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Item 8. Financial Statements and Supplementary Data

2021-08-06 compared with 2020-08-24 · 773 added, 526 removed, 107 unchanged (92% of the section changed)

3 unchanged sentences

TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets as of April 30, 2020 and 2019

Consolidated Statements of Operations and Comprehensive Loss for the years ended April 30, 2020 and 2019

Consolidated Statements of Stockholders’

Equity (Deficit) for the years ended April 30, 2020 and 2019

Consolidated Statements of Cash Flows for the years ended April 30, 2020 and 2019

Notes to Consolidated Financial Statements

of Independent Registered Public Accounting Firm

the Stockholders and the Board of Directors of Slinger Bag Inc.

Balance Sheets as of April 30, 2021 and 2020

Statements of Operations and Comprehensive Loss for the years ended April 30, 2021 and 2020

Statements of Shareholders’

Deficit for the years ended April 30, 2021 and 2020

Statements of Cash Flows for the years ended April 30, 2021 and 2020

to Consolidated Financial Statements

of Independent Registered Public Accounting Firm

of Directors and Shareholders

on the Financial Statements

have audited the accompanying consolidated balance sheets of Slinger Bag Inc.

and its subsidiaries (the Company) as of April 30,

2020 and 2019, the related consolidated statements of operations and comprehensive loss, stockholders' equity (deficit) and cash

flows for the year then ended, and the related notes to the consolidated financial statements (collectively, the financial

In our opinion, the financial statements present fairly, in all material respects, the financial position of the

Company as of April 30, 2020 and 2019, and the results of its operations and its cash flows for the years then ended, in conformity

with accounting principles generally accepted in the United States of America.

accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

in Note 2 to the financial statements, the Company has suffered recurring losses from operations and more losses are anticipated

in the development of the business.

This raises substantial doubt about the Company's ability to continue as a going concern.

Management's plans in regard to these matters also are described in Note 2.

The financial statements do not include any adjustments

that might result from the outcome of this uncertainty.

financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on

the Company’s financial statements based on our audits.

We are a public accounting firm registered with the Public

Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company

in accordance with U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission

and the PCAOB.

as of April 30, 2021 and 2020, and the related consolidated

statements of operations and comprehensive loss, shareholders’

deficit, and cash flows for each of the two years in the period

ended April 30, 2021, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the

financial statements present fairly, in all material respects, the financial position of Slinger Bag Inc.

as of April 30, 2021 and 2020,

and the results of its operations and its cash flows for each of the two years in the period ended April 30, 2021, in conformity with

accounting principles generally accepted in the United States of America.

accompanying financial statements have been prepared assuming that the entity will continue as a going concern.

As discussed in Note

2 to the financial statements, the entity has suffered recurring losses from operations and has a net capital deficiency that raise substantial

doubt about its ability to continue as a going concern.

Management's plans in regard to these matters are also described in Note 2.

financial statements do not include any adjustments that might result from the outcome of this uncertainty.

financial statements are the responsibility of the entity’s management.

Our responsibility is to express an opinion on these financial

statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United

States) (“PCAOB”) and are required to be independent with respect to Slinger Bag Inc.

in accordance with the U.S.

securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit

to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not

for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing

an opinion on the effectiveness of the entity’s internal control over financial reporting.

Accordingly, we express no such opinion.

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to

error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence

regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles

used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error

or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding

the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits

provide a reasonable basis for our opinion.

Audit Matters

critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated

or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial

statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters

does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit

matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Company developed, and now sells, a tennis ball launcher that is built into a bag (the “Slinger Launcher”).

The Company utilizes

manufacturing companies who deliver its Slinger Launchers to third party warehouses around the world to enable the Company to distribute

its product internationally.

As discussed in Note 3 of the consolidated financial statements the Company values their inventory at the

lower of cost (determined principally on a first-in first-out basis) or net realizable value.

Due to the numerous warehouse locations,

inventory in transit, and the multiple components that go into the Slinger Launcher auditing the inventory balance was challenging and

required complex auditor judgment.

order to audit the Company’s inventory balance, we sent confirmations to third party warehouses after they completed their internal

inventory counts, reconciled and verified all inventory in transit amounts by reviewing third party support and shipping records, and

we ensured all values assigned to components and completed Slinger Launchers was accurate by reviewing source documents and invoices

from third party manufacturers.

Debt and Equity Transactions

the year under audit the Company entered into multiple debt and/or equity transactions and agreements that contained terms and provisions

that were uncommon in practice.

Due to the unusual nature of the agreements, ensuring the accounting for the transactions were challenging,

subjective, and required complex auditor judgment, including detailed analysis and interpretation of accounting standards.

order to audit these significant unusual transactions, we reviewed Company analysis and had to perform a significant amount of research

in order to gain comfort in the accounting for each.

Mac Accounting Group, LLP

have served as the Company's auditor since 2019.

have served as the Company’s auditor since 2019.

Balance Sheets

and cash equivalents

receivable, net

expenses and other current assets

current assets

Prepaid expenses and other current assets

Total current assets

Property and equipment, net

Intangible assets, net

Liabilities and Stockholders’

and Shareholders’

payable and accrued expenses

payroll and bonuses

interest - related party

payable - related party, net

notes payable, net

current liabilities

Accounts payable and accrued expenses

Deferred revenue

Accrued interest - related parties

Stock refund payable

Notes payable - related party

Convertible notes payable, net

Derivative liability

Due to related parties

Total current liabilities

Long-term liabilities

Long-term portion of convertible notes payable, net

Note payable, net

Total liabilities

Commitments and contingencies

Stockholders’

Common stock, $0.001 par value, 300,000,000 shares authorized, 24,749,354 and 24,380,000 shares issued and outstanding as of April 30, 2020 and 2019, respectively;

8,137,859 shares issuable as of April 30, 2020

Additional paid-in capital

Accumulated other comprehensive loss

Accumulated deficit

portion of convertible notes payable, net

and contingencies (Note 10)

Shareholders’

stock, $0.001 par value, 300,000,000 shares authorized, 27,642,828 and 24,749,354 shares issued and outstanding as of April

30, 2021 and 2020, respectively;

6,921,299 and 8,137,859 shares issuable as of April 30, 2021 and 2020, respectively

paid-in capital

other comprehensive loss

(28,823,273 )

Total stockholders’

Total liabilities and stockholders’

(10,228,513 )

shareholders’

(18,450,744 )

liabilities and shareholders’

accompanying notes to consolidated financial statements

Statements of Operations and Comprehensive Loss

For the Year Ended

Cost of sales

the Year Ended

income (loss)

and marketing expenses

and administrative expenses

and development costs

operating expenses

Selling and marketing expenses

General and administrative expenses

Stock-based compensation

Research and development costs

Transaction costs

Total operating expenses

Loss from operations

Other expenses:

Amortization of debt discount

Interest expense - related party

Interest expense

Total other expense

Loss before income taxes

Provision for (benefit from) income taxes

from operations

expenses (income):

of debt discount

on extinguishment of debt

conversion loss

on change in fair value of derivatives

expense - related party

other expense

before income taxes

(18,594,760 )

for income taxes

$ (18,594,760 )

$ (9,227,744 )

comprehensive loss, net of tax

currency translation adjustments

other comprehensive loss, net of tax

Foreign currency translation adjustments

Total other comprehensive loss, net of tax

Comprehensive loss

Comprehensive

$ (18,609,894 )

Net loss per share, basic and diluted

Weighted average number of common shares outstanding, basic and

$ (9,232,778 )

loss per share, basic and diluted

Weighted average

number of common

outstanding, basic and diluted

accompanying notes to consolidated financial statements

Statements of Stockholders’

Equity (Deficit)

Statements of Shareholders’

Comprehensive

April 30, 2019

shares cancelled

April 30, 2019

of Slinger Bag Limited

4 unchanged sentences

issued with note payable

Foreign currency

April 30, 2020

issued related to note payable

issued related to notes payable - related party

issued in connection with conversion of notes payable

issued for conversion of convertible debt

issued in connection with purchase of trademark

issued in connection with services

currency translation

(18,594,760 )

April 30, 2021

3 unchanged sentences

Statements of Cash Flows

For the Year Ended

Cash flows from operating activities

$ (9,227,744 )

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

Stock-based compensation

Non-cash interest expense

Amortization of debt discount

Changes in operating assets and liabilities:

Prepaid expenses and other current assets

Accounts payable and accrued expenses

Deferred revenue

Accrued interest - related parties

Due to related parties

Net cash used in operating activities

Cash flows from investing activities

Proceeds from contribution of net assets of Slinger Bag Limited

Net cash provided by investing activities

Cash flows from financing activities

Distribution to shareholder

Proceeds from notes payable - related party

Proceeds from note payable

Proceeds from convertible note payable

Net cash provided by financing activities

Effect of exchange rate fluctuations on cash

Net change in cash

Cash, beginning of the period

Cash, end of the period

Supplemental disclosure of cash flow information:

Interest paid

Income taxes paid

Supplemental disclosure of non-cash investing and financing information:

Forgiveness of net liabilities owed to former majority shareholder

Shares issuable related to convertible note payable agreement

Debt discount due to derivative liability

Conversion of note payable and accrued interest into common stock

Warrants issued with note payable

Net assets contributed from Slinger Bag Limited

Cancellation of common stock for refund payable

the Year Ended

flows from operating activities:

to reconcile net loss to net cash used in operating activities:

and amortization expense

on c hange in fair value of derivatives

issued in connection with services

on extinguishment of debt

conversion loss

interest expense

of debt discount

in operating assets and liabilities:

receivable, net

expenses and other current assets

payable and accrued expenses

payroll and bonuses

interest - related party

cash used in operating activities

Cash flows from

investing activities:

of intangible assets

from contribution of net assets of Slinger Bag Limited

cash (used in) provided by investing activities

Cash flows from

f inancing activities:

to shareholder

from notes payable - related party

from note payable

of notes payable –

related party

from convertible note payable

cash provided by financing activities

of exchange rate fluctuations on cash and cash equivalents

in cash and cash equivalents

and cash equivalents at beginning of period

and cash equivalents at end of period

disclosure of cash flow information:

disclosure of non-cash investing and financing activities:

of net liabilities owed to former majority shareholder

issuable related to convertible note payable agreement

discount due to derivative liability

of note payable and accrued interest into common stock

issued with note payable

assets contributed from Slinger Bag Limited

of convertible note payable to note payable

of notes payable to notes payable –

related party

and warrants issued in connection with purchase of trademark

of notes payable and accrued interest into common stock

and shares issued with note payable

accompanying notes to consolidated financial statements

3 unchanged sentences

On August 23, 2019, the majority

owner of Lazex entered into a Stock Purchase Agreement with Slinger Bag Americas Inc., a Delaware corporation (“Slinger

Bag Americas”) which was 100% owned by Slinger Bag Ltd.

owner of Lazex entered into a Stock Purchase Agreement with Slinger Bag Americas Inc., a Delaware corporation (“Slinger Bag Americas”),

which was 100% owned by Slinger Bag Ltd.

(“SBL”), an Israeli company.

In connection with the

Stock Purchase Agreement, Slinger Bag Americas acquired 20,000,000 shares of common stock of Lazex for $332,239.

16, 2019, SBL transferred its ownership of Slinger Bag Americas to Lazex in exchange for the 20,000,000 shares of Lazex acquired

on August 23, 2019.

As a result of these transactions, Lazex owned 100% of Slinger Bag Americas and the sole shareholder of SBL

now owned 20,000,000 shares of common stock (approximately 82%) of Lazex.

Effective September 13, 2019, Lazex changed its name

to Slinger Bag Inc.

October 31, 2019, Slinger Bag Americas acquired control of Slinger Bag Canada, Inc., (“Slinger Bag Canada”) a Canadian

company incorporated on November 3, 2017.

There are no assets or liabilities or historical operational activity of Slinger Bag

February 10, 2020, Slinger Bag Americas became the 100% owner of SBL, along with SBL’s wholly owned subsidiary Slinger Bag

International (UK) Limited (“Slinger Bag UK”) formed on April 3, 2019, after Zehava Tepler, the owner of SBL, contributed

it to Slinger Bag Americas for no consideration.

operations of Slinger Bag Inc., Slinger Bag Americas, Slinger Bag Canada, Slinger Bag UK and SBL are collectively referred to

as the “Company.”

In connection with the Stock Purchase Agreement, Slinger

Bag Americas acquired 20,000,000 shares of common stock of Lazex for $332,239.

On September 16, 2019, SBL transferred its ownership of

Slinger Bag Americas to Lazex in exchange for the 20,000,000 shares of Lazex acquired on August 23, 2019.

As a result of these transactions,

Lazex owned 100% of Slinger Bag Americas and the sole shareholder of SBL owned 20,000,000 shares of common stock (approximately 82%)

Effective September 13, 2019, Lazex changed its name to Slinger Bag Inc.

October 31, 2019, Slinger Bag Americas acquired control of Slinger Bag Canada, Inc., (“Slinger Bag Canada”) a Canadian company

incorporated on November 3, 2017.

There were no assets, liabilities or historical operational activity of Slinger Bag Canada.

February 10, 2020, Slinger Bag Americas became the 100% owner of SBL, along with SBL’s wholly owned subsidiary Slinger Bag International

(UK) Limited (“Slinger Bag UK”), which was formed on April 3, 2019.

On February 10, 2020, Zehava Tepler, the owner of SBL,

contributed Slinger Bag UK to Slinger Bag Americas for no consideration.

operations of Slinger Bag Inc., Slinger Bag Americas, Slinger Bag Canada, Slinger Bag UK and SBL are collectively referred to as the

“Company.”

Company operates in the sporting and athletic goods business.

The Company is the owner of Slinger Launcher, which is a portable

tennis ball launcher.

February 25, 2020, the Company increased its number of authorized shares of common stock from 75,000,000 to 300,000,000 and effected

a four-to-one forward split of the outstanding shares of common stock.

The Company is the owner of the Slinger Launcher, which is a portable tennis

ball launcher, as well as other associated tennis accessories.

February 25, 2020, the Company increased the number of authorized shares of common stock from 75,000,000 to 300,000,000 via a

four-to-one forward split of its outstanding shares of common stock.

All share and per share information contained in this report

1 unchanged sentence

of Presentation

accompanying consolidated financial statements of the Company are presented in accordance with accounting principles generally

accepted in the United States of America (“GAAP”).

As a result of the transactions described above, the accompanying

consolidated financial statements include the combined results of Slinger Bag Inc., Slinger Bag Americas, Slinger Bag Canada,

Slinger Bag UK and SBL for the year ended April 30, 2020.

The contribution of the net assets of SBL is reflected as an equity

contribution at historical cost on May 1, 2019, the beginning of the earliest period in which the entities were under common control.

There was no historical activity in Slinger Bag Americas or Slinger Bag Canada prior to May 1, 2019.

The accompanying financial

statements for the year ended April 30, 2019 reflect the historical results of Slinger Bag Inc.

(formerly known as Lazex).

intercompany accounts and transactions have been eliminated in consolidation.

accompanying consolidated financial statements of the Company are presented in accordance with accounting principles generally accepted

in the United States of America (“GAAP”).

As a result of the transactions described above, the accompanying consolidated

financial statements include the combined results of Slinger Bag Inc., Slinger Bag Americas, Slinger Bag Canada, Slinger Bag UK and SBL

for the years ended April 30, 2021 and 2020.

The contribution of the net assets of SBL is reflected as an equity contribution

at historical cost on May 1, 2019, the beginning of the earliest period in which the entities were under common control.

historical activity in Slinger Bag Americas or Slinger Bag Canada prior to May 1, 2019.

All intercompany accounts and transactions have

been eliminated in consolidation.

GOING CONCERN

financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets

and discharge its liabilities in the normal course of business for the foreseeable future.

The Company has an accumulated deficit

of $10,228,513 as of April 30, 2020 and more losses are anticipated in the development of the business.

Accordingly, there is

substantial doubt about the Company’s ability to continue as a going concern.

These financial statements do not include

any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that

might be necessary should the Company be unable to continue as a going concern.

ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or being

able to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations

when they become due.

Management intends to finance operating costs over the next twelve months with existing cash on hand, loans

from related parties, and/or private placement of common stock.

financial statements have been prepared on a going concern basis, which assumes the Company will be able to realize its assets and discharge

its liabilities in the normal course of business for the foreseeable future.

The Company has an accumulated deficit of $28,823,273

as of April 30, 2021, and more losses are anticipated in the development of the business.

Accordingly, there is substantial doubt

about the Company’s ability to continue as a going concern.

These financial statements do not include any adjustments related to

the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company

be unable to continue as a going concern.

ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or being able

to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they

Management intends to finance operating costs over the next twelve months with existing cash on hand, loans from related

parties, and/or private placement of debt and/or common stock.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions

that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of

the financial statements and the reporting amounts of revenues and expenses during the reported period.

Accordingly, actual results

could differ from those estimates.

preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect

the amounts reported in the financial statements and accompanying notes.

Accordingly, actual results could differ from those estimates.

Statement Reclassification

account balances from prior periods have been reclassified in these consolidated financial statements to conform to current period

classifications.

prior year amounts have been reclassified in these consolidated financial statements to conform to current year presentation.

and Cash Equivalents

Company considers all highly liquid temporary cash investments with an original maturity of three months or less when purchased,

to be cash equivalents.

is valued at the lower of the cost or net realizable value.

Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.

The majority of payments due from banks for credit card transactions process within 24 to 48 hours and are accordingly classified as

cash and cash equivalents.

Company’s accounts receivable are non-interest bearing trade receivables resulting from the sale of products and payable over terms

ranging from 15 to 60 days.

The Company provides an allowance for doubtful accounts at the point when collection is considered doubtful.

Once all collection efforts have been exhausted, the Company charges-off the receivable with the allowance for doubtful accounts.

Company had no allowance for doubtful accounts as of April 30, 2021 or 2020.

is valued at the lower of the cost (determined principally on a first-in, first-out basis) or net realizable value.

The Company’s

valuation of inventory includes inventory reserves for inventory that will be sold below cost and the impact of inventory shrink.

reserves are based on historical information and assumptions about future demand and inventory shrink trends.

The Company’s

inventory as of April 30, 2021 consisted of $1,591,826 of finished goods, $1,777,028 of component and replacement parts, $347,362

of capitalized duty and freight, and a $23,000 inventory reserve.

The Company’s inventory as of April 30, 2020 consisted of

$663,750 of finished goods and $255,894 of component and replacement parts.

The Company had no inventory at April 30, 2019.

Concentration

3 unchanged sentences

monitors its banking relationships and consequently has not experienced any losses in such accounts.

The Company believes it is

not exposed to any significant credit risk on cash or cash equivalents.

Effective May 1, 2018, the Company adopted

Accounting Standards Codification (“ASC”) 606, the core principle of which is that an entity should recognize revenue

to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity

expects to be entitled to receive in exchange for those goods or services.

The adoption of ASC 606 had no impact on the Company’s

historical financial statements.

The Company’s contracts with customers contain one performance obligation.

recognizes revenue for its performance obligation at a point in time once products are shipped or physically delivered,

depending on the third-party shipping terms.

Amounts collected from customers in advance of revenue being recognized

are reflected as deferred revenue on the accompanying consolidated balance sheets.

While we may be exposed to credit

risk, we consider the risk remote and do not expect that any such risk would result in a significant effect on our results of operations

or financial condition.

Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) 606, the core principle of which

is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects

the consideration to which the entity expects to be entitled to receive in exchange for those goods or services.

The Company recognizes

revenue for its performance obligation associated with its contracts with customers at a point in time once products are shipped.

Amounts collected from customers in advance of shipping products ordered are reflected as deferred revenue on the accompanying

consolidated balance sheets.

The Company’s standard terms are non-cancelable and do not provide for the right-of-return, other

than for defective merchandise covered under the Company’s standard warranty.

The Company has not historically experienced any

significant returns or warranty issues.

Value of Financial Instruments

value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction

between market participants at the measurement date, based on the Company’s principal or, in the absence of a principal,

most advantageous market for the specific asset or liability.

provides for a three-level hierarchy of inputs to valuation techniques used to measure fair value, defined as follows:

Inputs that are quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity

Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly

or indirectly, for substantially the full term of the asset or liability, including:

prices for similar assets or liabilities in active markets

prices for identical or similar assets or liabilities in markets that are not active

other than quoted prices that are observable for the asset or liability

that are derived principally from or corroborated by observable market data by correlation or other means

Inputs that are unobservable and reflect the Company’s own assumptions about the assumptions market participants

would use in pricing the asset or liability based on the best information available in the circumstances (e.g., internally

derived assumptions surrounding the timing and amount of expected cash flows).

Company’s financial instruments consist of cash and cash equivalents, accounts payable and amounts due to related parties.

The carrying amount of these financial instruments approximates fair value due to their short-term maturity.

The Company’s

derivative liability was calculated using Level 2 assumptions.

value of financial and non-financial assets and liabilities is defined as an exit price, representing the amount that would be received

to sell an asset or paid to transfer a liability in an orderly transaction between market participants.

The three-tier hierarchy for

inputs used in measuring fair value, which prioritizes the inputs used in the methodologies of measuring fair value for assets and liabilities,

is as follows:

Quoted prices in active markets for identical assets or liabilities

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

Unobservable pricing inputs in the market

assets and financial liabilities are classified in their entirety based on the lowest level of input that is significant to the fair

value measurements.

Our assessment of the significance of a particular input to the fair value measurements requires judgment and may

affect the valuation of the assets and liabilities being measured and their categorization within the fair value hierarchy.

Company’s financial instruments consist of cash and cash equivalents, accounts receivable, and accounts payable.

amount of these financial instruments approximates fair value due to their short-term maturity.

The Company’s derivative liabilities

were calculated using Level 2 assumptions on the issuance date via a Black-Scholes option pricing model whose assumptions are

in line with the assumptions noted below in the warrant section.

taxes are accounted for in accordance with the provisions of ASC 740, Accounting for Income Taxes.

Deferred tax assets and liabilities

are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of

existing assets and liabilities and their respective tax bases.

Deferred tax assets and liabilities are measured using enacted

tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or

The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that

includes the enactment date.

Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts

expected to be realized, but no less than quarterly.

and Equipment

and equipment are recorded at cost and are depreciated on a straight-line basis over their estimated useful lives of three years.

At April 30, 2019, the Company had total capitalized property and equipment costs of $3,000 and accumulated depreciation of $2,250.

In connection with the Stock Purchase Agreement (see Note 1), the existing property and equipment with a remaining book value

of $500 was contributed to the previous majority shareholder of Lazex.

As of April 30, 2020, the remaining book value of property

and equipment were $0.

expense for the year ended April 30, 2020 and 2019 was $250 and $1,000, respectively.

assets consisted of capitalized software costs and are amortized on a straight-line basis over an estimated useful life of three

At April 30, 2019, the Company had total gross intangible assets of $4,800 and accumulated amortization of $3,066.

In connection

with the Stock Purchase Agreement (see Note 1), the existing capitalized software with a remaining book value of $1,334 was contributed

to the previous majority shareholder of Lazex.

As of April 30, 2020, the remaining book value of intangible assets were $0.

expense for the year ended April 30, 2020 and 2019 was $400 and $1,600, respectively.

accordance with ASC 360-10, the Company evaluates long-lived assets for impairment whenever events or changes in circumstances

indicate that their net book value may not be recoverable.

When such factors and circumstances exist, the Company compares the

projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives

against their respective carrying amount.

Impairment, if any, is based on the excess of the carrying amount over the fair value,

based on market value when available, or discounted expected cash flows, of those assets and is recorded in the period in which

the determination is made.

There was no impairment of long-lived assets identified during the year ended April 30, 2020 or 2019.

are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing

assets and liabilities and their respective tax bases.

Deferred tax assets and liabilities are measured using enacted tax rates expected

to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

The effect on deferred

tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

allowances are established, when necessary, to reduce deferred tax assets to the amounts that are more likely than not to be realized.

asset relates to the “Slinger”

technology trademark, which the Company purchased on November 10, 2020.

The trademark

is amortized over its expected life of 20 years.

Amortization expense for the year ended April 30, 2021 and 2020 was $2,730 and

zero, respectively.

The amount of amortization expense for each of the next five years will be approximately $5,800 per year.

accordance with ASC 360-10, the Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate

that their net book value may not be recoverable.

When such factors and circumstances exist, the Company compares the projected undiscounted

future cash flows associated with the related asset or group of assets over their estimated useful lives against their respective carrying

If those net undiscounted cash flows do not exceed the carrying amount, impairment, if any, is based on the excess of the carrying

amount over the fair value based on the market value or discounted expected cash flows of those assets and is recorded in the

period in which the determination is made.

There was no impairment of long-lived assets identified during the year ended April 30, 2021

Company accounts for share-based compensation in accordance with ASC 718, Compensation-Stock Compensation (ASC 718).

Under the fair value

recognition provisions of this topic, stock-based compensation cost is measured at the grant date based on the fair value of the award

and is recognized as an expense on a straight-line basis over the requisite service period, which is the vesting period.

Company grants warrants to key employees and executives as compensation on a discretionary basis.

The Company also grants warrants

in connection with certain note payable agreements.

The Company measures the fair value of the awards using the Black-Scholes

option pricing model as of the measurement date.

Warrants granted in connection with ongoing arrangements are more fully described

The Company also grants warrants in

connection with certain note payable agreements and other key arrangements.

Company is required to estimate the fair value of share-based awards on the measurement date and recognize as expense that value of the

portion of the award that is ultimately expected to vest over the requisite service period.

granted in connection with ongoing arrangements are more fully described in Note 7:

Note Payable and Note 9:

Stockholders’

warrants granted during the year ended April 30, 2020 and 2019 were valued using the Black-Scholes pricing method on the date

of grant using the following assumptions below.

Expected life in years

Stock price volatility

121.4% - 144.2%

Risk free interest rate

0.36% - 2.43%

Expected dividends

and Diluted Earnings Per Share

earnings per share are calculated by dividing income available to stockholders by the weighted-average number of common shares

Shareholders’

warrants granted during the year ended April 30, 2021 and 2020 were valued using a Black-Scholes option pricing model

on the date of grant using the following assumptions:

life in years

price volatility

free interest rate

Currency Translation

portion of SBL’s operations are conducted in Israel and its functional currency is the Israeli Shekel, the Company’s

operations of Slinger Bag Canada are conducted in its functional currency of Canadian Dollars, and the Company’s Slinger

Bag UK operations are conducted in its functional currency of the British pound (GBP).

The accounts of SBL, Slinger Bag Canada,

and Slinger Bag UK have been translated into U.S.

dollars (“USD”).

Assets and liabilities are translated into USD at

the applicable exchange rates at period-end.

Shareholders’

equity is translated using historical exchange rates.

and expenses are translated at the average exchange rates for the period.

Any translation adjustments are included as foreign currency

translation adjustments on the consolidated statements of operations and comprehensive loss.

earnings per share are calculated by dividing income available to shareholders by the weighted-average number of common shares

outstanding during each period.

Diluted earnings per share are computed using the weighted average number of common and dilutive

common share equivalents outstanding during the period.

The Company had 8,137,859 common shares issuable as of April 30, 2020

(see Note 5) which were not included in the calculation of diluted earnings per share as the effect is antidilutive.

also had outstanding notes payable convertible into 7,465,811 shares of common stock as of April 30, 2020 (see Note 5), as well

as outstanding warrants exercisable into 13,000,000 shares of common stock which were excluded from calculation of diluted earnings

per share as the effect is antidilutive.

There were no common share equivalents outstanding during the year ended April 30, 2019.

As a result, the basic and diluted earnings per share are the same for each of the periods presented.

Diluted earnings per share are computed using the weighted average number of common and dilutive common

share equivalents outstanding during the period.

Company had 6,921,299 and 8,137,859 common shares issuable as of April 30, 2021 and 2020, respectively, (see Note 5 and 6) which

were not included in the calculation of diluted earnings per share as the effect is antidilutive.

The Company also had outstanding notes

payable convertible into zero and 7,465,811 shares of common stock as of April 30, 2021 and 2020, respectively, (see Note 6),

outstanding warrants exercisable into 24,503,107 and 13,000,000 shares of common stock as of April 30, 2021 and 2020,

respectively, and 21,786 and zero shares related to make-whole provisions as of April 30, 2021 and 2020, respectively, (see Note 7),

which were excluded from the calculation of diluted earnings per share as the effect is antidilutive.

As a result, the basic and

diluted earnings per share are the same for each of the periods presented.

Accounting Pronouncements

February 2016, the FASB issued Accounting Standards Update 2016-02, “Leases”

This guidance is effective

for public entities for fiscal years beginning after December 15, 2018 including the interim periods within those fiscal years.

Early application is permitted.

Under the new provisions, all lessees will report a right-of-use asset and a liability for the

obligation to make payments for all leases with the exception of those leases with a term of 12 months or less.

All other leases

will fall into one of two categories:

(i) Financing leases, similar to capital leases, which will require the recognition of an

asset and liability, measured at the present value of the lease payments and (ii) Operating leases which will require the recognition

of an asset and liability measured at the present value of the lease payments.

The Company has adopted this standard on May 1,

2019 with no significant impact to the Company’s financial statements.

accounting pronouncements have been issued but deemed by management to be outside the scope of relevance to the Company.

December 2019, the FASB issued Accounting Standards Update (ASU), 2019-12, Simplifying the Accounting for Income Taxes , which

amends ASC 740, Income Taxes (ASC 740).

This update is intended to simplify accounting for income taxes by removing certain exceptions

to the general principles in ASC 740 and amending existing guidance to improve consistent application of ASC 740.

This update is effective

for fiscal years beginning after December 15, 2021.

The guidance in this update has various elements, some of which are applied on a

prospective basis and others on a retrospective basis with earlier application permitted.

The Company is currently evaluating the effect

of this ASU on the Company’s financial statements and related disclosures.

recently issued accounting pronouncements did not, or are not believed by management to, have a material effect on the Company’s

present or future consolidated financial statements.

INTANGIBLE ASSET

November 10, 2020, the Company entered into a Trademark Assignment Agreement to acquire the “Slinger”

trademark for $30,000

in cash, 35,000 shares of the Company’s common stock, and warrants to purchase 50,000 shares of the Company’s common stock

at an exercise price of $0.50 per share.

The warrants vested immediately and have a contractual life of 10 years.

common stock was valued at the closing stock price on November 10, 2020 and the warrants were valued using a Black-Scholes option pricing

model, for a fair value of $35,351 and $50,232, respectively.

purchase price of the trademark was determined to be $115,583.

NOTE PAYABLE –

2 unchanged sentences

Slinger Bag Canada for borrowings of $500,000 bearing interest at 12% per annum.

All principal and accrued interest were due on

demand under the original agreement.

On December 13, 2019, the Company entered into an Amended and Restated Loan Agreement making

the all principal and accrued interest due on July 15, 2020.

On July 8, 2020, the terms of the debt were amended to extend the

due date to January 8, 2021 (see Note 11).

December 3, 2019, the Company entered into a loan agreement with the same related party for borrowings of $500,000 bearing interest

at 12% per annum.

All principal and accrued interest were due on demand

under the original agreement.

On December 13, 2019, the Company entered into an Amended and Restated Loan Agreement making all principal

and accrued interest due on July 15, 2020, which was later amended to extend the due date to September 1, 2021.

December 3, 2019, the Company entered into a loan agreement with the same related party for borrowings of $500,000 bearing interest at

12% per annum.

All principal and accrued interest were due on demand under the original agreement.

On December 13, 2019, the

Company entered into an Amended and Restated Loan Agreement increasing the interest rate earned from 12% to 24% per annum and

making the all principal and accrued interest due on July 15, 2020.

On July 8, 2020, the terms of the debt were amended to extend

the due date to January 8, 2021 (see Note 11).

On December 13, 2019, the Company

entered into an Amended and Restated Loan Agreement increasing the interest rate earned from 12% to 24% per annum and making all principal

and accrued interest due on July 15, 2020, which was later amended to extend the due date to September 1, 2021.

December 11, 2019, the Company entered into a loan agreement with the same related party for borrowings of $700,000 bearing interest

1 unchanged sentence

All principal and accrued interest were due on July 15, 2020.

On July 8, 2020, the terms of the debt were amended

to extend the due date to January 8, 2021 (see Note 11).

On July 8, 2020, the terms of the debt were amended to

extend the due date to January 8, 2021, which was later amended to extend the due date to September 1, 2021.

January 6, 2020, the Company entered into a loan agreement with the same related party for borrowings of $200,000 bearing interest

at 24% per annum.

All principal and accrued interest were due on January 8, 2021.

On July 8, 2020, the terms of the debt were

amended to extend the due date to January 8, 2021 (see Note 11).

March 1, 2020, the Company entered into a loan agreement with the same related party for borrowings of $200,000 bearing interest

All principal and accrued interest were due on January 8, 2021, which was later amended to extend the due date to

September 1, 2021.

February 28, 2020, the Company entered into a loan agreement with the same related party for borrowings of $200,000 bearing interest

at 24% per annum.

All outstanding borrowings and accrued interest under all agreements are due on January 8, 2021.

Company received additional borrowings totaling $1.75 million from this related party subsequent to the year end April 30, 2020

(see Note 11).

All principal and accrued interest were due on February 28, 2021, which was later amended to extend the

due date to September 1, 2021.

May 12, 2020 and July 3, 2020, the Company entered into loan agreements with the same related party for borrowings of $1,000,000

and $500,000, respectively, bearing interest at 24% per annum.

All principal and accrued interest were due on August

31, 2020 and July 3, 2021, respectively, which was later amended to extend the due date to September 1, 2021.

July 8, 2020, the Company entered into a Purchase Order Financing Agreement (“PO Financing Agreement”) whereby $1,900,000

of the total $3,600,000 in outstanding debt due to the related party as of the date of the agreement was labeled as inventory financing

(“PO Financing Amount”).

The PO Financing Amount, along with any accrued interest, is due in full no later than six

months from the effective date of the PO Financing Agreement, which was later amended to extend the due date to September 1, 2021.

The outstanding balance of the PO Financing Agreement bears interest at a rate of 2% per month.

The Company agreed to repay the PO Financing

Amount together with any accrued, but unpaid, interest thereon out of proceeds from the sale of its products, licensing activities, revenue

to be generated from operations and/or amounts received by the Company from investors, lenders, financiers, financing sources or other

persons before making payments of any other nature (including dividends and distributions), except for payments required to finance the

Company’s operations.

August 10, 2020, the Company entered into a loan agreement with the same related party for borrowings of $250,000 under

the PO Financing Agreement bearing interest at 24% per annum.

All principal and accrued interest were due on August 10, 2021, which

was later amended to extend the due date to September 1, 2021.

September 7, 2020, the outstanding debt from the existing related party lender was amended to reduce the interest rate to 9.5% per annum

on all outstanding loans, including the PO Financing Agreement, effective the date of the agreement.

As consideration for agreeing

to reduce the interest rate, the Company issued the related party warrants to purchase 2,500,000 shares of the Company’s common

stock at an exercise of $0.001 per share.

The warrants vested immediately and have a contractual life of 10 years.

The amendment of the

outstanding debt was treated as an extinguishment of the debt and therefore the value of the warrants issued to the lender of $1,999,487

was expensed as a loss on extinguishment of debt during the year ended April 30, 2021.

September 8, 2020, the related party lender agreed to extend the due date of all outstanding loans to September 1, 2021.

September 15, 2020, the Company entered into a loan agreement with the same related party for borrowings of $250,000 bearing interest

at 9.5% per annum and due in full on September 15, 2021.

In connection with the loan, the Company issued warrants to the related

party lender to purchase 125,000 shares of the Company’s common stock at an exercise price of $0.001 per share.

vested immediately and have a contractual life of 10 years.

The note was discounted by $70,130 allocated from the valuation of the

warrants issued.

The discount recorded on the note is being amortized through the maturity date, which amounted to $43,615

and zero for the years ended April 30, 2021 and 2020, respectively, and is recorded in amortization of debt discount on the statement

of operations.

As of April 30, 2021, the remaining discount was $26,515.

November 24, 2020, the Company entered into a loan agreement with the same related party for borrowings of $300,000 bearing interest

at 9.5% per annum and due in full on November 24, 2021.

In connection with the loan, the Company issued warrants to the related party

lender to purchase 125,000 shares of the Company’s common stock at an exercise price of $0.001 per share.

The warrants vested

immediately and have a contractual life of 10 years.

This note was discounted by $88,201 allocated from the valuation of the warrants

The discount recorded on the note is being amortized through the maturity date, which amounted to $37,939 and zero

for the years ended April 30, 2021 and 2020, respectively, and is recorded in amortization of debt discount on the statement of operations.

As of April 30, 2021, the remaining discount was $50,262.

December 3, 2020, Mont-Saic Investments LLC (“Mont-Saic”) entered into an Assignment and Conveyance Agreement

with 2490585 Ontario Inc., the Company’s existing related party lender.

In connection with the agreement, Mont-Saic sold

its full right, title and interest in its outstanding notes payable amounting to $1,820,000, which consisted of a $1,700,000 note

payable (see Note 6) and a $120,000 note payable (see Note 7), to 2490585 Ontario Inc., along with the 1,216,560 shares of common

stock previously issued to Mont-Saic in connection with the debt agreement and the rights to receive the remaining 6,921,299 shares

Subsequent to this point in time, the outstanding debt of $1,820,000 and all accrued interest is payable to 2490585 Ontario

Inc., and future interest will accrue at a rate of 9.5% per annum consistent with the rate being charged on their other outstanding debt.

The scheduled maturity date of the debt remains unchanged and is due June 1, 2021.

of April 30, 2021, there remain 6,921,299 shares issuable related to this note.

outstanding borrowings from this related party as of April 30, 2021 and 2020 amounted to $6,220,000 and $2,100,000, respectively.

outstanding amount is net of total discounts of $76,777 for a net book value of $6,143,223 as of April 30, 2021.

expense related to this related party for the year ended April 30, 2021 and 2020 amounted to $608,668 and $171,918, respectively.

interest due to the related party amounted to $138,967 as of April 30, 2020.

Accrued interest due to the related party amounted to $747,636 and $138,967 as of April 30, 2021 and 2020, respectively.

March 25, 2021, the Company entered into a loan agreement with a different related party for borrowings of $1,000,000 bearing interest

at 1% per annum and due in full on April 25, 2021.

The Company repaid the loan in full at maturity and there were no outstanding borrowings

as of April 30, 2021.

CONVERTIBLE NOTES PAYABLE

June 1, 2019, the Company entered into a note payable agreement with Montsaic Investments (“Montsaic”) which provided

for borrowings of $1,700,000 bearing interest at a rate of 12.6% per annum.

All outstanding amounts are due on the maturity date

360 days after the loan issue date.

The Company may repay up to 50% of the outstanding balance on the loan prior to the maturity

date at their discretion.

The outstanding principal and accrued interest are convertible into shares of the Company’s common

stock at any time at the option of the debtholder at a conversion price equal to 75% of the lowest closing price of the common

June 1, 2019, the Company entered into a convertible note payable agreement with Mont-Saic Investments LLC (“Mont-Saic”)

which provided for borrowings of $1,700,000 bearing interest at a rate of 12.6% per annum.

All outstanding amounts were due on the

maturity date 360 days after the loan issue date.

The Company may repay up to 50% of the outstanding balance on the loan prior to the

maturity date at their discretion.

The outstanding principal and accrued interest are convertible into shares of the Company’s

common stock at any time at the option of the debtholder at a conversion price equal to 75% of the lowest closing price of the common

stock as defined in the agreement.

Effective June 1, 2020, the Company and Montsaic entered into an amendment to the note payable

agreement to eliminate the conversion right contained in the original agreement and extend the maturity date to June 1, 2021 (see

note payable agreement, as amended on September 11, 2019, also provides Montsaic with a warrant giving them the right to acquire

33% of the outstanding shares of SBL on a fully-diluted basis for no consideration up through the maturity date.

16, 2019, Montsaic and Slinger Bag Inc.

entered into a warrant assignment and conveyance agreement which transferred the right

to acquire 33% of the outstanding common stock shares of SBL to Slinger Bag Inc.

The allocated value of the warrant amounted to

$1,492,188, which has been reflected as a discount to the outstanding note balance.

The Company has not issued the shares of common

stock as of April 30, 2020.

As a result, as of April 30, 2020 the Company has 8,137,859 shares of common stock that are issuable.

On May 6, 2020, the Company issued 1,216,560 shares of common stock as partial satisfaction of the shares issuable (see Note 11).

convertible note payable agreement, as amended on September 11, 2019, also provided Mont-Saic with a warrant giving them

the right to acquire 33% of the outstanding shares of SBL on a fully-diluted basis for no consideration up through one year after

the maturity date.

On September 16, 2019, Mont-Saic and Slinger Bag Inc.

entered into a warrant assignment and conveyance

agreement which updated Mont-Saic’s right to acquire 33% of the outstanding common stock shares of SBL to Slinger Bag Inc.

The allocated value of the warrant of $1,492,188 was recorded as a discount to the outstanding note balance.

2020, the Company issued 1,216,560 shares of common stock as partial satisfaction of the shares issuable.

June 1, 2020, the Company and Mont-Saic entered into an amendment to the convertible note payable agreement to eliminate

the conversion right contained in the original agreement and extend the maturity date to June 1, 2021.

Company evaluated the conversion option under the guidance in ASC 815-10, Derivatives and Hedging, and determined it to have characteristics

of a derivative liability.

Under this guidance, this derivative liability is marked-to-market at each reporting period with the

non-cash gain or loss recorded in the period as a gain or loss on derivatives.

The value of the conversion option amounted to

$566,667 as of the issuance date on September 11, 2019, which has been recorded as a discount to the outstanding note balance,

less $358,855 representing the amount of the conversion option exceeding the face value of the note payable which was recorded

immediately as interest expense, and a derivative liability.

There was no change in the derivative liability as of April 30, 2020.

combined discount relating to the warrant and conversion option are being amortized over the term of the agreement.

of debt discounts during the year ended April 30, 2020 amounted to $1,493,939, and is recorded as amortization of debt discount

in the accompanying consolidated statements of operations.

The unamortized discount balance amounted to $206,061 as of April 30,

November 20, 2019, the Company entered into a convertible note payable agreement for borrowings of $125,000 bearing interest at

12% per annum.

All outstanding borrowings and accrued interest are due on November 20, 2020.

The outstanding principal and accrued

interest are convertible into shares of the Company’s common stock at any time at the option of the debtholder at a conversion

price equal to 70% of the lowest closing price of the common stock as defined in the agreement.

On March 2, 2020, the holder elected

to convert the outstanding principal of $125,000 and accrued interest of $4,274 into 369,354 shares of the Company’s common

stock in accordance with the terms in the agreement.

The remaining balance outstanding was $0 at April 30, 2020.

Under this guidance, this derivative liability is marked-to-market at each reporting period with the non-cash

gain or loss recorded in the period as a gain or loss on derivatives.

The value of the conversion option derivative amounted to $566,667

as of the issuance date on September 11, 2019, which was recorded as a discount to the outstanding note balance less $358,855 representing

the amount of the conversion option exceeding the face value of the note payable which was recorded immediately as interest expense,

and a derivative liability.

On June 1, 2020, in connection with the elimination of the conversion option, this derivative ceased to exist

and the value of the derivate of $566,667 was recognized as a loss on extinguishment of debt on the consolidated statements of operations

for the year ended April 30, 2021.

combined discount relating to the warrant and conversion option were amortized over the term of the agreement.

Amortization of debt discounts

during the year ended April 30, 2020 amounted to $1,493,939, and were recorded as amortization of debt discount in the accompanying consolidated

statements of operations.

The remaining $206,061 was amortized during the year ended April 30, 2021.

December 3, 2020, Mont-Saic entered into an Assignment and Conveyance Agreement with the Company’s exiting related party lender

wherein Mont-Saic sold its full right, title and interest in its outstanding notes payable amounting to $1,820,000, which consisted of

the $1,700,000 note payable and the $120,000 note payable (see Note 7), to the Company’s related party lender, along with the 1,216,560

shares of common stock previously issued to Mont-Saic in connection with the debt agreement and the rights to receive the remaining 6,921,299

shares issuable (see Note 5).

November 20, 2019, the Company entered into a convertible note payable agreement for borrowings of $125,000 bearing interest at 12% per

All outstanding borrowings and accrued interest were due on November 20, 2020.

The outstanding principal and accrued interest

are convertible into shares of the Company’s common stock at any time at the option of the debtholder at a conversion price equal

to 70% of the lowest closing price of the common stock as defined in the agreement.

On March 2, 2020, the holder elected to convert the

outstanding principal of $125,000 and accrued interest of $4,274 into 369,354 shares of the Company’s common stock in accordance

with the terms in the agreement.

Company evaluated the conversion option under the guidance in ASC 815-10, Derivatives and Hedging, and determined it to have characteristics

of a derivative liability.

Under this guidance, this derivative liability is marked-to-market at each reporting period with the

non-cash gain or loss recorded in the period as a gain or loss on derivatives.

The value of the conversion option amounted to

$53,571 as of the issuance date on November 20, 2019, which was initially recorded as a discount to the outstanding note balance

and a derivative liability.

The discount of $53,571 was fully amortized during the year ended April 30, 2020 upon the conversion

of the outstanding note payable balance.

Upon conversion of the note payable balance, the derivative liability amount of $53,571

was reclassified as additional paid-in capital as part of stockholders’

February 11, 2020, the Company entered into a convertible note payable agreement for borrowings of $125,000 bearing interest at

12% per annum.

Under this guidance, this derivative liability is marked-to-market at each reporting period with the non-cash

gain or loss recorded in the period as a gain or loss on derivatives.

The value of the conversion option derivative amounted to $53,571

as of the issuance date on November 20, 2019, which was initially recorded as a discount to the outstanding note balance and a derivative

The discount of $53,571 was fully amortized during the year ended April 30, 2020 upon the conversion of the outstanding

note payable balance.

Upon conversion of the note payable balance, the derivative liability amount of $53,571 was reclassified as additional

paid-in capital as part of shareholders’

February 11, 2020, the Company entered into a convertible note payable agreement for borrowings of $125,000 bearing interest at 12% per

All outstanding borrowings and accrued interest are due on February 11, 2021.

The outstanding principal and accrued

interest are convertible into shares of the Company’s common stock at any time at the option of the debtholder at a conversion

price equal to 70% of the lowest closing price of the common stock as defined in the agreement.

The outstanding principal and accrued interest are

convertible into shares of the Company’s common stock at any time at the option of the debtholder at a conversion price equal to

70% of the lowest closing price of the common stock as defined in the agreement.

Company evaluated the conversion option under the guidance in ASC 815-10, Derivatives and Hedging, and determined it to have characteristics

of a derivative liability.

Under this guidance, this derivative liability is marked-to-market at each reporting period with the

non-cash gain or loss recorded in the period as a gain or loss on derivatives.

The value of the conversion option amounted to

$53,571 as of the issuance date on February 11, 2020, which was initially recorded as a discount to the outstanding note balance

and a derivative liability.

There was no change in the fair value of the derivative liability as of April 30, 2020.

is being amortized over the term of the agreement.

Amortization of debt discounts during the year ended April 30, 2020 amounted

to $10,699 and is recorded as amortization of debt discount in the accompanying consolidated statements of operations.

The unamortized

discount balance amounted to $42,872 as of April 30, 2020.

outstanding principal of convertible notes payable at April 30, 2020 and 2019 amounted to $1,825,000 and $0, respectively.

outstanding balances are netted with debt discounts at April 30, 2020 and 2019 of $248,933 and $0, respectively.

scheduled maturities of long-term convertible debt are as follows.

March 16, 2020, the Company entered into a promissory note payable whereby the Company borrowed $500,000 bearing interest at 12%

Under this guidance, this derivative liability is marked-to-market at each reporting period with the non-cash

gain or loss recorded in the period as a gain or loss on derivatives.

The value of the conversion option amounted to $53,571 as of the

issuance date on February 11, 2020, which was initially recorded as a discount to the outstanding note balance and a derivative liability.

The discount was being amortized over the term of the agreement.

September 4, 2020, the Company and the convertible debt holder entered into an agreement to convert the outstanding convertible

note payable balance of $125,000 and accrued interest of $8,466 into 300,000 shares of the Company’s common stock.

Under the guidance

in ASC 470-20-40-16, the Company recognized an expense at the conversion date equal to the fair value of the shares transferred

after the change in terms, less the fair value of securities issuable under the original conversion terms.

The excess in value, which

amounted to $51,412 was recorded as an induced conversion loss in the consolidated statements of operations during

the year ended April 30, 2021.

the time of the conversion, the remaining debt discount was fully amortized and the derivative liability amount of $53,571 was reclassified

as additional paid-in capital as part of shareholders’

Amortization of debt discounts during the year ended

April 30, 2021 and 2020 was $42,872 and $10,699, respectively, and was recorded as amortization of debt discount in the

accompanying consolidated statements of operations.

The unamortized discount balance amounted to zero and $42,872 as of April 30, 2021

and 2020, respectively.

outstanding principal of convertible notes payable at April 30, 2021 and 2020 amounted to zero and $1,825,000, respectively.

outstanding balances are netted with debt discounts at April 30, 2021 and 2020 of zero and $248,933, respectively.

March 16, 2020, the Company entered into a promissory note payable whereby the Company borrowed $500,000 bearing interest at 12% per

Interest on the note is payable monthly and outstanding principal on the note is due in full on March 16, 2022.

scheduled maturities of long-term debt are as follows.

connection with the promissory note payable on March 16, 2020, the Company issued warrants to purchase 500,000 shares of the Company’s

common stock at an exercise price equal to a 40% discount of the market price of the Company’s stock, as defined in the

common stock at an exercise price equal to a 40% discount of the market price of the Company’s stock, as defined in the agreement.

The warrants expire on March 16, 2022 and are fully vested upon issuance.

The note was discounted by $112,990 allocated

from the valuation of the warrants issued.

The discount recorded on the note is being amortized as interest expense through the

maturity date, which amounted to $6,965 for year ended April 30, 2020.

As of April 30, 2020, the net book value of the promissory

note amounted to $393,975 including the principal amount outstanding of $500,000 net of the remaining discount of $106,025.

The note was discounted by $112,990 based on an allocation

of the value of the warrants issued.

The discount recorded on the note was amortized into amortization of debt discount through

the maturity date, which amounted to $35,542 and $6,965 for years ended April 30, 2021 and 2020, respectively.

December 15, 2020, the debt holder agreed to convert the outstanding note payable of $500,000 into 500,000 shares of the Company’s

common stock as full settlement of the promissory note payable.

Accrued interest on the note was paid in cash.

As a result of this settlement,

the Company recognized the unamortized debt discount of $70,483 as a loss on extinguishment of debt on the consolidated statements

of operations during the year ended April 30, 2021.

June 30, 2020, the Company entered into a loan agreement with Mont-Saic to borrow $120,000.

This loan bears interest at an annual rate

of 12.6% and is required to be repaid in full, together with all accrued, but unpaid, interest by June 30, 2021.

On December 3, 2020,

Mont-Saic entered into an Assignment and Conveyance Agreement with the Company’s exiting related party lender wherein Mont-Saic

sold its full right, title and interest in this note to the Company’s related party lender (see Note 5).

December 24, 2020, the Company entered into a promissory note with a third-party to borrow $1,000,000.

The promissory note bore

interest at 2.25% and was due February 8, 2021.

On February 2, 2021, the Company and the third-party entered into an amendment to

extend the promissory note to April 30, 2021.

April 11, 2021, the Company and the lender entered into an agreement whereby the lender converted the promissory

note into 272,332 shares of Company stock, which were issued to the lender at a 20% discount from the closing price

of the stock on the day prior to the conversion.

In addition to the discount, the

agreement contains a guarantee that the aggregate gross sales of the shares by the lender will be no less than $1,500,000 over the next

three years and if the aggregate gross sales are less than $1,500,000 the Company will issue additional shares of common stock to the

lender for the difference between the total gross proceeds and $1,500,000, which could result in an infinite number of shares being required

to be issued.

Company evaluated the conversion option of the note payable to shares under the guidance in ASC 815-40, Derivatives and Hedging, and

determined the conversion option qualified for equity classification.

The Company also evaluated the profit guarantee under ASC 815,

Derivatives and Hedging, and determined it to be a make-whole provision, which is an embedded derivative within the host instrument.

As the economic characteristics are dissimilar to the host instrument, the profit guarantee was bifurcated from the host instrument and

stated as a separate derivative liability, which is marked to market at the end of each reporting period with the non-cash gain or loss

recorded in the period as a gain or loss on derivative.

the date of conversion, the Company recognized a $1,501,914 loss on extinguishment of debt, which

represented the difference between the promissory note and the fair value of the shares issued of $1,250,004, which were recorded in

shares issued in connection with conversion of note payable within shareholders’

as well as the derivative liability of $1,251,910, which was valued using a Black-Scholes option pricing model .

fair value of the derivative liability was $1,229,851 as of April 30, 2021, and the Company recognized a gain on change in fair value

of $22,059 for the year ended April 30, 2021.

April 15, 2021, the Company entered into a $2,000,000 note payable (the “Note”).

The Note matures April 14,

2023 and bears interest at fifteen percent (15%) per year.

The Company pays interest at maturity, at which time all principal and unpaid

interest is due.

Note is collateralized by all business assets, including patents, trademarks and other intellectual property.

It is also collateralized

by the ownership of Slinger Bag Americas, Inc., Slinger Bag Canada, Inc., Slinger Bag Limited, and Slinger Bag International (UK) Limited.

connection with the Note, the Company issued 2,200,000 warrants with an exercise price of $0.25.

The exercise price has customary anti-dilution

protection for stock splits, mergers, etc.

Additionally, the warrant contains a stipulation that the Company will guarantee the value

of the shares sold will be no less, on average, than $1.50 per share through April 15, 2023.

If the value is less

than $1.50, the Company will issue additional shares of common stock to compensate for the shortfall, which could result in an infinite

number of shares being required to be issued.

Company evaluated the warrants and the profit guarantee under the guidance in ASC 815-40, Derivatives and Hedging, and determined they

represent a derivative liability given the profit guarantee represents a make-whole provision that is not separated from the host instrument.

The derivative liability is marked to market at the end of each reporting period with the non-cash gain or loss recorded in the period

as a gain or loss on derivative.

fair value of the derivative liability on the date of the execution of the Note was valued using

a Black-Scholes option pricing model at $14,501,178, which was first allocated as

a discount to the Note payable of $2,000,0000, which will be amortized

using the effective interest method over the remaining term of the Note, with the remainder of the value of $12,501,178 recorded

as interest expense.

of debt discounts during the year ended April 30, 2021 was $10,477, which was recorded as amortization of debt discount in the accompanying

consolidated statements of operations.

The unamortized discount balance amounted to $1,989,523 as of April 30, 2021.

fair value of the derivative liability was $12,583,598 as of April 30, 2021, and the Company recognized a gain on change in fair value

of $1,917,580 for the year ended April 30, 2021.

RELATED PARTY TRANSACTIONS

support of the Company’s efforts and cash requirements, it may rely on advances from related parties until such time that

the Company can support its operations or attain adequate financing through sales of its equity or traditional debt financing.

There is no formal written commitment for continued support by officers, directors, or shareholders.

Amounts represent advances

or amounts paid in satisfaction of liabilities.

The advances are considered temporary in nature and have not been formalized by

a promissory note.

of April 30, 2019, the Company had $10,114 of outstanding borrowings from the previous majority shareholder and sole officer and

director of the Company.

The borrowings were non-interest bearing and due on demand.

In connection with the Stock Purchase Agreement

(see Note 1), the outstanding balances were forgiven.

As of April 30, 2020, amounts due to related parties were $377,106 which

represented unpaid salaries and reimbursable expenses due to officers of the Company.

Company has outstanding notes payable of $2,100,000 and accrued interest of $138,967 due to a related party as of April 30, 2020

(see Note 4).

STOCKHOLDERS’

support of the Company’s efforts and cash requirements, it may rely on advances from related parties until such time that the Company

can support its operations or attain adequate financing through sales of its equity or traditional debt financing.

There is no formal

written commitment for continued support by officers, directors, or shareholders.

Amounts represent advances, amounts paid in

satisfaction of liabilities, or accrued compensation that has been deferred.

The advances are considered temporary in nature and

have not been formalized by a promissory note.

of April 30, 2021 and 2020, amounts due to related parties were $1,283,464 and $377,106, respectively, which represented unpaid salaries

and bonuses and reimbursable expenses due to officers of the Company.

Company has outstanding notes payable of $6,220,000 and $2,100,000

and accrued interest of $747,636 and $138,967 due to a related party as of April 30, 2021 and 2020, respectively (see Note 5).

Company recognized net sales of $615,584 during the year ended April 30, 2021, to a related party.

As of April 30, 2021, the related

party had accounts receivable due to the Company of $86,956.

There were no sales to this related party during the year ended April 30,

SHAREHOLDERS’

Company has 300,000,000 shares of common stock authorized with a par value of $0.001 per share.

As of April 30, 2020, the Company

had 24,749,354 shares of common stock issued and outstanding.

Transactions During Year Ended April 30, 2019

May 15, 2018, the Company cancelled 240,000 of its common shares and accrued a stock refund payable of $1,200 as of April 30,

As of April 30, 2021 and 2020, the Company

had 27,642,828 and 24,749,354 shares of common stock issued and outstanding, respectively.

Transactions During Year Ended April 30, 2020

March 2, 2020, the Company issued 369,354 shares of common stock for the conversion of outstanding convertible notes payable of

$125,000 and accrued interest of $4,274.

Upon conversion of the note payable balance, the derivative liability amount of $53,571

was reclassified as additional paid-in capital as part of stockholders’

March 2, 2020, the Company issued 369,354 shares of common stock for the conversion of an outstanding convertible note payable

of $125,000 and accrued interest of $4,274.

Upon conversion of the note payable balance, the derivative liability of $53,571 related

to the convertible note payable was reclassified as additional paid-in capital as part of shareholders’

purchase price of $332,239 under the Stock Purchase Agreement (see Note 1), which resulted in shares of Lazex being acquired by

the shareholder of SBL, was paid by SBL on behalf of the shareholder.

The amount has been recorded as a distribution to shareholder

and therefore is classified as a reduction of additional paid-in capital.

The amount has been recorded as a distribution to shareholder and

therefore is classified as a reduction of additional paid-in capital.

connection with the Stock Purchase Agreement (see Note 1), net liabilities of $15,289 were forgiven by the previous majority shareholder

2 unchanged sentences

additional paid-in capital.

Transactions During Year Ended April 30, 2021

May 6, 2020, the Company issued 1,216,560 shares of its common stock to Mont-Saic as partial satisfaction of the shares issuable

under a convertible note payable agreement.

May 15, 2020, the Company issued 243,800 shares of its common stock to a vendor as compensation for business advisory services performed,

which resulted in $65,826 of general and administrative expenses for the year ended April 30, 2021.

September 4, 2020, the Company issued 300,000 shares of its common stock for the conversion of a convertible note payable (see

The fair value of the common stock was $238,449.

October 8, 2020, the Company issued 100,000 shares of its common stock to a vendor as compensation for business advisory services performed,

which resulted in $114,000 of operating expenses for the year ended April 30, 2021.

October 28, 2020, the Company granted 400,000 warrants to a service provider for advertising services over the next year.

have an exercise price of $0.75 per share, a contractual life of 10 years from the date of issuance, and vest quarterly over a year from

the grant date.

The warrants were valued using a Black-Scholes option pricing model and the expense related to the issuance of the warrants

is being recognized over the service agreement.

The Company recognized $221,826 of operating expenses related to this agreement during

the year ended April 30, 2021.

October 29, 2020, the Company and the three members of its advisory board entered into agreements whereby each member will receive an

aggregate number of warrants each quarter equal to $7,500 divided by the average closing price of the Company’s stock for the five

days prior to the Company’s most recently completed fiscal quarter.

The warrants vest quarterly, have an exercise price of $0.001

per share and a contractual life of 10 years from the date of issuance.

43,107 warrants were issued under these agreements during the

year ended April 30, 2021.

The warrants were valued using a Black-Scholes option pricing model, which resulted in operating expenses

of $48,502 during the year ended April 30, 2021.

November 24, 2020 and on January 11, 2021, the Company issued 46,087 and 100,000 shares of its common stock, respectively, to

two vendors as compensation for marketing and other advisory services.

The Company also issued 55,945 shares of its common stock on November

24, 2020 to a third-party vendor as full settlement of payables of $30,000 related to consulting services, which resulted in a $25,278

loss on extinguishment of debt.

The total fair value of the shares issued related to these transactions was $198,386, of which $39,750

was recognized in prepaids and other assets and will be recognized over the period that the related services are rendered.

30, 2021, there was $26,500 in prepaids related to these transactions and the remaining $146,608 was recognized as operating expenses

for the year ended April 30, 2021.

November 10, 2020, the Company issued 35,000 shares of common stock as partial payment for the purchase of the Slinger trademark.

common stock had a fair value of $35,351 on the date of issuance, which has been capitalized as an intangible asset on the balance

December 15, 2020, the Company issued 500,000 shares of common stock as full payment of its $500,000 note payable to a third party (see

The fair value of the shares issued was $500,000.

April 11, 2021, the Company issued 272,332 shares of its common stock for the conversion of a note payable (see

The fair value of the shares issued was $1,250,004.

April 11, 2021 and on April 13, 2021, the Company issued 18,750 and 5,000 shares of its common stock to two vendors as compensation for

marketing and advisory services, which resulted in an operating expense of $43,294 for the year ended April 30, 2021.

the three months ended April 30, 2021, the Company granted an aggregate total of 60,000 warrants and equity options for 120,00 shares

(which have all expired unexercised) to four of its brand ambassadors as compensation.

The warrants have an exercise price of $0.001

per share, a contractual life of 10 years from the date of issuance and are vested immediately upon grant and the shares had a 90 day

exercise period at a 50% discount on the stock price.

The warrants and shares were valued using a Black-Scholes option pricing model

and the expense related to the issuance of the warrants and equity options is being recognized over the service agreements.

recognized $59,838 and $98,457 of operating expenses related to the warrant and equity options, respectively, during the year ended April

Stock Issuable

discussed in Note 5, on September 16, 2019, the Company entered into a warrant assignment and conveyance agreement with Montsaic,

pursuant to which the Company allows Montsaic to acquire 33% of the outstanding common stock shares of the Company on a fully-diluted

discussed in Note 6, on September 16, 2019, the Company entered into a warrant assignment and conveyance agreement with Mont-Saic,

pursuant to which the Company allows Mont-Saic to acquire 33% of the outstanding common stock shares of the Company on a fully-diluted

basis for no consideration.

The allocated value of the warrant amounted to $1,492,188, which has been reflected as additional

paid-in capital.

are 8,137,859 shares of common stock that are issuable under this agreement.

As of April 30, 2020, none of these shares have been

The allocated value of the warrant amounted to $1,492,188 was reflected as additional paid-in capital

during the year ended April 30, 2020.

were 8,137,859 shares of common stock that were issuable under this agreement and as of April 30, 2020 none of the shares had been

As of April 30, 2021, 1,216,560 shares have been issued and the remaining 6,921,299 continue to be issuable to a related

Issued for Compensation

April 30, 2020, the Company granted an aggregate total of 12,500,000 warrants to key employees and officers of the Company as

compensation.

The warrants have an exercise price of $0.001 per share, a contractual life of 10 years from the date of issuance,

and are vested immediately upon grant.

The warrants granted as compensation during the year ended April 30, 2020 were valued using

the Black-Scholes pricing method.

The total stock-based compensation expense related to the issuance of the warrants amounted

to $3,741,746.

April 30, 2020, the Company granted an aggregate total of 12,500,000 warrants to key employees and officers of the Company as compensation.

The warrants have an exercise price of $0.001 per share, a contractual life of 10 years from the date of issuance and are vested immediately

The warrants granted as compensation during the year ended April 30, 2020 were valued using a Black-Scholes option

pricing model.

The total share-based compensation expense related to the issuance of the warrants amounted to $3,741,746.

February 9, 2021, the Company issued 6,000,000 warrants to key employees and officers of the Company as a performance bonus.

warrants have an exercise price of $0.001 per share for non-U.S.

warrant holders (1,500,000 warrants) and an exercise price of

$3.94, which is equal to the closing price of the Company’s common stock on the grant date, for U.S.

The warrants were valued using a Monte Carlo simulation with the key inputs as of 4/30/20 being the executives’

agreement term, the Company’s $100 million market capitalization threshold being achieved, a risk free rate of 0.76%, and a stock

price volatility of 63% because the warrant grant was contingent on a market condition being achieved.

The Company recognized $70,997

of share-based compensation related to these awards during the year ended April 30, 2021.

COMMITMENTS AND CONTINGENCIES

Company leases its office space under short-term leases with terms under a year.

Total rent expense for the year ended April 30,

2020 and 2019 amounted to $2,800 and $0, respectively.

Company leases office space under short-term leases with terms under a year.

Total rent expense for the year ended April 30, 2021 and

2020 amounted to $8,400 and $2,800, respectively.

Contingencies

time to time, the Company may become involved in legal proceedings arising in the ordinary course of business.

The Company is

not presently a party to any legal proceedings that it currently believes would individually or taken together have a material

adverse effect on the Company’s business or financial statements.

The Company does business in the US

through its subsidiaries Slinger Bag Inc.

The Company is not presently

a party to any legal proceedings that it currently believes would individually or taken together have a material adverse effect on the

Company’s business or financial statements.

Company does business in the US through its subsidiaries Slinger Bag Inc.

and Slinger Bag Americas.

It also does business in Israel through SBL, whose operations

are reflected in the Company’s consolidated financial statements from May 1, 2019 on, the beginning of the earliest period

in which the entities were under common control.

Net deferred tax assets from operations

in the US, using an effective tax rate of 21%, consisted of the following.

Deferred tax assets (liabilities):

Loss carryforwards

Related party accruals

Start-up costs

Valuation allowance

Net deferred tax assets

income tax provision differs from the amount of income tax determined by applying the applicable US statutory income tax

rate of 21% to pretax loss due to the following for the year ended April 30, 2020 and 2019.

Income tax benefit based on book loss at US statutory rate

It also does business in Israel through

SBL whose operations are reflected in the Company’s consolidated financial statements.

The Company’s operations in Canada

and the UK were immaterial for the years ended April 30, 2021 and 2020.

deferred tax assets from operations in the US, using an effective tax rate of 21%, consisted of the following:

carryforwards

Accrued payroll

party accruals

deferred tax assets

income tax provision differs from the amount of income tax determined by applying the applicable statutory income tax rate to pretax

loss due to the following for the years ended April 30, 2021 and 2020:

tax benefit based on book loss at US statutory rate

$ (3,832,300 )

Stock-based compensation

Debt discount amortization

Related party accruals

Start up costs

Interest expense

Meals and entertainment

Valuation allowance

Total income tax provision

The Company had net operating loss carryforwards

of approximately $1,424,000 as of April 30, 2020 which can be used to offset future taxable income in the US from the

year 2021 through 2040.

Tax years that remain subject to examination are 2017 and forward.

Net deferred tax assets from

operations in Israel , using an effective tax rate of 23%, consisted of the following.

The net deferred tax assets as of

April 30, 2019 represent the amounts from SBL contributed to the Company on May 1, 2019.

Deferred tax assets (liabilities):

Loss carryforwards

Accrued expenses

Research and development costs

Valuation allowance

Net deferred tax assets

The income tax provision differs from the

amount of income tax determined by applying the applicable Israeli statutory income tax rate of 23% to pretax loss due to the

following for the year ended April 30, 2020.

As the net assets of SBL were contributed on May 1, 2019, there is no income tax

provision related to the year ended April 30, 2019.

Income tax benefit based on book loss at Israeli statutory rate

Debt discount amortization

Related party accruals

Research and development

Other non-deductible items

Valuation allowance

Total income tax provision

Company had net operating loss carryforwards of approximately $1,671,000 as of April 30, 2020 which can be used to offset future

taxable income in Israel.

$ (1,273,000 )

compensation and shares for services

discount amortization

party accruals

and entertainment

on extinguishment of debt

Gain on change

in fair value of derivatives

income tax provision

Company had net operating loss carryforwards of $3,032,000 and $1,424,000 as of April 30, 2021 and 2020, respectively,

which can be used to offset future taxable income in the US for the years ended 2022 through 2041.

Tax years that remain subject to

examination are 2017 and forward.

deferred tax assets from operations in Israel, using an effective tax rate of 23%, consisted of the following:

carryforwards

and development costs

deferred tax assets

tax provision differs from the amount of income tax determined by applying the applicable Israeli statutory income tax rate of 23% due

to the following for the years ended April 30, 2021 and 2020:

tax provision (benefit) based on book income (loss) at Israeli statutory rate

discount amortization

party accruals

and development costs

non-deductible items

income tax provision

Company had net operating loss carryforwards of approximately $774,000 and $1,671,000 as of April 30, 2021 and 2020, respectively, which

can be used to offset future taxable income in Israel.

All of the Company’s tax years since inception are open for examination.

The Company’s policy is to record

interest and penalties on uncertain tax positions as income tax expense.

There were no interest or penalties recognized in the

accompanying consolidated statements of operations for the year ended April 30, 2020 or 2019.

Company’s policy is to record interest and penalties on uncertain tax positions as income tax expense.

There were no interest or

penalties recognized in the accompanying consolidated statements of operations for the year ended April 30, 2021 or 2020.

SUBSEQUENT EVENTS

May 12, 2020, the Company borrowed an additional $1,000,000 from its existing related party lender (see Note 4).

On July 3, 2020,

the Company borrowed an additional $500,000 from this same related party.

The borrowings bear interest at a rate of 24% per annum

and are due on February 8, 2021.

On July 8, 2020, the Company entered into a Purchase Order Financing Agreement (“PO Financing

Agreement”) whereby $1,900,000 of the total $3,600,000 in outstanding debt due to the related party as of the date of the

agreement has been labeled as inventory financing (“PO Financing Amount”).

The PO Financing Amount, along with any

accrued interest, is due in full no later than six months from the effective date of the PO Financing Agreement, or January 8,

The outstanding balance of the PO Financing Amount bears interest at a rate of 2% per month.

The Company has agreed to repay

the PO Financing Amount together with any accrued, but unpaid, interest thereon out proceeds from the sale of its products, licensing

activities, revenue to be generated from operations and/or amounts received by the Company from investors, lenders, financiers,

financing sources or other persons before making payments of any other nature (including dividends and distributions) except for

payments required to finance the Company’s operations.

On August 10, 2020, the Company borrowed an additional $250,000 subject

to the PO Financing Agreement.

May 15, 2020, the Company issued 243,800 shares of its common stock to a vendor as compensation for business advisory services

June 1, 2020, the Company and Montsaic entered into an amendment to the $1.7 million convertible note payable (see Note 5) to

eliminate the conversion right contained in the original agreement and extend the maturity date to June 1, 2021.

On May 6, 2020,

the Company issued 1,216,560 shares of its common stock to Montsaic as partial satisfaction of the shares issuable under this

note payable agreement.

June 30, 2020, the Company entered into a loan agreement with Montsaic to borrow an additional $120,000.

This loan bears interest

at an annual rate of 12.6% and is required to be repaid in full, together with all accrued, but unpaid, interest by June 30, 2021.

May 26, 2021, the Company and the related party lender entered into a note conversion agreement whereby the related party lender agreed

to convert its total outstanding borrowings as of that date of $6,220,000 into 1,636,843 shares of the Company’s common stock.

Per the terms of the note conversion agreement the accrued interest related to the debt was not converted into shares and is still due

to the related party.

The note conversion agreement contains a guarantee that the aggregate gross sales of the shares by the related

party will be no less than $6,220,000 over the next three years and if the aggregate gross sales are less than $6,220,000 the Company

will issue additional shares of common stock to the related party for the difference between the total gross proceeds and $6,220,000.

June 21, 2021, the Company entered into a membership interest purchase agreement (“MIPA”) with Charles Ruddy (the “Seller”)

to acquire a 100% ownership stake in Foundation Sports Systems, LLC (“Foundation Sports”) in exchange for 1,000,000 shares

of common stock of the Company to be issued to the Seller and two other Foundation Sports employees in three tranches (the “Purchase

Price”):

(i) 600,000 shares of common stock on the closing date, 200,000 shares of common stock on the first anniversary of the

closing date and (iii) 200,000 shares of common stock on the second anniversary of the closing date (collectively, the “Shares”),

provided that 10% of the Shares of each tranche will be held back by the Company and not delivered to the recipients for a period of

12 months from the date of their issuance.

The Shares are subject

to a 12-month lock-up from their date of delivery during which time they may not be offered or sold by the Seller or any other recipient

thereof without the express written consent of the Company.

On June 23, 2021, the Company issued 540,000 shares of its common stock to

the receipts under the MIPA, which consisted of 600,000 shares less a hold-back of 10% (i.e., 60,000 shares).

July 21, 2021, the Company entered into a Convertible Loan Agreement with PlaySight Interactive Ltd (the Borrower) wherein the Company

granted the Borrower a $2,000,000 line of credit with a six-month maturity date.

Any borrowings under the line of credit bear interest

at a rate of 15% per annum.

On July 26, 2021, the Company issued $300,000 to the Borrower under the line of credit.

July 23, 2021, the Company entered into a loan agreement with its related party lender for borrowings of $500,000.

The loan is to be

repaid within 30 days of receipt and shall bear interest at a rate of 12% per annum.

August 2, 2021, the Company entered into a loan agreement with its related party lender for borrowings of $500,000.

The loan is to be

repaid within 30 days of receipt and shall bear interest at a rate of 12% per annum.

the three months ended July 31, 2021, the Company issued 68,965 shares of its common stock to one vendor and two employees as compensation

for marketing and other services rendered.

the three months ended July 31, 2021, the Company granted an aggregate total of 90,937 shares of its common stock to six brand ambassadors

as compensation for services.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data