What changed in this filing

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Item 7. Management’s Discussion and Analysis

2024-05-29 compared with 2023-05-30 · 619 added, 483 removed, 34 unchanged (97% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

following management’s discussion and analysis of the Company’s financial condition and results of operations contain forward-looking

statements that involve risks, uncertainties and assumptions including, among others, statements regarding our capital needs, business

plans and expectations.

In evaluating these statements, you should consider various factors, including the risks, uncertainties and assumptions

set forth in reports and other documents we have filed with or furnished to the SEC and, including, without limitation, this Annual Report

on Form 10-K filing for the fiscal year ended February 28, 2023, including the consolidated financial statements and related notes contained

These factors, or any one of them, may cause our actual results or actions in the future to differ materially from any forward-looking

statement made in this document.

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following management’s discussion

and analysis of the Company’s financial condition and results of operations contain forward-looking statements that involve risks,

uncertainties and assumptions including, among others, statements regarding our capital needs, business plans and expectations.

In evaluating

these statements, you should consider various factors, including the risks, uncertainties and assumptions set forth in reports and other

documents we have filed with or furnished to the SEC and, including, without limitation, this Annual Report on Form 10-K filing for the

fiscal year ended February 29, 2024, including the consolidated financial statements and related notes contained herein.

These factors,

or any one of them, may cause our actual results or actions in the future to differ materially from any forward-looking statement made

in this document.

Refer to “Cautionary Note Regarding Forward-looking Statements” and Item 1A.

Risk Factors.

following discussion summarizes the results of operations for each of our fiscal years ended February 28, 2023 and February 28, 2022

and our financial condition as at February 28, 2023 and February 28, 2022, with a particular emphasis on fiscal 2023, our most recently

completed fiscal year.

Company is a mobile data specialist company that operates the following lines of business:

The following discussion summarizes the results

of operations for each of our fiscal years ended February 29, 2024 and February 28, 2023 and our financial condition as at February 29,

2024 and February 28, 2023, with a particular emphasis on fiscal 2024, our most recently completed fiscal year.

The Company is a mobile data specialist company

incorporated in Delaware, USA, with its head office located at 111 Somerset Road, Level 3, Singapore 238164.

The Company operates the

following lines of business:

(i) Telecommunications Products and Services;

(ii) Value Added Product and Services;

(iii) SMS and MMS;

(iv) a RCS platform;

(ii) Value Added Products and Services (iii) Short Message

Services (“ SMS ”) and Multimedia Messaging Services (“ MMS ”);

(iv) a Rich Communication Services (“ RCS ”)

(v) Big Data Insights;

and (vi) a Video Game Division

Telecommunications

Products and Services

Company’s current product mix consisting of payment and recharge services, data plans, subscription plans, mobile phones, loyalty

points redemption and other products bundles (i.e.

and (vi) a Video Games Division (inactive).

Telecommunications Products and Services

The Company’s current product mix consisting

of payment and recharge services, data plans, subscription plans, mobile phones, loyalty points redemption and other products bundles

mobile protection plans).

Chinese mobile phone consumers often utilize third-party

e-marketing websites to pay their phone bills.

If the consumer connected directly to the telecommunications provider to pay his or her

bill, the consumer would miss out on any benefits or marketing discounts that e-marketers provide.

Thus, consumers log on to these e-marketer’s

websites, click into their respective phone provider’s store, and “top up,” or pay, their telecommunications provider

for additional mobile data and talk time.

connect to the respective mobile telecommunications providers, these e-marketers must utilize a portal licensed by the applicable telecommunication

company that processes the payment.

We have been granted one of these licenses by China Unicom and China Mobile, each of which is a major

telecommunications provider in China.

We principally earn revenue by providing mobile payment and recharge services to customers of China

Unicom and China Mobile.

conduct our mobile payment business through JiuGe Technology, our contractually controlled affiliate through the entry into a series

of agreements known as VIE Agreements in October 2018.

In the first half of 2018, JiuGe Technology secured contracts with China Unicom

and China Mobile to distribute mobile data for businesses and corporations in nine provinces/municipalities, namely Chengdu, Jiangxi,

Jiangsu, Chongqing, Shanghai, Zhuhai, Zhejiang, Shaanxi, Inner Mongolia, Henan and Fujian.

In September 2018, JiuGe Technology launched

and commercialized mobile payment and recharge services to businesses for China Unicom.

In May 2021, JiuGe Technology signed a volume-based

agreement with China Mobile Fujian to offer recharge services to the Fujian province which we have launched and commercialized in November

JiuGe Technology mobile payment and recharge platform enables the seamless delivery of real-time payment and recharge services to third-party

channels and businesses.

We earn a rebate from each telecommunications company on the funds paid by consumers to the telecommunications

companies we process.

To encourage consumers to utilize our portal instead of using our competitors’ platforms or paying China

Unicom or China Mobile directly, we offer mobile data and talk time at a rate discounted from these companies’ stated rates, which

are also the rates we must pay to them to purchase the mobile data and talk time provided to consumers through the use of our platform.

Accordingly, we earn income on the rebates we receive from China Unicom and China Mobile, reduced by the amounts by which we discount

the mobile data and talk time sold through our platform.

started and commercialized its “Business to Business” (“ B2B ”) model by integrating with various e-commerce

platforms to provide its mobile payment and recharge services to subscribers or end consumers.

In the first quarter of 2019 FingerMotion

expanded its business by commercializing its first “Business to Consumer” (“ B2C ”) model, offering the

telecommunication providers’ products and services, including data plans, subscription plans, mobile phones, and loyalty points

redemption, directly to subscribers or customers of the e-commerce companies, such as PinDuoDuo (“ PDD ”), TMall (“ TMALL ”)

and JD.Com (“ JD ”).

The Company is planning to further expand its universal exchange platform by setting up B2C stores

on several other major e-commerce platforms in China.

In addition to that, we have been assigned as one of China’s Mobile’s

loyalty redemption partner where we will be providing the services for their customers via our platform.

Additionally,

as previously disclosed, on July 7, 2019, JiuGe Technology, our contractually controlled affiliate, entered into that certain Cooperation

Agreement with China Unicom’s Yunnan subsidiary.

Under the Cooperation Agreement, JiuGe Technology is responsible for constructing

and operating China Unicom’s electronic sales platform through which consumers can purchase various goods and services from China

Unicom, including mobile telephones, mobile telephone service, broadband data services, terminals, “smart” devices and related

financial insurance.

The Cooperation Agreement provides that JiuGe Technology is required to construct and operate the platform’s

webpage in accordance with China Unicom’s specifications and policies, and applicable law, and bear all expenses in connection

As consideration for the service it provides under the Cooperation Agreement, JiuGe Technology receives a percentage of the

revenue received from all sales it processes for China Unicom on the platform.

The Cooperation Agreement expires three years from the

date of its signature with yearly auto-renewal terms, but it may be terminated by (i) JiuGe Technology upon three months’ written

notice or (ii) by China Unicom unilaterally.

the recent fiscal year, the Company expanded its offering under their telecommunication product and services by increasing their product

line revenue streams.

In March 2020, FingerMotion secured a contract with both China Mobile and China Unicom to acquire new users to

take up the respective subscription plans.

February 2021, we increased the mobile phones sales to end users using all of our platforms.

This business will continue to contribute

to the overall revenue for the group as part of our offering to our customers.

Added Product and Services

are new product and services that the Company expects to secure and work with the telecommunication provider and all our e-commerce platform

partners to market.

The current and upcoming value-added product is the Mobile Protection programs which we plan to launch soon.

2022, our contractually controlled subsidiary, JiuGe Technology, through its 99% own subsidiary TengLian signed an agreement with both

China Unicom and China Mobile to co-operate to roll out the Mobile Device Protection product which is incorporated into the Telecommunication

subscription plans in line with their roll out of new mobile phones and new 5G phones.

In mid-July 2022, we launched the roll out of

the Mobile Device protection product with the roll out of the new mobile phones and 5G phones.

and MMS Services

March 7, 2019, the Company through JiuGe Technology acquired Beijing Technology, a company in the business of providing mass SMS text

services to businesses looking to communicate with large numbers of their customers and prospective customers.

With this acquisition,

the Company expanded into a second partnership with the telecom companies by acquiring bulk SMS and MMS bundles at reduced prices and

offering bulk SMS services to end consumers with competitive pricing.

FingerMotion’s subsidiary, Beijing Technology, retains a

license from the Ministry of Industry and Information Technology (“MIIT”) to operate the SMS and MMS business in the

Similar to the mobile payment and recharge business, Beijing Technology is required to make a deposit or bulk purchase in advance

and has secured business customers, including premium car manufacturers, hotel chains, airlines and e-commerce companies, that utilize

Beijing Technology’s SMS integrated platform to send bulk SMS text messages monthly.

Beijing Technology has the capability to manage

and track the entire process, including guiding the Company’s customer to meet MIIT’s guidelines on messages composed, until

the SMS messages have been delivered successfully.

Communication Services

March 2020, the Company began the development of an RCS platform, also known as Messaging as a Platform (“MaaP”).

platform will be a proprietary business messaging platform that enables businesses and brands to communicate and service their customers

on the 5G infrastructure, delivering a better and more efficient user experience at a lower cost.

For example, with the new 5G RCS message

service, consumers will have the ability to list available flights by sending a message regarding a holiday and will also be able to

book and buy flights by sending messages.

This will allow telecommunication providers like China Unicom and China Mobile to retain users

on their systems, without having to utilize third party apps or log onto the Internet, which will increase their user retention.

this to open up a new marketing channel for the Company’s current and prospective business partners.

Data Insights

July 2020, the Company launched its proprietary technology platform “Sapientus” as its big data insights arm to deliver data-driven

solutions and insights for businesses within the insurance, healthcare, and financial services industries.

The Company applies its vast

experience in the insurance and financial services industry and capabilities in technology and data analytics to develop revolutionary

solutions targeted towards insurance and financial consumers.

Integrating diverse publicly available information, insurance and financial

based data with technology and finally registering them into the FingerMotion telecommunications and insurance ecosystem, the Company

would be able to provide functional insights and facilitate the transformation of key components of the insurance value chain, including

driving more effective and efficient underwriting, enabling fraud evaluation and management, empowering channel expansion and market

penetration through novel product innovation, and more.

The ultimate objective is to promote, enhance and deliver better value to our

partners and customers.

Company’s proprietary risk assessment engine offers standard and customized scoring and appraisal services based on multi-dimensional

The Company has the ability to provide potential customers and partners with insights-driven and technology-enabled solutions

and applications including preferred risk selection, precision marketing, product customization, and claims management (e.g., fraud detection).

The Company’s mission is to deliver the next generation of data-driven solutions in the financial services, healthcare, and insurance

industries that result in more accurate risk assessments, more efficient processes, and a more delightful user experience.

or around January 25, 2021, the Company’s wholly owned subsidiary, Finger Motion Financial Company Limited’s, big data analytic

arm branded “Sapientus,” entered into a services agreement with Pacific Life Re, a global life reinsurer serving the insurance

industry with a comprehensive suite of products and services.

December 2021, the Company through JiuGe Technology formed a collaborative research alliance with Munich Re in extending behavioral analytics

to enhance understanding of morbidity and behavioral patterns in China market, with the goal of creating value for both insurers and

the end insurance consumers through better technology, product offerings and customer experience.

Video Game Division

video game industry covers multiple sectors and is currently experiencing a move away from physical games towards digital software.

in technology and streaming now allow users to download games rather than visiting retailers.

Video game publishers are expanding their

direct-to-consumer channels with mobile gaming, the current growth leader, and eSports and virtual reality gaining momentum as the next

In June 2018, we temporarily paused its publishing and operating plans for existing games, and the Company’s Board

of Directors decided to re-focus the company’s resources into new business opportunities in China, particularly the mobile phone

payment and data business.

or around October 2022, our contractually controlled subsidiary, JiuGe Technology signed a cooperation agreement with Suning.com to expand

our reach to the China market.

Sunning.com is a portal that primarily caters to consumers shopping for home appliances, consumer electronics,

health, and beauty products.

or around December 2022, our contractually controlled subsidiary, JiuGe Technology and Munich Re, a large global reinsurer, have set

the stage for extension of their ongoing behavioral research and analytic studies into commercial implementation in the China market.

Through a proprietary behaviour intelligence system developed by “Sapientus”, the analytic innovation development arm of

FingerMotion, the companies will bring forward their jointly developed model algorithms and analytic insights for productionized applications

and wider market adoption.

or about April 6, 2023, we eliminated our remaining convertible debt with our primary lender as a result of conversions by the primary

lender and payment by us to the primary lender.

April 28, 2023, we repaid in full the US$730,000 convertible note that was issued in favor of Dr.

Chinese mobile phone consumers often utilize third-party e-marketing websites to pay their phone bills.

If the consumer connected directly to the telecommunications provider to pay his or her bill, the consumer would miss out on any benefits

or marketing discounts that e-marketers provide.

Thus, consumers log on to these e-marketer’s websites, click into their respective

phone provider’s store, and “top up,” or pay, their telecommunications provider for additional mobile data and talk

To connect to the respective mobile telecommunications

providers, these e-marketers must utilize a portal licensed by the applicable telecommunication company that processes the payment.

have been granted one of these licenses by China United Network Communications Group Co., Ltd.

(“ China Unicom ”) and

China Mobile Communications Corporation (“ China Mobile ”), each of which is a major telecommunications provider in China.

We principally earn revenue by providing mobile payment and recharge services to customers of China Unicom and China Mobile.

We conduct our mobile payment business through

JiuGe Technology, our contractually controlled affiliate through the entry into the VIE Agreements in October 2018.

In the first half

of 2018, JiuGe Technology secured contracts with China Unicom and China Mobile to distribute mobile data for businesses and corporations

in nine provinces/municipalities, namely Chengdu, Jiangxi, Jiangsu, Chongqing, Shanghai, Zhuhai, Zhejiang, Shaanxi, Inner Mongolia, Henan

In September 2018, JiuGe Technology launched and commercialized mobile payment and recharge services to businesses for China

In May 2021, JiuGe Technology signed a volume-based agreement with China Mobile Fujian to offer recharge services to the Fujian

province which we have launched and commercialized in November 2021.

The JiuGe Technology mobile payment and recharge

platform enables the seamless delivery of real-time payment and recharge services to third-party channels and businesses.

We earn a rebate

from each telecommunications company on the funds paid by consumers to the telecommunications companies we process.

To encourage consumers

to utilize our portal instead of using our competitors’ platforms or paying China Unicom or China Mobile directly, we offer mobile

data and talk time at a rate discounted from these companies’ stated rates, which are also the rates we must pay to them to purchase

the mobile data and talk time provided to consumers through the use of our platform.

Accordingly, we earn income on the rebates we receive

from China Unicom and China Mobile, reduced by the amounts by which we discount the mobile data and talk time sold through our platform.

FingerMotion started and commercialized its “Business

to Business” (“ B2B ”) model by integrating with various e-commerce platforms to provide its mobile payment and

recharge services to subscribers or end consumers.

In the first quarter of 2019 FingerMotion expanded its business by commercializing

its first “Business to Consumer” (“ B2C ”) model, offering the telecommunication providers’ products

and services, including data plans, subscription plans, mobile phones, and loyalty points redemption, directly to subscribers or customers

of the e-commerce companies, such as PinDuoDuo (“ PDD ”), TMall (“ TMALL ”) and JD.Com.

is planning to further expand its universal exchange platform by setting up B2C stores on several other major e-commerce platforms in

In addition to that, we have been assigned as one of China’s Mobile’s loyalty redemption partner where we will be providing

the services for their customers via our platform.

Additionally, as previously disclosed, on July

7, 2019, JiuGe Technology, our contractually controlled affiliate, entered into that certain Cooperation Agreement with China Unicom Yunnan,

whereby JiuGe Technology is responsible for constructing and operating China Unicom’s electronic sales platform through which consumers

can purchase various goods and services from China Unicom, including mobile telephones, mobile telephone service, broadband data services,

terminals, “smart” devices and related financial insurance.

The Cooperation Agreement provides that JiuGe Technology is required

to construct and operate the platform’s webpage in accordance with China Unicom’s specifications and policies, and applicable

law, and bear all expenses in connection therewith.

As consideration for the service JiuGe Technology provides under the Cooperation Agreement,

it receives a percentage of the revenue received from all sales it processes for China Unicom on the platform.

The Cooperation Agreement

expires three years from the date of its signature with a yearly auto-renewal clause, which is currently in an auto-renewal period, but

it may be terminated by (i) JiuGe Technology upon three months’ written notice or (ii) by China Unicom unilaterally.

During the recent fiscal year, the Company expanded

its offering under their telecommunication product and services by increasing their product line revenue streams.

In March 2020, FingerMotion

secured a contract with both China Mobile and China Unicom to acquire new users to take up the respective subscription plans.

In February 2021, we increased the mobile phones

sales to end users using all of our platforms.

This business will continue to contribute to the overall revenue for the group as part

of our offering to our customers.

Value Added Product and Services

These are new product and services that the Company

expects to secure and work with the telecommunication provider and all our e-commerce platform partners to market.

In February 2022, our

contractually controlled subsidiary, JiuGe Technology, through its 99% own subsidiary TengLian signed an agreement with both China Unicom

and China Mobile to co-operate to roll out the Mobile Device Protection product which is incorporated into the Telecommunication subscription

plans in line with their roll out of new mobile phones and new 5G phones.

In mid-July 2022, we launched the roll out of the Mobile Device

protection product with the roll out of the new mobile phones and 5G phones.

Complementing our hardware protection services, we have

introduced the cloud services designed to offer corporate customers robust data storage, processing capabilities, and databases accessible

via the internet.

SMS and MMS Services

On March 7, 2019, the Company through JiuGe Technology

acquired Beijing Technology Co, a company in the business of providing mass SMS text services to businesses looking to communicate with

large numbers of their customers and prospective customers.

With this acquisition, the Company expanded into a second partnership with

the telecom companies by acquiring bulk SMS and MMS bundles at reduced prices and offering bulk SMS services to end consumers with competitive

Beijing Technology retains a license from MIIT to operate the SMS and MMS business in the PRC.

Similar to the mobile payment

and recharge business, Beijing Technology is required to make a deposit or bulk purchase in advance and has secured business customers,

including premium car manufacturers, hotel chains, airlines and e-commerce companies, that utilize Beijing Technology’s SMS integrated

platform to send bulk SMS text messages monthly.

Beijing Technology has the capability to manage and track the entire process, including

guiding the Company’s customer to meet MIIT’s guidelines on messages composed, until the SMS messages have been delivered

successfully.

Rich Communication Services

In March 2020, the Company began the development

of an RCS platform, also known as Messaging as a Platform (“ MaaP ”).

This RCS platform will be a proprietary business

messaging platform that enables businesses and brands to communicate and service their customers on the 5G infrastructure, delivering

a better and more efficient user experience at a lower cost.

For example, with the new 5G RCS message service, consumers will have the

ability to list available flights by sending a message regarding a holiday and will also be able to book and buy flights by sending messages.

This will allow telecommunication providers like China Unicom and China Mobile to retain users on their systems, without having to utilize

third party apps or log onto the Internet, which will increase their user retention.

We expect this to open up a new marketing channel

for the Company’s current and prospective business partners.

Currently, the deployment of this RCS platform is under review, with

discussion ongoing among government bodies, major service providers, and telecommunication companies.

These deliberations aim to assess

the potential market impacts and establish the necessary consents before the launch, considering the significant changes the platform

may introduce to user interactions with existing services.

The discussion seeks to ensure that all stakeholders’ concerns are addressed

comprehensively.

Once these issues are resolved and the necessary approval is obtained, we anticipate a substantial enhancement in our

service offerings and an expansion of our market reach.

Big Data Insights

In July 2020, the Company launched its proprietary

technology platform “Sapientus” as its big data insights arm to deliver data-driven solutions and insights for businesses

within the insurance, healthcare, and financial services industries.

The Company applies its vast experience in the insurance and financial

services industry and capabilities in technology and data analytics to develop revolutionary solutions targeted towards insurance and

financial consumers.

Integrating diverse publicly available information, insurance and financial based data with technology and finally

registering them into the FingerMotion telecommunications and insurance ecosystem, the Company would be able to provide functional insights

and facilitate the transformation of key components of the insurance value chain, including driving more effective and efficient underwriting,

enabling fraud evaluation and management, empowering channel expansion and market penetration through novel product innovation, and more.

The ultimate objective is to promote, enhance and deliver better value to our partners and customers.

The Company’s proprietary risk assessment

engine offers standard and customized scoring and appraisal services based on multi-dimensional factors.

The Company has the ability to

provide potential customers and partners with insights-driven and technology-enabled solutions and applications including preferred risk

selection, precision marketing, product customization, and claims management (e.g., fraud detection).

The Company’s mission is to

deliver the next generation of data-driven solutions in the financial services, healthcare, and insurance industries that result in more

accurate risk assessments, more efficient processes, and a more delightful user experience.

On or around January 25, 2021, the Company’s

wholly owned subsidiary, Finger Motion Financial Company Limited’s, big data analytic arm branded “Sapientus,” entered

into a services agreement with Pacific Life Re, a global life reinsurer serving the insurance industry with a comprehensive suite of products

and services.

In December 2021, the Company through JiuGe Technology

formed a collaborative research alliance with Munich Re in extending behavioral analytics to enhance understanding of morbidity and behavioral

patterns in China market, with the goal of creating value for both insurers and the end insurance consumers through better technology,

product offerings and customer experience.

Our Video Game Division

The video game industry covers multiple sectors

and is currently experiencing a move away from physical games towards digital software.

Advances in technology and streaming now allow

users to download games rather than visiting retailers.

Video game publishers are expanding their direct-to-consumer channels with mobile

gaming, the current growth leader, and eSports and virtual reality gaining momentum as the next big sectors.

In June 2018, we temporarily

paused its publishing and operating plans for existing games, and the Company’s Board of Directors decided to re-focus the Company’s

resources into new business opportunities in China, particularly the mobile phone payment and data business.

Recent Developments

April 6, 2023, we eliminated our remaining convertible debt with our primary lender as a result of conversions by the primary lender and

payment by us to the primary lender.

28, 2023, we repaid in full the US$730,000 convertible note that was issued in favor of Dr.

Liew Yow Ming on May 1, 2022.

of Operations

Ended February 28, 2023 Compared to Year Ended February 28, 2022

following table sets forth our results of operations for the fiscal years ended February 28, 2023 and February 28, 2022:

On or about May 12, 2023,

our contractually controlled subsidiary, JiuGe Technology signed a cooperation agreement with Migu Video Technology Co., Ltd.

in-depth collaboration on overseas hardware and terminal business.

On July 28, 2023, we

granted an aggregate of 2,648,500 stock options pursuant to our 2023 Stock Incentive Plan, each having an exercise price of $4.62 per

Common Share and an expiry date of five years from the date of grant to 22 individuals who are employees of our subsidiaries and contractually

controlled affiliate.

Such stock options are subject to vesting provisions of 20% on the date of grant and 20% on each of the first, second,

third and fourth anniversary of the date of grant.

On September 11, 2023,

we entered into an At-The-Market Issuance Sales Agreement with Univest Securities, LLC (the “ Sales Agent ”), pursuant

to which we may issue and sell, from time to time, Common Shares having an aggregate offering price of not more than $25,000,000 through

the Sales Agent or any of its sub-agent(s) or other designees, acting as sales agent.

Such Common Shares are registered pursuant to our

shelf Registration Statement on Form S-3 (File No.

333-274456) filed on September 11, 2023, which was declared effective by the SEC on

September 29, 2023.

On or around January

10, 2024, our contractually controlled subsidiary, JiuGe Technology, launched a new consumer application called “Da Ge” introducing

subscribers to services such as car washing, detailing and maintenance, linking automobile owners with full service independent service

On April 17, 2024, our

contractually controlled subsidiary, JiuGe Technology, is entering into arrangements with certain electric vehicle (“EV”)

charging station providers in the PRC to allow EV owners who have subscribed to the Da Ge app to locate and charge their vehicles, which

is expected to significantly expand Da Ge’s usage.

Results of Operations

Year Ended February 29, 2024 Compared to

Year Ended February 28, 2023

The following table sets forth our results of

operations for the fiscal years ended February 29, 2024 and February 28, 2023:

February 29, 2024

February 28, 2023

operating expenses

other income (expenses)

Loss attributable to the Company’s shareholders

currency translation adjustment

Comprehensive

loss attributable to the Company

Loss Per Share attributable to the Company

following table sets forth the Company’s revenue from its three lines of business for the periods indicated:

Cost of revenue

$ (31,929,967 )

$ (31,735,735 )

Total operating expenses

$ (7,679,407 )

$ (8,984,535 )

Total other income (expenses)

Net Loss attributable to the Company’s shareholders

$ (3,757,519 )

$ (7,539,142 )

Foreign currency translation adjustment

Comprehensive loss attributable to the Company

$ (4,148,449 )

$ (8,068,212 )

Basic Loss Per Share attributable to the Company

Diluted Loss Per Share attributable to the Company

The following table sets forth the Company’s

revenue from its three lines of business for the periods indicated:

February 29, 2024

February 28, 2023

Telecommunication

Products & Services

& MMS Business

recorded $34,054,205 in revenue for the year ended February 28, 2023, an increase of $11,126,790 or 49%, compared to the year ended February

This increase resulted from an increase in revenue of $18,349,701 and $306,082 from our Telecommunication Products & Services

and Big Data business, respectively, offset in part by a decrease in revenue of $7,528,993 from our SMS & MMS business.

We principally

earn revenue by providing mobile payment and recharge services to customers of telecommunications companies in China.

Specifically, we

earn a negotiated rebate amount from the telecommunications companies for all monies paid by consumers to those companies that we process.

The increase in this line of business especially in the mobile recharge revenue was evident as we deployed certain funding that we had

secured in the last few months to this line of business.

We plan to continue to develop our mobile recharge business and expect that

revenues would continue to grow further when we continue to deploy more funds.

In contrast, our SMS texting service has shown a drop

in revenue as compared to last year.

We are facing some challenges in this line of business due to the ongoing Covid outbreak in China.

During the first half year of the last fiscal year, our Big Data division secured a contract with Pacific Life Re, a global life reinsurance

serving the insurance industry with a comprehensive suite of products and services, to develop a holistic multi-faceted risk rating concept,

leveraging the Company’s proprietary approach to analytics by drawing data from novel sources and filtering them through advance

algorithms with the ultimate goal to apply new insights generated from our predictive model to the traditional insurance industry.

August 2022, after a successful project with Pacific Life Re in Asia, we secured a further contract to advance to the next phase of collaboration

which has contributed to the current revenue recorded.

following table sets forth the Company’s cost of revenue for the periods indicated:

Telecommunication Products & Services

SMS & MMS Business

Total Revenue

We recorded $35,791,685 in revenue for the year

ended February 29, 2024, an increase of $1,737,480 or 5%, compared to the year ended February 28, 2023.

This increase resulted from an

increase in revenue of $5,783,968 from our Telecommunication Products & Services;

offset in part by a decrease in revenue of $3,936,901

and $109,587 from our SMS & MMS business and Big Data business, respectively.

We principally earn revenue by providing mobile payment

and recharge services to customers of telecommunications companies in China.

Specifically, we earn a negotiated rebate amount from the

telecommunications companies for all monies paid by consumers to those companies that we process.

The increase in this line of business

primarily stemmed from the enhancement of mobile recharge services provided to the consumer base of our partnering telecommunication firms.

Moreover, the overall revenue increase was also supported by ancillary services, notably our cloud-based business offerings.

sustained growth for this segment as we strategize to allocate more resources in the near future.

Contrastingly, our SMS and MMS business

has reduced substantially as compared to the previous year.

Changes in the government protocol for SMS and MMS distribution resulted in

a significant decline in our revenue in this sector, compelling us to focus on our other business lines.

However, it’s imperative

to note that we remain optimistic about the SMS and MMS business.

It continues to hold significance in our broader financial picture,

and we are actively re-evaluating our approach to adapt to these changes and uncover alternative avenues for growth within this segment.

In shifting focus to our Big Data business in FY2021, we forged a valuable alliance with Pacific Life Re, a global life reinsurance serving

the insurance industry with a comprehensive suite of products and services, to develop a holistic multi-faceted risk rating concept, leveraging

the Company’s proprietary approach to analytics by drawing data from novel sources and filtering them through advance algorithms

with the ultimate goal to apply new insights generated from our predictive model to the traditional insurance industry.

Building upon

the successful implementation of the initial phase, Pacific Life Re proceeded with Phase 2 in the previous fiscal year.

During the last

quarter of FY2022, we established a collaborative research alliance with Munich Re in extending behavioral analytics to enhance understanding

of morbidity and behavioral patterns in the Chinese market.

The objective is to create value for both insurers and the end insurance consumers

through technology advancements, improved product offerings and enhanced customer experiences.

Following the successful execution of our

joint initiatives with Munich Re, we are now in active discussion to develop a new partnership arrangement.

Cost of Revenue

The following table sets forth the Company’s cost of revenue

for the periods indicated:

February 29, 2024

February 28, 2023

Telecommunication

Products & Services

& MMS Business

Cost of Revenue

recorded $31,735,735 in costs of revenue for the year ended February 28, 2023, an increase of $11,622,441 or 58%, compared to the year

ended February 28, 2022.

As previously mentioned, we principally earn revenue by providing mobile payment and recharge services to customers

of telecommunications companies, subscription plans and mobile phone sales in China.

To earn this revenue, we incur cost of the product,

certain customer acquisition costs, including discounts to our customers and promotional expenses, which is reflected in our cost of

gross profit for the year ended February 28, 2023 was $2,318,470, a decrease of $495,651 or 18%, compared to the year ended February

This decrease in gross profit resulted from lower profit margin for the period.

The gross profit margin for the fiscal year

ended February 28, 2023 is 6.80% compared to a gross margin of 12.27% for the fiscal year ended February 28, 2022.

& Depreciation

recorded depreciation of $63,103 for fixed assets for the year ended February 28, 2023, an increase of $5,209 or 9%, compared to the

year ended February 28, 2022.

This increase resulted from the purchase of equipment.

and Administrative Expenses

following table sets forth the Company’s general and administrative expenses for the periods indicated:

Telecommunication Products & Services

SMS & MMS Business

Total Cost of Revenue

We recorded $31,929,967 in costs of revenue for

the year ended February 29, 2024, an increase of $194,232 or 1%, compared to the year ended February 28, 2023.

As previously mentioned,

we principally earn revenue by providing mobile payment and recharge services to customers of telecommunications companies, subscription

plans and mobile phone sales in China.

To earn this revenue, we incur cost of the product, certain customer acquisition costs, including

discounts to our customers and promotional expenses, which is reflected in our cost of revenue.

Our gross profit for the year ended February 29,

2024 was $3,861,718, an increase of $1,543,248 or 67%, compared to the year ended February 28, 2023.

The substantial rise in gross profit

was attributed to not only our increase in revenue but also to a strategic enhancement of our product mix within the Telecommunication

Products & Services, most notably in our cloud-based business offerings.

The refined focus on the product mix has been pivotal, as

it comes with higher margins that significantly contribute to the improved gross profits.

This strategic shift emphasizes our commitment

to optimizing profitability, rather than pursuing revenue growth alone, ensuring a more sustainable and margin-focused business model.

Amortization & Depreciation

We recorded depreciation of $70,909 for fixed

assets for the year ended February 29, 2024, an increase of $7,806 or 12%, compared to the year ended February 28, 2023.

General and Administrative Expenses

The following table sets forth the Company’s general and administrative

expenses for the periods indicated:

February 29, 2024

1 unchanged sentence

Entertainment

recorded $5,675,113 in general and administrative expenses for the year ended February 28, 2023, an increase of $394,531 or 7%, compared

to the year ended February 28, 2022.

The increased in travelling and other expenses are principally due to the funding exercise and the

Company’s promotional activities during the period.

following table sets forth the Company’s marketing cost for the periods indicated:

Salaries & Wages

Stock Option Compensation Expenses

Technical Fee

Total G&A Expenses

We recorded $6,583,481 in general and administrative

expenses for the year ended February 29, 2024, an increase of $908,368 or 16%, compared to the year ended February 28, 2023.

encompasses a range of costs integral to the Company’s ongoing operational and administrative requirements.

The expenses include,

but are not limited to, regulatory filings, professional services fees, ongoing funding activities, and other costs associated with adhering

to both domestic and international operational standards and requirements.

This increase reflects our focus on strengthening governance

and ensuring compliance, key to our growth and agility in the market.

Marketing Cost

The following table sets forth the Company’s

marketing cost for the periods indicated:

February 29, 2024

February 28, 2023

recorded $430,291 in marketing cost for the year ended February 28, 2023, a decrease $211,626 or 33% compared to the year ended February

This decrease resulted from the product mix to meet the current market scenario which incurred less promotional activities.

Marketing costs represent the costs of promoting our product offerings through all our platforms.

& Development

following table sets forth the Company’s research & development for the periods indicated:

Marketing Cost

We recorded $140,052 in marketing cost for the

year ended February 29, 2024, a decrease $290,239 or 67% compared to the year ended February 28, 2023.

These marketing costs were for

our telecommunication products and services business.

Marketing costs represent the costs of promoting our product offerings through all

our platforms.

Research & Development

The following table sets forth the Company’s

research & development for the periods indicated:

February 29, 2024

February 28, 2023

& Development – Big Data

recorded $797,549 in research & development for the year ended February 28, 2023, as compared to $923,387 for the year ended February

The decrease of $125,838 or 14% was due to the savings from data access and usage fee charged by telecommunications company.

Insurtech division focuses on consumer behavioral insights extraction for the purpose of risk assessment.

Insights are mined from a multitude

of data sources, harmonized with the objectives of our various business partners.

The initial phase of business application is to focus

on the insurance industry, particularly in the area of underwriting risk rating, complementary claims adjudication and assessment, and

risk segmentation & market penetration.

division comprises of experienced actuaries, data scientists, and computer programmers.

expenses for research & development include associated wages and salaries, data access fees and IT infrastructure.

the past year, we have deepened the Company’s determined commitment toward working with partners in elucidating consumer insights

via big data algorithms and applying behavioral analytics to the fintech sector in sparking new innovations and commercial applications.

The following capture the most recent accomplishments and milestones:

Strengthening

partnership network – Signed a new agreement to advance to the next phase of collaboration with Pacific Life Re in Asia.

of the analytic engine – We have enriched the algorithms with more elaborative auxiliary data, which, in conjunction with the

existing information system and records, will lend transformational support and capabilities to the analytics, empowering more precise

and robust results that are suited for commercial applications.

The collaborative research studies with leading industry partners

have enhanced and validated our analytic framework and insurance risk rating services platform, which is now ready for deployment

to the wide insurance and financial services industry.

rollout for market adoption – Our risk rating services platform is built on an application programming interface (API) structure

that is integrated with our partners’ core system, linked to an underlying data repertoire and analytic framework that facilitates

real-time rating feedback to insurance companies.

Regular API upgrades and enhancements enable greater flexibility in tightening

service integration and broadening commercial opportunities with our partners.

patent recognition – Over the past two years, Sapientus has been granted eight patents by the National Copyright Administration

of China (NCAC) for the abovementioned model algorithms and technological infrastructure as well as insurance-oriented applications,

for example, Risk Rating API Design, Insurance Risk Assessment platform and Insurance Fraud Detection System (one other applications

is still pending approval).

Research & Development – Big Data

We recorded $699,559 in research & development

for the year ended February 29, 2024, as compared to $797,549 for the year ended February 28, 2023.

The decrease of $97,990 or 12% was

due to the savings from data access and usage fees charged by telecommunications company.

Our Insurtech division focuses on consumer behavioral

insights extraction for the purpose of risk assessment.

Insights are mined from a multitude of data sources, harmonized with the objectives

of our various business partners.

The initial phase of business application is to focus on the insurance industry, particularly in the

area of underwriting risk rating, complementary claims adjudication and assessment, and risk segmentation & market penetration.

This division comprises of experienced actuaries,

data scientists, and computer programmers.

The expenses for research & development include

associated wages and salaries, data access fees and IT infrastructure.

Over the course of 2023, Sapientus has made great

strides on several fronts:

market implementation, analytical advancement, and network engagement.

These developments proceed in parallel

with continued efforts to enrich our portfolio line-up towards fulfilling our commercialization potential and value creation objectives:

of an analytic engine within the leading reinsurer’s risk assessment and selection system.

- Our rating models have been onboarded onto our partner’s

innovative digital solutions platform as an embedded component of their underwriting engine.

Through this pilot adoption, we brought

forward both integrative as well as complementary value through injecting new data-driven insights and risk-scoring capabilities into

our partner’s system.

We believe this arrangement strategically positions Sapientus for further market recognition and partnership

opportunities.

- Currently, our rating models are being used by more than 20 major

insurance companies, with increasing reach in terms of user base and business coverage as our reinsurer partner continues to actively

engage more insurance clients and apply our model results across wider spectrums of product lines including medical and Critical Illness

(CI) portfolios.

Model enhancement through calibration against empirical data - We have deepened our analytic capabilities in generating risk insights and behavioral understanding through sharpening our proprietary modelling tools with empirical insurance claims data, in conjunction with our partner’s medical as well as non-medical underwriting guidelines.

The elevated intelligence of our system could empower our partners with a greater latitude of risk and value segmentation abilities critical for successful portfolio management.

Strengthening of existing partnerships and broadening into new engagements -We continue to leverage our vast analytical assets and reinvent our capabilities to better serve existing partners as well as recruit new collaboration parties.

As part of our new business and partner acquisition strategy, we have been actively developing and promoting new value propositions, such as offering proprietary analytic tools and insights that facilitate more effective sales profiling and creative product innovations, capturing a wider commercial audience.

Official patent recognition – Over the past four years, Sapientus has been granted eight patents by the National Copyright Administration of China (NCAC) for the abovementioned model algorithms and technological infrastructure as well as insurance-oriented applications, for example, Risk Rating API Design, and Insurance Risk Assessment platform and Insurance Fraud Detection System.

NCAC is the governing body for patent and copyright verification and approval in China.

The Company’s

successful applications for these patents validate Sapientus’ continuing innovation in data science and its application in

the field of insurance, finance, and beyond, demonstrating the Company’s active participation and contributions to the industry.

Compensation Expenses

following table sets forth the Company’s share compensation expenses for the periods indicated:

The Company’s successful applications for these patents validate Sapientus’ continuing innovation in data science and its application in the field of insurance, finance, and beyond, demonstrating the Company’s active participation and contributions to the industry.

It is important to emphasize that our allocation

to research and development is foundational to our technology-oriented operations.

Our steadfast dedication to innovation remains undiminished,

and we expect to persistently advance in our developmental endeavors to reinforce our technological edge.

Share Compensation Expenses

The following table sets forth the Company’s

share compensation expenses for the periods indicated:

February 29, 2024

February 28, 2023

compensation expenses

incurred fees of $2,018,479 in share issuance for consultants in consideration of the services which have been provided to the company

for the year ended February 28, 2023 as compared to $777,576 for the year ended February 28, 2022.

The increase of $1,240,903 or 160%

was due to more consulting services and advisor associated with the Company’s recent funding activities.

The rationale for rewarding

these consultants and advisors with shares is to minimize the usage of cash by the Company to allow the Company to use the cash to invest

in revenue-generating activities.

recorded $8,984,535 in operating expenses for the year ended February 28, 2023 as compared to $7,681,356 in operating expenses for the

year ended February 28, 2022.

The increase of $1,303,179 or 17% for the year ended February 28, 2023 is as set forth above.

Loss attributable to the Company’s shareholders

net loss attributable to the Company’s shareholders was $7,539,142 for the year ended February 28, 2023 and $4,943,444 for the

year ended February 28, 2022.

The increase in net loss attributable to the Company’s shareholders of $2,595,698 or 53% resulted

primarily from the lower gross profit, increase in expenses pertaining to the funding exercise, interest expenses, provision for the

mandatory default amount and exercise of warrants from our primary lender on the Note issued on August 9, 2022.

and Capital Resources

following table sets out our cash and working capital as of February 28, 2023 and February 28, 2022:

at February 28, 2023

at February 28, 2022

February 28, 2023, we had cash and cash equivalents of $9,240,241as compared to cash and cash equivalents of $461,933 at February 28,

The increase in the cash reserves is mainly due to the recent funds that we have raised.

In order for us to continue to operate

our mobile payment business, we must deposit funds with our telecommunication companies from time to time in order to obtain access to

the mobile data and talk time we make available to consumers on our portal.

With the recent funds that we have managed to raise, we have

deployed some of these funds into operations to increase our prepayments and deposits with the telecommunication companies and in return

able to generate a higher revenue.

Accordingly, the amount of cash we have on hand fluctuates significantly from period to period as

explained above to ensure our cash is being used efficiently by our operations to generate revenues.

The Company otherwise does not have

any planned capital expenditures and has historically funded its operations from revenues and sales of securities, including convertible

debt securities.

We believe that our cash on hand, cash equivalents, and short-term investments, along with our revenues from operations,

will fund our projected operating requirements, fund our current operations and repay our outstanding indebtedness, in each case, for

at least the next 12 months.

However, to grow our business substantially, we will need to increase the amount of funds we have deposited

with the telecommunications companies for which we process mobile recharge payments.

Accordingly, we intend to continue to seek additional

capital through public or private sales of our equity or debt securities, or both.

We might also enter into financing arrangements with

commercial banks or non-traditional lenders.

We cannot provide investors with any assurance that we will be able to raise additional

funding from the sale of our equity or debt securities, or both, in order to increase our deposits with our telecommunications company

clients, or if available, that such funding will be on terms acceptable to us.

did, however, raise $12,020,000 through the sale of shares of our common stock in private placement transactions exempt from the registration

requirements of the Securities Act during the year ended February 28, 2023.

following table provides a summary of cash flows for the periods presented:

Share compensation expenses

We incurred fees of $185,406 in share issuance

for consultants in consideration of the services which have been provided to the Company for the year ended February 29, 2024 as compared

to $2,018,479 for the year ended February 28, 2023.

The decrease of $1,833,073 or 91% was due to the reduced engagement of consultants

to the Company that were compensated with shares of our common stock, which highlights our effort to minimize equity issuances as part

of our broader financial strategy to optimize equity issuances.

However, we will continue to employ equity compensation for consultants

selectively, aligning with our strategic and financial objectives.

Operating Expenses

We recorded $7,679,407 in operating expenses for

the year ended February 29, 2024 as compared to $8,984,535 in operating expenses for the year ended February 28, 2023.

The decrease of

$1,305,128 or 15% for the year ended February 29, 2024 is as set forth above.

Net Loss attributable to the Company’s

The net loss attributable to the Company’s

shareholders was $3,757,519 for the year ended February 29, 2024 and $7,539,142 for the year ended February 28, 2023.

The decrease in

net loss attributable to the Company’s shareholders of $3,781,623 or 50% resulted primarily from the higher gross profit and some

reductions from the various expenses as discussed above.

Liquidity and Capital Resources

The following table sets out our cash and working

capital as of February 29, 2024 and February 28, 2023:

As at February 29, 2024

As at February 28, 2023

Cash reserves

Working capital

At February 29, 2024, we had cash and cash equivalents

of $1,517,232 as compared to cash and cash equivalents of $9,240,241 at February 28, 2023.

Our mobile payment business model necessitates

periodic fund deposits with our telecommunication companies to obtain access to the mobile data and talk time we make available to consumers

on our portal.

Additionally, our expansion into the cloud-based business, which features a longer collection cycle, has led to an increase

in accounts receivable and consequently, a greater strain on our liquidity.

To manage these operational demands effectively, we have had

to carefully monitor and manage our cash flows.

The Company otherwise does not have any planned capital expenditures and has historically

funded its operations from revenues and sales of securities, including convertible debt securities.

We believe that our cash on hand and

cash equivalents, coupled with our operating revenues, will sufficiently cover our projected operational needs and address our outstanding

liabilities for the next 12 months.

For more expansive growth, further enhancing our deposits with telecommunication entities will be

In line with this, we intend to continue to seek additional capital through public or private sales of our equity or debt securities,

We might also enter into financing arrangements with commercial banks or non-traditional lenders.

We cannot provide investors

with any assurance that we will be able to raise additional funding from the sale of our equity or debt securities, or both, in order

to increase our deposits with our telecommunications company clients, or if available, that such funding will be on terms acceptable to

We did, however, raise $840,000 through the exercise

of warrants to purchase shares of our common stock, which transactions were exempt from the registration requirements of the U.S.

Act of 1933, as amended (the “ U.S.

Securities Act ”) during the year ended February 29, 2024.

Statement of Cashflows

The following table provides a summary of cash

flows for the periods presented:

February 29, 2024

February 28, 2023

cash used in operating activities

cash used in investing activities

cash provided by financing activities

of exchange rates on cash & cash equivalents

increase (decrease) in cash and cash equivalents

Flow used in Operating Activities

cash used in operating activities increased by $2,766,271 in the year ended February 28, 2023 compared to the year ended February 28,

2022, primarily due to increase in prepayment and deposit of ($1,074,983) (2022:

($2,684,965)), increase in other receivable of ($1,872,266)

($32,545)), decrease in accounts payable of ($3,237,152) (2022:

$1,114,653), decrease in accrual and other payables of ($527,489)

Net cash used in operating activities

$ (8,203,947 )

$ (8,614,133 )

Net cash used in investing activities

Net cash provided by financing activities

Effect of exchange rates on cash & cash equivalents

Net increase (decrease) in cash and cash equivalents

$ (7,723,009 )

Cash Flow used in Operating Activities

Net cash used in operating activities decreased

by $410,186 in the year ended February 29, 2024 compared to the year ended February 28, 2023, primarily due to increase in accounts receivable

of ($7,855,567) (2023:

$3,100,387), increase in prepayment and deposit of ($1,507,836) (2023:

($1,074,983)), increase in other receivable

of ($1,444,834) (2023:

($1,872,266)) and decrease in lease liability of ($6,802) (2023:

($3,191)) offset by a decrease in accounts receivable of $3,100,387

($775,837)) and increase in inventories of $1,280 (2021:($6)).

Flow used in Investing Activities

the year ended February 28, 2023, investing activities increased by $48,745 compared to the year ended February 28, 2022.

resulted from the purchase of equipment.

Flow provided by Financing Activities

the year ended February 28, 2023, financing activities provided cash of $17,343,333 compared to $5,414,194 during the year ended February

The increase of $11,929,139 in the year ended February 28, 2023 was primarily due to the issuance of convertible notes and

the proceeds from issuance of shares of our common stock.

Sheet Arrangements

are no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition,

changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that

is material to investors.

have determined that we do not have any material subsequent events to report.

May 22, 2023, we have 51,988,030 issued and outstanding shares of common stock.

Accounting Policies

consolidated financial statements have been prepared in accordance with U.S.

($2,212)) offset by increase in accounts payable

of $5,126,949 (2023:

($3,237,152)) and increase in accrual and other payables of $495,042 (2023:

Cash Flow used in Investing Activities

During the year ended February 29, 2024, investing

activities decreased by $74,441 compared to the year ended February 28, 2023.

Cash Flow provided by Financing Activities

During the year ended February 29, 2024, net

cash used by financing activities was $295,333 compared to net cash provided by financing activities of $17,343,333 during the year

ended February 28, 2023.

The decrease was primarily due to the repayment of convertible notes and a decrease in the sale of equity

securities during the year.

Off-Balance Sheet Arrangements

There are no off-balance sheet arrangements that

have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues

or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Subsequent Events

Subsequent to February 29, 2024, we received subscriptions to purchase

310,000 shares of our common stock at $2.50 per share on a private placement basis.

As of May 28, 2024, we have received $775,000 in subscription

proceeds and expect to close the $2.50 private placement in the very near future.

Outstanding Share Data

At May 23, 2024, we have 52,712,850 issued and

outstanding shares of common stock.

Critical Accounting Policies

The consolidated financial statements have been

prepared in accordance with U.S.

generally accepted accounting principles (“U.S.

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.

interest entity

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.

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

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.

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

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.

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

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:

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.

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.

Risks and Uncertainties

Company relies on cloud-based hosting through a global accredited hosting provider.

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.

Intangible Assets

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.

of Long-Lived Assets

Company classifies its long-lived assets into:

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.

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.

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

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 the 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.

Receivable and Concentration of Risk

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.

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

and Cash Equivalents

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.

and Equipment

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.

(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

It is possible that these assets could become impaired as a result of technology, economy, or other industry changes.

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 the 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

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.

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.

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.

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

(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.

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

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

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.

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.

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.

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:

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);

(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.

Company uses the asset and liability method of accounting for income taxes in accordance with Accounting Standards Codification (“ASC”)

740, “Income Taxes” (“ASC 740”).

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.

The Company uses the asset and liability method

of accounting for income taxes in accordance with Accounting Standards Codification (“ASC”) 740, “Income Taxes”

Under this method, income tax expense is recognized as the amount of:

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

interests held 1% of the shares of two of our subsidiaries are recorded as a component of our equity, separate from the Company’s

Purchase or sales of equity interests that do not result in a change of control are accounted for as equity transactions.

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.

Issued Accounting Pronouncements

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.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

a smaller reporting company as defined in Rule 12b-2 under the Exchange Act, the Company is not required to provide the information required

by this item.

(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.

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.

Recent Issued Accounting Pronouncements

The Company does not believe recently issued but

not yet effective accounting standards, if currently adopted, would have a material effect on the consolidated financial position, statements

of operations and cash flows.

QUANTITATIVE AND QUALITATIVE DISCLOSURES

ABOUT MARKET RISK

As a smaller reporting company as defined in Rule

12b-2 under the Exchange Act, the Company is not required to provide the information required by this item.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis