8-K
FingerMotion, Inc. (FNGR)
UNITED
STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
FORM
8-K
CURRENT
REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
January 16, 2024Date of Report (Date of earliest event reported)
FINGERMOTION, INC.
****(Exact name of registrant as specified in its charter)
| Delaware | 001-41187 | 46-4600326 |
|---|---|---|
| (State<br> or other jurisdiction of incorporation) | (Commission<br> File Number) | (IRS<br> Employer Identification No.) |
| 111 Somerset Road, Level 3 Singapore | 238164 | |
| --- | --- | |
| (Address<br> of principal executive offices) | (Zip<br> Code) |
(347)
349-5339 Registrant’s telephone number, including area code
Notapplicable.(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written<br> communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting<br> material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement<br> communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement<br> communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title<br> of each class | Trading<br> Symbol (s) | Name<br> of each exchange on which registered |
|---|---|---|
| Common<br> Stock | FNGR | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (Section 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (Section 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
SECTION 2 – FINANCIALINFORMATION
| Item 2.02 | Results of Operations and Financial Condition. |
|---|
On January 16, 2024, FingerMotion, Inc. (the “Company”) issued a news release to report its financial results for the third quarter of fiscal 2024 for the period ended November 30, 2023. The information regarding the financial results for the third fiscal quarter ended November 30, 2023 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 filing.
SECTION 7 – REGULATION FD
| Item 7.01 | Regulation FD Disclosure |
|---|
On January 16, 2024, the Company issued a news release to report its financial results for the third quarter of fiscal 2024 for the period ended November 30, 2023. To review the full financial results, please view the Company’s recent 10-Q filing at www.sec.gov/edgar/search or on the Company’s website at www.fingermotion.com/investor-relations/financial-information/details, which should be read in connection with this news release.
Q3 2024 Financial Summary(results expressed in US$ unless otherwise indicated):
| ● | Reported<br> quarterly revenue of $6.14 million (includes SMS & MMS, Telecommunications Products & Services businesses, and Big Data)<br> which was a decrease of $5.26 million or 46% compared to Q3 2023; |
|---|---|
| ● | Reported<br> quarterly decrease in Telecommunications Products & Services business revenue of $4.22 million or 41% compared to Q3 2023; |
| ● | Reported<br> quarterly Big Data revenue of $.01 million compared to $.19 million in Q3 2023; |
| ● | Reported<br> quarterly SMS & MMS business revenue of $.01 million compared to $.87 million in Q3 2023; |
| ● | Reported<br> quarterly cost of revenue of $5.50 million which was a decrease of $5.04 million or 48% compared to Q3 2023; |
| ● | Reported<br> a gross profit of $.64 million which was a decrease of $.22 million or 26% compared to Q3 2023; |
| ● | Reported<br> quarterly loss of $1.94 million which was a decrease of $0.58 million or 23% compared to Q3 2023; |
| ● | Basic<br> and Diluted loss per share of $0.04 versus a loss per share of $0.06 for Q3 2023; |
| ● | On<br> November 30, 2023, FingerMotion had $1,934,565 in cash and cash equivalents, a working capital surplus of $12,510,848 and a positive<br> shareholders equity of $12,636,828; |
| ● | Total<br> Assets were $17.57 million, Total Current Liabilities were $4.92 million and Total Liabilities were also $4.92 million; and |
| ● | 52,545,350<br> common shares were issued and outstanding as of November 30, 2023. |
-2-
The Company experienced a challenging market in all its business segments. Despite the market challenges, Q3 2024 compared to Q3 2023 gross margins improved from 7.5% to 10.4% reflecting improved management of our diversified product line. The Company is confident a recovery in revenues will ensue looking at how essential the Company’s suite of products and services are woven into the fabric of the Chinese economy. The regulatory climate has had a notable impact on the SMS and MMS business, but the Company is adapting its approach to regulatory changes to uncover alternative revenues for growth in this business segment. The Big Data business is evolving with our existing partners with the ultimate goal of a large-scale commercialization of this business expected in the coming years. Our behavioral algorithms have become entrenched in our partners validation of their product models and demonstrate that a commercialization would likely be structured as a profit-sharing deal.
“The numbers do not reflect the optimism that management sees going forward,” said Martin Shen, CEO of FingerMotion Inc. “We were looking for positive cash flow from our diversification into new business segments by the end of the quarter, but missed the cutoff. Exciting new business segments are underway in the current quarter that could improve revenues, margins, and get us close to our goal of profitability. We are building this business for the long term and innovate our way out of market challenges.”
General and administrative expenses increased by $620,385 or 38% during the quarter which was a result of an increase in a range of costs related to Company administration. Research and development expenses dropped to $176,119 during the quarter which 2% lower due to savings from data access fees charged by the telecom companies.
A copy of the news release is attached as Exhibit 99.1 hereto.
The information in this Item 7.01 (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act, or the Exchange Act, except as expressly set forth by specific reference in such a filing.
SECTION 9 – FINANCIAL STATEMENTS ANDEXHIBITS
| Item 9.01 | Financial Statements and Exhibits |
|---|
(d) Exhibits
| Exhibit | Description |
|---|---|
| 99.1 | News<br> Release dated January 16, 2024 |
| 104 | Cover<br> Page Interactive Data File (the cover page XBRL tags are embedded within the inline XBRL document) |
-3-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| FINGERMOTION, INC. | ||
|---|---|---|
| DATE: January 16, 2024 | By: | /s/ Martin J. Shen |
| Martin J. Shen | ||
| CEO |
-4-
FingerMotionReports Q3 2024 Financial Results
**SINGAPORE/ ACCESSWIRE / January 16, 2024 /**FingerMotion, Inc. (NASDAQ:FNGR) (the “Company” or “FingerMotion”), a mobile services and data company, is pleased to report its financial results for the third quarter of fiscal 2024 for the period ended November 30, 2023. To review the full financial results, please view the Company’s recent 10-Q filing at www.sec.gov/edgar/search or on the Company’s website at www.fingermotion.com/investor-relations/financial-information/details, which should be read in connection with this news release.
Q32024 Financial Summary(results expressed in US$ unless otherwise indicated):
| ● | Reported<br> quarterly revenue of $6.14 million (includes SMS & MMS, Telecommunications Products & Services businesses, and Big Data)<br> which was a decrease of $5.26 million or 46% compared to Q3 2023; |
|---|---|
| ● | Reported<br> quarterly decrease in Telecommunications Products & Services business revenue of $4.22 million or 41% compared to Q3 2023; |
| ● | Reported<br> quarterly Big Data revenue of $.01 million compared to $.19 million in Q3 2023; |
| ● | Reported<br> quarterly SMS & MMS business revenue of $.01 million compared to $.87 million in Q3 2023; |
| ● | Reported<br> quarterly cost of revenue of $5.50 million which was a decrease of $5.04 million or 48% compared to Q3 2023; |
| ● | Reported<br> a gross profit of $.64 million which was a decrease of $.22 million or 26% compared to Q3 2023; |
| ● | Reported<br> quarterly loss of $1.94 million which was a decrease of $0.58 million or 23% compared to Q3 2023; |
| ● | Basic<br> and Diluted loss per share of $0.04 versus a loss per share of $0.06 for Q3 2023; |
| ● | On<br> November 30, 2023, FingerMotion had $1,934,565 in cash and cash equivalents, a working capital surplus of $12,510,848 and a positive<br> shareholders equity of $12,636,828; |
| ● | Total<br> Assets were $17.57 million, Total Current Liabilities were $4.92 million and Total Liabilities were also $4.92 million; and |
| ● | 52,545,350<br> common shares were issued and outstanding as of November 30, 2023. |
The Company experienced a challenging market in all its business segments. Despite the market challenges, Q3 2024 compared to Q3 2023 gross margins improved from 7.5% to 10.4% reflecting improved management of our diversified product line. The Company is confident a recovery in revenues will ensue looking at how essential the Company’s suite of products and services are woven into the fabric of the Chinese economy. The regulatory climate has had a notable impact on the SMS and MMS business, but the Company is adapting its approach to regulatory changes to uncover alternative revenues for growth in this business segment. The Big Data business is evolving with our existing partners with the ultimate goal of a large-scale commercialization of this business expected in the coming years. Our behavioral algorithms have become entrenched in our partners validation of their product models and demonstrate that a commercialization would likely be structured as a profit-sharing deal.
“The numbers do not reflect the optimism that management sees going forward,” said Martin Shen, CEO of FingerMotion Inc. “We were looking for positive cash flow from our diversification into new business segments by the end of the quarter, but missed the cutoff. Exciting new business segments are underway in the current quarter that could improve revenues, margins, and get us close to our goal of profitability. We are building this business for the long term and innovate our way out of market challenges.”
General and administrative expenses increased by $620,385 or 38% during the quarter which was a result of an increase in a range of costs related to Company administration. Research and development expenses dropped to $176,119 during the quarter which 2% lower due to savings from data access fees charged by the telecom companies.
AboutFingerMotion, Inc.
FingerMotion is an evolving technology company with a core competency in mobile payment and recharge platform solutions in China. As the user base of its primary business continues to grow, the Company is developing additional value-added technologies to market to its users. The vision of the Company is to rapidly grow the user base through organic means and have this growth develop into an ecosystem of users with high engagement rates utilizing its innovative applications. Developing a highly engaged ecosystem of users would strategically position the Company to onboard larger customer bases. FingerMotion eventually hopes to serve over 1 billion users in the China market and eventually expand the model to other regional markets.
For more information on FingerMotion, visit: https://fingermotion.com/
CompanyContact:
FingerMotion, Inc.
For further information e-mail: info@fingermotion.com
Phone: 718-269-3366
InvestorRelations Contact:
Skyline Corporate Communications Group, LLC
Scott Powell, President
One Rockefeller Plaza, 11th Floor
New York, NY 10020
Office: (646) 893-5835
Email: info@skylineccg.com
SafeHarbor Statement
Exceptfor the statements of historical fact contained herein, the information presented in this news release constitutes “forward-lookingstatements” as such term is used in applicable United States securities laws. These statements relate to analysis and other informationthat are based on forecasts or future results, estimates of amounts not yet determinable and assumptions of management. Any other statementsthat express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions orfuture events or performance (often, but not always, using words or phrases such as “expects”, or “does not expect”,“is expected”, “anticipates” or “does not anticipate”, “plans”, “estimates” or “intends”,or stating that certain actions, events or results “may”, “could”, “would”, “might” or “will”be taken, occur or be achieved) are not statements of historical fact and should be viewed as “forward-looking statements”.We have based these forward-looking statements on our current expectations about future events or performance, including expected revenues.While we believe these expectations are reasonable, such forward-looking statements are inherently subject to risks and uncertainties,many of which are beyond our control. Our actual future results may differ materially from those discussed or implied in our forward-lookingstatements for various reasons. Factors that could contribute to such differences include, but are not limited to: international, nationaland local general economic and market conditions; demographic changes; the ability of the Company to sustain, manage or forecast itsgrowth; the ability of the Company to manage its VIE contracts; the ability of the Company to maintain its relationships and licensesin China; adverse publicity; competition and changes in the Chinese telecommunications market; fluctuations and difficulty in forecastingoperating results; business disruptions, such as technological failures and/or cybersecurity breaches; and the other factors discussedin the Company’s periodic reports that are filed with the Securities and Exchange Commission and available on its website (http://www.sec.gov).There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materiallyfrom those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements containedin this news release and in any document referred to in this news release. The forward-looking statements included in this release aremade only as of the date hereof. For forward-looking statements in this news release, the Company claims the protection of the safe harborfor forward-looking statements contained in the Private Securities Litigation Report Act of 1995. The Company assumes no obligation toupdate or supplement any forward-looking statements whether as a result of new information, future events or otherwise. This news releaseshall not constitute an offer to sell or the solicitation of any offer to our securities.