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What changed in FingerMotion, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of FingerMotion, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+327 added−310 removedSource: 10-K (2025-05-29) vs 10-K (2024-05-29)

Top changes in FingerMotion, Inc.'s 2025 10-K

327 paragraphs added · 310 removed · 211 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

91 edited+42 added−14 removed110 unchanged
Biggest changeOver the past several years, Sapientus’ predictive models had garnered much interest and positive receptivity from the industry, particularly reinsurers and insurers in China and the greater region; we continue to elevate our analytic capabilities and align our services against the needs of our partners and the larger ecosystem.
Biggest changeThe Company’s flexible data structure is built from the ground up, by transforming raw telco data into basic building blocks, statistical measures and behavioral inferences, while layering in auxiliary contextual information, to extract behavioral insights and power revolutionary applications for insurance and financial services. 4 Source: https://www.gsma.com/futurenetworks/rcs/ & https://www.marketresearch.com/Infogence-Marketing-Advisory-Services-v4010/Global-Rich-Communication-Services-RCS-30323369/ 5 Source: https://www.gsma.com/futurenetworks/wp-content/uploads/2020/04/5G-Messaging-White-Paper-EN.pdf - 13 - Table of Contents Over the past several years, Sapientus’s predictive models had garnered much interest and positive receptivity from the industry, particularly reinsurers and insurers in China and the greater region; we continue to elevate our analytic capabilities and align our services against the needs of our partners and the larger ecosystem.
To encourage consumers to utilize our portal instead of using our competitors’ platforms or paying China Unicom or China Mobile directly, we offer mobile data and talk time at a rate discounted from these companies’ stated rates, which are also the rates we must pay to them to purchase the mobile data and talk time provided to consumers through the use of our platform.
To encourage consumers to utilize our portal instead of using our competitors’ platforms or paying China Unicom or China Mobile directly, we offer mobile data and talk time at a rate discounted from these companies’ stated rates, which are also the rates we must pay to them to purchase the mobile data and talk time provided to consumers through the use of our platform.
Ltd Obtained 2020SR0867792 China JiuGe Mobile Digital Precision Marketing Software V1.0.0 (7) Shanghai JiuGe Information Technology Co. Ltd Shanghai JiuGe Information Technology Co. Ltd Obtained 2021SR2129368 China JiuGe Risk Query API and UI Design V1.0.0 (8) Shanghai JiuGe Information Technology Co. Ltd Shanghai JiuGe Information Technology Co.
Ltd Shanghai JiuGe Information Technology Co. Ltd Obtained 2020SR0867792 China JiuGe Mobile Digital Precision Marketing Software V1.0.0 (7) Shanghai JiuGe Information Technology Co. Ltd Shanghai JiuGe Information Technology Co. Ltd Obtained 2021SR2129368 China JiuGe Risk Query API and UI Design V1.0.0 (8) Shanghai JiuGe Information Technology Co. Ltd Shanghai JiuGe Information Technology Co.
Li Li may not, without prior written consent of the WFOE: (i) transfer or dispose of the equity interests in the VIE or the assets of the VIE in any manner; (ii) create any encumbrance of any kind over the equity interests in the VIE, other than the VIE Agreements; and (iii) resolve to or procure the VIE to: (a) change its registered capital; (b) amend its articles of association; (c) change any of its shareholders; (d) appoint, remove or replace its senior management; (e) make or receive investment of any kind or merge or consolidate with any entity; (f) change information filed at the competent authorities in the PRC; (g) make any lending or borrowing or provide security of any kind; (h) pay, make or declare any dividend, charge, fee or other distribution of any kind; (i) incure, create or permit to subsist or have any outstanding financial indebtedness; (j) enter into any agreements that conflict with the JiuGe Technology Call Option Agreement; or (k) do any acts that would adversely impair the VIE’s ability to perform the obligations under the VIE Agreements.
Li Li may not, without prior written consent of the WFOE: (i) transfer or dispose of the equity interests in the VIE or the assets of the VIE in any manner; (ii) create any encumbrance of any kind over the equity interests in the VIE, other than the VIE Agreements; and (iii) resolve to or procure the VIE to: (a) change its registered capital; (b) amend its articles of association; (c) change any of its shareholders; (d) appoint, remove or replace its senior management; (e) make or receive investment of any kind or merge or consolidate with any entity; (f) change information filed at the competent authorities in the PRC; (g) make any lending or borrowing or provide security of any kind; (h) pay, make or declare any dividend, charge, fee or other distribution of any kind; (i) incur, create or permit to subsist or have any outstanding financial indebtedness; (j) enter into any agreements that conflict with the JiuGe Technology Call Option Agreement; or (k) do any acts that would adversely impair the VIE’s ability to perform the obligations under the VIE Agreements.
In the first quarter of 2019 FingerMotion expanded its business by commercializing its first “Business to Consumer” (“ B2C ”) model, offering the telecommunication providers’ products and services, including data plans, subscription plans, mobile phones, and loyalty points redemption, directly to subscribers or customers of the e-commerce companies, such as PinDuoDuo (“ PDD ”), TMall (“ TMALL ”) and JD.Com.
In the first quarter of 2019 FingerMotion expanded its business by commercializing its first “Business-to-Consumer” (“ B2C ”) model, offering the telecommunication providers’ products and services, including data plans, subscription plans, mobile phones, and loyalty points redemption, directly to subscribers or customers of the e-commerce companies, such as PinDuoDuo.com, TMall.com and JD.Com.
The following diagram depicts our corporate structure: -4- Table of Contents Our holding company structure presents unique risks as our investors may never directly hold equity interests in our subsidiaries or the VIE, and will be dependent upon contributions from our subsidiaries and the VIE to finance our cash flow needs.
The following diagram depicts our corporate structure: - 4 - Table of Contents Our holding company structure presents unique risks as our investors may never directly hold equity interests in our subsidiaries or the VIE, and we will be dependent upon contributions from our subsidiaries and the VIE to finance our cash flow needs.
Rich Communication Services (RCS) Platform Telecommunication operators around the world have reached consensus on the need to upgrade the operator messaging service from SMS to Rich Communication Services (RCS) messaging in the 5G era.
Rich Communication Services (RCS) Platform Telecommunication operators around the world have reached consensus on the need to upgrade the operator messaging service from SMS to Rich Communication Services (“ RCS ”) messaging in the 5G era.
This description of the VIE Agreements discussed above do not purport to be complete and are qualified in their entirety by reference to the terms of the VIE Agreements, which were filed as exhibits to our Current Report on Form 8-K filed with the SEC on December 27, 2018 and are incorporated by reference herein.
This description of the VIE Agreements discussed above does not purport to be complete and are qualified in their entirety by reference to the terms of the VIE Agreements, which were filed as exhibits to our Current Report on Form 8-K filed with the SEC on December 27, 2018 and are incorporated by reference herein.
Types of value that can be realized through ecosystems include: ■ Friction reduction : Creating a one-stop shop or interface for consumers by removing the hassle of switching among multiple providers; ■ Network effects : Generating synergy value for stakeholders by pooling and sharing information and resources to serve common needs; and ■ Data integration : Mining and analyzing available data, applying learnings to deliver convenience and tangible benefits to customers.
Types of value that can be realized through ecosystems include: - 15 - Table of Contents ■ Friction reduction : Creating a one-stop shop or interface for consumers by removing the hassle of switching among multiple providers; ■ Network effects : Generating synergy value for stakeholders by pooling and sharing information and resources to serve common needs; and ■ Data integration : Mining and analyzing available data, applying learnings to deliver convenience and tangible benefits to customers.
Worldwide, the GSM Association (GSMA) indicates 90 operators have launched RCS in 60 countries, attracting approximately 421 million users and projecting an estimated value of $15.78 billion by 2027, growing at a CAGR of 18.5%. 4 On April 8, 2020, China’s three major telecommunication operators, namely China Mobile, China Telecom and China Unicom, released a 5G messaging white paper outlining their commitment to mandate all compatible handsets sold in the country support RCS. 5 5G messaging service or RCS can support not only Person-to-Person (P2P) messaging, but also Application-to-Person (A2P) messaging.
Worldwide, the GSM Association (“ GSMA ”) indicates 90 operators have launched RCS in 60 countries, attracting approximately 421 million users and projecting an estimated value of $15.78 billion by 2027, growing at a compound annual growth rate, or CAGR, of 18.5%. 4 On April 8, 2020, China’s three major telecommunication operators, namely China Mobile, China Telecom and China Unicom, released a 5G messaging white paper outlining their commitment to mandate all compatible handsets sold in the country support RCS. 5 5G messaging service or RCS can support not only Person-to-Person (“ P2P ”) messaging, but also Application-to-Person (“ A2P ”) messaging.
The Company has the ability to provide potential customers and partners with insights-driven and technology-enabled solutions and applications including preferred risk selection, precision marketing, product customization, and claims management (e.g., fraud detection).
The Company has the ability to provide potential customers and collaborators with insights-driven and technology-enabled solutions and applications including preferred risk selection, precision marketing, product customization, and claims management (e.g., fraud detection).
The ultimate objective is to promote, enhance and deliver better value to our partners and customers. The Company’s proprietary risk assessment engine offers standard and customized scoring and appraisal services based on multi-dimensional factors.
The ultimate objective is to promote, enhance and deliver better value to our customers and collaborators. The Company’s proprietary risk assessment engine offers standard and customized scoring and appraisal services based on multi-dimensional factors.
Anti-corruption laws generally prohibit offering, promising, giving, accepting or authorizing others to provide anything of value, either directly or indirectly, to or from a government official or private party in order to influence official action or otherwise gain an unfair business advantage, such as to obtain or retain business. Additional Regulatory Developments .
Anti-corruption laws generally prohibit offering, promising, giving, accepting or authorizing others to provide anything of value, either directly or indirectly, to or from a government official or private party in order to influence official action or otherwise gain an unfair business advantage, such as to obtain or retain business. - 20 - Table of Contents Additional Regulatory Developments .
Li Li to cooperate with WFOE’s instructions and avoid damaging the rights and interests of the WFOE and investors; -6- Table of Contents ● a power of attorney agreement under which the owner of JiuGe Technology has vested their collective voting control over JiuGe Technology to JiuGe Management and will only transfer their equity interests in JiuGe Technology to JiuGe Management or its designee(s) (the “ JiuGe Technology Power of Attorney Agreement ”).
Li Li to cooperate with WFOE’s instructions and avoid damaging the rights and interests of the WFOE and investors; ● a power of attorney agreement under which the owner of JiuGe Technology has vested their collective voting control over JiuGe Technology to JiuGe Management and will only transfer their equity interests in JiuGe Technology to JiuGe Management or its designee(s) (the “ JiuGe Technology Power of Attorney Agreement ”).
Name of Online Stores Partners / Platform Details JiuGe TongXin Store TMall.com Telco Products & Services HeNan China Mobile Store TMall.com China Mobile Flagship Store JiuGe Mobile Data Store PingDuoDuo.com Telco Products & Services JiuGe Mobile Data Store Tbao Telco Products & Services -11- Table of Contents SMS and MMS Services Short Message Service (SMS) remains the only secure and reliable communication medium that connects all telecommunication operators globally.
Name of Online Stores Partners / Platform Details JiuGe TongXin Store TMall.com Telco Products & Services HeNan China Mobile Store TMall.com China Mobile Flagship Store JiuGe Mobile Data Store PingDuoDuo.com Telco Products & Services JiuGe Mobile Data Store Tbao Telco Products & Services SMS and MMS Services Short Message Service (SMS) remains the only secure and reliable communication medium that connects all telecommunication operators globally.
FMCL, a Hong Kong corporation, was formed on April 6, 2016 and is an information technology company that specializes in operating and publishing mobile games. Pursuant to the Share Exchange Agreement, the Company agreed to exchange the outstanding equity stock of FMCL held by the FMCL Shareholders for shares of common stock of the Company.
FMCL, a Hong Kong corporation, was formed on April 6, 2016 and is an information technology company that then specialized in operating and publishing mobile games. Pursuant to the Share Exchange Agreement, the Company agreed to exchange the outstanding equity stock of FMCL held by the FMCL Shareholders for shares of common stock of the Company.
In May 2021, JiuGe Technology signed a volume-based agreement with China Mobile Fujian to offer recharge services to the Fujian province which we have launched and commercialized in November 2021. The JiuGe Technology mobile payment and recharge platform enables the seamless delivery of real-time payment and recharge services to third-party channels and businesses.
In May 2021, JiuGe Technology signed a volume-based agreement with China Mobile Fujian to offer recharge services to the Fujian province which we have launched and commercialized in November 2021. - 1 - Table of Contents The JiuGe Technology mobile payment and recharge platform enables the seamless delivery of real-time payment and recharge services to third-party channels and businesses.
The use of VIE agreements is a common structure used to acquire PRC corporations, particularly in certain industries in which foreign investment is restricted or forbidden by the PRC government.
The use of VIE agreements is a common structure used to acquire operational control of PRC corporations, particularly in certain industries in which foreign investment is restricted or forbidden by the PRC government.
Beijing Technology has the capability to manage and track the entire process, including guiding the Company’s customer to meet MIIT’s guidelines on messages composed, until the SMS messages have been delivered successfully. Rich Communication Services In March 2020, the Company began the development of an RCS platform, also known as Messaging as a Platform (“ MaaP ”).
Beijing Technology has the capability to manage and track the entire process, including guiding the Company’s customer to meet MIIT’s guidelines on messages composed, until the SMS messages have been delivered successfully. - 2 - Table of Contents Rich Communication Services In March 2020, the Company began the development of a Rich Communication Services (“ RCS ”) platform, also known as Messaging as a Platform (“ MaaP ”).
The Company’s platform can be used standalone as an independent rating tool, as well as offered as part of an integrated system, joining forces with various ecosystem partners on data access, customer relationships, advanced analytics, product and service capabilities.
The Company’s platform can be used standalone as an independent rating tool, as well as offered as part of an integrated system, joining forces with various collaborators in the ecosystem on data access, customer relationships, advanced analytics, product and service capabilities.
Acquisition of Beijing Technology On March 7, 2019, the Company through JiuGe Technology acquired Beijing Technology, a company in the business of providing mass SMS text services to businesses looking to communicate with large numbers of their customers and prospective customers.
Acquisition of Operational Control of Beijing Technology On March 7, 2019, the Company acting through JiuGe Technology acquired operational control of Beijing Technology, a company in the business of providing mass SMS text services to businesses looking to communicate with large numbers of their customers and prospective customers.
(9) PRC Contractually controlled Notes : (1) Finger Motion Company Limited is a wholly-owned subsidiary of FingerMotion, Inc. (2) Finger Motion (CN) Global Limited is a wholly-owned subsidiary of FingerMotion, Inc. (3) Finger Motion (CN) Limited is a wholly-owned subsidiary of Finger Motion (CN) Global Limited.
(10) PRC Contractually controlled Notes : (1) Finger Motion Company Limited is a wholly-owned subsidiary of FingerMotion, Inc. (2) Finger Motion (CN) Global Limited is a wholly-owned subsidiary of FingerMotion, Inc. (3) Finger Motion (CN) Limited is a wholly-owned subsidiary of Finger Motion (CN) Global Limited.
In 2018, the Company developed a proprietary universal exchange platform called “PigeonHoles Integration System”, which provides seamless integration between telecommunication operators and online stores servicing Chinese consumers all around China. The Company’s products and services offerings include the following: Product / Service Details Recharge Services The Company offers recharge services to consumers throughout China.
In 2018, the Company developed a proprietary universal exchange platform called “PigeonHoles Integration System”, which provides seamless integration between telecommunication operators and online stores servicing Chinese consumers all around China. - 10 - Table of Contents The Company’s products and services offerings include the following: Product / Service Details Recharge Services The Company offers recharge services to consumers throughout China.
Stage 2: Expansion The expansion stage will see the Company offer tech services to cover more insurance product lines and serve more industry clients and partners/channels.
Stage 2: Expansion The expansion stage will see the Company offer tech services to cover more insurance product lines and serve more industry clients and collaborator/channels.
Ltd Obtained 2023SR0092476 China JiuGe Insurance Client Financial Rating System V1.0.0 (11) Shanghai JiuGe Information Technology Co. Ltd Shanghai JiuGe Information Technology Co. Ltd Obtained -18- Table of Contents Notes: (1) PigeonHoles Integration System is the Company’s proprietary universal exchange platform which provides seamless integration between telecommunication operators and online stores servicing PRC’s customers.
Ltd Obtained 2023SR0092476 China JiuGe Insurance Client Financial Rating System V1.0.0 (11) Shanghai JiuGe Information Technology Co. Ltd Shanghai JiuGe Information Technology Co. Ltd Obtained Notes: (1) PigeonHoles Integration System is the Company’s proprietary universal exchange platform which provides seamless integration between telecommunication operators and online stores servicing PRC’s customers.
Any AML and sanctions compliance program we put in place will need to involve policies, procedures and internal controls designed to address these legal and regulatory requirements and assist in managing money laundering and terrorist financing risks. -19- Table of Contents Data Protection and Information Security.
Any AML and sanctions compliance program we put in place will need to involve policies, procedures and internal controls designed to address these legal and regulatory requirements and assist in managing money laundering and terrorist financing risks. Data Protection and Information Security.
(4) PRC 100% Shanghai JiuGe Information Technology Co., Ltd. (5) PRC Contractually controlled (5) Beijing XunLian TianXia Technology Co., Ltd. (6) PRC Contractually controlled Finger Motion Financial Group Limited (7) Samoa 100% Finger Motion Financial Company Limited (8) Hong Kong 100% Shanghai TengLian JiuJiu Information Communication Technology Co., Ltd.
(4) PRC 100% Shanghai JiuGe Information Technology Co., Ltd. (5) PRC Contractually controlled (5) Beijing XunLian TianXia Technology Co., Ltd. (6) PRC Contractually controlled Finger Motion Financial Group Limited (7) Samoa 100% Finger Motion Financial Company Limited (8) Hong Kong 100% Shanghai TengLian JiuJiu Information Communication Technology Co., Ltd. (9) PRC Contractually controlled Shanghai KeShunXiang Automobile Service Co., Ltd.
To address challenges resulting from laws, policies and practices that may disfavors foreign-owned entities that operate within industries deemed sensitive by the Chinese government, we use the VIE structure to provide contractual exposure to foreign investment in the PRC-based companies. We own 100% of the equity of a WFOE, Shanghai JiuGe Business Management Co., Ltd.
To address challenges resulting from laws, policies and practices that may disfavor foreign-owned entities that operate within industries deemed sensitive by the Chinese government, we use the VIE structure to provide contractual exposure to foreign investment in Chinese-based companies. We indirectly own 100% of the equity of Shanghai JiuGe Business Management Co., Ltd.
By integrating with external data sources, the Company’s R&D departments can develop innovative insurtech and fintech products to the Company’s re-insurance and financial services companies and partners. Competition Our industry is highly competitive, rapidly changing, highly innovative and increasingly subject to regulatory scrutiny and oversight.
By integrating with external data sources, the Company’s R&D department can develop innovative insurtech and fintech products in collaboration with re-insurance and financial services companies. Competition Our industry is highly competitive, rapidly changing, highly innovative and increasingly subject to regulatory scrutiny and oversight.
Ltd Obtained 2020SR0809253 China JiuGe Risk Assessment System Software V1.0.0 (5) Shanghai JiuGe Information Technology Co. Ltd Shanghai JiuGe Information Technology Co. Ltd Obtained 2020SR0860695 China JiuGe Internet Big Data Software V1.0.0 (6) Shanghai JiuGe Information Technology Co. Ltd Shanghai JiuGe Information Technology Co.
Ltd Obtained 2020SR0772385 China JiuGe TELCO Big Data Software V1.0.0 (4) Shanghai JiuGe Information Technology Co. Ltd Shanghai JiuGe Information Technology Co. Ltd Obtained 2020SR0809253 China JiuGe Risk Assessment System Software V1.0.0 (5) Shanghai JiuGe Information Technology Co. Ltd Shanghai JiuGe Information Technology Co. Ltd Obtained 2020SR0860695 China JiuGe Internet Big Data Software V1.0.0 (6) Shanghai JiuGe Information Technology Co.
Because we have been awarded a contract to process payments for China Unicom and China Mobile and, are therefore, able to offer services directly to market with value added services, we believe the Company is in an advantageous position as compared to its competition.
Because we have been awarded a contract to process payments for China Unicom and China Mobile and, are therefore, able to offer services directly to market with value added services, we believe the Company is in an advantageous position as compared to its competition. We look to take advantage of the position that we have been afforded.
Share Exchange Agreement Effective July 13, 2017, the Company entered into that certain Share Exchange Agreement (the “ Share Exchange Agreement ”) by and among the Company, Finger Motion Company Limited, a Hong Kong corporation (“ FMCL ”) and certain shareholders of FMCL (the “ FMCL Shareholders ”).
Share Exchange Agreement Effective July 13, 2017, the Company entered into that certain Share Exchange Agreement (the “ Share Exchange Agreement ”) by and among the Company, Finger Motion Company Limited (“ FMCL ”) and certain shareholders of FMCL (the “ FMCL Shareholders ”).
Revenue during this time has been sourced mainly from offering proprietary rating system and related services that are customized to fit the Company’s reinsurer partners’ specific needs. Furthermore, establishing collaborative facilities with reinsurers has allowed the Company to integrate posterior information (claims and underwriting experience, for example) and further improve its scoring/measurement system.
Revenue during this time has been sourced mainly from offering proprietary rating system and related services that are customized to fit the reinsurer collaboration parties’ specific needs, in consideration of royalties. Furthermore, establishing collaborative facilities with reinsurers has allowed the Company to integrate posterior information (claims and underwriting experience, for example) and further improve its scoring/measurement system.
The Company operates its video game division through FMCL. However, in June 2018, the Company decided to pause the operation of the game division as it saw the opportunity in the telecommunication business and have since refocused into this business.
However, in June 2018, the Company decided to pause the operation of the game division as it saw the opportunity in the telecommunication business and have since refocused into this business.
The Company plans to commercialize the offering in the first quarter of 2021. Down-Stream Partners The Company currently operates online stores and pages on various e-commerce and social media platforms, gaining access to millions of users without having to incur the associated marketing expenditures or user acquisition investments.
Down-Stream Partners The Company currently operates online stores and pages on various e-commerce and social media platforms, gaining access to millions of users without having to incur the associated marketing expenditures or user acquisition investments.
SMS and MMS Services On March 7, 2019, the Company through JiuGe Technology acquired Beijing Technology Co, a company in the business of providing mass SMS text services to businesses looking to communicate with large numbers of their customers and prospective customers.
SMS and MMS Services On March 7, 2019, the Company, acting through JiuGe Technology acquired operational control of Beijing XunLian TianXia Technology Co., Ltd. (“ Beijing Technology ”), a company in the business of providing mass SMS text services to businesses looking to communicate with large numbers of their customers and prospective customers.
(“ China Unicom ”) and China Mobile Communications Corporation (“ China Mobile ”), each of which is a major telecommunications provider in China. We principally earn revenue by providing mobile payment and recharge services to customers of China Unicom and China Mobile.
(“ China Unicom ”) and China Mobile Communications Corporation (“ China Mobile ”), each of which is a major telecommunications provider in China. We principally earn revenue by providing mobile payment and recharge services to customers of China Unicom and China Mobile. We conduct our mobile payment business through JiuGe Technology.
(“ TengLian ”) (a 99% owned subsidiary of Shanghai JiuGe Information Technology Co., Ltd.) signed a co-operation agreement with China Unicom to launch the Device Protection program for mobile phones and the new 5G phones. -8- Table of Contents Intercorporate Relationships The following is a list of all of our subsidiaries and the corresponding date of jurisdiction of incorporation or organization and the ownership interest of each.
In January 2022, TengLian (a 99% owned subsidiary of JiuGe Technology) signed a co-operation agreement with China Unicom to launch the Device Protection program for mobile phones and the new 5G phones. Intercorporate Relationships The following is a list of all of our subsidiaries and the corresponding date of jurisdiction of incorporation or organization and the ownership interest of each.
Channel expansion could be achieved by cross-selling through the Company’s affiliated company and reinsurance brokerage firm partner, supported by leads generation for niche marketing and further upselling. In addition, developing customized product solutions with reinsurers will augment value proposition, offering more personalized and efficient coverage based on the latent risks of individuals.
Channel expansion could be achieved by cross-selling through the Company’s affiliated companies, including JiuGe Technology, and reinsurance brokerage firm with which it has collaboration agreements, supported by leads generation for niche marketing and further upselling. In addition, developing customized product solutions with reinsurers will augment value proposition, offering more personalized and efficient coverage based on the latent risks of individuals.
Employees As of February 29, 2024, we had 64 total employees, of whom all were full time. We have approximately 55 employees in China, 3 employees in Malaysia, 2 employees in Hong Kong, 1 employee in Taiwan, 2 employees in USA and 1 employee in Canada. We believe that we enjoy good relations with our employees.
Employees As of February 28, 2025, we had 65 total employees, of whom all were full time. We have approximately 55 employees in China, 4 employees in Malaysia, 2 employees in Hong Kong, 1 employee in Taiwan, 2 employees in USA and 1 employee in Canada. We believe that we enjoy good relations with our employees.
Precision marketing enhances product take-up rates, while preferred risk selection is expected to attract profitable business and improve portfolio results. As such, added value can be generated and shared among Sapientus and its (re)insurer and distribution partners. -15- Table of Contents Stage 3: Integration As Sapientus matures, the Company enters the integration stage.
Precision marketing enhances product take-up rates, while preferred risk selection is expected to attract profitable business and improve portfolio results. As such, added value can be generated through FMFC’s Sapientus Platform and shared among FMFC and its (re)insurer and distribution collaborators. Stage 3: Integration As Sapientus matures, the Company enters the integration stage.
Li Li pledged 100% equity interests in the VIE, representing the entire registered capital of the VIE, by way of first-ranking security to the WFOE. This agreement could constrain Ms.
Li Li’s obligations under the JiuGe Technology Loan Agreement, Ms. Li Li pledged 100% equity interests in JiuGe Technology, representing the entire registered capital of the VIE, by way of first-ranking security to the WFOE. This agreement could constrain Ms.
This description of the Cooperation Agreement does not purport to be complete and is qualified in its entirety by reference to the terms of the Cooperation Agreement, which was filed as an exhibit to our Current Report on Form 8-K filed with the SEC on November 9, 2019 and is incorporated by reference herein.
Any disputes arising between the parties under the Cooperation Agreement will be adjudicated in Chinese courts. - 8 - Table of Contents This description of the Cooperation Agreement does not purport to be complete and is qualified in its entirety by reference to the terms of the Cooperation Agreement, which was filed as an exhibit to our Current Report on Form 8-K filed with the SEC on November 9, 2019 and is incorporated by reference herein.
In addition, the Company issued 600,000 shares to consultants in connection with the transactions contemplated by the Share Exchange Agreement, and 2,562,500 additional shares to accredited investors, which was a concurrent financing but not a condition of closing the Share Exchange Agreement. -5- Table of Contents As a result of the Share Exchange Agreement and the other transactions contemplated thereunder, FMCL became a wholly owned subsidiary of the Company.
In addition, the Company issued 600,000 shares to consultants in connection with the transactions contemplated by the Share Exchange Agreement, and 2,562,500 additional shares to accredited investors, which was a concurrent financing but not a condition of closing the Share Exchange Agreement.
To accomplish this, the Company is partnering with reinsurers to increase its visibility as well as assimilate its data analytics into the reinsurers’ value chain. Engagements include, among various other initiatives, underwriting enhancement, market segmentation and product design..
To accomplish this, the Company, acting primarily through FMFC, is entering into collaboration agreements with reinsurers to increase Sapientus’s visibility, as well as assimilating its data analytics into the reinsurers’ value chain. Engagements include, among various other initiatives, underwriting enhancement, market segmentation and product design..
The Company intends to also continue to build its core values to enhance and differentiate its support and services to ensure it is able to stand out from its competitors. -16- Table of Contents Sales and Marketing ■ The Company’s sales and marketing efforts are focused on promoting brand awareness of its JiuGe telecommunication stores currently operating on most major e-commerce and social media platforms in China. ■ The Company is continuously planning, in cooperation with its telco partners, seasonal and targeted marketing events in different provinces and cities. ■ Since the inception of JiuGe Technology in 2018, the Company has secured contracts and agreements to work with nine (9) online stores and twenty (20) business partners.
Sales and Marketing ■ The Company’s sales and marketing efforts are focused on promoting brand awareness of its JiuGe telecommunication stores currently operating on most major e-commerce and social media platforms in China. ■ The Company is continuously planning, in cooperation with its telco partners, seasonal and targeted marketing events in different provinces and cities. ■ Since the inception of JiuGe Technology in 2018, the Company has secured contracts and agreements to work with nine (9) online stores and twenty (20) business partners.
(7) Finger Motion Financial Group Limited is a wholly-owned subsidiary of FingerMotion, Inc. (8) Finger Motion Financial Company Limited is a wholly-owned subsidiary of Finger Motion Financial Group Limited. (9) Shanghai TengLian JiuJiu Information Communication Technology Co., Ltd. is a 99% owned subsidiary of Shanghai JiuGe Information Technology Co., Ltd.
(6) Beijing XunLian TianXia Technology Co., Ltd. is a 99% owned subsidiary of Shanghai JiuGe Information Technology Co., Ltd. (7) Finger Motion Financial Group Limited is a wholly-owned subsidiary of FingerMotion, Inc. (8) Finger Motion Financial Company Limited is a wholly-owned subsidiary of Finger Motion Financial Group Limited.
Value Added Products and Services New product lines and services will be brought in by the Company to offer to the existing user base through the delivery channels of the Telecommunication partners and the platform partners. -10- Table of Contents Up-Stream Partners The Company partners with all three major telecommunication operators in China, namely China Mobile, China Unicom and China Telecom, to offer its products and services: Telecommunication Operator Products and Services China Mobile Recharge Service Data Plan Subscription Plans Mobile Protection Plans China Unicom Recharge Service Data Plan Subscription Plan Mobile Protection Plans China Telecom Recharge Service Data Plan Notes: In 2020, the Company entered into arrangements with two third party smartphone distributors (VSens and ZhengZhouXinSiWei) to extend their product offerings across online stores on various platforms.
Up-Stream Partners The Company partners with all three major telecommunication operators in China, namely China Mobile, China Unicom and China Telecom, to offer its products and services: Telecommunication Operator Products and Services China Mobile Recharge Service Data Plan Subscription Plans Mobile Protection Plans China Unicom Recharge Service Data Plan Subscription Plan Mobile Protection Plans China Telecom Recharge Service Data Plan Notes: In 2020, the Company entered into arrangements with two third party smartphone distributors (VSens and ZhengZhouXinSiWei) to extend their product offerings across online stores on various platforms.
The Company’s strategy is to expand into the entire China region and to reach out to a wider base of customers and users that can benefit from the Company’s product offerings. ■ The Company’s new agreement with China Mobile on the loyalty redemption business is a step towards the Company’s customer retention strategy that is expected to also enable it to cross-sell additional products and offerings from the Company. ■ The Company intends to continue to focus on, and expand, its roster of corporate clients to improve sales in its SMS business, and intends to focus on expanding into different industries.
The Company’s strategy is to expand into the entire China region and to reach out to a wider base of customers and users that can benefit from the Company’s product offerings. ■ The Company’s new agreement with China Mobile on the loyalty redemption business is a step towards the Company’s customer retention strategy that is expected to also enable it to cross-sell additional products and offerings from the Company. - 17 - Table of Contents ■ The Company intends to continue to focus on, and expand, its roster of corporate clients to improve sales in its SMS business, and intends to focus on expanding into different industries. § The Company’s sales and marketing efforts for the DaGe platform focus on driving user growth, transaction volume, and service provider engagement within our digital automotive services marketplace.
(2) The Company’s SMS Integrated System provides a robust back-end control panel for corporate partners to access and manage their own messaging settings. Corporate partners can upload a list of targeted members, compose text or multimedia messages and define broadcasting settings.
The SMS Integrated System provides a robust back-end control panel for corporate partners to access and manage their own messaging settings. Corporate partners can upload a list of targeted members, compose text or multimedia messages and define broadcasting settings. All messages must be submitted to the ministry for review before being delivered to telecommunication operators’ back-end for broadcasting.
As with all dynamic markets, the specifics of our operational contracts have naturally evolved over time but our dedication to these provinces is unwavering, and we consistently enhance our service and product offerings to ensure optimal service.
As with all dynamic markets, the specifics of our operational contracts have naturally evolved over time but our dedication to these provinces is unwavering, and we consistently enhance our service and product offerings to ensure optimal service. Additionally, as we continue to grow, there is the potential for our reach to expand into additional provinces in the PRC.
The WFOE has the right to convert the whole or any part of the outstanding principal amount into the equity interests in the VIE and may demand repayment of any or all of the principal amount/ As security for performance and discharge of Ms. Li Li’s obligations under the JiuGe Technology Loan Agreement, Ms.
The loan amount has now been increased to RMB50,000,000. The WFOE has the right to convert the whole or any part of the outstanding principal amount into the equity interests in the VIE and may demand repayment of any or all of the principal amount/ As security for performance and discharge of Ms.
The Cooperation Agreement contains customary representations from each party regarding such party’s authority to enter into and perform under the Cooperation Agreement, and provides customary events of default, including for various types of failure to perform. Any disputes arising between the parties under the Cooperation Agreement will be adjudicated in Chinese courts.
The Cooperation Agreement contains customary representations from each party regarding such party’s authority to enter into and perform under the Cooperation Agreement, and provides customary events of default, including for various types of failure to perform.
In February 2022, our contractually controlled subsidiary, JiuGe Technology, through its 99% own subsidiary TengLian signed an agreement with both China Unicom and China Mobile to co-operate to roll out the Mobile Device Protection product which is incorporated into the Telecommunication subscription plans in line with their roll out of new mobile phones and new 5G phones.
(“ TengLian ”), signed an agreement with both China Unicom and China Mobile to co-operate to roll out the Mobile Device Protection product which is incorporated into the Telecommunication subscription plans in line with their roll out of new mobile phones and new 5G phones.
This agreement ensures that the WFOE and investors will be able to legally obtain the profits of the VIE, and transfer them to the WFOE more conveniently in the form of “service fee”; ● a loan agreement through which JiuGe Management grants a loan to the Legal Representative of JiuGe Technology for the purpose of capital contribution (the “ JiuGe Technology Loan Agreement ”).
This agreement ensures that the WFOE and investors will be able to legally obtain the profits of the VIE, and transfer them to the WFOE more conveniently in the form of “service fee”; - 6 - Table of Contents ● a loan agreement through which JiuGe Management grants loans to Ms.
However, as of March 31, 2023, pursuant to the Overseas Listing Trial Measures promulgated by the CSRC, we may have to file with the CSRC with respect to a new offering of our securities.
However, as of March 31, 2023, pursuant to the Overseas Listing Trial Measures promulgated by the CSRC, we will be required to make filings with the CSRC with respect to any new overseas offering of our securities.
In addition to that, we have been assigned as one of China’s Mobile’s loyalty redemption partner where we will be providing the services for their customers via our platform. -1- Table of Contents Additionally, as previously disclosed, on July 7, 2019, JiuGe Technology, our contractually controlled affiliate, entered into that certain Cooperation Agreement with China Unicom Yunnan, whereby JiuGe Technology is responsible for constructing and operating China Unicom’s electronic sales platform through which consumers can purchase various goods and services from China Unicom, including mobile telephones, mobile telephone service, broadband data services, terminals, “smart” devices and related financial insurance.
Additionally, as previously disclosed, on July 7, 2019, JiuGe Technology, our contractually controlled affiliate, entered into that certain Cooperation Agreement with China Unicom Yunnan, whereby JiuGe Technology is responsible for constructing and operating China Unicom’s electronic sales platform through which consumers can purchase various goods and services from China Unicom, including mobile telephones, mobile telephone service, broadband data services, terminals, “smart” devices and related financial insurance.
However, since these statements and regulatory actions, including the Overseas Listing Trial Measures, are new, it is uncertain what potential impact such modified or new laws and regulations will have on our daily business operation, the ability to accept foreign investments and list our securities on an U.S. or other foreign exchange.
However, since these statements and regulatory actions, including the Overseas Listing Trial Measures, are new, it is uncertain what potential impact such modified or new laws and regulations will have on our daily business operation, the ability to accept foreign investments and list our securities on an U.S. or other foreign exchange. - 5 - Table of Contents To operate, the VIE and Beijing XunLian TianXia Technology Co., Ltd. are required to obtain, and have obtained, a value-added telecommunications business licence from PRC authorities.
The Company applies its vast experience in the insurance and financial services industry and capabilities in technology and data analytics to develop revolutionary solutions targeted towards insurance and financial consumers.
The Company, acting primarily through its indirect wholly-owned subsidiary, Finger Motion Financial Company Limited (“ FMFC ”) applies its vast experience in the insurance and financial services industry and capabilities in technology and data analytics to develop revolutionary solutions targeted towards insurance and financial consumers.
As of the date of this periodic report on Form 10-K, we and the VIE are not required to seek permissions from the CSRC, the CAC, or any other entity that is required to approve of the operations of the VIE, other than a value-added telecommunications business licence, which has already been obtained.
Any failure by the VIE or its shareholder to perform their obligations under such contractual arrangements would have a material and adverse effect on our business. - 9 - Table of Contents As of the date of this Annual Report on Form 10-K, we and the VIE are not required to seek permissions from the CSRC, the CAC, or any other entity that is required to approve of the operations of the VIE, other than a value-added telecommunications business licence, which has already been obtained.
VIE Agreements On October 16, 2018, the Company, through its indirect wholly owned subsidiary, Shanghai JiuGe Business Management Co., Ltd. (“ JiuGe Management ”), entered into a series of agreements known as variable interest agreements (the “ VIE Agreements ”) pursuant to which Shanghai JiuGe Information Technology Co., Ltd. (“ JiuGe Technology ”) became our contractually controlled affiliate.
VIE Agreements On October 16, 2018, the Company, through its indirect wholly-owned WFOE, JiuGe Management, entered into the VIE Agreements pursuant to which JiuGe Technology became our contractually controlled affiliate.
Beijing Technology has the capability to manage and track the entire process, including guiding the Company’s customer to meet government’s guidelines on messages composed, until the SMS messages have been delivered successfully. 1 https://www.chinabaogao.com/data/202402/691933.html 2 https://wap.miit.gov.cn/jgsj/yxj/xxfb/art/2024/art_8e331aa8abeb4870a7446a3be26d3ce1.html 3 https://www.miit.gov.cn/gxsj/tjfx/txy/art/2024/art_76b8ecef28c34a508f32bdbaa31b0ed2.html -12- Table of Contents The Company’s SMS Integrated System performs more than 150 million SMS transactions monthly.
Beijing Technology has the capability to manage and track the entire process, including guiding the Company’s customer to meet government’s guidelines on messages composed, until the SMS messages have been delivered successfully. - 12 - Table of Contents The Company’s SMS Integrated System performs more than 150 million SMS transactions monthly.
(4) Shanghai JiuGe Business Management Co., Ltd. is a wholly-owned subsidiary of Finger Motion (CN) Limited. (5) Shanghai JiuGe Information Technology Co., Ltd. is a variable interest entity that is contractually controlled by Shanghai JiuGe Business Management Co., Ltd. (6) Beijing XunLian TianXia Technology Co., Ltd. is a 99% owned subsidiary of Shanghai JiuGe Information Technology Co., Ltd.
(4) Shanghai JiuGe Business Management Co., Ltd., sometimes referred to in this Annual Report as “the WFOE,” is a wholly-owned subsidiary of Finger Motion (CN) Limited. (5) Shanghai JiuGe Information Technology Co., Ltd., sometimes referred to in this Annual Report as “the VIE,” is a variable interest entity that is contractually controlled by Shanghai JiuGe Business Management Co., Ltd.
Beijing Technology retains a license from the Ministry of Industry and Information Technology to operate SMS and MMS business in the PRC.
The mass SMS text message service offers bulk SMS services to end consumers with competitive pricing. Beijing Technology retains a license from the Ministry of Industry and Information Technology to operate SMS and MMS business in the PRC.
Value Added Product and Services These are new product and services that the Company expects to secure and work with the telecommunication provider and all our e-commerce platform partners to market.
This business will continue to contribute to the overall revenue for the group as part of our offering to our customers. Value Added Products and Services These are new products and services that the Company expects to secure and work with the telecommunication provider and all our e-commerce platform partners to market.
Sapientus is strategically focused on developing and promoting our core analytic products to the market, specifically: ■ enhancing modeling precision by incorporating additional insurance datasets; ■ expanding modeling efforts to cover various insurance products; ■ begin promoting models to a broader client base for extensive real-world use, targeting insurers as well as various other ecosystem partners.; and ■ further developing a sales rating engine by leveraging our comprehensive data assets and applying AI technology. -14- Table of Contents The Company is steadily advancing along its planned roadmap, ready to move beyond “Stage 1: Initialization” and advance into “Stage 2: Expansion”: Stage 1: Initialization (largely completed) During the initialization stage, the Company’s focus has been on building its brand and honing its rating framework and analytics.
Sapientus is strategically focused on developing and promoting our core analytic products to the market, specifically: ■ enhancing modeling precision by incorporating additional insurance datasets; ■ expanding modeling efforts to cover various insurance products; ■ begin promoting models to a broader client base for extensive real-world use, targeting insurers as well as various other prospective collaborators in the ecosystem; and ■ further developing a sales rating engine by leveraging our comprehensive data assets and applying AI technology.
The JiuGe Technology mobile payment and recharge platform enables the seamless delivery of real-time payment and recharge services to third-party channels and businesses. We earn a negotiated rebate amount from each of China Unicom and China Mobile for all monies paid by consumers to China Unicom and China Mobile that we process.
We earn a negotiated rebate amount from each of China Unicom and China Mobile for all monies paid by consumers to China Unicom and China Mobile that we process.
In early 2019, the Company completed beta testing of its proprietary SMS Integrated System and the commercialization phase began in April 2019. The SMS Integrated System provides a robust back-end control panel for corporate partners to access and manage their own messaging settings.
(2) The Company’s SMS Integrated System provides a robust back-end control panel for corporate partners to access and manage their own messaging settings.
This agreement was duly signed between the WFOE and Ms. Li Li. Under this agreement, the WFOE loaned RMB 10,000,000 to Ms. Li Li, as the sole shareholder of the VIE, solely for the purpose of the capital contribution of the subscribed capital of the VIE. The loan amount has now been increased to RMB50,000,000.
Li Li, as the sole shareholder of JiuGe Technology for the purpose of capital contribution (the “ JiuGe Technology Loan Agreement ”). Under this agreement, JiuGe Management loaned RMB 10,000,000 to Ms. Li Li, as the sole shareholder of the VIE, solely for the purpose of funding the capital contribution of the subscribed capital of the VIE.
It is currently working and negotiating with one of the largest phone distributors in China to be among the first partners launching services on the platform. 4 https://www.gsma.com/futurenetworks/rcs/ & https://www.marketresearch.com/Infogence-Marketing-Advisory-Services-v4010/Global-Rich-Communication-Services-RCS-30323369/ 5 https://www.gsma.com/futurenetworks/wp-content/uploads/2020/04/5G-Messaging-White-Paper-EN.pdf -13- Table of Contents Big Data Insights The Company launched its proprietary platform “Sapientus” in July 2020 as its big data insights arm to deliver data-driven solutions and insights for businesses within the insurance and financial services industries.
It is currently working and negotiating with one of the largest phone distributors in China to be among the first partners launching services on the platform. Big Data Insights The Company launched its proprietary platform “Sapientus” in July 2020 to deliver data-driven solutions and insights for businesses within the insurance and financial services industries.
(3) Patent based on JiuGe’s big data analysis and commercialization of consumer’s profile (4) Patent based on JiuGe’s big data analysis for telecommunication products and services (5) Patent based on JiuGe’s big data analysis on risk assessment system (6) Patent based on JiuGe’s big data analysis for online product.
Corporate partners can upload a list of targeted members, compose text or multimedia messages and define broadcasting settings. - 19 - Table of Contents (3) Patent based on JiuGe’s big data analysis and commercialization of consumer’s profile (4) Patent based on JiuGe’s big data analysis for telecommunication products and services (5) Patent based on JiuGe’s big data analysis on risk assessment system (6) Patent based on JiuGe’s big data analysis for online product.
The Company has registered the following patents: Patent Registration Number Region Title Inventors Applicant Status as of the date of this Annual Report 2019SR0439119 Shanghai, China PigeonHoles Integration System (1) Shanghai JiuGe Business Management Co. Ltd Shanghai JiuGe Business Management Co. Ltd Obtained 2020SR0741902 Shanghai, China SMS Integrated System (2) Shanghai JiuGe Information Technology Co.
The Company has also implemented strict controls to ensure the safe and secure keeping of any source codes. - 18 - Table of Contents The Company has registered the following patents: Patent Registration Number Region Title Inventors Applicant Status as of the date of this Annual Report 2019SR0439119 Shanghai, China PigeonHoles Integration System (1) Shanghai JiuGe Business Management Co.
Nevertheless, Chinese regulatory authorities may in the future promulgate laws, regulations or implement rules that require us, our subsidiaries or the VIEs to obtain permissions from such regulatory authorities to approve the operations of the VIE or any securities listing. -9- Table of Contents Products and Services Telecommunications Products and Services Historically, telecommunication operators focused their efforts on expanding their retail presence; however, consumer behaviors and demands have shifted from offline to online.
Nevertheless, Chinese regulatory authorities may in the future promulgate laws, regulations or implement rules that require us, our subsidiaries or the VIEs to obtain permissions from such regulatory authorities to approve the operations of the VIE or any securities listing.
Ltd Shanghai JiuGe Information Technology Co. Ltd Obtained 2020SR0792227 China JiuGe Customer Profiling Software V1.0.0 (3) Shanghai JiuGe Information Technology Co. Ltd Shanghai JiuGe Information Technology Co. Ltd Obtained 2020SR0772385 China JiuGe TELCO Big Data Software V1.0.0 (4) Shanghai JiuGe Information Technology Co. Ltd Shanghai JiuGe Information Technology Co.
Ltd Shanghai JiuGe Business Management Co. Ltd Obtained 2020SR0741902 Shanghai, China SMS Integrated System (2) Shanghai JiuGe Information Technology Co. Ltd Shanghai JiuGe Information Technology Co. Ltd Obtained 2020SR0792227 China JiuGe Customer Profiling Software V1.0.0 (3) Shanghai JiuGe Information Technology Co. Ltd Shanghai JiuGe Information Technology Co.
Once these issues are resolved and the necessary approval is obtained, we anticipate a substantial enhancement in our service offerings and an expansion of our market reach. -2- Table of Contents Big Data Insights In July 2020, the Company launched its proprietary technology platform “Sapientus” as its big data insights arm to deliver data-driven solutions and insights for businesses within the insurance, healthcare, and financial services industries.
Big Data Insights In July 2020, the Company launched its proprietary technology platform “Sapientus” as its big data insights arm to deliver data-driven solutions and insights for businesses within the insurance, healthcare, and financial services industries.
As a result of our use of the VIE structure, you may never directly hold equity interests in the VIE. Any securities that we offer will be securities of the Company, the Delaware holding company, not of the VIE. We fund the registered capital and operating expenses of the VIE by extending loans to the shareholders of the VIE.
Any securities that we offer will be securities of the Company, the Delaware holding company, not of the VIE. As described in more detail below, under the subheading “VIE Agreements,” we fund the registered capital and operating expenses of the VIE by extending loans to Ms.
However, the VIE Agreements have never been challenged or recognized in court for the time being, and the PRC government may determine that the VIE Agreements are not in compliance with applicable PRC laws, rules and regulations compared with direct ownership, there may be less effective in controlling through the VIE structure.
However, the VIE Agreements have never been challenged or recognized in court for the time being, and the PRC government may determine that the VIE Agreements are not in compliance with applicable PRC laws, rules and regulations compared with direct ownership, there may be less effective in controlling through the VIE structure. - 7 - Table of Contents In the first half of 2018, JiuGe Technology established contracts with China Unicom and China Mobile, initiating the provision of mobile data services to businesses and corporations in key provinces/municipalities including Chengdu, Jiangxi, Jiangsu, Chongqing, Shanghai, Zhuhai, Zhejiang, Shaanxi and Inner Mongolia.
The Company is planning to further expand its universal exchange platform by setting up B2C stores on several other major e-commerce platforms in China.
The Company is planning to further expand its universal exchange platform by setting up B2C stores on several other major e-commerce platforms in China. In addition to that, we have been designated as one of China’s Mobile’s loyalty redemption partners, which allows us to provide such the services for their customers via our platform.
We look to take advantage of the position that we have been afforded. -17- Table of Contents Intellectual Property The Company has sufficient intellectual property rights to operate its mobile payment and recharge platform system. Specifically, the Company has registered patents for its mobile payment and recharge platform system.
Intellectual Property The Company has sufficient intellectual property rights to operate its mobile payment and recharge platform system. Specifically, the Company has registered patents for its mobile payment and recharge platform system. The Company will continue to enhance the system to meet market and consumer demands and requirements.
In January 2022, Shanghai TengLian JiuJiu Information Communication Technology Co., Ltd.
In February 2022, our contractually controlled subsidiary, JiuGe Technology, through its 99% owned subsidiary Shanghai TengLian JiuJiu Information Communication Technology Co., Ltd.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

55 edited+13 added−53 removed228 unchanged
Biggest changeHowever, our operations are conducted through the VIE in PRC, and our ability to pay dividends is primarily dependent on receiving distributions of funds from the VIE, if we do not obtain or maintain any of the permissions or approvals which may be required in the future by the PRC government for the operation of the VIE or the execution of VIE Agreements, our operations and financial conditions could be adversely effected, even significantly limit or completely hinder our ability to offer or continue to offer securities or dividends to investors and cause the value of our securities to significantly decline or become worthless. -38- Table of Contents Although the audit report included in our Annual Report for the fiscal year ended February 29, 2024 was prepared by an auditor who has been currently inspected by the PCAOB, if it is later determined that the PCAOB is unable to inspect or investigatge our auditor completely, we could be delisted if we are unable to meet the PCAOB inspection requirements established by the HFCAA.
Biggest changeHowever, our operations are conducted through the VIE in PRC, and our ability to pay dividends is primarily dependent on receiving distributions of funds from the VIE, if we do not obtain or maintain any of the permissions or approvals which may be required in the future by the PRC government for the operation of the VIE or the execution of VIE Agreements, our operations and financial conditions could be adversely effected, even significantly limit or completely hinder our ability to offer or continue to offer securities or dividends to investors and cause the value of our securities to significantly decline or become worthless.
Recently, the Cyberspace Administration of China (the “ CAC ”) has taken action against several Chinese internet companies in connection with their initial public offerings on U.S. securities exchanges, for alleged national security risks and improper collection and use of the personal information of Chinese data subjects.
The Cyberspace Administration of China (the “ CAC ”) has taken action against several Chinese internet companies in connection with their initial public offerings on U.S. securities exchanges, for alleged national security risks and improper collection and use of the personal information of Chinese data subjects.
The PRC government may exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers. Recent statements by the PRC government indicate an intent to take actions to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers.
Recent statements by the PRC government indicate an intent to take actions to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers.
On February 17, 2023, the CSRC promulgated Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the “ Overseas Listing Trial Measures ”) and five relevant guidelines, which became effective on March 31, 2023.
On February 17, 2023, the CSRC promulgated Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies (the “ Overseas Listing Trial Measures ”) and five guidelines, which became effective on March 31, 2023.
Moreover, the legal uncertainty created by the Data Security Law and the recent Chinese government actions could materially adversely affect our ability, on favorable terms, to raise capital, including engaging in follow-on offerings of our securities in the U.S. market. -32- Table of Contents Restrictions on currency exchange may limit our ability to receive and use our revenues effectively.
Moreover, the legal uncertainty created by the Data Security Law and the recent Chinese government actions could materially adversely affect our ability, on favorable terms, to raise capital, including engaging in follow-on offerings of our securities in the U.S. market. - 31 - Table of Contents Restrictions on currency exchange may limit our ability to receive and use our revenues effectively.
As a result of these factors, we may experience difficulty in establishing management, legal and financial controls, collecting financial data and preparing financial statements, books of account and corporate records and instituting business practices that meet Western standards. Therefore, we may, in turn, experience difficulties in implementing and maintaining adequate internal controls as required under Section 404 of the SOA.
As a result of these factors, we may experience difficulty in establishing management, legal and financial controls, collecting financial data and preparing financial statements, books of account and corporate records and instituting business practices that meet Western standards. Therefore, we may, in turn, experience difficulties in implementing and maintaining adequate internal controls as required under Section 404 of the SOX.
For example: ● loans by us to our wholly-owned subsidiary in China, which is a foreign-invested enterprise, cannot exceed statutory limits and must be registered with the State Administration of Foreign Exchange of the PRC (the “ SAFE ”) or its local counterparts; -33- Table of Contents ● loans by us to our affiliated entities, which are domestic PRC entities, over a certain threshold must be approved by the relevant government authorities and must also be registered with the SAFE or its local counterparts; and ● capital contributions to our wholly-owned subsidiary must file a record with the PRC Ministry of Commerce (“ MOFCOM ”) or its local counterparts and shall also be limited to the difference between the registered capital and the total investment amount.
For example: ● loans by us to our wholly-owned subsidiary in China, which is a foreign-invested enterprise, cannot exceed statutory limits and must be registered with the State Administration of Foreign Exchange of the PRC (the “ SAFE ”) or its local counterparts; ● loans by us to our affiliated entities, which are domestic PRC entities, over a certain threshold must be approved by the relevant government authorities and must also be registered with the SAFE or its local counterparts; and ● capital contributions to our wholly-owned subsidiary must file a record with the PRC Ministry of Commerce (“ MOFCOM ”) or its local counterparts and shall also be limited to the difference between the registered capital and the total investment amount.
This may result in significant deficiencies or material weaknesses in our internal controls, which could impact the reliability of our financial statements and prevent us from complying with Commission rules and regulations and the requirements of the SOA. Any such deficiencies, weaknesses or lack of compliance could have a materially adverse effect on our business.
This may result in significant deficiencies or material weaknesses in our internal controls, which could impact the reliability of our financial statements and prevent us from complying with Commission rules and regulations and the requirements of the SOX. Any such deficiencies, weaknesses or lack of compliance could have a materially adverse effect on our business.
Our PRC subsidiary is also required under PRC laws and regulations to allocate at least 10% of our annual after-tax profits determined in accordance with PRC GAAP to a statutory general reserve fund until the amounts in said fund reaches 50% of our registered capital.
Our PRC subsidiary is also required under PRC laws and regulations to allocate at least 10% of our annual after-tax profits determined in accordance with PRC GAAP to a statutory general reserve fund until the amount in said fund reaches 50% of our registered capital.
On September 21, 2006, the CSRC published a notice on its official website specifying the documents and materials required to be submitted by overseas special purpose companies seeking the CSRC’s approval of their overseas listings. The M&A Rules established additional procedures and requirements that could make merger and acquisition activities in China by foreign investors more time-consuming and complex.
On September 21, 2006, the CSRC published a notice on its official website specifying the documents and materials required to be submitted by overseas special purpose companies seeking the CSRC’s approval of their overseas listings. - 35 - Table of Contents The M&A Rules established additional procedures and requirements that could make merger and acquisition activities in China by foreign investors more time-consuming and complex.
As a public company, we are subject to the reporting requirements of the Exchange Act and the Sarbanes-Oxley Act of 2002 (the “ SOA ”). The SOA requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting.
As a public company, we are subject to the reporting requirements of the Exchange Act and the Sarbanes-Oxley Act of 2002 (the “ SOX ”). The SOX requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting.
As JiuGe Technology is already our contractually controlled affiliate, JiuGe Management’s exercising of the option would not bring immediate benefits to our company, and payment of the purchase prices could adversely affect our financial position. -28- Table of Contents Risks Related to Doing Business in China Changes in China’s political or economic situation could harm us and our operating results.
As JiuGe Technology is already our contractually controlled affiliate, JiuGe Management’s exercising of the option would not bring immediate benefits to our company, and payment of the purchase prices could adversely affect our financial position. Risks Related to Doing Business in China Changes in China’s political or economic situation could harm us and our operating results.
On February 1, 2022, the Xinhua News Agency reported that the combined business revenue in the telecom sector rose 8% year on year to about USD232.43 billion in 2021, with the growth rate up 4.1 percentage points from 2020, according to the PRC Ministry of Industry and Information Technology.
On February 1, 2022, the Xinhua News Agency reported that the combined business revenue in the telecom sector rose 8% year on year to about US$232.43 billion in 2021, with the growth rate up 4.1 percentage points from 2020, according to the PRC Ministry of Industry and Information Technology.
As a result of the new Data Security Law, we may need to make adjustments to our data processing practices to comply with this law. -31- Table of Contents Additionally, China’s Cyber Security Law, requires companies to take certain organizational, technical and administrative measures and other necessary measures to ensure the security of their networks and data stored on their networks.
As a result of the new Data Security Law, we may need to make adjustments to our data processing practices to comply with this law. Additionally, China’s Cyber Security Law, requires companies to take certain organizational, technical and administrative measures and other necessary measures to ensure the security of their networks and data stored on their networks.
You could lose all or a significant portion of your investment due to any one of these material risks and uncertainties. -20- Table of Contents Risks Related to the Business We have a limited operating history and, as a result, our past results may not be indicative of future operating performance.
You could lose all or a significant portion of your investment due to any one of these material risks and uncertainties. Risks Related to the Business We have a limited operating history and, as a result, our past results may not be indicative of future operating performance.
If we are unable to generate adequate revenue growth and manage our expenses, we may continue to incur significant losses in the future and may not be able to achieve or maintain profitability. If we fail to effectively manage our growth, our business, financial condition and results of operations could be adversely affected.
If we are unable to generate adequate revenue growth and manage our expenses, we may continue to incur significant losses in the future and may not be able to achieve or maintain profitability. - 21 - Table of Contents If we fail to effectively manage our growth, our business, financial condition and results of operations could be adversely affected.
The Chinese economy differs from the economies of most countries belonging to the Organization for Economic Cooperation and Development (the “OECD”), in many ways. For example, state-owned enterprises still constitute a large portion of the Chinese economy and weak corporate governance and a lack of flexible currency exchange policy still prevail in China.
The Chinese economy differs from the economies of most countries belonging to the Organization for Economic Cooperation and Development (the “ OECD ”), in many ways. For example, state-owned enterprises still constitute a large portion of the Chinese economy and weak corporate governance and a lack of flexible currency exchange policy still prevail in China.
Broad or active public trading market for our shares of common stock may not develop or be sustained. -26- Table of Contents Risks Related to the VIE Agreements The PRC government may determine that the VIE Agreements are not in compliance with applicable PRC laws, rules and regulations.
Broad or active public trading market for our shares of common stock may not develop or be sustained. Risks Related to the VIE Agreements The PRC government may determine that the VIE Agreements are not in compliance with applicable PRC laws, rules and regulations.
For example, our present and prospective PRC subsidiary’s and affiliate’s ability to conduct foreign exchange activities, such as the remittance of dividends and foreign currency-denominated borrowings, may be subject to compliance with Circular 75 by our PRC resident beneficial holders. In addition, such PRC residents may not always be able to complete the necessary registration procedures required by Circular 75.
For example, our present and prospective PRC subsidiaries’ and affiliates’ ability to conduct foreign exchange activities, such as the remittance of dividends and foreign currency-denominated borrowings, may be subject to compliance with Circular 75 by our PRC resident beneficial holders. In addition, such PRC residents may not always be able to complete the necessary registration procedures required by Circular 75.
Under the VIE Agreements, JiuGe Technology’s shareholders have granted JiuGe Management an option for the maximum period of time permitted by law to purchase all of the equity interest in JiuGe Technology at a price equal to one dollar or the lowest applicable price allowable by PRC laws and regulations.
Under the VIE Agreements, JiuGe Technology’s shareholder has granted JiuGe Management an option for the maximum period of time permitted by law to purchase all of the equity interest in JiuGe Technology at a price equal to one dollar or the lowest applicable price allowable by PRC laws and regulations.
We have a history of net losses and we may not be able to achieve or maintain profitability in the future. For all annual periods of our operating history we have experienced net losses. We generated net losses of approximately $3.8 million, $7.5 million and $4.9 million for the years ended February 29, 2024, 2023 and 2022, respectively.
We have a history of net losses and we may not be able to achieve or maintain profitability in the future. For all annual periods of our operating history we have experienced net losses. We generated net losses of approximately $5.1 million, $3.8 million and $7.5 million for the years ended February 28, 2025, 2024 and 2023, respectively.
According to the Overseas Listing Trial Measures, if the issuer meets both the following conditions, the overseas securities offering and listing conducted by such issuer will be determined as indirect overseas offering, which shall be subject to the filing procedure set forth under the Overseas Listing Trial Measures: (i) 50% or more of the issuer’s operating revenue, total profit, total assets or net assets as documented in its audited consolidated financial statements for the most recent accounting year is accounted for by domestic companies; and (ii) the main parts of the issuer’s business activities are conducted in mainland China, or its main places of business are located in mainland China, or the senior managers in charge of its business operations and management are mostly Chinese citizens or domiciled in mainland China.
Under the Overseas Listing Trial Measures, if the issuer meets both of the following conditions, any overseas securities offering or listing conducted by such issuer will constitute an indirect overseas offering that is subject to the prescribed filing procedures: (i) 50% or more of the issuer’s operating revenue, total profit, total assets or net assets as documented in its audited consolidated financial statements for the most recent accounting year is accounted for by domestic companies; and (ii) the main parts of the issuer’s business activities are conducted in mainland China, or its main places of business are located in mainland China, or the senior managers in charge of its business operations and management are mostly Chinese citizens or domiciled in mainland China.
With this regulation in force, it may result in delays by the Company to fulfill any request to provide relevant documents or materials by the regulatory authorities or in the worst-case scenario that the Company would not be able to fulfill the request if the approval from the regulatory authority of the State Council and the relevant State Council department(s) were rejected. -29- Table of Contents You may have difficulty enforcing judgments against us.
With this regulation in force, it may result in delays by the Company to fulfill any request to provide relevant documents or materials by the regulatory authorities or in the worst-case scenario that the Company would not be able to fulfill the request if the approval from the regulatory authority of the State Council and the relevant State Council department(s) were rejected.
As of February 29, 2024, we had an accumulated deficit of $28.4 million. We have not achieved profitability, and we may not realize sufficient revenue to achieve profitability in future periods.
As of February 28, 2025, we had an accumulated deficit of $34.2 million. We have not achieved profitability, and we may not realize sufficient revenue to achieve profitability in future periods.
The successful assertion of one or more large claims against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could have an adverse effect on our reputation, brand, business, financial condition and results of operations. -22- Table of Contents Systems failures and resulting interruptions in the availability of our platform or offerings could adversely affect our business, financial condition and results of operations.
The successful assertion of one or more large claims against us that exceed available insurance coverage, or the occurrence of changes in our insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could have an adverse effect on our reputation, brand, business, financial condition and results of operations.
Uncertainties in the application of various laws, rules, regulations or policies in PRC legal system could limit our liability to enforce the VIE Agreements and protect our interests. -27- Table of Contents The payment arrangement under the VIE Agreements may be challenged by the PRC tax authorities.
Uncertainties in the application of various laws, rules, regulations or policies in PRC legal system could limit our liability to enforce the VIE Agreements and protect our interests. The payment arrangement under the VIE Agreements may be challenged by the PRC tax authorities. We generate our revenues through the payments we receive pursuant to the VIE Agreements.
Also on February 17, 2023, the CSRC also held a press conference for the release of the Overseas Listing Trial Measures and issued the Notice on Administration for the Filing of Overseas Offering and Listing by Domestic Companies, which, among others, clarifies that the domestic companies that have already been listed overseas on or before the effective date of the Overseas Listing Trial Measures (March 31, 2023) shall be deemed as “stock enterprises”.
On February 17, 2023, the CSRC held a press conference in connection with the release of the Overseas Listing Trial Measures and issued the Notice on Administration for the Filing of Overseas Offering and Listing by Domestic Companies, which, among other things, clarified that domestic companies that had been listed overseas on or before the effective date of the Overseas Listing Trial Measures (March 31, 2023) shall be deemed to be “stock enterprises”.
Also on February 17, 2023, the CSRC also held a press conference for the release of the Overseas Listing Trial Measures and issued the Notice on Administration for the Filing of Overseas Offering and Listing by Domestic Companies, which, among others, clarifies that the domestic companies that have already been listed overseas on or before the effective date of the Overseas Listing Trial Measures (March 31, 2023) shall be deemed as “stock enterprises”.
Also, the directly liable persons and actual controllers of the domestic company that organize or instruct the aforementioned violations shall be warned and/or imposed fines. - 36 - Table of Contents Also on February 17, 2023, the CSRC also held a press conference for the release of the Overseas Listing Trial Measures and issued the Notice on Administration for the Filing of Overseas Offering and Listing by Domestic Companies, which, among others, clarifies that the domestic companies that have already been listed overseas on or before the effective date of the Overseas Listing Trial Measures (March 31, 2023) shall be deemed as “stock enterprises”.
Accordingly, government actions in the future, including any decision not to continue to support recent economic reforms and to return to a more centrally planned economy or regional or local variations in the implementation of economic policies, could have a significant effect on economic conditions in China or particular regions thereof and could require us to divest ourselves of any interest we then hold in Chinese properties or joint ventures.
Accordingly, government actions in the future, including any decision not to continue to support recent economic reforms and to return to a more centrally planned economy or regional or local variations in the implementation of economic policies, could have a significant effect on economic conditions in China or particular regions thereof and could require us to divest ourselves of any interest we then hold in Chinese properties or joint ventures. - 29 - Table of Contents The PRC government may exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers.
Li Li is the legal representative and general manager, and also a shareholder of JiuGe Technology. There could be conflicts that arise from time to time between our interests and the interests of Ms. Li.
Shareholders of JiuGe Technology have potential conflicts of interest with our Company which may adversely affect our business. Li Li is the legal representative and general manager, and also a shareholder of JiuGe Technology. There could be conflicts that arise from time to time between our interests and the interests of Ms. Li.
For the Company to continue to grow, the deposit with the Telecoms needs to increase, as most of the revenue we process is dependent on the size of the deposit we have with each Telecom. We will likely need to raise additional capital to materially increase the amounts of these deposits.
For the Company to continue to grow, the deposit with the Telecoms needs to increase, as most of the revenue we process is dependent on the size of the deposit we have with each Telecom.
Any of these events could adversely affect our business, financial condition and results of operations. -24- Table of Contents Risks Related to Our Securities Our stock has limited liquidity. Our common stock began trading on the Nasdaq Capital Market on December 28, 2021, and before that it traded on the OTCQX operated by OTC Markets Group Inc.
Any unexpected government action could affect how we operate or grow our business in the future. - 24 - Table of Contents Risks Related to Our Securities Our stock has limited liquidity. Our common stock began trading on the Nasdaq Capital Market on December 28, 2021, and before that it traded on the OTCQX operated by OTC Markets Group Inc.
Political tensions between the United States and China have escalated due to, among other things, trade disputes, the COVID-19 outbreak, sanctions imposed by the U.S.
Recently there have been heightened tensions in international economic relations, such as the one between the United States and China. Political tensions between the United States and China have escalated due to, among other things, trade disputes, the COVID-19 outbreak, sanctions imposed by the U.S.
Any actual or perceived breach of privacy or security could interrupt our operations, result in our platform being unavailable, result in loss or improper disclosure of data, result in fraudulent transfer of funds, harm our reputation and brand, damage our relationships with third-party partners, result in significant legal, regulatory and financial exposure and lead to loss of confidence in, or decreased use of, our platform, any of which could adversely affect our business, financial condition and results of operations.
Our information technology and infrastructure may be vulnerable to cyberattacks or security breaches; also, employee error, malfeasance or other errors in the storage, use or transmission of personal information could result in an actual or perceived privacy or security breach or other security incident. - 22 - Table of Contents Any actual or perceived breach of privacy or security could interrupt our operations, result in our platform being unavailable, result in loss or improper disclosure of data, result in fraudulent transfer of funds, harm our reputation and brand, damage our relationships with third-party partners, result in significant legal, regulatory and financial exposure and lead to loss of confidence in, or decreased use of, our platform, any of which could adversely affect our business, financial condition and results of operations.
A failure by our PRC resident beneficial holders or future PRC resident shareholders to comply with Circular 75, if the SAFE requires it, could subject these PRC resident beneficial holders to fines or legal sanctions, restrict our overseas or cross-border investment activities, limit our subsidiary’s and affiliate’s ability to make distributions or pay dividends or affect our ownership structure, which could adversely affect our business and prospects. -34- Table of Contents We may be subject to fines and legal sanctions by the SAFE or other PRC government authorities if we or our employees who are PRC citizens fail to comply with PRC regulations relating to employee stock options granted by offshore listed companies to PRC citizens.
A failure by our PRC resident beneficial holders or future PRC resident shareholders to comply with Circular 75, if the SAFE requires it, could subject these PRC resident beneficial holders to fines or legal sanctions, restrict our overseas or cross-border investment activities, limit our subsidiary’s and affiliate’s ability to make distributions or pay dividends or affect our ownership structure, which could adversely affect our business and prospects.
The Overseas Listing Trial Measures regulate both direct and indirect overseas offering and listing of PRC domestic companies’ securities by adopting a filing-based regulatory regime.
The Overseas Listing Trial Measures have introduced a filing-based regulatory regime that regulates both direct and indirect overseas offerings and listings of PRC domestic companies’ securities.
The Cracking Down on Illegal Securities Activities Opinions emphasized the need to strengthen the administration over illegal securities activities and the supervision over overseas listings by China-based companies, and proposed to take measures, including promoting the construction of relevant regulatory systems to control the risks and deal with the incidents faced by China-based overseas-listed companies. -37- Table of Contents In addition, on December 24, 2021, the CSRC issued the draft Administration Provisions of the State Council on the Administration of Overseas Securities Offering and Listing by Domestic Companies (the “ Draft Administration Provisions ”) and the draft Administrative Measures for the Filing of Overseas Securities Offering and Listing by Domestic Companies (the “ Draft Administrative Measures ”), for public comments.
The Cracking Down on Illegal Securities Activities Opinions emphasized the need to strengthen the administration over illegal securities activities and the supervision over overseas listings by China-based companies, and proposed to take measures, including promoting the construction of relevant regulatory systems to control the risks and deal with the incidents faced by China-based overseas-listed companies.
There are risks involved with the operation of our business in reliance on the VIE Agreements, including the risk that the VIE Agreements may be determined by PRC regulators or courts to be unenforceable.
Almost all economic benefits and risks arising from JiuGe Technology’s operations are transferred to JiuGe Management under these agreements. - 26 - Table of Contents There are risks involved with the operation of our business in reliance on the VIE Agreements, including the risk that the VIE Agreements may be determined by PRC regulators or courts to be unenforceable.
Li will vote her shares in our best interest or otherwise act in the best interests of our company. If Ms. Li fails to act in our best interests, our operating performance and future growth could be adversely affected.
Li will vote her shares in our best interest or otherwise act in the best interests of our company. If Ms.
We are a Delaware holding company, but Finger Motion (CN) Limited is a Hong Kong company, and our principal operating affiliate and subsidiary, JiuGe Technology and JiuGe Management, are located in the PRC. Most of our assets are located outside the United States and most of our current operations are conducted in the PRC.
You may have difficulty enforcing judgments against us. We are a Delaware holding company, but Finger Motion (CN) Limited is a Hong Kong company, and our principal operating affiliate and subsidiary, JiuGe Technology and JiuGe Management, are located in the PRC.
We rely on the approval certificates and business license held by JiuGe Management and any deterioration of the relationship between JiuGe Management and JiuGe Technology could materially and adversely affect our business operations.
Li fails to act in our best interests, our operating performance and future growth could be adversely affected. - 27 - Table of Contents We rely on the approval certificates and business license held by JiuGe Management and any deterioration of the relationship between JiuGe Management and JiuGe Technology could materially and adversely affect our business operations.
Additionally, if we do not effectively manage the growth of our business and operations, the quality of our offerings could suffer, which could negatively affect our reputation and brand, business, financial condition and results of operations. -21- Table of Contents We depend on our key personnel and other highly skilled personnel, and if we fail to attract, retain, motivate or integrate our personnel, our business, financial condition and results of operations could be adversely affected.
We depend on our key personnel and other highly skilled personnel, and if we fail to attract, retain, motivate or integrate our personnel, our business, financial condition and results of operations could be adversely affected.
As a result, it could be difficult for investors to effect service of process in the United States or to enforce a judgment obtained in the United States against our Chinese operations, subsidiary and affiliate.
As a result, it could be difficult for investors to effect service of process in the United States or to enforce a judgment obtained in the United States against our Chinese operations, subsidiary and affiliate. - 28 - Table of Contents The current tensions in international trade and rising political tensions, particularly between the United States and China, may adversely impact our business, financial condition, and results of operations.
PRC regulation of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from making loans or additional capital contributions to our PRC subsidiary and affiliated entities, which could harm our liquidity and our ability to fund and expand our business.
Any limitations on the ability of our PRC subsidiary to transfer funds to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends and otherwise fund and conduct our business. - 32 - Table of Contents PRC regulation of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from making loans or additional capital contributions to our PRC subsidiary and affiliated entities, which could harm our liquidity and our ability to fund and expand our business.
In addition, all of our directors and officers are nationals and residents of countries other than the United States. A substantial portion of the assets of these persons is located outside the United States. As a result, it may be difficult for you to effect service of process within the United States upon these persons.
Most of our assets are located outside the United States and most of our current operations are conducted in the PRC. In addition, all of our directors and officers are nationals and residents of countries other than the United States. A substantial portion of the assets of these persons is located outside the United States.
JiuGe Management manages and operates the mobile data business through JiuGe Technology pursuant to the rights its holds under the VIE Agreements. Almost all economic benefits and risks arising from JiuGe Technology’s operations are transferred to JiuGe Management under these agreements.
JiuGe Management, our WFOE, manages and operates the mobile data business through JiuGe Technology, the VIE, pursuant to the rights its holds under the VIE Agreements.
On July 30, 2021, in response to the recent regulatory developments in China and actions adopted by the PRC government, the Chairman of the SEC issued a statement asking the SEC staff to seek additional disclosures from offshore issuers associated with China-based operating companies before their registration statements will be declared effective.
We may have to adjust, modify, or completely change our business operations in response to adverse regulatory changes or policy developments, and we cannot assure you that any remedial action adopted by us can be completed in a timely, cost-efficient, or liability-free manner or at all. - 30 - Table of Contents On July 30, 2021, in response to the recent regulatory developments in China and actions adopted by the PRC government, the Chairman of the SEC issued a statement asking the SEC staff to seek additional disclosures from offshore issuers associated with China-based operating companies before their registration statements will be declared effective.
If we were treated as a “resident enterprise” by PRC tax authorities, we would be subject to taxation in both the U.S. and China, and our PRC tax may not be creditable against our U.S. tax. -35- Table of Contents We may be exposed to liabilities under the Foreign Corrupt Practices Act (the “FCPA”) and Chinese anti-corruption laws, and any determination that we violated these laws could have a material adverse effect on our business.
We may be exposed to liabilities under the Foreign Corrupt Practices Act (the “FCPA”) and Chinese anti-corruption laws, and any determination that we violated these laws could have a material adverse effect on our business.
Where an abovementioned issuer submits an application for an initial public offering to competent overseas regulators, such issuer shall file with the CSRC within three business days after such application is submitted.
Any such issuer that submits an application for an initial public offering to competent overseas regulators, must make the required filing with the CSRC within three business days following the date of the application.
Any such failure could also result in the SPV’s affiliates being impeded or prevented from distributing their profits and the proceeds from any reduction in capital, share transfer or liquidation to the SPV, or from engaging in other transfers of funds into or out of China.
Any such failure could also result in the SPV’s affiliates being impeded or prevented from distributing their profits and the proceeds from any reduction in capital, share transfer or liquidation to the SPV, or from engaging in other transfers of funds into or out of China. - 33 - Table of Contents We have advised our shareholders who are PRC residents, as defined in Circular 75, to register with the relevant branch of SAFE, as currently required, in connection with their equity interests in us and our acquisitions of equity interests in our PRC subsidiary and affiliate.
Where a domestic company fails to fulfill filing procedure or in violation of the provisions as stipulated above, in respect of its overseas offering and listing, the CSRC shall order rectification, issue warnings to such domestic company, and impose a fine ranging from RMB1,000,000 to RMB10,000,000.
Where a domestic company fails to comply with filing requirements or is otherwise determined to be in violation of the Overseas Listing Trial Measures, the CSRC may order rectification, issue a warning, and impose a fine ranging from RMB1,000,000 to RMB10,000,000.
Accordingly, you should review our SEC reports, filings and our other public announcements with the understanding that no local regulator has done any due diligence on our Company and with the understanding that none of our SEC reports, other filings or any of our other public announcements has been reviewed or otherwise been scrutinized by any local regulator. -36- Table of Contents Certain PRC regulations, including those relating to mergers and acquisitions and national security, may require a complicated review and approval process which could make it more difficult for us to pursue growth through acquisitions in China.
Accordingly, you should review our SEC reports, filings and our other public announcements with the understanding that no local regulator has done any due diligence on our Company and with the understanding that none of our SEC reports, other filings or any of our other public announcements has been reviewed or otherwise been scrutinized by any local regulator.
We generate our revenues through the payments we receive pursuant to the VIE Agreements. We could face adverse tax consequences if the PRC tax authorities determine that the VIE Agreements were not entered into based on arm’s length negotiations.
We could face adverse tax consequences if the PRC tax authorities determine that the VIE Agreements were not entered into based on arm’s length negotiations. For example, PRC tax authorities may adjust our income and expenses for PRC tax purposes which could result in our being subject to higher tax liability or cause other adverse financial consequences.
Stock enterprises are not required to complete the filling procedures immediately, and they shall be required to file with the CSRC when subsequent matters such as refinancing are involved. -30- Table of Contents If we offer new securities in the future, we will be required to file with the CSRC, which could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and could cause the value of our securities to significantly decline or be worthless.
If we are found to be delinquent in our filing obligations under, or are otherwise found to be in violation of, the Overseas Listing Trial Measures, this could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and could cause the value of our securities to significantly decline or be worthless.
The current tensions in international trade and rising political tensions, particularly between the United States and China, may adversely impact our business, financial condition, and results of operations. Recently there have been heightened tensions in international economic relations, such as the one between the United States and China.
Any of these events could adversely affect our business, financial condition and results of operations. Geopolitical Tensions Between the United States and China Could Adversely Affect Our Operations and Business Environment.
Removed
Our information technology and infrastructure may be vulnerable to cyberattacks or security breaches; also, employee error, malfeasance or other errors in the storage, use or transmission of personal information could result in an actual or perceived privacy or security breach or other security incident.
Added
Additionally, if we do not effectively manage the growth of our business and operations, the quality of our offerings could suffer, which could negatively affect our reputation and brand, business, financial condition and results of operations.
Removed
For example, PRC tax authorities may adjust our income and expenses for PRC tax purposes which could result in our being subject to higher tax liability or cause other adverse financial consequences. Shareholders of JiuGe Technology have potential conflicts of interest with our Company which may adversely affect our business.
Added
Systems failures and resulting interruptions in the availability of our platform or offerings could adversely affect our business, financial condition and results of operations.
Removed
Also the directly liable persons and actual controllers of the domestic company that organize or instruct the aforementioned violations shall be warned and/or imposed fines.
Added
We will need to raise additional capital to materially increase the amounts of these deposits with the Telecoms and to support the rollout of our Command & Communications business.
Removed
We may have to adjust, modify, or completely change our business operations in response to adverse regulatory changes or policy developments, and we cannot assure you that any remedial action adopted by us can be completed in a timely, cost-efficient, or liability-free manner or at all.
Added
Although our services are not directly affected by tariffs, ongoing political and trade tensions between the United States and China could lead to new regulations or restrictions that may impact our operations. These may include changes in laws, data rules, or cross-border business policies that we cannot predict at this time.
Removed
Any limitations on the ability of our PRC subsidiary to transfer funds to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends and otherwise fund and conduct our business.
Added
As a result, it may be difficult for you to effect service of process within the United States upon these persons.
Removed
We have advised our shareholders who are PRC residents, as defined in Circular 75, to register with the relevant branch of SAFE, as currently required, in connection with their equity interests in us and our acquisitions of equity interests in our PRC subsidiary and affiliate.
Added
Controlling persons (including directors and officers) of the domestic company that are determined to be responsible for such filing delinquencies or violations can also be sanctioned.
Removed
We are actively monitoring the possibility of “resident enterprise” treatment.
Added
Stock enterprises were exempted from having to immediately comply with the filing procedures, with their first filings being deferred to when they undertook a further overseas offering or listing.
Removed
Also the directly liable persons and actual controllers of the domestic company that organize or instruct the aforementioned violations shall be warned and/or imposed fines.
Added
Generally, we understand that, for these purposes, the filing requirement would apply in respect of securities that are offered in a public overseas offering, and likely to securities that, having been offered in a private overseas offering, become eligible for resale to the public.
Removed
As a public company with securities listed on Nasdaq, we are required to have our financial statements audited by an independent registered public accounting firm registered with the PCAOB.
Added
Specifics of the Overseas Listing Trial Measures, and the administrative rules, policies and practices of the CSRC, are somewhat unclear, and it remains uncertain what potential impact such modified or new laws and regulations will have on our ability to conduct our business, accept investments or list or maintain a listing on a U.S. or foreign exchange.
Removed
A requirement of being registered with the PCAOB is that if requested by the SEC or PCAOB, such accounting firm is required to make its audits and related audit work papers be subject to regular inspections to assess its compliance with the applicable professional standards.
Added
We may be subject to fines and legal sanctions by the SAFE or other PRC government authorities if we or our employees who are PRC citizens fail to comply with PRC regulations relating to employee stock options granted by offshore listed companies to PRC citizens.
Removed
Since our auditor is located in Hong Kong and PRC, a jurisdiction where the PCAOB has previously been unable to conduct inspections without the approval of the PRC authorities due to various state secrecy laws and the revised Securities Law, the PCAOB did not have free access to inspect the work of our auditor.
Added
We are actively monitoring the possibility of “resident enterprise” treatment. - 34 - Table of Contents If we were treated as a “resident enterprise” by PRC tax authorities, we would be subject to taxation in both the U.S. and China, and our PRC tax may not be creditable against our U.S. tax.
Removed
This lack of access to the PCAOB inspection in the PRC prevents the PCAOB from fully evaluating audits and quality control procedures of our auditor based in the PRC. As a result, the investors may be deprived of the benefits of such PCAOB inspections.
Added
Certain PRC regulations, including those relating to mergers and acquisitions and national security, may require a complicated review and approval process which could make it more difficult for us to pursue growth through acquisitions in China.
Removed
The inability of the PCAOB to conduct inspections of auditors in the PRC makes it more difficult to evaluate the effectiveness of these accounting firms’ audit procedures or quality control procedures as compared to auditors outside of the PRC that are subject to the PCAOB inspections. On December 18, 2020, the HFCAA was enacted.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

5 edited+0 added−0 removed16 unchanged
Biggest changeWe are currently enhancing these protocols to further strengthen our defenses and reduce potential vulnerabilities. -41- Table of Contents Risks from Cybersecurity Threats We do not currently identify any major cybersecurity threats that have materially affected or are reasonably likely to materially affect us (including our business strategy, results of operations, or financial condition).
Biggest changeRisks from Cybersecurity Threats We do not currently identify any major cybersecurity threats that have materially affected or are reasonably likely to materially affect us (including our business strategy, results of operations, or financial condition).
These risks are evaluated on an ongoing basis as part of our overall risk management strategy that is monitored and tracked by our Risk and Information Security Committee, as well as through a separate cybersecurity assessment of the China IT platform opearated by our contractually controlled subsidiary, JiuGe Technology, which is required under PRC laws.
These risks are evaluated on an ongoing basis as part of our overall risk management strategy that is monitored and tracked by our Risk and Information Security Committee, as well as through a separate cybersecurity assessment of the China IT platform operated by our contractually controlled subsidiary, JiuGe Technology, which is required under PRC laws.
As we progress in the assessment and enhancement of our cybersecurity program, we plan to consider the following areas for enhancement and incorporation into the cybersecurity risk management and governance program in the future: · Oversight of Third-Party cybersecurity risk · Engaging/ outsourcing Risk management Personnel · Monitoring system/ procedures for cybersecurity incidents · Reporting to Board of Directors regarding cybersecurity risks and incidents Risk Management Personnel Primary responsibility for assessing, monitoring, and managing our cybersecurity risks rests with the CEO, Mr.
As we progress in the assessment and enhancement of our cybersecurity program, we plan to consider the following areas for enhancement and incorporation into the cybersecurity risk management and governance program in the future: · Oversight of Third-Party cybersecurity risk · Engaging/ outsourcing Risk management Personnel · Monitoring system/ procedures for cybersecurity incidents · Reporting to Board of Directors regarding cybersecurity risks and incidents - 38 - Table of Contents Risk Management Personnel Primary responsibility for assessing, monitoring, and managing our cybersecurity risks rests with the CEO, Mr.
The final MLPS report is submitted to the appropriate authorities, and the IT Manager also reviews this report with our CFO. Our CFO and the IT Manager report directly to the Risk and Information Security Committee to review the Company’s information security and cybersecurity risks, including but not limited to, the MLPS report.
The final MLPS report is submitted to the appropriate authorities, and the IT Manager also reviews this report with our CFO. - 37 - Table of Contents Our CFO and the IT Manager report directly to the Risk and Information Security Committee to review the Company’s information security and cybersecurity risks, including but not limited to, the MLPS report.
FingerMotion will consider resource and capital constraints when determining the nature and timing of enhancing our cybersecurity infrastructure. Overseeing Risks stemming from Third-Party Service Providers We maintain comprehensive internal protocols to mitigate cybersecurity threats associated with our use of third party service providers.
FingerMotion will consider resource and capital constraints when determining the nature and timing of enhancing our cybersecurity infrastructure. Overseeing Risks stemming from Third-Party Service Providers We maintain comprehensive internal protocols to mitigate cybersecurity threats associated with our use of third-party service providers. We are currently enhancing these protocols to further strengthen our defenses and reduce potential vulnerabilities.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed2 unchanged
Biggest changeThere are no matters as of February 29, 2024 that in the opinion of management might have a material adverse effect on our results of operations, financial condition or cash flows, or that are required to be disclosed under the rules of the SEC.
Biggest changeThere are no matters as of February 28, 2025 that in the opinion of management might have a material adverse effect on our results of operations, financial condition or cash flows, or that are required to be disclosed under the rules of the SEC.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+4 added−0 removed4 unchanged
Biggest changeQuarter Ended High Bid Low Bid February 29, 2024 $4.50 $2.05 November 30, 2023 $7.97 $3.88 August 31, 2023 $7.16 $1.30 May 31, 2023 $2.50 $1.01 February 28, 2023 $4.66 $1.39 November 30, 2022 $9.79 $0.62 August 31, 2022 $2.30 $0.83 May 31, 2022 $2.99 $1.24 February 28, 2022 $9.25 $2.03 On May 23, 2024, the last reported sale price of our common stock on the Nasdaq Capital Market was $2.95 per share.
Biggest changeQuarter Ended High Bid Low Bid February 29, 2025 $ 2.70 $ 1.03 November 30, 2024 $ 2.46 $ 1.79 August 31, 2024 $ 3.26 $ 1.63 May 31, 2024 $ 3.96 $ 1.92 February 29, 2024 $ 4.50 $ 2.05 November 30, 2023 $ 7.97 $ 3.88 August 31, 2023 $ 7.16 $ 1.30 May 31, 2023 $ 2.50 $ 1.01 February 28, 2023 $ 4.66 $ 1.39 On May 23, 2025, the last reported sale price of our common stock on the Nasdaq Capital Market was $4.08 per share.
Holders of Common Shares As of May 23, 2024, there were approximately 81 holders of record of our common stock as reported by our transfer agent, VStock Transfer, LLC, which does not include shareholders whose shares are held in street or nominee names. Dividends We have never declared or paid any cash dividends on our capital stock.
Holders of Common Shares As of May 23, 2025, there were approximately 335 holders of record of our common stock as reported by our transfer agent, VStock Transfer, LLC, which does not include shareholders whose shares are held in street or nominee names. Dividends We have never declared or paid any cash dividends on our capital stock.
Recent Sales of Unregistered Securities Year Ended February 29, 2024 All sales of unregistered securities during the fiscal year ended February 29, 2024 have been previously reported.
Recent Sales of Unregistered Securities Year Ended February 28, 2025 All sales of unregistered securities during the fiscal year ended February 28, 2025 have been previously reported.
We currently intend to grant a dividend in kind of warrants to purchase shares of our common stock to holders of our common stock as previously disclosed, however, we intend to use the net proceeds from any offerings of our securities and our future earnings, if any, to finance the further development and expansion of our business and do not intend or expect to pay cash dividends in the foreseeable future.
We intend to use the net proceeds from any offerings of our securities and our future earnings, if any, to finance the further development and expansion of our business and do not intend or expect to pay cash dividends in the foreseeable future.
Subsequent to the Year Ended February 29, 2024 On March 29, 2024, we issued 17,500 shares of our common stock at a deemed price of $2.80 per share to one entity pursuant to consulting agreements, dated February 27, 2023 and February 24, 2024.
Subsequent to the Year Ended February 28, 2025 On March 3, 2025, we issued 27,500 shares of our common stock at a deemed price of $1.86 per share to one entity pursuant to a consulting agreement.
We relied upon the exemption from registration under the Securities Act provided by Rule 506(b) or Section 4(a)(2) of the Securities Act for the issuance of the shares to the entity that is a U.S. person. -43- Table of Contents Issuer Repurchases of Equity Securities We did not repurchase any of our outstanding securities during the fiscal year ended February 29, 2024.
We relied upon the exemption from registration under the Securities Act provided by Rule 506(b) of Regulation D and/or Section 4(a)(2) of the Securities Act for the issuance of the shares to the entity that is a U.S. person.
Added
On May 28, 2025, we issued an aggregate of 940,000 shares of our common stock at a price of $2.50 per share to eight individuals due to the closing of a private placement for aggregate gross proceeds of $2,350,000.
Added
We relied upon the exemption from registration under the Securities Act, provided by Rule 903 of Regulation S promulgated under the Securities Act for the issuance of the shares to the non-U.S. persons as the shares were issued to the non-U.S. persons through offshore transactions which were negotiated and consummated outside the United States.
Added
The proceeds from the private placement offering will be used for general corporate and working capital purposes. - 40 - Table of Contents In connection with the closing of the private placement on May 28, 2025, we paid cash finder’s fees of $235,000 to one non-U.S. individual.
Added
Issuer Repurchases of Equity Securities We did not repurchase any of our outstanding securities during the fiscal year ended February 28, 2025.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

53 edited+57 added−32 removed59 unchanged
Biggest changeOn April 17, 2024, our contractually controlled subsidiary, JiuGe Technology, is entering into arrangements with certain electric vehicle (“EV”) charging station providers in the PRC to allow EV owners who have subscribed to the Da Ge app to locate and charge their vehicles, which is expected to significantly expand Da Ge’s usage. -47- Table of Contents Results of Operations Year Ended February 29, 2024 Compared to Year Ended February 28, 2023 The following table sets forth our results of operations for the fiscal years ended February 29, 2024 and February 28, 2023: Year Ended February 29, 2024 Year Ended February 28, 2023 Revenue $ 35,791,685 $ 34,054,205 Cost of revenue $ (31,929,967 ) $ (31,735,735 ) Total operating expenses $ (7,679,407 ) $ (8,984,535 ) Total other income (expenses) $ 5,672 $ (872,772 ) Net Loss attributable to the Company’s shareholders $ (3,757,519 ) $ (7,539,142 ) Foreign currency translation adjustment $ (390,670 ) $ (529,603 Comprehensive loss attributable to the Company $ (4,148,449 ) $ (8,068,212 ) Basic Loss Per Share attributable to the Company (0.07 ) (0.17 ) Diluted Loss Per Share attributable to the Company (0.07 ) (0.17 ) Revenues The following table sets forth the Company’s revenue from its three lines of business for the periods indicated: Year Ended February 29, 2024 Year Ended February 28, 2023 Change (%) Telecommunication Products & Services $ 32,790,946 $ 27,006,978 21 % SMS & MMS Business $ 2,672,826 $ 6,609,727 -60 % Big Data $ 327,913 $ 437,500 -25 % Total Revenue $ 35,791,685 $ 34,054,205 5 % We recorded $35,791,685 in revenue for the year ended February 29, 2024, an increase of $1,737,480 or 5%, compared to the year ended February 28, 2023.
Biggest changeResults of Operations Year Ended February 28, 2025 Compared to Year Ended February 29, 2024 The following table sets forth our results of operations for the fiscal years ended February 28, 2025 and February 29, 2024: Year Ended February 28, 2025 Year Ended February 29, 2024 Revenue $ 35,607,614 $ 35,791,685 Cost of revenue $ (32,843,907 ) $ (31,929,967 ) Total operating expenses $ (8,712,708 ) $ (7,679,407 ) Total other income (expenses) $ (39,462 ) $ 5,672 Net Loss attributable to the Company’s stockholders $ (5,112,804 ) $ (3,811,503 ) Foreign currency translation adjustment $ (176,265 ) $ (375,319 ) Comprehensive loss attributable to the Company $ (5,288,467 ) $ (4,187,272 ) Basic Loss Per Share attributable to the Company (0.09 ) (0.07 ) Diluted Loss Per Share attributable to the Company (0.09 ) (0.07 ) - 45 - Table of Contents Revenues The following table sets forth the Company’s revenue from its three lines of business for the periods indicated: Year Ended February 28, 2025 Year Ended February 29, 2024 Change (%) Telecommunication Products & Services $ 27,205,347 $ 32,790,946 -17 % SMS & MMS $ 8,191,308 $ 2,672,826 206 % DaGe Platform $ 80,592 $ — 100 % Command & Communication $ 188,576 $ — 100 % Big Data $ (58,209 ) $ 327,913 -118 % Total Revenue $ 35,607,614 $ 35,791,685 -1 % We recorded $35,607,614 in revenue for the year ended February 28, 2025, a decrease of $184,071 or 1%, compared to the year ended February 29, 2024.
In mid-July 2022, we launched the roll out of the Mobile Device protection product with the roll out of the new mobile phones and 5G phones. . Complementing our hardware protection services, we have introduced the cloud services designed to offer corporate customers robust data storage, processing capabilities, and databases accessible via the internet.
In mid-July 2022, we launched the Mobile Device protection product with the roll out of the new mobile phones and 5G phones. Complementing our hardware protection services, we have introduced cloud services designed to offer corporate customers robust data storage, processing capabilities, and databases accessible via the internet.
In the first quarter of 2019 FingerMotion expanded its business by commercializing its first “Business to Consumer” (“ B2C ”) model, offering the telecommunication providers’ products and services, including data plans, subscription plans, mobile phones, and loyalty points redemption, directly to subscribers or customers of the e-commerce companies, such as PinDuoDuo (“ PDD ”), TMall (“ TMALL ”) and JD.Com.
In the first quarter of 2019 FingerMotion expanded its business by commercializing its first “Business to Consumer” (“ B2C ”) model, offering the telecommunication providers’ products and services, including data plans, subscription plans, mobile phones, and loyalty points redemption, directly to subscribers or customers of the e-commerce companies, such as PinDuoDuo.com, TMall.com and JD.Com.
In February 2022, our contractually controlled subsidiary, JiuGe Technology, through its 99% own subsidiary TengLian signed an agreement with both China Unicom and China Mobile to co-operate to roll out the Mobile Device Protection product which is incorporated into the Telecommunication subscription plans in line with their roll out of new mobile phones and new 5G phones.
In February 2022, our contractually controlled subsidiary, JiuGe Technology, through its 99% own subsidiary TengLian signed an agreement with both China Unicom and China Mobile to co-operate in the introduction of the Mobile Device Protection product which is incorporated into the Telecommunication subscription plans in line with their roll out of new mobile phones and new 5G phones.
In December 2021, the Company through JiuGe Technology formed a collaborative research alliance with Munich Re in extending behavioral analytics to enhance understanding of morbidity and behavioral patterns in China market, with the goal of creating value for both insurers and the end insurance consumers through better technology, product offerings and customer experience.
In December 2021, the Company acting through JiuGe Technology, formed a collaborative research alliance with Munich Re in extending behavioral analytics to enhance understanding of morbidity and behavioral patterns in China market, with the goal of creating value for both insurers and the end insurance consumers through better technology, product offerings and customer experience.
NCAC is the governing body for patent and copyright verification and approval in China. The Company’s successful applications for these patents validate Sapientus’ continuing innovation in data science and its application in the field of insurance, finance, and beyond, demonstrating the Company’s active participation and contributions to the industry.
NCAC is the governing body for patent and copyright verification and approval in China. The Company’s successful applications for these patents validate Sapientus’s continuing innovation in data science and its application in the field of insurance, finance, and beyond, demonstrating the Company’s active participation and contributions to the industry.
Introduction The following discussion summarizes the results of operations for each of our fiscal years ended February 29, 2024 and February 28, 2023 and our financial condition as at February 29, 2024 and February 28, 2023, with a particular emphasis on fiscal 2024, our most recently completed fiscal year.
Introduction The following discussion summarizes the results of operations for each of our fiscal years ended February 28, 2025 and February 29, 2024 and our financial condition as at February 28, 2025 and February 29, 2024, with a particular emphasis on fiscal 2025, our most recently completed fiscal year.
Beijing Technology has the capability to manage and track the entire process, including guiding the Company’s customer to meet MIIT’s guidelines on messages composed, until the SMS messages have been delivered successfully. ‘ Rich Communication Services In March 2020, the Company began the development of an RCS platform, also known as Messaging as a Platform (“ MaaP ”).
Beijing Technology has the capability to manage and track the entire process, including guiding the Company’s customer to meet MIIT’s guidelines on messages composed, until the SMS messages have been delivered successfully. - 42 - Table of Contents Rich Communication Services In March 2020, the Company began the development of an RCS platform, also known as Messaging as a Platform (“ MaaP ”).
Similar to tangible property and equipment, the Company periodically evaluates identifiable intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. -53- Table of Contents Impairment of Long-Lived Assets The Company classifies its long-lived assets into: (i) computer and office equipment; (ii) furniture and fixtures, (iii) leasehold improvements, and (iv) finite–lived intangible assets.
Similar to tangible property and equipment, the Company periodically evaluates identifiable intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Impairment of Long-Lived Assets The Company classifies its long-lived assets into: (i) computer and office equipment; (ii) furniture and fixtures, (iii) leasehold improvements, and (iv) finite–lived intangible assets.
Additionally, as previously disclosed, on July 7, 2019, JiuGe Technology, our contractually controlled affiliate, entered into that certain Cooperation Agreement with China Unicom Yunnan, whereby JiuGe Technology is responsible for constructing and operating China Unicom’s electronic sales platform through which consumers can purchase various goods and services from China Unicom, including mobile telephones, mobile telephone service, broadband data services, terminals, “smart” devices and related financial insurance.
Additionally, as previously disclosed, on July 7, 2019, JiuGe Technology, our VIE, entered into that certain Cooperation Agreement with China Unicom Yunnan, whereby JiuGe Technology is responsible for constructing and operating China Unicom’s electronic sales platform through which consumers can purchase various goods and services from China Unicom, including mobile telephones, mobile telephone service, broadband data services, terminals, “smart” devices and related financial insurance.
In May 2021, JiuGe Technology signed a volume-based agreement with China Mobile Fujian to offer recharge services to the Fujian province which we have launched and commercialized in November 2021. The JiuGe Technology mobile payment and recharge platform enables the seamless delivery of real-time payment and recharge services to third-party channels and businesses.
In May 2021, JiuGe Technology signed a volume-based agreement with China Mobile Fujian to offer recharge services to the Fujian province which we have launched and commercialized in November 2021. - 41 - Table of Contents The JiuGe Technology mobile payment and recharge platform enables the seamless delivery of real-time payment and recharge services to third-party channels and businesses.
In evaluating these statements, you should consider various factors, including the risks, uncertainties and assumptions set forth in reports and other documents we have filed with or furnished to the SEC and, including, without limitation, this Annual Report on Form 10-K filing for the fiscal year ended February 29, 2024, including the consolidated financial statements and related notes contained herein.
In evaluating these statements, you should consider various factors, including the risks, uncertainties and assumptions set forth in reports and other documents we have filed with or furnished to the SEC and, including, without limitation, this Annual Report on Form 10-K filing for the fiscal year ended February 28, 2025, including the consolidated financial statements and related notes contained herein.
As part of our new business and partner acquisition strategy, we have been actively developing and promoting new value propositions, such as offering proprietary analytic tools and insights that facilitate more effective sales profiling and creative product innovations, capturing a wider commercial audience. ● Official patent recognition – Over the past four years, Sapientus has been granted eight patents by the National Copyright Administration of China (NCAC) for the abovementioned model algorithms and technological infrastructure as well as insurance-oriented applications, for example, Risk Rating API Design, and Insurance Risk Assessment platform and Insurance Fraud Detection System.
As part of our new business and collaboration strategy, we have been actively developing and promoting new value propositions, such as offering proprietary analytic tools and insights that facilitate more effective sales profiling and creative product innovations, capturing a wider commercial audience. ● Official patent recognition – Over the past four years, FMFCL has been granted eight patents by the National Copyright Administration of China (NCAC) in relation to Sapientus for the abovementioned model algorithms and technological infrastructure as well as insurance-oriented applications, for example, Risk Rating API Design, and Insurance Risk Assessment platform and Insurance Fraud Detection System.
Critical Accounting Policies The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). The consolidated financial statements include the financial statements of the Company, and its wholly-owned subsidiaries. All intercompany accounts, transactions, and profits have been eliminated upon consolidation.
Critical Accounting Policies The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“ U.S. GAAP ”). The consolidated financial statements include the financial statements of the Company, and its wholly-owned subsidiaries. All intercompany accounts, transactions, and profits have been eliminated upon consolidation.
SMS and MMS Services On March 7, 2019, the Company through JiuGe Technology acquired Beijing Technology Co, a company in the business of providing mass SMS text services to businesses looking to communicate with large numbers of their customers and prospective customers.
SMS and MMS Services On March 7, 2019, the Company, acting through JiuGe Technology, acquired operational control of Beijing Technology, a company in the business of providing mass SMS text services to businesses looking to communicate with large numbers of their customers and prospective customers.
The elevated intelligence of our system could empower our partners with a greater latitude of risk and value segmentation abilities critical for successful portfolio management. -50- Table of Contents ● Strengthening of existing partnerships and broadening into new engagements -We continue to leverage our vast analytical assets and reinvent our capabilities to better serve existing partners as well as recruit new collaboration parties.
The elevated intelligence of our system could empower our partners with a greater latitude of risk and value segmentation abilities critical for successful portfolio management. ● Strengthening of existing strategic collaboration arrangements and broadening into new engagements - We continue to leverage our vast analytical assets and reinvent our capabilities to better serve existing partners as well as recruit new collaboration parties.
The decrease of $97,990 or 12% was due to the savings from data access and usage fees charged by telecommunications company. Our Insurtech division focuses on consumer behavioral insights extraction for the purpose of risk assessment. Insights are mined from a multitude of data sources, harmonized with the objectives of our various business partners.
The decrease of $66,792 or 10% was due to the savings from data access and usage fees charged by telecommunications company. Our Insurtech division focuses on consumer behavioral insights extraction for the purpose of risk assessment. Insights are mined from a multitude of data sources, harmonized with the objectives of our various business partners.
However, we will continue to employ equity compensation for consultants selectively, aligning with our strategic and financial objectives. Operating Expenses We recorded $7,679,407 in operating expenses for the year ended February 29, 2024 as compared to $8,984,535 in operating expenses for the year ended February 28, 2023.
However, we will continue to employ equity compensation for consultants selectively, aligning with our strategic and financial objectives. Operating Expenses We recorded $8,712,708 in operating expenses for the year ended February 28, 2025 as compared to $7,679,407 in operating expenses for the year ended February 29, 2024.
Share Compensation Expenses The following table sets forth the Company’s share compensation expenses for the periods indicated: Year Ended February 29, 2024 Year Ended February 28, 2023 Share compensation expenses $ 185,406 $ 2,018,479 We incurred fees of $185,406 in share issuance for consultants in consideration of the services which have been provided to the Company for the year ended February 29, 2024 as compared to $2,018,479 for the year ended February 28, 2023.
Share Compensation Expenses The following table sets forth the Company’s share compensation expenses for the periods indicated: Year Ended February 28, 2025 Year Ended February 29, 2024 Share compensation expenses $ 761,802 $ 185,406 We incurred fees of $761,802 in share issuance for consultants in consideration of the services which have been provided to the Company for the year ended February 28, 2025 as compared to $185,406 for the year ended February 29, 2024.
(“ China Unicom ”) and China Mobile Communications Corporation (“ China Mobile ”), each of which is a major telecommunications provider in China. We principally earn revenue by providing mobile payment and recharge services to customers of China Unicom and China Mobile.
(“ China Unicom ”) and China Mobile Communications Corporation (“ China Mobile ”), each of which is a major telecommunications provider in China. We principally earn revenue by providing mobile payment and recharge services to customers of China Unicom and China Mobile. We conduct our mobile payment business through JiuGe Technology, our VIE.
Use of Estimates The preparation of the Company’s financial statements in conformity with generally accepted accounting principles of the United States of America requires management 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.
The creditors of JiuGe Technology do not have recourse to the Company’s general credit. - 51 - Table of Contents Use of Estimates The preparation of the Company’s financial statements in conformity with generally accepted accounting principles of the United States of America requires management 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.
Cash Flow provided by Financing Activities During the year ended February 29, 2024, net cash used by financing activities was $295,333 compared to net cash provided by financing activities of $17,343,333 during the year ended February 28, 2023.
Cash Flow provided by Financing Activities During the year ended February 28, 2025, net cash provided by financing activities was $7,776,249 compared to net cash used by financing activities of $295,333 during the year ended February 29, 2024.
The Company is planning to further expand its universal exchange platform by setting up B2C stores on several other major e-commerce platforms in China. In addition to that, we have been assigned as one of China’s Mobile’s loyalty redemption partner where we will be providing the services for their customers via our platform.
The Company is planning to further expand its universal exchange platform by setting up B2C stores on several other major e-commerce platforms in China. In addition, we have been designated as one of China’s Mobile’s loyalty redemption partners, which allows us to provide such services for their customers via our platform.
In line with this, we intend to continue to seek additional capital through public or private sales of our equity or debt securities, or both. We might also enter into financing arrangements with commercial banks or non-traditional lenders.
To support all these, we intend to continue to seek additional capital through public or private sales of our equity or debt securities, or both. We may also explore entering into financing arrangements with commercial banks or non-traditional lenders.
We cannot provide investors with any assurance that we will be able to raise additional funding from the sale of our equity or debt securities, or both, in order to increase our deposits with our telecommunications company clients, or if available, that such funding will be on terms acceptable to us.
We cannot provide investors with any assurance that we will be able to raise additional funding from the sale of our equity and/or debt securities on terms acceptable to us, or at all, in order to support the rollout of our Command & Communication business and increase our deposits with our telecommunications company client .
Cash Flow used in Investing Activities During the year ended February 29, 2024, investing activities decreased by $74,441 compared to the year ended February 28, 2023.
Cash Flow used in Investing Activities During the year ended February 28, 2025, investing activities increased by $3,739 compared to the year ended February 29, 2024.
The Company applies its vast experience in the insurance and financial services industry and capabilities in technology and data analytics to develop revolutionary solutions targeted towards insurance and financial consumers.
The Company, acting primarily through its indirect wholly-owned subsidiary, Finger Motion Financial Company Limited (“ FMFC ”) applies its vast experience in the insurance and financial services industry and capabilities in technology and data analytics to develop revolutionary solutions targeted towards insurance and financial consumers.
ASC 606 establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers.
Revenue Recognition The Company adopted ASC 606, Revenue from Contracts with Customers (“ASC 606”) beginning on January 1, 2018 using the modified retrospective approach. ASC 606 establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers.
Off-Balance Sheet Arrangements There are no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors. -52- Table of Contents Subsequent Events Subsequent to February 29, 2024, we received subscriptions to purchase 310,000 shares of our common stock at $2.50 per share on a private placement basis.
Off-Balance Sheet Arrangements There are no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors. - 50 - Table of Contents Subsequent Events On March 3, 2025, we issued 27,500 shares of our common stock at a deemed price of $1.86 per share to one entity pursuant to a consulting agreement.
We account for our multi-element arrangements, such as instances where we design a custom website and separately offer other services such as hosting, which are recognized over the period for when services are performed.
We account for our multi-element arrangements, such as instances where we design a custom website and separately offer other services such as hosting, which are recognized over the period for when services are performed. Income Taxes The Company uses the asset and liability method of accounting for income taxes in accordance with ASC 740, “Income Taxes” (“ASC 740”).
As previously mentioned, we principally earn revenue by providing mobile payment and recharge services to customers of telecommunications companies, subscription plans and mobile phone sales in China. To earn this revenue, we incur cost of the product, certain customer acquisition costs, including discounts to our customers and promotional expenses, which is reflected in our cost of revenue.
As previously mentioned, we principally earn revenue by providing mobile payment and recharge services to customers of telecommunications companies, subscription plans and mobile phone sales in China.
On or around January 25, 2021, the Company’s wholly owned subsidiary, Finger Motion Financial Company Limited’s, big data analytic arm branded “Sapientus,” entered into a services agreement with Pacific Life Re, a global life reinsurer serving the insurance industry with a comprehensive suite of products and services.
On or around January 25, 2021, FMFC entered into a Sapientus services agreement with Pacific Life Re, a global life reinsurer serving the insurance industry with a comprehensive suite of products and services.
Depreciation of property and equipment is provided using the straight-line method for financial reporting purposes at rates based on the estimated useful lives of the assets. Estimated useful lives range from three to seven years. Land is classified as held for sale when management has the ability and intent to sell, in accordance with ASC Topic 360-45.
Property and Equipment Property and equipment are stated at cost. Depreciation of property and equipment is provided using the straight-line method for financial reporting purposes at rates based on the estimated useful lives of the assets. Estimated useful lives range from three to seven years.
Diluted earnings per share should be based on the actual number of options or shares granted and not yet forfeited, unless doing so would be anti-dilutive. The Company uses the “treasury stock” method for equity instruments granted in share-based payment transactions provided in ASC 260 to determine diluted earnings per share.
ASC 260, Earnings Per Share (“ASC 260”), requires that employee equity share options, non-vested shares and similar equity instruments granted to employees be treated as potential common shares in computing diluted earnings per share. Diluted earnings per share should be based on the actual number of options or shares granted and not yet forfeited, unless doing so would be anti-dilutive.
The decrease of $1,305,128 or 15% for the year ended February 29, 2024 is as set forth above. Net Loss attributable to the Company’s shareholders The net loss attributable to the Company’s shareholders was $3,757,519 for the year ended February 29, 2024 and $7,539,142 for the year ended February 28, 2023.
The increase of $1,033,301 or 13% for the year ended February 28, 2025 is as set forth above. Net Loss attributable to the Company’s shareholders The net loss attributable to the Company’s shareholders was $5,112,804 for the year ended February 28, 2025 and $3,811,503 for the year ended February 29, 2024.
Specifically, we earn a negotiated rebate amount from the telecommunications companies for all monies paid by consumers to those companies that we process. The increase in this line of business primarily stemmed from the enhancement of mobile recharge services provided to the consumer base of our partnering telecommunication firms.
We principally earn revenue by providing mobile payment and recharge services to customers of telecommunications companies in China. Specifically, we earn a negotiated rebate amount from the telecommunications companies for all monies paid by consumers to those companies that we process.
Results of operations attributable to the non-controlling interest are included in our consolidated results of operations and, upon loss of control, the interest sold, as well as interest retained, if any, will be reported at fair value with any gain or loss recognized in earnings.
Results of operations attributable to the non-controlling interest are included in our consolidated results of operations and, upon loss of control, the interest sold, as well as interest retained, if any, will be reported at fair value with any gain or loss recognized in earnings. - 53 - Table of Contents Recent Issued Accounting Pronouncements The Company does not believe recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the consolidated financial position, statements of operations and cash flows.
Once these issues are resolved and the necessary approval is obtained, we anticipate a substantial enhancement in our service offerings and an expansion of our market reach. -46- Table of Contents Big Data Insights In July 2020, the Company launched its proprietary technology platform “Sapientus” as its big data insights arm to deliver data-driven solutions and insights for businesses within the insurance, healthcare, and financial services industries.
Big Data Insights In July 2020, the Company launched its proprietary technology platform “Sapientus” as its big data insights arm to deliver data-driven solutions and insights for businesses within the insurance, healthcare, and financial services industries.
Cash and Cash Equivalents Cash and cash equivalents represent cash on hand, demand deposits, and other short-term highly liquid investments placed with banks, which have original maturities of three months or less and are readily convertible to known amounts of cash. Property and Equipment Property and equipment are stated at cost.
The right-of-use assets and lease liabilities may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. - 52 - Table of Contents Cash and Cash Equivalents Cash and cash equivalents represent cash on hand, demand deposits, and other short-term highly liquid investments placed with banks, which have original maturities of three months or less and are readily convertible to known amounts of cash.
Accordingly, we earn income on the rebates we receive from China Unicom and China Mobile, reduced by the amounts by which we discount the mobile data and talk time sold through our platform. -45- Table of Contents FingerMotion started and commercialized its “Business to Business” (“ B2B ”) model by integrating with various e-commerce platforms to provide its mobile payment and recharge services to subscribers or end consumers.
FingerMotion started and commercialized its “Business to Business” (“ B2B ”) model by integrating with various e-commerce platforms to provide its mobile payment and recharge services to subscribers or end consumers.
General and Administrative Expenses The following table sets forth the Company’s general and administrative expenses for the periods indicated: Year Ended February 29, 2024 Year Ended February 28, 2023 Accounting $ 160,402 $ 124,409 Consulting $ 1,953,170 $ 1,997,178 Entertainment $ 283,046 $ 224,954 IT $ 98,979 $ 68,099 Rent $ 142,033 $ 134,742 Salaries & Wages $ 2,044,348 $ 1,980,125 Stock Option Compensation Expenses $ 544,803 $ 342,996 Technical Fee $ 131,886 $ 97,526 Travelling $ 305,331 $ 211,734 Others $ 919,483 $ 493,350 Total G&A Expenses $ 6,583,481 $ 5,675,113 We recorded $6,583,481 in general and administrative expenses for the year ended February 29, 2024, an increase of $908,368 or 16%, compared to the year ended February 28, 2023.
General and Administrative Expenses The following table sets forth the Company’s general and administrative expenses for the periods indicated: Year Ended February 28, 2025 Year Ended February 29, 2024 Accounting $ 330,021 $ 160,402 Consulting $ 1,768,516 $ 1,953,170 Entertainment $ 321,404 $ 283,046 IT $ 64,945 $ 98,979 Rent $ 22,746 $ 142,033 Salaries & Wages $ 2,452,796 $ 2,044,348 Stock Option Compensation Expenses $ 376,699 $ 544,803 Technical Fee $ 144,202 $ 131,886 Travelling $ 386,408 $ 305,331 Others $ 578,034 $ 919,483 Total G&A Expenses $ 6,445,771 $ 6,583,481 We recorded $6,445,771 in general and administrative expenses for the year ended February 28, 2025, a slight decrease of $137,710 or 2%, compared to the year ended February 29, 2024 The decrease reflects certain minor reclassifications made during the year to align expense recognition with the appropriate reporting periods.
Research & Development The following table sets forth the Company’s research & development for the periods indicated: Year Ended February 29, 2024 Year Ended February 28, 2023 Research & Development – Big Data $ 699,559 $ 797,549 We recorded $699,559 in research & development for the year ended February 29, 2024, as compared to $797,549 for the year ended February 28, 2023.
The majority of these marketing costs were incurred in promoting our newly launched Da Ge App platform. - 47 - Table of Contents Research & Development The following table sets forth the Company’s research & development for the periods indicated: Year Ended February 28, 2025 Year Ended February 29, 2024 Research & Development $ 632,767 $ 699,559 We recorded $632,767 in research & development for the year ended February 28, 2025, as compared to $699,559 for the year ended February 29, 2024.
Such Common Shares are registered pursuant to our shelf Registration Statement on Form S-3 (File No. 333-274456) filed on September 11, 2023, which was declared effective by the SEC on September 29, 2023.
The shares of Common Stock, the Common Warrants and the Placement Agent Warrants described above and the shares of Common Stock underlying each of the Common Warrants and the Placement Agent Warrant were offered and sold pursuant to the Registration Statement on Form S-3 (File No. 333-274456), which was declared effective by the Securities and Exchange Commission on September 29, 2023 (the “ Registration Statement ”).
Earnings Per Share Basic (loss) earnings per share is based on the weighted average number of common shares outstanding during the period while the effects of potential common shares outstanding during the period are included in diluted earnings per share. -54- Table of Contents FASB Accounting Standard Codification Topic 260 (“ASC 260”), “Earnings Per Share,” requires that employee equity share options, non-vested shares and similar equity instruments granted to employees be treated as potential common shares in computing diluted earnings per share.
Earnings Per Share Basic (loss) earnings per share is based on the weighted average number of common shares outstanding during the period while the effects of potential common shares outstanding during the period are included in diluted earnings per share.
The decrease in net loss attributable to the Company’s shareholders of $3,781,623 or 50% resulted primarily from the higher gross profit and some reductions from the various expenses as discussed above.
The increase in net loss attributable to the Company’s shareholders of $1,301,301 or 34% resulted primarily from the significant decline in gross profit which due to the higher margin product mix in the Telecommunication Product & Services segment during the prior period, particularly from our cloud business and some increases from the various expenses as discussed above.
Following the successful execution of our joint initiatives with Munich Re, we are now in active discussion to develop a new partnership arrangement. -48- Table of Contents Cost of Revenue The following table sets forth the Company’s cost of revenue for the periods indicated: Year Ended February 29, 2024 Year Ended February 28, 2023 Telecommunication Products & Services $ 29,384,841 $ 25,327,090 SMS & MMS Business $ 2,545,126 $ 6,408,645 Total Cost of Revenue $ 31,929,967 $ 31,735,735 We recorded $31,929,967 in costs of revenue for the year ended February 29, 2024, an increase of $194,232 or 1%, compared to the year ended February 28, 2023.
Cost of Revenue The following table sets forth the Company’s cost of revenue for the periods indicated: Year Ended February 28, 2025 Year Ended February 29, 2024 Telecommunication Products & Services $ 24,861,246 $ 29,384,841 SMS & MMS $ 7,671,635 $ 2,545,126 DaGe Platform $ 151,065 $ — Command & Communication $ 159,961 $ — Total Cost of Revenue $ 32,843,907 $ 31,929,967 - 46 - Table of Contents We recorded $32,843,907 in costs of revenue for the year ended February 28, 2025, an increase of $913,940 or 3%, compared to the year ended February 29, 2024.
Statement of Cashflows The following table provides a summary of cash flows for the periods presented: Year Ended February 29, 2024 Year Ended February 28, 2023 Net cash used in operating activities $ (8,203,947 ) $ (8,614,133 ) Net cash used in investing activities $ (376 ) $ (74,817 ) Net cash provided by financing activities $ (295,333 ) $ 17,343,333 Effect of exchange rates on cash & cash equivalents $ 776,647 $ 123,925 Net increase (decrease) in cash and cash equivalents $ (7,723,009 ) $ 8,778,308 Cash Flow used in Operating Activities Net cash used in operating activities decreased by $410,186 in the year ended February 29, 2024 compared to the year ended February 28, 2023, primarily due to increase in accounts receivable of ($7,855,567) (2023: $3,100,387), increase in prepayment and deposit of ($1,507,836) (2023: ($1,074,983)), increase in other receivable of ($1,444,834) (2023: ($1,872,266)) and decrease in lease liability of ($6,802) (2023: ($2,212)) offset by increase in accounts payable of $5,126,949 (2023: ($3,237,152)) and increase in accrual and other payables of $495,042 (2023: ($527,489)).
Statement of Cashflows The following table provides a summary of cash flows for the periods presented: Year Ended February 28, 2025 Year Ended February 29, 2024 Net cash used in operating activities $ (8,179,304 ) $ (7,327,320 ) Net cash used in investing activities $ (4,115 ) $ (376 ) Net cash provided by financing activities $ 7,776,249 $ (295,333 ) Effect of exchange rates on cash & cash equivalents $ 18,073 $ (99,980 ) Net increase (decrease) in cash and cash equivalents $ (389,097 ) $ (7,723,009 ) Cash Flow used in Operating Activities Net cash used in operating activities increased by $851,984 in the year ended February 28, 2025 compared to the year ended February 29, 2024, primarily due to increase in accounts receivable of ($24,860,498) (2024: ($7,919,533)), increase in prepayment and deposit of ($1,365,105) (2024: ($1,525,857)), increase in inventories of ($137,354) (2024: nil) and decrease in lease liability of ($100,668) (2024: ($6,857)) offset by, decrease in other receivable of $1,399,140 (2024: ($65,266)), increase in accounts payable of $19,665,662 (2024: $5,168,763) and increase in accrual and other payables of $7,788,318 (2024: $499,252).
This increase reflects our focus on strengthening governance and ensuring compliance, key to our growth and agility in the market. -49- Table of Contents Marketing Cost The following table sets forth the Company’s marketing cost for the periods indicated: Year Ended February 29, 2024 Year Ended February 28, 2023 Marketing Cost $ 140,052 $ 430,291 We recorded $140,052 in marketing cost for the year ended February 29, 2024, a decrease $290,239 or 67% compared to the year ended February 28, 2023.
Marketing Costs The following table sets forth the Company’s marketing costs for the periods indicated: Year Ended February 28, 2025 Year Ended February 29, 2024 Marketing Costs $ 276,258 $ 140,052 We recorded $276,258 in marketing costs for the year ended February 28, 2025, an increase $136,206 or 97% compared to the year ended February 29, 2024.
Amortization & Depreciation We recorded depreciation of $70,909 for fixed assets for the year ended February 29, 2024, an increase of $7,806 or 12%, compared to the year ended February 28, 2023.
In contrast, there were no contributions from the cloud business during the current year, which typically generates higher margin . Amortization & Depreciation We recorded depreciation of $156,497 for fixed assets for the year ended February 28, 2025, an increase of $85,888 or 121%, compared to the year ended February 29, 2024.
Liquidity and Capital Resources The following table sets out our cash and working capital as of February 29, 2024 and February 28, 2023: As at February 29, 2024 As at February 28, 2023 Cash reserves $ 1,517,232 $ 9,240,241 Working capital $ 11,971,003 $ 15,229,331 -51- Table of Contents At February 29, 2024, we had cash and cash equivalents of $1,517,232 as compared to cash and cash equivalents of $9,240,241 at February 28, 2023.
Liquidity and Capital Resources The following table sets out our cash and working capital as of February 28, 2025 and February 29, 2024: As at February 28, 2025 As at February 29, 2024 Cash reserves $ 1,128,135 $ 1,517,232 Working capital $ 6,902,805 $ 11,602,192 At February 28, 2025, we had cash and cash equivalents of $1,128,135 as compared to cash and cash equivalents of $1,517,232 at February 29, 2024. - 49 - Table of Contents Our business model, particularly in mobile payment, requires periodic fund deposits with our telecommunication companies to obtain access to the mobile data and talk time we make available to consumers on our portal.
Antidilutive securities represent potentially dilutive securities which are excluded from the computation of diluted earnings or loss per share as their impact was antidilutive. Revenue Recognition The Company adopted ASC 606, Revenue from Contracts with Customers (“ASC 606”) beginning on January 1, 2018 using the modified retrospective approach.
The Company uses the “treasury stock” method for equity instruments granted in share-based payment transactions provided in ASC 260 to determine diluted earnings per share. Antidilutive securities represent potentially dilutive securities which are excluded from the computation of diluted earnings or loss per share as their impact was antidilutive.
As of May 28, 2024, we have received $775,000 in subscription proceeds and expect to close the $2.50 private placement in the very near future. Outstanding Share Data At May 23, 2024, we have 52,712,850 issued and outstanding shares of common stock.
In connection with the closing of the private placement on May 28, 2025, we paid cash finder’s fees of $235,000 to one non-U.S. individual. Outstanding Share Data At May 23, 2025, we have 57,581,186 issued and outstanding shares of common stock.
The decrease of $1,833,073 or 91% was due to the reduced engagement of consultants to the Company that were compensated with shares of our common stock, which highlights our effort to minimize equity issuances as part of our broader financial strategy to optimize equity issuances.
The increase of $576,396 or 311% was due to the engagement of consultants to the Company that were compensated with shares of our common stock, the rationale for rewarding these consultants and advisors with shares is to minimize the usage of cash by the Company.
Removed
We conduct our mobile payment business through JiuGe Technology, our contractually controlled affiliate through the entry into the VIE Agreements in October 2018.
Added
As described elsewhere in this Annual Report, our Company has been organized as a holding company and conducts a significant part of our operations through our subsidiaries and through contractual arrangements with JiuGe Technology, a VIE based in China.
Removed
The discussion seeks to ensure that all stakeholders’ concerns are addressed comprehensively.
Added
We indirectly own 100% of the equity of JiuGe Management, a WFOE that has entered into the VIE Agreements which gives us operational control over JiuGe Technology.
Removed
Video game publishers are expanding their direct-to-consumer channels with mobile gaming, the current growth leader, and eSports and virtual reality gaining momentum as the next big sectors.
Added
Accordingly, we earn income on the rebates we receive from China Unicom and China Mobile, reduced by the amounts by which we discount the mobile data and talk time sold through our platform.
Removed
In June 2018, we temporarily paused its publishing and operating plans for existing games, and the Company’s Board of Directors decided to re-focus the Company’s resources into new business opportunities in China, particularly the mobile phone payment and data business.
Added
The discussion seeks to ensure that all stakeholders’ concerns are addressed comprehensively. Once these issues are resolved and the necessary approval is obtained, we anticipate a substantial enhancement in our service offerings and an expansion of our market reach.
Removed
Recent Developments On or about April 6, 2023, we eliminated our remaining convertible debt with our primary lender as a result of conversions by the primary lender and payment by us to the primary lender. On April 28, 2023, we repaid in full the US$730,000 convertible note that was issued in favor of Dr.
Added
While publishers are expanding their direct-to-consumer models through mobile gaming, eSports and virtual, the Company has exited the video game business and re-directed its resources towards new business opportunities in China, particularly the mobile phone payment and data business. Smart Mobility Solution The C2 Platform, FingerMotion’s Advanced Mobile Integrated Command and Communication solution, saw considerable advancements during the fiscal year.
Removed
Liew Yow Ming on May 1, 2022. On or about May 12, 2023, our contractually controlled subsidiary, JiuGe Technology signed a cooperation agreement with Migu Video Technology Co., Ltd. to start in-depth collaboration on overseas hardware and terminal business.
Added
Designed to support mission-critical mobile communications for public safety agencies, emergency response teams, and industrial sectors, the C2 Platform is built on FingerMotion’s telecommunications infrastructure, leveraging 5G connectivity and cloud-based technology to offer real-time data sharing, geospatial mapping, and situational awareness. - 43 - Table of Contents During the year, we expanded the deployment of the C2 Platform into pilot regions, establishing partnerships with automotive manufacturers and industrial partners.
Removed
On July 28, 2023, we granted an aggregate of 2,648,500 stock options pursuant to our 2023 Stock Incentive Plan, each having an exercise price of $4.62 per Common Share and an expiry date of five years from the date of grant to 22 individuals who are employees of our subsidiaries and contractually controlled affiliate.
Added
These partnerships enabled us to showcase the platform's capabilities, including mobile video feeds, real-time GPS tracking, and AI-driven analytics for improving public safety operations. Our C2 Platform is positioned to serve both public sector agencies and private sector enterprises in high-risk areas such as disaster management, fleet operations, and emergency response missions.
Removed
Such stock options are subject to vesting provisions of 20% on the date of grant and 20% on each of the first, second, third and fourth anniversary of the date of grant.
Added
We expect these deployments to scale in the upcoming fiscal year, with further geographic expansion planned for key markets in China. These developments are expected to drive revenue growth from enterprise sales, government contracts, and strategic partnerships. DaGe Platform The DaGe platform, FingerMotion’s integrated marketplace for automotive products and services, continued its expansion in the fiscal year.
Removed
On September 11, 2023, we entered into an At-The-Market Issuance Sales Agreement with Univest Securities, LLC (the “ Sales Agent ”), pursuant to which we may issue and sell, from time to time, Common Shares having an aggregate offering price of not more than $25,000,000 through the Sales Agent or any of its sub-agent(s) or other designees, acting as sales agent.
Added
The platform offers a range of services, such as vehicle maintenance, repair, tire replacement, and EV charging, catering to the growing EV market. With the increasing adoption of EVs, the demand for EV charging stations and related services has been a significant growth driver for DaGe.
Removed
On or around January 10, 2024, our contractually controlled subsidiary, JiuGe Technology, launched a new consumer application called “Da Ge” introducing subscribers to services such as car washing, detailing and maintenance, linking automobile owners with full service independent service stations.
Added
During the year, we expanded our network of service providers, onboarded additional automotive maintenance providers, and onboarded more EV charging stations into the platform. We also enhanced user experience by offering location-based, proximity recommendations, real-time pricing, and seamless transaction processing, all within the mobile app.
Removed
This increase resulted from an increase in revenue of $5,783,968 from our Telecommunication Products & Services; offset in part by a decrease in revenue of $3,936,901 and $109,587 from our SMS & MMS business and Big Data business, respectively. We principally earn revenue by providing mobile payment and recharge services to customers of telecommunications companies in China.
Added
The increase in user engagement on the DaGe platform resulted in higher transaction volumes, which directly contributed to revenue growth in this segment. Additionally, we leveraged our existing telecommunications infrastructure to expand the platform’s reach, capitalizing on cross-promotion opportunities within our mobile services business.
Removed
Moreover, the overall revenue increase was also supported by ancillary services, notably our cloud-based business offerings. We foresee sustained growth for this segment as we strategize to allocate more resources in the near future. Contrastingly, our SMS and MMS business has reduced substantially as compared to the previous year.
Added
The introduction of loyalty programs and seasonal promotions helped retain users and drive repeat business, further strengthening the platform’s position in the market. As we look ahead, we plan to continue expanding DaGe’s offerings by targeting new markets and forming strategic partnerships with both local and national service providers.
Removed
Changes in the government protocol for SMS and MMS distribution resulted in a significant decline in our revenue in this sector, compelling us to focus on our other business lines. However, it’s imperative to note that we remain optimistic about the SMS and MMS business.
Added
Recent Developments On September 10, 2024, we appointed CT International LLP as our new independent registered public accounting firm, succeeding our previous auditors, Centurion ZD CPA & Co. On November 29, 2024, Michael Chan resigned as a director of the Company. On December 3, 2024, following the resignation of Mr.
Removed
It continues to hold significance in our broader financial picture, and we are actively re-evaluating our approach to adapt to these changes and uncover alternative avenues for growth within this segment.

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