UNITED STATES


SECURITIES AND EXCHANGE COMMISSION
 Washington, DC 20549


FORM 10-Q










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





For the quarterly period ended October 31, 2009





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





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.    Yesx 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: December 15, 2009, 77,349,167 shares.















TABLE OF CONTENTS





UPSNAP, INC.





Form 10-Q for the period ended October 31, 2009





TABLE OF CONTENTS





PagePART I - FINANCIAL INFORMATIONITEM 1 - FINANCIAL STATEMENTSConsolidated Balance Sheets as of October 31, 2009 (Unaudited) and January 31, 2009 (Audited)
3Consolidated Statement of Operations for the three-months ended October 31, 2009 and 2008 (Unaudited)
4Consolidated Statement of Operations for the nine-months ended October 31, 2009 and 2008 (Unaudited)
5Consolidated Statements of Cash Flows for the nine-months ended October 31, 2009 and the year ended Jan. 31, 2009
6Notes to Financial Statements
7-20ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
21ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
24ITEM 4 (A) - CONTROLS AND PROCEDURES
25ITEM 4 (A)T – INTERNAL CONTROL OVER FINANCIAL REPORTING
25PART II - OTHER INFORMATIONITEM 1 - LEGAL PROCEEDINGS
25ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
26ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
27ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
27ITEM 5 - OTHER INFORMATION
27ITEM 6 - EXHIBITS
27SIGNATURES
28





2
 Table of Contents





PART I – FINANCIAL INFORMATION




ITEM 1.  FINANCIAL STATEMENTS





UpSnap, Inc. F/K/A Duratech Group Inc.Consolidated Balance SheetAs of


As ofOctober 31, 2009


January 31, 2009(Unaudited)


(Audited)ASSETSCURRENT ASSETSCash and Cash Equivalents

$
-


$
-Accounts Receivable


638,673



812,355Deposits/Holdback


43,531



117,973Inventory


911,271



1,947,581TOTAL CURRENT ASSETS


1,593,475



3,542,131OTHER ASSETS


417,350



365,934PROPERTY, PLANT, AND EQUIPMENT, NET


1,250,528



638,305TOTAL ASSETS

$
3,261,353


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

$
326,559


$
319,263Notes Payable, current


1,634,704



2,136,664Due to related party, current


131,582



70,308Accounts Payable and Accrued Liabilities


1,027,864



961,195Customer Deposits


340,412



273,289TOTAL LIABILITIES


3,459,871



3,760,719STOCKHOLDERS' EQUITY/(DEFICIT)Common Stock ($.001 par value, 97,500,000 authorized;
77,349,167 and 75,224,676 issued and outstanding)


77,349



75,225Paid in Capital


2,390,107



1,403,688Accumulated Other Comprehensive Income


62,906



109,209Retained Earnings/(Accumulated Deficit)


(2,728,880
)


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


(198,518
)


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

$
3,261,353


$
3,882,148





The accompanying notes are an integral part of these financial statements.




3
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UpSnap, Inc. F/K/A Duratech Group Inc.Consolidated Statement of Operations
(Unaudited)For the three months
ended October 31,2009


2008SALES AND COST OF SALESSales

$
1,728,864


$
2,238,649Cost of Sales (excluding depreciation)


1,432,326



1,377,129EXPENSESSelling, general and administrative


183,911



231,398Payroll Expense


128,838



528,454Bad Debt Expense


-



317Depreciation


43,138



-TOTAL EXPENSES


355,887



760,169Net Income/(Loss) from Operations


(59,349
)


101,351OTHER INCOME/(EXPENSE)Other Income


-



2,851Interest Expense


(52,670
)


(70,841
)Interest Income


-



-NET OTHER INCOME/(EXPENSE)


(52,670
)


(67,990
)NET INCOME/(LOSS) FROM CONTINUED OPERATIONS


(112,019
)


33,361OTHER COMPREHENSIVE INCOME (LOSS)Foreign Currency Translation Gain/(Loss)


(43
)


(2,684
)COMPREHENSIVE INCOME (LOSS)


(111,976
)


30,677Net (Loss) per share—basic and fully-diluted


(0.00
)


0.16Weighted average shares outstanding


77,349,167



195,514





The accompanying notes are an integral part of these financial statements.




4
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UpSnap, Inc. F/K/A Duratech Group Inc.Consolidated Statement of Operations
(Unaudited)For the nine months
ended October 31,2009


2008SALES AND COST OF SALESSales

$
3,480,510


$
4,278,661Cost of Sales (excluding depreciation)


2,910,324



2,857,922EXPENSESSelling, general and administrative


663,193



600,443Payroll Expense


622,326



1,201,732Bad Debt Expense


-



320Depreciation


113,503



-TOTAL EXPENSES


1,399,022



1,802,495Net Income/(Loss) from Operations


(828,836
)


(381,756
)OTHER INCOME/(EXPENSE)Other Income


484



3,806Interest Expense


(241,996
)


(154,230
)Interest Income


-



-NET OTHER INCOME/(EXPENSE)


(241,512
)


(150,424
)NET INCOME/(LOSS) FROM CONTINUED OPERATIONS


(1,070,348
)


(532,180
)OTHER COMPREHENSIVE INCOME (LOSS)Foreign Currency Translation Gain/(Loss)


(46,303
)


47,898COMPREHENSIVE INCOME (LOSS)


(1,116,651
)


(484,282
)Net (Loss) per share—basic and fully-diluted


(0.01
)


(2.48
)Weighted average shares outstanding


76,558,894



195,514





The accompanying notes are an integral part of these financial statements.




5
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UpSnap Inc. F/K/A Duratech Group, Inc.Consolidated Statements of Cash FlowsFor nine-months ended October 31
2009


For year
ended Jan. 31
2009(Unaudited)


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

$
(1,070,348
)

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


113,503



124,397Bad Debt Expense


-



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


173,682



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


-



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


74,442



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


1,036,310



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


50,770



670,714Increase/(Decrease) In Customer Deposits


67,123



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


445,482



(387,494
)CASH FLOWS FROM INVESTING ACTIVITIES:Purchase of Other Assets


(51,416
)


-Purchase of Property, Plant, and Equipment


(142,223
)


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


(193,639
)


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


(259,518
)


539,340Proceeds/(Payment) of Shareholder Loans


-



-Proceeds from Long-term Debt


-



-Increase/(decrease) in Due to related party


61,274



-Proceeds/(Payment) of Bank Overdraft


7,296



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


-



-Payment for Structures Acquisition


-



-NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES


(205,540
)


319,284EFFECT OF EXCHANGE RATE CHANGES ON CASH


(46,303
)


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

$
192,655


$
277,653Taxes

$
-


$
-NON-CASH FINANCING ACTIVITIES
 Issuance of shares for Land/Equipment


500,000



431,653Conversion of Notes Payable/Accounts Payable to Equity


343,765



-Conversion 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.




6
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UPSNAP, INC. F/K/A Duratech GroupInc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


FOR THE THREE AND NINE MONTHS ENDED OCTOBER 31, 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 5 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 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 October 31, 2009 and January 31, 2009 was 0.9262 and .0.81248, respectively. The average for the quarter ending October 31, 2009 and 2008 was 0.92655 and 0.90428, respectively.




7
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UPSNAP, INC. F/K/A Duratech Group Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


FOR THE THREE AND NINE MONTHS ENDED OCTOBER 31, 2009 AND 2008


(Unaudited)







NOTE A—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)




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.





Revenue Recognition— Revenues from long-term construction contracts (over one year) of the Residential Homebuilding division, which builds on-site conventional homes, are recognized using the percentage-of-completion method. Revenues from short-term
contracts of the Modular Construction 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).




8
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UPSNAP, INC. F/K/A Duratech Group Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


FOR THE THREE AND NINE MONTHS ENDED OCTOBER 31, 2009 AND 2008


(Unaudited)







NOTE A—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)





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 October 31, 2009 and 2008, the company incurred $2,548 and $0 respectively.  For year to date ended October 31, 2009 and 2008, the company incurred
$17,511 and 16,467, 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.





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 October 31, 2009 and 2008, no amounts were deemed uncollectible as of October 31, 2009.  Outstanding Accounts
Receivable as of October 31, 2009 was $638,673.  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.





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UPSNAP, INC. F/K/A Duratech Group Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


FOR THE THREE AND NINE MONTHS ENDED OCTOBER 31, 2009 AND 2008


(Unaudited)







NOTE A—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)





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 years ended January 31, 2009 and 2008 were $124,397 and $21,598 respectively.





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.





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UPSNAP, INC. F/K/A Duratech Group Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


FOR THE THREE AND NINE MONTHS ENDED OCTOBER 31, 2009 AND 2008


(Unaudited)







NOTE A—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)





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.




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UPSNAP, INC. F/K/A Duratech Group Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


FOR THE THREE AND NINE MONTHS ENDED OCTOBER 31, 2009 AND 2008


(Unaudited)







NOTE B—SUPPLEMENTAL CASH FLOW INFORMATION





Supplemental disclosures of cash flow information for the quarter ended October 31, 2009 and year ended January 31, 2009 is summarized as follows:





Cash paid during the years for interest and income taxes:





Oct. 31,
2009


Jan, 31
2009Interest

$
241,996


$
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.




12
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UPSNAP, INC. F/K/A Duratech Group Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


FOR THE THREE AND NINE MONTHS ENDED OCTOBER 31, 2009 AND 2008


(Unaudited)







NOTE D—INCOME TAXES (CONTINUED)





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

$
-


$
-





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.




13
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UPSNAP, INC. F/K/A Duratech Group Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


FOR THE THREE AND NINE MONTHS ENDED OCTOBER 31, 2009 AND 2008


(Unaudited)







NOTE D—INCOME TAXES (CONTINUED)







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%

$
89,250Demand Note
prime rate plus 2%

$
21,537Demand Note
Vary 8-18%

$
376,867Demand Note
Vary 8-18%

$
887,518Residential Line of Credit a
Vary 6-8%

$
259,532$
1,634,704a 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.  In addition to the notes listed above, the Company also has a bank overdraft in the amount of $326,559.





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

$
81,429Work in Progress

$
509,877Finished Goods

$
319,965$
911,271





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UPSNAP, INC. F/K/A Duratech Group Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


FOR THE THREE AND NINE MONTHS ENDED OCTOBER 31, 2009 AND 2008


(Unaudited)







NOTE G—SEGMENT REPORTING





The Company has two reportable segments—Modular Construction and Residential Homebuilding





The Net Sales and Profit/(Loss) by Segment for the nine-months ended October 31, 2009 are as follows:





Net Sales by Segment

For the nine-months ended October 31, 2009Modular Construct.


Resident. Home-building


TotalsSales, net

$
2,032,938


$
1,447,572


$
3,480,510Cost of Sales (excluding depreciation)


1,866,444



1,043,880



2,910,324Profit/(Loss) by Segment

For the nine-months ended October 31, 2009Modular Construct.


Resident. Home-building


TotalsNet Operating Profit/(Loss)

$
(322,011
)

$
(748,820
)

$
(1,070,831
)





The Net Sales and Profit/(Loss) by Segment for the nine-months ended October 31, 2008 are as follows:





Net Sales by Segment

For the nine-months ended October 31, 2008Modular Construct.


Resident. Home-building


TotalsSales, net

$
1,660,654


$
2,618,007


$
4,278,661Cost of Sales (excluding depreciation)


1,196,826



1,661,096



2,857,922Profit/(Loss) by Segment

For the nine-months ended October 31, 2008Modular Construct.


Resident. Home-building


TotalsNet Operating Profit/(Loss)

$
(315,175
)

$
(217,005)


$
(535,072)




15
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UPSNAP, INC. F/K/A Duratech Group Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


FOR THE THREE AND NINE MONTHS ENDED OCTOBER 31, 2009 AND 2008


(Unaudited)







NOTE G—SEGMENT REPORTING





Total Assets by Segment as of October 31, 2009 and January 31, 2009 are as follows:





Total Assets by Segment

For the period ended October 31, 2009Modular Construct.


Resident. Home-building


TotalsTotal Assets

$
1,106,570


$
2,154,783


$
3,261,353





Total Assets by Segment

For the year ended January 31, 2009Modular Construct.


Resident. Home-building


TotalsTotal Assets

$
1,794,626


$
2,087,522


$
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 October 31, 2009 and January 31, 2009 is as follows:





Number of
shares
outstanding2009Common shares


77,349,167Options to purchase common shares


20,380,702Warrants 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





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UPSNAP, INC. F/K/A Duratech Group Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


FOR THE THREE AND NINE MONTHS ENDED OCTOBER 31, 2009 AND 2008


(Unaudited)







NOTE H—EQUITY (CONTINUED)





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.





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 October 31,
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.




17
 Table of Contents





UPSNAP, INC. F/K/A Duratech Group Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


FOR THE THREE AND NINE MONTHS ENDED OCTOBER 31, 2009 AND 2008


(Unaudited)







NOTE H—EQUITY (CONTINUED)





A summary of the time-based stock awards as of October 31, 2009, and changes during the quarter ended October 31, 2009, is as follows:




Shares


Weighted
Average
Exercise PriceOutstanding at June 30, 2008


2,570,000


$
0.10Granted (part of Share Exchange Agreement)


17,810,702


$
0.05Forfeited or expired


-


$
-Outstanding October 31, 2009


20,380,702


$
0.056Exercisable at October 31, 2009


2,570,000


$
0.10





The following tables summarize information about fixed stock options outstanding and exercisable at October 31, 2009:





Stock Options OutstandingRange of Exercise Prices

Number of
Shares
Outstanding

Weighted
Average
Contractual Life
in Years$0.10

700,000

7.50$0.10

170,000

8.59$0.10

1,700,000

8.67$0.016 – 0.125

17,810,702

8.9220,380,702

8.85Stock Options ExercisableRange of Exercise Prices

Number of
Shares
Exercisable

Weighted
Average
Exercise Price$0.10

2,570,000

$0.10$0.016 – 0.125

13,422,912

$0.0515,992,912





The exercise price of stock options granted during the period ended October 31, 2009 was equal to the market price of the underlying common stock on the grant date.





There was no aggregate intrinsic value as of October 31, 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.




18
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UPSNAP, INC. F/K/A Duratech Group Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


FOR THE THREE AND NINE MONTHS ENDED OCTOBER 31, 2009 AND 2008


(Unaudited)







NOTE H—EQUITY (CONTINUED)





A summary of warrant activity for the period ended October 31, 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, October 31, 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, October 31, 2009


560,000


$
0.90



560,000


$
0.90





At October 31, 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



2.03



1,800,000


$
1.10$
0.90



560,000


$
0.90



2.12



560,000


$
0.902,360,000











2,360,000





19
 Table of Contents




UPSNAP, INC. F/K/A Duratech Group Inc.


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


FOR THE THREE AND NINE MONTHS ENDED OCTOBER 31, 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 PreferredStock 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 October 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 $131,582.  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 October 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 $2,728,880.





Management believes that actions presently being taken to secure profitable construction contracts, raise equity capital, seek strategic relationships and alliances, and pursue strategic acquisitions 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.




20
 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 Residential Homebuilding 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 Modular Construction division.





Duratech had $1,728,864 and $3,480,510 in revenues for the three and nine months ended October 31, 2009 compared to $2,238,649 and $4,278,661 for the three and nine months ended October 31, 2008.  Including reorganization, acquisition costs and foreign currency translation gains and losses, the net loss for the three and
nine months ended October 31, 2009 was $111,976 and $1,116,651 compared to net gain of $30,677 for the three months and net loss of $484,282 for the nine months ended October 31, 2008. Duratech has two principal strategies for growth: 1) build market share 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 October 31, 2009 and 2008 and related notes thereto.





THREE MONTHS ENDED OCTOBER 31, 2009 COMPARED TO THREE MONTHS ENDED OCTOBER 31, 2008





Operating Revenues. Revenues for the three months ended October 31, 2009 were $1,728,864 compared to revenues for the three months ended October 31, 2008 of $2,238,649. The decrease in revenues of $509,785 is principally
attributable to a decline in residential homebuilding for the current quarter offset by an increase in modular construction for the current quarter versus the same period last year.  The Company acquired Duratech Strcutures in July, 2008 and thus had just started to incorporate modular construction into its operations in 2008, but the quarter end for 2009 and 2008 reflect an increase in modular construction sales versus the prior periods.  Sales for the Residential Homebuilding division decreased
to $65,120 for the three months ended October 31, 2009 from $1,211,541 for period ended October 31, 2008 due to a substantial decline in new home sales due to global economic impact on the Company’s principal markets. The Modular Construction division went from $1,028,530 for the quarter ended October 31, 2008 to $1,663,744 in sales for the quarter ended October 31, 2009 due to an increase in sales of modular structures.




21
 Table of Contents





Selling, General and Administrative Expenses. Selling, general and administrative expenses for the period ended October 31, 2009 were $183,911, compared to selling, general and administrative expenses of $231,398 for the corresponding period in 2008, a decrease of $47,487 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.





Payroll Expense. Payroll expense for the three months ended October 31, 2009 fiscal year were $128,838, compared to payroll expense for the same period in 2008 of $528,454principally due to a reduction
in expenses in 2009 in response to the global economic recession compared to higher business operations in 2008 in both the Residential Homebuilding division and Modular Construction division in anticipation of greater growth that did not materialize because of global economic conditions.





Other Expenses. Bad debt expense for the period ended October 31, 2009 and 2008 was $0; interest expense for the three months ended October 31, 2009 was $52,670 compared to $70,841 for the corresponding period in 2008 due to lower borrowings associated with fewer houses under construction;
and depreciation and amortization expense for the quarter ended October 31, 2009 was $43,138 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 in early 2009.





Net Other Income. Net other income for the three months ended October 31, 2009 and 2008 was $0 and $2,851, respectively.





Net Income. Net loss for the quarter ended October 31, 2009 was $112,019 compared to a net gain for the same quarter in 2008 of $33,361.  The increase in net loss is principally attributable to the decrease in residential homebuilding sales during the third quarter compared to
the same period in 2008 offset by a reduction in selling, general & administrative and payroll expenses in response to the global economic recession in the three month period ended October 31, 2009.  The net gain for the period ended October 31, 2008 was a net loss of $8,114 for Residential Homebuilding division and a gain of $42,381 for Modular Construction division which reflects growth of the respective divisions prior to the company’s reverse merger.  The net loss for the period
ended October 31, 2009 was a net loss of $167,127 for Residential Homebuilding division principally as a result of a decline in sales due to the global economic recession and a net gain of $55,108 for Modular Construction division.





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 $43 for the three months ended October 31, 2009
compared to a loss of $2,684 for the same period in 2008. The prevailing exchange rate used to translate the Canadian dollars to U.S dollars at October 31, 2009 and January 31, 2009 was 0.9262 and .0.81248, respectively. The average for the quarter ending October 31, 2009 and 2008 was 0.92655 and 0.90428, respectively.





NINE MONTHS ENDED OCTOBER 31, 2009 COMPARED TO NINE MONTHS ENDED OCTOBER 31, 2008





Operating Revenues. Revenues for the nine months ended October 31, 2009 were $3,480,510, compared to revenues for the nine months ended October 31, 2008 of $4,278,661. The decrease in revenues of $798,151 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 Residential Homebuilding division decreased to $1,447,572 for the nine months ended October 31, 2009 from $2,618,007 for the same period ended October 31, 2008 because a decrease in new home sales in the first and third quarter as a result of the global economic recession was only slightly offset
by the increase in new home sales in the second quarter. Sales for the Modular Construction division increased to $2,032,938 for the nine months ended October 31, 2009 from $1,660,654 in sales for the nine months ended October 31, 2008 because the increase in modular home sales in the second and third quarter offset by the decrease in sales of modular structures in the first quarter as a result of the global economic recession and decrease in oil prices from the prior year and only a partial year of revenues
for 2008 since the modular construction business was acquired in July, 2008.





Selling, General and Administrative Expenses.Selling, general and administrative expenses for the nine months ended October 31, 2009 were $663,193, compared to selling, general and administrative expenses of $600,443 for the corresponding period in 2008, an increase of about
$62,750 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.




22
 Table of Contents





Payroll Expense. Payroll expense for the nine months ended October 31, 2009 fiscal year were $622,326, compared to payroll expense for the same period in 2008 of $1,201,732 principally due to an increase in business operations at Residential Homebuilding division and Modular
Construction 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 nine months ended October 31, 2009 and 2008 was $0 and $320, respectively; interest expense for the nine months ended October 31, 2009 was $241,996 compared to $154,230 for the corresponding period in 2008 due to larger borrowings associated
with more houses under construction; and depreciation and amortization expense for the nine months ended October 31, 2009 was $113,503 compared to $0 for the period in 2008 due to greater property plant and equipment associated with larger operations and purchase of Truss Equipment.





Net Other Income. Net other income for the nine months ended October 31, 2009 and 2008 was $484 and $3,806, respectively.





Net Income. Net loss for the nine months ended October 31, 2009 was $1,070,348compared to a net loss for the period in 2008 of $537,180.
The increase in net loss is principally attributable to the decrease home and modular sales during the first quarter and decrease in home sales during the third quarter as a result of the global economic recession and slight increase in selling, general and administrative expenses in the nine month period ended October 31, 2009, including turn-around costs and acquisition expenses related to reverse merger, offset by a decrease in payroll expenses in 2009 in response to the global economic recession. The net
loss for the nine months ended October 31, 2009 was $748,820 for Residential Homebuilding division which included overhead expenses for the Company and $322,011 for Modular Construction division principally as a result of a decline in sales in the first quarter due to the global economic recession. The net loss for the nine months ended October 31, 2008 was a loss of $217,005 for Residential Homebuilding division and a loss of $315,175 for Modular Construction division.





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 $46,303 for the nine months ended October
31, 2009 compared to a gain of $47,898 for the same period in 2008. The prevailing exchange rate used to translate the Canadian dollars to U.S dollars at October 31, 2009 and January 31, 2009 was 0.9262 and .0.81248, respectively. The average for the quarter ending October 31, 2009 and 2008 was 0.92655 and 0.90428, respectively.





Liquidity and Capital Resources




As of October 31, 2009, cash and cash equivalents totaled $0. The net cash generated by operations for the nine-months ended October 31, 2009 of $445,482 increased from the net cash used in fiscal year end January 31, 2009 of $387,494 principally due to a decrease in inventories from sales and accounts receivable offset by net loss from operations.
The net cash used in investing activities of $193,639 for the period was mainly due to acquisition property plant and equipment compared to $46,867 for the fiscal year end January 31, 2009.  The decrease in financing activities of $205,540 for nine-months ended October 31, 2009 compared to $319,284 generated for the prior fiscal year end was mainly due payment of and proceeds from notes payable for each period.




The working capital at October 31, 2009 was $(1,866,600), comprised of accounts receivable, net of $638,673, deposits/holdback of $43.531 and inventory of $911,271 less payables and accrued liabilities of $1,027,864, customer deposits of $340,412, short term loans of $326,559; current portion of notes payable of $1,634,704 and current
portion of shareholder notes payable of $131,582.





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.




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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 Residential
Homebuilding division which builds stick-built homes and has approximately $319,942 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, but may well have to be sold at a lower profit then in the past. The Company does not expect at this time that it would have to sell such inventory below its cost. The Company’s Modular Construction 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; in fact almost all of the customer deposits on the company’s balance sheet reflect deposits for Modular Construction.





Going forward we will rely substantially on revenue from existing contracts, new business development efforts, 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 ongoing 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.





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 October 31, 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.




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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 October 31, 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 October 31, 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.





PART II - OTHER INFORMATION





ITEM 1 - LEGAL PROCEEDINGS





In regards to Registrant’s Purchase Agreement dated as of June 8, 2009 which was subsequently terminated as described under Item 5 – Other Information: It is unclear what impact the cancellation of the Agreement will have on the previously disclosed complaint with Entech (as summarized below).  It would appear
that since Duratech no longer has an Agreement with the various parties mentioned that the complaint with regards to Duratech would be withdrawn or dismissed.  However, these matters have yet to be determined by a court of law.





Background: Entech Energy Group (International)  Inc. (“Entech” or “Plaintiff”) filed on July 21, 2009 against Alan Kirby (“Kirby”), 1152645 Alberta Ltd.(“1152645”) and Duratech Group Inc. (“Duratech”) (collectively “Defendants”) in the Court of Queen’s
Bench of Alberta, Judicial Centre of Calgary (Solicitor’s File No. 09-1567/BHH), in which it alleged among other claims that Entech and Kirby had entered into a prior agreement on March 1, 2009 in which Plaintiff agreed to purchase all of the intellectual property and reclamation technology used on the soil reclamation business (“Intellectual Property”) and all shares in 1152645 owned by Kirby and would thus be in breach of contract which would preclude Duratech from proceeding with its purchase
of 100% of Kirby’s ownership interest in 1152645.  In regards to Duratech, Plaintiff alleged that Duratech unduly interfered with the contractual relations of the Plaintiff and Kirby and 1152645 and induced a breach of agreement between the parties.  In regards to Duratech, Plaintiff requested a declaration that the Intellectual Property and shares of Kirby be held in trust for Plaintiff, that a order for transfer of such intellectual property and shares to the Plaintiff, that damages
in an amount to be proven at trial and punitive damages of $1,000,000.  Duratech vehemently denied the allegations of Plaintiff and believes that its claims are without merit.  The Company has engaged Stringam Denecky Law Office, counsel admitted to practice law in the Court of Queen’s Bench of Alberta, and intend to vigorously defend its rights and position to the fullest extent of the law.




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As part of its consolidation efforts described under Item 5 – Other Information, Structures is negotiating with vendors and debt holders to settle outstanding obligations.  The following claims and/or lawsuits have been filed with Structures on these obligations.  On December 1, 2009, one such entity filed suit against Structures and was granted
a summary judgment for $25,578.  On November 27, 2009, Purdy and Lanz Marketing Corporation (“PLMC”) filed a Statement of Claim with Structures with which it had a marketing agreement for $159,284 and has also named Group in the claim.  Structures and Group dispute this amount and the naming of Group in the claim and is negotiating with PLMC on this matter.  On December 14, 2009, 2920 Ninth Avenue North Inc. (“Landlord”) filed a claim in the Court of Queen’s
Bench of Alberta, Judicial District of Lethbridge/MacLeod against Structures and Peter Van Hierden, personally, for $65,389.01 for rental proceeds due for occupancy of facilities at 2920 Ninth Avenue North as well as yet to be determined clean up costs of restoring, repairing and cleaning up the premises that the Landlord also claims is due.  Structures is negotiating with the claimant on this matter and working with an arbitrator and will defend itself in a court of law as necessary.  In
is uncertain what the outcome will be for these matters.  Structures and Group are working to settle these matters and resolve other obligations to avoid such action going forward.  Expenses associated with these matters have already been recorded on the company’s books.





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





The following land for equity transactions previously reported in the quarter ending July 31, 2009 were rescinded during the quarter ending October 31, 2009 because the parties could not deliver and remove liens on the land agreed upon.  The shares were never issued; the noted transactions are in Canadian Dollars unless otherwise
noted:





On May 1, 2009,  David DenHollander and 647497 BC Ltd., a British Columbia, Canada company that David DenHollander owns and Brad and Linda Osborne agreed to sell the Company that portion of Recline Ridge Estates—Phase 4 consisting of Lot Numbers 9, 11, 12 and 13 with an estimated net market value of $740,000 in exchange
for 740,000 shares of common stock in the Company and the same terms as the Duratech Group Inc. shareholders.  This transaction was rescinded on October 31, 2009 and therefore no shares were issue and the Registrant has no further obligations under their original agreement.





On October 31, 2009, Jerry Froese and 1199575 Alberta Ltd., a Alberta, Canada company that Jerry Froese owns, agreed to sell the company land with a market value of $240,000 in exchange of 240,000 shares of common stock in the Company and a loan of $30,000 payable over a 5-year period of time. This transaction was based on the same terms
as the Duratech Group Inc. shareholders.  This transaction was rescinded on October 31, 2009 and therefore no shares were issue and the loan of $30,000 cancelled and the Registrant has no further obligations under their original agreement.





The following debt for equity transactions were modified after the end of the quarter ending October 31, 2009 and will be reflected in the filing for the period ending January 31, 2010.  The shares mentioned herein are reported for information purposes and have not been issued and are not otherwise due until the company has adequate
shares available for issuance.  The noted transactions are in Canadian Dollars unless otherwise noted and each of these transactions was based on the same terms as the Duratech Group Inc. shareholders which means the parties converting their debt obligation with the Company will receive additional shares pro-rata with the Duratech Group Inc. preferred shareholders upon completion of their Preferred Stock Exchange Agreement dated January 8, 2009 between UpSnap Inc. and Duratech Group Inc.





Indenbosch Auction agreed to convert $220,132.59 in loans it had with the Company into 1,865,967 shares of common stock of the Company instead of the previously reported 220,132 shares; Jaclyn Van Hierden agreed to convert $5,592.19 that the Company owed to her into 47,401 shares of common stock of the Company instead of the previously
reported 5,592 shares; 1199575 Alberta Ltd. agreed to convert $6,073.20 that it was owed by the company into 51,478 shares of common stock of the Company instead of the previously reported 6,073 shares; Pacific Maduco agreed to convert $4,592.74 that it was owed by the company into 25,955 shares of common stock of the Company instead of the previously reported 3,062 shares.





Larry and Margaret Kyllo agreed to convert their $75,000 loan to the Company into 2,119,145 shares of common stock of the Company based on a previously agreed upon $0.30 price per share instead of the previously reported 250,000 shares.  The agreement with John Doerksen to convert $50,000 that he was owed by the company into 50,000
shares of common stock of the Company was rescinded.





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ITEM 3 - DEFAULTS UPON SENIOR SECURITIES





None.





ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS





None.





ITEM 5 - OTHER INFORMATION





As previously reported on Form 8-K filed with the SEC on December 9, 2009, the Registrant through its principal subsidiary Duratech Group Inc. (“Duratech”) cancelled its Purchase Agreement dated as of June 8, 2009 (the “Agreement”) between and among Duratech, 1152645 Alberta Ltd., an Alberta numbered corporation
(“Alberta Company”), and Al Kirby, a citizen of Alberta, Canada (“Kirby”) and the principal owner of Alberta Company, pursuant to which Duratech had a right to acquire, subject to the satisfaction of certain conditions subsequent, 100% of Al Kirby’s ownership interest in Alberta Company, which reflected 100% of the common voting shares and approximately 76% of the overall ownership of the Alberta Company for consideration consisting of cash having an aggregate market value of approximately
$1 million (Canadian Dollars), approximately $924,000 U.S. Dollars based on foreign currency rates on the date of the Agreement.  The consummation of the acquisition was contingent on Duratech completing an acquisition financing that provided $1,000,000 (CAD) in cash which the Company was unable to obtain.  The Registrant has not yet completed a recapitalization that would increase its authorized common stock and thus afford the Registrant the ability to raise capital through a private placement
of equity securities.  Duratech was unable to otherwise raise the necessary capital to fulfill its initial obligation to pay $500,000 (CAD) in cash to Kirby as required by the Agreement and upon the expiration of a 90 period, the Agreement was cancelled.  Given this action and that Duratech will be unable to assume the assets and intellectual property provided under the Agreement with Kirby and the Alberta Company, Duratech has no further obligations under the Agreement.  The Registrant
will continue to explore and negotiate alternative arrangements with the parties which may allow the Registrant to secure some of the rights under the prior Agreement or joint venture with the parties.





The Registrant has decided to consolidate its Canadian building operations under its principal subsidiary, Duratech Group Inc. (“Group” or “Company”), and close its Duratech Structures (“Structures”) subsidiary.   Group would expect to continue to build temporary structures on a scaled
back basis as the current economic environment permits.





ITEM 6. EXHIBITS AND REPORTS ON FORM8-K





(b) Exhibits





Exhibits for UpSnap, Inc. and its subsidiaries are listed below.





INDEX TO EXHIBITS





The exhibits designated by an asterisk (*) are filed herein. The exhibits not so designated are incorporated by reference to the indicated filing.





Exhibit No.
Descriptions2.1
Share Exchange Agreement, dated August 29, 2008 (incorporated by reference to Exhibit 2.1 from Form 8-K/A filed on May 27, 2009)2.2
Asset Purchase Agreement, dated August 29, 2009 (incorporated by reference to Exhibit 2.2 from Form 8-K/A filed on May 27, 2009)2.3
Preferred Stock Exchange Agreement, dated January 8, 2009 (incorporated by reference to Exhibit 2.1 from Form 8-K filed on January 20, 2009)3.1
Articles of Incorporation of UpSnap, Inc. (incorporated by reference to Exhibit 3.1 from Form SB-2 filed on September 18, 2003)3.2
By-laws of UpSnap, Inc. (incorporated by reference to Exhibit 3.2 from Form SB-2 filed on September 18, 2003)3.3
Certificate of Amendment to Articles of Incorporation changing name of corporation and authorizing 3:1forward split (incorporated by reference to Exhibit 3.1 from Form 8-K filed on November 17, 2005)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 1934*31.2
Certification of the Chief Financial Officer Pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934*32
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: December 21, 2009
By:
/s/ Peter van HierdenPeter van HierdenChief Executive OfficerDate: December 21, 2009
By:
/s/Richard von GnechtenRichard von GnechtenChief Financial Officer





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