FNGR · FingerMotion, Inc.

FingerMotion, Inc. entered into a securities purchase agreement with an institutional investor to issue a $5 million senior secured convertible note, reflecting a significant financing event. The note carries a $700,000 original issue discount, resulting in net proceeds of $3.3 million at closing, with an additional $1 million to be released upon SEC effectiveness of a resale registration statement. The note is convertible into common stock at a fixed price of $0.94 per share, subject to standard adjustments, and includes monthly redemption conversion options at a discount to VWAP. The transaction is structured to provide the investor with substantial protections, including a first-priority security interest in substantially all of the company's personal property assets, customary events of default with a 125% premium, and registration rights. The company also granted a security agreement covering all personal property, excluding certain items. The offering was conducted under Section 4(a)(2) and Rule 506(b) of Regulation D, with the investor representing accredited investor status. Weild & Co. acted as placement agent and received a $200,000 cash commission. This financing provides FingerMotion with immediate working capital but imposes significant debt service obligations and potential dilution, given the conversion features and exchange cap of 12,256,260 shares (subject to stockholder approval for larger issuances). The transaction's terms, including the low conversion price and monthly redemption mechanics, may pressure the stock price and increase shareholder dilution. The company's ability to meet the registration and other covenants will be critical to avoid default and potential acceleration of the note at a premium.