AIRWA INC.

CONSOLIDATED BALANCE SHEETS (IN US$) (UNAUDITED)

AS OF JANUARY 31, 2025 AND APRIL 30, 2024

CONNEXA SPORTS TECHNOLOGIES INC.

CONSOLIDATED STATEMENTS OF OPERATIONS (IN US$) (UNAUDITED)

FOR THE NINE-MONTH AND THREE-MONTH PERIODS ENDED JANUARY 31, 2025 AND 2024

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

(IN US$) (UNAUDITED)

FOR THE NINE-MONTH PERIODS ENDED JANUARY 31, 2025 AND 2024

CONSOLIDATED STATEMENTS OF CASH FLOWS (IN US$) (UNAUDITED)

NINE-MONTH PERIODS ENDED JANUARY 31, 2025 AND 2024

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1: ORGANIZATION AND NATURE OF BUSINESS

Organization

Lazex Inc. (“Lazex”) was incorporated under the laws of the State of Nevada on July 12, 2015. On August 23, 2019, the majority owner of Lazex entered into a Stock Purchase Agreement with Slinger Bag Americas Inc., a Delaware corporation (“Slinger Bag Americas”), which was 100% owned by Slinger Bag Ltd. (“SBL”), an Israeli company. As a result of a number of transactions, Lazex owned 100% of Slinger Bag Americas, and the sole shareholder of SBL owned 50,000 shares of common stock (approximately 82%) of Lazex. Effective September 13, 2019, Lazex changed its name to Slinger Bag Inc.

On May 16, 2022, the Company changed its domicile from Nevada to Delaware. On April 7, 2022, the Company effected a name change to Connexa Sports Technologies Inc. We also changed our ticker symbol to “CNXA”.

On June 14, 2022, the Company consummated a public offering of shares of its common stock, par value $0.001 per share (the “Common Stock”), and the listing of the Common Stock on the Nasdaq Capital Market.

On January 19, 2024, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with three investors (the “January 2024 Investors”) for the issuance and sale to each investor of (i)116,510 shares of Common Stock (the “Shares”) and (ii) pre-funded warrants to purchase an aggregate of 1,258,490 shares of Common Stock (the “Pre-Funded Warrants”) at a combined purchase price of $4 per share of Common Stock for an aggregate amount of approximately $16.5 million. The Pre-Funded Warrants had an exercise price of $0.0002 per share of Common Stock and became exercisable beginning on May 15, 2024, the date stockholder approval was received and effective, allowing exercisability of the Pre-Funded Warrants under Nasdaq rules until the Pre-Funded Warrants were exercised in full. The aggregate number of shares issued to the January 2024 Investors was 349,530, and the aggregate number of Pre-Funded Warrants was 3,775,470.

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.

On April 15, 2024, the Company effected a symbol change from “CNXA” to “YYAI”.

From April 2024 through May 2024, the Company acknowledged and agreed to the entry into certain warrant purchase agreements (the “WPAs”) by the January 2024 Investors and 10 purchasers (the “Pre-Funded Warrant Purchasers”) pursuant to which the January 2024 Investors sold all of the 3,775,470 Pre-Funded Warrants to the Pre-Funded Warrant Purchasers for an aggregate amount of $18,877,350 in cash.

On June 27, 2024, the Company (i) increased the number of authorized shares of Common Stock from 300,000,000 to 1,000,000,000 and (ii) effected a 1-for-20 reverse stock split, whereby the Company’s Common Stock began to trade on a reverse split adjusted basis. All fractional interests were rounded up to the nearest whole number of shares of Common Stock. All references to the outstanding stock in this Quarterly Report on Form 10-Q have been retrospectively adjusted to reflect this reverse split.

On May 28 2024, the Company filed a registration statement in respect of 1,925,000 shares of its Common Stock consisting of (a)349,530 Shares and (b)1,575,470 shares of Common Stock issuable upon the exercise of the Pre-Funded Warrants, and on August 21, 2024 such registration statement became effective.

On October 11, 2024, the Company filed a registration statement in respect of 2,200,000 shares of Common Stock that were issued on August 16, 2024 upon the exercise of pre-funded warrants issued on January 19, 2024. This registration statement became effective on November 22, 2024.

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 interest 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 five new directors, with such appointment taking effect on November 21, 2024 upon the closing of the Acquisition.

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.

YYEM was registered in Hong Kong on November 11, 2021. Itsbusiness purpose is to provide technology services. YYEM’s registered office is located at Rm 4, 16/F, Ho King Comm Ctr, 2-16 Fayuen St, Mongkok, Kowloon, Hong Kong.

For details of all prior operations of Slinger Bag Inc., Slinger Bag Americas, Slinger Bag Canada, Slinger Bag UK, SBL, and Flixsense Pty, Ltd. please see the Company’s previous filing on Form 10-K for the year ended April 30, 2024, filed July 25, 2024.

Basis of Presentation

The accompanying condensed consolidated financial statements of Connexa Sports Technologies Inc. (“YYAI”) and YYEM, collectively referred to as the “Company,” are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”). As a result of the transactions described above, the accompanying consolidated financial statements include the combined results of YYAI and YYEM for the periods ended January 31, 2025 and 2024. No amounts or disclosures related to our Legacy Business of Slinger Bag, Inc. are reflected herein.

Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Interim Financial Statements

The accompanying condensed financial statements of the Company have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and disclosures required by GAAP have been condensed or omitted pursuant to such rules and regulations. These condensed financial statements reflect all adjustments that, in the opinion of management, are necessary to present fairly the results of operations of the Company for the period presented. The results of operations for the nine-month period ended January 31, 2025, are not necessarily indicative of the results that may be expected for any future period or the fiscal year ending April 30, 2025 and should be read in conjunction with the Company’s audited financial statements included in the Company’s registration statement on Form S-1 filed with the SEC on May 28, 2024. Please note that the Company’s accounting policies going forward post-merger may differ, as the Company’s management has now changed.

Non-controlling Interests

In accordance with ASC 810-10-45,Noncontrolling Interests in Consolidated Financial Statements,**the Company classifies non-controlling interests as a component of equity within the consolidated balance sheet. Effective with the purchase of the additional 50% of YYEM on November 21, 2024, the percentage that the Company owns in YYEM was increased to 70%. The remaining 30% is reflected as non-controlling interests in the consolidated financial statements.

Use of Estimates

The preparation of these financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to long-lived assets and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience, and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

Financial Statement Reclassification

Certain prior year amounts within accounts payable, accrued expenses, and certain operating expenses have been reclassified for consistency with the current year presentation and had no effect on the Company’s balance sheet, net loss, shareholders’ equity, or cash flows.

Cash and Cash Equivalents

For financial accounting purposes, cash and cash equivalents are all considered to be highly liquid investments with a maturity of three months or less at the time of purchase.

Accounts Receivable

Management reviews accounts receivable periodically to determine if any receivables will potentially be uncollectible. Management’s evaluation includes several factors including the aging of the accounts receivable balances, a review of significant past due accounts, economic conditions, and our historical write-off experience, net of recoveries. The Company includes any accounts receivable balances that are determined to be uncollectible, along with a general reserve, in its allowance for doubtful accounts. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. As of January 31, 2025 and April 30, 2024, the Company had made no reserves.

Intangible Assets

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired as additional paid-in capital is the fair value at the date of acquisition. Each intangible asset with a finite life is subsequently amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least at each year end.

Concentration of Credit Risk

The Company maintains its cash in bank deposit accounts, the balances of which at times may exceed insured limits. The Company continually monitors its banking relationships and consequently has not experienced any losses in such accounts. While we may be exposed to credit risk, we consider the risk remote and do not expect that any such risk would result in a significant effect on our results of operations or financial condition.

Revenue Recognition

The Company follows ASC 606,Revenue from Contracts with Customers, the core principle of which is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle, five basic criteria must be met before revenue can be recognized: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to performance obligations in the contract; and (5) recognize revenue when or as the Company satisfies a performance obligation.

The Company recognizes revenue in an amount that reflects the consideration to which it expects to be entitled for its products andservices. Accounts receivable are recorded when the right to consideration becomes unconditional. The Company’s terms and conditions vary by customer and typically provide net 90-day terms.

The Company receives royalty income in the form of license fees from customers for the use of the Company’s technology rights by the customers. Royalty income is recognized over time when the Company’s technology rights are used by the customers in accordance with the terms and conditions of the relevant license agreement. Revenue is recognized by the Company not only when invoices have been signed and confirmed by customers but also at the end of each month over the term of the relevant license agreements as the service is provided to the customers.

Cost of Revenue

The cost of revenue consists primarily of amortization charge of intangible assets – technology rights, which are directly attributable to the revenue.

Fair Value of Financial Instruments

Fair value of financial and non-financial assets and liabilities is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The three-tier hierarchy for inputs used in measuring fair value, which prioritizes the inputs used in the methodologies of measuring fair value for assets and liabilities, is as follows:

Level 1 — Quoted prices in active markets for identical assets or liabilities

Level 2 — Observable inputs other than quoted prices in active markets for identical assets and liabilities

Level 3 — Unobservable pricing inputs in the market

Financial assets and financial liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurements. Our assessment of the significance of a particular input to the fair value measurements requires judgment and may affect the valuation of the assets and liabilities being measured and their categorization within the fair value hierarchy.

The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, and accounts payable. The carrying amount of these financial instruments approximates fair value due to their short-term maturity.

As discussed in Note 5, the Company holds a Level 1 investment in a Hong Kong company that has a quoted market price. The contributor of this investment has provided a downside guarantee to ensure a minimum value, so the asset is carried at a consistent value during periods in which the per-share price of the investment is below the originally contributed amount.

The Company’s derivative liabilities were calculated using Level 2 assumptions on the issuance and balance sheet dates via a Black-Scholes option pricing model and consisted of the following ending balances and gain amounts as of and for the nine-month period ended January 31, 2025:

The Black-Scholes option pricing model assumptions for the derivative liabilities during the periods ended January 31, 2025 and 2024 consisted of the following:

Income Taxes

The Company has adopted ASC 740,Income Taxes, which requires the use of the asset and liability method of accounting for income taxes. Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

Prior to the acquisition by YYAI, YYEM was a limited liability company. As a limited liability company, the Company’s taxable income or loss is allocated to members in accordance with their respective percentage ownership. Therefore, no provision or liability for federal income taxes has been included in the financial statements. In the event of an examination of the Company’s tax return, the tax liability of the members could be changed if an adjustment in the Company’s income is ultimately sustained by the taxing authorities.

Impairment of Long-Lived Assets

In accordance with ASC 360-10,Impairment and Disposal of Long-Lived Assets, the Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that their net book value may not be recoverable. Factors which could trigger impairment review include significant underperformance relative to historical or projected future operating results, significant changes in the manner of use of the assets or the strategy for the overall business, a significant decrease in the market value of the assets, or significant negative industry or economic trends. When such factors and circumstances exist, the Company compares the projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives against their respective carrying amount. If those net undiscounted cash flows do not exceed the carrying amount, impairment, if any, is based on the excess of the carrying amount over the fair value based on the market value or discounted expected cash flows of those assets and is recorded in the period in which the determination is made.

Share-Based Payment

The Company accounts for share-based compensation in accordance with ASC 718,Compensation—Stock Compensation. Under the fair value recognition provisions of this topic, stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as an expense on a straight-line basis over the requisite service period, which is the vesting period.

Warrants

The Company grants warrants to key employees and executives as compensation on a discretionary basis. The Company also grants warrants in connection with certain note payable agreements and other key arrangements. The Company is required to estimate the fair value of share-based awards on the measurement date and recognize as expense that value of the portion of the award that is ultimately expected to vest over the requisite service period.

The warrants granted during the periods ended January 31, 2025 and 2024 were valued using a Black-Scholes option pricing model on the date of grant using the following assumptions:

Earnings Per Share

Basic earnings per share are calculated by dividing income available to shareholders by the weighted-average number of common shares outstanding during each period. Diluted earnings per share are computed using the weighted average number of common and dilutive common share equivalents outstanding during the period.

All common stock equivalents such as shares to be issued for the conversion of warrants were excluded from the calculation of diluted earnings per share as the effect is antidilutive.

Recent Accounting Pronouncements

The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows, or disclosures.

In November 2023, the Financial Accounting Standards Board issued Accounting Standards Update 2023-07 (“ASU 2023-07”). ASU 2023-07 requires more detailed information about reportable segments and expenses, including the requirement to disclose qualitative information about factors used to identify reportable segments and quantitative information about profit and loss measures and significant expense categories. ASU 2023-07 became effective for public companies in fiscal years beginning after December 15, 2023. The Company operates as a single reportable segment. The chief operating decision maker is the Company’s chief executive officer, who assesses performance based on total revenue, expenses, cash flows, and progress made in the Company’s ongoing development efforts. All of the Company’s long-lived assets are located in Hong Kong. The Company reports revenue by geographical location as required under the standard. The Company has analyzed ASU 2023-07 and determined that the required information is presented within the consolidated financial statements and note disclosures herein. The Company does not believe that ASU 2023-07 will have a material impact on the consolidated financial statements.

Note 3: INTANGIBLE ASSETS

Technology rights are stated at cost less accumulated amortization and impairment losses. Amortization is calculated on a straight-line basis over their estimated useful lives offive years.

Amortization expense for the nine-month periods ended January 31, 2025 and 2024 was approximately $2,232,693 and $432,692, respectively. These amounts are included in cost of revenue in the consolidated statements of operations.

Note 4:REVENUE – SEGMENT REPORTING BY GEOGRAPHIC REGION

The following represents the Company’s revenue segmented by geographic region for the nine-month and three-month periods ended January 31, 2025. All of the revenue in the nine-month and three-month periods ended January 31, 2024 was from Hong Kong.

Note 5:INVESTMENT

This represents a quoted investment in Brightstar Technology Group Co., Ltd. as of January 31, 2025, a company listed on the Hong Kong Stock Exchange. The contributor of this investment has provided a downside guarantee to ensure a minimum value, so the asset is carried at a consistent value during periods in which the per-share price of the investment is below the originally contributed amount.

Note 6: PREPAYMENTS

Prepayments are for the use of technology from unrelated third parties. The prepayments are to be expensed upon the Company using the technology, which is expected to commence in the next financial year beginning on May 1, 2025.

Note 7: ACCOUNTS PAYABLE AND ACCRUED EXPENSES

The following is a summary of accounts payable and accrued expenses as of January 31, 2025 and April 30, 2024, respectively.

Note 8: SHAREHOLDERS’ EQUITY (DEFICIT)

Common Stock

The Company has 1,000,000,000 shares of common stock authorized with a par value of $0.001 per share. As of January 31, 2025 and April 30, 2024, the Company had 14,563,026 and 1,828,541 shares of common stock issued and outstanding, respectively.

For the period from August 1, 2024 through October 31, 2024, the Company issued 3,776,305 shares of common stock for the exercise of warrants.

For the period from May 1, 2024 through July 31, 2024, the Company issued 830,608 shares of common stock to true-up shares related to the February 22, 2022 acquisition of PlaySight Interactive Ltd. (10), for services rendered (214,128), for the exercise of warrants (505,680), and for fractional shares as part of the 1-for-20 reverse stock split (110,790).

For the period from May 1, 2023 through July 31, 2023, the Company issued 189,718 shares of common stock to brand ambassadors under their agreements (188), to vendors in settlement of accounts payable (67,500), for settlement with former owners of Foundation Sports Systems, LLC (1,350), for the exercise of warrants (27,000), and to satisfy the profit guarantee on a note (93,680).

For the period from August 1, 2023 through October 31, 2023, the Company issued 1,844,506 shares of common stock for services rendered (13,707), for settlement with former owners of Flixsense Pty, Ltd. and as remaining contingent consideration (1,964), for the exercise of warrants (1,708,152), and to satisfy the profit guarantee on a note (85,000). In addition, we issued 35,683 to satisfy our requirement under the 1-for-40 reverse stock split that occurred in this period.

For the period November 1, 2024 through January 31, 2025, the Company issued 8,127,572 shares of common stock to complete the acquisition of YYEM.

Restricted Stock Grants

The Company issued restricted stock grants to five directors and officers. The grants are for common stock with a value of $12,500 and cash with a value of $7,500, for a total of $100,000 per quarter for the five directors and officers. None of the shares have been issued at this time.

Note 9: COMMITMENT

On November 21, 2024, the Company entered into a service agreement with its CEO for a period of five years. Pursuant to the service agreement, the CEO will be compensated as follows: (a) a monthly gross salary of $60,000 per month as a base salary which may be increased by the Board and may be deferred if the Company does not have sufficient funds to pay said salary, and may be converted into equity at the request of the CEO; (b) a $300,000 signing bonus payable in shares of common stock; (c) an annual bonus, as of the end of each fiscal year and as of the date of termination of the Services Agreement, of at least 100% of the CEO’s base salary, payable in cash or equity; and (d) a special bonus in the event of a change of control as defined in the agreement.

As of January 31, 2025, the Company accrued the $1,000,000 success fee and the $300,000 signing bonus, as well as monthly compensation of $157,500 which includes $17,500 in accrued benefits.

Note 10: SUBSEQUENT EVENTS