What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2025-05-29 compared with 2024-05-29 · 372 added, 250 removed, 403 unchanged (61% of the section changed)

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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:

As described elsewhere in

this Annual Report, our Company has been organized as a holding company and conducts a significant part of our operations through our

subsidiaries and through contractual arrangements with JiuGe Technology, a VIE based in China.

We indirectly own 100% of the equity of

JiuGe Management, a WFOE that has entered into the VIE Agreements which gives us operational control over JiuGe Technology.

The Company operates the following lines of business:

(i) Telecommunications Products and Services;

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

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

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

(ii) Value Added Products and Services (iii) Short Message Services (“ SMS ”)

and Multimedia Messaging Services (“ MMS ”);

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

(v) Big Data Insights;

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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.

JiuGe Technology, our VIE.

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 2021.

The JiuGe Technology mobile payment and recharge

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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.

of the e-commerce companies, such as PinDuoDuo.com, TMall.com and JD.Com.

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, we have been designated as one of

China’s Mobile’s loyalty redemption partners, which allows us to provide such 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.

7, 2019, JiuGe Technology, our VIE, 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

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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

and China Mobile to co-operate in the introduction of 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 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.

Complementing our hardware protection services, we have introduced

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.

On March 7, 2019, the Company, acting through

JiuGe Technology, acquired operational control of 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.

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

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

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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, acting primarily through its indirect wholly-owned subsidiary,

Finger Motion Financial Company Limited (“ FMFC ”) 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

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.

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

The Company’s proprietary risk assessment

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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.

On or around January 25, 2021, FMFC entered into

a Sapientus 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 acting 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

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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.

While publishers are expanding their direct-to-consumer models through mobile

gaming, eSports and virtual, the Company has exited the video game business and re-directed its resources towards new business opportunities

in China, particularly the mobile phone payment and data business.

Smart Mobility Solution

The C2 Platform, FingerMotion’s Advanced

Mobile Integrated Command and Communication solution, saw considerable advancements during the fiscal year.

Designed to support mission-critical

mobile communications for public safety agencies, emergency response teams, and industrial sectors, the C2 Platform is built on FingerMotion’s

telecommunications infrastructure, leveraging 5G connectivity and cloud-based technology to offer real-time data sharing, geospatial mapping,

and situational awareness.

During the year, we expanded the deployment of

the C2 Platform into pilot regions, establishing partnerships with automotive manufacturers and industrial partners.

These partnerships

enabled us to showcase the platform's capabilities, including mobile video feeds, real-time GPS tracking, and AI-driven analytics for

improving public safety operations.

Our C2 Platform is positioned to serve both public sector agencies and private sector enterprises

in high-risk areas such as disaster management, fleet operations, and emergency response missions.

We expect these deployments to scale in the upcoming

fiscal year, with further geographic expansion planned for key markets in China.

These developments are expected to drive revenue growth

from enterprise sales, government contracts, and strategic partnerships.

DaGe Platform

The DaGe platform, FingerMotion’s integrated

marketplace for automotive products and services, continued its expansion in the fiscal year.

The platform offers a range of services,

such as vehicle maintenance, repair, tire replacement, and EV charging, catering to the growing EV market.

With the increasing adoption

of EVs, the demand for EV charging stations and related services has been a significant growth driver for DaGe.

During the year, we expanded our network of service

providers, onboarded additional automotive maintenance providers, and onboarded more EV charging stations into the platform.

We also enhanced

user experience by offering location-based, proximity recommendations, real-time pricing, and seamless transaction processing, all within

the mobile app.

The increase in user engagement on the DaGe platform resulted in higher transaction volumes, which directly contributed

to revenue growth in this segment.

Additionally, we leveraged our existing telecommunications

infrastructure to expand the platform’s reach, capitalizing on cross-promotion opportunities within our mobile services business.

The introduction of loyalty programs and seasonal promotions helped retain users and drive repeat business, further strengthening the

platform’s position in the market.

As we look ahead, we plan to continue expanding DaGe’s offerings by targeting new markets

and forming strategic partnerships with both local and national service providers.

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.

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 10, 2024,

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.

we appointed CT International LLP as our new independent registered public accounting firm, succeeding our previous auditors, Centurion

On November 29, 2024,

Michael Chan resigned as a director of the Company.

On December 3, 2024,

following the resignation of Mr.

Chan as a director of the Company creating a vacancy on each of the Board’s audit committee and

the compensation committee, the Board appointed Hsien Loong Wong as a member of the audit committee of the Board and appointed Yew Poh

Leong as the chair of the audit committee of the Board.

In addition, the Board appointed Eng Ho Ng as a member of the compensation committee

of the Board.

On December 16, 2024,

the Company and Univest Securities, LLC mutually agreed to terminate the At-the-Market Issuance Sales Agreement, dated September 11, 2023,

between the Company and Univest, effective December 16, 2024.

On December 20, 2024,

the Company entered into a securities purchase agreement (the “ Purchase Agreement ”) with certain institutional

investors (the “ Purchasers ”), which provided for the issuance and sale, in a registered direct offering by the Company

of (i) 3,333,336 shares of its common stock, par value $0.0001 per share (the “ Common Stock ”) and (ii) warrants (the

“ Common Warrants ”) to purchase up to an aggregate of 5,000,004 shares of its common stock (the “ Offering ”)

at a combined purchase price of $1.50 per share and one and one-half Common Warrants.

Each share of Common

Stock was offered together with one and one-half Common Warrants, with each whole Common Warrant to purchase one share of Common Stock.

The Common Warrants have an exercise price of $1.50 per share of Common Stock.

The Common Warrants are exercisable upon issuance

and expire five years from the date of issuance.

The exercise price of the Common Warrants is subject to adjustment for share dividend,

share splits, share combinations and similar capital transactions, as further described in the Common Warrants.

In addition, the exercise

price of the Common Warrants is subject to reduction in the event of certain Common Stock and Common Stock equivalent issuances, other

than certain agreed exempt issuances, at a price lower than the exercise price of the Common Warrants then in effect.

Furthermore, if

at any time on or after the date of issuance there occurs any share split, share dividend, share combination recapitalization or other

similar transaction involving our common stock (each, a “ Share Combination Event ”) and the lowest daily volume weighted

average price during the period commencing five consecutive trading days immediately preceding and ending immediately after the five consecutive

trading days beginning on the date of such Share Combination Event, is less than the exercise price of the Common Warrants then in effect,

then the exercise price of the Common Warrants will be reduced to the lowest daily volume weighted average price during such period.

The Purchase Agreement

contains customary representations and warranties and agreements of the Company and the Purchasers, and customary indemnification rights

and obligations of the parties.

In addition, the Purchase Agreement includes a participation right in favour of the Purchasers under which

the Purchasers will be entitled, for a period of one year following closing, to participate in future equity financings of the Company

up to a participation rate of a maximum of 40% of such offering.

The Company has agreed not to enter into or complete certain equity financings,

subject to certain agreed exemptions, for a 60-day period from the date of closing of the Offering.

In addition, the Company has agreed

not to enter into any “Variable Rate Transactions”, as defined in the Purchase Agreement, for a period of six months following

closing of the Offering, provided that the Company is entitled to proceed with an “at-the-market offering” after the expiry

of the initial 60-day period following closing.

Certain directors, officers and 10% stockholders of the Company also entered into lock-up

agreements in connection with the Offering under which they have agreed not to sell or transfer any of their equity securities in the

Company for a period of 60 days, subject to certain customary exceptions.

In connection with the

Offering, the Company entered into a Placement Agency Agreement (the “ Placement Agency Agreement ”) on December

20, 2024 with Roth Capital Partners, LLC (the “ Placement Agent ”), as the exclusive placement agent in connection with

the Offering.

As compensation to the Placement Agent, the Company paid the Placement Agent a cash fee of 7.0% of the aggregate gross proceeds

raised in the Offering and issued to the Placement Agent a placement agent warrant to purchase up to 250,000 shares of Common Stock at

an exercise price of $1.88 per share (the “ Placement Agent Warrant ”) for a term of five years from the date of commencement

of sales in the Offering.

The Placement Agent Warrant includes adjustment provisions equivalent to the adjustment provisions provided

to the Purchasers under the Common Warrants, as described above.

In addition, the Company has agreed to pay the Placement Agent up to

$110,000 for its expenses.

The shares of Common

Stock, the Common Warrants and the Placement Agent Warrants described above and the shares of Common Stock underlying each of the Common

Warrants and the Placement Agent Warrant were offered and sold pursuant to the Registration Statement on Form S-3 (File No.

which was declared effective by the Securities and Exchange Commission on September 29, 2023 (the “ Registration Statement ”).

The Company filed a prospectus supplement to the base prospectus incorporated in the Registration Statement with the SEC on December 23,

2024 in connection with the Offering, which closed on December 23, 2024.

The Company received

net proceeds of approximately $4.44 million from the Offering, after deducting the estimated offering expenses payable by the Company,

including the fees and expenses of the Placement Agent.

Results of Operations

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Total other income (expenses)

Net Loss attributable to the Company’s shareholders

Net Loss attributable to the Company’s stockholders

$ (5,112,804 )

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Telecommunication Products & Services

SMS & MMS Business

DaGe Platform

Command & Communication

Total Revenue

We recorded $35,607,614 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.

ended February 28, 2025, a decrease of $184,071 or 1%, compared to the year ended February 29, 2024.

This decrease resulted from increases

in revenue of $5,518,482, $80,592 and $188,576 from our SMS & MMS, DaGe Platform and Command & Communication businesses, respectively,

offset by decreases in revenue of $5,585,599 and $386,122 from our Telecommunication Products & Services and Big Data businesses,

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.

For the year ended February

28, 2025, our revenue remained primarily driven by our Telecommunication Products & Services segment, despite a decrease compared

to the same period in 2024.

The SMS & MMS business experienced a notable increase during this period.

Importantly, the DaGe Platform, launched in 2024,

recorded its first revenue contributions during the year.

While still in the early stages of development, this segment marks a strategic

advancement in our diversification efforts, offering car-related services through a growing digital ecosystem that includes car wash,

maintenance, and EV charging.

Although the platform remains under active development, we have already begun generating revenue, reflecting

initial market traction.

With increasing user adoption and continued integration of EV charging station networks, we expect the DaGe Platform

to deliver stronger returns in future periods.

The Command and Communication business also made

its initial contribution during the year, supporting our long-term growth plans.

However, the overall revenue from recharge services for

the year ended February 28 2025 was lower than prior corresponding period, it continues to be the primary contributor to our overall performance.

In the Big Data business segment, although revenue

decline during the year, we remain committed to advancing out analytical capabilities and commercial applications.

Since FY2021, we have

established foundational partnerships with major reinsurance companies including Pacific Life Re and Munich Re, which enabled us to co-develop

predictive analytics models designed to enhance risks assessment across the insurance value chain.

These initiatives have laid the foundation

for the next phase of development of our advanced data analytics capabilities and shaped the future direction of Sapientus.

Looking ahead,

we are aligning the Big Data business with our broader strategic objectives of diversification, innovation, and scalability.

efforts are focused on expanding into new industry verticals, pursuing opportunities for geographic growth globally, and further enhancing

our technological platforms.

Through these initiatives, we aim to position Sapientus as a leading provider of data-driven solutions, supporting

a wide range of industries while strengthening our role as a trusted analytics partner worldwide.

Cost of Revenue

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Telecommunication Products & Services

SMS & MMS Business

DaGe Platform

Command & Communication

Total Cost of Revenue

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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.

discounts, promotion and marketing initiatives to support user growth and vendor participation, particularly for new business segments

which are reflected in our cost of revenue.

gross profit for the year ended February 28, 2025 was $2,763,707, a decrease of $1,098,011 or 28%, compared to the year ended February

The significant decline in gross profit was primarily due to the higher margin product mix in the Telecommunication Product

& Services segment during the prior period, particularly from our cloud business.

In contrast, there were no contributions from the

cloud business during the current year, which typically generates higher margin .

Amortization & Depreciation

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assets for the year ended February 28, 2025, an increase of $85,888 or 121%, compared to the year ended February 29, 2024.

was due to the amortization of right-of-use assets.

General and Administrative Expenses

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We recorded $6,445,771 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

expenses for the year ended February 28, 2025, a slight decrease of $137,710 or 2%, compared to the year ended February 29, 2024 The decrease

reflects certain minor reclassifications made during the year to align expense recognition with the appropriate reporting periods.

adjustments were reflected through retained earnings and did not have a material impact on the current year’s financial results.

Our general and administrative expenses primarily consists of personnel-related costs, professional and accounting services, and general

office and operational expenses necessary to support our business growth and regulatory compliance.

These expenses include ongoing costs

associated with corporate governance, audit and regulatory filings, consulting and advisory services, and operational support across our

business segment.

Marketing Costs

The following table sets forth the Company’s

marketing cost for the periods indicated:

marketing costs for the periods indicated:

February 28, 2025

February 29, 2024

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.

Marketing Costs

We recorded $276,258 in marketing costs for the

year ended February 28, 2025, an increase $136,206 or 97% compared to the year ended February 29, 2024.

The majority of these marketing

costs were incurred in promoting our newly launched Da Ge App platform.

Research & Development

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February 29, 2024

Research & Development – Big Data

Research & Development

We recorded $632,767 in research & development

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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.

Deployment 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.

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.

Strengthening of existing strategic collaboration arrangements 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 collaboration 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, FMFCL has been granted eight patents by the National Copyright Administration of China (NCAC) in relation to Sapientus 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’s 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.

Looking ahead, we are executing a deliberate strategy

to expand the Sapientus brand beyond China, with an emphasis on building scalable, adaptable, and low-capital data-driven solutions that

can serve diverse markets and industries globally.

Our expansion efforts are designed to gradually strengthen our presence internationally

while maintaining a flexible approach to market opportunities as they arise.

Research and development remains fundamental to

our technology-oriented operations.

We continue to invest consistently in innovation, recognizing that data science and advanced analytics

are core to our long-term competitiveness.

Through Sapientus, we are committed to reinforcing our technological leadership and enhancing

our ability to deliver impactful solutions for our clients both within China and internationally.

Credit Impairment Loss

The following table sets forth the Company’s

credit impairment loss for the periods indicated:

February 28, 2025

February 29, 2024

Credit impairment loss

We recorded $439,613 in credit impairment loss

for the year ended February 28, 2025, an increase $439,613 or 100% compared to the year ended February 29, 2024, reflecting a prudent

assessment of expected credit loss based on updated evaluations of customer credit risk and overall credit exposure.

Share Compensation Expenses

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to $185,406 for the year ended February 29, 2024.

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.

The increase of $576,396 or 311% was due to the engagement of consultants to the Company

that were compensated with shares of our common stock, the rationale for rewarding these consultants and advisors with shares is to minimize

the usage of cash by the Company.

However, we will continue to employ equity compensation for consultants selectively, aligning with our

strategic and financial objectives.

Operating Expenses

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the year ended February 28, 2025 as compared to $7,679,407 in operating expenses for the year ended February 29, 2024.

The decrease of

The increase of

$1,033,301 or 13% for the year ended February 28, 2025 is as set forth above.

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shareholders was $5,112,804 for the year ended February 28, 2025 and $3,811,503 for the year ended February 29, 2024.

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.

The increase in

net loss attributable to the Company’s shareholders of $1,301,301 or 34% resulted primarily from the significant decline in gross

profit which due to the higher margin product mix in the Telecommunication Product & Services segment during the prior period, particularly

from our cloud business and some increases from the various expenses as discussed above.

Liquidity and Capital Resources

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of $1,128,135 as compared to cash and cash equivalents of $1,517,232 at February 29, 2024.

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.

business model, particularly in mobile payment, requires 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, the expansion into areas such as cloud-based

business, which features a longer collection cycle, as well as investments in other growth initiatives, has increased our accounts receivable

and placed added pressure on our liquidity.

To manage these operational demands effectively, we have had to carefully monitor and manage

our cash flows.

We anticipate our cash on hand and cash equivalents, along with our revenues from operations, will support our ongoing

operations and repayment of outstanding indebtedness in the near term.

However, to sustain our growth and support strategic initiatives,

including the rollout of our Command & Communication business and increase deposits with telecommunication companies, we will require

additional capital.

To support all these, we intend to continue to seek additional capital through public or private sales of our equity

or debt securities, or both.

We may also explore entering 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 and/or debt

securities on terms acceptable to us, or at all, in order to support the rollout of our Command & Communication business and increase

our deposits with our telecommunications company client .

We did, however, raise $6,642,504 through a closing

of a private placement of 1,095,000 shares of our common stock at a price of $1.50 per share and entered into a securities purchase agreement

with certain institutional investors, which provided for the issuance and sale, in a registered direct offering by the Company of 3,333,336

shares of our common stock at a price of $1.50 per share, during the year ended February 28, 2025.

In addition to these equity financings,

we also obtained loan financing comprising approximately $1.59 million denominated in SGD, which provided additional working capital to

support our operational and strategic initiatives.

Statement of Cashflows

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Cash Flow used in Operating Activities

Net cash used in operating activities decreased

Net cash used in operating activities increased

by $851,984 in the year ended February 28, 2025 compared to the year ended February 29, 2024, primarily due to increase in accounts receivable

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($7,919,533)), increase in prepayment and deposit of ($1,365,105) (2024:

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

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

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

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

($1,525,857)), increase in inventories

of ($137,354) (2024:

nil) and decrease in lease liability of ($100,668) (2024:

($6,857)) offset by, decrease in other receivable of $1,399,140

($65,266)), increase in accounts payable of $19,665,662 (2024:

$5,168,763) and increase in accrual and other payables of $7,788,318

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During the year ended February 28, 2025, investing

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

activities increased by $3,739 compared to the year ended February 29, 2024.

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.

During the year ended February 28, 2025, net cash

provided by financing activities was $7,776,249 compared to net cash used by financing activities of $295,333 during the year ended February

The increase was due to the receipt of subscription proceeds to purchase 1,095,000 shares of our common stock at $1.50 per share

on a private placement basis and a registered direct offering by the Company of 3,333,336 shares of our common stock at $1.50 per share.

Company received some short-term loan facilities of an aggregate of SGD$2,120,000 .

February 14, 2025, the Company repaid 2 short-term loans of SGD$370,000 and SGD$250,000.

Off-Balance Sheet Arrangements

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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.

On March 3, 2025, we issued 27,500 shares of our

common stock at a deemed price of $1.86 per share to one entity pursuant to a consulting agreement.

On May 28, 2025, we issued an aggregate of 940,000 shares of our common

stock at a price of $2.50 per share to eight individuals due to the closing of a private placement for aggregate gross proceeds of $2,350,000.

The proceeds from the private placement offering will be used for general corporate and working capital purposes.

In connection with the closing of the private

placement on May 28, 2025, we paid cash finder’s fees of $235,000 to one non-U.S.

Outstanding Share Data

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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.

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.

In connection with the preparation of our consolidated

financial statements for the year ended February 28, 2025, we identified accounting errors related to revenue and stock options.

The accumulated

deficit as of February 28, 2023, Consolidated Balance Sheet as of February 29, 2024, and the related Consolidated Statements of Operations,

Stockholders’ Equity and Cash Flows for the fiscal year ended February 29, 2024, have been restated to correct the errors.

the materiality of the errors and determined that the impacts were not material, individually or in the aggregate, to our previously issued

consolidated financial statements for any of the prior quarters or annual periods in which they occurred.

See Note 16 of the notes to

our consolidated financial statements for further discussion.

Variable interest entity

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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.

ASC 260, Earnings Per Share (“ASC 260”),

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

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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:

(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.

of accounting for income taxes in accordance with 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.

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

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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