v3.26.1
Income Taxes
 3 Months Ended
May 31, 2026
Income Tax Disclosure [Abstract]  
Income Taxes

Note 13 – Income Taxes

 

The Company and its subsidiaries file separate income tax returns.

 

The United States of America

 

FingerMotion, Inc. is incorporated in the State of Delaware in the U.S. and is subject to a U.S. federal corporate income tax of 21%. The Company generated a taxable loss for the three months ended May 31, 2026 and 2025.

 

Hong Kong

 

Finger Motion Company Limited, Finger Motion (CN) Limited and Finger Motion Financial Company Limited were incorporated in Hong Kong and Hong Kong’s profits tax rate is 16.5%. These companies did not earn any income that was derived in Hong Kong for the three months ended May 31, 2026 and 2025.

 

The People’s Republic of China (PRC)

 

JiuGe Management, Beijing XunLian, Shanghai TengLian JiuJiu, Shanghai KeShunXiang, Zhejiang ChangXin Communication Equipment Co., Ltd and Shanghai XiaoYi Bin Tong Technology Co., Ltd. were incorporated in the People’s Republic of China and subject to PRC income tax at 25%. JiuGe Technology was incorporated in the People’s Republic of China and subject to PRC income tax at 15% as high-tech enterprise.

 

Income tax mainly consists of foreign income tax at statutory rates and the effects of permanent and temporary differences. The Company’s effective income tax rates for the three months ended May 31, 2026 and 2025 are as follows:

 

          
   For the three months ended 
   May 31, 2026   May 31, 2025 
   (unaudited)   (unaudited) 
U.S. statutory tax rate   21.0%   21.0%
PRC profit tax rate   25.0%   25.0%
Changes in valuation allowance and others   (46.0%)   (46.0%)
Effective tax rate   0%   0%

  

               
    May 31, 2026     February 28, 2026  
    (unaudited)         
Current tax   $ —     $ —  
Deferred tax benefit     —       —  
Total provision for (benefit from) income tax expense   $ —     $ —  

 

The reconciliations of income tax expenses computed by applying the statutory income tax rates, ranging from 15% to 25%, to the Company’s income tax expenses for the presented years are as follows:

 

          
   May 31, 2026   February 28, 2026 
   (unaudited)     
Loss before income tax expenses  $(2,009,784)  $(7,041,333)
Income tax credit computed at various statutory income tax rate (15% to 25%)   (250,814)   (440,899)
Reconciling items:          
Tax incentive – R&D Credit   —    (69,940)
Income not subject to tax in China   (9,741)   (38,590)
Non-deductible expenses   260,555    549,429 
Total provision for (benefit from) income tax  $—   $— 

 

Deferred tax has resulted primarily from future tax deductible or creditable temporary differences. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. At May 31, 2026 and February 28, 2026, the valuation allowances were $4,631,065 and $4,389425, respectively.

 

The significant components of the Company’s deferred tax account balances are as follows: 

 

          
   May 31, 2026   February 28, 2026 
   (unaudited)     
Deferred tax assets          
Net operating losses carry forward  $4,362,371   $4,244,187 
Accruals and reserves   7,351,148    7,121,646 
Lease liability   1,537    20,160 
Total deferred tax assets   11,715,056    11,385,993 
Less: Valuation allowance   (4,631,065)   (4,389,425)
Total deferred tax assets, net of valuation allowance   7,083,991    6,996,568 
Deferred tax liabilities          
Right-of-use asset   (18,248)   (18,002)
Total deferred tax liabilities   (18,248)   (18,002)
           
Net deferred tax assets (liabilities)  $7,065,743   $6,978,566