FingerMotion, Inc. 10-Q

ITEM 1 – FINANCIAL STATEMENTS 3 FINGERMOTION, INC. CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS For the three months ended May 31, 2026 (Unaudited - Expressed in U.S. Dollars) 4 FingerMotion, Inc. Condensed Consolidated Balance Sheets May 31, February 28, 2026 2026 (Unaudited) ASSETS Current Assets Cash and cash equivalents $ 987,391 $ 68,596 Accounts receivable, net 44,927,081 44,832,946 Inventories 309,492 258,159 Prepayment and deposit 4,932,114 4,800,636 Other receivables 1,777,834 1,811,226 Total Current Assets 52,933,912 51,771,563 Non-current Assets Equipment 27,530 28,366 Intangible assets 1,833,914 2,030,291 Right-of-use asset 20,428 19,201 Deferred tax asset 7,083,991 6,996,568 Total Non-current Assets 8,965,863 9,074,426 TOTAL ASSETS $ 61,899,775 $ 60,845,989 LIABILITIES AND STOCKHOLDER’S DEFICIT Current Liabilities Accounts payable $ 35,105,714 $ 34,412,906 Accrual and other payables 9,540,101 10,678,667 Loan payable, current portion 576,233 576,233 Convertible note payable, current portion 3,319,767 — Lease liability, current portion 10,245 10,604 Total Current Liabilities 48,552,060 45,678,410 Non-current Liabilities Deferred tax liabilities 18,248 18,002 Total Non-current Liabilities 18,248 18,002 TOTAL LIABILITIES $ 48,570,308 $ 45,696,412 STOCKHOLDERS’ EQUITY Preferred stock, par value $ .0001 per share; Authorized 1,000,000 shares; issued and outstanding - 0 - shares. — — Common Stock, par value $ .0001 per share; Authorized 200,000,000 shares; issued and outstanding 61,281,308 shares and 61,281,308 issued and outstanding at May 31, 2026 and February 28, 2026 respectively 6,129 6,129 Additional paid-in capital 54,652,121 54,652,121 Additional paid-in capital - stock options 1,798,658 1,798,658 Accumulated deficit ( 43,185,481 ) ( 41,185,154 ) Accumulated other comprehensive income 105,570 ( 84,104 ) Stockholders’ equity before non-controlling interests 13,376,997 15,187,650 Non-controlling interests ( 47,530 ) ( 38,073 ) TOTAL STOCKHOLDERS’ EQUITY 13,329,467 15,149,577 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 61,899,775 $ 60,845,989 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 5 FingerMotion, Inc. Unaudited Condensed Consolidated Statements of Operations Three Months Ended May 31, May 31, 2026 2025 Revenue $ 650,089 $ 8,458,743 Cost of revenue ( 441,611 ) ( 8,306,222 ) Gross profit 208,478 152,521 Amortization & depreciation ( 197,592 ) ( 10,553 ) General & administrative expenses ( 1,236,546 ) ( 1,510,426 ) Marketing cost ( 48,029 ) ( 12,106 ) Research & development ( 56,280 ) ( 172,652 ) Credit impairment loss ( 522,946 ) ( 307,967 ) Stock compensation expenses ( 81,166 ) ( 127,747 ) Total operating expenses ( 2,142,559 ) ( 2,141,451 ) Net loss from operations ( 1,934,081 ) ( 1,988,930 ) Other income (expense): Interest income 4,982 5,137 Interest expense ( 78,824 ) ( 51,881 ) Exchange rate gain (loss) ( 1,861 ) 3,761 Other income — 9,152 Total other income (expense) ( 75,703 ) ( 33,831 ) Net loss before income tax $ ( 2,009,784 ) $ ( 2,022,761 ) Income tax expenses — — Net loss $ ( 2,009,784 ) $ ( 2,022,761 ) Less: Net loss attributable to the non-controlling interest ( 9,457 ) ( 14,205 ) Net loss attributable to the Company’s stockholders $ ( 2,000,327 ) $ ( 2,008,556 ) Other comprehensive income: Foreign currency translation adjustments 189,674 152,309 Comprehensive loss $ ( 1,810,653 ) $ ( 1,856,247 ) Less: Comprehensive income (loss) attributable to non-controlling interest ( 616 ) 542 Comprehensive loss attributable to the Company $ ( 1,810,037 ) $ ( 1,856,789 ) NET LOSS PER SHARE Loss Per Share - Basic $ ( 0.03 ) $ ( 0.04 ) Loss Per Share - Diluted $ ( 0.03 ) $ ( 0.04 ) NET LOSS PER SHARE ATTRIBUTABLE TO THE COMPANY Loss Per Share - Basic $ ( 0.03 ) $ ( 0.04 ) Loss Per Share - Diluted $ ( 0.03 ) $ ( 0.04 ) Weighted Average Common Shares Outstanding - Basic 61,281,308 57,289,873 Weighted Average Common Shares Outstanding - Diluted 61,281,308 57,289,873 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 6 FingerMotion, Inc. Unaudited Condensed 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, 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 other comprehensive income — — — — — 189,674 189,674 — 189,674 Net Loss — — — — ( 2,000,327 ) — ( 2,000,327 ) ( 9,457 ) ( 2,009,784 ) Balance at May 31, 2026 61,281,308 6,129 54,652,121 1,798,658 ( 43,185,481 ) 105,570 13,376,997 ( 47,530 ) 13,329,467 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 1,679,743 168 2,956,447 — — — 2,956,615 — 2,956,615 Common stock issued for professional service 27,500 3 56,760 — — — 56,763 — 56,763 Common stock issued for conversion of customer deposit 560,000 56 1,399,944 — — — 1,400,000 — 1,400,000 Accumulated other comprehensive income — — — — — 152,309 152,309 — 152,309 Net Loss — — — — ( 2,008,556 ) — ( 2,008,556 ) ( 14,205 ) ( 2,022,761 ) Balance at May 31, 2025 59,408,429 5,941 51,717,567 1,473,996 ( 36,195,940 ) ( 790,967 ) 16,210,597 ( 8,715 ) 16,201,882 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 7 FingerMotion, Inc. Unaudited Condensed Consolidated Statements of Cash Flows Three Months Ended May 31, May 31, 2026 2025 Net (loss) $ ( 2,009,784 ) $ ( 2,022,761 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Share based compensation expenses 81,166 127,747 Amortization and depreciation 197,592 10,553 Provision for expected credit losses 522,946 307,967 Amortization of debt discount 44,767 — Gain on disposal of equipment — 30 Change in operating assets and liabilities: (Increase) decrease in accounts receivable ( 11,443 ) ( 6,005,779 ) (Increase) decrease in prepayment and deposit ( 148,973 ) 862,490 (Increase) decrease in others receivable 57,431 71,455 (Increase) decrease in inventories ( 47,263 ) 43,613 Increase (decrease) in accounts payable 220,815 5,375,987 Increase (decrease) in accrual and other payables ( 1,251,456 ) 26,048 Increase (decrease) due to lease liability ( 1,452 ) ( 1,567 ) Net Cash (used in) operating activities ( 2,345,654 ) ( 1,204,217 ) Cash flows from investing activities Purchase of equipment — ( 1,826 ) Net cash (used in) investing activities — ( 1,826 ) Cash flows from financing activities Proceeds from convertible promissory note 3,275,000 — Proceeds from issuance of common stock — 2,956,615 Net cash provided by financing activities 3,275,000 2,956,615 Effect of exchange rates on cash and cash equivalents ( 10,551 ) ( 15,469 ) Net change in cash 918,795 1,735,103 Cash at beginning of period 68,596 1,128,135 Cash at end of period $ 987,391 $ 2,863,238 Supplemental disclosures of cash flow information: Interest paid $ 78,824 $ 51,881 Supplemental disclosures of non-cash investing and financing activities: Common stock issued for professional service $ — $ 56,763 Conversion of customer deposit to shares $ — $ 1,400,000 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 8 FINGERMOTION, INC. Three months ended May 31, 2026 and 2025 Notes to the Unaudited Condensed Consolidated Financial Statements Note 1 – Nature of Business and basis of Presentation FingerMotion, Inc. aka 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. 9 FINGERMOTION, INC. Three months ended May 31, 2026 and 2025 Notes to the Unaudited Condensed Consolidated Financial Statements Note 1 – Nature of Business and basis of Presentation (continued) 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. 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. 10 FINGERMOTION, INC. Three months ended May 31, 2026 and 2025 Notes to the Unaudited Condensed Consolidated Financial Statements Note 2 - Summary of Principal Accounting Policies (continued) The following assets and liabilities and of the VIE and VIE’s subsidiaries are included in the accompanying condensed consolidated financial statements of the Company as of May 31, 2026 and February 28, 2026: Assets and liabilities of the VIE Schedule of variable interest entity May 31, 2026 February 28, 2026 (unaudited) Current assets $ 9,378,562 $ 9,099,111 Non-current assets 421,553 415,307 Total assets $ 9,800,115 $ 9,514,418 Current liabilities $ 14,785,043 $ 14,276,754 Non-current liabilities 18,248 18,002 Total liabilities $ 14,803,291 $ 14,294,756 Assets and liabilities of the VIE’s Subsidiaries May 31, 2026 February 28, 2026 (unaudited) Current assets $ 41,639,027 $ 41,411,094 Non-current assets 6,042,999 5,962,380 Total assets $ 47,682,026 $ 47,373,474 Current liabilities $ 49,193,830 $ 48,142,684 Non-current liabilities — — Total liabilities $ 49,193,830 $ 48,142,684 Operating Result of VIE For the Three Months Ended May 31, 2026 For the Three Months Ended May 31, 2025 (unaudited) (unaudited) Revenue $ 497,117 $ 129,512 Cost of revenue ( 357,959 ) ( 72,819 ) Gross profit $ 139,158 $ 56,693 Amortization and depreciation ( 380 ) ( 4,634 ) General and administrative expenses ( 281,924 ) ( 410,535 ) Research & development — ( 36,064 ) Credit impairment loss ( 17,562 ) ( 41,170 ) Total operating expenses $ ( 299,866 ) $ ( 492,403 ) Loss from operations $ ( 160,708 ) $ ( 435,710 ) Interest income 4,981 4,735 Interest expense ( 93 ) — Other income — 266 Total other income $ 4,888 $ 5,001 Tax expense — — Net profit (loss) $ ( 155,820 ) $ ( 430,709 ) 11 FINGERMOTION, INC. Three months ended May 31, 2026 and 2025 Notes to the Unaudited Condensed Consolidated Financial Statements Note 2 - Summary of Principal Accounting Policies (continued) Operating Result of VIE’s Subsidiaries For the Three Months Ended May 31, 2026 For the Three Months Ended May 31, 2025 (unaudited) (unaudited) Revenue $ 166,068 $ 7,412,639 Cost of revenue ( 83,652 ) ( 7,344,151 ) Gross profit $ 82,416 $ 68,488 Amortization and depreciation ( 707 ) ( 238 ) General and administrative expenses ( 329,908 ) ( 263,639 ) Marketing cost ( 48,029 ) ( 12,106 ) Research & development — ( 66,968 ) Credit impairment loss ( 427,476 ) ( 273,009 ) Total operating expenses $ ( 806,120 ) $ ( 615,960 ) Loss from operations $ ( 723,704 ) $ ( 547,472 ) Interest income 1 27 Other income — 8,886 Total other income $ 1 $ 8,913 Tax expense — — Net profit (loss) $ ( 723,703 ) $ ( 538,559 ) 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. 12 FINGERMOTION, INC. Three months ended May 31, 2026 and 2025 Notes to the Unaudited Condensed Consolidated Financial Statements Note 2 - Summary of Principal Accounting Policies (continued) 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 May 31, 2026 RMB6.7667 to $1.00 February 28, 2026 RMB6.8590 to $1.00 Income statement and cash flows items For the three months ended May 31, 2026 RMB6.8453 to $1.00 For the three months ended May 31, 2025 RMB7.2541 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. 13 FINGERMOTION, INC. Three months ended May 31, 2026 and 2025 Notes to the Unaudited Condensed Consolidated Financial Statements 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 three months ended May 31, 2026 and for the year ended February 28, 2026. 14 FINGERMOTION, INC. Three months ended May 31, 2026 and 2025 Notes to the Unaudited Condensed Consolidated Financial Statements Note 2 - Summary of Principal Accounting Policies (continued) 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 three months ended May 31, 2026, four customers each accounted for more than 10% of the Company’s total revenue, with individual contributions of 29 % , 29 % , 18 % and 16 % . As at May 31, 2026, amounts due from these customers were nil. For the three months ended May 31, 2025, three customers each accounted for more than 10% of the Company’s total revenue, with individual contributions of 74 % , 11 % and 10 % . As at May 31, 2025, amounts due from these customers represented approximately 37 % of the Company’s total accounts receivable. For the three months ended May 31, 2026, two suppliers each accounted for more than 10% of the Company’s total purchase, with individual contributions of 70 % and 11 % . As at May 31, 2026, amounts due to these suppliers represented approximately 1 % of the Company’s total accounts payable. For the three months ended May 31, 2025, three suppliers each accounted for more than 10% of the Company’s total purchase, with individual contributions of 75 % , 11 % and 10 % . As at May 31, 2025, amounts due to these suppliers represented approximately 77 % 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. 15 FINGERMOTION, INC. Three months ended May 31, 2026 and 2025 Notes to the Unaudited Condensed Consolidated Financial Statements Note 2 - Summary of Principal Accounting Policies (continued) 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. 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. 16 FINGERMOTION, INC. Three months ended May 31, 2026 and 2025 Notes to the Unaudited Condensed Consolidated Financial Statements Note 2 - Summary of Principal Accounting Policies (continued) 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. 17 FINGERMOTION, INC. Three months ended May 31, 2026 and 2025 Notes to the Unaudited Condensed Consolidated Financial Statements 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. 18 FINGERMOTION, INC. Three months ended May 31, 2026 and 2025 Notes to the Unaudited Condensed Consolidated Financial Statements Note 3 - Going Concern The accompanying condensed 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 $ 43,185,481 and $ 41,185,154 as at May 31, 2026 and February 28, 2026 respectively, and had a net loss of $ 2,009,784 and $ 2,022,761 for the three months ended May 31, 2026 and 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. Note 4 - Revenue We recorded $ 650,089 and $ 8,458,743 in revenue, respectively, for the three months ended May 31, 2026 and 2025. Schedule of revenue For the three months ended May 31, 2026 May 31, 2025 (unaudited) (unaudited) Telecommunication Products & Services $ 502,672 $ 8,311,254 Marketplace Platform & Digital Commerce Infrastructure Solutions 11,939 10,938 Advanced Technology & Platform Solutions 135,478 109,241 Data & Analytics Platform Solutions — 27,310 $ 650,089 $ 8,458,743 Note 5 – Equipment At May 31, 2026 and February 28, 2026, the company has the following amounts related to tangible assets: Schedule of property, plant and equipment May 31, 2026 February 28, 2026 (unaudited) Equipment $ 129,961 $ 128,347 Less: accumulated depreciation ( 102,431 ) ( 99,981 ) Net equipment $ 27,530 $ 28,366 No significant residual value is estimated for the equipment. Depreciation expenses for the three months ended May 31, 2026 and 2025 totaled $ 1,184 and $ 3,414 , respectively. 19 FINGERMOTION, INC. Three months ended May 31, 2026 and 2025 Notes to the Unaudited Condensed Consolidated Financial Statements Note 6 – Intangible Assets At May 31, 2026 and February 28, 2026, the company has the following amounts related to intangible assets: Schedule of intangible assets May 31, 2026 February 28, 2026 (unaudited) Mobile applications $ 2,360,337 $ 2,569,478 Less: accumulated amortization ( 526,423 ) ( 539,187 ) Net intangible assets $ 1,833,914 $ 2,030,291 No significant residual value is estimated for these intangible assets. Amortization expenses for the three months ended May 31, 2026 and 2025 totaled $ 196,408 and $ 7,139 respectively. 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. 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 May 31, 2026 February 28, 2026 (unaudited) Deposit $ 4,757,658 $ 4,518,064 Prepayment 174,456 282,572 $ 4,932,114 $ 4,800,636 Note 8 – Accounts Receivable, net Schedule of accounts receivable May 31, 2026 February 28, 2026 (unaudited) Accounts receivable $ 47,175,549 $ 46,535,767 Less: allowance for credit losses ( 2,248,468 ) ( 1,702,821 ) $ 44,927,081 $ 44,832,946 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 May 31, 2026 February 28, 2026 (unaudited) At beginning of the period $ 1,702,821 $ 435,345 Additions 545,647 1,267,476 At end of the period $ 2,248,468 $ 1,702,821 20 FINGERMOTION, INC. Three months ended May 31, 2026 and 2025 Notes to the Unaudited Condensed Consolidated Financial Statements Note 9 – Other Receivables At May 31, 2026 and February 28, 2026, the company has the following amounts related to other receivables: Schedule of other receivables May 31, 2026 February 28, 2026 (unaudited) Other receivables represent: Advances to suppliers $ 1,456,336 $ 1,498,558 Security deposit 309,273 297,896 Others 12,225 14,772 Other receivables $ 1,777,834 $ 1,811,226 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 three months ended May 31, 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 May 31, 2026 February 28, 2026 Right-of-use asset (unaudited) Right-of-use asset, net $ 20,428 $ 19,201 Lease liability Current lease liability $ 10,245 $ 10,604 Non-current lease liability — — Total lease liability $ 10,245 $ 10,604 Remaining lease term and discount rate May 31, 2026 Weighted-average remaining lease term 2 months Weighted-average discount rate 3.68 % Commitments The following table summarizes the future minimum lease payments due under the Company’s operating leases as of May 31, 2026: Schedule of future minimum lease payments due 2026 $ 10,277 Less: imputed interest ( 32 ) $ 10,245 The following summarizes cash flow information related to leases for the year ended May 31, 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 $ 10,667 21 FINGERMOTION, INC. Three months ended May 31, 2026 and 2025 Notes to the Unaudited Condensed Consolidated Financial Statements 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. 22 FINGERMOTION, INC. Three months ended May 31, 2026 and 2025 Notes to the Unaudited Condensed Consolidated Financial Statements Note 11 - Common Stock (continued) On May 13, 2026, the Company entered into a securities purchase agreement with an institutional investor and issued a senior secured convertible 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 was, and the shares of common stock issuable upon conversion of the note will be, issued in a transaction exempt from the registration requirements under the Securities Act in reliance on Section 4(a)(2) thereof and Rule 506(b) of Regulation D thereunder. As of May 31, 2026 there were 61,281,308 shares of the Company’s common stock issued and outstanding, and none of the preferred shares were issued and outstanding. Share Purchase Warrants A continuity schedule of outstanding stock purchase warrants as at May 31, 2026, and the changes during the periods, is as follows: Schedule of purchase warrants Number of Warrants Weighted Average Exercise Price Balance, February 28, 2026 8,275,594 $ 1.64 Correction of prior warrant count adjustment ( 25,333 ) 1.50 Balance, May 31, 2026 8,250,261 $ 1.37 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. 23 FINGERMOTION, INC. Three months ended May 31, 2026 and 2025 Notes to the Unaudited Condensed Consolidated Financial Statements Share Purchase Warrants (continued) In connection with the preparation of the current period financial statements, the Company reviewed the adjustment provisions contained within the Placement Agent Warrant and determined that the previously disclosed increase of 25,333 warrants under the Placement Agent Warrant should not have been recorded. Accordingly, the Placement Agent Warrant remained exercisable for 100,000 shares of common stock, The Company has corrected the warrant continuity schedule in this Quarterly Report. On November 21, 2025, 10,000 stock purchase warrants having an exercise price of $ 6.70 per share expired. 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 contained within the common stock purchase warrants and placement agent warrant issued in the registered direct offering that closed on December 23, 2024, the exercise price of such warrants was adjusted to $0.94 per share. The adjustment did not result in any increase in the number of warrants outstanding. The Company had previously disclosed in its Annual Report on Form 10-K that the number of warrants outstanding increased as a result of this adjustment. Upon further review, the Company determined that only the exercise price was adjusted, and the number of warrants outstanding remained unchanged. Accordingly, the warrant continuity schedule in this Quarterly Report reflects the corrected number of warrants outstanding and the adjusted exercise price. A summary of stock purchase warrants outstanding and exercisable as at May 31, 2026 is as follows: Schedule of share purchase warrants outstanding and exercisable Number of Warrants Remaining Contractual Exercise Price Outstanding Life (Years) Expiry Date 0.94 3,950,261 3.57 December 23, 2029 1.65 3,000,000 0.89 April 20, 2027 2.15 1,000,000 0.89 April 20, 2027 1.65 300,000 0.91 April 27, 2027 1.37 8,250,261 24 FINGERMOTION, INC. Three months ended May 31, 2026 and 2025 Notes to the Unaudited Condensed Consolidated Financial Statements 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 May 31, 2026 February 28, 2026 Expected Risk-Free Interest Rate 1.06 % 1.06 % Expected Volatility 15.27 % 15.27 % Expected Life in Years 0.58 0.83 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 May 31, 2026 February 28, 2026 Expected Risk-Free Interest Rate 5.37 % 5.37 % Expected Volatility 25.48 % 25.48 % Expected Life in Years 2.16 2.41 Expected Dividend Yield — — Weighted-Average Grant Date Fair Value $ 4.58 $ 4.58 25 FINGERMOTION, INC. Three months ended May 31, 2026 and 2025 Notes to the Unaudited Condensed Consolidated Financial Statements Stock Options (continued) A continuity schedule of outstanding stock options as at May 31, 2026, and the changes during the period, is as follows: Schedule of stock option activity Number of Stock Options Exercise Price Balance, February 28, 2026 6,039,100 $ 4.18 Cancelled/Forfeited — — Balance, May 31, 2026 6,039,100 $ 4.18 A continuity schedule of outstanding unvested stock options at May 31, 2026, and the changes during the three months periods, is as follows: Schedule of unvested restricted stock Number of Unvested Stock Options Weighted Average Grant Date Fair Value Balance, February 28, 2026 1,059,400 $ 4.58 Vested — $ — Balance, May 31, 2026 1,059,400 $ 4.58 As at May 31, 2026, the aggregate intrinsic value of the outstanding stock options granted on December 28, 2021 was estimated at $ 0 as the current price as of May 31, 2026 is $0.77 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 May 31, 2026 is lower than the strike price. A summary of stock options outstanding and exercisable as at May 31, 2026 is as follows: Schedule of stock options Options Outstanding Options Exercisable Range of Exercise Prices Outstanding at May 31, 2026 Exercise Price Weighted Average Remaining Contractual Term (Years) Exercisable at May 31, 2026 Exercise Price Weighted Average Remaining Contractual Term (Years) $ 3.00 to $ 4.00 3,390,600 $ 3.84 0.58 3,390,600 $ 3.84 0.58 $ 4.00 to $ 5.00 2,648,500 $ 4.62 2.16 1,589,100 $ 4.62 2.16 6,039,100 4,979,700 26 FINGERMOTION, INC. Three months ended May 31, 2026 and 2025 Notes to the Unaudited Condensed Consolidated Financial Statements 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 three months ended May 31, 2026 May 31, 2025 Numerator - basic and diluted (unaudited) (unaudited) Net Loss $ ( 2,009,784 ) $ ( 2,022,761 ) Denominator Weighted average number of common shares outstanding — basic 61,281,308 57,289,873 Weighted average number of common shares outstanding — diluted 61,281,308 57,289,873 Loss per common share — basic $ ( 0.03 ) $ ( 0.04 ) Loss per common share — diluted $ ( 0.03 ) $ ( 0.04 ) 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 three months ended May 31, 2026 and 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 three months ended May 31, 2026 and 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 the three months ended May 31, 2026 and 2025 are as follows: Schedule of effective income tax rate reconciliation For the three months ended May 31, 2026 May 31, 2025 (unaudited) (unaudited) 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 %) ( 46.0 %) Effective tax rate 0 % 0 % 27 FINGERMOTION, INC. Three months ended May 31, 2026 and 2025 Notes to the Unaudited Condensed Consolidated Financial Statements Note 13 – Income Taxes (continued) Schedule of income tax expenses May 31, 2026 February 28, 2026 (unaudited) Current tax $ — $ — Deferred tax benefit — — Total provision for (benefit from) income tax expense $ — $ — 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 May 31, 2026 February 28, 2026 (unaudited) Loss before income tax expenses $ ( 2,009,784 ) $ ( 7,041,333 ) Income tax credit computed at various statutory income tax rate (15% to 25%) ( 250,814 ) ( 440,899 ) Reconciling items: Tax incentive – R&D Credit — ( 69,940 ) Income not subject to tax in China ( 9,741 ) ( 38,590 ) Non-deductible expenses 260,555 549,429 Total provision for (benefit from) income tax $ — $ — 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 May 31, 2026 and February 28, 2026, the valuation allowances were $ 4,631,065 and $ 4,389425 , respectively. The significant components of the Company’s deferred tax account balances are as follows: Schedule of deferred tax assets May 31, 2026 February 28, 2026 (unaudited) Deferred tax assets Net operating losses carry forward $ 4,362,371 $ 4,244,187 Accruals and reserves 7,351,148 7,121,646 Lease liability 1,537 20,160 Total deferred tax assets 11,715,056 11,385,993 Less: Valuation allowance ( 4,631,065 ) ( 4,389,425 ) Total deferred tax assets, net of valuation allowance 7,083,991 6,996,568 Deferred tax liabilities Right-of-use asset ( 18,248 ) ( 18,002 ) Total deferred tax liabilities ( 18,248 ) ( 18,002 ) Net deferred tax assets (liabilities) $ 7,065,743 $ 6,978,566 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 28 FINGERMOTION, INC. Three months ended May 31, 2026 and 2025 Notes to the Unaudited Condensed Consolidated Financial Statements 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. 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. 29 FINGERMOTION, INC. Three months ended May 31, 2026 and 2025 Notes to the Unaudited Condensed Consolidated Financial Statements Note 16 – Convertible Note Payable 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 $ 3,275,000 after the deduction of $ 25,000 legal fee, 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. 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. 30 FINGERMOTION, INC. Three months ended May 31, 2026 and 2025 Notes to the Unaudited Condensed Consolidated Financial Statements Note 17 – 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. At May 31, 2026 and February 28, 2026,, the Company engaged in the following transactions with ZhongXin Marine (Zhoushan) Satellite Communications Equipment Co., Ltd., which holds a 30% non-controlling interest in the Company’s subsidiary: Schedule of related party transactions May 31, 2026 February 28, 2026 Related party transaction Purchases of two satellite portable stations — $ 15,270 Jinhua project - traffic fees $ 8,473 — Yantai Wanhua project - satellite equipment $ 20,949 — The following balances were outstanding at the end of the reporting periods: Schedule of balances were outstanding May 31, 2026 February 28, 2026 Related party payable ZhongXin Marine (Zhoushan) Satellite Communications Equipment Co., Ltd. $ — $ 7,938 May 31, 2026 February 28, 2026 Related party prepayment ZhongXin Marine (Zhoushan) Satellite Communications Equipment Co., Ltd. $ 30,081 $ — Note 18 - Subsequent Events Subsequent to May 31, 2026, the resale registration statement relating to the shares of common stock issuable upon conversion of the senior secured convertible note was declared effective by the SEC. Following effectiveness, the remaining $ 1,000,000 of the aggregate subscription amount was released to the Company. 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. 31