Connexa Sports Technologies Inc.(YYAI) - 2026 Q2 - Quarterly Report

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]