UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, DC 20549










FORM 10-Q/A
Amendment No. 1





xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





For the quarterly period ended April 30, 2009





Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12 b-2 of the Exchange Act)   Yes oNo x




Commission File Number 000-50560







UPSNAP, INC.


(Exact name of Registrant as specified in its charter)







Nevada
20-0118697(State or other jurisdiction of incorporation or organization)
(IRS Employer Identification No.)





c/o Duratech Group Inc.


2920 9th Avenue North


Lethbridge, Alberta, Canada T1H 5E4


(Address of principal executive offices)





(403) 320-1778


(Registrant's telephone number)








Check whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act during the past 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 o





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





Large Accelerated Filer o   Accelerated Filer o   Non-accelerated Filer o   Smaller Reporting Company x





Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):    Yes o   No x





State the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: October 30, 2009, 78,379,167shares.







UPSNAP, INC.
  Form 10-Q for the period ended April 30, 2009
  TABLE OF CONTENTS
  PagePART I - FINANCIAL INFORMATIONITEM 1 - FINANCIAL STATEMENTSConsolidated Balance Sheets as of April 30, 2009 (Unaudited) and January 31, 2009 (Audited)
3Consolidated Statement of Operations for the three-months ended April 30, 2009 and 2008 (Unaudited)
4Consolidated Statements of Cash Flows for the three-months ended April 30, 2009 (Unaudited) and the twelve-months ended January 31, 2009 (Audited)
5Notes to Financial Statements
6-16ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
17ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
19ITEM 4 (A) - CONTROLS AND PROCEDURES
19ITEM 4 (A)T – INTERNAL CONTROL OVER FINANCIAL REPORTING
19PART II - OTHER INFORMATIONITEM 1 - LEGAL PROCEEDINGS
20ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
20ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
20ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
20ITEM 5 - OTHER INFORMATION
20ITEM 6 - EXHIBITS
20SIGNATURES
21
  2
 Table of Contents


PART I – FINANCIAL INFORMATION
  ITEM 1.  FINANCIAL STATEMENTS
  UpSnap, Inc. F/K/A Duratech GroupInc.Consolidated Balance SheetAs of


As ofApril 30, 2009


January 31, 2009ASSETS

(Unaudited)


(Audited)CURRENT ASSETSCash and Cash Equivalents

$
-


$
-Accounts Receivable


1,345,575



812,355Deposits/Holdback


71,279



117,973Inventory


2,136,512



1,947,581TOTAL CURRENT ASSETS


3,553,366



3,542,131OTHER ASSETS


323,882



365,934PROPERTY, PLANT, AND EQUIPMENT, NET


659,917



638,305TOTAL ASSETS

$
4,537,165


$
3,882,148LIABILITIES AND STOCKHOLDERS' EQUITY/(DEFICIT)LIABILITIESCURRENT LIABILITIES:Bank Overdraft

$
303,643


$
319,263Notes Payable, current


1,929,173



2,136,664Due to related party, current


64,167



70,308Accounts Payable and Accrued Liabilities


1,488,224



961,195Customer Deposits


1,192,681



273,289TOTAL LIABILITIES


4,977,888



3,760,719STOCKHOLDERS' EQUITY/(DEFICIT)Common Stock ($.001 par value, 97,500,000 authorized;
75,224,676 issued and outstanding)


75,225



75,225Paid in Capital


1,450,871



1,403,688Accumulated Other Comprehensive Income


100,474



109,209Retained Earnings/(Accumulated Deficit)


(2,067,293
)


(1,466,693
)TOTAL STOCKHOLDERS' EQUITY/(DEFICIT)


(440,723
)


121,429TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY/(DEFICIT)

$
4,537,165


$
3,882,148


The accompanying notes are an integral part of these financial statements.
  3
 Table of Contents
  UpSnap, Inc. F/K/A Duratech Group Inc.Consolidated Statement of Operations
(Unaudited)For the three months
ended April 30,2009


2008SALES AND COST OF SALESSales

$
800,910


$
1,529,447Cost of Sales (excluding depreciation)


796,070



1,093,739EXPENSESSelling, general and administrative


207,724



166,183Payroll Expense


239,956



213,042Bad Debt Expense


-



-Depreciation


28,280



-TOTAL EXPENSES


475,960



379,225Net Income/(Loss) from Operations


(471,120
)


56,483OTHER INCOME/(EXPENSE)Other Income


-



-Interest Expense


(85,224
)


(40,226
)Interest Income


-



-NET OTHER INCOME/(EXPENSE)


(85,224
)


(40,226
)NET INCOME/(LOSS) FROM CONTINUED OPERATIONS


(556,344
)


16,257OTHER COMPREHENSIVE INCOME (LOSS)Foreign Currency Translation Gain/(Loss)


(8,735
)


(5
)COMPREHENSIVE INCOME (LOSS)


(565,079
)


16,252Net (Loss) per share—basic and fully-diluted


(0.01
)


(0.08
)Weighted average shares outstanding


75,224,676



195,514
  The accompanying notes are an integral part of these financial statements.
  4
 Table of Contents
 UpSnap Inc. F/K/A Duratech Group, Inc.Consolidated Statements of Cash FlowsFor three-months ended April 30
2009


For year
ended Jan. 31
2009(Unaudited)


(Audited)CASH FLOWS FROM OPERATING ACTIVITIES:Net Income/(loss) from continued operations

$
(556,334
)

$
(1,050,993
)Adjustments to reconcile net loss to net cash provided by (used in)operating activities:Depreciation


28,280



124,397Bad Debt Expense


-



62Changes in Assets and Liabilities:(Increase)/Decrease in Accounts Receivable


(533,220
)


(345,833
)(Increase)/Decrease in Accounts Receivable--Related Party


-



89,289(Increase)/Decrease in Deposits/Holdbacks


46,694



(117,973
)(Increase)/Decrease in Inventories


(188,931
)


23,236Increase/(Decrease) in Accounts Payable and Accrued Expenses


529,946



670,714Increase/(Decrease) In Customer Deposits


919,392



219,607NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES


245,827



(387,494
)CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of Property, Plant, and Equipment


(7,840
)


(46,867
)NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES


(7,840
)


(46,867
)CASH FLOWS FROM FINANCING ACTIVITIES:Proceeds/(Payment) of Notes Payable


(207,491
)


539,340Proceeds/(Payment) of Shareholder Loans


-



-Proceeds from Long-term Debt


-



-Increase/(decrease) in Due to related party


(6,141
)


-Proceeds/(Payment) of Bank Overdraft


(15,620
)


(220,056
)Proceeds/(Payment) from Share Redemption


-



-Payment for Structures Acquisition


-



-NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES


(229,252
)


319,284EFFECT OF EXCHANGE RATE CHANGES ON CASH


(8,735
)


115,077NET INCREASE IN CASH ANDCASH EQUIVALENTS


-



-CASH AND CASH EQUIVALENTS:Beginning of Period


-



-End of Period

$
-


$
-SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:CASH PAID DURING THE PERIOD FOR:Interest

$
85,224


$
277,653Taxes

$
-


$
-NON-CASH FINANCING ACTIVITIESIssuance of shares for Land/Equipment


-



431,653Conversion of Due to related party to Equity


-



592,435Conversion of Duratech Stock for UpSnap Stock


-



459,209
  The accompanying notes are an integral part of these financial statements.
  5
 Table of Contents
  UPSNAP, INC. F/K/A Duratech Group Inc.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE THREE MONTHS ENDED APRIL 30, 2009 AND 2008
 (Unaudited)
 NOTE A—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 Organization and Nature of Business—UpSnap, Inc. (“UpSnap” or “the Company”) was incorporated on July 24, 2003 under the laws of the State of Nevada.  The Company was a Development Stage Company, as defined by the
Statement of Financial Accounting Standard (“SFAS”) No. 7 “Accounting and Reporting by Development Stage Enterprises.”
 
 On August 29, 2008, UpSnap Inc. (the “Company”) entered into a Share Exchange Agreement (the “Share Exchange Agreement”) by and among the Company; Tony Philipp, an officer, director and shareholder of the Company (“Philipp”); Duratech Group Inc., an Alberta, Canada corporation (“Duratech”)
and the shareholders of Duratech (“Duratech Shareholders”), including Peter van Hierden, a citizen of Alberta, Canada and owner directly or indirectly of approximately 96% of the share capital of Duratech (“van Hierden”).
 
 Upon closing of the share exchange transaction (the “Share Exchange”) on September 17, 2008, the Duratech Shareholders transferred all of their shares of common stock in Duratech to the Company in exchange for an agreement to issue to them an aggregate of 50,349,342 shares of Common Stock of the Company, resulting in Duratech
becoming a majority owned subsidiary of the Company.
 
 After the consummation of the transactions contemplated by the Share Exchange Agreement, the Company, on the day after the Closing Date, consummated the sale of its assets related to its mobile information search services, subject to assumption and payment of all of the Company’s liabilities related to periods prior to the closing,
to UpSnap Services, LLC, a North Carolina limited liability corporation (“UpSnap Services”), which is owned by Philipp, pursuant to an Asset Purchase Agreement dated as of August 29, 2008 (the “Asset Purchase Agreement”). As part of the reverse merger, the Company will cease engaging in the mobile information search services business.
  UpSnap, Inc.’s principal operations following the reverse-merger are conducted through Duratech Group Inc. (previously named Duratech Contracting Inc.).  Prior to the date of the reverse-merger, the historical financial statements only include the historical results and operations of Duratech Group,
Inc. (the accounting acquirer). Duratech commenced operations on December 18, 2002 as a small homebuilding company constructing about five homes a year until Peter van Hierden (“van Hierden”) bought out the majority partners and took control of the operations in July, 2007.  Shortly thereafter, Mr. van Hierden identified a synergistic opportunity to acquire a modular oil camp factory which was also in distress and acquired the company in July, 2007.  Since that time management
has been able to turn both these operations around and now seeks to grow the company organically and through additional acquisitions.
  Duratech’s principle operations are building manufactured and stick-built homes and modular oil camps in Alberta and Saskatchewan, Canada.
  Duratech manufactures and builds homes and modular camp sites for its marketplace, principally Alberta and Saskatchewan.  The Company has three principal products that it offers: first, the company builds on-site conventional homes; second, the company builds ready-to-move (RTM) homes in factories and brings
them on foundations to sell to end users; and third, the company builds modular camp sites for the oil mining industry.
 On July 1, 2007, Duratech Contracting Inc. acquired Duratech Structures Inc. (Previously known as Jobsite Structures). On July 28, 2008, Duratech Contracting Inc. changed its name to become Duratech Group Inc.
 
 Cash and Cash Equivalents—For purposes of the Consolidated Statement of Cash Flows, the Company considers liquid investments with an original maturity of three months or less to be cash equivalents.
 
 Management’s Use of Estimates—The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.
 
 Presentation and Foreign Currency Translation—These consolidated financial statement have been prepared in accordance with US generally accepted accounting principles (GAAP) and translated into U.S dollars. The prevailing exchange rate used to translate
the Canadian dollars to U.S dollars at April 30, 2009 and January 31, 2009 was 0.8384 and .0.81248, respectively. The average for the quarter ending April 30, 2009 and 2008 was 0.82544 and 0.9957, respectively.
  Assets and liabilities denominated in respective functional currencies are translated into United States Dollars at the exchange rate as of the balance sheet date.  The share capital and retained earnings are translated at exchange rates prevailing at the time of the transactions.  Revenues, costs, and expenses denominated
in respective functional currencies are translated into United States Dollars at the weighted average exchange rate for the period.  The effects of foreign currencies translation adjustments are included as a separate component of accumulated other comprehensive income.
  6
 Table of Contents
 UPSNAP, INC. F/K/A Duratech Group Inc.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE THREE MONTHS ENDED APRIL 30, 2009 AND 2008
 (Unaudited)
 
 NOTE A—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
 
 Revenue Recognition— Revenues from long-term construction contracts (over one year) of the Duratech Contracting division, which builds on-site conventional homes, are recognized using the percentage-of-completion method. Revenues from short-term contracts of
the Duratech Structures division, which builds ready-to-move homes and modular camp sites, are recognized as the work is performed and related costs are incurred. Contract costs include all direct materials and labor costs and those indirect costs related to contract performance, such as indirect labor, supplies, tools, and repair costs. General and administrative costs are charged to expense as incurred.
  As a result of the global economic environment and decrease in natural resource prices, demand for on-site conventional homes (long-term construction contracts) have slowed slightly and prices have decreased up to 10% in some markets.  In regards to short-term contracts, the Company has found continued demand for ready-to-move (RTM)
homes and a moderation of demand for modular camp sites for the oil mining industry.  The Company expects demand for modular camp sites to accelerate with any increase in natural resource prices, principally oil and natural gas.
 
 Revenue and all related costs and expenses from house and land sales are recognized at the time that closing has occurred, when title and possession of the property and the risks and rewards of ownership transfer to the buyer, and we do not have a substantial continuing involvement in accordance with SFAS No. 66, “Accounting
for Sales of Real Estate”(“SFAS 66”). In order to properly match revenues with expenses, we estimate construction and land development costs incurred and to be incurred, but not paid at the time of closing. Estimated costs to complete are determined for each closed home and land sale based upon historical data with respect to similar product types and geographical areas and allocated to closings along with actual costs incurred based on a relative sales value approach. We monitor the
accuracy of estimates by comparing actual costs incurred subsequent to closing to the estimate made at the time of closing and make modifications to the estimates based on these comparisons.
 
 Revenue is recognized for long-term construction contract sales on the percentage-of-completion method when the land sale takes place prior to all contracted work being completed. Pursuant to the requirements of SFAS 66, if the seller has some continuing involvement with the property and does not transfer substantially all of the risks
and rewards of ownership, profit shall be recognized by a method determined by the nature and extent of the seller’s continuing involvement. In the case of our land sales, this involvement typically consists of final development activities. We recognize revenue and related costs as work progresses using the percentage-of-completion method, which relies on estimates of total expected costs to complete required work. Revenue is recognized in proportion to the percentage of total costs incurred in relation
to estimated total costs at the time of sale. Actual revenues and costs to complete construction in the future could differ from our current estimates. If our estimates of development costs remaining to be completed and relative sales values are significantly different from actual amounts, then our revenues, related cumulative profits and costs of sales may be revised in the period that estimates change.
 
 Comprehensive Income (Loss)—The Company adopted Financial Accounting Standards Board Statement of Financial Accounting Standards (SFAS) No. 130, “Reporting Comprehensive
Income,” which establishes standards for the reporting and display of comprehensive income and its components in the consolidated financial statements.  The other comprehensive income (loss) applicable to the Company during the periods covered in the consolidated financial statements were foreign currency translation gains/(loss).
  Cash and Bank Overdraft—Cash consists of cash, cash equivalents and checks issued in excess of cash on deposit. Cash is put in the Bank account which has a negative balance. For the purpose of the cash flow statement, Bank overdrafts are also classified
as cash.
 
 Advertising Costs—Advertising costs are expensed as incurred.  For the quarter ended April 30, 2009 and 2008, the company incurred $8,460 and $0 respectively.
 
 Net Loss per Common Share—Statement of Financial Accounting Standard (SFAS) No. 128 requires dual presentation of basic and diluted earnings per share (EPS) with a reconciliation of the numerator and denominator of the EPS computations.  Basic
earnings per share amounts are based on the weighted average shares of common stock outstanding.  If applicable, diluted earnings per share would assume the conversion, exercise or issuance of all potential common stock instruments such as options, warrants and convertible securities, unless the effect is to reduce a loss or increase earnings per share.  Accordingly, this presentation has been adopted for the period presented.  There were no adjustments required to net loss for the
period presented in the computation of diluted earnings per share.
 
 Income Taxes—Income taxes are provided in accordance with Statement of Financial Accounting Standards (SFAS) No. 109, “Accounting for Income Taxes.”A deferred tax asset
or liability is recorded for all temporary differences between financial and tax reporting and net operating loss-carryforwards.
 
 Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that, and some portion or the entire deferred tax asset will not be realized.  Deferred tax assets and liabilities are adjusted for the effect of changes in tax laws and rates on the date of enactment.
  7
 Table of Contents
 UPSNAP, INC. F/K/A Duratech Group Inc.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE THREE MONTHS ENDED APRIL 30, 2009 AND 2008
 (Unaudited)
  NOTE A—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
 
 Fair Value of Financial Instruments—The carrying amounts reported in the consolidated balance sheet for cash, accounts receivable and payable approximate fair value based on the short-term maturity of these instruments.
  Accounts Receivable— Accounts deemed uncollectible are written off in the year they become uncollectible.  For the quarters ended April 30, 2009 and 2008, no amounts were deemed uncollectible as of April 30, 2009.  Outstanding Accounts
Receivable as of April 30, 2009 was $1,345,575.  Typical payment terms for short-term contracts are 30% down, 60% upon completion and 10% holdback to be released once the structure is on-site and attached.  Typical payment terms for stick-built homes (long-term construction contracts) are four draws from bank upon completion of backfill, lockup, ready-to-paint and at completion and a 10% holdback is held for 45 days to allow for builder liens by lawyer.  Accounts receivable are considered
current as long as there is reasonable expectation that payments will be made as agreed upon or otherwise negotiated, but in no event longer than 12 months.  The Company evaluates collectability based on receiving payments as agreed upon or as otherwise negotiated.
 
 Impairment of Long-Lived Assets— Using the guidance of Statement of Financial Accounting Standards (SFAS) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” the
Company reviews the carrying value of property, plant, and equipment for impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of assets. The factors considered by management
in performing this assessment include current operating results, trends and prospects, the manner in which the property is used, and the effects of obsolescence, demand, competition, and other economic factors.
 
 Inventory—Inventory is stated at the lower of accumulated cost or fair value, as determined in accordance with Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long Lived Assets” (“SFAS
144”). Accumulated cost includes costs associated with land acquisition, land development, and home construction costs, including certain direct and indirect overhead costs related to development and construction. Land acquisition and development costs are allocated to individual lots using actual lot cost determined based on the total expected land acquisition and development costs and the total expected home closings for the project. The specific identification method is used to accumulate home construction
costs.
 
 Cost of sales includes the construction cost of the home, the actual lot cost for the home or project, and commissions and closing costs applicable to the home. The construction cost of the home includes amounts paid through the closing date of the home.  Any costs incurred but not yet paid are expensed as incurred and are typically
very nominal in nature because the construction projects have been completed before recorded as sales.  The construction cycles for the long-term construction projects (stick-built homes) are approximately one year and for the short-term construction projects (modular and ready-to-move homes) are approximately two to three months.
 
 For those projects for which construction and development activities have been idled for an extended period of time, longer than three months, an impairment analysis will be performed to determine if an adjustment may be necessary.  If the fair market value of a home (based on comparable units in the market) is less than its cost,
this would suggest impairment and an appropriate adjustment would be made.  Recent market activity has shown that such fair market value estimates are not very sensitive or subjective.  These analyses are performed on a regular basis and confirmed before filing documents with the Commission.
 
 Property and Equipment—Property and equipment is stated at cost.  Depreciation is provided by the straight-line method over the estimated economic life of the property and equipment.  The following table shows the estimated useful
life used for each class of fixed asset:
 
 Asset
Estimated Useful LifeBuildings
25
yearsShed
10
yearsTools and Equipment
5
yearsSmall tools and equipment
4
yearsComputer and Office Equipment
3
yearsAutomobiles
3
yearsLeasehold Improvements
5
yearsComputer Hardware
2.5
years
 
 The estimated annual depreciation expense is $124,397 per year.  Total depreciation expense for the year ended January 31, 2009 and the quarter ended April 30, 2009 were $124,397 and 28,280 respectively.
 8
 Table of Contents
 UPSNAP, INC. F/K/A Duratech Group Inc.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE THREE MONTHS ENDED APRIL 30, 2009 AND 2008
 (Unaudited)
 NOTE A—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
 
 Customer Deposits—The cash deposit received from customers when project in progress are shown in the balance sheet as current liabilities and apply against the revenue expected from customers when the project is terminated and the customers are billed.
The deposit is without interest.
  Deposits/Holdback—The deposits referenced under Deposits/Holdbacks are land deposits for future development that are refundable and not deposits from customers for home construction.  The holdbacks included under Deposits/Holdback
are deficiency holdbacks that are held by the closing attorney on a completed project until it’s determined that there will not be any further claims by sub-contractors on the project.
  Recent Accounting Pronouncements—In February 2007, the FASB issued Statement of Financial Accounting Standards No. 159, “The Fair Value for Financial Assets and Financial Liabilities—including an amendment of FASB
Statement No. 115.”  This statement permits entities to choose to measure many financial instruments and certain other items at value.  The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions.  This Statement is expected to expand the use of fair value measurement, which is consistent
with the Board’s long-term measurement objectives for accounting for financial instruments.  Effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007. Early adoption is permitted as of the beginning of a fiscal year that begins on or before November 15, 2007, provided the entity also elects to apply the provisions of FASB Statement No. 157, Fair Value Measurements. No entity is permitted to
apply the Statement retrospectively to fiscal years preceding the effective date unless the entity chooses early adoption. The Company has adopted these pronouncements and determined that it had no effect on the Company’s results of operations or its financial position.
  In December 2007, the FASB issued SFAS 141(revised 2007), Business Combinations (“SFAS 141R”). SFAS 141R will significantly change the accounting for business combinations in a number of areas including the treatment of contingent consideration, contingencies, acquisition costs, IPR&D and restructuring costs.
In addition, under SFAS 141R, changes in deferred tax asset valuation allowances and acquired income tax uncertainties in a business combination after the measurement period will impact income tax expense. SFAS 141R is effective for fiscal years beginning after December 15, 2008.   Adoption of this standard is not expected to have a material effect on the Company’s results of operations or its financial position.
 
 In December 2007, the FASB issued SFAS 160, Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51 (“SFAS 160”). SFAS 160 will change the accounting and reporting for minority interests, which will be recharacterized as noncontrolling interests (NCI) and classified as a
component of equity. This new consolidation method will significantly change the account with minority interest holders. SFAS 160 is effective for fiscal years beginning after December 15, 2008. Adoption of this standard is not expected to have a material effect on the Company’s results of operations or its financial position.
 
 In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities — an amendment to FASB Statement No. 133.” SFAS No. 161 is intended to improve financial standards for derivative instruments and hedging activities by requiring enhanced disclosures to enable
investors to better understand their effects on an entity’s financial position, financial performance, and cash flows. Entities are required to provide enhanced disclosures about: (a) how and why an entity uses derivative instruments; (b) how derivative instruments and related hedged items are accounted for under Statement 133 and its related interpretations; and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and
cash flows. It is effective for financial statements issued for fiscal years beginning after November 15, 2008, with early adoption encouraged. The adoption of this statement, which is expected to occur in the first quarter of 2009, is not expected to have a material effect on the Company’s financial statements.
 
 In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles.” SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements of nongovernmental entities that are presented in conformity
with generally accepted accounting principles in the United States. It is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, “The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles.” The adoption of this statement is not expected to have a material effect on the Company’s financial statements.
 
 In May 2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee Insurance Contracts — An interpretation of FASB Statement No. 60.” SFAS No. 163 requires that an insurance enterprise recognize a claim liability prior to an event of default when there is evidence that credit deterioration
has occurred in an insured financial obligation. It also clarifies how Statement No. 60 applies to financial guarantee insurance contracts, including the recognition and measurement to be used to account for premium revenue and claim liabilities, and requires expanded disclosures about financial guarantee insurance contracts. It is effective for financial statements issued for fiscal years beginning after December 15, 2008, except for some disclosures about the insurance enterprise’s risk-management
activities. SFAS No. 163 requires that disclosures about the risk-management activities of the insurance enterprise be effective for the first period beginning after issuance. Except for those disclosures, earlier application is not permitted.
  The adoption of this statement is not expected to have a material effect on the Company’s financial statements.
  9
 Table of Contents
 UPSNAP, INC. F/K/A Duratech Group Inc.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE THREE MONTHS ENDED APRIL 30, 2009 AND 2008
 (Unaudited)
 
 NOTE B—SUPPLEMENTAL CASH FLOW INFORMATION
 
 Supplemental disclosures of cash flow information for the quarter ended April 30, 2009 and year ended January 31, 2009 is summarized as follows:
  Cash paid during the years for interest and income taxes:
 
 April 30,
2009


Jan, 31
2009Interest

$
85,224


$
277,653Income Taxes

$
-


$
-
  NOTE C—PROPERTY AND EQUIPMENT
 
 Property and equipment consisted of the following as of January 31, 2009:
 
 Asset

Cost


Accumulated Depreciation


Net Book ValueLand

$
32,855


$
-


$
32,855Buildings


69,088



6,660



62,428Tools and Equipment


457,908



72,045



385,863Small Tools and Equipment


19,294



9,878



9,416Computer and Office Equipment


47,002



22,473



24,529Automobiles


97,485



55,486



41,999Leasehold Improvements


99,752



18,537



81,215$
823,384


$
185,079


$
638,305
 
 One half of the depreciation is used in the year of acquisition.
 
 NOTE D—INCOME TAXES
 
 Due to the prior years’ operating losses and the inability to recognize an income tax benefit therefrom, there is no provision for current or deferred federal or state income taxes or Canadian taxes for the year ended January 31, 2009.  Deferred income taxes reflect the net tax effects of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and the amount used for federal and state income tax purposes.
 
 For the twelve month periods ended September 30, 2008 and 2007, prior to the reverse-merger with Duratech, the Company incurred net operation losses and accordingly, no provision for income taxes has been recorded.  In addition, no benefit for income taxes has been recorded due to the uncertainty of the realization of any tax
assets.  For the period ending September 30, 2008, the Company had additional net operating loss carry-forward for its operations through September 17 prior to the completion of its share exchange agreement with Duratech.  The figures here reflect an estimate of those net operating loss carry-forward (see the Company’s 10-QSB for the period ending June 30, 2008 filed on August 13, 2008 for additional information).  Thus, at September 30, 2008, the Company had approximately
$8,881,662 of accumulated net operating losses.  The net operating loss carry-forwards, if not utilized, will begin to expire in 2022.
 
 The components of the Company’s deferred tax asset are as follows:
  Twelve Month Period
Ended September 30


Twelve Month Period
Ended September 302008


2007Federal and state income tax benefit

$
5,909,622


$
1,040,214Change in valuation allowance on deferred tax assets


(5,909,622
)


(1,040,214
)Net deferred tax assets

$
-


$
-
  10
 Table of Contents
 UPSNAP, INC. F/K/A Duratech Group Inc.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE THREE MONTHS ENDED APRIL 30, 2009 AND 2008
 (Unaudited)
 
 NOTE D—INCOME TAXES (CONTINUED)
 
 A reconciliation between the amounts of income tax benefit determined by applying the applicable U.S. and State statutory income tax rate to pre-tax loss is as follows:
  Twelve Month Period
Ended September 30


Twelve Month Period
Ended September 302008


2007Federal and state statutory rate

$
5,909,622


$
1,040,214Change in valuation allowance on deferred tax assets


(5,909,622
)


(1,040,214
)$
-


$
-
 
 The reconciliation of income taxes computed at the federal statutory income tax rate to total income taxes for the year ended September 30, 2008 is as follows:
 
 2008


2007Income tax computed at the federal statutory rate


34
%


34
%State income tax, net of federal tax benefit


0
%


0
%Total


34
%


34
%Valuation allowance


-34
%


-34
%Total deferred tax asset


0
%


0
%
 
 The Company’s principle subsidiary (Duratech Group Inc.) is subject to income taxes on income arising in or derived from the tax jurisdiction in which it is domiciled and operates (Canada).  However, because of the Company’s lack of earnings history, the deferred tax asset has been fully offset by
a valuation allowance.  The valuation allowance increased (decreased) by $1,050,993 and $98,867 for the year ended January 31, 2009 and 2008 respectively.
 
 The components of Company’s estimated deferred tax asset, calculated using federal and state effective tax rates, as of January 31, 2009 and 2008 are as follows:
  Twelve Month Period
Ended January 31


Twelve Month Period
Ended January 312009


2008Federal and state income tax benefit

$
1,050,993


$
98,867Change in valuation allowance on deferred tax assets


(1,050,993
)


(98,867
)Net deferred tax assets

$
-


$
-
  As of January 31, 2009, the Company had Canadian net operating loss carryforwards of approximately $1,372,058 which will expire at various times through the year 2028.
  NOTE E—NOTES PAYABLE
  Description
Rate

BalanceNote due September 30, 2017
prime rate plus 1.5%

$
283,196Note due June 30, 2009
prime rate plus 2%

$
188,879Demand Note
Vary 8-18%

$
153,670Demand Note
Vary 8-18%

$
942,916Residential Line of Credit a
Vary 6-8%

$
360,512$
1,929,173a This is a residential loan line of credit. Progress loans are available upon satisfactory inspection
 There are no covenants associated with the above debt arrangements.
  11
 Table of Contents
  UPSNAP, INC. F/K/A Duratech Group Inc.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE THREE MONTHS ENDED APRIL 30, 2009 AND 2008
 (Unaudited)
  NOTE F—FINISHED GOODS AND WORK IN PROGRESS INVENTORY
 
 Land (finished goods) and residential spec home inventory is valued at the lower of cost and net realizable value with the cost being determined on an actual cost basis. Presold residential homes in work in Progress are recorded at the actual expenses incurred to date.
 
 Raw materials inventory is stated at the lowest cost, on first-in, first-out basis, and net realizable value. Periodic inventory method is used for it evaluation.
 
 Inventories are as follows:Raw Materials

$
68,391Work in Progress

$
1,607,873Finished Goods

$
460,248$
2,136,512
 
 NOTE G—SEGMENT REPORTING
 
 The Company has two reportable segments—Duratech Structures, Inc. and Duratech Contracting, Inc.
 
 The Net Sales and Profit/(Loss) by Segment for the year endedApril 30, 2009 are as follows:
 
 Net Sales by Segment

For the quarter ended April 30, 2009Duratech Structures, Inc.


Duratech Contracting, Inc.


TotalsSales, net

$
212,515


$
588,395


$
800,910Cost of Sales (excluding depreciation)


266,937



529,133



796,070Profit/(Loss) by Segment

For the quarter ended April 30, 2009Duratech Structures, Inc.


Duratech Contracting, Inc.


TotalsNet Operating Profit/(Loss)

$
(210,175
)

$
(346,169
)

$
(556,344
)
 The Net Sales and Profit/(Loss) by Segment for the year endedApril 30, 2008 are as follows:
 
 Net Sales by Segment

For the quarter ended April 30, 2008Duratech Structures, Inc.


Duratech Contracting, Inc.


TotalsSales, net

$
617,957


$
911,490


$
1,529,447Cost of Sales (excluding depreciation)


405,901



687,838



1,093,739Profit/(Loss) by Segment

For the quarter ended April 30, 2008Duratech Structures, Inc.


Duratech Contracting, Inc.


TotalsNet Operating Profit/(Loss)

$
(48,778
)

$
65,035


$
16,257
  12
 Table of Contents
 UPSNAP, INC. F/K/A Duratech Group Inc.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE THREE MONTHS ENDED APRIL 30, 2009 AND 2008
 (Unaudited)
  NOTE G—SEGMENT REPORTING (CONTINUED)
 Total Assets by Segment as ofApril 30, 2009 andJanuary 31, 2009are
as follows:
 
 Total Assets by Segment

For the period ended April 30, 2009Duratech Structures, Inc.


Duratech Contracting, Inc.


TotalsTotal Assets

$
2,122,135


$
2,415,030


$
4,537,165
  Total Assets by Segment

For the year ended January 31, 2009Duratech Structures, Inc.


Duratech Contracting, Inc.


TotalsTotal Assets

$
1,034,908


$
2,847,240


$
3,882,148
 
 The accounting policies used for segment reporting are the same as those described in Note A “Summary of Significant Accounting Policies.”
 
 NOTE H—EQUITY
 
 OUTSTANDING SHARE DATA
 
 The outstanding share data as at April 30, 2009 and January 31, 2009 is as follows:
  Number of shares
outstanding2009Common shares


75,224,676Options to purchase common shares


21,520,334Warrants to purchase common shares


2,360,000Debentures convertible to common shares


-Accrued interest convertible to common shares


-
  Shares Issued from Share Exchange Agreement
 
 The following common shares were issued to Duratech Shareholders following the closing of the Share Exchange Agreement on September 17, 2008:
  Janet van Hierden


6,387,729Jason van Hierden


580,703Peter van Hierden


41,255,711Brendon van Hierden


116,141George Sawatzky


2,009,058Total


50,349,342
  Stock Plan
  On November 2, 2006 the Board of Directors of UpSNAP, Inc. approved a 2006 Omnibus Stock and Incentive Plan. The Plan made four million (4,000,000) shares, either unissued or reacquired by the Company, available for awards of either options, stock appreciation rights, restricted stocks, other stock grants, or any combination thereof. Eligible
recipients include employees, officers, consultants, advisors and directors. Options granted generally have a ten-year term and vest over four years from the date of grant. Certain of the stock options granted under the Plan have been granted pursuant to various stock option agreements. Each stock option agreement contains specific terms. The Board of Directors increased the size of the Plan to seven and one half million (7,500,000) total shares on August 8, 2007, which was ratified by stockholders in September
2007.
 
 Stock-Based Compensation
 
 Under the fair value recognition provisions of SFAS No. 123(R), stock-based compensation cost is estimated at the grant date based on the fair value of the award and is recognized as expense over the requisite service period of the award. The Company has awarded stock-based compensation both as restricted stock and stock options.
 
 We use the Black-Scholes option valuation model to value option awards under SFAS No. 123(R). The Company currently has awards outstanding with only service conditions and graded-vesting features. We recognize compensation cost on a straight-line basis over the requisite service period.
  13
 Table of Contents
 UPSNAP, INC. F/K/A Duratech Group Inc.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE THREE MONTHS ENDED APRIL 30, 2009 AND 2008
 (Unaudited)
  NOTE H—EQUITY (CONTINUED)
  Time-Based Stock Awards
  The fair value of each time-based award is estimated on the date of grant using the Black-Scholes option valuation model, which uses the assumptions described below. Our weighted-average assumptions used in the Black-Scholes valuation model for equity awards with time-based vesting provisions granted during the quarter ended April 30, 2009
are shown in the following table:
  Expected volatility
70.0%Expected dividends
0%Expected terms
6.0-6.25 yearsPre-vesting forfeiture rate
50%Risk-free interest rate
4.45%-4.76%
  The expected volatility rate was estimated based on historical volatility of the Company’s common stock over approximately the seventeen month period since the reverse merger and comparison to the volatility of similar size companies in the similar industry. The expected term was estimated based on a simplified method, as allowed
under SEC Staff Accounting Bulletin No. 107, averaging the vesting term and original contractual term. The risk-free interest rate for periods within the contractual life of the option is based on U.S. Treasury securities. The pre-vesting forfeiture rate was based upon plan to date experience. As required under SFAS No. 123(R), we will adjust the estimated forfeiture rate to our actual experience. Management will continue to assess the assumptions and methodologies used to calculate estimated fair value
of share-based compensation. Circumstances may change and additional data may become available over time, which could result in changes to these assumptions and methodologies, and thereby materially impact our fair value determination.
  A summary of the time-based stock awards as of April 30, 2009, and changes during the quarter ended April 30, 2009, is as follows:
 Shares


Weighted
Average
Exercise PriceOutstanding at June 30, 2008


2,570,000


$
0.10Granted (part of Share Exchange Agreement)


18,950,334


$
0.05Forfeited or expired


-


$
-Outstanding April 30, 2009


21,520,334


$
0.056Exercisable at April 30, 2009


2,570,000


$
0.10
 
 The following tables summarize information about fixed stock options outstanding and exercisable at April 30, 2009:
  Stock Options OutstandingRange of Exercise Prices

Number of
Shares
Outstanding

Weighted
Average
Contractual Life
in Years$0.10

700,000

8.00$0.10

170,000

9.09$0.10

1,700,000

9.17$0.10

18,950,334

9.4221,520,334

9.35Stock Options ExercisableRange of Exercise Prices

Number of
Shares
Exercisable

Weighted
Average
Exercise Price$0.10

2,570,000

$0.10$0.016 – 0.125

18,950,334

$0.0521,520,334
  14
 Table of Contents
  UPSNAP, INC. F/K/A Duratech Group Inc.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE THREE MONTHS ENDED APRIL 30, 2009 AND 2008
 (Unaudited)
 
 NOTE H—EQUITY (CONTINUED)
  The exercise price of stock options granted during the period ended April 30, 2009 was equal to the market price of the underlying common stock on the grant date.
 
 There was no aggregate intrinsic value as of April 30, 2009. Intrinsic value represents the pretax value (the period’s closing market price, less the exercise price, times the number of in-the-money options) that would have been received by all option holders had they exercised their options at the end of the
period.
 
 Warrants
 
 The Company has recorded the warrant instruments as equity in accordance with SFAS No. 133, Accounting for Derivative Instruments and Hedging Activity, paragraph 11(a), and EITF 00-19, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company's Own Stock.
  A summary of warrant activity for the period ended April 30, 2009 is as follows:
  Series BNumber of
Warrants


Weighted-
Average
Exercise
Price


Warrants
Exercisable


Weighted-
Average
Exercise
PriceOutstanding, January 31, 2009


1,800,000


$
1.10



1,800,000


$
1.10Granted


-Expired


-Exercised


-



-







-Outstanding, April 30, 2009


1,800,000


$
1.10



1,800,000


$
1.10
  Number of
Warrants


Weighted-
Average
Exercise
Price


Warrants
Exercisable


Weighted-
Average
Exercise
PriceOutstanding, January 31, 2009


560,000


$
0.90



560,000


$
0.90Granted


-Exercised


-Outstanding, April 30, 2009


560,000


$
0.90



560,000


$
0.90
  At April 30, 2009, the range of warrant prices for shares under warrants and the weighted-average remaining contractual life is as follows:
  Warrants Outstanding


Warrants ExercisableRange of
Warrant
Exercise Price


Number of
Warrants


Weighted-
Average
Exercise
Price


Weighted-
Average
Remaining
Contractual
Life


Number
Of
Warrants


Weighted-
Average
Exercise Price$
1.10



1,800,000


$
1.10



2.53



1,800,000


$
1.10$
0.90



560,000


$
0.90



2.62



560,000


$
0.902,360,000











2,360,000
  The Company may from time to time reduce the exercise price for any of the warrants either permanently or for a limited period or extend their expiration date.
  15
 Table of Contents
 UPSNAP, INC. F/K/A Duratech Group Inc.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE THREE MONTHS ENDED APRIL 30, 2009 AND 2008
 (Unaudited)
 NOTE H—EQUITY (CONTINUED)
 
 Shares to be Issued from Preferred Stock Exchange Agreement
 
 On January 8, 2009, the Company and certain individuals (the “Sellers”) entered into the Preferred Stock Exchange Agreement, pursuant to which the Company agreed to issue 338,938,010 shares of Common Stock, when the same are authorized, and to issue 127,568,470 options on Common Stock of the Company, when
the same are authorized in exchange for not less than 3,198,362 shares of Preferred Stock of Duratech, and up to 1,203,790 options on Preferred
 
 Stock of Duratech. The exchange ratio under the Preferred Stock Exchange Agreement for the exchange of both the Common Stock of the Company for the Preferred Stock of Duratech, and for the options on Common Stock of the Company for options on the Preferred Stock of Duratech is equal to 105.97 to one.
 
 The Preferred Stock of Duratech has a designation which entitles it to one vote per share, has a $1.00 liquidation preference and is not entitled to any dividend or conversion privilege. Following this conversion, there are also 158,096 shares of Duratech Preferred Non-Voting Stock that remain oustanding, which have
a $1.00 liquidation preference, are not entitled to any dividend or conversion privilege, and are to be liquidated in three years.
 
 The Company may from time to time reduce the exercise price for any of the warrants either permanently or for a limited period or extend their expiration date.
  NOTE I—COMMITMENTS/LEASES
 
 As of July 31, 2009, the company had commitments for the acquisition of residential lots and land. The company had paid non-refundable deposits $24,374. This deposit is included in Deposits/Holdback.
 NOTE J—RELATED PARTIES
 
 The Company has an outstanding amount Due to a shareholder in the amount of $129,364.  This outstanding amount is due upon demand, is unsecured and does not bear an interest rate.
 NOTE K—GOING CONCERN
 
 As shown in the accompanying financial statements, the Company had a loss for the period ended July 31, 2009.  During the years ended January 31, 2009 and 2008, the Company had a net loss of $935,916 and $104,735 respectively.  The Company has a net deficiency of $2,555,842.
 Management believes that actions presently being taken to win more contracts, raise equity capital, seek strategic relationships and alliances, and build its marketing efforts to generate positive cash flow provide the means for the Company to continue as a going concern.  The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
  16
 Table of Contents
  ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  PRELIMINARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
 
 This discussion contains forward-looking statements. The reader should understand that several factors govern whether any forward-looking statement contained herein will be or can be achieved. Any one of those factors could cause actual results to differ materially from those projected herein. These forward-looking statements include plans
and objectives of management for future operations, including plans and objectives relating to the products and the future economic performance of the company. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions, future business decisions, and the time and money required to successfully complete development projects, all of which are difficult or impossible to predict accurately and many of which are beyond the control
of the company. Although the company believes that the assumptions underlying the forward-looking statements contained herein are reasonable, any of those assumptions could prove inaccurate and, therefore, there can be no assurance that the results contemplated in any of the forward-looking statements contained herein will be realized. Based on actual experience and business development, the company may alter its marketing, capital expenditure plans or other budgets, which may in turn affect the company's results
of operations. In light of the significant uncertainties inherent in the forward-looking statements included therein, the inclusion of any such statement should not be regarded as a representation by the company or any other person that the objectives or plans of the company will be achieved.
 
 OVERVIEW
 
 On September 17, 2008, the Company consummated a reverse merger with Duratech Group Inc., a corporation organized and existing under the laws of the province of Alberta (“Duratech”). As a result, Duratech became a majority owned subsidiary of the Company, and the existing businesses of the Company were disposed of. one
day after the closing. From and after September 18, 2008, the Company has and will engage only in Duratech’s businesses, and any other businesses that it may acquire.
 
 Duratech manufactures and builds homes and modular sites for its marketplace, principally Alberta and Saskatchewan. The Company has three principal products that it offers: first, the company builds on-site conventional homes through its Duratech Contracting division; second, the company builds ready-to-move (RTM) homes in factories
and brings them on foundations to sell to end users; and, third, the company builds modular camp sites for the oil mining industry through its Duratech Structures division.
 
 Duratech had $800,910 in revenues for the three months ended April 30, 2009 compared to $1,529,447 for the three months ended April 30, 2008. Including reorganization, acquisition costs and foreign currency translation gains and losses, the net loss for the period ended April 30, 2009 was $565,079 compared
to net income of $16,252 for the same period in 2008. Duratech has two principal strategies for growth: 1) build construction for its existing marketplace and 2) expand through strategic acquisitions both in its existing market and the United States.
 RESULTS OF OPERATIONS
 
 The following discussion should be read in conjunction with the unaudited consolidated Financial Statements of the Company for the three-month period ended April 30, 2009 and 2008 and related notes thereto.
  THREE MONTHS ENDED APRIL 30, 2009 COMPARED TO THREE MONTHS ENDED APRIL 30, 2008
  Operating Revenues. Revenues for the three months ended April 30, 2009 were $800,910, compared to revenues for the three months ended April 30, 2008 of $1,529,447. The decrease in revenues of $728,884 is principally attributable to a decline in housing sales
as a result of the global recession and its impact on the Canadian economy since late 2008 compared to a very rapidly growing economy during the prior year period when oil prices were substantially higher.  Sales for the Duratech Contracting division decreased to $588,395 for the period ended April 30, 2009 from $911,490 for period ended April 30, 2008 due to a decrease in new home sales. The Duratech Structures division went from $617,957 for the quarter ended April 30, 2008 to $212,515 in
sales for the quarter ended April 30, 2009 due to a decrease in sales of modular structures.
  Selling, General and Administrative Expenses. Selling, general and administrative expenses for the period ended April 30, 2009 were $207,724, compared to selling, general and administrative expenses of $166,183 for the corresponding period in 2008, an increase
of about $41,541 principally due to transition costs associated with turning-around, expanding its core business and additional overhead expenses associated with taking the company public offset by reduction in expenses in response to the decrease in sales from the global economic recession.
  17
 Table of Contents
 
 Payroll Expense. Payroll expense for the three months ended April 30, 2009 fiscal year were $239,956, compared to payroll expense for the same period in 2008 of $213,042 principally due to an increase in business operations at Duratech Contracting division and Duratech Structures
division in anticipation of greater growth that did not materialize because of global economic conditions offset by reduction in expenses as a result of same.
 
 Other Expenses. Bad debt expense for the period ended April 30, 2009 and 2008 was $0; interest expense for the three months ended April 30, 2009 was $85,224 compared to $40,226 for the corresponding period in 2008 due to larger borrowings associated with more houses under construction;
and depreciation and amortization expense for the quarter ended April 30, 2009 was $28,280 compared to $0 for the same quarter in 2008 due to greater property plant and equipment associated with larger operations and purchase of Truss Equipment which is expected to save the company money in the future.
 
 Net Other Income. Net other income for the three months ended April 30, 2009 and 2008 was $0.
 
 Net Income. Net loss for the quarter ended April 30, 2009 was $556,344 compared to a net gain for the same quarter in 2008 of $16,257.  The increase in net loss is principally attributable to the increase in payroll and selling, general and administrative expenses in the three
month period ended April 30, 2009, including turn-around costs and acquisition expenses related to reverse merger as well as the decrease in sales as a result of the global economic recession. The net income for the period ended April 30, 2008 was $65,035 for Duratech Contracting division and a loss of $48,778 for Duratech Structures division which reflects growth of the respective divisions prior to the company’s reverse merger.  The net loss for the period ended April 30, 2009 was $346,169 for
Duratech Contracting division which included overhead expenses for the Company and $210,175 for Duratech Structures division principally as a result of a decline in sales due to the global economic recession.
 
 Foreign Currency Gains/Losses. Because the Company operates in Alberta and Saskatchewan, Canada, the company does incur foreign currency gains/losses for US GAAP reporting purposes. The Company incurred a loss on currency conversion of $8,735 for the three months ended April 30, 2009
compared to a loss of $5 for the same period in 2008. The prevailing exchange rate used to translate the Canadian dollars to U.S dollars at April 30, 2009 and January 31, 2009 was 0.8384 and .0.81248, respectively. The average for the quarter ending April 30, 2009 and 2008 was 0.82544 and 0.9957, respectively.
 
 Liquidity and Capital Resources
  As of April 30, 2009, cash and cash equivalents totaled $0.  The net cash provided by operations for the three months ended April 30, 2009 of $245,827 increased from the net cash used in fiscal year end January 31, 2009 of $387,494 principally due to an increase in accounts payable and customer deposits offset
by an increase in inventories and receivables associated with new housing production. The net cash used in investing activities of $7,840 for the period was mainly due to additions to property, plant and equipment compared to $46,867 for the fiscal year end January 31, 2009. The decrease in financing activities of $229,252 for quarter ended April 30, 2009 compared to $319,284 generated for the prior fiscal year end was mainly due to the decrease in the proceeds from notes payable of $207,491.
 The working capital at April 30, 2009 was $(1,424,522), comprised of accounts receivable, net of $1,345,575, other receivables of $71,279 and inventory of $2,136,512 less payables and accrued liabilities of $1,488,224, customer deposits of $1,192,681, short term loans of $303,643; current portion of notes payable of $1,929,173 and current
portion of shareholder notes payable of $64,167.
  The Company is currently experiencing decreased demand for its products as a result of slowed economic growth in Western Canada, which has been affected by the global recession that began late in 2008. In particular, the oil and natural gas sector, the primary industry in Alberta and Saskatchewan, has experienced
falling revenues due to the continuing uncertainty in the global economy and weak financing conditions, which has translated into several oil and gas projects being cancelled or put on hold.  This, in turn, resulted in historically high, seasonally adjusted unemployment rates in August 2009 of 7.4% and 6.1% in Alberta and Saskatchewan, respectively.  The impact of the decline in the oil and natural gas sector has also been felt in the housing market in the Western Prairie provinces, which
saw a decline in new housing starts of 17% in July 2009 compared to July 2008, and an expected overall decrease of 6.8% in home prices in 2009, according to data from the Canada Mortgage and Housing Corporation (“CMHC”), Canada’s national housing agency. However, in CMHC’s Third Quarter 2009 “Housing Market Outlook – Prairie Region Highlights” report, CMHC revised their 2009 forecast upward for housing starts and resales as price declines, government incentives, and low
mortgage rates are expected to lead to stronger activity in the fourth quarter of the year.  For 2010, the report also indicates that lower inventories in both the new and resale markets, a strengthening economy, and rising demand will support a healthy increase in new home construction, along with restored price growth in the region.
 
 Nevertheless, if economic conditions were to worsen and the Company’s products became unsellable, the Company would not be able to recover the full cost of its inventory. As a result, operations could deteriorate and our liquidity would be further diminished. This risk, however, is principally related to the
Company’s Duratech Contracting division that builds stick-built homes and has approximately $519,912 in inventory, which is substantially lower than it has been in prior periods. The Company does not expect that this inventory would be unsellable altogether or that it would have to sell such inventory below its cost, although it may well have to be sold at a lower profit then in the past. The Company’s Duratech Structures division builds modular homes and other structures on a contractual basis and
is paid as work is done, so there is little risk that the Company’s inventory for these lines of business would be impacted as almost all of the customer deposits on the Company’s balance sheet reflect deposits for Duratech Structures.
 
 Going forward we will rely substantially on revenue from existing contracts, new business development efforts, and acquisitions. Actual sales will be recorded upon completion of each project, while sales and service revenue will be recorded as earned. To date, the Company has had investors willing to contribute equity,
convert debt to equity or offer private loans to finance on-going operations.  In addition, the Company does have some relationships with lending institutions to provide financing on inventory and/or completed homes.  The company has wound down its joint venture relationships with P&R Gateway Development Inc. and 1371009 Alberta Ltd. and will no longer be securing financing through these entities until the economic conditions improve.
  18
 Table of Contents
 
 Furthermore, the economic conditions within Canada, particularly as a result of natural resources markets, could impact future interest in housing and modular buildings. Overall, we have funded our cash needs from inception through April 30, 2009 with a series of private loan, debt and equity transactions.
 
 Demand for our products will be dependent upon, among other things, market acceptance of our products, the real estate market in general, and global economic conditions. Inasmuch as a major portion of our activities is the receipt of revenues from the sales of new home services, our business operations may be adversely affected by
our competitors and prolonged recessionary periods. The Company does believe that the Alberta and Saskatchewan regions, where its principle operations are located, will continue to be attractive Canadian markets, and that these areas will be less impacted by overall economic conditions, but there is no guarantee this will remain so going forward.
 
 CRITICAL ACCOUNTING POLICIES
 
 The preparation of financial statements in conformity with accounting principles generally accepted in the U.S., or GAAP, requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. In recording transactions and balances resulting from business operations, the Company uses estimates based on the best information available for such items as depreciable lives. The Company revises the recorded estimates when better information is available, facts change or actual amounts can be determined. These revisions can affect operating results.
 
 The critical accounting policies and use of estimates are discussed in and should be read in conjunction with the annual consolidated financial statements and notes included in the latest 10-K, as filed with the SEC, which includes audited consolidated financial statements for the two fiscal years ended January 31, 2009.
  ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
 Exchange Rate Risk
 
 The Company cannot guarantee that the current exchange rate will remain steady; therefore there is a possibility that the Company could post the same amount of profit for two comparable periods and because of the fluctuating exchange rate actually post higher or lower profit depending on exchange rate of Canadian$ converted to US$ on that
date. The exchange rate could fluctuate depending on changes in economic environments without notice.
 
 Inflation
 
 Inflationary factors, such as increases in the cost of raw materials and overhead costs, could impair our operating results. Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, a high rate of inflation in the future may have an adverse effect on our ability to maintain
current levels of gross margin and selling, general and administrative expenses as a percentage of sales revenue if the selling prices of our products do not increase with these increased costs.
  ITEM 4(A) - CONTROLS AND PROCEDURES
 
 The Chief Executive Officer and Chief Financial Officer (the principal executive officer and principal financial officer, respectively) of the Company have concluded, based on their evaluation as of April 30, 2009, that the design and operation of the Company's "disclosure controls and procedures" (as defined in Rule 13a-15(e) under the
Securities Exchange Act of 1934, as amended ("Exchange Act")) are not effective to ensure that information required to be disclosed in the reports filed or submitted by the Company under the Exchange Act is accumulated, recorded, processed, summarized and reported to the management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding whether or not disclosure is required.
 ITEM 4(A)T – INTERNAL CONTROL OVER FINANCIAL REPORTING
 
 (a) The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended). Management conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting
based on the criteria set forth in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this evaluation, management has concluded that the Company’s internal control over financial reporting was not effective as of April 30, 2009.
 (b) This quarterly report does not include an attestation report of the company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the company’s registered public accounting firm pursuant to temporary rules of the Securities and
Exchange Commission that permit the company to provide only management’s report in this quarterly report.
 
 (c) There were no changes in the Company's internal controls over financial reporting, known to the chief executive officer or the chief financial officer that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.
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  PART II - OTHER INFORMATION
 
 ITEM 1 - LEGAL PROCEEDINGS
 
 None.
 
 ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 
 None.
 
 ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
 
 None.
 
 ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
 None.
 
 ITEM 5 - OTHER INFORMATION
 
 None.
 
 ITEM 6 - EXHIBITS
  31.1
Certification of the Chief Executive Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 193431.2
Certification of the Chief Financial Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 193432
Certification of the Company's Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. SS. 1350 Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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  SIGNATURES
 
 Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
 
 UPSNAP, INC.Date: November 20, 2009
By:
/s/Peter van HierdenPeter van HierdenChief Executive OfficerDate: November 20, 2009
By:
/s/Richard von GnechtenRichard von GnechtenChief Financial Officer
 
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