10q10k10q10k.net

What changed in AIRWA INC.'s 10-K — 2023 vs 2024

vs

Paragraph-level year-over-year comparison of AIRWA INC.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+541 added−301 removedSource: 10-K (2024-07-25) vs 10-K (2023-09-14)

Top changes in AIRWA INC.'s 2024 10-K

541 paragraphs added · 301 removed · 211 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

58 edited+136 added−18 removed62 unchanged
Biggest changeDelinquency Notices On October 10, 2022, the Company received a letter from the Listing Qualifications Department of the Nasdaq indicating that the Company’s common stock is subject to potential delisting from Nasdaq because, for a period of 30 consecutive business days, the bid price of the Company’s common stock has closed below the minimum $1.00 per share requirement for continued listing under Nasdaq Listing Rule 5450(a)(1) (the “Bid Price Rule”).
Biggest changeOn December 12, 2023, the Company received a letter (the “Notice”) from the Staff informing the Company that because the closing bid price for the Common Stock listed on Nasdaq was below $1.00 for 30 consecutive trading days, the Company was not in compliance with the minimum bid price requirement for continued listing on Nasdaq as set forth in Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”).
Effective February 25, 2020, the Company increased the number of authorized shares of common stock from 75,000,000 to 300,000,000 via a four-to-one forward split of its outstanding shares of common stock. All share and per share information contained in this report have been retroactively adjusted to reflect the impact of the stock split.
Effective February 25, 2020, the Company increased the number of authorized shares of common stock from 75,000,000 to 300,000,000 via a four-to-one forward split of its outstanding shares of common. All share and per share information contained in this report have been retroactively adjusted to reflect the impact of the stock split.
The Company is the owner of the Slinger Launcher, which is comprised of a portable tennis ball launcher, a portable padel tennis ball launcher and a portable pickleball launcher and Gameface AI, providing AI technology and performance analytics. From inception to date, we have been focused on the ball sport market globally.
The Company is the owner of the Slinger Launcher, which is comprised of a portable tennis ball launcher, a portable padel tennis ball launcher and a portable pickleball launcher and Gameface, providing AI technology and performance analytics. From inception to date, we have been focused on the ball sport market globally.
The United States market will remain predominantly a direct-to-consumer market for Slinger Bag for all sport verticals. 4 As the largest tennis and pickleball market in the world with 17.4 million tennis players and over 5 million pickleball players, the United States is a key market both to establish the Slinger brand and to drive demonstrable growth.
The United States market will remain predominantly a direct-to-consumer market for Slinger Bag for all sport verticals. As the largest tennis and pickleball market in the world with 17.4 million tennis players and over 5 million pickleball players, the United States is a key market both to establish the Slinger brand and to drive demonstrable growth.
Furthermore, additional equity financing may be dilutive to the holders of shares of our common stock, and debt financing, if available, may involve restrictive covenants, and strategic relationships, if necessary, to raise additional funds, and may require that we relinquish valuable rights.
Furthermore, additional equity financing may be dilutive to the holders of shares of our common stock, and debt financing, if available, may involve restrictive covenants, and strategic relationships, if necessary, to raise additional funds, and may require that we relinquish valuable rights. 22
Outside of our core marketing strategy, Slinger Bag has taken advantage of numerous opportunities to partner with key brands in the tennis and pickleball spaces and/or to advertise at key tennis or pickleball related events.
Outside of our core marketing strategy, Slinger Bag has taken advantage of numerous opportunities to partner with key brands in the tennis, pickleball and padel spaces and/or to advertise at key tennis, pickleball and padel related events.
Gameface’s core capabilities are delivered through a compatible single camera or smart phone, which allows us to build scalable solutions for the sports market without relying on specific hardware or camera types. We envision Gameface as a product and technology that will be at the heart of ‘powering’ the Connexa portfolio of brands.
Gameface’s core capabilities are delivered through a compatible single camera or smart phone, which allows us to build scalable solutions for the sports market without relying on specific hardware or camera types. We envision Gameface as a product and technology that will be at the heart of ‘powering’ the Slinger portfolio of brands.
The Company intends to enter into a database access and marketing agreement with Foundation Sports pursuant to which Foundation Sports will (i) provide the Company with sporting or racquet facility information and contact data of its customers (subject to applicable law) and (ii) publish any promotional content, call to action, survey or similar promotional communications provided by the Company to Foundation Sport’s customers for its Customers to promote said material to their extended network of consumers in exchange for 7% of any gross revenue to be generated from such activities.
The Company entered into a database access and marketing agreement with Foundation Sports pursuant to which Foundation Sports will (i) provide the Company with sporting or racquet facility information and contact data of its customers (subject to applicable law) and (ii) publish any promotional content, call to action, survey or similar promotional communications provided by the Company to Foundation Sport’s customers for its Customers to promote said material to their extended network of consumers in exchange for 7% of any gross revenue to be generated from such activities.
We also see Gameface technology as a driver of real-time data and analytics for Connexa’s core sport focus – across all racquetsports, baseball and cricket – coupled with partnerships with external brands and other strategic partners for its applications for all other sports, outside of these core categories.
We also see Gameface technology as a driver of real-time data and analytics for Slinger’s core sport focus – across all racquetsports, baseball and cricket – coupled with partnerships with external brands and other strategic partners for its applications for all other sports, outside of these core categories.
The Slinger Bag brand ambassador team has also been integral to the overall brand marketing strategy through their support of our product and by creating and sharing their user content, representing themselves as affiliated with the brand and through their personal appearances at events, tournaments, etc.
The Slinger Bag brand ambassador team has, historically, been integral to the overall brand marketing strategy through their support of our product and by creating and sharing their user content, representing themselves as affiliated with the brand and through their personal appearances at events, tournaments, etc.
We are currently field testing our new our Baseball / Softball launchers, which are expected to be introduced to the market in 2024. We plan to introduce similar transportable, versatile and affordable ball launchers for cricket and other ball sports over the course of the next three years.
We are currently field testing our new our Baseball / Softball launchers, which are expected to be introduced to the market in 2025. We plan to introduce similar transportable, versatile and affordable ball launchers for cricket and other ball sports over the course of the next three years.
In 2024 and going forward, Gameface expects to dedicate resources to baseball analytics and identifying strategic partners for other high-profile team sports such as basketball and soccer. We also intend to license technology to validated global partners in sports verticals that remain non-core to Connexa with the aim to become the recognized leader in sports AI globally.
In late 2024 and going forward, Gameface expects to dedicate resources to baseball analytics and identifying strategic partners for other high-profile team sports such as basketball and soccer. We also intend to license technology to validated global partners in sports verticals that remain non-core to Slinger with the aim to become the recognized leader in sports AI globally.
There are, however, other companies that market traditional tennis ball machines, including the following brands: ● Nisplay ● Spinshot ● Lobster Sports – Tennis, Pickleball and Padel ● Spinfire ● MatchMate ● Sports Tutor - Tennis, Pickleball and Padel ● Silent Partner ● Hydrogen Proton ● Playmate ● Erne Pickleball ● Simon X Pickleball ● Padelmaster - Padel 7 Gameface There are currently no competitors for our cricket and tennis AI analytics product that are similar to the cricket technique analysis app or the Slinger app (currently in beta testing), based on functionality and affordability.
There are, however, other companies that market traditional tennis ball machines, including the following brands: ● ● Nisplay Titan Ball Machines 18 ● Spinshot ● Lobster Sports – Tennis, Pickleball and Padel ● Spinfire ● MatchMate ● Sports Tutor - Tennis, Pickleball and Padel ● Silent Partner ● Hydrogen Proton ● Playmate ● Erne Pickleball ● Simon X Pickleball Gameface There are currently no competitors for our cricket and tennis AI analytics product that are similar to the cricket technique analysis app or the Slinger app (currently in beta testing), based on functionality and affordability.
The operations of Slinger Bag Inc., Slinger Bag Americas, Slinger Bag Canada, Slinger Bag UK, SBL, Foundation Sports, PlaySight and Gameface are collectively referred to as the “Company.” On June 14, 2022, the Company effected a 1-for-10 reverse stock split, where the Company’s common stock began to trade on a reverse split adjusted basis.
The operations of Slinger Bag Inc., Slinger Bag Americas, Slinger Bag Canada, Slinger Bag UK, SBL and Gameface are collectively referred to as the “Company.” On June 14, 2022, the Company effected a 1-for-10 reverse stock split, where the Company’s common stock began to trade on a reverse split adjusted basis.
Connexa Brand Marketing With the go-to-market strategy for Slinger Bag focused on its core North American tennis and pickleball markets as a direct-to-consumer business e-commerce brand, all in-house marketing activity and advertising media is centered around a consumer push to the Slinger Bag e-commerce platform at https://www.slingerbag.com/ and then working to convert brand or product interest to purchases.
With the go-to-market strategy for Slinger Bag focused on its core North American market as a direct-to-consumer business e-commerce brand, all in-house marketing activity and advertising media is centered around a consumer push to the Slinger Bag e-commerce platform at https://www.slingerbag.com/ and then working to convert brand or product interest to purchases.
(“SBL”), an Israeli company. In connection with the Stock Purchase Agreement, Slinger Bag Americas acquired 2,000,000 shares of common stock of Lazex for $332,239. On September 16, 2019, SBL transferred its ownership of Slinger Bag Americas to Lazex in exchange for the 200,000 shares of Lazex acquired on August 23, 2019.
(“SBL”), an Israeli company. In connection with the Stock Purchase Agreement, Slinger Bag Americas acquired 2,500 shares of common stock of Lazex for $332,239. On September 16, 2019, SBL transferred its ownership of Slinger Bag Americas to Lazex in exchange for the 2,500 shares of Lazex acquired on August 23, 2019.
They are also generally expensive – often well above U.S. $1,000 compared to the entry price of $700 for a Slinger Bag Launcher.
They are also generally expensive – often well above U.S. $1,000 compared to the entry price of $600 for a Slinger Bag Launcher.
Slinger Bag has significant numbers of its consumers who are avid fans of our brand and fully engaged in generating Slinger Bag related social media content through their own means. Since inception, Slinger Bag has built up a base of in excess of 60,000 users of Slinger Bag.
Slinger Bag has significant numbers of its consumers who are avid fans of our brand and who are fully engaged in generating Slinger Bag related social media content through their own means. Since inception, Slinger Bag has built up a base of approximately 100,000 users of Slinger Bag.
As a result of these transactions, Lazex owned 100% of Slinger Bag Americas and the sole shareholder of SBL owned 200,000 shares of common stock (approximately 82%) of Lazex. Effective September 13, 2019, Lazex changed its name to Slinger Bag Inc.
As a result of these transactions, Lazex owned 100% of Slinger Bag Americas and the sole shareholder of SBL owned 2,500 shares of common stock (approximately 82%) of Lazex. Effective September 13, 2019, Lazex changed its name to Slinger Bag Inc.
Similar prominent ambassadors are being identified for both pickleball in the United States of America and by our exclusive padel distributor for the global padel market and are expected to be in place and active over the coming months.
Prominent ambassadors are now also being identified for both Pickleball - across the United States of America, and by our exclusive Padel distributor for the global Padel market and are expected to be in place and active over the coming months.
Through our acquisition and retained interest in Foundation Sports we have access to Foundation’s database of over 500,000 avid tennis players. We use email marketing to engage with this groups a few times per annum in order to generate additional sales interest.
Through our acquisition and retained interest in Foundation Sports we have access to Foundation’s database of over 500,000 avid tennis players. We use email marketing to engage with this group several times per annum in order to generate additional sales interest.
We are engaged in ongoing efforts to register more trademarks across an expanding list of products, services and applications, which are in various stages of the registration process. We own the rights to its www.connexasports.com/ domain and other associated and derivative domains.
We are engaged in ongoing efforts to register more trademarks across an expanding list of products, services and applications, which are in various stages of the registration process. We own the rights to its www.connexasports.com/ www.slingerbag.com and https://gameface.ai domains and other associated and derivative domains.
Based on the target tennis and pickleball demographic, our marketing focus centers around three core marketing pillars: digital advertising; influencers and brand ambassadors. Our marketing efforts also focus on core targeted social media platforms such as Facebook, Google, Instagram and You Tube.
Based on our target demographic, our marketing focus centers around three core marketing pillars: digital advertising; influencers and brand ambassadors. Our marketing efforts also engage our core consumers through targeted social media platforms such as Facebook, Google, Instagram and You Tube.
Connexa is now the holding company under which Slinger Bag, PlaySight, Gameface and Foundation Sports reside.
Connexa is now the holding company under which Slinger Bag and Gameface reside.
As a result of the share purchase agreement, Gameface would become a wholly owned subsidiary of the Company. On February 22, 2022, the Company entered into a merger agreement with PlaySight Interactive Ltd. (“PlaySight”) and Rohit Krishnan (the “Shareholders’ Representative”). As a result of the merger agreement, PlaySight would become a wholly owned subsidiary of the Company.
On February 2, 2022, the Company entered into a share purchase agreement with Flixsense Pty, Ltd. (“Gameface”). As a result of the share purchase agreement, Gameface became a wholly owned subsidiary of the Company. On February 22, 2022, the Company entered into a merger agreement with PlaySight Interactive Ltd. (“PlaySight”) and Rohit Krishnan (the “Shareholders’ Representative”).
Using demographic data for tennis and pickleball and following a period of advertising testing, our digital advertising spend is focused mainly towards Facebook and Google platforms. 5 In addition to our paid marketing activities, Slinger Bag relies on the expertise of our small internal team to build out a network of ‘followers’ across various social media platforms – mainly Instagram, Facebook, You Tube and LinkedIn.
Currently considering our demographic data for tennis, pickleball and padel our digital advertising spend is focused mainly toward Facebook and Google platforms. 16 In addition to our paid marketing activities, Slinger Bag relies on the expertise of our small internal team to build out a network of ‘followers’ across various social media platforms – mainly Instagram, Facebook, You Tube and LinkedIn.
In addition, within the United States, we comply with the required California 65 regulations in respect to the materials used in the construction of its trolley bag. 8 Government Regulation Both the Slinger Bag Launcher and the Slinger Oscillator meet all the United States government requirements for electrical, radio wave and battery standards, as well as having all necessary and required certifications to facilitate global marketing and sales of these products. 9 Research and Development Slinger Bag Slinger Bag is working with our vendor management partner, Stride Innovation, and our China based vendors to produce ball launchers for new market segments, such as Pickleball, Padel and Baseball/Softball.
Government Regulation Both the Slinger Bag Launcher and the Slinger Oscillator meet all the United States government requirements for electrical, radio wave and battery standards, as well as having all necessary and required certifications to facilitate global marketing and sales of these products. 20 Research and Development Slinger Bag Slinger Bag is working with our vendor management partner, Stride Innovation, and our China based vendors to produce ball launchers for new market segments, such as Pickleball, Padel and Baseball/Softball.
After launching the tennis app, Gameface plans to revisit the cricket vertical and enhance its technology offering based on the advances made in its tennis AI, which will broaden and deepen its reach across the cricket world.
Following the successful launch of the Slinger App for Tennis, Gameface plans to revisit the cricket vertical and enhance its technology offering based on the advances made in its tennis AI, which will broaden and deepen its reach across the cricket world.
Additionally, through our management team’s close association to the tennis industry, we have been able to provide many touring professionals with a Slinger Bag Launcher for their personal use. These arrangements were non-contractual product seeding opportunities.
Additionally, through our management team’s close association to the general racquetsports industry, we have been able to provide many professional players with a Slinger Bag Launcher for their personal use across all sports. These arrangements were non-contractual product seeding opportunities.
On March 7, 2023, Slinger Bag entered into an exclusive distribution agreement for Padel Tennis with a company located in Valencia, Spain called with Desarrollo y Promocion de Padel S.L. This agreement is contracted to deliver approximately $20million in revenue over a 5-year period.
On March 7, 2023, Slinger Bag entered into an exclusive distribution agreement for Padel Tennis with a company located in Valencia, Spain called with Desarrollo y Promocion de Padel S.L. This agreement is contracted to deliver approximately $15 million in revenue by the end of 2028.
To support the Slinger Bag marketing program, we have engaged the following agencies: ● Ad Venture Media Group, a New York based PPC (pay-per-click) agency whose work is grounded in scientific analysis of consumer data and consumer trends.
To support the Slinger Bag marketing program, we have engaged the following agencies: ● Ad Venture Media Group, a New York based PPC (pay-per-click) agency whose work is grounded in scientific analysis of consumer data and consumer trends. Ad Venture Media leads all of our paid digital and social media advertising activities for Slinger Bag on a performance-based fee structure.
Tennis Europe provides a platform for 60,000 aspiring junior tennis players to compete in age-group categorized events. ● Country Federations: Slinger Bag is an official partner of the UK Lawn Tennis Association (“LTA”). In similar vein, we are looking to deliver partnerships for the co-branded supply of Pickle Balls and Padel Tennis Balls.
Tennis Europe provides a platform for 60,000 aspiring junior tennis players to compete in age-group categorized events. In a similar vein, we are looking to deliver partnerships for the co-branded supply of Pickle Balls and Padel Tennis Balls.
We believe these partnerships provide us significant levels of brand exposure and credibility driving mutually beneficial marketing campaigns aimed at reaching avid tennis players globally.
As such, we currently have several strategic partnerships that emphasize this. We believe these partnerships provide us significant levels of brand exposure and credibility driving mutually beneficial marketing campaigns aimed at reaching avid tennis players globally.
Recent Events On September 13, the Company held a special meeting of stockholders in which the following items were approved: (i) the issuance of (i) 1,018,510 shares of the our common stock, par value $0.001 per share, that were issued on October 3, 2022, and, (ii) 11,802,002 shares of our common stock issuable upon exercise of Pre-Funded Warrants at an exercise price of $0.00001 per share, (iii) 12,820,512 shares of common stock issuable upon the exercise of 5-Year Warrants at an exercise price of $0.39 per share, (iv) 25,641,024 shares of common stock issuable upon the exercise of 7.5 Year Warrants at an exercise price of $0.43 per share and (v) 18,099,548 shares of our common stock issuable upon the exercise of 5.5 Year Warrants at an at an exercise price per share equal to $0.221 per share to Armistice Capital Master Fund Ltd and (ii) a reverse stock split of our common stock within a range of one (1)-for-ten (10) to one (1)-for-forty (40) (“Reverse Stock Split”), with the Board of Directors of the Company to set the specific ratio and determine the date for the reverse split to be effective and any other action deemed necessary to effectuate the Reverse Stock Split, without further approval or authorization of stockholders, at any time within 12 months of the special meeting date.
Special Meeting of Stockholders On September 13, 2023 the Company held a special meeting of stockholders in which the following items were approved: (i) the issuance of (i) 1,274 shares of the our common stock, par value $0.001 per share, that were issued on October 3, 2023, and, (ii) 14,753 shares of our common stock issuable upon exercise of Pre-Funded Warrants at an exercise price of $0.0002 per share, (iii) 16,026 shares of common stock issuable upon the exercise of 5-Year Warrants at an exercise price of $312 per share, (iv) 32,052 shares of common stock issuable upon the exercise of 7.5 Year Warrants at an exercise price of $344 per share and (v) 22,625 shares of our common stock issuable upon the exercise of 5.5 Year Warrants at an at an exercise price per share equal to $1,768 per share to Armistice Capital Master Fund Ltd and (ii) a reverse stock split of our common stock within a range of one (1)-for-ten (10) to one (1)-for-forty (40) (“Reverse Stock Split”), with the Board of Directors of the Company to set the specific ratio and determine the date for the reverse split to be effective and any other action deemed necessary to effectuate the Reverse Stock Split, without further approval or authorization of stockholders, at any time within 12 months of the special meeting date.
During April 2022, the Company determined that the technology utilized in the Foundation Sports acquired entity would take substantially more financial resources and more time to bring to market and achieve profitability than originally anticipated.
As a result of the merger agreement, PlaySight would become a wholly owned subsidiary of the Company. During April 2022, the Company determined that the technology utilized in the Foundation Sports acquired entity would take substantially more financial resources and more time to bring to market and achieve profitability than originally anticipated.
We entered into a lease for use of office space at this location effective September 1, 2019. This location is owned by Zeek Logistics, which is a company owned by Yonah Kalfa, who is a director, Chief Innovation Officer, and our largest shareholder.
Facilities Our principal office is located at 2709 N. Rolling Road, Suite 138, Windsor Mill, Maryland 21244. We entered into a lease for use of office space at this location effective September 1, 2019. This location is owned by Zeek Logistics, which is a company owned by Yonah Kalfa, who is a director, Chief Innovation Officer, and our largest shareholder.
Industry Overview Over the next five years, we believe that there will be a significant increase in demand from sports consumers for AI (artificial intelligence) technology that will play an integral role in supporting their enjoyment of their chosen sport through personalized insights and analytics and associated self-coaching tools. 3 Over the course of the next twelve months, we will be focused on reaching the global tennis, padel tennis and pickleball communities as our primary target markets.
Industry Overview Over the next five years, we believe that there will be a significant increase in demand from sports consumers for AI (artificial intelligence) technology that will play an integral role in supporting their enjoyment of their chosen sport through personalized insights and analytics and associated self-coaching tools.
Each distributor is also conducting its own Slinger brand marketing program. All efforts in this regard are aimed at reaching the avid tennis player directly and are focused on ensuring that the Slinger Bag brand message is consistent around the globe.
Each local country distributor, as well as our global padel distribution partner are also conducting their own Slinger brand marketing program. All efforts in this regard are aimed at reaching the avid tennis, pickleball and padel players directly and are focused on ensuring that the Slinger Bag brand message is consistent around the globe.
Gameface initially focused its technology on the cricket and soccer markets, where it has built an automated platform to extract various data points from live and archived match footage.
Gameface initially focused its technology on the cricket and soccer markets, where it has built an automated platform to extract various data points from live and archived match footage. The Gameface team has been dedicated over the last 18 months to building its technology to deliver performance insights in tennis.
In developing our Slinger Bag tennis, pickleball and padel launchers, we have designed the three products that share many common parts. We expect this to aid efficiency of the production process.
Unfortunately, this issue resulted in a short-term consumer confidence issue that impacted the delivery of the 2024 minimum volumes. 14 In developing our Slinger Bag tennis, pickleball and padel launchers, we have designed the three products that share many common parts. We expect this to aid efficiency of the production process.
As a result, the Company sold PlaySight back to its original owners of in November 2022, and the Company sold most (75%) of Foundation Tennis back to their original owners, with an option to purchase any remaining interests.
As a result, the Company sold PlaySight back to its original owners of in November 2022, and the Company sold most (75%) of Foundation Tennis back to their original owners, with an option to purchase any remaining interests. The Company believes these divestitures will bring about greater cash flow and result in a reduction in net loss from operations.
Our manufacturing capacity is estimated at approximately 5,000 units monthly. This capacity will be shared across our three Slinger Bag Launcher products– tennis, pickleball, and padel. The pickleball product was introduced to the market in March 2023 and was followed by Padel Tennis in June 2023.
Our manufacturing capacity is estimated at approximately 5,000 units monthly. This capacity will be shared across our three Slinger Bag Launcher products– tennis, pickleball, and padel. The pickleball product was introduced to the market in March 2023 and has been well received in the Pickleball community and is currently selling at a rate of around 300 units per month.
The Company believes these divestitures will bring about greater cash flow and result in a reduction in net loss from operations. 12 We intend to overcome the circumstances that impact its ability to remain a going concern through a combination of the commencement of revenues, with interim cash flow deficiencies being addressed through additional equity and debt financing.
We intend to overcome the circumstances that impact its ability to remain a going concern through a combination of the commencement of revenues, with interim cash flow deficiencies being addressed through additional equity and debt financing.
(ii) The maturity due date of the Promissory Note is December 31, 2023 subject to a one year extension in the discretion of the Buyer until December 31, 2024. (iii) The Promissory Note can be partially paid over the time, but in the event it is not paid in full by December 31, 2024, then the remaining amount due (i.e.
(iii) The Promissory Note can be partially paid over the time, but in the event it is not paid in full by December 31, 2024, then the remaining amount due (i.e.
Ukraine War The impact of the Ukraine ware has been limited on the Company with the direct impact being seen through those distributors bordering the war zone who have seen a significant decline in demand. Gameface – no direct impact seen on this business to date.
We do not pay any rent or fee to use this location. Ukraine War The impact of the Ukraine war has been limited on the Company with the direct impact being seen through those distributors bordering the war zone who have seen a significant decline in demand.
Trademark protection has been applied for and/or received in the following countries: ● US ● Chile ● Mexico ● EU ● Russia ● Poland ● Czech Republic ● Australia ● New Zealand ● China ● South Korea ● Vietnam ● Singapore ● Canada ● United Arab Emirates* ● South Africa* ● Columbia* ● Israel* ● Japan* ● Switzerland* ● Indonesia* ● Malaysia* ● Thailand* ● Turkey* ● Argentina ● Brazil *Trademark protection is pending.
Trademark protection has been applied for and/or received in the following countries: ● US ● Chile ● Mexico ● EU ● Russia ● Poland ● Czech Republic ● Australia ● New Zealand ● China ● South Korea ● Vietnam ● Singapore ● Canada ● United Arab Emirates* ● South Africa* ● Columbia* ● Israel* ● Japan* ● Switzerland* ● Indonesia* ● Malaysia* ● Thailand* ● Turkey* ● Argentina ● Brazil *Trademark protection is pending. 19 In addition we are currently in the application process for up to 12 novel innovations that are patentable as part of our planned marketing introduction of a Slinger Baseball Launcher in 2025.
The Company has also released PlaySight from all of its obligations (except for those created by the Agreement) in respect of the Company, including any inter-company debts on the books, and the Buyer has released the Company from all of its obligations (except for those created by the Agreement) in respect of PlaySight and the Buyer.
The Company has also released PlaySight from all of its obligations (except for those created by the Agreement) in respect of the Company, including any inter-company debts on the books, and the Buyer has released the Company from all of its obligations (except for those created by the Agreement) in respect of PlaySight and the Buyer. 2 The reason for the entry into the Agreement and the transactions contemplated thereby was to eliminate the need for the Company to provide further financing for PlaySight’s operations.
Costs and Effects of Complying with Environmental Regulations Set forth below is a detailed chart of all our Product Certifications for key global markets covering battery, remote control (radio wave), and power charger.
Costs and Effects of Complying with Environmental Regulations Set forth below is a detailed chart of all our Product Certifications for key global markets covering battery, remote control (radio wave), and power charger. In addition, within the United States, we comply with the required California 65 regulations in respect to the materials used in the construction of its trolley bag.
We believe that up until the introduction of the Slinger Bag Launcher, the majority of traditional tennis ball machines were sold to tennis facilities, institutions and tennis teachers, with only a few being sold directly to tennis playing consumers.
We believe that up until the introduction of the Slinger Bag Launcher, the majority of traditional tennis ball machines were sold to tennis facilities, institutions and tennis teachers, with only a few being sold directly to tennis playing consumers. 12 Recent Events On May 15, 2024, the Company held its 2024 annual general meeting of stockholders at which the following items were approved: 1.
On June 21, 2021, Slinger Bag Americas entered into a membership interest purchase agreement with Charles Ruddy to acquire a 100% ownership stake in Foundation Sports Systems, LLC (“Foundation Sports”). On February 2, 2022, the Company entered into a share purchase agreement with Flixsense Pty, Ltd. (“Gameface”).
Effective June 27, 2024, the Company increased the number of authorized shares of common stock from 300,000,000 to 1,000,000,000. On June 21, 2021, Slinger Bag Americas entered into a membership interest purchase agreement with Charles Ruddy to acquire a 100% ownership stake in Foundation Sports Systems, LLC (“Foundation Sports”).
All end consumer service support is currently managed by a small service team based in Canada. All distributor partners are managed and supported by our distributor manager located in Israel. Gameface Gameface will provide the consumer with access to analytics data through a sport specific automated AI platform that analyzes and extracts data from uploaded consumer or team videos.
Gameface Gameface will provide the consumer with access to analytics data through a sport specific automated AI platform that analyzes and extracts data from uploaded consumer or team videos.
Employees As at the date of this report, we have 9 full-time employees spread across Israel, USA, Australia and the UK. Management believes its relations with employees is good. We also hire part-time employees and engage consultants to support our operations as needed. Facilities Our principal office is located at 2709 N. Rolling Road, Suite 138, Windsor Mill, Maryland 21244.
Employees As at the date of this report, we have 8 full-time employees spread across Israel, USA, Australia and the UK. Management believes its relations with employees is good. We also hire part-time employees, engage consultants and outsource services e.g. logistics, service, QA & QC to professional partner organizations in order to support our operations as needed.
The ITF cites the global tennis market as having 80 million active participants, with many million other consumers being acknowledged as avid fans of the sport.
Over the course of the next twelve months, we will be focused on reaching the global tennis, padel tennis and pickleball communities as our primary target markets. The ITF cites the global tennis market as having 80 million active participants, with many million other consumers being acknowledged as avid fans of the sport.
Ad Venture Media leads all of our paid digital and social media advertising activities for Slinger Bag on a performance-based fee structure. ● We have partnered with Team Activations through their Team HQS portal to manage an affiliate marketing program geared towards US-based teaching professionals, players, juniors and events, in the United States tennis and pickleball markets.
We are experiencing consistent ROAS (Return On Ad Spend) of 10X+ ● We have partnered with various organizations to manage an affiliate marketing program geared towards US-based teaching professionals, players, juniors and events, in the United States tennis and pickleball markets.
Ultimately, this group will also form the core target consumer market for our upcoming launch of the Slinger Tennis App.
This core group is also now very important as a core target consumer market for our recent introduction of our Slinger Tennis App.
The Nasdaq notice indicated that, in accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company would be provided 180 calendar days, or until April 10, 2023, to regain compliance. If the Company were to fail to regain compliance with the Bid Price Rule before April 10, 2023, t he Company may be eligible for an additional 180-calendar day compliance period.
In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company was given a period of 180 calendar days from December 12, 2023, or until June 10, 2024, to regain compliance with the Minimum Bid Price Requirement.
Distributor marketing budgets are allocated to Google, Facebook, Instagram, YouTube and other relevant websites or platforms in their region, and several are supported, approved and /or overseen by AdVenture Media Group where applicable. 6 Brand Endorsements In 2021 we reached agreements with several globally recognized tennis players and coaches to become brand ambassadors, but those agreements terminated in the first two calendar quarters of 2023.
Distributor marketing budgets are allocated to Google, Facebook, Instagram, YouTube and other relevant websites or platforms in their region, and several are supported, approved and /or overseen by AdVenture Media Group where applicable. 17 Strategic Brand Partnerships Slinger Bag believes that building strong strategic partnerships across all of our sports underpins the credibility and awareness of the Slinger Bag brand.
In regard to development of our pending performance and analytics app, the development team of Gameface is working to create a Tennis specific analysis code for the app.
In regard to development of our pending performance and analytics app, the development team of Gameface has completed the initial work on the Slinger App for Tennis and the Slinger App is now available to consumers via the Apple App or Google Play Stores.
Removed
The reason for the entry into the Agreement and the transactions contemplated thereby was to eliminate the need for the Company to provide further financing for PlaySight’s operations.
Added
(ii) The maturity due date of the Promissory Note is December 31, 2023 subject to a one year extension in the discretion of the Buyer until December 31, 2024. The Buyer timely elected to extend the maturity date of the Promissory Note to December 31, 2024.
Removed
The Company failed to regain compliance with the Bid Price Rule by April 10, 2023 and requested and received an additional period of 180 days until October 9, 2023 to regain compliance with the Minimum Bid Price Requirement. The Company is in the process of obtaining shareholder consent to effect a reverse split of its shares of common stock.
Added
On November 16, 2023, the Company entered into an agreement with Agile Capital Funding (the “ACF Agreement”) pursuant to which the Company sold $693,500 in future receivables to ACF (the “ACF Receivable Amount”) in exchange for $450,000 in cash. The Company agreed to pay ACF $28,895.83 each week until the ACF Receivable Amount is paid in full.
Removed
If granted, the Company will initiate a reverse split as soon as reasonably practical thereafter in an attempt to regain compliance with the Minimum Bid Price Requirement. 2 On July 26, 2023, the Company received a letter from the Listing Qualifications Department of Nasdaq indicating that the Company’s stockholders’ equity as reported in its Quarterly Report on Form 10-Q for the quarterly period ended January 31, 2023 did not satisfy the continued listing requirement under Nasdaq Listing Rule 5550(b)(1), which requires that a listed company’s stockholders’ equity be at least $2.5 million (the “Minimum Stockholders’ Equity Requirement”).
Added
In order to secure payment and performance of the Company’s obligations to ACF under the ACF Agreement, the Company granted to ACF a security interest in the following collateral: all present and future accounts receivable.
Removed
The Company timely submitted a compliance plan to the Panel and on August 23, 2023 received notice from Nasdaq that it has until January 22, 2024 to demonstrate compliance with the Minimum Stockholders’ Equity Requirement.
Added
The Company also agreed not to create, incur, assume, or permit to exist, directly or indirectly, any lien on or with respect to any of such collateral.
Removed
There can be no assurance that the Company will be able to satisfy the Nasdaq’s continued listing requirements, regain compliance with the Rule, the Minimum Stockholders’ Equity Requirement, and the Minimum Bid Price Requirement, and maintain compliance with other Nasdaq listing requirements. Operations The Company operates in the sports equipment and technology business.
Added
As previously disclosed on the Current Report on Form 8-K furnished with the SEC on September 9, 2020, the Company entered into a service agreement dated September 7, 2020 (the “YK Employment Agreement”) with Yonah Kalfa, the Company’s chief innovation officer and member of the Company’s board of directors.
Removed
Gameface has successfully launched this technology previously in Cricket in Australia and is working to introduce to the market a unique application for Tennis. Once tested and established in Tennis, this technology can easily be adapted for other racquetsports, baseball, cricket and other sports verticals.
Added
Pursuant to Sections 2.1(a) and 2.1(b) of the YK Employment Agreement, the Company owes Mr. Kalfa $1,137,000 in salary (the “Salary Compensation”) through January 31, 2024 to Mr. Kalfa. The Company was unable to pay Mr. Kalfa any of the compensation in cash and, given Mr.
Removed
The Gameface team has been dedicated to building its technology to deliver performance insights in tennis, which will form the core of our new Slinger app, which is planned to be launched in late 2023.
Added
Kalfa’s extraordinary contribution to the Company, pursuant to Section 2.1(b) of the YK Employment Agreement, on January 20, 2024 the Company agreed to pay $1 million of the $1.137 million owed (with Mr.
Removed
During the fiscal year that ended on April 30, 2022, our ambassador team included: Tommy Hass, Robert Bryan, Darren Cahill, Eugenie Bouchard, Patrick Mouratoglou, Dustin Brown and the Jensen brothers. All ambassador arrangements terminated prior to the date hereof, which means that we no longer have any active tennis ambassadors.
Added
Kalfa waiving the right to receive the $137,000 balance) via an issuance of shares of Common Stock as memorialized by that certain Deferred Payment Conversion Agreement with Mr. Kalfa, dated January 20, 2024 (the “2024 Agreement”).
Removed
We are now in the process of re-evaluating this program and of potentially either renewing a select core group or identifying new ambassadors for our tennis activities and for relevant ambassadors to support our Pickleball and Padel category activities. We have also engaged with the following organizations to promote our Slinger brand and products.
Added
The 2024 Agreement sets forth the price per share of the shares to be issued (267,380), the number of shares to be issued using that price ($3.74), and the amount due to Mr. Kalfa through January 31, 2024. Due to administrative delays, the Company did not issue the shares in January.
Removed
Peter Burwash International (“PBI”), a United States-based, highly respected, global tennis services company set up by Peter Burwash some 35 years ago. PBI provides tennis programs and other tennis services to over 28 of the global luxury resorts.
Added
Rather, on March 15, 2024, the Company issued 220,265 shares of Common Stock. This is the amount of stock owed for a $1 million payment at a conversion price of $4.54, which was the closing price of the Common Stock on March 13, 2024 (and a higher price than the closing price on March 14, 2024).
Removed
Slinger Bag Launchers are available to use at each resort and the PBI team will be actively promoting the Slinger brand as part of our affiliate marketing activity. The Dink – a leading Pickleball platform with 250,000 active pickleball players on their database.
Added
No shareholder approval was required for the issuance of the 220,265 shares because it was less than 20% of the number of the Company’s outstanding shares of Common Stock as of March 14, 2024 and was issued at a price per share ($4.54) above the Minimum Price as defined under Nasdaq Listing Rule 5635(d). 3 The Company sought and obtained shareholder approval, pursuant to Nasdaq Listing Rule 5635(c), to issue the balance of 47,115 shares (267,380 minus 220,265) to Mr.

… 132 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

85 edited+20 added−18 removed300 unchanged
Biggest changeOn September 28, 2022, we issued (i) 1,018,510 shares of common stock and (ii) pre-funded warrants (the “Pre-Funded Warrants”) to purchase an aggregate of 11,802,002 shares of its common stock, together with accompanying common stock warrants, at a combined purchase price of $0.39 per share of the common stock and associated common stock warrant and $0.3899 per Pre-Funded Warrant and associated common stock warrants.
Biggest changeOn January 19, 2024, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with three investors (the “Investors”) for the issuance and sale to each investor of (i) 116,510 shares of common stock (the “Shares”) and (ii) pre-funded warrants (the “Pre-Funded Warrants”) to purchase an aggregate of 1,258,490 shares of its common stock at a combined purchase price of 4.00 per share of the common stock for an aggregate amount of approximately $16.5 million (the “Offering”).
Actions taken by athletes or other endorsers, associated with our products that harm the reputations of those athletes or endorsers, could also seriously harm our brand image with consumers and, as a result, could have an adverse effect on our sales and financial condition.
Actions taken by athletes or other endorsers, associated with our products that harm the reputations of those athletes or endorsers, could also seriously harm our brand image with consumers and, as a result, could have an adverse effect on our sales and financial condition.
We may take advantage of these reporting exemptions until we are no longer an emerging growth company. If we cannot provide reliable financial reports or prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price of our common stock, if a market ever develops, could drop significantly.
We may take advantage of these reporting exemptions until we are no longer an emerging growth company. 44 If we cannot provide reliable financial reports or prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and the trading price of our common stock, if a market ever develops, could drop significantly.
Risks include, but are not limited to, credit card fraud or data mismanagement. 22 Our products are subject to risks associated with overseas sourcing, manufacturing and financing. The principal materials used in our products (e.g., injection molded plastics, polyester, electrical motors, remote controls, trolley bags) are available in countries where our manufacturing takes place.
Risks include, but are not limited to, credit card fraud or data mismanagement. Our products are subject to risks associated with overseas sourcing, manufacturing and financing. The principal materials used in our products (e.g., injection molded plastics, polyester, electrical motors, remote controls, trolley bags) are available in countries where our manufacturing takes place.
If we fail to continue to develop adapters or respond to new applications or newer versions of existing applications in a timely manner, our business could suffer. 29 Risks Related to the Company’s Legal and Regulatory Requirements Failure to adequately protect our intellectual property and curb the sale of counterfeit merchandise could injure our brand and negatively affect our sales.
If we fail to continue to develop adapters or respond to new applications or newer versions of existing applications in a timely manner, our business could suffer. Risks Related to the Company’s Legal and Regulatory Requirements Failure to adequately protect our intellectual property and curb the sale of counterfeit merchandise could injure our brand and negatively affect our sales.
Changes in U.S. trade policies, including new and potential changes to import tariffs and existing trade policies and agreements, could also have a significant impact on our activities in foreign jurisdictions, and could adversely affect our results of operations. Our financial results may be adversely affected if substantial investments in businesses and operations fail to produce expected returns.
Changes in U.S. trade policies, including new and potential changes to import tariffs and existing trade policies and agreements, could also have a significant impact on our activities in foreign jurisdictions, and could adversely affect our results of operations. 33 Our financial results may be adversely affected if substantial investments in businesses and operations fail to produce expected returns.
Any actual or perceived weaknesses and conditions that need to be addressed in our internal control over financial reporting or disclosure of management’s assessment of our internal controls over financial reporting may have an adverse impact on the price of our common stock. Any acquisitions we make could disrupt our business and seriously harm our financial condition.
Any actual or perceived weaknesses and conditions that need to be addressed in our internal control over financial reporting or disclosure of management’s assessment of our internal controls over financial reporting may have an adverse impact on the price of our common stock. 36 Any acquisitions we make could disrupt our business and seriously harm our financial condition.
However, our auditors will not be required to formally attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 until we are no longer a “smaller reporting company”. 25 The costs of being a public company could result in us being unable to continue as a going concern.
However, our auditors will not be required to formally attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 until we are no longer a “smaller reporting company”. The costs of being a public company could result in us being unable to continue as a going concern.
The failure of these systems to operate effectively, including as a result of security breaches, viruses, hackers, malware, natural disasters, vendor business interruptions or other causes, or failure to properly maintain, protect, repair or upgrade systems, or problems with transitioning to upgraded or replacement systems could cause delays in product fulfillment and reduced efficiency of our operations, could require additional capital to remediate the problem which may not be sufficient to cover all eventualities, and may have an adverse effect on our reputation, results of operations and financial condition. 18 We also use Information Technology Systems to process financial information and results of operations for internal reporting purposes and to comply with regulatory financial reporting, legal and tax requirements.
The failure of these systems to operate effectively, including as a result of security breaches, viruses, hackers, malware, natural disasters, vendor business interruptions or other causes, or failure to properly maintain, protect, repair or upgrade systems, or problems with transitioning to upgraded or replacement systems could cause delays in product fulfillment and reduced efficiency of our operations, could require additional capital to remediate the problem which may not be sufficient to cover all eventualities, and may have an adverse effect on our reputation, results of operations and financial condition. 28 We also use Information Technology Systems to process financial information and results of operations for internal reporting purposes and to comply with regulatory financial reporting, legal and tax requirements.
We do not currently use the derivative markets to hedge foreign currency fluctuations. The growth of our business depends on the successful execution of our growth strategy, and our efforts to expand internationally by growing our e-commerce business. We are focused on developing an integrated Play and Learn platform under our Connexa brand.
We do not currently use the derivative markets to hedge foreign currency fluctuations. The growth of our business depends on the successful execution of our growth strategy, and our efforts to expand internationally by growing our e-commerce business. We are focused on developing an integrated Watch, Play and Learn platform under our Connexa brand.
In the opinion of management, these factors, among others, raise substantial doubt about the ability of the Company to continue as a going concern as of the date of the end of the period covered by this report and for one year from the issuance of the consolidated financial statements. We have limited financial resources.
In the opinion of management, these factors, among others, raise substantial doubt about the ability of the Company to continue as a going concern as of the date of the end of the period covered by this report and for one year from the issuance of the consolidated financial statements. 34 We have limited financial resources.
The market in which Gameface operates is characterized by rapid, and sometimes disruptive, technological developments, evolving industry standards, frequent new product introductions and enhancements and changes in user requirements. In addition, both traditional and new competitors are investing heavily in our market areas and competing for users.
The market in which our Gameface technology operates is characterized by rapid, and sometimes disruptive, technological developments, evolving industry standards, frequent new product introductions and enhancements and changes in user requirements. In addition, both traditional and new competitors are investing heavily in our market areas and competing for users.
Therefore, we may face claims by employees demanding remuneration beyond their regular salary and benefits. We may be subject to product liability lawsuits or claims, which could harm our financial condition and liquidity if we are not able to successfully defend or insure against such claims.
Therefore, we may face claims by employees demanding remuneration beyond their regular salary and benefits. 40 We may be subject to product liability lawsuits or claims, which could harm our financial condition and liquidity if we are not able to successfully defend or insure against such claims.
Additional sales of our common shares in the public market after the date hereof, or the perception that these sales could occur, could reduce the market price of our common stock. We will be required to file an additional registration statement once we regain compliance with the Nasdaq listing requirements.
Additional sales of our common shares in the public market after the date hereof, or the perception that these sales could occur, could reduce the market price of our common stock. 46 We will be required to file an additional registration statement once we regain compliance with the Nasdaq listing requirements.
We also may experience increased costs and difficulties in replacing that vendor and replacement services may not be available on commercially reasonable terms, on a timely basis, or at all. 27 In addition, our platform may be accessed by many users at the same time.
We also may experience increased costs and difficulties in replacing that vendor and replacement services may not be available on commercially reasonable terms, on a timely basis, or at all. In addition, our platform may be accessed by many users at the same time.
To the extent that the interests of these shareholders may differ from the interests of the Company’s other shareholders, the Company’s other shareholders may be disadvantaged by any actions that these shareholders may seek to pursue. 36 Our stockholders may not be able to enforce judgments entered by United States courts against certain of our officers and directors.
To the extent that the interests of these shareholders may differ from the interests of the Company’s other shareholders, the Company’s other shareholders may be disadvantaged by any actions that these shareholders may seek to pursue. Our stockholders may not be able to enforce judgments entered by United States courts against certain of our officers and directors.
As a result, you should expect to receive a return on your investment in our common shares only if the market price of our common stock increases, which may never occur. 35 Future sales, or the perception of future sales, of our common stock may depress the price of our common stock.
As a result, you should expect to receive a return on your investment in our common shares only if the market price of our common stock increases, which may never occur. Future sales, or the perception of future sales, of our common stock may depress the price of our common stock.
Upon the sale, or the perception that a sale will occur, as described above, our stock price may decline significantly, even if our business is doing well. 39
Upon the sale, or the perception that a sale will occur, as described above, our stock price may decline significantly, even if our business is doing well.
If new sources of financing are required, but are unattractive, insufficient or unavailable, then we will be required to modify our growth and operating plans based on available funding, if any, which would inhibit our growth and could harm our business. 17 Our extended supply chain requires long lead times and relies heavily on manufacturers in Asia.
If new sources of financing are required, but are unattractive, insufficient or unavailable, then we will be required to modify our growth and operating plans based on available funding, if any, which would inhibit our growth and could harm our business. 27 Our extended supply chain requires long lead times and relies heavily on manufacturers in Asia.
The Company’s management has determined that there is substantial doubt about the Company’s ability to continue as a going concern and the report of our independent registered public accounting firm on our consolidated financial statements for the years ended April 30, 2023 and 2022 included an explanatory paragraph with respect to the foregoing.
The Company’s management has determined that there is substantial doubt about the Company’s ability to continue as a going concern and the report of our independent registered public accounting firm on our consolidated financial statements for the years ended April 30, 2024 and 2023 included an explanatory paragraph with respect to the foregoing.
The COVID-19 pandemic, Ukraine war, inflationary trends, shifts in consumer purchasing patterns, availability of transport, labor shortages in the shipping, trucking, and warehousing industries, port strikes, infrastructure congestion, equipment shortages and other factors have all contributed to delivery delays, greater costs and uncertainty in arranging and scheduling transport of our products.
The COVID-19 pandemic, Ukraine war, the Israel-Hamas war, inflationary trends, shifts in consumer purchasing patterns, availability of transport, labor shortages in the shipping, trucking, and warehousing industries, port strikes, infrastructure congestion, equipment shortages and other factors have all contributed to delivery delays, greater costs and uncertainty in arranging and scheduling transport of our products.
Our business may be adversely affected by the COVID-19 pandemic and the Ukraine war, as well as macro-economic conditions such as inflation, employment levels, wage and salary levels, trends in consumer confidence and spending, reductions in consumer net worth, interest rates, inflation, the availability of consumer credit and taxation policies influence on public spending confidence.
Our business may be adversely affected by the COVID-19 pandemic, the Ukraine war and the Israel-Hamas war, as well as macro-economic conditions such as inflation, employment levels, wage and salary levels, trends in consumer confidence and spending, reductions in consumer net worth, interest rates, inflation, the availability of consumer credit and taxation policies influence on public spending confidence.
We have listed the shares of our common stock on the Nasdaq, under the symbol “CNXA.” As such we are subject to, among other things, our fulfilling all of the listing requirements of the Nasdaq. In addition, Nasdaq has rules for continued listing, including, without limitation, minimum market capitalization and other requirements. As described above under “Item 1.
We have listed the shares of our common stock on the Nasdaq, under the symbol “YYAI.” As such we are subject to, among other things, our fulfilling all of the listing requirements of the Nasdaq. In addition, Nasdaq has rules for continued listing, including, without limitation, minimum market capitalization and other requirements. As described above under “Item 1.
Shareholders may be diluted significantly through our efforts to obtain financing and satisfy obligations through issuance of additional shares . Our Board of Directors has authority, without action or vote of the shareholders, to issue all or part of the authorized 300,000,000 shares that are not issued or reserved for issuance under convertible or exchangeable instruments.
Shareholders may be diluted significantly through our efforts to obtain financing and satisfy obligations through issuance of additional shares . Our Board of Directors has authority, without action or vote of the shareholders, to issue all or part of the authorized 1,000,000,000 shares that are not issued or reserved for issuance under convertible or exchangeable instruments.
Any losses or damages incurred by us could have a material adverse effect on our business, financial condition and results of operations. 14 Further, our operations could be disrupted by the obligations of our employees to perform military service. Our chief marketing officer is subject to the obligation to perform reserve military duty.
Any losses or damages incurred by us could have a material adverse effect on our business, financial condition and results of operations. 24 Further, our operations could be disrupted by the obligations of our employees to perform military service. Our chief marketing officer is subject to the obligation to perform reserve military duty.
Continued disruptions in our supply chain and adverse consequences from aggressive trade policies could have a material adverse impact on our profitability and financial performance. 15 We face risks associated with operating in international markets. We operate in a global marketplace and international sales growth is a key element of our growth strategy.
Continued disruptions in our supply chain and adverse consequences from aggressive trade policies could have a material adverse impact on our profitability and financial performance. 25 We face risks associated with operating in international markets. We operate in a global marketplace and international sales growth is a key element of our growth strategy.
If our market does not experience significant growth, or if demand for our products does not increase in line with our projections, then our business, results of operations and financial condition will be adversely affected. 20 We rely on technical innovation and high-quality products to compete in the market for our products.
If our market does not experience significant growth, or if demand for our products does not increase in line with our projections, then our business, results of operations and financial condition will be adversely affected. 30 We rely on technical innovation and high-quality products to compete in the market for our products.
We are a sports equipment and technology company delivering products and technologies and the relative popularity of tennis, pickleball and padel tennis and other various sports activities and changing design trends affect the demand for our products. The sports equipment industry and sports-related technology industry are both are highly competitive both in the U.S. and worldwide.
We are a sports equipment and technology company delivering products and technologies and the relative popularity of tennis, pickleball, padel tennis, baseball and cricket and other various sports activities and changing design trends affect the demand for our products. The sports equipment industry and sports-related technology industry are both are highly competitive both in the U.S. and worldwide.
If we are unable to maintain or enhance our brands in new markets, then our growth strategy could be adversely affected. 13 The cost of raw materials, labor or freight could lead to an increase in our cost of sales and cause our results of operations to suffer .
If we are unable to maintain or enhance our brands in new markets, then our growth strategy could be adversely affected. 23 The cost of raw materials, labor or freight could lead to an increase in our cost of sales and cause our results of operations to suffer .
Additionally, natural disasters and public health emergencies, such as extreme weather events and the COVID-19 pandemic and the Ukraine War, could have a significant adverse effect on our business, including interruption of our business operations, supply chain disruption, endangerment of our personnel, and other delays or losses of materials and results. 19 The Russian-Ukrainian Conflict may adversely affect our business, financial condition and results.
Additionally, natural disasters and public health emergencies, such as extreme weather events and the COVID-19 pandemic, the Ukraine War and the Israel-Hamas war, could have a significant adverse effect on our business, including interruption of our business operations, supply chain disruption, endangerment of our personnel, and other delays or losses of materials and results. 29 The Russian-Ukrainian Conflict may adversely affect our business, financial condition and results.
Results of operations in any period should not be considered indicative of the results to be expected for any future period. 21 We may be adversely affected by the financial health of our third-party internet partners, wholesale purchasers, retailers, and distributors.
Results of operations in any period should not be considered indicative of the results to be expected for any future period. 31 We may be adversely affected by the financial health of our third-party internet partners, wholesale purchasers, retailers, and distributors.
If our business does not generate cash flow from operating activities sufficient to fund these activities, and if sufficient funds are not otherwise available to us, we will need to seek additional capital, through debt or equity financings, to fund our growth.
If our business does not generate cash flow from operating activities sufficient to fund planned activities, and if sufficient funds are not otherwise available to us, we will need to seek additional capital, through debt or equity financings, to fund our growth.
As a result of our deficiency in working capital on April 30, 2023 and other factors, our auditors have included a paragraph in their audit report regarding substantial doubt about our ability to continue as a going concern.
As a result of our deficiency in working capital on April 30, 2024 and other factors, our auditors have included a paragraph in their audit report regarding substantial doubt about our ability to continue as a going concern.
If we are unable to develop the integrated Play and Learn platform and expand our business internationally, our growth strategy and our financial results could be materially adversely affected. 16 If we are unable to respond effectively to changes in market trends and consumer preferences, our market share, net sales and profitability could be adversely affected.
If we are unable to develop the integrated Watch, Watch, Play and Learn platform and expand our business internationally, our growth strategy and our financial results could be materially adversely affected. 26 If we are unable to respond effectively to changes in market trends and consumer preferences, our market share, net sales and profitability could be adversely affected.
If we are unable to successfully integrate this new technology with our existing products, we may not realize the benefits of the Gameface acquisition and / or our relationships with Foundation, and our business may be materially adversely affected. Prior to our acquisition of Gameface, we focused on the production and sale of the Slinger Bag.
If we are unable to successfully integrate this new technology with our existing products, we may not realize the benefits of the Gameface brand acquisition, and our business may be materially adversely affected. Prior to our acquisition of Gameface, we focused on the production and sale of the Slinger Bag.
This determination was based on the following factors: (i) the Company has a working capital deficit as of April 30, 2023, used cash in operations for the fiscal year ended April 30, 2023 of $6,365,389 and the Company’s available cash as of the date of this filing will not be sufficient to fund its anticipated level of operations for the next 12 months; (ii) the Company will require additional financing for the fiscal year ending April 30, 2023 to continue at its expected level of operations; and (iii) if the Company fails to obtain the needed capital, it will be forced to delay, scale back, or eliminate some or all of its development activities or perhaps cease operations.
This determination was based on the following factors: (i) the Company has a working capital deficit as of April 30, 2024, used cash in operations for the fiscal year ended April 30, 2024 of $3,001,433 and the Company’s available cash as of the date of this filing will not be sufficient to fund its anticipated level of operations for the next 12 months; (ii) the Company will require additional financing for the fiscal year ending April 30, 2024 to continue at its expected level of operations; and (iii) if the Company fails to obtain the needed capital, it will be forced to delay, scale back, or eliminate some or all of its development activities or perhaps cease operations.
As defined in Exchange Act Rule 13a-15(f), internal control over financial reporting is a process designed by, or under the supervision of, the principal executive and principal financial officer and effected by the board of directors of the Company (the “Board of Directors”), management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that: ● pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; ● provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and/or directors of the Company; and ● provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
As defined in Exchange Act Rule 13a-15(f), internal control over financial reporting is a process designed by, or under the supervision of, the principal executive and principal financial officer and effected by the board of directors of the Company (the “Board of Directors”), management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that: ● pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; ● provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and/or directors of the Company; and ● provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements. 35 Our internal controls may be inadequate or ineffective, which could cause financial reporting to be unreliable and lead to misinformation being disseminated to the public.
The sale of a large number of shares of common stock by our principal shareholder could depress the market price of our common stock. As of April 30, 2023, Yonah Kalfa beneficially owned approximately 14.7% of our common stock outstanding. The shares may become available for resale, subject to the requirements of the U.S. securities laws.
The sale of a large number of shares of common stock by our principal shareholder could depress the market price of our common stock. As of April 30, 2024, Yonah Kalfa beneficially owned approximately 12.2% of our common stock outstanding. The shares may become available for resale, subject to the requirements of the U.S. securities laws.
The reputation and integrity of our brands are essential to the success of our business. We believe that our consumers value the status and reputation of brands we promote, and the superior quality, performance, functionality and durability that our brands represent. Building, maintaining and enhancing the status and reputation of our brands’ image is important to expanding our consumer base.
We believe that our consumers value the status and reputation of brands we promote, and the superior quality, performance, functionality and durability that our brands represent. Building, maintaining and enhancing the status and reputation of our brands’ image is important to expanding our consumer base.
Increasingly, consumers are using mobile-based devices and applications to shop online with us and with our competitors and to do comparison shopping. We are increasingly using social media and proprietary mobile applications to interact with our consumers and as a means to enhance their shopping experience.
Many of our consumers shop with us through our digital platforms. Increasingly, consumers are using mobile-based devices and applications to shop online with us and with our competitors and to do comparison shopping. We are increasingly using social media and proprietary mobile applications to interact with our consumers and as a means to enhance their shopping experience.
Such funding sources may not be available, or the terms of such funding sources may not be acceptable to the Company. 24 We will need additional capital in the future to finance our planned growth, which we may not be able to raise or it may only be available on terms unfavorable to us or our stockholders, which may result in our inability to fund our working capital requirements and harm our operational results.
We will need additional capital in the future to finance our planned growth, which we may not be able to raise or it may only be available on terms unfavorable to us or our stockholders, which may result in our inability to fund our working capital requirements and harm our operational results.
Certain of the Company’s large shareholders, including our officers and directors, represented approximately 30% of the Company’s voting rights as of April 30, 2023.
Certain of the Company’s large shareholders, including our officers and directors, represented approximately 21.6% of the Company’s voting rights as of April 30, 2024.
If we are not able to successfully add staff resources with sufficient technical skills to develop and bring new products to market in a timely manner, achieve market acceptance of our products and services or identify new market opportunities for our products and services, our business and results of operations may be materially and adversely affected. 28 The business-to-business e-commerce industry is highly competitive, and we may not be able to compete effectively.
If we are not able to successfully add staff resources with sufficient technical skills to develop and bring new products to market in a timely manner, achieve market acceptance of our products and services or identify new market opportunities for our products and services, our business and results of operations may be materially and adversely affected.
If we are not able to enhance or introduce new products that achieve market acceptance and keep pace with technological developments, our business, results of operations and financial condition could be harmed.
The competitive pressures facing us may harm our business, operating results and financial condition. If we are not able to enhance or introduce new products that achieve market acceptance and keep pace with technological developments, our business, results of operations and financial condition could be harmed.
There can be no assurance that a reverse stock split will result in a per share price that will attract institutional investors or investment funds or that such share price will satisfy the investing guidelines of institutional investors or investment funds.
There can be no assurance that a reverse stock split will result in a per share price that will attract institutional investors or investment funds or that such share price will satisfy the investing guidelines of institutional investors or investment funds. As a result, the trading liquidity of our common stock may not necessarily improve.
The market for business-to-business (“B2B”) e-commerce solutions is rapidly changing and intensely competitive. We expect competition to intensify as the number of entrants and new technologies increases. We may not be able to compete successfully against current or future competitors. The competitive pressures facing us may harm our business, operating results and financial condition.
The business-to-business e-commerce industry is highly competitive, and we may not be able to compete effectively. The market for business-to-business (“B2B”) e-commerce solutions is rapidly changing and intensely competitive. We expect competition to intensify as the number of entrants and new technologies increases. We may not be able to compete successfully against current or future competitors.
As a result, the trading liquidity of our common stock may not necessarily improve. 37 There can be no assurances that our common stock will not be subject to potential delisting if we do not regain compliance with the listing requirements of the Nasdaq.
There can be no assurances that our common stock will not be subject to potential delisting if we do not regain compliance with the listing requirements of the Nasdaq.
If granted, the Company will initiate a reverse split as soon as reasonably practical thereafter in an attempt to regain compliance with the Minimum Bid Price Requirement. 38 On July 26, 2023, the Company received a letter from the Listing Qualifications Department of Nasdaq indicating that the Company’s stockholders’ equity as reported in its Quarterly Report on Form 10-Q for the quarterly period ended January 31, 2023 did not satisfy the continued listing requirement under Nasdaq Listing Rule 5550(b)(1), which requires that a listed company’s stockholders’ equity be at least $2.5 million (the “Minimum Stockholders’ Equity Requirement”).
On July 26, 2023, the Company received a letter from the Listing Qualifications Department of Nasdaq indicating that the Company’s stockholders’ equity as reported in its Quarterly Report on Form 10-Q for the quarterly period ended January 31, 2023 did not satisfy the continued listing requirement under Nasdaq Listing Rule 5550(b)(1), which requires that a listed company’s stockholders’ equity be at least $2.5 million (the “Minimum Stockholders’ Equity Requirement”).
The terms of various open-source licenses to which we are subject have not been interpreted by U.S. courts, and there is a risk that such licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to operate our systems, limits our use of the software, inhibits certain aspects of our systems and negatively affects our business operations. 26 Some open-source licenses contain requirements that we make source code modifications or derivative works we create publicly available or make such modifications or derivative works available on unfavorable terms or at no cost, depending on the type of open-source software used.
The terms of various open-source licenses to which we are subject have not been interpreted by U.S. courts, and there is a risk that such licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to operate our systems, limits our use of the software, inhibits certain aspects of our systems and negatively affects our business operations.
If we implement a reverse stock split to regain compliance with the Bid-Price Rule, it may not result in a proportional increase in the per share price of our common stock. As described above under “Item 1.
If we fall out of compliance with the Bid-Price Rule and implement a reverse stock split to regain compliance with such rule, it may not result in a proportional increase in the per share price of our common stock.
If the Company’s common stock ceases to be listed for trading on the Nasdaq Capital Market, the Company would expect that its common stock would be traded on one of the three tiered marketplaces of the OTC Markets Group.
There can be no assurance that the Company will be able to satisfy the Nasdaq’s continued listing requirements. If the Company’s common stock ceases to be listed for trading on the Nasdaq Capital Market, the Company would expect that its common stock would be traded on one of the three tiered marketplaces of the OTC Markets Group.
With the acquisition of Gameface, we are slowly transforming from a sports products only company to offering an additional sports technology platform focused on the Play & Learn Platform.
Through our Gameface company, we are slowly transforming from a sports equipment-only company to offering an additional sports technology platform focused on the Watch, Play & Learn Platform.
Recent dramatic downturns in the strength of global stock markets, currencies and key economies have highlighted many if not all, of these risks. 23 Consumer purchases in general may decline during recessions, periods of prolonged declines in the equity markets or housing markets and periods when disposable income and perceptions of consumer wealth are lower, and these risks may be exacerbated for us due to our focus on discretionary premium sporting good items.
Consumer purchases in general may decline during recessions, periods of prolonged declines in the equity markets or housing markets and periods when disposable income and perceptions of consumer wealth are lower, and these risks may be exacerbated for us due to our focus on discretionary premium sporting good items.
We are subject to the tax laws in the U.S. and numerous foreign jurisdictions. Current economic and political conditions make tax laws and regulations, or their interpretation and application, in any jurisdiction subject to significant change.
Current economic and political conditions make tax laws and regulations, or their interpretation and application, in any jurisdiction subject to significant change.
Further, our effective tax rate in a given financial period may be materially impacted by changes in mix and level of earnings or by changes to existing accounting rules or regulations. In addition, tax legislation enacted in the future could negatively impact our current or future tax structure and effective tax rates.
Further, our effective tax rate in a given financial period may be materially impacted by changes in mix and level of earnings or by changes to existing accounting rules or regulations.
If we are unable to successfully enhance our existing platform and capabilities to meet evolving customer requirements, increase adoption and usage of our platform, develop new products, or if our efforts to increase the usage of our products are more expensive than we expect, then our business, results of operations and financial condition could be harmed.
If we are unable to successfully enhance our existing platform and capabilities to meet evolving customer requirements, increase adoption and usage of our platform, develop new products, or if our efforts to increase the usage of our products are more expensive than we expect, then our business, results of operations and financial condition could be harmed. 39 Customers may experience difficulty in integrating Gameface with third-party applications, which would inhibit sales.
These factors could cause our future results to differ materially from our historical results and from expectations reflected in forward-looking statements. Risks Related to Our Business, Operations, and Industry We depend on the strength of our brands. We expect to derive substantially all of our net sales from sales of branded products and services we own, including Slinger and Gameface.
These factors could cause our future results to differ materially from our historical results and from expectations reflected in forward-looking statements. Risks Related to Our Business, Operations, and Industry We depend on the strength of our brands.
Although the Endorsement Guides are advisory in nature and do not operate directly with the force of law, they provide guidance about what the FTC staff generally believes the Federal Trade Commission Act, or FTC Act, requires in the context using of endorsements and testimonials in advertising and any practices inconsistent with the Endorsement Guides can result in violations of the FTC Act’s proscription against unfair and deceptive practices. 32 To the extent we may rely on endorsements or testimonials, we will review any relevant relationships for compliance with the Endorsement Guides and we will otherwise endeavor to follow the FTC Act and other legal standards applicable to our advertising.
Although the Endorsement Guides are advisory in nature and do not operate directly with the force of law, they provide guidance about what the FTC staff generally believes the Federal Trade Commission Act, or FTC Act, requires in the context using of endorsements and testimonials in advertising and any practices inconsistent with the Endorsement Guides can result in violations of the FTC Act’s proscription against unfair and deceptive practices.
We generally do not enter into non-competition agreements as part of our employment agreements with our employees and it may be difficult for us to restrict our competitors from benefitting from the expertise our former employees or consultants developed while working for us. 31 We could be subject to changes in tax rates, adoption of new tax laws, additional tax liabilities or increased volatility in our effective tax rate.
We generally do not enter into non-competition agreements as part of our employment agreements with our employees and it may be difficult for us to restrict our competitors from benefitting from the expertise our former employees or consultants developed while working for us.
The liquidity of the shares of our common stock may also be affected adversely by a forward stock split given the reduced number of shares that will be outstanding following a reverse stock split, especially if the market price of our common stock does not increase as a result of the forward stock split. 34 Our stock price may be volatile, or may decline regardless of our operating performance, and you could lose all or part of your investment as a result.
The liquidity of the shares of our common stock may also be affected adversely by a forward stock split given the reduced number of shares that will be outstanding following a reverse stock split, especially if the market price of our common stock does not increase as a result of the forward stock split.
We are subject to a complex array of laws and regulations, which could have an adverse effect on our business, financial condition and results of operations. As a global business, we are subject to and must comply with extensive laws and regulations in the U.S. and other jurisdictions in which we have operations and distribution channels.
As a global business, we are subject to and must comply with extensive laws and regulations in the U.S. and other jurisdictions in which we have operations and distribution channels.
To the extent we use or are dependent on any particular third-party data, technology, or software, we may also be harmed if such data, technology, or software becomes non-compliant with existing regulations or industry standards, becomes subject to third-party claims of intellectual property infringement, misappropriation, or other violation, or malfunctions or functions in a way we did not anticipate.
This may result in the inability to approve otherwise qualified applicants through our platform, which may adversely impact our business by negatively impacting our reputation and reducing our transaction volume. 38 To the extent we use or are dependent on any particular third-party data, technology, or software, we may also be harmed if such data, technology, or software becomes non-compliant with existing regulations or industry standards, becomes subject to third-party claims of intellectual property infringement, misappropriation, or other violation, or malfunctions or functions in a way we did not anticipate.
Furthermore, even if the market price of our common stock does rise following a reverse stock split, we cannot assure you that the market price of our common stock immediately after a reverse stock split will be maintained for any period of time.
The market price of our common stock may also be affected by other factors which may be unrelated to a future reverse stock split or the number of shares outstanding. 47 Furthermore, even if the market price of our common stock does rise following a reverse stock split, we cannot assure you that the market price of our common stock immediately after a reverse stock split will be maintained for any period of time.
Any lawsuit or claim seeking monetary damages significantly exceeding our coverage or outside of our coverage may have a material adverse effect on our business and financial condition. 30 If we provide products and services related to sports betting, our business may become subject to a variety of U.S. and foreign laws, many of which are unsettled and still developing and which could subject us to claims or otherwise harm our business.
If we provide products and services related to sports betting, our business may become subject to a variety of U.S. and foreign laws, many of which are unsettled and still developing and which could subject us to claims or otherwise harm our business.
On September 8, 2021, we filed a registration statement with the SEC to register 1,640,000 shares of common stock for resale by certain selling stockholders, which was declared effective on January 27, 2022.
On September 8, 2021, we filed a registration statement with the SEC to register 182,000 shares of common stock for resale by certain selling stockholders, which was declared effective on January 27, 2022. Following our public offering resulting in our common stock being listed on Nasdaq, additional conversion shares need to be registered.
The Company timely submitted a compliance plan to the Panel and on August 23, 2023 received notice from Nasdaq that it has until January 22, 2024 to demonstrate compliance with the Minimum Stockholders’ Equity Requirement.
In addition, the Company did not meet the alternatives of listed securities or net income from continuing operations as of the date of the letter. The Company timely submitted a compliance plan to the Panel and on August 23, 2023 received notice from Nasdaq that it has until January 22, 2024 to demonstrate compliance with the Minimum Stockholders’ Equity Requirement.
In addition to risks related to license requirements, the use of certain open-source software can lead to greater risks than the use of third-party commercial software, as open-source licensors generally do not provide support, warranties, indemnification, controls or other contractual protections regarding infringement claims or the quality of the origin of the software.
If we were required to publicly disclose any portion of our proprietary models, it is possible we could lose the benefit of trade secret protection for our models. 37 In addition to risks related to license requirements, the use of certain open-source software can lead to greater risks than the use of third-party commercial software, as open-source licensors generally do not provide support, warranties, indemnification, controls or other contractual protections regarding infringement claims or the quality of the origin of the software.
Now our focused has shifted to the Play and Learn integrated platform which includes the analysis and AI offered by Gameface. The Play and Learn Platform requires integration of the capabilities of our existing business with those of Gameface. we may not realize the benefits of the Gameface acquisition and our business may be materially adversely affected.
Now our focused has shifted to the Watch, Watch, Play and Learn integrated platform which includes the analysis and AI offered by Gameface under the Slinger App brand. The Watch, Watch, Play and Learn Platform requires integration of the capabilities of our existing business with those of Gameface AI platform.
We cannot predict whether the reduced disclosure requirements applicable to smaller reporting companies will make our common shares less attractive to investors. We are currently a “smaller reporting company”.
For as long as we are a “smaller reporting company,” we will not be required to comply with certain reporting requirements that apply to other publicly reporting companies. We cannot predict whether the reduced disclosure requirements applicable to smaller reporting companies will make our common shares less attractive to investors. We are currently a “smaller reporting company”.
In addition, increasing market share concentration among one or a few retailers in a particular country or region increases the risk that if any one of them substantially reduces their purchases of our products, we may be unable to find a sufficient number of other retail outlets for our products to sustain the same level of sales and revenues.
In addition, increasing market share concentration among one or a few retailers in a particular country or region increases the risk that if any one of them substantially reduces their purchases of our products, we may be unable to find a sufficient number of other retail outlets for our products to sustain the same level of sales and revenues. 32 If the technology-based systems that give our consumers the ability to shop with us online do not function effectively, our operating results, as well as our ability to grow our digital commerce business globally, could be materially adversely affected.
If Gameface fails to gain broad market acceptance due to its inability to support a variety of these platforms, our operating results may suffer.
Gameface may serve a customer base with a wide variety of constantly changing hardware, operating system software, packaged software applications and networking platforms. If Gameface fails to gain broad market acceptance due to its inability to support a variety of these platforms, our operating results may suffer.
Although we believe we have clearly reflected the economics of these transactions and the proper local transfer pricing documentation is in place, tax authorities may propose and sustain adjustments that could result in changes that may impact our mix of earnings in countries with differing statutory tax rates.
Although we believe we have clearly reflected the economics of these transactions and the proper local transfer pricing documentation is in place, tax authorities may propose and sustain adjustments that could result in changes that may impact our mix of earnings in countries with differing statutory tax rates. 42 To the extent we may rely on endorsements or testimonials, we will review any relevant relationships for compliance with the Endorsement Guides and we will otherwise endeavor to follow the FTC Act and other legal standards applicable to our advertising .
In addition, the adoption of new laws or regulations, or changes in the interpretation of existing laws or regulations, may result in significant unanticipated legal and reputational risks.
In addition, the adoption of new laws or regulations, or changes in the interpretation of existing laws or regulations, may result in significant unanticipated legal and reputational risks. Any current or future legal or regulatory proceedings could divert management’s attention from our operations and result in substantial legal fees.
There have been proposals to reform foreign tax laws that could significantly impact how U.S. multinational corporations are taxed on foreign earnings. Although we cannot predict whether or in what form these proposals will pass, several of the proposals considered, if enacted into law, could have an adverse impact on our income tax expense and cash flows.
Although we cannot predict whether or in what form these proposals will pass, several of the proposals considered, if enacted into law, could have an adverse impact on our income tax expense and cash flows. 43 We are subject to a complex array of laws and regulations, which could have an adverse effect on our business, financial condition and results of operations.
The Pre-Funded Warrants have an exercise price of $0.00001 per share of common stock and are exercisable until the Pre-Funded Warrants are exercised in full.
The Pre-Funded Warrants have an exercise price of $0.0002 per share of common stock and are exercisable beginning on the date stockholder approval is received and effective allowing exercisability of Pre-Funded Warrants under Nasdaq rules until the Pre-Funded Warrants are exercised in full.
As of April 30, 2023, we had 13,543,155 outstanding common shares. Of these shares, 5,734,294 shares were in the public float. The remaining 7,808,861 shares common stock outstanding were “restricted securities” within the meaning of Rule 144.
As of April 30, 2024, we had 1,828,541 outstanding common shares. Of these shares, 1,230,099 shares were in the public float. The remaining 598,442 shares common stock outstanding were “restricted securities” within the meaning of Rule 144.
In addition, the re-engineering process could require us to expend significant additional research and development resources, and we may not be able to complete the re-engineering process successfully. If we were required to publicly disclose any portion of our proprietary models, it is possible we could lose the benefit of trade secret protection for our models.
In addition, the re-engineering process could require us to expend significant additional research and development resources, and we may not be able to complete the re-engineering process successfully.
These broad market fluctuations, as well as general economic, systemic, political and market conditions, such as recessions, loss of investor confidence, interest rate changes, or international currency fluctuations, may negatively affect the market price of our shares.
These broad market fluctuations, as well as general economic, systemic, political and market conditions, such as recessions, loss of investor confidence, interest rate changes, or international currency fluctuations, may negatively affect the market price of our shares. 45 If any of the foregoing occurs, it could cause our stock price to fall and may expose us to securities class action litigation that, even if unsuccessful, could be costly to defend and a distraction to management.
However, as competition in our industry has increased, the costs associated with establishing and retaining such sponsorships and other relationships have increased.
We establish relationships with professional athletes, as well as other public figures such as teaching pros and influencers, to develop, evaluate and promote our products, as well as establish product authenticity with consumers. However, as competition in our industry has increased, the costs associated with establishing and retaining such sponsorships and other relationships have increased.
The new registration statement will cover both the shares originally registered for resale, the new conversion shares and the recent financing shares. Certain of the Company’s large shareholders may be able to exert significant influence on the Company and their interests may conflict with the interests of its other shareholders .
We also have agreed to register additional shares in connection with our recent financing. See “Item 1. Business—Recent Developments” for more information. Certain of the Company’s large shareholders may be able to exert significant influence on the Company and their interests may conflict with the interests of its other shareholders .

… 43 more changes not shown on this page.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−1 removed4 unchanged
Biggest changeExcept for the Oasis lawsuit against Mike Ballardie, we know of no pending proceedings to which any director, member of senior management, or affiliate is either a party adverse to us or has a material interest adverse to us.
Biggest changeOn February 28, 2024, the Company and Oasis settled this matter by entering into a settlement agreement pursuant to which the Company paid Oasis $225,000 in cash in exchange for a dismissal of the action by Oasis and a full release. 51 We know of no pending proceedings to which any director, member of senior management, or affiliate is either a party adverse to us or has a material interest adverse to us.
Removed
The Company believes the claims made in the amended complaint are without merit and the Company and Mike Ballardie are vigorously defending itself.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

9 edited+7 added−25 removed4 unchanged
Biggest changeQuarter Ended High Bid Low Bid April 30, 2023 $ 0.18 $ 0.15 January 31, 2023 $ 0.25 $ 0.22 October 31, 2022 $ 0.27 $ 0.23 July 31, 2022 $ 1.08 $ 0.87 Quarter Ended High Bid Low Bid April 30, 2022 $ 13.50 $ 13.50 January 31, 2022 $ 15.80 $ 14.30 October 31, 2021 $ 30.80 $ 29.00 July 31, 2021 $ 33.90 $ 30.80 April 30, 2021 $ 52.30 $ 50.30 Holders of Record On September 14, 2023, there were 239 holders of record of our common stock, as reported by the Company’s transfer agent.
Biggest changeQuarter Ended High Bid Low Bid April 30, 2024 $ 45.20 $ 3.80 January 31, 2024 $ 18.80 $ 2.80 October 31, 2023 $ 214.40 $ 16.40 July 31, 2023 $ 130.40 $ 95.20 Quarter Ended High Bid Low Bid April 30, 2023 $ 320.80 $ 108.00 January 31, 2023 $ 452.80 $ 128.8 0 October 31, 2022 $ 1,552.00 $ 168.80 July 31, 2022 $ 2,336.00 $ 616.00 Holders of Record On April 30, 2024, there were 218 holders of record of our common stock, as reported by the Company’s transfer agent.
In computing the number of holders of record, each broker-dealer and clearing corporation holding shares on behalf of its customers is counted as a single shareholder. Dividends We have never declared or paid any cash dividends on our common stock nor do we anticipate paying any in the foreseeable future.
In computing the number of holders of record, each broker-dealer and clearing corporation holding shares on behalf of its customers is counted as a single shareholder. 52 Dividends We have never declared or paid any cash dividends on our common stock nor do we anticipate paying any in the foreseeable future.
The 2020 Plan shall continue in effect, unless sooner terminated, until the tenth (10th) anniversary of the date on which it was adopted by the Board of Directors (except as to awards outstanding on that date).
The 2020 Plan shall continue in effect, unless sooner terminated, until the tenth (10th) anniversary of the date one which it was adopted by the Board of Directors (except as to awards outstanding on that date).
ITEM 5. MARKET FOR COMPANY’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Market Information As of April 30, 2023, our shares of common stock were quoted on the OTCQB by the OTC Markets Group Inc. of the Financial Industry Regulatory Authority, Inc. (“FINRA”) under the symbol “SLBG” (since November 2019).
ITEM 5. MARKET FOR COMPANY’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Market Information As of April 30, 2024, our shares of common stock were quoted on the OTCQB by the OTC Markets Group Inc. of the Financial Industry Regulatory Authority, Inc. (“FINRA”) under the symbol “YYAI” (since April 15, 2024).
The Company has reserved a total of 1,500,000 shares for issuance under awards to be made under the 2020 Plan, all of which may, but need not, be issued in connection with ISOs.
The Company had reserved a total of 1,875 shares for issuance under awards to be made under the 2020 Plan, all of which may, but need not, be issued in connection with ISOs.
Global Share Incentive Plan (2020), or the 2020 Plan, which was approved by stockholders holding in the aggregate 19,994,700 shares of the Company’s common stock, or approximately 75.4% of the Company’s common stock outstanding on such date.
Global Share Incentive Plan (2020), or the 2020 Plan, which was approved by stockholders holding in the aggregate 999,375 shares of the Company’s common stock, or approximately 75.4% of the Company’s common stock outstanding on such date.
The Board of Directors in its discretion may terminate the 2020 Plan at any time with respect to any shares for which awards have not theretofore been granted; provided, however, that the 2020 Plan’s termination shall not materially and adversely impair the rights of a holder, without the consent of the holder, with respect to any award previously granted. 41 Future new hires, non-employee directors and additional non-employee consultants are eligible to participate in the 2020 Plan as well.
The Board of Directors in its discretion may terminate the 2020 Plan at any time with respect to any shares for which awards have not theretofore been granted; provided, however, that the 2020 Plan’s termination shall not materially and adversely impair the rights of a holder, without the consent of the holder, with respect to any award previously granted.
The number of awards to be granted to officers, non-employee directors, employees and non-employee consultants cannot be determined at this time as the grant of awards is dependent upon various factors such as hiring requirements and job performance.
Future new hires, non-employee directors and additional non-employee consultants are eligible to participate in the 2020 Plan as well. The number of awards to be granted to officers, non-employee directors, employees and non-employee consultants cannot be determined at this time as the grant of awards is dependent upon various factors such as hiring requirements and job performance.
Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities Since May 1, 2022, the Company has issued an aggregate of 6,881,655 shares of its common stock consisting of: On June 16, 2022, we issued 4,389,469 shares of common stock to the investors who purchased on August 6, 2021 our 8% Senior Convertible Note in an aggregate principal amount of $11,000,000.
Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities Since May 1, 2024, the Company has issued an aggregate of 725,342 shares of its common stock consisting of: On May 24, 2024, the Company issued 47,116 shares of common stock to Yonah Kalfa in satisfaction of deferred compensation obligations.
Removed
On June 27, 2022, we issued 25,000 shares of common stock to Gabriel Goldman for consulting services performed in the first quarter of calendar 2022 (Gabriel Goldman became a director of the Company on June 15, 2022).
Added
On April 15, 2024, the Company effected a symbol change from “CNXA” to “YYAI”.
Removed
On August 25, 2022, we issued 30,000 shares of common stock to Midcity Capital Ltd (“Midcity”) pursuant to a cashless conversion of warrants Midcity received from its warrant agreement with company dated March 2020.
Added
On May 20, 2024, the Company issued 263 shares of common stock to Yonah Kalfa and warrants to purchase 263 shares of common stock with an exercise price of $0.02 and a term of 10 years to Mike Ballardie thereby depleting the 1,875 share reserve.
Removed
On August 25, 2022, we issued 30,000 shares of common stock to Midcity Capital Ltd (“Midcity”) pursuant to a cashless conversion of warrants Midcity received from its warrant agreement with company dated March 2020.
Added
On May 15, 2024, at the Company’s annual general meeting, the stockholders of the Company approved an amendment to make an additional 1,500,000 shares of the Common Stock available for the issuance of awards under the plan by a vote of 13,170,657 for, 49,045 against and 1,457 abstentions.
Removed
On September 28, 2022, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with a single institutional investor (the “Investor”) for the issuance and sale of (i) 1,018,510 shares of common stock and (ii) pre-funded warrants (the “Pre-Funded Warrants”) to purchase an aggregate of 11,802,002 shares of its common stock, together with accompanying common stock warrants, at a combined purchase price of $0.39 per share of the common stock and associated common stock warrant and $0.3899 per Pre-Funded Warrant and associated common stock warrants for an aggregate amount of approximately $5.0 million (the “Offering”).
Added
On May 24, 2024, the Company issued 150,000 shares of common stock to its directors as compensation for the service and for their extraordinary contributions to the Company and warrants to purchase 50,000 shares of common stock with an exercise price of $0.02 and a term of 10 years to Mike Ballardie as compensation for his service and for his extraordinary contribution to the Company.
Removed
The Pre-Funded Warrants have an exercise price of $0.00001 per share of common stock and are exercisable until the Pre-Funded Warrants are exercised in full.
Added
On May 24, 2024, the Company issued 33,500 shares of common stock consisting of 16,750 shares of common stock to each of Juda Honickman and Mark Radom for their extraordinary contributions to the Company. On June 27, 2024, the Company issued 511,214 shares of common stock upon the exercise of warrants.
Removed
The shares of common stock and Pre-Funded Warrants were sold in the offering together with common stock warrants to purchase 12,820,512 shares of common stock at an exercise price of $0.39 per share and a term of five years following the initial exercise date (the “5-Year Warrants”) and 25,641,024 common stock warrants to purchase 25,641,024 shares of common stock at an exercise price of $0.43 per share and a term of seven and one half years (the “7.5-Year Warrants”) following the initial exercise date (collectively, the “Warrants”).
Added
On July 8, 2024, the Company issued 110,665 shares of common stock to satisfy DTC’s request for round-up shares as a result of the Company’s recent 1-20 reverse split.
Removed
The Warrants issued in the Offering contain variable pricing features. The Warrants and Pre-Funded Warrants will be exercisable beginning on the date stockholder approval is received and effective allowing exercisability of the Warrants and Pre-Funded Warrants under Nasdaq rules. On September 28, 2022, the Company and the Investor entered into a registration rights agreement (the “Registration Rights Agreement”).
Added
On July 23, 2024, the Company issued 10 shares of common stock to a former shareholder of PlaySight in satisfaction of the Company’s obligation to issue shares of its common stock in exchange for its shares of PlaySight. This issuance was delayed until July 23, 2024 due to administrative issues. Issuer Purchases of Equity Securities None.
Removed
The Registration Rights Agreement provides that the Company shall file a registration statement with the Securities and Exchange Commission (“SEC”) covering the resale of the unregistered shares of common stock and the shares of common stock issuable upon exercise of the Warrants and Pre-Funded Warrants no later than December 20, 2022 (the “Filing Date”) and to use best efforts to have the registration statement declared effective as promptly as practical thereafter, and in any event no later than sixty (60) days after the Filing Date.
Removed
On January 6, 2023, the Company entered into a loan and security agreement (the “Loan and Security Agreement”) with a one or more institutional investors (the “Lenders”) and Armistice Capital Master Fund Ltd. as agent for the Lenders (the “Agent”) for the issuance and sale of (i) a note in an aggregate principal amount of up to $2,000,000 (the “Note”) with the initial advance under the Loan and Security Agreement being $1,400,000 and (ii) warrants (the “Warrants”) to purchase a number of shares of common stock of the Company equal to 200% of the face amount of the Note divided by the closing price of the common stock of the Company on the date of the issuance of the Notes (collectively, the “Initial Issuance”).
Removed
The closing price of the Company’s common stock on January 6, 2023, as reported by Nasdaq, was $0.221 per share, so the Warrants in respect of the initial advance under the Note are exercisable for up to 18,099,548 shares of the Company’s common stock.
Removed
The Warrants have an exercise price per share equal to the closing price of the common stock of the Company on the date of the issuance of the Note, or $0.221 per share and a term of five- and one-half (5½) years following the initial exercise date.
Removed
The initial exercise date of the Warrants will be the date stockholder approval is received and effective allowing exercisability of the Warrants under Nasdaq rules. Pursuant to the terms of the Loan and Security Agreement, an additional advance of $600,000 may be made by to the Company under the Note.
Removed
The Company’s obligations under the terms of the Loan and Security Agreement are fully and unconditionally guaranteed by all of the Company’s subsidiaries (the “Guarantors”). 42 In connection with the Loan and Security Agreement, the Company and each of the Guarantors entered into a pledge and security agreement with the Agent (the “Pledge and Security Agreements”).
Removed
The Pledge and Security Agreements provide that the Company and the Guarantors will grant the Agent a security interest in all of the Company’s and each Guarantor’s respective assets.
Removed
The Company used the net proceeds from the Loan and Security Agreement to pay expenses, including accounting and legal fees, relating to the registration of certain previously issued securities of the Company, which securities were issued to an affiliate of the Agent, and following the payment of such expenses, to fund the Company’s operations.
Removed
On May 23, 2023, Connexa Sports Technologies Inc.
Removed
(the “Company”) issued the following shares of its common stock (“Shares”) to the following persons in transactions that were exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 4(a)(2) of the Securities Act as transactions by an issuer not involving any public offering: 1. 2,700,000 Shares to vendors in exchange for a reduction of $270,000 in the amount owed to such vendors; 2. 790,000 Shares to Mike Ballardie, the Company’s chief executive officer and director, pursuant to an exercise of warrants by Mr.
Removed
Ballardie; 3. 290,000 Shares to Yona Kalfa, the Company’s chief innovation officer and director, pursuant to an exercise of warrants by Mr.
Removed
Kalfa; 4. 6,000 Shares to ambassadors as compensation to such ambassadors under their ambassador agreements; and 5. 54,000 Shares to the former owner and staff of Foundation Sports Systems, LLC (“Foundation”) as final payment to such persons for 100% of the membership interests of Foundation pursuant to the Membership Interest Purchase Agreement between the Company and Charlie Ruddy dated June 18, 2021.
Removed
On June 8, 2023, the Company issued (i) 1,500 shares to an ambassador as compensation to such ambassador under its ambassador agreement and (ii) 1,737442 shares to a lender (the “Lender”) in connection with the conversion of the outstanding principal amount of a $1,000,000 2.25% Promissory Note due April 30, 2021 into shares of common stock of the Company in exchange for a sufficient amount of shares of the Company to realize $1,500,000 in proceeds from the sale of shares of the Company’s common stock (the “Lender”).
Removed
On June 20, 2023, the Company issued 272,332 shares of common stock to the Lender in connection with the Conversion. On July 26, 2023, the Company issued 1,737,442 shares of common stock to the Lender in connection with the Conversion.
Removed
On August 1, 2023, the Company issued 1,241,658 shares of common stock to Armistice upon the exercise of its Pre-Funded Warrants. On August 17, 2023, the Company issued 75,003 shares of common stock to Rodney Rapson as compensation for Mr. Rapson’s advisory services under the advisory agreement between the Company and Mr. Rapson.
Removed
On August 31, 2023, the Company issued 1,700,000 shares of common stock to the Lender in connection with the Conversion.
Removed
The company used the net proceeds it received from its registered offering on June 14, 2022 (i.e., $4,195,000) for the following purposes (dollars in thousands): Use of Net Proceeds Working Capital $ 3,195 Repayment of Midcity Capital loan (1) $ 500 Payment to Mr.
Removed
Shaik (2) $ 500 (1) For more information, see “Management’s Discussion and Analysis of Results of Operations and Financial Condition—Description of Indebtedness—Loan Agreements .” (2) For more information, see “ Management’s Discussion and Analysis of Results of Operations and Financial Condition—Overview—Gameface Acquisition.” Issuer Purchases of Equity Securities None.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

58 edited+167 added−28 removed45 unchanged
Biggest changeResults of Operations for the Years Ended April 30, 2023 and 2022 The following are the results of our operations for the year ended April 30, 2023 as compared to April 30, 2022: For the Years Ended April 30, 2023 2022 Change ($) Change (%) Net sales $ 9,922,799 $ 16,102,672 $ (6,179,873 ) -38 % Cost of sales 7,144,335 11,878,010 (4,733,675 ) -40 % Gross profit 2,778,464 4,224,662 (1,446,198 ) -34 % Operating expenses: Selling and marketing expenses 1,928,198 3,447,570 (1,549,372 ) -45 % General and administrative expenses 22,743,877 46,718,986 (23,975,109 ) 49 % Research and development costs 65,164 736,141 (670,977 ) -91 % Total operating expenses 24,737,239 50,932,697 (26,195,458 ) 49 % Loss from operations (21,958,775 ) (46,708,035 ) 24,749,260 -53 % Other expenses (income): Amortization of debt discount (4,095,030 ) 8,150,284 4,055,254 -50 % Loss on extinguishment of debt - (7,096,730 ) 7,096,730 -100 % Loss on issuance of convertible notes - (5,889,369 ) 5,889,369 -100 % Gain on change in fair value of derivative liability 10,950,017 18,557,184 (7,607,167 ) -41 % Gain on change in fair value of contingent consideration - 4,847,000 (4,847,000 ) -100 % Derivative Expense (8,995,962 ) (8,995,962 ) -100 % Interest expense - related party (293,090 ) 165,558 (127,532 ) 77 % Interest expense (884,985 ) (1,920,183 ) 1,035,198 -54 % Total other (income) expense (3,319,050 ) (182,060 ) (3,501,110 ) -1,923 % Net loss from Continuing Operations $ (25,227,825 ) $ (46,525,975 ) $ 21,248,150 -46 % 50 Net sales Our net sales during the year ended April 30, 2023 were $9,922,799, compared to net sales of $16,102,672, in the same period to April 30, 2022, a reduction of -38%.
Biggest changeRecent Accounting Pronouncements Recently Adopted The following are the results of our operations for the year ended April 30, 2024 as compared to April 30, 2023: For the Years Ended April 30, 2024 2023 Change ($) Change (%) Net sales $ 8,398,049 $ 9,922,799 $ (1,524,750 -15 % Cost of sales 5,004,375 7,144,335 (2,139,960 ) -30 % Gross profit 3,393,674 2,778,464 615,210 22 % Operating expenses: Selling and marketing expenses 1,565,006 1,928,198 (363,192 ) -19 % General and administrative expenses 8,271,823 22,743,877 (14,472,054 ) -64 % Research and development costs - 65,164 (65,164 ) -100 % Total operating expenses 9,836,829 24,737,239 (14,900,410 ) -60 % Loss from operations (6,443,155 ) (21,958,775 ) 15,515,620 -71 % Other expenses (income): Amortization of debt discount (1,067,806 ) (4,095,030 ) 3,027,224 -74 % Loss on conversion of accounts payable to common stock (289,980 ) - (289,908 ) - % - Gain on change in fair value of derivative liability 7,635,612 10,950,017 (3,314,405 ) -30 % - Derivative Expense (14,119,784 ) (8,995,962 ) (5,123,822 ) 57 % Interest expense - related party - (293,090 ) (293,090 ) -100 % Interest expense (1,351,305 ) (884,985 ) (466,320 ) 53 % Total other (income) expense (9,193,263 ) (3,319,050 ) (5,874,213 ) 177 % Net loss from Continuing Operations $ (15,636,418 ) $ (25,227,825 ) $ 9,641,407 -38 % 69 Net sales Our net sales during the year ended April 30, 2024 were $8,398,049, compared to net sales of $9,922,799, in the same period to April 30, 2023, a reduction of 15%.
Effective February 25, 2020, the Company increased the number of authorized shares of common stock from 75,000,000 to 300,000,000 via a four-to-one forward split of its outstanding shares of common stock. All share and per share information contained in this report have been retroactively adjusted to reflect the impact of the stock split.
Effective February 25, 2020, the Company increased the number of authorized shares of common stock from 75,000,000 to 300,000,000 via a four-to-one forward split of its outstanding shares of common. All share and per share information contained in this report have been retroactively adjusted to reflect the impact of the stock split.
The Company also released PlaySight from all of its obligations (except for those created by the Agreement) in respect of the Company, including any inter-company debts on the books, and the Buyer has released the Company from all of its obligations (except for those created by the Agreement) in respect of PlaySight and the Buyer.
The Company has also released PlaySight from all of its obligations (except for those created by the Agreement) in respect of the Company, including any inter-company debts on the books, and the Buyer has released the Company from all of its obligations (except for those created by the Agreement) in respect of PlaySight and the Buyer.
The Company is the owner of the Slinger Bag Launcher, which is comprised of a portable tennis ball launcher, a portable padel tennis ball launcher and a portable pickleball launcher and Gameface AI, providing AI technology and performance analytics for sports. Critical Accounting Policies and Estimates The critical accounting policies relate exclusively to our continuing operations.
The Company is the owner of the Slinger Bag Launcher, which is comprised of a portable tennis ball launcher, a portable padel tennis ball launcher and a portable pickleball launcher and Gameface, providing AI technology and performance analytics for sports. Critical Accounting Policies and Estimates The critical accounting policies relate exclusively to our continuing operations.
Meged Agreement On June 8, 2023, the Company entered into a merchant cash advance agreement with Meged Funding Group (“Meged”) pursuant to which the Company sold $315,689 in future receivables to Meged (the “Meged Receivables Purchased Amount”) to in exchange for payment to the Company of $210,600 in cash less fees of $10,580.
Meged Agreements On June 8, 2023, the Company entered into a merchant cash advance agreement with Meged Funding Group (“Meged”) pursuant to which the Company sold $315,689 in future receivables to Meged (the “Meged Receivables Purchased Amount”) to in exchange for payment to the Company of $210,600 in cash less fees of $10,580.
The operations of Slinger Bag Inc., Slinger Bag Americas, Slinger Bag Canada, Slinger Bag UK, SBL and Gameface are collectively referred to as the “Company.” 45 The Company operates in the sports equipment and technology business.
The operations of Slinger Bag Inc., Slinger Bag Americas, Slinger Bag Canada, Slinger Bag UK, SBL and Gameface are collectively referred to as the “Company.” The Company operates in the sports equipment and technology business.
Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts that are more likely than not to be realized. 47 Long-Lived Assets and Goodwill In accordance with ASC 360-10, the Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that their net book value may not be recoverable.
Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts that are more likely than not to be realized. 68 Long-Lived Assets and Goodwill In accordance with ASC 360-10, the Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that their net book value may not be recoverable.
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. In connection with the Stock Purchase Agreement, Slinger Bag Americas acquired 2,000,000 shares of common stock of Lazex for $332,239.
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. In connection with the Stock Purchase Agreement, Slinger Bag Americas acquired 2,500 shares of common stock of Lazex for $332,239.
As a result of the transactions described above, the accompanying consolidated financial statements include the combined results of Slinger Bag Inc., Slinger Bag Americas, Slinger Bag Canada, Slinger Bag UK, SBL and Gameface for the years ended April 30, 2023 and 2022. All intercompany accounts and transactions have been eliminated in consolidation.
As a result of the transactions described above, the accompanying consolidated financial statements include the combined results of Slinger Bag Inc., Slinger Bag Americas, Slinger Bag Canada, Slinger Bag UK, SBL and Gameface for the years ended April 30, 2024 and 2023. All intercompany accounts and transactions have been eliminated in consolidation.
On September 16, 2019, SBL transferred its ownership of Slinger Bag Americas to Lazex in exchange for the 2,000,000 shares of Lazex acquired on August 23, 2019. As a result of these transactions, Lazex owned 100% of Slinger Bag Americas and the sole shareholder of SBL owned 2,000,000 shares of common stock (approximately 82%) of Lazex.
On September 16, 2019, SBL transferred its ownership of Slinger Bag Americas to Lazex in exchange for the 2,500 shares of Lazex acquired on August 23, 2019. As a result of these transactions, Lazex owned 100% of Slinger Bag Americas and the sole shareholder of SBL owned 2,500 shares of common stock (approximately 82%) of Lazex.
The Company has not historically experienced any significant returns or warranty issues. 46 Business Combinations Upon acquisition of a company, we determine if the transaction is a business combination, which is accounted for using the acquisition method of accounting.
The Company has not historically experienced any significant returns or warranty issues. 67 Business Combinations Upon acquisition of a company, we determine if the transaction is a business combination, which is accounted for using the acquisition method of accounting.
On December 5, 2022, the Company analyzed this investment and established a reserve for the investment at the full amount of $500,000. 44 On November 27, 2022, the Company entered into a share purchase agreement (the “Agreement”) with PlaySight, Chen Shachar and Evgeni Khazanov (together, the “Buyer”) pursuant to which the Buyer purchased 100% of the issued and outstanding shares of PlaySight from the Company in exchange for (1) releasing the Company from all of PlaySight’s obligations towards its vendors, employees, tax authorities and any other (past, current and future) creditors of PlaySight; (2) waiver by the Buyer of 100% of the personal consideration owed to them under their employment agreements in the total amount of U.S. $600,000 (which would have been increased in December 2022 to U.S. $800,000); and (3) cash consideration of U.S. $2 million to be paid to the Company as follows: (i) a promissory note in the amount of U.S. $2 million issued and delivered to the Company (the “Promissory Note”).
On November 27, 2022, the Company entered into a share purchase agreement (the “Agreement”) with PlaySight, Chen Shachar and Evgeni Khazanov (together, the “Buyer”) pursuant to which the Buyer purchased 100% of the issued and outstanding shares of PlaySight from the Company in exchange for (1) releasing the Company from all of PlaySight’s obligations towards its vendors, employees, tax authorities and any other (past, current and future) creditors of PlaySight; (2) waiver by the Buyer of 100% of the personal consideration owed to them under their employment agreements in the total amount of U.S. $600,000 (which would have been increased in December 2022 to U.S. $800,000); and (3) cash consideration of U.S. $2 million to be paid to the Company as follows: (i) a promissory note in the amount of U.S. $2 million issued and delivered to the Company (the “Promissory Note”).
The Company previously classified Foundation Sports in continuing operations, until December 5, 2022 when they sold 75% of Foundation Sports back to the original owners at which time it deconsolidated this subsidiary and recorded a loss on the sale. The Company also determined to dispose of the PlaySight entity during the year ended April 30, 2023.
The Company continued to classify Foundation Sports in continuing operations, until December 5, 2022 when it sold 75% of Foundation Sports back to the original owners at which time it deconsolidated this subsidiary and recorded a loss on the sale. The Company also determined to dispose of the PlaySight entity during the year ended April 30, 2023.
The Warrants have an exercise price per share equal to the closing price of the common stock of the Company on the date of the issuance of the Note, or $0.221 per share and a term of five- and one-half (5½) years following the initial exercise date.
The Warrants have an exercise price per share equal to the closing price of the common stock of the Company on the date of the issuance of the Note, or $4.42 per share and a term of five- and one-half (5½) years following the initial exercise date.
On June 28, 2022, the Company entered into amendments for the two related party loan agreements with the lenders in which the repayment date was extended to July 31, 2024. There were $1,953,842 and $2,000,000 in outstanding borrowings from the Company’s related parties for the years ended April 30, 2023 and 2022, respectively.
On June 27, 2022, the Company entered into amendments for the two related party loan agreements with the lenders in which the repayment date was extended to July 31, 2024. There were $1,169,291and $1,953,842 in outstanding borrowings from the Company’s related parties for the years ended April 30, 2024 and 2023, respectively.
Gabriel and Rohit were members of the audit and compensation committees. Gabriel Goldman was a member of the Company’s Nominating and Corporate Governance Committee. Neither Gabriel nor Rohit advised the Company of any disagreement with the Company on any matter relating to its operations, policies or practices.
Gabriel Goldman was a member of the Company’s Nominating and Corporate Governance Committee. Neither Gabriel nor Rohit advised the Company of any disagreement with the Company on any matter relating to its operations, policies or practices.
As a result of the share purchase agreement, Gameface would become a wholly owned subsidiary of the Company. On February 22, 2022, the Company entered into a merger agreement with PlaySight Interactive Ltd. (“PlaySight”) and Rohit Krishnan (the “Shareholders’ Representative”). As a result of the merger agreement, PlaySight became a wholly owned subsidiary of the Company.
On February 2, 2022, the Company entered into a share purchase agreement with Flixsense Pty, Ltd. (“Gameface”). As a result of the share purchase agreement, Gameface became a wholly owned subsidiary of the Company. On February 22, 2022, the Company entered into a merger agreement with PlaySight Interactive Ltd. (“PlaySight”) and Rohit Krishnan (the “Shareholders’ Representative”).
The Company also agreed not to create, incur, assume, or permit to exist, directly or indirectly, any lien on or with respect to any of such collateral. 53 Description of Indebtedness Loan and Security Agreement On January 6, 2023, the Company entered into a loan and security agreement (the “Loan and Security Agreement”) with one or more institutional investors (the “Lenders”) and Armistice Capital Master Fund Ltd. as agent for the Lenders (the “Agent”) for the issuance and sale of (i) a note in an aggregate principal amount of up to $2,000,000 (the “Note”) with the initial advance under the Loan and Security Agreement being $1,400,000 and (ii) warrants (the “Warrants”) to purchase a number of shares of common stock of the Company equal to 200% of the face amount of the Note divided by the closing price of the common stock of the Company on the date of the issuance of the Notes (collectively, the “Initial Issuance”).
Description of Indebtedness Loan and Security Agreement On January 6, 2023, the Company entered into a loan and security agreement (the “Loan and Security Agreement”) with one or more institutional investors (the “Lenders”) and Armistice Capital Master Fund Ltd. as agent for the Lenders (the “Agent”) for the issuance and sale of (i) a note in an aggregate principal amount of up to $2,000,000 (the “Note”) with the initial advance under the Loan and Security Agreement being $1,400,000 and (ii) warrants (the “Warrants”) to purchase a number of shares of common stock of the Company equal to 200% of the face amount of the Note divided by the closing price of the common stock of the Company on the date of the issuance of the Notes (collectively, the “Initial Issuance”).
With the adoption of the ASU 2017-04, which eliminates the second step of the goodwill impairment test, the Company tests impairment of goodwill in one step. In this step, the Company compares the fair value of each reporting unit with goodwill to its carrying value.
Goodwill is evaluated for impairment on an annual basis. With the adoption of the ASU 2017-04, which eliminates the second step of the goodwill impairment test, the Company tests impairment of goodwill in one step. In this step, the Company compares the fair value of each reporting unit with goodwill to its carrying value.
Accrued interest due to related parties as of April 30, 2023 and 2022 amounted to $917,957 and $908,756, respectively.
Accrued interest due to related parties as of April 30, 2024 and 2023 amounted to $917,957 and $917,957, respectively.
We had an accumulated deficit of $151,750,610 as of April 30, 2023, and more losses are anticipated in the development of the business. Accordingly, there is substantial doubt about our ability to continue as a going concern.
We had an accumulated deficit of $167,387,028 as of April 30, 2024, and more losses are anticipated in the development of the business. Accordingly, there is substantial doubt about our ability to continue as a going concern.
The closing price of the Company’s common stock on January 6, 2023, as reported by Nasdaq, was $0.221 per share, so the Warrants in respect of the initial advance under the Note are exercisable for up to 18,099,548 shares of the Company’s common stock.
The closing price of the Company’s common stock on January 6, 2023, as reported by Nasdaq, was $176.80 per share, so the Warrants in respect of the initial advance under the Note are exercisable for up to 90,498 shares of the Company’s common stock.
The 4.28% in gross profit margin can be attributed to a combination of a reduction in transportation costs from Asia, compared to the same period in 2022, coupled with a small increase in average selling price of the Slinger Bag units.
The 41% in gross profit margin can be attributed to a combination of a reduction in transportation costs from Asia as well as inland USA, compared to the same period in 2023, coupled with a small increase in average selling price of the Slinger Bag units.
On September 13, the Company held a special meeting of stockholders in which the following items were approved: (i) the issuance of (i) 1,018,510 shares of the our common stock, par value $0.001 per share, that were issued on October 3, 2022, and, (ii) 11,802,002 shares of our common stock issuable upon exercise of Pre-Funded Warrants at an exercise price of $0.00001 per share, (iii) 12,820,512 shares of common stock issuable upon the exercise of 5-Year Warrants at an exercise price of $0.39 per share, (iv) 25,641,024 shares of common stock issuable upon the exercise of 7.5 Year Warrants at an exercise price of $0.43 per share and (v) 18,099,548 shares of our common stock issuable upon the exercise of 5.5 Year Warrants at an at an exercise price per share equal to $0.221 per share to Armistice Capital Master Fund Ltd and (ii) a reverse stock split of our common stock within a range of one (1)-for-ten (10) to one (1)-for-forty (40) (“Reverse Stock Split”), with the Board of Directors of the Company to set the specific ratio and determine the date for the reverse split to be effective and any other action deemed necessary to effectuate the Reverse Stock Split, without further approval or authorization of stockholders, at any time within 12 months of the special meeting date.
Special Meeting of Stockholders On September 13, 2023 the Company held a special meeting of stockholders in which the following items were approved: (i) the issuance of (i) 1,274 shares of the our common stock, par value $0.001 per share, that were issued on October 3, 2023, and, (ii) 14,753 shares of our common stock issuable upon exercise of Pre-Funded Warrants at an exercise price of $0.00002 per share, (iii) 16,026 shares of common stock issuable upon the exercise of 5-Year Warrants at an exercise price of $312 per share, (iv) 32,052 shares of common stock issuable upon the exercise of 7.5 Year Warrants at an exercise price of $344 per share and (v) 22,625 shares of our common stock issuable upon the exercise of 5.5 Year Warrants at an at an exercise price per share equal to $1,768per share to Armistice Capital Master Fund Ltd and (ii) a reverse stock split of our common stock within a range of one (1)-for-ten (10) to one (1)-for-forty (40) (“Reverse Stock Split”), with the Board of Directors of the Company to set the specific ratio and determine the date for the reverse split to be effective and any other action deemed necessary to effectuate the Reverse Stock Split, without further approval or authorization of stockholders, at any time within 12 months of the special meeting date.
The initial exercise date of the Warrants will be the date stockholder approval is received and effective allowing exercisability of the Warrants under Nasdaq rules. Pursuant to the terms of the Loan and Security Agreement, an additional advance of $600,000 may be made by to the Company under the Note.
The initial exercise date of the Warrants was September 13, 2023, the date stockholder approval was received and effective allowing exercisability of the Warrants under Nasdaq rules. Pursuant to the terms of the Loan and Security Agreement, an additional advance of $600,000 was made to the Company under the Note in February 2023.
ASC 350 requires that goodwill not be amortized, but reviewed for impairment if impairment indicators arise and, at a minimum, annually. The Company records goodwill as the excess purchase price over assets acquired and includes any work force acquired as goodwill. Goodwill is evaluated for impairment on an annual basis.
The Company accounts for goodwill in accordance with ASC 350, Intangibles - Goodwill and Other (“ASC 350”). ASC 350 requires that goodwill not be amortized, but reviewed for impairment if impairment indicators arise and, at a minimum, annually. The Company records goodwill as the excess purchase price over assets acquired and includes any work force acquired as goodwill.
Net cash used in operating activities was $6,365,389 during the year ended April 30, 2023, compared with $12,366,700 during the year ended April 30, 2022.
Net cash used in operating activities was $3,001,433 during the year ended April 30, 2024, compared with $6,365,389 during the year ended April 30, 2023.
Selling and marketing expenses During the year ended April 30, 2023, we incurred selling and marketing expenses of $1,928,198 compared with $3,477,570 during the year ended April 30, 2022, a reduction of -45%.
Selling and marketing expenses During the year ended April 30, 2024, we incurred selling and marketing expenses of $1,565,006 compared with $1,928,198 during the year ended April 30, 2023, a reduction of 19%.
On December 5, 2022, the Company assigned 75% of its membership interest in Foundation Sports to Charles Ruddy, its founder and granted him the right for a period of three years to purchase the remaining 25% of its Foundation Sports membership interests for $500,000 in cash.
The reason for the entry into the Agreement and the transactions contemplated thereby was to eliminate the need for the Company to provide further financing for PlaySight’s operations. 55 On December 5, 2022, the Company assigned 75% of its membership interest in Foundation Sports to Charles Ruddy, its founder and granted him the right for a period of three years to purchase the remaining 25% of its Foundation Sports membership interests for $500,000 in cash.
Our cash used in operating activities during the year ended April 30, 2023 was primarily the result of our net loss of $71,153,685 for the year which was partially offset by our non-cash expenses of $56,348,619 as well as increases in accounts receivable, accounts payable, accrued interest and contract liabilities.
Our cash used in operating activities during the year ended April 30, 2024 was primarily the result of our net loss for the years which was partially offset by our non-cash expenses as well as net decreases in inventories, prepaid inventories, prepaid expenses, other current assets and accounts payable and accrued expenses, offset by net increases in accounts receivable, other current liabilities and accrued interest.
(ii) The maturity due date of the Promissory Note is December 31, 2023 subject to a one year extension in the discretion of the Buyer until December 31, 2024. (iii) The Promissory Note can be partially paid over the time, but in the event it is not paid in full by December 31, 2024, then the remaining amount due (i.e.
(iii) The Promissory Note can be partially paid over the time, but in the event it is not paid in full by December 31, 2024, then the remaining amount due (i.e.
The ability to continue as a going concern is dependent upon our generating profitable operations in the future and/or being able to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they become due.
Our financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern. 70 The ability to continue as a going concern is dependent upon our generating profitable operations in the future and/or being able to obtain the necessary financing to meet our obligations and repay our liabilities arising from normal business operations when they become due.
All references to the outstanding stock have been retrospectively adjusted to reflect this reverse split. The Company also consummated a public offering of shares of its common stock and the listing of its common stock on the Nasdaq Capital Market. On November 17, 2022, Gabriel Goldman and Rohit Krishnan resigned from the board of directors of the Company.
The Company also consummated a public offering of shares of its common stock and the listing of its common stock on the Nasdaq Capital Market. On November 17, 2022, Gabriel Goldman and Rohit Krishnan resigned from the board of directors of the Company. Gabriel and Rohit were members of the audit and compensation committees.
Cost of sales Our cost of sales during the year ended April 30, 2023 were $7,144,335, compared to $11,878,010 for the period to April 30, 2022, a reduction of -40%. Cost of Sales represents the costs of units shipped during the period. This reduction in Cost of Sales is a direct result of the reduction in net sales.
Cost of sales Our cost of sales during the year ended April 30, 2024 were $5,004,257, compared to $7,144,335 for the period to April 30, 2023, a reduction of 30%. Cost of Sales represents the costs of units shipped during the period.
As of December 5, 2022, the results of Foundation Sports were no longer be consolidated in the Company’s financial statements, the Company recorded a loss on the sale and the investment is now accounted for as an equity method investment.
As of December 5, 2022, the results of Foundation Sports will no longer be consolidated in the Company’s financial statements, and the investment was accounted for as an equity method investment. On December 5, 2022, the Company analyzed this investment and established a reserve for the investment at the full amount of $500,000.
The Company’s obligations under the terms of the Loan and Security Agreement are fully and unconditionally guaranteed by all of the Company’s subsidiaries (the “Guarantors”).
The Company’s obligations under the terms of the Loan and Security Agreement were fully and unconditionally guaranteed by all of the Company’s subsidiaries (the “Guarantors”). 73 On October 11, 2023, Connexa Sports Technologies Inc.
On June 21, 2021, Slinger Bag Americas entered into a membership interest purchase agreement with Charles Ruddy to acquire a 100% ownership stake in Foundation Sports Systems, LLC (“Foundation Sports”). On February 2, 2022, the Company entered into a share purchase agreement with Flixsense Pty, Ltd. (“Gameface”).
Effective June 27, 2024, the Company increased the number of authorized shares of common stock from 300,000,000 to 1,000,000,000. On June 21, 2021, Slinger Bag Americas entered into a membership interest purchase agreement with Charles Ruddy to acquire a 100% ownership stake in Foundation Sports Systems, LLC (“Foundation Sports”).
The following is a summary of our cash flows from operating, investing and financing activities for the years ended April 30, 2023 and 2022: For the Years Ended April 30, 2023 2022 Cash flows used in operating activities $ (6,365,389 ) $ (12,366,700 ) Cash flows used in investing activities $ - $ (1,618,341 ) Cash flows provided by financing activities $ 5,700,362 $ 13,734,286 We had cash and cash equivalents of $202,095 as of April 30, 2023, as compared to $665,002 as of April 30, 2022.
The following is a summary of our cash flows from operating, investing and financing activities for the years ended April 30, 2024 and 2023: For the Years Ended April 30, 2024 2023 Cash flows used in operating activities $ (3,001,433 ) $ (6,365,389 ) Cash flows used in investing activities $ (16,500,000 ) $ - Cash flows provided by financing activities $ 19,478,993 $ 5,821,187 We had cash and cash equivalents of $229,705 as of April 30, 2024, as compared to $202,095 as of April 30, 2023.
Cash provided by financing activities for the year ended April 30, 2023 consisted of proceeds of $8,744,872 from issuance of common stock, $2,000,000 from notes payable, offset by $4,377,537 in repayments of notes payable and $546,158 in repayments of notes payable to related parties.
Cash provided by financing activities for the year ended April 30, 2024 consisted of proceeds of $17,961,828 from issuance of common stock, $3,728,000 from notes payable, offset by $785,509 in repayments of notes payable and $1,425,326 in repayments of notes payable to related parties.
Discontinued Operations Discontinued operations incorporates the impact of the divestments of both PlaySight and Gameface during the period to April 30, 2023.
Discontinued Operations Discontinued operations incorporates the impact of the divestments of both PlaySight and Gameface during the period to April 30, 2024. Total loss from discontinued operations was $0 during the year ended April 30, 2024 compared to $45,875,860 in the year ended April 30, 2023.
Total loss from discontinued operations was $45,875,860 during the year ended April 30, 2023 compared to $5,247,677 in the year ended April 30, 2022. 51 The loss from discontinued operations was $4,461,968 during the period to April 30,2023 compared to $5,247,677 in the period to April 30, 2022.
The loss from discontinued operations was $0 during the period to April 30,2024 compared to $4,461,968 in the period to April 30, 2023.
As a result, the goodwill and intangible assets related to Gameface were fully impaired as of April 30, 2023, resulting in an impairment loss of $11,421,817.
As a result, the goodwill and intangible assets related to Foundation Sports were fully impaired as of April 30, 2022, resulting in an impairment loss of $3,486,599. In addition, during April 2022 the Company decided to sell a portion of Foundation Sports.
Research and development costs During the year ended April 30, 2023, we incurred research and development costs of $65,164 compared with $736,141 during the year ended April 30, 2022. This decrease is mainly driven by our need to pause all development activity in the period due to limited cash flow being available for investment.
This decrease is mainly driven by our need to pause all development activity in the period due to limited cash flow being available for investment. Other expenses During the year ended April 30, 2024, we recorded a gain on change in fair value of derivatives of $7,635,612, compared to $10,950,017 during the year ended April 30, 2023.
Cedar Agreement The Company entered into an agreement with Cedar Advance LLC (“Cedar”) pursuant to which the Company sold $1,124,250 in future receivables (the “Cedar Receivables Purchased Amount”) to Cedar in exchange for payment to the Company of $750,000 in cash less fees of $60,000.
Cedar Advance Agreement No.1 On January 29, 2024, the Company entered into an agreement with Cedar Advance LLC (the “Cedar Agreement”) pursuant to which the Company sold $1,183,200 in future receivables to Cedar Advance LLC (the “Cedar Receivable Amount”) in exchange for $752,000 in cash.
On June 14, 2022, the Company effected a 1-for-10 reverse stock split, where the Company’s common stock began to trade on a reverse split adjusted basis. No fractional shares were issued in connection with the reverse stock split and all such fractional interests were rounded up to the nearest whole number of shares of common stock.
No fractional shares were issued in connection with the reverse stock split and all such fractional interests were rounded up to the nearest whole number of shares of common stock. All references to the outstanding stock have been retrospectively adjusted to reflect this reverse split.
The total loss on disposal of Foundation Sports and PlaySight amounted to $41,413,892 in the year ended April 30, 2023. In April 2023, the Company determined that the technology utilized in Gameface would take substantially more financial resources and more time to bring to market and achieve profitability than originally anticipated.
As a result of the merger agreement, PlaySight would become a wholly owned subsidiary of the Company. During April 2022, the Company determined that the technology utilized in the Foundation Sports acquired entity would take substantially more financial resources and more time to bring to market and achieve profitability than originally anticipated.
The decrease in other expenses for the year ended April 30, 2023 as compared to April 30, 2022 was primarily due a reduction in amortization of discounts and losses incurred on extinguishment of our debt and convertible notes, a decrease in interest expense from 2022 to 2023 due to changes in our long-term debt, offset by increases in derivative expense and interest to related parties.
The increase in other expenses for the year ended April 30, 2024 as compared to April 30, 2023 was primarily due an increase in derivative expenses coupled with increases in amortization of debt discounts, losses incurred on conversion of accounts payable to common stock, and an increase in interest expense.
Net cash used in investing activities was $0 for the year ended April, 30 2023, compared with net cash used in investing activities of $1,618,341 for the for year ended April 30, 2022.
Net cash used in investing activities was $16,500,000 for the year ended April, 30 2024, compared with net cash used in investing activities of $0 for the for year ended April 30, 2023. Investing activities for the year ended April, 30 2024 related to the acquisition of a 20% stake in Yuanyu Enterprise Management.
Excluding the gains, during the years ended April 30, 2023 and 2022, we had other expenses totaling $14,269,067 and $23,222,124, respectively.
Excluding the gain from the change in the fair value of the derivative liabilities during the years ended April 30, 2024 and 2023, we had other expenses totaling $16,828,875 and $14,269,067, respectively.
The Company agreed to pay UFS $13,491 each week for the first three weeks and thereafter $44,970 per week until the UFS Receivables Purchased Amount is paid in full.
The Company agreed to pay Meged $17,538 each week until the Meged Receivables Purchased Amount is paid in full.
The details of the merchant cash advance agreements are as follows: UFS Agreement The Company entered into an agreement with Unique Funding Solutions LLC (“UFS”) pursuant to which the Company sold $1,124,250 in future receivables (the “UFS Receivables Purchased Amount”) to UFS in exchange for payment to the Company of $750,000 in cash less fees of $60,000.
UFS Agreement On August 7, 2023, the Company entered into an agreement with UFS (the “UFS Agreement”) pursuant to which the Company sold $797,500 in future receivables (the “UFS Second Receivables Purchased Amount”) to UFS in exchange for payment to the Company of $550,000 in cash less fees of $50,000.
During the year ended April 30, 2023, we incurred general and administrative expenses of $22,743,877 compared with $46,718,986 during the year ended April 30, 2022, a reduction of -51%.
General and administrative expenses General and administrative expenses consist primarily of compensation, including share-based compensation, and other employee-related costs, as well as legal fees and fees for professional services. During the year ended April 30, 2024, we incurred general and administrative expenses of $8,721,823 compared with $22,743,877 during the year ended April 30, 2023, a reduction of 64%.
The Company agreed to pay Cedar $13,491 each week for the first three weeks and thereafter $44,970 per week until the Cedar Receivables Purchased Amount is paid in full.
The Company agreed to pay UFS $30,000 each week until the UFS Second Receivables Purchased Amount was paid in full.
The decrease in general and administrative expenses is largely due to a reduction in our share based compensation that resulted in an expense of $31,727,091, and our impairment loss on the intangible assets and goodwill of Gameface of $11,421,817 in the year ended April 30, 2023.
The decrease in general and administrative expenses is largely due to a reduction in our share based compensation and reductions in all professional fees and amortization costs. Research and development costs During the year ended April 30, 2024, we incurred research and development costs of $0 compared with $65,164 during the year ended April 30, 2023.
This resulted in a gross profit of $2,778,464, or 28.00%. compared to a gross profit of $4,224,622, or 26.24% for the period to April 30, 2022.
This reduction in Cost of Sales is a result of the reduction in net sales coupled with efficiencies in both our incoming and outgoing product supply chains. This resulted in a gross profit of $3,393,674, or 41%. compared to a gross profit of $2,778,464, or 28% for the period to April 30, 2023.
Investing activities for the year ended April, 30 2022 mostly related to the issuance of a note receivable in the amount of $2,250,000, offset by cash received in acquisitions of the entities acquired in fiscal April 30, 2022. 52 Net cash provided by financing activities was $5,821,178 for the year ended April 30 2023, compared with $13,734,286 for the year ended April 30, 2022.
Net cash provided by financing activities was $19,478,993 for the year ended April 30, 2024, compared with $5,821,178 for the year ended April 30, 2023.
The significant decrease in our online consumer marketing of Slinger Bag, coupled with the general marketplace impact resulting from the increased consumer social mobility following the lifting of all covid -related restrictions contributed to the significant decrease in sales.
The significant decrease in our online consumer marketing of Slinger Bag, coupled with on-going delays in inventory production in Asia, resulting in a significant lack of availability in Q4, all combined to contribute to the significant decrease in sales as of April 30, 2024.
The Company completed the sale in November 2022 and recorded a loss on the sale at that time. The total loss on disposal of Foundation Sports and PlaySight amounted to $41,413,892 in the year ended April 30, 2023.
The Company completed the sale in November 2022 and recorded a loss on the sale at that time. In April 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, “CNXA”.
Removed
Long-lived assets and goodwill related to Gameface in the amount of $11,421,817 were fully impaired as of April 30, 2023, resulting in an impairment loss. The Company accounts for goodwill in accordance with ASC 350, Intangibles - Goodwill and Other (“ASC 350”).
Added
Connexa is now the holding company under which Slinger Bag and Gameface reside.
Removed
Recent Accounting Pronouncements Recently Adopted In January 2017, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”), which simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test.
Added
The operations of Slinger Bag Inc., Slinger Bag Americas, Slinger Bag Canada, Slinger Bag UK, SBL and Gameface are collectively referred to as the “Company.” 54 On June 14, 2022, the Company effected a 1-for-10 reverse stock split, where the Company’s common stock began to trade on a reverse split adjusted basis.
Removed
Under ASU 2017-04, goodwill impairment will be tested by comparing the fair value of a reporting unit with its carrying amount, and recognizing an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value.
Added
(ii) The maturity due date of the Promissory Note is December 31, 2023 subject to a one year extension in the discretion of the Buyer until December 31, 2024. The Buyer timely elected to extend the maturity date of the Promissory Note to December 31, 2024.
Removed
The new guidance must be applied on a prospective basis and is effective for periods beginning after December 15, 2022, with early adoption permitted. The Company adopted ASU 2017-04 effective May 1, 2021.
Added
The Company intends to enter into a database access and marketing agreement with Foundation Sports pursuant to which Foundation Sports will (i) provide the Company with sporting or racquet facility information and contact data of its customers (subject to applicable law) and (ii) publish any promotional content, call to action, survey or similar promotional communications provided by the Company to Foundation Sport’s customers for its Customers to promote said material to their extended network of consumers in exchange for 7% of any gross revenue to be generated from such activities.
Removed
The adoption of the new standard did not have a material effect on the Company’s consolidated financial statements. 48 In December 2019, the FASB issued Accounting Standards Update (“ASU”), 2019-12, Simplifying the Accounting for Income Taxes , which amends ASC 740, Income Taxes (ASC 740).
Added
On March 7, 2023, Slinger Bag entered into an exclusive distribution agreement for Padel Tennis with a company located in Valencia, Spain called with Desarrollo y Promocion de Padel S.L. This agreement is contracted to deliver approximately $15 million in revenue by the end of 2028.
Removed
This update is intended to simplify accounting for income taxes by removing certain exceptions to the general principles in ASC 740 and amending existing guidance to improve consistent application of ASC 740. This update is effective for fiscal years beginning after December 15, 2021.
Added
On November 16, 2023, the Company entered into an agreement with Agile Capital Funding (the “ACF Agreement”) pursuant to which the Company sold $693,500 in future receivables to ACF (the “ACF Receivable Amount”) in exchange for $450,000 in cash. The Company agreed to pay ACF $28,895.83 each week until the ACF Receivable Amount is paid in full.
Removed
The guidance in this update has various elements, some of which are applied on a prospective basis and others on a retrospective basis with earlier application permitted. The adoption of the new standard did not have a material effect on the Company’s consolidated financial statements.
Added
In order to secure payment and performance of the Company’s obligations to ACF under the ACF Agreement, the Company granted to ACF a security interest in the following collateral: all present and future accounts receivable.
Removed
In August 2020, the FASB issued ASU No. 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.
Added
The Company also agreed not to create, incur, assume, or permit to exist, directly or indirectly, any lien on or with respect to any of such collateral.
Removed
ASU 2020-06 will simplify the accounting for convertible instruments by reducing the number of accounting models for convertible debt instruments and convertible preferred stock. Limiting the accounting models results in fewer embedded conversion features being separately recognized from the host contract as compared with current GAAP.
Added
As previously disclosed on the Current Report on Form 8-K furnished with the SEC on September 9, 2020, the Company entered into a service agreement dated September 7, 2020 (the “YK Employment Agreement”) with Yonah Kalfa, the Company’s chief innovation officer and member of the Company’s board of directors.
Removed
Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting and (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital.
Added
Pursuant to Sections 2.1(a) and 2.1(b) of the YK Employment Agreement, the Company owes Mr. Kalfa $1,137 in salary (the “Salary Compensation”) through January 31, 2024 to Mr. Kalfa. The Company was unable to pay Mr. Kalfa any of the compensation in cash and, given Mr.
Removed
ASU 2020-06 also amends the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. ASU 2020-06 will be effective for public companies for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years.
Added
Kalfa’s extraordinary contribution to the Company, pursuant to Section 2.1(b) of the YK Employment Agreement, on January 20, 2024 the Company agreed to pay $1 million of the $1.137 million owed (with Mr.

… 173 more changes not shown on this page.

Other YYAI 10-K year-over-year comparisons