FingerMotion, Inc.
For the period ended Nov 30, 2024. Filed Jan 14, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Nov 30, 2024 · Filed Jan 14, 2025
FNGR$0.11+5.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-08-31; filed 2024-10-15.
0001520138-24-000360
ITEM 2. – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThree Months Ended August 31, 2024 Compared to the Three Months Ended August 31, 2023Six Months Ended August 31, 2024 Compared to the Six Months Ended August 31, 2023Liquidity and Capital ResourcesCurrent report: 10-Q
Period ended 2024-11-30; filed 2025-01-14.
0001520138-25-000040
ITEM 2. – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThree Months Ended November 30, 2024 Compared to the Three Months Ended November 30, 2023Nine Months Ended November 30, 2024 Compared to the Nine Months Ended November 30, 2023Liquidity and Capital ResourcesThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 159 previous paragraphs and 164 current paragraphs.
127 unchanged; 26 reworded; 11 added; 6 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 32 previous and 32 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (11)
Current report
On November 29, 2024, Michael Chan resigned as a director of the Company.
Current report
Nine Months Ended November 30, 2024 Compared to the Nine Months Ended November 30, 2023*
Current report
On October 11, 2024, we closed a private placement of 1,095,000 shares of our common stock at a price of $1.50 per share for gross proceeds of $1,642,500, most of which subscription proceeds were received during the prior quarter ended August 31, 2024.
Current report
On December 3, 2024, following the resignation of Michael Chan as a director of the Company creating a vacancy on each of the Board’s audit committee and the compensation committee, the Board appointed Hsien Loong Wong as a member of the audit committee of the Board and appointed Yew Poh Leong as the chair of the audit committee of the Board. In addition, the Board appointed Eng Ho Ng as a member of the compensation committee of the Board.
Current report
On December 16, 2024, we and Univest Securities, LLC mutually agreed effective December 16, 2024 to terminate the At-the-Market Issuance Sales Agreement, dated September 11, 2023.
Current report
On December 20, 2024, we entered into a Securities Purchase Agreement with certain institutional investors (the “Purchasers”), which provided for the issuance and sale, in a registered direct offering by us of (i) 3,333,336 shares of our Common Stock and (ii) Common Warrants to purchase up to an aggregate of 5,000,004 shares of our common stock (the “Offering”) at a combined purchase price of $1.50 per share and one and one-half Common Warrants.
Current report
Each share of Common Stock was offered together with one and one-half Common Warrants, with each whole Common Warrant to purchase one share of Common Stock. The Common Warrants have an exercise price of $1.50 per share of Common Stock. The Common Warrants are exercisable upon issuance and expire five years from the date of issuance. The exercise price of the Common Warrants is subject to adjustment for share dividend, share splits, share combinations and similar capital transactions, as further described in the Common Warrants. In addition, the exercise price of the Common Warrants is subject to reduction in the event of certain Common Stock and Common Stock equivalent issuances, other than certain agreed exempt issuances, at a price lower than the exercise price of the Common Warrants then in effect. Furthermore, if at any time on or after the date of issuance there occurs any share split, share dividend, share combination recapitalization or other similar transaction involving our common stock (each, a “Share Combination Event”) and the lowest daily volume weighted average price during the period commencing five consecutive trading days immediately preceding and ending immediately after the five consecutive trading days beginning on the date of such Share Combination Event, is less than the exercise price of the Common Warrants then in effect, then the exercise price of the Common Warrants will be reduced to the lowest daily volume weighted average price during such period.
Current report
The Purchase Agreement contains customary representations and warranties and agreements of us and the Purchasers, and customary indemnification rights and obligations of the parties. In addition, the Purchase Agreement includes a participation right in favor of the Purchasers under which the Purchasers will be entitled, for a period of one year following closing, to participate in our future equity financings up to a participation rate of a maximum of 40% of such offering. We have agreed not to enter into or complete certain equity financings, subject to certain agreed exemptions, for a 60 day period from the date of closing of the Offering. In addition, we have agreed not to enter into any “Variable Rate Transactions”, as defined in the Purchase Agreement, for a period of six months following closing of the Offering, provided that we are entitled to proceed with an “at-the-market offering” after the expiry of the initial 60 day period following closing. Certain of our directors, officers and 10% stockholders also entered into lock-up agreements in connection with the Offering under which they have agreed not to sell or transfer any of their equity securities in us for a period of 60 days, subject to certain customary exceptions.
Current report
In connection with the Offering, we entered into a Placement Agency Agreement on December 20, 2024 with Roth Capital Partners, LLC (the “Placement Agent”), as the exclusive placement agent in connection with the Offering. As compensation to the Placement Agent, we paid the Placement Agent a cash fee of 7.0% of the aggregate gross proceeds raised in the Offering and issued to the Placement Agent a Placement Agent Warrant to purchase up to 250,000 shares of our Common Stock at an exercise price of $1.88 per share for a term of five years from the date of commencement of sales in the Offering. The Placement Agent Warrant includes adjustment provisions equivalent to the adjustment provisions provided to the Purchasers under the Common Warrants, as described above. In addition, we have agreed to pay the Placement Agent up to $110,000 for its expenses.
Current report
The shares of Common Stock, the Common Warrants and the Placement Agent Warrants described above and the shares of Common Stock underlying each of the Common Warrants and the Placement Agent Warrant were offered and sold pursuant to the Registration Statement on Form S-3 (File No. 333-274456), which was declared effective by the Securities and Exchange Commission on September 29, 2023. We filed a prospectus supplement to the base prospectus incorporated in the Registration Statement with the SEC on December 23, 2024 in connection with the Offering, which closed on December 23, 2024.
Current report
We received net proceeds of approximately $4.44 million from the Offering, after deducting the estimated offering expenses payable by us, including the fees and expenses of the Placement Agent. We intend to use the net proceeds from the Offering for general corporate and working capital purposes.
Removed paragraphs (6)
Previous report
On July 9, 2024, our contractual controlled subsidiary, JiuGe Technology, embarked on the development of crisis and emergency response solutions. These solutions are designed to facilitate collaboration with dispatchers, first responders, and healthcare agencies during emergency situations in China. JiuGe Technology has received its first order for its Advance Mobile Integrated Command and Communication Platform (“C2 Platform”), to be installed in all vehicles and apparatuses involved in the country’s civil emergency crisis program.
Previous report
On August 19, 2024, we announced that JiuGe Technology’s Advance Mobile Integrated C2 Platform, to be integrated into Maxus vehicles produced by SAIC Motor Corporation Limited, has officially received national certification from China’s MIIT. This marks the first certification of its kind, aimed to expedite the deployment of the emergency response vehicles across China. This certification validates the platform’s quality, reliability, and advanced technological features, enabling us to commence the assembly and rollout of vehicles equipped with our platform and technology.
Previous report
Six Months Ended August 31, 2024 Compared to the Six Months Ended August 31, 2023*
Previous report
We did, however, as of August 31, 2024, receive $1,605,000 in subscription proceeds to purchase 1,070,000 shares of our common stock at $1.50 per share on a private placement basis. When we issue the shares pursuant to the subscription agreements, we intend to rely upon the exemption from the registration requirements of the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”) provided by Rule 903 of Regulation S promulgated under the U.S. Securities Act.
Previous report
On September 4, 2024, the remaining SGD$500,000 of the SGD$1,500,000 Loan has been fully drawn upon by our wholly owned subsidiary, Finger Motion Company Limited.
Previous report
On October 11, 2024, we issued 1,095,000 shares of common stock to 15 individuals due to the closing of our private placement at $1.50 per share for gross proceeds of $1,642,500. In connection with the closing of the private placement, we paid cash finder’s fees of an aggregate of $158,000 to three individuals.
Reworded paragraphs (26)
Previous wording
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 six months ended August 31, 2024, and our Annual Report on Form 10-K for the fiscal year ended February 29, 2024, 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 29, 2024, and Item 1A - Risk Factors, under Part II - Other Information of this Quarterly Report.
Current wording
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 nine months ended November 30, 2024, and our Annual Report on Form 10-K for the fiscal year ended February 29, 2024, 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 29, 2024, and Item 1A - Risk Factors, under Part II - Other Information of this Quarterly Report.
Previous wording
This MD&A is focused on material changes in our financial condition from February 29, 2024, our most recently completed year end, to August 31, 2024, and our results of operations for the three and six months ended August 31, 2024, 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 29, 2024.
Current wording
This MD&A is focused on material changes in our financial condition from February 29, 2024, our most recently completed year end, to November 30, 2024, and our results of operations for the three and nine months ended November 30, 2024, 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 29, 2024.
Previous wording
We recorded $8,458,763 in revenue for the three months ended August 31, 2024, a decrease of $820,403 or 9%, compared to the three months ended August 31, 2023. This decrease resulted from an increase in revenue of $28,730 from our Command & Communication, offset by decreases in revenue of $767,965, $4,422 and $76,746 from our Telecommunication Products & Services, SMS & MMS business and Big Data businesses, respectively. We principally earn revenue by providing mobile payment and recharge services to customers of telecommunications companies in China. Specifically, we earn a negotiated rebate amount from the telecommunications companies for all monies paid by consumers to those companies that we process. For the three months ended August 31, 2024, revenue contribution came mainly from the Telecommunication Products & Services segment. In shifting focus to our Big Data business since FY2021, we forged an alliance and collaborative partnerships with two key reinsurance companies, Pacific Life Re and Munich Re, which enabled us to develop a holistic multi-faceted risk rating concept, leveraging the Company’s proprietary approach to analytics by drawing data from novel sources and filtering them through advance algorithms with the ultimate goal of applying new insights generated from our predictive model to the traditional insurance industry and extending behavioral analytics to enhance understanding of morbidity and behavioral patterns in the Chinese market. Our goal is to create value for both insurers and end consumers by driving technological advancements, improving product offerings, and enhancing customer experiences. After successfully executing joint initiatives with Munich Re, we are now actively working on promoting our data capabilities to customers.
Current wording
We recorded $8,534,079 in revenue for the three months ended November 30, 2024, an increase of $2,393,933 or 39%, compared to the three months ended November 30, 2023. This increase resulted from an increase in revenue of $2,362,960 and $36,557 from our Telecommunication Products & Services and SMS & MMS businesses, respectively; offset by decreases in revenue of $5,584 from our Big Data business. We principally earn revenue by providing mobile payment and recharge services to customers of telecommunications companies in China. Specifically, we earn a negotiated rebate amount from the telecommunications companies for all monies paid by consumers to those companies that we process. For the three months ended November 30, 2024, revenue contribution came mainly from the Telecommunication Products & Services segment. In shifting focus to our Big Data business since FY2021, we forged an alliance and collaborative partnerships with two key reinsurance companies, Pacific Life Re and Munich Re, which enabled us to develop a holistic multi-faceted risk rating concept, leveraging the Company’s proprietary approach to analytics by drawing data from novel sources and filtering them through advance algorithms with the ultimate goal of applying new insights generated from our predictive model to the traditional insurance industry and extending behavioral analytics to enhance understanding of morbidity and behavioral patterns in the Chinese market. Our goal is to create value for both insurers and end consumers by driving technological advancements, improving product offerings, and enhancing customer experiences. After successfully executing joint initiatives with Munich Re, we are now actively working on promoting our data capabilities to customers.
Previous wording
We recorded $8,157,735 in costs of revenue for the three months ended August 31, 2024, an increase of $720,103 or 10%, compared to the three months ended August 31, 2023. As previously mentioned, we principally earn revenue by providing mobile payment and recharge services to customers of telecommunications companies, subscription plans and mobile phone sales in China. To earn this revenue, we incur cost of the product, certain customer acquisition costs, including discounts to our customers and promotional expenses, which is reflected in our cost of revenue.
Current wording
We recorded $8,090,509 in costs of revenue for the three months ended November 30, 2024, an increase of $2,588,358 or 47%, compared to the three months ended November 30, 2023. As previously mentioned, we principally earn revenue by providing mobile payment and recharge services to customers of telecommunications companies, subscription plans and mobile phone sales in China. To earn this revenue, we incur cost of the product, certain customer acquisition costs, including discounts to our customers and promotional expenses, which is reflected in our cost of revenue.
Previous wording
Our gross profit for the three months ended August 31, 2024 was $301,028, a decrease of $1,540,506 or 84%, compared to the three months ended August 31, 2023. The significant decrease in gross profit was primarily due to the higher margins realized from the Cloud business segment under the Telecommunication Product & Services during the prior period. In contrast, the current period’s product mix resulted in a lower gross profit generated from recharge services revenue.
Current wording
Our gross profit for the three months ended November 30, 2024 was $443,570, a decrease of $194,425 or 30%, compared to the three months ended November 30, 2023. The decrease in gross profit was primarily due to the higher margins realized from the Cloud business segment under the Telecommunication Product & Services during the prior period. In contrast, the current period’s product mix resulted in a lower gross profit generated from recharge services revenue.
Previous wording
We recorded depreciation of $11,740 for fixed assets for the three months ended August 31, 2024, a decrease of $5,931 or 34%, compared to the three months ended August 31, 2023.
Current wording
We recorded depreciation of $11,561 for fixed assets for the three months ended November 30, 2024, a decrease of $5,964 or 34%, compared to the three months ended November 30, 2023.
Previous wording
We recorded $1,548,036 in general and administrative expenses for the three months ended August 31, 2024, a decrease of $86,320 or 5%, compared to the three months ended August 31, 2023. The expenses encompass a range of costs integral to the Company’s ongoing operational and administrative requirements; which include, but are not limited to, regulatory filings, professional services fees, ongoing funding activities, and other costs associated with adhering to both domestic and international operational standards and requirements.
Current wording
We recorded $1,579,619 in general and administrative expenses for the three months ended November 30, 2024, a decrease of $676,566 or 30%, compared to the three months ended November 30, 2023. The expenses encompass a range of costs integral to the Company’s ongoing operational and administrative requirements; which include, but are not limited to, regulatory filings, professional services fees, ongoing funding activities, and other costs associated with adhering to both domestic and international operational standards and requirements.
Previous wording
We recorded $71,582 in marketing cost for the three months ended August 31, 2024, being an increase of $13,145 or 22%, compared to the three months ended August 31, 2023. The majority of these marketing costs were incurred in promoting our newly launched Da Ge App platform.
Current wording
We recorded $140,478 in marketing cost for the three months ended November 30, 2024, being an increase of $99,515 or 243%, compared to the three months ended November 30, 2023. The majority of these marketing costs were incurred in promoting our newly launched Da Ge App platform.
Previous wording
We incurred fees of $180,273 in research & development for the three months ended August 31, 2024 as compared to $176,956 for the three months ended August 31, 2023. The increase of $3,317 or 2% was due to the data access and usage fee charged by telecommunications companies.
Current wording
We incurred fees of $146,735 in research & development for the three months ended November 30, 2024 as compared to $176,119 for the three months ended November 30, 2023. The decrease of $29,384 or 17% was due to the reduced data access and usage fee charged by telecommunications companies.
Previous wording
We incurred fees of $403,233 in share issuance for consultants in consideration of the services which have been provided to the company for the six months ended August 31, 2024, as compared to $450,879 for the six months ended August 31, 2023. The decrease of $47,646 or 11% was due to the reduced engagement of consultants to the Company that were compensated with shares of our common stock. The rationale for rewarding these consultants and advisors with shares is to minimize the usage of cash by the Company to allow the Company to use the cash to invest in revenue-generating activities.
Current wording
We incurred fees of $179,284 in share issuance for consultants in consideration of the services which have been provided to the Company for the three months ended November 30, 2024, as compared to $108,213 for the three months ended November 30, 2023. The increase of $71,071 or 66% was due to the engagement of consultants to the Company that were compensated with shares of our common stock.
Previous wording
We recorded $1,992,194 in operating expenses for the three months ended August 31, 2024, as compared to $2,041,838 in operating expenses for the three months ended August 31, 2023. The decrease of $49,644 or 2%, for the three months ended August 31, 2024, is as set forth above.
Current wording
We recorded $2,057,677 in operating expenses for the three months ended November 30, 2024, as compared to $2,599,005 in operating expenses for the three months ended November 30, 2023. The decrease of $541,328 or 21%, for the three months ended November 30, 2024, is as set forth above.
Previous wording
The net loss attributable to the Company’s shareholders was $3,344,133 for the six months ended August 31, 2024, and $1,399,552 for the six months ended August 31, 2023. The increase in net loss attributable to the Company’s shareholders of $1,944,581 or 139% resulted primarily from the reduced revenue and gross profit as discussed above.
Current wording
The net loss attributable to the Company’s shareholders was $1,660,801 for the three months ended November 30, 2024, and $1,944,343 for the three months ended November 30, 2023. The decrease in net loss attributable to the Company’s shareholders of $283,542 or 15%, is as discussed above.
Previous wording
We recorded $16,832,746 in revenue for the six months ended August 31, 2024, a decrease of $4,615,511 or 22%, compared to the six months ended August 31, 2023. This decrease resulted from increases in revenue of $8,151,251 and $28,730 from our SMS & MMS and Command & Communication businesses, respectively, offset by decreases in revenue of $12,569,040 and $226,452 from our Telecommunication Products & Services and Big Data businesses, respectively. We principally earn revenue by providing mobile payment and recharge services to customers of telecommunications companies in China. Specifically, we earn a negotiated rebate amount from the telecommunications companies for all monies paid by consumers to those companies that we process. For the three months ended August 31, 2024, our SMS & MMS business saw a significant revenue increase compensating for a shortfall from the recharge services. The Company is constantly reallocating its resources when needed, reflecting our focus on optimizing our business portfolio by prioritizing higher-margin segments, which during the six months ended August 31, 2024, resulted in a corresponding decrease in revenue from our Telecommunication Products & Services. However, this shift could not compensate for the higher revenue generated from recharge services in the previous six months ended August 31, 2023. In shifting focus to our Big Data business, since FY2021, we forged an alliance and collaborative partnerships with two key reinsurance companies, Pacific Life Re and Munich Re, which enabled us to develop a holistic multi-faceted risk rating concept, leveraging the Company’s proprietary approach to analytics by drawing data from novel sources and filtering them through advance algorithms with the ultimate goal to apply new insights generated from our predictive model to the traditional insurance industry and extending behavioral analytics to enhance understanding of morbidity and behavioral patterns in the Chinese market. Our goal is to create value for both insurers and end consumers by driving technological advancements, improving product offerings, and enhancing customer experiences. After successfully executing joint initiatives with Munich Re, we are now actively working on promoting our data capabilities to customers.
Current wording
We recorded $25,366,825 in revenue for the nine months ended November 30, 2024, a decrease of $2,221,578 or 8%, compared to the nine months ended November 30, 2023. This decrease resulted from increases in revenue of $8,187,808 and $28,868 from our SMS & MMS and Command & Communication businesses, respectively, offset by decreases in revenue of $10,206,218 and $232,036 from our Telecommunication Products & Services and Big Data businesses, respectively. We principally earn revenue by providing mobile payment and recharge services to customers of telecommunications companies in China. Specifically, we earn a negotiated rebate amount from the telecommunications companies for all monies paid by consumers to those companies that we process. For the nine months ended November 30, 2024, our revenue remained primarily driven by our Telecommunication Products & Services segment, despite a decrease compared to the same period in 2023. The SMS & MMS business experienced a notable increase during this period, reflecting our ongoing efforts to optimize our business portfolio and allocate resources strategically. However, the overall revenue from recharge services for the nine months ended November, 2024 was lower than prior corresponding period, it continues to be the primary contributor to our overall perfomance. In shifting focus to our Big Data business, since FY2021, we forged an alliance and collaborative partnerships with two key reinsurance companies, Pacific Life Re and Munich Re, which enabled us to develop a holistic multi-faceted risk rating concept, leveraging the Company’s proprietary approach to analytics by drawing data from novel sources and filtering them through advance algorithms with the ultimate goal to apply new insights generated from our predictive model to the traditional insurance industry and extending behavioral analytics to enhance understanding of morbidity and behavioral patterns in the Chinese market. Our goal is to create value for both insurers and end consumers by driving technological advancements, improving product offerings, and enhancing customer experiences. After successfully executing joint initiatives with Munich Re, we are now actively working on promoting our data capabilities to customers.
Previous wording
We recorded $15,849,829 in costs of revenue for the six months ended August 31, 2024, a decrease of $3,094,345 or 16%, compared to the six months ended August 31, 2023. As previously mentioned, we principally earn revenue by providing mobile payment and recharge services to customers of telecommunications companies, subscription plans and mobile phone sales in China. To earn this revenue, we incur cost of the product, certain customer acquisition costs, including discounts to our customers and promotional expenses, which is reflected in our cost of revenue.
Current wording
We recorded $23,940,338 in costs of revenue for the nine months ended November 30, 2024, a decrease of $505,987or 2%, compared to the nine months ended November 30, 2023. As previously mentioned, we principally earn revenue by providing mobile payment and recharge services to customers of telecommunications companies, subscription plans and mobile phone sales in China. To earn this revenue, we incur cost of the product, certain customer acquisition costs, including discounts to our customers and promotional expenses, which is reflected in our cost of revenue.
Previous wording
Our gross profit for the six months ended August 31, 2024 was $982,917, a decrease of $1,521,166 or 61%, compared to the six months ended August 31, 2023. The significant decline in gross profit was primarily due to the higher margin product mix in the Telecommunication Product & Services segment during the prior period, particularly from our cloud business. In contrast, there were no contributions from the cloud business during the current six months, which typically generates higher margin.
Current wording
Our gross profit for the nine months ended November 30, 2024 was $1,426,487, a decrease of $1,715,591 or 55%, compared to the nine months ended November 30, 2023. The significant decline in gross profit was primarily due to the higher margin product mix in the Telecommunication Product & Services segment during the prior period, particularly from our cloud business. In contrast, there were no contributions from the cloud business during the current nine months, which typically generates higher margin.
Previous wording
We recorded depreciation of $23,754 for fixed assets for the six months ended August 31, 2024, a decrease of $12,259 or 34%, compared to the six months ended August 31, 2023.
Current wording
We recorded depreciation of $35,315 for fixed assets for the nine months ended November 30, 2024, a decrease of $18,223 or 34%, compared to the nine months ended November 30, 2023.
Previous wording
We recorded $3,429,813 in general and administrative expenses for the six months ended August 31, 2024, an increase of $433,467 or 14%, compared to six months ended August 31, 2023. The increase encompasses a range of costs integral to the Company’s ongoing operational and administrative requirements. The expenses include, but are not limited to, regulatory filings, professional services fees, ongoing funding activities, and other costs associated with adhering to both domestic and international operational standards and requirements.
Current wording
We recorded $4,997,452 in general and administrative expenses for the nine months ended November 30, 2024, a decrease of $255,079 or 5%, compared to the nine months ended November 30, 2023. The decrease encompasses a range of costs integral to the Company’s ongoing operational and administrative requirements. The expenses include, but are not limited to, regulatory filings, professional services fees, ongoing funding activities, and other costs associated with adhering to both domestic and international operational standards and requirements.
Previous wording
We recorded $134,106 in marketing cost for the six months ended August 31, 2024, being an increase of $82,510 or 160%, compared to the six months ended August 31, 2023. The majority of these marketing costs were incurred in promoting our newly launched Da Ge App platform.
Current wording
We recorded $274,584 in marketing cost for the nine months ended November 30, 2024, being an increase of $182,025 or 197%, compared to the nine months ended November 30, 2023. The majority of these marketing costs were incurred in promoting our newly launched Da Ge App platform.
Previous wording
We incurred fees of $359,266 in research & development for the six months ended August 31, 2024, as compared to $349,055 for the six months ended August 31, 2023. The increase of $10,211 or 3% was due to the data access and usage fee charged by telecommunications companies.
Current wording
We incurred fees of $506,001 in research & development for the nine months ended November 30, 2024, as compared to $525,174 for the nine months ended November 30, 2023. The decrease of $19,173 or 4% was due to the data access and usage fee charged by telecommunications companies.
Previous wording
We incurred fees of $180,563 in share issuance for consultants in consideration of the services which have been provided to the Company for the three months ended August 31, 2024, as compared to $154,418 for the three months ended August 31, 2023. The increase of $26,145 or 17% was due to the engagement of consultants to the Company that were compensated with shares of our common stock. The rationale for compensating these consultants and advisors with shares is to minimize the usage of cash by the Company to allow the Company to use the cash to invest in revenue-generating activities.
Current wording
We incurred fees of $582,517 in share issuance for consultants in consideration of the services which have been provided to the Company for the nine months ended November 30, 2024, as compared to $559,092 for the nine months ended November 30, 2023. The increase of $23,425 or 4% was due to the engagement of consultants to the Company that were compensated with shares of our common stock. The rationale for rewarding these consultants and advisors with shares is to minimize the usage of cash by the Company to allow the Company to use the cash to invest in revenue-generating activities.
Previous wording
We recorded $4,350,172 in operating expenses for the six months ended August 31, 2024, as compared to $3,883,889 in operating expenses for the six months ended August 31, 2023. The increase of $466,283 or 12%, for the six months ended August 31, 2024, is as set forth above.
Current wording
We recorded $6,395,869 in operating expenses for the nine months ended November 30, 2024, as compared to $6,482,894 in operating expenses for the nine months ended November 30, 2023. The decrease of $87,025 or 1%, the nine months ended November 30, 2024, is as set forth above.
Previous wording
The net loss attributable to the Company’s shareholders was $1,688,229 for the three months ended August 31, 2024, and $134,081 for the three months ended August 31, 2023. The increase in net loss attributable to the Company’s shareholders of $1,554,148 or 1,159% resulted primarily from the reduced revenue and gross profit as discussed above.
Current wording
The net loss attributable to the Company’s shareholders was $5,004,934 for the nine months ended November 30, 2024, and $3,343,895 for the nine months ended November 30, 2023. The increase in net loss attributable to the Company’s shareholders of $1,661,039 or 50% resulted primarily from the reduced revenue and gross profit as discussed above.
Previous wording
At August 31, 2024, we had cash and cash equivalents of $810,284, as compared to cash and cash equivalents of $1,517,232 at February 29, 2024. 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. Additionally, our expansion into the cloud-based business, which features a longer collection cycle, has led to an increase in accounts receivable and consequently, a greater strain on our liquidity. To manage these operational demands effectively, we have had to carefully monitor and manage our cash flows. We believe that our cash on hand and cash equivalents, along with our revenues from operations, will fund our core operations and repay our outstanding indebtedness for at least the next 12 months. However, we anticipate the need for additional capital to support the rollout of our Command & Communication business as well for more continued growth, increasing our deposits with telecommunication entities will be crucial. To support all these, we intend to continue to seek additional capital through public or private sales of our equity or debt securities, or both. We may also explore entering 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 support the rollout of our Command & Communication business and increase our deposits with our telecommunications company clients, or if available, that such funding will be on terms acceptable to us.
Current wording
At November 30, 2024, we had cash and cash equivalents of $164,600, as compared to cash and cash equivalents of $1,517,232 at February 29, 2024. Our business model, particularly in mobile payment, requires periodic fund deposits with our telecommunication companies to obtain access to the mobile data and talk time we make available to consumers on our portal. Additionally, the expansion into areas such as cloud-based business, which features a longer collection cycle, as well as investments in other growth initiatives, has increased our accounts receivable and placed added pressure on our liquidity. To manage these operational demands effectively, we have had to carefully monitor and manage our cash flows. We anticipate our cash on hand and cash equivalents, along with our revenues from operations, will support our ongoing operations and repayment of outstanding indebtedness in the near term. However, to sustain our growth and support strategic initiatives, including the rollout of our Command & Communication business and increase deposits with telecommunication companies, we will require additional capital. To support all these, we intend to continue to seek additional capital through public or private sales of our equity or debt securities, or both. We may also explore entering 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 support the rollout of our Command & Communication business and increase our deposits with our telecommunications company clients, or if available, that such funding will be on terms acceptable to us.
Previous wording
Net cash used in operating activities decreased by $1,969,990 in the six months ended August 31, 2024 compared to the six months ended August 31, 2023, primarily due to an increase in account receivable of ($12,209,223) (August 31, 2023: ($7,292,931)) and increase in prepayment and deposit of ($22,226) (August 31, 2023: $329,727); offset by decrease in other receivable of $527,972 (August 31, 2023: ($2,067,397)), increase in accounts payable of $10,002,702 (August 31, 2023: $5,327,561), increase in accrual and other payable of $1,369,869 (August 31, 2023: ($434,852)) and increase in lease liability of $11,448 (August 31, 2023: ($2,673)).
Current wording
Net cash used in operating activities decreased by $2,366,159 in the nine months ended November 30, 2024 compared to the nine months ended November 30, 2023, primarily due to an increase in account receivable of ($17,296,795) (November 30, 2023: ($5,072,577)) and increase in inventories ($31,096) (November 30, 2023 : nil); offset by decrease in prepayment and deposit of $1,390,794 (November 30, 2023: ($1,113,267)), decrease in other receivable of $1,438,128 (November 30, 2023: ($2,161,319)), increase in accounts payable of $13,319,337 (November 30, 2023: $3,864,745), increase in accrual and other payable of $567,593 (November 30, 2023: ($102,182)) and increase in lease liability of $10,314 (November 30, 2023: ($4,618)).
Previous wording
During the six months ended August 31, 2024, net cash used in investing activities increased by $1,369 compared to $372 in the six months ended August 31, 2023.
Current wording
During the nine months ended November 30, 2024, net cash used in investing activities increased by $1,326 compared to $379 in the nine months ended November 30, 2023 due to the purchase of equipment.
Previous wording
During the six months ended August 31, 2024, net cash provided by financing activities was $2,629,688 compared to net cash used by financing activities during the six months ended August 31, 2023 of $295,333. The increase was due to the receipt of subscription proceeds to purchase 1,070,000 shares of our common stock at $1.50 per share on a private placement basis and short-term loan facility of SGD$1,370,000.
Current wording
During the nine months ended November 30, 2024, net cash provided by financing activities was $3,239,306 compared to net cash used by financing activities during the nine months ended November 30, 2023 of $295,333. The increase was due to the receipt of subscription proceeds to purchase 1,095,000 shares of our common stock at $1.50 per share on a private placement basis and short-term loan facilities of an aggregate of SGD$2,120,000.