FingerMotion, Inc. 10-K

ITEM 1. BUSINESS Company Overview FingerMotion, Inc. (“ FingerMotion ,” the “ Company ,” “ we ,” “ our ,” or “ us ”) is a Delaware holding company. Headquartered in Singapore, the Company provides technology-enabled platforms and services in the People’s Republic of China (“ PRC ” or “ China ”, and, unless the context requires otherwise and solely for the purpose of this Annual Report such as describing legal or tax matters, authorities, entities, or persons, excludes Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan) and selected international markets. The Company’s offerings include mobile payment and recharge solutions, data analytics services, and platform-based digital applications and solutions. The Company operates through its subsidiaries and contractual arrangements with affiliated entities in the PRC, including its variable interest entity (“ VIE ”), through which it conducts a substantial portion of its operations. These contractual arrangements are intended to provide the Company with effective control over, and the ability to receive economic benefits from, the VIE. Its business model focuses on delivering transaction-based services, platform solutions, and data-driven applications to telecommunications carriers, enterprise customers, and other commercial partners. For a description of the contractual arrangements and the related risks, see “Item 1A. Risk Factors—Risks Related to VIE Agreements” and “Risks Related to Doing Business in China.” The Company organizes its operations across four primary areas: (i) telecommunications products and services, (ii) marketplace platform and digital commerce infrastructure solutions, (iii) data and analytics platform solutions, and (iv) advanced technology and platform solutions. The Company’s strategic focus is to continue operating and optimizing its telecommunications products and services business while expanding its higher-margin, technology-driven platform offerings. These offerings include the development and commercialization of its marketplace platforms, data analytics solutions (including applications for insurance and financial services), and critical infrastructure technology platforms. The Company is also focused on enhancing its underlying technology capabilities, including platform scalability, data processing, and system integration, to support growth across multiple industry verticals. The timing and extent of growth in these areas will depend on factors such as market adoption, competitive conditions, regulatory developments, and the Company’s ability to execute its platform development and commercialization strategies. Business Segments The Company operates an integrated portfolio of technology-driven platforms and services across four core areas: (i) telecommunication products and services, (ii) marketplace platform and digital commerce infrastructure solutions, (iii) data and analytics platform solutions, and (iv) advanced technology and platform solutions. These offerings leverage the Company’s technological capabilities across multiple industry applications, with a focus on scalable and extensible platform architectures. (i) Telecommunications Products and Services The Company offers telecommunications-related services in the PRC through its subsidiaries and VIE structure. This segment includes mobile payment and recharge services, as well as enterprise messaging services such as short message services (“ SMS ”) and multimedia messaging services (“ MMS ”). These services historically represent a significant portion of the Company’s revenue. The Company conducts its operations through JiuGe Technology. Mobile Payment and Recharge Services The Company provides mobile airtime and data recharge services to telecommunications carriers and channel partners, allowing end users to purchase prepaid mobile credits through its platform. The Company procures airtime and data packages in bulk from telecommunications operators and distributes them through a network of enterprise customers, digital platforms, and other distribution channels. - 1 - JiuGe Technology holds licensed access agreements with major Chinese telecom providers, including China Mobile Communications Corporation (“ China Mobile ”) and China United Network Communications Group Co., Ltd. (“ China Unicom ”). Through these arrangements, JiuGe Technology offers mobile payment and recharge services, earning revenue from transaction rebates paid by telecom operators. The platform provides real-time payment and recharge services to third-party businesses, e-commerce channels, and online marketplaces such as JD.com, Pinduoduo, and Tmall. JiuGe Technology generates revenue by processing payments for telecom services and receiving rebates from telecom operators. To attract users, it may offer discounted data or talk-time packages through its platform. Additionally, the Company serves as a loyalty redemption agent for China Mobile, allowing customers to redeem telecom loyalty benefits through its platform. In 2019, JiuGe Technology entered into an agreement with China Unicom’s Yunnan division to build and operate an online sales platform for telecom-related products and services, including mobile phones, broadband services, smart devices, and related insurance offerings. Under this arrangement, JiuGe Technology receives a percentage of the sales revenue generated through the platform. The Company has also secured contracts with China Mobile and China Unicom to acquire new telecom subscribers and continues to expand mobile phone sales through its online channels. Enterprise Messaging Services (SMS and MMS) The Company provides enterprise messaging services through Beijing XunLian TianXia Technology Co., Ltd. (“ Beijing Technology ”), which it controls operationally via JiuGe Technology. Beijing Technology is licensed by the Ministry of Industry and Information Technology (“ MIIT ”) to provide SMS and MMS services in the PRC. The Company procures messaging capacity in bulk and delivers these services to enterprise customers, including automobile manufacturers, hotel chains, airlines, and e-commerce companies. Its integrated messaging platform enables enterprise customers to manage high-volume messaging campaigns, ensuring compliance with relevant regulatory requirements for message content and distribution, and provides delivery tracking capabilities. (ii) Marketplace Platform and Digital Commerce Infrastructure The Company develops mobile-first, online-to-offline (“ O2O ”) marketplace platform solutions designed to connect consumers with service providers and vendors of products and services. The platform integrates core marketplace functionalities, including service discovery, provider matching, booking and scheduling, payment processing, and post-transaction feedback mechanisms. The Marketplace Platform and Digital Commerce Infrastructure segment is designed to be scalable and extensible across multiple service-based and transaction-oriented industry verticals. The Company focuses on ongoing technology development and platform enhancement, including improvements to system performance, user experience, data analytics integration, and transaction processing efficiency. These initiatives are intended to enhance user engagement, improve transaction conversion rates, and support long-term scalability. The Company intends to generate revenue from its Marketplace Platform and Digital Commerce Infrastructure services through transaction-based fees, subscription arrangements, advertising services, and other value-added offerings. The timing and extent of revenue generation will depend on factors such as market adoption, platform scalability, competitive conditions, regulatory developments, and the Company’s ability to execute its commercialization strategy. DaGe Platform The DaGe Platform is a digital marketplace designed to connect automotive owners with service providers and vendors of automotive-related products and services. This platform facilitates various services, including vehicle maintenance, repair, tire replacement, and electric vehicle (EV) charging, as well as the sale of automotive accessories. The platform includes functionality for service discovery, booking management, payment processing, and user feedback, and is intended to support mobility-related applications. The DaGe Platform is part of the Company’s Marketplace Platform and Digital Commerce Infrastructure services initiatives and is at early stages of development. These activities may require ongoing investment and may not generate significant revenue in the near term. The Company may seek to generate revenue from this platform through transaction-based fees, subscriptions, advertising, and related services; however, the timing and extent of such revenue remain uncertain and will depend on market adoption, platform development, and regulatory conditions. - 2 - JiuGe Procurement Platform The JiuGe Procurement Platform is an enterprise procurement solution operated by JiuGe Technology and is included within the Company’s Marketplace Platform and Digital Commerce Infrastructure initiatives. The platform is designed to support JiuGe Technology’s mobile recharge business by centralizing supplier product catalogues and facilitating procurement workflows for employee benefits, customer rewards, and promotional campaign distribution. The goal is to improve procurement efficiency, supplier coordination, and internal resource allocation. (iii) Data And Analytics Platform Solutions The Company provides data analytics and data-driven solutions through its Sapientus platform to insurance companies, financial service providers, and enterprise customers. This segment represents a key strategic focus and is intended to support the Company’s transition toward higher-margin and scalable services. Sapientus aggregates and processes large volumes of structured and unstructured data from multiple sources to generate analytical insights and reporting outputs that support decision-making in sectors such as insurance, financial services, and mobility. The platform is designed to support risk assessment, trends identification, customer segmentation, marketing analysis, and related business operations. The Company continues to invest in expanding its data capabilities and analytical models. The performance and growth of this segment may be affected by market acceptance, regulatory developments, and the Company’s ability to access and utilize data in compliance with applicable laws and regulations. (iv) Advanced Technology and Platform Solutions The Company develops advanced technology and platform solutions designed for enterprise and mission-oriented environments that require real-time communication, coordination, and operational management capabilities. These solutions are intended to support complex workflows across a range of industry applications where reliability, performance, and system integration are important. C2 Platform The Company, through its VIE, JiuGe Technology, has developed a C2 Platform focused on communications and operational coordination for mobility-related applications, including emergency response, logistics, and specialized field operations. The C2 Platform represents the Company’s initial deployment of its technology in mission-critical and public infrastructure environments that support public safety and operational coordination. The platform reflects the Company’s ability to design and implement system-level software solutions intended to operate in environments requiring reliability, performance, and continuity of service. The Company intends to leverage its experience and technical capabilities developed through the C2 Platform to evaluate and pursue opportunities in other areas of critical infrastructure. These potential applications may include public safety systems, transportation networks, emergency response coordination, and other large-scale operational environments, subject to customer demand, technical feasibility, and regulatory considerations. The C2 Platform integrates mobile communications, data processing, and system coordination functions to facilitate information sharing between field personnel and centralized command centres. This platform is designed to support real-time data transmission, remote monitoring, and coordination of field operations. The Company’s C2 Platform initiatives focus on developing and deploying communication and platform solutions for commercial and specialty vehicles. These solutions aim to enhance situational awareness, fleet coordination, and remote operations across various use cases, including emergency response, logistics, and infrastructure services. The C2 Platform is currently in the commercialization stage and is being introduced to enterprise and public-sector customers through pilot deployments, procurement processes, and direct engagement activities. The timing and extent of future revenue generation will depend on a number of factors, including customer adoption, procurement cycles, competitive conditions, and the successful scaling of deployments across additional jurisdictions and applications. - 3 - Corporate Information The Company has been organized as a holding company and conducts a significant part of its operations through subsidiaries and contractual arrangements with affiliated entities in the PRC, including its VIE. The Company’s operations in the PRC are primarily carried out through its wholly owned subsidiaries and a wholly foreign-owned enterprise (“ WFOE ”), which has entered into a series of contractual agreements with the VIE and its respective shareholder. These contractual arrangements are intended to provide the Company with effective control over the VIE and the ability to receive substantially all of the economic benefits of the VIE’s operations. The VIE structure is employed to comply with PRC laws and regulations that restrict or prohibit foreign ownership in certain industries. However, these arrangements have not been tested in a court of law in the PRC and carry associated risks and uncertainties. See “Item 1A. Risk Factors—Risks Related to VIE Agreements.” The following diagram depicts our corporate structure: The Company’s holding company structure presents unique risks as the Company’s investors may never directly hold equity interests in the Company’s subsidiaries or the VIE. - 4 - The Company relies on distributions and other payments from its subsidiaries and VIE to fund its operations. These payments are subject to PRC laws and regulations, including restrictions on dividends, foreign exchange controls, and other regulatory requirements. The Company’s subsidiaries and VIE are subject to regulation by PRC authorities, including the China Securities Regulatory Commission (“ CSRC ”) and the Cyberspace Administration of China (“ CAC ”). As of the date of this report, the Company is not required to obtain specific approvals from these authorities to operate its current business. However, under the CSRC’s Overseas Listing Trial Measures, the Company may be required to complete filing procedures for future overseas securities offerings. The regulatory environment in China is evolving, and it remains uncertain how new or changing laws and regulations may impact the Company’s operations, its ability to accept foreign investment, or its ability to maintain a listing on a U.S. or other foreign exchange. Licensing The Company’s operations in the PRC require specific licenses and permits. Its VIE and related operating entities hold value-added telecommunications business licenses issued by the MIIT. These licenses are necessary for providing mobile payment, recharge, and messaging services in China. VIE Structure The Company conducts a substantial portion of its operations in China through VIE arrangements. These arrangements consist of a series of contractual agreements (the “ VIE Agreements ”) between the Company’s WFOE and the VIE, along with its shareholder, pursuant to which JiuGe Technology became the Company’s contractually controlled affiliate. 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 the VIE. The purpose of these agreements is to give the Company effective control over the VIE and to enable it to receive the majority of the economic benefits from its operations. However, the Company lacks direct equity ownership in the VIE, which means these arrangements may not be as effective as direct ownership. The enforceability of the VIE agreements under PRC law remains uncertain, and there is no guarantee that the Company will be able to maintain effective control over the VIE. Please see “Item 1A. Risk Factors—Risks Related to VIE Agreements.” Acquisition of Operational Control of Beijing Technology The Company acting through the VIE expanded its telecommunications services through the acquisition of operational control of Beijing XunLian TianXia Technology Co., Ltd., which provides enterprise messaging solutions, including SMS and MMS, for enterprise customers. This service complements the Company’s mobile payment and recharge offerings and operates under licenses issued by the MIIT. Strategic Cooperation with China Unicom The Company, through its VIE, JiuGe Technology, has established cooperative arrangements with China United Network Communications Limited and its regional branches, including China Unicom Yunnan. These arrangements represent a key component of the Company’s telecommunications ecosystem and support its transaction-based service model. Under these cooperation arrangements, JiuGe Technology is responsible for constructing and operating electronic sales platforms and related services through which consumers may purchase telecommunications products and services, including mobile devices, mobile service plans, broadband services, and related offerings. The Company receives a share of the revenue generated from transactions processed through these platforms. The Company believes these arrangements enhance its integration with major telecommunications operators in China and provide opportunities to increase transaction volume and service penetration. The extent of revenue generated from these arrangements depends on transaction activity, customer adoption, and ongoing commercial cooperation with the relevant counterparties. In addition, in January 2022, TengLian, a subsidiary of JiuGe Technology, entered into a cooperation arrangement with China Unicom to support device protection programs for mobile and 5G devices. This initiative expands the Company’s involvement in value-added telecommunications services and may enhance its broader service offerings. - 5 - These cooperative arrangements are subject to customary commercial terms, including renewal provisions and termination rights, and their continuation and financial contributions will depend on ongoing performance, regulatory conditions, and market demand. 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 Annual 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 Annual 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 shares of common stock (“ Common Shares ”) to depreciate significantly or become worthless. 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. - 6 - As of the date of this Annual Report on Form 10-K, 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 license, 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. Products and Services The Company’s activities are organized by its four primary business segments: (i) telecommunications products and services, (ii) marketplace platform and digital commerce infrastructure solutions, (iii) data and analytics platform solutions, and (iv) advanced technology and platform solutions. Across these segments, the Company employs a combination of digital distribution channels, direct sales efforts, and strategic collaborations to support customer acquisition, increase service utilization, and expand its market presence. Telecommunications Products and Services The Company conducts its sales and marketing activities for its telecommunications products and services primarily through online distribution channels, including e-commerce marketplaces and social media platforms in the PRC. These channels are used to facilitate customer acquisition, promote product offerings, and support transaction execution. In coordination with telecommunications operator arrangements, the Company conducts periodic promotional campaigns, including seasonal and region-specific initiatives, designed to align with local market conditions and consumer demand. The Company also maintains relationships with online storefront operators and other business collaborators to support distribution and customer outreach. In addition, the Company has implemented customer engagement initiatives, including loyalty-based programs in collaboration with telecommunications operators, which are intended to support customer retention and increase usage of its services. For its enterprise-focused communications services, including SMS offerings, the Company utilizes direct sales, account management, and channel partnerships to expand its corporate customer base and increase service adoption across multiple industry sectors. The Company’s products and services offerings include the following: Product / Service Details Recharge Services The Company offers recharge services to consumers throughout China. Data Plan The Company offers mobile data plans to consumers, including 5G plans. Mobile Phone The Company offers mobile phones to consumers online. Upon order completion, the Company’s up-stream partners or phone distributors (VSens and ZhengZhouXinSiWei) will arrange direct delivery to the customer. Subscription Plan The Company acquires new customers by offering telecommunication subscription plans. The Company shares revenue with telecommunication operators on a new subscribers’ spending over the following 12 months. Value Added Products and Services New product lines and services will be brought in by the Company to offer to the existing user base through the delivery channels of the Telecommunication partners and the platform partners. - 7 - Up-Stream Partners The Company partners with all three major telecommunication operators in China, namely China Mobile, China Unicom and China Telecom, to offer its products and services: Telecommunication Operator Products and Services China Mobile Recharge Service Data Plan Subscription Plans Mobile Protection Plans China Unicom Recharge Service Data Plan Subscription Plan Mobile Protection Plans China Telecom Recharge Service Data Plan Down-Stream Partners The Company currently operates online stores and pages on various e-commerce and social media platforms, gaining access to millions of users without having to incur the associated marketing expenditures or user acquisition investments. Name of Online Stores Partners / Platform Details JiuGe TongXin Store TMall.com Telco Products & Services HeNan China Mobile Store TMall.com China Mobile Flagship Store JiuGe Mobile Data Store PingDuoDuo.com Telco Products & Services JiuGe Mobile Data Store Tbao Telco Products & Services SMS and MMS Services The Company’s SMS Integrated System provides a robust back-end control panel for corporate partners to access and manage their own messaging settings. Corporate partners can upload a list of targeted members, compose text or multimedia messages and define broadcasting settings. All messages must be submitted to the ministry for review before being delivered to telecommunication operators’ back-end for broadcasting. The mass SMS text message service offers bulk SMS services to end consumers with competitive pricing. Beijing Technology retains a license from the MIIT to operate 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 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 guiding the Company’s customer to meet government’s guidelines on messages composed, until the SMS messages have been delivered successfully. The Company’s SMS Integrated System performs more than 150 million SMS transactions monthly. The Company focuses its efforts on: ■ Continuously enhancing the SMS Integrated System to offer a more flexible, reliable, and scalable platform. ■ Working closely with telecommunication operators in a select few provinces allows the Company’s business development team to negotiate and secure better bulk purchase pricing from time to time. ■ The Company’s corporate partners span various industries such as airlines, insurance and financial services, e-commerce and consumer markets; diversifying sources of revenue improves the stability of the Company’s revenue stream and minimizes seasonal fluctuations with SMS volume. Marketplace Platform and Digital Commerce Infrastructure Solutions – DaGe Platform The DaGe platform is an integrated digital marketplace designed to connect automotive owners with a wide network of service providers and merchants. It enables users to access a variety of automotive services, such as car maintenance, repairs, tire replacement, and electric vehicle (EV) charging stations. Additionally, the platform allows merchants to sell car-related products and accessories, creating a comprehensive automotive marketplace. - 8 - The DaGe platform functions as an online marketplace tailored to automotive needs, aggregating service providers and product vendors into a single, user-friendly ecosystem. Through the DaGe Mobile App, users can locate nearby services using geolocation, schedule appointments, purchase accessories, and make secure payments. Features include service provider ratings, booking management, promotions, and loyalty rewards. Supporting the expansion of EV infrastructure, the DaGe platform facilitates access to a growing network of EV charging stations, aligning with broader trends toward sustainable mobility. The Company’s sales and marketing efforts for its DaGe Platform are focused on increasing user adoption, expanding service provider participation, and driving transaction volume across its platforms. Marketing activities are conducted primarily through digital channels, including mobile applications such as WeChat Mini-Programs, social media platforms, and messaging-based campaigns. The Company also leverages its existing telecommunications customer base and distribution channels to promote its marketplace platforms and facilitate user acquisition. The Company engages in co-marketing initiatives with automotive service providers and commercial partners to expand platform visibility and service offerings. Customer acquisition and retention strategies include promotional campaigns, referral programs, and targeted marketing efforts based on geographic and user behaviour data. As the Company expands its marketplace platforms into additional regions or service categories, it intends to adapt its marketing strategies to reflect local market conditions and consumer preferences. Data and Analytics Platform Solutions The Company launched its proprietary platform “Sapientus” in July 2020 to deliver data-driven solutions and insights for businesses within the insurance and financial services industries. Sapientus forms the core of the Company’s big data analytics arm, which is housed in the Company’s indirect wholly-owned subsidiary, Finger Motion Financial Company Limited (“FMFC”). Leveraging the Company’s strong tech and data backbone, Sapientus specializes in data mining and insights extraction. The Company’s flexible data structure is built from the ground up, by transforming raw telco data into basic building blocks, statistical measures and behavioral inferences, while layering in auxiliary contextual information, to extract behavioral insights and power revolutionary applications for insurance and financial services. Over the past several years, Sapientus’s predictive models had garnered much interest and positive receptivity from the industry, particularly reinsurers and insurers in China and the greater region; we continue to elevate our analytic capabilities and align our services against the needs of our partners and the larger ecosystem. Sapientus is strategically focused on developing and promoting our core analytic products to the market, specifically: ■ enhancing modeling precision by incorporating additional insurance datasets; ■ expanding modeling efforts to cover various insurance products; ■ begin promoting models to a broader client base for extensive real-world use, targeting insurers as well as various other prospective collaborators in the ecosystem; and ■ further developing a sales rating engine by leveraging our comprehensive data assets and applying AI technology. The Company sells its data and analytics platform solutions to enterprise customers in the insurance and reinsurance sectors, as well as financial institutions and intermediaries. Sales activities are conducted primarily through direct sales and business development personnel and include customer engagement, relationship management, and participation in industry events. The Company supports customer evaluation and adoption through product demonstrations, pilot deployments, and proof-of-concept implementations. The sales cycle is generally long and complex due to enterprise procurement, integration requirements, and data governance considerations. The Company may enter into strategic arrangements to support data access, integration, and distribution of its platform. Growth in this segment depends on market acceptance of analytics solutions, data availability, competitive conditions, and compliance with applicable regulatory and data protection requirements. - 9 - Advanced Technology and Platform Solutions — C2 Platform The Company’s advanced technology and platform solutions business vertical focuses on enabling next-generation connected vehicle ecosystems by integrating advanced communication, data, and AI technologies into commercial and specialty (e.g., emergency response) vehicles. Through our subsidiary, JiuGe Technology, we provide system integration services and technology platforms that support the development of intelligent, networked vehicle fleets for government and enterprise customers. We have developed the Advanced Mobile Integrated Command and Communication Platform (the “C2 Platform”) as a core offering to address critical communications needs for emergency response, disaster recovery, and specialized field operations. The C2 Platform integrates satellite communication, 5G mobile networks, IoT-enabled sensors, AI-driven data analytics, and cloud-based infrastructure to enable real-time data transmission, remote monitoring, and mobile command coordination. This platform is designed to enhance field operations by maintaining reliable communication links, enabling remote command capabilities, and facilitating data-driven decision-making, even in remote or disaster-affected environments. The Company markets its C2 platform to enterprise and public-sector customers, including municipalities, emergency response agencies, industrial operators, and automotive partners. Sales activities are conducted through direct engagement, government procurement processes, and strategic partnerships. The Company supports adoption through pilot programs, live demonstrations, and participation in public safety and technology-related events. The C2 platform is positioned for deployment in mission-critical communication and operational environments. The Company provides implementation support, system integration, and training services to facilitate customer onboarding and platform deployment. Growth in this segment depends on public-sector procurement activity, enterprise adoption, and the Company’s ability to secure strategic alliances and integration partnerships. Growth Strategy The Company’s long-term growth strategy focuses on scaling its existing business capabilities, enhancing its technology platforms, and expanding into adjacent markets where its platform, data, and system-level expertise can be effectively applied. Key elements of this strategy include: · Strengthening core operations. The Company intends to continue to improve operational efficiency, platform reliability, and technological capabilities within its existing markets in the PRC. This includes optimizing transaction processing, improving system scalability, and maintaining strong relationships with telecommunications operators, service providers, and enterprise customers. · Expansion of the telecommunications ecosystem. The Company seeks to support the growth of its telecommunications-related services by increasing transaction volumes, strengthening operator integrations, and broadening service offerings through its operating subsidiaries. Growth in this segment is expected to be driven by enhanced enterprise adoption, deeper ecosystem integration, and ongoing product innovation. · Advancement of data analytics technologies and platforms. The Company intends to further develop its data analytics capabilities and platforms to address evolving market demand and create additional revenue streams. This includes enhancing the Sapientus Platform to expand data processing capabilities, analytical modeling, and enterprise reporting solutions, enabling scalable, data-driven decision-making tools across various industry verticals. · Scaling of marketplace platform and digital commerce infrastructure solutions. The Company intends to scale its mobile-first, online-to-offline (“ O2O ”) marketplace platforms through increased user adoption, expansion of service provider networks, and higher transaction volumes across its digital commerce ecosystem. Growth initiatives will include enhancing platform functionality, optimizing user experience, and expanding into additional service categories and geographies. The Company also seeks to strengthen monetization through transaction-based fees, subscription models, and advertising services, subject to market adoption and platform maturity. · Expansion of advanced technology and platform solutions. The Company plans to expand its advanced technology and platform solutions offerings, including its C2 Platform, into additional areas of critical infrastructure and business critical operations. These areas may include public safety systems, transportation networks, emergency response coordination, and other large-scale operational environments. Growth in this segment is expected to be driven by continued product development, pilot deployments, and increased customer adoption in both enterprise and public-sector markets, subject to procurement cycles, regulatory requirements, and technical validation. - 10 - · Productization for regional deployment. The Company plans to adapt its existing intellectual property, data analytics models, and platform capabilities, including its Sapientus Platform and mobility platforms, for deployment in selected regional markets. This approach aims to enable scalable expansion by leveraging established technology assets and operational expertise across multiple markets. · Strategic partnerships, investments, and acquisitions. The Company seeks to identify and pursue strategic partnerships, joint ventures, and acquisition opportunities that enhance its distribution capabilities, expand its service offerings, and support long-term value creation. Research & Development ■ Telecommunications Products & Services - The Company continues to develop its messaging platform that allows businesses and brands to engage with their customers using 5G infrastructure, providing a more efficient, cost-effective, and robust user experience. This development is expected to create a new marketing channel for the Company’s current and prospective business partners. ■ Data Analytics Platform Solutions - The Company continues to develop its Data Analytics Platform Solutions (Big Data) analytics capabilities, including its Sapientus data platform, by integrating external data sources and refining proprietary data models to support insurtech and fintech applications in collaboration with insurance and financial services partners. ■ DaGe Platform - The Company is developing its DaGe platform to enhance data processing, aggregation, and analytics capabilities, with a focus on scalable deployment for enterprise use cases that require large-scale processing of structured and unstructured data. ■ C2 Platform - Development efforts are focused on improving system reliability, integration capabilities, and interoperability with public-sector and enterprise infrastructure. Competition The Company operates in a highly competitive and rapidly evolving industry that is subject to technological change and regulatory oversight. The Company competes with a range of participants, including larger, more established companies, as well as providers that offer similar or substitute products and services. The Company’s mobile payments business competes with other licensed service providers authorized by mobile telecommunications operators in China, as well as unlicensed payment processors that offer comparable services. In addition, the Company competes with alternative payment methods, including credit and debit cards, other electronic payment platforms, and bank transfers. The Company holds an exclusive license to act as an authorized payment processor for China Unicom and China Mobile. These arrangements provide the Company with access to distribution channels for mobile payment services; however, competition remains based on service capabilities, pricing, technology, and customer adoption. Intellectual Property The Company has sufficient intellectual property rights to operate its mobile payment and recharge platform system. Specifically, the Company has registered patents for its mobile payment and recharge platform system. The Company will continue to enhance the system to meet market and consumer demands and requirements. The Company has also implemented strict controls to ensure the safe and secure keeping of any source codes. The Company has registered the following patents: Patent Registration Number Region Title Inventors Applicant Status as of the date of this Annual Report 2019SR0439119 Shanghai, China PigeonHoles Integration System (1) Shanghai JiuGe Business Management Co. Ltd Shanghai JiuGe Business Management Co. Ltd Obtained - 11 - 2020SR0741902 Shanghai, China SMS Integrated System (2) Shanghai JiuGe Information Technology Co. Ltd Shanghai JiuGe Information Technology Co. Ltd Obtained 2020SR0792227 China JiuGe Customer Profiling Software V1.0.0 (3) Shanghai JiuGe Information Technology Co. Ltd Shanghai JiuGe Information Technology Co. Ltd Obtained 2020SR0772385 China JiuGe TELCO Big Data Software V1.0.0 (4) Shanghai JiuGe Information Technology Co. Ltd Shanghai JiuGe Information Technology Co. Ltd Obtained 2020SR0809253 China JiuGe Risk Assessment System Software V1.0.0 (5) Shanghai JiuGe Information Technology Co. Ltd Shanghai JiuGe Information Technology Co. Ltd Obtained 2020SR0860695 China JiuGe Internet Big Data Software V1.0.0 (6) Shanghai JiuGe Information Technology Co. Ltd Shanghai JiuGe Information Technology Co. Ltd Obtained 2020SR0867792 China JiuGe Mobile Digital Precision Marketing Software V1.0.0 (7) Shanghai JiuGe Information Technology Co. Ltd Shanghai JiuGe Information Technology Co. Ltd Obtained 2021SR2129368 China JiuGe Risk Query API and UI Design V1.0.0 (8) Shanghai JiuGe Information Technology Co. Ltd Shanghai JiuGe Information Technology Co. Ltd Obtained 2021SR1773860 China JiuGe Insurance Anti-Fraud System Design V1.0.0 (9) Shanghai JiuGe Information Technology Co. Ltd Shanghai JiuGe Information Technology Co. Ltd Obtained 2022SR1343393 China JiuGe Insurance Client Medical Behavior Assessment System V1.0.0 (10) Shanghai JiuGe Information Technology Co. Ltd Shanghai JiuGe Information Technology Co. Ltd Obtained 2023SR0092476 China JiuGe Insurance Client Financial Rating System V1.0.0 (11) Shanghai JiuGe Information Technology Co. Ltd Shanghai JiuGe Information Technology Co. Ltd Obtained 2024SR0201599 China JiuGe Mobile Protection Mini Program Server System V1.0.0 (12) Shanghai JiuGe Information Technology Co. Ltd Shanghai JiuGe Information Technology Co. Ltd Obtained 2024SR0373838 China JiuGe Mobile Protection Mini Program Client System V1.0.0 (13) Shanghai JiuGe Information Technology Co. Ltd Shanghai JiuGe Information Technology Co. Ltd Obtained 2024SR2019159 China JiuGe Mobile Recharge System V1.0.0 (14) Shanghai JiuGe Information Technology Co. Ltd Shanghai JiuGe Information Technology Co. Ltd Obtained 2025SR1169273 China JiuGe Mobile Recharge Channel Management System V1.0.0 (15) Shanghai JiuGe Information Technology Co. Ltd Shanghai JiuGe Information Technology Co. Ltd Obtained 2025SR1946587 China JiuGe Traffic Operation Management System V1.0.0 (16) Shanghai JiuGe Information Technology Co. Ltd Shanghai JiuGe Information Technology Co. Ltd Obtained - 12 - Notes: (1) PigeonHoles Integration System is the Company’s proprietary universal exchange platform which provides seamless integration between telecommunication operators and online stores servicing PRC’s customers. (2) The Company’s SMS Integrated System provides a robust back-end control panel for corporate partners to access and manage their own messaging settings. Corporate partners can upload a list of targeted members, compose text or multimedia messages and define broadcasting settings. (3) Patent based on JiuGe’s big data analysis and commercialization of consumer’s profile (4) Patent based on JiuGe’s big data analysis for telecommunication products and services (5) Patent based on JiuGe’s big data analysis on risk assessment system (6) Patent based on JiuGe’s big data analysis for online product. (7) Patent based on JiuGe’s big data analysis for online digital contents on mobile (8) Patent based on JiuGe’s big data analysis for Risk Query API and UI designs (9) Patent based on JiuGe’s big data analysis for Insurance Anti-Fraud System Design (10) Patent based on JiuGe’s big data analysis for Insurance Client Medical Behavior Assessment System (11) Patent based on JiuGe’s big data analysis for Insurance Client Financial Rating System (12) JiuGe Mobile Protection Mini Program Server System is a data analysis and processing service powered by big data platforms. It cooperates with insurance companies to provide mobile screen and other hardware protection services for telecom operator users. (13) JiuGe Mobile Protection Mini Program Client System is a client application that, based on big data analytics and in cooperation with insurance companies, supports mobile screen and other hardware protection services for telecom operator users. (14) JiuGe Mobile Recharge System is an in-house developed direct top-up platform that enables seamless integration between telecom carriers and online stores serving customers in mainland China. (15) JiuGe Mobile Recharge Channel Management System is the channel management service for the JiuGe Mobile Recharge System. It features routing, management, and accounting across multiple carriers, regions, channels, and plans. (16) JiuGe Traffic Operation Management System is an in-house developed direct data recharge platform built by our company. It is dedicated to enabling seamless integration between telecom carriers and online stores as well as points malls serving customers in the Chinese mainland. Regulation The Company operates in a highly regulated environment related to its payments business. The regulatory framework governing digital and mobile payments continues to evolve in response to developments in areas such as anti-money laundering, counter-terrorist financing, data privacy, cybersecurity, and consumer protection. In China, the Company’s payment-related activities are subject to oversight by relevant financial regulatory authorities, including the People’s Bank of China. Other national or provincial regulatory agencies may have or assert jurisdiction over our activities, including agencies and authorities outside of China, if our platform is utilized by consumers in such jurisdictions. The laws and regulations applicable to the payments industry in any given jurisdiction are subject to interpretation and change. - 13 - The Company is subject to anti-money laundering and counter-terrorist financing laws in the United States, China, and other jurisdictions where it operates. These requirements include compliance with applicable sanctions regimes, including those administered by the U.S. Department of the Treasury’s Office of Foreign Assets Controls (“ OFAC ”) and equivalent authorities in China and other countries whose jurisdiction we may become subject as a result of our operations.. The Company is also subject to data protection and information security laws in China, the U.S. and the jurisdictions in which it operates, including requirements relating to the safeguarding of personal information and maintaining information security programs. Regulatory authorities around the world are considering numerous legislative and regulatory proposals concerning privacy and data protection that may contain additional privacy and data protection obligations than exist today. In addition, the interpretation and application of these privacy and data protection laws in China, the U.S. and elsewhere are often uncertain and in a state of flux. The Company is subject to applicable anti-corruption laws, including the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act, as well as similar laws in other jurisdictions in which it operates. Anti-corruption laws generally prohibit offering, promising, giving, accepting or authorizing others to provide anything of value, either directly or indirectly, to or from a government official or private party in order to influence official action or otherwise gain an unfair business advantage, such as to obtain or retain business. Regulatory developments continue in areas such as digital payments, virtual currencies, identity verification, cybersecurity, and marketing practices, which may affect the regulatory framework applicable to the Company’s business. The Company must also adhere to environmental laws and regulations in the jurisdictions in which it operates. Compliance with these laws and regulations has not had a material effect on the Company’s capital expenditures, results of operations, or competitive position. Employees As of February 28, 2026, we had 48 total employees, of whom all were full-time. We have 40 employees in China, 4 employees in Malaysia, 2 employees in Hong Kong, 1 employee in Taiwan and 1 employee in Canada. We believe that we maintain satisfactory working relationships with our employees.