PreAxia Shifts to AI-Powered Fintech, Reports Zero R&D Spend

TL;DR

**PAXH is a speculative bet on an unproven AI fintech pivot with no revenue, zero R&D, and no IP protection, making it a high-risk gamble.**

AI Summary

PREAXIA HEALTH CARE PAYMENT SYSTEMS INC. (PAXH) reported no revenue or net income for the fiscal year ended May 31, 2025, continuing its development phase. The company established a new wholly-owned subsidiary, Zane Inc. CA, on May 23, 2025, to develop and market personal financial management products and enhance healthcare payment processing services. Zane Inc. CA had no operations before June 30, 2025. Research and development expenses decreased significantly from $5,632 in 2024 to $0 in 2025, indicating a shift in development focus or completion of certain phases. The company's strategy is to target the growing health spending account (HSA) market, which reached $123.3 billion in assets in 2024, and to introduce AI-powered personal financial management tools through its Zane subsidiaries. PAXH's common stock traded at a consistent $0.057 for most of the fiscal year, with 53,824,000 shares outstanding as of August 31, 2025. The company has no registered patents or trademarks, and operates with one full-time consultant, Mr. Tom Zapatinas.

Why It Matters

PreAxia's strategic pivot into AI-powered personal financial management through its Zane subsidiaries, targeting Generation Z, could be a high-risk, high-reward move for investors. While the company reported no revenue and zero R&D spend in 2025, indicating a pre-commercial or re-strategizing phase, the focus on a 'personal AI-banker' aims to disrupt traditional banking and budgeting apps. This positions PreAxia as a potential partner rather than a direct competitor to existing financial institutions, which could attract strategic alliances. However, the lack of intellectual property protection and reliance on a single consultant, Mr. Tom Zapatinas, raises significant operational and competitive concerns in a rapidly evolving fintech landscape.

Risk Assessment

Risk Level: high — The company reported $0 in research and development expenses for the fiscal year ended May 31, 2025, down from $5,632 in 2024, despite announcing ambitious plans for AI-powered financial products. This lack of investment in R&D, coupled with the absence of any pending or registered patents or trademarks, indicates a significant vulnerability to competition and a high execution risk for its new product lines. Furthermore, the company operates with only one full-time consultant, Mr. Tom Zapatinas, which presents a substantial key-person risk for a company aiming to disrupt the fintech market.

Analyst Insight

Investors should approach PAXH with extreme caution, recognizing its highly speculative nature. Given the zero revenue, zero R&D spend, and lack of intellectual property, this is a 'wait and see' situation. Monitor for concrete product launches, significant capital raises, and the hiring of a robust development team before considering any investment.

Financial Highlights

debt To Equity

N/A

revenue

$0

operating Margin

N/A

total Assets

N/A

total Debt

N/A

net Income

$0

eps

$0

gross Margin

N/A

cash Position

$0

revenue Growth

N/A

Key Numbers

• $0 — Research and Development Expenses (for the fiscal year ended May 31, 2025, down from $5,632 in 2024)
• $123.3 billion — HSA Assets in the US (as of 2024, an 18% increase over the prior year)
• 34.7 million — HSA Consumers in the US (as of 2023)
• $0.057 — Common Stock High/Low Bid Price (consistent price for most of the fiscal year ended May 31, 2025)
• 53,824,000 — Shares of Common Stock Outstanding (as of August 31, 2025)
• 2,400,000 — Stock Options Available for Issuance (re-affirmed in July 2025)
• $494,059 — Aggregate Market Value of Non-Affiliate Common Equity (as of November 30, 2024)
• 10% — APY Average (target for Zane's High-Interest Super Account)

Key Players & Entities

• PREAXIA HEALTH CARE PAYMENT SYSTEMS INC. (company) — registrant
• PAXH (company) — ticker symbol
• Zane Inc. CA (company) — wholly owned subsidiary created May 23, 2025
• Tom Zapatinas (person) — President and sole full-time consultant
• Benecaid (company) — competitor in Health Spending Accounts
• Olympia Benefits (company) — competitor in Health Spending Accounts
• QuickCard (company) — competitor in Health Spending Accounts and group insurance
• Zelle (company) — competitor in mobile internet money management
• Nevada (regulator) — state of incorporation
• SEC (regulator) — filing oversight

FAQ

Risk Factors

• Dependence on Key Personnel [high — operational]: The company operates with only one full-time consultant, Mr. Tom Zapatinas. This extreme reliance on a single individual for operations poses a significant risk if he becomes unavailable, impacting the company's ability to execute its business plan and maintain operations.
• Lack of Revenue and Profitability [high — financial]: For the fiscal year ended May 31, 2025, the company reported $0 revenue and $0 net income. This indicates a lack of commercial viability for its current offerings and a significant dependence on future capital raises to fund operations.
• Need for Additional Capital [high — financial]: The company explicitly states its plan to raise additional capital to execute its business plans. A failure to secure necessary funding could halt operations and prevent the development and launch of its intended products and services.
• Early Stage Development and Unproven Products [medium — operational]: The company is in its development phase, with a newly established subsidiary, Zane Inc. CA, for product development. There is no guarantee that these products will be successfully developed, marketed, or adopted by consumers, especially in a competitive market.
• Uncertainty in Health Payment Market [medium — regulatory]: While the company targets the growing HSA market, regulatory changes in healthcare and financial services could impact its business model. The company's strategy relies on the continued growth and favorable regulatory environment of HSAs.
• Lack of Registered Patents or Trademarks [low — intellectual property]: The company has no registered patents or trademarks. This leaves its intellectual property vulnerable to imitation by competitors and limits its ability to establish a strong brand or competitive moat.

Industry Context

The health payment systems industry is undergoing a significant shift towards consumer-directed healthcare, creating opportunities for innovative financial services. The Health Spending Account (HSA) market, in particular, is experiencing rapid growth, with substantial assets and a growing consumer base. This trend blurs the lines between healthcare and financial services, driving demand for faster, more convenient benefit services and new financial products.

Regulatory Implications

The company operates in the regulated sectors of healthcare and financial services. Changes in healthcare regulations, consumer protection laws, or financial transaction rules could impact its business model and operational costs. Compliance with these evolving regulations will be crucial for its success.

What Investors Should Do

1. Monitor Capital Raise Efforts
2. Evaluate Product Development Progress
3. Assess Market Penetration Strategy
4. Consider High Risk/High Reward Profile

Key Dates

• 2025-05-23: Creation of Zane Inc. CA — Establishes a new subsidiary focused on personal financial management products and healthcare payment processing, indicating a strategic expansion and diversification of the company's future business.
• 2025-05-31: Fiscal Year End — The reporting period shows $0 revenue and $0 net income, highlighting the company's continued development stage and lack of commercial operations.
• 2025-08-31: Shares of Common Stock Outstanding Record Date — Confirms 53,824,000 shares outstanding, providing a key metric for market capitalization calculations and investor ownership analysis.
• 2025-07-01: Stock Options Re-affirmed — Indicates 2,400,000 stock options available for issuance, suggesting potential future dilution and a mechanism for incentivizing management or employees.
• 2024-11-30: Aggregate Market Value of Non-Affiliate Common Equity Record Date — Reports $494,059 in market value, offering a snapshot of the company's valuation at that time, though this figure may fluctuate significantly.

Glossary

Health Spending Account (HSA)

A special account established by an employer for an employee to pay for eligible medical and related health care expenses. It offers greater control over funds and their usage. (This is the primary market the company intends to target with its payment processing and financial management services.)

Consumer-Directed Healthcare

A healthcare model where consumers have more control and responsibility in managing their healthcare decisions and spending. (This trend is creating opportunities for companies like PreAxia to offer innovative financial solutions.)

Zane Inc. CA

A newly created wholly-owned subsidiary of PreAxia Health Care Payment Systems Inc., established to develop and market personal financial management products and enhance healthcare payment processing services. (Represents a strategic initiative for future growth and product development within the company.)

PreAxia Health Care Payment Limited

A wholly-owned subsidiary through which PreAxia Health Care Payment Systems Inc. primarily conducts its operations. (The operational arm of the company focused on the health payment market.)

Year-Over-Year Comparison

The fiscal year ended May 31, 2025, shows a stark contrast to the previous year, with Research and Development expenses dropping from $5,632 to $0. This indicates a potential shift in development focus or the completion of certain R&D phases. Crucially, the company continues to report $0 revenue and $0 net income, underscoring its ongoing development stage. The establishment of Zane Inc. CA signifies a new strategic direction for product development and market entry.

Key Financial Figures

• $0.001 — ection 12(g) of the Act: Common Stock, $0.001 par value (Title of class) Indicate
• $494,059 — ed second fiscal quarter. Approximately $494,059 on November 30, 2024. (APPLICABLE ONLY
• $123.3 billion — ies suggest that HSAs in the US reached $123.3 billion in assets in 2024 and 34.7 million cons
• $0 — ded May 31, 2025, and 2024, we incurred $0 and $5,632 in research and development
• $5,632 — 31, 2025, and 2024, we incurred $0 and $5,632 in research and development expenses.
• $0.057 — High Low 05 / 31 / 2025 $0 . 057 $0.057 02 / 28 / 2025 $0.057 $0 . 057 11
• $0.0565 — 0.057 $0.057 08 / 31/2024 $0 . 057 $0.0565 05 / 31 / 2024 $0 . 057 $0.057 02
• $14 — xia's cash balance was $0 compared to $14 as of May 31, 2024. Our Company will be
• $2,342,041 — reAxia had a working capital deficit of $2,342,041 as of May 31, 2025, compared with a wor
• $2 — pared with a working capital deficit of $2 ,3 96 , 179 as of May 31 , 2024. Our
• $1,500,000 — oject that we will require an estimated $1,500,000 over the next twelve-month period to pa
• $200,000 — our arms-length creditors approximately $200,000 plus an additional $1,300,000 to comple
• $1,300,000 — proximately $200,000 plus an additional $1,300,000 to complete our business plan. The Comp

Filing Documents

• paxh53125k.htm (10-K) — 521KB
• ex31.htm (EX-31) — 8KB
• ex32.htm (EX-32) — 5KB
• 0001262463-25-000185.txt ( ) — 536KB

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS. 4

RISK FACTORS

ITEM 1A. RISK FACTORS 7

UNRESOLVED STAFF COMMENTS

ITEM 1B. UNRESOLVED STAFF COMMENTS 7

PROPERTIES

ITEM 2. PROPERTIES 7

LEGAL PROCEEDINGS

ITEM 3. LEGAL PROCEEDINGS 7

MINE SAFETY DISCLOSURES

ITEM 4. MINE SAFETY DISCLOSURES 7 PART II 7 ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 7

SELECTED FINANCIAL DATA

ITEM 6. SELECTED FINANCIAL DATA 8

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 8

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 10

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 11

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 12

CONTROLS AND PROCEDURES

ITEM 9A. CONTROLS AND PROCEDURES 12

OTHER INFORMATION

ITEM 9B. OTHER INFORMATION 12 PART III 13

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 13

EXECUTIVE COMPENSATION

ITEM 11. EXECUTIVE COMPENSATION 16

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS 18

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 19

PRINCIPAL ACCOUNTING FEES AND SERVICES

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES 20 PART IV 21

EXHIBITS, FINANCIAL STATEMENT SCHEDULES

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES 21

FORM 10-K SUMMARY

ITEM 16. FORM 10-K SUMMARY 21

SIGNATURES

SIGNATURES 22 3 PART I FORWARD-LOOKING This annual report contains forward-looking statements.

Forward-looking statements are

Forward-looking statements are projections in respect of future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may," "should," "intend," "expect,", "plan," "anticipate," "believe," "estimate," "predict," "potential," or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, including 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. These risks and uncertainties include: a continued downturn in international economic conditions; any adverse occurrence with respect to the development or marketing of our product; any adverse occurrence with respect to any of our licensing agreements; our ability to successfully bring products to market; product development or other initiatives by our competitors; fluctuations in the availability and cost of materials required to produce our products; any adverse occurrence with respect to distribution of our products; potential negative financial impact from claims, lawsuits and other legal proceedings or challenges; and other factors beyond our control. Although we believe that the expectations reflected in the

forward-looking statements are reasonable, we cannot guarantee

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 actual results. As used in this annual report, the terms "we," "us," "our," the "Corporation," and "PreAxia" mean PreAxia Health Care Payment Systems Inc. and our and its wholly owned subsidiaries (i) PreAxia Health Care Payment Systems Inc., incorporated pursuant to the laws of the Province of 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"), unless the context clearly requires otherwise. Unless otherwise stated, "

BUSINESS

ITEM 1. BUSINESS Corporate Overview PreAxia Health Care Payment Systems Inc. (the "Company" or "PreAxia") was incorporated on April 3, 2000, in the State of Nevada. The Company primarily undertakes its operations through its wholly owned subsidiary, PreAxia Health Care Payment Limited ("PreAxia Payment"). PreAxia Payment was 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 $123.3 billion in assets in 2024 and 34.7 million consumers in 2023, an increase of more than 18% of assets over the prior year. This co

PROPERTIES

ITEM 2. PROPERTIES Although much of the research and development and the building of our system have been completed , our Calgary office closed during the 2017 fiscal year, and we presently operate out of remote employment sites.

LEGAL PROCEEDINGS

ITEM 3. LEGAL PROCEEDINGS We know of no material, active or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. PART II

MARKET FOR

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is quoted on the OTC Markets Pink Sheets under the symbol PAXH. Following is a report of high and low bid prices for each quarterly period for the years ended May 31, 2025, and 2024. Quarter Ended High Low 05 / 31 / 2025 $0 . 057 $0.057 02 / 28 / 2025 $0.057 $0 . 057 11/30 / 2024 $0.057 $0.057 08 / 31/2024 $0 . 057 $0.0565 05 / 31 / 2024 $0 . 057 $0.057 02 / 28 / 2024 $0.057 $0 . 057 11/30 / 2023 $0.057 $0.057 08 / 31/2023 $0 . 057 $0.0565 Holders of Our Common Stock As of August 31, 2025, there were 92 holders of record of our common stock and 43,024,000 shares of common stock outstanding and 10,800,000 in treasury stock pending vesting. There is currently only one class of common stock with one vote per share. Pacific Stock Transfer Company of 6725 Via Austin Parkway, Suite 300, Las Vegas, Nevada 89119, is the registrar and transfer agent for our common shares. Dividends We have not declared or paid dividends on shares of our common stock and we do not expect to declare or pay dividends on shares of our common stock for the foreseeable future. We intend to retain earnings, if any, to finance the development and expansion of our business. Our future dividend policy will be subject to the discretion of our board of directors and will depend upon our future earnings, if any , our financial condition, and other factors deemed relevant by the board. Equity Compensation Plans We adopted and approved our current stock option plan on January 28, 2010. This plan was re-affirmed in July 2025 for 2,400,000 stock options. The following table provides a summary of the number of options granted under our stock option plan, the weighted average exercise price and the number of options remaining available for issuance all as of May 31, 2025. 7 Number of securities to

SELECTED FINANCIAL DATA

ITEM 6. SELECTED FINANCIAL DATA Not Applicable.

MANAGEMENT'S DISCUSSION

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 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. The Company primarily undertakes its operations through its wholly owned subsidiary, PreAxia Health Care Payment Limited ("PreAxia Payment"). PreAxia Payment was incorporated pursuant to the laws of the Province of Alberta on November 26, 2015. 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 $123.3 billion in assets in 2023 and 37.4 million consumers in 2023, an increase of more than I 8% 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 Ca

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