FingerMotion, Inc.

The following table sets out our cash and working capital as of November 30, 2024 and February 29, 2024:

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.

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.

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 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)).

Cash Flow used in Investing Activities

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.

Cash Flow provided by Financing Activities

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.

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

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.

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.

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.

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.

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.

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.

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.

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.

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 29, 2024 filed with the SEC on May 29, 2024.

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 29, 2024 filed with the SEC on May 29, 2024.

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.