SEC Form DEF 14A filed by Connexa Sports Technologies Inc.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

(RULE 14a-101)

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

(Amendment No. )

Filed by the Registrant ☒

Filed by a Party other than the Registrant ☐

Check the appropriate box:

CONNEXA SPORTS TECHNOLOGIES INC.

(Exact name of registrant as specified in its charter)

N/A

(Name of person(s) filing proxy statement, if other than the registrant)

Payment of Filing Fee (check the appropriate box):

CONNEXA SPORTS TECHNOLOGIES INC.

2709 North Rolling Road, Suite 138

Windsor Mill, Maryland 21244

TO THE STOCKHOLDERS OF CONNEXA SPORTS TECHNOLOGIES INC.:

You are cordially invited to attend an Annual Meeting of the stockholders of Connexa Sports Technologies Inc., a Delaware corporation (referred to herein as “Connexa,” the “Company,” “we,” “us” or “our”), which will be held virtually, via live webcast on May 15, 2024, at 11:00 a.m. Eastern Time. You will be able to attend the Annual Meeting by first registering at http://www.viewproxy.com/CNXA/2024 no later than May 14, 2024, at 11:59 p.m. Eastern Time. After registering, you will receive a meeting invitation and password via e-mail with your unique link to join the meeting.

At the Annual Meeting, our stockholders will be asked to consider and vote upon a proposal, which we refer to as the “Share Exchange Proposal,” to approve the issuance of shares of our common stock pursuant to that certain Share Exchange Agreement dated March 18, 2024 (the “Exchange Agreement”) among Connexa, Mr. Hongyu Zhou (Mr. Zhou, or the “YYEM Seller”), and Yuanyu Enterprise Management Co., Limited (“YYEM”), in exchange for 50% of the issued and outstanding ordinary shares of YYEM. The Exchange Agreement is a part of a transaction between us, YYEM Seller, and YYEM, whereby we agreed to purchase a total of 70% of the issued and outstanding ordinary shares of YYEM by entering into a share purchase agreement (the “Purchase Agreement”) and the Exchange Agreement. We refer to this transaction as the “Acquisition” and to the shares of our common stock issuable pursuant to the Exchange Agreement as the “Exchange Shares.” A copy of the Exchange Agreement is attached to the accompanying proxy statement as Annex A. In connection with the Acquisition, we are asking our stockholders to approve amendments to our Certificate of Incorporation (the “Certificate of Incorporation”) as reflected in the form of Certificate of Amendment to the Certificate of Incorporation attached as Annex B to the accompanying proxy statement (the “Amendment”).

Upon the closing of the Acquisition, the YYEM Seller will be issued a number of Exchange Shares equal to 82.4% of our issued and outstanding shares of common stock immediately following the closing of the Acquisition, and Connexa stockholders as of immediately prior to closing of the Acquisition will retain the balance of approximately 17.6% of such outstanding shares.

Connexa’s common stock is listed on The Nasdaq Capital Market under the symbol “YYAI,” having undergone a symbol change from “CNXA” that took effect prior to the market opening on April 15, 2024.

At the Annual Meeting, our stockholders will be asked to consider and vote upon:

Each of these proposals is more fully described in the accompanying proxy statement, which each stockholder is encouraged to carefully read and consider.

We are providing the proxy statement and accompanying proxy card to our stockholders in connection with the solicitation of proxies to be voted at the Annual Meeting and at any adjournment or postponement of the Annual Meeting. Whether or not you plan to attend the Annual Meeting, please take the time to vote by one of the means described in the accompanying proxy statement. YOUR VOTE IS VERY IMPORTANT.

Thank you for your participation. We look forward to your continued support.

CONNEXA SPORTS TECHNOLOGIES INC.

2709 North Rolling Road, Suite 138

Windsor Mill, Maryland 21244

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS.

To Be Held on May 15, 2024

YOUR VOTE IS VERY IMPORTANT.

PLEASE VOTE YOUR SHARES PROMPTLY.

NOTICE IS HEREBY GIVEN, that you are cordially invited to attend an Annual Meeting (the “Annual Meeting”) of stockholders of Connexa Sports Technologies Inc., to be held virtually, via live webcast on May 15, 2024, at 11:00 a.m. Eastern Time. In order to attend the meeting, you must register at http:// www.viewproxy.com/CNXA/2024 by 11:59 p.m. Eastern Time on May 14, 2024. Stockholders attending the Annual Meeting will be afforded the same rights and opportunities to participate as they would at an in-person meeting. We encourage you to join us and participate online. We recommend that you log in a few minutes before 11:00 a.m., Eastern Time, on May 15, 2024 to ensure you are logged in when the Annual Meeting starts. You will not be able to attend the Annual Meeting in person.

The purpose of the Annual Meeting is to consider and vote upon:

1) the Election of Directors Proposal – the election of five directors to serve until the 2025 annual meeting of stockholders and until their respective successors are duly elected and qualified, subject to their earlier death, resignation or removal;

2) the Ratification of Accountant Proposal – the ratification of the appointment of Olayinka Oyebola & Co. as our independent registered public accounting firm for our fiscal year ending April 30, 2024;

3) the Share Exchange Proposal – the issuance of the Exchange Shares in exchange for 50% of the issued and outstanding ordinary shares of YYEM and the other terms and conditions of the Exchange Agreement and the transactions contemplated thereby, which is part of the Acquisition transaction;

4) the Capital Increase Proposal – the approval of the Amendment to increase the authorized shares of our common stock from 300,000,000 shares to 1,000,000,000 shares;

5) the Reverse Stock Split Proposal – the approval of the Amendment to authorize the Reverse Stock Split of our common stock within a range of 1-for-10 to 1-for-100, with the Board to set the specific ratio and determine the date for the Reverse Stock Split to be effective;

6) the Separation Proposal – the approval of the separation of our “Slinger Bag” business and products and the transactions contemplated by the separation agreement related to the Acquisition;

7) the Amendment to October and December 2023 Warrants Exercise Price Proposal – the approval of the amendment to the exercise price of our certain existing warrants to $0.16 per share for purposes of complying with Nasdaq Listing Rule 5635(d);

8) the Issuance to January 2024 Investors Proposal – the approval of the issuance of shares of our common stock to certain investors party to our securities purchase agreements entered into in January 2024 for purposes of complying with Nasdaq Listing Rule 5635(d);

9) the Yonah Kalfa Share Issuance Proposal – the approval of the issuance of 942,307 shares of our common stock to Yonah Kalfa for purposes of complying with Nasdaq Listing Rule 5635(c);

10) the Director Shares Issuance Proposal – the approval of the issuance of shares of our common stock to each of our directors for their services and extraordinary contribution to the Company for purposes of complying with Nasdaq Listing Rule 5635(c);

11) the Management Shares Issuance Proposal — the approval of the issuance of shares of our common stock to certain of our officers for their services and extraordinary contribution to the Company for the purposes of complying with Nasdaq Listing Rule 5635(c);

12) the Increase in Number of Shares Reserved for Incentive Plan Proposal – the approval of the increase in the number of shares authorized for issuance under our 2020 Slinger Bag Inc. Global Share Incentive Plan;

13) the Adjournment Proposal – the adjournment of the Annual Meeting by the Chairman thereof to a later date to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the Annual Meeting, there are not sufficient votes to approve the Share Exchange Proposal; and

14) the transaction of such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof.

The accompanying proxy statement and our Annual Report on Form 10-K for the fiscal year ended April 30, 2023, which is part of these proxy materials, can be accessed directly at the following Internet address: http:// ://www.viewproxy.com/CNXA/2024.

Only holders of record of the Company’s common stock at the close of business on March 21, 2024, or the “Record Date,” are entitled to notice of the Annual Meeting and to vote and have their votes counted at the Annual Meeting and any adjournment or postponement of the Annual Meeting. We intend to mail these proxy materials beginning on or about May 2, 2024 to all stockholders of record entitled to vote at the Annual Meeting.

A complete list of the stockholders entitled to vote at the Annual Meeting will be available for examination during regular business hours for the 10 days prior to the Annual Meeting by request. You may email us at [email protected] and [email protected] to coordinate arrangements to view the stockholder list.

After careful consideration, the Board unanimously recommends that you vote, or instruct your broker or the agent to vote:

YOUR VOTE IS IMPORTANT

WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON, WE ENCOURAGE YOU TO SUBMIT YOUR PROXY AS PROMPTLY AS POSSIBLE (1) THROUGH THE INTERNET, (2) BY PHONE OR (3) BY MARKING, SIGNING AND DATING THE ENCLOSED PROXY CARD AND RETURNING IT IN THE POSTAGE-PAID ENVELOPE PROVIDED. You may revoke your proxy or change your vote at any time before the closing of voting at the Annual Meeting. If your shares are held in the name of a bank, broker or other nominee, please follow the instructions on the voting instruction card furnished to you by such bank, broker or other nominee, which is considered the stockholder of record, in order to vote. As a beneficial owner, you have the right to direct your broker or other agent on how to vote the shares in your account. Without your instructions, your broker can vote your shares only with respect to routine matters such as the Ratification of Accountant Proposal and the Adjournment Proposal. Without your instructions, your broker or other agent cannot vote on the Election of Directors Proposal, the Share Exchange Proposal, the Capital Increase Proposal, the Reverse Stock Split Proposal, the Separation Proposal, the Amendment to October and December 2023 Warrants Exercise Price Proposal, the Issuance to January 2024 Investors Proposal, the Yonah Kalfa Share Issuance Proposal, the Director Shares Issuance Proposal, the Management Shares Issuance Proposal or the Increase in Number of Shares Reserved for Incentive Plan Proposal.

If you fail to return your proxy card, grant your proxy electronically over the Internet, submit your vote over the phone, or vote virtually at the Annual Meeting, your shares will not be counted for purposes of determining whether a quorum is present at the Annual Meeting. If you are a stockholder of record as of the Record Date, voting virtually at the Annual Meeting will revoke any proxy that you previously submitted. If you hold your shares through a bank, broker or other nominee, you must obtain from the record holder a valid “legal” proxy issued in your name in order to vote virtually at the Annual Meeting.

We encourage you to read the accompanying proxy materials carefully. If you have any questions concerning the Acquisition, the Annual Meeting or the accompanying proxy materials, would like additional copies of the proxy materials or need help voting your shares of common stock, please contact our General Counsel, Mark Radom, Connexa Sports Technologies Inc., 2709 N. Rolling Road, Suite 138, Windsor Mill, MD 21244, or by phone at (443) 407-7564.

Thank you for your participation. We look forward to your continued support.

TABLE OF CONTENTS

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

This proxy statement contains forward-looking statements regarding, among other things, Connexa’s plans, strategies and prospects, both business and financial. Although Connexa believes that its plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, Connexa cannot assure you that we will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions including, without limitation, the factors described under “Risk Factors” in this proxy statement and from time to time in Connexa’s other filings with the Securities and Exchange Commission, or the “SEC”. Many of the forward-looking statements contained in this presentation may be identified by the use of forward-looking words such as “believe”, “expect”, “anticipate”, “should”, “planned”, “will”, “may”, “intend”, “estimated”, “aim”, “on track”, “target”, “opportunity”, “tentative”, “positioning”, “designed”, “create”, “predict”, “project”, “seek”, “would”, “could”, “continue”, “ongoing”, “upside”, “increases” and “potential”, among others. Important factors that could cause actual results to differ materially from the forward-looking statements we make in this proxy statement are set forth in other reports or documents that we file from time to time with the SEC, and include, but are not limited to:

You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this proxy statement. All forward-looking statements included herein attributable to any of Connexa, YYEM, or any person acting on any party’s behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Except to the extent required by applicable laws and regulations, none of Connexa and YYEM have any obligation to update these forward-looking statements to reflect events or circumstances after the date of this proxy statement or to reflect the occurrence of unanticipated events.

SUMMARY TERM SHEET

This Summary Term Sheet provides an overview of material information regarding the proposed Acquisition and may not contain all of the information that is important to you. You should carefully read this entire proxy statement, including the Exchange Agreement attached as Annex A for a more complete understanding of the Acquisition and the Exchange Agreement and related matters.

QUESTIONS AND ANSWERS ABOUT THE PROPOSALS AND THE ANNUAL MEETING

The following are answers to some questions that Connexa stockholders may have regarding the Share Exchange Proposal, the Capital Increase Proposal, and the Reverse Stock Split Proposal and the other matters being considered at Connexa’s Annual Meeting of Stockholders, which is referred to herein as the “Annual Meeting.” We urge you to carefully read the remainder of this proxy statement because the information in this section does not provide all the information that might be important to you with respect to the Acquisition and the other matters being considered at the Annual Meeting. Additional important information is also contained in the Annexes to this proxy statement.

Stockholders are encouraged to vote as soon as possible after carefully reviewing this proxy statement and the Annexes attached hereto. If Connexa stockholders fail to adopt and approve the Share Exchange Proposal, the Acquisition cannot be completed.

“FOR” each of the individuals nominated for election as directors pursuant to the Election of Directors Proposal;

“FOR” the Ratification of Accountant Proposal;

“FOR” the Share Exchange Proposal;

“FOR” the Capital Increase Proposal;

“FOR” the Reverse Stock Split Proposal;

“FOR” the Separation Proposal;

“FOR” the Amendment to October and December 2023 Warrants Exercise Price Proposal;

“FOR” the Issuance to January 2024 Investors Proposal;

“FOR” the Yonah Kalfa Share Issuance Proposal;

“FOR” the Director Shares Issuance Proposal;

“FOR” the Management Shares Issuance Proposal;

“FOR” the Increase in Number of Shares Reserved for Incentive Plan Proposal; and

“FOR” the Adjournment Proposal, if presented.

You should read the discussion in the “Background of the Acquisition” section beginning on page 29 and the discussion of each of the proposals for a discussion of the factors that the Board considered in deciding to recommend the approval of the Share Exchange Proposal and related proposals.

Stockholders of Record and Voting

If your shares of Connexa common stock are registered directly in your name with Connexa’s transfer agent, Worldwide Stock Transfer, LLC, you are the stockholder of record of those shares and these proxy materials have been mailed or e-mailed to you by the Company. You may vote your shares by Internet, telephone or by mail as further described below. Your vote authorizes Mike Ballardie, the President and Chief Executive Officer of the Company, as your proxy, with the power to appoint his substitute, to represent and vote your shares as you direct.

If you need assistance in voting by telephone or over the Internet or completing your proxy card or have questions regarding the meeting, please contact our proxy advisor:

Alliance Advisors

200 Broadacres Drive, 3^rd Floor

Bloomfield, NJ 07003

1-833-970-2874 (Toll free in United States)

[email protected]

Beneficial Owners

If your shares of Connexa common stock are held in a stock brokerage account, by a bank, broker or other nominee, you are considered the beneficial owner of shares held in street name and these proxy materials are being forwarded to you by your bank, broker or nominee that is considered the holder of record of those shares. As the beneficial owner, you have the right to direct your bank, broker, trustee or nominee on how to vote your shares via the Internet or by telephone if the bank, broker, trustee or nominee offers these options. You can also sign and return a proxy card. Your bank, broker, trustee or nominee will send you instructions for voting your shares. Please note that you may not vote shares held in street name by returning a proxy card directly to Connexa or by voting at the Annual Meeting unless you provide a “legal proxy,” which you must obtain from your broker, bank or nominee. Furthermore, brokers, banks and nominees who hold shares of Connexa common stock on your behalf may not give a proxy to Connexa to vote those shares without specific instructions from you.

For a discussion of the rules regarding the voting of shares held by beneficial owners, please see the question below entitled “If I am a beneficial owner of shares of Connexa common stock, what happens if I don’t provide voting instructions? What is discretionary voting? What is a broker non-vote?”

We are advised that the Ratification of Accountant Proposal and the Adjournment Proposal are discretionary proposals; however, each of the other proposals to be presented at the Annual Meeting is a non-discretionary proposal. Accordingly, if you are a beneficial owner and you do not provide voting instructions to your broker, bank or other holder of record holding shares for you, your shares may not be voted with respect to any of the proposals other than the Ratification of Accountant and the Adjournment Proposal, if presented. Broker non-votes will have no effect on the outcome of the vote on any of the other proposals.

If you choose either of the first two methods, you must submit your written notice of revocation or your new proxy to the Secretary of Connexa, as specified below under “What is the deadline to propose actions for consideration at next year’s annual meeting of stockholders or to nominate individuals to serve as directors?” no later than the beginning of the Annual Meeting. If your shares are held in street name by your broker, bank or nominee, you should contact them to change your vote.

Connexa Sports Technologies Inc.

Attention: Corporate Secretary

2709 North Rolling Road, Suite 138

Windsor Mill, Maryland 21244

The proposal or nomination must also contain the information required by our amended and restated bylaws. For the 2025 annual meeting, we will be required pursuant to Rule 14a-19 under the Exchange Act to include on our proxy card all nominees for director for whom we have received notice under the rule, which, if our meeting is held within 30 days of May 15, 2025, must be received no later than March 16, 2025 (60 calendar days prior to May 15, 2025 (the anniversary of the Annual Meeting)).

RISK FACTORS

Post-Acquisition, Yuanyu Enterprise Management Co., Limited will be faced with a market environment that cannot be predicted and that involves significant risks, many of which will be beyond its control. In addition to the other information contained in this proxy statement, you should carefully consider the material risks described below before deciding how to vote your shares of Connexa common stock. You should also read and consider the risks associated with the business of Connexa because these risks may also affect YYEM after closing of the Acquisition. These risks are contained in this proxy statement and can be found in Connexa’s Annual Report on Form 10-K for the year ended April 30, 2023 and most recent Quarterly Reports on Form 10-Q. If any of the following risks and uncertainties develops into actual events, these events could have a material adverse effect on Connexa or the businesses, financial conditions or results of operations of YYEM, or ownership of Connexa securities following the Acquisition. You should also read and consider the other information in this proxy statement. Please see the section titled “Where You Can Find More Information” on page 93 of this proxy statement. In addition, past financial performance may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results or trends in future periods.

Risks Related to the Acquisition

The market price of our Common Stock will continue to fluctuate after the Acquisition.

Following completion of the Acquisition, the market price of our Common Stock will continue to fluctuate, potentially significantly, as a result of a variety of factors, including, among others, general market and economic conditions, changes in Connexa’s or YYEM’s respective businesses, operations and prospects, interest rates, general market, industry and economic conditions and other factors generally affecting the stock prices, federal, state and local legislation, governmental regulation and legal developments in the industry segments in which Connexa will operate. Connexa’s market capitalization and trading volume may contribute to greater volatility. In addition, any significant price or volume fluctuations in the stock market generally could have a material adverse effect on the market for, or liquidity of, the Connexa Common Stock, regardless of the post-Acquisition actual operating performance.

Failure to complete the Acquisition, which includes the Share Exchange, could negatively impact Connexa’s stock price and we may not be able to avoid dissolution.

If the Share Exchange Proposal is not approved at the Annual Meeting, or the Acquisition is not completed for any reason, it is likely that our Common Stock would be delisted from Nasdaq, with all the attendant risks described below in this section. Furthermore, if the Acquisition is not completed, the price of our Common Stock may decline significantly. If that were to occur, it is uncertain when, if ever, the price of our Common Stock would reach the price implied in the Acquisition or at which it traded as of the date we announced the Purchase Agreement and the Exchange Agreement or the date of this proxy statement. Accordingly, if the Acquisition is not completed, there can be no assurance as to the effect on the future value of your shares of our Common Stock.

After the Acquisition, Connexa stockholders will have a significantly lower ownership and voting interest in Connexa post-Acquisition than they currently have in Connexa and will exercise less influence over management and policies of Connexa post-Acquisition.

Based on the number of shares of YYEM and Connexa Common Stock outstanding as of the close of business on March 18, 2024, the date of the Exchange Agreement and Purchase Agreement, upon completion of the Acquisition, Connexa stockholders are expected to own approximately 17.6% of the outstanding shares of Connexa Common Stock and the YYEM shareholder immediately following the Acquisition is expected to own approximately 82.4% of the outstanding shares of Connexa Common Stock. Consequently, former Connexa stockholders will have less influence over the management and policies of Connexa post-Acquisition than they currently have over the management and policies. Additionally, the stockholders of Connexa may not realize a benefit from the Acquisition commensurate with the ownership dilution they will experience in connection with the Acquisition.

Obtaining required approvals and satisfying closing conditions may prevent or delay completion of the Acquisition.

The Acquisition is subject to a number of conditions to Closing as specified in the Exchange Agreement. No assurance can be given that the required stockholder, governmental and regulatory consents and approvals will be obtained or that the required conditions to Closing will be satisfied. Additionally, if all required consents and approvals are obtained and the required conditions are satisfied, no assurance can be given as to the terms, conditions and timing of such consents and approvals. Any delay in completing the Acquisition could cause Connexa not to realize, or to be delayed in realizing, some or all of the benefits that Connexa and YYEM expect to achieve if the Acquisition is successfully completed within its expected time frame.

Except in specified circumstances, if the Closing has not occurred by the Termination Date, either Connexa or YYEM Seller may choose not to proceed with the transaction.

Either Connexa or YYEM Seller may terminate the Exchange Agreement if the Acquisition has not been consummated by the date that is 180 days from the date of the Exchange Agreement, the Termination Date. However, this right to terminate the Exchange Agreement will not be available to Connexa or YYEM Seller if such party has materially breached any of its representations, warranties, covenants or agreements under the Exchange Agreement and such breach has been a contributing factor that resulted in the failure of the Acquisition to be consummated by the Termination Date.

Failure to attract, motivate and retain executives and other key employees could diminish the anticipated benefits of the Acquisition.

The success of the Acquisition will depend in part on Connexa’s ability post-Acquisition to retain the talents and dedication of key professionals currently employed by Connexa or YYEM. It is possible that these employees may decide not to remain with Connexa or YYEM, as applicable, while the Acquisition is pending, or with Connexa post-Acquisition. If key employees terminate their employment, or if an insufficient number of employees are retained to maintain effective operations, Connexa’s business activities post-Acquisition may be adversely affected and management’s attention may be directed to hiring suitable replacements, all of which may cause Connexa’s business to suffer. In addition, Connexa or YYEM may not be able to locate suitable replacements for any key employees that leave either company or offer employment to potential replacements on reasonable terms. No assurance can be given that post-Acquisition, Connexa will be able to attract or retain key employees of Connexa and YYEM to the same extent that those companies have been able to attract or retain their own employees in the past.

Whether or not the Acquisition is completed, the announcement and pendency of the Acquisition could cause disruptions in the business of Connexa, which could have an adverse effect on its business and financial results.

Regardless of whether the Acquisition is completed, the announcement and pendency of the Acquisition could cause disruptions in the business of Connexa, including by diverting the attention of Connexa’s management toward the completion of the Acquisition. In addition, Connexa has diverted significant management resources in an effort to complete the Acquisition and is subject to restrictions contained in the Exchange Agreement on the conduct of its business. If the Acquisition is not completed, Connexa will have incurred significant costs, including the diversion of management resources, for which it will have received little or no benefit.

A market for our Common Stock may not continue, which would adversely affect the liquidity and price of our Common Stock.

Following the Acquisition and in light of our proposed Reverse Stock Split, the market price of our Common Stock may fluctuate significantly due to the market’s reaction to the Acquisition and general market and economic conditions. An active trading market for our Common Stock following the Acquisition may never develop or, if developed, it may not be sustained. In addition, the market price of our Common Stock after the Acquisition may vary due to general economic conditions and forecasts, our general business condition and the release of our financial reports. Additionally, if our Common Stock becomes delisted from Nasdaq for any reason and is relegated to the OTC Bulletin Board (an inter-dealer automated quotation system for equity securities that is not a national securities exchange), the liquidity and price of our Common Stock will be more limited than if we were quoted or listed on Nasdaq or another national securities exchange. You may be unable to sell your shares of Common Stock unless a market for our Common Stock can be established or sustained.

Although we expect that our Common Stock will remain listed on Nasdaq after the Acquisition, there can be no assurance that we will be able to comply with the continued listing standards of Nasdaq.

To continue listing our Common Stock on Nasdaq subsequent to the Closing, we will be required to demonstrate compliance with Nasdaq’s continued listing standards prior to the Closing and Nasdaq’s initial listing standards at the Closing (due to the change of control of our Company). We cannot assure you that we will be able to meet Nasdaq’s continued listing standards, and we can provide no assurance that we will be able to satisfy the initial listing requirements.

If, before or after the Acquisition, Nasdaq delists our Common Stock due to our failure to meet its continued listing standards, or for failure to re-qualify under Nasdaq’s initial listing standards upon Closing, we and our stockholders could face significant material adverse consequences including:

If the Acquisition’s benefits do not meet the expectations of investors, stockholders or financial analysts, the market price of our securities may decline.

If the benefits of the Acquisition do not meet the expectations of investors or securities analysts, the market price of our Common Stock prior to the completion of the Acquisition may decline. The market values of our securities at the time of the Acquisition may vary significantly from their prices on the date the Purchase Agreement and Exchange Agreement were executed, the date of this proxy statement, or the date on which our stockholders vote on the Share Exchange Proposal.

In addition, following the Acquisition, fluctuations in the price of our Common Stock could contribute to the loss of all or part of your investment. Prior to the Acquisition, there has been no public market for YYEM’s securities. Accordingly, the valuation ascribed to YYEM and our common stock in the Acquisition may not be indicative of the price that will prevail in the trading market following the Acquisition. If an active market for our common stock develops and continues, the trading price of our common stock following the Acquisition could be volatile and subject to wide fluctuations in response to various factors, some of which are beyond our control. Any of the factors listed below could have a material adverse effect on your investment in our Common Stock, and our Common Stock may trade at prices significantly below the price you paid for them. In such circumstances, the trading price of our Common Stock may not recover and may experience a further decline.

Broad market and industry factors may materially harm the market price of our securities irrespective of our operating performance. The stock market in general, and Nasdaq in particular, have experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected. The trading prices and valuations of these stocks, and of our securities, may not be predictable. A loss of investor confidence in the market for retail stocks or the stocks of other companies which investors perceive to be similar to the Company could depress our stock price regardless of our business, prospects, financial conditions or results of operations. A decline in the market price of our securities also could adversely affect our ability to issue additional securities and our ability to obtain additional financing in the future.

YYEM may not realize anticipated growth opportunities.

YYEM expects that it will realize growth opportunities and other financial and operating benefits as a result of the Acquisition. YYEM cannot predict with certainty if or when these growth opportunities and benefits will occur, or the extent to which they actually will be achieved. For example, the benefits from the Acquisition may be offset by costs incurred in connection with the Acquisition, or as a result of being part of a public company. See “Risks Related to YYEM’s Business and Industry” for a fuller discussion of the risks relating to YYEM following the Acquisition.

The Company and YYEM will incur significant transaction-related costs in connection with the Acquisition.

The Company and YYEM expect to incur significant nonrecurring costs associated with the Acquisition before, at, and after Closing. The Company and YYEM will also incur transaction fees and costs related to formulating and implementing post-Acquisition plans, including increased employment-related costs.

Risks Relating to Connexa Post-Acquisition

Connexa may be exposed to increased litigation, which could have an adverse effect on its business and operations post-Acquisition.

Connexa may be exposed to increased litigation from stockholders, customers, suppliers, distributors, consumers and other third parties following the Acquisition. Such litigation may have an adverse impact on Connexa’s business and results of operations or may cause disruptions to Connexa’s operations.

After the Acquisition, holders of Connexa’s Common Stock will have no equity or other ownership interest in its current business, as after the Acquisition Connexa will sell, transfer and assign its existing business to a newly formed entity. Investors will therefore after such sale, transfer and assignment have a continuing equity interest only in the business of YYEM.

Pursuant to a Separation Agreement to be entered into per the Exchange Agreement, after consummation of the Acquisition, Connexa will sell, transfer and assign all its existing business to a newly formed entity to be owned by Yonah Kalfa and Mike Ballardie. After such sale, transfer, assignment or divestiture, Common Stock of Connexa will represent equity interests solely in the business of YYEM and not any equity interest in the current business of Connexa.

The separation of the Legacy Business is dependent on the Acquisition and will not result in monetization, and holders of Common Stock of Connexa will not receive any consideration in connection with the separation of Legacy Business.

Upon consummation of the Acquisition, pursuant to the Separation Agreement, Connexa will sell, transfer, assign, or otherwise divest itself of the Legacy Business to a purchaser controlled by two of the Company’s current directors, Mike Ballardie and Yonah Kalfa. The separation of the Legacy Business will not involve a monetization transaction, and the consummation of such sale, transfer, assignment or other divesture may be completed at a discount to the fair market value or on terms less favorable to Connexa and its stockholders than might otherwise have been obtainable under other circumstances. In connection with the separation of the Legacy Business, holders of the Common Stock of Connexa will not receive any consideration related to the Legacy Business.

On a pro forma basis, as of April 17, 2024, the Legacy Business’ assets were approximately $5.2 million (which represents the assets of the Company as of January 31, 2024, minus, on a pro forma basis, the $16.5 million used for the purchase of 20% ownership of YYEM in April 2024), and the liabilities of the Legacy Business were $17.7 million (which represents the liabilities of the Company as of January 31, 2024, minus, on a pro forma basis, approximately $7 million of liabilities converted into equity from February 1 to April 17).

Declaration, payment and amounts of dividends, if any, to stockholders of Connexa post-Acquisition will be uncertain.

Connexa has not historically paid cash dividends on its capital stock. Whether any dividends are declared or paid to stockholders of Connexa post-Acquisition, and the amounts of any such dividends that are declared or paid, are uncertain and depend on a number of factors. The Connexa Board post-Acquisition will have the discretion to determine the dividend policy of Connexa, including the amount and timing of dividends, if any, that Connexa may declare from time to time, which may be impacted by any of the following factors:

Stockholders should be aware that they have no contractual or other legal right to dividends that have not been declared.

Holders of Connexa’s Common Stock may be diluted by the future issuance of additional Common Stock, preferred stock or securities convertible into shares of Common Stock or preferred stock in connection with incentive plans, acquisitions or otherwise; future sales of such shares in the public market or the expectation that such sales may occur may decrease the market price of Connexa’s Common Stock.

Connexa post-Acquisition could issue a significant number of shares of Common Stock in the future, for example in connection with investments or acquisitions. Connexa plans to increase the number of shares of Common Stock reserved for the 2020 Plan which will provide additional shares of Common Stock for the issuance, pursuant to the terms and subject to the conditions set forth in the 2020 Plan, of long-term incentive compensation which may take the form of options, restricted stock units or other securities. Any of these issuances could dilute Connexa existing stockholders, and such dilution could be significant. Moreover, such dilution could have a material adverse effect on the market price for the shares of Connexa’s Common Stock. Any issuance of shares of preferred stock with voting rights may adversely affect the voting power of the holders of shares of Connexa’s Common Stock, either by diluting the voting power of Connexa’s Common Stock if the preferred stock votes together with the Common Stock as a single class, or by giving the holders of any such preferred stock the right to block an action on which they have a separate class vote, even if the action were approved by the holders of Connexa’s shares of Common Stock. The future issuance of shares of preferred stock with dividend or conversion rights, liquidation preferences or other economic terms favorable to the holders of preferred stock could adversely affect the market price for Connexa’s Common Stock by making an investment in the Common Stock less attractive. For example, investors in the Common Stock may not wish to purchase Common Stock at a price above the conversion price of a series of convertible preferred stock because the holders of the preferred stock would effectively be entitled to purchase Common Stock at the lower conversion price, causing economic dilution to the holders of Common Stock. As of January 31, 2024, Connexa had no shares of preferred stock authorized, issued or outstanding.

Risks Related to YYEM’s Business and Industry

References in this section to “we,” “us,” “our,” “YYEM” and the “company” refer to YYEM and its subsidiaries.

If we fail to add users, our revenue, financial results, and business may be significantly harmed.

Our financial performance will be significantly determined by our success in adding and retaining users of our services. The size of our user base is impacted by a number of factors, including competing products and services and global and regional business, macroeconomic, and geopolitical conditions.

If people do not perceive our services to be useful, we may not be able to attract or retain users. With each new generation of users, expectations of our services change and user behaviors and priorities shift. As a result, we may need to further leverage our existing capabilities or advances in technologies such as artificial intelligence (“AI”) and those relating to the metaverse, or adopt new technologies, to improve our existing services or introduce new services in order to better satisfy existing users and to expand our penetration of what continues to be a large available new-user market. However, there can be no assurance that further implementation of technologies such as AI and those relating to the metaverse will enhance our services or be beneficial to our business, and the introduction of new features or services to our existing services may have unintended consequences for our ecosystem, which could lead to fluctuations in the size of our user base.

If we are unable to maintain or increase the size of our user base (or if our licensees are unable to do so), our revenue and other financial results may be adversely affected. Furthermore, as the size of our user base fluctuates in one or more markets from time to time, we may become increasingly dependent on our ability to maintain or increase levels of monetization in order to grow our revenue. Any significant decrease in user retention or growth could render our services less attractive to users, which would likely have a material and adverse impact on our business, financial condition, and results of operations.

We are dependent on third parties for a significant portion of our revenue through intellectual property licensing agreements, and we may not realize the expected benefits of such arrangements.

We have in the past entered into, and may continue to enter into, licensing arrangements with third parties that we believe will commercialize our intellectual property and bolster our revenue. See “The Acquisition — Valuation Report of Ravia Global Appraisal Advisory Limited —Revenue Growth” for details of some of these arrangements.

Our revenue from licensing agreements increased significantly in the year ended January 31, 2024, constituting substantially all of our revenue, and our results of operations have been, and may continue to be, affected by such arrangements. Licensing agreements involving our intellectual property are subject to various risks. Our licensees may fail to comply with their obligations set out in the respective agreements. If the licensees generate insufficient revenue from their operations, they may be unable to meet the minimum payments required under the agreements. Our licensees may elect to cease the licensing arrangement due to a change in their strategic focus, the availability of funding, or other external factors. Termination of any licensing arrangements may result in a reduction in our revenue and the need for replacement arrangements with other licensees. 


Our licensees have significant discretion in determining the efforts and resources that they will apply to their own operations, potentially resulting in less revenue than we anticipate at the outset of the relationship. Such licensees may independently develop intellectual property that could substitute for ours or may partner with competitors offering different technology. 


Our licensees may not properly maintain or defend our intellectual property rights or may use our intellectual property or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property rights or our rights over our proprietary information or could expose us to potential liability.

Disputes may arise between us and our licensees that interfere with the licensing arrangements or lead to the termination of the licensing agreements. Such disputes could result in costly litigation or arbitration that diverts management attention and resources.

As we expand to new jurisdictions, if we fail to enter into licensing arrangements for a particular territory with a suitable strategic partner and do not have sufficient funds or local expertise to undertake the necessary commercialization activities ourselves, we may not be able to generate revenue from such territory.

For these and other reasons, we may not achieve the outcomes expected from our licensing arrangements. These arrangements are subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and are beyond our control. We may face operational and financial risks including increases in near- and long-term expenditure, exposure to unknown liabilities, disruption of our business, and diversion of our management’s time and attention. Even if we achieve the expected benefits, we may not be able to do so within the anticipated time frame. Any of the foregoing could materially adversely affect our business, financial condition, results of operations and prospects.

The love and marriage market sector, including matchmaking apps, is competitive, with low switching costs and a consistent stream of new services and entrants, and innovation by our competitors may disrupt our business.

The love and marriage market sector, including matchmaking apps, is competitive, with a consistent stream of new services and entrants. Some of our competitors may enjoy better competitive positions in certain geographical regions, user demographics, or other key areas that we currently serve or may serve in the future. These advantages could enable such competitors to offer services that are more appealing to users and potential users than our services or to respond more quickly or cost-effectively than us to new or changing opportunities.

In addition, within the love and marriage market sector generally, costs for consumers to switch between services are low, and consumers have a propensity to try new approaches to connecting with people and to use multiple services at the same time. As a result, new services, entrants, and business models are likely to continue to emerge. If we become established as a dominant player in any particular market, it is possible that a new service could gain rapid scale at the expense of existing brands by harnessing a new technology, such as generative AI, or a new or existing distribution channel, creating a new or different approach to connecting people, or some other means. We may need to respond by introducing new services or features, and we may not be successful in that. If we do not sufficiently innovate to provide new services, or improve upon existing services, that our users or prospective users find appealing, we may be unable to continue to attract new users or continue to appeal to existing users.

Potential competitors include larger companies that could devote greater resources to the promotion or marketing of their services, take advantage of acquisitions or other opportunities more readily, or develop and expand their services more quickly than we do. Potential competitors also include established social media companies that may develop features or services that compete with ours or operators of mobile operating systems and app stores. For example, Facebook offers a dating feature on its platform, which it rolled out globally several years ago and has grown dramatically in size supported by Facebook’s massive worldwide user footprint. These social media and mobile platform competitors could use strong or dominant positions in one or more markets, coupled with ready access to existing large pools of potential users and personal information regarding those users, to gain competitive advantages over us, including by offering different features or services that users may prefer or offering their services to users at no charge, which may enable them to acquire and engage users at the expense of our user growth or engagement.

If we (or our licensees) are not able to compete effectively against current or future competitors as well as other services that may emerge, or if our decisions regarding where to focus our investments are not successful in the long term, the size and level of engagement of our user base may decrease, which could have an adverse effect on our business, financial condition, and results of operations. If, similarly, our licensees are unable to compete effectively or are unsuccessful in this regard, the size and level of engagement of their user base may decrease, which could impact their payments to us and therefore have an adverse effect on our business, financial condition, and results of operations.

The limited operating history and geographic reach of our brands and services makes it difficult to evaluate our current business and future prospects.

We seek to tailor our services to meet the preferences of specific geographies, demographics, and other communities of users. Building a given brand or service is generally an iterative process that occurs over a meaningful period of time and involves considerable resources and expenditure. Although our China-based licensee has experienced significant growth over a relatively short period of time, the historical growth rate of that brand and service may not be an indication of future growth rates for our brand and service or for brands and services that we may launch in other jurisdictions. We have encountered, and may continue to encounter, risks and difficulties as we build our brands and services. The failure to successfully scale these brands and services and address these risks and difficulties could adversely affect our business, financial condition, and results of operations.

Our growth and profitability rely, in part, on our ability to attract and retain users through cost-effective marketing efforts. Any failure in those efforts could adversely affect our business, financial condition, and results of operations.

Attracting and retaining users for our services will involve considerable expenditure for online and offline marketing, likely requiring higher marketing outlays over time in order to sustain our growth. This also applies to our licensees, whose success is a key component of our own. Evolving consumer behavior can affect the availability of profitable marketing opportunities. Offline campaigns may diminish in effectiveness as consumers move increasingly online. Online campaigns may become less fruitful as large tech platforms, such as Apple and Google, increasingly limit advertisers’ ability to access and use unique advertising identifiers, cookies, and other information to acquire potential users (such as Apple’s rules regarding the collection and use of identifiers for advertising, often referred to as IDFA). This is especially important for us, given that our offline storefronts are an important component of our business model and identifying which users are most likely to be amenable to in-person services is therefore also key to our success. To continue to reach potential users and grow our businesses, we will likely be required to identify and devote more of our overall marketing expenditure to newer advertising channels, such as social media and online video platforms. We could have less success using these newer advertising channels and methods to identify potential customers. There can be no assurance that we will be able to appropriately manage our marketing efforts in response to these and other trends in the advertising industry. Any failure to do so could adversely affect our business, financial condition, and results of operations.

Distribution and marketing of, and access to, our online services may rely, in significant part, on a variety of third-party platforms, in particular, mobile app stores. If these third parties limit, prohibit, or otherwise interfere with features or services or change their policies in any material way, it could adversely affect our business, financial condition, and results of operations.

We will market and distribute our online services (including our AI matchmaker application) through a variety of third-party distribution channels, some of which may limit or prohibit advertisements for services such as ours, whether because they decide to launch competing offerings in the same industry or because they are reacting to poor behavior by other industry participants, or for some other reason. Furthermore, certain platforms on which we market our services may not properly monitor or ensure the quality of content located adjacent to or near our advertisements on such platforms, which may have a negative effect on consumers’ perceptions of our company. Any of these developments could rise to a level where our business, financial condition, and results of operations is adversely affected.

Additionally, our mobile applications will be most often accessed through the Apple App Store and Google Play Store. Both Apple and Google have broad discretion to change their policies regarding their mobile operating systems and app stores in ways that may limit, eliminate, or otherwise interfere with our ability to distribute or promote our applications through their stores, our ability to update our applications, and our ability to access information that they collect about our users. To the extent either of them does so, our business, financial condition, and results of operations could be adversely affected.

The success of our services will depend, in part, on our ability to access, collect, and use personal data about our users and subscribers.

We will rely extensively on the Apple App Store and Google Play Store, as well as other technology platforms, to distribute and monetize our mobile applications. Our users and subscribers will pay through these platforms, which will prevent us from accessing key user data that we would otherwise receive if we transacted with our users and subscribers directly. This could negatively impact our customer relationship management efforts, our ability to reach new segments of our user and subscriber bases and the population generally, the efficiency of our paid marketing efforts, the rates we are able to charge advertisers seeking to reach users and subscribers of our services, our ability to comply with applicable law, and our ability to identify and exclude users and subscribers whose access would violate applicable terms and conditions, including underage individuals and bad actors, all of which could cause our business, financial condition, and results of operations to be adversely affected.

As the distribution of our online services through app stores increases, in order to maintain our profit margins, we may need to take steps to offset increasing app store fees by decreasing traditional marketing expenditure, increasing user volume or monetization per user, or consolidating back-office and technical functions, or by engaging in other efforts to increase revenue or decrease costs generally.

While we expect that our mobile applications will be free to download from intermediary platforms like the Apple App Store and the Google Play Store, we intend to offer our users the opportunity to purchase subscriptions and features within the applications. These purchases are in most cases required to be processed through the in-app payment systems provided by the intermediary, thus requiring us to pay them a meaningful share of the revenue we receive from these transactions.

While we are constantly innovating and developing our own payment systems and methods, given the expected increase in fees relating to these intermediary platforms, we may in the future need to offset these increased fees by decreasing traditional marketing expenditure as a percentage of revenue, increasing user volume or monetization per user, or consolidating back-office or technical functions, or by engaging in other efforts to increase revenue or decrease costs generally.

Challenges with properly managing the use of artificial intelligence could result in reputational harm, competitive harm, and legal liability.

We and our licensees are working to integrate AI technologies into our services, which integrations may become important to our operations over time. Our competitors or other third parties may incorporate AI into their services more quickly or more successfully than us, which could impair our ability to compete effectively and adversely affect our results of operations. Additionally, AI algorithms and training methodologies may be flawed. If the content or recommendations that AI applications assist in producing are or are alleged to be deficient, inaccurate, offensive, biased, or otherwise improper or harmful, we may face reputational consequences or legal liability, and our business, financial condition, and results of operations may be adversely affected. Furthermore, the use of AI has been known to result in, and may in the future result in, cybersecurity incidents that implicate the personal data of end users of AI-enhanced services. Any such cybersecurity incidents related to our use of AI could adversely affect our reputation and results of operations. AI also presents emerging ethical issues, and if our use of AI becomes controversial, we may experience reputational harm, competitive harm, or legal liability. The rapid evolution of AI will require the dedication of significant resources to develop, test, and maintain AI technologies, including to further implement AI ethically in order to minimize unintended harmful impact. While we will aim to deploy AI responsibly and attempt to identify and mitigate ethical and legal issues presented by its use, we may be unsuccessful in identifying or resolving issues before they arise.

The legal and regulatory landscape surrounding generative AI technologies is rapidly evolving and uncertain, including in the areas of intellectual property, discrimination, cybersecurity, and privacy and data protection. Compliance with existing, new, and changing laws, regulations, and industry standards relating to AI may limit some uses of AI, impose significant operational costs, and limit our ability to develop, deploy, or use AI technologies. Furthermore, the integration of AI technologies into our services may result in new or enhanced governmental or regulatory scrutiny. Failure to appropriately respond to this evolving landscape may result in legal liability, regulatory action, or reputational harm.

Foreign currency exchange rate fluctuations may adversely affect our results of operations.

Because our reporting currency is the U.S. dollar but our revenue is received in various other currencies due to our international operations, our revenue will be reduced when translated into U.S. dollars during periods of a strengthening U.S. dollar. In addition, as foreign currency exchange rates fluctuate, the translation of our international revenue into U.S. dollar-denominated operating results affects the period-over-period comparability of such results and will also result in foreign currency exchange gains and losses.

We depend on our key personnel.

Our future success will depend on our continued ability to identify, hire, develop, motivate, and retain highly skilled individuals across the markets where we operate, with the continued contributions of our management, our sales teams, and our technology teams being especially critical to our success. Competition for well-qualified employees is intense, and our continued ability to compete effectively depends, in part, on our ability to attract new employees.

Effective succession planning is also important to our future success. If we fail to ensure the effective transfer of management or other institutional knowledge, our ability to execute short- and long-term strategic, financial, and operating goals, as well as our business, financial condition, and results of operations generally, could be adversely affected.

In addition to intense competition for talent, workforce dynamics are constantly evolving, such as recent broad shifts to hybrid work models. If we do not manage changing workforce dynamics effectively, it could materially adversely affect our culture, reputation, and operational flexibility going forward.

Our success depends, in part, on the integrity of our systems and infrastructure and on our ability to enhance, expand, and adapt these in a timely and cost-effective manner.

To succeed, our systems and infrastructure must perform well on a consistent basis. We may from time to time experience system interruptions that make some or all of our systems or data unavailable and prevent our services from functioning properly for our users. Any such interruption could arise for any number of reasons, including as a result of our own actions, actions by government agencies, cyberattacks, fire, power loss, telecommunications failures, computer viruses, software bugs, acts of God, and similar events. While we have backup systems in place for certain aspects of our operations, not all of our systems and infrastructure are fully redundant, disaster recovery planning is not sufficient for all eventualities, and our property and business interruption insurance coverage may not be adequate to fully compensate us for any losses that we may suffer. Any interruptions or outages, regardless of the cause, could negatively impact our users’ experiences, tarnish our reputation, and decrease demand for our services, any or all of which could adversely affect our business, financial condition, and results of operations.

We will work on our technology and network to improve the experience of our users, accommodate substantial increases in the volume of traffic to our various platforms, and ensure acceptable load times for our services, and keep up with changes in technology and user preferences. Any failure to do so in a timely and cost-effective manner could adversely affect our users’ experience with our various services, thereby negatively impacting the demand for our services, and could increase our costs, either of which could adversely affect our business, financial condition, and results of operations.

From time to time, we may augment and enhance, or transition to other, enterprise resource planning, human resources, financial, or other systems. Such actions may cause us to experience difficulties in managing our systems and processes, which could disrupt our operations, the management of our finances, and the reporting of our financial results, which, in turn, may result in our inability to manage the growth of our business and to accurately forecast and report our results, each of which could adversely affect our business, financial condition, and results of operations.

We may not be able to protect our systems and infrastructure from cyberattacks and may be adversely affected by cyberattacks experienced by third parties.

As we build out our online offerings, we may find ourselves targeted by cyberattacks, computer viruses, worms, bot attacks or other destructive or disruptive software, distributed denial of service attacks, and attempts to misappropriate customer information, including personal user data, credit card information, and account login credentials. While we continue to invest in the protection of our systems and infrastructure, in related personnel and training, and in employing a data minimization strategy where appropriate, there can be no assurance that our efforts will prevent significant breaches in our systems or other such events from occurring. Any cyber or similar attack that we are unable to protect ourselves against could damage our systems and infrastructure, prevent us from providing our services, tarnish our reputation, result in the disclosure of confidential or sensitive information of our users, and be costly to remedy, as well as subject us to investigation by regulatory authorities or to litigation that could result in liability to third parties.

The impact of cyber or similar attacks experienced by any third parties who provide services to us or might otherwise process data on our behalf could have a similar effect on us. Even cyber or similar attacks that do not directly affect us or our third-party service providers or data processors may result in widespread access to user data, for instance through account login credentials that such users might have used across multiple internet sites, including our sites, or directly through access to user data that these third-party service providers could process in the context of the services they provide to us. These events can lead to government enforcement actions, fines, and litigation, as well as a loss of consumer confidence generally, which could make users less likely to use or continue to use our services. The occurrence of any of these events could have an adverse effect on our business, financial condition, and results of operations.

Our success depends, in part, on the integrity of third-party systems and infrastructure.

We may rely on third parties, primarily data centers and cloud-based, hosted web service providers, as well as third-party computer systems, service providers, and broadband and other communications systems, in connection with the provision of our services generally, as well as to facilitate and process certain transactions with our users. We will have no control over any of these third parties or their operations, and such third-party systems are increasingly complex. Any changes in service levels at our data centers or hosted web service providers or any interruptions, outages, or delays in our systems or those of our third-party providers, deterioration in the performance of these systems, or cyber or similar attacks on these systems could impair our ability to provide our services or process transactions with our users, which would adversely impact our business, financial condition, and results of operations.

If the security of personal and confidential or sensitive user information that we maintain and store is breached or otherwise accessed by unauthorized persons, it may be costly to mitigate the impact of such an event and our reputation could be harmed.

We receive, process, store, and transmit a significant amount of personal user and other confidential or sensitive information, including, without limitation, credit card information and user-to-user communications. We also enable our users to share their personal information with each other. In some cases, we may engage third-party service providers to store or process this information. We work to protect the security, integrity, and confidentiality of this information, but we cannot guarantee that inadvertent or unauthorized use or disclosure will not occur in the future or that third parties will not gain unauthorized access to, or will not use for unauthorized purposes, this information despite our efforts. When such events occur, we may not be able to remedy them, and we may be required by an increasing number of laws to notify regulators and individuals whose personal information was processed, used, or disclosed without authorization. We may also be subject to claims against us, including government enforcement actions, fines, and litigation, and have to expend significant capital and other resources to mitigate the impact of such events, including by developing and implementing protections to prevent future events of this nature from occurring. When breaches of security (or the security of our service providers) occur, the perception of the effectiveness of our security measures, the security measures of our service providers, and our reputation may be harmed, we may lose current and potential users, and our reputation and competitive position may be tarnished, any or all of which might adversely affect our business, financial condition, and results of operations.

Our business is subject to complex and evolving laws and regulations, including with respect to data privacy and platform liability. These laws and regulations are subject to change and uncertain interpretation, and could result in changes to our business practices, increased cost of operations, declines in user growth or engagement, legal claims, monetary penalties, or other harm to our business.

As we plan on expanding our footprint internationally, we will be subject to a variety of laws and regulations that involve matters that are important to or may otherwise impact our business. We are indirectly affected by laws and regulations in jurisdictions where we do not operate but our licensees do. Some laws and regulations can be enforced by private parties in addition to governmental entities and are constantly evolving and subject to change. As a result, the application, interpretation, and enforcement of these laws and regulations are often uncertain, particularly in the rapidly evolving industry in which we and our licensees operate, and such laws and regulations may be interpreted and applied inconsistently from jurisdiction to jurisdiction. These laws and regulations, as well as any associated inquiries, investigations, or other government actions, may be costly to comply with and may delay or impede the development of new services, require changes to or cessation of certain business practices, result in negative publicity, increase our operating costs, require significant management time and attention, and subject us to remedies that may harm our business, including fines or modifications to existing business practices.

Tax laws, in particular, are subject to interpretation by the relevant taxing authorities. While we endeavor to comply with applicable law, there can be no assurance that the relevant taxing authorities will not take a position contrary to us, and if so, that such position will not adversely affect us, directly or indirectly. Any events of this nature could adversely affect our business, financial condition, and results of operations.

Proposed or new legislation and regulations could also adversely affect our business. To the extent new or more stringent measures are required to be implemented, impose new liability, or limit or remove existing protections, our business, financial condition, and results of operations could be adversely affected.

The adoption of any laws or regulations that adversely affect the popularity or growth in use of the internet or our services, including laws or regulations that undermine open and neutrally administered internet access, could decrease user demand for our service offerings and increase our cost of doing business, thereby negatively impacting our business, financial condition, and results of operations.

We are subject to a number of risks related to credit card payments, including data security breaches and fraud that we or third parties experience, any of which could adversely affect our business, financial condition, and results of operations.

We will accept payment from our users primarily through credit card transactions and certain online payment service providers. When we or a third party experiences a data security breach involving credit card information, affected cardholders will often cancel their credit cards. In the case of a breach experienced by a third party, the more sizable the third party’s customer base and the greater the number of credit card accounts impacted, the more likely it is that our users would be impacted by the breach. To the extent our users are affected by such a breach experienced by us or a third party, we would need to contact such users to obtain new credit card information and process any pending transactions. It is likely that we would not be able to reach all affected users, and even if we could, some users’ new credit card information may not be obtained and some pending transactions may not be processed, which could adversely affect our business, financial condition, and results of operations.

Even if our users are not directly impacted by a given data security breach, they may lose confidence in the ability of service providers to protect their personal information generally, which could cause them to stop using their credit cards online or choose alternative payment methods that are less convenient or more costly for us or otherwise restrict our ability to process payments without significant effort on the part of the user or us, or both.

Additionally, if we fail to adequately prevent fraudulent credit card transactions, we may face litigation, fines, governmental enforcement action, civil liability, diminished public perception of our security measures, significantly higher credit card-related and remediation costs, or refusal by credit card processors to continue to process payments on our behalf, any of which could adversely affect our business, financial condition, and results of operations.

Inappropriate actions by certain of our users could be attributed to us and damage our reputation, which in turn could adversely affect our business.

Users of our services may in the future be physically, financially, emotionally, or otherwise harmed by individuals that such users meet through one of our services. If any users suffer or allege to have suffered any such harm, we could experience negative publicity or legal action that could damage our reputation. Similar events affecting users of our competitors’ services could result in negative publicity for our industry generally, which could in turn negatively affect our business.

In addition, our reputation may be adversely affected by actions of our users that are deemed to be hostile, offensive, defamatory, inappropriate, untrue, or unlawful. While our focus to date on offline matchmaking has helped to avoid such incidents, and while we intend to develop systems and processes that aim to monitor and review the appropriateness of content accessible through our online services, together with policies regarding illegal, offensive, or inappropriate use of our services, our users could nonetheless engage in activities that violate our policies. Such bad actors may also use emerging technologies, such as AI, to engage in such activities, making it more difficult for us to detect and prevent such negative behavior. Our safeguards may not be sufficient to avoid harm to our reputation, especially if such hostile, offensive, or inappropriate use is well-publicized.

We may fail to adequately protect our intellectual property rights or may be accused of infringing the intellectual property rights of third parties.

We rely heavily on our trademarks and related domain names and logos for marketing and to build and maintain brand loyalty and recognition. We also rely on patented and patent-pending proprietary technologies and trade secrets relating to our services.

We rely on a combination of laws as well as contractual restrictions to establish and protect our intellectual property rights. For example, we continue to apply to register, or secure by contract where appropriate, trademarks and service marks as they are developed and used, and we are reserving, registering, and renewing domain names as we deem appropriate. Effective trademark protection may not be available or sought in every country in which our services are made available, and contractual disputes may affect the use of marks governed by private contract. Similarly, not every variation of a domain name may be available or registered, even if available.

We generally will seek to apply for patents or other similar statutory protections as and when we deem appropriate, based on then-current facts and circumstances. No assurance can be given that any patent application we have filed or will file will result in a patent being issued, or that any existing or future patents will afford adequate protection against competitors and similar technologies. In addition, no assurance can be given that third parties will not create new products or methods that achieve similar results without infringing upon patents we own.

Despite these measures, our intellectual property rights may still not be protected in a meaningful manner, challenges to contractual rights could arise, third parties could copy or otherwise obtain and use our intellectual property without authorization, our existing trademarks, patents, or trade secrets could be determined to be invalid or unenforceable, or laws and interpretations of laws regarding the enforceability of existing intellectual property rights may change over time in a manner that provides less protection. The occurrence of any of these events could tarnish our reputation, limit our marketing ability, or impede our ability to effectively compete against competitors with similar technologies, any of which could adversely affect our business, financial condition, and results of operations.

We may also occasionally be subject to legal proceedings and claims regarding intellectual property, including claims of alleged infringement of trademarks, copyrights, patents, and other intellectual property rights held by third parties and of invalidity of our own rights. In addition, we may decide we should engage in litigation to enforce our intellectual property rights, protect our trade secrets and patents, or to determine the validity and scope of proprietary rights claimed by others. Any litigation of this nature, regardless of outcome or merit, could result in substantial costs and diversion of management and technical resources, any of which could adversely affect our business, financial condition, and results of operations.

We intend to expand to various international markets, including markets in which we have limited experience, and as a result, we face additional risks in connection with those operations.

Operating internationally, particularly in countries in which we have limited experience, exposes us to a number of additional risks, such as:

These risks could adversely affect our business, financial condition, and results of operations.

We are subject to litigation, and adverse outcomes in such litigation could have an adverse effect on our financial condition.

From time to time, we may become subject to litigation, and to various legal proceedings relating to employment matters, intellectual property matters, and privacy and consumer protection laws, as well as stockholder derivative suits, class action lawsuits, mass arbitrations, and other matters. Such litigation and proceedings may involve claims for substantial amounts of money or for other relief, may result in significant costs for legal representation, arbitration fees, or other legal or related services, or might necessitate changes to our business or operations. The defense of these actions is likely to be time consuming and expensive. We will evaluate these litigation claims and legal proceedings to assess the likelihood of unfavorable outcomes and to estimate, if possible, the amount of potential loss. Based on these assessments and estimates, we may establish reserves or disclose the relevant litigation claims or legal proceedings as and when required or appropriate. These assessments and estimates will be based on information available to our management at the time of such assessment or estimation and will involve a significant amount of judgment. As a result, actual outcomes or losses could differ materially from those envisioned by our current assessments and estimates. Our failure to successfully defend or settle any of these litigation claims or legal proceedings could result in liability that, to the extent not covered by our insurance, could have an adverse effect on our business, financial condition, and results of operations.

Our operations are subject to volatile global economic conditions, particularly those that adversely impact consumer confidence and spending behavior.

Adverse macroeconomic conditions, including lower consumer confidence, changes to fiscal and monetary policy, the availability and cost of credit, and weakness in the economies in which we and our users are located may continue to adversely affect our business, financial condition, and results of operations. In recent years, the United States, Europe and other key global markets have experienced historically high levels of inflation, which have impacted, among other things, employee compensation expenses. If inflation rates rise again or continue to remain historically high or further increase in those locations where inflation rates remain elevated, it will likely affect our expenses, and may reduce consumer discretionary spending, which could affect the buying power of our users and lead to a reduction in demand for our services. Other events and trends that could result in decreased levels of consumer confidence and discretionary spending include a general economic downturn, recessionary concerns, high unemployment levels, and increased interest rates, as well as any sudden disruption in business conditions. Economic growth in Mainland China has declined notably in recent years, affecting us through the impact on Hong Kong’s economy and potentially through our China-based licensee. Additionally, geopolitical developments, such as wars in Ukraine and the Middle East, tensions between the United States and China, climate change, and the responses by central banking authorities to control inflation (in some economies of the West) or boost growth (in China), can increase levels of political and economic unpredictability globally and increase the volatility of global financial markets.

THE ACQUISITION

Overview

On March 18, 2024, the Company entered into the Purchase Agreement and the Exchange Agreement to acquire a total of 70% of the issued and outstanding ordinary shares of YYEM, from the sole shareholder of YYEM, Mr. Hongyu Zhou, or the YYEM Seller, for a combined $56 million. The consummation of the transactions contemplated in the Purchase Agreement and the Exchange Agreement will result in a change in control of the Company, as the shareholders of YYEM will become the owners of 82.4% of the issued and outstanding shares of common stock of the Company (the “Common Stock”). As part of this transaction, as further described below under the heading “The Separation Agreement,” the Company has agreed to sell its wholly owned subsidiary, Slinger Bag Americas Inc., to a newly established entity.

See below for more detailed discussion of the terms of the Exchange Agreement.

The Acquisition Structure

Pursuant to the Purchase Agreement, the Company agreed to purchase, and the YYEM Seller agreed to sell, 2,000 ordinary shares of YYEM, representing 20% of the issued and outstanding ordinary shares of YYEM, for the purchase price of $16,500,000 (the “Share Purchase Consideration”), payable in cash (the “Share Purchase Transaction”). The Company would pay 48% of the Share Purchase Consideration (or $8,000,000) at the closing of the Share Purchase Transaction and would pay the remaining 52% of the Share Purchase Consideration (or $8,500,000) within two weeks of the closing date of the Share Purchase Transaction. The Share Purchase Transaction closed on March 20, 2024. The $16.5 million was paid in full as of April 3, 2024. As a result, the Company owns 20% of the capital stock of YYEM.

Pursuant to the Exchange Agreement, the Company has agreed to purchase, and the YYEM Seller has agreed to sell, 5,000 ordinary shares of YYEM, representing 50% of the issued and outstanding ordinary shares of YYEM, for the Exchange Shares consisting of 162,551,440 newly issued shares of Common Stock to the YYEM Seller (the “Share Exchange Transaction”). The Exchange Shares are expected to represent 82.4% of the issued and outstanding shares of Common Stock as of the date of the closing of the Share Exchange Transaction.

The Exchange Shares will be issued without registration under the Securities Act, in reliance upon a safe harbor for offshore transactions or an exemption from registration for transactions not involving a public offering and, as such, will constitute “restricted securities” within the meaning of Rule 144 under the Securities Act. Under Rule 144, the Exchange Shares generally may not be offered or sold publicly unless they have been held for at least six months and subject to other conditions.

Separation Agreement

In connection with the Exchange Transaction, the Company has agreed that at or prior to the Closing Date, it will enter into a separation agreement to sell, transfer and assign all or substantially all of its legacy business, assets and liabilities related to or necessary for the operations of its “Slinger Bag” business or products (the “Legacy Business”) to a newly established entity (“NewCo”), and that after the Closing Date, NewCo will have the sole right to and obligations of the Legacy Business and will be liable to the Company for any losses arising from third-party claims against the Company that arise from liabilities related to the Legacy Business (the “Separation”). The form of the Separation Agreement is attached to this proxy statement as Annex C. NewCo will be owned by Yonah Kalfa and Mike Ballardie.

On a pro forma basis, as of April 17, 2024, the Legacy Business’ assets were approximately $5.2 million (which represents the assets of the Company as of January 31, 2024, minus, on a pro forma basis, the $16.5 million used for the purchase of 20% ownership of YYEM in April 2024), and the liabilities of the Legacy Business were $17.7 million (which represents the liabilities of the Company as of January 31, 2024, minus, on a pro forma basis, the $7 million of liabilities converted into equity from February 1^st to April 17^th).

Financial Accommodations

As an inducement to the Company to complete the Acquisition, the Agreements provide that aggregate payments of $5 million shall be made to the Company in cash by YYEM, as follows: (i) $800,000 payable within two business days of the date of the Agreements; (ii) $1,200,000 payable within three business days of the Company changing its ticker symbol from “CNXA” to “YYAI” or such other symbol as the parties may agree; (iii) $500,000 to be deposited in an escrow account at the Closing, which amount shall be held in the escrow account for a period of 30 days from the Closing Date and paid to NewCo provided no claims relating to the period prior to the Separation are made against the Company; and (iv) $2,500,000 payable at the Closing to the Company.

Nasdaq Stock Market Listing

Our common stock is currently listed on Nasdaq under the symbol “YYAI.” We have agreed to use commercially reasonable efforts to obtain approval for listing on Nasdaq of the Exchange Shares. It is a condition to closing that the common stock be listed on Nasdaq and no reason shall exist as to why such listing shall not continue immediately following the closing.

Executive Officers and Directors of the Company Following the Closing of the Acquisition

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

In the above table, the “*” denotes that our Board has determined that the director meets the independence requirements of the SEC and Nasdaq.

At or after the Closing, all current members of the Board shall resign with such resignation being effective on the later of the Closing or the appointment or election of the new directors.

Set forth below is biographical information for the proposed officers and directors for the period following the Closing.

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

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

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

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

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

Hongyu Zhou has 15 years of experience founding, growing, and managing successful enterprises. His experience extends to such areas as enterprise management, entertainment technology, and information technology, including as an investor and business manager of a technology company, as a founder and manager of an innovative entertainment company, and as the founder and manager of several technology companies. Mr. Zhou has served as the Chairman of each of Shenzhen Qiangwo Entertainment Technology Co. and Shenzhen Qianyue Information Technology Co., Ltd. since 2021. Mr. Zhou is also the founder of Shenzhen YuanZu Century Network Technology Co. since 2020 and Shenzhen Qiangwo Entertainment Co. since 2017. In founding, managing, and growing companies across various industries, Mr. Zhou has honed his skills in strategic planning, business development, and team leadership.

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

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

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

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

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

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

Effect of the Acquisition

Pursuant to the Purchase Agreement and the Exchange Agreement, among other things and subject to the terms and conditions contained therein, we will acquire 70% of the outstanding capital stock of YYEM from the YYEM Seller in exchange for a $16.5 million payment in cash and the issuance to the YYEM Seller of the Exchange Shares. Upon completion of the Acquisition, the Connexa stockholders immediately prior to the Acquisition will retain ownership of their shares of our common stock. The $16.5 million was paid in full as of April 3, 2024. As a result, the Company owns 20% of the capital stock of YYEM.

Effect if the Acquisition is Not Completed

If the Share Exchange Proposal is not approved at the Annual Meeting, or the Acquisition is not completed for any reason, it is likely that our common stock will be delisted from Nasdaq, with all the attendant risks described in the “Risks Related to the Acquisition” section of this proxy statement. Furthermore, if the Acquisition is not completed, the price of Connexa’s common stock may decline significantly. If that were to occur, it is uncertain when, if ever, the price of Connexa’s Common Stock would reach the price implied in the Acquisition or at which it traded as of the date we announced the Purchase Agreement and Exchange Agreement or the date of this proxy statement. Accordingly, if the Acquisition is not completed, there can be no assurance as to the effect on the future value of your shares of our Common Stock.

Reasons for the Acquisition

In evaluating the Acquisition and recommending that Connexa’s stockholders vote to approve the Share Exchange Proposal, the Board, in consultation with Connexa’s senior management, outside legal counsel and financial advisors, considered numerous positive factors relating to the Purchase Agreement, the Exchange Agreement, the Acquisition and the other transactions contemplated thereby, including the following material factors:

Our Board believes that the potential benefits of the Acquisition and the other transactions contemplated by the Exchange Agreement, including the Separation, outweigh the risks and uncertainties of the Acquisition.

In the course of reaching the determinations and decisions and making the recommendation described above, the Board, in consultation with Connexa’s senior management, outside legal counsel and financial advisors, considered the risks and potentially negative factors relating to the Exchange Agreement, the Acquisition and the other transactions contemplated thereby, including the following material factors:

The foregoing discussion of factors considered by the Board is not intended to be exhaustive but is a summary only of the material factors considered by the Board. In light of the variety of factors considered in connection with its evaluation of the Acquisition, the Board did not find it practicable to, and did not, quantify or otherwise assign relative weights to the specific factors considered in reaching its determinations and recommendations. Moreover, each member of the Board applied his or her own personal business judgment to the process and may have given different weight to different factors. The Board did not undertake to make any specific determination as to whether any factor, or any particular aspect of any factor, supported or did not support its ultimate determination. The Board based its recommendation on the totality of the information presented.

Background of the Acquisition

At the beginning of the Company’s fiscal year 2023, management recognized that with deteriorating capital markets, the Company’s ability to raise funds to continue its “Slinger Bag” business had become and would continue to be increasingly difficult. To address these external market conditions, the Company’s management and Board commenced an assessment of our business, financial condition, results of operations and prospects, and reviewed other opportunities including inorganic options.

After a thorough process in which over 10 companies were contacted, management and our Board, in consultation with our advisors, determined that the Acquisition with YYEM and the Separation of our Legacy Business was the best possible strategy for our shareholders and the Company. Following are further details on this process.

The following chronology summarizes key meetings and events that led to the signing of the Purchase Agreement and Exchange Agreement. This chronology does not purport to catalogue every conversation of, by, with or among members of the Board, the Company’s management, legal advisors or other representatives or any other person.

The Company operates in the sports equipment and technology business. 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.

Beginning in May 2021, at the direction of our executive team and Board, we commenced an assessment of our business, financial condition, results of operation and prospects, and a potential strategic investment in the Company to raise the working capital that we estimated would be needed to support our business and operations.

As previously disclosed, the Company appeared at a hearing before the Nasdaq Hearing Panel on March 30, 2023 to address the previously disclosed non-compliance with the Nasdaq Listing Rules regarding (a) the filing of the Company’s Annual and Quarterly Reports with the SEC, (b) majority independent director, audit committee and compensation committee composition requirements, and (c) the bid price rule. On April 12, 2023, Nasdaq notified the Company that the Panel had granted the Company’s request for continued listing on Nasdaq had been granted subject to certain conditions.

On July 26, 2023, the Company received a letter from 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. On January 30, 2024, the Company received a letter from Nasdaq confirming that following the receipt of an investment of $16.5 million as disclosed in the Company’s Current Report filed on Form 8-K on January 24, 2024, the Company had regained compliance with the minimum shareholder equity requirement in Listing Rule 5550(b)(1).

On August 2, 2023 and September 18, 2023, the Company received letters from Nasdaq indicating that because the Company had failed to file its Annual Report on Form 10-K for the year ended April 30, 2023 and its Quarterly Report on Form 10-Q for the period ended July 31, 2023, respectively, the Company was not in compliance with the obligation to timely file all required periodic financial reports with the SEC as set forth in Nasdaq Listing Rule 5250(c)(1).

On December 12, 2023, the Company received a letter from Nasdaq informing the Company that because the closing bid price for the Company’s 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).

To address the Nasdaq deficiencies listed above and to continue the Company’s operations, in fiscal year 2023, management began considering ways to further reduce operating expenses and potential strategies to raise funds to augment our working capital, including a possible equity line of credit and restructuring of our outstanding warrants in exchange for the warrant holders’ exercise of the warrants.

After a thorough process in which over 10 companies were contacted, management and our Board, in consultation with our advisors, determined that the Acquisition with YYEM and the Separation of our Legacy Business was the best possible strategy for our shareholders and the Company.

On November 19, 2023, we executed a term sheet with YYEM. Subsequent discussions took place in December, leading to the formalization of an escrow agreement in the same month. Additionally, we engaged in a series of inquiries and responses to facilitate YYEM’s due diligence process.

On November 19, 2023, we received a non-binding letter of intent from YYEM regarding the acquisition of Connexa in a reverse merger transaction.

In January 2024, we pursued a transaction with strategic investors, but they withdrew from the arrangement unexpectedly. Following this setback, we sought advice from investment bankers recommended by an existing investor. The Board, however, decided that the various transactions proposed in initial discussions with these bankers and in discussions with the investor were not viable options. Given these circumstances, pursuing an acquisition emerged as the most viable option, offering a realistic chance of success without entailing unduly adverse terms.

Between January 2024 and March 2024, our management and advisors conducted diligence regarding YYEM and negotiated the definitive terms of the Acquisition with YYEM and its advisors through multiple in-person and online meetings, as well as by visiting YYEM and its China-based licensee partner in person.

On March 14, 2024, Ravia Global Appraisal Advisory Limited delivered its valuation report to our management.

After discussions with management and a review of the valuation report in Board meetings held on March 14, 2024 and March 18, 2024, our Board unanimously approved the Acquisition.

On March 21, 2024, we reported in the Current Report on Form 8-K that on March 18, 2024, we signed the Purchase Agreement and Exchange Agreement to acquire 70% of the capital stock of YYEM in exchange for a $16.5 million cash payment and the Exchange Shares. We also reported that the closing of the Separation was expected to occur on or prior to the closing date of the Acquisition.

Valuation Report of Ravia Global Appraisal Advisory Limited

On March 14, 2024, Ravia Global Appraisal Advisory Limited (“Ravia”) provided a valuation report of YYEM to the Board to the effect that, as of January 31, 2024 and based on investigation and analysis conducted by Ravia and subject to Ravia’s scope of work and limitations in scope of work, information available, the assumptions adopted and the valuation method employed as set forth in its valuation report, the investment value of 100% of the equity interest of YYEM was $96,600,000.

Ravia’s valuation report was performed for a valuation of 100% of the equity interest of YYEM under YYEM’s specific objective and assumption, and was prepared solely for the use of the directors and management of YYEM for internal reference purpose, such as business development, strategic planning and internal discussion. The summary of the valuation report describes the procedures followed, assumptions made, qualifications, conditions and limitations on the review undertaken and other matters considered by Ravia in connection with the preparation of the valuation report. Neither Ravia’s valuation report nor the summary of its valuation report and the related analyses set forth in this proxy statement are intended to be, nor do they constitute, advice or a recommendation to the Board, the Company or any security holder as to how to act or vote on any matter relating to the Acquisition or otherwise.

In connection with rendering its valuation report, Ravia has confirmed, among other things, that it:

Ravia’s opinion was solely based upon the assumptions stated in the valuation report and the information provided by the management of YYEM and has not verified the accuracy of the information provided and have assumed that the aforesaid information is accurate. While all data set forth in the report are reasonable and accurately determined to the best of Ravia’s knowledge, and the data, opinions, or estimates identified as being furnished by others that have been used in formulating Ravia’s analysis are gathered from reliable sources, Ravia made no guarantee or assumed any liability for their accuracy. The valuation reflects facts and conditions existing at the date of valuation report; subsequent events have not been considered, and Ravia is not required to update the report for such events and conditions.

Set forth below is a summary of Ravia’s valuation report. The following summary, however, does not purport to be a complete description of the valuation performed by Ravia.

Summary of Ravia’s Valuation Report

Source of Information

The valuation considered a range of relevant factors including, but not limited to, the following:

Overview of YYEM

Established in November 2021, YYEM is based in Hong Kong and has a single shareholder, Hongyu Zhou. Mr. Zhou is also the sole shareholder of YYEM’s China-based licensee. YYEM operates in the emerging “love & marriage” market sector, where, according to YYEM management, YYEM competes with US-based companies such as Match Group Inc (MTCH) and Bumble (BMBL).

According to YYEM’s management, the expected corporate structure of YYEM in 2025 is as follows:

Revenue Growth

YYEM is now engaged in generating royalty revenues through the licensing of its intellectual property, which is used by licensees, including its China-based licensee, for their offline and online matchmaker platforms and will be further utilized by the new licensees operating in the UK/Europe, Sub-Saharan Africa, and Hong Kong/South East Asia markets, as well as by newly established subsidiary markets in the future.

According to the management, its China-based licensee currently operates 200 retail stores across 40 cities and expects to have 3,000,000 registered users by the end of fiscal year 2024. Revenue from each registered user can be as high as RMB10,000 (approximately $1,500), consisting of the one-time matchmaking service fees that provide the user with a personalized service delivered through the “Hand-In-Hand” store-front operations.

The expected longer-term revenue growth of the China-based “Hand-in-Hand” business can be directly attributable to the rapid expansion of their retail stores across all provinces and cities. Store expansion is planned to increase from the 200 stores currently operating in 2023 to 1,000 stores in 2024, 3,000 stores in 2025 and 10,000 stores in 2026. This store expansion is expected to drive the matchmaker user base to a target of 100,000,000 subscribers. The China operation now provides a template for new licensees and future subsidiary markets to replicate.

YYEM has already identified external investment capital to fund the store expansion plan in 2024 and 2025 and is planning to utilize its free cash flows to fund expansion in 2026 and beyond. Meanwhile, the online matchmaking business, delivered through its proprietary app, for which YYEM has numerous software-related, China-issued patents, will officially launch in late 2024. According to the due diligence report  , YYEM has recently developed an artificial intelligence (AI) matchmaker application, which according to the management, is designed to integrate with other large AI models such as Huawei Pangu, Baidu 6 Wenxinyiyan, Alibaba Tongyi, and Tencent Hunyuan. In addition, YYEM possesses six underlying metaverse-related technologies and nine patents in relation to the AI matchmaking application, which together enable access to Augmented Reality (AR) and eXtended Reality (XR), further enhancing YYEM’s future revenue growth potential in the online matchmaking segment. According to the management, the application is already being tested in the market to ensure the optimum user experience. The management anticipates that a large proportion of YYEM’s registered base of users will become subscribers of the AI matchmaking app and expand their matchmaking reach via a metaverse app.

As part of its longer-term vision, YYEM plans to develop a complete 360-degree platform that will drive incremental revenue by providing registered users with access to products and services that meet both their professional and social status.

YYEM has entered into license agreements with three regional or international non-affiliated companies. These agreements provide YYEM with contracted revenues through December 2026. Licensee details are as follows:

Intellectual Property

The intellectual property used by YYEM for its business operations was transferred by Mr. Zhou during YYEM’s fiscal year 2023. This intellectual property underpins YYEM’s matchmaker operations and covers its online activities, including its website, all app-based products and its proposed metaverse activities.

The proprietary intellectual property owned by YYEM facilitates the analysis of big data to drive consumers to their websites, apps and retail stores and to track user lifestyle choices as YYEM works to deliver matchmaking events that lead to successful life partnerships. Key elements of YYEM’s intellectual property assets are designed to integrate into existing big data platforms. The company has numerous patents issued in China that cover specific attributes of its unique matchmaking platforms, both its online apps and its planned offline stores.

Adopted Approach for the Valuation

The income approach is adopted in the valuation as it takes the future growth potential and firm-specific issues into consideration and derives the expected value to YYEM on a continuing-use basis. Under the income approach, the Discounted Cash Flow (“DCF”) method, which begins with an estimation of the annual cash flows a market participant acquirer would expect the asset to generate over a discrete projection period, is adopted. The estimated cash flows for each of the years in the discrete projection period are then converted to their present value equivalent using a rate of return appropriate for the risk of achieving the asset’s projected cash flows. The present values of the estimated cash flows are then added to the present value equivalent of the residual value of the asset (if any) at the end of the discrete projection period to arrive at an estimate of the value of the specific asset.

In order to estimate the value of YYEM and perform an overall reasonability assessment, it is required to determine the appropriate discount rate for YYEM. As such, Ravia has adopted the weighted average cost of capital (“WACC”) as a basic discount rate. WACC represents the weighted average return attributable to all of the operating assets of YYEM.

The concept of marketability addresses liquidity considerations of an ownership interest, that is, how readily an ownership interest can be converted into cash if the owner chooses to liquidate. Compared to similar interests in public companies, ownership interests in privately held company are not readily marketable. Therefore, the value of a share in a privately held company is in general less than that in a publicly held company. The discount for lack of marketability (“DLOM”) approach is a downward adjustment to the value of an investment in order to reflect its lower level of marketability. In this valuation, a DLOM of 15.7% was adopted.

In the valuation, the adopted parameters were determined with reference to the information in respect of publicly listed companies that were considered to be comparable to YYEM (the “Comparable Companies”). Since no company is exactly like YYEM, a set of Comparable Companies was required for valuing YYEM. To determine the Comparable Companies appropriately, the selection criteria were focused on companies that are principally engaged in the offline or online matchmaking business and are listed on a major stock exchange, with securities that have traded actively for a reasonable period, with sufficiency of information such as financial and operational information accessible from the market. Comparable Companies include Match Group Inc., Bumble Inc., ibj Inc., Matrimony.Com Ltd., Grindr Inc., Love Group Global Ltd., and Prosiebensat.1 Media SE.

Under the DCF method, a forecast of free cash flow streams is required throughout the projection period until an assumed stabilization occurs for the assets being appraised or until the end of economic useful life of the subject assets. Free cash flow will not necessarily be assumed to be stable in the near projection period but is expected to be mature and stabilized in the long run. To determine the future cash flow derived from YYEM, Ravia solely relied on the financial projection (the “Projection”) provided by YYEM management. The timeframe of the free cash flow projection was eight years, starting from February 1, 2024 to January 31, 2032 (the “Projection Period”). The projected revenue, gross profit and selling, general and administrative expenses for the Projection Period provided by the management are as follows:

Revenue

According to YYEM management, the revenue for the three years ending December 2026 is contracted by the three regional licensing agreements discussed above, which provide for a three-year cumulative revenue of $76 million (approximately 63% of the total projected revenue in the first three years).

Gross Profit

Selling, General and Administrative Expenses (SG&A Expenses)

Major Assumptions

In conducting the valuation work, certain major assumptions were adopted by Ravia in order to sufficiently support its opinion of value. In addition, Ravia’s valuation analyses are also subject to specific representations and certain principal assumptions that YYEM management considered necessary and appropriate for adoption in the valuation analyses, which are as follows:

In case actual events do not accord with one or more of the above assumptions, the resulting value of YYEM may vary substantially from the figure set out in Ravia’s valuation report.

Miscellaneous

Ravia is a well-known independent valuation and advisory group based in Hong Kong. It was founded by experts including professional property surveyors, business appraisers, certified practicing accountants, and business development specialists. Ravia serves listed companies, auditors and other professional parties that need professional valuation services based on rigorous analysis and technical expertise.

Ravia received a fee of HKD250,000 (approximately $32,000) from YYEM for providing its valuation. This valuation fee was not contingent upon the consummation of the Acquisition. Further, YYEM has agreed to reimburse Ravia for its expenses and to indemnify Ravia against certain liabilities that might arise in relation to its engagement. In the ordinary course of Ravia’s business, Ravia and its affiliates may actively trade securities of Connexa for Ravia’s own account or the account of its customers and, accordingly, may at any time hold a long or short position in such securities. Ravia has not performed valuation services, material financial advisory, or any other services for YYEM in the past. Ravia has not performed valuation services, material financial advisory, or any other services for Connexa or their respective affiliates.

Closing and Effective Time of the Acquisition

We are working to complete the Acquisition as quickly as possible, and we expect to complete the Acquisition on or about June 15, 2024 if the Share Exchange Proposal is approved. However, we cannot assure you when or if the Acquisition will occur. The Acquisition is subject to other conditions, and it is possible that factors outside the control of both Connexa and YYEM could result in the Acquisition being completed at a later time, or not at all.

Dissenters’ and Appraisal Rights

Connexa stockholders do not have dissenters’ or appraisal rights under the DGCL in connection with the Acquisition and will not be afforded such rights.

Accounting Treatment

Both Connexa and YYEM prepare their financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”).

Board of Directors and Management Following the Acquisition

At or after the Acquisition, the Board shall comprise those individuals designated by YYEM Seller, and all current members of the Board shall resign with such resignation being effective on the later of the Closing or the appointment or election of the new directors.

Interests of Connexa’s Directors and Officers in the Acquisition

As of the Record Date, the directors and executive officers of Connexa as a group owned and were entitled to vote approximately 4,482,341 shares of our common stock, representing 12.87% of the outstanding shares. Connexa expects that its directors and executive officers will vote their shares in favor of each of the proposals to be presented at the Annual Meeting.

Except as referred to above, the directors and executive officers of the Company do not have interests in the Acquisition different than the stockholders of Connexa.

Regulatory Approvals Required for the Acquisition

Under Nasdaq Listing Rule 5635(a)(1), a company listed on Nasdaq is required to obtain stockholder approval prior to the issuance of common stock, among other things, in connection with the acquisition of another company’s stock if the number of shares of common stock to be issued is in excess of 20% of the number of shares of common stock then outstanding. Although the Exchange Shares will only constitute 19.99% of our issued and outstanding shares of common stock immediately prior to Closing, it will result in the issuance of more than 20% of our issued and outstanding shares of common stock immediately prior to Closing in connection with the Acquisition.

Under Nasdaq Listing Rule 5635(b), a listed company is required to obtain stockholder approval prior to the issuance of common stock that will result in a “change of control” of the company (which may be deemed to occur if, as a result of the issuance, an investor or affiliated investor group acquires, or has the right to acquire, at least 20% of the outstanding shares of common stock (or securities convertible into or exercisable for common stock) or voting power of an issuer and such ownership or voting power would be the largest ownership position of the issuer). You should note that a “change of control” as described under Nasdaq Listing Rule 5635(b) applies only with respect to the application of such rule.

Accordingly, in order to ensure compliance with Nasdaq Listing Rule 5635(a)(1) and Rule 5635(b), we must obtain the approval of our stockholders for the issuance of the Exchange Shares in connection with the Acquisition. Furthermore, under the Exchange Agreement, stockholder approval of the issuance of the Exchange Shares is a condition to closing the Acquisition.

Except as set forth above, the Acquisition and the transactions contemplated by the Exchange Agreement are not subject to any additional federal or state regulatory requirement or approval, except for Nasdaq’s approval of listing of the Exchange Shares, Nasdaq’s approval of the Reverse Stock Split, and the filings with the Secretary of State of the State of Delaware necessary to effectuate the Capital Increase Proposal if they are approved at the Annual Meeting.

THE EXCHANGE AGREEMENT

General

On March 18, 2024, the Company entered into the Purchase Agreement and Exchange Agreement with YYEM Seller and YYEM.

Pursuant to the Exchange Agreement, the Company has agreed to purchase, and the YYEM Seller has agreed to sell, 5,000 ordinary shares of YYEM, representing 50% of the issued and outstanding ordinary shares of YYEM, for 162,551,440 newly issued shares of Common Stock to the YYEM Seller. The shares are expected to represent 82.4% of the issued and outstanding shares of Common Stock as of the date of the closing of the Share Exchange Transaction.

Representations and Warranties

The Exchange Agreement contains customary representations and warranties made by the YYEM Seller and YYEM. Specifically, the representations and warranties in the Exchange Agreement (many of which are qualified by concepts of knowledge, materiality and/or dollar thresholds, as may or may not be specifically indicated in the text of the Exchange Agreement) relate to the following subject matters, among other things:

The Exchange Agreement also contains customary representations and warranties made by Connexa to YYEM. Specifically, the representations and warranties of Connexa in the Exchange Agreement (some of which are qualified by concepts of knowledge and/or materiality) relate to the following subject matters, among other things: due organization and qualification to do business; requisite authority and power; binding obligations; subsidiaries; organizational documents; capitalization; brokers and finders; compliance with laws; legal and other proceedings; contracts; financial statements; taxes; absence of certain changes; proxy statement information and financial disclosures; validity of representation and warranties.

Many of the representations and warranties contained in the Exchange Agreement are qualified by a materiality standard, including in some cases a “Buyer Material Adverse Effect” or “Company Material Adverse Effect” (as defined in the Exchange Agreement). Moreover, the representations and warranties contained in the Exchange Agreement are complicated and not easily summarized. You are urged to carefully read the sections of the Exchange Agreement, which is attached hereto as Annex A, titled “Representations and Warranties of Seller” and “Representations and Warranties of Buyer.”

The representations and warranties contained in the Exchange Agreement (as well as the covenants described herein and set forth in the Exchange Agreement) were made solely for purposes of the Exchange Agreement and solely for the benefit of the parties to the Exchange Agreement, may be subject to limitations agreed upon by the contracting parties, including being qualified by references to the Company’s filings with the SEC and confidential disclosures, were made for the purposes of allocating contractual risk among the parties to the agreements instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to stockholders. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Exchange Agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures. The Company will provide additional disclosure in its public reports to the extent that it is aware of the existence of any material facts that are required to be disclosed under federal securities laws that might contradict the terms and information contained in the Exchange Agreement and will update such disclosure as required by federal securities laws. The representations and warranties will not survive the closing of the Acquisition.

Covenants and Agreements

Connexa has agreed to carry on its business in the ordinary course and substantially in the manner currently conducted, and has further agreed to not take any of the following actions, without the prior written consent of the YYEM, such consent not to be unreasonably withheld, conditioned or delayed:

Post-Closing Covenants

The Parties each agree that they will take any further action (including the execution and delivery of such further instruments and documents) as any other party may reasonably request in the event it is necessary to carry out the purposes of the Exchange Agreement.

Indemnification

From and after the Closing, the Company and YYEM Seller agreed to indemnify each other, and their respective Affiliates, employees, agents, partners, representatives, successors and permitted assigns, and hold them harmless against any losses any such indemnified party may suffer or become subject to as a result of, or which arise out of, relate to, or are caused by (i) any inaccuracy in or breach of any respective representation or warranty set forth in the Exchange Agreement or in any certificate; or (ii) any breach of any respective covenant or agreement set forth in the Exchange Agreement, unless and until the aggregate amount of all losses subject to indemnification thereunder exceeds $100,000, which threshold shall not apply to losses arising from or incurred as a result of fraud.

Public Announcements

Connexa filed a Current Report on Form 8-K on March 21, 2024, describing the material terms of the Exchange Agreement and the transactions contemplated thereby. Prior to the Closing, Connexa and YYEM shall consult with each other in issuing any press releases or otherwise making public statements or filings and other communications with the SEC or any other regulatory agency or Nasdaq with respect to the transactions contemplated by the Acquisition and the Exchange Agreement. The parties shall all receive the prior written consent of the others before issuing a press release or otherwise making a public statement, filings or other communications. The disclosing party shall use commercially reasonable efforts to provide the other parties with at least three days’ prior notice of such disclosure and shall incorporate in the disclosure the reasonable comments of the other parties.

Efforts to Obtain Nasdaq Approval, and Continued Listing

We are also required to use our commercially reasonable best efforts to cause the Exchange Shares to be issued and to be approved for listing on Nasdaq and to continue to trade on Nasdaq following the Closing. Failure to continue being listed on Nasdaq will result in our common stock being illiquid.

Financial Accommodations

As an inducement to the Company to complete the Acquisition, the Agreements provide that aggregate payments of (a) $5 million shall be made to the Company in cash by YYEM as follows: (i) $800,000 payable within two business days of the date of the Agreements; (ii) $1,200,000 payable within three business days of the Company changing its ticker symbol from “CNXA” to “YYAI” or such other symbol as the parties may agree; (iii) $500,000 to be deposited in an escrow account at the Closing, which amount shall be held in the escrow account for a period of 30 days from the Closing Date and paid to NewCo provided no claims relating to the period prior to the Separation are made against the Company; and (iv) $2,500,000 payable at the Closing to the Company.

Conditions to Closing of the Acquisition

The Exchange Agreement provides that:

We cannot provide assurance as to when, or if, all of the closing conditions will be satisfied or waived by the relevant party. As of the date of this proxy statement, we have no reason to believe that any of the conditions will not be satisfied.

Closing Deliverables

At the Closing, the Company shall deliver to YYEM Seller the following:

At the Closing, YYEM Seller shall deliver to the Company the following:

Termination

The Exchange Agreement may be terminated by mutual written consent of the Company and the YYEM Seller at any time before the Closing or by either the Company or the YYEM Seller at any time before the Closing if the Share Exchange Transaction has not been consummated by the date that is 180 days from the date of the Exchange Agreement (the “Terminated Date”) or if any party breaches the Exchange Agreement with respect to the closing conditions and such breaches cannot be cured by the Termination Date. If the Exchange Agreement is terminated by the Company unilaterally and of its own volition other than due to the aforementioned termination conditions, the Company shall be liable for a termination fee in the amount of three times the fees and costs incurred by the YYEM Seller in connection with the Share Exchange Transaction up to a maximum amount in the aggregate of $600,000, with certain exceptions, including, but not limited to lack of SEC or Nasdaq approval or lack of approval from holders of shares of Common Stock of the Share Exchange Transaction.

Fees and Expenses

Except as described above under “Financial Accommodations,” each party will bear its own expenses in connection with the Exchange Agreement and the transactions contemplated thereby.

Third-Party Beneficiaries

Except as set forth in the Exchange Agreement, nothing expressed or referred to in the Exchange Agreement will be construed to give any person other than the parties to the Exchange Agreement any legal or equitable right, remedy, or claim under or with respect to the Exchange Agreement or any provision of the Exchange Agreement.

Governing Law

All matters arising out of or relating to the Exchange Agreement (including its interpretation, construction, performance and enforcement) shall be governed by and construed in accordance with the Law of the State of New York without giving effect to any choice or conflict of law provision or rule that would cause the application of Laws of any jurisdictions other than those of the State of New York.

FINANCIAL INFORMATION RELATED TO THE ACQUISITION

Financial Statements of the Company

The audited financial statements of the Company for the years ended April 30, 2023 and April 30, 2022 and the unaudited financial statements of the Company for the nine months ended January 31, 2024 and January 31, 2023 are included herein. See “Index to Financial Statements” below in this proxy statement.

A representative of Olayinka Oyebola & Co. is not expected to be present at the Annual Meeting or to be available to comment or respond to questions.

Management’s Discussion and Analysis of Financial Condition and Results of Operations of the Company

The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements and related notes included elsewhere in this proxy statement and our Annual Report on Form 10-K for the year ended April 30, 2023. Certain statements in this discussion and elsewhere in this report constitute forward-looking statements. See “Cautionary Statement Regarding Forward-Looking Information” elsewhere in this proxy statement. Because this discussion involves risks and uncertainties, our actual results may differ materially from those anticipated in these forward-looking statements.

Overview

Lazex Inc. (“Lazex”) was incorporated under the laws of the State of Nevada on July 12, 2015. On August 23, 2019, the majority owner of Lazex entered into a Stock Purchase Agreement with Slinger Bag Americas Inc., a Delaware corporation (“Slinger Bag Americas”), which was 100% owned by Slinger Bag Ltd. (“SBL”), an Israeli company. 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 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. Effective September 13, 2019, Lazex changed its name to Slinger Bag Inc.

On October 31, 2019, Slinger Bag Americas acquired control of Slinger Bag Canada, Inc., (“Slinger Bag Canada”) a Canadian company incorporated on November 3, 2017. There were no assets, liabilities or historical operational activity of Slinger Bag Canada.

On February 10, 2020, Slinger Bag Americas became the 100% owner of SBL, along with SBL’s wholly owned subsidiary Slinger Bag International (UK) Limited (“Slinger Bag UK”), which was formed on April 3, 2019. On February 10, 2021, Zehava Tepler, the owner of SBL, contributed Slinger Bag UK to Slinger Bag Americas for no consideration.

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.

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”). 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 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. 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. 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.

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. 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. On December 5, 2022, the Company analyzed this investment and established a reserve for the investment at the full amount of $500,000.

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:

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 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, 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. 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 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 impaired all goodwill as of April 30, 2023.

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 Company agreed to pay Meged $17,538 each week until the Meged Receivables Purchased Amount is paid in full.

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”). 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. On January 22, 2024, the Company consummated and received a cash investment of $16,500,000 (as described in more detail below), which increased the company’s stockholder equity to $4,484,993, which has brought the Company back into compliance with the Minimum Stockholders’ Equity Requirement. On January 30, 2024, the Company received a letter from Nasdaq confirming that following the receipt of a an investment of $16.5 million as disclosed in the Company’s current report filed on Form 8-K on January 24, 2024 (i) the Company has regained compliance with the minimum shareholder equity requirement in Listing Rule 5550(b)(1) (the “Equity Rule”), as required by the Nasdaq Hearing Panel’s decision dated April 12, 2023, and (ii) in application of Listing Rule 5815(d)(4)(B), the Company will be subject to a mandatory panel monitor for a period of one year from the date of such letter. If, within that one-year monitoring period, the Company is no longer in compliance with the Equity Rule, then, notwithstanding Rule 5810(c)(2), the Company will not be permitted to provide Nasdaq with a plan of compliance with respect to such deficiency and Nasdaq will not be permitted to grant additional time for the Company to regain compliance with respect to such deficiency, nor will the Company be afforded an applicable cure or compliance period pursuant to Ruel 5810(c)(3). Instead, Nasdaq will issue a delist determination letter and the Company will have the opportunity to request a new hearing. The Company will have the opportunity to respond/present to the hearing panel as provided by Listing Rule 5815(d)(4)(C) and the Company’s securities may at that time be delisted from Nasdaq.

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. The Company agreed to pay UFS $30,000 each week until the UFS Second Receivables Purchased Amount is paid in full.

In order to secure payment and performance of the Company’s obligations to UFS under the UFS Agreement, the Company granted to UFS a security interest in the following collateral: all accounts receivable and all proceeds as such term is defined by Article 9 of the UCC. 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.

On September 13, 2023, the Company held a special meeting of stockholders in which the following items were approved: (i) the issuance of (i) 25,463 shares of the our common stock, par value $0.001 per share, that were issued on October 3, 2022, and, (ii) 295,051 shares of our common stock issuable upon exercise of Pre-Funded Warrants at an exercise price of $0.00001 per share, (iii) 320,513 shares of common stock issuable upon the exercise of 5-Year Warrants at an exercise price of $15.60 per share, (iv) 641,026 shares of common stock issuable upon the exercise of 7.5 Year Warrants at an exercise price of $17.20 per share and (v) 452,489 shares of our common stock issuable upon the exercise of 5.5 Year Warrants at an exercise price per share equal to $8.84 per share to an investor and (ii) a reverse stock split of our common stock within a range of 1-for-10 to 1-for-40, with the Board to set the specific ratio and determine the date for the reverse stock 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 Company effected a 1-for-40 reverse stock split of its common stock on September 25, 2023.

On September 25, 2023, as a result of the shareholder approval obtained at the special meeting of stockholders on September 13, 2023 and the reverse stock split, the aggregate number of Pre-Funded Warrants, 5-Year Warrants, 5.5-Year Warrants and 7-Year Warrants increased from 1,709,097 to 9,426,952 due to certain adjustments that were required to be made by the terms of the relevant warrants in the event of receipt of shareholder approval and the occurrence of the reverse stock split.

On September 19, 2023, the Company entered into an agreement with Meged (the “Second Meged Agreement”) pursuant to which the Company sold $423,000 in future receivables to Meged (the “Meged Second Receivable Amount”) in exchange for paying the then outstanding balance of $70,153.20 of the Meged Receivables Purchased Amount in full with the balance being retained by the Company in cash for general purposes. The Company agreed to pay Meged $15,107.14 each week until the Meged Second Receivable Amount is paid in full.

In order to secure payment and performance of the Company’s obligations to Meged under the Second Meged Agreement, the Company granted to Meged a security interest in the following collateral: all accounts receivable and all proceeds as such term is defined by Article 9 of the UCC. 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.

On September 19, 2023, the Company entered into an agreement with Meged (the “Second Meged Agreement”) pursuant to which the Company sold $423,000 in future receivables to Meged (the “Meged Second Receivable Amount”) in exchange for paying the then outstanding balance of $70,153.20 of the Meged Receivables Purchased Amount in full with the balance being retained by the Company in cash for general purposes. The Company agreed to pay Meged $15,107.14 each week until the Meged Second Receivable Amount is paid in full.

In order to secure payment and performance of the Company’s obligations to Meged under the Second Meged Agreement, the Company granted to Meged a security interest in the following collateral: all accounts receivable and all proceeds as such term is defined by Article 9 of the UCC. 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.

On October 11, 2023, the Company entered into a loan and security modification agreement (the “Loan and Security Modification Agreement”) with a one or more institutional investors (the “Lenders”) and a certain institutional investor, as agent for the Lenders (the “Agent”) amending the terms of the Loan and Security Agreement dated January 6, 2023 (the “LSA”) by and among the Company, the Lenders and the Agent to make an additional loan of $1,000,000 and modify the terms of the LSA to reflect the New Loan.

In connection with the Loan and Security Modification Agreement, the Company agreed to issue to the investor warrants (the “Common Warrants”) to purchase up to 169,196 shares of Common Stock at an exercise price of $1.90 per share. The Common Warrants are exercisable nine months after their issuance and will expire five and one-half years from their date of issuance. The Common Warrants and the shares of our Common Stock issuable upon the exercise of the Common Warrants are not being registered under the Securities Act of 1933, as amended (the “Securities Act”), were not offered pursuant to the Registration Statement and were offered pursuant to the exemption provided in Section 4(a)(2) under the Securities Act, and Rule 506(b) promulgated thereunder.

On October 12, 2023, the Board approved an amendment to the Bylaws of the Company to reduce the percentage of shares of stock, issued and outstanding and entitled to vote, to be present in person or represented by proxy in order to constitute a quorum for the transaction of any business from a majority to thirty three and one third percent (33-1/3%).

On November 14, 2023, the Company issued 224,472 shares of Common Stock to Sapir LLC. Sapir LLC is controlled by Aitan Zacharin, an investor relations and financial structuring consultant to the Company who is a party to an amended and restated consulting agreement with the Company dated April 30, 2020 (the “AZ Consulting Agreement”). Pursuant to the AZ Consulting Agreement, the Company owed Mr. Zacharin $127,500 as consulting fee compensation through November 30, 2023 (the “Consulting Fee Compensation”). In addition, the Company granted Mr. Zacharin $127,500 as discretionary compensation (“Discretionary Compensation”) pursuant to Section 2.1(d) of the AZ Consulting Agreement. In consideration of the Consulting Fee Compensation and the Discretionary Compensation, the issuance of shares of Common Stock consisted of (i) 160,338 shares of Common Stock as payment of the Consulting Fee Compensation, and (ii) 64,134 shares of Common Stock as payment of the Discretionary Compensation.

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.

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. 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.

On December 6, 2023, the Company entered into an inducement offer letter agreement (the “Inducement Letter”) with the holder of certain of the Company’s existing warrants to purchase up to a total of 4,972,203 shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”), consisting of: (i) 1,410,151 shares of Common Stock issuable upon the exercise of warrants issued on September 28, 2022 each at an exercise price of $3.546 per share with a term of five year (the “September 2022 Five Year Warrants”); (ii) 3,109,563 shares of Common Stock issuable upon the exercise of warrants issued on September 28, 2022 each at an exercise price of $3.546 per share with a term of seven and one half years (the “September 2022 Seven and a Half Year Warrants”); and (iii) 452,489 shares of Common Stock issuable upon the exercise of warrants issued on January 6, 2023 (the “January 2023 Warrants” and, together with the September 2022 Five Year Warrants and the September 2022 Seven and a Half Year Warrants, the “Existing Warrants”).

Pursuant to the Inducement Letter, the holder of the warrants agreed to exercise for cash its Existing Warrants to purchase an aggregate of 4,972,203 shares of Common Stock at a reduced exercise price of $0.294 per share in consideration of the Company’s agreement to issue new common stock purchase warrants (the “New Warrants”), as described below, to purchase up to an aggregate of 9,944,406 shares of Common Stock (the “New Warrant Shares”). The Company received aggregate gross proceeds of $1,461,827.68 from the exercise of the Existing Warrants by the Holder, before deducting offering expenses payable by us. The transaction closed on December 7, 2023 (the “Closing Date”).

The resale of the shares of the Common Stock underlying the Existing Warrants and 224,472 shares of Common Stock owned by Sapir LLC, a consultant engaged by the Company were registered pursuant to an existing registration statement on Form S-1 (File No. 333-275407), declared effective by the SEC on December 4, 2023.

The Company also agreed to file a registration statement on Form S-1 (or other appropriate form if it is not then Form S-1 eligible) providing for the resale of the New Warrant Shares issued or issuable upon the exercise of the New Warrants (the “Resale Registration Statement”), within 60 days after the Closing Date, and to use commercially reasonable efforts to have such Resale Registration Statement declared effective by the SEC within 120 days following the Closing Date and to keep the Resale Registration Statement effective at all times until no holder of the New Warrants owns any New Warrants or New Warrant Shares. The Company will have to pay partial liquidated damages pursuant to the Resale Registration Statement provision of the Inducement Letter if certain deadlines and requirements are not met. In the Inducement Letter, the Company agreed not to issue any shares of Common Stock or Common Stock equivalents or to file any other registration statement with the SEC (in each case, subject to certain exceptions) until 60 days after the Closing Date. The Company also agreed not to effect or agree to effect any Variable Rate Transaction (as defined in the Inducement Letter) until one (1) year after the Closing Date (subject to an exception). In addition, the Company agreed in the Inducement Letter to grant the Holder a participation right in future financings until the date the principal amount of a promissory note issued to the Holder in January 2023 and as modified in October 2023 has been fully repaid.

On December 12, 2023, the Company received a letter (the “Notice”) from the Listing Qualifications Department (the “Staff”) of Nasdaq informing the Company that because the closing bid price for the Company’s common stock listed on Nasdaq was below $1.00 for 30 consecutive trading days, the Company is not in compliance with the minimum bid price requirement for continued listing on the Nasdaq as set forth in Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”). In accordance with Nasdaq Marketplace Rule 5810(c)(3)(A), the Company has a period of 180 calendar days from December 12, 2023, or until June 10, 2024, to regain compliance with the Minimum Bid Price Requirement. If at any time before June 10, 2024, the closing bid price of the Company’s common stock closes at or above $1.00 per share for a minimum of 10 consecutive trading days (which number days may be extended by Nasdaq), Nasdaq will provide written notification that the Company has achieved compliance with the Minimum Bid Price Requirement, and the matter would be resolved. The Notice also disclosed that in the event the Company does not regain compliance by June 10, 2024, the Company may be eligible for an additional 180-calendar day compliance period. To qualify for additional time, the Company would be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for Nasdaq, with the exception of the bid price requirement, and would need to provide written notice of its intention to cure the deficiency during the second compliance period, by effecting a reverse stock split, if necessary. In the event the Company is not eligible for the second grace period, Nasdaq will provide written notice that the Company’s common stock is subject to delisting. If the Company is notified by Nasdaq that its securities will be subject to delisting, the Company may appeal the delisting determination and request a hearing before the Nasdaq Hearings Panel (the “Panel”). If the request for a Panel is timely made, any further suspension or delisting action would be stayed pending the conclusion of the hearing process and expiration of any extension that may be granted by the Panel. There can be no assurance that the Company will be able to satisfy the Nasdaq’s continued listing requirements, regain compliance with the Minimum Bid Price Requirement, the Minimum Stockholders’ Equity Requirement, and maintain compliance with other Nasdaq listing requirements.

There can be no assurance that the Company will be able to satisfy the Nasdaq’s continued listing requirements, regain compliance with the Minimum Bid Price Requirement, and maintain compliance with other Nasdaq listing requirements.

On January 10, 2024, the Company entered into an agreement with Agile Capital Funding, LLC (the “Agile Jan Agreement”) pursuant to which the Company sold $1,460,000 in future receivables to Agile Capital Funding, LLC (the “Agile Jan Receivable Amount”) in exchange for $1,000,000 in cash. The Company agreed to pay Agile Capital Funding, LLC (“Agile”) $52,142.86 each week until the Agile Receivable Amount is paid in full. In order to secure payment and performance of the Company’s obligations to Agile under the Agile Jan Agreement, the Company granted to Agile a security interest in the following collateral: all present and future accounts receivable. 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. The proceeds from the sale of future receivables were used, in part, to pay the outstanding balance of the ACF Receivable Amount (as defined below).

On 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) 2,330,200 shares of common stock (the “Shares”) and (ii) pre-funded warrants (the “Pre-Funded Warrants”) to purchase an aggregate of 25,169,800 shares of its common stock at a combined purchase price of $0.20 per share of the common stock for an aggregate amount of approximately $16.5 million (the “Offering”). The Pre-Funded Warrants have an exercise price of $0.00001 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. The aggregate number of Shares to be issued is 6,990,600 and the aggregate number of Pre-Funded Warrants is 75,509,400.

On January 23, 2024, the Company issued 200,000 shares of Common Stock to Smartsports LLC. Smartsports LLC is an investor relations consultant to the Company who is a party to a consulting agreement with the Company dated January 23, 2024 (the “Smartsports Consulting Agreement”). Pursuant to the Smartsports Consulting Agreement, the Company agreed to issue and deliver to Smartsports LLC 200,000 shares of its common stock as a consulting fee for the provision of investor relations services (the “Consulting Fee Compensation”) and use its commercially reasonable efforts to prepare and file with the Securities Exchange Commission a registration statement covering the resale of all of the Shares on Form S-1 as soon as is reasonably practicable.

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. The Company agreed to pay Cedar Advance LLC (“Cedar”) $39,440 each week until the Cedar Receivable Amount is paid in full. In order to secure payment and performance of the Company’s obligations to Cedar under the Cedar Agreement, the Company granted to Cedar a security interest in the following collateral: all present and future accounts receivable. 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.

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. 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.

Results of Operations for the Three Months Ended January 31, 2024 and 2023

The following are the results of our operations for the three months ended January 31, 2024 as compared to 2023:

Net sales

Net sales increased $463,776, or 29%, during the three months ended January 31, 2024 as compared to the three months ended January 31, 2023. The increase was due to incremental sales being driven by Slinger Bag Pickleball as compared to the 3 months to 31, January 2023 as Slinger Bag Pickleball had not been introduced to the market at that time. This increase in net sales came despite on-going inventory shortage issues that resulted in significant delays to meeting consumer demand due to higher than planned sales orders. Had inventory been at our normal levels, sales would have been greater in this three month period.

Cost of sales and Gross income

Cost of sales increased $240,887 or 45% during the three months ended January 31, 2024 as compared to the three months ended January 31, 2023, which is primarily due to the increase in net sales. Gross income increased $222,889, or 21%, during the three months ended January 31, 2024 as compared to the three months ended January 31, 2023. This improvement in gross income is driven by a combination of the higher levels of net sales and a greater efficiencies realized in our supply chain across both container rates and ocean freight.

Selling and marketing expenses

Selling and marketing expenses increased $464,853, or 172%, during the three months ended January 31, 2024 as compared to the three months ended January 31, 2023. This increase is largely driven by an increase in social media advertising across both Tennis and Pickleball, and other investments in our public relations presence. Marketing investment was also made behind the beta launch of the Slinger Bag App for tennis.

General and administrative expenses

General and administrative expenses, which primarily consist of compensation (including share-based compensation) and other employee-related costs, as well as legal fees and fees for professional services, increased $914,179 or 50% during the three months ended January 31, 2024 as compared to the three months ended January 31, 2023. This increase is primarily driven by an increase in debt settlement, legal and other professional fees in the period.

Research and development costs

Research and development costs decreased $3,638 or 100% during the three months ended January 31, 2024 as compared to the three months ended January 31, 2023. This decrease is primarily driven by our need to pause all development activity in the period due to limited cash flow being available for investment.

Loss From Operations

Loss from operations increased by $1,152,505 or 111%% in the three months ended January 31, 2024 as compared to the three months ended January 31, 2023. This increase in loss in operations was driven by a combination of an $1,375,394 increase in total operating expenses recorded in the quarter, offset by an improvement in gross income of $222,889.

Other expense

Total other expense decreased $4,210,649 or 65% during the three months ended January 31, 2024 as compared to the three months ended January 31, 2023. We recorded an improvement in both amortization of debt discounts of $217,775 and in fair value of derivatives of $5,070,525. Excluding these improvements, we recorded other expenses totaling $3,102,141 and $2,024,490 for the periods to January 31, 2024 and 2023 respectively, an increase of $1,077,651. The increases in other expenses for the three months ended January 31, 2024 as compared to January 31, 2023 included an increase in derivative and interest expenses offset by a reduction in interest to related parties.

Results of Operations for the Nine Months Ended January 31, 2024 and 2023

The following are the results of our operations for the nine months ended January 31, 2024 as compared to 2023:

Net sales

Net sales decreased $147,232, or 2%, during the nine months ended January 31, 2024 as compared to the nine months ended January 31, 2023. The decrease was primarily due to inventory shortages in January 2024 due to higher than planned sales orders.

Cost of sales and Gross income

Cost of sales decreased $601,500 or 11% during the nine months ended January 31, 2024 as compared to the nine months ended January 31, 2023, which is primarily due to the reduction in net sales combined with greater efficiencies realized in our supply chain, resulting in a gross margins of 37.8% and 31.2% for the nine months to 31, January 2024 and 2023 respectively. Gross income increased $454,268, or 19%, during the nine months ended January 31, 2024 as compared to the nine months ended January 31, 2023 due to the reduction in cost of sales resulting from reduced net sales and efficiencies realized in both container volumes and rates and associated ocean freight.

Selling and marketing expenses

Selling and marketing expenses decreased $91,709, or 7%, during the nine months ended January 31, 2024 as compared to the nine months ended January 31, 2023. This decrease is largely driven by a decrease in the costs associated with ambassador agreements that expired and were not renewed, offset by a net increase in spend against social media advertising and other investments in our public relations presence.

General and administrative expenses

General and administrative expenses, which primarily consist of compensation (including share-based compensation) and other employee-related costs, as well as legal fees and fees for professional services, decreased $2,688,785 or 28% during the nine months ended January 31, 2024 as compared to the nine months ended January 31, 2023. This decrease is primarily driven by a decrease in share-based compensation as well as in both headcount and outside consulting costs and in all professional fees.

Research and development costs

Research and development costs decreased $65,164 or 100% during the nine months ended January 31, 2024 as compared to the nine months ended January 31, 2023. This decrease is primarily a result of our need to pause all development activity in the period due to limited cash flow being available for research and development investments.

Loss from Operations

Loss from operations improved $3,299,926 or 38% in the nine months ended 31 January 2024 as compared to the nine months ended January 31, 2023. This improvement was driven by a combination of increased gross income $454,268 or 19% coupled with a reduction in total operating expenses of $2,845,658 or 26%.

Other expense

Total other expense improved $12,136,713 or 125% during the nine months ended January 31, 2024 as compared to the nine months ended January 31, 2023. We recorded a gains in fair value of derivatives of $18,523,422 compared to $3,295,687, in the nine months to January 31, 2024 compared to January 31, 2023. Excluding this gain, we had other expenses totaling $16,058,511 for the period to January 31 2024 compared to $12,967,489 for the same period to January 31, 2023 respectively, an increase in expense of $3,091,022. The increases in these other expenses for the nine months ended January 31, 2024 as compared to January 31, 2023 was a reduction in amortization of debt discounts and interest paid to related parties offset by increased expenses in loss on conversion of accounts payable to common stock and derivative expenses.

Liquidity and Capital Resources

Our financial statements have been prepared on a going concern basis, which assumes we will be able to realize our assets and discharge our liabilities in the normal course of business for the foreseeable future. We had an accumulated deficit of $154,607,884 as of January 31, 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. 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.

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. Management intends to finance operating costs over the next twelve months with existing cash on hand, loans from related parties, and/or private placement of debt and/or common stock. In respect to additional financing, refer to the consolidated financial statements herein. In the event that the Company is unable to successfully raise capital and/or generate revenues, the Company will likely reduce general and administrative expenses, and cease or delay its development plan until it is able to obtain sufficient financing. There can be no assurance that additional funds will be available on terms acceptable to the Company, or at all.

The following is a summary of our cash flows from operating, investing and financing activities for the nine months ended January 31, 2024 and 2023:

We had cash and cash equivalents of $17,192,733 as of January 31, 2024, as compared to $202,095 as of April 30, 2023.

Net cash used in operating activities was $(2,748,446) during the nine months ended January 31, 2024, as compared to net cash used in operating activities of $(6,845,810) during the same period in 2023. Our net cash used in operating activities during the nine months ended January 31, 2024 was primarily the result of our net income of $(2,857,274) for the period, and our net non-cash expenses of $1,379,337, incorporating the change in fair value of derivative liability, reductions in shares and warrants issued for services, share-based compensation, amortization of debt discounts, interest and interest due to related parties, settlement expense, loss on depreciation, amortization and impairment expenses, as well as changes in our current assets and liabilities related to our operations. The most notable changes occurred in our accounts receivables. inventory and prepaid inventory which all significantly decreased in the nine month periods, together with significant decreases in accounts payable, accrued expenses, derivative liabilities, contingent consideration and an increases in accrued interest, current portion of notes payable, net of discount related and other current liabilities.

Our net cash used in operating activities during the nine months ended January 31, 2024 was primarily the result of our net loss of $2,857,274 for the period and our net non-cash expenses of $1,279,377 as well as the changes in our operating current assets and liabilities.

We incurred no investing activities in either of the nine-month periods ended January 31, 2024 and 2023.

Net cash used in financing activities was $19,689,673 for the nine months ended January 31, 2024, as compared to net cash provided by financing activities of $6,481,772 for the same period in 2023. The changes is financing activities for the nine months ended January 31, 2024 primarily consisted of proceeds of $17,961,828 resulting from issuance of common stock and warrants, $3,728,000 from notes payable, offset by $710,216 in payments of notes payable to related parties and $1,289,939 in payments of notes payable. Changes in financing activities for the nine months ended January 31, 2023 consisted of proceeds of $9,194,882 resulting from issuance of common stock, offset with $62,434 in payments of notes to related parties and $4,040,676 in payment of notes payable.

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 Company agreed to pay Meged $17,538 each week until the Meged Receivables Purchased Amount is paid in full.

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. The Company agreed to pay UFS $30,000 each week until the UFS Second Receivables Purchased Amount is paid in full.

In order to secure payment and performance of the Company’s obligations to UFS under the UFS Agreement, the Company granted to UFS a security interest in the following collateral: all accounts receivable and all proceeds as such term is defined by Article 9 of the UCC. 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.

On September 19, 2023, the Company entered into an agreement with Meged (the “Second Meged Agreement”) pursuant to which the Company sold $423,000 in future receivables to Meged (the “Meged Second Receivable Amount”) in exchange for paying the then outstanding balance of $70,153.20 of the Meged Receivables Purchased Amount in full with the balance being retained by the Company in cash for general purposes. The Company agreed to pay Meged $15,107.14 each week until the Meged Second Receivable Amount is paid in full.

In order to secure payment and performance of the Company’s obligations to Meged under the Second Meged Agreement, the Company granted to Meged a security interest in the following collateral: all accounts receivable and all proceeds as such term is defined by Article 9 of the UCC. 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.

On October 11, 2023, the Company entered into a loan and security modification agreement (the “Loan and Security Modification Agreement”) with a one or more institutional investors (the “Lenders”) and a certain institutional investor, as agent for the Lenders (the “Agent”) amending the terms of the Loan and Security Agreement dated January 6, 2023 (the “LSA”) by and among the Company, the Lenders and the Agent to make an additional loan of $1,000,000 and modify the terms of the LSA to reflect the New Loan.

In connection with the Loan and Security Modification Agreement, the Company agreed to issue to the investor warrants (the “Common Warrants”) to purchase up to 169,196 shares of Common Stock at an exercise price of $1.90 per share. The Common Warrants are exercisable nine months after their issuance and will expire five and one-half years from their date of issuance. The Common Warrants and the shares of our Common Stock issuable upon the exercise of the Common Warrants are not being registered under the Securities Act, were not offered pursuant to the Registration Statement and were offered pursuant to the exemption provided in Section 4(a)(2) under the Securities Act, and Rule 506(b) promulgated thereunder.

Description of Indebtedness

Notes Payable - Related Party

On January 14, 2022, the Company entered into two loan agreements with Yonah Kalfa and Naftali Kalfa, each for $1,000,000, pursuant to which the Company received a total amount of $2,000,000. The loans bear interest at a rate of 8% per annum and are required to be repaid in full by July 31, 2024 or such other date as may be accepted by the lenders. The Company is not permitted to make any distribution or pay any dividends unless or until the loans are repaid in full.

There were $1,244,584 and $1,953,115 in outstanding borrowings from the Company’s related parties for the period ended January 31, 2024 and 2023, respectively. Accrued interest due to related parties as of January 31, 2024 and 2023 amounted to $917,957 and $ 917,957, respectively.

On January 6, 2023, we sold certain of our inventory including all components, parts, additions and accessions thereto to Yonah Kalfa and Naftali Kalfa who immediately consigned it back to us in exchange for a payment of $103 per ball launcher we sell until we have paid them an aggregate total of $2,092,700, which represents payment in full of the principal amounts of the Loan Agreements (as defined below) and certain other expenses they incurred in connection with the Company.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Effect of Inflation and Changes in Prices

We do not believe that inflation and changes in prices will have a material effect on our operations.

Going Concern

Our independent registered public accounting firm auditors’ report accompanying our April 30, 2023 financial statements contained an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The financial statements have been prepared assuming that we will continue as a going concern, which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business.

Financial Statements of YYEM

The audited historical financial statements of YYEM for fiscal years ended January 31, 2024 and January 31, 2023 are included in the “Index to Financial Statements” section of this proxy statement.

Management’s Discussion and Analysis of Financial Condition and Results of Operations of YYEM

Forward-looking statements

You should read the following discussion and analysis of YYEM’s financial condition and results of operations together with its financial statements and the related notes appearing elsewhere in this proxy statement. Among other things, those historical financial statements include more detailed information regarding the basis of presentation for the financial data than is included in the following discussion. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. YYEM’s actual results may differ materially from those discussed below.

YYEM was founded and first registered in Hong Kong on November 11, 2021. The Company’s founder and sole director is Hongyu Zhou.

The Company provides intellectual property, licensing and technology services and operates in the emerging “love & marriage” market sector, where it owns significant proprietary intellectual property which the Company believes is unique to this business sector, covering its online presence and underpinning its matchmaker operations. Its recently developed AI matchmaker application is designed to integrate with existing Big Data models and other larger AI models, such as Huawei Pangu, Baidu 6 Wenxinyiyan, Alibaba Tongyi, and Tencent Hunyuan. Additionally, YYEM possesses six technologies related to the metaverse and nine AI matchmaking patents, which together enable access to both Augmented Reality (AR) and eXtended Reality (XR), further enhancing its future revenue growth potential in the online matchmaking segment.

YYEM has an indirect operating business model in the Chinese market, where its licensee partner operates 200 Hand-in-Hand branded retail stores across 40 cities. One-time subscriber matchmaker fees, of amounts as high as $1,500, provide the subscriber with a bespoke matchmaking service delivered through face-to-face interactions across their owned stores.

YYEM collected royalties of around $1.9M in its year ended January 31, 2024 and has license agreements in place covering the UK/Europe, Sub-Saharan Africa, and South East Asia, with cumulative contracted revenue over the next three years in excess of $70 million.

Results of Operations for the Years Ended January 31, 2024 and 2023

The following are the results of our operations for the years ended January 31, 2024 as compared to 2023:

Revenues

Revenues increased by $1,666,667, or 650%, for the year ended January 31, 2024, as compared to the year ended January 31, 2023. This increase was driven by royalty income from newly appointed licensees as compared to the year ended January 31, 2023.

Cost of revenues and Gross profit

Cost of sales increased by $500,020, or 650%, for the year ended January 31, 2024, as compared to the year ended January 31, 2023, primarily due to the increase in amortization costs of two new intellectual property/technology rights. Gross profit increased by $1,166,647, or 650%, for the year ended January 31, 2024, as compared to the year ended January 31, 2023, driven by our higher royalty income.

General and administrative expenses

General and administrative expenses, which mainly consist of general administration expenses related to YYEM’s intellectual property, increased by $4,487, or 78%, for the year ended January 31, 2024, as compared to the year ended January 31, 2023. This was primarily driven by an increase in royalty revenues for the period.

Profit From operations

Profit from operations increased by $1,162,160, or 669%, for the year ended January 31, 2024, as compared to the year ended January 31, 2023, primarily as a result of the royalty income generated by new licensees and from the two new intellectual property/technology rights noted above.

Liquidity and Capital Resources

YYEM finances its operations primarily through cash generated from operations. YYEM recorded net current assets of $6,126,039 as of January 31, 2024, compared to $223,256 for the period ending January 31, 2023

As of January 31, 2024, the capital structure of YYEM consisted of equity attributable to owner of the company of $20,621,943, comprising issued share capital and reserves.

The following is a summary of our cash flows from operating, investing and financing activities for the years ended January 31, 2024 and 2023 respectively:

We had cash and cash equivalents of $499,678 as of January 31, 2024, as compared to $0 for the period ending January 31, 2023.

Net cash provided by operating activities was $499,678 for the year ended January 31, 2024, as compared to $0 for the same period in 2023. Our net cash provided by operating activities for the year ended January 31, 2024 was primarily the result of our net income of $1,335,898 for the period and our net non-cash expenses of $576,923 incorporating the amortization of technology rights.

Our net cash provided by operating activities for the year ended January 31, 2024 was primarily the result of our net income of $1,335,898 for the year and our net non-cash expenses of $576,923, as well as the changes in our operating current assets and liabilities.

There was no net cash used in investing activities and no net cash used in financing activities for either of the years ended January 31, 2024 and 2023.

Description of Indebtedness

The Company has no outstanding indebtedness.

Off Balance Sheet Arrangements

The Company has no off balance sheet arrangements.

Effect of Inflation and Changes in Prices

The Company does not believe that inflation and changes in prices will have a material effect on our operations.

Going Concern

The financial statements have been prepared assuming that we will continue as a going concern, which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

As a smaller reporting company, we are not required to provide this information.

DESCRIPTION OF YYEM BUSINESS

For purposes of this section only, “YYEM,” “we,” “us,” “our” or “the Company” refers to YYEM, together with its subsidiaries, unless the context otherwise requires.

Established in November 2021 and based in Hong Kong, YYEM provides intellectual property, licensing and technology services and operates in the emerging “love & marriage” market sector. YYEM owns what the Company believes is proprietary intellectual property unique to this business sector, covering the Company’s online presence and underpinning its matchmaker operations. Its recently developed AI matchmaker application is designed to integrate with existing Big Data models and other larger AI models, such as Huawei Pangu, Baidu 6 Wenxinyiyan, Alibaba Tongyi, and Tencent Hunyuan. Additionally, YYEM possesses six technologies related to the metaverse and nine AI matchmaking patents, which together enable access to both Augmented Reality (AR) and eXtended Reality (XR), further enhancing the Company’s future revenue growth potential in the online matchmaking segment.

Through interrogating and analyzing available Big Data, YYEM’s intellectual property supports the identification of its target subscriber base, while providing subscriber profile analysis and integrating with YYEM’s AI matchmaker platform, all of which will help YYEM to deliver effective matchmaking events and help subscribers to find successful life partnerships.

A licensee partner of YYEM that is located in China operates 200 retail stores across 40 cities. One-time subscriber matchmaker fees, reaching up to $1,500, provide the subscriber with a bespoke matchmaking service, delivered through face-to-face interactions across Hand-in-Hand branded offline stores.

YYEM collected royalties of approximately $1.9 million in its fiscal year ended January 31, 2024. In addition, YYEM has entered into term sheets with three entities (one in Hong Kong for rights to use the intellectual property in Japan and South Korea among other locations, one in the UK for rights to use the intellectual property in Europe, and one in the USA for rights to use the intellectual property in Sub-Saharan Africa), with cumulative revenues over the next three years anticipated to be in excess of $70 million.

PROPOSAL 1 - ELECTION OF DIRECTORS

Our Board is currently composed of five members. Vacancies on the Board and newly created directorships may be filled by the affirmative vote of a majority of the remaining directors then in office, although less than a quorum. A director elected by the Board to fill a vacancy (including a vacancy created by an increase in the number of directors) shall serve for the remainder of the full term of directors in which the vacancy occurred and until the director’s successor is elected and has duly qualified, or until such director’s earlier death, resignation or removal.

Nominees

Our Nominating and Corporate Governance Committee has recommended, and our Board has approved, the nominations of Mike Ballardie, Yonah Kalfa, Kirk Taylor, Stephen Crummey, and Rodney Rapson for election as directors at the Annual Meeting. If elected, Messrs. Ballardie, Kalfa, Taylor, Crummey, and Rapson will serve as directors until the 2025 annual meeting of stockholders and until their respective successors are duly elected and qualified. For information concerning the nominees, please see the section titled “Board of Directors and Corporate Governance.”

If you are a stockholder of record and you sign your proxy card or vote by telephone or over the Internet but do not give instructions with respect to the voting of directors, your shares will be voted “FOR” the re-election of each of Messrs. . Messrs. Ballardie, Kalfa, Taylor, Crummey, and Rapson have agreed to serve as directors if elected; however, in the event that either director nominee is unable or declines to serve as a director at the time of the Annual Meeting, your proxy will be voted for any nominee who shall be designated by our Board to fill such vacancy. If you are a street name stockholder and you do not give voting instructions to your broker or nominee, your broker will leave your shares unvoted on this matter.

Vote Required

Each of the five nominees receiving a plurality of the votes cast will be elected as directors. Abstentions and broker non-votes are not deemed to be votes “cast” and, therefore, will have no effect on the Election of Directors Proposal.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” EACH OF

THE NOMINEES NAMED ABOVE.

BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

The following table sets forth information about Messrs. Ballardie, Kalfa, Taylor, Crummey, and Rapson and each of the other current members of our Board, if any: