FingerMotion, Inc. 10-K

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following management’s discussion and analysis of the Company’s financial condition and results of operations contain forward-looking statements that involve risks, uncertainties and assumptions including, among others, statements regarding our capital needs, business plans and expectations. In evaluating these statements, you should consider various factors, including the risks, uncertainties and assumptions set forth in reports and other documents we have filed with or furnished to the SEC and, including, without limitation, this Annual Report on Form 10-K filing for the fiscal year ended February 28, 2026, including the consolidated financial statements and related notes contained herein. These factors, or any one of them, may cause our actual results or actions in the future to differ materially from any forward-looking statement made in this document. Refer to “Cautionary Note Regarding Forward-looking Statements” and Item 1A. Risk Factors. Introduction The following discussion summarizes the results of operations for each of our fiscal years ended February 28, 2026 and February 28, 2025 and our financial condition as at February 28, 2026 and February 28, 2025, with a particular emphasis on fiscal 2026, our most recently completed fiscal year. Overview The Company is a mobile services, data, and technology company incorporated in Delaware, USA, with its head office located at 111 Somerset Road, Level 3, Singapore 283164. As described elsewhere in this Annual Report, the Company has been organized as a holding company and conducts a significant part of its operations through its subsidiaries and through contractual agreements with JiuGe Technology, the VIE based in China. The Company indirectly owns 100% of the equity of JiuGe Management, a WFOE that has entered into the VIE Agreements which gives the Company operational control over JiuGe Technology and consolidates its financial results. The Company operates its business across four primary segments: · telecommunications products and services; · marketplace platform and digital commerce infrastructure solutions; · data and analytics platform solutions; and · advanced technology and platform solutions. The telecommunications products and services segment includes the distribution of telecommunications-related products and the provision of communication services, such as SMS, MMS, and related messaging solutions. The marketplace platform and digital commerce infrastructure segment includes the Company’s mobile-first, online-to-offline (“ O2O ”) marketplace platforms. The data and analytics platform solutions segment includes the Company’s Sapientus platform, which provides data-driven analytics solutions to enterprise customers, particularly in the insurance and financial services sectors. The advanced technology and platform solutions segment includes the Company’s C2 Platform, designed to support real-time communication, coordination, and operational management across enterprise and industry applications. Historically, the Company’s revenue has primarily derived from its telecommunications products and services segment. However, the Company is increasingly focused on expanding its higher-margin, technology-driven platform businesses, including enterprise communications, data analytics, and platform solutions. The newer platform segments are in various stages of development and commercialization, and their future contributions to revenue and profitability will depend on market adoption, technological advancements, and regulatory conditions. Business Segments The Company operates its business across four primary segments: · Telecommunications Products and Services The Company’s telecommunications products and services segment represents its core operating business, encompassing mobile recharge and top-up services, data plans, subscription plans, mobile devices, and related value-added telecommunications services for consumers and enterprise customers in the PRC. These services are primarily delivered through strategic arrangements and integrations with major telecommunications operators, including China Mobile and China Unicom. - 34 - · Marketplace Platform And Digital Commerce Infrastructure Solutions The Company’s marketplace platform and digital commerce infrastructure segment comprises mobile-first, O2O marketplace and procurement platform solutions designed to facilitate digital commerce transactions and service integration across various industry verticals. This segment includes the DaGe Platform, which connects automotive owners with providers of vehicle-related products and services, and the JiuGe Procurement Platform, an enterprise procurement solution that supports supplier coordination and procurement workflows. The Company continues to invest in platform development, scalability, data analytics integration, and user experience enhancements to support long-term growth and monetization through transaction-based fees, subscription services, advertising, and other value-added offerings. · Data And Analytics Platform Solutions The Company’s data and analytics platform solutions segment operates under the Sapientus brand, offering AI-powered data analytics and enterprise intelligence solutions for the telecommunications and insurance industries. The platform leverages telecommunications and behavioural data to enhance precision marketing, customer acquisition, risk assessment, product personalization, and analytics-driven business decision-making. · Advanced Technology And Platform Solutions The Company’s advanced technology and platform solutions segment includes its C2 Platform, which integrates satellite communications, 5G networks, IoT systems, and AI-driven analytics for emergency response vehicles and specialized commercial applications. The platform is designed to support mission-critical communications, operational coordination, and real-time data transmission in public safety, emergency response, transportation, and related infrastructure environments. Technology and Platform Strategy The Company’s operations are supported by proprietary and third-party technology platforms, including messaging infrastructure, digital commerce systems, and data analytics capabilities. The Company continues to invest in enhancing these platforms to improve scalability, reliability, and performance across its operating subsidiaries. Customers and Markets The Company serves enterprise customers, telecommunications operators, and platform users primarily in the PRC. The Company’s solutions are designed to support high-volume transactional environments and data-driven enterprise use cases. Key Business Developments During fiscal 2026, the Company continued its strategic transformation from a telecommunications-focused operating business to a diversified technology and platform enterprise. Management’s initiatives during the fiscal year were focused on expanding platform-based capabilities, enhancing technology infrastructure, strengthening strategic positioning across multiple business segments, and pursuing scalable growth opportunities. Expansion of Marketplace Platform and Digital Commerce Infrastructure Solutions During fiscal 2026, the Company expanded its marketplace platform and digital commerce infrastructure solutions segment through the acquisition of intellectual property assets related to the DaGe Platform. The DaGe Platform is an integrated digital marketplace ecosystem that connects vehicle owners with automotive service providers, electric vehicle (EV) charging networks, and accessory vendors through mobile applications and mini-program platforms. As of February 28, 2026, the platform had integrated approximately 86,000 charging stations and approximately 12,500 vendors and service providers. Management believes the acquisition enhances the Company’s position within the intelligent mobility and digital commerce ecosystem and supports the Company’s strategy of developing scalable platform-based revenue models and diversified enterprise service capabilities. - 35 - In addition, the Company launched the JiuGe Procurement Platform during fiscal 2026, the enterprise procurement and supplier management platform is designed to support employee benefits programs, customer rewards initiatives, and promotional campaign management for enterprise customers. As of February 28, 2026, the platform was being piloted with select regional operations of China Mobile and Juneyao Airlines. Management believes the procurement platform may facilitate future expansion of enterprise-focused digital commerce infrastructure services and contribute to the diversification of the Company’s marketplace-related revenue streams. Advancement of Advanced Technology and Platform Solutions During fiscal 2026, the Company continued its development and commercialization activities related to the Advanced Mobile Integrated C2 Platform through JiuGe Technology. The C2 Platform integrates satellite communications, 5G networks, IoT systems, high-definition video transmission, intelligent conferencing systems, and AI-driven analytics specifically designed for emergency response vehicles and specialized operational environments. Throughout the fiscal year, JiuGe Technology secured contracts from government emergency response agencies in multiple Chinese cities through competitive public tender processes. As of February 28, 2026, ten vehicles equipped with the C2 Platform had been deployed for beta testing and operational use. Management believes that the advanced technology and platform solutions segment may represent a long-term, higher-margin growth opportunity, expanding the Company’s exposure beyond traditional telecommunications-related services into mission-critical communications and infrastructure solutions. Development of Data and Analytics Platform Solutions The Company continued to invest in its Sapientus platform, which provides AI-powered data analytics and enterprise intelligence solutions for the telecommunications and insurance industries. The platform leverages telecommunications-related and behavioural data to facilitate precision marketing, analytics-driven customer acquisition, risk assessment, product personalization, and enhanced enterprise decision-making capabilities. Although the current revenue contribution from this segment remains limited, management views the platform as a strategic long-term initiative that may support future growth opportunities in both domestic and regional markets. JiuGe Procurement Platform Launch On December 1, 2025, the Company launched the JiuGe Procurement Platform, an enterprise procurement solution operated by JiuGe Technology and included within the Company’s Marketplace Platform and Digital Commerce Infrastructure segment. 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. As of February 28, 2026, the platform was being piloted with certain regional operations of China Mobile in Shanghai and Jiangxi, as well as with Juneyao Airlines. The Company intends to continue evaluating opportunities to expand the platform’s adoption and geographic reach as part of its strategy to broaden its enterprise service offerings and diversify revenue sources. Recent Financing May 2026 Note Offering On May 13, 2026 (the “ Closing Date ”), we entered into a securities purchase agreement (the “ May 2026 Note Purchase Agreement ”) with an institutional investor (the “ Note Investor ”), pursuant to which we issued to the Note Investor a senior secured convertible note (the “ Note ”) with an original principal amount of $5,000,000 and an original issue discount of $700,000. The Note bears no interest (except upon an event of default) and, unless earlier converted or redeemed, will mature on the first anniversary of the Closing Date. At closing, the Company received $3,300,000, with the remaining $1,000,000 of the $4,300,000 aggregate subscription amount to be released to the Company upon the SEC declaring effective a resale registration statement covering the resale of a number of shares of Common Stock equal to 200% of the maximum number of Conversion Shares issuable upon conversion of the Note (constituting the “ Registrable Securities ” as more fully defined in the Registration Rights Agreement, which is filed as an exhibit hereto). - 36 - The Note is convertible, at any time at the Note Investor’s option, into shares of the Company’s common stock, par value $0.0001 per share (the “ Common Stock ” and such shares issuable upon conversion, the “ Conversion Shares ”), at an initial fixed conversion price of $0.94 per share (the “ Fixed Conversion Price ”), which is subject to adjustment for stock splits, stock dividends, stock combinations, recapitalizations, and other customary events. In addition, during each monthly period specified in the Note (each, a “ Monthly Redemption Conversion Period ”), the Note Investor may convert up to $1,000,000 in aggregate principal amount of the Note (plus all accrued and unpaid amounts thereon) at a “Redemption Conversion Price” equal to the lower of (i) the Fixed Conversion Price then in effect and (ii) 90% of the lowest daily volume-weighted average price of the Common Stock during the seven consecutive trading days ending on and including the applicable date of conversion or the first trading day of the applicable Monthly Redemption Conversion Period, in each case subject to a floor price (the “ Floor Price ”) initially set at 20% of the Nasdaq Minimum Price (as defined in Nasdaq Listing Rule 5635) on the trading day prior to the date of the May 2026 Note Purchase Agreement, which resets automatically every six months. If the Company is unable to issue Conversion Shares due to the exchange cap described below or if a Floor Price condition exists, the Note Investor may require the Company to satisfy the applicable monthly conversion amount in cash at a 7.5% premium. If an event of default occurs and is continuing, the Note shall become due and payable, at the Note Investor’s election, in cash at an amount equal to 125% of all the outstanding principal amount of the Note, accrued and unpaid interest, and any other unpaid amounts (collectively, the “ Outstanding Value ”). Upon the occurrence and continuation of an event of default, default interest shall accrue at an annual rate of 12%. The Note also contains additional conversion, redemption, and put mechanics, including (i) an optional redemption right in favor of the Company, exercisable after 40 trading days following the effective date of the initial resale registration statement, at a price equal to 115% of the Outstanding Value of the Note, (ii) a change of control put right entitling the Note Investor to require redemption of the Outstanding Value under the Note at a premium upon the occurrence of a change of control transaction, and (iii) a subsequent placement redemption right entitling the Note Investor to require the Company to apply up to 30% of the gross proceeds of such subsequent placement to redeem at a price equal to 115% of the Outstanding Value being redeemed, in each case subject to the terms and conditions set forth in the Note. The May 2026 Note Purchase Agreement contains customary representations, warranties, and agreements of the Company and the Note Investor, and customary indemnification rights and obligations of the parties. The Company has agreed to seek stockholder approval for the issuance of Conversion Shares in excess of 19.99% of the outstanding shares of Common Stock as of the date of the May 2026 Note Purchase Agreement. Absent such approval (or an opinion of outside counsel that stockholder approval is not required), the Company may not issue Conversion Shares in excess of 12,256,260 shares in the aggregate (the “ Exchange Cap ”). Conversions are also subject to a 9.99% beneficial ownership limitation. In connection with the May 2026 Note Purchase Agreement, the Company entered into a registration rights agreement with the Note Investor. The Company also entered into a security agreement with the Note Investor (the “ Security Agreement ”), pursuant to which the Company granted to the Note Investor, acting as collateral agent, a first-priority security interest in substantially all of the Company’s personal property assets, subject to customary permitted liens and excluded assets, as set forth in the Security Agreement. Results of Operations Year Ended February 28, 2026 Compared to Year Ended February 28, 2025 The following table sets forth our results of operations for the fiscal years ended February 28, 2026 and February 28, 2025: Year Ended February 28, 2026 Year Ended February 28, 2025 Revenue $ 24,132,261 $ 35,607,614 Cost of revenue $ (23,438,416 ) $ (32,843,907 ) Total operating expenses $ (7,633,882 ) $ (8,712,708 ) Total other income (expenses) $ (101,296 ) $ (39,462 ) Net Loss attributable to the Company’s stockholders $ (6,997,770 ) $ (5,112,804 ) Foreign currency translation adjustment $ 859,172 $ (176,265 ) Comprehensive loss attributable to the Company $ (6,139,142 ) $ (5,288,467 ) Basic Loss Per Share attributable to the Company (0.12 ) (0.09 ) Diluted Loss Per Share attributable to the Company (0.12 ) (0.09 ) - 37 - Revenue The following table sets forth the Company’s revenue from its three lines of business for the periods indicated: Year Ended February 28, 2026 Year Ended February 28, 2025 Change (%) Telecommunication Products & Services $ 23,937,558 $ 35,396,655 -32 % Marketplace Platform & Digital Commerce Infrastructure Solutions $ 25,037 $ 80,592 -69 % Advanced Technology & Platform Solutions $ 141,886 $ 188,576 -25 % Data & Analytics Platform Solutions $ 27,780 $ (58,209 ) 148 % Total Revenue $ 24,132,261 $ 35,607,614 -32 % We recorded $24,132,261 in revenue for the year ended February 28, 2026, a decrease of $11,475,353 or 32%, compared to the year ended February 28, 2025. This decrease was primarily attributable to a decline of $11,459,097 in revenue from our Telecommunication Products & Services segment. Within this segment, revenue from sales of mobile devices amounted to $7,410,130 for the year ended February 28, 2026, compared to $17,964,650 for the year ended February 28, 2025, representing a decrease of $10,554,520. The overall decrease was also attributable to decreases of $55,555 from Marketplace Platform and Digital Commerce Infrastructure Solutions, mainly the DaGe Platform and $46,690 from Advanced Technology and Platform Solutions, primarily the C2 Platform. These decreases were partially offset by an increase of $85,989 in revenue from Data and Analytics Platform Solutions, mainly the Sapientus Platform. 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. This operating model requires working capital to support transaction volumes. During the year ended February 28, 2026, our revenue remained primarily driven by our Telecommunication Products & Services segment, which contributed $23.94 million, representing 99.2% of total revenue. The DaGe Platform, launched in 2024, generated $25,037 in revenue compared to $80,592 in the prior year. Revenue remained limited during the year as operational and promotional activities were constrained by available working capital. The Advanced Technology and Platform Solutions segment generated $141,886 in revenue for the year ended February 28, 2026, compared to $188,576 in the prior year. Revenue contributions remained limited, and activity during the year primarily reflected project-based work, with the scope and pace of deployment constrained by available working capital. The Data and Analytics Platform Solutions segment generated revenue of $27,780 for the year ended February 28, 2026. Activity in this segment remains limited during the year. Cost of Revenue The following table sets forth the Company’s cost of revenue for the periods indicated: Year Ended February 28, 2026 Year Ended February 28, 2025 Telecommunication Products & Services $ 23,270,576 $ 32,532,881 Marketplace Platform & Digital Commerce Infrastructure Solutions $ 48,049 $ 151,065 Advanced Technology & Platform Solutions $ 119,791 $ 159,961 Data & Analytics Platform Solutions $ — $ — Total Cost of Revenue $ 23,438,416 $ 32,843,907 We recorded $23,438,416 in costs of revenue for the year ended February 28, 2026, a decrease of $9,405,491 or 29%, compared to the year ended February 28, 2025. 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. - 38 - Gross Profit Our gross profit for the year ended February 28, 2026 was $693,845, a decrease of $2,069,862 or 75%, compared to the year ended February 28, 2025. Cost of revenue primarily consists of product costs and transaction-related costs incurred in connection with mobile payment and recharge services provided to customers of telecommunications companies in China. As transaction activity declined during the year due to working capital constraints, the associated variable costs declined proportionately. Amortization & Depreciation We recorded amortization & depreciation of $351,204 for intangible assets & fixed assets for the year ended February 28, 2026, an increase of $194,707 or 124%, compared to the year ended February 28, 2025. The increase resulted from the purchase of software IP. General and Administrative Expenses The following table sets forth the Company’s general and administrative expenses for the periods indicated: Year Ended February 28, 2026 Year Ended February 28, 2025 Accounting $ 247,671 $ 330,021 Consulting $ 1,265,334 $ 1,768,516 Entertainment $ 178,181 $ 321,404 IT $ 59,482 $ 64,945 Rent $ 150,470 $ 22,746 Salaries & Wages $ 2,191,595 $ 2,452,796 Technical Fee $ 136,596 $ 144,202 Travelling $ 181,904 $ 386,408 Others $ 638,187 $ 954,733 Total G&A Expenses $ 5,049,420 $ 6,445,771 We recorded $5,049,420 in general and administrative expenses for the year ended February 28, 2026, a decrease of $1,396,351 or 22%, compared to the year ended February 28, 2025 The decrease was primarily due to lower salaries & wages, traveling, entertainment, accounting, consulting 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 regulatory compliance. These expenses include ongoing costs associated with corporate governance, audit and regulatory filings, consulting and advisory services, as well as operational support across our business segments . Marketing Costs The following table sets forth the Company’s marketing costs for the periods indicated: Year Ended February 28, 2026 Year Ended February 28, 2025 Marketing Costs $ 83,197 $ 276,258 We recorded $83,197 in marketing costs for the year ended February 28, 2026, a decrease of $193,061 or 70% compared to the year ended February 28, 2025. The decrease was primarily attributable to reduced marketing and promotional activities during the year, reflecting cost control measures implemented in response to liquidity constraints. Research & Development The following table sets forth the Company’s research & development for the periods indicated: Year Ended February 28, 2026 Year Ended February 28, 2025 Research & Development $ 411,925 $ 632,767 - 39 - We recorded $411,925 in research & development for the year ended February 28, 2026, a decrease of $220,842 or 35% compared to the year ended February 28, 2025. Research and development expenses primarily consist of personnel-related costs. Activities during the year remained limited in scope, with expenditures aligned to our available working capital. Credit Impairment Loss The following table sets forth the Company’s credit impairment loss for the periods indicated: Year Ended February 28, 2026 Year Ended February 28, 2025 Credit impairment loss $ 1,207,516 $ 439,613 We recorded $1,207,516 in credit impairment loss for the year ended February 28, 2026, an increase of $767,903 or 175% compared to the year ended February 28, 2025. The increase was mainly attributable to a higher allowance recognized on trade receivables following management’s assessment of expected credit losses, including the aging of outstanding balances, collection experience, current business conditions and expected timing of recoveries. The provision reflects a prudent assessment of expected credit risk, while management continues to monitor collections and credit exposure on an ongoing basis. Share Compensation Expenses The following table sets forth the Company’s share compensation expenses for the periods indicated: Year Ended February 28, 2026 Year Ended February 28, 2025 Share compensation expenses $ 530,620 $ 761,802 We incurred fees of $530,620 in share issuance for consultants in consideration of services and stock option compensation expenses for the year ended February 28, 2026 as compared to $761,802 for the year ended February 28, 2025. The decrease of $231,182 or 30% was due to the reduced engagement of consultants to the Company that were compensated with shares of our common stock, which highlights our effort to minimize equity issuances as part of our broader financial strategy to optimize equity issuances. However, we will continue to employ equity compensation for consultants selectively, aligning with our strategic and financial objectives. Operating Expenses We recorded $7,633,882 in operating expenses for the year ended February 28, 2026 as compared to $8,712,708 in operating expenses for the year ended February 28, 2025. The decrease of $1,078,826 or 12% for the year ended February 28, 2026 is as set forth above. Net Loss attributable to the Company’s stockholders The net loss attributable to the Company’s stockholders was $6,997,770 for the year ended February 28, 2026 and $5,112,804 for the year ended February 28, 2025. The increase in net loss attributable to the Company’s stockholders of $1,884,966 or 37% is as set forth above. Liquidity and Capital Resources The following table sets out our cash and working capital as of February 28, 2026 and February 28, 2025: As at February 28, 2026 As at February 28, 2025 Cash reserves $ 68,596 $ 1,128,135 Working capital $ 6,093,153 $ 6,902,805 At February 28, 2026, we had cash and cash equivalents of $68,596 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. During the period, liquidity constraints limited our ability to fund certain operations, which contributed to reduced activity levels. Management continues to monitor cash flows and align expenditures with available resources. In addition, the Company is pursuing financing initiatives, including equity and debt financing arrangements, to support ongoing operations, satisfy certain obligations, and advance its strategic initiatives. The Company continues to focus on improving collection cycles, optimizing payment terms, and enhancing operational efficiency. The Company’s ability to support its operations and execute its business strategy will depend on a combination of operational cash flows, effective working capital management, and access to additional financing. There can be no assurance that additional financing will be available on acceptable terms, or at all. - 40 - Statement of Cashflows The following table provides a summary of cash flows for the periods presented: Year Ended February 28, 2026 Year Ended February 28, 2025 Net cash used in operating activities $ (3,905,194 ) $ (8,179,304 ) Net cash used in investing activities $ (20,216 ) $ (4,115 ) Net cash provided by financing activities $ 2,863,503 $ 7,776,249 Effect of exchange rates on cash & cash equivalents $ 2,368 $ 18,073 Net increase (decrease) in cash and cash equivalents $ (1,059,539 ) $ (389,097 ) Cash Flow used in Operating Activities Net cash used in operating activities decreased by $4,274,110 in the year ended February 28, 2026 compared to the year ended February 28, 2025, primarily due to increase in accounts receivable of ($10,974,384) (2025: ($24,860,498)), increase in other receivable of ($621,761) (2025: 1,399,140), increase in inventories of ($109,386) (2025: ($137,354)) and decrease in lease liability of ($8,487) (2025: ($100,668)) offset by, decrease in prepayment and deposit of $2,124,453 (2025: ($1,365,105)), increase in accounts payable of $8,016,055 (2025: $19,665,662) and increase in accrual and other payables of $2,620,191 (2025: $7,788,318). Cash Flow used in Investing Activities During the year ended February 28, 2026, investing activities increased by $16,101 compared to the year ended February 28, 2025 due to the purchase of equipment. Cash Flow provided by Financing Activities During the year ended February 28, 2026, net cash provided by financing activities was $2,863,503 compared to net cash provided by financing activities during the year ended February 28, 2025 of $7,776,249. The decrease was primarily attributable to lower net borrowings during the year, including repayments of loans made earlier in the fiscal year. During the year ended February 28, 2026, we also raised additional capital through sales of common stock under our at-the-market (“ ATM ”) offering program. Proceeds from these issuances were used primarily for general working capital purposes. Notwithstanding these proceeds, we continue to experience working capital constraints, and our liquidity remains dependent on operating performance, the timing of customer collections, and access to additional financing. During the fourth quarter of Fiscal 2026, we issued 64,083 shares of our common stock under the sales agreement pursuant to the ATM offering program for gross cash proceeds of $98,942. The total issuance costs were $2,474, all of which were related to compensation paid to the sales agent. Our ATM offering is being conducted pursuant to an at-the-market issuance sales agreement (the “ Sales Agreement ”) with R.F. Lafferty & Co., Inc. (the “ Sales Agent ”), under which we may issue and sell from time to time shares of our common stock having an aggregate offering price of not more than $50,000,000 through the Sales Agent. Sales of the common stock, if any, will be made by any method permitted by law deemed to be an “at-the-market offering” as defined in Rule 415 promulgated under the Securities Act, including sales made directly through the Nasdaq Capital Market, the existing trading market for our common stock, sales made to or through a market maker other than on an exchange or otherwise, in negotiated transactions at market prices, and/or any other method permitted by law. The Sales Agent will offer our common stock at prevailing market prices subject to the terms and conditions of the Sales Agreement as agreed upon by us and the Sales Agent. The shares have been registered under our shelf registration statement Form S-3 under the Securities Act (the “ Registration Statement ”), filed with the SEC on September 11, 2023 (SEC File Nol 333-274456), and declared effective by the SEC on September 29, 2023, and are being offered pursuant to a prospectus supplement (the “ ATM Prospectus Supplement ”) filed pursuant to Rule 424(b)(5) under the Securities Act on October 23, 2025, and the accompanying base prospectus dated September 29, 2023 (the “ Base Prospectus ”). - 41 - Upon filing with the SEC, this Annual Report is deemed to update the Base Prospectus and ATM Prospectus Supplement for the purposes of section 10(a)(3) of the Securities Act. As of the date of this Annual Report, the aggregate market value of our common stock held by non-affiliates of our Company is less than $75 million. Accordingly, our Company no longer qualifies for General Instruction I.B.I of Form S-3 and is instead subject to General Instruction I.B.6 of Form S-3 which limits the amounts that we may sell under a registration statement prepared on that form. However, the Company is relying on administrative guidance published by the Corporation Finance Division of the SEC (Corporation Finance Interpretation No. 116.26) to the effect that staff at the SEC will not object if a registrant continues offering and selling the full amount of securities covered by a previously-filed prospectus supplement in these circumstances. At the time of filing the ATM Prospectus Supplement, our Company qualified for General Instruction I.B.I of Form S-3, and the Sales Agreement contemplated an at-the-market offering of up to an aggregate of $50,000,000 of shares of common stock, being an amount of securities that we reasonably expected to offer and sell. Accordingly, the Registration Statement of which the Prospectus and the ATM Prospectus Supplement collectively form a part continues to be available to sell such aggregate amount of our common stock under the Sales Agreement. Capital Allocation Strategy Our capital allocation strategy focuses on: 1. Supporting Core Business Operations – Maintaining adequate working capital to support the telecommunications products and services business at sustainable transaction volumes while optimizing capital efficiency. 2. Selective Platform Investments – Allocating capital to platform-based initiatives (C2 Platform, DaGe Platform, JiuGe Procurement Platform, Sapientus solutions) based on commercial traction, market opportunity, and potential return on investment. 3. Strategic Acquisitions – Pursuing selective acquisition opportunities that provide complementary technology capabilities, expand market access, enhance operational scale, or accelerate platform development.. 4. Regional Expansion – Investing in market entry and business development activities in Southeast Asian markets, such as Indonesia and Thailand, for the C2 Platform and Sapientus solutions. 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 On March 4, 2026, Finger Motion Company Limited, a wholly owned subsidiary of the Company, entered into a further extension agreement with Dr. Liew Yow Mingin respect of the remaining outstanding balance of SGD$500,000 under the loan agreement dated July 18, 2024, extending the repayment date from March 4, 2026 to September 4, 2026. The loan had previously been extended on September 4, 2025, when the repayment date was extended from September 4, 2025 to March 4, 2026 and the interest rate was revised to 24.5% per annum. All other material terms remained unchanged. On May 13, 2026, the Company entered into a securities purchase agreement with an institutional investor and issued the Note with an original principal amount of $5,000,000 and an original issue discount of $700,000. The Note is convertible into shares of the Company’s common stock at an initial fixed conversion price of $0.94 per share, subject to adjustment as set forth in the Note. The Note and the shares issuable upon conversion were issued in a transaction exempt from registration under the Securities Act in reliance on Section 4(a)(2) thereof and Rule 506(b) of Regulation D thereunder. See “—Recent Financing — May 2026 Note Offering” for a more detailed description. In connection with the issuance of the Note, pursuant to the adjustment provisions to the exercise price contained within the common stock purchase warrants (the “Common Warrants”) and the placement agent warrant (the “Placement Agent Warrant”) issued in the registered direct offering that closed on December 23, 2024, the number of warrants remaining under the Common Warrants has been increased by 2,293,771 and the number of warrants remaining under the Placement Agent Warrant have increased by 74,666, with the remaining number of warrants thereunder entitling the holders of the Common Warrants and the Placement Agent to purchase an aggregate of 6,344,031 shares of common stock at a price of $0.94 per share. Outstanding Share Data At May 26, 2026, we have 61,281,308 issued and outstanding shares of common stock. - 42 - Critical Accounting Policies The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“ U.S. GAAP ”). The consolidated financial statements include the financial statements of the Company, and its wholly-owned subsidiaries. All intercompany accounts, transactions, and profits have been eliminated upon consolidation. Variable interest entity Pursuant to Financial Accounting Standards Board (“ FASB ”) Accounting Standards Codification (“ ASC ”) Section 810, “Consolidation” (“ ASC 810 ”), the Company is required to include in its consolidated financial statements, the financial statements of its variable interest entities (“ VIEs ”). ASC 810 requires a VIE to be consolidated if that company is subject to a majority of the risk of loss for the VIE or is entitled to receive a majority of the VIE’s residual returns. VIEs are those entities in which a company, through contractual arrangements, bears the risk of, and enjoys the rewards normally associated with ownership of the entity, and therefore the company is the primary beneficiary of the entity. Under ASC 810, a reporting entity has a controlling financial interest in a VIE, and must consolidate that VIE, if the reporting entity has both of the following characteristics: (a) the power to direct the activities of the VIE that most significantly affect the VIE’s economic performance; and (b) the obligation to absorb losses, or the right to receive benefits, that could potentially be significant to the VIE. The reporting entity’s determination of whether it has this power is not affected by the existence of kick-out rights or participating rights, unless a single enterprise, including its related parties and de - facto agents, have the unilateral ability to exercise those rights. JiuGe Technology’s actual stockholders do not hold any kick-out rights that affect the consolidation determination. Through the VIE agreements disclosed in Note 1 – Nature of Business and basis of Presentation of the Notes to the Consolidated Financial Statements as presented under Item 8, Financial Statements and Supplementary Data in this Annual Report on Form 10-K, the Company is deemed the primary beneficiary of JiuGe Technology. Accordingly, the results of JiuGe Technology have been included in the accompanying consolidated financial statements. JiuGe Technology has no assets that are collateral for or restricted solely to settle their obligations. The creditors of JiuGe Technology do not have recourse to the Company’s general credit. Use of Estimates The preparation of the Company’s financial statements in conformity with generally accepted accounting principles of the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management makes its best estimate of the ultimate outcome for these items based on historical trends and other information available when the financial statements are prepared. Actual results could differ from those estimates. Certain Risks and Uncertainties The Company relies on cloud-based hosting through a global accredited hosting provider. Management believes that alternate sources are available; however, disruption or termination of this relationship could adversely affect our operating results in the near term. Segment reporting ASC 280, “Segment Reporting”, establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organizational structure as well as information about geographical areas, business segments and major customers in consolidated financial statements for detailing the Company’s business segments. Based on the criteria established by ASC 280, The Company uses the management approach to determine reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s CODM, specifically the Company’s CEO and CFO, for making decisions, allocating resources and assessing performance. The Company does not distinguish revenues, costs and expenses between segments in its internal reporting, but instead reports costs and expenses by nature as a whole. Based on the management’s assessment, the Company determines that it has only one operating segment and therefore one reportable segment as defined by ASC 280. Furthermore, the whole of the Group’s revenue is derived in or from China with all operation being carried out in China, and the Company’s long-lived assets are located in China, no geographical segments are presented. As such, all financial segment information required by the authoritative guidance can be found in these consolidated financial statements. Foreign Currency Translation and Transactions The Company’s reporting currency is the US dollar. The functional currencies of the Company’s foreign subsidiaries are their respective local currencies (China Renminbi, Singapore dollar and Hong Kong dollar), which are the monetary unit of account of the principal economic environment in which the Company’s foreign subsidiaries operate. Assets and liabilities of the foreign subsidiaries are translated into US dollars at exchange rates in effect at each period end. Revenues and expenses are translated at average exchange rates in effect during the period. The resulting translation adjustments are recorded in accumulated other comprehensive income (loss) as a component of stockholders’ equity. - 43 - Translation of amounts from RMB into USD has been made at the following exchange rates for the respective periods: Balance sheet items, except for equity accounts February 28, 2026 RMB6.8590 to $1.00 February 28, 2025 RMB7.2830 to $1.00 Income statement and cash flows items For the year ended February 28, 2026 RMB7.1315 to $1.00 For the year ended February 28, 2025 RMB7.2123 to $1.00 Identifiable Intangible Assets Identifiable intangible assets are recorded at cost and are amortized over 3-10 years. Similar to tangible property and equipment, the Company periodically evaluates identifiable intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Impairment of Long-Lived Assets The Company classifies its long-lived assets into: (i) computer and office equipment; (ii) furniture and fixtures, (iii) leasehold improvements, and (iv) finite–lived intangible assets. Long-lived assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of such assets may not be fully recoverable. It is possible that these assets could become impaired as a result of technology, economy, or other industry changes. If circumstances require a long-lived asset or asset group to be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying value. If the carrying value of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques, including discounted cash flow models, relief from royalty income approach, quoted market values and third-party independent appraisals, as considered necessary. The Company makes various assumptions and estimates regarding estimated future cash flows and other factors in determining the fair values of the respective assets. The assumptions and estimates used to determine future values and the remaining useful lives of long-lived assets are complex and subjective. They can be affected by various factors, including external factors such as industry and economic trends, and internal factors such as the Company’s business strategy and its forecasts for specific market expansion. Accounts Receivable, Net Accounts receivable is stated at the amount the Company expects to collect. The Company maintains allowances for credit losses for estimated losses. Management considers the following factors when determining the collectability of specific accounts: historical experience, creditworthiness of the clients, aging of the receivables and other specific circumstances related to the accounts. Allowance for credit losses is made and recorded into administrative expenses based on the aging of accounts receivable and on any specifically identified receivables that may become uncollectible. Accounts receivable which are deemed to be uncollectible are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Our assessment considered the estimates of expected credit and collectability trends. Volatility in market conditions and evolving credit trends are difficult to predict and may cause variability and volatility that may have an impact on our allowance for credit losses in future periods. Refer to Note 8 – Accounts Receivable, net of the Notes to the Consolidated Financial Statements as presented under Item 8, Financial Statements and Supplementary Data in this Annual Report on Form 10-K, for allowances for credit losses recognized in profit or loss by the Company during the year ended February 28, 2026 and February 28, 2025. Concentration of Credit Risks Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, accounts receivable and other receivable. The Company’s cash and cash equivalents are placed with high-credit-quality financial institutions, and at times exceed federally insured limits. To date, the Company has not experienced any credit loss relating to its cash and cash equivalents. - 44 - For the year ended February 28, 2026, two customers each accounted for more than 10% of the Company’s total revenue, with individual contributions of 57% and 23%. As at February 28, 2026, amounts due from these customers represented approximately 62% of the Company’s total accounts receivable. For the year ended February 28, 2025, three customers each accounted for more than 10% of the Company’s total revenue, with individual contributions of 47%, 24% and 20%. As at February 28, 2025, amounts due from these customers represented approximately 92% of the Company’s total accounts receivable. For the year ended February 28, 2026, two suppliers each accounted for more than 10% of the Company’s total purchase, with individual contributions of 57% and 23%. As at February 28, 2026, amounts due to these suppliers represented approximately 54% of the Company’s total accounts payable. For the year ended February 28, 2025, three suppliers each accounted for more than 10% of the Company’s total purchase, with individual contributions of 45%, 25% and 23%. As at February 28, 2025, amounts due to these suppliers represented approximately 83% of the Company’s total accounts payable. Lease Operating and finance lease right-of-use assets and lease liabilities are recognized at the commencement date based on the present value of the future lease payments over the lease term. When the rate implicit to the lease cannot be readily determined, the Company utilizes its incremental borrowing rate in determining the present value of the future lease payments. The incremental borrowing rate is derived from information available at the lease commencement date and represents the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term and amount equal to the lease payments in a similar economic environment. The right-of-use asset includes any lease payments made and lease incentives received prior to the commencement date. Operating lease right-of-use assets also include any cumulative prepaid or accrued rent when the lease payments are uneven throughout the lease term. The right-of-use assets and lease liabilities may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Cash and Cash Equivalents Cash and cash equivalents represent cash on hand, demand deposits, and other short-term highly liquid investments placed with banks, which have original maturities of three months or less and are readily convertible to known amounts of cash. Equipment Equipment is stated at cost. Depreciation of equipment is provided using the straight-line method for financial reporting purposes at rates based on the estimated useful lives of the assets. Estimated useful lives range from three to seven years. Land is classified as held for sale when management has the ability and intent to sell, in accordance with ASC Topic 360-45. Earnings Per Share Basic (loss) earnings per share is based on the weighted average number of common shares outstanding during the period while the effects of potential common shares outstanding during the period are included in diluted earnings per share. FASB Accounting Standard Codification Topic 260 (“ ASC 260 ”), “Earnings Per Share,” requires that employee equity share options, non-vested shares and similar equity instruments granted to employees be treated as potential common shares in computing diluted earnings per share. Diluted earnings per share should be based on the actual number of options or shares granted and not yet forfeited, unless doing so would be anti-dilutive. The Company uses the “treasury stock” method for equity instruments granted in share-based payment transactions provided in ASC 260 to determine diluted earnings per share. Antidilutive securities represent potentially dilutive securities which are excluded from the computation of diluted earnings or loss per share as their impact was antidilutive. Revenue Recognition The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers, when control of promised goods or services is transferred to customers in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services. It generates revenue primarily from telecommunications mobile recharge and top-up services, data plans, subscription plan, mobile devices and related services provided to consumer and enterprise customers. - 45 - Telecommunication Services The Company provides mobile recharge and top-up services, data plans, subscription plans, and other related telecommunication services to third-party businesses and online marketplaces through its digital platform. Revenue is recognized when the related services are delivered, activated, or otherwise made available to the customer, which is the point at which control of the promised services is transferred to the customer in accordance with the terms of the underlying arrangements. Telecommunication Products Telecommunication products revenue primarily relates to sales of mobile devices. Telecommunication products are generally considered separate performance obligations because customers can benefit from the devices independently. Revenue associated with mobile devices sales is recognized at a point in time when control transfers to the customer, generally upon picked up by the customer. Other Segments The Company recognizes revenue from providing online-to-offline integration services (DaGe platform), communication and coordination solutions, and data and analytics services to its customers. The Company recognizes revenue when all of the following conditions are satisfied: (1) there is persuasive evidence of an arrangement; (2) the service has been provided to the customer or the equipment has been accepted by the customer; (3) the amount of fees to be paid by the customer is fixed or determinable; and (4) the collection of fees is probable. We account for our multi-element arrangements in data and analytics services, such as instances where we design a custom website and separately offer other services, which are recognized over the period for when services are performed. Cost of Revenue Cost of revenue consists of telecommunication products and services, and SMS & MMS business for operators or other suppliers, and the purchase cost of emergency equipment for command and communication. Research and Development Research and development costs are expensed as incurred. Research and development expenses for Sapientus include compensation, employee benefits, stock-based compensation, materials and components purchased for research and development. During the year ended February 28, 2026, the Company also commenced product development efforts under a new strategic collaboration to integrate its Mobile Integrated Command and Communication Platform into emergency response vehicles. Selling, General and Administrative Selling, general and administrative expenses include compensation, employee benefits, stock-based compensation, professional service fees, allocation of facility costs, depreciation, and amortization associated with general selling and administrative overhead activities. Income Taxes The Company uses the asset and liability method of accounting for income taxes in accordance with Accounting Standards Codification (“ ASC ”) 740, “Income Taxes” (“ ASC 740 ”). Under this method, income tax expense is recognized as the amount of: (i) taxes payable or refundable for the current year and (ii) future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if based on the weight of available evidence it is more likely than not that some portion or all of the deferred tax assets will not be realized. Non-controlling interest Non-controlling interests held 1% of the shares of three of our subsidiaries, 30% of the shares of Zhejiang ChangXin Communication Equipment Co., Ltd. and 20% of the shares of Shanghai XiaoYi Bin Tong Technology Co., Ltd., are recorded as a component of our equity, separate from the Company’s equity. Purchase or sales of equity interests that do not result in a change of control are accounted for as equity transactions. Results of operations attributable to the non-controlling interest are included in our consolidated results of operations and, upon loss of control, the interest sold, as well as interest retained, if any, will be reported at fair value with any gain or loss recognized in earnings. The cumulative results of operations attributable to noncontrolling interests are also recorded as noncontrolling interests in the Company’s consolidated balance sheets. - 46 - Recently Issued Accounting Pronouncements (i) Recently adopted accounting pronouncements In December 2023, the FASB issued Accounting Standards Update (ASU) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which enhances the transparency and decision usefulness of income tax disclosures. The amendments address more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. The ASU also includes certain other amendments to improve the effectiveness of income tax disclosures. The amendments in this ASU are effective for public business entities for annual periods beginning after December 15, 2024 on a prospective basis through retrospective application is permitted. Early adoption is permitted. The Company adopted ASU 2023-09 for the year beginning on March 1, 2025 on a retrospective basis and the adoption does not have a material impact on its disclosures. (ii) Recently issued accounting pronouncements not yet adopted In November 2024, the FASB issued ASU No. 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40). This ASU requires disclosure, in the notes to financial statements, of specified information about certain costs and expenses. A reporting entity is required to 1) disclose the amounts of (a) purchases of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and (e) depreciation, depletion, and amortization recognized as part of oil and gas-producing activities (DD&A) (or other amounts of depletion expense) included in each relevant expense caption. A relevant expense caption is an expense caption presented on the face of the income statement within continuing operations that contains any of the expense categories listed in (a)–(e); 2) include certain amounts that are already required to be disclosed under current generally accepted accounting principles in the same disclosure as the other disaggregation requirements; 3) disclose a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, and 4) disclose the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses. The ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of this accounting standard update on its consolidated financial statements and related disclosures. In January 2025, the FASB issued ASU 2025-01, “Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures.” The amendment in ASU 2025-01 amends the effective date of ASC 2024-03 to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption of is permitted. The Company is currently evaluating the impact of this accounting standard update on its consolidated financial statements and related disclosures. In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets (ASU 2025-05), which amends guidance on the measurement of credit losses for accounts receivable and contract assets. ASU 2025-05 is effective for annual reporting periods beginning after December 15, 2025, and interim periods within those annual periods. Early adoption is permitted. The Company is currently evaluating the impact of this accounting standard update on its consolidated financial statements and related disclosures. In December 2025, the Financial Accounting Standards Board (“ FASB ”) issued Accounting Standards Update (“ ASU ”) 2025-11, Interim Reporting (Topic 270): Improvements to Interim Disclosure Requirements. The standard clarifies disclosure requirements for interim financial statements and is effective for interim periods beginning after December 15, 2026. Early adoption is permitted. The Company is currently evaluating the impact of this accounting standard update on its consolidated financial statements and related disclosures. ITEM 7A. 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.