YYAI Connexa Sports Technologies Inc

 

As filed with the Securities Exchange Commission on February 14, 2025

 

Registration No. 333-284188

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Amendment No.1

to

FORM S-3

REGISTRATION STATEMENT

 

UNDER THE SECURITIES ACT OF 1933

 

 

CONNEXA SPORTS TECHNOLOGIES INC.

(Exact name of registrant as specified in its charter)

 

Delaware		61-1789640
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

 

74 E. Glenwood Ave. #320

Smyrna, DE 19977

(443) 407-7564

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

 

Vcorp Services LLC

1013 Centre Road, Suite 403-B

Wilmington, DE 19805

(888) 528-2677

(Address, including zip code, and telephone number, including area code, of agent for service)

 

With Copies to:

 

Joseph M. Lucosky, Esq.

Steven A. Lipstein, Esq.

Lucosky Brookman LLP

101 Wood Avenue South, 5th Floor

Woodbridge, New Jersey 08830

(732) 395-4400

 

 

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to time after the effective date of this registration statement.

 

If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. ☐

 

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. ☒

 

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

 

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

 

If this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective on filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. ☐

 

If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

 

 

Large-Accelerated Filer	☐	Accelerated Filer	☐
Non-Accelerated Filer	☒	Smaller Reporting Company	☒
		Emerging Growth Company	☐

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

 

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

 

 

 

EXPLANATORY NOTE

 

This registration statement contains two prospectuses:

 

●

a base prospectus covering the potential offering, issuance, and sale by us of up to $300 million of our common stock, preferred stock, debt securities, warrants, rights, and units; and

 

●

a sales agreement prospectus covering the potential offering, issuance, and sale by us of shares of our common stock having a maximum aggregate offering price of up to $3,196,275 that may be issued and sold under the sales agreement (the “Sales Agreement”) dated January 8, 2025 with A.G.P./Alliance Global Partners.

 

The base prospectus immediately follows this explanatory note. The specific terms of any securities to be offered pursuant to the base prospectus will be specified in a prospectus supplement to the base prospectus. The sales agreement prospectus, which specifies the terms of our common stock to be sold under the Sales Agreement, immediately follows the base prospectus. The common stock that may be offered, issued, and sold under the sales agreement prospectus is included in the $300 million of securities that may be offered, issued, and sold under the base prospectus. Upon termination of the Sales Agreement, any portion of the $3,196,275 included in the sales agreement prospectus that is not sold pursuant to the Sales Agreement will be available for sale in other offerings pursuant to the base prospectus and a corresponding prospectus supplement.

 

 

The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

 

Subject to Completion, dated February 14, 2025.

 

PROSPECTUS

 

CONNEXA SPORTS TECHNOLOGIES INC.

 

$300,000,000

 

Common Stock

Preferred Stock

Debt Securities

Warrants

Rights

Units

 

 

We may offer and sell up to $300 million in the aggregate of the securities identified above from time to time in one or more offerings. This prospectus provides you with a general description of the securities.

 

Each time we offer and sell securities, we will provide a supplement to this prospectus that contains specific information about the offering and the amounts, prices and terms of the securities. The supplement may also add, update or change information contained in this prospectus with respect to that offering. You should carefully read this prospectus and the applicable prospectus supplement before you invest in any of our securities.

 

We may offer and sell the securities described in this prospectus and any prospectus supplement to or through one or more underwriters, dealers and agents, or directly to purchasers, or through a combination of these methods. If any underwriters, dealers or agents are involved in the sale of any of the securities, their names and any applicable purchase price, fee, commission or discount arrangement between or among them will be set forth, or will be calculable from the information set forth, in the applicable prospectus supplement. See the sections of this prospectus entitled “About this Prospectus” and “Plan of Distribution” for more information. No securities may be sold without delivery of this prospectus and the applicable prospectus supplement describing the method and terms of the offering of such securities.

 

We are a “controlled company” as defined under the Nasdaq Stock Market Listing Rules, because our existing controlling shareholder Mr. Hongyu Zhou is able to exercise a majority of the total voting power of our Common Stock. As a controlled company, we may elect not to comply with certain Nasdaq corporate governance requirements, including the requirements to have (i) a board composed of a majority of independent directors; (ii) compensation of executive officers determined by a majority of the independent directors or a compensation committee comprised solely of independent directors; and (iii) director nominees selected or recommended for our board either by a majority of the independent directors or by a nominating committee comprised solely of independent directors. If we cease to be a “controlled company” and our shares are listed on Nasdaq, we will be required to comply with these standards and, depending on the independence determination with respect to our then-current directors, we may be required to add additional directors to our board to achieve such compliance within the applicable transition periods. We currently do, and intend to continue to, comply with the Nasdaq corporate governance requirements for companies that are not controlled companies.

 

The aggregate market value of our outstanding common stock held by non-affiliates is $9,588,826.46 based on 14,563,026 shares of outstanding common stock, of which 8,127,572 are held by affiliates, and a per share price of $1.49 based on the closing sale price of our common stock on January 14, 2025. Pursuant to General Instruction I.B.6 of Form S-3, in no event will we sell our common stock in a public primary offering with a value exceeding more than one-third of our public float in any 12-month period so long as our public float remains below $75,000,000. We have not offered any securities pursuant to General Instruction I.B.6. of Form S-3 during the prior 12 calendar month period that ends on and includes the date of this prospectus.

 

Our common stock is listed on the Nasdaq Capital Market under the symbol “YYAI.”

 

INVESTING IN OUR SECURITIES INVOLVES RISKS. SEE THE “RISK FACTORS” ON PAGE 7 OF THIS PROSPECTUS AND ANY SIMILAR SECTION CONTAINED IN THE APPLICABLE PROSPECTUS SUPPLEMENT CONCERNING FACTORS YOU SHOULD CONSIDER BEFORE INVESTING IN OUR SECURITIES.

  

We face risks associated with our operating subsidiary, Yuanyu Enterprise Management Co., Limited (“YYEM”) being based in the Hong Kong Special Administrative Region (“Hong Kong”) of the People’s Republic of China (the “PRC”). As a special administrative region of the PRC, Hong Kong enjoys separate governing and economic systems from that of mainland China under the principle of “one country, two systems.” The Basic Law of the Hong Kong Special Administrative Region (the “Basic Law”) provides that PRC laws and regulations shall not be applied in Hong Kong except for those listed in Annex III of the Basic Law, which is confined to laws relating to national defense, foreign affairs, and other matters that are not within the scope of autonomy. YYEM therefore is not directly subject to PRC laws and regulations regarding the general conduct of its business or regarding overseas listings. Nevertheless, Hong Kong is part of China, giving rise to a number of regulatory, liquidity, and enforcement risks. For example, we may face risks and uncertainties regarding the enforcement of laws and the fact that rules and regulations in the PRC can change quickly with little advance notice. In addition, the Chinese government could intervene or influence our operations at any time, or could exert more control over offerings conducted overseas or foreign investment in China-based issuers, which could result in a material change in our operations or the value of our Common Stock. Any actions by the Chinese government to exert more oversight and control over offerings that are conducted overseas or over foreign investment in China-based issuers, in particular any effort to extend such actions directly or indirectly to Hong Kong-based companies, could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless. See “The Company — Permission or Approvals Required from the PRC Authorities with respect to the Operations of YYEM.”

 

Following the completion of the Acquisition (as defined below), we directly own YYEM and do not have or intend to have any contractual arrangement to establish a variable interest entity (“VIE”) structure with any entity in mainland China. If we did have a VIE structure, any action by the Chinese government to disallow such structures would likely result in a material change in our operations and a material change in the value of the securities we are registering for sale, including the possibility that such development could cause the value of our securities to significantly decline or become worthless

 

 

In the event that YYEM were to become subject to PRC laws and regulations, it could incur material costs to ensure compliance, and it might be subject to fines, or no longer be permitted to continue business operations as presently conducted; and we could experience devaluation of our securities or delisting, or no longer be permitted to conduct offerings to foreign investors. Being based in Hong Kong, YYEM faces risks and uncertainties associated with the complex and evolving PRC laws and regulations, in particular, whether and how those laws and regulations, including recent PRC government statements and regulatory developments such as those relating to corporate structure, overseas listings, data- and cyberspace security, and anti-monopoly concerns, might be applicable to Hong Kong-based companies such as YYEM. If certain PRC laws and regulations were to become applicable to YYEM in the future, it could have a material adverse impact on our business, financial condition, and results of operations and on our ability to offer or continue to offer securities to investors, any of which could cause the value of our securities, including the shares that we are registering for sale, to significantly decline or become worthless.

 

One of YYEM’s licensees is based in Mainland China, which imposes various limitations, procedures, and formalities on payments out of China. YYEM understands from this licensee that because the royalties due under the applicable licensing agreement constitute current account payments, the payment of the royalties is permitted under PRC regulations, subject to certain routine requirements, but there can be no assurance that China’s capital controls will not hinder the ability of the licensee to make the required royalty payments on time or at all.

 

On December 16, 2021, the PCAOB reported that it was unable to completely inspect or investigate registered public accounting firms headquartered in mainland China or Hong Kong because of a position taken by one or more authorities in each of those jurisdictions. However, following the signing of a Statement of Protocol with the China Securities Regulatory Commission (the “CSRC”) and the Ministry of Finance of the PRC in August 2022, the PCAOB on December 15, 2022 vacated its previous determination and confirmed that it was now able to secure complete access to inspect and investigate registered public accounting firms headquartered in those jurisdictions. Nevertheless, should PRC authorities obstruct or otherwise fail to facilitate the PCAOB’s access in the future, the PCAOB may issue a new determination.

 

Neither our current auditor, Bush & Associates CPA (“B&A”), nor our former auditor, Olayinka Oyebola & Co. (“OOC”), is headquartered in mainland China or Hong Kong and neither was identified as an accounting firm subject to the determinations announced by the PCAOB in December 2021. Nevertheless, should B&A or OOC in the future have any work papers in China or Hong Kong that the PCAOB is unable to fully inspect, it will be difficult to evaluate the effectiveness of B&A’s or OOC’s audit procedures or equity control procedures and investors could consequently lose confidence in our reported financial information and procedures or the quality of our financial statements, which could adversely affect us and our securities. Furthermore, if trading in our securities is prohibited under the Holding Foreign Companies Accountable Act (“HFCAA”) in the future because the PCAOB determines that it cannot inspect or fully investigate B&A at such future time, an exchange will likely delist our securities. See “The Company — Permission or Approvals Required from the PRC Authorities with respect to the Operations of YYEM.”

 

OOC and its principal, Olayinka Oyebola, have been charged by the SEC in connection with allegedly aiding and abetting a securities fraud. On October 30, 2024, the Board of Directors and the audit committee approved the engagement of B&A as the Company’s independent registered public accounting firm for the fiscal year ended April 30, 2025, effective immediately, and dismissed OOC as the Company’s independent registered public accounting firm. Because OOC was also the independent registered public accounting firm for YYEM for the fiscal year ended January 31, 2024, if OOC’s audit work is found to be deficient, financial reporting of the Company and YYEM could be questioned, leading to potential restatements, delays in regulatory filings, or reputational harm. If OOC is barred from acting as auditors or accountants for U.S. public companies, we will be unable to include financial statements of the Company and YYEM reviewed by OOC in any filing made after that date, and those financial statements will need to be reaudited. Any of these outcomes could have a material adverse effect on our and YYEM’s business, financial condition, and stock price, which could contribute to the loss of all or part of your investment. See “Risk Factors — The SEC’s charges against our former independent auditor, Olayinka Oyebola & Co., could impact the credibility of our financial statements and those of YYEM, potentially leading to restatements and other adverse effects.”

 

We anticipate that revenue will primarily be received by YYEM, where it will be used to pay operating expenses and be reinvested in outsourced R&D, the purchase of additional patents and other intellectual property, and branding and other promotional activities, among other things. If needed, management may decide to transfer cash between YYEM and the Company, or between one of these two entities and any subsidiaries that we may establish or acquire in other jurisdictions. We do not intend to declare dividends or distribute earnings (if any) in the near future. Any determination to declare dividends or distribute earnings (if any) in the future will be at the discretion of our board of directors.

 

The Company and YYEM are not subject to any significant restrictions on buying or selling foreign exchange or on transferring cash between entities within our group, across borders, or to U.S. investors. Nor are there any significant restrictions or limitations on our ability to distribute earnings (if any) from YYEM to the Company and U.S. investors or our ability to settle amounts owed. However, there can be no assurance that the PRC government will not intervene or impose restrictions on the ability of YYEM to buy or sell foreign exchange or transfer or distribute cash within our organization.

 

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

 

The date of this prospectus is                  , 2025.

 

 

TABLE OF CONTENTS

 

ABOUT THIS PROSPECTUS	2
WHERE YOU CAN FIND MORE INFORMATION; INCORPORATION BY REFERENCE	2
THE COMPANY	4
RISK FACTORS	9
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS	10
USE OF PROCEEDS	10
DESCRIPTION OF CAPITAL STOCK	11
DESCRIPTION OF DEBT SECURITIES	14
DESCRIPTION OF WARRANTS	20
DESCRIPTION OF RIGHTS	21
DESCRIPTION OF UNITS	22
PLAN OF DISTRIBUTION	23
LEGAL MATTERS	24
EXPERTS	24

 

 

ABOUT THIS PROSPECTUS

 

This prospectus is part of a registration statement that we filed with the U.S. Securities and Exchange Commission, or the SEC, using a “shelf” registration process. By using a shelf registration statement, we may sell securities from time to time and in one or more offerings up to a total dollar amount of $300 million as described in this prospectus. Each time that we offer and sell securities, we will provide a prospectus supplement to this prospectus that contains specific information about the securities being offered and sold and the specific terms of that offering. The prospectus supplement may also add, update or change information contained in this prospectus with respect to that offering. If there is any inconsistency between the information in this prospectus and the applicable prospectus supplement, you should rely on the prospectus supplement. Before purchasing any securities, you should carefully read both this prospectus and the applicable prospectus supplement, together with the additional information described under the heading “Where You Can Find More Information; Incorporation by Reference.”

 

We have not authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We will not make an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus and the applicable prospectus supplement to this prospectus is accurate as of the date on its respective cover, and that any information incorporated by reference is accurate only as of the date of the document incorporated by reference, unless we indicate otherwise. Our business, financial condition, results of operations and prospects may have changed since those dates.

 

As used in this prospectus, unless the context otherwise requires, the terms “Connexa,” “Company,” “we,” “us,” or “our” refer to Connexa Sports Technologies Inc. and its subsidiaries. When we refer to “you,” we mean the holders of the applicable series of securities.

 

WHERE YOU CAN FIND MORE INFORMATION; INCORPORATION BY REFERENCE

 

Available Information

 

The SEC maintains a website that contains reports, proxy and information statements and other information about issuers, such as us, who file electronically with the SEC. The address of that website is www.sec.gov.

 

Our website address is www.yuanyuenterprise.com. The information on our website, however, is not, and should not be deemed to be, a part of this prospectus.

 

This prospectus and any prospectus supplement are part of a registration statement that we filed with the SEC and do not contain all of the information in the registration statement. The full registration statement may be obtained from the SEC or us, as provided below. Forms of the documents establishing the terms of the offered securities are or may be filed as exhibits to the registration statement. Statements in this prospectus or any prospectus supplement about these documents are summaries and each statement is qualified in all respects by reference to the document to which it refers. You should refer to the actual documents for a more complete description of the relevant matters. You may inspect a copy of the registration statement through the SEC’s website, as provided above.

 

Incorporation by Reference

 

The SEC’s rules allow us to “incorporate by reference” information into this prospectus, which means that we can disclose important information to you by referring you to another document filed separately with the SEC. The information incorporated by reference is deemed to be part of this prospectus, and subsequent information that we file with the SEC will automatically update and supersede that information. Any statement contained in a previously filed document incorporated by reference will be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained in this prospectus modifies or replaces that statement.

 

We incorporate by reference our documents listed below and any future filings made by us with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, which we refer to as the “Exchange Act” in this prospectus, between the date of this prospectus and the termination of the offering of the securities described in this prospectus. We are not, however, incorporating by reference any documents or portions thereof, whether specifically listed below or filed in the future, that are not deemed “filed” with the SEC, including any information furnished pursuant to Items 2.02 or 7.01 of Form 8-K or related exhibits furnished pursuant to Item 9.01 of Form 8-K.

 

 

This prospectus and any accompanying prospectus supplement incorporate by reference the documents set forth below that have previously been filed with the SEC:

 

	●	Our Annual Report on Form 10-K for the year ended April 30, 2024, filed with the SEC on July 25, 2024;
	●	Our Quarterly Report on Form 10-Q for the period ended July 31, 2024, filed with the SEC on September 10, 2024, and Quarterly Report on Form 10-Q for the period ended October 31, 2024, filed with the SEC on December 13, 2024;
	●	Our Current Reports on Form 8-K filed with the SEC on May 7, 2024, May 17, 2024, June 17, 2024, July 2, 2024, November 1, 2024, November 25, 2024, January 14, 2025 and February 6, 2025 (in each case, except for information contained therein which is furnished rather than filed); and
	●	The description of our Common Stock contained in our registration statement on Form 8-A12B filed with the SEC on June 14, 2022.

 

All reports and other documents we subsequently file pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the termination of this offering, including all such documents we may file with the SEC after the date of the initial registration statement and prior to the effectiveness of the registration statement, but excluding any information furnished to, rather than filed with, the SEC, will also be incorporated by reference into this prospectus and deemed to be part of this prospectus from the date of the filing of such reports and documents.

 

You may request a free copy of any of the documents incorporated by reference in this prospectus or any accompanying prospectus supplement (other than exhibits, unless they are specifically incorporated by reference in the documents) by contacting us as follows:

 

74 E. Glenwood Ave. #320

Smyrna, DE 19977

(443) 407-7564

 

 

This section highlights selected information that is presented in greater detail elsewhere, or incorporated by reference, in this prospectus. It does not contain all of the information that may be important to you and your investment decision. Before investing in our securities, you should carefully read this entire prospectus, including the matters set forth in the section titled “Risk Factors” and the financial statements and related notes and other information that we incorporate by reference herein, including our Annual Report on Form 10-K.

 

THE COMPANY

 

The Acquisition

 

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

 

On November 21, 2024, following The Nasdaq Stock Market LLC’s (“Nasdaq”) approval of the new listing application submitted to it in connection with the Acquisition, the Company completed the purchase of 5,000 ordinary shares of YYEM, representing 50% of the issued and outstanding ordinary shares of YYEM, for 8,127,572 newly issued shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”) to the YYEM Seller, representing 55.8% of the issued and outstanding shares of Common Stock as of the date of the closing (the “Share Exchange Transaction”). As part of this transaction, the Company agreed to sell its wholly owned subsidiary, Slinger Bag Americas Inc., to a newly established Florida limited liability company called J&M Sports LLC (“J&M”). J&M is owned by Yonah Kalfa, former Chief Innovation Officer and director of the Company; Mike Ballardie, former President, Chief Executive Officer, Treasurer and director of the Company; Juda Honickman, former Chief Marketing Officer of the Company; and Mark Radom, former general counsel and Secretary of the Company. On November 21, 2024, the Company entered into a separation and assignment agreement (the “Separation Agreement”) with J&M to sell, transfer, and assign all or substantially all of its legacy business, assets, and liabilities related to or necessary for the operations of its “Slinger Bag” business or products (the “Legacy Business”) to J&M, in consideration for $1.00. Following the Separation Agreement, J&M has obtained the sole right to and assumed all the obligations of the Legacy Business and is liable to the Company for any losses arising from third-party claims against the Company that arise from liabilities related to the Legacy Business (the “Separation”). As a result of the completion of the Acquisition, on November 21, 2024, the Company’s directors and officers resigned from their positions on November 21, 2024. On November 19, 2024, prior to the resignation of all of the directors of the Company, the Company’s Board of Directors (the “Board”) appointed the five directors named below, with such appointment taking effect on November 21, 2024 upon the closing of the Acquisition.

 

As an inducement to the Company to complete the Acquisition, YYEM agreed, pursuant to the Exchange Agreement, to make an aggregate payment to the Company of $5,000,000, of which approximately $4,500,000 had been transferred to the Company and, following the completion of the Acquisition, J&M as of February 12, 2025.

 

Permission or Approvals Required from the PRC Authorities with respect to the Operations of YYEM

 

Business operations

 

YYEM conducts business in Hong Kong and is required to obtain, and has obtained, a business license issued by the Hong Kong Companies Registry. As a special administrative region of the PRC, Hong Kong enjoys separate governing and economic systems from that of mainland China under the principle of “one country, two systems.” YYEM, as a Hong Kong-based company without operations in mainland China, is not directly subject to PRC laws and regulations regarding the general conduct of its business or regarding overseas listings. As of the date of this prospectus, YYEM has not received any notice of, and has not been subject to, any penalty or other disciplinary action from any PRC authority for the failure to obtain or the insufficiency of any approval or permit in connection with the conduct or service of its business operations. YYEM has not been denied by any PRC authority with respect to the application of any requisite permissions by YYEM.

 

However, YYEM may be subject to additional licensing requirements, and our conclusion on the status of YYEM’s licensing compliance may prove to be mistaken, due to uncertainties around the interpretation and implementation of relevant laws and regulations and the enforcement practice by relevant governmental authorities, the PRC government’s ability to intervene in or influence YYEM’s operations, and the rapid evolvement of PRC laws, regulations, and rules, sometimes with little or no advance notice. We cannot assure you that YYEM is or will be in compliance with all licensing requirements applicable to it or will not be subject to any penalty in the future due to the lack or insufficiency of approvals or permits. The failure of YYEM to obtain or to thereafter maintain any permit or license required for its operations may result in the suspension or termination of, or otherwise give rise to a material adverse change to, its businesses, which would materially and adversely affect our financial condition and results of operations and cause our Common Stock to significantly decline in value. For more detailed information, see “Risk Factors — Risks Related to Doing Business in Hong Kong.”

 

 

Securities offering

 

We believe that, as of the date of this prospectus, YYEM is not required to obtain any permission from the China Securities Regulatory Commission (“the CSRC”), the Cyberspace Administration of China (the “CAC”), or any other PRC authority in connection with this offering. As a result, it has not submitted any application to any such authority for the approval of the offering. As of the date of this prospectus, it has not received any inquiry, notice, warning, or official objection in relation to this offering from the CSRC, the CAC, or any other PRC authority. However, there remains uncertainty as to the enactment, interpretation, and implementation of regulatory requirements related to overseas securities offerings and other capital markets activities. We believe that YYEM has received all requisite permissions and approvals to operate its business. If YYEM does not receive or maintain such permissions or approvals or has inadvertently concluded that the approvals of the CSRC, the CAC, or any other regulatory authority are not required for this offering, or if applicable laws, regulations, or interpretations change and YYEM is required to obtain approvals in the future, seeking such approvals could cause the value of our securities, including the Common Stock, to significantly decline or be worthless. Any uncertainties or negative publicity regarding such an approval requirement could have a material adverse effect on the trading price of our securities. In addition, these regulatory agencies may impose fines and penalties on YYEM, limit its ability to pay dividends outside of China, limit its operations in China, delay or restrict the repatriation of the proceeds from this offering into China, or take other actions that could have a material adverse effect on its business, financial condition, results of operations, and prospects, as well as the trading price of our securities. The CSRC or other PRC regulatory agencies also may take actions requiring us, or making it advisable for us, to halt this offering before settlement and delivery of our Common Stock. Consequently, if you engage in market trading or other activities in anticipation of and prior to settlement and delivery, you do so at the risk that settlement and delivery may not occur. See “Risk Factors — Risks Related to Doing Business in Hong Kong — Changes in the PRC’s economic, political, or social conditions or governmental policies could have a material adverse effect on our business and results of operations.”

 

Audit inspections

 

On December 16, 2021, the PCAOB reported that it was unable to completely inspect or investigate registered public accounting firms headquartered in mainland China or Hong Kong because of a position taken by one or more authorities in each of those jurisdictions. However, following the signing of a Statement of Protocol with the CSRC and the Ministry of Finance of the PRC in August 2022, the PCAOB on December 15, 2022 vacated its previous determination and confirmed that it was now able to secure complete access to inspect and investigate registered public accounting firms headquartered in those jurisdictions. Nevertheless, should PRC authorities obstruct or otherwise fail to facilitate the PCAOB’s access in the future, the PCAOB may issue a new determination.

 

Our former auditor, OOC, an independent public accounting firm registered with the PCAOB, and an auditor of publicly traded companies in the United States, is subject to U.S. laws pursuant to which the PCAOB conducts regular inspections to assess its compliance with applicable professional standards. Our former auditor has been inspected by the PCAOB on a regular basis, with the last inspection in November 2023. Our former auditor is not headquartered in mainland China or Hong Kong and was not identified as an accounting firm subject to the determinations announced by the PCAOB on December 16, 2021. Nevertheless, should our former auditor in the future have any work papers in China or Hong Kong that the PCAOB is unable to fully inspect, it would be difficult to evaluate the effectiveness of our former auditor’s audit procedures or equity control procedures. Investors could consequently lose confidence in our reported financial information and procedures or the quality of our financial statements, which would adversely affect us and our securities.

 

Our current auditor, B&A, an independent public accounting firm registered with the PCAOB, and an auditor of publicly traded companies in the United States, is subject to U.S. laws pursuant to which the PCAOB conducts regular inspections to assess its compliance with current professional standards. Our current auditor is scheduled to be inspected by the PCAOB in March 2025. Our current auditor is not headquartered in mainland China or Hong Kong and was not identified as an accounting firm subject to the determinations announced by the PCAOB on December 16, 2021. Nevertheless, should our current auditor in the future have any work papers in China or Hong Kong that the PCAOB is unable to fully inspect, it would be difficult to evaluate the effectiveness of our auditor’s audit procedures or equity control procedures. Investors could consequently lose confidence in our reported financial information and procedures or the quality of our financial statements, which would adversely affect us and our securities.

 

Moreover, if trading in our securities is prohibited under the HFCAA in the future because the PCAOB determines that it cannot inspect or fully investigate our auditor at such future time, an exchange would in all likelihood delist our securities. On June 22, 2021, the U.S. Senate passed the AHFCAA, and on December 29, 2022, the Consolidated Appropriations Act was signed into law by President Biden, which contained, among other things, an identical provision to the AHFCAA and amended the HFCAA by requiring the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three, thus reducing the time period for triggering the delisting of our Company and the prohibition of trading in our securities if the PCAOB is unable to inspect our accounting firm at such future time.

 

 

Capital controls

 

Following the Acquisition, our corporate organization consists of the Company and YYEM. We anticipate that revenue will primarily be received by YYEM, where it will be used to pay operating expenses and be reinvested in outsourced research and development, the purchase of additional patents and other intellectual property, and branding and other promotional activities, among other things. If needed, management may decide to transfer cash between YYEM and the Company, or between one of these two entities and any subsidiaries that we may establish or acquire in other jurisdictions. This could take the form of intercompany fund advances or capital contributions. Under our cash management policy, the amount of intercompany transfers will be determined by our management based on the working capital needs of the entities within our group, and intercompany transactions will be subject to our internal approval process and funding arrangements.

 

We have not declared or paid dividends or made any distribution of earnings as of the date of this prospectus. We do not intend to declare dividends or distribute earnings (if any) in the near future. Any determination to declare dividends or distribute earnings (if any) in the future will be at the discretion of our board of directors.

 

The Company and YYEM are not subject to any significant restrictions on buying or selling foreign exchange or on transferring cash between entities within our group, across borders, or to U.S. investors. There are no significant restrictions or limitations on our ability to distribute earnings (if any) from YYEM to the Company and U.S. investors or our ability to settle amounts owed. However, there can be no assurance that the PRC government will not intervene or impose restrictions on the ability of YYEM to buy or sell foreign exchange or transfer or distribute cash within our organization, which could result in an inability to make, or a prohibition on making, transfers or distributions to entities outside of Hong Kong and adversely affect our business.

 

One of YYEM’s licensees is based in Mainland China, which imposes various limitations, procedures, and formalities on payments out of China. Capital account transactions, which relate to the purchase and sale of foreign assets and liabilities and include such transactions as investments and loans, are subject to review by the State Administration of Foreign Exchange (“SAFE”). Current account payments, including royalty payments, should generally not be restricted, but SAFE has a significant degree of administrative discretion in implementing laws and regulations and has on occasion used this discretion to limit the convertibility of current account payments out of China. YYEM understands from its Mainland China licensee that because the royalties due to YYEM under the applicable licensing agreement constitute current account payments, the payment of such royalties is permitted under PRC regulations, provided the sending and receiving banks can show that the transactions are legitimate. However, there can be no assurance that the distinction between restrictions on capital account transactions and restrictions on current account transactions will be consistently interpreted by SAFE and China’s other regulatory agencies, nor can there be any assurance that the legal analysis of the licensee is correct or that the PRC government will not intervene or impose other restrictions on the ability of the licensee to make the required payments to YYEM outside of Mainland China. We expect that the immediate financial impact of any such development in the coming months, while adversely affecting our business prospects, would be limited by the fact that, to date, YYEM has not received any revenue from, and is therefore not financially dependent on, such licensee.

 

Management

 

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

 

Name		Age		Position
Thomas Tarala		58		Chief Executive Officer and Director
Guibao Ji		60		Chief Financial Officer
Hongyu Zhou		36		Director
Warren Thomson		48		Director
Chenlong Liu		35		Director
Kong Liu		35		Director

 

Set forth below is a brief description of the background and business experience for the past five years of individuals who currently serve as executive officers and directors of the Company following completion of the Acquisition.

 

 

Thomas Tarala

 

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

 

As General Counsel of HNA Group (International) Company Limited, the overseas headquarters of 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

 

Guibao Ji has been a certified public accountant in China for 25 years and worked as an accountant at Shenzhen Wanda Accounting Firm beginning in January 2005. He was a partner of the firm and is 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 was certified by the Chinese Institute of Certified Public Accountants in 1999.

 

Hongyu Zhou

 

Hongyu Zhou has 15 years of experience founding, growing, and managing successful enterprises. His experience extends to such areas as enterprise management, entertainment technology, and information technology, including as an investor and business manager of a technology company, as a founder and manager of an innovative entertainment company, and as the founder and manager of several technology companies. Mr. Zhou has served as the Chairman of each of Shenzhen Qiangwo Entertainment Technology Co., Ltd. and Shenzhen Qianyue Information Technology Co., Ltd. since 2021. Mr. Zhou founded Shenzhen Yuanzu Century Network Technology Co., Ltd. in 2020 and Shenzhen Qiangwo Entertainment Technology Co., Ltd. in 2017. In founding, managing, and growing companies across various industries, Mr. Zhou has honed his skills in strategic planning, business development, and team leadership. Mr. Zhou owns 8,127,572 shares of Common Stock, representing 55.8% of the issued and outstanding shares of Common Stock as of December 24, 2024.

 

Warren Thomson

 

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

 

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.

 

Kong Liu

 

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

 

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.

 

 

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

 

Name:		Independent		Audit		Compensation		Nominating
Thomas Tarala
Hongyu Zhou
Warren Thomson		Yes		Yes		Yes		Yes
Chenlong Liu		Yes		Yes		Yes		Yes
Kong (“Luke”) Liu		Yes		Yes		Yes		Yes

 

Business Overview

 

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

 

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

 

For the quarter ended October 31, 2024, the operations of Connexa Sports Technologies Inc., Slinger Bag Americas, Slinger Bag Canada, Slinger Bag UK, Slinger Bag Limited, and Gameface are collectively referred to as the “Company.” Following the closing of the Acquisition and the separation of the Legacy Business, the Company’s historic operations are no longer part of the Company’s operations and YYEM is the Company’s operating subsidiary. The results of the Company’s operations for the six months ended October 31, 2024 reflect the Legacy Business operations and are not necessarily representative of what the results of operations of the Company (based on YYEM’s results of operations) will be following the Acquisition.

 

Executive Compensation of YYEM

 

Summary Compensation Table

 

The following summary compensation table sets forth all compensation awarded to, earned by, or paid to Guibao Ji, YYEM’s only executive officer during the fiscal year ended January 31, 2025.

 

EXECUTIVE OFFICER COMPENSATION TABLE

 

Name and Principal Position		Year Ended January 31, 2025				Salary ($)				Bonus ($)				Share Awards ($)				Non-Equity Incentive Plan Compensation ($)				All other compensation				Total ($)
Guibao Ji, Chief Financial Officer (1)			2025				76,389				0				0				0				0				76,389

 

(1) From August 1, 2024 through November 20, 2024, Mr. Ji earned $76,389, which was paid by YYEM, for his services as Chief Financial Officer of YYEM. From November 21, 2024 to January 31, 2025, Mr. Ji earned $48,612, which was paid by the Company, for his services as Chief Financial Officer of the Company.

 

Outstanding Equity Awards at Fiscal Year End

 

As of January 31, 2025, YYEM did not grant any equity awards.

 

Director Compensation

 

The sole director of YYEM, Hongyu Zhou, did not receive compensation from YYEM during the fiscal years ended January 31, 2025.

 

The Company’s Former Independent Registered Public Accounting Firm

 

On October 30, 2024, the Board and the audit committee of the Board approved the engagement of B&A as the Company’s independent registered public accounting firm for the fiscal year that will end on April 30, 2025, effective immediately, and dismissed OOC as the Company’s independent registered public accounting firm.

 

On September 30, 2024, OOC was charged by the SEC in connection with allegedly aiding and abetting violations of the antifraud provisions of the federal securities laws. The SEC also charged OOC’s principal, Olayinka Oyebola, with allegedly aiding and abetting a violation involving lying to auditors. The SEC complaint seeks civil penalties as well as permanent injunctive relief, including an order permanently barring Mr. Oyebola and OOC from acting as auditors or accountants for U.S. public companies or otherwise providing substantial assistance in the preparation of financial statements filed with the SEC. This action could affect the credibility of the financial statements audited by OOC. Because OOC was also the independent registered public accounting firm for YYEM for the fiscal year ended January 31, 2024, the SEC action could also impact the credibility of YYEM’s financial statements for the year ended January 31, 2024 audited by OOC.

 

If OOC’s audit work is found to be deficient, the financial reporting of the Company and YYEM could be questioned, leading to potential restatements, delays in regulatory filings, or reputational harm. If OOC is barred from acting as auditors or accountants for U.S. public companies, we will be unable to include financial statements of the Company and YYEM reviewed by OOC in any filing made after that date, and those financial statements will need to be reaudited. Any of these outcomes could have a material adverse effect on our business, financial condition, and stock price, which could contribute to the loss of all or part of your investment. See “Risk Factors — The SEC’s charges against our former independent auditor, Olayinka Oyebola & Co., could impact the credibility of our financial statements and those of YYEM, potentially leading to restatements and other adverse effects.”

 

Corporate Information

 

The Company was incorporated under the laws of the State of Nevada on July 12, 2015 and redomiciled in the State of Delaware on April 7, 2022 under the name Connexa Sports Technologies Inc. Our corporate offices are located at 74 E. Glenwood Ave. #320, Smyrna, DE 19977. Our telephone number is (443) 407-7564. Our website is www.yuanyuenterprise.com. None of the information on our website or any other website identified herein is part of this prospectus or the registration statement of which it forms a part.

 

 

RISK FACTORS

 

Investment in any securities offered pursuant to this prospectus and the applicable prospectus supplement involves risks. You should carefully consider the risk factors incorporated by reference to our most recent Annual Report on Form 10-K, our most recent Quarterly Report on Form 10-Q, and any subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K we file after the date of this prospectus, and all other information contained in or incorporated by reference into this prospectus, as updated by our subsequent filings under the Exchange Act, and the risk factors and other information contained in the applicable prospectus supplement before acquiring any of such securities. The occurrence of any of these risks might cause you to lose all or part of your investment in the offered securities.

 

The SEC’s charges against our former independent auditor, Olayinka Oyebola & Co., could impact the credibility of our financial statements and those of YYEM, potentially leading to restatements and other adverse effects.

 

Our former independent auditor, OOC, has been charged by the SEC in connection with allegedly aiding and abetting violations of the antifraud provisions of the federal securities laws. The SEC also charged OOC’s principal, Olayinka Oyebola, with allegedly aiding and abetting a violation involving lying to auditors. The SEC complaint seeks civil penalties as well as permanent injunctive relief, including an order permanently barring Mr. Oyebola and OOC from acting as auditors or accountants for U.S. public companies or otherwise providing substantial assistance in the preparation of financial statements filed with the SEC. This action could affect the credibility of the financial statements audited by OOC. If their audit work is found to be deficient, our financial reporting could be questioned, leading to potential restatements, delays in regulatory filings, or reputational harm. If OOC is barred from acting as auditors or accountants for U.S. public companies, we will be unable to include the financial statements reviewed by OOC in any filing made after that date, and our financial statements will need to be reaudited. Any of these outcomes could have a material adverse effect on our business, financial condition, and stock price, which could contribute to the loss of all or part of your investment.

 

On October 30, 2024, the Board of Directors and the audit committee approved the engagement of B&A as the Company’s independent registered public accounting firm for the fiscal year ended April 30, 2025, effective immediately, and dismissed OOC as the Company’s independent registered public accounting firm.

 

In addition to serving as our former independent auditor, OOC was also the independent registered public accounting firm for YYEM for the fiscal year ended January 31, 2024. As a result, the SEC action could impact the credibility of YYEM’s financial statements audited by OOC. If a restatement of YYEM’s financial statements is required, it could materially affect our reported financial condition and results of operations, particularly given the impact of the Acquisition. Specifically, any potential restatement could affect the accounting treatment of the acquisition, our historical and pro forma financial statements, and the value of YYEM’s assets on our balance sheet. Furthermore, if any deficiencies in OOC’s audit work necessitate reauditing YYEM’s financial statements, it could result in delays in our SEC filings and increased costs associated with obtaining new audits. These factors could have a material adverse effect on our financial condition, business operations, and the value of our securities.

 

 

SPECIAL NOTICE REGARDING FORWARD-LOOKING STATEMENTS

 

This prospectus contains forward-looking statements that involve risks and uncertainties, principally in the sections entitled “Risk Factors.” All statements other than statements of historical fact contained in this prospectus, including statements regarding future events, our future financial performance, business strategy and plans and objectives of management for future operations, are forward-looking statements. We have attempted to identify forward-looking statements by terminology such as “anticipates,” “believes,” “can,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “should,” or “will” or the negative of these terms or other comparable terminology. Although we do not make forward-looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks outlined under “Risk Factors” or elsewhere in this prospectus, which may cause our or our industry’s actual results, levels of activity, performance or achievements expressed or implied by these forward-looking statements to differ materially from such predictions.

 

Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at or by which that performance or those results will be achieved. Forward-looking statements are based on information available at the time they are made or on management’s good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from what is expressed in or suggested by the forward-looking statements.

 

Forward-looking statements speak only as of the date they are made. You should not put undue reliance on any forward-looking statements. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, except to the extent required by applicable securities laws. If we do update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

 

USE OF PROCEEDS

 

We intend to use the net proceeds from the sale of the securities as set forth in the applicable prospectus supplement.

 

 

DESCRIPTION OF CAPITAL STOCK

 

The following discussion is a summary of selected provisions of our certificate of incorporation, bylaws and Delaware General Corporation Law, as amended (the “DGCL”), as in effect on the date of this prospectus relating to us and our capital stock. This summary does not purport to be complete. This discussion is subject to the relevant provisions of Delaware law and is qualified by reference to our certificate of incorporation, our bylaws and the provisions of Delaware law. You should read the provisions of our certificate of incorporation and our bylaws as currently in effect for provisions that may be important to you.

 

Common Stock

 

We are authorized to issue up to 1,000,000,000 shares of Common Stock. As of February 12, 2025, there were 14,563,026 shares of Common Stock outstanding. All outstanding shares of Common Stock are fully paid and non-assessable.

 

The Common Stock is not entitled to pre-emptive or other similar subscription rights to purchase any of our securities. The Common Stock is neither convertible nor redeemable.

 

Voting Rights

 

Each holder of shares of Common Stock is entitled to one vote per share on each matter submitted to a vote of stockholders, as provided by our certificate of incorporation. Our bylaws provide that the holders of a majority of the capital stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, will constitute a quorum at all meetings of the stockholders for the transaction of business. When a quorum is present, the affirmative vote of a majority of the votes cast is required to take action, unless otherwise specified by law, our Bylaws or our Certificate of Incorporation, and except for the election of directors, which is determined by a plurality vote. There are no cumulative voting rights.

 

Liquidation Rights

 

If we are involved in voluntary or involuntary liquidation, dissolution or winding up of our affairs, or a similar event, each holder of shares of Common Stock will participate pro rata in all assets remaining after payment of liabilities.

 

Dividend Policy

 

We have not paid and do not expect to declare or pay any cash dividends on the Common Stock in the foreseeable future. We currently expect to retain all future earnings for use in the operation and expansion of our business. The declaration and payment of any cash dividends in the future will be determined by our Board, in its discretion, and will depend on a number of factors, including our earnings, capital requirements, overall financial condition and contractual restrictions, if any.

 

Market for Shares of Common Stock

 

The Common Stock is listed on the Nasdaq Capital Market under the symbol “YYAI.” On February 10, 2025, the closing sale price of the Common Stock was $0.40.

 

Transfer Agent

 

The transfer agent and registrar for the Common Stock is ClearTrust, LLC.

 

 

Preferred Stock

 

We do not have any authorized shares of preferred stock.

 

Options

 

On November 11, 2020, our Board approved the 2020 Slinger Bag Inc. Global Share Incentive Plan (as amended, the “2020 Plan”), which provides for the grant of awards which are incentive stock options (“ISOs”), non-qualified stock options, unrestricted stock, restricted stock, restricted stock units, performance stock and other equity-based and cash awards or any combination of the foregoing, to eligible key management employees, non-employee directors, and non-employee consultants of the Company or any of its subsidiaries (each a “participant”). Only the employees of the Company and its subsidiaries are eligible for incentive stock option awards. The Company has reserved a total of 1,500,000 shares for issuance under awards to be made under the 2020 Plan, all of which may, but need not, be issued in connection with ISOs. As of February 12, 2025, there were 37,500 shares of Common Stock subject to outstanding awards and approximately 1,500,000 shares of Common Stock remain available under the 2020 Plan for future awards. To the extent that an award lapses, expires, is canceled, is terminated unexercised or ceases to be exercisable for any reason, or the rights of its holder terminate, any shares subject to such award shall again be available for the grant of a new award. The 2020 Plan shall continue in effect, unless sooner terminated, until the tenth anniversary of the date on which it was adopted by the Board (except as to awards outstanding on that date). The Board in its discretion may terminate the 2020 Plan at any time with respect to any shares for which awards have not theretofore been granted; provided, however, that the 2020 Plan’s termination shall not materially and adversely impair the rights of a holder, without the consent of the holder, with respect to any award previously granted.

 

Certain Anti-Takeover Provisions of Delaware Law, Our Certificate of Incorporation and Our Bylaws

 

Section 203 of the DGCL provides that if a person acquires 15% or more of the voting stock of a Delaware corporation, such person becomes an “interested stockholder” and may not engage in certain “Business Combinations” with such corporation for a period of three years from the time such person acquired 15% or more of such corporation’s voting stock, unless: (1) the board of such corporation approves the acquisition of stock or the merger transaction before the time that the person becomes an interested stockholder, (2) the interested stockholder owns at least 85% of the outstanding voting stock of such corporation at the time the merger transaction commences (excluding voting stock owned by directors who are also officers and certain employee stock plans), or (3) the merger transaction is approved by the board and at a meeting of stockholders, not by written consent, by the affirmative vote of two-thirds of the outstanding voting stock which is not owned by the interested stockholder. A Delaware corporation may elect in its certificate of incorporation or Bylaws not to be governed by this particular Delaware law.

 

Our certificate of incorporation, our bylaws and the DGCL contain provisions that could have the effect of rendering more difficult, delaying, or preventing an acquisition deemed undesirable by our Board. These provisions could also make it difficult for stockholders to take certain actions, including electing directors who are not nominated by the members of our Board or taking other corporate actions, including effecting changes in our management.

 

Specifically, among other things, our certificate of incorporation and our bylaws:

 

●

do not provide for cumulative voting in the election of directors;

 

●

provide for the exclusive right of the Board to elect a director to fill a vacancy created by the expansion of the Board or the resignation, death, or removal of a director by stockholders;

 

●

requires that a special meeting of stockholders may be called only by the Board, or by a committee of the Board that has been designated by the Board;

 

●

limits the liability of, and provides indemnification to, our directors and officers;

 

●

controls the procedures for the conduct and scheduling of stockholder meetings;

 

 

●

grants the ability to remove directors for cause only by the affirmative vote of at least two-thirds of the voting power of all of the then outstanding shares of voting stock of the Company entitled to vote at an election of directors;

 

●

specifies advance notice procedures that stockholders must comply with in order to nominate candidates to the Board or to propose matters to be acted upon at a stockholders’ meeting.

 

The combination of these provisions will make it more difficult for our stockholders to replace our Board as well as for another party to obtain control of us by replacing our Board. Since our Board has the power to retain and discharge our officers, these provisions could also make it more difficult for stockholders or another party to effect a change in management.

 

Our authorized but unissued Common Stock will be available for future issuances without stockholder approval and could be utilized for a variety of corporate purposes, including future offerings to raise additional capital, acquisitions and employee benefit plans. The existence of authorized but unissued and unreserved Common Stock could render more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise.

 

The provisions described above are intended to enhance the likelihood of continued stability in the composition of our Board and its policies and to discourage coercive takeover practices and inadequate takeover bids. These provisions are also designed to reduce our vulnerability to hostile takeovers and to discourage certain tactics that may be used in proxy fights. However, such provisions could have the effect of discouraging others from making tender offers for our shares of Common Stock and may have the effect of delaying changes in our control or management. As a consequence, these provisions may also inhibit fluctuations in the market price of the Common Stock.

 

Limitation of Liability and Indemnification

 

Our bylaws provide that we will indemnify our directors to the fullest extent authorized or permitted by applicable law. Under our Bylaws, we are required to indemnify each of our directors and officers if the basis of the indemnitee’s involvement was by reason of the fact that the indemnitee is or was our director or officer or was serving at our request as a director, officer, employee or agent for another entity. We must indemnify our officers and directors against all expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the indemnitee in connection with such action, suit or proceeding if the indemnitee acted in good faith and in a manner the indemnitee reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the indemnitee’s conduct was unlawful. Our bylaws also require us to advance expenses (including attorneys’ fees) incurred by a director or officer in defending any civil, criminal, administrative or investigative action, suit or proceeding, provided that such person will repay any such advance if it is ultimately determined that such person is not entitled to indemnification by us. Any claims for indemnification by our directors and officers may reduce our available funds to satisfy successful third-party claims against us and may reduce the amount of money available to us.

 

 

DESCRIPTION OF DEBT SECURITIES

 

General

 

The debt securities that we may offer by this prospectus consist of notes, debentures, or other evidences of indebtedness. The debt securities may constitute either senior or subordinated debt securities, and in either case may be either secured or unsecured. Any debt securities that we offer and sell will be our direct obligations. Debt securities may be issued in one or more series. All debt securities of any one series need not be issued at the same time, and unless otherwise provided, a series of debt securities may be reopened, with the required consent of the holders of outstanding debt securities, for issuance of additional debt securities of that series or to establish additional terms of that series of debt securities (with such additional terms applicable only to unissued or additional debt securities of that series). The form of indenture has been filed as an exhibit to the registration statement of which this prospectus is a part and is subject to any amendments or supplements that we may enter into with the trustee(s), however, we may issue debt securities not subject to the indenture provided such terms of debt securities are not otherwise required to be set forth in the indenture. The material terms of the indenture are summarized below and we refer you to the indenture for a detailed description of these material terms. Additional or different provisions that are applicable to a particular series of debt securities will, if material, be described in a prospectus supplement relating to the offering of debt securities of that series. These provisions may include, among other things and to the extent applicable, the following:

 

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the title of the debt securities, including, as applicable, whether the debt securities will be issued as senior debt securities, senior subordinated debt securities or subordinated debt securities, any subordination provisions particular to the series of debt securities;

 

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any limit on the aggregate principal amount of the debt securities;

 

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whether the debt securities are senior debt securities or subordinated debt securities and applicable subordination provisions, if any;

 

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whether the debt securities will be secured or unsecured;

 

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if other than 100% of the aggregate principal amount, the percentage of the aggregate principal amount at which we will sell the debt securities, such as an original issuance discount;

 

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the date or dates, whether fixed or extendable, on which the principal of the debt securities will be payable;

 

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the rate or rates, which may be fixed or variable, at which the debt securities will bear interest, if any, the date or dates from which any such interest will accrue, the interest payment dates on which we will pay any such interest, the basis upon which interest will be calculated if other than that of a 360-day year consisting of twelve 30-day months, and, in the case of registered securities, the record dates for the determination of holders to whom interest is payable;

 

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the place or places where the principal of and any premium or interest on the debt securities will be payable and where the debt securities may be surrendered for conversion or exchange;

 

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whether we may, at our option, redeem the debt securities, and if so, the price or prices at which, the period or periods within which, and the terms and conditions upon which, we may redeem the debt securities, in whole or in part, pursuant to any sinking fund or otherwise;

 

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if other than 100% of the aggregate principal amount thereof, the portion of the principal amount of the debt securities which will be payable upon declaration of acceleration of the maturity date thereof or provable in bankruptcy, or, if applicable, which is convertible or exchangeable;

 

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any obligation we may have to redeem, purchase or repay the debt securities pursuant to any sinking fund or analogous provisions or at the option of a holder of debt securities, and the price or prices at which, the currency in which and the period or periods within which, and the terms and conditions upon which, the debt securities will be redeemed, purchased or repaid, in whole or in part, pursuant to any such obligation, and any provision for the remarketing of the debt securities;

 

 

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the issuance of debt securities as registered securities or unregistered securities or both, and the rights of the holders of the debt securities to exchange unregistered securities for registered securities, or vice versa, and the circumstances under which any such exchanges, if permitted, may be made;

 

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the denominations, which may be in United States Dollars or in any foreign currency, in which the debt securities will be issued, if other than denominations of $1,000 and any integral multiple thereof;

 

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whether the debt securities will be issued in the form of certificated debt securities, and if so, the form of the debt securities (or forms thereof if unregistered and registered securities are issuable in that series), including the legends required by law or as we deem necessary or appropriate, the form of any coupons or temporary global security which may be issued and the forms of any other certificates which may be required under the indenture or which we may require in connection with the offering, sale, delivery or exchange of the debt securities;

 

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if other than United States Dollars, the currency or currencies in which payments of principal, interest and other amounts payable with respect to the debt securities will be denominated, payable, redeemable or repurchasable, as the case may be;

 

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whether the debt securities may be issuable in tranches;

 

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the obligations, if any, we may have to permit the conversion or exchange of the debt securities into Common Stock, preferred stock or other capital stock or property, or a combination thereof, and the terms and conditions upon which such conversion or exchange will be effected (including conversion price or exchange ratio), and any limitations on the ownership or transferability of the securities or property into which the debt securities may be converted or exchanged;

 

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if other than the trustee under the indenture, any trustees, authenticating or paying agents, transfer agents or registrars or any other agents with respect to the debt securities;

 

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any deletions from, modifications of or additions to the events of default with respect to the debt securities or the right of the Trustee or the holders of the debt securities in connection with events of default;

 

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any deletions from, modifications of or additions to the covenants with respect to the debt securities;

 

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if the amount of payments of principal of, and make-whole amount, if any, and interest on the debt securities may be determined with reference to an index, the manner in which such amount will be determined;

 

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whether the debt securities will be issued in whole or in part in the global form of one or more debt securities and, if so, the depositary for such debt securities, the circumstances under which any such debt security may be exchanged for debt securities registered in the name of, and under which any transfer of debt securities may be registered in the name of, any person other than such depositary or its nominee, and any other provisions regarding such debt securities;

 

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whether, under what circumstances and the currency in which, we will pay additional amounts on the debt securities to any holder of the debt securities who is not a United States person in respect of any tax, assessment or governmental charge and, if so, whether we will have the option to redeem such debt securities rather than pay such additional amounts, and the terms of any such option;

 

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whether the debt securities will be secured by any collateral and, if so, a general description of the collateral and the terms of any related security, pledge or other agreements;

 

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the persons to whom any interest on the debt securities will be payable, if other than the registered holders thereof on the regular record date therefor; and

 

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any other material terms or conditions upon which the debt securities will be issued.

 

Unless otherwise indicated in the applicable prospectus supplement, we will issue debt securities in fully registered form without coupons and in denominations of $1,000 and in integral multiples of $1,000, and interest will be computed on the basis of a 360-day year of twelve 30-day months. If any interest payment date or the maturity date falls on a day that is not a business day, then the payment will be made on the next business day without additional interest and with the same effect as if it were made on the originally scheduled date. “Business day” means any calendar day that is not a Saturday, Sunday or legal holiday in New York, New York, and on which the trustee and commercial banks are open for business in New York, New York.

 

 

Unless we inform you otherwise in a prospectus supplement, each series of our senior debt securities will rank equally in right of payment with all of our other unsubordinated debt. The subordinated debt securities will rank junior in right of payment and be subordinate to all of our unsubordinated debt.

 

Unless otherwise indicated in the applicable prospectus supplement, the trustee will act as paying agent and registrar for the debt securities under the indenture. We may act as paying agent under the indenture.

 

The prospectus supplement will contain a description of United States federal income tax consequences relating to the debt securities, to the extent applicable.

 

Covenants

 

The applicable prospectus supplement will describe any covenants, such as restrictive covenants restricting us or our subsidiaries, if any, from incurring, issuing, assuming or guarantying any indebtedness or restricting us or our subsidiaries, if any, from paying dividends or acquiring any of our or its capital stock.

 

Consolidation, Merger and Transfer of Assets

 

The indenture permits a consolidation or merger between us and another entity and/or the sale, conveyance or lease by us of all or substantially all of our property and assets, provided that:

 

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the resulting or acquiring entity, if other than us, is organized and existing under the laws of a United States jurisdiction and assumes all of our responsibilities and liabilities under the indenture, including the payment of all amounts due on the debt securities and performance of the covenants in the indenture;

 

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immediately after the transaction, and giving effect to the transaction, no event of default under the indenture exists; and

 

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we have delivered to the trustee an officers’ certificate stating that the transaction and, if a supplemental indenture is required in connection with the transaction, the supplemental indenture comply with the indenture and that all conditions precedent to the transaction contained in the indenture have been satisfied.

 

If we consolidate or merge with or into any other entity, or sell or lease all or substantially all of our assets in compliance with the terms and conditions of the indenture, the resulting or acquiring entity will be substituted for us in the indenture and the debt securities with the same effect as if it had been an original party to the indenture and the debt securities. As a result, such successor entity may exercise our rights and powers under the indenture and the debt securities, in our name and, except in the case of a lease, we will be released from all our liabilities and obligations under the indenture and under the debt securities.

 

Notwithstanding the foregoing, we may transfer all of our property and assets to another entity if, immediately after giving effect to the transfer, such entity is our wholly owned subsidiary. The term “wholly owned subsidiary” means any subsidiary in which we and/or our other wholly owned subsidiaries, if any, own all of the outstanding capital stock.

 

Modification and Waiver

 

Under the indenture, some of our rights and obligations and some of the rights of the holders of the debt securities may be modified or amended with the consent of the holders of not less than a majority in aggregate principal amount of the outstanding debt securities affected by the modification or amendment. However, the following modifications and amendments will not be effective against any holder without its consent:

 

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a change in the stated maturity date of any payment of principal or interest;

 

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a reduction in the principal amount of or interest on any debt securities;

 

 

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an alteration or impairment of any right to convert at the rate or upon the terms provided in the indenture;

 

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a change in the currency in which any payment on the debt securities is payable;

 

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an impairment of a holder’s right to sue us for the enforcement of payments due on the debt securities; or

 

	●	a reduction in the percentage of outstanding debt securities required to consent to a modification or amendment of the indenture or required to consent to a waiver of compliance with certain provisions of the indenture or certain defaults under the indenture.
	●	Under the indenture, the holders of not less than a majority in aggregate principal amount of the outstanding debt securities may, on behalf of all holders of the debt securities:

 

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waive compliance by us with certain restrictive provisions of the indenture; and

 

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waive any past default under the indenture in accordance with the applicable provisions of the indenture, except a default in the payment of the principal of or interest on any series of debt securities.

 

Events of Default

 

Unless we indicate otherwise in the applicable prospectus supplement, “event of default” under the indenture will mean, with respect to any series of debt securities, any of the following:

 

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failure to pay interest on any debt security for 30 days after the payment is due;

 

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failure to pay the principal of any debt security when due, either at maturity, upon redemption, by declaration or otherwise;

 

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failure on our part to observe or perform any other covenant or agreement in the indenture that applies to the debt securities for 90 days after we have received written notice of the failure to perform in the manner specified in the indenture; and

 

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certain events of bankruptcy, insolvency or reorganization.

 

Remedies Upon an Event of Default

 

If an event of default occurs and continues, the trustee or the holders of not less than 25% in aggregate principal amount of the outstanding debt securities of such series may declare the entire principal of all the debt securities to be due and payable immediately, except that, if the event of default is caused by certain events in bankruptcy, insolvency or reorganization, the entire principal of all of the debt securities of such series will become due and payable immediately without any act on the part of the trustee or holders of the debt securities. If such a declaration occurs, the holders of a majority of the aggregate principal amount of the outstanding debt securities of such series can, subject to conditions, rescind the declaration.

 

The indenture requires us to furnish to the trustee not less often than annually, a certificate from our principal executive officer, principal financial officer or principal accounting officer, as the case may be, as to such officer’s knowledge of our compliance with all conditions and covenants under the indenture. The trustee may withhold notice to the holders of debt securities of any default, except defaults in the payment of principal of or interest on any debt securities if the trustee in good faith determines that the withholding of notice is in the best interests of the holders. For purposes of this paragraph, “default” means any event which is, or after notice or lapse of time or both would become, an event of default under the indenture.

 

The trustee is not obligated to exercise any of its rights or powers under the indenture at the request, order or direction of any holders of debt securities, unless the holders offer the trustee satisfactory security or indemnity. If satisfactory security or indemnity is provided, then, subject to other rights of the trustee, the holders of a majority in aggregate principal amount of the outstanding debt securities may direct the time, method and place of:

 

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conducting any proceeding for any remedy available to the trustee; or

 

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exercising any trust or power conferred upon the trustee.

 

 

The holder of a debt security will have the right to begin any proceeding with respect to the indenture or for any remedy only if:

 

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the holder has previously given the trustee written notice of a continuing event of default;

 

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the holders of not less than a majority in aggregate principal amount of the outstanding debt securities have made a written request of, and offered reasonable indemnity to, the trustee to begin such proceeding;

 

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the trustee has not started such proceeding within 60 days after receiving the request; and

 

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no direction inconsistent with such written request has been given to the trustee under the indenture.

 

However, the holder of any debt security will have an absolute right to receive payment of principal of and interest on the debt security when due and to institute suit to enforce this payment.

 

Satisfaction and Discharge; Defeasance

 

Satisfaction and Discharge of Indenture. Unless otherwise indicated in the applicable prospectus supplement, if at any time:

 

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we have paid the principal of and interest on all the debt securities of any series, except for debt securities which have been destroyed, lost or stolen and which have been replaced or paid in accordance with the indenture, as and when the same shall have become due and payable; or

 

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we have delivered to the trustee for cancellation all debt securities of any series theretofore authenticated, except for debt securities of such series which have been destroyed, lost or stolen and which have been replaced or paid as provided in the indenture; or

 

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all the debt securities of such series not theretofore delivered to the trustee for cancellation have become due and payable, or are by their terms are to become due and payable within one year or are to be called for redemption within one year, and we have deposited with the trustee, in trust, sufficient money or government obligations, or a combination thereof, to pay the principal, any interest and any other sums due on the debt securities, on the dates the payments are due or become due under the indenture and the terms of the debt securities, then the indenture shall cease to be of further effect with respect to the debt securities of such series, except for:

 

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rights of registration of transfer and exchange, and our right of optional redemption;

 

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substitution of mutilated, defaced, destroyed, lost or stolen debt securities;

 

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rights of holders to receive payments of principal thereof and interest thereon upon the original stated due dates therefor (but not upon acceleration) and remaining rights of the holders to receive mandatory sinking fund payments, if any;

 

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the rights, obligations and immunities of the trustee under the indenture; and

 

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the rights of the holders of such series of debt securities as beneficiaries thereof with respect to the property so deposited with the trustee payable to all or any of them.

 

Defeasance and Covenant Defeasance. Unless otherwise indicated in the applicable prospectus supplement, we may elect with respect to any debt securities of any series either:

 

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to defease and be discharged from all of our obligations with respect to such debt securities (“defeasance”), with certain exceptions described below; or

 

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to be released from our obligations with respect to such debt securities under such covenants as may be specified in the applicable prospectus supplement, and any omission to comply with those obligations will not constitute a default or an event of default with respect to such debt securities (“covenant defeasance”).

 

 

We must comply with the following conditions before the defeasance or covenant defeasance can be effected:

 

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we must irrevocably deposit with the indenture trustee or other qualifying trustee, under the terms of an irrevocable trust agreement in form and substance satisfactory to the trustee, trust funds in trust solely for the benefit of the holders of such debt securities, sufficient money or government obligations, or a combination thereof, to pay the principal, any interest and any other sums on the due dates for those payments; and

 

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we must deliver to the trustee an opinion of counsel to the effect that the holders of such debt securities will not recognize income, gain or loss for federal income tax purposes as a result of defeasance or covenant defeasance, as the case may be, to be effected with respect to such debt securities and will be subject to federal income tax on the same amount, in the same manner and at the same times as would be the case if such defeasance or covenant defeasance, as the case may be, had not occurred.

 

In connection with defeasance, any irrevocable trust agreement contemplated by the indenture must include, among other things, provision for:

 

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payment of the principal of and interest on such debt securities, if any, appertaining thereto when due (by redemption, sinking fund payments or otherwise);

 

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the payment of the expenses of the trustee incurred or to be incurred in connection with carrying out such trust provisions;

 

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rights of registration, transfer, substitution and exchange of such debt securities in accordance with the terms stated in the indenture; and

 

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continuation of the rights, obligations and immunities of the trustee as against the holders of such debt securities as stated in the indenture.

 

The accompanying prospectus supplement may further describe any provisions permitting or restricting defeasance or covenant defeasance with respect to the debt securities of a particular series.

 

Global Securities

 

Unless otherwise indicated in the applicable prospectus supplement, each debt security offered by this prospectus will be issued in the form of one or more global debt securities representing all or part of that series of debt securities. This means that we will not issue certificates for that series of debt securities to the holders. Instead, a global debt security representing that series will be deposited with, or on behalf of, a securities depositary and registered in the name of the depositary or a nominee of the depositary. Any such depositary must be a clearing agency registered under the Exchange Act. We will describe the specific terms of the depositary arrangement with respect to a series of debt securities to be represented by a global security in the applicable prospectus supplement.

 

Notices

 

We will give notices to holders of the debt securities by mail at the addresses listed in the security register. In the case of notice in respect of unregistered securities or coupon securities, we may give notice by publication in a newspaper of general circulation in New York, New York.

 

Governing Law

 

The particular terms of a series of debt securities will be described in a prospectus supplement relating to such series of debt securities. Any indentures will be subject to and governed by the Trust Indenture Act of 1939, as amended, and may be supplemented or amended from time to time following their execution. Unless otherwise stated in the applicable prospectus supplement, we will not be limited in the amount of debt securities that we may issue, and neither the senior debt securities nor the subordinated debt securities will be secured by any of our property or assets. Thus, by owning debt securities, you are one of our unsecured creditors.

 

Regarding the Trustee

 

From time to time, we may maintain deposit accounts and conduct other banking transactions with the trustee to be appointed under the indenture or its affiliates in the ordinary course of business.

 

 

DESCRIPTION OF WARRANTS

 

As of February 12, 2025, we have issued and outstanding warrants to purchase 2,024 shares of Common Stock with a weighted average exercise price per share of $0.01.

 

We may offer to sell warrants from time to time. If we do so, we will describe the specific terms of the warrants in a prospectus supplement. In particular, we may issue warrants for the purchase of Common Stock, preferred stock and/or debt securities in one or more series. We may also issue warrants independently or together with other securities and the warrants may be attached to or separate from those securities.

 

We will evidence each series of warrants by warrant certificates that we will issue under a separate agreement. We will enter into the warrant agreement with a warrant agent. We will indicate the name and address of the warrant agent in the applicable prospectus supplement relating to a particular series of warrants.

 

We will describe in the applicable prospectus supplement the terms of the series of warrants, including:

 

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the offering price and aggregate number of warrants offered;

 

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the currency for which the warrants may be purchased;

 

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if applicable, the designation and terms of the securities with which the warrants are issued and the number of warrants issued with each such security or each principal amount of such security;

 

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if applicable, the date on and after which the warrants and the related securities will be separately transferable;

 

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in the case of warrants to purchase debt securities, the principal amount of debt securities purchasable upon exercise of one warrant and the price at, and currency in which, this principal amount of debt securities may be purchased upon such exercise;

 

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in the case of warrants to purchase Common Stock or preferred stock, the number of shares of Common Stock or preferred stock, as the case may be, purchasable upon the exercise of one warrant and the price at which these shares may be purchased upon such exercise;

 

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the effect of any merger, consolidation, sale or other disposition of our business on the warrant agreement and the warrants;

 

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the terms of any rights to redeem or call the warrants;

 

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any provisions for changes to or adjustments in the exercise price or number of securities issuable upon exercise of the warrants;

 

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the dates on which the right to exercise the warrants will commence and expire;

 

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the manner in which the warrant agreement and warrants may be modified;

 

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certain United States federal income tax consequences of holding or exercising the warrants;

 

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the terms of the securities issuable upon exercise of the warrants; and

 

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any other specific material terms, preferences, rights or limitations of or restrictions on the warrants.

 

Holders may exercise the warrants by delivering the warrant certificate representing the warrants to be exercised together with other requested information, and paying the required amount to the warrant agent in immediately available funds, as provided in the applicable prospectus supplement. We will set forth in the applicable prospectus supplement the information that the holder of the warrant will be required to deliver to the warrant agent.

 

Upon receipt of the required payment and the warrant certificate properly completed and duly executed at the office of the warrant agent or any other office indicated in the applicable prospectus supplement, we will issue and deliver the securities purchasable upon such exercise. If a holder exercises fewer than all of the warrants represented by the warrant certificate, then we will issue a new warrant certificate for the remaining amount of warrants.

 

Holder will not have any of the rights of the holders of the securities purchasable upon the exercise of warrants until you exercise them. Accordingly, holder will not be entitled to, among other things, vote or receive dividend payments or similar distributions on the securities you can purchase upon exercise of the warrants.

 

The information provided above is only a summary of the terms under which we may offer warrants for sale. Accordingly, investors must carefully review the applicable warrant agreement for more information about the specific terms and conditions of these warrants before investing in us. In addition, please carefully review the information provided in the applicable prospectus supplement, which contains additional information that is important for you to consider in evaluating an investment in our securities.

 

 

DESCRIPTION OF RIGHTS

 

We may issue rights to our stockholders to purchase shares of our Common Stock or preferred stock described in this prospectus. We may offer rights separately or together with one or more additional rights, preferred stock, Common Stock, warrants or any combination of those securities in the form of units, as described in the applicable prospectus supplement. Each series of rights will be issued under a separate rights agreement to be entered into between us and a bank or trust company, as rights agent. The rights agent for any rights we offer will be set forth in the applicable prospectus supplement. The rights agent will act solely as our agent in connection with the certificates relating to the rights of the series of certificates and will not assume any obligation or relationship of agency or trust for or with any holders of rights certificates or beneficial owners of rights. The following description sets forth certain general terms and provisions of the rights to which any prospectus supplement may relate. The particular terms of the rights to which any prospectus supplement may relate and the extent, if any, to which the general provisions may apply to the rights so offered will be described in the applicable prospectus supplement. To the extent that any particular terms of the rights, rights agreement or rights certificates described in a prospectus supplement differ from any of the terms described below, then the terms described below will be deemed to have been superseded by that prospectus supplement. We encourage you to read the applicable rights agreement and rights certificate for additional information before you decide whether to purchase any of our rights.

 

The prospectus supplement relating to any rights that we offer will include specific terms relating to the offering, including, among other matters:

 

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the date of determining the stockholders entitled to the rights distribution;

 

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the aggregate number of shares of Common Stock, preferred stock or other securities purchasable upon exercise of the rights;

 

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the exercise price;

 

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the aggregate number of rights issued;

 

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whether the rights are transferrable and the date, if any, on and after which the rights may be separately transferred;

 

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the date on which the right to exercise the rights will commence, and the date on which the right to exercise the rights will expire;

 

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the method by which holders of rights will be entitled to exercise;

 

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the conditions to the completion of the offering;

 

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the withdrawal, termination and cancellation rights;

 

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whether there are any backstop or standby purchaser or purchasers and the terms of their commitment;

 

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whether stockholders are entitled to oversubscription right;

 

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any U.S. federal income tax considerations; and

 

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any other terms of the rights, including terms, procedures and limitations relating to the distribution, exchange and exercise of the rights.

 

If less than all of the rights issued in any rights offering are exercised, we may offer any unsubscribed securities directly to persons other than stockholders, to or through agents, underwriters or dealers or through a combination of such methods, including pursuant to standby arrangements, as described in the applicable prospectus supplement. In connection with any rights offering, we may enter into a standby underwriting or other arrangement with one or more underwriters or other persons pursuant to which such underwriters or other persons would purchase any offered securities remaining unsubscribed for after such rights offering.

 

 

DESCRIPTION OF UNITS

 

We may issue units consisting of any combination of the other types of securities offered under this prospectus in one or more series. We may evidence each series of units by unit certificates that we will issue under a separate agreement. We may enter into unit agreements with a unit agent. We will indicate the name and address of the unit agent in the applicable prospectus supplement relating to a particular series of units.

 

The following description, together with the additional information included in any applicable prospectus supplement, summarizes the general features of the units that we may offer under this prospectus. You should read any prospectus supplement and any free writing prospectus that we may authorize to be provided to you related to the series of units being offered, as well as the complete unit agreements that contain the terms of the units. Specific unit agreements will contain additional important terms and provisions and we will file as an exhibit to the registration statement of which this prospectus is a part, or will incorporate by reference from another report that we file with the SEC, the form of each unit agreement relating to units offered under this prospectus.

 

If we offer any units, certain terms of that series of units will be described in the applicable prospectus supplement, including, without limitation, the following, as applicable:

 

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the title of the series of units;

 

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identification and description of the separate constituent securities comprising the units;

 

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the price or prices at which the units will be issued;

 

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the date, if any, on and after which the constituent securities comprising the units will be separately transferable;

 

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a discussion of certain United States federal income tax considerations applicable to the units; and

 

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any other terms of the units and their constituent securities.

 

 

PLAN OF DISTRIBUTION

 

We may sell the securities from time to time pursuant to underwritten public offerings, negotiated transactions, block trades or a combination of these methods or through underwriters or dealers, through agents and/or directly to one or more purchasers. The securities may be distributed from time to time in one or more transactions:

 

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at a fixed price or prices, which may be changed;

 

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at market prices prevailing at the time of sale;

 

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at prices related to such prevailing market prices; or

 

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at negotiated prices.

 

Each time that we sell securities covered by this prospectus, we will provide a prospectus supplement or supplements that will describe the method of distribution and set forth the terms and conditions of the offering of such securities, including the offering price of the securities and the proceeds to us, if applicable.

 

Offers to purchase the securities being offered by this prospectus may be solicited directly. Agents may also be designated to solicit offers to purchase the securities from time to time. Any agent involved in the offer or sale of our securities will be identified in a prospectus supplement.

 

If a dealer is utilized in the sale of the securities being offered by this prospectus, the securities will be sold to the dealer, as principal. The dealer may then resell the securities to the public at varying prices to be determined by the dealer at the time of resale.

 

If an underwriter is utilized in the sale of the securities being offered by this prospectus, an underwriting agreement will be executed with the underwriter at the time of sale and the name of any underwriter will be provided in the prospectus supplement that the underwriter will use to make resales of the securities to the public. In connection with the sale of the securities, we or the purchasers of securities for whom the underwriter may act as agent, may compensate the underwriter in the form of underwriting discounts or commissions. The underwriter may sell the securities to or through dealers, and those dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters and/or commissions from the purchasers for which they may act as agent. Unless otherwise indicated in a prospectus supplement, an agent will be acting on a best efforts basis and a dealer will purchase securities as a principal, and may then resell the securities at varying prices to be determined by the dealer.

 

Any compensation paid to underwriters, dealers or agents in connection with the offering of the securities, and any discounts, concessions or commissions allowed by underwriters to participating dealers will be provided in the applicable prospectus supplement. Underwriters, dealers and agents participating in the distribution of the securities may be deemed to be underwriters within the meaning of the Securities Act of 1933, as amended, and any discounts and commissions received by them and any profit realized by them on resale of the securities may be deemed to be underwriting discounts and commissions. We may enter into agreements to indemnify underwriters, dealers and agents against civil liabilities, including liabilities under the Securities Act, or to contribute to payments they may be required to make in respect thereof and to reimburse those persons for certain expenses.

 

Any Common Stock will be listed on the Nasdaq Capital Market, but any other securities may or may not be listed on a national securities exchange. To facilitate the offering of securities, certain persons participating in the offering may engage in transactions that stabilize, maintain or otherwise affect the price of the securities. This may include over-allotments or short sales of the securities, which involve the sale by persons participating in the offering of more securities than were sold to them. In these circumstances, these persons would cover such over-allotments or short positions by making purchases in the open market or by exercising their over-allotment option, if any. In addition, these persons may stabilize or maintain the price of the securities by bidding for or purchasing securities in the open market or by imposing penalty bids, whereby selling concessions allowed to dealers participating in the offering may be reclaimed if securities sold by them are repurchased in connection with stabilization transactions. The effect of these transactions may be to stabilize or maintain the market price of the securities at a level above that which might otherwise prevail in the open market. These transactions may be discontinued at any time.

 

 

We may engage in at-the-market offerings into an existing trading market in accordance with Rule 415(a)(4) under the Securities Act.

 

In addition, we may enter into derivative transactions with third parties, or sell securities not covered by this prospectus to third parties in privately negotiated transactions. If the applicable prospectus supplement so indicates, in connection with those derivatives, the third parties may sell securities covered by this prospectus and the applicable prospectus supplement, including in short sale transactions. If so, the third party may use securities pledged by us or borrowed from us or others to settle those sales or to close out any related open borrowings of stock, and may use securities received from us in settlement of those derivatives to close out any related open borrowings of stock. The third party in such sale transactions will be an underwriter and, if not identified in this prospectus, will be named in the applicable prospectus supplement (or a post-effective amendment). In addition, we may otherwise loan or pledge securities to a financial institution or other third party that in turn may sell the securities short using this prospectus and an applicable prospectus supplement. Such financial institution or other third party may transfer its economic short position to investors in our securities or in connection with a concurrent offering of other securities.

 

We do not make any representation or prediction as to the direction or magnitude of any effect that the transactions described above might have on the price of the securities. In addition, we do not make any representation that underwriters will engage in such transactions or that such transactions, once commenced, will not be discontinued without notice.

 

The specific terms of any lock-up provisions in respect of any given offering will be described in the applicable prospectus supplement.

 

To comply with applicable state securities laws, the securities offered by this prospectus will be sold, if necessary, in such jurisdictions only through registered or licensed brokers or dealers. In addition, securities may not be sold in some states unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with.

 

The underwriters, dealers and agents may engage in transactions with us, or perform services for us, in the ordinary course of business for which they receive compensation.

 

LEGAL MATTERS

 

Lucosky Brookman LLP, Woodbridge, New Jersey, will pass upon certain legal matters relating to the issuance and sale of the securities offered hereby on behalf of Connexa Sports Technologies, Inc. Additional legal matters may be passed upon for us or any underwriters, dealers or agents, by counsel that we will name in the applicable prospectus supplement.

 

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

ON ACCOUNTING AND FINANCIAL DISCLOSURE

 

On October 30, 2024, the Board and the audit committee of the Board approved the engagement of B&A as the Company’s independent registered public accounting firm for the fiscal year ended April 30, 2025, effective immediately, and dismissed OOC as the Company’s independent registered public accounting firm.

 

Until B&A was engaged on October 31, 2024, OOC was the Company’s auditor and had audited the Company’s consolidated financial statements for the fiscal years ended April 30, 2023 and 2024.

 

The reason for the dismissal of OOC and the engagement of B&A is that due to the charges brought by the SEC against OOC for allegedly aiding and abetting a securities fraud, the risk of continuing with OOC as the Company’s auditor was no longer tolerable to the Company.

 

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

 

During the course of OOC’s engagement there were no disagreements with OOC on any matters of accounting principles or practices, financial statement disclosure or auditing scope and procedures which, if not resolved to the satisfaction of OOC, would have caused OOC to make reference to the matter in its audit opinion.

 

We have provided OCC with a copy of the disclosures set forth under the heading “Changes In and Disagreements with Accountants on Accounting and Financial Disclosure” in this prospectus.

 

Prior to the engagement of B&A, we did not consult with B&A on matters that involved the application of accounting principles to a specified transaction, the type of audit opinion that might be rendered on our consolidated financial statements or any other matter that was either the subject of a disagreement or a reportable event.

 

EXPERTS

 

The financial statements as of and for the years ended April 30, 2024 and 2023 of Connexa have been audited by OOC, an independent registered public accounting firm, and have been included on the authority of said firm as experts in auditing and accounting.

 

The financial statements as of and for the years ended January 31, 2024 and 2023 of YYEM have been audited by OOC and have been included on the authority of said firm as experts in auditing and accounting.

 

 

The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

 

Subject to Completion, dated February 14, 2025.

 

PROSPECTUS

 

CONNEXA SPORTS TECHNOLOGIES INC.

 

Up to $3,196,275 of Shares of

 

Common Stock

 

We have entered into a sales agreement (the “Sales Agreement”) with A.G.P./Alliance Global Partners (the “Sales Agent” or “AGP”), pursuant to which we may, from time to time, issue and sell shares of our common stock, $0.001 par value per share (the “Common Stock”), covered by this prospectus supplement and accompanying prospectus from time to time through or to the Sales Agent, acting as our agent or principal.

 

An At-the-Market (“ATM”) program will allow us to raise capital by selling shares of Common Stock in open market transactions at our discretion. Unlike in underwritten public offerings, sales under ATM programs are not marketed, they are made at prevailing market prices, and they are generally less dilutive to stockholders than marketed offerings that generate the same net proceeds because (i) they are typically less expensive to transact than marketed offerings and (ii) they can be executed without a discount to the prevailing market price of the stock that is typical in marketed offerings. Our Board of Directors (the “Board”) has concluded that, at this time, it is in our best interest to have an ATM program available and to be used at our discretion for capital raising, since it enables us to determine the timing, quantity, and pricing of sales. Under the Sales Agreement, we will not be obligated to sell any shares, but we may issue and sell shares of Common Stock having an aggregate gross sales price of up to $3,196,275 through the Sales Agent.

 

The Common Stock is listed on the Nasdaq Capital Market under the symbol “YYAI.” On February 10, 2025, the closing sale price of the Common Stock was $0.40.

 

The aggregate market value of the outstanding Common Stock held by non-affiliates is $9,588,826.46 based on 14,563,026 shares of outstanding Common Stock, of which 8,127,572 are held by affiliates, and a per share price of $1.49 based on the closing sale price of the Common Stock on January 14, 2025. Pursuant to General Instruction I.B.6 of Form S-3, in no event will we sell Common Stock in a public primary offering with a value exceeding one-third of our public float in any 12-month period so long as our public float remains below $75,000,000. We have not offered any securities pursuant to General Instruction I.B.6. of Form S-3 during the prior 12 calendar month period that ends on and includes the date of this prospectus.

 

Shares of Common Stock covered by this prospectus may be sold by any method deemed to be an “at-the-market offering” as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended (the “Securities Act”). If authorized by us in writing, the Sales Agent may also sell shares of our Common Stock in negotiated transactions at market prices prevailing at the time of sale or at prices related to such prevailing market prices and/or by any other method permitted by law. If we and the Sales Agent agree on any method of distribution other than sales of shares of our Common Stock on or through Nasdaq or another existing trading market in the United States at market prices, we will file a further prospectus supplement providing all information about such offering as required by Rule 424(b) under the Securities Act. The Sales Agent is not required to sell any specific number or dollar amount of securities but, when it receives a sale order from us, the Sales Agent has agreed to use commercially reasonable efforts consistent with normal trading and sales practices to execute the order on mutually agreed terms. There is no arrangement for funds to be received in any escrow, trust, or similar arrangement.

 

The compensation payable to the Sales Agent for sales of Common Stock sold pursuant to the Sales Agreement will be 3.0% of the gross proceeds of the sales price of Common Stock sold, in addition to reimbursement of certain expenses. See “Plan of Distribution.” We anticipate no other commissions or material expenses for sales under the Sales Agreement. The orders will be executed at price limits imposed by us.

 

Even though this prospectus does not relate to a marketed offering of Common Stock, in connection with the sale of Common Stock under the Sales Agreement, the Sales Agent will be deemed to be an “underwriter” within the meaning of the Securities Act, and the compensation of the Sales Agent will be deemed to be underwriting commissions or discounts. We have agreed to indemnify the Sales Agent against certain civil liabilities, including liabilities under the Securities Act. See the section titled “Plan of Distribution” on page S-8 of this prospectus.

 

We are a “controlled company” as defined under the Nasdaq Stock Market Listing Rules, because our existing controlling shareholder Mr. Hongyu Zhou is able to exercise a majority of the total voting power of our Common Stock. As a controlled company, we may elect not to comply with certain Nasdaq corporate governance requirements, including the requirements to have (i) a board composed of a majority of independent directors; (ii) compensation of executive officers determined by a majority of the independent directors or a compensation committee comprised solely of independent directors; and (iii) director nominees selected or recommended for our board either by a majority of the independent directors or by a nominating committee comprised solely of independent directors. If we cease to be a “controlled company” and our shares are listed on Nasdaq, we will be required to comply with these standards and, depending on the independence determination with respect to our then-current directors, we may be required to add additional directors to our board to achieve such compliance within the applicable transition periods. We currently do, and intend to continue to, comply with the Nasdaq corporate governance requirements for companies that are not controlled companies.

 

INVESTING IN OUR SECURITIES INVOLVES RISKS. SEE THE “RISK FACTORS” BEGINNING ON PAGE S-5 OF THIS PROSPECTUS AND IN THE DOCUMENTS INCORPORATED BY REFERENCE IN THIS PROSPECTUS CONCERNING FACTORS YOU SHOULD CONSIDER BEFORE INVESTING IN OUR COMMON STOCK.

 

We face risks associated with our operating subsidiary, Yuanyu Enterprise Management Co., Limited (“YYEM”) being based in the Hong Kong Special Administrative Region (“Hong Kong”) of the People’s Republic of China (the “PRC”). As a special administrative region of the PRC, Hong Kong enjoys separate governing and economic systems from that of mainland China under the principle of “one country, two systems.” The Basic Law of the Hong Kong Special Administrative Region (the “Basic Law”) provides that PRC laws and regulations shall not be applied in Hong Kong except for those listed in Annex III of the Basic Law, which is confined to laws relating to national defense, foreign affairs, and other matters that are not within the scope of autonomy. YYEM therefore is not directly subject to PRC laws and regulations regarding the general conduct of its business or regarding overseas listings. Nevertheless, Hong Kong is part of China, giving rise to a number of regulatory, liquidity, and enforcement risks. For example, we may face risks and uncertainties regarding the enforcement of laws and the fact that rules and regulations in the PRC can change quickly with little advance notice. In addition, the Chinese government could intervene or influence our operations at any time, or could exert more control over offerings conducted overseas or foreign investment in China-based issuers, which could result in a material change in our operations or the value of our Common Stock. Any actions by the Chinese government to exert more oversight and control over offerings that are conducted overseas or over foreign investment in China-based issuers, in particular any effort to extend such actions directly or indirectly to Hong Kong-based companies, could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless. See “The Company — Permission or Approvals Required from the PRC Authorities with respect to the Operations of YYEM.”

 

Following the completion of the Acquisition (as defined below), we directly own YYEM and do not have or intend to have any contractual arrangement to establish a variable interest entity (“VIE”) structure with any entity in mainland China. If we did have a VIE structure, any action by the Chinese government to disallow such structures would likely result in a material change in our operations and a material change in the value of the securities we are registering for sale, including the possibility that such development could cause the value of our securities to significantly decline or become worthless. 

 

In the event that YYEM were to become subject to PRC laws and regulations, it could incur material costs to ensure compliance, and it might be subject to fines, or no longer be permitted to continue business operations as presently conducted; and we could experience devaluation of our securities or delisting, or no longer be permitted to conduct offerings to foreign investors. Being based in Hong Kong, YYEM faces risks and uncertainties associated with the complex and evolving PRC laws and regulations, in particular, whether and how those laws and regulations, including recent PRC government statements and regulatory developments such as those relating to corporate structure, overseas listings, data- and cyberspace security, and anti-monopoly concerns, might be applicable to Hong Kong-based companies such as YYEM. If certain PRC laws and regulations were to become applicable to YYEM in the future, it could have a material adverse impact on our business, financial condition, and results of operations and on our ability to offer or continue to offer securities to investors, any of which could cause the value of our securities, including the shares that we are registering for sale, to significantly decline or become worthless.

 

One of YYEM’s licensees is based in Mainland China, which imposes various limitations, procedures, and formalities on payments out of China. YYEM understands from this licensee that because the royalties due under the applicable licensing agreement constitute current account payments, the payment of the royalties is permitted under PRC regulations, subject to certain routine requirements, but there can be no assurance that China’s capital controls will not hinder the ability of the licensee to make the required royalty payments on time or at all.

 

On December 16, 2021, the PCAOB reported that it was unable to completely inspect or investigate registered public accounting firms headquartered in mainland China or Hong Kong because of a position taken by one or more authorities in each of those jurisdictions. However, following the signing of a Statement of Protocol with the China Securities Regulatory Commission (the “CSRC”) and the Ministry of Finance of the PRC in August 2022, the PCAOB on December 15, 2022 vacated its previous determination and confirmed that it was now able to secure complete access to inspect and investigate registered public accounting firms headquartered in those jurisdictions. Nevertheless, should PRC authorities obstruct or otherwise fail to facilitate the PCAOB’s access in the future, the PCAOB may issue a new determination.

 

Neither our current auditor, Bush & Associates CPA (“B&A”), nor our former auditor, Olayinka Oyebola & Co. (“OOC”), is headquartered in mainland China or Hong Kong and neither was identified as an accounting firm subject to the determinations announced by the PCAOB in December 2021. Nevertheless, should B&A or OOC in the future have any work papers in China or Hong Kong that the PCAOB is unable to fully inspect, it will be difficult to evaluate the effectiveness of B&A’s or OOC’s audit procedures or equity control procedures and investors could consequently lose confidence in our reported financial information and procedures or the quality of our financial statements, which could adversely affect us and our securities. Furthermore, if trading in our securities is prohibited under the Holding Foreign Companies Accountable Act (“HFCAA”) in the future because the PCAOB determines that it cannot inspect or fully investigate B&A at such future time, an exchange will likely delist our securities. See “The Company — Permission or Approvals Required from the PRC Authorities with respect to the Operations of YYEM.”

 

OOC and its principal, Olayinka Oyebola, have been charged by the SEC in connection with allegedly aiding and abetting a securities fraud. On October 30, 2024, the Board of Directors and the audit committee approved the engagement of B&A as the Company’s independent registered public accounting firm for the fiscal year ended April 30, 2025, effective immediately, and dismissed OOC as the Company’s independent registered public accounting firm. Because OOC was also the independent registered public accounting firm for YYEM for the fiscal year ended January 31, 2024, if OOC’s audit work is found to be deficient, financial reporting of the Company and YYEM could be questioned, leading to potential restatements, delays in regulatory filings, or reputational harm. If OOC is barred from acting as auditors or accountants for U.S. public companies, we will be unable to include financial statements of the Company and YYEM reviewed by OOC in any filing made after that date, and those financial statements will need to be reaudited. Any of these outcomes could have a material adverse effect on our and YYEM’s business, financial condition, and stock price, which could contribute to the loss of all or part of your investment. See “Risk Factors — The SEC’s charges against our former independent auditor, Olayinka Oyebola & Co., could impact the credibility of our financial statements and those of YYEM, potentially leading to restatements and other adverse effects.”

 

We anticipate that revenue will primarily be received by YYEM, where it will be used to pay operating expenses and be reinvested in outsourced R&D, the purchase of additional patents and other intellectual property, and branding and other promotional activities, among other things. If needed, management may decide to transfer cash between YYEM and the Company, or between one of these two entities and any subsidiaries that we may establish or acquire in other jurisdictions. We do not intend to declare dividends or distribute earnings (if any) in the near future. Any determination to declare dividends or distribute earnings (if any) in the future will be at the discretion of our board of directors.

 

The Company and YYEM are not subject to any significant restrictions on buying or selling foreign exchange or on transferring cash between entities within our group, across borders, or to U.S. investors. Nor are there any significant restrictions or limitations on our ability to distribute earnings (if any) from YYEM to the Company and U.S. investors or our ability to settle amounts owed. However, there can be no assurance that the PRC government will not intervene or impose restrictions on the ability of YYEM to buy or sell foreign exchange or transfer or distribute cash within our organization.

 

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

 

A.G.P.

 

The date of this prospectus supplement is        , 2025.

 

 

TABLE OF CONTENTS

 

PROSPECTUS SUPPLEMENT

 

	Page
ABOUT THIS PROSPECTUS SUPPLEMENT	S-1
PROSPECTUS SUMMARY	S-2
THE OFFERING	S-4
RISK FACTORS	S-5
CAUTIONARY NOTE ABOUT FORWARD-LOOKING STATEMENTS	S-7
USE OF PROCEEDS	S-7
DILUTION	S-7
PLAN OF DISTRIBUTION	S-8
LEGAL MATTERS	S-10
EXPERTS	S-10
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE	S-10
WHERE YOU CAN FIND MORE INFORMATION	S-10

 

 

ABOUT THIS PROSPECTUS SUPPLEMENT

 

This prospectus supplement and the accompanying prospectus are part of a registration statement on Form S-3 that we filed with the Securities and Exchange Commission (the “SEC” or the “Commission”) utilizing a “shelf” registration process on January 8, 2025. Under the shelf registration process, we may offer shares of Common Stock from time to time at prices and on terms to be determined by market conditions at the time of offering, and, specifically, up to $3,196,275 under this prospectus supplement. This prospectus supplement and the documents incorporated herein by reference include important information about us, the shares being offered, and other information you should know before investing in the Common Stock.

 

This prospectus supplement describes the specific terms of the Common Stock we are offering and also adds to, and updates information contained in the accompanying prospectus and the documents incorporated by reference into this prospectus supplement. To the extent there is a conflict between the information contained in this prospectus supplement, on the one hand, and the information contained in the accompanying prospectus or any document incorporated by reference into this prospectus supplement that was filed with the SEC before the date of this prospectus supplement, on the other hand, you should rely on the information in this prospectus supplement. If any statement in one of these documents is inconsistent with a statement in another document having a later date — for example, a document incorporated by reference into this prospectus supplement — the statement in the document having the later date modifies or supersedes the earlier statement.

 

You should rely only on the information contained in this prospectus supplement and the information incorporated or deemed to be incorporated by reference in this prospectus supplement and in any free writing prospectus that we may authorize for use in connection with this offering. We have not, and the Sales Agent has not, authorized anyone to provide you with information that is in addition to or different from that contained or incorporated by reference in this prospectus supplement. If anyone provides you with different or inconsistent information, you should not rely on it. We are not, and the Sales Agent is not, offering to sell these securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information contained or incorporated by reference in this prospectus is accurate as of any date other than the date of this prospectus or in the case of the documents incorporated by reference, the date of such documents regardless of the time of delivery of this prospectus or any sale of the Common Stock. Our business, financial condition, liquidity, results of operations, and prospects may have changed since those dates.

 

You should read this prospectus supplement, and the documents incorporated by reference into this prospectus supplement and in any free writing prospectus that we may authorize for use in connection with this offering, in their entirety before making an investment decision. You should also read and consider the information in the documents to which we have referred you in the sections of this prospectus entitled “Where You Can Find More Information; Incorporation by Reference.”

 

We are offering to sell, and seeking offers to buy, shares of Common Stock only in jurisdictions where offers and sales are permitted. The distribution of this prospectus supplement and the offering of the Common Stock in certain jurisdictions may be restricted by law. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to the offering of the Common Stock and the distribution of this prospectus outside the United States. This prospectus does not constitute, and may not be used in connection with, an offer to sell, or a solicitation of an offer to buy, any securities offered by this prospectus by any person in any jurisdiction in which it is unlawful for such person to make such an offer or solicitation.

 

We further note that the representations, warranties and covenants made by us in any agreement that is filed as an exhibit to any document that is incorporated by reference into the prospectus and accompanying prospectus were made solely for the benefit of the parties to such agreement, including, in some cases, for the purpose of allocating risk among the parties to such agreement, and should not be deemed to be a representation, warranty or covenant to you. Moreover, such representations, warranties or covenants were accurate only as of the date when made. Accordingly, such representations, warranties and covenants should not be relied on as accurately representing the current state of our affairs.

 

As used in this prospectus, unless the context otherwise requires, the terms “Connexa,” “Company,” “we,” “us,” or “our” refer to Connexa Sports Technologies Inc. and its subsidiaries. When we refer to “you,” we mean the holders of the applicable series of securities.

 

 

 

 

 

 

 

 

RISK FACTORS

 

Before purchasing any of the securities, you should carefully consider the risk factors relating to our company described below and incorporated by reference in this prospectus from our Annual Report on Form 10-K for the year ended April 30, 2024 or Quarterly Reports on Form 10-Q, as well as the risks, uncertainties, and additional information set forth in other documents incorporated by reference in this prospectus. For a description of these reports and documents, and information about where you can find them, see “Where You Can Find More Information; Incorporation by Reference.” Additional risks not presently known or that we presently consider to be immaterial could subsequently materially and adversely affect our financial condition, results of operations, business and prospects.

 

Risks Related to Our Business, Operations, Industry, Legal, and Regulatory Requirements

 

We have limited financial resources. Our former independent registered public accounting firm’s report includes an explanatory paragraph stating that there is substantial doubt about our ability to continue as a going concern.

 

As a result of our deficiency in working capital on April 30, 2024 and other factors, our former auditors, Olayinka Oyebola & Co. (“OOC”), have included a paragraph in their audit report regarding substantial doubt about our ability to continue as a going concern.

 

We have recorded net losses since inception and have significant accumulated deficits. We have relied upon loans and equity financings for operating capital. Total revenues may be insufficient to pay off debt and fund operations. We may be required to rely on further debt financing, further loans from related parties, and private or public placements of shares of Common Stock for our additional cash needs. Such funding sources may not be available, or the terms of such funding sources may not be acceptable to the Company.

 

The SEC’s charges against our former independent auditor, Olayinka Oyebola & Co., could impact the credibility of our financial statements and those of YYEM, potentially leading to restatements and other adverse effects.

 

Our former independent auditor, OOC, has been charged by the SEC in connection with allegedly aiding and abetting violations of the antifraud provisions of the federal securities laws. The SEC also charged OOC’s principal, Olayinka Oyebola, with allegedly aiding and abetting a violation involving lying to auditors. The SEC complaint seeks civil penalties as well as permanent injunctive relief, including an order permanently barring Mr. Oyebola and OOC from acting as auditors or accountants for U.S. public companies or otherwise providing substantial assistance in the preparation of financial statements filed with the SEC. This action could affect the credibility of the financial statements audited by OOC. If their audit work is found to be deficient, our financial reporting could be questioned, leading to potential restatements, delays in regulatory filings, or reputational harm. If OOC is barred from acting as auditors or accountants for U.S. public companies, we will be unable to include the financial statements reviewed by OOC in any filing made after that date, and our financial statements will need to be reaudited. Any of these outcomes could have a material adverse effect on our business, financial condition, and stock price, which could contribute to the loss of all or part of your investment.

 

On October 30, 2024, the Board of Directors and the audit committee approved the engagement of B&A as the Company’s independent registered public accounting firm for the fiscal year ended April 30, 2025, effective immediately, and dismissed OOC as the Company’s independent registered public accounting firm.

 

In addition to serving as our former independent auditor, OOC was also the independent registered public accounting firm for YYEM for the fiscal year ended January 31, 2024. As a result, the SEC action could impact the credibility of YYEM’s financial statements audited by OOC. If a restatement of YYEM’s financial statements is required, it could materially affect our reported financial condition and results of operations, particularly given the impact of the Acquisition. Specifically, any potential restatement could affect the accounting treatment of the acquisition, our historical and pro forma financial statements, and the value of YYEM’s assets on our balance sheet. Furthermore, if any deficiencies in OOC’s audit work necessitate reauditing YYEM’s financial statements, it could result in delays in our SEC filings and increased costs associated with obtaining new audits. These factors could have a material adverse effect on our financial condition, business operations, and the value of our securities.

 

Risks Relating to this Offering

 

We may allocate the net proceeds from this offering in ways that you and other stockholders may not approve.

 

We currently intend to use the net proceeds of this offering, if any, for general corporate purposes, which may include working capital, capital expenditures, acquisitions of additional brands or companies (although no potential acquisition targets have been currently identified), and investments. This expected use of the net proceeds from this offering represents our intentions based on our current plans and business conditions. The amounts and timing of our actual expenditures may vary significantly depending on numerous factors. Because of the number and variability of factors that will determine our use of the proceeds from this offering, their ultimate use may vary substantially from their currently intended use. As a result, we will retain broad discretion over the allocation of the net proceeds from this offering and could spend the proceeds in ways that do not necessarily improve our operating results or enhance the value of the Common Stock. See “Use of Proceeds.”

 

 

The sale of the Common Stock in this offering and any future sales of the Common Stock may depress our stock price and our ability to raise funds in new stock offerings.

 

We may issue Common Stock from time to time in connection with this offering. This issuance from time to time of these new shares of Common Stock, or our ability to issue these shares of Common Stock in this offering, could result in resales of the Common Stock by our current stockholders concerned about the potential dilution of their holdings. In addition, sales of the Common Stock on the public market following this offering could lower the market price of the Common Stock. Sales may also make it more difficult for us to sell equity securities or equity-related securities in the future at a time and price that our management deems acceptable, or at all. We cannot predict the number of these shares that might be resold or the effect that future sales of shares of Common Stock would have on the market price of the Common Stock.

 

We plan to sell shares of the Common Stock in “at-the-market offerings” and investors who buy shares of Common Stock at different times will likely pay different prices.

 

Investors who purchase shares of Common Stock in this offering at different times will likely pay different prices and may experience different outcomes in their investment results. We will have discretion, subject to the effect of market conditions, to vary the timing, price, and number of shares sold in this offering. Investors may experience a decline in the value of their shares of Common Stock. The trading price of the Common Stock has been volatile and subject to wide fluctuations. Many factors could have an impact on the market price of the Common Stock, including the factors described above and in the accompanying prospectus and those incorporated by reference herein and therein.

 

We cannot predict the actual number of shares of Common Stock that we will sell under the Sales Agreement, or the gross proceeds resulting from those sales.

 

Subject to certain limitations in the Sales Agreement and compliance with applicable law, we will have the discretion to deliver a placement notice to the Sales Agent at any time during the term of the Sales Agreement. The number of shares of Common Stock that are sold through the Sales Agent will fluctuate based on a number of factors, including the market price of the Common Stock during the sales period, the limits we set with the Sales Agent in any applicable placement notice, and the demand for the Common Stock during the sales period. Because the price per share of each share sold will fluctuate during the sales period, it is not possible to predict the number of shares that will be sold or the gross proceeds we will raise in connection with those sales.

 

Sales of a significant number of shares of Common Stock in the public markets, or the perception that such sales could occur, could depress the market price of the Common Stock.

 

Sales of a significant number of shares of Common Stock in the public markets, or the perception that such sales could occur as a result of our utilization of our shelf registration statement, our Sales Agreement with the Sales Agent or otherwise could depress the market price of the Common Stock and impair our ability to raise capital through the sale of additional equity securities. We cannot predict the effect that future sales of Common Stock or the market perception that we are permitted to sell a significant number of our securities would have on the market price of the Common Stock.

 

We will be a “controlled company” within the meaning of Nasdaq listing standards and, as a result, will qualify for exemptions from certain corporate governance requirements.

 

Hongyu Zhou, a director of the Company, holds approximately 55.8% of the voting power in us and, as a result, we are a “controlled company” within the meaning of the Nasdaq listing standards. For so long as we remain a controlled company, we are eligible to be exempted from the obligation to comply with certain Nasdaq corporate governance requirements, however, we do not plan to take advantage of the exemptions provided to controlled companies, which include:

 

	●	our Board is not required to be comprised of a majority of independent directors;
	●	our Board is not subject to the compensation committee requirements; and
	●	we are not subject to the requirements that director nominees be selected either by the independent directors or a nomination committee comprised solely of independent directors.

 

The controlled company exemptions do not apply to the audit committee requirement or the requirement for executive sessions of independent directors. We are required to disclose in our annual report that we are a controlled company and the basis for that determination. Although we do not plan to take advantage of the exemptions provided to controlled companies, we may in the future take advantage of such exemptions. Our status as a controlled company could cause our securities to be less attractive to certain investors or otherwise adversely affect our securities’ trading price.

 

 

SPECIAL NOTICE REGARDING FORWARD-LOOKING STATEMENTS

 

This prospectus contains forward-looking statements that involve risks and uncertainties, principally in the sections entitled “Risk Factors.” All statements other than statements of historical fact contained in this prospectus, including statements regarding future events, our future financial performance, business strategy and plans and objectives of management for future operations, are forward-looking statements. We have attempted to identify forward-looking statements by terminology such as “anticipates,” “believes,” “can,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “should,” or “will” or the negative of these terms or other comparable terminology. Although we do not make forward-looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks outlined under “Risk Factors” or elsewhere in this prospectus, which may cause our or our industry’s actual results, levels of activity, performance or achievements expressed or implied by these forward-looking statements to differ materially from such predictions.

 

Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by which, that performance or those results will be achieved. Forward-looking statements are based on information available at the time they are made or on management’s good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from what is expressed in or suggested by the forward-looking statements.

 

Forward-looking statements speak only as of the date they are made. You should not put undue reliance on any forward-looking statements. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, except to the extent required by applicable securities laws. If we do update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

 

USE OF PROCEEDS

 

We may issue and sell shares of Common Stock having aggregate sales proceeds of up to $3,196,275 from time to time, before deducting Sales Agent commissions and expenses. The amount of proceeds from this offering will depend upon the number of shares of Common Stock sold and the market price at which they are sold. Because there is no minimum offering amount required as a condition of this offering, the actual total public offering amount, commissions and proceeds to us, if any, are not determinable at this time. There can be no assurance that we will be able to sell any shares under or fully utilize the Sales Agreement.

 

As of the date of this prospectus, we cannot specify with certainty all of the particular uses for the net proceeds to us from this offering. However, we currently intend to use the net proceeds from this offering for capital expenditure, sales and marketing activities, and working capital and general corporate purposes.

 

We will retain broad discretion in the allocation of the net proceeds from this offering and could utilize the proceeds in ways that do not necessarily improve our results of operations or enhance the value of the Common Stock.

 

DILUTION

 

The net tangible book value of our Common Stock as of October 31, 2024, was approximately $8,039,781, or approximately $1.249 per share of Common Stock. Net tangible book value per share represents the amount of our total tangible assets less total liabilities divided by the total number of our Common Stock outstanding as of October 31, 2024.

 

 

After the issuance of 8,127,572 shares of Common Stock to Mr. Hongyu Zhou on November 21, 2024 in the Share Exchange Transaction, our pro forma net tangible book value as of October 31, 2024 would have been approximately $11,776,435, or approximately $0.809 per share of Common Stock.

 

After giving effect to the sale of 8,405,815 shares of Common Stock in this offering at an assumed offering price of $0.40 per share, the last reported sale price of Common Stock on the Nasdaq Capital Market on February 10, 2025, and after deducting commissions and estimated offering expenses payable by us (estimated at $465,435), our pro forma as adjusted net tangible book value as of October 31, 2024, would have been approximately $14,673,326, or approximately $0.639 per share of Common Stock. This represents an immediate decrease in pro forma net tangible book value of approximately $0.170 per share of Common Stock to our existing security holders and an immediate increase in pro forma as adjusted net tangible book value of approximately $0.239 per share of Common Stock to the purchaser of securities in this offering, as illustrated by the following table:

 

Assumed Offering price per share of Common Stock						$	0.40
Net tangible book value per share of Common Stock as of October 31,2024		$	1.249
Decrease in pro forma net tangible book value per share of Common Stock attributable to pro forma adjustment		$	(0.440	)
Pro forma net tangible book value per share of Common Stock as of October 31, 2024		$	0.809
Decrease in pro forma net tangible book value per share of Common Stock attributable to the offering		$	0.170
Pro forma as adjusted net tangible book value per share of Common Stock as of October 31, 2024, after giving effects to this offering						$	0.639
Increase in pro forma as adjusted net tangible book value per share Common Stock to new investors participating in this offering						$	0.239

 

To the extent that outstanding exercisable options or warrants are exercised, you may experience dilution. In addition, we may need to raise additional capital and to the extent that we raise additional capital by issuing equity or convertible debt securities your ownership may be diluted.

 

The above discussion and table are based on approximately 6,435,454 shares of Common Stock outstanding as of October 31, 2024 and does not include:

 

	●	2,024 shares of Common Stock underlying outstanding warrants, at a weighted average exercise price of $0.01 per share; and
	●	1,500,000 shares of Common Stock reserved for future issuance under the 2020 Slinger Bag Inc. Global Share Incentive Plan.

 

PLAN OF DISTRIBUTION

 

We have entered into the Sales Agreement with AGP under which we may from time to time issue and sell shares of Common Stock, having a maximum aggregate offering price of up to $3,196,275, to or through AGP, acting as our sales agent or principal. The sales of Common Stock, if any, under this prospectus supplement will be made at market prices by any method deemed to be an “at-the-market offering” as defined in Rule 415(a)(4) under the Securities Act, including sales made directly on Nasdaq, on any other existing trading market for the Common Stock or to or through a market maker. If we and AGP agree on any method of distribution other than sales of shares of Common Stock on or through Nasdaq or another existing trading market in the United States at market prices, we will file a further prospectus supplement providing all information about such offering as required by Rule 424(b) under the Securities Act.

 

Each time that we wish to issue and sell shares of Common Stock under the Sales Agreement, we will provide AGP with a placement notice describing the amount of shares to be sold, the time period during which sales are requested to be made, any limitation on the amount of shares of Common Stock that may be sold in any single day, any minimum price below which sales may not be made or any minimum price requested for sales in a given time period and any other instructions relevant to such requested sales. Upon receipt of a placement notice, AGP, acting as our sales agent, will use commercially reasonable efforts, consistent with its normal trading and sales practices and applicable state and federal laws, rules and regulations and the rules of Nasdaq, to sell shares of Common Stock under the terms and subject to the conditions of the placement notice and the Sales Agreement. We or AGP may suspend the offering of Common Stock pursuant to a placement notice upon notice and subject to other conditions.

 

 

Settlement for sales of Common Stock, unless the parties agree otherwise, will occur on the first trading day following the date on which any sales are made in return for payment of the net proceeds to us. There are no arrangements to place any of the proceeds of this offering in an escrow, trust or similar account. Sales of Common Stock as contemplated in this prospectus supplement will be settled through the facilities of The Depository Trust Company or by such other means as we and AGP may agree upon.

 

Because there are no minimum sale requirements as a condition to this offering, the actual total public offering price, commissions and net proceeds to us, if any, are not determinable at this time. The actual dollar amount and number of shares of Common Stock we sell through this prospectus supplement will be dependent, among other things, on market conditions and our capital raising requirements.

 

We will report at least quarterly the number of shares of Common Stock sold through AGP under the Sales Agreement, the net proceeds to us and the compensation paid by us to AGP in connection with the sales of Common Stock under the Sales Agreement.

 

The offering pursuant to the Sales Agreement will terminate upon the earlier of (i) the sale of all shares of Common Stock subject to the Sales Agreement and (ii) termination of the Sales Agreement as permitted therein. We may terminate the Sales Agreement in our sole discretion at any time by giving five days’ prior notice to AGP. AGP may terminate the Sales Agreement under the circumstances specified in the Sales Agreement and in its sole discretion at any time by giving five days’ prior notice to us.

 

This prospectus supplement in electronic format may be made available on a website maintained by AGP, and AGP may distribute this prospectus supplement electronically.

 

Fees and Expenses

 

We will pay AGP commissions for its services in acting as our sales agent in the sale of Common Stock pursuant to the Sales Agreement. AGP will be entitled to compensation at a fixed commission rate of 3.0% of the gross proceeds from the sale of Common Stock on our behalf pursuant to the Sales Agreement. We have also agreed to reimburse AGP for its reasonable and documented out-of-pocket expenses (including but not limited to the reasonable and documented fees and expenses of its legal counsel) in an amount not to exceed $50,000 and up to an additional $20,000 per fiscal year for maintenance.

 

Assuming the sale of the maximum amount of the Common Stock permitted by regulation to be sold pursuant to the registration statement to which this prospectus supplement relates, we estimate that the total expenses for this offering, excluding compensation payable to AGP and certain expenses reimbursable to AGP under the terms of the Sales Agreement, will be approximately $75,000. The remaining sales proceeds, after deducting any expenses payable by us and any transaction fees imposed by any governmental, regulatory, or self-regulatory organization in connection with the sales, will equal our net proceeds for the sale of such Common Stock.

 

Regulation M

 

In connection with the sale of Common Stock on our behalf, AGP will be deemed to be an “underwriter” within the meaning of the Securities Act, and the compensation of AGP will be deemed to be underwriting commissions or discounts.

 

AGP will not engage in any market making activities involving the Common Stock while the offering is ongoing under this prospectus supplement if such activity would be prohibited under Regulation M or other anti-manipulation rules under the Securities Act. As our sales agent, AGP will not engage in any transactions that stabilize the Common Stock.

 

Indemnification

 

We have agreed to indemnify AGP against certain civil liabilities, including liabilities under the Securities Act and the Securities Exchange Act of 1934, as amended, and to contribute to payments that AGP may be required to make in respect of such liabilities.

 

 

Listing

 

The Common Stock is listed on the Nasdaq Capital Market under the symbol “YYAI.”

 

Other Relationships

 

AGP and/or its affiliates may in the future engage, in transactions with, and may from time to time perform investment banking and advisory services for us in the ordinary course of their business and for which it will receive customary fees and expenses. In addition, in the ordinary course of its business activities, AGP and its affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for its own account and for the accounts of its customers. Such investments and securities activities may involve securities and/or instruments of ours or our affiliates.

 

LEGAL MATTERS

 

The validity of the securities that may be offered hereby will be passed upon for us by Lucosky Brookman LLP, Woodbridge, New Jersey. The Sales Agent is being represented in connection with this offering by Thompson Hine LLP, New York, New York.

 

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

ON ACCOUNTING AND FINANCIAL DISCLOSURE

 

On October 30, 2024, the Board and the audit committee of the Board approved the engagement of B&A as the Company’s independent registered public accounting firm for the fiscal year ended April 30, 2025, effective immediately, and dismissed OOC as the Company’s independent registered public accounting firm.

 

Until B&A was engaged on October 31, 2024, OOC was the Company’s auditor and had audited the Company’s consolidated financial statements for the fiscal years ended April 30, 2023 and 2024.

 

The reason for the dismissal of OOC and the engagement of B&A is that due to the charges brought by the SEC against OOC for allegedly aiding and abetting a securities fraud, the risk of continuing with OOC as the Company’s auditor was no longer tolerable to the Company.

 

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

 

During the course of OOC’s engagement there were no disagreements with OOC on any matters of accounting principles or practices, financial statement disclosure or auditing scope and procedures which, if not resolved to the satisfaction of OOC, would have caused OOC to make reference to the matter in its audit opinion.

 

We have provided OCC with a copy of the disclosures set forth under the heading “Changes In and Disagreements with Accountants on Accounting and Financial Disclosure” in this prospectus.

 

Prior to the engagement of B&A, we did not consult with B&A on matters that involved the application of accounting principles to a specified transaction, the type of audit opinion that might be rendered on our consolidated financial statements or any other matter that was either the subject of a disagreement or a reportable event.

 

EXPERTS

 

The financial statements as of and for the years ended April 30, 2024 and 2023 of Connexa have been audited by Olayinka Oyebola & Co. (“OOC”), an independent registered public accounting firm, and have been included on the authority of said firm as experts in auditing and accounting.

 

The financial statements as of and for the years ended January 31, 2024 and 2023 of YYEM have been audited by OOC and have been included on the authority of said firm as experts in auditing and accounting.

 

WHERE YOU CAN FIND MORE INFORMATION; INCORPORATION BY REFERENCE

 

Available Information

 

The SEC maintains a website that contains reports, proxy and information statements and other information about issuers, such as us, who file electronically with the SEC. The address of that website is www.sec.gov.

 

Our website address is www.yuanyuenterprise.com. The information on our website, however, is not, and should not be deemed to be, a part of this prospectus.

 

This prospectus supplement is part of a registration statement that we filed with the SEC and does not contain all of the information in the registration statement. The full registration statement may be obtained from the SEC or us, as provided below. Statements in this prospectus supplement about the Sales Agreement are summaries and each statement is qualified in all respects by reference to the Sales Agreement to which it refers. You should refer to the actual Sales Agreement for a more complete description of the relevant matters. You may inspect a copy of the registration statement through the SEC’s website, as provided above.

 

Incorporation by Reference

 

The SEC’s rules allow us to “incorporate by reference” information into this prospectus supplement, which means that we can disclose important information to you by referring you to another document filed separately with the SEC. The information incorporated by reference is deemed to be part of this prospectus supplement, and subsequent information that we file with the SEC will automatically update and supersede that information. Any statement contained in a previously filed document incorporated by reference will be deemed to be modified or superseded for purposes of this prospectus supplement to the extent that a statement contained in this prospectus supplement modifies or replaces that statement.

 

 

We incorporate by reference our documents listed below and any future filings made by us with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act between the date of this prospectus supplement and the termination of the offering of the securities described in this prospectus supplement. We are not, however, incorporating by reference any documents or portions thereof, whether specifically listed below or filed in the future, that are not deemed “filed” with the SEC, including any information furnished pursuant to Items 2.02 or 7.01 of Form 8-K or related exhibits furnished pursuant to Item 9.01 of Form 8-K.

 

This prospectus supplement incorporates by reference the documents set forth below that have previously been filed with the SEC:

 

	●	Our Annual Report on Form 10-K for the year ended April 30, 2024, filed with the SEC on July 25, 2024;
	●	Our Quarterly Report on Form 10-Q for the period ended July 31, 2024, filed with the SEC on September 10, 2024, and our Quarterly Report on Form 10-Q for the period ended October 31, 2024, filed with the SEC on December 13, 2024;
	●	Our Current Reports on Form 8-K filed with the SEC on May 7, 2024, May 17, 2024, June 17, 2024, July 2, 2024, November 1, 2024, November 25, 2024, January 14, 2025 and February 6, 2025 (in each case, except for information contained therein which is furnished rather than filed); and
	●	The description of our Common Stock contained in our registration statement on Form 8-A12B filed with the SEC on June 14, 2022.

 

All reports and other documents we subsequently file pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the termination of this offering, including all such documents we may file with the SEC after the date of the initial registration statement and prior to the effectiveness of the registration statement, but excluding any information furnished to, rather than filed with, the SEC, will also be incorporated by reference into this prospectus supplement and deemed to be part of this prospectus supplement from the date of the filing of such reports and documents.

 

You may request a free copy of any of the documents incorporated by reference in this prospectus (other than exhibits, unless they are specifically incorporated by reference in this prospectus supplement) by contacting us as follows:

 

74 E. Glenwood Ave. #320

Smyrna, DE 19977

(443) 407-7564

 

 

 

 

Up to $3,196,275 of Shares of Common Stock

 

 

 

PROSPECTUS SUPPLEMENT

 

 

 

 

 

A.G.P.

 

 

 

__________, 2025

 

 

 

 

PART II

 

INFORMATION NOT REQUIRED IN PROSPECTUS

 

Item 14. Other Expenses of Issuance and Distribution

 

The following is an estimate of the expenses (all of which are to be paid by the registrant) that we may incur in connection with the securities being registered hereby.

 

SEC registration fee		$	45,930
FINRA filing fee			45,500
Printing expenses			*
Legal fees and expenses			*
Accounting fees and expenses			*
Blue Sky qualification fees and expenses			*
Transfer agent fees and expenses			*
Trustee fees and expenses			*
Miscellaneous			*
Total		$	91,430

 

* These fees are calculated based on the securities offered and the number of issuances and accordingly cannot be estimated at this time.

 

Item 15. Indemnification of Directors and Officers

 

Our bylaws provide that we will indemnify our directors to the fullest extent authorized or permitted by applicable law. Under our Bylaws, we are required to indemnify each of our directors and officers if the basis of the indemnitee’s involvement was by reason of the fact that the indemnitee is or was our director or officer or was serving at our request as a director, officer, employee or agent for another entity. We must indemnify our officers and directors against all expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the indemnitee in connection with such action, suit or proceeding if the indemnitee acted in good faith and in a manner the indemnitee reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the indemnitee’s conduct was unlawful. Our bylaws also require us to advance expenses (including attorneys’ fees) incurred by a director or officer in defending any civil, criminal, administrative or investigative action, suit or proceeding, provided that such person will repay any such advance if it is ultimately determined that such person is not entitled to indemnification by us. Any claims for indemnification by our directors and officers may reduce our available funds to satisfy successful third-party claims against us and may reduce the amount of money available to us.

 

 

Item 16. Exhibits

 

(a) Exhibits

 

A list of exhibits filed with this registration statement on Form S-3 is set forth on the Exhibit Index below.

 

Exhibit No.		Exhibit Description
1.1**		Sales Agreement, dated January 8, 2025, by and between the Company and A.G.P./Alliance Global Partners
3.1		Certificate of Incorporation of Connexa Sports Technologies Inc. (incorporated herein by reference to Exhibit 3.1 of the Current Report on Form 8-K, filed with the SEC on May 16, 2022)
3.2		Certificate of Amendment to Certificate of Incorporation of Connexa Sports Technologies Inc., filed with the State of Delaware on September 20, 2023 (incorporated herein by reference to Exhibit 3.1 of the Quarterly Report on Form 10-Q, filed with the SEC on October 5, 2023)
3.3		Certificate of Amendment to Certificate of Incorporation of Connexa Sports Technologies Inc., filed with the State of Delaware on June 26, 2024 (incorporated herein by reference to Exhibit 3.1 of the Current Report on Form 8-K, filed with the SEC on July 2, 2024)
3.4		Amended and Restated Bylaws (incorporated herein by reference to Exhibit 3 of the Current Report on Form 8-K, filed with the SEC on October 16, 2023)
4.1**		Form of Indenture relating to the issuance from time to time in one or more series of debentures, notes, bonds or other evidence of indebtedness
5.1**		Opinion of Lucosky Brookman LLP
23.1*		Consent of Olayinka Oyebola & Co.
23.2*		Consent of Olayinka Oyebola & Co.
23.3**		Consent of Lucosky Brookman LLP (reference is made to Exhibit 5.1)
24.1**		Power of Attorney (included on signature page)
25.1+		Form T-1 Statement of Eligibility of Trustee
107**		Filing Fee Table

 

* Filed Herewith.

** Previously filed.

+ To be filed as an exhibit to a Current Report on Form 8-K or pursuant to Section 305(b)(2) of the Trust Indenture Act of 1939 under the electronic form type “305(b)(2)” and incorporated herein by reference pursuant to the requirements of Item 601(b)(2) of Regulation S-K under the Exchange Act. 

 

Item 17. Undertakings

 

The undersigned registrant hereby undertakes:

 

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

 

(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

 

(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

 

(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

 

(2) That for the purpose of determining any liability under the Securities Act of 1933 each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

 

(4) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

 

(5) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities:

 

 

The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

 

(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

 

(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

 

(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

 

(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

 

(6) The undersigned registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreement certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

 

(7) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions described in Item 14 above, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

 

(8) The undersigned registrant hereby undertakes:

 

(1) That for purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4), or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

 

(2) That for the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and this offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 

(9) The undersigned registrant hereby undertakes to file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust Indenture Act in accordance with the rules and regulations prescribed by the SEC under Section 305(b)(2) of the Trust Indenture Act.

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the Hong Kong Special Administrative Region, China, on February 14, 2025.

 

	CONNEXA SPORTS TECHNOLOGIES, INC.
	By:	/s/ Thomas Tarala
	Name:	Thomas Tarala
	Title:	Chief Executive Officer

 

POWER OF ATTORNEY

 

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated:

 

Signature		Title		Date
/s/ Thomas Tarala		Chief Executive Officer		February 14, 2025
Thomas Tarala		(Principal Executive Officer)
*		Chief Financial Officer		February 14, 2025
Guibao Ji		(Principal Financial and Accounting Officer)
		Director		February 14, 2025
Hongyu Zhou
*		Director		February 14, 2025
Warren Thomson
*		Director		February 14, 2025
Chenlong Liu
*
Kong Liu		Director		February 14, 2025

 

* By:	/s/ Thomas Tarala
	Thomas Tarala
	Attorney-in-fact

  

 

 

Exhibit 23.1

 

 

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To The Shareholders and Board of Directors of Connexa Sports Technologies, Inc.

 

We consent to the inclusion in the Form S-3 Registration Statement under the Securities Act of 1933 of Connexa Sports Technologies, Inc. of our report dated July 24th, 2024, of the balance sheet and the related statements of operations, stockholders’ equity, and cashflows for the years ended April 30, 2024, and 2023.

 

/S/ Olayinka Oyebola

OLAYINKA OYEBOLA & CO

Chartered Accountant

 

PCAOB No:5968

Lagos, Nigeria

February 14, 2025

 

 

 

Exhibit 23.2

 

 

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To The Shareholders and Board of Directors of Connexa Sports Technologies, Inc

 

We consent to the inclusion in the Form S-3 Registration Statement under the Securities Act of 1933 of Connexa Sports Technologies, Inc. of our report dated March 24th, 2024, for Yuanyu Enterprise Management Co., Limited of the balance sheet and the related statements of operations, stockholders’ equity, and cashflows for the year ended January 31, 2024, and 2023.

 

/S/ Olayinka Oyebola

OLAYINKA OYEBOLA & CO

Chartered Accountant

 

PCAOB No:5968

Lagos, Nigeria

February 14, 2025

 

 

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