Item 7.01 Regulation FD Disclosure
On December 27, 2022, FingerMotion, Inc. (the "Company" or "FingerMotion")
issued a news release to announce that it expects is quarterly revenues for the
period ended November 30, 2022 to exceed $10 million. Based on expected revenue
growth in its core businesses, the Company also anticipates the annual revenue
should exceed prior year's total for the current fiscal period.
Over the past 6 months the Company raised a total of $15.5 million in proceeds
from a convertible note private placement and a non-brokered private placement
offering that closed in two tranches. Through the end of November 2022, only a
portion of the funds raised was employed in operations, while a portion of the
remaining balance of $11.5 million could be used to pay or extinguish the
existing note from the convertible note private placement (the "Note").
According to the repayment provisions and the default remedies provided in the
Note, the Company offered to comply with the repayment of 25% of the proceeds
towards the Note, unless waived, as well as to pay the mandatory default amount
of $5.28 million, if the lender declared the mandatory default amount due and
payable. However, the lender did not recognize the invocation of any of the
rights or remedies provided in the Note and has refused to address the Company's
offer or to provide any waiver of the repayment of 25% of the proceeds towards
repayment. Thus, the Company can only assume that the lender is not interested
in early repayment and the Company will plan to make monthly payments starting
on February 9, 2023 and will utilize more of the funds raised towards operations
and revenue generation.
"This large capital inflow into existing operations is a welcomed event," said
Martin Shen, CEO of FingerMotion Inc. "While we would have preferred to
strengthen our balance sheet by repaying the Note, the strong cash flow
generated from the available capital provided formidable revenue results. With
the recent funds raised, the Company could experience significant revenue growth
as we can triple the capital of the original investment. And our projections do
not include the full launch of the device protection program, which may prove
another significant driver of revenue and margin as we anticipate that division
to grow rapidly."
A copy of the news release is attached as Exhibit 99.1 hereto.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit Description
99.1 News Release dated December 27, 2022
104 Cover Page Interactive Data File (the cover page XBRL tags are
embedded within the inline XBRL document)
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