FingerMotion, Inc. 10-Q

ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The terms the “Registrant”, “we”, “us”, “our”, “FingerMotion” and the “Company” mean FingerMotion, Inc. or as the context requires, collectively with its consolidated subsidiaries and contractually controlled companies. Cautionary Note Regarding Forward-Looking Statements The following management’s discussion and analysis of the Company’s financial condition and results of operations (the “MD&A”) contains 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 Quarterly Report on Form 10-Q for the three months ended May 31, 2025, and our Annual Report on Form 10-K for the fiscal year ended February 28, 2025, including the consolidated financial statements and related notes contained therein. 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” as disclosed in our Annual Report on Form 10-K for the fiscal year ended February 28, 2025, and Item 1A - Risk Factors, under Part II - Other Information of this Quarterly Report. Introduction This MD&A is focused on material changes in our financial condition from February 28, 2025, our most recently completed year end, to May 31, 2025, and our results of operations for the three months ended May 31, 2025, and should be read in conjunction with Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations as contained in our Annual Report on Form 10-K for the fiscal year ended February 28, 2025. Corporate Information The Company was initially incorporated as Property Management Corporation of America on January 23, 2014 in the State of Delaware. On June 21, 2017, the Company amended its certificate of incorporation to effect a 1-for-4 reverse stock split of the Company’s outstanding common stock, to increase the authorized shares of common stock to 200,000,000 shares and to change the name of the Company from “Property Management Corporation of America” to “FingerMotion, Inc.” (the “ Corporate Actions ”). The Corporate Actions and the amended certificate of incorporation became effective on June 21, 2017. Our principal executive offices are located at 111 Somerset Road, Level 3, Singapore 238164, and our telephone number is (347) 349-5339. As described above, our Company has been organized as a holding company and conducts a significant part of our operations through our subsidiaries and through the VIE Agreements entered into between JiuGe Management and JiuGe Technology, a VIE based in China, which is owned by Ms. Li Li who, in addition to being the sole shareholder, is also the legal representative and general manager. We indirectly own 100% of the equity in JiuGe Management, a wholly foreign owned enterprise (“ WFOE ”), which through the VIE Agreements provides us with operational control over JiuGe Technology. The VIE Agreements have not been tested in court. As a result of our use of the VIE structure, you may never directly hold equity interests in the VIE. Any securities that we offer will be securities of the Company, the Delaware holding company, not of the VIE. As described in more detail below, under the subheading “VIE Agreements,” we fund the registered capital and operating expenses of the VIE by extending loans to Ms. Li Li, the sole shareholder of the VIE, for the purpose of funding the capital contribution of the subscribed capital of the VIE. The VIE Agreements governing the relationship between the VIE and our WFOE enable us to (i) direct the activities of the VIE that most significantly impact the VIE’s economic performance, (ii) receive substantially all of the economic benefits of the VIE, and (iii) have an exclusive call option to purchase, at any time, all or part of the equity interests in and/or assets of the VIE to the extent permitted by Chinese laws. As a result of the VIE Agreements, the Company is considered the primary beneficiary of the VIE for accounting purposes and is able to consolidate the financial results of the VIE in its consolidated financial statements in accordance with U.S. GAAP. 29 The following diagram depicts our corporate structure: 30 Our holding company structure presents unique risks as our investors may never directly hold equity interests in our subsidiaries or the VIE, and we will be dependent upon contributions from our subsidiaries and the VIE to finance our cash flow needs. Our subsidiaries and the VIE are currently not required to obtain permission from the Chinese authorities including the China Securities Regulatory Commission (the “ CSRC ”), or Cybersecurity Administration Committee (the “ CAC ”), to operate or to issue securities to foreign investors. However, as of March 31, 2023, pursuant to the Overseas Listing Trial Measures promulgated by the CSRC, we will be required to make filings with the CSRC with respect to any new overseas offering of our securities. Generally, we understand that, for these purposes, the filing requirement would apply in respect of securities that are offered in a public overseas offering, and likely to securities that, having been offered in a private overseas offering, become eligible for resale to the public. The business of our subsidiaries and the VIE until now are not subject to cybersecurity review with the CAC, given that: (i) data processed in our business does not have a bearing on national security and thus may not be classified as core or important data by the authorities; and (ii) we do not possess a large amount of personal information in our business operations. In addition, we are not subject to merger control review by China’s anti-monopoly enforcement agency due to the level of our revenues which provided from us and audited by our auditor and the fact that we currently do not expect to propose or implement any acquisition of control of, or decisive influence over, any company with revenues within China of more than RMB400 million. Currently, these statements and regulatory actions have had no impact on our daily business operations, the ability to accept foreign investments and list our securities on an U.S. or other foreign exchange. However, since these statements and regulatory actions, including the Overseas Listing Trial Measures, are fairly new, it is uncertain what potential impact such modified or new laws and regulations will have on our daily business operation, the ability to accept foreign investments and list our securities on an U.S. or other foreign exchange. To operate, the VIE and Beijing XunLian TianXia Technology Co., Ltd. are required to obtain, and have obtained, a value-added telecommunications business licence from PRC authorities. In connection with our previous issuance of securities to foreign investors, under current PRC laws, regulations and regulatory rules, as of the date of this periodic report on Form 10-Q, we, our PRC subsidiaries and the VIE, (i) are not required to obtain permissions from the CSRC except that as of March 31, 2023 we may have to file with the CSRC with respect to a new offering of our securities, (ii) are not required to go through cybersecurity review by the CAC, and (iii) have received or were not denied such requisite permissions by any PRC authority. If we, our subsidiaries or the VIE (i) do not receive or maintain such permissions or approvals, (ii) inadvertently conclude that such permissions or approvals are not required or (iii) applicable laws, regulations, or interpretations change and we are required to obtain such permissions or approvals in the future, we may be subject to government enforcement actions, investigations, penalties, sanctions and fines imposed by the CSRC, the CAC and relevant departments of the State Council. In severe circumstances, the business of our PRC subsidiary may be ordered to suspend and its business qualifications and licenses may be revoked. Share Exchange Agreement Effective July 13, 2017, the Company entered into that certain Share Exchange Agreement (the “ Share Exchange Agreement ”) by and among the Company, Finger Motion Company Limited (“ FMCL ”) and certain shareholders of FMCL (the “ FMCL Shareholders ”). FMCL, a Hong Kong corporation, was formed on April 6, 2016 and is an information technology company that then specialized in operating and publishing mobile games. Pursuant to the Share Exchange Agreement, the Company agreed to exchange the outstanding equity stock of FMCL held by the FMCL Shareholders for shares of common stock of the Company. On the closing date of the Share Exchange Agreement, the Company issued 12,000,000 shares of common stock to the FMCL shareholders. In addition, the Company issued 600,000 shares to consultants in connection with the transactions contemplated by the Share Exchange Agreement, and 2,562,500 additional shares to accredited investors, which was a concurrent financing but not a condition of closing the Share Exchange Agreement. As a result of the Share Exchange Agreement and the other transactions contemplated thereunder, FMCL became a wholly-owned subsidiary of the Company. At that time, FMCL continued operations as the Company’s video game division. However, in June 2018, the Company decided to pause the operation of the game division as it saw the opportunity in the telecommunication business and have since refocused into this business. 31 This description of the Share Exchange Agreement does not purport to be complete and is qualified in its entirety by reference to the terms of the Share Exchange Agreement, which was filed as an exhibit to our Current Report on Form 8-K filed with the SEC on July 20, 2017 and incorporated by reference herein. VIE Agreements On October 16, 2018, the Company, through its indirect wholly-owned WFOE, JiuGe Management, entered into the VIE Agreements pursuant to which JiuGe Technology became our contractually controlled affiliate. The use of VIE agreements is a common structure used to acquire operational control of PRC corporations, particularly in certain industries in which foreign investment is restricted or forbidden by the PRC government. The VIE Agreements include a Consulting Services Agreement, a Loan Agreement, a Power of Attorney Agreement, a Call Option Agreement, and a Share Pledge Agreement in order to secure the connection and commitments of JiuGe Technology. We operate our mobile payment platform business through JiuGe Technology. The VIE Agreements included: ● a consulting services agreement through which JiuGe Management is mainly engaged in data marketing, technical services, technical consulting and business consultancy to JiuGe Technology (the “ JiuGe Technology Consulting Services Agreement ”). This agreement was duly signed among the WFOE and the VIE. Under this agreement, the WFOE will provide the following services to the VIE on an exclusive basis: (i) providing a comprehensive solution for all technical issues required for the VIE’s business; (ii) providing training to the professional technicians of the VIE; (iii) assisting the VIE in collecting technical and commercial information and conducting market surveys; (iv) assisting the VIE in procuring business opportunities to obtain contracts awarded by the telecom carries in China and maintaining the commercial relationship with the telecom carriers; (v) introducing clients to the VIE and assisting the VIE in developing commercial and cooperative relationship with the clients; (vi) providing suggestions and opinions on establishment and improvement of the VIE’s corporate structure, management system and departmental organization; (vii) assisting the VIE in formulating annual business plans, the draft of which shall be made available to WFOE by the VIE prior to the end of November each year; (viii) granting license to the VIE to use WFOE’s intellectual property necessary for the services; and (ix) providing other consulting and technical services at the request of the VIE. The VIE will pay to the WFOE service fees equivalent to the after-tax net profits distributable by the VIE to its shareholder each year, as set forth in the audited financial statements in accordance with the PRC accounting standards, ensuring all the distributable profits of the VIE will be dispatched to the WFOE. The VIE may not assign any of its rights and obligations under the JiuGe Technology Consulting Services Agreement without prior written consent of the WFOE. This agreement ensures that the WFOE and investors will be able to legally obtain the profits of the VIE, and transfer them to the WFOE more conveniently in the form of “service fee”; ● a loan agreement through which JiuGe Management grants loans to Ms. Li Li, as the sole shareholder of JiuGe Technology for the purpose of capital contribution (the “ JiuGe Technology Loan Agreement ”). Under this agreement, JiuGe Management loaned RMB 10,000,000 to Ms. Li Li, as the sole shareholder of the VIE, solely for the purpose of funding the capital contribution of the subscribed capital of the VIE. The loan amount has now been increased to RMB50,000,000. The WFOE has the right to convert the whole or any part of the outstanding principal amount into the equity interests in the VIE and may demand repayment of any or all of the principal amount/ As security for performance and discharge of Ms. Li Li’s obligations under the JiuGe Technology Loan Agreement, Ms. Li Li pledged 100% equity interests in JiuGe Technology, representing the entire registered capital of the VIE, by way of first-ranking security to the WFOE. This agreement could constrain Ms. Li Li to cooperate with WFOE’s instructions and avoid damaging the rights and interests of the WFOE and investors; ● a power of attorney agreement under which the owner of JiuGe Technology has vested their collective voting control over JiuGe Technology to JiuGe Management and will only transfer their equity interests in JiuGe Technology to JiuGe Management or its designee(s) (the “ JiuGe Technology Power of Attorney Agreement ”). The Power of Attorney Agreement was duly issued by Ms. Li Li to the WFOE. Under the JiuGe Technology Power of Attorney Agreement, the WFOE is the exclusive agent who may exercise, at WFOE’s sole discretion, all the rights and powers in respect of all the 100% equity interests held by Ms. Li Li in the VIE on Ms. Li Li’s behalf, including without limitation to propose to convene, attend and vote at the shareholder’s meeting of the VIE. Ms. Li Li cannot assign her rights and obligations under the JiuGe Technology Power of Attorney Agreement without prior written consent of the WFOE and the WFOE will bear its own costs, expenses and fees in connection with performance of the JiuGe Technology Power of Attorney Agreement. This agreement ensures that the WFOE can replace Ms. LI Li in the operation and management of the VIE, and controlling its assets; 32 ● a call option agreement under which the owner of JiuGe Technology has granted to JiuGe Management the irrevocable and unconditional right and option to acquire all of their equity interests in JiuGe Technology or transfer these rights to a third party (the “ JiuGe Technology Call Option Agreement ”). This agreement was duly signed by and among Ms. Li Li, the WFOE and the VIE. Under this agreement, the WFOE has an exclusive, irrevocable and unconditional option to purchase or to designate a third party to purchase 100% equity interests of the VIE at RMB one (1) yuan or the lowest amount of consideration permitted under the laws of PRC at any time, giving the WFOE a sole discretion to exercise such option at any time and in any manner as permitted by the laws of PRC. Pursuant to the JiuGe Technology Call Option Agreement, Ms. Li Li may not, without prior written consent of the WFOE: (i) transfer or dispose of the equity interests in the VIE or the assets of the VIE in any manner; (ii) create any encumbrance of any kind over the equity interests in the VIE, other than the VIE Agreements; and (iii) resolve to or procure the VIE to: (a) change its registered capital; (b) amend its articles of association; (c) change any of its shareholders; (d) appoint, remove or replace its senior management; (e) make or receive investment of any kind or merge or consolidate with any entity; (f) change information filed at the competent authorities in the PRC; (g) make any lending or borrowing or provide security of any kind; (h) pay, make or declare any dividend, charge, fee or other distribution of any kind; (i) incur, create or permit to subsist or have any outstanding financial indebtedness; (j) enter into any agreements that conflict with the JiuGe Technology Call Option Agreement; or (k) do any acts that would adversely impair the VIE’s ability to perform the obligations under the VIE Agreements. Neither Ms. Li Li nor the VIE may assign any of its rights and obligations under the agreement without the prior written consent of WFOE or unilaterally terminate the agreement. This agreement is one of the guarantees for WFOE and investors to ensure that the VIE will not have any potential equity changes that endanger the rights and interests of WFOE and investors; and ● a share pledge agreement under which the owner of JiuGe Technology has pledged all of their rights, titles and interests in JiuGe Technology to JiuGe Management to guarantee JiuGe Technology’s performance of its obligations under the JiuGe Technology Consulting Services Agreement (the “ JiuGe Technology Share Pledge Agreement ”). This agreement was duly signed among Ms. Li Li, the WFOE and the VIE. Under this agreement, all the equity interests of the VIE held by Ms. Li Li were pledged to the WFOE, giving the WFOE a right to exercise the share pledge where Ms. Li Li or the VIE violates the VIE Agreements. This measure under this agreement will result in the equity of the VIE being locked, making it impossible for any third party to legally obtain the equity of the VIE without the prior consent of the WFOE. Our PRC counsel has reviewed these agreements and believes that all the VIE Agreements were duly signed and are not in violation of applicable laws of PRC. We are of the opinion that the VIE Agreements are valid and giving the WFOE a full control over the VIE in respect of the current and effective PRC laws and regulations. However, the VIE Agreements have never been challenged or recognized in court for the time being, and the PRC government may determine that the VIE Agreements are not in compliance with applicable PRC laws, rules and regulations compared with direct ownership, they may be less effective in controlling through the VIE structure. In the first half of 2018, JiuGe Technology established contracts with China Unicom and China Mobile, initiating the provision of mobile data services to businesses and corporations in key provinces/municipalities including Chengdu, Jiangxi, Jiangsu, Chongqing, Shanghai, Zhuhai, Zhejiang, Shaanxi and Inner Mongolia. As with all dynamic markets, the specifics of our operational contracts have naturally evolved over time but our dedication to these provinces is unwavering, and we consistently enhance our service and product offerings to ensure optimal service. Additionally, as we continue to grow, there is the potential for our reach to expand into additional provinces in the PRC. 33 In September 2018, JiuGe Technology launched and commercialized mobile payment and recharge services to businesses for China Unicom. 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 negotiated rebate amount from each of China Unicom and China Mobile for all monies paid by consumers to China Unicom and China Mobile that 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 the telecommunications companies, reduced by the amounts by which we discount the mobile data and talk time sold through our platform. In October 2018, China Unicom and China Mobile awarded JiuGe Technology with contracts that established partnerships for data analysis, that could unlock potential value-added services. This description of the VIE Agreements discussed above does not purport to be complete and are qualified in their entirety by reference to the terms of the VIE Agreements, which were filed as exhibits to our Current Report on Form 8-K filed with the SEC on December 27, 2018 and are incorporated by reference herein. The English translation version of the JiuGe Technology Share Pledge Agreement was filed as Exhibit 10.6 to our Form S-1/A (Amendment No. 1) filed with the SEC on January 5, 2023, and is incorporated by reference herein. Acquisition of Operational Control of Beijing Technology 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. Through Beijing Technology, the Company entered into the business of mass SMS text message service as a compliment to its mobile payment and recharge business. The mass SMS text message service offers bulk SMS services to end consumers with competitive pricing. Currently, the Company’s SMS integrated platform is processing more than 150 million SMS text messages per month. Beijing Technology retains a license from the Ministry of Industry and Information Technology (“ MIIT ”) to operate SMS and MMS business in the PRC. Similar to the mobile recharge business, Beijing Technology is required to make a deposit or bulk purchase in advance and has secured business customers that will 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 to assist the Company’s clients to fulfil the government guidelines, until the SMS messages have been delivered successfully. China Unicom Cooperation Agreement On July 7, 2019, JiuGe Technology entered into that certain Yunnan Unicom Electronic Sales Platform Construction and Operation Cooperation Agreement (the “ Cooperation Agreement ”) with China United Network Communications Limited Yunnan Branch (“ China Unicom Yunnan ”). Under the Cooperation Agreement, JiuGe Technology is responsible for constructing and operating China Unicom Yunnan’s electronic sales platform through which consumers can purchase various goods and services from China Unicom Yunnan, 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 Yunnan’s specifications and policies, and applicable law, and bear all expenses in connection therewith. As consideration for the services it provides under the Cooperation Agreement, JiuGe Technology receives a percentage of the revenue received from all sales it processes for China Unicom Yunnan on the platform. The Cooperation Agreement expires three years from the date of its signature, subject to 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 Yunnan unilaterally. The Cooperation Agreement contains customary representations from each party regarding such party’s authority to enter into and perform under the Cooperation Agreement, and provides customary events of default, including for various types of failure to perform. Any disputes arising between the parties under the Cooperation Agreement will be adjudicated in Chinese courts. 34 This description of the Cooperation Agreement does not purport to be complete and is qualified in its entirety by reference to the terms of the Cooperation Agreement, which was filed as an exhibit to our Current Report on Form 8-K filed with the SEC on November 9, 2019 and is incorporated by reference herein. In January 2022, TengLian (a 99% owned subsidiary of JiuGe Technology) signed a co-operation agreement with China Unicom to launch the Device Protection program for mobile phones and the new 5G phones. Intercorporate Relationships The following is a list of all of our subsidiaries and the corresponding date of jurisdiction of incorporation or organization and the ownership interest of each. All of our subsidiaries are directly or indirectly owned or controlled by us: Name of Entity Place of Incorporation / Formation Ownership Interest Finger Motion Company Limited (1) Hong Kong 100% Finger Motion (CN) Global Limited (2) Samoa 100% Finger Motion (CN) Limited (3) Hong Kong 100% Shanghai JiuGe Business Management Co., Ltd. (4) PRC 100% Shanghai JiuGe Information Technology Co., Ltd. (5) PRC Contractually controlled (5) Beijing XunLian TianXia Technology Co., Ltd. (6) PRC Contractually controlled Finger Motion Financial Group Limited (7) Samoa 100% Finger Motion Financial Company Limited (8) Hong Kong 100% Shanghai TengLian JiuJiu Information Communication Technology Co., Ltd. (9) PRC Contractually controlled Shanghai KeShunXiang Automobile Service Co., Ltd. (10) PRC Contractually controlled Zhejiang ChangXin Communication Equipment Co., Ltd. (11) PRC Contractually controlled Shanghai XiaoYi Bin Tong Technology Co., Ltd. (12) PRC Contractually controlled Notes : (1) Finger Motion Company Limited is a wholly-owned subsidiary of FingerMotion, Inc. (2) Finger Motion (CN) Global Limited is a wholly-owned subsidiary of FingerMotion, Inc. (3) Finger Motion (CN) Limited is a wholly-owned subsidiary of Finger Motion (CN) Global Limited. (4) Shanghai JiuGe Business Management Co., Ltd., sometimes referred to in this Quarterly Report as “the WFOE”, is a wholly-owned subsidiary of Finger Motion (CN) Limited. (5) Shanghai JiuGe Information Technology Co., Ltd., sometimes referred to in this Quarterly Report as “the VIE”, is a variable interest entity that is contractually controlled by Shanghai JiuGe Business Management Co., Ltd. (6) Beijing XunLian TianXia Technology Co., Ltd. is a 99% owned subsidiary of Shanghai JiuGe Information Technology Co., Ltd. (7) Finger Motion Financial Group Limited is a wholly-owned subsidiary of FingerMotion, Inc. (8) Finger Motion Financial Company Limited is a wholly-owned subsidiary of Finger Motion Financial Group Limited. (9) Shanghai TengLian JiuJiu Information Communication Technology Co., Ltd. is a 99% owned subsidiary of Shanghai JiuGe Information Technology Co., Ltd. (10) Shanghai KeShunXiang Automobile Service Co., Ltd. is a 99% owned subsidiary of Shanghai JiuGe Information Technology Co., Ltd. (11) Zhejiang ChangXin Communication Equipment Co., Ltd. is a 70% owned subsidiary of Shanghai KeShunXiang Automobile Service Co., Ltd. (12) Shanghai XiaoYi Bin Tong Technology Co., Ltd. is a 80% owned subsidiary of Shanghai JiuGe Information Technology Co., Ltd. Because we do not directly hold equity interests in the VIE, we are subject to risks and uncertainties of the interpretations and applications of Chinese laws and regulations, including but not limited to, the validity and enforcement of the VIE Agreements among the WFOE, the VIE and the shareholder of the VIE. We are also subject to the risks and uncertainties about any future actions of the Chinese government in this regard that could disallow the VIE structure, which would likely result in a material change in our operations and may cause the value of our Common Shares to depreciate significantly or become worthless. 35 The VIE Agreements may not be as effective as direct ownership in providing operational control. For instance, the VIE and its shareholders could breach their contractual arrangements with us by, among other things, failing to conduct their operations in an acceptable manner or taking other actions that are detrimental to our interests. The shareholder of the VIE may not act in the best interests of our Company or may not perform their obligations under the VIE Agreements. Such risks exist throughout the period in which we intend to operate certain portions of our business through the VIE Agreements with the VIE. In the event that the VIE or its shareholder fail to perform their respective obligations under the VIE Agreements, we may have to incur substantial costs and expend additional resources to enforce such arrangements. In addition, even if legal actions are taken to enforce the VIE Agreements, there is uncertainty as to whether Chinese courts would recognize or enforce judgments of U.S. courts against us or such persons predicated upon the civil liability provisions of the securities laws of the United States or any state. See “Risk Factors—Risks Related to the VIE Agreements”. We rely on the VIE Agreements with the VIE and its shareholder for a significant portion of our business operations. The VIE Agreements may not be as effective as direct ownership in providing operational control. Any failure by the VIE or its shareholder to perform their obligations under such contractual arrangements would have a material and adverse effect on our business. As of the date of this Quarterly Report on Form 10-Q, we and the VIE are not required to seek permissions from the CSRC, the CAC, or any other entity that is required to approve of the operations of the VIE, other than a value-added telecommunications business licence, which has already been obtained. Nevertheless, Chinese regulatory authorities may in the future promulgate laws, regulations or implement rules that require us, our subsidiaries or the VIEs to obtain permissions from such regulatory authorities to approve the operations of the VIE or any securities listing. Overview 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. As described elsewhere in this Quarterly 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. 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 ”) platform; (v) Big Data Insights; 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 (i.e. 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. 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. We 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 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. 36 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.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 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 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 Shanghai TengLian JiuJiu Information Communication Technology Co., Ltd. signed an agreement with both China Unicom 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 cloud services designed to offer corporate customers robust data storage, processing capabilities, and databases accessible via the internet. 37 SMS and MMS Services On March 7, 2019, the Company, acting through JiuGe Technology, acquired operational control of Beijing XunLian TianXia Technology Co., Ltd. (“ 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 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, 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 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, 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. 38 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. Building on these capabilities, the Company signed an agreement with PT Mach Wireless Teknologi to introduce its AI-powered insurance risk rating platform in Indonesia. The platform applies proprietary machine learning and risk analytics to support motor, health, and life insurance underwriting, adapted to local infrastructure and regulations. This arrangement aims to advance the telco-insurance ecosystem by fostering collaboration between telecom operators, insurers, and local digital service providers. 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. 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 FingerMotion’s Advanced Mobile Integrated Command and Communication Platform (the “ C2 Platform ”), saw considerable advancements during the fiscal year ended February 28, 2025. 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 fiscal year ended February 28, 2025, 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 up during the fiscal year ending February 28, 2026, 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 ended February 28, 2025. 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 fiscal year ended February 28, 2025, 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. 39 Building on the momentum from the previous fiscal year, the DaGe platform continued to evolve during the three months ended May 31, 2025. We focused on strengthening relationships with service providers, enhancing user experience, and selectively expanding coverage across key regions. Ongoing efforts to refine platform functionality and deepen user engagement are aligned with our broader strategy to scale DaGe’s presence in the automotive services and EV ecosystem. We also continued to leverage synergies with our telecommunications business to support user acquisition and platform traffic. Recent Developments On June 5, 2025, our subsidiary, JiuGe Technology, entered into a strategic collaborationarrangement with Zhejiang Jincheng Automotive Group Co., Ltd. The arrangement sets the framework for joint efforts in integrating FingerMotion’s C2 Platform into a new generation of emergency response vehicles. The collaboration will focus on technical integration, hardware adaptation, and business model development to serve enterprise and government customers in the emergency response market. On June 12, 2025, JiuGe Technology also entered into a strategic collaboration arrangement with Qingling Motors Co., Ltd., a leading Chinese automotive manufacturer. This partnership aims to co-develop next-generation intelligent vehicle solutions based on FingerMotion’s C2 Platform to deliver smarter, more responsive technologies for high-demand sectors such as emergency services and smart logistics. The collaboration covers system development, IP protection, and potential commercial deployment. Results of Operations Three Months Ended May 31, 2025 Compared to Three Months Ended May 31, 2024 The following table sets forth our results of operations for the periods indicated: For the three months ended May 31, 2025 May 31, 2024 Revenue $ 8,458,743 $ 8,373,983 Cost of revenue $ (8,306,222 ) $ (7,692,094 ) Total operating expenses $ (2,141,451 ) $ (2,357,978 ) Total other income (expenses) $ (33,831 ) $ 20,257 Net Loss attributable to the Company’s shareholders $ (2,008,556 ) $ (1,655,904 ) Foreign currency translation adjustment $ 152,309 $ (64,999 ) Comprehensive loss attributable to the Company $ (1,856,789 ) $ (1,719,837 ) Basic Loss Per Share attributable to the Company $ (0.04 ) $ (0.03 ) Diluted Loss Per Share attributable to the Company $ (0.04 ) $ (0.03 ) Revenue The following table sets forth the Company’s revenue from its lines of business for the periods indicated: For the three months ended May 31, 2025 May 31, 2024 Change (%) Telecommunication Products & Services $ 8,311,254 $ 8,373,520 -1 % DaGe Platform $ 10,938 $ 463 2262 % Command & Communication $ 109,241 $ — 100 % Big Data $ 27,310 $ — -100 % Total Revenue $ 8,458,743 $ 8,373,983 1 % We recorded $8,458,743 in revenue for the three months ended May 31, 2025, an increase of $84,760 or 1%, compared to the three months ended May 31, 2024. This increase resulted from increases in revenue of $10,475, $109,241 and $27,310 from our DaGe Platform, Command & Communication and Big Data, respectively, offset by decrease in revenue of $62,266 from our Telecommunication Products & Services. 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 three months ended May 31, 2025, our revenue remained primarily driven by our Telecommunication Products & Services segment, which contributed $8.31 million, representing 98% of total revenue. Although this segment recorded a slight year-over-year decrease of 1%, it continues to be the core contributor to our overall performance. 40 The DaGe Platform, launched in 2024, continue to gain early momentum, generating $10,938 in revenue compared to $463 in the same period last year. While still in its development phase, the platform represents a strategic entry into the car services market, including offerings such as car wash, maintenance, and EV charging. Initial revenue reflects growing user engagements, and we anticipate stronger contributions in future periods as we expand services and deepen integration with EV charging networks. The Command and Communication segment generated $109,241 in revenue during the quarter, reflecting continued progress in deploying our emergency response and communication services. This business supports our long-term diversification strategy and reinforces our commitment to scalable public safety solutions. The Big Data segment generated revenue of $27,310 during the quarter. During this period, we continued to advance our AI-driven analytics initiatives under the Sapientus brand, with a focus on developing an insurance analytics platform and a broader AI-powered ecosystem. These initiatives include the rollout of intelligent customer profiling tools, AI chatbots, and web-based financial literacy platform aimed at supporting insurance and telco partners. We are progressing from system design and testing toward commercial deployment, targeting future revenue streams through platform subscriptions, consulting services, and data-enable product distribution across Southeast Asia. Cost of Revenue The following table sets forth the Company’s cost of revenue for the periods indicated: For the three months ended May 31, 2025 May 31, 2024 Telecommunication Products & Services $ 8,194,652 $ 7,691,616 DaGe Platform $ 22,490 $ 478 Command & Communication $ 89,080 $ — Big Data $ — $ — Total Cost of Revenue $ 8,306,222 $ 7,692,094 We recorded $8,306,222 in costs of revenue for the three months ended May 31, 2025, an increase of $614,128 or 8%, compared to the three months ended May 31, 2024. 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, promotion and marketing initiatives aimed at user growth and partner engagement, particularly in our emerging segments which are reflected in our cost of revenue. Gross profit Our gross profit for the three months ended May 31, 2025 was $152,521, a decrease of $529,368 or 78%, compared to the three months ended May 31, 2024. The decline was primarily attributable to the lower margin product mix in the Telecommunication Product & Services segment during the period. In addition, initial ramp-up costs in our emerging segments particularly the DaGe Platform and Command and Communication business contributed to overall margin compression as these businesses are still in the early stages of development and have yet to achieve scale efficiencies. 41 Amortization & Depreciation We recorded depreciation of $10,553 for fixed assets for the three months ended May 31, 2025, a decrease of $1,461 or 12%, compared to the three months ended May 31, 2024. General & Administrative Expenses The following table sets forth the Company’s general and administrative expenses for the periods indicated: For the three months ended May 31, 2025 May 31, 2024 Accounting $ 49,879 $ 23,628 Consulting $ 455,609 $ 424,438 Entertainment $ 45,088 $ 67,823 IT $ 10,778 $ 11,738 Rent $ 31,621 $ 33,196 Salaries & Wages $ 612,045 $ 616,642 Technical fee $ 31,717 $ 60,346 Travelling $ 79,187 $ 81,838 Others $ 194,502 $ 562,128 Total G&A Expenses $ 1,510,426 $ 1,881,777 We recorded $1,510,426 in general and administrative expenses for the three months ended May 31, 2025, decrease of $371,351 or 20%, compared to the three months ended May 31, 2024. The decrease was primarily due to lower technical fee, entertainment, and other miscellaneous expenses compared to the prior year. General and administrative expenses consist 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 Cost The following table sets forth the Company’s marketing cost for the periods indicated: For the three months ended May 31, 2025 May 31, 2024 Marketing Cost $ 12,106 $ 62,524 We recorded $12,106 in marketing cost for the three months ended May 31, 2025, being a decrease of $50,418 or 81%, compared to the three months ended May 31, 2024. Marketing activities during the quarter were primarily related to targeted campaigns supporting the continued rollout of our DaGe platform. Research & Development The following table sets forth the Company’s research & development for the periods indicated: For the three months ended May 31, 2025 May 31, 2024 Research & Development $ 172,652 $ 178,993 We incurred fees of $172,652 in research & development for the three months ended May 31, 2025 as compared to $178,993 for the three months ended May 31, 2024 representing a decrease of $6,341 or 4%. A substantial portion of the research and development efforts during the quarter was directed toward our Big Data segment under the Sapientus brand, while preliminary development activities also began within our Command and Communication segment, which is currently in its initial buildout phase under a strategic joint venture. 42 The Sapientus division continues to focus on AI-powered analytics and insurance-related data modelling, supported by a team of actuaries, data scientists, and software engineers. During the quarter, we continued to maintain and refine our credit risk assessment platform as part of our broader suite of data-driven solutions. We also commenced development of a new insurance platform with integrated AI capabilities, aimed at supporting intelligent risk evaluation, product innovation, and sales enablement. In parallel, we continued to refine our analytics using empirical data and progressed internal efforts to support future capabilities in portfolio segmentation and data-driven distribution strategies. The Company also holds registered patents in China covering proprietary model algorithms and insurance analytics infrastructure. Looking ahead, we remain focused on expanding Sapientus beyond China, with an emphasis on scalable and low capital data solutions designed for international markets. At the same time, we are progressing the early stage development of our Command & Communication segment under a strategic collaboration, supporting future opportunities in emergency response and public safety infrastructure. Research and development remains core to our innovation led strategy and long term value creation across both analytics and technology-driven services. Credit Impairment Loss The following table sets forth the Company’s credit impairment loss for the periods indicated: For the three months ended May 31, 2025 May 31, 2024 Credit impairment loss $ 307,967 $ — We recorded $307,967 in credit impairment loss for three months ended May 31, 2025, an increase $307,967 or 100% compared to the three months ended May 31, 2024, reflecting a prudent assessment of expected credit loss based on updated evaluations of customer credit risk and overall credit exposure. Share Compensation Expenses The following table sets forth the Company’s share compensation expenses for the periods indicated: For the three months ended May 31, 2025 May 31, 2024 Share compensation expenses $ 127,747 $ 222,670 We incurred fees of $127,747 in share issuance for consultants in consideration of services and stock option compensation expense for the three months ended May 31, 2025 as compared to $222,670 for the three months ended May 31, 2024. The decrease of $94,923 or 43% 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 $2,141,451 in operating expenses for the three months ended May 31, 2025, as compared to $2,357,978 in operating expenses for the three months ended May 31, 2024. The decrease of $216,527 or 9%, for the three months ended May 31, 2025 is as set forth above. Net Loss attributable to the Company’s shareholders The net loss attributable to the Company’s shareholders was $2,008,556 for the three months ended May 31, 2025 and $1,655,904 for the three months ended May 31, 2024. The increase in net loss attributable to the Company’s shareholders of $352,652 or 21% resulted primarily from the significant decline in gross profit which was due to the low margin product mix in the Telecommunication Product & Services segment as discussed above. 43 Liquidity and Capital Resources The following table sets out our cash and working capital as of May 31, 2025 and February 28, 2025: As at May 31, 2025 As at February 28, 2025 Cash reserves $ 2,863,238 $ 1,128,135 Working capital $ 9,399,996 $ 6,902,805 At May 31, 2025, we had cash and cash equivalents of $2,863,238, as compared to cash and cash equivalents of $1,128,135 at February 28, 2025. Our 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 clients . We did, however, as of May 31, 2025, receive $950,000 in subscription proceeds to purchase 380,000 shares of our common stock at $2.50 per share on a private placement basis, $1,724,615 from the exercise of warrants to purchase 1,149,743 shares of our common stock at $1.50 per share and $282,000 from the exercise of warrants to purchase 150,000 shares of our common stock at $1.88 per share. Statement of Cashflows The following table provides a summary of cash flows for the periods presented: For the three months ended May 31, 2025 May 31, 2024 Net cash used in operating activities $ (1,204,217 ) $ (1,409,939 ) Net cash used in investing activities $ (1,826 ) $ — Net cash provided by financing activities $ 2,956,615 $ 775,000 Effect of exchange rates on cash & cash equivalents $ (15,469 ) $ 181,831 Net increase (decrease) in cash and cash equivalents $ 1,735,103 $ (453,108 ) Cash Flow used in Operating Activities Net cash used in operating activities decreased by $205,722 in the three months ended May 31, 2025 compared to the three months ended May 31, 2024, primarily due to an increase in account receivable of ($6,005,779) (May 31, 2024: ($7,762,176)) and decrease in lease liability of ($1,567) (May 31, 2024: $12,006); offset by decrease in prepayment and deposit of $862,490 (May 31, 2043: $24,000 ), decrease in other receivable of $71,455 (May 31, 2024: ($150,316)), decrease in inventories of $43,613 (May 31, 2024: $nil), increase in accounts payable of $5,375,987 (May 31, 2024: $6,884,661) and increase in accrual and other payable of $26,048 (May 31, 2024: $833,177 ) 44 Cash Flow used in Investing Activities During the three months ended May 31, 2025, net cash used in investing activities increased by $1,826 compared to $nil in the three months ended May 31, 2024. Cash Flow provided by Financing Activities During the three months ended May 31, 2025, net cash provided by financing activities was $2,956,615 compared to net cash provided by financing activities during the three months ended May 31, 2024 of $775,000. The increase was due to the receipt of subscription proceeds on a private placement basis and exercise of warrants. 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 Other than the above, we have determined that we do not have any material subsequent events to report. Critical Accounting Policies For a complete summary of all our significant accounting policies refer to Note 2 - Summary of Principal Accounting Policies of the Notes to the Consolidated Financial Statements as presented under Item 8, Financial Statements and Supplementary Data in our Annual Report on Form 10-K for our fiscal year ended February 28, 2025 filed with the SEC on May 29, 2025. For our Critical Accounting Policies, please refer to the “Critical Accounting Policies” section under Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for our fiscal year ended February 28, 2025 filed with the SEC on May 29, 2025. Recently Issued Accounting Pronouncements The Company does not believe recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the consolidated financial position, statements of operations and cash flows. ITEM 3 - 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.