FingerMotion Inc

The following table sets out our cash and working capital as of November 30, 2023 and February 28, 2023:

At November 30, 2023, we had cash and cash equivalents of $1,934,565, as compared to cash and cash equivalents of $9,240,241 at February 28, 2023. Our mobile payment business model necessitates periodic fund deposits with our telecommunication companies to obtain access to the mobile data and talk time we make available to consumers on our portal. The capital influx from our November 2022 private placements enabled us to subsequently amplify our prepayments and deposits with the telecommunication entities, subsequently driving a surge in revenue. Therefore, the observed variability in our cash holdings is a deliberate operational strategy to try to optimize revenue generation. The Company otherwise does not have any planned capital expenditures and has historically funded its operations from revenues and sales of securities, including convertible debt securities. We believe that our cash on hand and cash equivalents, coupled with our operating revenues, will sufficiently cover our projected operational needs and address our outstanding liabilities for the next 12 monhts. For more expansive growth, further enhancing our deposits with telecommunication entities will be crucial. In line with this, we intend to continue to seek additional capital through public or private sales of our equity or debt securities, or both. We might also enter into financing arrangements with commercial banks or non-traditional lenders. We cannot provide investors with any assurance that we will be able to raise additional funding from the sale of our equity or debt securities, or both, in order to increase our deposits with our telecommunications company clients, or if available, that such funding will be on terms acceptable to us.

We did, however, raise $840,000 through the exercise of warrants to purchase shares of our common stock during the nine months ended November 30, 2023, which transactions were exempt from the registration requirements of the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”).

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Statement of Cashflows

The following table provides a summary of cash flows for the periods presented:

Cash Flow used in Operating Activities

Net cash used in operating activities increased by $1,352,581 in the nine months ended November 30, 2023 compared to the nine months ended November 30, 2022, primarily due to an increase in account receivable of ($5,072,577) (November 30, 2022: $555,729), increase in prepayment and deposit of ($1,113,267) (November 30, 2022: ($1,695,534)), increase in other receivable of ($2,161,319) (November 30, 2022: $141,173), decrease in accrual and other payable of ($102,182) (November 30, 2022: $1,093,377) and decrease in lease liability of ($4,618) (November 30, 2022: ($1,322)); offset by increase in accounts payable of $3,864,745 (November 30, 2022: ($1,871,709)).

Cash Flow used in Investing Activities

During the nine months ended November 30, 2023, net cash used in investing activities decreased by $67,382 compared to $67,761 in the nine months ended November 30, 2022.

Cash Flow provided by Financing Activities

During the nine months ended November 30, 2023, net cash used by financing activities was $295,333 compared to net cash provided by financing activities during the nine months ended November 30, 2022 was $17,550,000, which reflects a decrease of $17,845,333 from the $17,550,000 provided by financing activities in the nine months ended November 30, 2022. The decrease was primarily due to the repayment of convertible notes and a decrease in the sale of equity securities during the nine months ended November 30, 2023.

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.

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, 2023 filed with the SEC on May 30, 2023.

Refer to “Critical Accounting Policies” 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, 2023 filed with the SEC on May 30, 2023.

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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.