Naka- is a prefix that can have several different meanings. Usually, it's used as a past tense verb indicating that someone was able to do something. This case looks like it's using the second meaning, which is used as an adjective to describe a current state. That would mean that nakaupo here would be the equivalent of "is seated". You can do this with other root words, like nakatayo [is standing], or even colors and clothing like naka-kurbata [is wearing a tie] or nakapula [in red].