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BSCN· 2025-08-25 13:22
🚨UPDATE: @JUCOINEX ANNOUNCES $500 MILLION PARTNERSHIP WITH NASDAQ-LISTED CONNEXA TO LAUNCH THE AIRWA TRADING PLATFORM ...
Connexa(CNXA) - 2025 Q4 - Annual Report
2025-08-13 21:30
Part I [Item 1. Business](index=5&type=section&id=Item%201.%20Business) Connexa's operations now focus on licensing AI-powered matchmaking and metaverse technology, generating **$12.8 million** in FY2025 royalties, after acquiring YYEM and divesting its legacy business - The company completed the acquisition of a 70% stake in Yuanyu Enterprise Management Co., Limited (YYEM) for a combined **$56 million**, making YYEM its sole operating subsidiary. Concurrently, it sold its legacy "Slinger Bag" business for **$1.00**[16](index=16&type=chunk)[17](index=17&type=chunk) - The core business is licensing its portfolio of six metaverse-related technologies and five AI matchmaking patents to partners worldwide. The AI technology is designed to integrate with major Big Data models like those from Huawei, Baidu, and Alibaba[18](index=18&type=chunk)[20](index=20&type=chunk) Fiscal Year 2025 Revenue | Metric | Value (USD) | | :--- | :--- | | Royalties Generated | $12.8 million | - A new social networking vertical was launched via a Multi-Channel Network (MCN) agreement with TikTok in February 2025 to create and sell content for users in the Middle East and North Africa (MENA) region[27](index=27&type=chunk) - The company has three main licensees for its technology, covering Japan/South Korea, UK/Europe, and Sub-Saharan Africa[35](index=35&type=chunk) - On July 9, 2025, the company received a notice of non-compliance from Nasdaq regarding the composition of its Board and Audit Committee, and has a cure period to regain compliance[54](index=54&type=chunk)[55](index=55&type=chunk)[56](index=56&type=chunk) [Item 1A. Risk Factors](index=15&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant business, Hong Kong, and stock ownership risks, including licensee dependence, regulatory uncertainties, and potential Nasdaq delisting - A substantial portion of revenue is dependent on intellectual property licensing agreements with third parties, and the failure of these licensees to perform could significantly impact financial results[61](index=61&type=chunk)[62](index=62&type=chunk) - The love and marriage market is highly competitive with low switching costs. Competitors, including large social media companies like Facebook, could leverage their existing user bases to gain an advantage[68](index=68&type=chunk)[70](index=70&type=chunk) - The company faces risks related to doing business in Hong Kong, including potential oversight from the Chinese government, uncertainty regarding PRC laws on data security and overseas listings, and the impact of the Hong Kong National Security Law[142](index=142&type=chunk)[147](index=147&type=chunk)[156](index=156&type=chunk) - The company is not currently in compliance with Nasdaq Listing Rule 5605 for board and audit committee independence, which could lead to delisting if not cured within the provided timeframe[162](index=162&type=chunk)[164](index=164&type=chunk) - A single shareholder, Hongyu Zhou, beneficially owns approximately **55.8%** of the company's outstanding common stock, giving him significant influence over corporate matters[161](index=161&type=chunk)[175](index=175&type=chunk) - The company's former independent auditor, Olayinka Oyebola & Co. (OOC), has been charged by the SEC, which could impact the credibility of past financial statements for both the company and its subsidiary YYEM[125](index=125&type=chunk)[127](index=127&type=chunk) [Item 1B. Unresolved Staff Comments](index=36&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) This section is not applicable as the company is a smaller reporting company - Not applicable to smaller reporting companies[178](index=178&type=chunk) [Item 1C. Cybersecurity](index=36&type=section&id=Item%201C.%20Cybersecurity) The company maintains an internally managed cybersecurity risk framework with Board oversight, reporting no material incidents in FY2025 - The company has an internally managed cybersecurity risk management framework integrated into its overall enterprise risk management system[180](index=180&type=chunk) - The Board of Directors oversees the cybersecurity risk profile and receives timely information regarding any significant incidents[184](index=184&type=chunk) - There were no cybersecurity incidents during the fiscal year ended April 30, 2025, that resulted in a material impact on the company's business, financial condition, or results of operations[183](index=183&type=chunk) [Item 2. Properties](index=38&type=section&id=Item%202.%20Properties) The company leases its principal office in Hong Kong for approximately **$5,400** monthly, with the lease expiring in August 2026 - The company's principal office is located at Rm. 3212, Tower 1, The Gateway, Harbour City, 25 Canton Road, Tsim Sha Tsui, Kowloon, Hong Kong[186](index=186&type=chunk) - The company leases approximately 800 square feet for HKD42,000 (approx. **$5,400**) per month, with the lease expiring on August 3, 2026[186](index=186&type=chunk) [Item 3. Legal Proceedings](index=38&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently involved in any material pending or threatened legal proceedings - There were no pending or threatened legal proceedings that could reasonably be expected to have a material effect on the Company's results of operations[187](index=187&type=chunk) [Item 4. Mine Safety Disclosures](index=38&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company - Not applicable[189](index=189&type=chunk) Part II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=39&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on Nasdaq under 'YYAI', with no cash dividends paid or planned, and maintains an equity incentive plan - The company's common stock is listed on Nasdaq under the symbol "YYAI". As of August 7, 2025, there were **14,563,019** shares outstanding[6](index=6&type=chunk)[192](index=192&type=chunk) - The company has never declared or paid cash dividends and does not plan to in the near future[194](index=194&type=chunk) - On November 21, 2024, the Company issued **8,127,572** shares of common stock to complete the acquisition of a 70% ownership stake in YYEM[198](index=198&type=chunk) [Item 6. Selected Financial Data](index=39&type=section&id=Item%206.%20Selected%20Financial%20Data) This section is not applicable as the company is a smaller reporting company - Not applicable to smaller reporting companies[200](index=200&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operation](index=40&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operation) FY2025 saw significant revenue and gross profit growth driven by licensing, though increased G&A expenses led to a net cash outflow from operations Results of Operations (Year Ended April 30) | | 2025 | 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | $12,818,182 | $5,195,804 | $7,622,378 | 147% | | **Gross Profit** | $9,841,259 | $4,018,881 | $5,822,378 | 145% | | **Operating Income** | $6,659,857 | $3,854,505 | $2,725,352 | 71% | - Revenue growth was driven by royalty income from new licensees following agreements made in January 2024[213](index=213&type=chunk) - General and administrative expenses increased significantly by **$3.1 million (1,884%)** due to business growth and costs related to YYEM becoming a Nasdaq-listed company's operating subsidiary, including audit fees, legal fees, and D&O compensation[215](index=215&type=chunk) Cash Flow Summary (Year Ended April 30) | | 2025 | 2024 | | :--- | :--- | :--- | | **Net cash (used in)/provided by Operating Activities** | $(379,388) | $2,486,255 | | **Net cash (used in)/provided by Financing Activities** | $394,781 | $(2,446,904) | - Working capital increased by **93%** to **$16.0 million** as of April 30, 2025, largely due to a **$10.0 million** increase in accounts receivable[216](index=216&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=47&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is not required as the company is a smaller reporting company - As a smaller reporting company, we are not required to provide this information[250](index=250&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=47&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) FY2025 financial statements show **$32.9 million** in total assets and **$4.6 million** net income, reflecting YYEM reverse acquisition accounting and significant customer concentration Consolidated Balance Sheet Highlights (As of April 30) | | 2025 | 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $22,396,159 | $9,678,124 | | **Total Assets** | $32,905,794 | $23,164,682 | | **Total Current Liabilities** | $6,487,171 | $1,442,006 | | **Total Shareholders' Equity** | $26,418,623 | $21,722,676 | Consolidated Statement of Operations Highlights (Year Ended April 30) | | 2025 | 2024 | | :--- | :--- | :--- | | **Revenue** | $12,818,182 | $5,195,804 | | **Net Income** | $4,633,447 | $2,625,554 | | **Net income per share - basic** | $0.36 | $0.23 | - The acquisition of YYEM was accounted for as a "reverse acquisition," with YYEM deemed the accounting acquirer. The consolidated financial statements represent a continuation of YYEM's financial statements[281](index=281&type=chunk)[282](index=282&type=chunk) - The company has a significant customer concentration risk. For the year ended April 30, 2025, three major customers accounted for **100%** of total accounts receivable and **100%** of total revenues[350](index=350&type=chunk)[353](index=353&type=chunk) - On June 30, 2025, the company entered into a securities purchase agreement for a private placement to raise gross proceeds of **$4.6 million** through the sale of **20 million** units at **$0.23** per unit[381](index=381&type=chunk) [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=71&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company changed its independent auditor to Enrome LLP in March 2025 due to geographical challenges, reporting no disagreements with the former firm - On March 24, 2025, the company engaged Enrome LLP as its independent registered public accounting firm, dismissing Bush & Associates CPA (B&A)[383](index=383&type=chunk) - The company stated there were no disagreements with the former auditor, B&A, on any matter of accounting principles, financial statement disclosure, or auditing scope[385](index=385&type=chunk) [Item 9A. Controls and Procedures](index=71&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of April 30, 2025, with no material changes to internal controls during the fiscal year - Based on an evaluation as of the end of the period, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of April 30, 2025[387](index=387&type=chunk) - There were no material changes to the company's internal control over financial reporting during the year ended April 30, 2025[388](index=388&type=chunk) [Item 9B. Other Information](index=72&type=section&id=Item%209B.%20Other%20Information) This section is not applicable - Not applicable[392](index=392&type=chunk) [Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=72&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This section is not applicable - Not applicable[393](index=393&type=chunk) Part III [Item 10. Directors, Executive Officers and Corporate Governance](index=73&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) The company's leadership includes CEO Thomas Tarala and CFO Guibao Ji, with a five-member Board of Directors, including independent members and an Audit Committee Financial Expert - The executive officers are Thomas Tarala (CEO) and Guibao Ji (CFO). The board of directors consists of Thomas Tarala, Hongyu Zhou, Chenlong Liu, and Kong Liu[396](index=396&type=chunk) - The Board is composed of five members, with Chenlong Liu and Kong Liu determined to be independent directors[407](index=407&type=chunk)[408](index=408&type=chunk) - Chenlong Liu is qualified as the Audit Committee Financial Expert[410](index=410&type=chunk) [Item 11. Executive Compensation](index=78&type=section&id=Item%2011.%20Executive%20Compensation) FY2025 CEO compensation totaled **$1.62 million**, including salary and share awards, while director compensation was set at **$15,000** cash per quarter FY2025 Named Executive Officer Compensation | Name and Principal Position | Salary ($) | Share Awards ($) | Total ($) | | :--- | :--- | :--- | :--- | | Thomas Tarala (CEO) | 320,000 | 1,300,000 | 1,620,000 | | Guibao Ji (CFO) | 111,111 | - | 111,111 | - CEO Thomas Tarala's employment agreement includes a **$720,000** annual base salary, a **$300,000** stock signing bonus, and a **$1.0 million** success fee related to the YYEM merger[429](index=429&type=chunk) - CFO Guibao Ji's employment agreement includes an annual salary of **$250,000** and a discretionary bonus[436](index=436&type=chunk) - Director compensation was set at **$15,000** cash per quarter, retroactive to each director's appointment[417](index=417&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=81&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Director Hongyu Zhou beneficially owns **55.81%** of the common stock, making him the largest shareholder, with **1,500,000** shares available under the incentive plan Security Ownership of Major Shareholders and Management | Name | of Shares | % of Class | | :--- | :--- | :--- | | Hongyu Zhou (Director) | 8,127,572 | 55.81% | | All current officers and directors as a group (5 persons) | 8,127,572 | 55.81% | - Percentages are based on **14,563,019** shares of Common Stock outstanding as of August 7, 2025[443](index=443&type=chunk) - The company has **1,500,000** shares of common stock available for issuance under its 2020 Global Share Incentive Plan[449](index=449&type=chunk) [Item 13. Certain Relationships and Related Transactions and Director Independence](index=82&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%20and%20Director%20Independence) Director Hongyu Zhou provided a **$4.2 million** guarantee on an investment, resulting in a **$2.8 million** contingent receivable and a **$775,406** payable to him as of April 30, 2025 - Director Hongyu Zhou has provided a guarantee on the value of the company's investment in Brightstar Technology Group Co., Ltd., obligating him to compensate for any decline below a guaranteed amount of **$4,210,385** upon sale[450](index=450&type=chunk) - As of April 30, 2025, the company had a contingent receivable of **$2,827,528** from Mr. Zhou related to the guarantee and a payable of **$775,406** to Mr. Zhou for reimbursed expenses[450](index=450&type=chunk)[451](index=451&type=chunk) [Item 14. Principal Accountant Fees and Services](index=82&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Audit fees from independent accountants increased to **$200,000** in FY2025 from **$120,000** in FY2024, with no other service fees incurred Accountant Fees | | Fiscal 2025 | Fiscal 2024 | | :--- | :--- | :--- | | Audit Fees | $200,000 | $120,000 | | Tax Fees | $0 | $0 | | All Other Fees | $0 | $0 | | **Total** | **$200,000** | **$120,000** | Part IV [Item 15. Exhibit and Financial Statement Schedules](index=83&type=section&id=Item%2015.%20Exhibit%20and%20Financial%20Statement%20Schedules) This section lists all exhibits and incorporates financial statements by reference, including corporate governance documents, material contracts, and SEC certifications - This section lists the financial statements and exhibits filed with the Form 10-K, including corporate governance documents, material contracts, and SEC certifications[455](index=455&type=chunk)[456](index=456&type=chunk)
Connexa(CNXA) - 2025 Q3 - Quarterly Report
2025-03-24 21:29
Acquisition and Ownership - The Company acquired 70% of Yuanyu Enterprise Management Co., Limited (YYEM) for a total of $56 million, with $16.5 million paid in cash for 20% on March 20, 2024[87]. - Following the acquisition, the Company completed a share exchange transaction on November 21, 2024, acquiring an additional 50% of YYEM for 8,127,572 newly issued shares, resulting in a total ownership of 70%[88]. - The historical operating results of the Company are now those of YYEM, as the legacy business operations are no longer part of the Company's operations following the acquisition[105]. - The Company accounted for the acquisition as a reverse merger, impacting the financial reporting and operational structure moving forward[88]. - The Company’s directors and officers resigned on November 21, 2024, following the completion of the acquisition, and a new board was appointed[88]. Financial Performance - Net revenue increased by $8.4 million, or 581%, for the nine-month period ended January 31, 2025, driven by royalty income from new licensees[113]. - Cost of revenue increased by $1.8 million, or 416%, for the nine-month period ended January 31, 2025, primarily due to increased amortization costs of new intellectual property[114]. - Gross profit increased by $6.6 million, or 651%, for the nine-month period ended January 31, 2025, attributed to higher royalty income[114]. - General and administrative expenses rose by $2,280,120 for the nine-month period ended January 31, 2025, mainly due to increased personnel costs and professional fees[115][116]. - Net income from operations increased by $4.3 million for the nine-month period ended January 31, 2025, primarily from royalty income generated by new licensees[117]. - Net current assets increased to $15.3 million as of January 31, 2025, up from $9.0 million as of April 30, 2024[118]. - Accounts receivable increased by $9.1 million, reflecting recognized royalty revenue in accordance with the company's revenue recognition policy[118]. - The company reported no outstanding indebtedness as of the reporting date[120]. Strategic Initiatives - YYEM generated approximately $1.9 million in royalties for the fiscal year ended January 31, 2024, and has potential cumulative revenue exceeding $70 million from agreements in Japan, South Korea, Europe, and Sub-Saharan Africa over the next three years[104]. - The Company has entered into a Multi-Channel Network (MCN) agency services agreement with TikTok to create and sell content, focusing on live-streaming and user-generated content in the Middle East and North Africa[109]. - The Company has not yet built a network of influencers for the TikTok agreement, and fees generated will depend on user conversion rates[109]. Management and Governance - The new executive team includes Thomas Tarala as CEO and Guibao Ji as CFO, with a focus on leveraging their extensive experience in corporate finance and accounting[90][94]. - The Company dismissed its previous auditor, Olayinka Oyebola & Co, due to SEC charges against them, and engaged Bush & Associates CPA as the new independent registered public accounting firm[106]. Economic Environment - The company does not believe inflation and changes in prices will materially affect its operations[122]. - As a smaller reporting company, the company is not required to provide disclosure about market risk[124].
Connexa(CNXA) - 2025 Q2 - Quarterly Report
2024-12-13 21:55
Acquisition and Business Operations - The Company acquired 70% of Yuanyu Enterprise Management Co., Limited (YYEM) for a total of $56 million, with $16.5 million paid in cash for 20% on March 20, 2024[181]. - On November 21, 2024, the Company completed the purchase of 50% of YYEM for 8,127,572 newly issued shares, representing 55.8% of the outstanding shares of Common Stock[182]. - Following the Acquisition, the Company sold its legacy business to J&M Sports LLC for $1.00, transferring all related assets and liabilities[198]. - The Company has separated from its legacy operations, with YYEM now serving as its primary operating subsidiary[202]. - The new executive team includes Thomas Tarala as CEO and Guibao Ji as CFO, with extensive experience in corporate finance and accounting[184][188]. Financial Performance - Net sales decreased by $1.93 million, or -84%, for the three months ended October 31, 2024, compared to the same period in 2023, primarily due to ongoing inventory availability issues[216]. - Cost of sales decreased by $1.21 million, or -74%, during the three months ended October 31, 2024, resulting in a gross profit decrease of $0.72 million, or -111%[217]. - Selling and marketing expenses decreased by $0.71 million, or -56%, during the three months ended October 31, 2024, reflecting a reduction in marketing activities related to Tennis and Pickleball products[218]. - General and administrative expenses decreased by $0.45 million, or -28%, during the three months ended October 31, 2024, driven by annual insurance policy renewals and ongoing legal fees[220]. - Loss from operations increased by $0.9 million, or 7%, in the three months ended October 31, 2024, due to a decrease in gross profit offset by reduced operating expenses[221]. - Net sales decreased by $4.35 million, or -80%, for the six months ended October 31, 2024, compared to the same period in 2023, attributed to limited inventory availability[225]. - Cost of sales decreased by $3.01 million, or -78%, during the six months ended October 31, 2024, leading to a gross income decrease of $1.34 million, or -87%[226]. - Selling and marketing expenses decreased by $0.28 million, or -49%, during the six months ended October 31, 2024, due to the cessation of marketing activities[227]. - General and administrative expenses increased by $0.42 million, or 10%, during the six months ended October 31, 2024, primarily due to debt settlement and legal fees related to acquisitions[229]. - Loss from operations increased by $1.45 million, or 48%, in the six months ended October 31, 2024, driven by increased operating expenses and reduced gross profit[230]. Cash Flow and Financial Position - As of October 31, 2024, the company had an accumulated deficit of $(172,973,917) and cash and cash equivalents of $1,642,969, compared to $229,705 as of April 30, 2024[232]. - Net cash used in operating activities was $2,726 for the six months ended October 31, 2024, a significant improvement from $(648,056) during the same period in 2023[233]. - The net loss for the period ended October 31, 2024 was $(5,586,889), with net non-cash expenses totaling $2,496,748[233]. - Net cash used in financing activities was $1,546,328 for the six months ended October 31, 2024, compared to net cash provided of $654,479 in the same period in 2023[236]. - Proceeds from the exercise of warrants amounted to $1,618,996 during the six months ended October 31, 2024[236]. - The company has outstanding borrowings of $1,169,291 under related-party loan agreements as of October 31, 2024[238]. - Accrued interest due to related parties was $917,957 as of October 31, 2024[238]. - The repayment deadline for related-party loans has been extended to July 31, 2025[237]. - The company has no off-balance sheet arrangements[240]. Concerns and Future Outlook - There is substantial doubt about the company's ability to continue as a going concern, as noted by the former independent auditors[242]. - YYEM collected approximately $1.9 million in royalties for the fiscal year ended January 31, 2024, and has potential revenues exceeding $70 million from agreements in multiple regions over the next three years[201]. - The Company has a licensee partner in China operating 200 retail stores across 40 cities, charging up to $1,500 for matchmaking services[200]. - YYEM's AI matchmaker application integrates with Big Data models, enhancing its service offerings in the love and marriage market[199]. - The aggregate number of warrants increased from 1,709,097 to 9,426,952 due to adjustments from the reverse stock split[205]. - The Company held a special meeting on September 13, 2023, approving a reverse stock split of 1-for-40, effective September 25, 2023[204].
Connexa(CNXA) - 2025 Q1 - Quarterly Report
2024-09-10 15:20
Financial Performance - Net sales for the three months ended July 31, 2024, decreased by $2.42 million, or 77%, compared to the same period in 2023, primarily due to inventory availability issues[142]. - Gross profit for the same period decreased by $620,628, or 70%, with a gross margin of 41% on actual sales made[144]. - The Company incurred a net loss from continuing operations of $4.22 million for the three months ended July 31, 2024, compared to a loss of $846,765 in the same period in 2023[141]. - Loss from operations increased by $1.4 million or 76% for the three months ended July 31, 2024, compared to the same period in 2023, driven by a $0.78 million increase in total operating expenses and a $0.62 million reduction in gross profit[148]. - Total other expense decreased by $2.00 million or 196% during the three months ended July 31, 2024, with improvements in amortization of debt discounts and loss on conversion of accounts payable to common stock[149]. Cash Flow and Financing - Net cash used in operating activities was $(72,646) for the three months ended July 31, 2024, a significant improvement from $(803,363) in the same period in 2023[153]. - Cash and cash equivalents increased to $1,711,283 as of July 31, 2024, compared to $229,705 as of April 30, 2024[152]. - Net cash used in financing activities was $1,614,958 for the three months ended July 31, 2024, compared to net cash provided of $601,002 in the same period in 2023[154]. - The company has outstanding borrowings of $1,169,291 from related parties as of July 31, 2024, with accrued interest of $917,957[156]. Impairments and Losses - The Company recorded an impairment loss of $11,421,817 related to Gameface as of April 30, 2023, due to higher than anticipated financial resources and time required to achieve profitability[118]. - The Company fully impaired all goodwill as of April 30, 2024[118]. - The Company recorded a loss on the sale of Foundation Sports, which was deconsolidated on December 5, 2022[113]. - The total loss on disposal of Foundation Sports and PlaySight amounted to $0 for the year ended April 30, 2024[117]. Acquisitions and Corporate Actions - The Company agreed to acquire 70% of Yuanyu Enterprise Management Co., Limited for a total of $56 million, with $16.5 million paid in cash[125]. - The Company expects to complete the Acquisition of YYEM by purchasing 5,000 ordinary shares, representing 50% of YYEM, for 8,127,572 newly issued shares of Common Stock[126]. - The Company completed a reverse stock split of 1-for-40 on September 25, 2023, following shareholder approval[122]. - The Company entered into a securities purchase agreement in January 2024, raising approximately $16.5 million through the issuance of common stock and pre-funded warrants[121]. - The Company will transfer all legacy business assets related to the "Slinger Bag" business to a newly established entity, J&M Sports LLC, following the Acquisition[136]. Expenses and Operational Changes - General and administrative expenses increased by $876,119, or 35%, during the three months ended July 31, 2024, driven by debt settlement and legal fees related to the YYEM acquisition[146]. - Selling and marketing expenses decreased by $96,216, or 40%, during the three months ended July 31, 2024, due to reduced net sales and cessation of marketing activities for Tennis products[145]. - Research and development costs remained at $0 during the three months ended July 31, 2024, reflecting limited cash flow available for investment[147]. Management and Governance - The new executive team post-Acquisition will include Thomas Tarala as CEO and Guibao Ji as CFO, among others[126]. - There were no changes in the company's control over financial reporting since April 30, 2024, but material weaknesses were identified[163]. Going Concern - The company had an accumulated deficit of $171,607,773 as of July 31, 2024, raising substantial doubt about its ability to continue as a going concern[150]. - The independent auditors expressed substantial doubt about the company's ability to continue as a going concern in their report accompanying the financial statements[160].
Connexa(CNXA) - 2024 Q4 - Annual Report
2024-07-24 22:50
Acquisitions and Investments - The company acquired 100% ownership of Slinger Bag Canada on October 31, 2019, with no historical operational activity reported[19]. - The company agreed to acquire 70% of Yuanyu Enterprise Management Co., Limited for a total of $56 million, resulting in a change of control[41]. - The company purchased 20% of YYEM for $16,500,000 in cash, closing the transaction on March 20, 2024[42]. - The company will issue 8,127,572 newly issued shares of common stock to acquire an additional 50% of YYEM[43]. - The Company will receive aggregate cash payments of $4.5 million from YYEM, with specific payment milestones including $800,000 within two business days and $2 million at Closing[47]. - The Company approved a share exchange agreement to acquire 70% of YYEM, which will result in a change of control and the separation of the Slinger Bag business[103]. Financial Performance and Position - The company recorded an impairment loss of $3,486,599 related to Foundation Sports as of April 30, 2022, due to higher than expected costs and time to market[24]. - As of April 30, 2024, the Legacy Business' assets were approximately $5.1 million, while liabilities were $12.0 million[46]. - The Company received an investment of $16.5 million, regaining compliance with Nasdaq's minimum shareholder equity requirement[80]. - The Company issued 116,510 shares of common stock and pre-funded warrants for an aggregate amount of approximately $16.5 million on January 19, 2024[87]. - Financial statements are prepared on a going concern basis, with substantial doubt about the ability to continue without generating profitable operations or obtaining necessary financing[166]. - The company intends to raise additional funds through public or private financing to support business operations, but there are no guarantees of sufficient capital availability[170]. Sales and Revenue Generation - An exclusive distribution agreement for Padel Tennis was signed on March 7, 2023, projected to generate approximately $15 million in revenue by the end of 2028[32]. - The Company entered into an agreement to sell $693,500 in future receivables for $450,000 in cash on November 16, 2023[33]. - The Company sold $1,460,000 in future receivables to Agile Capital Funding, LLC for $1,000,000 in cash, agreeing to weekly payments of $52,142.86 until the receivable amount is paid in full[90]. - The Company entered into an agreement to sell $1,183,200 in future receivables to Cedar Advance LLC for $752,000 in cash, with weekly payments of $39,440[91]. Stock and Shareholder Matters - The company changed its name to Connexa Sports Technologies Inc. and its ticker symbol to "CNXA" on April 7, 2022[25]. - The Company completed a public offering and listed its common stock on the Nasdaq Capital Market following a reverse stock split[25]. - The Reverse Stock Split was approved at a ratio of 1-for-20, effective June 27, 2024[54]. - Following shareholder approval on May 15, 2024, the exercise price of the October and December Warrants was amended to $3.20 per share[72]. - The Company executed a 1-20 reverse stock split, raising its share price to $8.31, which helped regain compliance with the minimum bid price requirement[84]. Market and Competitive Landscape - The Company operates in the sports equipment and technology business, focusing on the Slinger Launcher, which includes portable tennis, padel, and pickleball ball launchers, along with AI technology and performance analytics through Gameface[99]. - The global tennis market has 80 million active participants, with pickleball recognized as the fastest-growing sport in the U.S. with over 5 million regular players, and an estimated 10 million padel players globally[106]. - The sports equipment and technology industry is highly competitive, with numerous companies vying for market share, which could affect the company's pricing and customer demand[215][216]. Product Development and Innovation - Gameface launched the Slinger App for tennis in April 2024, offering both freemium and subscription-based access to analytics data[118]. - The company is currently in the application process for up to 12 novel innovations related to the planned marketing introduction of a Slinger Baseball Launcher in 2025[143]. - Field testing for new Baseball/Softball launchers is ongoing, with market introduction expected in 2025, and plans for additional sports launchers over the next three years[152]. - The Slinger App for Tennis has been launched and will be fully operational with all planned features by the end of 2024[153]. Marketing and Brand Strategy - Slinger Bag has built a user base of approximately 100,000 users and has access to a database of over 500,000 avid tennis players through its acquisition of Foundation Sports[127]. - The marketing budget is primarily linked to distributor partners' annual purchase objectives, with a consistent Return On Ad Spend (ROAS) of over 10X achieved through digital advertising efforts[132]. - Slinger Bag's marketing strategy focuses on digital advertising, influencers, and brand ambassadors, primarily utilizing platforms like Facebook and Google[124]. - The company has engaged AdVenture Media Group for its paid digital and social media advertising, which is based on scientific analysis of consumer data[132]. - Slinger Bag is leveraging social media engagement from its consumers to generate brand awareness and drive sales through user-generated content[126]. Operational Challenges and Risks - Increasing costs for raw materials, labor, and freight could negatively impact gross margins and profitability, with labor costs at independent manufacturers rising and energy costs fluctuating dramatically[178]. - The company relies heavily on supply chain reliability, with disruptions from the COVID-19 pandemic, geopolitical tensions, and inflationary trends adversely affecting operations and profitability[190]. - International operations face risks including foreign laws, political unrest, and economic conditions, which could adversely impact results of operations and growth strategy[192]. - The ability to respond to changes in market trends and consumer preferences is crucial for maintaining market share and profitability, with potential risks if the company fails to innovate[198]. - Effective management of e-commerce channels and inventory is critical to prevent lost sales and maintain customer relationships, with potential negative impacts on net sales if not managed properly[200]. Corporate Governance and Compliance - The Company amended its bylaws to reduce the quorum requirement for stockholder meetings from a majority to 33.33%[77]. - The Company received a notice from Nasdaq regarding non-compliance with the minimum bid price requirement due to a closing bid price below $1.00 for 30 consecutive trading days[82]. - The company does not condone child labor in its production processes and maintains regular quality control visits to vendor facilities[159]. - The company has established quality control processes in partnership with Stride-Innovation to ensure product consistency and reliability[155]. Human Resources and Management - The company has 8 full-time employees and engages part-time employees and consultants to support operations[160]. - Retaining existing management and key employees is critical for the successful implementation of the company's growth strategy, as their loss could hinder operations[203][204].
Connexa Announces Entry into an Agreement to Acquire a 70% Stake in Yuanyu Enterprise Management Co., Limited for Cash and Shares
Newsfilter· 2024-03-21 12:30
Hong Kong-based, operating matchmaking services in emerging Love & Marriage sector.Owner of multiple patented matchmaker AI technologies.Hand-in-Hand branded retail stores, key advantage over competition.FY23 royalty revenue of $1.9 million with licensing agreements in place to deliver $77 million in royalties over the next 3 years. Windsor Mills, MD, March 21, 2024 (GLOBE NEWSWIRE) -- Connexa Sports Technologies Inc. (NASDAQ:CNXA) today announced that, subject to shareholder approval, it has signed definit ...
Connexa Reports Third Quarter and Nine Months 2024 Financial Results and Provides Review of Operations
Newsfilter· 2024-03-07 14:20
Revenue up 29 percent for the quarter ending January 31, 2024Operating expenses reduced 26% year-to-dateOperating loss improved 38% year-to-dateNet income improved 92% for Q3 and 96% year-to-dateRevenue on track for estimated 5% growth in FY24 Windsor Mills, MD, March 07, 2024 (GLOBE NEWSWIRE) -- Connexa Sports Technologies Inc. (NASDAQ:CNXA) reported operating results for the quarter and the nine month periods ended January 31, 2024 and provided an update and review of operations. For the third fiscal quar ...
Connexa(CNXA) - 2024 Q3 - Quarterly Report
2024-03-04 16:00
Financial Performance - Net sales increased by $463,776, or 29%, during the three months ended January 31, 2024, compared to the same period in 2023, driven by the introduction of Slinger Bag Pickleball[338]. - Cost of sales increased by $240,887, or 45%, during the three months ended January 31, 2024, primarily due to the increase in net sales[325]. - Gross income increased by $222,889, or 21%, during the three months ended January 31, 2024, attributed to higher net sales and improved supply chain efficiencies[325]. - Loss from operations was $2,193,122 for the three months ended January 31, 2024, compared to a loss of $1,040,617 in the same period in 2023, reflecting an increase in operational losses[337]. - Net loss from continuing operations was $3,772,628 for the three months ended January 31, 2024, a decrease of $3,058,144 compared to a net loss of $6,830,772 in the same period in 2023[337]. Expenses - Selling and marketing expenses rose by $464,853, or 172%, during the three months ended January 31, 2024, largely due to increased social media advertising and public relations investments[340]. - General and administrative expenses increased by $914,179, or 50%, during the three months ended January 31, 2024, primarily driven by higher debt settlement and legal fees[341]. - Research and development costs decreased by $3,638, or 100%, during the three months ended January 31, 2024, due to a pause in development activities caused by limited cash flow[326]. Financing Activities - The company sold $1,183,200 in future receivables to Cedar Advance LLC for $752,000 in cash, agreeing to weekly payments of $39,440 until the receivable amount is paid in full[335]. Business Operations - The company operates in the sports equipment and technology business, owning the Slinger Bag Launcher and Gameface, which provides AI technology and performance analytics for sports[336].
Connexa Announces that it has regained compliance with the Nasdaq Minimum Shareholder Equity Rule
Newsfilter· 2024-01-31 14:00
Windsor Mills, MD, Jan. 31, 2024 (GLOBE NEWSWIRE) -- Connexa Sports Technologies Inc. (NASDAQ:CNXA) announces that the Nasdaq has confirmed that the Company has regained compliance with Nasdaq's minimum shareholder equity rule by receiving an inward investment into the Company of $16.5 million from three non-US investors. "Following a period of productive discussions, I am delighted to welcome our three new, non-US investors into the Company" said Mike Ballardie, CEO Connexa Sports Technologies. "This inves ...