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 May 31, 2025

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		46-4600326
(State or other jurisdiction of organization)		(I.R.S. employer identification no.)

111 Somerset Road, Level 3

Singapore

238164

(Address of principal executive offices)

(Zip code)

(347) 349-5339

(Registrant’s telephone number, including area code)

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 x 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 x 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	x	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 x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date: 59,408,429 shares of common stock outstanding as of July 14, 2025.

FINGERMOTION, INC.

FORM 10-Q

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION	3

ITEM 1 – FINANCIAL STATEMENTS	3
ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	29
Three Months Ended May 31, 2025 Compared to Three Months Ended May 31, 2024	40
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	45
ITEM 4 – CONTROLS AND PROCEDURES	45
Evaluation of Disclosure Controls and Procedures	45
Changes in internal control over financial reporting	47

PART II – OTHER INFORMATION	48

ITEM 1 – LEGAL PROCEEDINGS	48
ITEM 1A – RISK FACTORS	48
ITEM 2 – UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF EQUIRY SECURITIES	67
ITEM 3 – DEFAULTS UPON SENIOR SECURITIES	67
ITEM 4 – MINE SAFETY DISCLOSURES	67
ITEM 5 – OTHER INFORMATION	68
ITEM 6 – EXHIBITS	68

PART I – FINANCIAL INFORMATION

ITEM 1 – FINANCIAL STATEMENTS

FINGERMOTION, INC.

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three months ended May 31, 2025

(Unaudited - Expressed in U.S. Dollars)

FingerMotion, Inc.

Condensed Consolidated Balance Sheets


	May 31,			February 28,
	2025			2025
	(Unaudited)
ASSETS

Current Assets
Cash and cash equivalents	$	2,863,238		$	1,128,135
Accounts receivable, net		38,781,671			32,659,437
Inventories		93,660			136,020
Prepayment and deposit		6,113,089			7,016,803
Other receivables		1,037,755			1,096,965
Total Current Assets		48,889,413			42,037,360
Non-current Assets
Equipment		19,805			23,260
Intangible assets		4,738			9,758
Right-of-use asset		100,616			126,581
Deferred tax asset		6,693,879			6,623,492
Total Non-Current Assets		6,819,038			6,783,091

TOTAL ASSETS	$	55,708,451		$	48,820,451

LIABILITIES AND SHAREHOLDER’S DEFICIT

Current Liabilities
Accounts payable	$	30,263,861		$	24,560,361
Accrual and other payables		7,992,558			9,323,641
Loan payable, current portion		1,133,745			1,133,745
Lease liability, current portion		99,253			116,808
Total Current Liabilities		39,489,417			35,134,555
Non-current Liabilities
Lease liability, non-current portion		—			9,986
Deferred tax liabilities		17,152			16,954
Total Non-Current Liabilities		17,152			26,940

TOTAL LIABILITIES	$	39,506,569		$	35,161,495

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 59,408,429 shares and 57,141,186 issued and outstanding at May 31, 2025 and February 28, 2025 respectively		5,941			5,714

Additional paid-in capital		51,717,567			47,304,416

Additional paid-in capital - stock options		1,473,996			1,473,996

Accumulated deficit		(36,195,940	)		(34,187,384	)

Accumulated other comprehensive income		(790,967	)		(943,276	)

Stockholders’ equity before non-controlling interests		16,210,597			13,653,466

Non-controlling interests		(8,715	)		5,490

TOTAL SHAREHOLDERS’ EQUITY		16,201,882			13,658,956

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	55,708,451		$	48,820,451

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

FingerMotion, Inc.

Unaudited Condensed Consolidated Statements of Operations


	Three Months Ended
	May 31,			May 31,
	2025			2024
Revenue	$	8,458,743		$	8,373,983
Cost of revenue		(8,306,222	)		(7,692,094	)

Gross profit		152,521			681,889

Amortization & depreciation		(10,553	)		(12,014	)
General & administrative expenses		(1,510,426	)		(1,881,777	)
Marketing cost		(12,106	)		(62,524	)
Research & development		(172,652	)		(178,993	)
Credit impairment loss		(307,967	)		—
Stock compensation expenses		(127,747	)		(222,670	)

Total operating expenses		(2,141,451	)		(2,357,978	)

Net loss from operations		(1,988,930	)		(1,676,089	)

Other income (expense):
Interest income		5,137			20,013
Interest expense		(51,881	)		—
Exchange gain (loss)		3,761			243
Other income		9,152			1
Total other income (expense)		(33,831	)		20,257

Net loss before income tax	$	(2,022,761	)	$	(1,655,832	)
Income tax expenses		—			—
Net Loss	$	(2,022,761	)	$	(1,655,832	)

Less: Net profit attributable to the non-controlling interest		(14,205	)		72

Net loss attributable to the Company’s shareholders	$	(2,008,556	)	$	(1,655,904	)

Other comprehensive income:
Foreign currency translation adjustments		152,309			(64,999	)
Comprehensive loss	$	(1,856,247	)	$	(1,720,903	)
Less: comprehensive income (loss) attributable to non-controlling interest		542			(1,066	)
Comprehensive loss attributable to the Company	$	(1,856,789	)	$	(1,719,837	)

NET LOSS PER SHARE
Loss Per Share - Basic	$	(0.04	)	$	(0.03	)
Loss Per Share - Diluted	$	(0.04	)	$	(0.03	)

NET LOSS PER SHARE ATTRIBUTABLE TO THE COMPANY
Loss Per Share - Basic	$	(0.04	)	$	(0.03	)
Loss Per Share - Diluted	$	(0.04	)	$	(0.03	)

Weighted Average Common Shares Outstanding - Basic		57,289,873			52,660,051
Weighted Average Common Shares Outstanding - Diluted		57,289,873			52,660,051

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

FingerMotion, Inc.

Unaudited Condensed Consolidated Statement of Shareholders’ Equity


												Accumulated
					Capital Paid		Additional					Other
	Common Stock				in Excess		Paid-in capital		Accumulated			Comprehensive			Stockholders’			Non-controlling
	Shares		Amount		of Par Value		stock options		Deficit			Income			equity			interest			Total
Balance at March 1, 2025		57,141,186		5,714		47,304,416		1,473,996		(34,187,384	)		(943,276	)		13,653,466			5,490			13,658,956

Common stock issued for cash		1,679,743		168		2,956,447		—		—			—			2,956,615			—			2,956,615
Common stock issued for professional service		27,500		3		56,760		—		—			—			56,763			—			56,763
Common stock issued for conversion of customer deposit		560,000		56		1,399,944		—		—			—			1,400,000			—			1,400,000
Accumulated other comprehensive income		—		—		—		—		—			152,309			152,309			—			152,309
Net Loss		—		—		—		—		(2,008,556	)		—			(2,008,556	)		(14,205	)		(2,022,761	)

Balance at May 31, 2025		59,408,429		5,941		51,717,567		1,473,996		(36,195,940	)		(790,967	)		16,210,597			(8,715	)		16,201,882

												Accumulated
					Capital Paid		Additional					Other
	Common Stock				in Excess		Paid-in capital		Accumulated			Comprehensive			Stockholders’			Non-controlling
	Shares		Amount		of Par Value		stock options		Deficit			Income			equity			interest		Total
Balance at March 1, 2024 (As restated)		52,545,350		5,254		40,292,778		1,233,619		(29,074,580	)		(767,011	)		11,690,060			2,028		11,692,088

Common stock issued for professional service		167,500		17		369,577		—		—			—			369,594			—		369,594
Accumulated other comprehensive income		—		—		—		—		—			(64,999	)		(64,999	)		—		(64,999	)
Net Loss		—		—		—		—		(1,655,904	)		—			(1,655,904	)		72		(1,655,832	)


Balance at May 31, 2024 (As restated)		52,712,850		5,271		40,662,355		1,233,619		(30,730,484	)		(832,010	)		10,338,751			2,100		10,340,851

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

FingerMotion, Inc.

Unaudited Condensed Consolidated Statements of Cash Flows


	Three Months Ended
	May 31,			May 31,
	2025			2024
Net (loss)	$	(2,022,761	)	$	(1,655,832	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Share based compensation expenses		127,747			392,527
Amortization and depreciation		10,553			12,014
Provision for expected credit losses		307,967
Gain on disposal of equipment		30			—

Change in operating assets and liabilities:
(Increase) decrease in accounts receivable		(6,005,779	)		(7,762,176	)
(Increase) decrease in prepayment and deposit		862,490			24,000
(Increase) decrease in others receivable		71,455			(150,316	)
(Increase) decrease in inventories		43,613			—
Increase (decrease) in accounts payable		5,375,987			6,884,661
Increase (decrease) in accrual and other payables		26,048			833,177
Increase (decrease) due to lease liability		(1,567	)		12,006
Net Cash (used in) operating activities		(1,204,217	)		(1,409,939	)

Cash flows from investing activities
Purchase of equipment		(1,826	)		—
Net cash (used in) investing activities		(1,826	)		—

Cash flows from financing activities
Advance from stock subscription payable		—			775,000
Proceeds from issuance of common stock		2,956,615			—
Net cash provided by financing activities		2,956,615			775,000

Effect of exchange rates on cash and cash equivalents		(15,469	)		181,831

Net change in cash		1,735,103			(453,108	)

Cash at beginning of period		1,128,135			1,517,232

Cash at end of period	$	2,863,238		$	1,064,124

Supplemental disclosures of cash flow information:
Interest paid	$	51,881		$	—
Taxes paid	$	—		$	—

Supplemental disclosures of non-cash investing and financing activities:
Common stock issued for professional service	$	56,763		$	—
Conversion of customer deposit to shares	$	1,400,000		$	—

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

FINGERMOTION, INC.

Three months ended May 31, 2025 and 2024

Notes to the Unaudited Condensed Consolidated Financial Statements

Note 1 – Nature of Business and basis of Presentation

FingerMotion, Inc. fka Property Management Corporation of America (the “Company”) was incorporated on January 23, 2014, under the laws of the State of Delaware. The Company then offered management and consulting services to residential and commercial real estate property owners who rent or lease their property to third-party tenants.

The Company changed its name to FingerMotion, Inc. on July 13, 2017, after a change in control. In July 2017 the Company acquired all of the outstanding shares of Finger Motion Company Limited (“FMCL”), a Hong Kong corporation formed on April 6, 2016, that is an information technology company which specialize in operating and publishing mobile games.

Pursuant to the Share Exchange Agreement with FMCL, effective July 13, 2017 (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. At the Closing Date, the Company issued 12,000,000 shares of common stock to the FMCL shareholders. In addition, the Company issued 600,000 shares to other consultants in connection with the transactions contemplated by the Share Exchange Agreement.

The transaction was accounted for as a “reverse acquisition” since, immediately following completion of the transaction, the shareholders of FMCL effectuated control of the post-combination Company. For accounting purposes, FMCL was deemed to be the accounting acquirer in the transaction and, consequently, the transaction is treated as a recapitalization of FMCL (i.e., a capital transaction involving the issuance of shares by the Company for the shares of FMCL). Accordingly, the consolidated assets, liabilities, and results of operations of FMCL became the historical financial statements of FingerMotion, Inc. and its subsidiaries, and the Company’s assets, liabilities and results of operations were consolidated with FMCL beginning on the acquisition date. No step-up in basis or intangible assets or goodwill were recorded in this transaction.

As a result of the Share Exchange Agreement and the other transactions contemplated thereunder, FMCL became a wholly owned subsidiary of the Company.

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 JiuGe Management’s contractually controlled affiliate. 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. The VIE Agreements include a Consulting Services Agreement, a Loan Agreement, a Power of Attorney Agreement, a Call Option Agreement, and a Share Pledge Agreement in order to secure the connection and commitments of JiuGe Technology.

On March 7, 2019, JiuGe Technology also acquired 99% of the equity interest of Beijing XunLian (“BX”), a subsidiary that provides bulk distribution of SMS messages for JiuGe Technology customers at discounted rates.

Finger Motion Financial Company Limited was incorporated on January 24, 2020, and is 100% owned by FingerMotion, Inc. The company has been activated for the insurtech business during the last quarter of the fiscal year 2021 where the Big Data division secured its first contract and recorded revenue.

Shanghai TengLian JiuJiu Information Communication Technology Co., Ltd. was incorporated on December 23, 2020, for the purpose of venturing into mobile phone sales in China. It is 99% owned by JiuGe Technology.

On February 5, 2021, JiuGe Technology disposed of its 99% owned subsidiary, Suzhou BuGuNiao Digital Technology Co., Ltd which was established to venture into R&D projects.

FINGERMOTION, INC.

Three months ended May 31, 2025 and 2024

Notes to the Unaudited Condensed Consolidated Financial Statements

Note 1 – Nature of Business and basis of Presentation (continued)

Shanghai KeShunXiang Automobile Service Co., Ltd. was incorporated on April 10, 2024 for the purpose of venturing into the communication and streaming services in China. It is 99% owned by JiuGe Technology.

Zhejiang ChangXin Communication Equipment Co., Ltd. was incorporated on March 28, 2025 for the purpose of venturing into the research and development, manufacturing and sales of communication equipment, as well as the technical service business of communication equipment in China. It is 70% owned by Shanghai KeShunXiang Automobile Service Co., Ltd.

Shanghai XiaoYi Bin Tong Technology Co., Ltd. was incorporated on April 15, 2025 for the purpose of venturing into the sale of household appliances and electronic products in China. It is 80% owned by JiuGe Technology.

Note 2 - Summary of Principal Accounting Policies

Principles of Consolidation and Presentation

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.

Variable interest entity

Pursuant to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Section 810, “Consolidation” (“ASC 810”), the Company is required to include in its consolidated financial statements, the financial statements of its variable interest entities (“VIEs”). ASC 810 requires a VIE to be consolidated if that company is subject to a majority of the risk of loss for the VIE or is entitled to receive a majority of the VIE’s residual returns. VIEs are those entities in which a company, through contractual arrangements, bears the risk of, and enjoys the rewards normally associated with ownership of the entity, and therefore the company is the primary beneficiary of the entity.

Under ASC 810, a reporting entity has a controlling financial interest in a VIE, and must consolidate that VIE, if the reporting entity has both of the following characteristics: (a) the power to direct the activities of the VIE that most significantly affect the VIE’s economic performance; and (b) the obligation to absorb losses, or the right to receive benefits, that could potentially be significant to the VIE. The reporting entity’s determination of whether it has this power is not affected by the existence of kick-out rights or participating rights, unless a single enterprise, including its related parties and de-facto agents, have the unilateral ability to exercise those rights. JiuGe Technology’s actual stockholders do not hold any kick-out rights that affect the consolidation determination.

Through the VIE agreements disclosed in Note 1, the Company is deemed the primary beneficiary of JiuGe Technology. Accordingly, the results of JiuGe Technology have been included in the accompanying consolidated financial statements. JiuGe Technology has no assets that are collateral for or restricted solely to settle their obligations. The creditors of JiuGe Technology do not have recourse to the Company’s general credit.

The following assets and liabilities and of the VIE and VIE’s subsidiaries are included in the accompanying condensed consolidated financial statements of the Company as of May 31, 2025 and February 28, 2025:

FINGERMOTION, INC.

Three months ended May 31, 2025 and 2024

Notes to the Unaudited Condensed Consolidated Financial Statements

Note 2 - Summary of Principal Accounting Policies (continued)

Assets and liabilities of the VIE

Schedule of variable interest entity
	May 31, 2025		February 28, 2025
		(unaudited)
Current assets	$	9,262,390	$	9,647,455
Non-current assets		486,799		512,958
Total assets	$	9,749,189	$	10,160,413

Current liabilities	$	12,990,377	$	12,925,255
Non-current liabilities		17,152		26,940
Total liabilities	$	13,007,529	$	12,952,195

Assets and liabilities of the VIE’s Subsidiaries

	May 31, 2025		February 28, 2025
		(unaudited)
Current assets	$	35,307,238	$	29,073,164
Non-current assets		5,663,710		5,598,659
Total assets	$	40,970,948	$	34,671,823

Current liabilities	$	40,972,825	$	34,137,259
Non-current liabilities		—		—
Total liabilities	$	40,972,825	$	34,137,259

Operating Result of VIE

	For the Three Months Ended May 31, 2025			For the Three Months Ended May 31, 2024
	(unaudited)			(unaudited)
Revenue	$	129,512		$	209,726
Cost of revenue		(72,819	)		(64,059	)
Gross profit	$	56,693		$	145,667

Amortization and depreciation		(4,634	)		(6,068	)
General and administrative expenses		(410,535	)		(513,885	)
Marketing cost		—			(8,528	)
Research & development		(36,064	)		(97,708	)
Credit impairment loss		(41,170	)		—
Total operating expenses	$	(492,403	)	$	(626,189	)

Loss from operations	$	(435,710	)	$	(480,522	)

Interest income		4,735			19,988
Other income		266			—
Total other income	$	5,001		$	19,988

Tax expense		—			—

Net profit (loss)	$	(430,709	)	$	(460,534	)

FINGERMOTION, INC.

Three months ended May 31, 2025 and 2024

Notes to the Unaudited Condensed Consolidated Financial Statements

Note 2 - Summary of Principal Accounting Policies (continued)

Operating Result of VIE’s Subsidiaries

	For the Three Months Ended May 31, 2025			For the Three Months Ended May 31, 2024
	(unaudited)			(unaudited)
Revenue	$	7,412,639		$	8,164,257
Cost of revenue		(7,344,151	)		(7,628,034	)
Gross profit	$	68,488		$	536,223

Amortization and depreciation		(238	)		(239	)
General and administrative expenses		(263,639	)		(453,187	)
Marketing cost		(12,106	)		(53,996	)
Research & development		(66,968	)		(21,631	)
Credit impairment loss		(273,009	)
Total operating expenses	$	(615,960	)	$	(529,053	)

Loss from operations	$	(547,472	)	$	7,170

Interest income		27			5
Other income		8,886			1
Total other income	$	8,913		$	6

Tax expense		—			—

Net profit (loss)	$	(538,559	)	$	7,176

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. Management makes its best estimate of the ultimate outcome for these items based on historical trends and other information available when the financial statements are prepared. Actual results could differ from those estimates.

Certain Risks and Uncertainties

The Company relies on cloud-based hosting through a global accredited hosting provider. Management believes that alternate sources are available; however, disruption or termination of this relationship could adversely affect our operating results in the near-term.

FINGERMOTION, INC.

Three months ended May 31, 2025 and 2024

Notes to the Unaudited Condensed Consolidated Financial Statements

Note 2 - Summary of Principal Accounting Policies (continued)

Segment reporting

ASC 280, “Segment Reporting”, establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organizational structure as well as information about geographical areas, business segments and major customers in consolidated financial statements for detailing the Company’s business segments. Based on the criteria established by ASC 280, The Company uses the management approach to determine reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s CODM, specifically the Company’s CEO and CFO, for making decisions, allocating resources and assessing performance. The Company does not distinguish revenues, costs and expenses between segments in its internal reporting, but instead reports costs and expenses by nature as a whole. Based on the management’s assessment, the Company determines that it has only one operating segment and therefore one reportable segment as defined by ASC 280. Furthermore, the whole of the Group’s revenue is derived in or from China with all operation being carried out in China, and the Company’s long-lived assets are located in China, no geographical segments are presented. As such, all financial segment information required by the authoritative guidance can be found in these consolidated financial statements.

Foreign Currency Translation and Transactions

The Company’s reporting currency is the US dollar. The functional currencies of the Company’s foreign subsidiaries are their respective local currencies (China Renminbi, Singapore dollar and Hongkong dollar), which are the monetary unit of account of the principal economic environment in which the Company’s foreign subsidiaries operate. Assets and liabilities of the foreign subsidiaries are translated into US dollars at exchange rates in effect at each period end. Revenues and expenses are translated at average exchange rates in effect during the period. The resulting translation adjustments are recorded in accumulated other comprehensive income (loss) as a component of stockholders’ equity.


Translation of amounts from RMB into USD has been made at the following exchange rates for the respective periods:

Balance sheet items, except for equity accounts
May 31, 2025	RMB7.1991 to $1.00
February 28, 2025	RMB7.2830 to $1.00
Income statement and cash flows items
For the three months ended May 31, 2025	RMB7.2541 to $1.00
For the three months ended May 31, 2024	RMB7.2238 to $1.00

Identifiable Intangible Assets

Identifiable intangible assets are recorded at cost and are amortized over 3 - 10 years. 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.

FINGERMOTION, INC.

Three months ended May 31, 2025 and 2024

Notes to the Unaudited Condensed Consolidated Financial Statements

Note 2 - Summary of Principal Accounting Policies (continued)

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.

Long-lived assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of such assets may not be fully recoverable. It is possible that these assets could become impaired as a result of technology, economy or other industry changes. If circumstances require a long-lived asset or asset group to be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying value. If the carrying value of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques, including discounted cash flow models, relief from royalty income approach, quoted market values and third-party independent appraisals, as considered necessary.

The Company makes various assumptions and estimates regarding estimated future cash flows and other factors in determining the fair values of the respective assets. The assumptions and estimates used to determine future values and remaining useful lives of long-lived assets are complex and subjective. They can be affected by various factors, including external factors such as industry and economic trends, and internal factors such as the Company’s business strategy and its forecasts for specific market expansion.

Accounts Receivable, Net

Accounts receivable is stated at the amount the Company expects to collect. The Company maintains allowances for credit losses for estimated losses. Management considers the following factors when determining the collectability of specific accounts: historical experience, creditworthiness of the clients, aging of the receivables and other specific circumstances related to the accounts. Allowance for credit losses is made and recorded into administrative expenses based on the aging of accounts receivable and on any specifically identified receivables that may become uncollectible. Accounts receivable which are deemed to be uncollectible are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Our assessment considered the estimates of expected credit and collectability trends. Volatility in market conditions and evolving credit trends are difficult to predict and may cause variability and volatility that may have an impact on our allowance for credit losses in future periods. Refer to note 8 for allowances for credit losses recognized in profit or loss by the Company during the three months ended May 31, 2025 and for the year ended February 28, 2025.

FINGERMOTION, INC.

Three months ended May 31, 2025 and 2024

Notes to the Unaudited Condensed Consolidated Financial Statements

Note 2 - Summary of Principal Accounting Policies (continued)

Concentration of Credit Risks

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, accounts receivable and other receivable. The Company’s cash and cash equivalents are placed with high-credit-quality financial institutions, and at times exceed federally insured limits. To date, the Company has not experienced any credit loss relating to its cash and cash equivalents.

For the three months ended May 31, 2025, the Company sold about 95% of its total revenue to three major customers and the amounts due from these companies represent approximately 37% of the total accounts receivable as at May 31, 2025.

For the three months ended May 31, 2024, the Company sold about 97% of its total revenue to one major customer and the amounts due from this company represent approximately 99% of the total accounts receivable as at May 31, 2024.

For the three months ended May 31, 2025, the Company purchased about 96% of its total purchase from three major suppliers and the amounts due to these companies represent approximately 77% of the total accounts payable as at May 31, 2025.

For the three months ended May 31, 2024, the Company purchased about 99% of its total purchase from one major supplier. The amounts due to this company represent approximately 79% of the total accounts payable as at May 31, 2024.

Lease

Operating and finance lease right-of-use assets and lease liabilities are recognized at the commencement date based on the present value of the future lease payments over the lease term. When the rate implicit to the lease cannot be readily determined, the Company utilizes its incremental borrowing rate in determining the present value of the future lease payments. The incremental borrowing rate is derived from information available at the lease commencement date and represents the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term and amount equal to the lease payments in a similar economic environment. The right-of-use asset includes any lease payments made and lease incentives received prior to the commencement date. Operating lease right-of-use assets also include any cumulative prepaid or accrued rent when the lease payments are uneven throughout the lease term. 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.

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.

Equipment

Equipment is stated at cost. Depreciation of 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.

FINGERMOTION, INC.

Three months ended May 31, 2025 and 2024

Notes to the Unaudited Condensed Consolidated Financial Statements

Note 2 - Summary of Principal Accounting Policies (continued)

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.

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. 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. 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. 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. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied.

The Company has assessed the impact of the guidance by reviewing its existing customer contracts and current accounting policies and practices to identify differences that will result from applying the new requirements, including the evaluation of its performance obligations, transaction price, customer payments, transfer of control and principal versus agent considerations. Based on the assessment, the Company concluded that there was no change to the timing and pattern of revenue recognition for its current revenue streams in scope of ASC 606 and therefore there was no material changes to the Company’s consolidated financial statements upon adoption of ASC 606.

The Company recognizes revenue from providing hosting and integration services and licensing the use of its technology platform to its customers. The Company recognizes revenue when all of the following conditions are satisfied: (1) there is persuasive evidence of an arrangement; (2) the service has been provided to the customer (for licensing, revenue is recognized when the Company’s technology is used to provide hosting and integration services); (3) the amount of fees to be paid by the customer is fixed or determinable; and (4) the collection of fees is probable. 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.

Cost of Revenue

Cost of revenue consists of telecommunication products and services, and SMS & MMS business for operators or other suppliers, and purchase cost of emergency equipment for command and communication.

Research and Development

Research and development costs are expensed as incurred. Research and development expenses for Sapientus include compensation, employee benefits, stock-based compensation, materials and components purchased for research and development. During the quarter, the Company also commenced product development efforts under a new strategic collaboration to integrate its Mobile Integrated Command and Communication Platform into emergency response vehicles.

FINGERMOTION, INC.

Three months ended May 31, 2025 and 2024

Notes to the Unaudited Condensed Consolidated Financial Statements

Note 2 - Summary of Principal Accounting Policies (continued)

Selling, General and Administrative

Selling, general and administrative expenses include compensation, employee benefits, stock-based compensation, professional service fees, allocation of facility costs, depreciation and amortization associated with general selling and administrative overhead activities.

Income Taxes

The Company uses the asset and liability method of accounting for income taxes in accordance with Accounting Standards Codification (“ASC”) 740, “Income Taxes” (“ASC 740”). Under this method, income tax expense is recognized as the amount of: (i) taxes payable or refundable for the current year and (ii) future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of available evidence it is more likely than not that some portion or all of the deferred tax assets will not be realized.

Non-controlling interest

Non-controlling interests held 1% of the shares of three of our subsidiaries, 30% of the shares of Zhejiang ChangXin Communication Equipment Co., Ltd. and 20% of the shares of Shanghai XiaoYi Bin Tong Technology Co., Ltd., are recorded as a component of our equity, separate from the Company’s equity. Purchase or sales of equity interests that do not result in a change of control are accounted for as equity transactions. 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. The cumulative results of operations attributable to noncontrolling interests are also recorded as noncontrolling interests in the Company’s consolidated balance sheets.

FINGERMOTION, INC.

Three months ended May 31, 2025 and 2024

Notes to the Unaudited Condensed Consolidated Financial Statements

Note 2 - Summary of Principal Accounting Policies (continued)

Recently Issued Accounting Pronouncements

(i)

Recently adopted accounting pronouncements

In November 2023, the FASB issued ASU No. 2023-07, Improvements to Reportable Segment Disclosures (Topic 280). This ASU updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment’s profit or loss. This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources. The ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Adoption of the ASU should be applied retrospectively to all prior periods presented in the financial statements. The Company adopted this ASU on March 1, 2024, which did not have a material impact on the Company’s consolidated financial statements. Refer to Note 2, Segment Reporting for the inclusion of the new required disclosures.

In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (Topic 740). The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024. Early adoption is also permitted for annual financial statements that have not yet been issued or made available for issuance. This ASU will result in the required additional disclosures being included in our consolidated financial statements, once adopted. The standard is effective for the Company’s 2026 annual period and can be applied either prospectively or retrospectively. The standard is effective for the Company’s 2026 annual period and can be applied either prospectively or retrospectively. The Company is currently evaluating the impact of this accounting standard update on its consolidated financial statements and related disclosures.

(ii)

Recently issued accounting pronouncements not yet adopted

In November 2024, the FASB issued ASU No. 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40). This ASU requires disclosure, in the notes to financial statements, of specified information about certain costs and expenses. A reporting entity is required to 1) disclose the amounts of (a) purchases of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and (e) depreciation, depletion, and amortization recognized as part of oil and gas-producing activities (DD&A) (or other amounts of depletion expense) included in each relevant expense caption. A relevant expense caption is an expense caption presented on the face of the income statement within continuing operations that contains any of the expense categories listed in (a)–(e); 2) include certain amounts that are already required to be disclosed under current generally accepted accounting principles in the same disclosure as the other disaggregation requirements; 3) disclose a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, and 4) disclose the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses. The ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of this accounting standard update on its consolidated financial statements and related disclosures.

FINGERMOTION, INC.

Three months ended May 31, 2025 and 2024

Notes to the Unaudited Condensed Consolidated Financial Statements

Note 3 - Going Concern

The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Company had an accumulated deficit of $36,195,940 and $34,187,384 as at May 31, 2025 and February 28, 2025 respectively, and had a net loss of $2,022,761 and $1,655,832 for the three months ended May 31, 2025 and 2024, respectively.

The Company’s continuation as a going concern is dependent on its ability to obtain additional financing to fund operations, implement its business model, and ultimately, attain profitable operations. The Company will need to secure additional funds through various means, including equity and debt financing or any similar financing. There can be no assurance that the Company will be able to obtain additional equity or debt financing, if and when needed, on terms acceptable to the Company, or at all. Any additional equity or debt financing may involve substantial dilution to the Company’s stockholders, restrictive covenants, or high interest costs. The Company’s long-term liquidity also depends upon its ability to generate revenues and achieve profitability.

Note 4 - Revenue

We recorded $8,458,743 and $8,373,983 in revenue, respectively, for the three months ended May 31, 2025 and 2024.

Schedule of revenue
	For the three months ended
	May 31, 2025		May 31, 2024
	(unaudited)		(unaudited)
Telecommunication Products & Services	$	8,311,254	$	8,373,520
DaGe Platform		10,938		463
Command & Communication		109,241		—
Big Data		27,310		—
	$	8,458,743	$	8,373,983

Note 5 – Equipment

At May 31, 2025 and February 28, 2025, the company has the following amounts related to tangible assets:


	May 31, 2025			February 28, 2025
	(unaudited)
Equipment	$	106,273		$	103,945
Less: accumulated depreciation		(86,468	)		(80,685	)
Net equipment	$	19,805		$	23,260

No significant residual value is estimated for the equipment. Depreciation expenses for the three months ended May 31, 2025 and 2024 totaled $3,414 and $6,898, respectively.

FINGERMOTION, INC.

Three months ended May 31, 2025 and 2024

Notes to the Unaudited Condensed Consolidated Financial Statements

Note 6 – Intangible Asset

At May 31, 2025 and February 28, 2025, the company has the following amounts related to intangible assets:

Schedule of intangible assets
	May 31, 2025			February 28, 2025
	(unaudited)
Mobile applications		204,348			201,993
Less: accumulated amortization		(199,610	)		(192,235	)
Net intangible assets	$	4,738		$	9,758

No significant residual value is estimated for these intangible assets. Amortization expenses for the three months ended May 31, 2025 and 2024 totaled $7,139 and $5,116, respectively.

Note 7 – Prepayment and Deposit

Prepaid expenses consist of the deposit pledge to the vendor for stock credits for resale. Our current vendors are China Unicom and China Mobile for our Telecommunication Products & Services business and our SMS & MMS business. Deposits include payments placed into the e-commerce platforms where we offer our products and services. The platforms are PinDuoDuo, Tmall, and JD.com.

Schedule of prepaid expense
	May 31, 2025		February 28, 2025
	(unaudited)
Deposit	$	5,923,992	$	6,631,704
Prepayment		189,097		385,099
	$	6,113,089	$	7,016,803

Note 8 – Accounts Receivable, net

Schedule of accounts receivable
	May 31, 2025			February 28, 2025
	(unaudited)
Accounts receivable	$	39,532,414		$	33,094,782
Less: allowance for credit losses		(750,743	)		(435,345	)
	$	38,781,671		$	32,659,437

The Company normally allows credit terms to customers ranging from 90 to 150 days. The Company seeks to maintain strict control over its accounts receivable. Overdue accounts receivable are reviewed regularly by the Board of Directors.

Activities related to allowance for credit losses are presented below.

Schedule of allowance for credit losses
	May 31, 2025		February 28, 2025
	(unaudited)
At beginning of the period	$	435,345	$	—
Additions		315,398		435,345

At end of the period	$	750,743	$	435,345

FINGERMOTION, INC.

Three months ended May 31, 2025 and 2024

Notes to the Unaudited Condensed Consolidated Financial Statements

Note 9 – Other Receivables

At May 31, 2025 and February 28, 2025, the company has the following amounts related to other receivables:

Schedule of other receivables
	May 31, 2025		February 28, 2025
	(unaudited)
Other receivables represent:
Advances to suppliers	$	758,841	$	745,935
Security deposit		173,246		336,558
Others		105,668		14,472
	$	1,037,755	$	1,096,965

Note 10 – Right-of-use Asset and Lease Liability

The Company has entered into lease agreements with various third parties. The terms of operating leases are one to two years. These operating leases are included in "Right-of-use Asset" on the Company's Condensed Consolidated Balance Sheet and represent the Company’s right to use the underlying asset for the lease term. The Company’s obligation to make lease payments are included in "Lease liability" on the Company's Condensed Consolidated Balance Sheet. Additionally, the Company has entered into various short-term operating leases with an initial term of twelve months or less. These leases are not recorded on the Company's Condensed Consolidated Balance Sheet. All operating lease expense is recognized on a straight-line basis over the lease term in the three months ended May 31, 2025.

Information related to the Company's right-of-use assets and related lease liabilities were as follows:


	May 31, 2025		February 28, 2025
Right-of-use asset	(unaudited)
Right-of-use asset, net	$	100,616	$	126,581

Lease liability
Current lease liability	$	99,253	$	116,808
Non-current lease liability		—		9,986
Total lease liability	$	99,253	$	126,794

Remaining lease term and discount rate	May 31, 2025
Weighted-average remaining lease term		11 months
Weighted-average discount rate		4.75	%

Commitments

The following table summarizes the future minimum lease payments due under the Company’s operating leases as of May 31, 2025:


Twelve months ended May 31, 2026	$	101,427
Less: imputed interest		(2,174	)
Present value of lease obligations	$	99,253

FINGERMOTION, INC.

Three months ended May 31, 2025 and 2024

Notes to the Unaudited Condensed Consolidated Financial Statements

Note 11 - Common Stock

On March 29, 2024, the Company 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.

On March 29, 2024, the Company issued 150,000 shares of our common stock under its 2023 Stock Incentive Plan at a deemed price of $2.15 per share to two individuals pursuant to consulting agreements.

On October 11, 2024, the Company issued 1,095,000 shares of common stock to 15 individuals due to the closing of its private placement at $1.50 per share for gross proceeds of $1,642,500. In connection with the closing of the private placement, the Company paid cash finder’s fees of an aggregate of $158,000 to three individuals.

On December 20, 2024, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with certain institutional investors (the “Purchasers”), which provided for the issuance and sale, in a registered direct offering by the Company of (i) 3,333,336 shares of its common stock, par value $0.0001 per share (the “Common Stock”) and (ii) warrants (the “Common Warrants”) to purchase up to an aggregate of 5,000,004 shares of Common Stock (the “Offering”) at a combined purchase price of $1.50 per share and one and one-half Common Warrants on December 23, 2024.

On March 3, 2025, the Company issued 27,500 shares of its common stock at a deemed price of $1.86 per share to one entity pursuant to a consulting agreement.

On May 15, 2025, the Company issued 312,500 shares of its common stock at a price of $1.50 per share to one entity pursuant to the exercise of warrants.

On May 23, 2025, the Company issued 100,000 shares of its common stock at a price of $1.88 per share to one entity pursuant to the exercise of warrants.

On May 28, 2025, the Company issued an aggregate of 940,000 shares of its common stock at a price or deemed price of $2.50 per share to 8 individuals due to the closing of a private placement, which resulted in the receipt of $950,000 in cash and the settlement of an outstanding liability of $1,400,000.

On May 28, 2025, the Company issued 837,243 shares of its common stock at a price of $1.50 per share to one entity pursuant to the exercise of warrants.

On May 29, 2025, the Company issued 50,000 shares of its common stock at a price of $1.88 per share to one entity pursuant to the exercise of warrants.

As of May 31, 2025 there were 59,408,429 shares of the Company’s common stock issued and outstanding, and none

SEC Form 10-Q filed by FingerMotion Inc.