Financial Performance - Revenue for the six months ended October 31, 2025, was $6.0 million, a decrease of $0.5 million or 8% compared to $6.5 million for the same period in 2024[155] - Gross profit for the six months ended October 31, 2025, was $4.5 million, down 11% from $5.1 million in the prior year[154] - Operating income decreased by 68% to $1.5 million for the six months ended October 31, 2025, compared to $4.8 million in the same period in 2024[154] - Net cash used in operating activities was $31.9 million for the six months ended October 31, 2025, compared to a net cash provided of $0.2 million in the same period in 2024[160] Expenses and Costs - General and administrative expenses increased by $2.2 million, from $0.3 million to $2.5 million for the six months ended October 31, 2025, primarily due to costs associated with YYEM becoming a Nasdaq-listed company[158] Cash and Working Capital - Cash and cash equivalents increased by approximately $105.45 million, from $0.05 million as of April 30, 2025, to $105.5 million as of October 31, 2025[160] - Working capital increased by approximately $140.5 million, or 884%, from $15.9 million as of April 30, 2025, to $156.0 million as of October 31, 2025[159] Investments and Acquisitions - The company signed a $500 million joint venture agreement to form AiRWA Exchange, a digital asset exchange focused on tokenizing U.S. stocks[143] - A private placement raised gross proceeds of $4.6 million by issuing 20,000,000 units, each comprising one share of common stock and two five-year warrants[146] - The company acquired an additional 30% of YYEM for $36 million, increasing its ownership stake[149] Accounting Policies and Standards - The Company adopted ASC 326 on June 30, 2022, which changed the impairment methodology to an "expected losses" approach for estimating credit losses[170] - Revenue is recognized when performance obligations are satisfied, following a five-step process in accordance with ASC 606[174] - Accounts receivable are recorded when obligations have been performed, with terms typically providing net 90-day terms[176] - Royalty income is recognized over time as the Company's technology rights are utilized by customers, reflecting ongoing revenue generation[177] - The Company has adopted ASC 740 for income taxes, recognizing deferred tax assets and liabilities based on temporary differences[178] - The Company does not expect recent accounting pronouncements to materially impact its financial position or results of operations[181] - The Company is currently evaluating the impact of several new accounting standards, including ASU 2024-03 and ASU 2025-01, but does not anticipate significant effects[182][184] Asset Performance - As of October 31, 2025, the Company had made no reserves for credit losses, indicating a stable collection environment[171] - The impairment charge recognized for the six months ended October 31, 2025, was nil, suggesting no significant adverse changes in asset values[172] - The Company has not recognized any impairment losses for long-lived assets, indicating stable asset performance[172]

Core Viewpoint - AiRWA Inc. has announced a registered direct offering of 15,382,378 shares of common stock at a price of $1.02 per share, aiming to raise approximately $15.69 million in gross proceeds before expenses [1][2]. Group 1: Offering Details - The offering is expected to close around December 22, 2025, pending customary closing conditions [1]. - A.G.P./Alliance Global Partners is acting as the sole placement agent for this offering [2]. Group 2: Use of Proceeds - The net proceeds from the offering will be used for a previously announced joint venture, corporate acquisitions, and general working capital purposes, although no specific acquisition plans are currently in place [2]. Group 3: Company Background - AiRWA Inc. operates through its majority-owned subsidiary, Yuanyu Enterprise Management Co., Limited, and focuses on technology licensing, particularly in the area of tokenized U.S. equities [5]. - The company is also involved in the Web3 space, promoting innovation in digital finance through the AiRWA Exchange, which emphasizes the tokenization of real-world assets [5].

Company Performance Overview - AiRWA Inc. experienced a dramatic stock price drop of approximately 51.93%, falling to $0.09, potentially due to a 1-for-50 reverse stock split effective October 27, 2025, which may signal financial instability [2][8] - Beneficient (BENF) saw a notable decline of 43.39%, with its stock price decreasing to $0.84, influenced by a strategy involving limited conversion of subsidiary securities into Class A common stock, which may have caused short-term uncertainty among investors [3][8] - Everbright Digital Holding Limited (EDHL) faced a 35.64% decrease in stock price to $0.69 after receiving a notification from Nasdaq regarding a deficiency in meeting the minimum bid price requirement [4][8] - Ambipar Emergency Response (AMBI) experienced a 32.14% decline in stock price to $0.76, as NYSE American announced delisting proceedings against the company, impacting investor confidence [5] - Integer Holdings Corporation (ITGR) saw a 30.52% decrease in stock price, now at $75.81, with its Q3 earnings report providing insights into its financial health [6] Market Dynamics - The significant price movements of these companies reflect a combination of company-specific developments, sectoral shifts, and broader market dynamics, which investors and stakeholders are closely monitoring to gauge future prospects [7]

Core Viewpoint - AiRWA Inc. will implement a 1-for-50 reverse stock split effective October 27, 2025, to meet Nasdaq's minimum bid price requirement and enhance the stock's appeal to institutional investors [1][2]. Group 1: Reverse Stock Split Details - The reverse stock split will consolidate every 50 shares into one, reducing the outstanding shares from approximately 949,066,180 to about 18,981,324 [3]. - No fractional shares will be issued; stockholders will receive a rounded-up whole share for any fractional shares resulting from the split [3]. - The number of authorized shares and par value per share will remain unchanged, and the stock will continue trading under the same Nasdaq ticker symbol (YYAI) with a new CUSIP number [3]. Group 2: Company Background - AiRWA Inc. owns advanced patents and proprietary technology through its subsidiary, Yuanyu Enterprise Management Co., Limited, focusing on digital matchmaking and technology solutions [5]. - The company is also involved in the Web3 space, particularly in the tokenization of real-world assets, including U.S. stocks [5].

Market Overview - U.S. stocks experienced an upward trend, with the Nasdaq Composite increasing by over 150 points on Wednesday. The Dow rose by 0.08% to 46,642.55, the NASDAQ increased by 0.70% to 22,947.47, and the S&P 500 gained 0.35% to 6,738.32 [1] - Information technology shares saw a notable increase of 1.1% on Tuesday, while energy stocks declined by 0.9% [1] Mortgage Applications - The volume of mortgage applications in the U.S. decreased by 4.7% for the week ending October 3, following a more significant drop of 12.7% in the previous week [2][7] Commodity Prices - In commodity markets, oil prices rose by 0.9% to $62.26, gold increased by 1.3% to $4,058.00, silver was up by 1.9% to $48.395, and copper saw a slight rise of 0.1% to $5.0985 [4] European Markets - European shares showed positive performance, with the eurozone's STOXX 600 rising by 0.7%, Spain's IBEX 35 Index increasing by 0.8%, London's FTSE 100 up by 0.6%, Germany's DAX 40 gaining 0.8%, and France's CAC 40 rising by 0.9% [5] Asian Markets - Asian markets closed lower, with Japan's Nikkei 225 falling by 0.45%, Hong Kong's Hang Seng index down by 0.48%, and India's BSE Sensex declining by 0.19% [6] Stock Movements - Xenetic Biosciences, Inc. (NASDAQ: XBIO) shares surged by 174% to $11.75, while Connexa Sports Technologies Inc. (NASDAQ: YYAI) saw a 102% increase to $0.3639. AlphaTON Capital Corp. (NASDAQ: ATON) shares rose by 81% to $10.08 [8] - Conversely, Galecto, Inc. (NASDAQ: GLTO) shares dropped by 42% to $10.48 after a significant jump of 383% on Tuesday. Zeta Network Group (NASDAQ: ZNB) shares fell by 41% to $2.00 following a $15 million registered direct offering at $1.00 per share. Envoy Medical, Inc. (NASDAQ: COCH) also experienced a decline of 38% to $0.9854 after announcing a $4 million registered direct offering at $1.33 per share [8]

Core Insights - AiRWA Inc. has secured an investment of approximately $30 million in Solana tokens, which will enhance the financial foundation of AiRWA Exchange and support its strategic focus on integrating Solana as a core asset for trading pairs [1] - AiRWA Exchange has completed test runs for settling trades of tokenized U.S. equities, allowing users to trade digital representations of U.S. stocks with the same ease as cryptocurrencies [2] - The platform aims to cater to cryptocurrency enthusiasts by enabling the trading of tokenized U.S. stocks like any other digital asset, with transactions settled within seconds on the blockchain [3] Business Model and Strategy - AiRWA Exchange plans to launch its services to approximately 4 million users from its joint venture partner, JuCoin, providing significant scale from the outset [4] - The company aims to revolutionize the trading experience for tokenized stocks and digital assets, merging blockchain technology's efficiency with traditional U.S. stock markets [5] - The integration of Solana and tokenized equities is expected to differentiate AiRWA Exchange in the digital asset marketplace, offering flexibility and speed for both institutional and retail traders [5] Company Background - AiRWA Inc. operates through its majority-owned subsidiary, Yuanyu Enterprise Management Co., Limited, which holds advanced patents and proprietary technology for digital matchmaking and technology solutions [6] - The company is actively involved in the Web3 space, focusing on the tokenization of real-world assets, particularly tokenized U.S. stocks [6]

Core Developments - Connexa Sports Technologies Inc. is transitioning to AiRWA Inc. to emphasize its focus on blockchain technology and the AiRWA Exchange [2][5] - The AiRWA Exchange aims to facilitate the tokenization and trading of real-world assets (RWA) and has secured $500 million in funding, with $100 million committed by JuCoin [1][5] - A partnership with Inca Digital will enhance the exchange's security and compliance through advanced monitoring and threat detection tools [1] Strategic Partnerships - AiRWA Exchange will prioritize Solana as its primary blockchain infrastructure, supported by an initial contribution of $30 million in Solana tokens from JuCoin [3][5] - The collaboration with JuCoin and Solana is seen as a long-term partnership aimed at driving innovation in digital finance [4] Vision and Future Outlook - The establishment of AiRWA Exchange represents a strategic shift towards creating a next-generation financial ecosystem [3] - The company believes in the decentralized future of finance, positioning AiRWA Exchange at the forefront of this transformation [4]

Core Insights - Connexa Sports Technologies Inc. has signed a service agreement with Inca Digital to support its joint venture with JuCoin Capital, focusing on the aiRWA platform for tokenizing real-world assets [1][4] - The aiRWA initiative is a $500 million project aimed at enhancing the exchange ecosystem's integrity through advanced monitoring and compliance capabilities provided by Inca Digital [2][5] Company Overview - Connexa Sports Technologies Inc. operates through its subsidiary, Yuanyu Enterprise Management Co., Limited, and holds advanced patents and proprietary technology for digital matchmaking solutions [6] Partnership Details - Inca Digital is recognized for its expertise in digital asset intelligence and security, having worked with major companies and U.S. federal agencies [3] - The collaboration aims to integrate compliance and security measures into the aiRWA platform from the outset, enhancing its operational standards [5] Strategic Goals - The partnership is expected to improve transparency, risk management, and regulatory alignment, which are crucial for the adoption of aiRWA by institutional and retail investors [5] - Inca Digital's involvement is part of its global growth strategy, particularly in expanding its presence in key digital asset markets in Asia [5] Technical Capabilities - Inca Digital will provide ecosystem mapping to identify threats, monitor for scams and fraud, analyze market data for manipulation, and deliver actionable outcomes through real-time alerts and collaboration with regulators [8]

[Filing Information](index=1&type=section&id=Filing%20Information) [Form 10-Q Details](index=1&type=section&id=Form%2010-Q%20Details) This Quarterly Report on Form 10-Q for Connexa Sports Technologies Inc. covers the period ended July 31, 2025, detailing its status as a Nasdaq-listed non-accelerated filer - The report is a **Quarterly Report on Form 10-Q** for the period ended July 31, 2025[2](index=2&type=chunk) - Connexa Sports Technologies Inc. is incorporated in Delaware[2](index=2&type=chunk) Company Classification and Trading Information | Attribute | Value | | :--- | :--- | | Trading Symbol | YYAI | | Exchange | Nasdaq Capital Market | | Filer Status | Non-accelerated filer, Smaller reporting company | [Shares Outstanding](index=2&type=section&id=Shares%20Outstanding) As of September 12, 2025, the company had 14,563,019 shares of common stock outstanding Common Stock Outstanding | Date | Shares Outstanding | | :--- | :--- | | September 12, 2025 | 14,563,019 | [Cautionary Statement Regarding Forward-Looking Information](index=3&type=section&id=CAUTIONARY%20STATEMENT%20REGARDING%20FORWARD%20LOOKING%20INFORMATION) [Forward-Looking Statements Disclosure](index=3&type=section&id=Forward-Looking%20Statements%20Disclosure) This report contains forward-looking statements subject to risks and uncertainties, with no obligation for the company to update them - The report includes **forward-looking statements** identified by words like 'believe,' 'expect,' 'anticipate,' 'intend,' 'estimate,' 'may,' 'should,' 'could,' 'will,' 'plan,' 'future,' and 'continue'[6](index=6&type=chunk) - Actual results may differ materially due to inaccurate assumptions, **business risks**, and known/unknown uncertainties beyond the company's control[6](index=6&type=chunk) - The company does not undertake to update or revise any forward-looking statements, except as required by law[7](index=7&type=chunk) [Key Risk Factors](index=3&type=section&id=Key%20Risk%20Factors) Key risks include low public float volatility, acquisition impacts, litigation, financing, and macroeconomic factors - **Volatility** related to the Company's relatively low public float[9](index=9&type=chunk) - The effects of prior **acquisitions and divestitures** on current and future business operations[9](index=9&type=chunk) - **Strategic and operational uncertainties**[9](index=9&type=chunk) - Risks associated with potential **litigation, financing transactions, or acquisitions**[9](index=9&type=chunk) - **Macroeconomic, competitive, legal, regulatory, tax, and geopolitical factors**[9](index=9&type=chunk) - Other **risks and uncertainties** related to prospects, properties, and business strategy[9](index=9&type=chunk) [PART I - FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents Connexa Sports Technologies Inc.'s unaudited consolidated financial statements and detailed notes [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased by $1.8 million, driven by accounts receivable and investments, while cash slightly decreased Consolidated Balance Sheet Highlights | Metric | As of July 31, 2025 | As of April 30, 2025 | Change (Approx.) | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | $52,693 | $54,744 | -$2,051 | | Investment | $2,464,615 | $1,382,857 | +$1,081,758 | | Accounts receivable | $18,388,701 | $15,388,701 | +$3,000,000 | | Total Current Assets | $24,972,762 | $22,396,159 | +$2,576,603 | | Intangible assets, net | $9,765,404 | $10,509,635 | -$744,231 | | TOTAL ASSETS | $34,738,166 | $32,905,794 | +$1,832,372 | | Total Current Liabilities | $7,058,612 | $6,487,171 | +$571,441 | | Total Shareholders' Equity | $27,679,554 | $26,418,623 | +$1,260,931 | [Consolidated Statements of Operations and Comprehensive Income](index=6&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) Revenue and gross profit decreased, while G&A expenses surged, leading to a substantial decline in net income Consolidated Statements of Operations Highlights (Three Months Ended July 31) | Metric | 2025 (unaudited) | 2024 (unaudited) | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | REVENUE | $3,000,000 | $3,272,727 | $(272,727) | -8% | | COST OF REVENUE | $744,231 | $744,231 | $0 | 0% | | GROSS PROFIT | $2,255,769 | $2,528,496 | $(272,727) | -11% | | General and administrative expenses | $764,386 | $88,520 | $675,866 | 764% | | OPERATING INCOME | $1,491,383 | $2,439,976 | $(948,593) | -39% | | NET INCOME ATTRIBUTABLE TO CONTROLLING INTEREST | $882,652 | $2,051,025 | $(1,168,373) | -57% | | Net income per share - basic | $0.06 | $0.18 | $(0.12) | -67% | | Weighted average common shares outstanding - basic | 14,563,023 | 11,610,817 | 2,952,206 | 25% | [Consolidated Statement of Changes in Shareholders' Equity](index=7&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Shareholders'%20Equity) Total shareholders' equity increased from May 1 to July 31, 2025, primarily due to comprehensive income Shareholders' Equity Changes (May 1, 2025 to July 31, 2025) | Metric | As of May 1, 2025 | Total Comprehensive Income | As of July 31, 2025 | | :--- | :--- | :--- | :--- | | Common Stock Amount | $14,563 | - | $14,563 | | Additional Paid-In Capital | $19,138,786 | - | $19,138,786 | | Retained Earnings | $6,123,114 | $882,652 | $7,005,766 | | Non-Controlling Interest | $1,142,160 | $378,279 | $1,520,439 | | Total Shareholders' Equity | $26,418,623 | $1,260,931 | $27,679,554 | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Operating cash usage increased, offset by financing, leading to a slight net decrease in cash and equivalents Consolidated Cash Flow Highlights (Three Months Ended July 31) | Metric | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Net income | $1,260,931 | $2,051,025 | $(790,094) | | Net cash used in operating activities | $(1,083,809) | $(601,294) | $(482,515) | | Net cash provided by financing activities | $1,081,758 | $606,803 | $474,955 | | NET INCREASE (DECREASE) IN CASH | $(2,051) | $5,509 | $(7,560) | | CASH AND CASH EQUIVALENTS - END OF PERIOD | $52,693 | $44,860 | $7,833 | [Notes to the Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) These notes detail accounting policies, risks, assets, revenue, related parties, equity, and subsequent events [Note 1. Organization and Nature of Business](index=9&type=section&id=Note%201.%20ORGANIZATION%20AND%20NATURE%20OF%20BUSINESS) Connexa acquired YYEM, divested Slinger Bag, now focusing on AI matchmaking technology and MENA social networking content - Connexa Sports Technologies Inc. (formerly Slinger Bag Inc.) acquired **70% of Yuanyu Enterprise Management Co., Limited (YYEM)** for **$56 million**, with **$16.5 million in cash** and the remainder in shares, closing on November 21, 2024[25](index=25&type=chunk)[33](index=33&type=chunk)[34](index=34&type=chunk) - The transaction was accounted for as a **'reverse acquisition'** where YYEM was the accounting acquirer, and Connexa was the legal acquirer, resulting in YYEM shareholders owning approximately **75.3%** of the combined company[35](index=35&type=chunk)[36](index=36&type=chunk) - Following the acquisition, Connexa disposed of its Slinger Bag business, making YYEM its sole operating subsidiary[34](index=34&type=chunk)[38](index=38&type=chunk) - YYEM operates in the emerging love and marriage market sector, aiming to empower global connections through innovative matchmaking technology[38](index=38&type=chunk) - YYEM owns advanced patents and proprietary technology, which it licenses out to partners worldwide to develop **AI-powered matchmaking platforms**[39](index=39&type=chunk) - YYEM is also developing a social networking vertical to produce content for live-streaming or TikTok users in the Middle East and North Africa (MENA region), anticipating an independent revenue stream based on performance-based conversion metrics[40](index=40&type=chunk) - YYEM's revenue model is currently based on **licensing fees**, generating **$12.8 million in royalties** for the financial year ended April 30, 2025[40](index=40&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=12&type=section&id=Note%202:%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines significant accounting policies, including GAAP, consolidation, revenue, and recent pronouncements - The financial statements are prepared in accordance with **U.S. GAAP** and SEC rules[45](index=45&type=chunk) - The company consolidates entities where it controls more than **50% of voting power** or has the ability to govern financial and operating policies[46](index=46&type=chunk)[47](index=47&type=chunk) - **Non-controlling interests** are classified as a component of equity, reflecting the **30% portion of YYEM** not attributable to the Company[50](index=50&type=chunk) - Revenue is recognized based on a **five-step model (ASC 606)** when performance obligations are satisfied, primarily from royalty income for technology licensing[75](index=75&type=chunk)[78](index=78&type=chunk) - Cost of revenue primarily consists of **amortization charges** for intangible assets (technology rights)[79](index=79&type=chunk) - The company evaluates long-lived assets for impairment when events indicate carrying value may not be recoverable, but **no impairment charge** was recognized for the three months ended July 31, 2025 and 2024[64](index=64&type=chunk) - The company adopted **ASU 2016-13 (CECL model)** for credit losses, but recorded **no expected credit losses** for accounts receivable for the three months ended July 31, 2025 and 2024[59](index=59&type=chunk)[62](index=62&type=chunk) - Several new FASB ASUs (2024-03, 2024-04, 2025-01, 2025-02, 2025-03, 2025-04, 2025-05) have been issued, but the company does not expect their adoption to have a **material impact** on its financial position, results of operations, or cash flows[98](index=98&type=chunk)[99](index=99&type=chunk)[100](index=100&type=chunk)[101](index=101&type=chunk)[102](index=102&type=chunk)[105](index=105&type=chunk)[106](index=106&type=chunk) [Note 3. Concentrations of Risk](index=21&type=section&id=Note%203:%20CONCENTRATIONS%20OF%20RISK) Significant customer and credit risk from reliance on three major customers for nearly all revenue and receivables - The company's accounts receivable and revenue are highly concentrated among **three major customers** (Customer A, D, E), accounting for approximately **100%** of total accounts receivable and total revenue for the three-month periods ended July 31, 2025 and 2024[112](index=112&type=chunk) Customer Concentration in Accounts Receivable | Customer | As of July 31, 2025 | As of July 31, 2024 | | :--- | :--- | :--- | | Customer A | 43% | 44% | | Customer D | 26% | 26% | | Customer E | 31% | 30% | - Cash and cash equivalents are held with major financial institutions believed to have high credit quality[111](index=111&type=chunk) [Note 4. Intangible Assets](index=21&type=section&id=Note%204:%20INTANGIBLE%20ASSETS) Intangible assets, primarily technology rights, are amortized over five years, with a net value of $9.77 million - Technology rights are amortized on a straight-line basis over an estimated useful life of **five years**[114](index=114&type=chunk) Intangible Assets - Technology Rights (as of July 31, 2025) | Metric | Amount | | :--- | :--- | | Cost | $14,884,615 | | Accumulated amortization | $(5,119,211) | | Net value | $9,765,404 | - Amortization expense for the three months ended July 31, 2025 and 2024, was approximately **$744,231**, included in cost of revenue[117](index=117&type=chunk) [Note 5. Revenue – Segment Reporting by Geographic Region](index=22&type=section&id=Note%205:%20REVENUE%20%E2%80%93%20SEGMENT%20REPORTING%20BY%20GEOGRAPHIC%20REGION) Revenue segmented by geographic region (Hong Kong, US, UK) decreased by 8% year-over-year Revenue by Geographic Region (Three Months Ended July 31) | Location | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Hong Kong | $1,250,000 | $1,363,636 | $(113,636) | | United States of America | $750,000 | $818,182 | $(68,182) | | United Kingdom | $1,000,000 | $1,090,909 | $(90,909) | | Total | $3,000,000 | $3,272,727 | $(272,727) | [Note 6. Accounts Receivable](index=22&type=section&id=Note%206:%20ACCOUNTS%20RECEIVABLE) Accounts receivable increased by $3.0 million to $18.39 million, with no credit loss provisions recorded Accounts Receivable | Metric | As of July 31, 2025 | As of April 30, 2025 | | :--- | :--- | :--- | | Accounts receivable | $18,388,701 | $15,388,701 | - All accounts receivable were due from third-party customers, and **no provisions for credit losses** were made as of July 31, 2025, and April 30, 2025[120](index=120&type=chunk) [Note 7. Investment](index=23&type=section&id=Note%207:%20INVESTMENT) Investment in Brightstar Technology Group is subject to a downside guarantee, ensuring a minimum value - The company holds a quoted investment in **Brightstar Technology Group Co., Ltd.**, a Hong Kong Stock Exchange-listed company[123](index=123&type=chunk) - A **downside guarantee** from the investment's contributor ensures a minimum value, with compensation for shortfalls recognized as 'Shares guarantee income'[123](index=123&type=chunk)[124](index=124&type=chunk) [Note 8. Amount Due From Related Party](index=23&type=section&id=Note%208:%20AMOUNT%20DUE%20FROM%20RELATED%20PARTY) Amount due from related party Hongyu Zhou decreased to $1.75 million, related to an investment guarantee, expected to settle Related Party Balances (Hongyu Zhou) | Metric | As of July 31, 2025 | As of April 30, 2025 | | :--- | :--- | :--- | | Amount due from related party | $1,745,770 | $2,827,528 | | Amount due to related party | $775,406 | $775,406 | - The amount due from Hongyu Zhou represents compensation under a **downside guarantee** for the investment in Brightstar Technology Group Co., Ltd., expected to be fully settled[125](index=125&type=chunk)[126](index=126&type=chunk) - The amount due to Hongyu Zhou represents expenses paid on behalf of the company[127](index=127&type=chunk) [Note 9. Accrued Expenses](index=24&type=section&id=Note%209:%20ACCURRED%20EXPENSES) Accrued expenses increased to $2.75 million, primarily due to higher accrued salaries and benefits for management Summary of Accrued Expenses | Accrued Expense Category | As of July 31, 2025 | As of April 30, 2025 | | :--- | :--- | :--- | | Accrued salaries and benefits – management | $797,387 | $477,500 | | Accrued signing bonus | $300,000 | $300,000 | | Accrued success fee | $1,000,000 | $1,000,000 | | Amount due from bank | $4,876 | $2,488 | | Accrued directors' fees | $150,000 | $150,000 | | Accrued professional fees | $498,143 | $498,143 | | Total | $2,750,406 | $2,428,131 | [Note 10. Shareholders' Equity](index=24&type=section&id=Note%2010:%20SHAREHOLDERS'%20EQUITY) Common shares outstanding increased to 14.56 million, mainly due to YYEM acquisition and warrant exercises Common Stock Issued and Outstanding | Date | Shares Issued and Outstanding | | :--- | :--- | | July 31, 2025 | 14,563,019 | | July 31, 2024 | 1,828,541 | - The company issued **8,127,572 shares** of common stock from November 1, 2024, through July 31, 2025, to complete the acquisition of YYEM[132](index=132&type=chunk) - From August 1, 2024, through October 31, 2024, **3,776,305 shares** were issued for warrant exercises[133](index=133&type=chunk) - From May 1, 2024, through July 31, 2024, **830,608 shares** were issued for various reasons including true-up shares, services rendered, warrant exercises, and fractional shares from a 1-for-20 reverse stock split[138](index=138&type=chunk) [Note 11. Commitments and Contingencies](index=25&type=section&id=Note%2011:%20COMMITMENTS%20AND%20CONTINGENCIES) No material legal proceedings or litigation existed as of July 31, 2025, that could adversely impact financial position - The company had **no material legal claims or litigation** for the three months ended July 31, 2025, that could have a material adverse impact on its financial position, results of operations, or cash flows[85](index=85&type=chunk)[139](index=139&type=chunk) [Note 12. Subsequent Events](index=25&type=section&id=Note%2012:%20SUBSEQUENT%20EVENTS) Post-period, the company closed a $4.6 million private placement, increased ATM facility, and entered a crypto exchange JV - On August 19, 2025, the company closed a private placement of **20,000,000 units** (common stock + warrants), generating gross proceeds of **$4,600,000**[140](index=140&type=chunk) - On August 22, 2025, the company increased the amount it could raise through its **'at the market' (ATM) facility to $200,000,000**[141](index=141&type=chunk) - On August 25, 2025, the company signed a JV Agreement with JuCoin Capital Pte Ltd to establish a cryptocurrency exchange, with each party contributing **$250,000,000** in cash or cryptocurrency. The company will hold **51%** of the JV's share capital[142](index=142&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition and results for the three months ended July 31, 2025, covering business, fundraising, and operations [Overview](index=26&type=section&id=Overview) Connexa operates through YYEM, focusing on AI matchmaking technology and content development for TikTok in MENA - The company operates through Yuanyu Enterprise Management Co., Limited (YYEM), a Hong Kong-based subsidiary established in November 2021, engaged in the **love and marriage market sector**[145](index=145&type=chunk) - YYEM licenses advanced patents and proprietary technology to develop an **AI-powered matchmaking platform** for global partners[146](index=146&type=chunk) - YYEM generated **$3.0 million in royalties** from license agreements across Asia, Europe, and Africa for the three months ended July 31, 2025[147](index=147&type=chunk) - In February 2025, YYEM entered an agency agreement to develop content for **TikTok in the MENA region**, aiming to diversify revenue streams through performance-based conversion metrics[148](index=148&type=chunk) [Fundraising](index=26&type=section&id=Fundraising) The company completed a $4.6 million private placement and increased its ATM facility to $200 million for capital flexibility - On June 30, 2025, the company executed a securities purchase agreement for a private placement of **20,000,000 units** (common stock + warrants) targeting **$4.6 million** in gross proceeds[149](index=149&type=chunk) - The private placement closed on August 19, 2025, generating **$4,600,000 in gross proceeds**[149](index=149&type=chunk) - Under a prospectus supplement dated August 22, 2025, the company's **ATM facility was increased to $200 million**, offering strategic flexibility for future capital raising[150](index=150&type=chunk) [Recent Developments](index=27&type=section&id=Recent%20Developments) The company entered a JV with JuCoin Capital to establish a crypto exchange, contributing $250 million for a 51% stake - On August 25, 2025, the company and JuCoin Capital Pte Ltd signed a JV Agreement to establish a **cryptocurrency exchange**[151](index=151&type=chunk) - Each party will contribute **$250 million** in cash or cryptocurrency to the JV[151](index=151&type=chunk) - The company will receive **51% of the JV's share capital** and appoint three of the five board members[151](index=151&type=chunk) [Components of Results of Operations](index=27&type=section&id=Components%20of%20Results%20of%20Operations) This section defines revenue, cost of revenue, general and administrative expenses, and gross profit components - Revenue is generated from **license fees** for the use of the company's technology[152](index=152&type=chunk) - Cost of revenue primarily consists of **amortization charges** against intangible assets (technology rights)[153](index=153&type=chunk) - General and administrative expenses include salaries, benefits, professional fees (legal, accounting, consulting), travel, and other office expenses[154](index=154&type=chunk) - Gross profit is calculated as revenue minus cost of revenue[154](index=154&type=chunk) [Results of Operations (Three months ended July 31, 2025, compared to July 31, 2024)](index=27&type=section&id=Results%20of%20Operations) Revenue decreased by 8%, gross profit declined by 11%, and G&A expenses surged by 764%, leading to a 39% drop in operating income Results of Operations (Three Months Ended July 31) | Metric | 2025 | 2024 | Change Amount | Change % | | :--- | :--- | :--- | :--- | :--- | | Revenue | $3,000,000 | $3,272,727 | $(272,727) | -8% | | Cost of Revenue | $744,231 | $744,231 | - | -% | | Gross Profit | $2,255,769 | $2,528,496 | $(272,727) | -11% | | General and Administrative Expenses | $764,386 | $88,520 | $675,866 | 764% | | Operating Income | $1,491,383 | $2,439,976 | $(948,593) | -39% | - Revenue decreased by **$0.3 million (8%)** due to minor timing differences in license agreement signings[156](index=156&type=chunk) - Cost of revenue remained constant as it consists solely of intangible asset amortization[157](index=157&type=chunk) - General and administrative expenses increased by **$0.7 million (764%)** due to higher costs associated with YYEM becoming an operating subsidiary of a Nasdaq-listed company (audit fees, legal fees, insurance, D&O compensation)[158](index=158&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) Working capital increased by 13%, net cash used in operating activities rose by 80%, and existing cash is sufficient for 12 months Cash Flow Summary (Three Months Ended July 31) | Metric | 2025 | 2024 | Change Amount | Change % | | :--- | :--- | :--- | :--- | :--- | | Cash Flow Used in Operating Activities | $(1,083,809) | $(601,294) | $(482,515) | 80% | | Cash Flow Provided by Financing Activities | $1,081,758 | $606,803 | $474,955 | 78% | | Cash and Cash Equivalents (End of Period) | $52,693 | $44,860 | $7,833 | 17% | - Working capital increased by approximately **$2.0 million (13%)** to **$17.9 million** as of July 31, 2025[159](index=159&type=chunk) - The increase in net cash used in operating activities was primarily driven by a **$0.7 million increase** in general and administrative expenses[161](index=161&type=chunk) - The company believes existing cash and potential capital market fundraising will be sufficient to meet anticipated operating needs for at least the next **12 months**[163](index=163&type=chunk) [Off Balance Sheet Arrangements](index=28&type=section&id=Off%20Balance%20Sheet%20Arrangements) The company has no material off-balance sheet arrangements impacting its financial condition or liquidity - The company has **no material off-balance sheet arrangements**[164](index=164&type=chunk) [Significant Accounting Policies](index=28&type=section&id=Significant%20Accounting%20Policies) This section reiterates key accounting policies: estimates, credit losses, impairment, fair value, revenue, and new pronouncements [Use of Estimates](index=30&type=section&id=Use%20of%20Estimates) Management makes estimates and assumptions for financial statements, particularly for long-lived assets and deferred tax valuation - Management makes estimates and assumptions affecting reported asset/liability amounts and revenue/expense disclosures, particularly for **long-lived assets** and **deferred income tax asset valuation allowances**[167](index=167&type=chunk) - Actual results may differ materially from estimates, impacting future operations[167](index=167&type=chunk) [Allowance for Credit Losses](index=30&type=section&id=Allowance%20for%20Credit%20Losses) The company adopted the CECL model for credit losses but recorded no reserves as of July 31, 2025, and April 30, 2025 - The company adopted **ASC 326 (CECL model)** on June 30, 2022, replacing the incurred loss methodology with an expected loss approach for credit losses[169](index=169&type=chunk) - **No reserves for credit losses** were made as of July 31, 2025, and April 30, 2025[170](index=170&type=chunk) [Impairment of Long-Lived Assets](index=30&type=section&id=Impairment%20of%20long-lived%20assets) Long-lived assets are evaluated for impairment, but no charge was recognized for the three months ended July 31, 2025, and 2024 - Long-lived assets are evaluated for impairment when events or changes in circumstances indicate that the carrying value may not be fully recoverable or the useful life is shorter than estimated[171](index=171&type=chunk) - **No impairment charge** was recognized for the three months ended July 31, 2025, and 2024[171](index=171&type=chunk) [Fair Value of Financial Instruments](index=30&type=section&id=Fair%20value%20of%20financial%20instruments) Fair value is the price for an orderly transaction, and short-term financial instruments approximate fair value - Fair value is the price received from selling an asset or paid to transfer a liability in an orderly transaction between market participants[172](index=172&type=chunk) - The carrying amount of cash and cash equivalents and accounts receivable approximates fair value due to their **short-term maturity**[71](index=71&type=chunk) [Revenue Recognition](index=30&type=section&id=Revenue%20Recognition) Revenue is recognized under ASC 606 using a five-step model, primarily from royalty income for technology licensing over time - Revenue is recognized net of VAT, following a **five-step model under ASC 606**, when performance obligations are satisfied by transferring control of goods or services to a customer[173](index=173&type=chunk)[174](index=174&type=chunk) - Royalty income from license fees for technology rights is recognized over time as the technology rights are used by customers[176](index=176&type=chunk) [Income Taxes](index=31&type=section&id=Income%20Taxes) The company applies ASC 740 for income taxes; prior to acquisition, YYEM allocated taxable income to members, no federal tax provision - The company adopted **ASC 740, Income Taxes**, using the asset and liability method[177](index=177&type=chunk) - Prior to the acquisition by YYAI, YYEM, as a limited liability company, allocated taxable income or loss to its members, thus **no provision or liability for federal income taxes** was included in its financial statements[178](index=178&type=chunk) [Share-Based Payment](index=31&type=section&id=Share-Based%20Payment) Share-based compensation is accounted for under ASC 718, measured at grant date fair value and expensed over the vesting period - Share-based compensation is accounted for in accordance with **ASC 718**, with costs measured at grant date fair value and recognized as an expense on a straight-line basis over the vesting period[179](index=179&type=chunk) [Recent Accounting Pronouncements](index=31&type=section&id=Recent%20Accounting%20Pronouncements) The company evaluated new FASB ASUs and does not expect a material impact on its financial position, results, or cash flows - The company is evaluating the impact of several new FASB ASUs (2024-03, 2024-04, 2025-01, 2025-02, 2025-03, 2025-04, 2025-05) but does not expect a **material impact** on its financial position, results of operations, or cash flows[181](index=181&type=chunk)[182](index=182&type=chunk)[183](index=183&type=chunk)[184](index=184&type=chunk)[185](index=185&type=chunk)[186](index=186&type=chunk)[187](index=187&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is not applicable to the company, indicating no material market risk disclosures are required - This section is **not applicable** to the company[188](index=188&type=chunk) [Item 4. Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective as of July 31, 2025, with no material changes in internal control - The company's **disclosure controls and procedures** were evaluated and deemed effective as of July 31, 2025[190](index=190&type=chunk) - There were **no material changes** in internal control over financial reporting during the quarter ended July 31, 2025[191](index=191&type=chunk) [PART II - OTHER INFORMATION](index=34&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=34&type=section&id=Item%201.%20Legal%20Proceedings) No material pending or threatened legal proceedings existed that could significantly affect the company's operations - As of the issuance date, there were **no pending or threatened legal proceedings** that could reasonably be expected to have a material effect on the company's operations[194](index=194&type=chunk) - No executive officers or directors have been involved in any bankruptcy proceedings, criminal proceedings (other than minor offenses), or subject to orders limiting business involvement within the last five years[195](index=195&type=chunk) [Item 1A. Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the Form 10-K for the period ended April 30, 2025 - **No material changes** to the risk factors previously disclosed in the Form 10-K for the period ended April 30, 2025[196](index=196&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=34&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company completed a private placement on August 19, 2025, issuing 20 million units to raise $4.6 million - On June 30, 2025, the company executed securities purchase agreements for a private placement of **20,000,000 units** (each comprising one share of common stock and two five-year warrants with an exercise price of $0.89)[197](index=197&type=chunk) - The private placement targeted gross proceeds of **$4.6 million** and closed on August 19, 2025[197](index=197&type=chunk) [Item 3. Defaults Upon Senior Securities](index=34&type=section&id=Item%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES.) The company reported no defaults upon senior securities - There were **no defaults upon senior securities**[198](index=198&type=chunk) [Item 4. Mine Safety Disclosures](index=34&type=section&id=Item%204.%20MINE%20SAFETY%20DISCLOSURES) This section is not applicable to the company - This section is **not applicable** to the company[199](index=199&type=chunk) [Item 5. Other Information](index=34&type=section&id=Item%205.%20OTHER%20INFORMATION.) No director or officer adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter - No director or officer adopted or terminated any **'Rule 10b5-1 trading arrangement'** or **'non-Rule 10b5-1 trading arrangement'** during the quarter ended July 31, 2025[200](index=200&type=chunk) [Item 6. Exhibits](index=34&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including director agreements, the JV agreement, and certifications - Director Service and Indemnity Agreement with Bini Zhu (August 15, 2025)[201](index=201&type=chunk) - Joint Venture Agreement with JuCoin Capital Pte Ltd (August 25, 2025)[201](index=201&type=chunk) - Certifications of Principal Executive Officer and Principal Financial Officer (Rule 13a-14(a) and 18 U.S.C. 1350)[202](index=202&type=chunk) - Inline XBRL Instance Document and Taxonomy Extension Documents[202](index=202&type=chunk) [Signatures](index=36&type=section&id=SIGNATURES) [Report Signatures](index=36&type=section&id=Report%20Signatures) The report was signed on September 15, 2025, by the CEO and CFO of Connexa Sports Technologies Inc - The report was signed on **September 15, 2025**[206](index=206&type=chunk) - Signatories include **Thomas Tarala, Chief Executive Officer**, and **Guibao Ji, Chief Financial Officer and Principal Accounting Officer**[206](index=206&type=chunk)

Core Insights - Connexa Sports Technologies Inc. (YYAI) and JuCoin Capital Pte Ltd have filed a $500 million definitive agreement to establish aiRWA, a digital asset platform focused on real-world asset tokenization [1][2][3] Company Overview - YYAI will contribute $250 million in cash and digital assets, while JuCoin will match this amount, aiming to bridge traditional and digital finance [3] - JuCoin is recognized in the digital finance sector with a global platform that includes asset management and blockchain infrastructure, while YYAI brings experience in traditional finance and public company governance [4] Industry Focus - The venture targets the emerging market for real-world asset (RWA) tokenization, which aims to digitize traditional investments like real estate and government bonds, enhancing transparency and accessibility [2] - The partnership is expected to accelerate the adoption of digital financial solutions while ensuring compliance and transparency standards [4][5]