During the nine months ended February 28, 2025 and February 29, 2024, the Company had revenue of $0 and $0, respectively. The Company earns a 10% commission on amounts reimbursed for eligible expenses.

Expenses

Our total expenses for the nine months ended February 28, 2025 were $31,756 compared to $94,838 for the nine months ended February 29, 2024. The decrease in total expenses of $63,082 for the nine months ending February 28, 2025 is due to a decrease in consulting fees of $60,000, a decrease of $5,027 in office and administration fees, and a decrease in research and development of $6,136 which was partially offset by an increase in professional expense of $8,081.

Consulting Fees

~~During~~Consulting fees during the ~~nine~~three months ended ~~February~~August 2831, 2025 ~~and February 29~~, ~~2024,~~increased ~~Tom Zapatinas~~to$65,000 ~~the~~compared ~~Chief~~to ~~Executive~~$0 ~~Officer~~paid ~~and~~during ~~Director of~~ the ~~Company,~~three ~~earned~~months $0ended ~~and~~August ~~$60~~31,~~000,~~ ~~respectively,~~2024. The ~~for~~increase ~~consulting services~~is ~~provided~~due to ~~the~~two ~~Company,~~contractors ~~which~~receiving isstock ~~included~~subscriptions infor ~~accounts~~$150,000 ~~payable~~in ~~and~~consulting ~~accrued liabilities – related party~~fees. ~~During the period from June 1~~$65,000 ~~2024~~was torecognized ~~February~~in ~~28,~~this ~~2025,~~quarter and the ~~Company~~rest ~~did~~will ~~not~~be ~~accrue~~recognized ~~compensation~~over tothe ~~Tom~~next ~~Zapatinas~~three years.

Research and Development

Research and development expenses during the three ~~nine~~ months ended ~~February~~August 2831, 2025, ~~was~~increased by $0391,263 to $391,763, as compared to $~~6,136~~0 during the ~~nine~~three months ended ~~February~~August 2931, 2024. Most ~~The~~of ~~decrease~~the isincrease was due to $367,500 allocated from a ~~decrease~~stock insubscription ~~software~~listed ~~lease~~in ~~expenses~~Management ~~from~~and ~~Microsoft~~labor above.

Office and Administration

Office and administration expenses decreased by $5,027 for the nine months ended February 28, 2025 due to a decrease in office supply expense and filing fees.

Professional Fees

Professional fees during the nine months ended February 28, 2025 increased by $8,081 to $23,704, as compared to $15,623 during the nine months ended February 29, 2024. Professional fees increased due an increase in audit fees.

Interest Expense

Interest- ~~expense~~net isconsists of $082 ~~for~~of interest income and ($13) of interest expense from banks during the ~~nine~~three months ended ~~February 28~~August 31, 2025, and ~~February~~$0 ~~29,~~for ~~2024~~the ~~because~~three ~~accounts~~months ~~payable~~ended August ~~and~~31, ~~accrued~~2024. ~~liabilities~~Accounts ~~– related party~~payable, ~~convertible~~accrued ~~note~~liabilities ~~payable~~- – related party ~~and~~ loans, ~~payable~~and –short-term ~~shareholders~~loans are non-interest bearing.

Critical Accounting Policies

We have identified certain accounting policies, described below, that are the most important to the portrayal of our current financial condition and results of operations. Please refer to Note 2 of the accompanying consolidated financial statements for a full and complete disclosure of our accounting policies.

Revenue Recognition

In accordance with ASC 606, "Revenue from Contracts with Customers," revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which we expect to be entitled to receive in exchange for these goods or services. ASC 606 requires us to apply the following steps: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, we satisfy the performance obligation.

Software Development Costs

The Company accounts for software development costs in accordance with several accounting pronouncements, including FASB ASC 730, "Research and Development," FASB ASC 350-40, "Internal-Use Software," FASB 985-20, "Costs of Computer Software to be Sold, Leased, or Marketed" and FASB ASC 350-50, "Website Development Costs."

Costs incurred during the period of planning and design, prior to the period determining technological feasibility, for all software developed for use internal and external, has been charged to operations in the period incurred as research and development costs. Additionally, costs incurred after determination of readiness for market have been expensed as research and development.

The Company will capitalize certain costs in the development of our proprietary software (computer software to be sold, leased or licensed) for the period after technological feasibility was determined and prior to our marketing and initial sales.

Website development costs are capitalized under the same criteria as our marketed software.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

9ITEM 4. CONTROLS AND PROCEDURES.

~~ITEM~~Evaluation 4.of ~~CONTROLS~~Disclosure ~~AND~~Controls ~~PROCEDURES~~and Procedures

~~Evaluation~~Management evaluated the effectiveness of ~~Disclosure~~our disclosure ~~Controls~~controls and procedures, as defined under Exchange Act Rule 13a-15(e). Based upon this evaluation, the Chief Executive Officer ~~Procedures~~and Chief Financial Officer concluded that, as of August 31, 2025, the disclosure controls and procedures, based on the Framework of lnternal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") 2013, were not effective.

~~Management~~Disclosure ~~evaluated the effectiveness of our disclosure~~ controls and procedures, asare ~~defined~~the ~~under~~controls and ~~Exchange~~other ~~Act~~procedures ~~Rule~~that ~~13a-15(e).~~are ~~Based~~designed ~~upon~~to ~~this~~ensure ~~evaluation,~~that ~~the~~information ~~Chief~~required ~~Executive~~to ~~Officer and~~be ~~Chief~~disclosed ~~Financial~~in ~~Officer~~our ~~concluded~~Company's ~~that,~~Exchange asAct ofreports ~~February~~is 28recorded, ~~2025~~ processed, ~~the~~summarized ~~disclosure controls~~ and ~~procedures,~~reported ~~based~~within on the ~~Framework~~time ~~of Internal~~periods ~~Control~~specified -in ~~Integrated Framework issued by~~ the ~~Committee~~Securities ofExchange ~~Sponsoring Organizations of the Treadway~~ Commission's ~~(“COSO”) 2013,~~rules ~~were~~and ~~not effective~~forms.

~~Disclosure~~Changes ~~controls and procedures are the controls and other procedures that are designed to ensure that information required to be disclosed~~ in ~~our~~Internal ~~Company’s~~Control ~~Exchange~~over ~~Act~~Financial ~~reports is recorded, processed, summarized and reported within the time periods specified in the Securities Exchange Commission’s rules and forms.~~Reporting

~~Changes~~There have been no changes in ~~Internal~~our ~~Control~~internal controls over ~~Financial~~financial reporting that occurred during the quarter ended August 31, 2025, that have materially affected, or are reasonably likely ~~Reporting~~to materially affect, our internal controls over financial reporting.

~~There~~PART ~~have~~II ~~been~~- noOTHER changes in our internal controls over financial reporting that occurred during the quarter ended February 28, 2025 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.INFORMATION

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We know of no material pending legal proceedings to which our company or subsidiary is a party or of which any of our property is the subject. In addition, we do not know of any such proceedings contemplated by any governmental authorities.

We know of no material proceedings in which any director, officer or affiliate of our company, or any registered or beneficial stockholder of our company, or any associate of any such director, officer, affiliate, or stockholder is a party adverse to our company or subsidiary or has a material interest adverse to our company or subsidiary.

ITEM 1A. RISK FACTORS

Not applicable to smaller reporting companies.

ITEM 1C. CYBERSECURITY

One of the key functions of our Board of Directors is informed oversight of our risk management process, including risks arising from cybersecurity threats. Our Chief Financial Officer and Chief Operating Officer are primarily responsible for assessing and managing material risks from cybersecurity threats on a day-to-day basis. Our Board of Directors is responsible for monitoring and assessing strategic risk exposure, and our management team is additionally responsible for the day-to-day management of the material risks we face. Our Board of Directors administers its cybersecurity risk oversight function directly as a whole. We additionally may utilize the assistance of a third-party service provider, an information technology solutions service for purposes of broadly managing our cybersecurity risks.

We have not maintained any current customer lists or sensitive data, but will create the procedures to assess, identify, and manage material risks from cybersecurity threats in the upcoming year.

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

~~None~~In August 2025, the Company received $200,000 a subscription for 800,000 shares of common stock in a private placement. The cash was used for working capital. The shares were issued in October 2025.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

During the quarter ended ~~November~~August 3031, ~~2024~~2025, no director or Section 16 officer adopted or terminated any Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements.

106

ITEM 6. EXHIBITS

Exhibit Number	Description
3.1	Articles of Incorporation (Incorporated by reference to the Exhibits filed with the Form SB-2 filed with the SEC on March 16, 2006)
3.2	Certificate of Amendment to Articles of Incorporation (Incorporated by reference to the Exhibits filed with Schedule 14C on November 14, 2008)
3.3	Bylaws (Incorporated by reference to the Exhibits filed with the Form SB-2 filed with the SEC on March 16, 2006)
3.4	Amended Bylaws (Incorporated by reference to the Exhibits filed with the Form SB-2 filed with the SEC on March 16, 2006)
10.1	Share Exchange Agreement dated May 31, 2005 between Kimberley Coonfer, Caribbean Overseas Investments Ltd., Sun World Partners Inc. and Tiempo De Mexico Ltd. (Incorporated by reference to the Exhibits filed with the Form SB-2 filed with the SEC on March 16, 2006)
10.2	Letter of Intent dated February 22, 2008 between Sun World Partners Inc. and H Pay Card Ltd. (Incorporated by reference to the Exhibits filed with the Form 8-K on March 5, 2008)
10.3	Acquisition Agreement dated April 22, 2008 (Incorporated by reference to the Exhibits filed with the Form 8-K on May 19, 2008)
10.4	Promissory note dated June 1, 2011 issued to Macleod Projects Inc. (Incorporated by reference to the Exhibits filed with the annual report on Form 10-K for the year ended May 31, 2011 filed with the SEC on October 21, 2011)
10.5	Promissory note dated August 5, 2011 issued to Macleod Projects Inc. (Incorporated by reference to the Exhibits filed with the annual report on Form 10-K for the year ended May 31, 2011 filed with the SEC on October 21, 2011 )
31.1*	Section 302 Certification of Principal Executive Officer
32.1*	Certification Pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 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.

117

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

PREAXIA HEALTH CARE PAYMENT SYSTEMS INC.

By: /s/Tom Zapatinas

Name: Tom Zapatinas

Title: President, Chief Executive Officer and Chief Financial Officer

(Principal Executive Officer and Principal Financial Officer)

Date: October ~~June 16~~21, 2025

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