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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 ...
Connexa(CNXA) - 2024 Q2 - Quarterly Report
2023-11-26 16:00
Financial Performance - Net sales decreased by $147,903, or 6%, for the three months ended October 31, 2023, compared to the same period in 2022, attributed to depleted inventory due to higher than planned sales orders [290]. - The company recorded a net loss from continuing operations of $915,354 for the three months ended October 31, 2023, compared to a loss of $15,289,998 in the same period in 2022 [294]. - The company had an accumulated deficit of $150,835,256 as of October 31, 2023, raising substantial doubt about its ability to continue as a going concern [298]. - The independent auditors expressed substantial doubt about the company's ability to continue as a going concern as of April 30, 2023 [309]. Expenses - General and administrative expenses decreased by $2,820,535, or 64%, during the three months ended October 31, 2023, primarily due to a reduction in share-based compensation and headcount [292]. - Total operating expenses decreased by $4,221,052, or 48%, during the six months ended October 31, 2023, compared to the same period in 2022 [294]. - Selling and marketing expenses decreased by $556,562, or 50%, during the six months ended October 31, 2023, largely due to reduced social media advertising and sponsorships [296]. Cash Flow and Financing - Cash and cash equivalents increased to $285,861 as of October 31, 2023, compared to $202,095 as of April 30, 2023 [299]. - The company entered into a loan and security modification agreement for an additional loan of $1,000,000 on October 11, 2023 [304]. - The company sold $797,500 in future receivables to UFS for $550,000 in cash on August 7, 2023 [283]. Risk and Controls - The company has identified material weaknesses in financial reporting controls and is in the process of implementing compensating controls [337]. - The material weaknesses will remain listed until the applicable controls operate effectively for a sufficient period [337]. - The company has adopted disclosure controls and procedures to ensure timely and accurate reporting [336]. - The company does not anticipate that inflation and price changes will materially affect operations [308].
Connexa(CNXA) - 2024 Q1 - Quarterly Report
2023-10-04 16:00
Financial Losses and Impairments - The total loss on disposal of Foundation Sports and PlaySight amounted to $41,413,892 for the year ended April 30, 2023[209]. - The Company recorded an impairment loss of $11,421,817 related to goodwill and intangible assets associated with Gameface as of April 30, 2023[210]. - The total loss from discontinued operations was $0 for the three months ended July 31, 2023, compared to a loss of $1,759,714 in the same period in 2022[231]. Receivables and Financing - The Company sold $797,500 in future receivables to UFS for $550,000 in cash, agreeing to pay UFS $30,000 weekly until the amount is settled[215]. - The Company sold $315,689 in future receivables to Meged for $210,600 in cash, with weekly payments of $17,538 until the amount is paid in full[213]. - The Company issued a promissory note for $2 million as part of the sale of PlaySight, with a maturity date of December 31, 2023[206]. Stock and Shareholder Actions - The Company increased the number of authorized shares of common stock from 75,000,000 to 300,000,000 via a four-to-one forward split[201]. - The Company completed a 1-40 reverse stock split of its common stock on September 25, 2023[211]. - The company issued 6,809 shares of common stock to the lender in connection with the conversion on June 20, 2023[233]. - The company issued 42,500 shares of common stock to the lender in connection with the conversion on August 31, 2023[235]. Operating Expenses and Cash Flow - The total rent expense for the three months ended July 31, 2023, was $1,969 compared to $700 for the same period in 2022[225]. - Total other expenses increased by $445,050 for the three months ended July 31, 2023, compared to the same period in 2022, with other expenses totaling $1,136,655[230]. - Net cash provided by operating activities was $803,363 for the three months ended July 31, 2023, compared to a net cash used of $3,122,519 in the same period in 2022[238]. - The company had net cash used in financing activities of $601,002 for the three months ended July 31, 2023, compared to a net cash used of $3,406,129 in the same period in 2022[238]. Future Financing and Going Concern - The company plans to finance operating costs over the next twelve months with existing cash, loans from related parties, and/or private placements of debt and/or common stock[237]. - The company had an accumulated deficit of $152,597,375 as of July 31, 2023, indicating substantial doubt about its ability to continue as a going concern[232]. Market and Compliance Issues - The company is subject to potential delisting from Nasdaq due to its common stock bid price closing below the minimum requirement of $1.00 per share for 30 consecutive business days[228]. Derivatives and Fair Value - The company recorded a gain in fair value of derivatives of $2,144,554 for the three months ended July 31, 2023, compared to $3,687,495 in the same period in 2022[230]. Earn-out Consideration - The Company agreed to earn-out consideration of common shares with a fair value of $1,334,000 in connection with the Gameface acquisition[227]. Warrants - The Company has not granted any warrants for the three months ended July 31, 2023[219].
Connexa(CNXA) - 2023 Q4 - Annual Report
2023-09-13 16:00
PART I [Item 1. Business](index=5&type=section&id=Item%201%20Business) The company operates in sports equipment and technology, focusing on ball launchers and AI analytics while undergoing significant corporate restructuring - Connexa Sports Technologies Inc, formerly Slinger Bag Inc, operates in the sports equipment and technology business, owning the Slinger Launcher and Gameface AI for performance analytics[156](index=156&type=chunk)[254](index=254&type=chunk)[455](index=455&type=chunk) - The company completed a **1-for-10 reverse stock split** and uplisted its common stock to the Nasdaq Capital Market on June 14, 2022[115](index=115&type=chunk)[251](index=251&type=chunk)[389](index=389&type=chunk) - In late 2022, the company divested PlaySight and 75% of Foundation Sports to reduce cash burn, recording a **total loss on disposal of $41,413,892** for the fiscal year[117](index=117&type=chunk)[119](index=119&type=chunk)[123](index=123&type=chunk)[325](index=325&type=chunk)[387](index=387&type=chunk)[955](index=955&type=chunk)[956](index=956&type=chunk) - The company's strategy focuses on global racquet sports markets through a direct-to-consumer model in North America and an international distributor network[162](index=162&type=chunk)[169](index=169&type=chunk)[171](index=171&type=chunk)[207](index=207&type=chunk) - Manufacturing of Slinger Bag Launchers is based in southern China with an estimated monthly capacity of **5,000 units** across its product lines[163](index=163&type=chunk)[164](index=164&type=chunk)[165](index=165&type=chunk) - The company faces intense competition in both sports equipment and AI-based sports technology markets, requiring continuous innovation[227](index=227&type=chunk)[228](index=228&type=chunk)[229](index=229&type=chunk)[465](index=465&type=chunk)[466](index=466&type=chunk)[470](index=470&type=chunk) [Item 1A. Risk Factors](index=20&type=section&id=Item%201A%20Risk%20Factors) The company faces substantial risks including going concern uncertainty, operational challenges, and financial volatility - There is **substantial doubt about the company's ability to continue as a going concern** due to an accumulated deficit of **$151,750,610** as of April 30, 2023[124](index=124&type=chunk)[187](index=187&type=chunk)[259](index=259&type=chunk)[323](index=323&type=chunk)[326](index=326&type=chunk)[492](index=492&type=chunk)[493](index=493&type=chunk)[494](index=494&type=chunk)[496](index=496&type=chunk)[500](index=500&type=chunk)[501](index=501&type=chunk) - The company's stock price may be volatile due to variations in operating results, market conditions, and competitor actions[25](index=25&type=chunk)[26](index=26&type=chunk)[27](index=27&type=chunk) - The company has received delinquency notices from Nasdaq for failing to meet minimum bid price and stockholders' equity requirements, **facing potential delisting**[48](index=48&type=chunk)[49](index=49&type=chunk)[50](index=50&type=chunk)[54](index=54&type=chunk)[55](index=55&type=chunk)[152](index=152&type=chunk)[154](index=154&type=chunk)[155](index=155&type=chunk)[599](index=599&type=chunk)[603](index=603&type=chunk)[605](index=605&type=chunk)[632](index=632&type=chunk)[633](index=633&type=chunk) - Operations are susceptible to increasing costs for raw materials, labor, and freight, which could negatively affect gross margins[332](index=332&type=chunk)[333](index=333&type=chunk)[343](index=343&type=chunk)[344](index=344&type=chunk)[345](index=345&type=chunk)[346](index=346&type=chunk)[347](index=347&type=chunk)[348](index=348&type=chunk)[399](index=399&type=chunk)[400](index=400&type=chunk)[485](index=485&type=chunk)[486](index=486&type=chunk)[487](index=487&type=chunk) - The business is exposed to risks from international operations, including foreign currency exchange rates and political instability[98](index=98&type=chunk)[140](index=140&type=chunk)[258](index=258&type=chunk)[292](index=292&type=chunk)[334](index=334&type=chunk)[335](index=335&type=chunk)[336](index=336&type=chunk)[337](index=337&type=chunk)[338](index=338&type=chunk)[339](index=339&type=chunk)[340](index=340&type=chunk)[341](index=341&type=chunk)[342](index=342&type=chunk)[350](index=350&type=chunk)[351](index=351&type=chunk)[411](index=411&type=chunk)[462](index=462&type=chunk)[464](index=464&type=chunk)[489](index=489&type=chunk)[490](index=490&type=chunk)[491](index=491&type=chunk)[498](index=498&type=chunk)[499](index=499&type=chunk) - Failure to adequately protect intellectual property and combat counterfeit products could harm brand image and sales[37](index=37&type=chunk)[230](index=230&type=chunk)[271](index=271&type=chunk)[537](index=537&type=chunk)[538](index=538&type=chunk) [Item 1B. Unresolved Staff Comments](index=47&type=section&id=Item%201B%20Unresolved%20Staff%20Comments) This section is not applicable as the company is a smaller reporting company - This item is not applicable to smaller reporting companies[65](index=65&type=chunk) [Item 2. Properties](index=47&type=section&id=Item%202%20Properties) The company does not own any properties and leases its principal office from a related party without rent - The company does not own any properties and its principal office is used without rent or fee from a company owned by a related party[66](index=66&type=chunk)[288](index=288&type=chunk) [Item 3. Legal Proceedings](index=47&type=section&id=Item%203%20Legal%20Proceedings) The company is defending against a lawsuit from Oasis Capital, LLC, alleging breach of a convertible note - Oasis Capital, LLC filed a complaint against the company and its CEO for alleged breach of a convertible note and securities law violations[67](index=67&type=chunk) - The company believes the claims are without merit and is vigorously defending itself[67](index=67&type=chunk) [Item 4. Mine Safety Disclosures](index=47&type=section&id=Item%204%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - This item is not applicable to the company[70](index=70&type=chunk) PART II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=48&type=section&id=Item%205%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's stock trades on Nasdaq, has experienced significant price volatility, and no cash dividends are anticipated - The company's common stock, ticker symbol 'CNXA', uplisted to the Nasdaq Capital Market on June 15, 2022[73](index=73&type=chunk) Common Stock Bid Price History (High/Low) | Quarter Ended | High Bid ($) | Low Bid ($) | |:--------------|:-------------|:------------| | April 30, 2023| 0.18 | 0.15 | | January 31, 2023| 0.25 | 0.22 | | October 31, 2022| 0.27 | 0.23 | | July 31, 2022 | 1.08 | 0.87 | | April 30, 2022| 13.50 | 13.50 | | January 31, 2022| 15.80 | 14.30 | | October 31, 2021| 30.80 | 29.00 | | July 31, 2021 | 33.90 | 30.80 | | April 30, 2021| 52.30 | 50.30 | - As of September 14, 2023, there were **239 holders of record** of the company's common stock[75](index=75&type=chunk) - The company has never declared or paid cash dividends and does not anticipate doing so, intending to retain earnings for operations[30](index=30&type=chunk)[31](index=31&type=chunk)[76](index=76&type=chunk) - The 2020 Global Share Incentive Plan reserves **1,500,000 shares** for awards to key employees, directors, and consultants[78](index=78&type=chunk)[111](index=111&type=chunk)[587](index=587&type=chunk) - Since May 1, 2022, the company issued **6,881,655 shares** of common stock for various purposes, including a securities purchase agreement for approximately **$5.0 million**[81](index=81&type=chunk)[82](index=82&type=chunk)[83](index=83&type=chunk)[84](index=84&type=chunk)[86](index=86&type=chunk)[89](index=89&type=chunk)[103](index=103&type=chunk)[104](index=104&type=chunk)[105](index=105&type=chunk)[614](index=614&type=chunk)[615](index=615&type=chunk)[616](index=616&type=chunk)[617](index=617&type=chunk)[618](index=618&type=chunk)[619](index=619&type=chunk)[637](index=637&type=chunk)[638](index=638&type=chunk)[639](index=639&type=chunk)[640](index=640&type=chunk)[641](index=641&type=chunk)[642](index=642&type=chunk)[691](index=691&type=chunk) - The company used net proceeds from a registered offering (**$4,195,000**) for working capital and debt repayment[92](index=92&type=chunk)[106](index=106&type=chunk) [Item 6. Selected Financial Data](index=50&type=section&id=Item%206%20Selected%20Financial%20Data) This section is not applicable as the company is a smaller reporting company - This item is not applicable to smaller reporting companies[107](index=107&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operation](index=51&type=section&id=Item%207%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operation) Financial performance shows a significant reduction in net sales and a substantial net loss, with ongoing liquidity concerns - The company's history includes multiple name changes, acquisitions, and recent divestitures to focus on its core business[109](index=109&type=chunk)[110](index=110&type=chunk)[111](index=111&type=chunk)[113](index=113&type=chunk)[114](index=114&type=chunk)[117](index=117&type=chunk)[119](index=119&type=chunk)[245](index=245&type=chunk)[246](index=246&type=chunk)[247](index=247&type=chunk)[248](index=248&type=chunk)[249](index=249&type=chunk)[250](index=250&type=chunk)[251](index=251&type=chunk) - Critical accounting policies include revenue recognition, inventory valuation, business combinations, and fair value of financial instruments[11](index=11&type=chunk)[13](index=13&type=chunk)[14](index=14&type=chunk)[15](index=15&type=chunk)[16](index=16&type=chunk)[262](index=262&type=chunk)[264](index=264&type=chunk)[265](index=265&type=chunk)[266](index=266&type=chunk)[268](index=268&type=chunk)[299](index=299&type=chunk)[300](index=300&type=chunk)[301](index=301&type=chunk)[303](index=303&type=chunk)[304](index=304&type=chunk)[305](index=305&type=chunk)[306](index=306&type=chunk)[307](index=307&type=chunk)[308](index=308&type=chunk)[309](index=309&type=chunk)[311](index=311&type=chunk)[312](index=312&type=chunk)[313](index=313&type=chunk)[412](index=412&type=chunk)[413](index=413&type=chunk)[456](index=456&type=chunk)[457](index=457&type=chunk)[458](index=458&type=chunk)[459](index=459&type=chunk)[460](index=460&type=chunk)[461](index=461&type=chunk) Consolidated Statements of Operations (Continuing Operations) | Metric | Year Ended April 30, 2023 ($) | Year Ended April 30, 2022 ($) | Change ($) | Change (%) | |:-----------------------------------------|:------------------------------|:------------------------------|:-----------|:-----------| | Net sales | 9,922,799 | 16,102,672 | (6,179,873)| -38% | | Cost of sales | 7,144,335 | 11,878,010 | (4,733,675)| -40% | | Gross profit | 2,778,464 | 4,224,662 | (1,446,198)| -34% | | Selling and marketing expenses | 1,928,198 | 3,447,570 | (1,549,372)| -45% | | General and administrative expenses | 22,743,877 | 46,718,986 | (23,975,109)| -49% | | Research and development costs | 65,164 | 736,141 | (670,977) | -91% | | Total operating expenses | 24,737,239 | 50,932,697 | (26,195,458)| -49% | | Loss from operations | (21,958,775) | (46,708,035) | 24,749,260 | -53% | | Total other (income) expense | (3,319,050) | (182,060) | (3,501,110)| -1,923% | | Net loss from Continuing Operations | (25,227,825) | (46,525,975) | 21,248,150 | -46% | | Loss from discontinued operations | (45,875,860) | (5,247,677) | (40,628,183)| 774% | | NET LOSS | (71,153,685) | (51,773,652) | (19,380,033)| 37% | - **Net sales decreased by 38% YoY** to $9,922,799 in 2023, while **gross profit margin improved to 28.00%** from 26.24%[430](index=430&type=chunk)[431](index=431&type=chunk) - Operating expenses decreased significantly, with **general and administrative expenses down 49%** and **R&D costs down 91%**[99](index=99&type=chunk)[100](index=100&type=chunk)[432](index=432&type=chunk)[433](index=433&type=chunk) Cash Flow Summary | Activity | Year Ended April 30, 2023 ($) | Year Ended April 30, 2022 ($) | |:------------------------------------|:------------------------------|:------------------------------| | Net cash used in operating activities | (6,365,389) | (12,366,700) | | Net cash used in investing activities | 0 | (1,618,341) | | Net cash provided by financing activities | 5,821,178 | 13,734,286 | | Cash and cash equivalents (end of period) | 202,095 | 665,002 | - **Net cash used in operating activities decreased by 48.5%** to $6,365,389 in 2023, while **net cash from financing activities decreased by 57.6%** to $5,821,178[127](index=127&type=chunk)[130](index=130&type=chunk) - The company entered into several merchant cash advance agreements to secure working capital by selling future receivables[132](index=132&type=chunk)[133](index=133&type=chunk)[134](index=134&type=chunk)[135](index=135&type=chunk)[174](index=174&type=chunk)[660](index=660&type=chunk)[662](index=662&type=chunk)[687](index=687&type=chunk)[688](index=688&type=chunk)[959](index=959&type=chunk)[960](index=960&type=chunk)[961](index=961&type=chunk) - Outstanding borrowings from related parties were **$1,953,842** as of April 30, 2023, with accrued interest of **$917,957**[137](index=137&type=chunk)[175](index=175&type=chunk)[176](index=176&type=chunk)[385](index=385&type=chunk)[663](index=663&type=chunk)[681](index=681&type=chunk)[689](index=689&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=61&type=section&id=Item%207A%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, these disclosures are not required - As a smaller reporting company, Connexa Sports Technologies Inc is not required to provide quantitative and qualitative disclosures about market risk[180](index=180&type=chunk) [Item 8. Financial Statements and Supplementary Data.](index=61&type=section&id=Item%208%20Financial%20Statements%20and%20Supplementary%20Data%2E) Audited financial statements are presented, with the independent auditor's report highlighting a going concern uncertainty - The independent auditor's report expresses a **going concern uncertainty** due to an accumulated deficit of **$(151,750,610)** and negative working capital of **$(18,775,991)**[187](index=187&type=chunk) - A critical audit matter involved the complex debt and equity transactions related to the disposal of PlaySight[193](index=193&type=chunk)[194](index=194&type=chunk) Consolidated Balance Sheets (Summary) | Metric | April 30, 2023 ($) | April 30, 2022 ($) | |:-----------------------------------|:-------------------|:-------------------| | Total Current Assets | 4,991,500 | 12,826,096 | | Total Non-Current Assets | 2,116,072 | 62,036,850 | | TOTAL ASSETS | 7,107,572 | 74,862,946 | | Total Current Liabilities | 23,767,491 | 38,980,522 | | Total Long-Term Liabilities | 1,953,842 | 3,370,492 | | Total Liabilities | 25,721,333 | 42,351,014 | | Total Stockholders' Equity (Deficit)| (18,613,761) | 32,511,932 | Consolidated Statements of Operations and Comprehensive Loss (Summary) | Metric | Year Ended April 30, 2023 ($) | Year Ended April 30, 2022 ($) | |:-----------------------------------|:------------------------------|:------------------------------| | NET SALES | 9,922,799 | 16,102,672 | | GROSS PROFIT | 2,778,464 | 4,224,662 | | Total Operating Expenses | 24,737,239 | 50,932,697 | | OPERATING LOSS | (21,958,775) | (46,708,035) | | NET LOSS | (71,153,685) | (51,773,652) | | Comprehensive income (loss) | (71,066,135) | (51,698,520) | | Net loss per share - basic and diluted | (6.36) | (13.46) | Consolidated Statements of Cash Flows (Summary) | Activity | Year Ended April 30, 2023 ($) | Year Ended April 30, 2022 ($) | |:------------------------------------|:------------------------------|:------------------------------| | Net cash used in operating activities | (6,365,389) | (12,366,700) | | Net cash used in investing activities | 0 | (1,618,341) | | Net cash provided by financing activities | 5,821,187 | 13,734,286 | | NET DECREASE IN CASH AND RESTRICTED CASH | (462,907) | (250,948) | | CASH AND RESTRICTED CASH - END OF PERIOD | 202,095 | 665,002 | - The company reclassified PlaySight and Foundation Sports as discontinued operations, recording a **total loss on disposal of $41,413,892** in 2023[123](index=123&type=chunk)[235](index=235&type=chunk)[255](index=255&type=chunk)[613](index=613&type=chunk)[630](index=630&type=chunk) Intangible Assets (Continuing Operations) | Asset Category | Carrying Value (April 30, 2023) ($) | Carrying Value (April 30, 2022) ($) | |:-----------------------------------|:------------------------------------|:------------------------------------| | Tradenames and patents | 101,281 | 376,104 | | Customer relationships | - | 3,896,251 | | Internally developed software | - | 570,501 | | Total intangible assets | 101,281 | 4,842,856 | - Goodwill related to Gameface was fully impaired as of April 30, 2023, resulting in an **impairment loss of $11,421,817**[415](index=415&type=chunk)[453](index=453&type=chunk) Accrued Expenses | Category | April 30, 2023 ($) | April 30, 2022 ($) | |:--------------------------|:-------------------|:-------------------| | Accrued payroll | 1,535,186 | 921,759 | | Accrued bonus | 1,720,606 | 1,014,833 | | Accrued professional fees | 490,442 | 1,706,560 | | Other accrued expenses | 1,165,623 | 738,749 | | Total | 4,911,839 | 4,381,901 | Deferred Tax Assets (US Operations) | Category | 2023 ($) | 2022 ($) | |:-----------------------------------|:---------|:---------| | Loss carryforwards | 3,049,000| 2,166,000| | Stock options | 8,454,000| 8,259,000| | Capital loss carryforward/Disposal | 11,039,000| — | | Related party accruals | 1,001,000| 799,000 | | Inventory reserve | 133,000 | 100,000 | | Interest deferral | 221,000 | 191,000 | | Start-up costs | 81,000 | 84,000 | | Other | 131,000 | 57,000 | | Valuation allowance | (24,109,000)| (11,656,000)| | Net deferred tax assets | — | — | [Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=97&type=section&id=Item%209%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company changed its independent registered public accounting firm twice during the fiscal year with no reported disagreements - On August 28, 2022, the company re-engaged Mac Accounting Group, LLP, replacing WithumSmith + Brown, PC[626](index=626&type=chunk) - On March 21, 2023, the company engaged Olayinka Oyebola & Co, replacing Mac Accounting Group, LLP[668](index=668&type=chunk) - There were no disagreements on accounting principles or reportable events during the engagements of the former accountants[667](index=667&type=chunk)[693](index=693&type=chunk) [Item 9A. Controls and Procedures](index=97&type=section&id=Item%209A%20Controls%20and%20Procedures) Disclosure controls and procedures were deemed ineffective due to material weaknesses in internal control over financial reporting - The company's disclosure controls and procedures were **not effective** as of April 30, 2023[670](index=670&type=chunk) - Management concluded that internal control over financial reporting was **not effective** as of April 30, 2023, due to material weaknesses[673](index=673&type=chunk) - Identified material weaknesses include a lack of a CFO and public company accounting expertise, inadequate segregation of duties, and insufficient accounting resources[673](index=673&type=chunk)[697](index=697&type=chunk)[725](index=725&type=chunk) - The company is implementing compensating controls and enhancing existing controls to remediate these material weaknesses[698](index=698&type=chunk) [Item 9B. Other Information](index=98&type=section&id=Item%209B%20Other%20Information) This section refers to acquisitions detailed elsewhere in the report - This section refers to acquisitions, which are detailed in other parts of the report[726](index=726&type=chunk) PART III [Item 10. Directors, Executive Officers and Corporate Governance](index=100&type=section&id=Item%2010%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) This section outlines the company's leadership, board composition, committee structure, and corporate governance framework - The executive officers and directors include Mike Ballardie (CEO), Juda Honickman (CMO), Mark Radom (General Counsel), and Yonah Kalfa (CIO)[700](index=700&type=chunk) - The board of directors is composed of five members, with **three identified as independent directors** under Nasdaq rules[714](index=714&type=chunk)[715](index=715&type=chunk) - The company has an Audit Committee, a Compensation Committee, and a Nominating and Corporate Governance Committee[738](index=738&type=chunk)[739](index=739&type=chunk)[740](index=740&type=chunk)[741](index=741&type=chunk) - The Board oversees a company-wide approach to risk management, with committees overseeing specific risk areas[575](index=575&type=chunk)[745](index=745&type=chunk) - A Code of Business Conduct and Ethics has been adopted for directors, officers, and employees[766](index=766&type=chunk) - Jalaluddin Shaik, President of Gameface, is identified as a significant employee[577](index=577&type=chunk)[747](index=747&type=chunk) [Item 11. Executive Compensation](index=106&type=section&id=Item%2011%20Executive%20Compensation) Details compensation for executive officers and directors, including salaries, bonuses, awards, and service agreements Summary Compensation Table for Executive Officers | Name and Principal Position | Year Ended April 30 | Salary ($) | Bonus ($) | Share Awards ($) | Non-Equity Incentive Plan Compensation ($) | All other compensation ($) | Total ($) | |:----------------------------|:--------------------|:-----------|:----------|:-----------------|:-------------------------------------------|:---------------------------|:----------| | Mike Ballardie | 2023 | 570,169 | 300,000 | - | 285,000 | 105,318 | 1,260,487 | | | 2022 | 571,123 | 277,500 | 16,100,000 | | 375,748 | 17,324,371| | Judah Honickman | 2023 | 179,502 | 87,400 | | | 27,144 | 294,046 | | | 2022 | 179,312 | 72,150 | 190,000 | | 10,454 | 451,916 | | Paul McKeown | 2023 | 366,023 | 77,411 | | | | 443,434 | | | 2022 | 344,048 | 83,250 | | | - | 427,298 | | Tom Dye | 2023 | 160,000 | 40,000 | | | 16,902 | 216,902 | | | 2022 | 160,000 | 37,000 | 25,647 | | - | 222,647 | | Mark Radom | 2023 | 150,000 | 28,500 | | | | 178,500 | | | 2022 | 114,000 | 23,241 | | | | 137,241 | | Yonah Kalfa | 2023 | | - | | | 495,000 | 495,000 | | | 2022 | - | - | 16,100,000 | | 593,250 | 16,693,250| | Jason Seifert | 2023 | 35,833 | | | | 8,442 | 44,275 | - Executive officers have service agreements outlining base salaries, bonus payments, and termination clauses[108](index=108&type=chunk)[580](index=580&type=chunk)[581](index=581&type=chunk)[724](index=724&type=chunk)[750](index=750&type=chunk)[751](index=751&type=chunk)[770](index=770&type=chunk)[772](index=772&type=chunk) - Non-employee directors are expected to receive **150,000 shares of common stock annually** as compensation[582](index=582&type=chunk)[718](index=718&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=109&type=section&id=Item%2012%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Details the beneficial ownership of common stock by principal shareholders, directors, and executive officers Beneficial Ownership of Common Stock (as of September 14, 2023) | Name | of Shares (1) | % of Class (1) | |:-----------------------------------|:----------------|:---------------| | Yonah Kalfa | 2,289,470 | 2.16% | | 2672237 Ontario Ltd. | 1,252,471 | 1.18% | | Mike Ballardie | 790,000 | 0.74% | | Judah Honickman | 350,000 | 0.33% | | Paul McKeown | 275,000 | 0.25% | | Tom Dye | 275,000 | 0.25% | | Mark Radom | 277,603 | 0.25% | | All current officers and directors as a group (6 persons) | 5,509,544 | 5.19% | - Beneficial ownership percentages are based on **24,148,532 common shares outstanding** as of September 14, 2023[584](index=584&type=chunk)[755](index=755&type=chunk) - The 2020 Global Share Incentive Plan has **15,000,000 shares reserved** for issuance, with 1,500,000 shares remaining available[111](index=111&type=chunk)[587](index=587&type=chunk)[756](index=756&type=chunk)[757](index=757&type=chunk) [Item 13. Certain Relationships and Related Transactions and Director Independence](index=111&type=section&id=Item%2013%20Certain%20Relationships%20and%20Related%20Transactions%20and%20Director%20Independence) This section primarily presents the fees incurred to the principal independent accountants - This section primarily presents the fees incurred to the principal independent accountants[779](index=779&type=chunk) [Item 14. Principal Accountant Fees and Services](index=111&type=section&id=Item%2014%20Principal%20Accountant%20Fees%20and%20Services) The company's audit fees decreased significantly in fiscal year 2023 compared to the prior year Principal Accountant Fees and Services | Category | Fiscal 2023 ($) | Fiscal 2022 ($) | |:-------------------|:----------------|:----------------| | Audit Fees | 34,000 | 331,690 | | Tax Fees | - | - | | All Other Fees | - | - | | Total | 34,000 | 331,690 | PART IV [Item 15. Exhibit and Financial Statement Schedules](index=112&type=section&id=Item%2015%20Exhibit%20and%20Financial%20Statement%20Schedules) This section lists all exhibits and financial statement schedules filed as part of the annual report - The section includes a list of exhibits such as loan agreements, warrants, securities purchase agreements, and corporate bylaws[591](index=591&type=chunk)[592](index=592&type=chunk)[760](index=760&type=chunk) - The financial statements required by Item 8 are incorporated by reference[781](index=781&type=chunk) [SIGNATURES](index=114&type=section&id=SIGNATURES) The report is duly signed by authorized representatives affirming compliance with the Securities Exchange Act of 1934 - The report is signed by the Principal Executive Officer, Principal Financial Officer, and other directors[761](index=761&type=chunk)[785](index=785&type=chunk) - Signatures confirm compliance with the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934[593](index=593&type=chunk)[762](index=762&type=chunk)
Connexa(CNXA) - 2023 Q4 - Annual Report
2023-07-24 21:06
[PART I - FINANCIAL INFORMATION](index=6&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This part presents the company's unaudited financial statements, management's analysis, and key risk disclosures [Item 1. Consolidated Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Consolidated%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements and notes for the periods ended January 31, 2023, and April 30, 2022 [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) The balance sheet shows a significant decrease in total assets and a shift to a stockholders' deficit, indicating a worsening financial position Total Assets | Period | Amount ($) | | :----- | :--------- | | Jan 31, 2023 | 19,507,622 | | Apr 30, 2022 | 74,862,946 | | **Change** | **-55,355,324 (-73.95%)** | Total Liabilities | Period | Amount ($) | | :----- | :--------- | | Jan 31, 2023 | 31,212,005 | | Apr 30, 2022 | 42,351,014 | | **Change** | **-11,139,009 (-26.30%)** | Total Stockholders' Equity (Deficit) | Period | Amount ($) | | :----- | :--------- | | Jan 31, 2023 | (11,704,383) | | Apr 30, 2022 | 32,511,932 | | **Change** | **-44,216,315 (-136.00%)** | [Consolidated Statements of Operations](index=8&type=section&id=Consolidated%20Statements%20of%20Operations) The company reported a significantly higher net loss for the nine months ended January 31, 2023, driven by a substantial loss on disposal of subsidiaries Net Sales (Nine Months Ended Jan 31) | Period | Amount ($) | | :----- | :--------- | | 2023 | 7,632,940 | | 2022 | 12,107,666 | | **Change** | **-4,474,726 (-36.96%)** | Gross Profit (Nine Months Ended Jan 31) | Period | Amount ($) | | :----- | :--------- | | 2023 | 2,378,159 | | 2022 | 3,805,745 | | **Change** | **-1,427,586 (-37.51%)** | Net Loss (Nine Months Ended Jan 31) | Period | Amount ($) | | :----- | :--------- | | 2023 | (64,169,773) | | 2022 | (44,630,793) | | **Change** | **-19,538,980 (-43.78%)** | - **Loss on Disposal of Subsidiaries** (Nine Months Ended Jan 31, 2023): **$41,413,892**[86](index=86&type=chunk) [Consolidated Statement of Changes in Shareholders' Equity (Deficit)](index=10&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Shareholders'%20Equity%20(Deficit)) Shareholders' equity shifted from a positive $32.51 million to a deficit of $(11.70) million, driven by a substantial net loss and stock conversions Total Stockholders' Equity (Deficit) | Period | Amount ($) | | :----- | :--------- | | May 1, 2022 | 32,511,932 | | Jan 31, 2023 | (11,704,383) | | **Change** | **-44,216,315 (-136.00%)** | - **Net Loss** for the Period (May 1, 2022 - Jan 31, 2023): **$(48,879,775)**[69](index=69&type=chunk) - Stock Issued for Conversion of Notes Payable: **$14,046,300** (4,389,469 shares)[88](index=88&type=chunk) - Share-based Compensation (May 1, 2022 - Jan 31, 2023): **$468,886**[69](index=69&type=chunk)[88](index=88&type=chunk) [Consolidated Statements of Cash Flows](index=12&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from financing activities decreased significantly, while cash used in operating activities saw a slight improvement for the nine months ended January 31, 2023 Net Cash Used in Operating Activities (Nine Months Ended Jan 31) | Period | Amount ($) | | :----- | :--------- | | 2023 | (6,845,810) | | 2022 | (7,795,944) | | **Change** | **950,134 (12.19% improvement)** | Net Cash Used in Investing Activities (Nine Months Ended Jan 31) | Period | Amount ($) | | :----- | :--------- | | 2023 | 0 | | 2022 | (2,250,000) | | **Change** | **2,250,000 (100% improvement)** | Net Cash Provided by Financing Activities (Nine Months Ended Jan 31) | Period | Amount ($) | | :----- | :--------- | | 2023 | 6,481,772 | | 2022 | 10,209,420 | | **Change** | **-3,727,648 (-36.51%)** | Cash and Restricted Cash - End of Period (Jan 31) | Period | Amount ($) | | :----- | :--------- | | 2023 | 316,750 | | 2022 | 1,056,754 | | **Change** | **-749,904 (-70.96%)** | [Notes to Condensed Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed disclosures on accounting policies, going concern, debt, equity, discontinued operations, and subsequent events [Note 1: Organization and Nature of Business](index=14&type=section&id=Note%201%3A%20Organization%20and%20Nature%20of%20Business) Details the company's name change, reverse stock split, recent divestitures, and current operational focus - Company changed name to Connexa Sports Technologies Inc and ticker symbol to **"CNXA"** on April 7, 2022[94](index=94&type=chunk) - Company effected a **1-for-10 reverse stock split** on June 14, 2022, and listed on Nasdaq Capital Market[95](index=95&type=chunk) - Company **sold PlaySight** in November 2022 and **75% of Foundation Sports** in December 2022, reclassifying them as discontinued operations[74](index=74&type=chunk)[93](index=93&type=chunk)[122](index=122&type=chunk) - Current operations focus on **Slinger Launcher** and **Gameface AI**[121](index=121&type=chunk) [Note 2: Going Concern](index=15&type=section&id=Note%202%3A%20Going%20Concern) Highlights a substantial accumulated deficit and management's plans to address going concern doubts - Accumulated Deficit (Jan 31, 2023): **$144,766,698**[100](index=100&type=chunk) - **Substantial doubt** about the Company's ability to continue as a going concern[100](index=100&type=chunk) - Management plans to finance operations through existing cash, related party loans, and/or private placement of debt/common stock[101](index=101&type=chunk) - Company reduced operating expenses by **selling PlaySight** and **75% of Foundation Sports** in late 2022[101](index=101&type=chunk) [Note 3: Summary of Significant Accounting Policies](index=16&type=section&id=Note%203%3A%20Summary%20of%20Significant%20Accounting%20Policies) Outlines key accounting methods for inventory, revenue recognition, business combinations, derivatives, goodwill, and share-based compensation - Inventory valued at **lower of cost (FIFO) or net realizable value**, with reserves for inventory sold below cost and shrink[104](index=104&type=chunk) - Revenue recognized at a point in time once products are shipped, based on **ASC 606**[106](index=106&type=chunk) - Business combinations accounted for using the **acquisition method**, recording assets/liabilities at fair value[110](index=110&type=chunk) - Derivative liabilities valued using **Level 2 assumptions** (Black-Scholes) and contingent consideration using **Level 3 inputs**[164](index=164&type=chunk)[165](index=165&type=chunk) - Goodwill impairment tested annually by comparing fair value of reporting unit to its carrying value (**one-step approach**)[146](index=146&type=chunk) - Share-based compensation measured at fair value on grant date and expensed over the vesting period[148](index=148&type=chunk) - Company adopted **ASU 2017-04 (Goodwill Impairment)** effective May 1, 2021, with no material effect[192](index=192&type=chunk) [Note 4: Concentration of Credit Risk and Other Risks and Uncertainties](index=23&type=section&id=Note%204%3A%20Concentration%20of%20Credit%20Risk%20and%20Other%20Risks%20and%20Uncertainties) Reveals significant concentration in accounts receivable and accounts payable with a small number of customers and suppliers - Accounts Receivable Concentration (Jan 31, 2023): **Two customers accounted for 46%** of trade receivables[178](index=178&type=chunk) - Accounts Payable Concentration (Jan 31, 2023): **Four suppliers accounted for 59%** of trade payables[195](index=195&type=chunk) [Note 5: Acquisitions and Business Combinations](index=23&type=section&id=Note%205%3A%20Acquisitions%20and%20Business%20Combinations) Details the acquisition of Gameface in FY2022 and the subsequent disposal of PlaySight and Foundation Sports - Acquired three entities in FY2022, including **Gameface**[155](index=155&type=chunk) - **Sold 100% of PlaySight** in November 2022[156](index=156&type=chunk) - **Disposed of 75% of Foundation Sports** in December 2022[179](index=179&type=chunk) Pro Forma Financial Information (Nine Months Ended Jan 31, 2022, as if Gameface acquired at beginning of period) | Metric | Amount ($) | | :----- | :--------- | | Revenues | 12,151,486 | | Net loss | (46,130,471) | | Basic and diluted earnings (loss) per share | (12.35) | [Note 6: Intangible Assets](index=24&type=section&id=Note%206%3A%20Intangible%20Assets) Summarizes the carrying value of intangible assets and the schedule for future amortization expenses Intangible Assets (Jan 31, 2023) | Asset Type | Carrying Value ($) | Accumulated Amortization ($) | Net Carrying Value ($) | Weighted Average Amortization Period (years) | | :-------------------------- | :----------------- | :--------------------------- | :--------------------- | :------------------------------------------- | | Tradenames and patents | 385,582 | 15,829 | 369,753 | 15.26 | | Customer relationships | 3,930,000 | 84,102 | 3,845,898 | 9.92 | | Internally developed software | 580,000 | 27,410 | 552,590 | 4.91 | | **Total** | **4,895,582** | **127,341** | **4,768,241** | | Amortization Expense (Nine Months Ended Jan 31) | Period | Amount ($) | | :----- | :--------- | | 2023 | 74,615 | | 2022 | 4,335 | Estimated Future Amortization Expense | Fiscal Year | Amortization Expense ($) | | :---------- | :----------------------- | | 2024 | 544,781 | | 2025 | 544,781 | | 2026 | 544,781 | | 2027 | 544,781 | | 2028 | 426,815 | | Thereafter | 2,162,302 | | **Total** | **4,768,241** | [Note 7: Accrued Expenses](index=24&type=section&id=Note%207%3A%20Accrued%20Expenses) Provides a breakdown of accrued expenses, showing an increase primarily in accrued payroll and bonus Accrued Expenses | Category | Jan 31, 2023 ($) | Apr 30, 2022 ($) | | :-------------------- | :--------------- | :--------------- | | Accrued payroll | 1,545,123 | 921,759 | | Accrued bonus | 1,611,606 | 1,014,833 | | Accrued professional fees | 1,300,000 | 1,706,560 | | Other accrued expenses | 984,697 | 738,749 | | **Total** | **5,441,426** | **4,381,901** | [Note 8: Note Payable - Related Party](index=25&type=section&id=Note%208%3A%20Note%20Payable%20-%20Related%20Party) Details outstanding borrowings and accrued interest from related parties, with repayment dates extended to July 2024 Outstanding Borrowings from Related Parties | Period | Amount ($) | | :----- | :--------- | | Jan 31, 2023 | 1,953,115 | | Apr 30, 2022 | 2,000,000 | Accrued Interest Due to Related Parties | Period | Amount ($) | | :----- | :--------- | | Jan 31, 2023 | 999,257 | | Apr 30, 2022 | 908,756 | Interest Expense - Related Parties (Nine Months Ended Jan 31) | Period | Amount ($) | | :----- | :--------- | | 2023 | 177,773 | | 2022 | 106,895 | - Repayment date for two **$1 million related party loan agreements** extended to **July 31, 2024**[1](index=1&type=chunk) [Note 9: Convertible Notes Payable](index=25&type=section&id=Note%209%3A%20Convertible%20Notes%20Payable) Describes the issuance and subsequent conversion of $13.2 million in senior convertible notes into common stock - Issued **$11,000,000 in 8% Senior Convertible Notes** and warrants in August 2021[2](index=2&type=chunk) - Principal balance increased to **$13,200,000** due to an amendment in December 2021[7](index=7&type=chunk) Outstanding Borrowings Related to Convertible Notes | Period | Amount ($) | | :----- | :--------- | | Jan 31, 2023 | 0 | | Apr 30, 2022 | 13,200,000 | - **4,389,469 shares of common stock** issued in June 2022 upon conversion of **$13.2 million in convertible notes** and $846,301 in accrued interest[8](index=8&type=chunk) - Recognized a **$2,200,000 loss** on issuance of convertible notes during the year ended April 30, 2022, related to the amendment[7](index=7&type=chunk) [Note 10: Notes Payable](index=27&type=section&id=Note%2010%3A%20Notes%20Payable) Outlines various financing agreements, including merchant cash advances and a loan agreement that resulted in significant derivative expenses Derivative Liability Fair Value | Period | Amount ($) | | :----- | :--------- | | Jan 31, 2023 | 1,429,620 | | Apr 30, 2022 | 1,061,550 | - Entered into two merchant cash advance agreements in July 2022, selling **$2,248,500 in future receivables** for **$1,500,000 cash**[20](index=20&type=chunk)[22](index=22&type=chunk) - Entered into a loan and security agreement in January 2023 for up to **$2,000,000**, with an initial advance of **$1,400,000** and warrants[24](index=24&type=chunk) - Recognized a **derivative expense of $1,715,557** and a **loss on change in fair value of derivative liability of $1,519,499** related to the January 2023 loan[24](index=24&type=chunk) - Company **defaulted** on the January 2023 note on July 6, 2023, with the interest rate increasing to 6.43% per annum[188](index=188&type=chunk) [Note 11: Related Party Transactions](index=29&type=section&id=Note%2011%3A%20Related%20Party%20Transactions) Summarizes financial transactions with related parties, including outstanding notes payable and a significant decrease in net sales Outstanding Notes Payable to Related Parties | Period | Amount ($) | | :----- | :--------- | | Jan 31, 2023 | 1,953,115 | | Apr 30, 2022 | 2,000,000 | Accrued Interest Due to Related Parties | Period | Amount ($) | | :----- | :--------- | | Jan 31, 2023 | 999,257 | | Apr 30, 2022 | 908,756 | Net Sales to Related Parties (Nine Months Ended Jan 31) | Period | Amount ($) | | :----- | :--------- | | 2023 | 104,586 | | 2022 | 424,394 | | **Change** | **-319,808 (-75.35%)** | [Note 12: Shareholders' Equity (Deficit)](index=29&type=section&id=Note%2012%3A%20Shareholders'%20Equity%20(Deficit)) Details significant changes in shareholders' equity, driven by a large increase in common stock issued through conversions and private placements Common Stock Issued and Outstanding | Period | Shares | | :----- | :----- | | Jan 31, 2023 | 13,543,155 | | Apr 30, 2022 | 4,194,836 | | **Change** | **9,348,319 (222.85% increase)** | - Issued **4,389,469 shares** upon conversion of convertible notes in June 2022[28](index=28&type=chunk) - Issued **1,048,750 shares** to investors in Nasdaq uplist round in June 2022[29](index=29&type=chunk) - Issued **1,018,510 shares of common stock** and pre-funded warrants for 11,802,002 shares in a September 2022 private placement, raising approximately **$5.0 million**[12](index=12&type=chunk) - Recognized **$32,381,309 of share-based compensation expense** in FY2022 for warrants granted to key employees and officers[226](index=226&type=chunk) [Note 13: Commitments and Contingencies](index=33&type=section&id=Note%2013%3A%20Commitments%20and%20Contingencies) Discloses contingent consideration from the Gameface acquisition and confirms no material legal proceedings are currently expected Contingent Consideration (Gameface acquisition) | Period | Amount ($) | | :----- | :--------- | | Jan 31, 2023 | 418,455 | | Apr 30, 2022 | 1,334,000 | - Issued **598,396 common shares** to former Gameface shareholders in June 2022[189](index=189&type=chunk) - Total rent expense for nine months ended Jan 31, 2023 and 2022 was **$2,800** and **$6,550**, respectively[229](index=229&type=chunk) - No current legal proceedings expected to have a **material adverse effect** on the company[230](index=230&type=chunk) [Note 14: Income Taxes](index=33&type=section&id=Note%2014%3A%20Income%20Taxes) States that income taxes are accounted for under ASC 740 and no interest or penalties on uncertain tax positions were recognized - Income taxes accounted for under **ASC 740**[167](index=167&type=chunk) - **No interest or penalties** on uncertain tax positions recognized for the nine months ended January 31, 2023 and 2022[231](index=231&type=chunk) [Note 15: Segments](index=33&type=section&id=Note%2015%3A%20Segments) Confirms the company now operates in a single equipment segment following the disposal of Foundation Sports and PlaySight - Company now operates only in the **equipment segment**[232](index=232&type=chunk) - Ceased reporting two segments after **disposing of Foundation Sports and PlaySight**[232](index=232&type=chunk) [Note 16: Discontinued Operations](index=33&type=section&id=Note%2016%3A%20Discontinued%20Operations) Provides details on the sale of PlaySight and Foundation Sports, resulting in a significant loss on disposal - **PlaySight sold 100%** in November 2022, releasing company from obligations and receiving a **$2,000,000 promissory note**[205](index=205&type=chunk) - **75% of Foundation Sports** membership interest assigned in December 2022, with a right to purchase remaining 25% for **$500,000**[206](index=206&type=chunk) Loss from Discontinued Operations (Nine Months Ended Jan 31) | Period | Amount ($) | | :----- | :--------- | | 2023 | (4,461,968) | | 2022 | (959,364) | - **Loss on Disposal of Discontinued Operations**: **$(41,413,892)**[236](index=236&type=chunk) Assets and Liabilities of Discontinued Operations (April 30, 2022) | Category | Current Assets ($) | Non-Current Assets ($) | Current Liabilities ($) | Non-Current Liabilities ($) | | :-------------------------- | :----------------- | :--------------------- | :---------------------- | :-------------------------- | | Cash and restricted cash | 916,082 | | | | | Accounts receivable | 288,980 | | | | | Inventory | 323,307 | | | | | Right of use asset – operating leases | 239,689 | | | | | Prepaid expenses | 490,260 | | | | | Goodwill | | 25,862,000 | | | | Property and equipment, net | | 126,862 | | | | Intangible assets, net | | 19,473,646 | | | | Contract assets, net of current portion | | 209,363 | | | | Finished products used in operations, net | | 4,693,575 | | | | Accounts payable and accrued expenses | | | 2,432,818 | | | Lease liability – operating leases | | | 237,204 | | | Contract liabilities | | | 2,545,200 | 1,370,492 | | **Total** | **2,258,318** | **50,365,446** | **5,215,222** | **1,370,492** | [Note 17: Subsequent Events](index=35&type=section&id=Note%2017%3A%20Subsequent%20Events) Details multiple Nasdaq delinquency notices and the subsequent appeal granting continued listing under specific compliance conditions - Received **Nasdaq delinquency notices** for unfiled 10-K (FY2022) and 10-Qs (Q1, Q2, Q3 FY2023)[238](index=238&type=chunk) - Received Nasdaq delinquency notice for failing to meet the **minimum $1.00 bid price requirement**[238](index=238&type=chunk) - Received Nasdaq delinquency notice for **Corporate Governance Deficiencies** (lack of independent directors, audit/compensation committee requirements)[237](index=237&type=chunk) - Nasdaq granted appeal for continued listing, requiring filing of delinquent reports, corporate governance compliance by July 15, 2023, and bid price compliance by October 9, 2023[214](index=214&type=chunk)[215](index=215&type=chunk)[239](index=239&type=chunk)[240](index=240&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=38&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on financial performance, recent corporate events, liquidity, and capital resources [Overview](index=38&type=section&id=Overview) Outlines the company's focus on the global ball sport market with its Slinger and Gameface AI products - Company focuses on global ball sport market, with **Slinger Bag Launcher** as a leading product in tennis (over 60,000 units sold)[269](index=269&type=chunk) - **Gameface AI** technology to deliver performance insights in tennis, pickleball, padel, baseball, and cricket[243](index=243&type=chunk)[269](index=269&type=chunk) - **Slinger Tennis App**, incorporating Gameface AI, to be launched as a free consumer app in late 2023[243](index=243&type=chunk) [Recent Events](index=38&type=section&id=Recent%20Events) Summarizes key corporate actions including a reverse stock split, auditor change, private placements, asset sales, and Nasdaq compliance issues - **Reverse Stock Split**: **1-for-10** reverse stock split on June 14, 2022[244](index=244&type=chunk) - **Change in Auditor**: Re-engaged Mac Accounting Group, LLP as independent auditor, dismissing WithumSmith + Brown, PC in August 2022[245](index=245&type=chunk) - **September 2022 Private Placement**: Issued 1,018,510 shares of common stock and pre-funded warrants for 11,802,002 shares, raising approximately **$5.0 million**[222](index=222&type=chunk) - **Sale of PlaySight**: Sold 100% of PlaySight in November 2022, receiving a **$2 million promissory note** and being released from PlaySight's obligations[249](index=249&type=chunk) - **Sale of Foundation Sports**: Assigned 75% of membership interest in December 2022, establishing a **$500,000 reserve** for the investment[278](index=278&type=chunk) - **January 2023 Private Placement**: Entered into a loan and security agreement for up to **$2 million**, with an initial advance of **$1.4 million** and warrants[279](index=279&type=chunk) - **Nasdaq Delinquency Notices**: Received notices for unfiled 10-K and 10-Qs, corporate governance deficiencies, and failure to meet minimum bid price[258](index=258&type=chunk)[281](index=281&type=chunk)[282](index=282&type=chunk) - **Nasdaq Appeal Outcome**: Granted continued listing subject to filing delinquent reports, achieving corporate governance compliance by July 15, 2023, and bid price compliance by October 9, 2023[285](index=285&type=chunk)[286](index=286&type=chunk) [Results of Operations for the Three Months Ended January 31, 2023 and 2022](index=44&type=section&id=Results%20of%20Operations%20for%20the%20Three%20Months%20Ended%20January%2031%2C%202023%20and%202022) Quarterly results show a sharp decline in net sales but an increase in gross profit, alongside a massive increase in other expenses Net Sales (Three Months Ended Jan 31) | Period | Amount ($) | Change (%) | | :----- | :--------- | :--------- | | 2023 | 1,605,783 | -62% | | 2022 | 4,188,774 | | Gross Profit (Three Months Ended Jan 31) | Period | Amount ($) | Change (%) | | :----- | :--------- | :--------- | | 2023 | 1,069,826 | 12% | | 2022 | 954,809 | | Total Operating Expenses (Three Months Ended Jan 31) | Period | Amount ($) | Change (%) | | :----- | :--------- | :--------- | | 2023 | 2,110,443 | -43.22% | | 2022 | 3,715,834 | | Total Other Expense (Three Months Ended Jan 31) | Period | Amount ($) | Change (%) | | :----- | :--------- | :--------- | | 2023 | (5,790,155) | 823% (increase in expense) | | 2022 | 801,131 | | - Decrease in R&D costs by **99%** due to reduction in development and maintenance costs for PlaySight and Gameface brands[265](index=265&type=chunk) [Results of Operations for the Nine Months Ended January 31, 2023 and 2022](index=45&type=section&id=Results%20of%20Operations%20for%20the%20Nine%20Months%20Ended%20January%2031%2C%202023%20and%202022) Nine-month results show decreased net sales and a dramatic reduction in operating expenses, primarily due to lower share-based compensation Net Sales (Nine Months Ended Jan 31) | Period | Amount ($) | Change (%) | | :----- | :--------- | :--------- | | 2023 | 7,632,940 | -37% | | 2022 | 12,107,666 | | Gross Income (Nine Months Ended Jan 31) | Period | Amount ($) | Change (%) | | :----- | :--------- | :--------- | | 2023 | 2,378,159 | -37.51% | | 2022 | 3,805,745 | | Total Operating Expenses (Nine Months Ended Jan 31) | Period | Amount ($) | Change (%) | | :----- | :--------- | :--------- | | 2023 | 11,000,270 | -74.77% | | 2022 | 43,612,436 | | Total Other Expense (Nine Months Ended Jan 31) | Period | Amount ($) | Change (%) | | :----- | :--------- | :--------- | | 2023 | (9,671,802) | 150% (increase in expense) | | 2022 | (3,864,738) | | - General and administrative expenses decreased by **$31.10 million (-76.49%)** due to reduced share-based compensation and shares issued for services[266](index=266&type=chunk)[319](index=319&type=chunk) - Research and development costs decreased by **$0.48 million (-88%)** due to reductions in Slinger Bag new project development and PlaySight/Gameface maintenance costs[320](index=320&type=chunk) [Liquidity and Capital Resources](index=47&type=section&id=Liquidity%20and%20Capital%20Resources) The company's significant accumulated deficit raises substantial doubt about its ability to continue as a going concern - Accumulated Deficit (Jan 31, 2023): **$144,766,698**, raising substantial doubt about going concern[322](index=322&type=chunk) Net Cash Used in Operating Activities (Nine Months Ended Jan 31) | Period | Amount ($) | | :----- | :--------- | | 2023 | (6,845,810) | | 2022 | (7,795,944) | Net Cash Provided by Financing Activities (Nine Months Ended Jan 31) | Period | Amount ($) | | :----- | :--------- | | 2023 | 6,481,772 | | 2022 | 10,209,420 | - Cash and Cash Equivalents (Jan 31, 2023): **$316,750**[323](index=323&type=chunk) Future Debt Obligations (Jan 31, 2023) | Category | Total ($) | Less than 1 year ($) | 1-3 years ($) | | :-------------------- | :-------- | :------------------- | :------------ | | Notes payable | 1,400,000 | 1,400,000 | 0 | | Notes payable – related party | 1,953,115 | 0 | 1,953,115 | | **Total** | **3,353,115** | **1,400,000** | **1,953,115** | - Company has **no off-balance sheet arrangements**[344](index=344&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=49&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, detailed market risk disclosures are not required and inflation is not expected to have a material effect - Company is a **smaller reporting company** and not required to provide detailed market risk disclosures[345](index=345&type=chunk) - Management does not expect inflation and price changes to **materially affect operations**[308](index=308&type=chunk) [Item 4. Controls and Procedures](index=50&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that internal control over financial reporting was not effective due to several identified material weaknesses - Internal control over financial reporting was **not effective** as of January 31, 2023[311](index=311&type=chunk) - **Material Weaknesses Identified**: Lack of adequate segregation of duties and independent Board/Audit Committee oversight[312](index=312&type=chunk) - **Material Weaknesses Identified**: Lack of accounting resources and controls to prevent/detect material misstatements, specifically over inventory and timely reconciliations[347](index=347&type=chunk) - **Remediation efforts are in process**, but material weaknesses remain as of January 31, 2023[335](index=335&type=chunk) [PART II - OTHER INFORMATION](index=51&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This part contains information on legal proceedings, risk factors, unregistered securities sales, and filed exhibits [Item 1. Legal Proceedings](index=51&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any legal proceedings that would be expected to have a material adverse effect - **No current legal proceedings** expected to have a material adverse effect on the company[230](index=230&type=chunk) - No pending proceedings involve directors, senior management, or affiliates adverse to the company[349](index=349&type=chunk) [Item 1A. Risk Factors](index=51&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the company's risk factors as previously disclosed in its Form 10-K - **No material changes** to risk factors since the Annual Report on Form 10-K for FY2022[350](index=350&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=51&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Details an unregistered offering of common stock and warrants to an institutional investor for approximately $5.0 million in September 2022 September 2022 Unregistered Offering | Item | Details | | :----- | :------ | | Common Stock Issued | 1,018,510 shares | | Pre-Funded Warrants Issued | To purchase 11,802,002 shares | | Common Stock Warrants Issued | 5-Year Warrants to purchase 12,820,512 shares; 7.5-Year Warrants to purchase 25,641,024 shares | | Aggregate Amount | Approximately $5.0 million | | Investor | Single institutional investor | [Item 6. Exhibits](index=52&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the report, including agreements, certifications, and XBRL data - Exhibits include Certificate of Incorporation, Bylaws, Loan and Security Agreement, Note, Warrant, Pledge and Security Agreement, Certifications (CEO, CFO), and XBRL documents[353](index=353&type=chunk) [SIGNATURES](index=53&type=section&id=SIGNATURES) Confirms the report's authorization and signing by the CEO on July 24, 2023 - Report signed by **Mike Ballardie** as President and CEO, and Principal Financial and Accounting Officer[343](index=343&type=chunk) - Date of signing: **July 24, 2023**[343](index=343&type=chunk)
Connexa(CNXA) - 2022 Q4 - Annual Report
2023-05-16 16:00
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended April 30, 2022 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________ to _____________ Commission File Number: 01-41423 CONNEXA SPORTS TECHNOLOGIES INC. (Exact name of registrant as specified in its charter) (State or other j ...
Connexa(CNXA) - 2022 Q3 - Quarterly Report
2022-03-16 16:00
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended January 31, 2022 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT For the transition period from ________ to ________ Commission File Number: 333-214463 SLINGER BAG INC. (Exact name of registrant as specified in its charter) Nevada 61-1789640 (State or other juris ...
Connexa(CNXA) - 2022 Q2 - Quarterly Report
2021-12-19 16:00
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended October 31, 2021 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT For the transition period from ________ to ________ Commission File Number: 333-214463 SLINGER BAG INC. (Exact name of registrant as specified in its charter) Nevada 61-1789640 (State or other juris ...
Connexa(CNXA) - 2022 Q1 - Quarterly Report
2021-09-13 16:00
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended July 31, 2021 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT For the transition period from ________ to ________ Commission File Number: 333-214463 SLINGER BAG INC. (Exact name of registrant as specified in its charter) Nevada 61-1789640 (State or other jurisdic ...
Connexa(CNXA) - 2021 Q4 - Annual Report
2021-08-05 16:00
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended April 30, 2021 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________ to _____________ Commission File Number: 333-214463 SLINGER BAG INC. (Exact name of registrant as specified in its charter) Nevada 61-1789640 (State or ...