FingerMotion, Inc. 8-K

What Happened

• FingerMotion, Inc. announced on March 18, 2026 that it entered into a Share Exchange Agreement to acquire all outstanding shares of Telforge, Inc. Pursuant to the deal, FingerMotion will issue up to 7,333,333 shares of its common stock to Telforge’s shareholders: 2,333,333 shares at closing and 5,000,000 “Milestone Shares” held in escrow and released only if specified revenue/contract targets are met within two earnout periods (3 months and 6 months after closing). The agreement requires closing conditions including a minimum equity financing and a closing date no later than April 15, 2026 unless extended by agreement.

Key Details

• Total potential shares issued: 7,333,333 (2,333,333 Closing Shares; 5,000,000 Milestone Shares in escrow).
• Earnout thresholds: first period (3 months) Cumulative Revenue + Secured Contract Value ≥ $2,500,000 → 2,000,000 shares; second period (6 months) ≥ $5,000,000 → 3,000,000 shares. Unearned Milestone Shares are forfeited.
• Financing and cash conditions: FingerMotion must complete an equity financing of at least $1,000,000 (net proceeds) before or at closing; $500,000 of those proceeds go to Telforge at closing. Telforge must have at least $2,000,000 in immediately available funds on its balance sheet at closing.
• Registration and restrictions: Shares will be issued as restricted securities with registration rights. FingerMotion must file a Form S-1/S-3 registration within 60 days after closing; failure to meet the filing deadline triggers liquidated damages of 80,000 additional shares per full or partial month until filing.

Why It Matters

• For investors, the transaction could materially increase FingerMotion’s outstanding shares (dilution) if earnouts vest or liquidated damages are triggered, and it ties part of the consideration to near‑term revenue/contract performance at Telforge. The requirement for a minimum $1.0M financing and Telforge’s $2.0M cash balance are gating conditions that affect whether and when the deal closes. Registered resale of the issued shares is intended but contingent on FingerMotion meeting SEC filing timelines, otherwise additional shares may be issued as damages.