UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended August 31, 2022

☐ 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, $0.0001 par value		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	☒
		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: 42,857,260 shares of common stock outstanding as of October 12, 2022.

Table of Contents

FINGERMOTION, INC.

FORM 10-Q

TABLE OF CONTENTS

PART 1. FINANCIAL INFORMATION		1

ITEM 1. FINANCIAL STATEMENTS		1
ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		25
Three Months Ended August 31, 2022 Compared to Three Months Ended August 31, 2021		32
Six Months Ended August 31, 2022 Compared to Six Months Ended August 31, 2021		35
Liquidity and Capital Resources		39
ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		41
ITEM 4 – CONTROLS AND PROCEDURES		41
Evaluation of Disclosure Controls and Procedures		41
Changes in internal control over financial reporting		41

PART II – OTHER INFORMATION		42

ITEM 1 – LEGAL PROCEEDINGS		42
ITEM 1A. RISK FACTORS		42
ITEM 2 – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS		62
ITEM 3 – DEFAULTS UPON SENIOR SECURITIES		62
ITEM 4 – MINE SAFETY DISCLOSURES		62
ITEM 5 – OTHER INFORMATION		62
ITEM 6 – EXHIBITS		63

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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 six months ended August 31, 2022

(Unaudited - Expressed in U.S. Dollars)

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FingerMotion, Inc.

Condensed Consolidated Balance Sheets


	August 31,			February 28,
	2022			2022
	(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents	$	1,984,562		$	461,933
Accounts receivable		2,777,946			4,875,149
Inventories		—			1,407
Prepayment and deposit		3,973,914			3,331,342
Other receivables		1,394,674			1,539,265
Current Assets		10,131,096			10,209,096
Non-current Assets
Equipment		22,274			26,808
Intangible assets		94,426			125,932
Right-of-use asset		207,406			5,069
Non-current Assets		324,106			157,809

TOTAL ASSETS	$	10,455,202		$	10,366,905

LIABILITIES AND SHAREHOLDER’S DEFICIT
Current Liabilities
Accounts payable	$	1,506,771		$	3,588,289
Accrual and other payables		1,042,201			1,685,297
Convertible notes payable, current portion		730,000			—
Lease liability, current portion		123,413			5,069
Current Liabilities		3,402,385			5,278,655
Non-current Liabilities
Convertible notes payable, non-current portion		4,800,000			—
Lease liability, non-current portion		83,993			—
Non-current Liabilities		4,883,993			—

TOTAL LIABILITIES	$	8,286,378		$	5,278,655

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 42,857,260 shares and 42,627,260 issued and outstanding at August 31, 2022 and February 28, 2022 respectively		4,286			4,263

Additional paid-in capital		22,323,418			21,730,941

Additional paid-in capital - stock options		356,328			356,328

Accumulated deficit		(20,133,660	)		(17,152,172	)

Accumulated other comprehensive income		(391,252	)		137,911

Stockholders’ equity before non-controlling interests		2,159,120			5,077,271

Non-controlling interests		9,704			10,979

TOTAL SHAREHOLDERS’ EQUITY		2,168,824			5,088,250

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	10,455,202		$	10,366,905

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Table of Contents

FingerMotion, Inc.

Unaudited Condensed Consolidated Statements of Operations


	Three Months Ended						Six Months Ended
	August 31,			August 31,			August 31,			August 31,
	2022			2021			2022			2021
Revenue	$	4,982,957		$	5,386,914		$	9,838,080		$	11,383,403
Cost of revenue		(4,565,173	)		(4,690,058	)		(9,043,225	)		(10,066,850	)
Gross profit		417,784			696,856			794,855			1,316,553

Amortization & Depreciation		(13,466	)		(14,402	)		(27,638	)		(28,823	)
General & administrative expenses		(1,275,869	)		(1,444,914	)		(2,515,419	)		(2,624,661	)
Marketing Cost		(169,389	)		(59,075	)		(226,580	)		(144,082	)
Research & Development		(198,104	)		(144,549	)		(409,751	)		(279,978	)
Stock compensation expenses		(254,547	)		(421,571	)		(544,478	)		(482,546	)

Total operating expenses		(1,911,375	)		(2,084,511	)		(3,723,866	)		(3,560,090	)

Net loss from operations		(1,493,591	)		(1,387,655	)		(2,929,011	)		(2,243,537	)

Other income (expense):
Interest income		700			447			1,457			1,717
Interest expense		(89,646	)		(80,247	)		(104,477	)		(172,813	)
Exchange gain (loss)		(346	)		(2,354	)		(618	)		(1,679	)
Other income		44,788			15,192			49,886			52,189
Total other income (expense)		(44,504	)		(66,962	)		(53,752	)		(120,586	)

Net loss before income tax	$	(1,538,095	)	$	(1,454,617	)	$	(2,982,763	)	$	(2,364,123	)
Income tax expenses		—			—			—			—
Net Loss	$	(1,538,095	)	$	(1,454,617	)	$	(2,982,763	)	$	(2,364,123	)

Less: Net profit attributable to the non-controlling interest		(730	)		1,147			(1,275	)		3,531

Net loss attributable to the Company’s shareholders	$	(1,537,365	)

SEC Form 10-Q filed by FingerMotion Inc.