The information contained in this Form 10-Q is intended to update the information contained in our Annual Report on Form 10-K for the year ended May 31, 2019 and presumes that readers have access to, and will have read, the "Management's Discussion and Analysis of Financial Condition and Results of Operations" and other information contained in such Form 10-K. The following discussion and analysis also should be read together with our financial statements and the notes to the financial statements included elsewhere in this Form 10-Q.

The following discussion contains certain statements that may be deemed "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements appear in a number of places in this Report, including, without limitation, "Management's Discussion and Analysis of Financial Condition and Results of Operations." These statements are not guarantees of future performance and involve risks, uncertainties and requirements that are difficult to predict or are beyond our control. Forward-looking statements speak only as of the date of this quarterly report. You should not put undue reliance on any forward-looking statements. We strongly encourage investors to carefully read the factors described in our Annual Report on Form 10-K for the year ended May 31, 2019 in the section entitled "Risk Factors" for a description of certain risks that could, among other things, cause actual results to differ from these forward-looking statements. We assume no responsibility to update the forward-looking statements contained in this quarterly report on Form 10-Q. The following should also be read in conjunction with the unaudited Financial Statements and notes thereto that appear elsewhere in this report.




Overview

Wewards, Inc. ("Wewards" or "the Company") was incorporated in the state of Nevada on September 10, 2013 as Betafox Corp., with the initial intent to manufacture and sell color candles. On April 26, 2015, Giorgos Kallides (the "Seller"), entered into an agreement with Future Continental Limited ("Purchaser"), pursuant to which, on May 11, 2015, the Seller sold to Purchaser six million (6,000,000) shares of common stock of the Company (the "Shares") owned by the Seller, constituting approximately 73.8% of the Company's 8,130,000 issued and outstanding common shares at such time, for $340,000. In October 2015, the Purchaser sold the 6,000,000 Shares to Mr. Lei Pei, an affiliate of the Purchaser, in consideration of Mr. Pei's agreement to serve as our director and CEO. On January 8, 2018, by consent of Lei Pei as the Company's principal shareholder, the Company changed its name to Wewards, Inc. The Company's corporate office is located in Las Vegas, Nevada.

The Company has developed and is the owner of a web-based platform accessible by mobile apps (the "Platform") that will enable consumers to purchase goods from merchants and earn rebates payable in the form of Bitcoin. The Platform provides an innovative Bitcoin rewards ecosystem. It is designed to transform traditional concepts of commerce into a cooperative society where both merchants and consumers are collaborating, utilizing Bitcoin to reward consumers. The ecosystem provides consumers with rewards each time they complete a challenge defined by a merchant. This is intended to make the ecommerce process beneficial to all market participants, and to help distribute commercial wealth among and between the merchants and consumers. The Company intends to generate revenue by licensing "white-label" versions of the Platform to third parties. However, to date, no such license agreement has been entered into, and the Company has not generated any revenues.

On April 2, 2020, the Company purchased intellectual property rights ("IP") from United Power, a Nevada Corporation under common ownership with Lei Pei, the Company's sole officer and director and majority shareholder, for cash consideration of $179,300, based on a price determined by an independent valuation.

The IP consists of technology and related rights associated with the game Megopoly, an MMO (Massively Multiplayer Online Game). Megopoly is expected to be the first MMO 3-D board game in the world, where players will be able to earn fractions of Bitcoins (satoshi) through buying, selling, and managing virtual real estate properties using in-game currency (Megopoly Coins). The game will be similar in some respects to Monopoly.

The game will allow players around the world to interact with each other online. Players travel (move) through different parts of a city, earning profit by investing in properties, charging rent, acquiring bonus assets, and selling their properties to other players for in-game currency. A player will be able to progress to higher levels of "cities" at any time.

The player's goal in Megopoly is to earn Megopoly Coins by investing in properties and collecting rent from other players. Players can keep playing the game using their Megopoly Coins for the opportunity to earn more coins, or they can exchange those coins for Bitcoins based on real-time market exchange rates.

Megopoly will be playable at any time through a web browser on a PC, tablet or smart phone, initially in Chinese, and in English in the near future. The game has been designed for players of all skill levels.





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Results of Operations for the Three Months Ended February 29, 2020 and February 28, 2019:

The following table summarizes selected items from the statement of operations for the three months ended February 29, 2020 and February 28, 2019.




                                     Three Months Ended
                               February 29,       February 28,      Increase /
                                   2020               2019          (Decrease)
Revenues                      $            -     $            -     $         -

Operating expenses:
General and administrative             3,142             88,448         (85,306 )
Rent expense, related party           45,000             48,479          (3,479 )
Professional fees                     15,250            101,100         (85,850 )
Total operating expenses:             63,392            238,027        (174,635 )

Operating loss                       (63,392 )         (238,027 )      (174,635 )

Total other income                  (116,311 )         (109,004 )         7,307

Net loss                      $     (179,703 )   $     (347,031 )   $  (167,328 )



Revenues

We have not generated any revenues to date.

General and Administrative Expenses

General and administrative expenses for the three months ended February 29, 2020 were $3,142, compared to $88,448 during the three months ended February 28, 2019, a decrease of $85,306, or 96%. The expenses consisted primarily of office, travel, compliance and business development expenses. General and administrative expense decreased during the current period due to decreased business development expenses.

Rent Expense, Related Party

Related party rent expense for the three months ended February 29, 2020 was $45,000, compared to $48,479 during the three months ended February 28, 2019, a decrease of $3,479, or 7%. Related party rent expense decreased slightly due to rent expense related to a small satellite office that was leased in the comparative period that is no longer rented by the Company.

Professional Fees

Professional fees for the three months ended February 29, 2020 were $15,250, compared to $101,100 during the three months ended February 28, 2019, a decrease of $85,850, or 85%. Professional fees decreased primarily due to cost savings related to transitioning to new compliance team members and reductions in fees paid to software developers during the current period.

Operating Loss

Our operating loss for the three months ended February 29, 2020 was $63,392, compared to $238,027 during the three months ended February 28, 2019, a decrease of $174,635, or 73%. Our operating loss decreased primarily due to cost savings related to reductions in business development fees, transitioning to new compliance team members and reductions in fees paid to software developers during the current period.






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Other Income (Expense)

Other expense, on a net basis, for the three months ended February 29, 2020 was $116,311, compared to other expense, on a net basis, of $109,004 during the three months ended February 28, 2019, an increase of $7,307, or 7%. Other expense consisted of $133,699 of interest expense on related party loans, as offset by $17,388 of interest income for the three months ended February 29, 2020. Other expense consisted of $131,850 of interest expense on related party loans, as offset by $22,846 of interest income for the three months ended February 28, 2019. Other expense, on a net basis, increased due to slightly increased interest expense and diminished interest income on cash balances.

Net Loss

Net loss for the three months ended February 29, 2020 was $179,703, compared to $347,031 during the three months ended February 28, 2019, a decrease of $167,217, or 48%. The decreased net loss was due to cost savings related to reductions in business development fees, transitioning to new compliance team members and reductions in fees paid to software developers during the current period.

Results of Operations for the Nine Months Ended February 29, 2020 and February 28, 2019:

The following table summarizes selected items from the statement of operations for the nine months ended February 29, 2020 and February 28, 2019.




                                     Nine Months Ended
                               February 29,      February 28,      Increase /
                                   2020              2019          (Decrease)
Revenues                      $            -     $           -     $         -

Operating expenses:
General and administrative             6,088           485,671        (479,583 )
Rent expense, related party          135,000           138,479          (3,479 )
Professional fees                    232,325           306,497         (74,172 )
Total operating expenses:            373,413           930,647        (557,234 )

Operating loss                      (373,413 )        (930,647 )      (557,234 )

Total other income                  (342,481 )        (369,019 )       (26,538 )

Net loss                      $     (715,894 )   $  (1,299,666 )   $  (583,772 )



Revenues

We have not generated any revenues to date.

General and Administrative Expenses

General and administrative expenses for the nine months ended February 29, 2020 were $6,088, compared to $485,671 during the nine months ended February 28, 2019, a decrease of $479,583, or 99%. The expenses consisted primarily of office, travel, compliance and business development expenses. General and administrative expense decreased during the current period due to decreased business development expenses.

Rent Expense, Related Party

Related party rent expense for the nine months ended February 29, 2020 was $135,000, compared to $138,479 during the nine months ended February 28, 2019, a decrease of $3,479, or 3%. Related party rent expense decreased slightly due to rent expense related to a small satellite office that was leased in the comparative period that is no longer rented by the Company.






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Professional Fees

Professional fees for the nine months ended February 29, 2020 were $232,325, compared to $306,497 during the nine months ended February 28, 2019, a decrease of $74,172, or 24%. Professional fees decreased primarily due to cost savings related to transitioning to new compliance team members and reductions in fees paid to software developers during the current period.

Operating Loss

Our operating loss for the nine months ended February 29, 2020 was $373,413, compared to $930,647 during the nine months ended February 28, 2019, a decrease of $557,234, or 60%. Our operating loss decreased primarily due to cost savings related to reductions in business development fees, transitioning to new compliance team members and reductions in fees paid to software developers during the current period.




Other Income (Expense)

Other expense, on a net basis, for the nine months ended February 29, 2020 was $342,481, compared to other expense, on a net basis, of $369,019 during the nine months ended February 28, 2019, a decrease of $26,538, or 7%. Other expense consisted of $401,714 of interest expense on related party loans, as offset by $59,233 of interest income for the nine months ended February 29, 2020. Other expense consisted of $423,015 of interest expense on related party loans, as offset by $53,996 of interest income for the nine months ended February 28, 2019. Other expense, on a net basis, decreased due to slightly decreased interest expense and increased interest income on cash balances.

Net Loss

Net loss for the nine months ended February 29, 2020 was $715,894 compared to $1,299,666 during the nine months ended February 28, 2019, a decrease of $583,772, or 45%. The decreased net loss was due to cost savings related to reductions in business development fees, transitioning to new compliance team members and reductions in fees paid to software developers during the current period.

Liquidity and Capital Resources

The following is a summary of the Company's cash flows used in operating, investing, and financing activities for the nine-month periods ended February 29, 2020 and February 28, 2019:




                                     2020            2019
Operating Activities              $ (259,298 )   $   (762,459 )
Investing Activities                       -         (432,200 )
Financing Activities                       -       (4,965,000 )

Net Increase (Decrease) in Cash $ (259,298 ) $ (6,159,659 )

Cash Flows from Operating Activities

We have not generated positive cash flows from operating activities. During the nine months ended February 29, 2020, net cash flows used in operating activities was $259,298. For the same period ended February 28, 2019, net cash flows used in operating activities was $762,459. The decrease in cash used in operating activities is primarily attributable to our decreased net loss.

Cash Flows from Investing Activities

During the nine months ended February 29, 2020, we did not use any cash in investing activities compared to $432,200 for the same period ended February 28, 2019. The decrease is attributable to investments made in intangible assets in the prior period that was not necessary in the current period.

Cash Flows from Financing Activities

For the nine months ended February 29, 2020, we did not use any cash in financing activities. For the nine months ended February 28, 2019, net cash used in financing activities was $4,965,000. In the comparative period, $35,000 was received by way of a loan from our sole officer, director and principal shareholder, and the Company repaid $5,000,000 on related party loans.






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Ability to Continue as a Going Concern

As of February 29, 2020, we had available cash of $4,249,099, current liabilities of $12,216,340 and had never generated any revenues. These conditions, among others, raise substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments that may result from the outcome of these uncertainties. Unless and until we begin to generate revenues and positive cash flow from our Platform or Megopoly game, as to which there is no assurance, we expect that working capital requirements will continue to be funded through cash on hand, related party loans and/or further issuances of other securities. There is no assurance that we will be able to meet our working capital requirement from these sources.

We have no lines of credit or other bank financing arrangements. To date, we have been wholly dependent upon our CEO and majority shareholder, Mr. Pei, and his affiliated companies, to provide financing to us, generally in the form of convertible loans. Additional issuances of equity or convertible debt securities will result in dilution to our current shareholders. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, and we might be unable to continue in business.

Material Commitments

As of the date of this Quarterly Report, we do not have any material commitments.

Purchase of Significant Equipment

We do not have any agreements at this time, to purchase any significant equipment during the next twelve months.

Off-Balance Sheet Arrangements

As of the date of this Quarterly Report, we do not have any off-balance sheet arrangements that 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 are material to investors.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires our management to make assumptions, estimates and judgments that affect the amounts reported, including the notes thereto, and related disclosures of commitments and contingencies, if any. We have identified certain accounting policies that are significant to the preparation of our financial statements. These accounting policies are important for an understanding of our financial condition and results of operations. Critical accounting policies are those that are most important to the presentation of our financial condition and results of operations and require management's subjective or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Certain accounting estimates are particularly sensitive because of their significance to financial statements and because of the possibility that future events affecting the estimate may differ significantly from management's current judgments.

While our significant accounting policies are more fully described in notes to our consolidated financial statements appearing elsewhere in this Form 10-Q, we believe that the following accounting policies are the most critical to aid you in fully understanding and evaluating our reported financial results and affect the more significant judgments and estimates that we used in the preparation of our financial statements.

Concentrations of Credit Risk

The Company maintains our cash in bank deposit accounts, the balances of which at times may exceed federally insured limits. Accounts are guaranteed by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 under current regulations. The Company had approximately $3,999,199 and $4,258,497 in excess of FDIC insured limits at February 29, 2020 and May 31, 2019, respectively. The Company has not experienced any losses in such accounts.

Reclassifications

In the current period, the Company separately classified professional fees from general and administrative expenses in the Condensed Statement of Operations. For comparative purposes, amounts in the prior period have been reclassified to conform to the current period presentation. These reclassifications had no effect on previously reported results of operations.






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Software Development Costs

The Company expenses software development costs, including costs to develop software products or the software component of products to be sold, leased, or marketed to external users, before technological feasibility is reached. Technological feasibility is typically reached shortly before the release of such products. Software development costs also include costs to develop software to be used solely to meet internal needs and cloud-based applications used to deliver our services. The Company capitalizes development costs related to these software applications once the preliminary project stage is complete and it is probable that the project will be completed, and the software will be used to perform the function intended. Capitalization ends, and amortization begins when the product is available for general release to customers.

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