FingerMotion, Inc. 10-Q

ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The terms the “Registrant”, “we”, “us”, “our”, “FingerMotion” and the “Company” mean FingerMotion, Inc. or as the context requires, collectively with its consolidated subsidiaries and contractually controlled companies. Cautionary Note Regarding Forward-Looking Statements The following management’s discussion and analysis of the Company’s financial condition and results of operations (the “MD&A”) contains forward-looking statements that involve risks, uncertainties and assumptions including, among others, statements regarding our capital needs, business plans and expectations. In evaluating these statements, you should consider various factors, including the risks, uncertainties and assumptions set forth in reports and other documents we have filed with or furnished to the SEC and, including, without limitation, this Quarterly Report on Form 10-Q for the three months ended May 31, 2026, and our Annual Report on Form 10-K for the fiscal year ended February 28, 2026, including the consolidated financial statements and related notes contained therein. These factors, or any one of them, may cause our actual results or actions in the future to differ materially from any forward-looking statement made in this document. Refer to “Cautionary Note Regarding Forward-looking Statements” as disclosed in our Annual Report on Form 10-K for the fiscal year ended February 28, 2026, and Item 1A - Risk Factors, under Part II - Other Information of this Quarterly Report. Introduction This MD&A is focused on material changes in our financial condition from February 28, 2026, our most recently completed year end, to May 31, 2026, and our results of operations for the three months ended May 31, 2026, and should be read in conjunction with Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations as contained in our Annual Report on Form 10-K for the fiscal year ended February 28, 2026. Corporate Information The Company has been organized as a holding company and conducts a significant part of its operations through subsidiaries and contractual arrangements with affiliated entities in the PRC, including Shanghai JiuGe Information Technology Co., Ltd. (“ JiuGe Technology ”, “ our VIE ” or “ the VIE ”). The Company’s operations in the PRC are primarily carried out through its wholly owned subsidiaries and Shanghai JiuGe Business Management Co., Ltd. (“ JiuGe Management ”, “ our WFOE ” or “ the WFOE ”), a wholly foreign-owned enterprise (“ WFOE ”), which has entered into a series of contractual agreements with the VIE and its respective shareholder. These contractual arrangements are intended to provide the Company with effective control over the VIE and the ability to receive substantially all of the economic benefits of the VIE’s operations. The VIE structure is employed to comply with PRC laws and regulations that restrict or prohibit foreign ownership in certain industries. However, these arrangements have not been tested in a court of law in the PRC and carry associated risks and uncertainties. See “Item 1A. Risk Factors—Risks Related to VIE Agreements.” 32 The following diagram depicts our corporate structure: The Company’s holding company structure presents unique risks as the Company’s investors may never directly hold equity interests in the Company’s subsidiaries or the VIE. The Company relies on distributions and other payments from its subsidiaries and VIE to fund its operations. These payments are subject to PRC laws and regulations, including restrictions on dividends, foreign exchange controls, and other regulatory requirements. The Company’s subsidiaries and VIE are subject to regulation by PRC authorities, including the China Securities Regulatory Commission (“ CSRC ”) and the Cyberspace Administration of China (“ CAC ”). As of the date of this report, the Company is not required to obtain specific approvals from these authorities to operate its current business. However, under the CSRC’s Overseas Listing Trial Measures, the Company may be required to complete filing procedures for future overseas securities offerings, the failing of which may result in an order to make correction, a warning, and/or the imposition of fines. The regulatory environment in China is evolving, and it remains uncertain how new or changing laws and regulations may impact the Company’s operations, its ability to accept foreign investment, or its ability to maintain a listing on a U.S. or other foreign exchange. 33 Licensing The Company’s operations in the PRC require specific licenses and permits. Its VIE and related operating entities hold value-added telecommunications business licenses issued by the Ministry of Industry and Information Technology (“ MIIT ”). These licenses are necessary for providing mobile payment, recharge, and messaging services in China. VIE Structure The Company conducts a substantial portion of its operations in China through VIE arrangements. These arrangements consist of a series of contractual agreements (the “ VIE Agreements ”) between the Company’s WFOE and the VIE, along with its shareholder, pursuant to which JiuGe Technology became the Company’s contractually controlled affiliate. The VIE Agreements include a consulting services agreement, a loan agreement, a power of attorney agreement, a call option agreement and a share pledge agreement in order to secure the connection and commitments of the VIE. The purpose of these agreements is to give the Company effective control over the VIE and to enable it to receive the majority of the economic benefits from its operations. However, the Company lacks direct equity ownership in the VIE, which means these arrangements may not be as effective as direct ownership. The enforceability of the VIE agreements under PRC law remains uncertain, and there is no guarantee that the Company will be able to maintain effective control over the VIE. Please see “Item 1A. Risk Factors—Risks Related to VIE Agreements.” Acquisition of Operational Control of Beijing Technology The Company acting through the VIE expanded its telecommunications services through the acquisition of operational control of Beijing XunLian TianXia Technology Co., Ltd. (“ Beijing Technology ”), which provides enterprise messaging solutions, including short message services (“ SMS ”) and multimedia messaging services (“ MMS ”), for enterprise customers. This service complements the Company’s mobile payment and recharge offerings and operates under licenses issued by the MIIT. Strategic Cooperation with China Unicom The Company, through its VIE, JiuGe Technology, has established cooperative arrangements with China United Network Communications Limited and its regional branches, including China Unicom Yunnan. These arrangements represent a key component of the Company’s telecommunications ecosystem and support its transaction-based service model. Under these cooperation arrangements, JiuGe Technology is responsible for constructing and operating electronic sales platforms and related services through which consumers may purchase telecommunications products and services, including mobile devices, mobile service plans, broadband services, and related offerings. The Company receives a share of the revenue generated from transactions processed through these platforms. The Company believes these arrangements enhance its integration with major telecommunications operators in China and provide opportunities to increase transaction volume and service penetration. The extent of revenue generated from these arrangements depends on transaction activity, customer adoption, and ongoing commercial cooperation with the relevant counterparties. In addition, in January 2022, TengLian, a subsidiary of JiuGe Technology, entered into a cooperation arrangement with China Unicom to support device protection programs for mobile and 5G devices. This initiative expands the Company’s involvement in value-added telecommunications services and may enhance its broader service offerings. These cooperative arrangements are subject to customary commercial terms, including renewal provisions and termination rights, and their continuation and financial contributions will depend on ongoing performance, regulatory conditions, and market demand 34 Intercorporate Relationships The following is a list of all of our subsidiaries and the corresponding date of jurisdiction of incorporation or organization and the ownership interest of each. All of our subsidiaries are directly or indirectly owned or controlled by us: Name of Entity Place of Incorporation / Formation Ownership Interest Finger Motion Company Limited (1) Hong Kong 100% Finger Motion (CN) Global Limited (2) Samoa 100% Finger Motion (CN) Limited (3) Hong Kong 100% Shanghai JiuGe Business Management Co., Ltd. (4) PRC 100% Shanghai JiuGe Information Technology Co., Ltd. (5) PRC Contractually controlled (5) Beijing XunLian TianXia Technology Co., Ltd. (6) PRC Contractually controlled Finger Motion Financial Group Limited (7) Samoa 100% Finger Motion Financial Company Limited (8) Hong Kong 100% Shanghai TengLian JiuJiu Information Communication Technology Co., Ltd. (9) PRC Contractually controlled Shanghai KeShunXiang Automobile Service Co., Ltd. (10) PRC Contractually controlled Zhejiang ChangXin Communication Equipment Co., Ltd. (11) PRC Contractually controlled Shanghai XiaoYi Bin Tong Technology Co., Ltd. (12) PRC Contractually controlled Notes : (1) Finger Motion Company Limited is a wholly-owned subsidiary of FingerMotion, Inc. (2) Finger Motion (CN) Global Limited is a wholly-owned subsidiary of FingerMotion, Inc. (3) Finger Motion (CN) Limited is a wholly-owned subsidiary of Finger Motion (CN) Global Limited. (4) Shanghai JiuGe Business Management Co., Ltd., sometimes referred to in this Quarterly Report as “the WFOE”, is a wholly-owned subsidiary of Finger Motion (CN) Limited. (5) Shanghai JiuGe Information Technology Co., Ltd., sometimes referred to in this Quarterly Report as “the VIE”, is a variable interest entity that is contractually controlled by Shanghai JiuGe Business Management Co., Ltd. (6) Beijing XunLian TianXia Technology Co., Ltd. is a 99% owned subsidiary of Shanghai JiuGe Information Technology Co., Ltd. (7) Finger Motion Financial Group Limited is a wholly-owned subsidiary of FingerMotion, Inc. (8) Finger Motion Financial Company Limited is a wholly-owned subsidiary of Finger Motion Financial Group Limited. (9) Shanghai TengLian JiuJiu Information Communication Technology Co., Ltd. is a 99% owned subsidiary of Shanghai JiuGe Information Technology Co., Ltd. (10) Shanghai KeShunXiang Automobile Service Co., Ltd. is a 99% owned subsidiary of Shanghai JiuGe Information Technology Co., Ltd. (11) Zhejiang ChangXin Communication Equipment Co., Ltd. is a 70% owned subsidiary of Shanghai KeShunXiang Automobile Service Co., Ltd. (12) Shanghai XiaoYi Bin Tong Technology Co., Ltd. is a 80% owned subsidiary of Shanghai JiuGe Information Technology Co., Ltd. Because we do not directly hold equity interests in the VIE, we are subject to risks and uncertainties of the interpretations and applications of Chinese laws and regulations, including but not limited to, the validity and enforcement of the VIE Agreements among the WFOE, the VIE and the shareholder of the VIE. We are also subject to the risks and uncertainties about any future actions of the Chinese government in this regard that could disallow the VIE structure, which would likely result in a material change in our operations and may cause the value of our shares of common stock (“ Common Shares ”) to depreciate significantly or become worthless. The VIE Agreements may not be as effective as direct ownership in providing operational control. For instance, the VIE and its shareholders could breach their contractual arrangements with us by, among other things, failing to conduct their operations in an acceptable manner or taking other actions that are detrimental to our interests. The shareholder of the VIE may not act in the best interests of our Company or may not perform their obligations under the VIE Agreements. Such risks exist throughout the period in which we intend to operate certain portions of our business through the VIE Agreements with the VIE. In the event that the VIE or its shareholder fail to perform their respective obligations under the VIE Agreements, we may have to incur substantial costs and expend additional resources to enforce such arrangements. In addition, even if legal actions are taken to enforce the VIE Agreements, there is uncertainty as to whether Chinese courts would recognize or enforce judgments of U.S. courts against us or such persons predicated upon the civil liability provisions of the securities laws of the United States or any state. See “Risk Factors—Risks Related to the VIE Agreements”. We rely on the VIE Agreements with the VIE and its shareholder for a significant portion of our business operations. The VIE Agreements may not be as effective as direct ownership in providing operational control. Any failure by the VIE or its shareholder to perform their obligations under such contractual arrangements would have a material and adverse effect on our business. 35 As of the date of this Quarterly Report on Form 10-Q, we and the VIE are not required to seek permissions from the CSRC, the CAC, or any other entity that is required to approve of the operations of the VIE, other than a value-added telecommunications business license, which has already been obtained. Nevertheless, Chinese regulatory authorities may in the future promulgate laws, regulations or implement rules that require us, our subsidiaries or the VIEs to obtain permissions from such regulatory authorities to approve the operations of the VIE. Overview The Company is a mobile services, data, and technology company incorporated in Delaware, USA, with its head office located at 111 Somerset Road, Level 3, Singapore 283164. As described elsewhere in this Quarterly Report, the Company has been organized as a holding company and conducts a significant part of its operations through its subsidiaries and through contractual agreements with JiuGe Technology, the VIE based in China. The Company indirectly owns 100% of the equity of JiuGe Management, a WFOE that has entered into the VIE Agreements which gives the Company operational control over JiuGe Technology and consolidates its financial results. The Company organizes its operations across four primary areas: (i) telecommunications products and services, (ii) marketplace platform and digital commerce infrastructure solutions, (iii) data and analytics platform solutions, and (iv) advanced technology and platform solutions. The Company’s strategic focus is to continue operating and optimizing its telecommunications products and services business while expanding its higher-margin, technology-driven platform offerings. These offerings include the development and commercialization of its marketplace platforms, data analytics solutions (including applications for insurance and financial services), and critical infrastructure technology platforms. The Company is also focused on enhancing its underlying technology capabilities, including platform scalability, data processing, and system integration, to support growth across multiple industry verticals. The timing and extent of growth in these areas will depend on factors such as market adoption, competitive conditions, regulatory developments, and the Company’s ability to execute its platform development and commercialization strategies. Business Segments The Company operates an integrated portfolio of technology-driven platforms and services across four core areas: (i) telecommunication products and services, (ii) marketplace platform and digital commerce infrastructure solutions, (iii) data and analytics platform solutions, and (iv) advanced technology and platform solutions. These offerings leverage the Company’s technological capabilities across multiple industry applications, with a focus on scalable and extensible platform architectures. (i) Telecommunications Products and Services The Company offers telecommunications-related services in the PRC through its subsidiaries and VIE structure. This segment includes mobile payment and recharge services, as well as enterprise messaging services such as SMS and MMS. These services historically represent a significant portion of the Company’s revenue. The Company conducts its operations through JiuGe Technology. 36 Mobile Payment and Recharge Services The Company provides mobile airtime and data recharge services to telecommunications carriers and channel partners, allowing end users to purchase prepaid mobile credits through its platform. The Company procures airtime and data packages in bulk from telecommunications operators and distributes them through a network of enterprise customers, digital platforms, and other distribution channels. JiuGe Technology holds licensed access agreements with major Chinese telecom providers, including China Mobile Communications Corporation (“ China Mobile ”) and China United Network Communications Group Co., Ltd. (“ China Unicom ”). Through these arrangements, JiuGe Technology offers mobile payment and recharge services, earning revenue from transaction rebates paid by telecom operators. The platform provides real-time payment and recharge services to third-party businesses, e-commerce channels, and online marketplaces such as JD.com, Pinduoduo, and Tmall. JiuGe Technology generates revenue by processing payments for telecom services and receiving rebates from telecom operators. To attract users, it may offer discounted data or talk-time packages through its platform. Additionally, the Company serves as a loyalty redemption agent for China Mobile, allowing customers to redeem telecom loyalty benefits through its platform. In 2019, JiuGe Technology entered into an agreement with China Unicom’s Yunnan division to build and operate an online sales platform for telecom-related products and services, including mobile phones, broadband services, smart devices, and related insurance offerings. Under this arrangement, JiuGe Technology receives a percentage of the sales revenue generated through the platform. The Company has also secured contracts with China Mobile and China Unicom to acquire new telecom subscribers and continues to expand mobile phone sales through its online channels. Enterprise Messaging Services (SMS and MMS) The Company provides enterprise messaging services through Beijing Technology, which it controls operationally via JiuGe Technology. Beijing Technology is licensed by the MIIT to provide SMS and MMS services in the PRC. The Company procures messaging capacity in bulk and delivers these services to enterprise customers, including automobile manufacturers, hotel chains, airlines, and e-commerce companies. Its integrated messaging platform enables enterprise customers to manage high-volume messaging campaigns, ensuring compliance with relevant regulatory requirements for message content and distribution, and provides delivery tracking capabilities. (ii) Marketplace Platform and Digital Commerce Infrastructure The Company develops mobile-first, online-to-offline (“ O2O ”) marketplace platform solutions designed to connect consumers with service providers and vendors of products and services. The platform integrates core marketplace functionalities, including service discovery, provider matching, booking and scheduling, payment processing, and post-transaction feedback mechanisms. The Marketplace Platform and Digital Commerce Infrastructure segment is designed to be scalable and extensible across multiple service-based and transaction-oriented industry verticals. The Company focuses on ongoing technology development and platform enhancement, including improvements to system performance, user experience, data analytics integration, and transaction processing efficiency. These initiatives are intended to enhance user engagement, improve transaction conversion rates, and support long-term scalability. 37 The Company intends to generate revenue from its Marketplace Platform and Digital Commerce Infrastructure services through transaction-based fees, subscription arrangements, advertising services, and other value-added offerings. The timing and extent of revenue generation will depend on factors such as market adoption, platform scalability, competitive conditions, regulatory developments, and the Company’s ability to execute its commercialization strategy. DaGe Platform The DaGe Platform is a digital marketplace designed to connect automotive owners with service providers and vendors of automotive-related products and services. This platform facilitates various services, including vehicle maintenance, repair, tire replacement, and electric vehicle (EV) charging, as well as the sale of automotive accessories. The platform includes functionality for service discovery, booking management, payment processing, and user feedback, and is intended to support mobility-related applications. The DaGe Platform is part of the Company’s Marketplace Platform and Digital Commerce Infrastructure services initiatives and is at early stages of development. These activities may require ongoing investment and may not generate significant revenue in the near term. The Company may seek to generate revenue from this platform through transaction-based fees, subscriptions, advertising, and related services; however, the timing and extent of such revenue remain uncertain and will depend on market adoption, platform development, and regulatory conditions. JiuGe Procurement Platform The JiuGe Procurement Platform is an enterprise procurement solution operated by JiuGe Technology and is included within the Company’s Marketplace Platform and Digital Commerce Infrastructure initiatives. The platform is designed to support JiuGe Technology’s mobile recharge business by centralizing supplier product catalogues and facilitating procurement workflows for employee benefits, customer rewards, and promotional campaign distribution. The goal is to improve procurement efficiency, supplier coordination, and internal resource allocation. (iii) Data And Analytics Platform Solutions The Company provides data analytics and data-driven solutions through its Sapientus platform to insurance companies, financial service providers, and enterprise customers. This segment represents a key strategic focus and is intended to support the Company’s transition toward higher-margin and scalable services. Sapientus aggregates and processes large volumes of structured and unstructured data from multiple sources to generate analytical insights and reporting outputs that support decision-making in sectors such as insurance, financial services, and mobility. The platform is designed to support risk assessment, trends identification, customer segmentation, marketing analysis, and related business operations. The Company continues to invest in expanding its data capabilities and analytical models. The performance and growth of this segment may be affected by market acceptance, regulatory developments, and the Company’s ability to access and utilize data in compliance with applicable laws and regulations. (iv) Advanced Technology and Platform Solutions The Company develops advanced technology and platform solutions designed for enterprise and mission-oriented environments that require real-time communication, coordination, and operational management capabilities. These solutions are intended to support complex workflows across a range of industry applications where reliability, performance, and system integration are important. 38 C2 Platform The Company, through its VIE, JiuGe Technology, has developed a C2 Platform focused on communications and operational coordination for mobility-related applications, including emergency response, logistics, and specialized field operations. The C2 Platform represents the Company’s initial deployment of its technology in mission-critical and public infrastructure environments that support public safety and operational coordination. The platform reflects the Company’s ability to design and implement system-level software solutions intended to operate in environments requiring reliability, performance, and continuity of service. The Company intends to leverage its experience and technical capabilities developed through the C2 Platform to evaluate and pursue opportunities in other areas of critical infrastructure. These potential applications may include public safety systems, transportation networks, emergency response coordination, and other large-scale operational environments, subject to customer demand, technical feasibility, and regulatory considerations. The C2 Platform integrates mobile communications, data processing, and system coordination functions to facilitate information sharing between field personnel and centralized command centres. This platform is designed to support real-time data transmission, remote monitoring, and coordination of field operations. The Company’s C2 Platform initiatives focus on developing and deploying communication and platform solutions for commercial and specialty vehicles. These solutions aim to enhance situational awareness, fleet coordination, and remote operations across various use cases, including emergency response, logistics, and infrastructure services. The C2 Platform is currently in the commercialization stage and is being introduced to enterprise and public-sector customers through pilot deployments, procurement processes, and direct engagement activities. The timing and extent of future revenue generation will depend on a number of factors, including customer adoption, procurement cycles, competitive conditions, and the successful scaling of deployments across additional jurisdictions and applications. Recent Developments 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. The financing was undertaken to support working capital requirements, ongoing operations and strategic initiatives. 39 Results of Operations Three Months Ended May 31, 2026 Compared to Three Months Ended May 31, 2025 The following table sets forth our results of operations for the periods indicated: For the three months ended May 31, 2026 May 31, 2025 Revenue $ 650,089 $ 8,458,743 Cost of revenue $ (441,611 ) $ (8,306,222 ) Total operating expenses $ (2,142,559 ) $ (2,141,451 ) Total other income (expenses) $ (75,703 ) $ (33,831 ) Net Loss attributable to the Company’s stockholders $ (2,000,327 ) $ (2,008,556 ) Foreign currency translation adjustment $ 189,674 $ 152,309 Comprehensive loss attributable to the Company $ (1,810,037 ) $ (1,856,789 ) Basic Loss Per Share attributable to the Company $ (0.03 ) $ (0.04 ) Diluted Loss Per Share attributable to the Company $ (0.03 ) $ (0.04 ) Revenue The following table sets forth the Company’s revenue from its lines of business for the periods indicated: For the three months ended May 31, 2026 May 31, 2025 Change (%) Telecommunication Products & Services $ 502,672 $ 8,311,254 -94 % Marketplace Platform & Digital Commerce Infrastructure Solutions $ 11,939 $ 10,938 9 % Advanced Technology & Platform Solutions $ 135,478 $ 109,241 24 % Data & Analytics Platform Solutions $ — $ 27,310 -100 % Total Revenue $ 650,089 $ 8,458,743 -92 % We recorded $650,089 in revenue for the three months ended May 31, 2026, a decrease of $7,808,654 or 92%, compared to $8,458,743 for the three months ended May 31, 2025. The decrease was primarily attributed to decreases in revenue of $7,808,582 and $27,310 from our Telecommunication Product & Services segment and Data & Analytics Platform Solutions segment, respectively. These decreases were partially offset by increases in revenue of $1,001 and $26,237 from our Marketplace Platform & Digital Commerce Infrastructure Solutions and Advanced Technology & Platform Solutions, respectively. We principally earn revenue by providing mobile payment and recharge services to customers of telecommunications companies in China. This operating model requires working capital to support transaction volumes with telecommunications operators and platform partners. During the three-month period ending May 31, 2026, revenue in this segment decreased significantly compared to the prior year period, primarily due to lower transaction volume. The lower transaction volume was attributable to the Company’s available working capital position during the period. Management continues to monitor transaction volumes, collection cycles and working capital allocation, and intends to deploy available capital selectively based on liquidity, commercial demand and expected returns. Revenue from our Marketplace Platform & Digital Commerce Infrastructure Solutions segment remained limited during the period. The DaGe platform and related marketplace initiatives remain at an early stage of commercialization, and revenue will depend on user adoption, business development activities, platform scaling, and available working capital. Revenue from our Advanced Technology and Platform Solutions segment increased to $135,478 for the three-months ended May 31, 2026, compared to $109,241 for the three-months ended May 31, 2025. Revenue in this segment was primarily project-based and related to delivery and deployment activities under the Company’s command and communication platform initiatives, including the delivery of two vehicles to a local emergency bureau in Zhejiang Province during the period. Revenue from this segment may vary from period to period depending on customer procurement schedules, delivery timing and project implementation progress. 40 No revenue was generated from our Data and Analytics Platform Solutions segment during the three months ended May 31, 2026, compared to $27,310 for the prior year period. Activity in this segment remains limited and is currently conducted on a project basis. Cost of Revenue The following table sets forth the Company’s cost of revenue for the periods indicated: For the three months ended May 31, 2026 May 31, 2025 Telecommunication Products & Services $ 357,963 $ 8,194,652 Marketplace Platform & Digital Commerce Infrastructure Solutions $ 10,268 $ 22,490 Advanced Technology & Platform Solutions $ 73,380 $ 89,080 Data & Analytics Platform Solutions $ — $ — Total Cost of Revenue $ 441,611 $ 8,306,222 We recorded $441,611 in costs of revenue for the three months ended May 31, 2026, a decrease of $7,864,611 or 95%, compared to the three months ended May 31, 2025. The decrease was primarily attributable to the significant reduction in transaction volume in the Telecommunication Products & Services segment during the period. As revenue from this segment decreased, the related product and service costs, including costs associated with mobile recharge, subscription plans and mobile phone sales, decreased correspondingly. Cost of revenue from the Marketplace Platform & Digital Commerce Infrastructure Solutions segment also decreased compared to the prior year period, reflecting the limited scale of activity during the quarter. Cost of revenue from the Advanced Technology & Platform Solutions segment decreased to $73,380 for the three months ended May 31, 2026 from $89,080 for the three months ended May 31, 2025, while revenue from this segment increased, reflecting project-specific margins during the period. Gross profit Our gross profit for the three months ended May 31, 2026 was $208,478, compared to $152,521 for the three months ended May 31, 2025, representing an increase of $55,957 or 37%. Gross margin improved to approximately 32% for the three months ended May 31, 2026 from approximately 2% for the three months ended May 31, 2025. The increase in gross profit and gross margin was primarily attributable to a change in revenue mix during the period. Although revenue from the Telecommunication Products & Services segment decreased significantly compared to the prior year period, the segment generates gross profit of $144,709, representing a gross margin of approximately 29% during the current period. In addition, the Advanced Technology & Platform Solutions segment generated gross profit of $62,098, representing a gross margin of approximately 46%, while the Marketplace Platform & Digital commerce Infrastructure Solutions segment generated gross profit of $1,671, representing a gross margin of approximately 14%. Management continues to evaluate revenue opportunities based on both transaction volume and margin contribution, with the objective of supporting sustainable gross profit while managing working capital requirements. Amortization & Depreciation We recorded amortization & depreciation of $197,592 for intangible assets & fixed assets for the three months ended May 31, 2026, an increase of $187,039 or 1,772%, compared to the three months ended May 31, 2025. The increase resulted from the purchase of software IP. 41 General & Administrative Expenses The following table sets forth the Company’s general and administrative expenses for the periods indicated: For the three months ended May 31, 2026 May 31, 2025 Accounting $ 36,840 $ 49,879 Consulting $ 384,673 $ 455,609 Entertainment $ 32,650 $ 45,088 IT $ 18,149 $ 10,778 Rent $ 34,463 $ 31,621 Salaries & Wages $ 433,164 $ 612,045 Technical fee $ 162,279 $ 31,717 Travelling $ 20,235 $ 79,187 Others $ 114,094 $ 194,502 Total G&A Expenses $ 1,236,546 $ 1,510,426 We recorded $1,236,546 in general and administrative expenses for the three months ended May 31, 2026, a decrease of $273,880 or 18%, compared to the three months ended May 31, 2025. The decrease was primarily due to lower salaries & wages, traveling, entertainment, accounting, consulting, and other miscellaneous expenses compared to the prior year. These decreases were partially offset by higher technical fees and IT expenses during the period. General and administrative expenses consist primarily of personnel-related costs, professional and accounting services, and general office and operational expenses necessary to support regulatory compliance. These expenses include ongoing costs associated with corporate governance, audit and regulatory filings, consulting and advisory services, as well as operational support across our business segments. Marketing Cost The following table sets forth the Company’s marketing cost for the periods indicated: For the three months ended May 31, 2026 May 31, 2025 Marketing Cost $ 48,029 $ 12,106 We recorded $48,029 in marketing costs for the three months ended May 31, 2026, an increase of $35,923 or 297%, compared to the three months ended May 31, 2025. The increase was primarily due to higher promotional and business development costs recognized during the period. Research & Development The following table sets forth the Company’s research & development for the periods indicated: For the three months ended May 31, 2026 May 31, 2025 Research & Development $ 56,280 $ 172,652 We recorded $56,280 in research & development for the three months ended May 31, 2026, a decrease of $116,372 or 67% compared to the three months ended May 31, 2025. The decrease was primarily due to lower personnel-related costs and reduced development activity during the period. Research and development activities were focused on ongoing platform maintenance and selected project-based development work, with expenditures managed in line with available working capital and project requirements. 42 Credit Impairment Loss The following table sets forth the Company’s credit impairment loss for the periods indicated: For the three months ended May 31, 2026 May 31, 2025 Credit impairment loss $ 522,946 $ 307,967 We recorded $522,946 in credit impairment loss for three months ended May 31, 2026, an increase of $214,979 or 70% compared to the three months ended May 31, 2025. The increase was mainly attributable to a higher allowance recognized on trade receivables following management’s assessment of expected credit losses, including the aging of outstanding balances, collection experience, current business conditions and expected timing of recoveries. The provision reflects a prudent assessment of expected credit risk, while management continues to monitor collections and credit exposure on an ongoing basis. Share Compensation Expenses The following table sets forth the Company’s share compensation expenses for the periods indicated: For the three months ended May 31, 2026 May 31, 2025 Share compensation expenses $ 81,166 $ 127,747 We incurred fees of $81,166 in share issuance for consultants in consideration of services and stock option compensation expense for the three months ended May 31, 2026 as compared to $127,747 for the three months ended May 31, 2025. The decrease of $46,581 or 36% was due to the reduced engagement of consultants to the Company that were compensated with shares of our common stock, which highlights our effort to minimize equity issuances as part of our broader financial strategy to optimize equity issuances. However, we will continue to employ equity compensation for consultants selectively, aligning with our strategic and financial objectives. Operating Expenses We recorded $2,142,559 in operating expenses for the three months ended May 31, 2026, as compared to $2,141,451 in operating expenses for the three months ended May 31, 2025. The increase of $1,108 or 0.1%, for the three months ended May 31, 2026, is as set forth above. Net Loss attributable to the Company’s stockholders The net loss attributable to the Company’s stockholders was $2,000,327 for the three months ended May 31, 2026 and $2,008,556 for the three months ended May 31, 2025. The decrease in net loss attributable to the Company’s stockholders of $8,229 or 0.4% is as set forth above. 43 Liquidity and Capital Resources The following table sets out our cash and working capital as of May 31, 2026 and February 28, 2026: As at May 31, 2026 As at February 28, 2026 Cash reserves $ 987,391 $ 68,596 Working capital $ 4,381,852 $ 6,093,153 At May 31, 2026, we had cash and cash equivalents of $987,391, as compared to cash and cash equivalents of $68,596 at February 28, 2026. The increase in cash was primarily attributable to proceeds received from the issuance of the senior secured convertible note in May 2026, partially offset by cash used in operating activities during the period. Working capital decreased to $4,381,852 at May 31, 2026 from $6,093,153 at February 28, 2026. The decrease was primarily due to continued operating cash requirements and changes in working capital balances during the period, including the use of cash to support operations and the settlement of certain obligations. Our business model, particularly in mobile payment, requires periodic fund deposits with telecommunication operators and platform partners to support transaction volumes. During the period, the Company’s liquidity constraints position affected the level of transaction activity that it was able to support. Management continues to monitor cash flows, collection cycles, payment terms, and working capital allocation, and is seeking to deploy available capital selectively based on liquidity, commercial demand, and expected returns. The Company’s ability to support its operations and execute its business strategy will depend on a combination of operational cash flows, effective working capital management, and access to additional financing. There can be no assurance that additional financing will be available on acceptable terms, or at all. Statement of Cashflows The following table provides a summary of cash flows for the periods presented: For the three months ended May 31, 2026 May 31, 2025 Net cash used in operating activities $ (2,345,654 ) $ (1,204,217 ) Net cash used in investing activities $ — $ (1,826 ) Net cash provided by financing activities $ 3,275,000 $ 2,956,615 Effect of exchange rates on cash & cash equivalents $ (10,551 ) $ (15,469 ) Net increase in cash and cash equivalents $ 918,795 $ 1,735,103 Cash Flow used in Operating Activities Net cash used in operating activities increased by $1,141,437 in the three months ended May 31, 2026 compared to the three months ended May 31, 2025, primarily due to an increase in account receivable of ($11,443) (May 31, 2025: ($6,005,779)), increase in prepayment and deposit of ($148,973) (May 31, 2025: $862,490), increase in inventories of ($47,263) (May 31, 2025: $43,613), decrease in accrual and other payables of ($1,251,456) (May 31, 2025: $26,048) and decrease in lease liability of ($1,452) (May 31, 2025: ($1,567)); offset by decrease in other receivable of $57,431 (May 31, 2025: $71,455), and increase in accounts payable of $220,815 (May 31, 2025: $5,375,987). Cash Flow used in Investing Activities During the three months ended May 31, 2026, the Company did not incur any investing activities. 44 Cash Flow provided by Financing Activities During the three months ended May 31, 2026, net cash provided by financing activities was $3,275,000 compared to net cash provided by financing activities during the three months ended May 31, 2025 of $2,956,615. On May 13, 2026 (the “ Closing Date ”), the Company 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. Capital Allocation Strategy Our capital allocation strategy focuses on: 1. Supporting Core Business Operations – Maintaining adequate working capital to support the telecommunications products and services business at sustainable transaction volumes while optimizing capital efficiency. 2. Selective Platform Investments – Allocating capital to platform-based initiatives (C2 Platform, DaGe Platform, JiuGe Procurement Platform, Sapientus solutions) based on commercial traction, market opportunity, and potential return on investment. 3. Strategic Acquisitions – Pursuing selective acquisition opportunities that provide complementary technology capabilities, expand market access, enhance operational scale, or accelerate platform development.. 4. Regional Expansion – Investing in market entry and business development activities in Southeast Asian markets, such as Indonesia and Thailand, for the C2 Platform and Sapientus solutions. Off-Balance Sheet Arrangements There are no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors. Subsequent Events 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. Other than the above, we have determined that we do not have any material subsequent events to report. Critical Accounting Policies For a complete summary of all our significant accounting policies refer to Note 2 - Summary of Principal Accounting Policies of the Notes to the Consolidated Financial Statements as presented under Item 8, Financial Statements and Supplementary Data in our Annual Report on Form 10-K for our fiscal year ended February 28, 2026, filed with the SEC on May 29, 2026. For our Critical Accounting Policies, please refer to the “Critical Accounting Policies” section under Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for our fiscal year ended February 28, 2026 filed with the SEC on May 29, 2026. Recently Issued Accounting Pronouncements The Company does not believe recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the consolidated financial position, statements of operations and cash flows. 45 ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK As a smaller reporting company as defined in Rule 12b-2 under the Exchange Act, the Company is not required to provide the information required by this item.