[FORM 8-K Filing Information](index=1&type=section&id=FORM%208-K%20Filing%20Information) Details administrative information for the Form 8-K filing, identifying FingerMotion, Inc. as registrant and its Nasdaq listing [Registrant and Filing Details](index=1&type=section&id=Registrant%20and%20Filing%20Details) Details administrative information for the Form 8-K filing, identifying FingerMotion, Inc. as registrant and its Nasdaq listing Registrant and Filing Details | Detail | Value | | :--- | :--- | | Registrant Name | FINGERMOTION, INC. | | State of Incorporation | Delaware | | Trading Symbol | FNGR | | Exchange | The Nasdaq Stock Market LLC | - The registrant is not an emerging growth company[4](index=4&type=chunk) [SECTION 2 – FINANCIAL INFORMATION](index=2&type=section&id=SECTION%202%20%E2%80%93%20FINANCIAL%20INFORMATION) This section reports FingerMotion, Inc.'s financial results for Q2 FY2026 and related disclosures [Item 2.02 Results of Operations and Financial Condition](index=2&type=section&id=Item%202.02%20Results%20of%20Operations%20and%20Financial%20Condition) Reports FingerMotion, Inc.'s Q2 FY2026 financial results, incorporated by reference from Item 7.01, with legal disclaimers - Financial results for the second quarter of fiscal year 2026 (period ended August 31, 2025) were reported via a news release on October 15, 2025, and are incorporated by reference from Item 7.01[5](index=5&type=chunk) - The information in this item is not deemed 'filed' for purposes of Section 18 of the Exchange Act, nor incorporated by reference in other filings, except as expressly set forth[6](index=6&type=chunk) [SECTION 7 – REGULATION FD](index=2&type=section&id=SECTION%207%20%E2%80%93%20REGULATION%20FD) Details the Regulation FD disclosure, including the Q2 FY2026 financial summary and operational highlights [Item 7.01 Regulation FD Disclosure](index=2&type=section&id=Item%207.01%20Regulation%20FD%20Disclosure) Discloses the October 15, 2025 news release reporting Q2 FY2026 financial results, with full details in the 10-Q - A news release was issued on October 15, 2025, to report financial results for Q2 fiscal 2026 (period ended August 31, 2025)[7](index=7&type=chunk) - Full financial results are available in the company's recent 10-Q filing and on its investor relations website[7](index=7&type=chunk) [Q2 2026 Financial Summary](index=2&type=section&id=Q2%202026%20Financial%20Summary) Summarizes Q2 FY2026 financial performance, highlighting revenue growth, gross profit decline, and reduced net loss Q2 2026 Key Financials (vs. Q2 2025) | Metric | Q2 FY2026 (US$) | Change vs Q2 FY2025 | | :--- | :--- | :--- | | Quarterly Revenue | 8.65 million US$ | +2% | | Telecommunications Products & Services Revenue | 8.64 million US$ | +3% | | DaGe Platform Revenue | 6,898 US$ | From $4,789 | | Command and Communication Segment Revenue | 585 US$ | From $28,730 | | Big Data Segment Revenue | 147 US$ | From $nil | | Cost of Revenue | 8.61 million US$ | - | | Gross Profit | 38,740 US$ | -87% | | Operating Expenses | 1.53 million US$ | -23% (from $1.99 million US$) | | Net Loss Attributable to Shareholders | 1.54 million US$ | -9% (from $1.69 million US$) | | Basic and Diluted Loss Per Share | 0.03 US$ | No change | Balance Sheet Snapshot (as of August 31, 2025) | Metric | Amount (US$) | | :--- | :--- | | Cash and Cash Equivalents | 0.22 million US$ | | Working Capital Surplus | 8.3 million US$ | | Shareholders' Equity | 15.1 million US$ | | Total Assets | 51.9 million US$ | | Total Current Liabilities | 36.8 million US$ | | Total Liabilities | 36.8 million US$ | - As of August 31, 2025, there were 59,408,429 shares of common stock issued and outstanding[8](index=8&type=chunk) [Operational Highlights and Management Commentary](index=3&type=section&id=Operational%20Highlights%20and%20Management%20Commentary) Highlights Q2 FY2026 operational performance, emphasizing core business growth, platform traction, Big Data revenue, and efficiency gains - The Telecommunications Products & Services segment remains the Company's foundation, delivering consistent revenue growth and serving millions of users across China[9](index=9&type=chunk) - The DaGe Platform's revenue increase signals early traction from its collaboration with Qingling Motors Co. Ltd. to develop intelligent vehicle solutions, supported by additional C2 platform investment[9](index=9&type=chunk) - The Big Data segment saw the emergence of revenue, reflecting a pivot toward leveraging advanced analytics to unlock new monetization avenues[10](index=10&type=chunk) - Operational efficiencies contributed to a **23% reduction in expenses** and a **9% narrowing of net loss**, underscoring progress towards breakeven[10](index=10&type=chunk) - CEO Martin Shen highlighted the resilience of the core business, diversification of revenue streams, improved income statement from operational efficiencies, and a strong balance sheet providing flexibility for strategic initiatives, expressing optimism about opportunities in mobile data, big data insights, and integrated services[11](index=11&type=chunk) [SECTION 9 – FINANCIAL STATEMENTS AND EXHIBITS](index=3&type=section&id=SECTION%209%20%E2%80%93%20FINANCIAL%20STATEMENTS%20AND%20EXHIBITS) This section lists the financial statements and exhibits accompanying the Form 8-K filing [Item 9.01 Financial Statements and Exhibits](index=3&type=section&id=Item%209.01%20Financial%20Statements%20and%20Exhibits) Lists exhibits for the Form 8-K filing, including the October 15, 2025 News Release and XBRL-tagged Cover Page Interactive Data File Exhibits | Exhibit | Description | | :--- | :--- | | 99.1 | News Release dated October 15, 2025 | | 104 | Cover Page Interactive Data File (XBRL tags embedded) | [SIGNATURES](index=4&type=section&id=SIGNATURES) This section contains the formal signatures for the Form 8-K filing, confirming its authorization [SIGNATURES](index=4&type=section&id=SIGNATURES_Details) The report is formally signed by Martin J. Shen, CEO and Director of FingerMotion, Inc., on October 15, 2025 - The report was signed by Martin J. Shen, CEO and Director of FingerMotion, Inc., on October 15, 2025[15](index=15&type=chunk)

PART I – FINANCIAL INFORMATION This section presents the unaudited condensed consolidated interim financial statements and management's discussion and analysis of the company's financial performance and condition [ITEM 1 – FINANCIAL STATEMENTS](index=3&type=section&id=ITEM%201%20%E2%80%93%20FINANCIAL%20STATEMENTS) This section presents the unaudited condensed consolidated interim financial statements, including balance sheets, statements of operations, statements of stockholders' equity, and statements of cash flows, along with detailed notes explaining the company's business, accounting policies, and financial position for the six months ended August 31, 2025, and comparative periods [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This statement provides a snapshot of the company's financial position, detailing assets, liabilities, and equity at specific points in time Condensed Consolidated Balance Sheets (August 31, 2025 vs. February 28, 2025) | Metric | August 31, 2025 | February 28, 2025 | | :-------------------------- | :-------------- | :---------------- | | Total Assets | $51,900,062 | $48,820,451 | | Total Liabilities | $36,824,675 | $35,161,495 | | Total Stockholders' Equity | $15,075,387 | $13,658,956 | | Cash and cash equivalents | $221,836 | $1,128,135 | | Accounts receivable, net | $37,778,762 | $32,659,437 | [Unaudited Condensed Consolidated Statements of Operations](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) This statement details the company's revenues, expenses, and net loss over specific interim periods Unaudited Condensed Consolidated Statements of Operations (Six Months Ended August 31) | Metric | 2025 | 2024 | Change | Change (%) | | :----------------------------------- | :----------- | :----------- | :----------- | :--------- | | Revenue | $17,106,254 | $16,832,746 | +$273,508 | +2% | | Cost of revenue | $(16,914,993) | $(15,849,829) | $(1,065,164) | +7% | | Gross profit | $191,261 | $982,917 | $(791,656) | -81% | | Total operating expenses | $(3,669,611) | $(4,350,172) | +$680,561 | -16% | | Net loss before income tax | $(3,572,285) | $(3,346,383) | $(225,902) | +7% | | Net loss attributable to stockholders | $(3,549,566) | $(3,344,133) | $(205,433) | +6% | | Loss Per Share - Basic | $(0.06) | $(0.06) | $0.00 | 0% | Unaudited Condensed Consolidated Statements of Operations (Three Months Ended August 31) | Metric | 2025 | 2024 | Change | Change (%) | | :----------------------------------- | :----------- | :----------- | :----------- | :--------- | | Revenue | $8,647,511 | $8,458,763 | +$188,748 | +2% | | Cost of revenue | $(8,608,771) | $(8,157,735) | $(451,036) | +6% | | Gross profit | $38,740 | $301,028 | $(262,288) | -87% | | Total operating expenses | $(1,528,160) | $(1,992,194) | +$464,034 | -23% | | Net loss before income tax | $(1,549,524) | $(1,690,551) | +$141,027 | -8% | | Net loss attributable to stockholders | $(1,541,010) | $(1,688,229) | +$147,219 | -9% | | Loss Per Share - Basic | $(0.03) | $(0.03) | $0.00 | 0% | [Unaudited Condensed Consolidated Statement of Stockholders' Equity](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Stockholders%27%20Equity) This statement outlines changes in the company's equity components, including common stock, paid-in capital, and accumulated deficit Changes in Stockholders' Equity (March 1, 2025 to August 31, 2025) | Item | Amount | | :------------------------------------ | :----------- | | Balance at March 1, 2025 | $13,658,956 | | Common stock issued for cash | $2,956,615 | | Common stock issued for professional service | $56,763 | | Common stock issued for conversion of customer deposit | $1,400,000 | | Additional paid in capital – stock options | $293,984 | | Net Loss | $(3,549,566) | | Balance at August 31, 2025 | $15,075,387 | [Unaudited Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement summarizes the cash inflows and outflows from operating, investing, and financing activities Unaudited Condensed Consolidated Statements of Cash Flows (Six Months Ended August 31) | Metric | 2025 | 2024 | Change | | :-------------------------------------- | :----------- | :----------- | :----------- | | Net cash used in operating activities | $(3,086,249) | $(2,904,172) | $(182,077) | | Net cash used in investing activities | $(1,826) | $(1,741) | $(85) | | Net cash provided by financing activities | $2,205,493 | $2,629,688 | $(424,195) | | Effect of exchange rates on cash | $(23,717) | $(430,723) | +$407,006 | | Net change in cash | $(906,299) | $(706,948) | $(199,351) | | Cash at end of period | $221,836 | $810,284 | $(588,448) | - The decrease in net cash provided by financing activities was primarily due to the repayment of **$751,122** in loan payable in 2025, compared to proceeds from loan payable and stock subscription advances in 2024[14](index=14&type=chunk)[247](index=247&type=chunk) [Notes to the Unaudited Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations of the company's business, significant accounting policies, and specific financial statement line items [Note 1 – Nature of Business and Basis of Presentation](index=10&type=section&id=Note%201%20%E2%80%93%20Nature%20of%20Business%20and%20Basis%20of%20Presentation) This note describes the company's business, its transition, and the basis for preparing the financial statements - FingerMotion, Inc. transitioned from property management to an information technology company in 2017, focusing on telecommunication services in China through a VIE structure[16](index=16&type=chunk)[17](index=17&type=chunk)[19](index=19&type=chunk) - The company uses a Variable Interest Entity (VIE) structure with Shanghai JiuGe Information Technology Co., Ltd. (JiuGe Technology) to acquire operational control in China, a common practice in industries with foreign investment restrictions[21](index=21&type=chunk)[139](index=139&type=chunk)[140](index=140&type=chunk) - Recent subsidiary incorporations (2024-2025) expand the company's ventures into communication/streaming services, communication equipment R&D/manufacturing, and sales of household/electronic products in China[26](index=26&type=chunk)[27](index=27&type=chunk)[28](index=28&type=chunk) [Note 2 - Summary of Principal Accounting Policies](index=11&type=section&id=Note%202%20-%20Summary%20of%20Principal%20Accounting%20Policies) This note outlines the key accounting principles and methods used in preparing the consolidated financial statements - Consolidated financial statements are prepared in accordance with U.S. GAAP and include the Company and its wholly-owned subsidiaries, with all intercompany accounts and transactions eliminated[29](index=29&type=chunk) - The Company consolidates its VIEs, specifically JiuGe Technology, as it is deemed the primary beneficiary through contractual arrangements, bearing the majority of risks and entitled to most returns[30](index=30&type=chunk)[32](index=32&type=chunk) Assets and Liabilities of the VIE (August 31, 2025 vs. February 28, 2025) | Metric | August 31, 2025 | February 28, 2025 | | :---------------- | :-------------- | :---------------- | | Total assets | $9,567,357 | $10,160,413 | | Total liabilities | $13,158,812 | $12,952,195 | Operating Result of VIE (Six Months Ended August 31) | Metric | 2025 | 2024 | | :-------------------------- | :----------- | :----------- | | Revenue | $1,241,600 | $3,941,998 | | Gross profit | $82,056 | $435,436 | | Net loss | $(731,712) | $(823,143) | Operating Result of VIE's Subsidiaries (Six Months Ended August 31) | Metric | 2025 | 2024 | | :-------------------------- | :----------- | :----------- | | Revenue | $14,943,155 | $12,890,748 | | Gross profit | $81,794 | $547,481 | | Net loss | $(803,280) | $(224,972) | - Financial statements require management to make estimates and assumptions, particularly for assets, liabilities, revenues, and expenses, with actual results potentially differing[38](index=38&type=chunk) - The Company relies on cloud-based hosting, and any disruption or termination of this relationship could adversely affect operating results[39](index=39&type=chunk) - The Company operates as a single reportable segment, with all revenue and operations derived from China, and no geographical segments are presented[40](index=40&type=chunk) - The Company's reporting currency is the US dollar, while foreign subsidiaries use local currencies (RMB, SGD, HKD) as functional currencies; assets and liabilities are translated at period-end rates, and revenues/expenses at average rates, with adjustments recorded in accumulated other comprehensive income[41](index=41&type=chunk) Exchange Rates for RMB to USD | Item | Rate | | :-------------------------------- | :---------------- | | August 31, 2025 (Balance Sheet) | RMB7.1314 to $1.00 | | February 28, 2025 (Balance Sheet) | RMB7.2830 to $1.00 | | Six months ended August 31, 2025 (Income Statement/Cash Flows) | RMB7.2155 to $1.00 | | Six months ended August 31, 2024 (Income Statement/Cash Flows) | RMB7.2231 to $1.00 | - Identifiable intangible assets are recorded at cost and amortized over 3-10 years, with periodic impairment evaluations[43](index=43&type=chunk) - Long-lived assets are reviewed for impairment when circumstances indicate carrying value may not be recoverable, comparing undiscounted cash flows to carrying value, and recognizing impairment if carrying value exceeds fair value[45](index=45&type=chunk) - Accounts receivable are stated at expected collectible amounts, with allowances for credit losses based on historical experience, creditworthiness, aging, and specific circumstances[47](index=47&type=chunk) - For the six months ended August 31, 2025, one major customer accounted for approximately **79% of total revenue** and **41% of total accounts receivable**[51](index=51&type=chunk) - For the six months ended August 31, 2025, one major supplier accounted for approximately **78% of total purchases** and **44% of total accounts payable**[52](index=52&type=chunk) - Operating and finance lease right-of-use assets and lease liabilities are recognized at commencement based on the present value of future lease payments, using the incremental borrowing rate when the implicit rate is not readily determinable[53](index=53&type=chunk) - Cash and cash equivalents include cash on hand, demand deposits, and highly liquid short-term investments with original maturities of three months or less[54](index=54&type=chunk) - Equipment is stated at cost and depreciated using the straight-line method over estimated useful lives of three to seven years[55](index=55&type=chunk) - Basic earnings per share is based on weighted average common shares outstanding, while diluted EPS includes potential common shares, using the "treasury stock" method for equity instruments[57](index=57&type=chunk)[58](index=58&type=chunk) - The Company adopted ASC 606, recognizing revenue when performance obligations are satisfied, with no material change to timing or pattern of revenue recognition for existing streams[59](index=59&type=chunk)[60](index=60&type=chunk) - Revenue is recognized from hosting and integration services and technology platform licensing when persuasive evidence of an arrangement exists, service is provided, fees are determinable, and collection is probable[61](index=61&type=chunk) - Cost of revenue includes telecommunication products and services, SMS & MMS business costs, and purchase costs for emergency equipment[62](index=62&type=chunk) - Research and development costs are expensed as incurred, including compensation, benefits, stock-based compensation, and materials for R&D, with recent efforts focused on integrating the Mobile Integrated Command and Communication Platform into emergency response vehicles[63](index=63&type=chunk) - Selling, general and administrative expenses cover compensation, benefits, stock-based compensation, professional fees, facility costs, depreciation, and amortization related to overhead activities[65](index=65&type=chunk) - The Company uses the asset and liability method for income taxes (ASC 740), recognizing current and future tax consequences of temporary differences, with a valuation allowance provided if deferred tax assets are unlikely to be realized[66](index=66&type=chunk) - Non-controlling interests represent minority ownership in subsidiaries (1% in three, 30% in Zhejiang ChangXin, 20% in Shanghai XiaoYi Bin Tong) and are recorded as a component of equity[67](index=67&type=chunk) - The Company adopted ASU No. 2023-07 (Improvements to Reportable Segment Disclosures) on March 1, 2024, with no material impact[69](index=69&type=chunk) - The Company is evaluating ASU No. 2023-09 (Improvements to Income Tax Disclosures), effective for the 2026 annual period, and ASU No. 2024-03 (Expense Disaggregation Disclosures), effective for annual periods beginning after December 15, 2026[70](index=70&type=chunk)[71](index=71&type=chunk) [Note 3 – Going Concern](index=20&type=section&id=Note%203%20%E2%80%93%20Going%20Concern) This note addresses the company's ability to continue operations, highlighting accumulated deficits and the need for future financing - The Company had an accumulated deficit of **$37,736,950** at August 31, 2025, and a net loss of **$3,572,285** for the six months ended August 31, 2025[73](index=73&type=chunk) - Continuation as a going concern depends on obtaining additional financing (equity/debt) to fund operations and achieve profitability, with no assurance of securing such funds on acceptable terms[74](index=74&type=chunk) [Note 4 – Revenue](index=20&type=section&id=Note%204%20%E2%80%93%20Revenue) This note disaggregates the company's revenue by its primary business segments for the reported periods Revenue by Segment (Six Months Ended August 31) | Segment | 2025 | 2024 | | :-------------------------------- | :----------- | :----------- | | Telecommunication Products & Services | $16,951,135 | $16,798,764 | | DaGe Platform | $17,836 | $5,252 | | Command & Communication | $109,826 | $28,730 | | Big Data | $27,457 | — | | **Total Revenue** | **$17,106,254** | **$16,832,746** | [Note 5 – Equipment](index=20&type=section&id=Note%205%20%E2%80%93%20Equipment) This note details the company's equipment assets, including cost, accumulated depreciation, and net book value Equipment (August 31, 2025 vs. February 28, 2025) | Metric | August 31, 2025 | February 28, 2025 | | :------------------------ | :-------------- | :---------------- | | Equipment | $107,185 | $103,945 | | Less: accumulated depreciation | $(94,829) | $(80,685) | | **Net equipment** | **$12,356** | **$23,260** | - Depreciation expenses for the six months ended August 31, 2025, totaled **$13,007**, a decrease from **$13,521** in the prior year[77](index=77&type=chunk) [Note 6 – Intangible Asset](index=21&type=section&id=Note%206%20%E2%80%93%20Intangible%20Asset) This note provides information on the company's intangible assets, including mobile applications, and their amortization Intangible Assets (August 31, 2025 vs. February 28, 2025) | Metric | August 31, 2025 | February 28, 2025 | | :------------------------ | :-------------- | :---------------- | | Mobile applications | $206,286 | $201,993 | | Less: accumulated amortization | $(203,699) | $(192,235) | | **Net intangible assets** | **$2,587** | **$9,758** | - Amortization expenses for the six months ended August 31, 2025, totaled **$5,312**, a decrease from **$10,233** in the prior year[80](index=80&type=chunk) [Note 7 – Prepayment and Deposit](index=21&type=section&id=Note%207%20%E2%80%93%20Prepayment%20and%20Deposit) This note details the company's prepayments and deposits, primarily related to vendor agreements and e-commerce platforms Prepayment and Deposit (August 31, 2025 vs. February 28, 2025) | Metric | August 31, 2025 | February 28, 2025 | | :---------- | :-------------- | :---------------- | | Deposit | $4,916,625 | $6,631,704 | | Prepayment | $385,099 | $468,048 | | **Total** | **$5,384,673** | **$7,016,803** | - Deposits are pledged to vendors like China Unicom and China Mobile for telecommunication products and services, and payments are made to e-commerce platforms such as PinDuoDuo, Tmall, and JD.com[81](index=81&type=chunk) [Note 8 – Accounts Receivable, net](index=21&type=section&id=Note%208%20%E2%80%93%20Accounts%20Receivable,%20net) This note presents the gross accounts receivable, allowance for credit losses, and net collectible amounts Accounts Receivable, net (August 31, 2025 vs. February 28, 2025) | Metric | August 31, 2025 | February 28, 2025 | | :-------------------------- | :-------------- | :---------------- | | Accounts receivable | $38,448,580 | $33,094,782 | | Less: allowance for credit losses | $(669,818) | $(435,345) | | **Net accounts receivable** | **$37,778,762** | **$32,659,437** | Allowance for Credit Losses (August 31, 2025 vs. February 28, 2025) | Metric | August 31, 2025 | February 28, 2025 | | :---------------------- | :-------------- | :---------------- | | At beginning of the period | $435,345 | $0 | | Additions | $234,473 | $435,345 | | **At end of the period** | **$669,818** | **$435,345** | [Note 9 – Other Receivables](index=22&type=section&id=Note%209%20%E2%80%93%20Other%20Receivables) This note itemizes other receivable balances, including advances to suppliers and security deposits Other Receivables (August 31, 2025 vs. February 28, 2025) | Metric | August 31, 2025 | February 28, 2025 | | :------------------ | :-------------- | :---------------- | | Advances to suppliers | $1,125,989 | $745,935 | | Security deposit | $179,949 | $336,558 | | Others | $244,715 | $14,472 | | **Total** | **$1,550,653** | **$1,096,965** | [Note 10 – Right-of-use Asset and Lease Liability](index=22&type=section&id=Note%2010%20%E2%80%93%20Right-of-use%20Asset%20and%20Lease%20Liability) This note details the company's lease assets and corresponding liabilities, including future minimum lease payments Right-of-use Asset and Lease Liability (August 31, 2025 vs. February 28, 2025) | Metric | August 31, 2025 | February 28, 2025 | | :------------------------ | :-------------- | :---------------- | | Right-of-use asset, net | $73,869 | $126,581 | | Current lease liability | $70,551 | $116,808 | | Non-current lease liability | $0 | $9,986 | | **Total lease liability** | **$70,551** | **$126,794** | - As of August 31, 2025, the weighted-average remaining lease term is **8 months**, and the weighted-average discount rate is **4.75%**[89](index=89&type=chunk) Future Minimum Lease Payments (as of August 31, 2025) | Period | Amount | | :----------------------- | :------- | | Twelve months ended August 31, 2026 | $71,672 | | Less: imputed interest | $(1,121) | | **Present value of lease obligations** | **$70,551** | [Note 11 – Common Stock](index=23&type=section&id=Note%2011%20%E2%80%93%20Common%20Stock) This note provides details on the company's common stock, including warrants and stock options outstanding Stock Purchase Warrants Continuity Schedule (February 28, 2025 to August 31, 2025) | Metric | Number of Warrants | Weighted Average Exercise Price | | :------------------------ | :----------------- | :------------------------------ | | Balance, February 28, 2025 | 5,288,316 | $1.56 | | Exercised | (1,149,743) | $1.50 | | Exercised | (150,000) | $1.88 | | **Balance, August 31, 2025** | **3,988,573** | **$1.57** | - Warrants to purchase **5,000,004 shares** of Common Stock were issued on December 23, 2024, at a combined purchase price of **$1.50 per share**, exercisable upon issuance and expiring in five years[95](index=95&type=chunk)[100](index=100&type=chunk) - The Company received **$1,918,614.50** from the exercise of warrants for **1,250,000 shares** of common stock during May 2025[102](index=102&type=chunk)[103](index=103&type=chunk) Stock Options Continuity Schedule (February 28, 2025 to August 31, 2025) | Metric | Number of Stock Options | Exercise Price | | :------------------------ | :-------------------- | :------------- | | Balance, February 28, 2025 | 6,039,100 | $4.18 | | Exercised | — | — | | Cancelled/Forfeited | — | — | | **Balance, August 31, 2025** | **6,039,100** | **$4.18** | - As of August 31, 2025, the aggregate intrinsic value of all outstanding stock options was estimated at **$0**, as the current stock price (**$1.51**) was lower than the strike prices of both the 2021 (**$3.84**) and 2023 (**$4.62**) grants[110](index=110&type=chunk) [Note 12 – Earnings Per Share](index=27&type=section&id=Note%2012%20%E2%80%93%20Earnings%20Per%20Share) This note calculates basic and diluted earnings per share based on net loss and weighted average common shares outstanding Earnings Per Share (Six Months Ended August 31) | Metric | 2025 | 2024 | | :------------------------------------------ | :------- | :------- | | Net Loss | $(3,572,285) | $(3,346,383) | | Weighted average number of common shares outstanding —basic | 58,349,151 | 52,686,451 | | Weighted average number of common shares outstanding —diluted | 58,349,151 | 52,686,451 | | Loss per common share — basic | $(0.06) | $(0.06) | | Loss per common share — diluted | $(0.06) | $(0.06) | [Note 13 – Income Taxes](index=27&type=section&id=Note%2013%20%E2%80%93%20Income%20Taxes) This note explains the company's income tax position, including effective tax rates and deferred tax assets and liabilities - The Company's effective income tax rate was **0.0%** for the six months ended August 31, 2025 and 2024, primarily due to valuation allowances[118](index=118&type=chunk) Deferred Tax Account Balances (August 31, 2025 vs. February 28, 2025) | Metric | August 31, 2025 | February 28, 2025 | | :------------------------------------------ | :-------------- | :---------------- | | Total deferred tax assets | $10,520,712 | $9,812,461 | | Less: Valuation allowance | $(3,768,932) | $(3,188,969) | | Total deferred tax assets, net of valuation allowance | $6,751,780 | $6,623,492 | | Total deferred tax liabilities | $(17,315) | $(16,954) | | **Net deferred tax assets (liabilities)** | **$6,734,465** | **$6,606,538** | [Note 14 – Commitments and Contingencies](index=28&type=section&id=Note%2014%20%E2%80%93%20Commitments%20and%20Contingencies) This note discloses any material outstanding claims, litigation, or other contingent liabilities - The Company is not currently involved in any material outstanding claims or litigation[123](index=123&type=chunk) [Note 15 – Loan Payable](index=29&type=section&id=Note%2015%20%E2%80%93%20Loan%20Payable) This note details the company's short-term loan obligations, including lenders, amounts, interest rates, and repayment activities - Finger Motion Company Limited secured short-term loans totaling **SGD$2,120,000** from Dr. Liew Yow Ming and Rita Chou Phooi Har in 2024 for working capital, with monthly interest rates ranging from **1.50% to 1.67%**[126](index=126&type=chunk)[127](index=127&type=chunk)[128](index=128&type=chunk) - The Company repaid **SGD$370,000** and **SGD$250,000** in February 2025, and an additional **SGD$1,000,000** (two SGD$500,000 loans) in July and August 2025[129](index=129&type=chunk)[130](index=130&type=chunk) [Note 16 – Subsequent Events](index=29&type=section&id=Note%2016%20%E2%80%93%20Subsequent%20Events) This note describes significant events that occurred after the balance sheet date but before the financial statements were issued - On September 30, 2025, the Company acquired all intellectual property for its DaGe platform from Shanghai Jihaohe Information Technology Co., Ltd[131](index=131&type=chunk) - The acquisition consideration was **1,500,000 shares** of common stock, issued on October 2, 2025, at a deemed price of **$1.57 per share**[131](index=131&type=chunk) [ITEM 2 – MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=30&type=section&id=ITEM%202%20%E2%80%93%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides management's perspective on the company's financial condition and results of operations, highlighting material changes, corporate structure, business lines, recent developments, and liquidity. It includes a detailed comparison of financial performance for the three and six months ended August 31, 2025, against the prior year, and discusses critical accounting policies and subsequent events [Introduction](index=30&type=section&id=Introduction) This section introduces the scope of management's discussion and analysis of financial condition and results of operations - The MD&A covers financial condition changes from February 28, 2025, to August 31, 2025, and results of operations for the six months ended August 31, 2025[135](index=135&type=chunk) - The report contains forward-looking statements subject to risks and uncertainties, as detailed in the Annual Report on Form 10-K and Item 1A - Risk Factors of this Quarterly Report[134](index=134&type=chunk) [Corporate Information](index=30&type=section&id=Corporate%20Information) This section describes the company's corporate structure, including its holding company status and Variable Interest Entity (VIE) arrangements in China - FingerMotion, Inc. is a Delaware holding company that conducts significant operations through its subsidiaries and a Variable Interest Entity (VIE), JiuGe Technology, in China[139](index=139&type=chunk) - The VIE structure provides operational control over JiuGe Technology and allows consolidation of its financial results in accordance with U.S. GAAP, achieved through contractual agreements and loans to the VIE's sole shareholder, Ms. Li Li[139](index=139&type=chunk)[140](index=140&type=chunk) - The company's holding company structure presents risks, as investors do not directly hold equity in subsidiaries or the VIE, and the company relies on contributions from them for cash flow[144](index=144&type=chunk) [Share Exchange Agreement](index=32&type=section&id=Share%20Exchange%20Agreement) This section details the acquisition of Finger Motion Company Limited and the company's strategic refocus on telecommunication business - On July 13, 2017, FingerMotion, Inc. acquired Finger Motion Company Limited (FMCL) via a Share Exchange Agreement, issuing **12,000,000 common shares** to FMCL shareholders and **600,000** to consultants[147](index=147&type=chunk) - FMCL became a wholly-owned subsidiary, initially a video game division, but the company refocused on the telecommunication business in June 2018[148](index=148&type=chunk) [VIE Agreements](index=33&type=section&id=VIE%20Agreements) This section explains the contractual arrangements used to gain operational control over JiuGe Technology in China - The Company entered into VIE Agreements with JiuGe Technology on October 16, 2018, to acquire operational control of its mobile payment platform business in China[151](index=151&type=chunk) - Key VIE agreements include a Consulting Services Agreement (transferring after-tax net profits), a Loan Agreement (funding capital contribution and providing conversion rights), a Power of Attorney Agreement (vesting voting control), a Call Option Agreement (irrevocable right to acquire equity), and a Share Pledge Agreement (guaranteeing performance)[152](index=152&type=chunk)[156](index=156&type=chunk) - While PRC counsel believes the VIE Agreements are valid, there are risks that PRC regulators or courts may deem them unenforceable, potentially impacting the company's control and financial benefits from JiuGe Technology[153](index=153&type=chunk)[302](index=302&type=chunk) [Acquisition of Operational Control of Beijing Technology](index=35&type=section&id=Acquisition%20of%20Operational%20Control%20of%20Beijing%20Technology) This section describes the acquisition of Beijing Technology and its entry into the mass SMS text services business - On March 7, 2019, JiuGe Technology acquired operational control of Beijing Technology, entering the mass SMS text services business[159](index=159&type=chunk) - Beijing Technology's platform processes over **150 million SMS messages monthly**, offering bulk services to businesses and managing delivery in compliance with MIIT guidelines[159](index=159&type=chunk)[181](index=181&type=chunk) [China Unicom Cooperation Agreement](index=35&type=section&id=China%20Unicom%20Cooperation%20Agreement) This section outlines the agreement with China Unicom Yunnan to build and operate an electronic sales platform - JiuGe Technology entered a Cooperation Agreement with China Unicom Yunnan on July 7, 2019, to build and operate its electronic sales platform[160](index=160&type=chunk) - The agreement grants JiuGe Technology a percentage of revenue from sales processed on the platform, which offers mobile phones, data services, smart devices, and financial insurance[160](index=160&type=chunk) - The agreement has a three-year term with yearly auto-renewal but can be terminated by JiuGe Technology with three months' notice or unilaterally by China Unicom Yunnan[161](index=161&type=chunk) [Intercorporate Relationships](index=36&type=section&id=Intercorporate%20Relationships) This section clarifies the company's complex corporate structure involving subsidiaries and contractually controlled entities in China - The company's corporate structure involves a holding company, wholly-owned subsidiaries (e.g., Finger Motion Company Limited, Finger Motion (CN) Global Limited), and contractually controlled entities in the PRC (e.g., Shanghai JiuGe Information Technology Co., Ltd. and its subsidiaries)[164](index=164&type=chunk)[167](index=167&type=chunk) - The company is subject to risks and uncertainties regarding Chinese laws and regulations, including the validity and enforcement of VIE Agreements, which could lead to a material change in operations or render common shares worthless if the VIE structure is disallowed[166](index=166&type=chunk) [Overview of Business Lines](index=37&type=section&id=Overview%20of%20Business%20Lines) This section provides a comprehensive description of the company's various business segments and service offerings [Telecommunications Products and Services](index=37&type=section&id=Telecommunications%20Products%20and%20Services) This section details the company's mobile payment, recharge, and data distribution services through major Chinese carriers - The company provides mobile payment and recharge services to China Unicom and China Mobile customers through a licensed portal, earning revenue from negotiated rebates[173](index=173&type=chunk)[175](index=175&type=chunk) - Services include payment/recharge, data plans, subscription plans, mobile phones, and loyalty points redemption, offered via B2B and B2C models on e-commerce platforms like PinDuoDuo.com, TMall.com, and JD.Com[172](index=172&type=chunk)[176](index=176&type=chunk) - JiuGe Technology has contracts with China Unicom and China Mobile to distribute mobile data in multiple provinces and signed a volume-based agreement with China Mobile Fujian in May 2021[174](index=174&type=chunk) [Value Added Product and Services](index=38&type=section&id=Value%20Added%20Product%20and%20Services) This section describes the company's development of mobile device protection and cloud-based data services - The company develops value-added products and services, including a Mobile Device Protection product for new mobile phones and 5G devices, in collaboration with China Unicom and China Mobile[180](index=180&type=chunk) - Cloud-based services offering secure data storage, processing, and databases are also provided to corporate customers, complementing telecommunication offerings[180](index=180&type=chunk) [SMS and MMS Services](index=39&type=section&id=SMS%20and%20MMS%20Services) This section outlines the company's mass messaging services for businesses, including licensing and operational scale - Through Beijing Technology, the company offers mass SMS and MMS services to businesses, processing over **150 million messages monthly**, with a license from MIIT[181](index=181&type=chunk) - The service involves acquiring bulk SMS/MMS bundles at reduced prices and providing competitive pricing to end consumers, including premium car manufacturers, hotel chains, airlines and e-commerce companies[181](index=181&type=chunk) [Rich Communication Services (RCS)](index=39&type=section&id=Rich%20Communication%20Services%20(RCS)) This section discusses the company's development of an RCS platform for 5G infrastructure to enhance business communication - The company is developing an RCS platform (Messaging as a Platform, MaaP) for 5G infrastructure, aiming to provide businesses with a better, more efficient, and lower-cost user experience for customer communication[182](index=182&type=chunk) - Deployment of the RCS platform is under review, with ongoing discussions among government bodies and telecommunication companies to assess market impacts and secure necessary approvals[182](index=182&type=chunk) [Big Data Insights (Sapientus)](index=39&type=section&id=Big%20Data%20Insights%20(Sapientus)) This section introduces the company's proprietary big data platform, offering data-driven solutions for various industries - Launched in July 2020, "Sapientus" is the company's proprietary big data insights platform, delivering data-driven solutions for insurance, healthcare, and financial services[183](index=183&type=chunk) - Sapientus offers a risk assessment engine for standard and customized scoring, providing insights for preferred risk selection, precision marketing, product customization, and fraud detection[184](index=184&type=chunk) - Recent advancements include the Insurance Management and Enablement (IME) platform, a digital solution to streamline customer management, product configuration, policy administration, and performance tracking for insurers and brokers[189](index=189&type=chunk) [Smart Mobility Solution (C2 Platform)](index=40&type=section&id=Smart%20Mobility%20Solution%20(C2%20Platform)) This section describes the company's advanced mobile integrated command and communication platform for public safety and industrial sectors - FingerMotion's Advanced Mobile Integrated Command and Communication Platform (C2 Platform) supports mission-critical mobile communications for public safety and industrial sectors, leveraging 5G and cloud technology[190](index=190&type=chunk) - The C2 Platform expanded deployment into pilot regions, establishing partnerships with automotive manufacturers and industrial partners, showcasing capabilities like mobile video feeds, real-time GPS tracking, and AI-driven analytics[191](index=191&type=chunk) [DaGe Platform](index=40&type=section&id=DaGe%20Platform) This section details the DaGe platform, an integrated marketplace for automotive products and services, including EV charging - The DaGe platform is an integrated marketplace for automotive products and services, including vehicle maintenance, repair, tire replacement, and EV charging, with significant growth driven by EV adoption[193](index=193&type=chunk) - The platform expanded its network of service providers and EV charging stations, enhanced user experience with location-based recommendations and real-time pricing, and leveraged telecommunications infrastructure for cross-promotion[194](index=194&type=chunk)[195](index=195&type=chunk) [Recent Developments](index=41&type=section&id=Recent%20Developments) This section highlights significant business events and strategic collaborations that occurred recently - In June 2025, JiuGe Technology entered strategic collaborations with Zhejiang Jincheng Automotive Group Co., Ltd. and Qingling Motors Co., Ltd. to integrate the C2 Platform into emergency response and intelligent vehicle solutions[198](index=198&type=chunk)[199](index=199&type=chunk) - On September 30, 2025, the Company acquired the intellectual property for its DaGe platform from Shanghai Jihaohe Information Technology Co., Ltd. for **1,500,000 common shares**[200](index=200&type=chunk) [Results of Operations](index=41&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance, comparing revenues, expenses, and profitability across periods [Three Months Ended August 31, 2025 Compared to Three Months Ended August 31, 2024](index=41&type=section&id=Three%20Months%20Ended%20August%2031,%202025%20Compared%20to%20Three%20Months%20Ended%20August%2031,%202024) This section provides a detailed comparison of financial results for the three-month periods Revenue by Segment (Three Months Ended August 31) | Segment | 2025 | 2024 | Change (%) | | :-------------------------------- | :----------- | :----------- | :--------- | | Telecommunication Products & Services | $8,639,881 | $8,425,244 | 3% | | DaGe Platform | $6,898 | $4,789 | 44% | | Command & Communication | $585 | $28,730 | -98% | | Big Data | $147 | — | 100% | | **Total Revenue** | **$8,647,511** | **$8,458,763** | **2%** | - Telecommunication Products & Services remained the primary revenue driver, contributing **99% of total revenue**[203](index=203&type=chunk) - DaGe Platform revenue grew by **44%**, and Big Data generated initial revenue of **$147**[204](index=204&type=chunk)[206](index=206&type=chunk) Cost of Revenue by Segment (Three Months Ended August 31) | Segment | 2025 | 2024 | | :-------------------------------- | :----------- | :----------- | | Telecommunication Products & Services | $8,594,670 | $8,121,699 | | DaGe Platform | $13,624 | $8,035 | | Command & Communication | $477 | $28,001 | | Big Data | — | — | | **Total Cost of Revenue** | **$8,608,771** | **$8,157,735** | - Total cost of revenue increased by **6%** to **$8.61 million**, driven by costs associated with mobile payment/recharge services, subscription plans, mobile phone sales, and customer acquisition initiatives[207](index=207&type=chunk) - Gross profit decreased by **87%** to **$38,740**, primarily due to margin variability in the Telecommunication Products & Services segment and initial ramp-up costs in emerging segments like DaGe Platform and Command and Communication[208](index=208&type=chunk) - Depreciation decreased by **34%** to **$7,766**[209](index=209&type=chunk) General & Administrative Expenses (Three Months Ended August 31) | Expense Category | 2025 | 2024 | Change (%) | | :----------------------- | :----------- | :----------- | :--------- | | Accounting | $97,764 | $35,629 | 174% | | Consulting | $340,715 | $361,628 | -6% | | Salaries & Wages | $568,709 | $616,947 | -8% | | Travelling | $38,017 | $81,619 | -53% | | **Total G&A Expenses** | **$1,387,466** | **$1,548,036** | **-10%** | - Total G&A expenses decreased by **10%** to **$1.39 million**, mainly due to lower salaries & wages, traveling, and entertainment expenses[210](index=210&type=chunk) - Marketing costs decreased by **74%** to **$18,836**, with activities focused on the DaGe platform rollout[211](index=211&type=chunk) - R&D expenses decreased by **57%** to **$77,540**, primarily directed towards the Big Data segment (Sapientus, IME platform) and preliminary development in the Command and Communication segment[212](index=212&type=chunk)[213](index=213&type=chunk)[214](index=214&type=chunk) - A credit impairment loss of **$(71,198)** was recorded, reflecting a favorable movement due to updated evaluation of customer credit risk[217](index=217&type=chunk) - Share compensation expenses decreased by **40%** to **$107,750**, due to reduced engagement of consultants compensated with common stock, aligning with efforts to optimize equity issuances[219](index=219&type=chunk) - Total operating expenses decreased by **23%** to **$1.53 million**[220](index=220&type=chunk) - Net loss attributable to shareholders decreased by **9%** to **$1.54 million**, primarily due to the reduction in operating expenses[221](index=221&type=chunk) [Six Months Ended August 31, 2025 Compared to Six Months Ended August 31, 2024](index=45&type=section&id=Six%20Months%20Ended%20August%2031,%202025%20Compared%20to%20Six%20Months%20Ended%20August%2031,%202024) This section provides a detailed comparison of financial results for the six-month periods Revenue by Segment (Six Months Ended August 31) | Segment | 2025 | 2024 | Change (%) | | :-------------------------------- | :----------- | :----------- | :--------- | | Telecommunication Products & Services | $16,951,135 | $16,798,764 | 1% | | DaGe Platform | $17,836 | $5,252 | 240% | | Command & Communication | $109,826 | $28,730 | 282% | | Big Data | $27,457 | — | 100% | | **Total Revenue** | **$17,106,254** | **$16,832,746** | **2%** | - Telecommunication Products & Services contributed **99% of total revenue**[224](index=224&type=chunk) - DaGe Platform revenue grew by **240%**, Command & Communication by **282%**, and Big Data generated initial revenue of **$27,457**[225](index=225&type=chunk)[226](index=226&type=chunk)[227](index=227&type=chunk) Cost of Revenue by Segment (Six Months Ended August 31) | Segment | 2025 | 2024 | | :-------------------------------- | :----------- | :----------- | | Telecommunication Products & Services | $16,789,322 | $15,813,315 | | DaGe Platform | $36,114 | $8,513 | | Command & Communication | $89,557 | $28,001 | | Big Data | — | — | | **Total Cost of Revenue** | **$16,914,993** | **$15,849,829** | - Total cost of revenue increased by **7%** to **$16.91 million**, driven by costs for mobile payment/recharge services, subscription plans, mobile phone sales, and customer acquisition[228](index=228&type=chunk) - Gross profit decreased by **81%** to **$191,261**, primarily due to margin variability in the Telecommunication Products & Services segment and initial ramp-up costs in the DaGe Platform and Command and Communication businesses[229](index=229&type=chunk) - Depreciation decreased by **23%** to **$18,319**[230](index=230&type=chunk) General & Administrative Expenses (Six Months Ended August 31) | Expense Category | 2025 | 2024 | Change (%) | | :----------------------- | :----------- | :----------- | :--------- | | Accounting | $147,643 | $59,257 | 149% | | Consulting | $796,324 | $786,066 | 1% | | Salaries & Wages | $1,180,754 | $1,233,589 | -4% | | Travelling | $117,204 | $163,457 | -28% | | **Total G&A Expenses** | **$2,897,892** | **$3,429,813** | **-16%** | - Total G&A expenses decreased by **16%** to **$2.90 million**, mainly due to lower salaries & wages, traveling, and other miscellaneous expenses[231](index=231&type=chunk) - Marketing costs decreased by **77%** to **$30,942**, primarily related to targeted campaigns for the DaGe platform[232](index=232&type=chunk) - R&D expenses decreased by **30%** to **$250,192**, with efforts focused on the Big Data segment (Sapientus, IME platform) and early-stage development of the Command & Communication segment[233](index=233&type=chunk)[234](index=234&type=chunk)[235](index=235&type=chunk) - A credit impairment loss of **$236,769** was recorded, reflecting a prudent assessment of expected credit loss[238](index=238&type=chunk) - Share compensation expenses decreased by **42%** to **$235,497**, due to reduced consultant engagement compensated with common stock[239](index=239&type=chunk) - Total operating expenses decreased by **16%** to **$3.67 million**[240](index=240&type=chunk) - Net loss attributable to shareholders increased by **6%** to **$3.55 million**, primarily due to the significant decline in gross profit from the low-margin product mix in the Telecommunication Product & Services segment[241](index=241&type=chunk) [Liquidity and Capital Resources](index=49&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash position, working capital, and future capital requirements Cash and Working Capital (August 31, 2025 vs. February 28, 2025) | Metric | August 31, 2025 | February 28, 2025 | | :-------------- | :-------------- | :---------------- | | Cash reserves | $221,836 | $1,128,135 | | Working capital | $8,252,110 | $6,902,805 | - The business model requires periodic fund deposits with telecommunication companies and expansion into cloud-based services has increased accounts receivable, placing pressure on liquidity[243](index=243&type=chunk) - Additional capital is required to sustain growth and strategic initiatives, including the rollout of the Command & Communication business and increased deposits with telecommunication companies, which the company plans to seek through equity or debt financing[243](index=243&type=chunk)[285](index=285&type=chunk) - Net cash used in operating activities increased by **$182,077** to **$3,086,249**, primarily due to a **$4.61 million** increase in accounts receivable, offset by increases in accounts payable and accrual and other payables[245](index=245&type=chunk) - Net cash used in investing activities was **$1,826**, a slight increase of **$85** compared to the prior year[246](index=246&type=chunk) - Net cash provided by financing activities decreased by **$424,195** to **$2,205,493**, mainly due to the repayment of **$751,122** in loan payable[247](index=247&type=chunk) [Off-Balance Sheet Arrangements](index=50&type=section&id=Off-Balance%20Sheet%20Arrangements) This section confirms the absence of material off-balance sheet arrangements - The Company has no material off-balance sheet arrangements[248](index=248&type=chunk) [Subsequent Events](index=50&type=section&id=Subsequent%20Events) This section reports on significant events occurring after the reporting period - On September 30, 2025, the Company acquired the intellectual property for its DaGe platform from Shanghai Jihaohe Information Technology Co., Ltd. for **1,500,000 common shares** at **$1.57 per share**[249](index=249&type=chunk) [Critical Accounting Policies](index=50&type=section&id=Critical%20Accounting%20Policies) This section refers to the detailed disclosure of key accounting policies - Critical accounting policies are detailed in Note 2 of the financial statements and the Annual Report on Form 10-K[250](index=250&type=chunk)[251](index=251&type=chunk) [Recently Issued Accounting Pronouncements](index=50&type=section&id=Recently%20Issued%20Accounting%20Pronouncements) This section discusses the impact of new accounting standards on the company's financial statements - Recently issued but not yet effective accounting standards are not expected to have a material effect on the Company's financial statements[252](index=252&type=chunk) [ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=50&type=section&id=ITEM%203%20-%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) As a smaller reporting company, FingerMotion, Inc. is exempt from providing quantitative and qualitative disclosures about market risk - As a smaller reporting company, FingerMotion, Inc. is not required to provide quantitative and qualitative disclosures about market risk[253](index=253&type=chunk) [ITEM 4 – CONTROLS AND PROCEDURES](index=50&type=section&id=ITEM%204%20%E2%80%93%20CONTROLS%20AND%20PROCEDURES) This section details the evaluation of the company's disclosure controls and procedures and internal control over financial reporting. It highlights the conclusion that controls were not effective due to material weaknesses, particularly in segregation of duties, and outlines management's ongoing remediation efforts [Evaluation of Disclosure Controls and Procedures](index=50&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section assesses the effectiveness of the company's disclosure controls and procedures - Disclosure controls and procedures were deemed ineffective as of August 31, 2025, due to material weaknesses in internal controls over financial reporting[255](index=255&type=chunk) - The material weakness identified is limited segregation of duties and oversight in the Company's finance and accounting functions, leading to a reasonable possibility of material misstatements not being prevented or detected[261](index=261&type=chunk) [Management's quarterly report on internal control over financial reporting](index=51&type=section&id=Management%27s%20quarterly%20report%20on%20internal%20control%20over%20financial%20reporting) This section presents management's assessment of the effectiveness of internal control over financial reporting - Management concluded that certain aspects of the Company's internal control over financial reporting were not effective as of August 31, 2025[259](index=259&type=chunk) - The ineffectiveness is attributed to a material weakness: limited segregation of duties and oversight, and lack of compensating controls in finance and accounting functions[261](index=261&type=chunk) - Management is implementing remediation actions, including documenting controls with proper segregation of duties and implementing corporate governance policies, but testing and validation of effectiveness are ongoing[262](index=262&type=chunk)[264](index=264&type=chunk) [Changes in internal control over financial reporting](index=52&type=section&id=Changes%20in%20internal%20control%20over%20financial%20reporting) This section reports on any material changes in internal control over financial reporting during the quarter - No material changes in internal control over financial reporting occurred during the quarter, other than ongoing remediation efforts for identified material weaknesses[263](index=263&type=chunk) PART II – OTHER INFORMATION This section provides additional disclosures beyond the financial statements, including legal proceedings, risk factors, equity sales, defaults, and exhibits [ITEM 1 – LEGAL PROCEEDINGS](index=53&type=section&id=ITEM%201%20%E2%80%93%20LEGAL%20PROCEEDINGS) The Company is not a party to any pending legal proceedings, nor is it aware of any pending legal proceedings involving its officers, directors, affiliates, or significant beneficial holders that would be adverse to the company - The Company is not a party to any pending legal proceedings[266](index=266&type=chunk) [ITEM 1A – RISK FACTORS](index=53&type=section&id=ITEM%201A%20%E2%80%93%20RISK%20FACTORS) This section outlines material risks and uncertainties that could adversely affect the company's business, financial condition, and operating results. These risks include those related to the company's business operations, its securities, its Variable Interest Entity (VIE) agreements, and the broader challenges of doing business in China, such as regulatory changes, geopolitical tensions, and legal system uncertainties [Risks Related to the Business](index=53&type=section&id=Risks%20Related%20to%20the%20Business) This section outlines various operational and strategic risks inherent to the company's business model - The Company has a limited operating history, making future results difficult to forecast and past results unreliable indicators of future performance[269](index=269&type=chunk)[270](index=270&type=chunk) - The Company has a history of net losses, including **$3.57 million** for the six months ended August 31, 2025, and may not achieve or maintain profitability due to increasing expenses for new offerings and market expansion[271](index=271&type=chunk) - Rapid growth increases business complexity and strains management, operations, and financial resources, requiring continuous expansion of infrastructure and personnel[272](index=272&type=chunk) - Success depends on retaining key personnel and attracting new talent; failure to do so could adversely affect strategic goals[273](index=273&type=chunk) - A substantial amount of revenue is derived from China Unicom and China Mobile; loss of business, payment difficulties, or changes in terms from these companies could materially harm financial condition[274](index=274&type=chunk) - The business involves processing sensitive user data, making it vulnerable to cyberattacks, security breaches, or employee errors, which could interrupt operations, harm reputation, and lead to significant legal and financial exposure[275](index=275&type=chunk)[277](index=277&type=chunk)[278](index=278&type=chunk) - Systems, or those of third parties, are vulnerable to service interruptions from hardware/software defects, cyberattacks, natural disasters, or human error, which could adversely affect business and reputation[280](index=280&type=chunk)[281](index=281&type=chunk) - Business operations rely on external Internet and mobile infrastructures; disruptions or increased costs could decrease consumer traffic and revenue[282](index=282&type=chunk) - Foreign governments may shut down services, and local governments may shut down the platform, damaging reputation and disrupting operations[283](index=283&type=chunk) - The company may face claims, lawsuits, and investigations, which are costly, time-consuming, and could result in substantial damages, fines, or changes in business practices[284](index=284&type=chunk) - The company requires additional capital to increase deposits with telecommunication companies and support the rollout of its Command & Communications business; failure to obtain funding could limit growth[285](index=285&type=chunk) - The company faces risks of intellectual property infringement claims, which could lead to substantial defense costs, damages, injunctions, or the need to develop alternative technologies, adversely affecting business[286](index=286&type=chunk)[287](index=287&type=chunk) - Ongoing political and trade tensions between the U.S. and China could lead to new regulations or restrictions impacting operations, data rules, or cross-border business policies[288](index=288&type=chunk) [Risks Related to Our Securities](index=57&type=section&id=Risks%20Related%20to%20Our%20Securities) This section details risks associated with the company's common stock, including liquidity and price volatility - The company's common stock has limited liquidity, with sporadic trading volume and potential price volatility, making it difficult for shareholders to sell shares[289](index=289&type=chunk) - The market price of common stock may fluctuate significantly due to factors like operating results, analyst estimates, competitor announcements, key personnel changes, and global market trends[290](index=290&type=chunk) - The company does not intend to pay cash dividends in the foreseeable future, requiring stockholders to rely on stock price appreciation for gains[291](index=291&type=chunk) - The market price and trading volume could decline if analysts publish unfavorable research, downgrade the stock, or cease coverage[292](index=292&type=chunk) - Future issuance of common or preferred shares for financing will dilute existing shareholders' ownership and voting power, potentially reducing book value or market price[293](index=293&type=chunk) - Failure to maintain effective disclosure controls and internal control over financial reporting could impair timely and accurate financial statements, lead to restatements, and adversely affect investor confidence and stock price[294](index=294&type=chunk)[295](index=295&type=chunk) - FINRA rules for speculative low-priced securities may make it difficult for broker-dealers to recommend the company's stock, potentially limiting trading and depressing the share price[296](index=296&type=chunk) - The company's shares have been thinly traded, and trading volume could decrease again, making it difficult for shareholders to sell at desired prices or at all[297](index=297&type=chunk) [Risks Related to the VIE Agreements](index=59&type=section&id=Risks%20Related%20to%20the%20VIE%20Agreements) This section discusses the specific risks associated with the company's Variable Interest Entity structure in China - The PRC government may determine that VIE Agreements are not in compliance with applicable laws, leading to economic penalties, operational restrictions, restructuring requirements, or revocation of licenses[299](index=299&type=chunk)[301](index=301&type=chunk)[302](index=302&type=chunk) - VIE Agreements may not provide as effective control over JiuGe Technology as direct ownership, potentially hindering business objectives and revenue growth if the VIE fails to perform its obligations[303](index=303&type=chunk) - Enforcing VIE Agreements through PRC law is uncertain, as remedies may not be effective, and the legal environment in China is less developed, limiting protection of interests[304](index=304&type=chunk) - PRC tax authorities may challenge the VIE Agreements' payment arrangements if not deemed arm's length, potentially leading to higher tax liability or adverse financial consequences[305](index=305&type=chunk) - The sole shareholder of JiuGe Technology, Ms. Li Li, also serves as its legal representative and general manager, creating potential conflicts of interest that could adversely affect the company's operating performance[306](index=306&type=chunk) - The company relies on JiuGe Management's licenses and certificates; failure to renew or deterioration of the relationship with JiuGe Technology could severely harm operations[308](index=308&type=chunk)[309](index=309&type=chunk) - If JiuGe Management exercises its option to purchase JiuGe Technology's equity at a nominal price, the payment could adversely affect the company's financial position, despite not bringing immediate benefits[310](index=310&type=chunk) [Risks Related to Doing Business in China](index=61&type=section&id=Risks%20Related%20to%20Doing%20Business%20in%20China) This section covers broad geopolitical, regulatory, and economic risks of operating in the Chinese market - Changes in China's economic reforms or legal systems, government involvement, foreign exchange control, or international trade restrictions could damage operations and profitability[311](index=311&type=chunk)[313](index=313&type=chunk) - The evolving PRC legal system, with non-uniform interpretations and enforcement, limits legal protections and makes litigation protracted and costly[314](index=314&type=chunk) - Heightened U.S.-China tensions could lead to new regulations or restrictions, impacting trade, investments, and technological exchanges, adversely affecting business[315](index=315&type=chunk) - PRC Securities Law Article 177 restricts providing securities-related documents to overseas parties without consent, potentially delaying or preventing compliance with regulatory requests[315](index=315&type=chunk) - Enforcing U.S. court judgments against the company or its non-U.S. resident officers/directors is difficult due to PRC-based assets and operations, and China's lack of reciprocal enforcement treaties with the U.S.[316](index=316&type=chunk) - The PRC government exerts substantial control over the economy; new, stricter regulations or interpretations could require additional expenditures or divestment of Chinese interests[317](index=317&type=chunk)[318](index=318&type=chunk) - The CSRC's Overseas Listing Trial Measures (effective March 31, 2023) require filing for indirect overseas offerings by PRC domestic companies meeting certain conditions, with non-compliance leading to fines and sanctions[319](index=319&type=chunk)[321](index=321&type=chunk) - Uncertainty regarding these new regulations could limit the company's ability to conduct business, accept investments, or maintain listings, potentially causing securities to decline in value[321](index=321&type=chunk) - High inflation in China could lead the government to impose credit/price controls, inhibiting economic activity and harming the company's market and operations[323](index=323&type=chunk) - PRC currency and capital transfer regulations may limit the company's ability to remit income earned in RMB to the U.S. or shareholders[324](index=324&type=chunk) - Recent regulatory developments in China, particularly on offshore capital raising, may lead to additional regulatory review, increased compliance costs, and potential limitations or suspension of business operations[325](index=325&type=chunk) - The SEC's request for additional disclosures from China-based operating companies and potential government interference could impact the company[326](index=326&type=chunk) - China's Data Security Law (effective September 2021) requires data classification and hierarchical protection, prohibiting data transfer to foreign agencies without approval[327](index=327&type=chunk) - The Cyber Security Law mandates security measures and a multi-level protection scheme (MLPS) for network operators[329](index=329&type=chunk) - The Personal Information Protection Law (effective November 2021) imposes comprehensive data privacy requirements, including local storage for critical information infrastructure operators and security assessments for data export[332](index=332&type=chunk) - Non-compliance with these evolving laws could lead to significant expenses, operational changes, fines, suspension, or delisting from U.S. markets[331](index=331&type=chunk)[333](index=333&type=chunk) - Restrictions on RMB convertibility may limit the company's ability to use RMB revenues for activities outside China or to make U.S. dollar dividend payments[335](index=335&type=chunk) - Fluctuations between the U.S. dollar and RMB can affect financial results, dividend values, and investments, with limited hedging options available in China[336](index=336&type=chunk)[338](index=338&type=chunk) - PRC regulations restrict dividend payments from the PRC subsidiary to its offshore parent, requiring allocation to statutory reserve funds, which limits the ability to fund growth, investments, or pay dividends[339](index=339&type=chunk) - Loans and capital contributions to PRC subsidiaries and affiliated entities are subject to statutory limits, registration, and approval requirements from SAFE or MOFCOM, which may delay or prevent funding and business expansion[340](index=340&type=chunk)[341](index=341&type=chunk) - Circular 19 (2015) limits the use of foreign currency capital contributions converted to RMB, potentially restricting fund transfers to China operations[342](index=342&type=chunk) - PRC residents' failure to register offshore special purpose companies (SPVs) under Circular 75 could lead to personal liability, fines, restrictions on investment activities, or limitations on profit distributions from PRC affiliates[343](index=343&type=chunk)[345](index=345&type=chunk) - Failure to comply with Circular 78 regarding employee stock options granted to Chinese citizens could result in fines, legal sanctions, and restrictions on future option grants[346](index=346&type=chunk) - If classified as a "resident enterprise" by PRC tax authorities, the company could be subject to a **25% enterprise income tax** on worldwide income and a **10% withholding tax** on dividends to non-PRC shareholders, with potential double taxation[347](index=347&type=chunk)[348](index=348&type=chunk)[349](index=349&type=chunk)[350](index=350&type=chunk) - The company is subject to FCPA and Chinese anti-corruption laws; unauthorized payments by employees or representatives could lead to severe criminal/civil sanctions and adverse effects on business[351](index=351&type=chunk) - PRC companies historically lack Western-style management and financial reporting, making it difficult to establish adequate controls, potentially leading to significant deficiencies in internal controls and non-compliance with U.S. securities laws[352](index=352&type=chunk) - The company's SEC reports and public announcements are not subject to review by PRC regulatory authorities, meaning no local agency has conducted due diligence on its China operations[353](index=353&type=chunk) - PRC M&A Rules and national security review requirements make acquisitions in China time-consuming and complex, potentially delaying or affecting growth strategies[354](index=354&type=chunk)[355](index=355&type=chunk)[356](index=356&type=chunk) - Failure to obtain required approvals could lead to challenges to PRC business, administrative punishments, and adverse effects on financial condition and stock price[357](index=357&type=chunk) - New CSRC regulations (Overseas Listing Trial Measures) require filings for new securities offerings, potentially limiting the ability to offer securities

FingerMotion to Showcase Advanced Command and Communication Platform at Indonesia's Emergency, Disaster Reduction and Rescue (EDRR) Expo "We see this as an important step in expanding our footprint in Southeast Asia and forging collaborations that strengthen disaster resilience across the region," said Martin Shen, CEO of FingerMotion. "With 10 vehicles and other equipment already deployed for beta testing, showcasing our C2 Platform at EDRR Indonesia allows us to fully demonstrate how reliable, real-time c ...

Revenue Performance - Reported annual revenue of $35.61 million, a decrease of $0.18 million or 0.5% compared to FY 2024[7] - Year over Year decline in Telecommunications Products & Services revenue of $5.59 million or 17% compared to FY 2024[7] - Year over Year growth in SMS & MMS revenue of $5.52 million or 206% compared to FY 2024[7] Financial Position - At February 28, 2025, total assets were $48.82 million and total liabilities were $35.16 million[13] - Cash balance at February 28, 2025, was $1.13 million with a working capital surplus of $6.90 million[13] Profitability - Reported annual net loss of $5.11 million, an increase of $1.30 million or 34% compared to FY 2024[7] Expenses - Marketing costs increased by $136,206 or 97% due to the promotion of the newly launched DaGe App platform[9] - General and administrative expenses decreased by $137,710 or 2% during the year[9] Strategic Initiatives - Introduction of new platforms such as the DaGe Platform and C2 Platform contributed to revenues in FY 2025[9] - Company remains committed to growth strategy through platform development and market expansion efforts[9]

Core Insights - FingerMotion, Inc. reported its financial results for Q1 of fiscal 2026, highlighting modest revenue growth and ongoing margin pressures due to evolving business dynamics [2][6] - The company is focusing on building higher-margin, data-driven business lines and refining operations to ensure long-term scalable growth [2] Financial Performance - Reported quarterly revenue of $8.46 million, a 1% increase compared to Q1 of fiscal 2025 [6] - Telecommunications Products & Services revenue was $8.31 million, down 1% from Q1 of fiscal 2025 [6] - DaGe Platform revenue grew to $10,938 from $463 in Q1 of fiscal 2025 [6] - Command and Communication segment contributed $109,241 in revenue, compared to $0 in Q1 of fiscal 2025 [6] - Big Data segment generated $27,310 in revenue, compared to $0 in Q1 of fiscal 2025 [6] - Cost of revenue increased to $8.31 million, resulting in a gross profit of $152,521, a 78% decrease from $681,889 in Q1 of fiscal 2025 [6] - Operating expenses were $2.14 million, a 9% decrease from $2.36 million in Q1 of fiscal 2025 [6] - Net loss attributable to shareholders was $2.01 million, a 21% increase from $1.66 million in Q1 of fiscal 2025 [6] - Basic and diluted loss per share reported at $0.04, compared to $0.03 for Q1 of fiscal 2025 [6] Company Overview - FingerMotion is a technology company specializing in mobile payment and recharge platform solutions in China [3] - The company aims to grow its user base organically and develop an ecosystem of highly engaged users utilizing its innovative applications [3] - FingerMotion's long-term vision includes serving over 1 billion users in the China market and expanding to other regional markets [3]

PART I – FINANCIAL INFORMATION This section presents FingerMotion, Inc.'s unaudited condensed consolidated interim financial statements and management's analysis [ITEM 1 – FINANCIAL STATEMENTS](index=9&type=section&id=ITEM%201%20%E2%80%93%20FINANCIAL%20STATEMENTS) This section presents FingerMotion, Inc.'s unaudited condensed consolidated interim financial statements and notes for Q1 2025 and 2024 [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents the company's financial position, including assets, liabilities, and equity, for May 31, 2025 and February 28, 2025 | Metric | May 31, 2025 (Unaudited) ($) | February 28, 2025 ($) | | :----------------------- | :----------------------- | :------------------ | | Cash and cash equivalents | $2,863,238 | $1,128,135 | | Accounts receivable, net | $38,781,671 | $32,659,437 | | Total Current Assets | $48,889,413 | $42,037,360 | | TOTAL ASSETS | $55,708,451 | $48,820,451 | | Total Current Liabilities | $39,489,417 | $35,134,555 | | TOTAL LIABILITIES | $39,506,569 | $35,161,495 | | TOTAL SHAREHOLDERS' EQUITY | $16,201,882 | $13,658,956 | - Total assets increased by approximately **$6.89 million**, from $48.82 million at February 28, 2025, to $55.71 million at May 31, 2025, primarily driven by an increase in cash and accounts receivable[8](index=8&type=chunk) - Total liabilities increased by approximately **$4.34 million**, from $35.16 million at February 28, 2025, to $39.51 million at May 31, 2025, mainly due to an increase in accounts payable[8](index=8&type=chunk) [Unaudited Condensed Consolidated Statements of Operations](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) This section details the company's revenues, expenses, and net loss for the three months ended May 31, 2025 and 2024 | Metric | Three Months Ended May 31, 2025 ($) | Three Months Ended May 31, 2024 ($) | Change (YoY) | | :------------------------------------ | :------------------------------ | :------------------------------ | :----------- | | Revenue | $8,458,743 | $8,373,983 | +1.01% | | Cost of revenue | $(8,306,222) | $(7,692,094) | +8.00% | | Gross profit | $152,521 | $681,889 | -77.65% | | Total operating expenses | $(2,141,451) | $(2,357,978) | -9.18% | | Net loss from operations | $(1,988,930) | $(1,676,089) | +18.66% | | Net Loss | $(2,022,761) | $(1,655,832) | +22.16% | | Net loss attributable to shareholders | $(2,008,556) | $(1,655,904) | +21.29% | | Loss Per Share - Basic | $(0.04) | $(0.03) | +33.33% | | Loss Per Share - Diluted | $(0.04) | $(0.03) | +33.33% | - Revenue increased slightly by **1% year-over-year**, reaching $8.46 million for the three months ended May 31, 2025[9](index=9&type=chunk) - Gross profit significantly decreased by **77.65% year-over-year**, from $681,889 to $152,521, primarily due to an 8% increase in cost of revenue[9](index=9&type=chunk) [Unaudited Condensed Consolidated Statement of Shareholders' Equity](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Shareholders%27%20Equity) This section outlines changes in shareholders' equity, including common stock issuances and net loss, for the three months ended May 31, 2025 | Metric | Balance at March 1, 2025 | Common Stock Issued (Cash) | Common Stock Issued (Service) | Common Stock Issued (Customer Deposit Conversion) | Net Loss | Balance at May 31, 2025 | | :------------------------------------ | :----------------------- | :------------------------- | :---------------------------- | :---------------------------------------------- | :--------- | :---------------------- | | Common Stock (Shares) | 57,141,186 | 1,679,743 | 27,500 | 560,000 | — | 59,408,429 | | Common Stock (Amount) ($) | $5,714 | $168 | $3 | $56 | — | $5,941 | | Additional Paid-in Capital ($) | $47,304,416 | $2,956,447 | $56,760 | $1,399,944 | — | $51,717,567 | | Accumulated Deficit ($) | $(34,187,384) | — | — | — | $(2,008,556) | $(36,195,940) | | Total Shareholders' Equity ($) | $13,658,956 | $2,956,615 | $56,763 | $1,400,000 | $(2,022,761) | $16,201,882 | - Total shareholders' equity increased from **$13,658,956** at March 1, 2025, to **$16,201,882** at May 31, 2025, primarily due to common stock issuances for cash, professional services, and conversion of customer deposits, despite a net loss[11](index=11&type=chunk) - The company issued **1,679,743 shares for cash**, **27,500 shares for professional services**, and **560,000 shares for the conversion of customer deposits** during the period[11](index=11&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section details the company's cash inflows and outflows from operating, investing, and financing activities for the three months ended May 31, 2025 and 2024 | Cash Flow Activity | Three Months Ended May 31, 2025 ($) | Three Months Ended May 31, 2024 ($) | | :------------------------------------ | :------------------------------ | :------------------------------ | | Net cash used in operating activities | $(1,204,217) | $(1,409,939) | | Net cash used in investing activities | $(1,826) | $0 | | Net cash provided by financing activities | $2,956,615 | $775,000 | | Effect of exchange rates on cash & cash equivalents | $(15,469) | $181,831 | | Net change in cash | $1,735,103 | $(453,108) | | Cash at end of period | $2,863,238 | $1,064,124 | - Net cash used in operating activities decreased by **$205,722**, from $(1,409,939) in 2024 to $(1,204,217) in 2025[13](index=13&type=chunk)[219](index=219&type=chunk) - Net cash provided by financing activities significantly increased to **$2,956,615** in 2025 from $775,000 in 2024, driven by proceeds from common stock issuance and warrant exercises[13](index=13&type=chunk)[221](index=221&type=chunk) [Notes to the Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the unaudited condensed consolidated financial statements [Note 1 – Nature of Business and basis of Presentation](index=9&type=section&id=Note%201%20%E2%80%93%20Nature%20of%20Business%20and%20basis%20of%20Presentation) FingerMotion, Inc. was incorporated in 2014, refocused to IT after a reverse acquisition in 2017, and operates in China via a VIE structure - FingerMotion, Inc. was incorporated on January 23, 2014, and changed its name from Property Management Corporation of America on July 13, 2017, following a change in control and acquisition of Finger Motion Company Limited (FMCL)[

Core Viewpoint - FingerMotion's subsidiary, JiuGe Technology, is collaborating with Qingling Motors to develop next-generation intelligent vehicle solutions aimed at enhancing efficiency and sustainability in commercial mobility [1][4]. Group 1: Collaboration Details - The joint effort focuses on creating smarter technologies for high-demand sectors such as logistics and emergency response, with Qingling Motors handling vehicle design and compliance, while JiuGe Technology provides system integration and software development [2][3]. - A joint technical taskforce has been established to accelerate innovation, streamline product development, and reduce time-to-market, emphasizing mutual knowledge exchange and shared intellectual property development [3]. Group 2: Market Positioning and Future Plans - This initiative positions both companies to lead in the digital transformation of the commercial vehicle sector, particularly in markets requiring connected and reliable platforms [4]. - Future efforts will include international market expansion and the creation of remote service ecosystems to support specialized logistics and emergency response applications [4]. Group 3: Company Backgrounds - FingerMotion is a technology company with a focus on mobile payment and recharge solutions in China, aiming to grow its user base and develop an ecosystem of high engagement [5]. - Qingling Motors, founded in 1985, is a leading commercial vehicle manufacturer in China, known for its expertise in chassis engineering and new energy powertrains [6].

Core Viewpoint - FingerMotion's subsidiary, JiuGe Technology, has formed a strategic collaboration with Zhejiang Jincheng Automotive to co-develop advanced emergency response vehicles, enhancing public safety solutions [1][2]. Group 1: Collaboration Details - The collaboration will focus on developing and marketing a new line of emergency response vehicles, including communication, command, and rescue units [2]. - Key areas of collaboration include product development, sales and promotion, customer support, and resource integration to improve operational efficiency [3]. Group 2: Strategic Alignment - This alliance aligns with JiuGe Technology's long-term growth strategy to strengthen its market position in the emergency response sector, leveraging combined technological expertise and market reach [4]. Group 3: Company Background - FingerMotion is a technology company specializing in mobile payment and recharge platform solutions in China, aiming to grow its user base and develop an ecosystem of high engagement [5]. - Zhejiang Jincheng Automotive, a subsidiary of Zhejiang Jinnong Group, specializes in vehicle development and manufacturing, with a registered capital of RMB 1 billion [6].

Financial Performance - FingerMotion reported annual revenue of $35.61 million, a decrease of $0.18 million or 0.5% compared to FY 2024 [4] - The company experienced a year-over-year decline in Telecommunications Products & Services revenue of $5.59 million or 17% compared to FY 2024 [4] - SMS & MMS business revenue grew by $5.52 million or 206% year-over-year compared to FY 2024 [4] - Big Data revenue declined by $0.39 million or 118% year-over-year compared to FY 2024 [4] - Revenue from the DaGe Platform was $0.08 million in FY 2025, while revenue from the Command & Communication (C2 Platform) was $0.19 million [4] Expense Management - General and administrative expenses decreased by $137,710 or 2% during the year [3] - Marketing costs increased by $136,206 or 97% due to the promotion of the newly launched DaGe App platform [3] - Research and development expenses decreased by $66,792 or 10% due to savings from data access and usage fees [3] Profitability and Loss - Gross profits were reported at $2.76 million, a decrease of $1.10 million or 28% compared to FY 2024 [4] - Annual cost of revenue increased by $0.91 million or 3% compared to FY 2024, totaling $32.84 million [4] - Operating expenses rose by $1.03 million or 13% compared to FY 2024, totaling $8.71 million [4] - The company reported an annual net loss of $5.11 million, an increase of $1.30 million or 34% compared to FY 2024 [4] Financial Position - As of February 28, 2025, FingerMotion had $1.13 million in cash, a working capital surplus of $6.90 million, and positive shareholders' equity of $13.66 million [4] - Total assets were reported at $48.82 million, with total current liabilities of $35.13 million and total liabilities of $35.16 million [4] - The company had 57,141,186 common shares issued and outstanding as of February 28, 2025 [4] Strategic Outlook - The CEO expressed confidence in the performance of the SMS & MMS business and the potential growth from the DaGe and C2 platforms [3] - The company aims to expand its customer base and diversify offerings to enhance market penetration [3] - FingerMotion envisions serving over 1 billion users in the China market and expanding to other regional markets [5]

Dividend Policy and Restrictions - The company has not declared or paid any dividends on its common stock and intends to retain all available funds for operations and growth[26]. - The company's ability to pay dividends is subject to PRC legal restrictions, which permit payments only from accumulated after-tax profits[28]. - The ability to pay dividends is limited to the registered capital amount of the WFOE, as determined by Chinese accounting standards[35]. - The Chinese government imposes controls on the conversion of RMB into foreign currencies, potentially complicating the remittance of dividends[35]. - The company relies on payments from the VIE to the WFOE to facilitate dividend payments to shareholders[31]. - The ability to pay dividends is subject to Chinese taxes, including a 6% VAT and 25% enterprise income tax, which may restrict cash flow[31]. - Current Chinese regulations allow the WFOE to pay dividends only out of its registered capital, which may limit the Company's ability to distribute profits[35]. - The company’s WFOE must allocate at least 10% of annual after-tax profits to a statutory general reserve fund until it reaches 50% of registered capital[28]. Regulatory Compliance and Risks - The company has not received any inquiries or sanctions from the CSRC regarding the Overseas Listing Trial Measures as of the report date[23]. - The Overseas Listing Trial Measures require domestic companies to file with the CSRC for overseas offerings if certain conditions are met, potentially impacting the company's operations[20]. - The company faces uncertainties regarding the interpretation and application of Chinese laws and regulations, which could materially affect its operations[19]. - The company faces risks related to the interpretation of Chinese laws and regulations regarding the VIE structure, which could materially affect operations[18]. - The PCAOB determined it could inspect registered public accounting firms in mainland China and Hong Kong, affecting the company's compliance status under the HFCAA[36]. - As of the latest report, the company is not a Commission Identified Issuer under the HFCAA, reducing the risk of delisting from Nasdaq[36]. - The enactment of the HFCAA could still cause investor uncertainty and negatively impact the market price of the company's common stock[37]. - The Overseas Listing Trial Measures require domestic companies to comply with filing procedures for overseas offerings, with penalties for non-compliance ranging from RMB1,000,000 to RMB10,000,000[20]. VIE Structure and Financial Implications - The company relies on payments from its VIE to its WFOE under the VIE Agreements for cash requirements, including dividends[25]. - The VIE is obligated to make payments to the WFOE, but such payments are subject to Chinese taxes, including a 6% VAT and 25% enterprise income tax[25]. - The VIE is obligated to make payments to the WFOE, which may be restricted by Chinese taxes including a 6% VAT and 25% enterprise income tax[31]. - The company relies on payments from the VIE to the WFOE for cash requirements, which may be limited by various regulatory restrictions[31]. Cybersecurity and Investigations - The company has not been involved in any cybersecurity investigations by Chinese regulatory authorities as of the report date[19]. - The company has not been involved in any cybersecurity investigations by Chinese regulatory authorities as of the report date[19].