FingerMotion, Inc. 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - 47 - FINGERMOTION, INC. CONSOLIDATED FINANCIAL STATEMENTS For the year ended February 28, 2026 (Expressed in U.S. Dollars) Index to the Financial Statements Contents Page(s) Report of Independent Registered Public Accounting Firm (Firm ID 6967 ) F-2 Consolidated Balance Sheets at February 28, 2026 and February 28, 2025 F-3 Consolidated Statements of Operations for the years ended February 28, 2026 and February 28, 2025 F-4 Consolidated Statement of Stockholders’ Equity for the years ended February 28, 2026 and February 28, 2025 F-5 Consolidated Statements of Cash Flows for the years ended February 28, 2026 and February 28, 2025 F-6 Notes to the Consolidated Financial Statements F-7 F- 1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of FingerMotion Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of FingerMotion, Inc. (the Company) as of February 28, 2026 and 2025, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the years in the two-year period ended February 28, 2026, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of February 28, 2026 and 2025, and the results of its operations and its cash flows for each of the years in the two-year period ended February 28, 2026, in conformity with accounting principles generally accepted in the United States of America. Substantial Doubt about the Company’s Ability to continue as a Going Concern The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has suffered recurring losses from operations that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters . Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there were no critical audit matters. /s/ CT International LLP We have served as the Company’s auditor since 2024. San Francisco, California May 29, 2026 F- 2 FingerMotion, Inc. Consolidated Balance Sheets February 28, February 28, 2026 2025 ASSETS Current Assets Cash and cash equivalents $ 68,596 $ 1,128,135 Accounts receivable, net 44,832,946 32,659,437 Inventories 258,159 136,020 Prepayment and deposit 4,800,636 7,016,803 Other receivables 1,811,226 1,096,965 Total Current Assets 51,771,563 42,037,360 Non-current Assets Equipment 28,366 23,260 Intangible assets 2,030,291 9,758 Right-of-use asset 19,201 126,581 Deferred tax asset 6,996,568 6,623,492 Total Non-current Assets 9,074,426 6,783,091 TOTAL ASSETS $ 60,845,989 $ 48,820,451 LIABILITIES AND SHAREHOLDER’S DEFICIT Current Liabilities Accounts payable $ 34,412,906 $ 24,560,361 Accrual and other payables 10,678,667 9,323,641 Loan payable, current portion 576,233 1,133,745 Lease liability, current portion 10,604 116,808 Total Current Liabilities 45,678,410 35,134,555 Non-current Liabilities Lease liability, non-current portion — 9,986 Deferred tax liabilities 18,002 16,954 Total Non-current Liabilities 18,002 26,940 TOTAL LIABILITIES $ 45,696,412 $ 35,161,495 STOCKHOLDERS’ EQUITY Preferred stock, par value $ 0.0001 per share; Authorized 1,000,000 shares; issued and outstanding - 0 - shares. — — Common Stock, par value $ 0.0001 per share; Authorized 200,000,000 shares; issued and outstanding 61,281,308 shares and 57,141,186 issued and outstanding at February 28, 2026 and February 28, 2025 respectively 6,129 5,714 Additional paid-in capital 54,652,121 47,304,416 Additional paid-in capital - stock options 1,798,658 1,473,996 Accumulated deficit ( 41,185,154 ) ( 34,187,384 ) Accumulated other comprehensive income ( 84,104 ) ( 943,276 ) Stockholders’ equity before non-controlling interests 15,187,650 13,653,466 Non-controlling interests ( 38,073 ) 5,490 TOTAL STOCKHOLDERS’ EQUITY 15,149,577 13,658,956 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 60,845,989 $ 48,820,451 The accompanying notes are an integral part of these consolidated financial statements. F- 3 FingerMotion, Inc. Consolidated Statements of Operations Year Ended February 28, February 28, 2026 2025 Revenue $ 24,132,261 $ 35,607,614 Cost of revenue ( 23,438,416 ) ( 32,843,907 ) Gross profit 693,845 2,763,707 Amortization & depreciation ( 351,204 ) ( 156,497 ) General & administrative expenses ( 5,049,420 ) ( 6,445,771 ) Marketing cost ( 83,197 ) ( 276,258 ) Research & development ( 411,925 ) ( 632,767 ) Credit impairment loss ( 1,207,516 ) ( 439,613 ) Stock compensation expenses ( 530,620 ) ( 761,802 ) Total operating expenses ( 7,633,882 ) ( 8,712,708 ) Net loss from operations ( 6,940,037 ) ( 5,949,001 ) Other income (expense): Interest income 25,849 87,063 Interest expense ( 146,235 ) ( 164,059 ) Exchange rate gain (loss) ( 14,455 ) 15,738 Other income 33,545 21,796 Total other income (expense) ( 101,296 ) ( 39,462 ) Net Loss before income tax $ ( 7,041,333 ) $ ( 5,988,463 ) Income tax benefit — 879,121 Net Loss $ ( 7,041,333 ) $ ( 5,109,342 ) Less: Net profit (loss) attributable to the non-controlling interest ( 43,563 ) 3,462 Net loss attributable to the Company’s stockholders $ ( 6,997,770 ) $ ( 5,112,804 ) Other comprehensive income: Foreign currency translation adjustments 859,172 ( 176,265 ) Comprehensive loss $ ( 6,138,598 ) $ ( 5,289,069 ) Less: comprehensive income (loss) attributable to non-controlling interest 544 ( 602 ) Comprehensive loss attributable to the Company $ ( 6,139,142 ) $ ( 5,288,467 ) NET LOSS PER SHARE Loss Per Share - Basic $ ( 0.12 ) $ ( 0.09 ) Loss Per Share - Diluted $ ( 0.12 ) $ ( 0.09 ) NET LOSS PER SHARE ATTRIBUTABLE TO THE COMPANY Loss Per Share - Basic $ ( 0.12 ) $ ( 0.09 ) Loss Per Share - Diluted $ ( 0.12 ) $ ( 0.09 ) Weighted Average Common Shares Outstanding - Basic 59,597,091 55,613,386 Weighted Average Common Shares Outstanding - Diluted 59,597,091 55,613,386 The accompanying notes are an integral part of these consolidated financial statements. F- 4 FingerMotion, Inc. Consolidated Statement of Stockholders’ Equity ` Accumulated Capital Paid Additional Other Common Stock in Excess Paid-in capital Accumulated Comprehensive Stockholders’ Non-controlling Shares Amount of Par Value stock options Deficit Income equity interest Total Balance at March 1, 2025 57,141,186 5,714 47,304,416 1,473,996 ( 34,187,384 ) ( 943,276 ) 13,653,466 5,490 13,658,956 Common stock issued for cash 1,985,122 199 3,420,816 — — — 3,421,015 — 3,421,015 Common stock issued for professional service 95,000 10 172,095 — — — 172,105 — 172,105 Common stock issued for conversion of customer deposit 560,000 56 1,399,944 1,400,000 1,400,000 Additional paid-in capital - stock options — — — 324,662 — — 324,662 — 324,662 Common stock issued for purchase of software IP 1,500,000 150 2,354,850 2,355,000 2,355,000 Accumulated other comprehensive income — — — — — 859,172 859,172 — 859,172 Net loss — — — — ( 6,997,770 ) — ( 6,997,770 ) ( 43,563 ) ( 7,041,333 ) Balance at February 28, 2026 61,281,308 6,129 54,652,121 1,798,658 ( 41,185,154 ) ( 84,104 ) 15,187,650 ( 38,073 ) 15,149,577 ` Accumulated Capital Paid Additional Other Common Stock in Excess Paid-in capital Accumulated Comprehensive Stockholders’ Non-controlling Shares Amount of Par Value stock options Deficit Income equity interest Total Balance at March 1, 2024 (As restated) 52,545,350 5,254 40,292,778 1,233,619 ( 29,074,580 ) ( 767,011 ) 11,690,060 2,028 11,692,088 Common stock issued for cash 4,428,336 443 6,642,061 — — — 6,642,504 — 6,642,504 Common stock issued for professional service 167,500 17 369,577 — — — 369,594 — 369,594 Additional paid-in capital - stock options — — — 240,377 — — 240,377 — 240,377 Accumulated other comprehensive income — — — — — ( 176,265 ) ( 176,265 ) — ( 176,265 ) Net loss — — — — ( 5,112,804 ) — ( 5,112,804 ) 3,462 ( 5,109,342 ) Balance at February 28, 2025 57,141,186 5,714 47,304,416 1,473,996 ( 34,187,384 ) ( 943,276 ) 13,653,466 5,490 13,658,956 The accompanying notes are an integral part of these consolidated financial statements. F- 5 FingerMotion, Inc. Consolidated Statements of Cash Flows Year Ended February 28, February 28, 2026 2025 Net loss $ ( 7,041,333 ) $ ( 5,109,342 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Share based compensation expenses 530,620 609,971 Amortization and depreciation 351,204 46,707 Amortization of right-of-use assets — 109,790 Provision for expected credit losses 1,207,516 439,613 Deferred income taxes — ( 6,665,539 ) Gain on disposal of equipment 118 — Changes in operating assets and liabilities (Increase) decrease in accounts receivable, net ( 10,974,384 ) ( 24,860,498 ) (Increase) decrease in prepayment and deposit 2,124,453 ( 1,365,105 ) (Increase) decrease in other receivable ( 621,761 ) 1,399,140 (Increase) decrease in inventories ( 109,386 ) ( 137,354 ) Increase (decrease) in accounts payable 8,016,055 19,665,662 Increase (decrease) in accrual and other payables 2,620,191 7,788,318 Increase (decrease) in due to lease liability ( 8,487 ) ( 100,668 ) Net Cash used in operating activities ( 3,905,194 ) ( 8,179,304 ) Cash flows from investing activities Purchase of equipment ( 20,216 ) ( 4,115 ) Net cash used in investing activities ( 20,216 ) ( 4,115 ) Cash flows from financing activities Proceed from loan payable 193,610 1,596,806 Repayment of loan payable ( 751,122 ) ( 463,061 ) Common stock issued for cash 3,421,015 6,642,504 Net cash provided by financing activities 2,863,503 7,776,249 Effect of exchange rates on cash and cash equivalents 2,368 18,073 Net change in cash ( 1,059,539 ) ( 389,097 ) Cash at beginning of year 1,128,135 1,517,232 Cash at end of year $ 68,596 $ 1,128,135 Supplemental disclosures of cash flow information: Interest paid $ 146,235 $ 164,059 Taxes paid $ — $ 8,941 Supplemental disclosures of non-cash investing and financing activities:: Common stock issued for professional service $ 172,105 $ — Conversion of customer deposit to shares $ 1,400,000 — Common stock issued for purchase of software IP $ 2,355,000 $ — The accompanying notes are an integral part of these consolidated financial statements. F- 6 Note 1 – Nature of Business and basis of Presentation FingerMotion, Inc. fka Property Management Corporation of America (the “ Company ”) was incorporated on January 23, 2014, under the laws of the State of Delaware. The Company then offered management and consulting services to residential and commercial real estate property owners who rent or lease their property to third-party tenants. The Company changed its name to FingerMotion, Inc. on July 13, 2017, after a change in control. In July 2017 the Company acquired all of the outstanding shares of Finger Motion Company Limited (“ FMCL ”), a Hong Kong corporation formed on April 6, 2016, that is an information technology company which then specialized in operating and publishing mobile games. Pursuant to the Share Exchange Agreement with FMCL, effective July 13, 2017 (the “ Share Exchange Agreement ”), the Company agreed to exchange the outstanding equity stock of FMCL held by the FMCL Shareholders for shares of common stock of the Company. At the Closing Date, the Company issued 12,000,000 shares of common stock to the FMCL shareholders. In addition, the Company issued 600,000 shares to other consultants in connection with the transactions contemplated by the Share Exchange Agreement. The transaction was accounted for as a “reverse acquisition” since, immediately following completion of the transaction, the shareholders of FMCL effectuated control of the post-combination Company. For accounting purposes, FMCL was deemed to be the accounting acquirer in the transaction and, consequently, the transaction is treated as a recapitalization of FMCL (i.e., a capital transaction involving the issuance of shares by the Company for the shares of FMCL). Accordingly, the consolidated assets, liabilities, and results of operations of FMCL became the historical financial statements of FingerMotion, Inc. and its subsidiaries, and the Company’s assets, liabilities and results of operations were consolidated with FMCL beginning on the acquisition date. No step-up in basis or intangible assets or goodwill were recorded in this transaction. As a result of the Share Exchange Agreement and the other transactions contemplated thereunder, FMCL became a wholly-owned subsidiary of the Company. On October 16, 2018, the Company through its indirect wholly-owned subsidiary, Shanghai JiuGe Business Management Co., Ltd. (“ JiuGe Management ”), entered into a series of agreements known as variable interest agreements (the “ VIE Agreements ”) pursuant to which Shanghai JiuGe Information Technology Co., Ltd. (“ JiuGe Technology ”) became JiuGe Management’s contractually controlled affiliate. The use of VIE agreements is a common structure used to acquire operational control of PRC corporations, particularly in certain industries in which foreign investment is restricted or forbidden by the PRC government. The VIE Agreements include a Consulting Services Agreement, a Loan Agreement, a Power of Attorney Agreement, a Call Option Agreement, and a Share Pledge Agreement in order to secure the connection and commitments of JiuGe Technology. On March 7, 2019, JiuGe Technology also acquired 99% of the equity interest of Beijing XunLian (“ BX ”), a subsidiary that provides bulk distribution of SMS messages for JiuGe customers at discounted rates. Finger Motion Financial Company Limited was incorporated on January 24, 2020, and is 100% owned by FingerMotion, Inc. The company has been activated for the insurtech business during the last quarter of the fiscal year 2021where the Big Data division secured its first contract and recorded revenue. Shanghai TengLian JiuJiu Information Communication Technology Co., Ltd. was incorporated on December 23, 2020, for the purpose of venturing into mobile phone sales in China. It is 99% owned by JiuGe Technology. On February 5, 2021, JiuGe Technology disposed of its 99% owned subsidiary, Suzhou BuGuNiao Digital Technology Co., Ltd which was established to venture into R&D projects. Shanghai KeShunXiang Automobile Service Co., Ltd. was incorporated on April 10, 2024 for the purpose of venturing into the communication and streaming services in China. It is 99% owned by JiuGe Technology. Zhejiang ChangXin Communication Equipment Co., Ltd. was incorporated on March 28, 2025 for the purpose of venturing into the research and development, manufacturing and sales of communication equipment, as well as the technical service business of communication equipment in China. It is 70% owned by Shanghai KeShunXiang Automobile Service Co., Ltd. Shanghai XiaoYi Bin Tong Technology Co., Ltd. was incorporated on April 15, 2025 for the purpose of venturing into the sale of household appliances and electronic products in China. It is 80% owned by JiuGe Technology. F- 7 Note 2 - Summary of Principal Accounting Policies Principles of Consolidation and Presentation 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, 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. The following assets and liabilities of the VIE and VIE’s subsidiaries are included in the accompanying consolidated financial statements of the Company as of February 28, 2026 and February 28, 2025: Assets and liabilities of the VIE Schedule of variable interest entity February 28, 2026 February 28, 2025 Current assets $ 9,099,111 $ 9,647,455 Non-current assets 415,307 512,958 Total assets $ 9,514,418 $ 10,160,413 Current liabilities $ 14,276,754 $ 12,925,255 Non-current liabilities 18,002 26,940 Total liabilities $ 14,294,756 $ 12,952,195 Assets and liabilities of the VIE Subsidiaries February 28, 2026 February 28, 2025 Current assets $ 41,411,094 $ 29,073,164 Non-current assets 5,962,380 5,598,659 Total assets $ 47,373,474 $ 34,671,823 Current liabilities $ 48,142,684 $ 34,137,259 Non-current liabilities — — Total liabilities $ 48,142,684 $ 34,137,259 F- 8 Note 2 - Summary of Principal Accounting Policies (continued) Operating Result of VIE For the Year Ended February 28, 2026 For the Year Ended February 28, 2025 Revenue $ 2,540,768 $ 4,548,991 Cost of revenue ( 2,341,450 ) ( 3,687,430 ) Gross profit (loss) $ 199,318 $ 861,561 Amortization and depreciation ( 13,495 ) ( 133,091 ) General and administrative expenses ( 1,518,566 ) ( 1,899,146 ) Marketing cost ( 13,596 ) ( 95,829 ) Research & development ( 62,981 ) ( 298,345 ) Credit impairment loss ( 376,395 ) ( 87,409 ) Total operating expenses $ ( 1,985,033 ) $ ( 2,513,820 ) Profit (loss) from operations $ ( 1,785,715 ) $ ( 1,652,259 ) Interest income 25,371 86,907 Other income 13,725 19,701 Total other income (expense) $ 36,096 $ 106,608 Tax expense — 354,229 Net profit (loss) $ ( 1,746,619 ) $ ( 1,191,422 ) Operating Result of VIE Subsidiaries For the Year Ended February 28, 2026 For the Year Ended February 28, 2025 Revenue $ 20,696,182 $ 31,053,615 Cost of revenue ( 20,191,615 ) ( 29,151,468 ) Gross profit (loss) $ 504,567 $ 1,902,147 Amortization and depreciation ( 1,404 ) ( 956 ) General and administrative expenses ( 1,013,540 ) ( 816,590 ) Marketing cost ( 69,601 ) ( 180,429 ) Research & development ( 68,051 ) ( 88,017 ) Credit impairment loss ( 667,654 ) ( 333,228 ) Total operating expenses $ ( 1,820,250 ) $ ( 1,419,220 ) Profit (loss) from operations $ ( 1,315,683 ) $ 482,927 Interest income 42 27 Other income (expense) 29,893 1,253 Total other income (expense) $ 29,935 $ 1,280 Tax expense — ( 137,987 ) Net profit (loss) $ ( 1,285,748 ) $ 346,220 F- 9 Note 2 - Summary of Principal Accounting Policies (continued) 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. Translation of amounts from RMB into USD has been made at the following exchange rates for the respective periods: Schedule of foreign currency translation and transactions 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. F- 10 Note 2 - Summary of Principal Accounting Policies (continued) 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 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 for allowances for credit losses recognized in profit or loss by the Company during the years 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. 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. F- 11 Note 2 - Summary of Principal Accounting Policies (continued) 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. 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. F- 12 Note 2 - Summary of Principal Accounting Policies (continued) Cost of Revenue Cost of revenue consists of telecommunication products and services, and SMS & MMS business for operators or other suppliers, and 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. F- 13 Note 2 - Summary of Principal Accounting Policies (continued) 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 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. Note 3 - Going Concern The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Company had an accumulated deficit of $ 41,166,157 and $ 34,187,384 as at February 28, 2026 and February 28, 2025 respectively, and had a net loss of $ 7,022,336 and $ 5,109,342 for the years ended February 28, 2026 and February 28, 2025, respectively. The Company’s continuation as a going concern is dependent on its ability to obtain additional financing to fund operations, implement its business model, and ultimately, attain profitable operations. The Company will need to secure additional funds through various means, including equity and debt financing or any similar financing. There can be no assurance that the Company will be able to obtain additional equity or debt financing, if and when needed, on terms acceptable to the Company, or at all. Any additional equity or debt financing may involve substantial dilution to the Company’s stockholders, restrictive covenants, or high interest costs. The Company’s long-term liquidity also depends upon its ability to generate revenues and achieve profitability. F- 14 Note 4 - Revenue We recorded $ 24,132,261 and $ 35,607,614 in revenue, respectively, for the years ended February 28, 2026 and February 28, 2025. Schedule of revenue For the Year Ended February 28, 2026 For the Year Ended February 28, 2025 Telecommunication Products & Services $ 23,937,558 $ 35,396,655 Marketplace Platform & Digital Commerce Infrastructure Solutions 25,037 80,592 Advanced Technology & Platform Solutions 141,886 188,576 Data & Analytics Platform Solutions 27,780 ( 58,209 ) $ 24,132,261 $ 35,607,614 Note 5 – Equipment At February 28, 2026 and February 28, 2025, the company has the following amounts related to tangible assets: Schedule of property, plant and equipment February 28, 2026 February 28, 2025 Equipment $ 128,347 $ 103,945 Less: accumulated depreciation ( 99,981 ) ( 80,685 ) Net equipment $ 28,366 $ 23,260 No significant residual value is estimated for the equipment. Depreciation expense for the years ended February 28, 2026 and February 28, 2025 totaled $ 16,439 and $ 26,249 , respectively. Note 6 – Intangible Assets At February 28, 2026 and February 28, 2025, the company has the following amounts related to intangible assets: Schedule of intangible assets February 28, 2026 February 28, 2025 Mobile applications / Software 2,569,478 201,993 Less: accumulated amortization ( 539,187 ) ( 192,235 ) Net intangible assets $ 2,030,291 $ 9,758 No significant residual value is estimated for these intangible assets. Amortization expense for the years ended February 28, 2026 and February 28, 2025 totaled $ 334,765 and $ 20,458 , respectively. F- 15 Note 7 – Prepayment and Deposit Prepaid expenses consist of the deposit pledge to the vendor for stock credits for resale. Our current vendors are China Unicom and China Mobile for our Telecommunication Products & Services business and our SMS & MMS business. Deposits include payments placed into the e-commerce platforms where we offer our products and services. The platforms are PinDuoDuo, Tmall, and JD.com. Schedule of prepaid expense February 28, 2026 February 28, 2025 Deposit $ 4,518,064 $ 6,631,704 Prepayment 282,572 385,099 $ 4,800,636 $ 7,016,803 Note 8 – Accounts Receivable, net Schedule of accounts receivable February 28, 2026 February 28, 2025 Accounts receivable $ 46,535,767 $ 33,094,782 Less: allowance for credit losses ( 1,702,821 ) ( 435,345 ) $ 44,832,946 $ 32,659,437 The Company normally allows credit terms to customers ranging from 90 to 150 days. The Company seeks to maintain strict control over its accounts receivable. Overdue accounts receivable are reviewed regularly by the Management. Activities related to allowance for credit losses are presented below. Schedule of allowance for credit losses February 28, 2026 February 28, 2025 At beginning of year $ 435,345 $ — Additions 1,267,476 435,345 At end of year $ 1,702,821 $ 435,345 Note 9 – Other Receivables At February 28, 2026 and February 28, 2025, the company has the following amounts related to other receivables: Schedule of other receivables February 28, 2026 February 28, 2025 Other receivables represent: Advances to suppliers $ 1,498,558 $ 745,935 Security deposit 297,896 336,558 Others 14,772 14,472 Other receivables $ 1,811,226 $ 1,096,965 F- 16 Note 10 – Right-of-use Asset and Lease Liability The Company has entered into lease agreements with various third parties. The terms of operating leases typically range from one to two years. These operating leases are included in “Right-of-use Asset” on the Company’s Condensed Consolidated Balance Sheet and represent the Company’s right to use the underlying asset for the lease term. The Company’s obligation to make lease payments is included in “Lease liability” on the Company’s Condensed Consolidated Balance Sheet. Additionally, the Company has entered into various short-term operating leases with an initial term of twelve months or less. These leases are not recorded on the Company’s Consolidated balance sheet. All operating lease expense is recognized on a straight-line basis over the lease term in the year ended February 28, 2026. Information related to the Company’s right-of-use assets and related lease liabilities were as follows: Schedule of operating leases assets and liabilities February 28, 2026 February 28, 2025 Right-of-use asset Right-of-use asset, net $ 19,201 $ 126,581 Lease Liability Current lease liability $ 10,604 $ 116,808 Non-current lease liability — 9,986 Total lease liability $ 10,604 $ 126,794 Remaining lease term and discount rate February 28, 2026 Weighted-average remaining lease term 2 months Weighted-average discount rate 4.75 % Commitments The following table summarizes the future minimum lease payments due under the Company’s operating leases as of February 28, 2026: Schedule of future minimum lease payments due 2026 $ 10,645 Less: imputed interest ( 41 ) $ 10,604 The following summarizes cash flow information related to leases for the year ended February 28, 2026: Schedule of cash flow information related to leases Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from leases $ 81,910 F- 17 Note 11 - Common Stock On March 3, 2025, the Company issued 27,500 shares of its common stock at a deemed price of $ 1.86 per share to one entity pursuant to a consulting agreement. On May 15, 2025, the Company issued 312,500 shares of its common stock at a price of $ 1.50 per share to one entity pursuant to the exercise of warrants. On May 23, 2025, the Company issued 100,000 shares of its common stock at a price of $ 1.88 per share to one entity pursuant to the exercise of warrants. On May 28, 2025, the Company issued an aggregate of 940,000 shares of its common stock at a price or deemed price of $ 2.50 per share to 8 individuals due to the closing of a private placement, which resulted in the receipt of $ 950,000 in cash and the settlement of an outstanding liability of $ 1,400,000 . On May 28, 2025, the Company issued 837,243 shares of its common stock at a price of $ 1.50 per share to one entity pursuant to the exercise of warrants. On May 29, 2025, the Company issued 50,000 shares of its common stock at a price of $ 1.88 per share to one entity pursuant to the exercise of warrants. On September 30, 2025, the Company, its indirect wholly owned subsidiary, Shanghai JiuGe Business Management Co., Ltd. (“ JiuGe Management ”), and Shanghai Jihaohe Information Technology Co., Ltd. (“ Shanghai Jihaohe ”), entered into an asset purchase agreement (the “ Asset Purchase Agreement ”) pursuant to which the Company caused JiuGe Management to acquire all of the intellectual property (including, without limitation, all of the inventions, software in source code or object code, trademarks, copyrights and trade secrets) underpinning the Company’s DaGe platform, in consideration of the issuance by the Company to Shanghai Jihaohe of 1,500,000 shares of common stock in the capital of the Company. The Asset Purchase Agreement closed on October 2, 2025, and the Company issued the 1,500,000 shares of common stock to Shanghai Jihaohe at a deemed issuance price of $ 1.57 per share. On October 17, 2025, the Company issued 60,000 shares of its common stock at a deemed price of $ 1.67 per share to one individual pursuant to a settlement agreement. On October 17, 2025, the Company issued 7,500 shares of its common stock at a deemed price of $ 1.86 per share to one entity pursuant to a consulting agreement. On October 23, 2025 the Company entered into a Sales Agreement (the “ Sales Agreement ”) with R.F. Lafferty & Co., Inc. as sales agent (the “ Sales Agent ”), under which the Company may, from time to time, sell shares of its common stock, par value $ 0.0001 per share (the “ Placement Shares ”), having an aggregate offering price of up to $ 50,000,000 through the Sales Agent (the “ ATM Offering ”). From October 23, 2025 to November 30, 2025, the Company issued 51,296 shares of its common stock under the Sales Agreement for gross cash proceeds of $ 80,087 . The total issuance costs were $ 2,002 , all of which were related to compensation paid to the Sales Agent. On November 14, 2025, the Company issued 190,000 shares of common stock at a price of $ 1.50 per share to one individual due to the closing of a private placement for gross proceeds of $ 285,000 . From December 12, 2025 to December 23, 2025, the Company issued 64,083 shares of its common stock under the Sales Agreement 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. As of February 28, 2026, and February 28, 2025, there were 61,281,308 and 57,141,186 shares of the Company’s common stock issued and outstanding, and none of the preferred shares were issued and outstanding. F- 18 Stock Purchase Warrants A continuity schedule of outstanding stock purchase warrants as at February 28, 2026, and the changes during the periods, is as follows: Schedule of purchase warrants Number of Warrants Weighted Average Exercise Price Balance, February 28, 2025 5,288,316 $ 1.56 Exercised ( 1,149,743 ) 1.50 Exercised ( 150,000 ) 1.88 Issued 3,000,000 1.65 Issued 1,000,000 2.15 Expired ( 28,312 ) 8.22 Issued 300,000 1.65 Adjustment to Exercise Price 25,333 1.50 Expired ( 10,000 ) 6.70 Balance, February 28, 2026 8,275,594 $ 1.64 On May 14, 2025, the Company received $ 468,750 from the exercise of warrants for the purchase of 312,500 shares of common stock of the Company at a price of $ 1.50 per share from an entity. On May 23, 2025, the Company received $ 188,000 from the exercise of the Placement Agent Warrant for the purchase of 100,000 shares of common stock of the Company at a price of $ 1.88 per share from the Placement Agent. On May 27, 2025, the Company received $ 1,255,864 .50 from the exercise of warrants for the purchase of 837,243 shares of common stock of the Company at a price of $ 1.50 per share from an entity. On May 29, 2025, the Company received $ 94,000 from the exercise of the Placement Agent Warrant for the purchase of 50,000 shares of common stock of the Company at a price of $ 1.88 per share from the Placement Agent. On October 21, 2025, the Company issued an aggregate of 4,000,000 common stock purchase warrants (the “ Warrants ”) to a consultant pursuant to a consulting services agreement with respect to investor relations services. 3,000,000 of the Warrants entitle the holder to purchase up to 3,000,000 shares of common stock (each, a “ Warrant Share ”) at an exercise price of $1.65 per Warrant Share until April 20, 2027, and 1,000,000 of the Warrants entitle the holder to purchase up to 1,000,000 Warrant Shares at an exercise price of $2.15 per Warrant Share until April 20, 2027. On November 4, 2025, 28,312 stock purchase warrants having an exercise price of $ 8.22 per share expired. On November 5, 2025, the Company issued 300,000 common stock purchase warrants (the “ Warrants ”) to a consultant pursuant to a consulting services agreement. The Warrants entitle the holder to purchase up to 300,000 shares of common stock (each, a “ Warrant Share ”) at an exercise price of $ 1.65 per Warrant Share until April 27, 2027. In connection with the issuance of shares of common stock under the Sales Agreement, the number of warrants remaining under the Placement Agent Warrant has been increased by 25,333 due to the adjustment provisions to the exercise price contained within the Placement Agent Warrant, with the remaining number of warrants thereunder entitling the Placement Agent to purchase 125,333 shares of common stock at a price of $ 1.50 per share. On November 21, 2025, 10,000 stock purchase warrants having an exercise price of $ 6.70 per share expired. F- 19 Stock Purchase Warrants (continued) A summary of stock purchase warrants outstanding and exercisable as at February 28, 2026 is as follows: Schedule of share purchase warrants outstanding and exercisable Number of Warrants Remaining Contractual Exercise Price Outstanding Life (Years) Expiry Date 1.50 3,975,594 3.82 December 23, 2029 1.65 3,000,000 1.14 April 20, 2027 2.15 1,000,000 1.14 April 20, 2027 1.65 300,000 1.16 April 27, 2027 1.64 8,275,594 F- 20 Stock Options On December 28, 2021, the Company granted an aggregate of 4,545,000 stock options pursuant to the Company’s 2021 Stock Incentive Plan having an exercise price of $ 8.00 per share and an expiry date of five years from the date of grant to 40 individuals who were directors, officers, employees and consultants of the Company. We relied upon the exemption from registration under the U.S. Securities Act provided by Rule 903 of Regulation S promulgated under the U.S. Securities Act for the grant of stock options to individuals who are non-U.S. persons and upon the exemption from registration under Section 4(a)(2) of the U.S. Securities Act for two individuals who are U.S. persons. The stock options are all subject to vesting provisions of 20% on the date of grant and 20% on each of the first, second, third, and fourth anniversary of the date of grant. At our annual meeting of stockholders held on February 17, 2023, the stockholder approved an amendment to the exercise price of the outstanding stock options from $8.00 to $3.84. The strike price adjustment did not affect the fair value. The fair value of these stock options was estimated at the date of grant, using the Black-Scholes Option Valuation Model, with the following weighted average assumptions: Schedule of valuation assumptions February 28, 2026 February 28, 2025 Expected Risk-Free Interest Rate 1.06 % 1.06 % Expected Volatility 15.27 % 15.27 % Expected Life in Years 0.83 1.83 Expected Dividend Yield — — Weighted-Average Grant Date Fair Value $ 6.46 $ 6.46 On July 28, 2023, the Company granted an aggregate of 2,648,500 stock options pursuant to the Company’s 2023 Stock Incentive Plan having an exercise price of $ 4.62 per share and an expiry date of five years from the date of grant to 22 individuals who were employees and consultants of the Company’s subsidiaries and contractually controlled affiliate. The stock options are all subject to vesting provisions of 20% on the date of grant and 20% on each of the first, second, third and fourth anniversary of the date of grant. The fair value of these stock options was estimated at the date of grant, using the Black-Scholes Option Valuation Model, with the following weighted average assumptions: Schedule of valuation assumptions February 28, 2026 February 28, 2025 Expected Risk-Free Interest Rate 5.37 % 5.37 % Expected Volatility 25.48 % 25.48 % Expected Life in Years 2.41 3.41 Expected Dividend Yield — — Weighted-Average Grant Date Fair Value $ 4.58 $ 4.58 A continuity schedule of outstanding stock options as at February 28, 2026, and the changes during the period, is as follows: Schedule of stock option activity Number of Stock Options Exercise Price Balance, February 28, 2025 6,039,100 $ 4.18 Cancelled/Forfeited — — Balance, February 28, 2026 6,039,100 $ 4.18 F- 21 Stock Options (continued) A continuity schedule of outstanding unvested stock options at February 28, 2026, and the changes during the period, is as follows Schedule of unvested restricted stock Number of Unvested Weighted Average Stock Options Grant Date Fair Value Balance, February 28, 2025 2,303,300 $ 5.16 Vested – July 28, 2025 ( 529,700 ) $ 4.58 Vested – December 28, 2025 ( 714,200 ) $ 6.46 Balance, February 28, 2026 1,059,400 $ 4.58 As at February 28, 2026, the aggregate intrinsic value of the outstanding stock options granted on 28 December 2021 was estimated at $ 0 as the current price as of February 28, 2026 is $1.23 which is lower than the strike price while the aggregate intrinsic value of the outstanding stock options granted on July 28, 2023 is $ 0 as the current price as of February 28, 2026 is lower than the strike price. A summary of stock options outstanding and exercisable as at February 28, 2026 is as follows: Schedule of stock options Options Outstanding Options Exercisable Range of Exercise Prices Outstanding at February 28, 2026 Exercise Price Weighted Average Remaining Contractual Term (Years) Exercisable at February 28, 2026 Exercise Price Weighted Average Remaining Contractual Term (Years) $ 3.00 to $ 4.00 3,390,600 $ 3.84 0.83 3,390,600 $ 3.84 0.83 $ 4.00 to $ 5.00 2,648,500 $ 4.62 2.41 1,589,100 $ 4.62 2.41 6,039,100 4,979,700 F- 22 Note 12 – Earnings Per Share The following table sets forth the computation of basic and diluted earnings per common share: Schedule of basic and diluted earnings per common share For the years ended February 28, 2026 February 28, 2025 Numerator – basic and diluted Net Loss $ ( 7,041,333 ) $ ( 5,109,342 ) Denominator Weighted average number of common shares outstanding —basic 59,597,091 55,613,386 Weighted average number of common shares outstanding —diluted 59,597,091 55,613,386 Loss per common share — basic $ ( 0.12 ) $ ( 0.09 ) Loss per common share — diluted $ ( 0.12 ) $ ( 0.09 ) Note 13 – Income Taxes The Company and its subsidiaries file separate income tax returns. The United States of America FingerMotion, Inc. is incorporated in the State of Delaware in the U.S. and is subject to a U.S. federal corporate income tax of 21 % . The Company generated a taxable loss for the years ended February 28, 2026 and February 28, 2025. Hong Kong Finger Motion Company Limited, Finger Motion (CN) Limited and Finger Motion Financial Company Limited were incorporated in Hong Kong and Hong Kong’s profits tax rate is 16.5 % . These companies did not earn any income that was derived in Hong Kong for the years ended February 28, 2026 and February 28, 2025. The People’s Republic of China (PRC) JiuGe Management, Beijing XunLian, Shanghai TengLian JiuJiu Shanghai KeShunXiang, Zhejiang ChangXin Communication Equipment Co., Ltd and Shanghai XiaoYi Bin Tong Technology Co., Ltd were incorporated in the People’s Republic of China and subject to PRC income tax at 25 % . JiuGe Technology was incorporated in the People’s Republic of China and subject to PRC income tax at 15 % as high-tech enterprise. Income tax mainly consists of foreign income tax at statutory rates and the effects of permanent and temporary differences. The Company’s effective income tax rates for years ended February 28, 2026 and February 28, 2025, are as follows: Schedule of effective income tax rate reconciliation For the years ended February 28, 2026 February 28, 2025 U.S. statutory tax rate 21.0 % 21.0 % PRC profit tax rate 25.0 % 25.0 % Changes in valuation allowance and others ( 46.0 %) ( 31.0 %) Effective tax rate 0 % 15.0 % F- 23 Note 13 – Income Taxes (continued) Schedule of income tax expenses February 28, 2026 February 28, 2025 Current tax $ — $ 5,786,417 Deferred tax benefit — ( 6,665,538 ) Total provision for (benefit from) income tax expense $ — $ ( 879,121 ) The reconciliations of income tax expenses computed by applying the statutory income tax rates, ranging from 15% to 25%, to the Company’s income tax expenses for the presented years are as follows : Schedule of reconciliations of income tax expenses February 28, 2026 February 28, 2025 Loss before income tax expenses $ ( 7,041,333 ) $ ( 5,988,461 ) Income tax credit computed at various statutory income tax rate (15% to 25%) ( 440,899 ) ( 1,035,381 ) Reconciling items: Tax incentive – R&D Credit ( 69,940 ) ( 144,047 ) Income not subject to tax in China ( 38,590 ) ( 11,118 ) Non-deductible expenses 549,429 311,425 Total provision for (benefit from) income tax $ — $ ( 879,121 ) Deferred tax has resulted primarily from future tax deductible or creditable temporary differences. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. At February 28, 2026 and February 28, 2025, the valuation allowances were $ 4,389,425 and $ 3,188,969 , respectively. The significant components of the Company’s deferred tax account balances are as follows: Schedule of deferred tax assets February 28, 2026 February 28, 2025 Deferred tax assets Net operating losses carryforward $ 4,244,187 $ 3,316,740 Accruals and reserves 7,121,646 6,476,962 Lease liability 20,160 19,029 Total deferred tax assets 11,385,993 9,812,461 Less: Valuation allowance ( 4,389,425 ) ( 3,188,969 ) Total deferred tax assets, net of valuation allowance 6,996,568 6,623,492 Deferred tax liabilities Right-of-use asset ( 18,002 ) ( 16,954 ) Total deferred tax liabilities ( 18,002 ) ( 16,954 ) Net deferred tax assets (liabilities) $ 6,978,566 $ 6,606,538 F- 24 Note 14 - Commitments and Contingencies From time to time, the Company may be involved in or referenced in legal matters arising in the ordinary course of business. The Company is not aware of any material outstanding claim or litigation against it Note 15 – Loan Payable On July 18, 2024, the Company’s wholly owned subsidiary, Finger Motion Company Limited (the “ Borrower ”), entered into a loan agreement with Dr. Liew Yow Ming (the “ Lender ”) whereby the Lender agreed to advance a short-term loan facility of SGD$1,500,000 (the “ Loan ”) to the Borrower for working capital purposes. As of September 4, 2024, the full amount of the Loan has been drawn upon by the Borrower. Each drawdown portion of the Loan is due one (1) year from the date of the drawdown, unless extended by the Lender. If the Lender agrees, the Borrower may prepay the whole or any part of the Loan by providing the Lender not less than three (3) business days prior written notice and subject to payment of interest accrued thereon. Any prepayment of the Loan shall be in an amount of SGD$50,000 or multiples thereof. The Loan shall bear interest at the rate of 1.50% per month, any such interest to accrue from day to day and to be calculated based on a 365-day year, and is payable on a monthly basis on or before the last day of each successive month. On July 21, 2025, the Company repaid a short-term loan of SGD 500,000 . On August 1, 2025, the Company repaid a short-term loan of SGD 500,000 . On September 4, 2025 the Company and the Lender entered into an extension of loan agreement of the final tranche of SGD$ 500,000 . The new repayment date is due on March 4, 2026 and the interest rate has been increased to 2 % per month. On December 9, 2025, the Company’s wholly owned subsidiary, Finger Motion Company Limited (the “ Borrower ”) entered into a loan agreement with Dr. Liew Yow Ming (the “ Lender ”) for a short-term loan facility of SGD$ 150,000 for working capital purposes. The loan bears interest at 12 % per annum, payable monthly, and matures six (6) months from the drawdown date unless otherwise extended by the Lender. On December 24, 2025, the Company’s wholly owned subsidiary, Finger Motion Company Limited (the “ Borrower ”) entered into a separate loan agreement with Dr. Liew Yow Ming (the “ Lender ”) for a short-term loan facility of SGD$ 100,000 for working capital purposes. The loan bears interest at 12 % per annum, payable monthly, and matures five (5) years from the drawdown date unless otherwise extended by the Lender. Note 16 – Related Party Transactions In the ordinary course of business, the Company engages in transactions with its principal stockholders, affiliates, and executive officers. These transactions are carried out on terms comparable to those that would be obtained in arm-length dealings with unrelated third parties. During the year ended February 28, 2026, the Company entered into a consulting service agreement with Mr. Choe Yang Yeat, a related party of the Company, for consulting and advisory services provided to the Company. The arrangement was entered into in the ordinary course of business and on terms that management considered commercially reasonable. During the years ended February 28, 2026 and 2025, the Company engaged in the following transactions with ZhongXin Marine (Zhoushan) Satellite Communications Equipment Co., Ltd., its affiliate: Schedule of related party transactions February 28, 2026 February 28, 2025 Related party transaction Purchases of two satellite portable stations $ 15,270 $ — The following balances were outstanding at the end of the reporting periods: Schedule of balances were outstanding February 28, 2026 February 28, 2025 Related party payable ZhongXin Marine (Zhoushan) Satellite Communications Equipment Co., Ltd. $ 7,938 $ — F- 25 Note 17 – Subsequent Events On March 4, 2026, Finger Motion Company Limited, a wholly owned subsidiary of the Company, entered into a further extension agreement with the existing lender in 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 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 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. 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. Except for the above, the Company has determined that it does not have any other material subsequent events to disclose in these consolidated financial statements. F- 26 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE We did not have any disagreements on accounting and financial disclosures with our present accounting firm during the reporting period.