PART I [Business](index=5&type=section&id=Item%201.%20Business) Connexa Sports Technologies, after divesting its legacy business, now focuses on licensing AI and metaverse matchmaking technology and developing a new social networking vertical - On March 18, 2024, the Company acquired **70% of Yuanyu Enterprise Management Co., Limited (YYEM) for $56 million**, concurrently divesting its legacy "Slinger Bag" business for $1.00, making YYEM its sole operating subsidiary[16](index=16&type=chunk)[17](index=17&type=chunk) - Primary revenue is derived from licensing **six metaverse-related technologies and five AI matchmaking patents**, designed to integrate with major AI models like Huawei Pangu and Baidu Wenxinyiyan[20](index=20&type=chunk)[21](index=21&type=chunk) Fiscal Year 2025 Revenue | Metric | Value | | :--- | :--- | | Royalty Revenue | $12.8 million | - A new social networking vertical was established in February 2025 through an agreement with TikTok to produce content for the MENA region, creating an independent revenue stream[27](index=27&type=chunk) - The company has **three main licensees** for its technology, covering Japan/South Korea, UK/Europe, and Sub-Saharan Africa[35](index=35&type=chunk) [Risk Factors](index=15&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant operational, financial, and regulatory risks, including reliance on licensees, market competition, funding needs, and geopolitical exposure through its Hong Kong subsidiary - A substantial portion of revenue is dependent on intellectual property licensing agreements with third parties, and their failure to perform could significantly impact financial results[61](index=61&type=chunk)[62](index=62&type=chunk) - The love and marriage market is highly competitive with low switching costs for consumers, and competition from large, established players like Facebook's dating feature poses a significant threat[68](index=68&type=chunk)[70](index=70&type=chunk) - The company may require additional financing to fund its working capital needs and growth strategy, with no guarantee of availability on favorable terms[115](index=115&type=chunk)[116](index=116&type=chunk) - Operating a subsidiary in Hong Kong exposes the company to risks from the Chinese government, which could exercise significant oversight and control, potentially impacting operations and stock value[142](index=142&type=chunk)[148](index=148&type=chunk) - The company's former independent auditor, Olayinka Oyebola & Co. (OOC), faces SEC charges, which could impact the credibility of past financial statements for both Connexa and YYEM and potentially require restatements[125](index=125&type=chunk)[127](index=127&type=chunk) - Following the acquisition of YYEM, the former YYEM shareholder owns approximately **55.8% of the company's common stock**, enabling significant influence over corporate matters[161](index=161&type=chunk) [Unresolved Staff Comments](index=36&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) This item is not applicable to the company because it qualifies as a smaller reporting company - Not applicable to smaller reporting companies[178](index=178&type=chunk) [Cybersecurity](index=36&type=section&id=Item%201C.%20Cybersecurity) The company has established a comprehensive cybersecurity risk management framework, managed internally and overseen by the Board, with no material incidents reported for FY2025 - A cybersecurity risk management framework is in place, managed by internal IT staff with oversight from the Board of Directors[180](index=180&type=chunk)[184](index=184&type=chunk) - No cybersecurity incidents occurred during the fiscal year ended April 30, 2025, that resulted in operational interruptions or material impact[183](index=183&type=chunk) [Properties](index=38&type=section&id=Item%202.%20Properties) The company does not own any real estate, leasing its principal office in Hong Kong for HKD 42,000 monthly, with the lease expiring in August 2026 - The company leases its principal office in Hong Kong for **HKD 42,000 per month**, with the lease expiring in August 2026[186](index=186&type=chunk) [Legal Proceedings](index=38&type=section&id=Item%203.%20Legal%20Proceedings) As of the report date, the company was not involved in any pending or threatened legal proceedings expected to materially affect its operations - There are no pending or threatened legal proceedings that could materially affect the company[187](index=187&type=chunk) [Mine Safety Disclosures](index=38&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[189](index=189&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=39&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on Nasdaq under "YYAI" with 509 holders of record as of August 7, 2025, and it has no plans to pay cash dividends, retaining earnings for operations and expansion - The company's common stock is listed on Nasdaq under the symbol **"YYAI"**[192](index=192&type=chunk) - As of August 7, 2025, there were **509 holders of record** of the common stock[193](index=193&type=chunk) - The company has never declared or paid cash dividends and does not anticipate paying any in the near future[194](index=194&type=chunk) [Selected Financial Data](index=39&type=section&id=Item%206.%20Selected%20Financial%20Data) This item is not applicable to the company because it qualifies as a smaller reporting company - Not applicable to smaller reporting companies[200](index=200&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operation](index=40&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operation) For FY2025, revenue increased by 147% to $12.8 million due to new licensing agreements, driving a 145% increase in gross profit and a 71% increase in operating income, while working capital grew 93% despite a decrease in operating cash flow due to increased accounts receivable Results of Operations (FY 2025 vs. FY 2024) | Metric | FY 2025 ($M) | FY 2024 ($M) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | $12.8 | $5.2 | +147% | | Gross Profit | $9.8 | $4.0 | +145% | | Operating Income | $6.6 | $3.9 | +71% | Cash Flow Summary (FY 2025 vs. FY 2024) | Metric | FY 2025 ($M) | FY 2024 ($M) | | :--- | :--- | :--- | | Cash Flow from Operating Activities | ($0.38) | $2.49 | | Cash Flow from Financing Activities | $0.39 | ($2.45) | - Working capital increased by **93% to $16.0 million** as of April 30, 2025, up from $8.2 million a year prior[216](index=216&type=chunk) - The decrease in operating cash flow was primarily driven by a **$10.0 million increase in accounts receivable**, as licensees have up to 90 days after year-end to pay[216](index=216&type=chunk)[218](index=218&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=47&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This item is not applicable to the company because it qualifies as a smaller reporting company - As a smaller reporting company, we are not required to provide this information[250](index=250&type=chunk) [Financial Statements and Supplementary Data](index=47&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data.) This section presents the company's audited consolidated financial statements for FY2025 and FY2024, with an unqualified opinion from Enrome LLP, reflecting the reverse acquisition accounting of YYEM and detailing key financial figures and accounting policies - The financial statements were audited by Enrome LLP, which issued an **unqualified opinion**[256](index=256&type=chunk) - The acquisition of YYEM was accounted for as a "reverse acquisition," with YYEM being the accounting acquirer and Connexa (the legal acquirer) being the accounting acquiree[281](index=281&type=chunk)[282](index=282&type=chunk) Consolidated Balance Sheet Highlights (as of April 30) | Metric | 2025 ($) | 2024 ($) | | :--- | :--- | :--- | | Total Assets | 32,905,794 | 23,164,682 | | Total Liabilities | 6,487,171 | 1,442,006 | | Total Shareholders' Equity | 26,418,623 | 21,722,676 | Consolidated Statement of Operations Highlights (for the year ended April 30) | Metric | 2025 ($) | 2024 ($) | | :--- | :--- | :--- | | Revenue | 12,818,182 | 5,195,804 | | Net Income | 4,633,447 | 2,625,554 | | Net Income Attributable to Controlling Interest | 3,491,287 | 2,625,554 | - The company's three largest customers accounted for **100% of total accounts receivable and revenues** for the year ended April 30, 2025[353](index=353&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=71&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) On March 24, 2025, the company dismissed Bush & Associates CPA and engaged Enrome LLP as its new independent registered public accounting firm to improve communication efficiency, with no disagreements on accounting principles or disclosures - The company changed its independent auditor from Bush & Associates CPA to Enrome LLP on **March 24, 2025**[383](index=383&type=chunk) - The reason for the change was to address communication challenges due to the geographic locations of the auditor and management[384](index=384&type=chunk) - There were no disagreements with the former auditor on any matter of accounting principles or practices[385](index=385&type=chunk) [Controls and Procedures](index=71&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of April 30, 2025, with no material changes to internal control over financial reporting during the fiscal year - Management concluded that disclosure controls and procedures were **effective** as of the end of the fiscal year, April 30, 2025[387](index=387&type=chunk) - No material changes to internal control over financial reporting occurred during the year ended April 30, 2025[388](index=388&type=chunk) [Other Information](index=72&type=section&id=Item%209B.%20Other%20Information) This item is not applicable - Not applicable[392](index=392&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=72&type=section&id=Item%209C.%20Foreign%20Jurisdictions%20that%20Prevent%20Inspection) This item is not applicable - Not applicable[393](index=393&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=73&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) This section provides biographical details for the company's executive officers, Thomas Tarala (CEO) and Guibao Ji (CFO), and its five-member Board of Directors, which includes three independent directors and an Audit Committee Financial Expert - The company's executive officers are **Thomas Tarala (CEO)** and **Guibao Ji (CFO)**[396](index=396&type=chunk) - The Board of Directors is composed of **five members, three of whom are independent**[407](index=407&type=chunk)[408](index=408&type=chunk) - Chenlong Liu is qualified as the **Audit Committee Financial Expert**[410](index=410&type=chunk) [Executive Compensation](index=78&type=section&id=Item%2011.%20Executive%20Compensation) Executive compensation for FY2025 and FY2024 is detailed, including CEO Thomas Tarala's $720,000 base salary, $300,000 stock signing bonus, and $1,000,000 merger success fee, and CFO Guibao Ji's $250,000 annual salary, with director compensation now a $15,000 quarterly cash payment Executive Compensation (FY 2025) | Name and Principal Position | Salary ($) | Share Awards ($) | Total ($) | | :--- | :--- | :--- | :--- | | Thomas Tarala (CEO) | 320,000 | 1,300,000 | 1,620,000 | | Guibao Ji (CFO) | 111,111 | - | 111,111 | - CEO Thomas Tarala's employment agreement includes a base salary of **$720,000**, a **$300,000 signing bonus** in common stock, and a **$1,000,000 success fee** related to the YYEM merger[429](index=429&type=chunk) - CFO Guibao Ji's employment agreement provides for an annual salary of **$250,000** and a discretionary bonus[436](index=436&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=81&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) As of August 7, 2025, director Hongyu Zhou was the largest beneficial owner, holding 55.81% of the company's common stock, representing the entire ownership of all current officers and directors as a group, with 1,500,000 shares available for future issuance under the 2020 Global Share Incentive Plan Security Ownership of Major Shareholders and Management | Name | of Shares | % of Class | | :--- | :--- | :--- | | Hongyu Zhou (Director) | 8,127,572 | 55.81% | | All current officers and directors as a group (5 persons) | 8,127,572 | 55.81% | - The 2020 Global Share Incentive Plan has **1,500,000 shares of common stock** available for issuance[449](index=449&type=chunk) [Certain Relationships and Related Transactions and Director Independence](index=82&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%20and%20Director%20Independence) The company has significant related-party transactions with director Hongyu Zhou, including a $2,827,528 contingent receivable from his guarantee on an investment and a $775,406 payable to him for covered expenses - Director Hongyu Zhou has provided a guarantee on the value of the company's investment in Brightstar Technology Group, creating a contingent receivable of **$2,827,528** as of April 30, 2025[450](index=450&type=chunk) - As of April 30, 2025, the company had a payable of **$775,406** to Mr. Zhou for expenses he covered on behalf of the company[451](index=451&type=chunk) [Principal Accountant Fees and Services](index=82&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) The company incurred $200,000 in audit fees for fiscal year 2025 and $120,000 for fiscal year 2024 from its principal independent accountants, with no other fees paid for tax or other services in either year Accountant Fees | Fee Type | Fiscal 2025 ($) | Fiscal 2024 ($) | | :--- | :--- | :--- | | Audit Fees | 200,000 | 120,000 | | Tax Fees | 0 | 0 | | All Other Fees | 0 | 0 | | **Total** | **200,000** | **120,000** | PART IV [Exhibits, Financial Statement Schedules](index=83&type=section&id=Item%2015.%20Exhibit%20and%20Financial%20Statement%20Schedules) This section incorporates the company's financial statements by reference and provides a comprehensive list of all exhibits filed as part of the Annual Report on Form 10-K, including key corporate documents and material agreements - This section lists all exhibits filed with the Form 10-K, including key corporate documents and material contracts[456](index=456&type=chunk)

Acquisition and Corporate Structure - The Company acquired 70% of Yuanyu Enterprise Management Co., Limited (YYEM) for a total of $56 million, with $16.5 million paid in cash for 20% on March 20, 2024[87]. - Following the acquisition, the Company completed a share exchange transaction on November 21, 2024, acquiring an additional 50% of YYEM for 8,127,572 newly issued shares, resulting in a total ownership of 70%[88]. - The Company accounted for the acquisition of YYEM as a reverse merger, with historical operating results reflecting those of YYEM[88]. - Hongyu Zhou, the YYEM Seller, agreed to make an aggregate payment of $5 million to the Company as part of the acquisition inducement[89]. - The Company appointed new directors and officers following the acquisition, including Thomas Tarala as CEO and Guibao Ji as CFO[90]. - The Company engaged Bush & Associates CPA as its new independent registered public accounting firm for the fiscal year ended April 30, 2025, after dismissing Olayinka Oyebola & Co due to SEC charges against them[106]. Financial Performance - Net revenue increased by $8.4 million, or 581%, for the nine-month period ended January 31, 2025, and by $2.8 million, or 581%, for the three-month period ended January 31, 2025, compared to the same periods in 2024[113]. - Cost of revenue increased by $1.8 million, or 416%, for the nine-month period ended January 31, 2025, and by $600,000, or 416%, for the three-month period ended January 31, 2025, compared to the same periods in 2024[114]. - Gross profit increased by $6.6 million, or 651%, for the nine-month period ended January 31, 2025, and by $2.2 million, or 651%, for the three-month period ended January 31, 2025, compared to the same periods in 2024[114]. - General and administrative expenses increased by $2,280,120 for the nine-month period ended January 31, 2025, and by $1,996,300 for the three-month period ended January 31, 2025, from an immaterial amount in the corresponding periods in 2024[115]. - Net income from operations increased by $4.3 million for the nine-month period ended January 31, 2025, and by $196,000 for the three-month period ended January 31, 2025, compared to the same periods in 2024[117]. - Net current assets increased to $15.3 million as of January 31, 2025, from $9.0 million as of April 30, 2024, an increase of approximately $6.3 million[118]. - Accounts receivable increased by $9.1 million as royalty revenue was recognized over the period[118]. - Provision for income taxes increased by 655% for the nine-month period ended January 31, 2025, compared to the same period in 2024[117]. - The company has no outstanding indebtedness[120]. Market Focus and Operations - YYEM generated approximately $1.9 million in royalties for the fiscal year ended January 31, 2024, and has potential cumulative revenue exceeding $70 million from agreements in Japan, South Korea, Europe, and Sub-Saharan Africa over the next three years[104]. - The Company reported that the results for the nine-month period ended January 31, 2025 do not include the Legacy Business operations, as YYEM is now the operating subsidiary[105]. - A Multi-Channel Network (MCN) agency services agreement was signed in February 2025 to create content for TikTok, focusing on live-streaming and user-generated content in the Middle East and North Africa[109]. - The Company has transitioned its focus to the emerging love and marriage market sector through YYEM, which operates an AI matchmaker application[103]. Economic Outlook - The company does not believe that inflation and changes in prices will have a material effect on its operations[122].

Core Insights - Connexa Sports Technologies Inc. has announced a new agreement through its subsidiary Yuanyu Enterprise Management Limited to create and sell content for TikTok, focusing on the MENA region [1][4] - The content will include live-streaming and videos across various categories such as sports, gaming, and lifestyle, leveraging popular influencers [2][4] - TikTok's penetration in the MENA region is significant, with countries like the UAE and Saudi Arabia reporting penetration rates exceeding 120% of the adult population, presenting a lucrative market opportunity [3] Company Overview - Connexa Sports Technologies Inc. operates through its subsidiary YYEM, which is involved in the Love and Marriage sector and holds numerous patents and technologies for big data and matchmaking analyses [5]

Core Insights - Connexa Sports Technologies Inc. (YYAI) is launching a new vertical focused on social networking applications through its 70% owned subsidiary, Yuanyu Enterprise Management Limited (YYEM) [1] - The new venture will include live-streaming, voice chat rooms, gaming, and influencer-driven user-generated content (UGC) [1] - TikTok's MENA subsidiary is in advanced discussions to sign a Multi-Channel Network (MCN) contract with YYEM to purchase influencer-generated content [1][2] Market Opportunity - YYEM aims to leverage TikTok's significant reach in the MENA region, where TikTok penetration rates exceed 120% of the adult population in countries like the UAE and Saudi Arabia as of July 2024 [2] - The MENA region is viewed as a prime market for YYAI and YYEM's new venture, especially given TikTok's challenges in North America [2][3] Strategic Positioning - The partnership with TikTok is seen as a validation of YYAI's entry into the social networking market and highlights the potential of the influencer network being developed [3] - The expansion aligns with Connexa's mission to utilize technology and partnerships to unlock new opportunities in the digital landscape [3] - The combination of innovative technologies and an extensive influencer network aims to redefine content creation in one of TikTok's most engaged markets [3]

Acquisitions and Business Transactions - The company acquired 70% of Yuanyu Enterprise Management Co., Limited (YYEM) for a combined $56 million, with $16.5 million paid in cash for 20% of YYEM[181] - The company completed the purchase of 50% of YYEM's ordinary shares for 8,127,572 newly issued shares of Common Stock, representing 55.8% of the issued and outstanding shares[182] - The company sold its legacy "Slinger Bag" business to J&M Sports LLC for $1.00, transferring all related assets and liabilities[182][198] YYEM Operations and Market Performance - YYEM collected royalties of approximately $1.9 million in its fiscal year ended January 31, 2024, and has term sheets with potential cumulative revenues exceeding $70 million over the next three years[201] - YYEM operates in the love and marriage market sector with proprietary intellectual property and an AI matchmaker application integrated with Big Data models[199] - YYEM's licensee partner in China operates 200 retail stores across 40 cities, with one-time subscriber matchmaker fees reaching up to $1,500[200] Stock and Financial Instruments - The company effected a 1-for-40 reverse stock split of its common stock on September 25, 2023, increasing the aggregate number of warrants from 1,709,097 to 9,426,952[204][205] - The company filed a registration statement for 1,925,000 shares of its common stock, which became effective on August 21, 2024[207] - Proceeds from the exercise of warrants for the six months ended October 31, 2024, were $1,618,996[236] Financial Performance and Expenses - Net sales decreased by $1.93 million (-84%) for the three months ended October 31, 2024, compared to the same period in 2023, due to inventory availability issues[216] - Gross income decreased by $0.72 million (-111%) for the three months ended October 31, 2024, compared to the same period in 2023, driven by reduced net sales[217] - Selling and marketing expenses decreased by $0.71 million (-56%) for the three months ended October 31, 2024, compared to the same period in 2023, due to reduced marketing activities[218] - General and administrative expenses decreased by $0.45 million (-28%) for the three months ended October 31, 2024, compared to the same period in 2023, primarily due to insurance policy renewals and legal fees[220] - Loss from operations increased by $0.9 million (7%) for the three months ended October 31, 2024, compared to the same period in 2023, driven by reduced gross profit and operating expenses[221] - Net sales decreased by $4.35 million (-80%) for the six months ended October 31, 2024, compared to the same period in 2023, due to ongoing inventory issues[225] - Gross income decreased by $1.34 million (-87%) for the six months ended October 31, 2024, compared to the same period in 2023, driven by reduced net sales[226] - Selling and marketing expenses decreased by $0.28 million (-49%) for the six months ended October 31, 2024, compared to the same period in 2023, due to reduced marketing activities[227] - General and administrative expenses increased by $0.42 million (10%) for the six months ended October 31, 2024, compared to the same period in 2023, driven by debt settlement and legal fees[229] - Loss from operations increased by $1.45 million (48%) for the six months ended October 31, 2024, compared to the same period in 2023, due to increased operating expenses and reduced gross profit[230] - Net loss for the six months ended October 31, 2024, was $(5,586,889), with net non-cash expenses of $2,496,748[233] Cash Flow and Financial Position - Accumulated deficit as of October 31, 2024, was $(172,973,917)[232] - Net cash provided by operating activities for the six months ended October 31, 2024, was $2,726, compared to $(648,056) for the same period in 2023[232][233] - Net cash provided by financing activities for the six months ended October 31, 2024, was $1,546,328, compared to $654,479 for the same period in 2023[232][236] - Cash and cash equivalents as of October 31, 2024, were $1,642,969, compared to $229,705 as of April 30, 2024[232] - No investing activities were incurred in the six-month periods ended October 31, 2024, and 2023[234] Related-Party Transactions and Loans - Outstanding borrowings under related-party loan agreements as of October 31, 2024, were $1,169,291[238] - Accrued interest due to related parties as of October 31, 2024, was $917,957[238] - The company extended the repayment deadline for related-party loans to July 31, 2025[237]

Core Insights - Connexa Sports Technologies Inc. has acquired an additional 50% stake in Yuanyu Enterprise Management Co., Limited, increasing its total ownership to 70% [1][2] - The acquisition has led to a change of control within Connexa, resulting in the appointment of new officers and directors, as well as a spin-off of the Slinger Bag business [2] - Yuanyu Enterprise Management operates in the Love and Marriage sector, leveraging patents, technologies, and algorithms for big data and matchmaking analyses [3] Company Developments - The acquisition of YYEM is expected to enhance Connexa's position in the Love and Marriage sector, which is rapidly emerging [3] - The former CEO of Connexa expressed gratitude to shareholders and directors for their support during the acquisition process [2] - Mr. Zhou, the Chairman of YYEM, has joined Connexa's Board of Directors, indicating a strategic shift towards the Love and Marriage sector [3]

Core Points - Connexa Sports Technologies Inc. (Nasdaq: YYAI) is set to commence trading on November 22, 2024, under the YYAI ticker symbol [2][3] - The company has not yet received confirmation from Nasdaq regarding the first day of trading, but anticipates it will be on November 22 [4] Company Overview - Connexa Sports is a leading connected sports company focused on delivering products, technologies, and Sport-as-a-Service across various sports verticals [5] - The mission of Connexa is to reinvent sports through technological innovation, emphasizing a strong focus on today's sports consumer [5] Related Company Information - Yuanyu Enterprise Management Co., Limited (YYEM) operates in the Love and Marriage sector, holding numerous patents and technologies that support its big data and matchmaking analyses [5]

Core Viewpoint - Connexa Sports Technologies Inc. has received Nasdaq approval for continued listing following the acquisition of an additional 50% stake in Yuanyu Enterprise Management Limited, increasing total ownership to 70% [2][4][8] Group 1: Acquisition Details - The acquisition of the additional 50% stake in Yuanyu Enterprise Management Limited (YYEM) has been approved by Connexa's shareholders and will lead to a change of control, new directors, and a spin-off of the Slinger Bag business [2][4] - The trading under the ticker symbol YYAI will commence on November 22, 2024 [3][4] Group 2: Strategic Importance - The acquisition is seen as a strategic move to enhance shareholder value, with YYEM having a strong balance sheet and promising growth prospects [4][5] - YYEM operates in the emerging Love and Marriage sector, owning significant proprietary intellectual property and technologies that support its business model [6][10] Group 3: Technological Edge - YYEM possesses six technologies related to the metaverse and five AI matchmaking patents, which are expected to enhance future revenue growth potential [6] - The AI technology developed by YYEM can integrate with existing Big Data models, providing significant business value through effective matchmaking services [6] Group 4: Market Position and Growth - YYEM has already demonstrated its business model's effectiveness, with a licensee partner integrating its technology across a growing network of retail stores [7] - The global growth opportunity in the Love and Marriage sector is highlighted as a key factor for Connexa's future success [5][8]

Financial Performance - Net sales decreased by $2.42 million, or -77%, for the three months ended July 31, 2024, compared to the same period in 2023, primarily due to ongoing inventory availability issues[180]. - Cost of sales decreased by $1.79 million, or -81%, during the same period, directly correlating with the decrease in net sales[182]. - Gross income decreased by $0.62 million, or -70%, with a gross margin of 41% on actual sales made[182]. - Selling and marketing expenses decreased by $0.96 million, or -40%, due to the reduction in net sales and cessation of Tennis product-related marketing activities[183]. - General and administrative expenses increased by $0.88 million, or 35%, driven by debt settlement and ongoing legal fees related to the acquisition of YYEM[184]. - Research and development costs remained at $0, reflecting inactivity due to limited cash flow linked to reduced net sales[185]. - Loss from operations increased by $1.4 million, or 76%, due to higher operating expenses and reduced gross profit[186]. - Total other expense decreased by $2.00 million or 196% for the three months ended July 31, 2024, compared to the same period in 2023[187]. Cash Flow and Financing - Net cash used in operating activities was $(72,646) for the three months ended July 31, 2024, a significant improvement from $(803,363) in the same period in 2023[191]. - Cash and cash equivalents increased to $1,711,283 as of July 31, 2024, up from $229,705 as of April 30, 2024[190]. - Net cash used in financing activities was $1,614,958 for the three months ended July 31, 2024, compared to net cash provided of $601,002 in the same period in 2023[193]. - The company has outstanding borrowings from related parties amounting to $1,169,291 as of July 31, 2024[196]. - The company intends to finance operating costs over the next twelve months with existing cash, loans from related parties, and/or private placements[189]. Impairments and Losses - The company recorded an impairment loss of $11,421,817 related to Gameface as of April 30, 2023, due to higher than anticipated financial resource requirements and time to market[150]. - The company impaired all goodwill as of April 30, 2024, following the deconsolidation of Foundation Sports and the sale of PlaySight[150]. - The company reported an accumulated deficit of $171,607,773 as of July 31, 2024, indicating substantial doubt about its ability to continue as a going concern[188]. - The independent auditors expressed substantial doubt about the company's ability to continue as a going concern in their report[200]. Acquisitions and Sales - The company completed the sale of PlaySight in November 2022, resulting in a total loss on disposal of Foundation Sports and PlaySight amounting to $0 for the year ended April 30, 2024[149]. - The company entered into a share purchase agreement to acquire 70% of Yuanyu Enterprise Management Co., Limited for a combined $56 million, with $16.5 million paid in cash[159]. - The company expects the acquisition of YYEM to close following Nasdaq's approval, which will result in a change of control with YYEM shareholders owning approximately 75.3% of the company[160]. - The company will transfer all legacy business assets related to the "Slinger Bag" to a newly established entity, J&M Sports LLC, post-acquisition[173]. - An aggregate payment of $4.5 million has been agreed upon as an inducement for the acquisition, with $2 million already transferred[172]. Stock and Shareholder Actions - The company increased the number of authorized shares of common stock from 300,000,000 to 1,000,000,000 and executed a 1-for-20 reverse stock split[157]. - The company held a special meeting on September 13, 2023, approving a reverse stock split of 1-for-40, effective September 25, 2023[154]. - The company issued 116,510 shares of common stock and pre-funded warrants to purchase an aggregate of 1,258,490 shares for a combined purchase price of $4 per share, totaling approximately $16.5 million[155]. - The company has a promissory note of $2 million due by December 31, 2023, related to the sale of PlaySight, with potential conversion into ordinary shares if not paid in full[146]. Financial Reporting and Controls - There have been no changes in the company's control over financial reporting since April 30, 2024[203]. - The company has no off-balance sheet arrangements[198]. - The company has a promissory note of $2 million due by December 31, 2023, related to the sale of PlaySight, with potential conversion into ordinary shares if not paid in full[146].

Financial Performance and Losses - Connexa Sports Technologies Inc. reported an impairment loss of $3,486,599 related to Foundation Sports due to longer-than-expected time and resources needed to achieve profitability[15]. - The company recorded a loss on the sale of PlaySight in November 2022, following the decision to eliminate further financing for its operations[22]. - The Legacy Business had assets of approximately $5.1 million and liabilities of $12.0 million as of April 30, 2024[39]. - Financial statements are prepared on a going concern basis, with substantial doubt about the ability to continue without generating profitable operations or obtaining necessary financing[151][152]. - A decline in demand could force the company to liquidate extra inventory at lower margins or at a loss, adversely affecting financial performance[196]. Business Agreements and Acquisitions - The company entered into an exclusive distribution agreement for Padel Tennis with Desarrollo y Promocion de Padel S.L., projected to generate approximately $15 million in revenue by the end of 2028[24]. - Connexa entered into a merger agreement with PlaySight Interactive Ltd., which subsequently became a wholly owned subsidiary[14]. - The Company entered into agreements to acquire 70% of Yuanyu Enterprise Management Co., Limited for a total of $56 million, resulting in YYEM shareholders owning 82.4% of the Company's common stock[33]. - The Share Purchase Agreement involved purchasing 20% of YYEM for $16.5 million, which closed on March 20, 2024[34]. - The Share Exchange Agreement included purchasing 50% of YYEM for 8,127,572 newly issued shares of common stock[35]. Stock and Shareholder Matters - Connexa's name change from Slinger Bag Inc. to Connexa Sports Technologies Inc. was effective on April 7, 2022, along with a change in ticker symbol to "CNXA"[16]. - The company increased its authorized shares of common stock from 300 million to 1 billion as of June 27, 2024[12]. - A reverse stock split of 1-for-20 was approved and took effect on June 27, 2024[48]. - Following a 1-20 reverse stock split on June 27, 2024, the company's share price rose to $8.31, allowing it to regain compliance with the Minimum Bid Price Requirement[74]. - The company regained compliance with Nasdaq's minimum shareholder equity requirement after receiving an investment of $16.5 million on January 24, 2024[70]. Cash Flow and Financing - Connexa sold $693,500 in future receivables to Agile Capital Funding for $450,000 in cash, agreeing to pay back $28,895.83 weekly until the receivable amount is fully paid[25]. - The Company sold $1,460,000 in future receivables to Agile Capital Funding, LLC for $1,000,000 in cash, agreeing to weekly payments of $52,142.86 until the amount is paid in full[80]. - The Company sold $1,183,200 in future receivables to Cedar Advance LLC for $752,000 in cash, with weekly payments of $39,440 until the amount is settled[81]. - The Company entered into a second agreement with Cedar, selling $438,000 in future receivables for $285,000 in cash, with weekly payments of $14,600[84]. - The Company sold $481,800 in future receivables to Cedar in a third agreement for $310,200 in cash, agreeing to weekly payments of $18,530.77[84]. Product Development and Market Strategy - The Company operates in the sports equipment and technology sector, focusing on the Slinger Launcher products, which include portable launchers for tennis, padel, and pickleball[86]. - The Company estimates a manufacturing capacity of approximately 5,000 units monthly across its three Slinger Bag Launcher products[96]. - The pickleball product, introduced in March 2023, is selling at a rate of around 300 units per month[96]. - The Company plans to target the global tennis, padel tennis, and pickleball communities, with an estimated 80 million active participants in the tennis market[94]. - The Company is working on an upgraded Tennis Launcher and aims to finalize testing for a Baseball/Softball Launcher by the end of the year[94]. Marketing and Consumer Engagement - Approximately 70% of Slinger Bag Tennis Launcher revenues are generated through a direct-to-consumer strategy in North America[101]. - The United States market has 17.4 million tennis players and over 5 million pickleball players, making it a key market for growth[103]. - Slinger Bag has built a user base of approximately 100,000 users and has access to a database of over 500,000 avid tennis players through Foundation Sports[112]. - The Slinger App for tennis, launched in April 2024, offers both freemium and subscription options for users[104]. - The company is experiencing a consistent Return On Ad Spend (ROAS) of 10X+ from its digital advertising efforts[116]. Risks and Challenges - The company acknowledges risks related to brand strength and the need for continuous innovation to maintain market position and financial performance[158][160]. - Rising costs for raw materials, labor, and freight could significantly impact gross margins and profitability, with labor costs at independent manufacturers increasing and energy costs fluctuating dramatically[163]. - The company relies heavily on supply chain reliability, and disruptions from factors like the COVID-19 pandemic and geopolitical tensions could materially affect operations and profitability[178]. - International operations are subject to risks including foreign currency exchange rates, economic instability, and changes in trade laws, which could adversely impact results[180]. - Political, economic, and military conditions in Israel may adversely affect business operations, as key personnel and product development are based there[167]. Technology and Innovation - The company has applied for international design and utility patent protection for its main products, including the Slinger Launcher and Slinger Oscillator[126]. - Slinger Bag is engaged in ongoing efforts to register more trademarks across an expanding list of products and services[128]. - The company is collaborating with Stride Innovation and Chinese vendors to develop ball launchers for new market segments, with a development timeline of approximately 18 months[138]. - The Gameface team has completed initial work on the Slinger App for Tennis, which is now available on Apple and Google Play Stores, with full functionality expected by the end of 2024[140]. - Significant reliance on information technology systems means that any security breach or failure could damage the company's reputation and operations[201].