DEF 14A of FingerMotion, Inc.
Filed Feb 4, 2025 · FY20240001520138-25-000049
Elements of the Compensation Program
| (b) motivating the short and long-term performance of these executives; and |
Stock Options
Stock Options Effective December 12, 2022, our Board adopted the 2023 Stock Incentive Plan (the “2023 Stock Incentive Plan”). The purpose of the 2023 Stock Incentive Plan is to enhance the long-term shareholder value by offering opportunities to our directors, executive officers, key employees and eligible consultants to acquire our shares of common stock in order to give these persons the opportunity to participate in our growth and success, and to encourage them to remain in the service of the Company. Previous grants will be taken into account when considering new grants and the 2023 Stock Incentive Plan currently provides for a maximum of 9,000,000 shares of common stock that may be issued pursuant to awards, which includes stock options, that may be granted under the 2023 Stock Incentive Plan. There are currently 6,039,100 options outstanding and no other awards issued under the 2023 Stock Incentive Plan.
Summary Compensation Table
Summary Compensation Table Our NEOs for the fiscal year ended February 29, 2024 (“Fiscal 2024”) and the fiscal year ended February 28, 2023 (“Fiscal 2023”) consist of (i) Martin J. Shen, our current President and Chief Executive Officer, (ii) Yew Hon Lee, our current Chief Financial Officer, Secretary and Treasurer and (iii) Li Li, the Legal Representative and General Manager of our contractual controlled company, JiuGe Technology. We have no other executive officers. The following Summary Compensation Table sets forth the compensation earned by or paid to our named executive officers for Fiscal 2024 and Fiscal 2023 are as follows:
Summary Compensation Table
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock awards ($) | Option awards ($) | Non-equity incentive plan compensation ($) | Non-qualified deferred compensation earnings ($) | All other compensation ($) | Total ($) | | Martin J. Shen (1) President and CEO | 2024 2023 | 180,000 180,000 | -- | -- | -- | -- | -- | -- | 180,000 180,000 | | Yew Hon Lee (2) CFO, Secretary and Treasurer | 2024 2023 | 144,000 84,000 | -- | -- | -- | -- | -- | -- | 144,000 84,000 | | Li Li Legal Representative and General Manager of JiuGe Technology | 2024 2023 | 127,645 133,745 | -- | -- | -- | -- | -- | -- | 127,645 133,745 |
Summary Compensation Table
Notes:
Summary Compensation Table
| (1) Mr. Shen was appointed as our CEO and CFO on December 1, 2018. Mr Shen resigned as our CFO effective December 10, 2020. | | (2) Mr. Yew Hon Lee was appointed as our CFO on December 11, 2020. |
Summary Compensation Table
During our most recently completed financial years, we did not pay any other executive compensation to our NEOs.
Outstanding Equity Awards Held by Named Executive Officers at Fiscal Year End
Outstanding Equity Awards Held by Named Executive Officers at Fiscal Year End The following table sets forth information as at February 29, 2024, relating to equity awards that have been granted to the NEOs. These equity awards are structured to vest over time, ensuring that our executive team remains motivated to drive the Company’s success over the long haul. While these equity awards are primarily focused on retention and long-term alignment rather than immediate performance milestones, we are actively developing additional performance-based incentives which are expected to be specifically designed to directly tie compensation to the achievement of strategic objectives and operational targets, thereby enhancing accountability and driving Company performance. We believe that introducing such performance-linked components will further refine our compensation strategy to support our business goals. We continue to review and adjust our equity compensation plans to ensure they effectively motivate our executives and align with our evolving business strategy and shareholder interest.
Outstanding Equity Awards Held by Named Executive Officers at Fiscal Year End
| | Option awards | | | | | Stock awards | | | | | Name | Number of securities underlying unexercised options (#) exercisable | Number of securities underlying unexercised options (#) unexercisable | Equity incentive plan awards: Number of securities underlying unexercised unearned options (#) | Option exercise price ($) | Option expiration date | Number of shares or units of stock that have not vested (#) | Market value of shares of units of stock that have not vested ($) | Equity incentive plan awards: Number of unearned shares, units or other rights that have not vested (#) | Equity incentive plan awards: Market or payout value of unearned shares, units or other rights that have not vested ($) | | Martin J. Shen | 46,000 | 92,000 | N/A | $3.84 | Dec. 28, 2026 | N/A | N/A | N/A | N/A | | Yew Hon Lee | 44,200 | 88,400 | N/A | $3.84 | Dec. 28, 2026 | N/A | N/A | N/A | N/A | | Li Li | 252,000 | 168,000 | N/A | $3.84 | Dec. 28, 2026 | N/A | N/A | N/A | N/A |
Director Compensation
Director Compensation Each of our directors receives regular cash compensation of $2,000 per month, for serving on the Board. The following table set forth information relating to the compensation paid to our non-executive directors for Fiscal 2024:
Director Compensation
| Name | Fees earned or paid in cash ($) | Stock awards ($) | Option awards ($) | Non-equity incentive plan compensation ($) | Nonqualified deferred compensation earnings ($) | All other compensation ($) | Total ($) | | Yew Poh Leong | 24,000 | - | - | - | - | - | 24,000 | | Michael Chan(1) | 24,000 | - | - | - | - | - | 24,000 | | Hsien Loong Wong | 24,000 | - | - | - | - | - | 24,000 | | Eng Ho Ng | 24,000 | - | - | - | - | - | 24,000 |
Director Compensation
Notes:
Director Compensation
| (1) Mr. Chan resigned from the Board of Directors on November 29, 2024. |
Director Compensation
As at February 29, 2024, our directors held stock options to acquire an aggregate of 298,500 shares of our common stock as follows: Yew Poh Leong – 78,500 stock options; Michael Chan – 78,500 stock options; Hsien Loong Wong – 78,500 stock options; and Eng Ho Ng – 63,000 stock options.
Pay Versus Performance
Pay Versus Performance As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation actually paid and certain financial performance measures of the company. As a Smaller Reporting Company, as the term is defined in Rule 405 of the Securities Act of 1933, we are only required to provide three years of Pay Versus Performance information.
Pay Versus Performance
| Year | Summary Compensation Table Total for PEO(1) | Compensation Actually Paid to PEO(2) | Average Summary Compensation Table Total for Non-PEO NEOs(3) | Average Compensation Actually Paid to Non-PEO NEOs(4) | Value of Initial Fixed $100 Investment Based On Total Shareholder Return(5) | Net Income (loss)(6) | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | | 2024 | $180,000 | $218,025 | $135,823 | $188,810 | $23.18 | $(3,812,017) | | 2023 | $180,000 | $188,280 | $108,873 | $120,411 | $12.50 | $(7,539,142) | | 2022 | $242,100 | $192,420 | $187,828 | $118,600 | $25.00 | $(4,943,444) |
Pay Versus Performance
| (1) The dollar amounts in column (b) represent total compensation paid to our principal executive officer (“PEO”), Martin J. Shen, CEO, and are taken directly from the summary compensation tables included in the Company’s annual report on Form 10-K for the period ended February 29, 2024, as filed with the SEC on May 29, 2024, and the Company’s amended annual report on Form 10-K/A for the period ended February 28, 2023, as filed with the SEC on August 31, 2023. |
Pay Versus Performance
| (2) The compensation amount actually paid to the PEO was calculated as follows: |
Pay Versus Performance
| Year (a) | Reported Summary Compensation Table Total for PEO (b) | Reported Value of Equity Awards (c) | Equity Award Adjustments (d) | Compensation Actually Paid to PEO (e) | | 2024 | $180,000 | - | $38,025 | $218,025 | | 2023 | $180,000 | - | $8,280 | $188,280 | | 2022 | $242,100 | $(62,100) | $12,420 | $192,420 |
Pay Versus Performance
The reported value of equity awards in column (c) was taken directly from the summary compensation tables included in the Company’s annual report on Form 10-K for the period ended February 29, 2024, as filed with the SEC on May 29, 2024, and the Company’s amended annual report on Form 10-K/A for the period ended February 28, 2023, as filed with the SEC on August 31, 2023. Further, the equity award adjustments in column (d) were calculated as follows:
Pay Versus Performance
| Year | Year End Fair Value of Equity Awards (1) | Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards (2) | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year (3) | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year (4) | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year (5) | Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation (6) | Total Equity Award Adjustments (for column d above) | | 2024 | - | $3,285 | - | $34,740 | - | - | $38,025 | | 2023 | - | - | - | $8,280 | - | - | $8,280 | | 2022 | - | - | $12,420 | - | - | - | $12,420 |
Pay Versus Performance
| (3) The dollar amounts in column (d) represent total compensation paid to Yew Hon Lee, CFO, and Li Li, Legal Representative and General Manager of JiuGe Technology, and are taken directly from the summary compensation tables included in the Company’s annual report on Form 10-K for the period ended February 29, 2024, as filed with the SEC on May 29, 2024, and the Company’s amended annual report on Form 10-K/A for the period ended February 28, 2023, as filed with the SEC on August 31, 2023. |
Pay Versus Performance
| (4) The average compensation amount actually paid to the non-PEO NEOs was calculated as follows: |
Pay Versus Performance
| Year (a) | Reported Summary Compensation Table Total for NEO (b) | Reported Value of Equity Awards (c) | Equity Award Adjustments (d) | Compensation Actually Paid to NEO (e) | | 2024 | $135,823 | - | $52,987 | $188,810 | | 2023 | $108,873 | - | $11,538 | $120,411 | | 2022 | $187,828 | $(86,535) | $17,307 | $118,600 |
Pay Versus Performance
The reported value of equity awards in column (c) was taken directly from the summary compensation tables included in the Company’s annual report on Form 10-K for the period ended February 29, 2024, as filed with the SEC on May 29, 2024, and the Company’s amended annual report on Form 10-K/A for the period ended February 28, 2023, as filed with the SEC on August 31, 2023. Further, the equity award adjustments in column (d) were calculated as follows:
Pay Versus Performance
| Year | Year End Fair Value of Equity Awards (1) | Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards (2) | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year (3) | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year (4) | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year (5) | Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation (6) | Total Equity Award Adjustments (for column d above) | | 2024 | - | $4,578 | - | $48,409 | - | - | $52,987 | | 2023 | - | - | - | $11,538 | - | - | $11,538 | | 2022 | - | - | $17,307 | - | - | - | $17,307 |
Pay Versus Performance
| (5) Cumulative total shareholder return is calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between the registrant’s share price at the end and the beginning of the measurement period, by the share price at the beginning of the measurement period. |
Pay Versus Performance
| (6) Net Income represents the amounts reported in the Company’s audited financial statements included in its annual report on Form 10-K for the period ended February 29, 2024, as filed with the SEC on May 29, 2024, and its annual report on Form 10-K for the period ended February 28, 2023, as filed with the SEC on May 30, 2023. |
Relationship Between Total Shareholder Return and Compensation Actually Paid
Relationship Between Total Shareholder Return and Compensation Actually Paid Pursuant to the information provided in the pay versus performance table, an investor making a $100 investment in the company on February 28, 2021, would have experienced cumulative negative total shareholder return as of February 28, 2022, February 28, 2023, and February 29, 2024. As a result of the negative total shareholder return, both the PEO and non-PEO NEOs were provided limited compensation actually paid during the three-year period presented in the table. For example, Mr. Shen’s compensation actually paid was only and $218,025, $188,280 and $192,420 for fiscal years 2024, 2023 and 2022, respectively, which is a very moderate compensation package as compared to other PEOs currently serving in similar roles at smaller publicly traded companies. Similarly, the average compensation actually paid to non-PEO NEOs for 2024, 2023 and 2022 was only $188,810, $120,411 and $118,600, respectively, which would also be considered a very moderate compensation package as compared to other non-PEO NEOs holding similar positions with smaller publicly traded companies.
Relationship Between Net Income and Compensation Actually Paid
Relationship Between Net Income and Compensation Actually Paid Pursuant to the information provided in the pay versus performance table, the Company recognized a net loss during each of the years ended February 29, 2024, February 28, 2023, and February 28, 2022. As a result of the recognized net loss, both the PEO and non-PEO NEOs were provided limited compensation actually paid during the three-year periods presented in the table. For example, Mr. Shen’s compensation actually paid was only $218,025, $188,280 and $192,420 for fiscal years 2024, 2023 and 2022, respectively, which is a very moderate compensation package relative to other PEOs currently serving in similar roles at smaller publicly traded companies. Similarly, the average compensation actually paid to non-PEO NEOs for 2024, 2023 and 2022 was only $188,810, $120,411 and $118,600, respectively, which would also be considered a very moderate compensation package as compared to other non-PEO NEOs holding similar positions with smaller publicly traded companies. Disclosure of the Company’s Policies and Practices Related to the Grant of Certain Equity Awards Close In Time to the Release of Material Nonpublic Information It is the Compensation Committee’s and the Board’s practice to not grant any awards under its 2023 Stock Incentive Plan when in possession of any material nonpublic information, and to wait until such material nonpublic information has been fully disclosed, widely disseminated to the public and at least two full business days has passed after such material nonpublic information has been disclosed. The Compensation Committee and the Board have not awarded any options to a NEO during the last completed fiscal year ended February 29, 2024.
THE ELECTION OF THE DIRECTOR NOMINEES SET FORTH ABOVE
THE ELECTION OF THE DIRECTOR NOMINEES SET FORTH ABOVE PROPOSAL NUMBER TWO: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS CT International LLP (“CT International”) have been selected as the independent registered public accountants of the Company for the fiscal year ending February 28, 2025. CT International was appointed as our independent registered public accountants on September 10, 2024. Centurion ZD CPA & Co. (“Centurion”), the former independent registered public accountants for the Company, audited the Company’s financial statements for the fiscal years ended February 29, 2024, and February 28, 2023. Neither representatives of CT International nor representatives of Centurion will be present at the Annual Meeting. On September 10, 2024, our Board of Directors as well as the Audit Committee approved and authorized the termination of Centurion as our independent registered public accounting firm. On the same date, the Board of Directors as well as the Audit Committee approved and authorized the engagement of the accounting firm of CT International as the Company’s new independent registered public accounting firm. Centurion’s report on our financial statements dated May 29, 2024, for the two most recent fiscal years ended February 29, 2024 and February 28, 2023, did not contain an adverse opinion or disclaimer of opinion, or qualification or modification as to uncertainty, audit scope, or accounting principles. In connection with the audit of our financial statements for the two most recent fiscal years ended February 29, 2024 and February 28, 2023, and in the subsequent interim period through the effective date of termination of Centurion on September 10, 2024, there were no disagreements, resolved or not, with Centurion on any matters of accounting principles or practices, financial statement disclosure or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of Centurion, would have caused Centurion to make reference to the subject matter of the disagreements in connection with its report on the financial statements for such years. During the Company’s two most recent fiscal years ended February 29, 2024 and February 28, 2023 and in the subsequent interim period through the effective date of termination of Centurion on September 10, 2024, there were no reportable events as described in Item 304(a)(1)(v) of Regulation S-K. We provided Centurion with a copy of our current report on Form 8-K prior to its filing with the Securities and Exchange Commission, and requested that Centurion furnish us with a letter addressed to the Securities and Exchange Commission stating whether Centurion agrees with the statements made in such current report on Form 8-K, and if not, stating the aspects with which it does not agree. A copy of the letter from Centurion, dated September 12, 2024, was filed as Exhibit 16.1 to our current report on Form 8-K filed with the Securities and Exchange Commission on September 12, 2024. During the two most recent fiscal years ended February 29, 2024 and February 28, 2023 and the subsequent interim period through the effective date of appointment of CT International on September 10, 2024, we had not, nor had any person on our behalf, consulted with CT International regarding either the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on our financial statements, nor had CT International provided to us a written report or oral advice regarding such principles or audit opinion on any matter that was the subject of a disagreement as set forth in Item 304(a)(1)(iv) of Regulation S-K or a reportable event as set forth in Item 304(a)(1)(v) of Regulation S-K with our former independent registered public accounting firm. In the event ratification by the stockholders of the appointment of CT International as the Company’s independent registered public accountants is not obtained, the Board will reconsider such appointment.