Connexa Sports Technologies Inc.

Current report

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited financial statements and the related notes appearing in this Quarterly Report on Form 10-Q. Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks, uncertainties, and assumptions. You should read the “Cautionary Statement Regarding Forward-Looking Statements” and “Risk Factors” sections of our Form 10-K for the period ended April 30, 2025 for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. All dollar figures expressed in terms of millions are rounded to one decimal place. All percentages are calculated using the unrounded underlying figures and rounded to the nearest whole number.

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Overview

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The Company operates through Yuanyu Enterprise Management Co., Limited (“YYEM”), a Hong Kong-based subsidiary established in November 2021 that is engaged in the emerging love and marriage market sector.

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YYEM’s mission is to empower global connections through innovative matchmaking technology. We own advanced patents and other proprietary technology which we license out, and we are using this intellectual property to develop an AI-powered matchmaking platform to license to partners worldwide, enabling them to create localized matchmaking experiences tailored to their specific markets and cultures. We believe our pioneering technology has the power to transform the matchmaking industry, leading to greater success for our licensees and their clients, and ultimately leading to more people finding successful life partnerships.

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We have license agreements in place with various entities to use the IP in numerous countries across Asia, Europe, and Africa, generating royalties of $3.0 million in our three months ended July 31, 2025.

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In February 2025, YYEM entered into an agency agreement to develop content for TikTok across the MENA region, leveraging Twitch-hosted live-streaming in sports, gaming, and lifestyle categories. While no upfront payments were received, the agreement positions us to monetize end-user engagement once our influencer network is developed. Revenue under this agreement will depend on performance-based conversion metrics, and as of July 31, 2025, influencer network capabilities were still nascent. We consider this development a positive step toward the diversification of our revenue streams.

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Fundraising

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Private Placement

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On June 30, 2025, we executed a securities purchase agreement to issue 20,000,000 units (each unit comprising one share of common stock and two five-year warrants with an exercise price of $0.89), targeting gross proceeds of $4.6 million (the “Private Placement”). Closing was contingent on Nasdaq listing compliance and shareholder approval. The warrants allow for cashless exercise if no effective registration is in place. This financing, when consummated, is anticipated to improve liquidity and capital resources through 2025 and beyond. On August 19, 2025, the Company closed the Private Placement, generating gross proceeds of $4,600,000 (without taking into account any exercise of the warrants included in the Private Placement).

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ATM Facility

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Under a prospectus supplement dated August 22, 2025 that amends the prospectus supplement dated June 11, 2025 and its accompanying prospectus dated June 11, 2025, filed with the Securities and Exchange Commission as part of our registration statement on Form S-3 (File No. 333-284188) (the “Registration Statement”) relating to the offer and sale of our common stock through A.G.P./Alliance Global Partners (“A.G.P.”) in “at the market offerings” (the “ATM facility”) as defined in Rule 415 promulgated under the Securities Act of 1933, as amended, pursuant to the sales agreement with A.G.P. dated as of January 8, 2025 (the “Sales Agreement”), the amount we could raise under our ATM facility was specified to be $200 million. No shares had been sold through this facility as of July 31, 2025, but the agreement provides strategic flexibility for future capital raising.

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Recent Developments

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On August 25, 2025, the Company and JuCoin Capital Pte Ltd (“JuCoin”) signed an agreement (the “JV Agreement”) to jointly establish a joint venture company (the “JV”) to found and operate a new cryptocurrency exchange (the “Joint Venture”) within 120 days of the JV Agreement. At the closing of the Joint Venture, each of the Company and JuCoin will contribute $250 million in cash or cryptocurrency. In exchange, the JV will issue 51% of its share capital to the Company and 49% to JuCoin. The Company will appoint three of the five members of the board of directors of the JV, though certain material decisions will require the approval of both parties. The JV Agreement may be terminated if the closing of the JV Agreement has not occurred within six months of signing, by mutual agreement of the parties, or if the transaction becomes prohibited by applicable law.

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Components of Results of Operations

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Revenue

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Our revenue is generated from license fees paid by customers for the use of our technology.

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Expenses

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Cost of revenue consists primarily of amortization charges against intangible assets (specifically, technology rights), which are directly attributable to revenue.

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General and administrative expense primarily consists of salaries and benefits for employees involved in general corporate functions; professional fees for external legal, accounting, and other consulting services; traveling expenses; and other general office and administrative expenses.

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Gross Profit

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Gross profit is calculated as revenue less cost of revenue.

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Results of Operations

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Three months ended July 31, 2025, compared to the three months ended July 31, 2024

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Revenue

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Our revenue decreased by $0.3 million, or 8%, from $3.3 million for the three-month period ended July 31, 2024 to $3.0 million for the three-month period ended July 31, 2025, which was attributable to a minor timing difference resulting from the dates on which the various license agreements were signed.

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Cost of Revenue

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Our cost of revenue did not change because it consists of the amortization of our IP intangible assets, which remained constant.

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General and administrative expenses, which mainly consist of salaries, professional fees, and other general office and administrative expenses, increased by $0.7 million, from $0.1 million to $0.8 million, primarily driven by higher costs relating to YYEM becoming an operating subsidiary of a Nasdaq-listed company, which occurred in November 2024. This included audit fees, legal fees, insurance premiums, and directors’ and officers’ compensation.

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The following is a summary of our cash flows from operating, investing, and financing activities for the three-month periods ended July 31, 2025 and 2024:

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Our cash and cash equivalents were relatively steady, at approximately $0.5 million as of July 31, 2025 and 2024.

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Net cash used in operating activities was $1.08 million for the three-month period ended July 31, 2025, compared with $0.6 million for the same period in the prior year, a decline of $0.5 million in operating cash flow. This change was driven primarily by a $0.7 million increase in general and administrative expenses relating to YYEM becoming an operating subsidiary of a Nasdaq-listed company, as explained in greater detail above.

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Since our cash level was low in the period before payment from our licensees was due, we had no cash allocated to investing activities, neither putting cash into investments nor receiving cash from investments.

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The only cash flow we recorded as financing activities was a non-cash item: a $1.1 million decline in the value of a guarantee given to the Company by our Chairman in respect of listed shares we own as the shares increased in value over this period. (As the deficit in the shares’ value declined, the size of the guarantee required to provide the Company with value equal to the shares’ value at the time of contribution also declined.)

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Based on our current operating plans, we believe that our existing cash at the time of this filing will be sufficient to meet our anticipated operating needs for at least the next 12 months and that we will have sufficient financial resources available through capital markets fundraising if we should decide to incur additional capital expenditure or make other investments. Our future capital requirements will depend upon many factors, including competing technological and market developments, our R&D efforts, and decisions regarding acquisitions of further patents or companies or other assets.

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We do not have any off balance sheet arrangements that have or are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditure, or capital resources that are material to investors.

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Significant Accounting Policies

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Our significant accounting policies are disclosed in Note 2 to the accompanying financial statements. The following is a summary of those accounting policies that involve significant estimates and judgment of management.

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Use of Estimates

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Allowance for Credit Losses

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Accounts receivable are stated at their historical carrying amount net of allowance for credit losses.

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The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements and related notes included elsewhere in this report. Certain statements in this discussion and elsewhere in this report constitute forward-looking statements. See “Cautionary Statement Regarding Forward Looking Information” elsewhere in this report. Because this discussion involves risks and uncertainties, our actual results may differ materially from those anticipated in these forward-looking statements*.***

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Recent Developments Related to the Acquisition

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On March 18, 2024, the Company entered into a share purchase agreement (the “Purchase Agreement”) and a share exchange agreement (the “Exchange Agreement”) to acquire 70% of Yuanyu Enterprise Management Co., Limited (“YYEM”) from Mr. Hongyu Zhou, the sole shareholder of YYEM (the “YYEM Seller”) for a combined $56 million (the “Acquisition”). $16.5 million of this amount was paid in cash on March 20, 2024 pursuant to the Purchase Agreement to acquire 20% of YYEM.

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On November 21, 2024, following The Nasdaq Stock Market LLC’s (“Nasdaq”) approval of the new listing application submitted to it in connection with the Acquisition, the Company completed the purchase of 5,000 ordinary shares of YYEM, representing 50% of the issued and outstanding ordinary shares of YYEM, for 8,127,572 newly issued shares of Common Stock to the YYEM Seller, representing 55.8% of the issued and outstanding shares of Common Stock as of the date of the closing (the “Share Exchange Transaction”). Upon the purchase of this additional 50%, the Company now owns 70% of YYEM; the additional 30% is reflected as non-controlling interests on the consolidated financial statements. The Company accounted for this transaction as a reverse merger and, as a result, the historical operating results are those of the accounting acquirer YYEM. As part of this transaction, the Company agreed to sell its wholly owned subsidiary, Slinger Bag Americas Inc., to a newly established Florida limited liability company called J&M Sports LLC (“J&M”). J&M is owned by Yonah Kalfa, former Chief Innovation Officer and director of the Company, Mike Ballardie, former President, Chief Executive Officer, Treasurer, and director of the Company, Juda Honickman, former Chief Marketing Officer of the Company, and Mark Radom, former general counsel and Secretary of the Company (Mr. Radom is currently a consultant to the Company). On November 21, 2024, the Company entered into a separation and assignment agreement (the “Separation Agreement”) with J&M, to sell, transfer, and assign all or substantially all of its legacy business, assets, and liabilities related to or necessary for the operations of its “Slinger Bag” business or products (the “Legacy Business”) to J&M, in consideration for $1.00. Under the Separation Agreement, J&M obtained the sole right to and assumed all the obligations of the Legacy Business and is liable to the Company for any losses arising from third-party claims against the Company that arise from liabilities related to the Legacy Business (the “Separation”). As a result of the completion of the Acquisition, on November 21, 2024, the Company’s directors and officers resigned from their positions on November 21, 2024. On November 19, 2024, prior to the resignation of all the directors of the Company, the Company’s Board of Directors (the “Board”) appointed the five directors named below, with such appointment taking effect on November 21, 2024 upon the closing of the Acquisition.

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As an inducement to the Company to complete the Acquisition, Hongyu Zhou (the YYEM Seller and a member of the Board and the Company’s controlling shareholder since November 21, 2024), pursuant to the Exchange Agreement, agreed to make an aggregate payment to the Company of $5 million, of which $2,344,960 was transferred to the Company prior to the closing of the Acquisition and $2,100,000 was transferred to J&M from November 21, 2024 through the date hereof. The remaining $555,040 in cash is due to be paid to J&M, together with an additional $250,000 as additional compensation for J&M’s willingness to delay receipt of the $5 million payment in full.

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The following table lists the names, ages, and positions of the individuals who now serve as executive officers and directors of the Company following completion of the Acquisition:

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Set forth below is a brief description of the background and business experience for the past five years of these individuals.

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Thomas Tarala

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Thomas Tarala has 30 years of international corporate finance experience in New York, London, and Hong Kong, including as a partner at two leading international law firms and as General Counsel for the international operations of one of the largest private conglomerates in China. As a partner of Baker McKenzie from 2022 to 2024 and another international firm earlier in his career, Thomas has led U.S. securities practices in Hong Kong, advising on equity and debt transactions, as well as cross-border joint ventures involving companies listed on Nasdaq. With a particular focus on the technology sector, he has acted for companies and investment banks in Mainland China, Hong Kong, Singapore, Indonesia, and Thailand, including on award-winning transactions in the region.

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As General Counsel in the overseas headquarters of HNA Group (International) Company Limited, a large conglomerate, from 2017 to 2022, Thomas worked closely with the business teams on a wide range of corporate and finance transactions, including multi-billion dollar acquisitions and divestments of household-name companies, the sale of airlines, and a range of investments ranging from New York and London skyscrapers to global technology companies, as well as numerous companies that were number one globally in their respective fields.

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Thomas graduatedmagna cum laude and Phi Beta Kappa from Georgetown University with a Bachelor of Science degree in Foreign Service and holds a Juris Doctor degree from the University of Virginia School of Law. Thomas speaks English, French, Spanish, and Mandarin and is qualified to practice law in New York, Connecticut, Florida, England and Wales, and Hong Kong.

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Guibao Ji

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Guibao Ji has been a certified public accountant in China for 25 years and has worked as an accountant at Shenzhen Wanda Accounting Firm since January 2005. He has been a partner of the firm and also an independent director of a number of listed companies, including Brightstar Technology Group and Hekeda Technology Co. Ltd.

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Mr. Ji graduated from Central Radio and TV University in 1994 with a degree in Business Accounting. He was certified by the Chinese Institute of Certified Public Accountants in 1999.

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Hongyu Zhou

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Hongyu Zhou has 15 years of experience founding, growing, and managing successful enterprises. His experience extends to such areas as enterprise management, entertainment technology, and information technology, including as an investor and business manager of a technology company, as a founder and manager of an innovative entertainment company, and as the founder and manager of several technology companies. Mr. Zhou has served as the Chairman of each of Shenzhen Qiangwo Entertainment Technology Co., Ltd. and Shenzhen Qianyue Information Technology Co., Ltd. since 2021. Mr. Zhou founded Shenzhen Yuanzu Century Network Technology Co., Ltd. in 2020 and Shenzhen Qiangwo Entertainment Technology Co., Ltd. in 2017. In founding, managing, and growing companies across various industries, Mr. Zhou has honed his skills in strategic planning, business development, and team leadership. Mr. Zhou owns 8,127,572 shares of Common Stock, representing 55.8% of the issued and outstanding shares of Common Stock as of March 24, 2025.

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Warren Thomson

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Warren Thomson is a lawyer with over 20 years of experience at international law firms and companies. Mr. Thomson served as a partner at Hogan Lovells, an international law firm in Dubai from 2013 to 2017, where he advised companies of all sizes in the Middle East and Asia through the whole of their corporate lifecycle, from incorporation through financing and expansion, and sometimes to winding-up. This experience included mergers and acquisitions, and commercial transactions, as well as regulatory, employment, and corporate finance matters. Mr. Thomson worked at HNA Group (International) Company Limited as Senior Counsel from 2018 to 2022 and as General Counsel in 2022, and since 2022 he has served as General Counsel (Overseas) at Link Asset Management Limited, the manager of Link REIT, a multi-billion-dollar real estate investment trust listed in Hong Kong.

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Mr. Thomson graduated with a Bachelor of Arts degree from Canberra University and a Bachelor of Laws degree with Honors from Australian National University before earning a Graduate Diploma in legal practice from the College of Law in Sydney. Mr. Thomson is a member of the Australian Chamber of Commerce (sitting on the Finance, Legal and Tax Committee) and the Association of Corporate Counsel and is qualified to practice law in New South Wales (Australia) and Hong Kong.

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Chenlong Liu

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Chenlong Liu is a certified public accountant, as well as an investor active in the technology industry. Mr. Liu’s career has focused on technology-related investments and mergers and acquisitions. He has participated in many well-known transactions in the industry. As an investment director at China Fusion Capital from 2016 to 2020, he helped execute Nasdaq-listed iQiyi’s convertible bond transactions, Kosdaq-listed Longtu’s acquisition and reverse takeover, Hong Kong-listed Kuaishou’s Series B investment round, and China Fusion Capital’s acquisition of Particle, Inc. Since 2020, Mr. Liu has served as a director of Particle, a San Francisco-based technology company.

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Mr. Liu earned a Bachelor of Science degree in mathematics from the University of Minnesota-Twin Cities in 2013 and was awarded a master’s degree in accounting from George Washington University in 2015. Mr. Liu became a certified public accountant in Washington State in January 2019.

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Kong Liu

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Kong (“Luke”) Liu is an entrepreneur with experience in both traditional industries and the technology and Web3 areas. (He is not related to Chenlong Liu.) Mr. Liu has experience in management and strategy roles in companies ranging from startups to multinationals, and he has founded several companies over the years. Mr. Liu has a particular focus on digital strategies at both traditional retailers and technology companies, as well as in the recruitment field. He serves as a managing director of MS Consultancy Pte Ltd, a business consultancy that he founded in November 2020 focusing on recruitment and M&A advisory work. He previously served as the CEO of World@Meta, a Singapore-based technology company developing mobile apps and games, where maximizing user engagement was a primary objective. In such environments, Mr. Liu has been responsible for establishing the vision of the enterprise and working across teams to make that vision a reality.

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Mr. Liu graduated from Nanyang Polytechnic, in Singapore, with a Diploma of Information Technology and from Trent University, in Canada, with a Bachelor of Business Administration.

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The following table identifies the individual who serve as independent and non-independent board and committee members of the Company following completion of the Acquisition:

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Business Overview

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Established in November 2021, YYEM is based in Hong Kong and operates in the emerging love and marriage market sector. YYEM owns proprietary intellectual property (IP), that the Company believes is unique to this business sector. Its AI matchmaker application is designed to integrate with existing Big Data models and provides the ability to connect to other larger AI models.

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YYEM collected royalties of approximately $1.9 million in its fiscal year ended January 31, 2024 In addition, YYEM has entered into term sheets with three entities — one in Hong Kong for rights to use the IP in Japan and South Korea among other locations, one in the UK for rights to use the IP in Europe, and one in the USA for rights to use the IP in Sub-Saharan Africa — with cumulative possible revenue over the next three years of more than $70 million.

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For the quarter ended January 31, 2025, the operations of Connexa Sports Technologies Inc. and YYEM are collectively referred to as the “Company.” Following the closing of the Acquisition and the Separation, the Company’s historic operations are no longer part of the Company’s operations and YYEM is the Company’s operating subsidiary. The results of the Company’s operations for the nine-month period ended January 31, 2025 do not reflect the Legacy Business operations and are not representative of what the results of operations of the Company would have been if the Acquisition had not taken place.

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Recent Developments Unrelated to the Acquisition

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Change in Accountants

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On October 30, 2024, the Board and the audit committee approved the engagement of Bush & Associates CPA (“B&A”) as the Company’s independent registered public accounting firm for the fiscal year ended April 30, 2025, effective immediately, and dismissed Olayinka Oyebola & Co (“OOC”) as the Company’s independent registered public accounting firm. OOC had audited the Company’s consolidated financial statements for the fiscal years ended April 30, 2023 and 2024. However, in light of charges brought by the SEC against OOC and its principal, Olayinka Oyebola, for allegedly aiding and abetting a securities fraud, the Board and audit committee considered it inadvisable to continue with OOC as the Company’s auditor.

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On October 31, 2024, the management of YYEM also dismissed OOC as its independent registered public accounting firm.

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OOC’s reports on the consolidated financial statements of the Company for the years ended April 30, 2024 and 2023 did not contain an adverse opinion or a disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting principles, other than an explanatory paragraph regarding the Company’s ability to continue as a going concern.

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During the course of OOC’s engagement there were no disagreements with OOC on any matters of accounting principles or practices, financial statement disclosure, or auditing scope and procedures which, if not resolved to the satisfaction of OOC, would have caused OOC to make reference to the matter in its audit opinion. There were no reportable events (as that term is described in Item 304(a)(1)(v) of Regulation S-K) during the period OOC was engaged as the Company’s auditor.

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For more information regarding recent developments related to OOC, see “Risk Factors — Our former independent auditor, Olayinka Oyebola & Co. and its principal have been charged by the SEC in connection with securities fraud allegations.”

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MCN Agency Services Agreement

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In February 2025, YYEM signed a Multi-Channel Network (MCN) agency services agreement to create and sell content to TikTok as part of YYEM’s new vertical centered on social networking applications. Under this agreement, YYEM will procure the production of content to be live-streamed or served as videos to TikTok’s users in the Middle East and North Africa. This is expected to include engaging broadcasts across various categories, such as sports, gaming, and lifestyle topics, produced by popular Twitch hosts and other influencers within the network that YYEM is developing. We anticipate that YYEM’s new vertical will also include live-streaming, voice chat rooms, gaming, and influencer-driven user-generated content. The fees generated by the arrangement with TikTok will depend on the rate of conversion by TikTok end-users. YYEM did not receive any payment from TikTok upon the signing of this agreement. Neither the Company nor YYEM has built a network of influencers yet.

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Results of Operations for the Nine-Month and Three-Month Periods Ended January 31, 2025 and 2024

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We have no off balance sheet arrangements.