AIRWA INC. 10-K

ITEM 8. FINANCIAL STATEMENTS The financial statements and supplementary financial information required by this Item 8 are set forth immediately below and are incorporated herein by reference. 51 INDEX TO AUDITED FINANCIAL STATEMENTS CONNEXA SPORTS TECHNOLOGIES, INC TABLE OF CONTENTS Report of Independent Registered Public Accounting Firm (PCAOB ID 5968 ) in respect of the fiscal year ended April 30, 2022 F-2 Report of Independent Registered Public Accounting Firm (PCAOB ID 6258 ) in respect of the fiscal year ended April 30, 2021 F-3 Consolidated Balance Sheets as of April 30, 2022 and 2021 F-4 Consolidated Statements of Operations and Comprehensive Loss for the years ended April 30, 2022 and 2021 F-5 Consolidated Statements of Cash Flows for the years ended April 30, 2022 and 2021 F-6 Consolidated Statements of Shareholders’ Equity/Deficit for the years ended April 30, 2022 and 2021 F-7 Notes to Consolidated Financial Statements F-8 F- 1 Report of Independent Registered Public Accounting Firm The Board of Directors and Stockholders of CONNEXA SPORTS TECHNOLOGIES INC. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Connexa Sports Technologies Inc (the ‘Company’) as of December 31, 2022, and the related consolidated statements of operations and comprehensive loss, changes in stockholders’ equity and cash flows for the year ended April 30, 2022, and the related notes (collectively referred to as the “financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of April 30, 2022, and the results of its operations and its cash flows for the year ended April 30, 2022, in conformity with accounting principles generally accepted in the United States of America. Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2, the Company suffered an accumulated deficit of $80,596,925, net loss of $51,773,652 and a negative working capital of $26,160,426. These matters raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans with regards to these matters are also described in Note 2 to the financial statements. These financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These 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 audit. 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 the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. 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. Accordingly, we express no such opinion. Our 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. Critical Audit Matters Critical audit matters 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. 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, providing separate opinions on the critical audit matter or on the accounts or disclosures to which they relate. Intangible assets During the year ended April 30, 2022, the company recognized Goodwill, Trade Name, Customers Relationship and Internally Generated Intangible assets on the subsidiary PlaySight Interactive Ltd. (“PlaySight”) through a merger that was effectuated in the February 2022 Furthermore, As disclosed in Note 5. On February 2, 2022, the Company entered into a share purchase agreement with Flixsense Pty, Ltd. (“Gameface”). As a result of the share purchase agreement, Gameface became a wholly owned subsidiary of Connexa Sports Technologies and recognized goodwill and other intangible assets on the acquisition. In determination of the cost of the intangible assets, the method and rate of the amortization; the management used significant judgement and estimate. The primary procedures we performed include. We reviewed and challenged the reasonableness of key management assumptions used for the estimate. We reviewed the report of the independent valuation firm that perform the valuation of the intangible assets. We assessed the suitability of the method used by the expert in valuation of the assets. We performed data integrity check including accuracy of sample journal entries by checking them to approved supporting documents. Valuation Related to Business Combination As discussed in Note 1 to the consolidated financial statements, the company consummated several business combinations during the year ended April 30, 2022, including Flixsense Pty, Ltd. (“Gameface”) and PlaySight Interactive Ltd. (“PlaySight”) We identified the Audit of valuation related to those business combinations as a critical audit matter because of the significant estimates and assumptions management used. Performing audit procedures to evaluate the reasonableness of these estimates and assumptions required a high degree of auditors judgement and an increase extent of efforts. The primary procedures we performed includes. We evaluated the reasonableness of the valuation methodology and discount rate by testing the source information underlying the discount rate and mathematical accuracy of the calculation and developing range of independent estimates and comparing those to the discount rate used by the management. We obtained an understanding and evaluated the reasonableness of management process for developing the discounted cashflow. We evaluated the reasonableness of management significant assumptions used in developing such discounted cashflow such as future projection of revenue growth and profitability and estimating the working capital needs by testing the data used by management in its analysis to compare to historical data. OLAYINKA OYEBOLA & CO. (Chartered Accountants) Lagos, Nigeria We have served as the Company’s auditor since 2023. May 17, 2023 F- 2 Report of Independent Registered Public Accounting Firm Board of Directors and Shareholders Connexa Sports Technologies Inc. (formally known as Slinger Bag Inc.) Opinion on the Financial Statements We have audited the accompanying consolidated balance sheet of Connexa Sports Technologies Inc. (formally known as Slinger Bag Inc.) as of April 30, 2021, and the related consolidated statement of operations and comprehensive loss, shareholders’ deficit, and cash flows for the year 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 Connexa Sports Technologies Inc. (formally known as Slinger Bag Inc.) as of April 30, 2021, and the results of its operations and its cash flows for the year in the period ended April 30, 2021, in conformity with accounting principles generally accepted in the United States of America. Going Concern The 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. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These financial statements are the responsibility of the entity’s management. Our responsibility is to express an opinion on these financial statements based on our audit. 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 Connexa Sports Technologies Inc. (formally known as Slinger Bag Inc.) in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We 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 or fraud. Connexa Sports Technologies Inc. (formally known as Slinger Bag Inc.) is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. 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 entity’s internal control over financial reporting. Accordingly, we express no such opinion. Our 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. Critical Audit Matters The 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. Inventory the 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. In 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. Complex Debt and Equity Transactions During 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. In 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. /s/ Mac Accounting Group, LLP We have served as the Company’s auditor since 2019. Midvale, Utah August 6, 2021 F- 3 CONNEXA SPORTS TECHNOLOGIES INC. CONSOLIDATED BALANCE SHEETS 2022 2021 April 30, 2022 2021 ASSETS Current assets: Cash and cash equivalents $ 1,424,360 $ 928,796 Restricted cash 156,724 — Accounts receivable, net 1,322,370 762,487 Inventories, net 8,185,144 3,693,216 Prepaid inventory 499,353 140,047 Operating lease right-of-use asset, current portion 239,689 — Contract assets 235,526 — Prepaid expenses and other current assets 762,930 60,113 Total current assets 12,826,096 5,584,659 Fixed assets, net 174,217 — Contract assets, net of current portion 209,363 — Finished products used in operations, net 4,693,575 — Goodwill 32,643,193 — Intangible assets, net 24,316,502 112,853 Total assets $ 74,862,946 $ 5,697,512 LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) Liabilities Current liabilities: Accounts payable $ 6,465,373 $ 1,041,817 Accrued expenses 5,602,011 2,292,123 Contract liabilities 2,656,706 99,531 Related party purchase obligation payable 500,000 Operating lease liability, current portion 237,204 — Accrued interest 708,677 — Accrued interest - related party 908,756 747,636 Notes payable, net 4,639,376 — Notes payable - related party, net — 6,143,223 Convertible notes payable, net 10,327,778 — Derivative liabilities 5,443,779 13,813,449 Contingent consideration 1,334,000 — Other current liabilities 156,862 — Total current liabilities 38,980,522 24,137,779 Contract liabilities, net of current portion 1,370,492 — Long-term portion of notes payable - related party, net 2,000,000 — Notes payable, net — 10,477 Total liabilities 42,351,014 24,148,256 Commitments and contingencies (Note 15) - - Shareholders’ equity (deficit): Common stock - $ .001 par value, 300,000,000 shares authorized, 4,194,836 and 2,764,282 shares issued and outstanding as of April 30, 2022 and 2021, respectively; 412,232 and 692,130 shares issuable as of April 30, 2022 and 2021 4,195 2,764 Additional paid-in capital 113,049,700 10,389,935 Accumulated other comprehensive income/(loss) 54,962 ( 20,170 ) Accumulated deficit ( 80,596,925 ) ( 28,823,273 ) Total shareholders’ equity (deficit) 32,511,932 ( 18,450,744 ) Total liabilities and shareholders’ equity (deficit) $ 74,862,946 $ 5,697,512 F- 4 CONNEXA SPORTS TECHNOLOGIES INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS 2022 2021 For the Years Ended April 30, 2022 2021 Net sales $ 16,831,477 $ 10,804,214 Cost of sales 12,346,712 7,680,290 Gross profit 4,484,765 3,123,924 Operating expenses: Selling and marketing expenses 3,536,617 1,881,434 General and administrative expenses 43,424,105 4,629,642 Research and development costs 855,660 339,385 Impairment loss 3,486,599 — Transaction costs 5,109,522 — Total operating expenses 56,412,503 6,850,461 Loss from operations ( 51,927,738 ) ( 3,726,537 ) Other expense (income): Amortization of debt discounts 8,150,284 376,506 Loss on extinguishment of debt 7,096,730 3,030,495 Loss on issuance of convertible notes 5,889,369 — Gain on change in fair value of derivatives ( 18,557,184 ) ( 1,939,639 ) Gain on change in fair value of contingent consideration ( 4,847,000 ) — Interest expense - related party 165,558 608,668 Interest expense, net 1,948,157 12,792,193 Total other (income) expense ( 154,086 ) 14,868,223 Loss before income taxes ( 51,773,652 ) ( 18,594,760 ) Provision for income taxes — — Net loss $ ( 51,773,652 ) $ ( 18,594,760 ) Other comprehensive gain (loss), net of tax Foreign currency translation adjustments 75,132 ( 15,134 ) Total other comprehensive gain (loss), net of tax 75,132 ( 15,134 ) Comprehensive loss $ ( 51,698,520 ) $ ( 18,609,894 ) Net loss per share, basic and diluted $ ( 13.44 ) $ ( 6.96 ) Weight average number of common shares outstanding, basic and diluted 3,847,672 2,672,304 See accompanying notes to consolidated financial statements F- 5 CONNEXA SPORTS TECHNOLOGIES INC. CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (DEFICIT) Shares Amount Capital Income/(loss) Deficit Total Accumulated Additional other Common Stock Paid-in comprehensive Accumulated Shares Amount Capital Income/(loss) Deficit Total Balance, April 30, 2020 2,474,935 $ 2,475 $ 5,237,244 $ ( 5,036 ) $ ( 10,228,513 ) $ ( 4,993,830 ) Shares issued related to note payable 121,656 122 ( 122 ) — — — Warrants issued related to notes payable - related party — — 2,157,818 — — 2,157,818 Shares issued in connection with conversion of notes payable 77,233 77 1,749,927 — — 1,750,004 Shares issued for conversion of convertible debt 30,000 30 238,419 — — 238,449 Shares issued in connection with purchase of trademark 3,500 3 35,348 — — 35,351 Warrants issued in connection with purchase of trademark — — 50,232 — — 50,232 Shares issued in connection with services 56,958 57 850,072 — — 850,129 Share-based compensation — — 70,997 — — 70,997 Foreign currency translation — — — ( 15,134 ) — ( 15,134 ) Net loss — — — — ( 18,594,760 ) ( 18,594,760 ) Balance, April 30, 2021 2,764,282 $ 2,764 $ 10,389,935 $ ( 20,170 ) $ ( 28,823,273 ) $ ( 18,450,744 ) Balance 2,764,282 $ 2,764 $ 10,389,935 $ ( 20,170 ) $ ( 28,823,273 ) $ ( 18,450,744 ) Shares issued for conversion of notes payable - related party 163,684 164 6,219,838 — — 6,220,002 Elimination of related party derivative liabilities — — 8,754,538 — — 8,754,538 Shares issued for conversion of common shares issuable 692,130 692 6,229 — — 6,921 Shares issued in connection with Foundation acquisition 54,000 54 3,549,946 — — 3,550,000 Shares issued for conversion of warrants 495,000 495 2,255 — — 2,750 Shares and warrants issued in connection with services 20,719 21 2,003,362 — — 2,003,383 Shares issuable in connection with Gameface acquisition — — 9,700,000 — — 9,700,000 Shares issuable in connection with PlaySight acquisition — — 39,950,000 — — 39,950,000 Shares issuable in connection with acquisition — — 39,950,000 — — 39,950,000 Share-based compensation 5,022 5 32,473,597 — — 32,473,602 Foreign currency translation — — — 75,132 — 75,132 Net loss — — — — ( 51,773,652 ) ( 51,773,652 ) Balance, April 30, 2022 4,194,836 $ 4,195 $ 113,049,700 $ 54,962 $ ( 80,596,925 ) $ 32,511,932 Balance 4,194,836 $ 4,195 $ 113,049,700 $ 54,962 $ ( 80,596,925 ) $ 32,511,932 See accompanying notes to consolidated financial statements F- 6 CONNEXA SPORTS TECHNOLOGIES INC. CONSOLIDATED STATEMENTS OF CASH FLOWS 2022 2021 For the Years Ended April 30, 2022 2021 Cash flows from operating activities: Net loss ( 51,773,652 ) $ ( 18,594,760 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization expense 410,852 2,730 Gain on change in fair value of derivatives ( 18,557,184 ) ( 1,939,639 ) Shares and warrants issued in connection with services 2,010,304 798,351 Share-based compensation 32,473,602 70,997 Loss on extinguishment of debt 7,096,730 3,030,495 Gain on change in fair value of contingent consideration ( 4,847,000 ) — Non-cash interest expense ( 105,349 ) 12,552,590 Non-cash transaction costs 2,355,349 — Impairment loss 3,486,599 — Amortization of debt discount 8,150,284 376,506 Loss on issuance of convertible notes 5,889,369 — Changes in operating assets and liabilities: Accounts receivable, net ( 210,910 ) ( 760,058 ) Inventories, net ( 3,988,800 ) ( 2,764,758 ) Prepaid inventory ( 154,428 ) — Contract assets 51,111 — Operating lease right of use asset 22,311 — Prepaid expenses and other current assets ( 281,413 ) 208,806 Accounts payable 3,667,812 946,716 Accrued expenses 1,417,869 1,025,734 Contract liabilities 29,241 ( 79,835 ) Operating lease liability, current portion ( 19,796 ) — Related party purchase obligation - Gameface 500,000 Other current liabilities ( 1,061,000 ) — Accrued interest, net 1,813,516 — Accrued interest - related party 161,120 608,668 Net cash used in operating activities ( 11,463,464 ) ( 4,517,457 ) Cash flows from investing activities: Purchase of trademark — ( 30,000 ) Cash acquired as part of Gameface acquisition 125,659 — Cash acquired as part of PlaySight acquisition 506,000 — Cash acquired from acquisition — — Note receivable issuance ( 2,250,000 ) — Net cash used in investing activities ( 1,618,341 ) ( 30,000 ) Cash flows from financing activities: Proceeds from notes - related party 2,000,000 3,300,000 Proceeds from note payable 5,500,000 3,120,000 Repayments of notes – related party — ( 1,000,000 ) Proceeds from convertible notes 11,000,000 — Debt issuance costs from convertible notes ( 800,251 ) — Repayment of note payable ( 3,965,463 ) — Net cash provided by financing activities 13,734,286 5,420,000 Effect of exchange rate fluctuations on cash and cash equivalents ( 193 ) ( 23,594 ) Increase in cash and cash equivalents 652,288 848,949 Cash and cash equivalents at beginning of year 928,796 79,847 Cash and cash equivalents at end of year $ 1,581,084 $ 928,796 Balances included in the consolidated balance sheets: Cash and cash equivalents 1,424,360 928,796 Restricted cash 156,724 — Cash, cash equivalents and restricted cash at end of year 1,581,084 928,796 Supplemental disclosure of cash flow information: Interest paid $ 222,210 $ 263,268 Income taxes paid 111,105 3,668 Supplemental disclosure of non-cash investing and financing activities: Transfer of convertible note payable to note payable — 1,700,000 Transfer of notes payable to notes payable – related party — 1,820,000 Shares and warrants issued in connection with purchase of trademark — 85,583 Conversion of notes payable and accrued interest into common stock — 1,937,041 Warrants and shares issued with note payable — 158,331 Shares issued for conversion of notes payable – related party 6,220,000 — Shares issued in connection with Foundation acquisition 3,550,000 — Shares issuable in connection with Gameface acquisition 9,700,000 — Shares issuable in connection with PlaySight acquisition 39,950,000 — Shares issuable in connection with acquisition 39,950,000 — Elimination of related party derivative liabilities 8,754,538 — Derivative liabilities recorded as debt discounts of convertible notes 13,889,116 — See accompanying notes to consolidated financial statements F- 7 CONNEXA SPORTS TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1: ORGANIZATION AND NATURE OF BUSINESS Organization Lazex Inc. (“Lazex”) was incorporated under the laws of the State of Nevada on July 12, 2015. On August 23, 2019, the majority owner of Lazex entered into a Stock Purchase Agreement with Slinger Bag Americas Inc., a Delaware corporation (“Slinger Bag Americas”), which was 100 % owned by Slinger Bag Ltd. (“SBL”), an Israeli company. In connection with the Stock Purchase Agreement, Slinger Bag Americas acquired 2,000,000 shares of common stock of Lazex for $ 332,239 . On September 16, 2019, SBL transferred its ownership of Slinger Bag Americas to Lazex in exchange for the 2,000,000 shares of Lazex acquired on August 23, 2019. As a result of these transactions, Lazex owned 100 % of Slinger Bag Americas and the sole shareholder of SBL owned 2,000,000 shares of common stock (approximately 82 %) of Lazex. Effective September 13, 2019, Lazex changed its name to Slinger Bag Inc. On October 31, 2019, Slinger Bag Americas acquired control of Slinger Bag Canada, Inc., (“Slinger Bag Canada”) a Canadian company incorporated on November 3, 2017. There were no assets, liabilities or historical operational activity of Slinger Bag Canada. On February 10, 2020, Slinger Bag Americas became the 100 % owner of SBL, along with SBL’s wholly owned subsidiary Slinger Bag International (UK) Limited (“Slinger Bag UK”), which was formed on April 3, 2019. On February 10, 2020, the owner of SBL, contributed Slinger Bag UK to Slinger Bag Americas for no consideration. On June 21, 2021, Slinger Bag Americas entered into a membership interest purchase agreement with Charles Ruddy to acquire a 100 % ownership stake in Foundation Sports Systems, LLC (“Foundation Sports”). On December 5, 2022, the Company sold 75 % of Foundation Sports back to the original sellers. As a result, at that time, the Company recorded a loss on the sale and deconsolidated Foundation Sports. (refer to Note 5 and Note 18). During the year ended April 30, 2022, the Company impaired certain intangible assets and goodwill in the amount of $ 3,486,599 . On February 2, 2022, the Company entered into a share purchase agreement with Flixsense Pty, Ltd. (“Gameface”). As a result of the share purchase agreement, Gameface would become a wholly owned subsidiary of the Company (refer to Note 5). On February 22, 2022, the Company entered into a merger agreement with PlaySight Interactive Ltd. (“PlaySight”) and Rohit Krishnan (the “Shareholders’ Representative”). As a result of the merger agreement, PlaySight would become a wholly owned subsidiary of the Company (refer to Note 5). In November 2022, the Company sold PlaySight and recorded a loss on the sale. See Note 18 for further details on the sale of PlaySight. In April 2022, the Company changed its domicile from Nevada to Delaware. On April 7, 2022, the Company effected a name change to Connexa Sports Technologies Inc. We also changed our ticker symbol, “CNXA”. Connexa is now the holding company under which Slinger Bag, PlaySight, Gameface and Foundation Sports reside. The operations of Slinger Bag Inc., Slinger Bag Americas, Slinger Bag Canada, Slinger Bag UK, SBL, Foundation Sports and Gameface are collectively referred to as the “Company.” On June 14, 2022, the Company effected a 1-for-10 reverse stock split, where the Company’s common stock began to trade on a reverse split adjusted basis. No fractional shares were issued in connection with the reverse stock split and all such fractional interests were rounded up to the nearest whole number of shares of common stock. All references herein to the outstanding stock have been retrospectively adjusted to reflect this reverse split. The Company also consummated a public offering of shares of its common stock and the listing of its common stock on the Nasdaq Capital Market. The Company operates in the sport equipment and technology business. The Company is the owner of the Slinger Launcher, which is a portable tennis ball launcher as well as other associated tennis accessories and Gameface AI an Australian artificial intelligence sports software company. Basis of Presentation The 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, SBL, PlaySight, Foundation Sports, and Gameface for the years ended April, 30 2022 and 2021. F- 8 CONNEXA SPORTS TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The Company reports Gameface on a one-month calendar lag allowing for the timely preparation of financial statements. Gameface operates on fiscal year end periods as of December 31. For the period ended April 30, 2022, the Company reported both Gameface as of the first quarter ended March 31, 2022. As the Company acquired Gameface on February 2, 2022, only the financial data from the acquisition date through March 31, 2022 are included in the Company’s consolidated financial statements. This one-month reporting lag is with the exception of significant transactions or events that occur during the intervening period. The Company did not identify any significant transactions during the one month ended April 30, 2022 at Gameface that would need to be disclosed as not included within the Company’s consolidated financial statements. Impact of COVID-19 Pandemic The Company has been carefully monitoring the COVID-19 pandemic and its impact on its business. In that regard, while the Company has continued to sell its products and grow its business it did experience certain disruptions in its supply chains. The Company expects the significance of the COVID-19 pandemic, including the extent of its effect on the Company’s financial and operational results, to be dictated by, among other things, its duration, the success of efforts to contain it and the impact of actions taken in response. While the Company has not experienced any material disruptions to its business and operations as a result of the COVID-19 pandemic, it is possible such disruptions may occur in the future which may impact its financial and operational results, and which could be material. Impact of Russian and Ukrainian Conflict In February 2022, the Russian Federation and Belarus commenced a military action with the country of Ukraine. We are closely monitoring the unfolding events due to the Russia-Ukraine conflict and its regional and global ramifications. We have one distributor in Russia, which is not material to our overall financial results. We do not have operations in Ukraine or Belarus. We are monitoring any broader economic impact from the current crisis. The specific impact on the Company’s financial condition, results of operations, and cash flows is also not determinable as of the date of these financial statements. However, to the extent that such military action spreads to other countries, intensifies, or otherwise remains active, such action could have a material adverse effect on our financial condition, results of operations, and cash flows. Note 2: GOING CONCERN The 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 $ 80,596,925 as of April 30, 2022, 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. The 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 debt and/or common stock. In respect to additional financing, refer to Note 9, Note 10, Note 11, and Note 18. In the event that the Company is unable to successfully raise capital and/or generate revenues, the Company will likely reduce general and administrative expenses, and cease or delay its development plan until it is able to obtain sufficient financing. The Company has begun reducing operating expenses and cash outflows by discontinuing operations of PlaySight, as well as selling 75 % of Foundation Sports. There can be no assurance that additional funds will be available on terms acceptable to the Company, or at all. Note 3: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The 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. Financial Statement Reclassification Certain prior year amounts within accounts payable, accrued expenses, and certain operating expenses have been reclassified for consistency with the current year presentation and had no effect on the Company’s balance sheet, net loss, shareholders’ deficit or cash flows. F- 9 CONNEXA SPORTS TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Cash and Cash Equivalents The 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. As of April 30, 2022, the Company had $ 156,724 in restricted cash from PlaySight. Accounts Receivable The 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. The Company recorded $ 175,000 in allowance for doubtful accounts for the year ended April 30, 2022. The Company did no t record an allowance for doubtful accounts for the year ended April 30, 2021. Inventory Inventory 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. Inventory reserves are based on historical information and assumptions about future demand and inventory shrink trends. The Company’s inventory for the years ended April 30, 2022 and 2021 consisted of the following: SUMMARY OF INVENTORY 2022 2021 Finished Goods $ 4,397,098 $ 1,591,826 Component/Replacement Parts 2,559,848 1,777,028 Capitalized Duty/Freight 1,328,198 347,362 Inventory Reserve ( 100,000 ) ( 23,000 ) Total $ 8,185,144 $ 3,693,216 Prepaid Inventory Prepaid inventory represents inventory that is in-transit that has been paid for but not received from the Company’s third-party vendors. The Company typically prepays for the purchase of materials and receives the products within three months after making payments. The Company continuously monitors delivery from, and payments to, the vendors. If the Company has difficulty receiving products from a vendor, the Company would cease purchasing products from such vendors in future periods. The Company has not had difficulty receiving products during the reporting periods. Property and equipment Property and equipment acquired through business combinations are stated at the estimated fair value at the date of the acquisition. Purchases of property and equipment are stated at cost, net of accumulated depreciation and impairment losses. Expenditures that materially increase the useful life of the assets are capitalized. Ordinary repairs and maintenance are expensed as incurred. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the related assets, which is an average of 5 years. Concentration of Credit Risk The Company maintains its cash in bank deposit accounts, the balances of which at times may exceed insured limits. The Company continually monitors its banking relationships and consequently has not experienced any losses in such accounts. 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. See Note 4 for further details on the Company’s concentration of credit risk as well as other risks and uncertainties. F- 10 CONNEXA SPORTS TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Revenue Recognition The Company recognizes revenue for their continuing operations 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 contract liabilities 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. The Company recognizes revenue under ASC 606, “Revenue from Contracts with Customers”. The core principle of this revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle: Step 1: Identify the contract with the customer The Company determines that it has a contract with a customer when each party’s rights regarding the products or services to be transferred can be identified, the payment terms for the services can be identified, the Company has determined the customer has the ability and intent to pay, and the contract has commercial substance. At contract inception, the Company evaluates whether two or more contracts should be combined and accounted for as a single contract and whether the combined or single contract includes more than one performance obligation. Step 2: Identify the performance obligations in the contract The Company’s customers are buying an integrated system. In evaluating whether the equipment is a separate performance obligation, the Company’s management considered the customer’s ability to benefit from the equipment on its own or together with other readily available resources and if so, whether the service and equipment are separately identifiable (i.e., is the service highly dependent on, or highly interrelated with the equipment). Because the Products and Services included in the customer’s contract are integrated and highly interdependent, and because they must work together to deliver the Solution, the Company has concluded that Products installed on customer’s premise and Services contracted for by the customer are generally not distinct within the context of the contract and, therefore, constitute a single, combined performance obligation. Step 3: Determine the transaction price The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer includes predetermined fixed amounts, variable amounts, or both. The Company’s contracts do not include any rights of returns or refunds. The Company collects each year’s service fees in advance and should therefore consider the existence of a significant financing component. However, due to the fact that the payments are provided for the service of a one-year term, the Company elected to apply the practical expedient under ASC 606 which exempts the adjustment of the consideration for the existence of a significant financing component when the period between the transfer of the services and the payment for such services is one year or less. Step 4: Allocate the transaction price to the performance obligations in the contract Contracts that contain multiple performance obligations require an allocation of the transaction price to each performance obligation based on each performance obligation’s relative standalone selling price (“SSP”). The Company has identified a single performance obligation in the contract, and therefore, the allocation provisions under ASC 606 do not apply to the Company’s contracts. Step 5: Recognize revenue when the Company satisfies a performance obligation Revenues for the Company’s single, combined performance obligation are recognized on a straight-line basis over the customer’s contract term, which is the period in which the parties to the contract have enforceable rights and obligations (Typically 3-4 years). Business Combinations Upon acquisition of a company, we determine if the transaction is a business combination, which is accounted for using the acquisition method of accounting. Under the acquisition method, once control is obtained of a business, the assets acquired, and liabilities assumed, are recorded at fair value. We use our best estimates and assumptions to assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date. One of the most significant estimates relates to the determination of the fair value of these assets and liabilities. The determination of the fair values is based on estimates and judgments made by management. Our estimates of fair value are based upon assumptions we believe to be reasonable, but which are inherently uncertain and unpredictable. Measurement period adjustments are reflected at the time identified, up through the conclusion of the measurement period, which is the time at which all information for determination of the values of assets acquired and liabilities assumed is received, and is not to exceed one year from the acquisition date. We may record adjustments to the fair value of these tangible and intangible assets acquired and liabilities assumed, with the corresponding offset to goodwill. The Company elected to apply pushdown accounting to all entities acquired during the year ended April 30, 2022. F- 11 CONNEXA SPORTS TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Additionally, uncertain tax positions and tax-related valuation allowances are initially recorded in connection with a business combination as of the acquisition date. We continue to collect information and reevaluate these estimates and assumptions periodically and record any adjustments to preliminary estimates to goodwill, provided we are within the measurement period. If outside of the measurement period, any subsequent adjustments are recorded to the consolidated statement of operations. Fair Value of Financial Instruments Fair 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: Level 1 — Quoted prices in active markets for identical assets or liabilities Level 2 — Observable inputs other than quoted prices in active markets for identical assets and liabilities Level 3 — Unobservable pricing inputs in the market Financial 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. The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, and accounts payable. The carrying amount of these financial instruments approximates fair value due to their short-term maturity. The Company’s contingent consideration in connection with the acquisition of Gameface and PlaySight were calculated using Level 3 inputs. The fair value of contingent consideration as of April 30, 2022 was $ 1,334,000 . The Company estimates the fair value of its intangible assets using Level 3 assumptions, primarily based on the income approach utilizing the discounted cash flow method. The Company’s derivative liabilities were calculated using Level 2 assumptions on the issuance and balance sheet dates via a Black-Scholes option pricing model and consisted of the following ending balances and gain amounts as of and for the year ended April 30, 2022: SUMMARY OF DERIVATIVE LIABILITIES April 30, 2022 (Gain) loss for year Note derivative is related to ending balance ended April 30, 2022 4/11/21 conversion of 12/24/20 note payable $ 1,061,550 $ ( 168,301 ) 4/15/21 note payable — ( 6,014,245 ) 5/26/21 conversion of notes payable – related party — ( 2,867,749 ) 8/6/21 convertible notes 4,382,229 ( 9,506,889 ) Total $ 5,443,779 $ ( 18,557,184 ) The Black-Scholes option pricing model assumptions for the derivative liabilities during the year ended April 30, 2022 and 2021 consisted of the following: SUMMARY OF WARRANTS GRANTED VALUATION USING BLACK-SCHOLES PRICING METHOD 2022 2021 Expected life in years 1.95 - 4.3 years 1.7 - 5.0 years Stock price volatility 50 % 50 %- 155 % Risk free interest rate 2.67 %- 2.90 % 0.16 %- 1.56 % Expected dividends 0 % 0 % Refer to Note 10 and Note 11 for more information regarding the derivative instruments. F- 12 CONNEXA SPORTS TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Income Taxes Income 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 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. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts that are more likely than not to be realized. Intangible Assets Intangible assets relate 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, 2022 and 2021 was $296,350 and $ 2,730 , respectively. The Company also acquired intangible assets as a part of the Gameface acquisition. These intangible assets include tradenames, internally developed software, and customer relationships. The acquired intangible assets are amortized based on the estimated present value of cash flows of each class of intangible assets in order to determine their economic useful life. The acquired tradenames, internally developed software, and customer relationships are amortized over their expected economic useful lives of 20 , 5 , and 15 , years respectively. Amortization expense for the acquired tradenames, internally developed software, and customer relationships for the year ended April 30, 2022 was $ 956 , $ 9,499 , and $ 33,749 , respectively. Refer to Note 7 for more information. Impairment of Long-Lived Assets In accordance with ASC 360-10, the Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that their net book value may not be recoverable. Factors which could trigger impairment review include significant underperformance relative to historical or projected future operating results, significant changes in the manner of use of the assets or the strategy for the overall business, a significant decrease in the market value of the assets or significant negative industry or economic trends. 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. 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. The Company performed this assessment in April 2022, and determined that the long-lived assets related to Foundation Sports were fully impaired as of April 30, 2022, resulting in an impairment loss of $ 1,056,599 . There was no impairment of long-lived assets identified during the year ended April 30, 2021. Goodwill The Company accounts for goodwill in accordance with ASC 350, Intangibles - Goodwill and Other (“ASC 350”). ASC 350 requires that goodwill not be amortized, but reviewed for impairment if impairment indicators arise and, at a minimum, annually. The Company records goodwill as the excess purchase price over assets acquired and includes any work force acquired as goodwill. Goodwill is evaluated for impairment on an annual basis. With the adoption of the ASU 2017-04, which eliminates the second step of the goodwill impairment test, the Company tests impairment of goodwill in one step. In this step, the Company compares the fair value of each reporting unit with goodwill to its carrying value. The Company determines the fair value of its reporting units with goodwill using a combination of a discounted cash flow and a market value approach. If the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, the Company will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value. If the fair value of the reporting unit exceeds the carrying value of the net assets assigned to that reporting unit, goodwill is not impaired and the Company will not record an impairment charge. The Company determined in April 2022 that the fair value of the reporting unit was less than the carrying value of the net assets assigned to the reporting unit and therefore goodwill was fully impaired for Foundation Sports at April 30, 2022, resulting in an impairment loss of $ 2,430,000 . There was no impairment of goodwill as of April 30, 2021. F- 13 CONNEXA SPORTS TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Share-Based Payment The 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. Warrants The 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 and other key arrangements. The 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. Warrants granted in connection with ongoing arrangements are more fully described in Note 11 and Note 14. The warrants granted during the year ended April 30, 2022 and 2021 were valued using a Black-Scholes option pricing model on the date of grant using the following assumptions: SUMMARY OF WARRANTS GRANTED VALUATION USING BLACK-SCHOLES PRICING METHOD 2022 2021 Expected life in years 5 – 10 years 2 – 10 years Stock price volatility 50 % - 148 % 148 % - 280 % Risk free interest rate 0.77 % - 1.63 % 0.12 % - 1.64 % Expected dividends 0 % 0 % Foreign Currency Translation Our functional currency is the U.S. dollar. The functional currency of our foreign operations, generally, is the respective local currency for each foreign subsidiary. Assets and liabilities of foreign operations denominated in local currencies are translated at the spot rate in effect at the applicable reporting date. Our consolidated statements of comprehensive loss are translated at the weighted average rate of exchange during the applicable period. The resulting unrealized cumulative translation adjustment is recorded as a component of accumulated other comprehensive loss in shareholders’ equity. Realized and unrealized transaction gains and losses generated by transactions denominated in a currency different from the functional currency of the applicable entity are recorded in other income (loss) in the period in which they occur. Earnings Per Share Basic 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 538,947 and 692,130 common shares issuable as of April 30, 2022 and 2021, respectively, (see Note 9 and Note 10) 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 10,327,778 shares of common stock as of April 30, 2022. No notes payable were convertible into common stock during the year ended April 30, 2021 (see Note 10), outstanding warrants exercisable into 3,881,364 and 2,450,311 shares of common stock as of April 30, 2022 and 2021, respectively, and 838,780 and 21,786 shares related to make-whole provisions as of April 30, 2022 and 2021, respectively, (see Note 11), 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. Recent Accounting Pronouncements Recently Adopted In January 2017, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”), which simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Under ASU 2017-04, goodwill impairment will be tested by comparing the fair value of a reporting unit with its carrying amount, and recognizing an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. The new guidance must be applied on a prospective basis and is effective for periods beginning after December 15, 2022, with early adoption permitted. The Company adopted ASU 2017-04 effective May 1, 2021. The adoption of the new standard did not have a material effect on the Company’s consolidated financial statements. F- 14 CONNEXA SPORTS TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Accounting Pronouncements Not Yet Adopted In December 2019, the FASB issued Accounting Standards Update (“ASU”), 2019-12, Simplifying the Accounting for Income Taxes , which amends ASC 740, Income Taxes (ASC 740). 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 has not yet adopted this update and is currently evaluating the effect of this ASU on the Company’s financial statements and related disclosures. In August 2020, the FASB issued ASU No. 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. ASU 2020-06 will simplify the accounting for convertible instruments by reducing the number of accounting models for convertible debt instruments and convertible preferred stock. Limiting the accounting models results in fewer embedded conversion features being separately recognized from the host contract as compared with current GAAP. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting and(2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. ASU 2020-06 also amends the guidance for the derivatives scope exception for contracts in an entity’s own equity to reduce form-over-substance-based accounting conclusions. ASU 2020-06 will be effective for public companies for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company is currently evaluating the impact that the adoption of ASU 2020-06 will have on the Company’s consolidated financial statement presentation or disclosures. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASC 326”). The guidance replaces the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (“CECL”) methodology. The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including loan receivables and held-to-maturity debt securities. It also applies to off-balance sheet credit exposures not accounted for as insurance (loan commitments, standby letters of credits, financial guarantees, and other similar instruments) and net investments in leases recognized by a lessor in accordance with Topic 842 on leases. ASC 326 requires enhanced disclosures related to the significant estimates and judgments used in estimating credit losses as well as the credit quality and underwriting standards of a company’s portfolio. In addition, ASC 326 made changes to the accounting for available-for-sale debt securities. One such change is to require credit losses to be presented as an allowance rather than as a write-down on available-for-sale debt securities the Company does not intend to sell or believes that it is more likely than not they will be required to sell. The ASU can be adopted no later than January 1, 2020 for SEC filers and January 1, 2023 for private companies and smaller reporting companies. The Company has not yet adopted this ASU as it qualifies as a smaller reporting company. The Company does not expect this ASU will have a material impact on its consolidated financial statements. In October 2021, the FASB issued ASU 2021-08, “Business Combinations - Accounting for Contract Assets and Contract Liabilities (Topic 805)”. The amendments in this Update address diversity and inconsistency related to the recognition and measurement of contract assets and contract liabilities acquired in a business combination. The amendments in this Update require that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue from Contracts with Customers. ASU 2021-08 is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. The Company does not expect the adoption of this ASU to have a material impact on the Company’s financial statements. The FASB has issued ASU 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation—Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40). ASU 2021-04 provides guidance that an entity should treat a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange as an exchange of the original instrument for a new instrument. The standard also provides guidance on how an entity should measure and recognize the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity classified. The amendments in this ASU are effective for the Company for fiscal years beginning after December 15, 2021. Early adoption is permitted for all entities, including adoption in an interim period. The Company is currently evaluating the impact that the adoption of ASU 2021-04 will have on the Company’s consolidated financial statement presentation or disclosures. F- 15 CONNEXA SPORTS TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Other 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. Note 4 : CONCENTRATION OF CREDIT RISK AND OTHER RISKS AND UNCERTAINTIES Revenue Concentration For the year ended April 30, 2022, the Company had four customers that accounted for 39.75 %, 12.97 %, 12.77 %, and 10.52 % of the Company’s revenues, respectively. For the year ended April 30, 2021 the Company had one customer that accounted for 12.14 % of revenue. Accounts Receivable Concentration For the year ended April 30, 2022, the Company had two customers that accounted for 24.01 % and 19.11 % of the Company’s trade receivables balance, respectively. For the year ended April 30, 2021 the Company had four customers that accounted for 14.93 %, 14.13 %, 11.89 %, and 10.26 % of the Company’s trade receivables balance, respectively. Purchases Concentration For the year ended April 30, 2022, the Company had three suppliers that accounted for 15.63 %, 14.93 %, and 10.18 % of the Company’s purchases balance, respectively. For the year ended April 30, 2021 the Company had three suppliers that accounted for 18.24 %, 12.58 %, and 10.34 % of the Company’s purchases balance, respectively. Accounts Payable Concentration As of April 30, 2022, the Company had four significant suppliers that accounted for 21.15 %, 13.28 %, 12.78 %, and 12.26 % of the Company’s trade payables balances, respectively. As of April 30, 2021, the Company had three significant suppliers that accounted for 22.26 %, 14.57 % and 13.91 % of trade payables, respectively. Note 5: ACQUISITIONS AND BUSINESS COMBINATIONS Foundation Sports Systems, LLC On 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 100,000 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) 60,000 shares of common stock on the closing date, (ii) 20,000 shares of common stock on the first anniversary of the closing date and (iii) 20,000 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 54,000 shares of its common stock to the receipts under the MIPA, which consisted of 60,000 shares less a hold-back of 10 % (i.e., 6,000 shares). F- 16 CONNEXA SPORTS TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The Company accounted for the transaction as a business combination and elected to apply pushdown accounting to the entity. The Company allocated the aggregate purchase price for the acquisition based upon the tangible and intangible assets acquired, as the Company did not acquire any liabilities in this acquisition. The allocation of the purchase price is detailed below: SCHEDULE OF ASSETS ACQUIRED AND LIABILITY ASSUMED Consideration transferred: Equity consideration $ 3,550,000 Total Purchase Price $ 3,550,000 Description Fair Value Assets acquired: Trade name $ 70,000 Internally developed software 100,000 Customer relationships 950,000 Total assets acquired 1,120,000 Fair value of net assets acquired $ 1,120,000 Goodwill $ 2,430,000 The amounts allocated for internally developed software, customer relationships, and the goodwill were updated since the Company’s third quarter filing upon further review of the fair value of the intangible assets. The fair value of internally developed software and customer relationships decreased by $ 140,000 and $ 1,050,000 , respectively, resulting in an increase of $ 1,190,000 in the fair value of goodwill. There was no change in the total purchase price. As a result of the change in fair value of the intangible assets, the amortization expense of the intangible assets acquired from Foundation Sports decreased by $ 154,999 . (Refer to Note 18 related to the disposition of 75 % of this business in December 2022). The Company impaired all of the remaining intangible assets and goodwill on April 30, 2022 as market conditions changed from June 2021 through April 30, 2022 and the Company determined that there was no fair value associated with these assets that should be recognized as of April 30, 2022. Gameface Ltd. On February 2, 2022, the Company entered into a share purchase agreement with Flixsense Pty, Ltd. (“Gameface”). As a result of the share purchase agreement, Gameface became a wholly owned subsidiary of the Company in exchange for 590,327 shares of common stock of the Company, 100,000 earn out shares of common stock of the Company, 66,667 shares of common stock of the Company that will not be issued until the end of the retention period, 478,225 warrants of the Company, and $500,000 in cash in lieu of 14,259 shares of common stock of the Company. Additionally, the Company recorded contingent consideration with a fair value of $ 1,334,000 related to the earn out shares of common stock. Financial results of Gameface are allocated to the Company’s technology segment . F- 17 CONNEXA SPORTS TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The Company accounted for the transaction as a business combination and elected to apply pushdown accounting to the entity. The Company allocated the aggregate purchase price for the acquisition based upon the tangible and intangible assets acquired, net of liabilities. The allocation of the purchase price is detailed below: SCHEDULE OF ASSETS ACQUIRED AND LIABILITY ASSUMED Consideration transferred: Contingent consideration $ 1,334,000 Seller note payable 500,000 Seller’s liability assumed 9,700,000 Total Purchase Price $ 11,534,000 Description Fair Value Assets acquired: Cash and cash equivalents $ 125,659 Prepaid expenses and other receivables 38,972 Property, plant and equipment 39,888 Other non-current assets 81,921 Intangible asset - Tradename 270,000 Intangible asset - Internally developed software 580,000 Intangible asset - Customer relationships 3,930,000 Total assets acquired $ 5,066,440 Liabilities assumed: Accounts payable $ 88,712 Contract liabilities 50,728 Provisions 90,388 Other liabilities 83,805 Total liabilities assumed 313,633 Fair value of net assets acquired $ 4,752,807 Goodwill $ 6,781,193 PlaySight Interactive Ltd. On February 21, 2022, the Company entered into a merger agreement with PlaySight Interactive Ltd. (“PlaySight”) and Rohit Krishnan (the “Shareholders’ Representative”). As a result of the merger agreement, PlaySight became a wholly owned subsidiary of the Company in exchange for 2,537,969 shares of common stock of the Company, and issued to PlaySight employees options to purchase up to 142,858 shares of Company common stock, and used a cash sum equal to 152,490 shares of the Company’s common stock ($2,200,000) to cover certain expenses. The PlaySight employee options vest at issuance, have an exercise price of $ 0.01 per share, and expire 10 years from issuance. The Company also agreed to earn-out consideration of up to 514,286 shares of common stock of the Company. Additionally, the Company recorded contingent consideration with a fair value of $ 4,847,000 related to the earn out shares of common stock . F- 18 CONNEXA SPORTS TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The Company accounted for the transaction as a business combination and elected to apply pushdown accounting to the entity. The Company allocated the aggregate purchase price for the acquisition based upon the tangible and intangible assets acquired, net of liabilities. The allocation of the purchase price is detailed below: SCHEDULE OF ASSETS ACQUIRED AND LIABILITY ASSUMED Consideration transferred: Contingent consideration $ 4,847,000 Seller’s note 2,200,000 Equity consideration 37,750,000 Total $ 44,797,000 Description Fair Value Assets acquired: Cash and cash equivalents $ 351,000 Restricted cash 155,000 Accounts receivable, net 347,000 Prepaid expenses and other current assets 294,000 Inventories, net 521,000 Contract assets 277,000 Fixed assets, net 129,000 Operating lease right-of-use asset 262,000 Contract assets, net of current portion 219,000 Finished products used in operations, net 4,749,000 Intangible asset - Tradename 1,700,000 Intangible asset - Internally developed software 2,430,000 Intangible asset - Customer relationships 15,590,000 Total assets acquired $ 27,024,000 Liabilities assumed: Accounts payable $ 1,126,000 Accrued expenses 1,800,000 Contract liabilities 2,534,000 Operating lease liability, current portion 257,000 Contract liabilities, net of current portion 1,311,000 Notes payable, net 1,061,000 Total liabilities assumed 8,089,000 Fair value of net assets acquired $ 18,935,000 Goodwill $ 25,862,000 Goodwill balances comprise of synergies recognized from combining operations and brand recognition. Total transaction costs for the three acquisitions were $ 5,109,522 and are included in the Transaction costs line of the consolidated statements of comprehensive loss. During November 2022, the Company made the decision to dispose of these operations. See Note 18 related to the disposition of this business in November 2022. F- 19 CONNEXA SPORTS TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Pro Forma Results The following pro forma financial information presents the results of operations of the Company as of the year ended April 30, 2022 and 2021, as if the acquisitions of PlaySight and Gameface had occurred as of the beginning of the first period presented instead of February 2022. The pro forma financial information (in thousands) of the Company as of the years ended April 30, 2022 and 2021 is as follows: SCHEDULE OF PROFORMA FINANCIAL INFORMATION Reported Proforma Reported Proforma For the For the Years Ended April 30, 2022 2021 Reported Proforma Reported Proforma Revenues $ 16,831 $ 21,236 $ 10,804 $ 16,424 Loss from operations ( 51,928 ) ( 57,372 ) ( 3,933 ) ( 11,350 ) Net loss $ ( 51,774 ) $ ( 48,011 ) $ ( 18,595 ) $ ( 31,333 ) Basic and diluted earnings (loss) per share $ ( 13.44 ) $ ( 12.46 ) $ ( 6.96 ) $ ( 11.73 ) Note 6 : GOODWILL The changes in the carrying amount of goodwill for the year ended April 30, 2022 were as follows: SCHEDULE OF GOODWILL Balance as of April 30, 2021 $ — Beginning balance $ — Gameface acquisition (Note 5) 6,781,193 PlaySight acquisition (Note 5) 25,862,000 Foundation Sports acquisition (Note 5) 2,430,000 Goodwill, acquired during period 2,430,000 Less impairment ( 2,430,000 ) Balance as of April 30, 2022 $ 32,643,193 Ending balance $ 32,643,193 Impairment of Goodwill Year ended April 30, 2022 The Company has assessed the indicators of impairment and concluded on the below for the respective reporting units: Equipment No goodwill was assigned to the Equipment segment as of April 30, 2022 . Therefore, further analysis is not required for the Equipment reporting unit. Technology PlaySight, Gameface, and Foundation Sports were all assigned to the Technology segment as of April 30, 2022. The Company determined in April 2022 that the fair value of Foundation Sports was less than the carrying value of the net assets assigned to this entity and therefore goodwill related to Foundation Sports was fully impaired as of April 30, 2022. Impairment loss relating to Foundation Sports was $ 2,430,000 . Note 7: INTANGIBLE ASSETS Intangible assets, net consisted of the following: SCHEDULE OF INTANGIBLE ASSETS Weighted Average Period April 30, 2022 Amortization (in years) Carrying Value Accumulated Amortization Impairment L oss Net Carrying Value Tradenames 15.26 $ 2,154,551 $ 24,102 ( 68,969 ) $ 2,061,480 Customer relationships 9.92 20,412,491 169,070 ( 892,491 ) 19,350,930 Internally developed software 4.91 3,105,139 105,908 ( 95,139 ) 2,904,092 Total intangible assets $ 25,672,181 $ 299,080 $ ( 1,056,599 ) $ 24,316,502 F- 20 CONNEXA SPORTS TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Weighted Average Amortization April 30, 2021 Period (in years) Carrying Value Accumulated Amortization Net Carrying Value Tradenames 20 $ 115,583 $ 2,730 $ 112,853 Total intangible assets $ 115,583 $ 2,730 $ 112,853 Amortization expense for the years ended April 30, 2022 and 2021 was approximately $ 296,350 and $ 2,730 , respectively. Intangible assets for Foundation Sports have been fully impaired as of April 30, 2022. This resulted in an impairment loss of $ 1,056,599 . As of April 30, 2022, the estimated future amortization expense associated with the Company’s intangible assets for each of the five succeeding fiscal years is as follows: SCHEDULE OF ESTIMATED FUTURE AMORTIZATION For the Years Ended April 30, Amortization Expense 2023 $ 1,572,905 2024 1,824,808 2025 2,569,690 2026 3,330,667 2027 3,122,430 Thereafter 11,896,002 Total $ 24,316,502 On 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 . The 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 $ 35,531 and $ 50,232 , respectively. The purchase price of the trademark was determined to be $ 115,583 . Note 8 : ACCRUED EXPENSES The composition of accrued expenses is summarized below: SCHEDULE OF ACCRUED EXPENSES 2022 2021 April 30, 2022 2021 Accrued payroll $ 2,041,949 $ 415,264 Accrued bonus 1,114,753 868,200 Accrued professional fees 1,706,560 240,177 Goods received not invoiced 293,413 487,945 Accrued sales taxes 250,000 Other accrued expenses 695,336 280,537 Total $ 5,602,011 $ 2,292,123 F- 21 CONNEXA SPORTS TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 9: NOTE PAYABLE - RELATED PARTY Beginning in October 2019, the Company entered into several loan agreements with a related party entity controlled by the former shareholder of Slinger Bag Canada. Total outstanding borrowings from this related party as of April 30, 2021 amounted to $ 6,220,000 , which was gross of total discounts of $ 76,777 and consisted of the following: SCHEDULE OF NOTES PAYABLE - RELATED PARTY Note Date Maturity Date Interest Rate April 30, 2021 6/1/2019 6/1/2021 9.5 % $ 1,700,000 6/30/2020 6/30/2021 9.5 % 120,000 8 notes from 10/2019 - 8/2020 9/1/2021 9.5 % 3,850,000 9/15/2020 9/15/2021 9.5 % 250,000 11/24/2020 11/24/2021 9.5 % 300,000 Total notes payable to related parties $ 6,220,000 On May 26, 2021, the Company and the related party lender entered into a note conversion agreement (the “Note Conversion Agreement”) whereby the related party lender agreed to convert its total outstanding borrowings as of that date of $ 6,220,000 into 163,684 shares of the Company’s common stock. 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 , which could result in an infinite number of shares being required to be issued. The Company evaluated the conversion option of the notes payable to shares under the guidance in ASC 815, Derivatives and Hedging (“ASC 815”), and determined the conversion option qualified for equity classification. The Company also evaluated the profit guarantee under ASC 815 and determined it to be a make-whole provision, which is an embedded derivative within the host instrument. As the economic characteristics of the make-whole provision 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. On the date of conversion the Company recognized a $ 5,118,435 loss on extinguishment of debt, which represented the difference between the $ 6,220,000 in notes payable that were converted and the fair value of the shares issued of $ 6,220,003 , which were recorded in shares issued for conversion of notes payable – related party within shareholders’ equity, the derivative liability of $ 5,052,934 , which was valued using a Black-Scholes option pricing model, and the write-off of the unamortized debt discount of $ 65,498 . Amortization of the debt discounts during the three months ended July 31, 2021, prior to the notes’ conversion, was $ 11,279 , which was recorded in amortization of debt discounts in the accompanying consolidated statements of comprehensive loss. Per the terms of the Note Conversion Agreement the accrued interest related to the notes payable was not converted into shares and is still due to the related party. The Company and the related party agreed that interest will be paid when separately agreed between the related party and the Company. On January 5, 2023, the Company and the related party entered into a forbearance agreement pursuant to which the Company has until December 30, 2023 to pay the outstanding balance of such interest, which is $ 917,957 . On 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. On August 4, 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. On August 11, 2021, the Company repaid the outstanding principal and interest to its related party lender for the July 23, 2021 loan of $ 500,000 and the August 4, 2021 loan of $ 500,000 . On August 31, 2021, the Company’s related party lender cancelled the guarantee in the Note Conversion Agreement that the aggregate gross sales of its converted shares will be no less than $ 6,220,000 . In connection with the elimination of the profit guarantee the derivative liability ceased to exist at that time. On August 31, 2021, the fair value of the derivative liability was remeasured using a Black-Scholes option pricing model and determined to be $ 2,185,185 . The change in fair value of the derivative through August 31, 2021, was recognized as a gain on change in fair value of derivatives of $ 2,867,749 for the year ended April 30, 2022, and the remaining value of the derivative of $ 2,185,185 was reclassified to additional paid-in capital as part of shareholders’ equity during the three months ended October 31, 2021 due to the related party nature of the transaction. F- 22 CONNEXA SPORTS TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS On January 14, 2022, the Company entered into two loan agreements with related party lenders, each for $ 1,000,000 , pursuant to which the Company received a total amount of $ 2,000,000 . The loans bear interest at a rate of 8 % per annum and are required to be repaid in full by April 30, 2022 or such other date as may be accepted by the lenders. The Company is not permitted to make any distribution or pay any dividends unless or until the loans are repaid in full. On June 28, 2022, the Company entered into amendments for the two related party loan agreements with the lenders in which the repayment date was extended to July 31, 2024. As this amendment occurred after the reporting date of April 30, 2022, but before the issuance of the consolidated financial statements, this balance was reclassified to long-term liabilities. There was $ 2,000,000 in outstanding borrowings from related parties as of April 30, 2022. Interest expense related to the related parties for the years ended April 30, 2022 and 2021 amounted to $ 165,558 and $ 608,668 , respectively. Accrued interest due to related parties as of April 30, 2022 and 2021 amounted to $ 908,756 and $ 747,636 , respectively. Note 10: CONVERTIBLE NOTES PAYABLE On 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. The 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. On May 6, 2020, the Company issued 1,216,560 shares of common stock as partial satisfaction of the shares issuable. On 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. The 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 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 derivative of $ 566,667 was recognized as a loss on extinguishment of debt on the consolidated statements of comprehensive loss for the year ended April 30, 2021. The 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 comprehensive loss. The remaining $ 206,061 was amortized during the year ended April 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 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 9), to the Company’s related party lender, along with the 121,656 shares of common stock previously issued to Mont-Saic in connection with the debt agreement and the rights to receive the remaining 692,130 shares issuable (see Note 5). On February 11, 2020, 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 were 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. On September 4, 2020, the Company and the convertible debtholder entered into an agreement to convert the outstanding convertible note payable balance of $ 125,000 and accrued interest of $ 8,466 into 30,000 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 interest expense in the consolidated statements of comprehensive loss during the year ended April 30, 2021. F- 23 CONNEXA SPORTS TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS At 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’ equity. Amortization of debt discounts during the year ended April 30, 2022 and 2021 was $ 8,127,778 and $ 42,872 , respectively, and was recorded as amortization of debt discount in the accompanying consolidated statements of comprehensive loss. The unamortized discount balance amounted to $ 2,872,222 and zero as of April 30, 2022 and 2021, respectively. On August 6, 2021, the Company consummated the closing (the “Closing”) of a private placement offering (the “Offering”) pursuant to the terms and conditions of that certain Securities Purchase Agreement, dated as of August 6, 2021 (the “Purchase Agreement”), between the Company and certain accredited investors (the “Purchasers”). At the Closing, the Company sold to the Purchasers (i) 8 % Senior Convertible Notes (the “Convertible Notes”) in an aggregate principal amount of $ 11,000,000 and (ii) warrants to purchase up to 733,333 shares of common stock of the Company (the “Warrants” and together with the Convertible Notes, the “Securities”). The Company received an aggregate of $ 11,000,000 in gross proceeds from the Offering, before deducting offering expenses and commissions. The Convertible Notes mature on August 6, 2022 (the “Maturity Date”) and bear interest at 8 % per annum payable on each conversion date (as to that principal amount then being converted), on each redemption date as well as mandatory redemption date (as to that principal amount then being redeemed) and on the Maturity Date, in cash. The Convertible Notes are convertible into shares of the Company’s common stock at any time following the date of issuance and prior to Mandatory Conversion (as defined in the Convertible Notes) at the conversion price equal to the lesser of: (i) $ 3.00 , subject to adjustment set forth in the Convertible Notes and (ii) in the case of an uplist to the NASDAQ, the Uplist Conversion Price (as defined in the Convertible Notes) of the Company’s common stock during the two Trading Day (as defined in the Convertible Notes) period after each conversion date; provided, however, that at any time from and after December 31, 2021 or an Event of Default (as defined in the Convertible Notes), the holder of the Convertible Notes may, by delivery of written notice to the Company, elect to cause all, or any part, of the Convertible Notes to be converted, at any time thereafter, each an “Alternate Conversion”, pursuant to the Section 4(f) of the Convertible Notes, all, or any part of, the then outstanding aggregate principal amount of the Convertible Notes into shares of Common Stock at the Alternate Conversion price. The Convertible Notes rank pari passu with all other notes now or thereafter issued under the terms set forth in the Convertible Notes. The Convertible Notes contain certain price protection provisions providing for adjustment of the number of shares of common stock issuable upon conversion of the Convertible Notes in case of certain future dilutive events or stock-splits and dividends. The Warrants are exercisable for five years from August 6, 2021 , at an exercise price equal to the lesser of $ 3.00 or a 20% discount to the public offering price that a share of the Company’s common stock or unit (if units are offered) is offered to the public resulting in the commencement of trading of the Company’s common stock on the NASDAQ, New York Stock Exchange or NYSE American. The Warrants contain certain price protection provisions providing for adjustment of the amount of securities issuable upon exercise of the Warrants in case of certain future dilutive events or stock-splits and dividends. The Company evaluated the Warrants and the conversion options under the guidance in ASC 815 and determined they represent derivative liabilities given the variability in the exercise and conversion prices upon the event of an up list to the NASDAQ. The Company also evaluated the other embedded features in the agreement and determined the interest make-whole provision and the subsequent financing redemption represent put features that are also accounted for as derivative liabilities. The derivative liabilities are 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 (see Note 3). The Warrants were valued at $ 12,026,668 on the date of issuance using a Monte Carlo simulation that accounted for the variability in the exercise price upon the event of an up list based on the Company’s expected future stock prices over the five -year term using inputs in line with those listed in Note 3. The remaining derivatives were valued at $ 1,862,450 on the issuance date based on the present value of their weighted average probability value. As part of the issuance of the Convertible Notes, the Company incurred and capitalized debt issuance costs of $ 800,251 related to brokerage and legal fees that met the debt issuance cost capitalization criteria of ASC 835. The total discount related to the Convertible Notes on the date of issuance of $ 14,689,369 exceeded their value, which resulted in the Company recognizing a $ 3,689,369 loss on the issuance of the Convertible Notes during the three months ended October 31, 2021. The discount on the Convertible Notes will be amortized through the maturity date on a straight-line basis. Amortization of the debt discount for the year ended April 30, 2022 was $ 8,127,778 , which was recorded in amortization of debt discounts in the accompanying consolidated statements of comprehensive loss. The unamortized discount balance amounted to $ 2,872,222 as of April 30, 2022. F- 24 CONNEXA SPORTS TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS On December 31, 2021, the Company entered into an Omnibus Amendment Agreement (the “Omnibus Agreement”) with certain Purchasers who are collectively holders of 67% or more of the Securities outstanding related to the August 6, 2021 Convertible Notes, amending each of (i) the Purchase Agreement and (ii) the Registration Rights Agreement. Simultaneously with the execution of the Omnibus Agreement, the Company issued to each Purchaser a Replacement Note (as defined below) in replacement of the Convertible Note held prior to December 31, 2021 by such Purchaser (each, an “Existing Note”) . The Purchase Agreement was amended to, among other things, (i) delete Exhibit A and replace it in its entirety with the 8% Senior Convertible Note (the “Replacement Note”) filed as Exhibit 10.2 to the Company’s current report on Form 8-K dated January 5, 2021, (ii) add a new definition of “Inventory Financing”, (iii) amend Section 4.18 to add at the end of Section 4.18 before the final period “, it being agreed that the provisions of this Section 4.18 shall not apply to the Qualified Subsequent Financing expected to occur after the date hereof”, (iv) delete Section 4.20 and replace it in its entirety with substantially the same text, including the following after the period, replacing the period with a semicolon: “; provided that the provisions of this Section 4.20 shall not apply to (i) in respect of any Holder to the extent that such Holder is an investor or a purchaser of the securities offered pursuant such Subsequent Financing, and (ii) with respect to an Inventory Financing.”, and (v) add a new Section 4.21. Most-Favored Nation provision. The Registration Rights Agreement was amended to, among other things, (i) delete the definition “Effectiveness Date” in Section 1 and replace it in its entirety with substantially the same text but revise the definition of “Effectiveness Date” causing the Initial Registration Statement required to be filed by January 31, 2022, and (ii) delete Section 2(d) and replace it in its entirety with substantially the same text but revised to delete the following “(2) no liquidated damages shall accrue or be payable hereunder with respect to any day on which the high price of the Common Stock on the Trading Market on which the Common Stock is then listed or traded is less than the then-applicable Conversion Price,” resulting in renumbering the text that follows as (2) instead of (3). As consideration for entering into the Omnibus Agreement, the outstanding principal balance of the Existing Note held by each Purchaser was increased by twenty percent ( 20 % ) and such increased principal balance is reflected on the Replacement Note issued to each Purchaser. The Company recognized a $ 2,200,000 loss on issuance of convertible notes during the year ended April 30, 2022 related to this amendment. The fair value of the derivative liability related to the Convertible Notes was $ 4,382,229 as of April 30, 2022, and the Company recognized a gain on change in fair value of $ 9,506,889 for the year ended April 30, 2022. Total outstanding borrowings related to the Convertible Notes as of April 30, 2022 were $ 13,200,000 . The outstanding amount is net of total discounts of $ 2,872,222 for a net book value of $ 10,327,778 as of April 30, 2022. Interest expense related to the Convertible Notes for the year ended April 30, 2022 was $ 708,677 . Note 11: NOTES PAYABLE On March 16, 2020, the Company entered into a promissory note payable whereby the Company borrowed $ 500,000 bearing interest at 12 % per annum. Interest on the note is payable monthly and outstanding principal on the note was due in full on March 16, 2022 . In connection with the promissory note payable on March 16, 2020, the Company issued warrants to purchase 50,000 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 agreement. The warrants expired on March 16, 2022 and were fully vested upon issuance. 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 for the year ended April 30, 2021. On December 15, 2020, the debt holder agreed to convert the outstanding note payable of $ 500,000 into 50,000 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 comprehensive loss during the year ended April 30, 2021. On 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 was 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 9). F- 25 CONNEXA SPORTS TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS On 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. On April 11, 2021, the Company and the lender entered into an agreement whereby the lender converted the promissory note into 27,233 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. The 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. On 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’ equity, as well as the derivative liability of $ 1,251,910 , which was valued using a Black-Scholes option pricing model. The fair value of the derivative liability was $ 1,061,550 as of April 30, 2022, and the Company recognized a gain on change in fair value of $ 168,301 for the year ended April 30, 2022. On 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. The 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, Slinger Bag Canada, Slinger Bag Limited, and Slinger Bag International (UK) Limited. In connection with the Note, the Company issued 220,000 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 per share, 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 . The 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 (see Note 3). The 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. On August 6, 2021, the Company used the net proceeds from the issuance of the Convertible Notes (see Note 10) to pay 100% of the outstanding principal and accrued interest of the Note. Amortization of the debt discount related to the Note during the years ended April 30, 2022 and 2021 was $ 11,228 and $ 10,477 , respectively, which was recorded in amortization of debt discounts in the accompanying consolidated statements of comprehensive loss. On the date the Note was paid off the unamortized debt discount balance of $ 1,978,295 was recognized as a loss on extinguishment of debt during the year ended April 30, 2022. F- 26 CONNEXA SPORTS TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS On August 6, 2021, the Note payable holder exercised its right to convert its 220,000 outstanding warrants into shares of common stock of the Company. At the conversion date the Note payable holder also agreed to cancel the guarantee that the value of the shares sold will be no less, on average, than $1.50 per share through April 15, 2023 . In connection with the elimination of the profit guarantee the derivative liability ceased to exist at that time. On August 6, 2021, the fair value of the derivative liability was remeasured using a Black-Scholes option pricing model and determined to be $ 6,569,353 . The change in fair value of the derivative through August 6, 2021, was recognized as a gain on change in fair value of derivatives of $ 6,014,245 for the year ended April 30, 2022, and the remaining value of the derivative of $ 6,569,353 was reclassified to additional paid-in capital as part of shareholders’ equity during the year ended April 30, 2022 due to the related party nature of the transaction. There were no outstanding borrowings related to the Note as of April 30, 2022. Interest expense related to the Note for the year ended April 30, 2022 amounted to $ 106,667 . On February 15, 2022, for and in consideration of $ 4,000,000 the Company conveyed, sold, transferred, set over, assigned and delivered to Slinger Bag Consignment, LLC, a Virginia limited liability company (“Consignor”), all of the Company’s right, title and interest in and to 13,000 units of certain surplus inventory, including all components, parts, additions and accessions thereto (collectively, the “Consigned Goods”). The Company subsequently amended the purchase schedule to purchase the Consigned Goods from Consignor and make the following payments to Consignor: a. Prior to March 15, 2022, the Company paid to Consignor $ 557,998 ($ 392.68 per consigned goods unit) for the purchase of 1,421 Consigned Goods. b. On March 21, 2022, Consignee paid to Consignor $ 157,465 ($ 392.68 per consigned goods unit) for the purchase of 401 Consigned Goods. c. On April 15, 2022, Consignee paid to Consignor $ 250,000 ($ 392.68 per consigned goods unit) for the purchase of 637 Consigned Goods. As of April 30, 2022, the Company had repaid $ 965,463 resulting in a net balance of the convertible note payable of $ 3,034,537 . Accrued interest on the consignment note was $ 1,104,839 for the year ended April 30, 2022. On April 1, 2022, the Company entered into a $ 500,000 note payable. The note matures on July 1, 2022 and bears interest at eight percent ( 8 % ) per year. The Company pays interest monthly and will pay all accrued and unpaid interest on the maturity date in which the outstanding principal is due. Interest expense related to the note payable amounted to $ 3,178 for the year ended April 30, 2022. Note 12: NOTES RECEIVABLE On July 21, 2021, the Company entered into a Convertible Loan Agreement with PlaySight Interactive Ltd (the “Borrower”) wherein the Company granted the Borrower a 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. On August 26, 2021 and October 5, 2021, the Company issued an additional $ 700,000 and $ 400,000 , respectively, to the Borrower under the line of credit. On November 17, 2021, December 7, 2021, and January 14, 2022, the Company issued an additional $ 300,000 , $ 300,000 , and $ 250,000 , respectively, to the Borrower under the line of credit. Interest income related to the note receivable for the year ended April 30, 2022 amounted to $ 105,349 . On February 22, 2022, the Company entered into a merger agreement with PlaySight Interactive Ltd. (“PlaySight”) and Rohit Krishnan (the “Shareholders’ Representative”). As a result of the merger agreement, PlaySight became a wholly owned subsidiary of the Company. As such, the note receivable balance and related interest income was eliminated upon consolidation as of April 30, 2022. For the year ended April 30, 2021, there was no note receivable or related interest expense (see Note 4). Note 13: RELATED PARTY TRANSACTIONS In 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. F- 27 CONNEXA SPORTS TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS As of April 30, 2022 and 2021, amounts due to related parties were $ 1,905,792 and $ 1,283,464 , respectively, which represented unpaid salaries and bonuses and reimbursable expenses due to officers of the Company. The Company has outstanding notes payable of $ 2,000,000 and $ 6,220,000 and accrued interest of $ 908,756 and $ 747,636 due to a related party as of April 30, 2022 and 2021, respectively (see Note 9). In addition, the Company has an outstanding purchase obligation to a related party in the amount of $ 500,000 as of April 30, 2022 related to the acquisition of Gameface. The Company recognized net sales of $ 368,164 and $ 615,584 during the years ended April 30, 2022 and 2021, respectively, to related parties. As of April 30, 2022 and 2021, related parties had accounts receivable due to the Company of $ 93,535 and $ 86,956 , respectively. Note 14: SHAREHOLDERS’ EQUITY (DEFICIT) Common Stock The Company has 300,000,000 shares of common stock authorized with a par value of $ 0.001 per share. As of April 30, 2022 and 2021, the Company had 4,194,836 and 2,764,282 shares of common stock issued and outstanding, respectively. Equity Transactions During the Year Ended April 30, 2022 On May 26, 2021, the Company issued 163,684 shares of its common stock for the conversion of related party notes payable (see Note 9). The fair value of the common stock was $ 6,220,000 . On June 23, 2021, the Company issued 54,000 shares of its common stock as partial consideration for the acquisition of Foundation Sports (see Note 5). The fair value of the total shares of common stock to be issued related to the acquisition was $ 3,550,000 . On July 6, 2021, the Company issued 5,022 shares of its common stock to two employees as compensation for services rendered in lieu of cash, which resulted in $ 187,803 in share-based compensation expense for the year ended April 30, 2022. On July 11, 2021, the Company issued 1,875 shares of its common stock to a vendor as compensation for marketing and other services rendered, which resulted in $ 16,875 of operating expenses for the year ended April 30, 2022. During the three months ended July 31, 2021, the Company granted an aggregate total of 9,094 shares of its common stock and equity options to purchase up to 6,000 shares (which are now expired) to six new brand ambassadors as compensation for services. The expense related to the issuance of the shares and equity options is being recognized over the service agreements, similar to the warrants and equity options issued to the four other brand ambassadors in the prior year. During the year ended April 30, 2022, the Company recognized $ 907,042 of operating expenses related to the shares, warrants and equity options granted to brand ambassadors. On August 6, 2021, the Note payable holder (see Note 11) exercised its right to convert its 220,000 outstanding warrants into 495,000 shares of common stock of the Company. On August 6, 2021, the Company’s related party lender exercised its right to convert its 275,000 outstanding warrants and 692,130 common shares issuable into 967,130 shares of common stock of the Company. On October 11, 2021, the Company issued 1,875 shares of its common stock to a vendor as compensation for marketing and other services rendered, which resulted in $ 16,875 of operating expenses during the year ended April 30, 2022. On January 11, 2022, the Company issued 1,875 shares of its common stock to a vendor as compensation for marketing and other services rendered, which resulted in $ 16,874 of operating expenses during the year ended April 30, 2022. During April 2022, the Company granted an aggregate total of 6,000 shares of its common stock to 6 new brand ambassadors as compensation for services. During the year ended April 30, 2022, the Company recognized $ 255,124 of operating expenses related to the shares granted to brand ambassadors. Equity Transactions During Year Ended April 30, 2021 On May 6, 2020, the Company issued 121,656 shares of its common stock to Mont-Saic as partial satisfaction of the shares issuable under a convertible note payable agreement. On May 15, 2020, the Company issued 24,380 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. F- 28 CONNEXA SPORTS TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS On September 4, 2020, the Company issued 30,000 shares of its common stock for the conversion of a convertible note payable (see Note 10). The fair value of the common stock was $ 238,449 . On October 8, 2020, the Company issued 10,000 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. On October 28, 2020, the Company granted 40,000 warrants to a service provider for advertising services over the next year. The warrants 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 $ 214,552 and $ 221,826 of operating expenses related to this agreement during the years ended April 30, 2022 and 2021, respectively. On 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. On November 24, 2020 and on January 11, 2021, the Company issued 4,608 and 10,000 shares of its common stock, respectively, to two vendors as compensation for marketing and other advisory services. The Company also issued 5,595 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. As of April 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. On November 10, 2020, the Company issued 3,500 shares of common stock as partial payment for the purchase of the Slinger trademark. The 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 sheet. On December 15, 2020, the Company issued 50,000 shares of common stock as full payment of its $500,000 note payable to a third party (see Note 11). The fair value of the shares issued was $ 500,000 . On April 11, 2021, the Company issued 27,233 shares of its common stock for the conversion of a note payable (see Note 11). The fair value of the shares issued was $ 1,250,004 . On April 11, 2021 and on April 13, 2021, the Company issued 1,875 and 500 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. During the three months ended April 30, 2021, the Company granted an aggregate total of 6,000 warrants and equity options for 12,000 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. The Company recognized $ 59,838 and $ 98,457 of operating expenses related to the warrant and equity options, respectively, during the year ended April 30, 2021. Warrants Issued During the Year Ended April 30, 2022 In accordance with the October 29, 2020 agreement with three members of the advisory board mentioned above, 46,077 warrants were issued during the year ended April 30, 2022. The warrants were valued using a Black-Scholes option pricing model on the grant date, which resulted in operating expenses of $ 87,656 during the year ended April 30, 2022. On August 6, 2021, in connection with the Convertible Notes issuance (see Note 10) the Company issued warrants to purchase up to 733,333 shares of common stock of the Company to the Purchasers. On August 6, 2021, in connection with the Convertible Notes issuance the Company also granted the lead placement agent for the Offering 26,667 warrants that are exercisable for five years from August 6, 2021, at an exercise price of $ 3.30 (subject to adjustment as set forth in the Convertible Notes per the terms of the agreement) and are vested immediately. The warrants were valued using a Black-Scholes option pricing model on the grant date and the Company recognized $ 376,000 of operating expenses related to them during the year ended April 30, 2022. F- 29 CONNEXA SPORTS TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS On September 3, 2021, the Company granted an aggregate total of 1,010,000 warrants to key employees and officers of the Company as compensation. The warrants have an exercise price of $ 0.001 per share for 1,000,000 of the warrants and $ 3.42 for 10,000 of the warrants, a contractual life of 10 years from the date of issuance and are vested immediately upon grant. The warrants were valued using a Black-Scholes option pricing model on the grant date and the Company recognized $ 32,381,309 of share-based compensation expense related to them during the year ended April 30, 2022. On February 2, 2022, in connection with the Gameface acquisition (see Note 5) the Company issued warrants to purchase up to 478,225 shares of common stock of the Company. Common Stock Issuable As discussed in Note 10, 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 was reflected as additional paid-in capital during the year ended April 30, 2020. There were 813,786 shares of common stock that were issuable under this agreement and as of April 30, 2020, none of the shares had been issued. As of April 30, 2021, 121,656 shares have been issued and the remaining 692,130 were issued as of April 30, 2022. On February 2, 2022, the Company authorized the issuance of 590,327 shares of common stock as partial consideration for the acquisition of Gameface (see Note 5). The fair value of the total shares of common stock to be issued related to the acquisition was $ 9,700,000 . As of April 30, 2022, none of the shares had been issued due to there being an issue with the transfer agent. The shares were issued in September 2022. Refer to Note 18 for more details. On February 22, the Company authorized the issuance of 2,537,969 shares of common stock as partial consideration for the acquisition of PlaySight (see Note 5). The fair value of the total shares of common stock to be issued related to the acquisition was $ 39,950,000 . As of April 30, 2022, none of the shares had been issued due to there being an issue with the transfer agent. The shares were issued in September 2022. Refer to Note 18 for more details. Warrants Issued for Compensation On February 9, 2021, the Company issued 600,000 warrants to key employees and officers of the Company as a performance bonus. The warrants have an exercise price of $ 0.001 per share for non-U.S. warrant holders ( 150,000 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. warrant holders. The warrants were valued using a Monte Carlo simulation with the key inputs as of 4/30/20 being the executives’ three-year 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. Note 15: COMMITMENTS AND CONTINGENCIES Leases The Company leases office space under short-term leases with terms under a year. Total rent expense for the years ended April, 30 2022 and 2021 amounted to $ 22,176 and $ 8,400 , respectively. Contingencies In connection with the Gameface acquisition on February 2, 2022, the Company agreed to earn-out consideration of up to 100,000 shares of the Company’s common stock with a fair value of $ 1,334,000 which is included as a current liability on the Company’s consolidated balance sheet as of April 30, 2022. Issuance of the earn-out shares is subject to the fulfillment of certain milestones. F- 30 CONNEXA SPORTS TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS In connection with the PlaySight acquisition on February 22, 2022, the Company agreed to earn-out consideration of up to 514,286 shares of the Company’s common stock with a fair value of $ 4,847,000 . Issuance of the earn-out shares is based on PlaySight’s annual recurring revenue at December 31, 2022. As a result of the Company’s decision to dispose of PlaySight, the earnout condition has not been met and will not be met. Accordingly, the Company wrote off the contingent consideration of $ 4,847,000 as of April 30, 2022. The Company recorded the write off as a gain on the change in fair value of contingent consideration. From 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. Note 16: INCOME TAXES The 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. The Company’s operations in Canada, Israel, and the UK were immaterial for the years ended April 30, 2022 and 2021. Net deferred tax assets from operations in the US, using an effective tax rate of 21 %, consisted of the following: SCHEDULE OF NET DEFERRED TAX ASSETS 2022 2021 April 30, 2022 2021 Deferred tax assets: Loss carryforwards $ 2,166,000 $ 788,400 Stock options 8,259,000 — Accrued payroll — 333,700 Related party accruals 799,000 194,400 Inventory reserve 100,000 — Interest deferral 191,000 — Start-up costs 84,000 109,600 Other 57,000 17,900 Valuation allowance ( 11,656,000 ) ( 1,444,000 ) Net deferred tax assets $ — $ — The 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 2022 and 2021: SCHEDULE OF INCOME TAX PROVISION 2022 2021 April 30, 2022 2021 Income tax benefit based on book loss at US statutory rate $ ( 10,259,000 ) $ ( 3,832,300 ) Share-based compensation and shares for services — 188,100 Debt discount amortization 1,841,000 79,100 Related party accruals 150,000 127,800 Start-up costs 6,815,000 — Interest expense 5,000 2,630,000 Depreciation 21,000 — Inventory reserve 55,000 — Interest deferral 13,000 — Acquisition costs 1,268,000 — Accrued legal 76,000 — Loss on extinguishment of debt — 636,400 Accrued payroll — 215,400 Gain on change in fair value of derivatives ( 1,298,000 ) ( 407,300 ) Other ( 29,000 ) 1,500 Valuation allowance 1,342,000 361,300 Total income tax provision $ — $ — F- 31 CONNEXA SPORTS TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The Company had net operating loss carryforwards of $ 12,366,000 and $ 3,032,000 as of April 30, 2022 and 2021, respectively, which may be available to be used to offset future taxable income in the US for the years ended 2023 through 2042. The utilization of the Company’s net operating losses may be subject to a U.S. federal limitation due to the “change in ownership provisions” under Section 382 of the Internal Revenue Code and other similar limitations in various state jurisdictions. Such limitations may result in a reduction of the amount of net operating loss carryforwards in future years and possibly the expiration of certain net operating loss carryforwards before their utilization. The Company has not completed a full study to assess whether an “ownership change” as defined in Section 382 has occurred or whether there have been multiple ownership changes since inception. Future changes in the Company’s stock ownership, which may be outside of the Company’s control, may trigger an “ownership change”. In addition, future equity offerings or acquisitions that have equity as a component of the purchase price could result in an “ownership change”. Tax years that remain subject to examination are 2018 and forward. Net deferred tax assets from operations in Israel, using an effective tax rate of 23 %, consisted of the following: SCHEDULE OF NET DEFERRED TAX ASSETS 2022 2021 April 30, 2022 2021 Deferred tax assets: Loss carryforwards $ 234,000 $ 178,000 Start-up costs — 13,000 Research and development costs ( 113,000 ) 113,000 Valuation allowance ( 121,000 ) ( 304,000 ) 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 % due to the following for the years ended April 30, 2022 and 2021: SCHEDULE OF INCOME TAX PROVISION 2022 2021 April 30, 2022 2021 Income tax provision (benefit) based on book income (loss) at Israeli statutory rate $ ( 56,000 ) $ 80,000 Research and development costs — 113,000 Start-up costs — 13,000 Valuation allowance 56,000 — Loss carryforward — ( 206,000 ) Total income tax provision $ — $ — The Company had net operating loss carryforwards of approximately 1,020,000 and $ 774,000 as of April 30, 2022 and 2021, respectively, which may be available to 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 comprehensive loss for the years ended April 30, 2022 and 2021. Note 17 : SEGMENTS Reportable Segments Operating segments for our continuing operations are components of the Company that combine similar business activities, with activities group to facilitate the evaluation of business units and allocation of resources by the Company’s board and management. As of April 30, 2022, the Company had two reportable segments: ● Equipment - Production and manufacturing of the Slinger Bag Launcher, marketed to regular tennis players who do not have regular access to state-of-the-art facilities ● Technology - Subscription-based technology such as automated production and live streaming, video replay, pro level coaching tools, live and on-demand sports channel, data analytics, and facilities management systems F- 32 CONNEXA SPORTS TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The results of each segment are regularly reviewed by the Company’s Chief Executive Officer, who is the Company’s chief operating decision maker, to assess the performance of the segment and make decisions regarding the allocation of resources. The Company’s chief operating decision maker uses revenue and EBITDA as measures of segment performance. The accounting policies of each segment are the same as those set out under the summary of significant account policies in Note 3. There are no intersegment sales or transfers. The below table represents revenues and profit or loss by each operating segment for the years ended April 30, 2022 and 2021: SCHEDULE OF REVENUES AND PROFIT LOSS OPERATING SEGMENT 2022 2021 Net Revenues Equipment $ 16,102,672 $ 10,804,214 Technology 728,805 — Total Net Revenues $ 16,831,477 $ 10,804,214 2022 2021 Profit or (Loss) Equipment $ ( 46,309,228 ) $ ( 18,594,760 ) Technology ( 5,464,424 ) — Total Profit or (Loss) $ ( 51,773,652 ) $ ( 18,594,760 ) The chief operating decision maker does not receive asset information by segment as the Company does not have this information as discrete financial data, and as such, this information is not included. Goodwill assigned to the Technology segment as of April 30, 2022 was $ 32,643,193 . There was no goodwill assigned to the Technology segment as of April 30, 2021. Intangibles assigned to the Technology segment as of April 30, 2022 were $ 24,209,442 . There were no intangible assets assigned to the Technology segment as of April 30, 2021. The Company did not have any goodwill assigned to the Equipment segment as of April 30, 2022 and 2021. Intangible assets, net assigned to the Equipment segment as of April 30, 2022 and 2021, was $ 107,060 and $ 112,853 , respectively. Goodwill and intangible assets related to Foundation Sports that was part of the Technology segment were fully impaired on April 30, 2022. Note 18: SUBSEQUENT EVENTS On May 16, 2022, the Company redomiciled from Nevada to Delaware and changed name from Slinger Bag Inc. to Connexa Sports Technologies Inc. On June 14, 2022, the Company registered their common shares on Form 8-A pursuant to Section 12(b) of the Securities Act of 1933, as amended and effected a 1-10 reverse split . On June 15, 2022, the Company finalized a Nasdaq Uplist and the registration statement on Form S-1 was declared effective. On June 29, 2022, Jason Seifert, CFO resigned. On July 29, 2022, the Company entered into two merchant cash advance agreements. The details of the merchant cash advance agreements are as follows: UFS Agreement The Company entered into an agreement (the “UFS Agreement”) with Unique Funding Solutions LLC (“UFS”) pursuant to which the Company sold $ 1,124,250 in future receivables (the “UFS Receivables Purchased Amount”) to UFS in exchange for payment to the Company of $ 750,000 in cash less fees of $ 60,000 . The Company has agreed to pay UFS $ 13,491 each week for the next three weeks and thereafter $ 44,970 per week until the UFS Receivables Purchased Amount is paid in full; provided, however that if the Company makes payment of an aggregate amount of $ 855,000 to UFS within 45 days of July 29, 2022, then the UFS Receivables Purchased Amount shall be reduced from $ 1,124,250 to $ 855,000 and the Company will have no further obligations under the UFS Agreement. F- 33 CONNEXA SPORTS TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS In order to secure payment and performance of the Company’s obligations to UFS under the UFS Agreement, the Company granted to UFS a security interest in the following collateral: all accounts receivable and all proceeds as such term is defined by Article 9 of the UCC. The Company also agreed not to create, incur, assume, or permit to exist, directly or indirectly, any lien on or with respect to any of such collateral. Cedar Agreement The Company entered into an agreement (the “Cedar Agreement”) with Cedar Advance LLC (“Cedar”) pursuant to which the Company sold $ 1,124,250 in future receivables (the “Cedar Receivables Purchased Amount”) to Cedar in exchange for payment to the Company of $ 750,000 in cash less fees of $ 60,000 . The Company has agreed to pay Cedar $ 13,491 each week for the next three weeks and thereafter $ 44,970 per week until the Cedar Receivables Purchased Amount is paid in full; provided, however that if the Company makes payment of an aggregate amount of $ 855,000 to Cedar within 45 days of July 29, 2022, then the Cedar Receivables Purchased Amount shall be reduced from $ 1,124,250 to $ 855,000 and the Company will have no further obligations under the Cedar Agreement. In order to secure payment and performance of the Company’s obligations to Cedar under the Cedar Agreement, the Company granted to Cedar a security interest in the following collateral: all accounts, including without limitation, all deposit accounts, accounts receivable and other receivables, chattel paper, documents, equipment, instruments and inventory as those terms are defined by Article 9 of the UCC. The Company also agreed not to create, incur, assume, or permit to exist, directly or indirectly, any lien on or with respect to any of such collateral. Since May 1, 2022, the Company has issued an aggregate of 6,063,145 shares of its common stock consisting of the following: ● On June 15, 2022, the Company issued 4,389,469 shares of common stock to the Convertible Noteholders upon conversion of convertible notes. ● On June 15, 2022, the Company issued 1,048,750 shares to investors who participated in the Company’s Nasdaq uplist round. ● On June 27, 2022, the Company issued 25,000 shares of common stock to Gabriel Goldman for consulting services performed in the first quarter of calendar 2022. Gabriel Goldman became a director of the Company on June 15, 2022. ● On June 27, 2022, the Company issued 598,396 shares of common stock to the former Gameface shareholders in connection with the purchase of Gameface. On August 25, 2022, the Company issued 300,000 shares of common stock to Midcity Capital Ltd (“Midcity”) pursuant to a cashless conversion of warrants Midcity received from its warrant agreement with the Company dated March 2020. On September 28, 2022, the Company entered into a securities purchase agreement with a single institutional investor for the issuance of 1,018,510 shares of common stock and pre-funded warrants to purchase an aggregate of 11,802,002 shares of common stock. Net proceeds to the Company were $ 4,549,882 . On November 27, 2022, the Company entered into a share purchase agreement (the “Agreement”) with PlaySight, Chen Shachar and Evgeni Khazanov (together, the “Buyer”) pursuant to which the Buyer purchased 100% of the issued and outstanding shares of PlaySight from the Company in exchange for (1) releasing the Company from all of PlaySight’s obligations towards its vendors, employees, tax authorities and any other (past, current and future) creditors of PlaySight; (2) waiver by the Buyer of 100% of the personal consideration owed to them under their employment agreements in the total amount of $600,000; and (3) cash consideration of $2,000,000 to be paid to the Company in the form of a promissory note that matures on December 31, 2023. On December 5, 2022, the Company assigned 75% of its membership interest in Foundation Sports to Charles Ruddy, its founder and granted him the right for a period of three years to purchase the remaining 25% of its Foundation Sports membership interests for $ 500,000 in cash. As of December 5, 2022, the results of Foundation Sports will no longer be consolidated in the Company’s financial statements, and the investment was accounted for as an equity method investment. On December 5, 2022, the Company analyzed this investment and established a reserve for the investment at the full amount of $ 500,000 . F- 34 CONNEXA SPORTS TECHNOLOGIES INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS On January 6, 2023, the Company entered into a loan and security agreement (the “Loan and Security Agreement”) with one or more institutional investors (the “Lenders”) and Armistice Capital Master Fund Ltd. as agent for the Lenders (the “Agent”) for the issuance and sale of (i) a note in an aggregate principal amount of up to $ 2,000,000 (the “Note”) with the initial advance under the Loan and Security Agreement being $ 1,400,000 and (ii) warrants (the “Warrants”) to purchase a number of shares of common stock of the Company equal to 200% of the face amount of the Note divided by the closing price of the common stock of the Company on the date of the issuance of the Notes (collectively, the “Initial Issuance”). The closing price of the Company’s common stock on January 6, 2023, as reported by Nasdaq, was $ 0.221 per share, so the Warrants in respect of the initial advance under the Note are exercisable for up to 18,099,548 shares of the Company’s common stock. The Warrants have an exercise price per share equal to the closing price of the common stock of the Company on the date of the issuance of the Note, or $ 0.221 per share and a term of five- and one-half (5½) years following the initial exercise date. The initial exercise date of the Warrants will be the date stockholder approval is received and effective allowing exercisability of the Warrants under Nasdaq rules. Pursuant to the terms of the Loan and Security Agreement, an additional advance of $ 600,000 may be made by to the Company under the Note. The Company’s obligations under the terms of the Loan and Security Agreement are fully and unconditionally guaranteed by all of the Company’s subsidiaries (the “Guarantors”). On August 16, 2022, the Company received a letter from the Listing Qualifications Department of the Nasdaq indicating that, since the Company has not yet filed its Annual Report on Form 10-K for the fiscal year ended April 30, 2022, as previously reported by the Company on a Form 12b-25, it no longer complies with Nasdaq Listing Rule 5250(c)(1) for continued listing. On September 26, 2022, the Company announced that it had received a letter from the Nasdaq on September 22, 2022 (“Notice Letter”), notifying the Company that it is not in compliance with the periodic filing requirements for continued listing because the Company’s Form 10-Q for the period ended July 31, 2022 (the “2023 Q1 10-Q”) and Form 10-K for the fiscal year ended April 30, 2022 (the “2022 10-K” and, together with the 2023 Q1 10-Q, the “Periodic Reports”) were not filed with the Securities and Exchange Commission by the required due dates. On October 10, 2022, the Company received a letter from the Listing Qualifications Department of the Nasdaq indicating that the Company’s common stock is subject to potential delisting from Nasdaq because, for a period of 30 consecutive business days, the bid price of the Company’s common stock has closed below the minimum $1.00 per share requirement for continued listing under Nasdaq Listing Rule 5450(a)(1) (the “Bid Price Rule”). The Nasdaq notice indicated that, in accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company will be provided 180 calendar days, or until April 10, 2023, to regain compliance. If, at any time before April 10, 2023, the bid price of the Company’s common stock closes at $1.00 per share or more for a minimum of 10 consecutive business days, Nasdaq staff will provide written notification that the Company has achieved compliance with the Bid Price Rule. If the Company fails to regain compliance with the Bid Price Rule before April 10, 2023, t he Company may be eligible for an additional 180-calendar day compliance period. To qualify, the Company will be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for Nasdaq, with the exception of the bid price requirement, and will need to provide written notice of its intention to cure the deficiency during the second compliance period, by effecting a reverse stock split, if necessary. In the event the Company is not eligible for the second grace period, Nasdaq will provide written notice that the Company’s common stock is subject to delisting. On November 17, 2022, Gabriel Goldman and Rohit Krishnan resigned from the board of directors of the Company. Gabriel and Rohit were members of the audit and compensation committees. Gabriel Goldman was a member of the Company’s Nominating and Corporate Governance Committee. Neither Gabriel nor Rohit advised the Company of any disagreement with the Company on any matter relating to its operations, policies or practices. As a result, the Company will be required to meet the continued listing requirement for board of directors and committees. On March 21, 2023, the Company received a letter from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“ Nasdaq ”) indicating that the Company’s failure to file its Quarterly Report on Form 10-Q for the period ended January 31, 2023 (“Additional Delinquency”) serves as an additional basis for delisting the Company’s securities from Nasdaq. The Company received a letter from the Nasdaq on February 14, 2023, indicating that, due to the Company’s failure, in violation of Listing Rule 5250(c)(1), to file its (i) Annual Report on Form 10-K with respect to the fiscal year ended April 30, 2022; and (ii) Quarterly Reports on Form 10-Q for the periods ended July 31, 2022 and October 31, 2022 (collectively, the “ Delinquent Filings ”), by February 13, 2023 (the due date for filing the Delinquent Filings pursuant to an exception to Nasdaq’s Listing Rule previously granted by Nasdaq), absent the submission of a timely appeal by February 21, 2023, trading of the Company’s common stock would have been suspended from the Nasdaq at the opening of business on February 23, 2023. Nasdaq would also have filed a Form 25-NSE with the Securities and Exchange Commission (the “SEC”), which would have resulted in the removal of the Company’s securities from listing and registration on the Nasdaq (the “ Staff Determination ”). Additionally, on October 10, 2022, the Company received a letter from Nasdaq indicating that the Company’s common stock is subject to potential delisting from Nasdaq because, for a period of 30 consecutive business days, the bid price of the Company’s common stock had closed below the minimum $1.00 per share requirement for continued listing under Nasdaq Listing Rule 5450(a)(1). On January 12, 2023, Nasdaq notified the Company that due to the resignations from the Company’s board, audit committee and compensation committee on November 17, 2022 (“ Corporate Governance Deficiencies ”), the Company no longer complies with Nasdaq’s independent director, audit committee and compensation committee requirements as set forth in Listing Rule 5605. The Company timely submitted its plan of compliance with respect to the Corporate Governance Deficiencies by February 27, 2023 as required by the Nasdaq. However, pursuant to Listing Rule 5810(c)(2)(A), the Corporate Governance Deficiencies serve as an additional and separate basis for delisting and the Company. On February 21, 2023, consistent with the Company’s previously announced intention to request an appeal of the Staff Determination by requesting a hearing before the Nasdaq Hearings Panel (the “ Panel ”) to stay the suspension of the Company’s securities and the filing of the Form 25-NSE with the SEC (the “ Hearing ”), the Company appealed the Staff Determination to the Panel, and requested that the stay of delisting, which otherwise would expire on March 8, 2023, pursuant to Listing Rule 5815(a)(1)(B), be extended until the Panel issued a final decision on the matter. The Nasdaq granted the Company’s request to extend the stay, pending the Hearing scheduled for March 30, 2023, and a final determination regarding the Company’s listing status. The Company is required to address the Additional Delinquency, the Delinquent Filings, and the Corporate Governance Deficiencies before the Panel. Although the Company is working diligently to file the Delinquent Filings and Additional Delinquency, there can be no assurance that they will be filed prior to the Hearing. If the Company’s appeal is denied or the Company fails to timely regain compliance with Nasdaq’s continued listing standards, the Company’s common stock will be subject to delisting on the Nasdaq. On March 30, 2023, the Company had its hearing with the Nasdaq, which indicated that a decision with respect to the Company’s listing status on the Nasdaq would be rendered within two weeks. On April 12, 2023, the Company received a letter from the Listing Qualifications Department of the Nasdaq indicating that the Company had not yet regained compliance with the Bid Price Rule, which serves as an additional basis for delisting the Company’s securities from the Nasdaq. The letter further indicated that the Panel will consider this matter in its decision regarding the Company’s continued listing on the Nasdaq Capital Market. In that regard, the Nasdaq indicated that the Company should present its views with respect to this additional delinquency to the Panel in writing no later than April 19, 2023. The Company offers no assurance that its request to be granted further time to file its Delinquent Filings, regain compliance with the Bid Price Rule and redress its Corporate Governance Deficiencies and to remain listed on the Nasdaq will be granted. F- 35 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE On August 28, 2022, the Board of Directors and the audit committee of Connex Sports Technologies Inc. (the “Company”) approved the re-engagement of Mac Accounting Group, LLP (“Mac”) as the Company’s independent registered public accounting firm for the fiscal year ended April 30, 2022, effective immediately, and dismissed WithumSmith + Brown, PC (“Withum”) as the Company’s independent registered public accounting firm. Until Withum was engaged on February 17, 2022, Mac was the Company’s auditor and had audited the Company’s consolidated financial statements for the fiscal years ended April 30, 2021 and 2020. Withum never issued an audit opinion on our financial statements, and during the course of their engagement there were no disagreements with Withum on any matters of accounting principles or practices, financial statement disclosure or auditing scope and procedures which, if not resolved to the satisfaction of Withum, would have caused Withum to make reference to the matter in their audit opinion, if issued. There were no reportable events (as that term is described in Item 304(a)(1)(v) of Regulation S-K) during the period Withum was engaged as the Company’s auditor. On March 21, 2023, the Board of Directors and the audit committee of the Company approved the engagement of Olayinka Oyebola & Co. (“OOC”) as the Company’s independent registered public accounting firm for the fiscal year ended April 30, 2022, effective immediately, and dismissed Mac Accounting Group, LLP (“Mac”) as the Company’s independent registered public accounting firm. Until OOC was engaged on March 21, 2023, Mac was the Company’s auditor and had audited the Company’s consolidated financial statements for the fiscal years ended April 30, 2021 and 2020. Mac never issued an audit opinion on our financial statements for the fiscal year ended April 30, 2022, and during the course of their engagement there were no disagreements with Mac on any matters of accounting principles or practices, financial statement disclosure or auditing scope and procedures which, if not resolved to the satisfaction of Mac, would have caused Mac to make reference to the matter in their audit opinion, if issued. There were no reportable events (as that term is described in Item 304(a)(1)(v) of Regulation S-K) during the period Mac was engaged as the Company’s auditor.