Business Context and Reporting Period
This Form 8-K was filed by Fingermotion, Inc. on August 2, 2021. The report addresses a request from the OTC Markets Group Inc. regarding recent promotional activity concerning the Company's common stock. The Company also notes it submitted an application to list its shares on the Nasdaq Capital Market on July 28, 2021.
Key Financial Metrics
The filing does not provide standard financial performance metrics such as revenue, profit, cash flow, operating margins, or total debt levels. The document focuses on equity transactions and regulatory disclosures rather than financial results.
- Recent Equity Issuances: The Company disclosed numerous share issuances and convertible notes between 2019 and August 2021, including 593,900 shares issued on July 13, 2021, at $5.00 per share.
- Convertible Notes: A convertible note of $296,000 with a conversion price of $5.00 per share was issued on August 1, 2021.
- Liquidity: No specific cash balance or liquidity ratios are provided in this filing.
Material Changes and Disclosures
The primary material event is the discovery of unauthorized promotional activity.
- Unauthorized Promotion: On July 28, 2021, the Company became aware of third-party promotional materials (newsletter-emails) encouraging investors to purchase its stock. The Company had no involvement or editorial control over these materials.
- Compliance Issue: The Company identified that Gregory Bergman, a third-party service provider, was indirectly involved in paying for the promotional activity through subcontractors. This action violated his agreement, which required pre-approval of all promotional materials by the Company.
- Trading Activity: The Company stated it could not determine the effect of the promotional activity on trading volume compared to its own news release regarding the Nasdaq listing application.
Guidance, Risks, and Management Commentary
Management issued a cautionary statement regarding the promotional materials.
- Investor Warning: The Company does not condone the use of sensational language regarding its business prospects. Investors are advised not to place undue reliance on the third-party promotional materials, as certain excerpts may be misleading or incomplete.
- Risk Disclosure: The Company reiterated that investing in its securities involves risks and uncertainties. Investors are directed to rely solely on filings made with the SEC via EDGAR.
- Service Providers: The Company listed several third-party service providers engaged in the last 12 months for investor relations and marketing, including Zacks Investment Research, Hybrid Financial Ltd., TD Media, LLC, Investor Brand Network, and Greg Bergman.
- Insider Trading: The Company reported no awareness of purchases or sales of its shares by officers, directors, or controlling shareholders in the past 90 days, excluding shares issued to service providers in June and July 2021.
- Verify the status of the Company's application to list on the Nasdaq Capital Market.
- Confirm the extent of dilution from the numerous share issuances and convertible notes listed in the filing, particularly those issued at discounts to market rates.
- Review the Company's official SEC filings (EDGAR) for accurate financial data, as this 8-K contains no revenue or earnings figures.
- Monitor for any further regulatory action or clarification regarding the unauthorized promotional activity involving Gregory Bergman.