Connexa Sports Technologies, Inc. reported audited operating results for the fiscal 2024 period ended April 30, 2024 and provided an update on operations.

The company reported revenue of $8.4 million for the fiscal year 2024 ended April 30 compared to $9.9 million in the year-ago period, a decrease of 15 percent.

Net sales reportedly consisted partially of shipped orders related to new orders placed and fulfilled to consumers via the company’s online marketplace and to its international distributors. The significant decrease in online consumer marketing of Slinger Bags, coupled with ongoing delays in inventory production in Asia, resulting in a significant lack of availability in Q4, all combined to contribute to the significant decrease in sales as of April 30, 2024.

Despite what the company said is ongoing high consumer demand, it also said the revenue shortfall could be directly attributed to inventory availability issues stemming back to the end of the fiscal third quarter ended December 3, 2023.

The gross margin for the full fiscal year continued to improve to 41 percent of sales, reflecting a 22 percent increase in gross profit against the sales decline for the full year.

Coupled with significant decreases in operating expenses, the company reported an operating loss of $6.4 million for the year, compared to $22.0 million in the prior year.

The company’s net loss was $15.6 million for the fiscal year, compared to a net loss of $71.1 million in fiscal 2023, which included $45.9 million in losses from discontinued businesses and loss of disposal of subsidiaries.

“The ongoing challenges faced by the company since the end of Q3 with inventory availability, for our tennis launcher in particular, drove an unexpected and significant reduction in Q4 sales,” said Mike Ballardie, CEO of Connexa Sports Technologies, Inc. “Despite this, the underlying Slinger Bag business remains resilient with high levels of consumer demand.”

Ballardie said the impact of the company’s consistent growth in gross margins and the reduction in operating expense base are delivering strong improvements to both operating and net income results.

“Within Q4, the company continued its progress by launching its Slinger App on both iOS and Android platforms and by concluding the acquisition of 20 percent of Yuanyu Enterprise Management,” Ballardie said.

On March 18, 2024, the company entered into a share purchase and share exchange agreement, to acquire a total of 70 percent of the issued and outstanding ordinary shares of Yuanyu Enterprise Management Co., Ltd. (YYEM), a Hong Kong company, from the sole shareholder of YYEM, Hongyu Zhou, for a combined $56 million. The consummation of the transactions in the Agreements will result in a change in control of the company as the shareholders of YYEM become the owners 82.4 percent of the issued and outstanding shares of common stock of the company.

Ballardie said the company now expects the balance of a share exchange acquisition to close within the coming weeks, subject to Nasdaq approval.

As previously announced, at the conclusion of this transaction a change-in-control will take place, with Slinger Bag and all its associated assets and liabilities separating out of Connexa and into a private company,” said Ballardie.

In a filing with the SEC, the company said it has agreed that at, or prior to, the closing date of the acquisition, it will enter into a separation agreement to sell, transfer and assign all, or substantially all, of its legacy business, assets and liabilities related to, or necessary for, the operations of its Slinger Bag business or products (the Legacy Business) to J&B Sports, LLC, a newly formed Florida entity (NewCo) and that after the closing date, NewCo will have the sole right to, and obligations of, the Legacy Business and will be liable to the company for any losses arising from third-party claims against the company that come from liabilities related to the Legacy Business.

NewCo is reportedly owned by Yonah Kalfa and Mike Ballardie.

On a pro forma basis, as of April 30, 2024, the Legacy Business’ assets were approximately $5.2 million, and its liabilities were approximately $12.0 million.

Image courtesy Slinger Bag