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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 November 30, 2023

 

or

 

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 ☒ 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: 52,545,350 shares of common stock outstanding as of January 12, 2024.

 

 

 

 

 

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  28
Three Months Ended November 30, 2023 Compared to the Three Months Ended November 30, 2022  39
Nine Months Ended November 30, 2023 Compared to the Nine Months Ended November 30, 2022  44
Liquidity and Capital Resources  48
ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  50
ITEM 4 – CONTROLS AND PROCEDURES  50
Evaluation of Disclosure Controls and Procedures  50
Changes in internal control over financial reporting  51
   
PART II – OTHER INFORMATION  52
   
ITEM 1 – LEGAL PROCEEDINGS  52
ITEM 1A. RISK FACTORS  52
ITEM 2 – UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY SECURITIES  77
ITEM 3 – DEFAULTS UPON SENIOR SECURITIES  77
ITEM 4 – MINE SAFETY DISCLOSURES  77
ITEM 5 – OTHER INFORMATION  77
ITEM 6 – EXHIBITS  78

 

i

 

PART I - FINANCIAL INFORMATION

 

ITEM 1. FINANCIAL STATEMENTS

 

-1-

 

FINGERMOTION, INC.

 

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

 

For the nine months ended November 30, 2023

 

(Unaudited - Expressed in U.S. Dollars)

 

-2-

 

FingerMotion, Inc.
Condensed Consolidated Balance Sheets

 

           
   November 30,   February 28, 
   2023   2023 
ASSETS   (Unaudited)      
           
Current Assets          
Cash and cash equivalents  $1,934,565   $9,240,241 
Accounts receivable   6,380,869    1,334,884 
Prepayment and deposit   5,173,840    4,139,061 
Other receivables   3,945,524    2,551,665 
Total Current Assets   17,434,798   17,265,851
Non-current Assets          
Equipment   53,463    78,098 
Intangible assets   40,874    73,066 
Right-of-use asset   42,105    130,109 
Total Non-current Assets    136,442   281,273
           
TOTAL ASSETS  $17,571,240   $17,547,124 
           
LIABILITIES AND SHAREHOLDER’S DEFICIT          
           
Current Liabilities          
Accounts payable  $3,891,419   $27,371 
Accrual and other payables   997,201    1,096,225 
Stock subscription payables       60,000 
Convertible notes payable, current portion       730,000 
Lease liability, current portion   35,330    122,924 
Total Current Liabilities    4,923,950   2,036,520
Non-current Liabilities          
Convertible note payable, non-current portion       2,533,333 
Lease liability, non-current portion       4,971 
Total Non-current Liabilities      2,538,304
           
TOTAL LIABILITIES  $4,923,950   $4,574,824 
           
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 52,545,350 shares and 49,432,214 issued and outstanding at November 30, 2023 and February 28, 2023 respectively   5,254    4,943 
           
Additional paid-in capital   40,292,778    37,406,415 
           
Additional paid-in capital - stock options   1,037,276    632,664 
           
Accumulated deficit   (28,035,209)   (24,691,314)
           
Accumulated other comprehensive income   (663,271)   (391,692)
           
Stockholders’ equity before non-controlling interests   12,636,828    12,961,016 
           
Non-controlling interests   10,462    11,284 
           
TOTAL SHAREHOLDERS’ EQUITY   12,647,290    12,972,300 
           
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY  $17,571,240   $17,547,124 

-3-

 

FingerMotion, Inc.  

Unaudited Condensed Consolidated Statements of Operations  

 

                     
   Three Months Ended   Nine Months Ended 
   November 30,   November 30,   November 30,   November 30, 
   2023   2022   2023   2022 
Revenue  $6,140,146   $11,402,935   $27,588,403   $21,241,015 
Cost of revenuex   (5,502,151)   (10,544,321)   (24,446,325)   (19,587,546)
                     
Gross profit   637,995    858,614    3,142,078    1,653,469 
                     
Amortization & Depreciation   (17,525)   (17,016)   (53,538)   (44,654)
General & administrative expenses   (2,256,185)   (1,635,800)   (5,252,531)   (4,151,219)
Marketing Cost   (40,963)   (64,012)   (92,559)   (290,592)
Research & Development   (176,119)   (180,158)   (525,174)   (589,909)
Stock compensation expenses   (108,213)   (823,431)   (559,092)   (1,367,909)
                     
Total operating expenses   (2,599,005)   (2,720,417)   (6,482,894)   (6,444,283)
                     
Net loss from operations   (1,961,010)   (1,861,803)   (3,340,816)   (4,790,814)
                     
Other income (expense):                    
Interest income   12,578    1,791    49,425    3,248 
Interest expense       (195,730)   (121,451)   (300,207)
Exchange gain (loss)   448    (174)   (1,580)   (792)
Other income   2,181    (465,802)   69,705    (415,916)
Total other income (expense)   15,207    (659,915)   (3,901)   (713,667)
                     
Net loss before income tax  $(1,945,803)  $(2,521,718)  $(3,344,717)  $(5,504,481)
Income tax expenses                
Net loss  $(1,945,803)  $(2,521,718)  $(3,344,717)  $(5,504,481)
                     
Less: Net profit (loss) attributable to the non-controlling interest   (1,460)   274    (822)   (1,001)
                     
Net loss attributable to the Company’s shareholders  $(1,944,343)  $(2,521,992)  $(3,343,895)  $(5,503,480)
                     
Other comprehensive income:                    
Foreign currency translation adjustments   252,155    (182,270)   (271,579)   (711,433)
Comprehensive loss  $(1,692,188)  $(2,704,262)  $(3,615,474)  $(6,214,913)
Less: Comprehensive loss attributable to non-controlling interest   221    (307)   (23)   (714)
Comprehensive loss attributable to the Company  $(1,692,409)  $(2,703,955)  $(3,615,451)  $(6,214,199)
                     
NET PROFIT (LOSS) PER SHARE                    
Loss Per Share - Basic  $(0.04)  $(0.06)  $(0.06)  $(0.13)
Loss Per Share - Diluted  $(0.04)  $(0.06)  $(0.06)  $(0.13)
                     
NET PROFIT (LOSS) PER SHARE ATTRIBUTABLE TO THE COMPANY                    
Loss Per Share - Basic  $(0.04)  $(0.06)  $(0.06)  $(0.13)
Loss Per Share - Diluted  $(0.04)  $(0.06)  $(0.06)  $(0.13)
                     
Weighted Average Common Shares Outstanding - Basic   52,527,382    43,692,686    52,044,125    43,063,637 
Weighted Average Common Shares Outstanding - Diluted   52,527,382    43,692,686    52,044,125    43,063,637 

-4-

 

 

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, 2023   49,432,214    4,943    37,406,415    632,664    (24,691,314)   (391,692)   12,961,016    11,284    12,972,300 
                                              
Common stock issued for cash   20,000    2    59,998                60,000        60,000 
Common stock issued for professional service   70,000    7    124,243                124,250        124,250 
Execution of convertible notes   2,465,816    247    1,682,466                1,682,713        1,682,713 
Accumulated other comprehensive income                       413,808    413,808        413,808 
Net profit (loss)                   (1,265,471)       (1,265,471)   1,209    (1,264,262)
                                              
Balance at May 31, 2023   51,988,030    5,199    39,273,122    632,664    (25,956,785)   22,116    13,976,316    12,493    13,988,809 
                                              
Common stock issued for cash   260,000    26    779,974                780,000        780,000 
Common stock issued for professional service   12,500    1    30,821                30,822        30,822 
Cashless exercise of warrants   121,422    12    (12)                        
Additional paid-in capital – stock options               483,086            483,086        483,086 
Accumulated other comprehensive income                       (937,542)   (937,542)       (937,542)
Net loss                   (134,081)       (134,081)   (571)   (134,652)
                                              
Balance at August 31, 2023   52,381,952    5,238    40,083,905    1,115,750    (26,090,866)   (915,426)   14,198,601    11,922    14,210,523 
                                              
Common stock issued for cash                                    
Common stock issued for professional service   72,500    7    130,408                130,415        130,415 
Deemed net-stock exercise of options   90,898    9    78,465    (78,474)                    
Accumulated other comprehensive income                       252,155    252,155        252,155 
Net loss                   (1,944,343)       (1,944,343)   (1,460)   (1,945,803)
                                              
Balance at November, 2023   52,545,350    5,254    40,292,778    1,037,276    (28,035,209)   (663,271)   12,636,828    10,462    12,647,290 

-5-

 

 

                       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, 2022   42,627,260    4,263    21,730,941    356,328    (17,152,172)   137,911    5,077,271    10,979    5,088,250 
                                              
Common stock issued for cash                                    
Common stock issued for professional service   150,000    15    435,235                435,250        435,250 
Accumulated other comprehensive income                       (305,370)   (305,370)       (305,370)
Net loss                   (1,444,123)       (1,444,123)   (545)   (1,444,668)
                                              
Balance at May 31, 2022   42,777,260    4,278    22,166,176    356,328    (18,596,295)   (167,459)   3,763,028    10,434    3,773,462 
                                              
Common stock issued for cash                                    
Common stock issued for professional service   80,000    8    157,242                157,250        157,250 
Accumulated other comprehensive income                       (223,793)   (223,793)       (223,793)
Net loss                   (1,537,365)       (1,537,365)   (730)   (1,538,095)
                                              
Balance at August 31, 2022   42,857,260    4,286    22,323,418    356,328    (20,133,660)   (391,252)   2,159,120    9,704    2,168,824 
                                              
Common stock issued for cash   3,077,500    308    12,019,692                12,020,000        12,020,000 
Common stock issued for professional service   381,875    38    709,112                709,150        709,150 
Accumulated other comprehensive income                       (182,270)   (182,270)       (182,270)
Net loss                   (2,521,992)       (2,521,992)   274    (2,521,718)
                                              
Balance at November 30, 2022   46,316,635    4,632    35,052,222    356,328    (22,655,652)   (573,522)   12,184,008    9,978    12,193,986 

-6-

 

FingerMotion, Inc.
Unaudited Condensed Consolidated Statements of Cash Flows

 

           
   Nine Months Ended 
   November 30,   November 30, 
   2023   2022 
Net loss  $(3,344,717)  $(5,504,481)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:          
Share based compensation expenses   927,372    1,635,155 
Amortization and depreciation   53,538    44,654 
Impairment of fixed assets       1,261 
           
Change in operating assets and liabilities:          
(Increase) decrease in accounts receivable   (5,072,577)   555,729 
(Increase) decrease in prepayment and deposit   (1,113,267)   (1,695,534)
(Increase) decrease in others receivable   (2,161,319)   141,173 
(Increase) decrease in inventories       1,253 
Increase (decrease) in accounts payable   3,864,745    (1,871,709)
Increase (decrease) in accrual and other payables   (102,182)   1,093,377 
Increase (decrease) in due to lease liability   (4,618)   (1,322)
Net Cash provided by (used in) operating activities   (6,953,025)   (5,600,444)
           
Cash flows from investing activities          
Purchase of equipment   (379)   (67,761)
Net cash provided by (used in) investing activities   (379)   (67,761)
           
Cash flows from financing activities          
Proceed from convertible note       5,530,000 
Repayment of convertible note   (1,135,333)    
Common stock issued for cash   840,000    12,020,000 
Net cash provided by (used in) financing activities   (295,333)   17,550,000 
           
Effect of exchange rates on cash and cash equivalents   (56,939)   (473,202)
           
Net change in cash   (7,305,676)   11,408,593 
           
Cash at beginning of period   9,240,241    461,933 
           
Cash at end of period  $1,934,565   $11,870,526 
           
Major non-cash transactions:          
Conversion of loan payables to shares  $1,682,713   $ 
           
Supplemental disclosures of cash flow information:          
Interest paid  $   $ 
Taxes paid  $   $ 

-7-

 

FINGERMOTION, INC.

Nine months ended November 30, 2023 and 2022

Notes to the 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 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. FMCL, a Hong Kong corporation, was formed in April 6, 2016.

 

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 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 the 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.

-8-

 

FINGERMOTION, INC.

Nine months ended November 30, 2023 and 2022

Notes to the Condensed Consolidated Financial Statements

 

Note 2 - Summary of Principal Accounting Policies

 

Principles of Consolidation and Presentation

 

The condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). The condensed 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.

 

-9-

 

FINGERMOTION, INC.

Nine months ended November 30, 2023 and 2022

Notes to the Condensed Consolidated Financial Statements

 

Note 2 - Summary of Principal Accounting Policies (Continued)

 

The following assets and liabilities of the VIE and VIE’s subsidiaries are included in the accompanying condensed consolidated financial statements of the Company as of November 30, 2023 and February 28, 2023:

 

Assets and liabilities of the VIE

 

          
   November 30, 2023   February 28, 2023 
    (unaudited)      
Current assets  $12,528,492   $6,706,994 
Non-current assets   88,201    196,477 
Total assets  $12,616,693   $6,903,471 
           
Current liabilities  $16,138,126   $11,220,948 
Non-current liabilities   35,330    4,971 
Total liabilities  $16,173,456   $11,225,919 

 

Assets and liabilities of the VIE Subsidiary

 

   November 30, 2023   February 28, 2023 
    (unaudited)      
Current assets  $1,551,268   $1,313,056 
Non-current assets   6,392    7,304 
Total assets  $1,557,660   $1,320,360 
           
Current liabilities  $567,219   $219,724 
Non-current liabilities        
Total liabilities  $567,219   $219,724 

-10-

 

FINGERMOTION, INC.

Nine months ended November 30, 2023 and 2022

Notes to the Condensed Consolidated Financial Statements

 

Note 2 - Summary of Principal Accounting Policies (Continued)

 

Operating Result of VIE

 

   For the Nine Months Ended
November 30, 2023
   For the Nine Months Ended
November 30, 2022
 
    (unaudited)    (unaudited) 
Revenue  $18,952,973   $11,632,351 
Cost of revenue   (17,165,083)   (10,492,448)
Gross profit  $1,787,890   $1,139,903 
           
Amortization and depreciation   (18,947)   (8,626)
General and administrative expenses   (1,672,860)   (1,664,299)
Marketing cost   (16,193)   (258,256)
Research & development   (244,859)   (295,527)
Total operating expenses  $(1,952,859)  $(2,226,708)
           
Net profit (loss) from operations  $(164,969)  $(1,086,805)
           
Interest income   48,931    3,122 
Other income   69,352    64,086 
Total other income  $118,283   $67,208 
           
Tax expense        
           
Net profit (loss)  $(46,686)  $(1,019,597)

 

Operating Result of VIE Subsidiary

 

   For the Nine Months Ended
November 30, 2023
   For the Nine Months Ended
November 30, 2022
 
    (unaudited)    (unaudited) 
Revenue  $7,573,286   $9,358,664 
Cost of revenue   (7,281,242)   (9,095,097)
Gross profit  $292,044   $263,567 
           
Amortization and depreciation   (726)   (763)
General and administrative expenses   (235,617)   (269,281)
Marketing cost   (76,367)   (32,336)
Research & development   (62,213)   (61,365)
Total operating expenses  $(374,923)  $(363,745)
           
Net profit (loss) from operations  $(82,879)  $(100,178)
           
Interest income   356    95 
Other income   353    1 
Total other income  $709   $96 
           
Tax expense        
           
Net profit (loss)  $(82,170)  $(100,082)

 

-11-

 

FINGERMOTION, INC.

Nine months ended November 30, 2023 and 2022

Notes to the Condensed Consolidated Financial Statements

 

Note 2 - Summary of Principal Accounting Policies (Continued)

 

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.

 

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.

 

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 and Concentration of Risk

 

Accounts receivable, net is stated at the amount the Company expects to collect, or the net realizable value. The Company provides a provision for allowances that includes returns, allowances and doubtful accounts equal to the estimated uncollectible amounts. The Company estimates its provision for allowances based on historical collection experience and a review of the current status of trade accounts receivable. It is reasonably possible that the Company’s estimate of the provision for allowances will change.

 

-12-

 

FINGERMOTION, INC.

Nine months ended November 30, 2023 and 2022

Notes to the Condensed Consolidated Financial Statements

 

Note 2 - Summary of Principal Accounting Policies (Continued)

 

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.

 

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. Land is classified as held for sale when management has the ability and intent to sell, in accordance with ASC Topic 360-45.

 

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.

 

-13-

 

FINGERMOTION, INC.

Nine months ended November 30, 2023 and 2022

Notes to the Condensed Consolidated Financial Statements

 

Note 2 - Summary of Principal Accounting Policies (Continued)

 

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.

 

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 two of our subsidiaries 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.

 

Recently 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.

-14-

 

FINGERMOTION, INC.

Nine months ended November 30, 2023 and 2022

Notes to the 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 $28,035,209 and $24,691,314 as at November 30, 2023 and February 28, 2023 respectively, and had a net loss of $3,344,717 and $5,504,481 for the nine months ended November 30, 2023 and 2022, 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 $27,588,403 and $21,241,015 in revenue, respectively, for the nine months ended November 30, 2023 and 2022.

 

          
   For the nine months ended 
   November 30, 2023   November 30, 2022 
   (unaudited)   (unaudited) 
Telecommunication Products & Services  $27,332,154   $14,673,364 
SMS & MMS Business   24,213    6,317,651 
Big Data   232,036    250,000 
   $27,588,403   $21,241,015 

 

Note 5 – Equipment

 

At November 30, 2023 and February 28, 2023, the company has the following amounts related to tangible assets:

 

          
   November 30, 2023   February 28, 2023 
     (unaudited)      
Equipment  $118,908   $120,996 
Less: accumulated depreciation   (65,445)   (42,898)
Net equipment  $53,463   $78,098 

 

No significant residual value is estimated for the equipment. Depreciation expense for the nine months ended November 30, 2023 and 2022 totalled $23,231 and $12,823, respectively.

-15-

 

FINGERMOTION, INC.

Nine months ended November 30, 2023 and 2022

Notes to the Condensed Consolidated Financial Statements

 

Note 6 – Intangible Assets

 

At November 30, 2023 and February 28, 2023, the company has the following amounts related to intangible assets: 

 

          
   November 30, 2023   February 28, 2023 
    (unaudited)       
Licenses  $200,000   $200,000 
Mobile applications   206,743    212,128 
    406,743    412,128 
Less: accumulated amortization   (324,824)   (298,017)
Impairment of intangible assets   (41,045)   (41,045)
Net intangible assets  $40,874   $73,066 

 

No significant residual value is estimated for these intangible assets. Amortization expenses for the nine months ended November 30, 2023 and 2022 totalled $30,307 and $31,831, 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 also include payments placed into the e-commerce platforms where we offer our products and services. The platforms are PinDuoDuo, Tmall and JD.com.

 

          
   November 30, 2023   February 28, 2023 
    (unaudited)       
Telecommunication Products & Services          
Deposit Paid / Prepayment  $4,558,409   $2,492,795 
Deposit received        
Net Prepaid expenses for Telecommunication Products & Services  $4,558,409   $2,492,795 
Others prepayment   482,272    1,047,631 
Prepayment and deposit  $5,040,681   $3,540,426 

 

   November 30, 2023   February 28, 2023 
    (unaudited)       
SMS & MMS Business          
Deposit Paid / Prepayment  $133,159   $598,635 
Deposit received   -     -  
Net Prepaid expenses for SMS  $133,159   $598,635 
Others prepayment        
Prepayment and deposit  $133,159   $598,635 

 

-16-

 

FINGERMOTION, INC.

Nine months ended November 30, 2023 and 2022

Notes to the Condensed Consolidated Financial Statements

 

Note 8 – Other Receivables

 

At November 30, 2023 and February 28, 2023, the company has the following amounts related to other receivables:

 

          
   November 30, 2023   February 28, 2023 
     (unaudited)      
Other receivables represent:          
Advances to suppliers  $1,494,547   $1,082,636 
In-transit capital injection for a subsidiary   702,675    720,979 
Security deposit   1,028,537    154,202 
Others   719,765    593,848 
Other receivables  $3,945,524   $2,551,665 

 

Note 9 – 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 nine months ended November 30, 2023.

 

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

 

          
   November 30, 2023   February 28, 2023 
Right-of-use asset   (unaudited)      
Right-of-use asset, net  $42,105   $130,109 
           
Lease liability          
Current lease liability   $35,330   $122,924 
Non-current lease liability       4,971 
Total lease liability  $35,330   $127,895 

 

Remaining lease term and discount rate  November 30, 2023 
Weighted-average remaining lease term   4 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 November 30, 2023:

 

      
2023   $35,648 
Thereafter     
Less: imputed interest    (318)
    $35,330 

 

-17-

 

FINGERMOTION, INC.

Nine months ended November 30, 2023 and 2022

Notes to the Condensed Consolidated Financial Statements

 

Note 10 - Convertible Note Payable

 

A Note Payable having a Face Value of $730,000 at May 1, 2022 and accruing interest at 20% was due on April 30, 2023. The note was convertible anytime from the date of issuance into $0.0001 par value Common Stock at $4.00 per share.

 

On April 28, 2023, the Company repaid the Note Payable of $730,000.

 

A secured, two-year, interest-free convertible promissory note with a principal amount of $4,800,000 was issued on August 9, 2022 representing a funded amount of $4,000,000 and a coupon of 20% (the “Note”). The principal amount was payable commencing 180 days after the issuance in 18 consecutive monthly payments, at the option of the Company, to be made in either cash, shares of common stock of the Company, or a combination of cash and shares of the common stock of the Company. The note shall be available to be converted by the holder any time after the earlier of 6 months from the date of issuance or the date of effectiveness of the registration statement covering the applicable conversion shares into $0.0001 par value Common stock at $2.00 per share subject to adjustment as provided therein.

 

An event of default under the Note occurred on November 4, 2022 and on November 21, 2022 pursuant to section 2.1(e) of the Note in relation to the closing of our private placements of shares of common stock in the aggregate amount of 2,887,500 shares at a price of $4.00 per share for gross proceeds of $11,550,000 (the “Private Placement Proceeds”).

 

Section 2.2 of the Note provided for the remedies upon an event of default, which as described in the Note, the holder may at any time at its option declare the Note immediately due and payable at an amount of 110% or 120% of the outstanding principal amount (the “Mandatory Default Amount”) depending on the type of event of default. In addition, upon an event of default, subject to any applicable cure periods, the holder may (a) from time-to-time demand that all or a portion of the outstanding principal amount be converted into shares of our common stock at the lower of (i) the conversion price ($2.00 per share) and (ii) 80% of the average of the three (3) lowest daily VWAPs during the twenty (20) days prior to the delivery of the conversion notice, or (b) exercise or otherwise enforce any one or more of the holder’s rights, powers, privileges, remedies and interests under the Note, the Purchase Agreement, the other transaction documents or applicable law.

 

The Mandatory Default Amount for an event of default under Section 2.1(e) of the Note is 110% of the outstanding principal amount of the Note, which is $5,280,000. However, the holder has not declared the Mandatory Default Amount due and payable, which is the trigger for accelerating the Mandatory Default Amount to be due and payable.

 

On February 15, 2023 and February 22, 2023, the Investor provided notice of partial conversion of the Note of 500,000 shares respectively on each date amounting to a total conversion of $2,000,000 of principal amount. On March 17, 2023, the Investor again provided notice of conversion of the Note of 2,465,816 shares amounting to a total of conversion of $2,128,000 of principal amount. On or about April 6, 2023, the Company paid the full outstanding balance of the Note which also included the 10% Mandatory Default Amount.

 

In addition, section 5.7 of the Purchase Agreement provides that if we issued any equity interests, other than “Exempted Securities” (as defined in the Purchase Agreement), for aggregate proceeds to us of greater than $10,000,000 during the term of the Purchase Agreement, excluding offering costs and other expenses, unless otherwise waived in writing by and at the discretion of the holder, we will direct 25% of such proceeds from such issuance to repay the Note. We have advised the holder that the aggregate Private Placement Proceeds exceeded $10,000,000 and the holder did not seek to waive or require payment of 25% of the proceeds as repayment of the Note.

 

-18-

 

FINGERMOTION, INC.

Nine months ended November 30, 2023 and 2022

Notes to the Condensed Consolidated Financial Statements

 

Note 11 - Common Stock

 

The Company issued 1,261,566 shares of common stock for the year ended February 28, 2022 for consideration of $5,694,499, including 125,000 shares of common stock to consultants.

 

The Company issued 2,477,200 shares of common stock during the fiscal year ended February 28, 2022 pursuant to the conversion of promissory notes in the aggregate amount of $1,941,000.

 

The Company cancelled 15,000 shares of common stock during the fiscal year ended February 28, 2022 pursuant to a financial advisory service agreement.

 

On March 7, 2022 the Company issued 5,000 shares of our common stock at deemed price of $5.00 per share to one entity pursuant to a consulting agreement.

 

On March 23, 2022, the Company issued 10,000 shares of our common stock at a deemed price of $3.66 per share to one individual pursuant to a consulting agreement.

 

On March 23, 2022, the Company issued an aggregate of 25,000 shares of our common stock at a deemed price of $2.85 per share to two individuals and one entity pursuant to consulting agreements.

 

On April 14, 2022, the Company issued 5,000 shares of our common stock at a deemed price of $5.00 per share to one entity pursuant to a consulting agreement.

 

On April 28, 2022, the Company issued 50,000 shares of our common stock at a deemed price of $2.61 per share to one entity pursuant to a consulting agreement.

 

On April 28, 2022, the Company issued 5,000 shares of our common stock at a deemed price of $2.56 per share to one entity pursuant to a consulting agreement.

 

On April 28, 2022, the Company issued 20,000 shares of our common stock at a deemed price of $2.51 per share to one individual pursuant to a consulting agreement.

 

On May 10, 2022, the Company issued 5,000 shares of our common stock at a deemed price of $5.00 per share to one entity pursuant to a consulting agreement.

 

On May 10, 2022, the Company issued 5,000 shares of our common stock at a deemed price of $3.66 per share to one individual pursuant to a consulting agreement.

 

On May 12, 2022, the Company issued 20,000 shares of our common stock at a deemed price of $2.03 per share to one entity pursuant to a consulting agreement as amended.

 

On July 5, 2022, the Company issued 5,000 shares of our common stock at a deemed price of $5.00 per share to one entity pursuant to a consulting agreement.

 

On July 5, 2022, the Company issued an aggregate of 25,000 shares of our common stock at a deemed price of $2.85 per share to two individuals and one entity pursuant to consulting agreements.

 

On August 3, 2022, the Company issued 50,000 shares of our common stock at a deemed price of $1.22 per share to one entity pursuant to a consulting agreement.

 

On October 19, 2022, the Company issued an aggregate of 25,000 shares of our common stock at a deemed price of $2.85 per share to two individuals and one entity pursuant to consulting agreements.

 

On October 19, 2022, the Company issued 20,000 shares of our common stock at a deemed price of $1.70 per share to one entity pursuant to a consulting agreement.

 

-19-

 

FINGERMOTION, INC.

Nine months ended November 30, 2023 and 2022

Notes to the Condensed Consolidated Financial Statements

 

Note 11 - Common Stock (continued)

 

On October 19, 2022, the Company issued 10,000 shares of our common stock at a deemed price of $3.66 per share to one individual pursuant to a consulting agreement.

 

On October 19, 2022, the Company issued 5,000 shares of our common stock at a deemed price of $2.56 per share to one entity pursuant to a consulting agreement.

 

On October 24, 2022, the Company issued 100,000 shares of our common stock at price of $2.00 per share to two individuals pursuant to the exercise of warrants.

 

On October 24, 2022, the Company issued 70,000 shares of our common stock at price of $3.00 per share to one individual pursuant to the exercise of warrants.

 

On November 3, 2022, the Company issued 20,000 shares of our common stock at price of $3.00 per share to two individuals pursuant to the exercise of warrants.

 

On November 3, 2022, the Company issued 5,000 shares of our common stock at a deemed price of $1.70 per share to one entity pursuant to a consulting agreement.

 

On November 3, 2022, the Company issued 25,000 shares of our common stock at a deemed price of $1.22 per share to one entity pursuant to a consulting agreement.

 

On November 3, 2022, the Company issued 200,000 shares of our common stock at a deemed price of $0.74 per share to one individual pursuant to a consulting agreement.

 

On November 4, 2022, the Company issued an aggregate of 1,887,500 shares of common stock at a price of $4.00 per share to eleven individuals due to the closing of its private placement at $4.00 per share for aggregate gross proceeds of $7,550,000.

 

In connection with the closing of the private placement on November 4, 2022, the Company issued 91,875 shares of common stock at price of $4.00 per share for a total value of $367,500 to one individual as finder’s fees.

 

On November 21, 2022, the Company issued 1,000,000 shares of common stock at a price of $4.00 per share to one entity due to the closing of its private placement at $4.00 per share for aggregate gross proceeds of $4,000,000.

 

On January 19, 2023, the Company issued 5,000 shares of our common stock at a deemed price of $1.70 per share to one entity pursuant to a consulting agreement.

 

On January 19, 2023, the Company issued an aggregate of 25,000 shares of our common stock at a deemed price of $2.85 per share to two individuals and one entity pursuant to consulting agreements.

 

On January 19, 2023, the Company issued 125,000 shares of our common stock at a deemed price of $1.44 per share to one entity pursuant to a consulting agreement.

 

On January 19, 2023, the Company issued 16,313 shares of our common stock at a deemed price of $5.19 per share to one entity pursuant to a consulting agreement.

 

On January 19, 2023, the Company issued 40,000 shares of our common stock at a deemed price of $4.15 per share to one entity pursuant to a consulting agreement.

 

On February 7, 2023, the Company issued 1,721,766 shares of common stock at deemed price of $1.75 per share to its primary lender pursuant to the cashless exercise of warrants of the convertible promissory note (the “Note”) issued to the Company’s primary lender on August 9, 2022.

 

-20-

 

FINGERMOTION, INC.

Nine months ended November 30, 2023 and 2022

Notes to the Condensed Consolidated Financial Statements

 

Note 11 - Common Stock (continued)

 

On February 7, 2023, the Company issued 25,000 shares of our common stock at a deemed price of $1.22 per share to one entity pursuant to a consulting agreement.

 

On February 15, 2023, the Company issued 500,000 shares of common stock at price of $ 2.00 per share to its primary lender pursuant to the conversion of $1,000,000 of principal amount of the convertible promissory note (the “Note”) issued to the Company’s primary lender on August 9, 2022.

 

On February 22, 2023, the Company issued 500,000 shares of common stock at price of $2.00 per share to its primary lender pursuant to the conversion of $1,000,000 of principal amount of the convertible promissory note (the “Note”) issued to the Company’s primary lender on August 9, 2022

 

On February 28, 2023, the Company issued 150,000 shares of our common stock at a deemed price of $ 0.74 per share to one individual pursuant to a consulting agreement.

 

On February 28, 2023, the Company issued 7,500 shares of our common stock at a deemed price of $2.47 per share to one entity pursuant to a consulting agreement.

 

On March 17, 2023, the Company issued 2,465,816 shares of common stock at price of $0.863 per share to our primary lender pursuant to the conversion of $2,128,000 of principal amount of the Note issued to our primary lender on August 9, 2022.

 

On April 18, 2023, the Company issued 20,000 shares of common stock at a price of $3.00 per share pursuant to the exercise of warrants.

 

On April 24, 2023, the Company issued 70,000 shares of our common stock at a deemed price of $1.64 per share to one entity pursuant to a consulting agreement.

 

On July 17, 2023, the Company issued 121,422 shares of our common stock at a deemed price of $1.75 per share to The Benchmark Company, LLC (“Benchmark”) pursuant to the cashless exercise of warrants.

 

On August 3, 2023, the Company issued 260,000 shares of our common stock at a price of $3.00 per share to three individuals pursuant to the exercise of warrants.

 

On August 3, 2023, the Company issued 12,500 shares of our common stock at a deemed price of $2.47 per share to one entity pursuant to a consulting agreement.

 

On September 5, 2023, the Company issued 2,500 shares of our common stock at a deemed price of $2.47 per share to one entity pursuant to a consulting agreement and issued 70,000 shares of our common stock at a deemed price of $1.64 per share to one entity pursuant to a consulting agreement.

 

On September 14, 2023, two officers of the Company exercised an aggregate of 180,400 stock options on a deemed net-stock exercise basis resulting in the issuance of an aggregate of 90,898 shares of our common stock and the forfeiture of 89,502 stock options to the Company.

 

As of November 30, 2023 there were 52,545,350 shares of the Company’s common stock issued and outstanding, and none of the preferred shares were issued and outstanding.

 

-21-

 

FINGERMOTION, INC.

Nine months ended November 30, 2023 and 2022

Notes to the Condensed Consolidated Financial Statements

 

Share Purchase Warrants

 

A continuity schedule of outstanding share purchase warrants as at November 30, 2023, and the changes during the periods, is as follows:

 

          
   Number of
Warrants
   Weighted Average
Exercise Price
 
Balance, February 28, 2020      $ 
Issued in Connection with October 2020 Offering   488,500   $2.10 
Issued in connection with January 2021 Offering   1,604,334   $3.00 
Exercised   (25,000)  $2.00 
Balance, February 28, 2021   2,067,834   $2.80 
Exercised   (221,666)  $2.44 
Balance, February 28, 2022   1,846,168   $2.84 
   Issued in Connection with August 2022 Offering   3,478,261   $1.75 
   Expired   (50,000)  $3.00 
   Issued in Connection with August 2022 Offering   168,000   $1.75 
   Issued in Connection with September 2022 Offering   350,000   $5.00 
   Issued in Connection with November 2022 Offering   28,312   $8.22 
   Issued in Connection with November 2022 Offering