Item 2.02 Results of Operations and Financial Condition.
On January 17, 2023, FingerMotion, Inc. (the “Company”) issued a news release to
report its financial results for the third quarter ended November 30, 2022. The
information regarding the financial results for the third fiscal quarter ended
November 30, 2022 of the Company contained in Item 7.01 below is responsive to
this Item 2.02 and is incorporated into this Item 2.02 by reference.
The information in this Item 2.02 (including Exhibit 99.1) shall not be deemed
“filed” for purposes of Section 18 of the U.S. Securities Exchange Act of 1934,
as amended (the “Exchange Act”), or otherwise subject to the liabilities of that
section, nor shall it be deemed incorporated by reference in any filing under
the U.S. Securities Act of 1933, as amended (the “Securities Act”), or the
Exchange Act, except as expressly set forth by specific reference in such a
Item 7.01 Regulation FD Disclosure
On January 17, 2023, the Company issued a news release to report its financial
results for the third quarter ended November 30, 2022. To review the full
financial results, please view the Company’s recent Form 10-Q filing on the
SEC’s website at https://ift.tt/0gVCeKi, which should be read in connection
with this news release.
Q3 2023 Financial Summary (results expressed in US$ unless otherwise indicated):
? Reported record quarterly revenue of $11.40 million (includes SMS & MMS,
Telecommunications Products & Services businesses, and Big Data);
? Reported a quarterly increase in revenues of 93% compared to Q3 2022;
? Reported sequential quarterly growth in revenue of $6.42 million from Q2 2023
representing a 129% increase quarter over quarter.
? Reported quarterly increase in Telecommunications Products & Services business
revenue of $7.07 million or 215% compared to Q3 2022;
? Reported quarterly Big Data revenue of $.19 million compared to nil in Q3 2022;
? Reported quarterly decline in SMS & MMS business revenue of $1.75 million or
67% compared to Q3 2022;
? Reported quarterly cost of revenue of $10.54 million which was an increase of
$5.61 million or 114% compared to Q3 2022;
? Reported quarterly loss of $2.52 million which was an increase of $1.49 million
or 143% compared to Q3 2022;
? Basic and Diluted loss per share of $0.06 versus a loss per share of $0.02 for
? On November 30, 2022, FingerMotion had $11,870,256 in cash, a working capital
surplus of $16,713,400 and a positive shareholders’ equity of $12,193,986;
? Total Assets were $21.90 million, Total Current Liabilities were $4.87 million
and Total Liabilities were $9.71 million;
? 46,316,635 common shares were issued and outstanding as of November 30, 2022.
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The Company exceeded the quarterly milestone of over $10 million in revenue for
the quarter. The Company anticipates even greater revenue growth in the upcoming
months as it deploys some of the $11 million held in reserve, which was raised
pursuant to private placements in November 2022.
“The Chinese ‘lockdowns’ are over now, but during the quarter they still had an
impact on the Company’s revenue mix,” said Martin Shen, CEO of FingerMotion Inc.
“The Company managed the quarter by focusing available resources to the Top-up
business as our corporate SMS customers were not interested in driving traffic
to retail establishments that were closed. Now that China has opened up again
the Company expects a resumption of the upward trend and a dramatic acceleration
in topline revenue growth. And while margins were temporarily depressed, they
are expected to rebound substantially in the ensuing quarter. We are also
encouraged to see the start of revenue from mobile phone sales and
subscriptions. We are very optimistic that we will see notable growth in this
area and the Big Data in the future.”
General and administrative expenses increased by $114,686 or 8% during the
quarter which was a result of an increase in consulting, travel, and other
expenses related to the funding and promotional activities for the quarter.
Research and development expenses increase to $180,158 during the quarter which
was up 14% due to higher data access fees charged by the telecom companies.
“The device protection business is nearing the end of its test phase and the
Company anticipates a full launch by the end of this fiscal year.”
A copy of the news release is attached as Exhibit 99.1 hereto.
The information in this Item 7.01 (including Exhibit 99.1) shall not be deemed
“filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to
the liabilities of that section, nor shall it be deemed incorporated by
reference in any filing under the Securities Act, or the Exchange Act, except as
expressly set forth by specific reference in such a filing.
Item 8.01 Other Events
On January 13, 2023, the Company’s board of directors has authorized a six month
extension to the expiry date of the common stock purchase warrants that the
Company issued on January 13, 2021 which have an expiry date of January 13, 2023
and an exercise price of $3.00 per share (the “January 2021 Warrants”), and of
which there are currently 1,417,668 January 2021 Warrants outstanding. The new
expiry date of the January 2021 Warrants is July 13, 2023.
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Item 9.01 Financial Statements and Exhibits
Exhibit Description 99.1 News Release dated January 17, 2023 104 Cover Page Interactive Data File (the cover page XBRL tags are embedded within the inline XBRL document) - 3 -
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