UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended November 30, 2021

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

For the transition period from ______________ to _______________

Commission File Number: 001-41187

FINGERMOTION, INC.

(Exact name of registrant as specified in its charter)

Delaware		20-0077155
(State or other jurisdiction of organization)		(I.R.S. employer identification no.)

1460 Broadway New York, New York		10036
(Address of principal executive offices)		(Zip code)

(347) 349-5339
(Registrant’s telephone number, including area code)

None
(Former name, former address, and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	FNGR	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

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

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated Filer	☒	Smaller reporting company	x
		Emerging growth company	☐

If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date: 42,567,260 shares of common stock outstanding as of January 11, 2022.

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PART 1. FINANCIAL INFORMATION	3

ITEM 1. FINANCIAL STATEMENTS	3

ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	24
*Three Months Ended November 30, 2021 Compared to Three Months Ended November 30, 2020*	29
*Nine Months Ended November 30, 2021 Compared to Nine Months Ended November 30, 2020*	32
*Liquidity and Capital Resources*	35

ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	36

ITEM 4 – CONTROLS AND PROCEDURES	36
*Evaluation of Disclosure Controls and Procedures*	36
*Change in Internal Control over Financial Reporting*	37

PART II – OTHER INFORMATION	37

ITEM 1 – LEGAL PROCEEDINGS	37

ITEM 1A. RISK FACTORS	37

ITEM 2 – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	49

ITEM 3 – DEFAULTS UPON SENIOR SECURITIES	49

ITEM 4 – MINE SAFETY DISCLOSURES	49

ITEM 5 – OTHER INFORMATION	49

ITEM 6 – EXHIBITS	50

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Table of Contents

PART 1. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

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Table of Contents

FINGERMOTION, INC.

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the nine months ended November 30, 2021

(Unaudited - Expressed in U.S. Dollars)

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Table of Contents

FingerMotion, Inc.

Condensed Consolidated Balance Sheets

	November 30,			February 28,
	2021			2021
	(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents	$	1,116,448		$	850,717
Accounts receivable		3,339,192			4,099,312
Inventories		15,909			1,401
Prepayment and deposit		3,145,675			646,377
Other receivables		2,153,249			1,506,720
Current Assets		9,770,473			7,104,527
Non-current Assets
Equipment		29,441			26,453
Intangible assets		136,158			161,210
Right-of-use asset		12,526			49,314
Non-current Assets		178,125			236,977

TOTAL ASSETS	$	9,948,598		$	7,341,504

LIABILITIES AND SHAREHOLDER’S DEFICIT

Current Liabilities
Accounts payable	$	1,675,465		$	2,473,636
Accrual and other payables		2,202,827			1,046,190
Stock subscription payables		390,000			—
Loan payable, current portion		—			544,900
Lease liability, current portion		12,526			47,569
Current Liabilities		4,280,818			4,112,295
Non-current Liabilities
Loan payable, non-current portion		—			1,109,307
Lease liability, non-current portion		—			4,936
Non-current Liabilities		—			1,114,243

TOTAL LIABILITIES	$	4,280,818		$	5,226,538

SHAREHOLDERS’ EQUITY
Preferred stock, par value $.0001 per share; Authorized 1,000,000 shares; issued and outstanding -0- shares.		—			—

Common Stock, par value $.0001 per share; Authorized 200,000,000 shares; issued and outstanding 42,482,260 shares and 38,903,494 issued and outstanding at November 30, 2021 and February 28, 2021 respectively		4,248			3,890

Additional paid-in capital		21,065,955			14,170,815

Accumulated deficit		(15,613,001	)		(12,208,728	)

Accumulated other comprehensive income		199,517			140,906

Stockholders’ equity before non-controlling interests		5,656,719			2,106,883

Non-controlling interests		11,061			8,083

TOTAL SHAREHOLDERS’ EQUITY		5,667,780			2,114,966

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	9,948,598		$	7,341,504

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Table of Contents

FingerMotion, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)


	Three Months Ended						Nine Months Ended
	November 30,			November 30,			November 30,			November 30,
	2021			2020			2021			2020
Revenue	$	5,901,899		$	4,881,601		$	17,285,302		$	11,245,589
Cost of revenue		(4,934,824	)		(4,261,058	)		(15,001,674	)		(10,072,216	)

Gross profit		967,075			620,543			2,283,628			1,173,373

Amortization & depreciation		(14,721	)		(45,734	)		(43,544	)		(53,351	)
General & administrative expenses		(1,521,114	)		(793,550	)		(4,145,775	)		(2,378,566	)
Marketing Cost		(240,299	)		(136,960	)		(384,381	)		(268,216	)
Research & Development		(158,055	)		(124,723	)		(438,033	)		(351,867	)
Stock compensation expenses		(96,891	)		(201,007	)		(579,437	)		(272,717	)

Total operating expenses		(2,031,080	)		(1,301,974	)		(5,591,170	)		(3,324,717	)

Net loss from operations		(1,064,005	)		(681,431	)		(3,307,542	)		(2,151,344	)

Other income (expense):
Interest income		955			1,009			2,672			1,415
Interest expense		—			(90,864	)		(172,813	)		(184,413	)
Exchange gain (loss)		(619	)		171			(2,298	)		1,200
Other income		26,497			65,469			78,686			88,729
Total other income (expense)		26,833			(24,215	)		(93,753	)		(93,069	)

Net loss before income tax	$	(1,037,172	)	$	(705,646	)	$	(3,401,295	)	$	(2,244,413	)
Income tax expenses		—			—			—			—
Net Loss	$	(1,037,172	)	$	(705,646	)	$	(3,401,295	)	$	(2,244,413	)

Less: Net profit attributable to the non-controlling interest		(553	)		2,507			2,978			2,840

Net loss attributable to the Company’s shareholders	$	(1,036,619	)	$	(708,153	)	$	(3,404,273	)	$	(2,247,253	)

Other comprehensive income:
Foreign currency translation adjustments		85,965			94,707			58,611			106,446
Comprehensive loss	$	(950,654	)	$	(613,446	)	$	(3,345,662	)	$	(2,140,807	)
Less: comprehensive income (loss) attributable to non-controlling interest		171			315			168			411
Comprehensive loss attributable to the Company	$	(950,825	)	$	(613,761	)	$	(3,345,830	)	$	(2,141,218	)

NET LOSS PER SHARE
Loss Per Share - Basic	$	(0.02	)	$	(0.02	)	$	(0.08	)	$	(0.07	)
Loss Per Share - Diluted	$	(0.02	)	$	(0.02	)	$	(0.08	)	$	(0.07	)

NET LOSS PER SHARE ATTRIBUTABLE TO THE COMPANY
Loss Per Share - Basic	$	(0.02	)	$	(0.02	)	$	(0.08	)	$	(0.07	)
Loss Per Share - Diluted	$	(0.02	)	$	(0.02	)	$	(0.08	)	$	(0.07	)

Weighted Average Common Shares Outstanding - Basic		42,281,985			35,032,380			40,280,409			32,424,218
Weighted Average Common Shares Outstanding - Diluted		42,281,985			35,032,380			40,280,409			32,424,218

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Table of Contents

FingerMotion, Inc.

Condensed Consolidated Statement of Shareholders’ Equity

(Unaudited)

					Capital Paid							Other
	Common Stock				in Excess		Shares to be		Accumulated			Comprehensive			Stockholders’			Non-controlling
	Shares		Amount		of Par Value		Issued		Deficit			Income			equity			interest		Total
Balance at March 1, 2021		38,903,494		3,890		14,170,815		—		(12,208,728	)		140,906			2,106,883			8,083		2,114,966

Common stock issued for cash		86,666		9		179,990		—		—			—			179,999			—		179,999
Common stock issued for professional service		5,000		1		9,999		—		—			—			10,000			—		10,000
Accumulated other comprehensive income		—		—		—		—		—			60,184			60,184			—		60,184
Net (Loss)		—		—		—		—		(911,890	)		—			(911,890	)		2,384		(909,506	)

Balance at May 31, 2021		38,995,160		3,900		14,360,804		—		(13,120,618	)		201,090			1,445,176			10,467		1,455,643

Common stock issued for cash		673,900		67		3,114,432		—		—			—			3,114,499			—		3,114,499
Common stock issued for professional service		55,000		5		259,995		—		—			—			260,000			—		260,000
Execution of convertible notes		2,477,200		248		1,940,752		—		—			—			1,941,000			—		1,941,000
Accumulated other comprehensive income		—		—		—		—		—			(87,538	)		(87,538	)		—		(87,538	)
Net (Loss)		—		—		—		—		(1,455,764	)		—			(1,455,764	)		1,147		(1,454,617	)

Balance at August 31, 2021		42,201,260		4,220		19,675,983		—		(14,576,382	)		113,552			5,217,373			11,614		5,228,987

Common stock issued for cash		276,000		28		1,379,972		—		—			—			1,380,000			—		1,380,000
Common stock issued for professional service		5,000		—		10,000		—		—			—			10,000			—		10,000
Accumulated other comprehensive income		—		—		—		—

SEC Form 10-Q filed by FingerMotion Inc.