AIRWA INC. 10-Q

ITEM 1. FINANCIAL STATEMENTS AiRWA, INC. CONSOLIDATED BALANCE SHEETS (Amounts in U.S. dollars, except for numbers of shares or as otherwise noted) As of As of October 31, 2025 April 30, 2025 (unaudited) (audited) ASSETS Current Assets: Cash and cash equivalents $ 105,508,149 $ 54,744 Investment 1,540,385 1,382,857 Accounts receivable 12,188,719 15,388,701 Amount due from related party 2,670,000 2,827,528 Deposits 25,313,776 - Prepayments 5,885,200 - Other receivables 10,003,838 2,742,329 Total Current Assets 163,110,067 22,396,159 Non-Current Asset: Intangible assets, net 9,021,174 10,509,635 Total Non-Current Asset 9,021,174 10,509,635 TOTAL ASSETS $ 172,131,241 $ 32,905,794 LIABILITIES AND SHAREHOLDERS’ EQUITY LIABILITIES Current Liabilities: Accrued expenses $ 2,140,275 $ 2,428,131 Other payable 10,959 - Amount due to related party 784,091 775,406 Income taxes payable 3,810,051 3,283,634 Total Current Liabilities 6,745,376 6,487,171 Total Liabilities 6,745,376 6,487,171 Commitments and Contingencies - - SHAREHOLDERS’ EQUITY Common stock, par value $ 0.001 , 1,000,000,000 shares authorized as of both October 31, 2025 and April 30, 2025; and 18,981,535 and 291,261 * shares issued and outstanding as of October 31, 2025 and April 30, 2025, respectively 949,066 14,563 Additional paid-in capital 191,380,857 19,138,786 (Accumulated deficit)/Retained earnings ( 26,944,058 ) 6,123,114 Total AiRWA, Inc. shareholders’ equity 165,385,865 25,276,463 Non-controlling interest - 1,142,160 Total Shareholders’ Equity 165,385,865 26,418,623 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 172,131,241 $ 32,905,794 * Adjusted to reflect the Reverse Stock Split described in Note 13. The accompanying notes are an integral part of these consolidated financial statements. F- 1 AiRWA, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME/(LOSS) FOR THE SIX-MONTH AND THREE-MONTH PERIODS ENDED OCTOBER 31, 2025 AND 2024 (Amounts in U.S. dollars, except for numbers of shares or as otherwise noted) For the Six-Month Period Ended For the Three-Month Period Ended October 31, October 31, October 31, October 31, 2025 2024 2025 2024 (unaudited) (unaudited) (unaudited) (unaudited) REVENUE $ 6,000,000 $ 6,545,454 3,000,000 3,272,727 COST OF REVENUE 1,488,462 1,488,462 744,231 744,231 GROSS PROFIT 4,511,538 5,056,992 2,255,769 2,528,496 OPERATING EXPENSES Selling and marketing expenses 450,000 - 450,000 - General and administrative expenses 2,515,471 288,002 1,751,085 199,482 Total Operating Expenses 2,965,471 288,002 2,201,085 199,482 OPERATING INCOME 1,546,067 4,768,990 54,684 2,329,014 NON-OPERATING INCOME Gain/(loss) on financial assets at fair value through profit or loss 157,528 178,066 ( 924,230 ) ( 390,231 ) Interest Income 19,507 32,684 793 16,342 Total Non-Operating Income/(Loss) 177,035 210,750 ( 923,437 ) ( 373,889 ) NON-OPERATING EXPENSE Share guarantee (income)/expense ( 157,528 ) ( 178,066 ) 924,230 390,231 Total Non-Operating Expense/(Income) ( 157,528 ) ( 178,066 ) 924,230 390,231 NET INCOME FROM OPERATIONS BEFORE INCOME TAX EXPENSE 1,565,574 4,801,674 55,477 2,345,356 Income tax expense ( 526,417 ) ( 876,883 ) ( 277,251 ) ( 471,590 ) NET INCOME/(LOSS) $ 1,039,157 $ 3,924,791 ( 221,774 ) 1,873,766 NET INCOME ATTRIBUTABLE TO NON-CONTROLLING INTEREST - - 378,279 - NET INCOME ATTRIBUTABLE TO CONTROLLING INTEREST $ 1,039,157 3,924,791 156,505 1,873,766 Net income/(loss) per share – basic $ 0.25 13.48 ( 0.05 ) 6.43 Net income/(loss) per share – diluted 0.25 13,48 ( 0.05 ) 6.43 Weighted average common shares outstanding – basic 4,163,758 291,260 4,163,758 291,260 Weighted average common shares outstanding – diluted 4,163,758 291,260 4,163,758 291,260 The accompanying notes are an integral part of these consolidated financial statements. F- 2 AiRWA, INC. CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY FOR THE SIX-MONTH PERIODS ENDED OCTOBER 31, 2025 AND 2024 (Amounts in U.S. dollars, except for numbers of shares or as otherwise noted) Shares Amount Additional Paid-In Capital Accumulated Other Comprehensive Income Accumulated Deficit/ (Retained Earnings AiRWA, Inc. Shareholders’ Equity Non- Controlling Interest Total Shareholders’ Equity Balance as of - May 1, 2024 1,828,541 $ 1,828 $ 176,801,473 183,541 $ ( 167,387,028 ) 9,599,814 $ - $ 9,599,814 Stock issued for: Service 214,128 214 2,501,602 - - 2,501,816 - 2,501,816 Acquisition/Contingent Consideration 10 - - - - - - - Exercise of warrants 505,680 506 1,617,670 - - 1,618,176 - 1,618,176 Fractional adjustment in reverse split 110,790 111 ( 111 ) - - - - - Change in comprehensive income - - - ( 60,733 ) ( 60,733 ) - ( 60,733 ) Net loss for the period - - - - ( 4,220,745 ) ( 4,220,745 ) - ( 4,220,745 ) Balance as of - July 31, 2024 2,659,149 $ 2,659 $ 180,920,634 122,808 $ ( 171,607,773 ) 9,438,328 $ - $ 9,438,328 Stock issued for: Exercise of warrants 3,776,305 3,776 ( 2,955 ) - 821 - 821 Change in comprehensive income - - - ( 32,224 ) - ( 32,224 ) - ( 32,224 ) Net loss for the period - - - - ( 1,366,144 ) ( 1,366,144 ) - ( 1,366,144 ) Balance as of -October 31, 2024 6,435,454 6,435 180,917,679 90,584 ( 172,973,917 ) 8,040,781 - 8,040,781 Balance as of - May 1, 2025 14,563,019 $ 14,563 $ 19,138,786 - $ 6,123,114 25,276,463 $ 1,142,160 $ 26,418,623 Balance 14,563,019 $ 14,563 $ 19,138,786 - $ 6,123,114 25,276,463 $ 1,142,160 $ 26,418,623 Net income for the period - - - - 882,652 882,652 378,279 1,260,931 Net income (loss) for the period - - - 882,652 882,652 378,279 1,260,931 Balance as of - July 31, 2025 14,563,019 $ 14,563 $ 19,138,786 - 7,005,766 26,159,115 1,520,439 27,679,554 Balance 14,563,019 $ 14,563 $ 19,138,786 - 7005,766 26,159,115 1,520,439 27,679,554 Stock issued for: Private Placement 20,000,000 20,000 4,580,000 - - 4,600,000 - 4,600,000 At-the-market transaction 914,503,196 914,503 167,662,071 - - 168,576,574 - 168,576,574 Fractional adjustment in reverse split ( 930,084,680 ) - - - - - - - Increase of shareholdings of a subsidiary - - - - ( 34,106,329 ) ( 34,106,329 ) ( 1,520,439 ) ( 35,626,768 ) Net income for the period - - - - 156,505 156,505 - 156,505 Balance as of - October 31, 2025 18,981,535 $ 949,066 $ 191,380,857 - $ ( 26,944,058 ) 165,385,865 $ - $ 165,385,865 Balance 18,981,535 $ 949,066 $ 191,380,857 - $ ( 26,944,058 ) 165,385,865 $ - $ 165,385,865 The accompanying notes are an integral part of these consolidated financial statements. F- 3 AIRWA, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX-MONTH PERIODS ENDED OCTOBER 31, 2025 AND 2024 (Amounts in U.S. dollars, except for numbers of shares or as otherwise noted) For the Six-Month Period Ended October 31, October 31, 2025 2024 (unaudited) (unaudited) CASH FLOW FROM OPERATING ACTIVITIES Net income $ 1,039,157 $ 3,924,791 Adjustments to reconcile net income to net cash used in operating activities Amortization expense 1,488,462 1,488,462 Gain on financial assets at fair value through profit or loss ( 157,528 ) ( 178,066 ) Changes in assets and liabilities, net of acquired amounts Accounts receivable 3,199,982 ( 4,176,580 ) Other receivables ( 6,510,001 ) ( 1,757,342 ) Prepayments and deposits ( 31,198,976 ) - Accounts payable and accrued expenses ( 287,855 ) - Income taxes payable 526,417 876,883 Other payables 10,596 - Net cash (used in)/provided by operating activities ( 31,889,746 ) 178,148 CASH FLOW FROM INVESTING ACTIVITY Payment to investment in subsidiary ( 36,000,000 ) - Net cash used in investing activity ( 36,000,000 ) - CASH FLOW FROM FINANCING ACTIVITIES Proceeds from private placement 4,600,000 - Proceeds from ATM offering 168,576,574 - Proceeds from exercise of warrants for cash 364 - Amount due from related party 157,528 178,066 Amount due to related party 8,685 238,002 Net cash provided by financing activities 173,343,151 416,068 Effect of exchange rate fluctuations on cash and cash equivalents - - NET INCREASE IN CASH 105,453,405 594,216 CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD 54,744 39,351 CASH AND CASH EQUIVALENTS - END OF PERIOD $ 105,508,149 $ 633,567 The accompanying notes are an integral part of these consolidated financial statements. F- 4 AiRWA, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 1. ORGANIZATION AND NATURE OF BUSINESS SCHEDULE OF EQUITY METHOD INVESTMENTS Entity Date of incorporation Place of incorporation Percentage of direct or indirect ownership Principal activities Subsidiary: Yuanyu Enterprise Management Co., Limited November 11, 2021 Hong Kong 100 % owned by the Company Technology licensing Lazex Inc. (“Lazex”) was incorporated under the laws of the State of Nevada on October 12, 2015. From 2019 through 2021, Lazex acquired various entities related to the manufacture and distribution of the Slinger Bag Launcher, a portable tennis ball, padel tennis ball, and pickleball launcher. In 2019, Lazex changed its name to Slinger Bag Inc.; in 2022 Slinger Bag Inc. changed its name to Connexa Sports Technologies Inc.; and on September 30, 2025, Connexa Sports Technologies Inc. changed its name to AiRWA, Inc. F- 5 AiRWA, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 1. ORGANIZATION AND NATURE OF BUSINESS (cont.) On March 18, 2024, the Company entered into a share purchase agreement (the “Purchase Agreement”) and a share exchange agreement (the “Exchange Agreement”) to acquire 70 % of Yuanyu Enterprise Management Co., Limited (“YYEM”) from Mr. Hongyu Zhou, the sole shareholder of YYEM (the “YYEM Seller”) for a combined $ 56 million (the “Acquisition”). $ 16.5 million of this amount was paid in cash pursuant to the Purchase Agreement, and the balance was required to be paid in shares pursuant to the Exchange Agreement following approval by shareholders and by Nasdaq. The Exchange Agreement also called for an inducement payment to the Company of $ 5 million by YYEM. Nasdaq approved the transaction on November 18, 2024, and the closing of the Acquisition took place on November 21. As a result of this transaction, a change of control was effected. The shareholders of YYEM became the owners of approximately 75.3 % of the issued and outstanding shares of common stock, and five directors were appointed by the YYEM Seller to replace the prior directors who had resigned. Slinger Bag Americas Inc., the Company’s wholly owned subsidiary prior to the closing, was sold to a newly established Florida limited liability company called J&M Sports LLC (“J&M”), owned by several former directors and officers of the Company, as required by the Exchange Agreement. In receiving substantially all of the then-existing assets of the Company at the closing, J&M also became responsible for all past and future liabilities related to the Slinger Bag business. The transactions were accounted for as a “reverse acquisition” since they occurred immediately following the consummation of the transaction through which the shareholders and management of YYEM gained effective control of the combined company. The management of the Company is drawn predominantly from YYEM. For accounting purposes, YYEM was deemed to be the accounting acquirer in the transaction, and the Company, the legal acquirer, was deemed to be the accounting acquiree. The consolidated financial statements represent a continuation of the consolidated financial statements of YYEM and reflect the following: (a) The assets and liabilities of YYEM were recognized and measured in the consolidated statement of financial position at their carrying amounts before the Acquisition. (b) The identifiable assets and liabilities of the Company were recognized and measured in the consolidated financial statements at their acquisition-date fair values. (c) The retained earnings and other equity balances recognized in the consolidated financial statements are the retained earnings and other equity balances of YYEM immediately before the Acquisition. (d) The amount recognized as issued equity interest in the consolidated financial statements was determined by adding the issued equity of YYEM outstanding immediately before the Acquisition to the fair value of the purchase consideration of the acquisition. The fair value of the purchase consideration is based on the fair value of the Company at the completion date. However, the equity structure appearing in the consolidated financial statements reflects the equity structure of the Company, including the equity instruments issued by the Company to effect the Acquisition. F- 6 AiRWA, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 1. ORGANIZATION AND NATURE OF BUSINESS (cont.) (e) The consolidated statement of comprehensive income for the financial year ended April 30, 2025 reflects that of the YYEM for the full period together with the post-acquisition results of the Company. (f) The comparative figures presented in the consolidated financial statements are those of YYEM. Since the closing of the Acquisition and the disposal of the Slinger Bag business, YYEM has been the sole operating subsidiary of the Company. On October 22, 2025, the Company entered into a share purchase agreement with Hongyu Zhou, now the Chairman of the Company, to acquire from him the 30% of the share capital of YYEM that it did not already own for $ 36,000,000 , payable in cash, resulting in YYEM becoming a wholly owned subsidiary of the Company. Established in November 2021, YYEM is based in Hong Kong and operates in the emerging love and marriage market sector. YYEM’s mission is to empower global connections through innovative matchmaking technology. YYEM owns advanced patents and other proprietary technology which it licenses out, and it is using this intellectual property to develop an AI-powered matchmaking platform to license to partners worldwide, enabling them to create localized matchmaking experiences tailored to their specific markets and cultures. The Company believes YYEM’s pioneering technology has the power to transform the matchmaking industry, leading to greater success for YYEM’s licensees and their clients, and ultimately leading to more people finding successful life partnerships. In August 2025, the Company signed a $500 million joint venture agreement to form AiRWA Exchange, a digital asset exchange focused on the tokenization of real-world assets (RWA), specifically U.S. stocks. AiRWA Exchange is not yet operational and generating revenue, but the Company has completed test runs for settling trades of tokenized U.S. equities, positioning AiRWA Exchange to offer users the ability to trade digital representations of U.S. stocks just as they would cryptocurrencies — with transactions settled within seconds and ownership recorded on the blockchain, which is accessible 24 hours per day. The Company believes AiRWA Exchange will mark a significant step toward bridging the gap between conventional financial systems and the emerging decentralized economy. YYEM’s, and thus the Company’s, revenue model is currently based on licensing fees with its partners, which the Company intends to bolster through the development or acquisition of additional patents. Through YYEM, the Company generated royalties of $ 6 million for the six-month period ended October31, 2025. YYEM was registered in Hong Kong on November 11, 2021. Its business purpose is to provide technology services. YYEM’s registered office is located at Room 4, 16/F, Ho King Commercial Centre, 2-16 Fayuen Street, Mongkok, Kowloon, Hong Kong. For details of all prior operations of Slinger Bag Inc., Slinger Bag Americas, Slinger Bag Canada, Slinger Bag UK, Slinger Bag Limited, and Flixsense Pty, Ltd. please see the Company’s filing on Form 10-K for the year ended April 30, 2024, filed July 25, 2024. F- 7 AiRWA, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The accompanying consolidated financial statements have been prepared in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Significant accounting policies followed by the Company in the preparation of the accompanying consolidated financial statements are summarized below. Principles of consolidation A subsidiary is an entity in which (i) the Company directly or indirectly controls more than 50% of the voting power, or (ii) the Company has the power to appoint or remove the majority of the members of the board of directors, to cast a majority of votes at board meetings, or to govern the financial and operating policies of the investee pursuant to a statute or under an agreement among the shareholders or equity holders. The accompanying consolidated financial statements include the consolidated financial statements of the Company and its wholly owned subsidiary. A subsidiary is an entity over which the Company has control. Control is achieved when the Company has power over the investee, is exposed to, or has rights to, variable returns from its involvement with the investee, and has the ability to use its power to affect those returns. A subsidiary is consolidated from the date on which the Company obtains control. The Company reassesses whether it controls an investee if facts and circumstances indicate changes to one or more of the three elements of control listed above. All inter-company balances and transactions are eliminated upon consolidation. The results of subsidiary acquired are recorded in the consolidated statements of operations from the effective date of acquisition, as appropriate. All significant transactions and balances between the Company and its subsidiary have been eliminated. F- 8 AiRWA, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) Use of estimates The preparation of these financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to long-lived assets and accounts receivable. The Company bases its estimates and assumptions on current facts, historical experience, and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. Foreign currency The Company’s reporting currency is the U.S. Dollar (“USD”). The functional currencies of its subsidiaries are their respective local currencies. The determination of the respective functional currency is based on the criteria set out by ASC 830, “Foreign Currency Matters”. Transactions denominated in currencies other than in the functional currency are translated into the functional currency using the exchange rates prevailing at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated into functional currency using the applicable exchange rates at the balance sheet date. Non-monetary items that are measured in terms of historical cost in foreign currency are re-measured using the exchange rates at the dates of the initial transactions. Exchange gains or losses arising from foreign currency transactions are included in the consolidated statements of operations and comprehensive (loss) income. Cash and cash equivalents For financial accounting purposes, cash and cash equivalents are all considered to be highly liquid investments with a maturity of three months or less at the time of purchase. F- 9 AiRWA, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) Accounts receivable Accounts receivable are recorded at the gross billing amount less an allowance for any uncollectible accounts due from customers. Accounts receivable do not bear interest. Since July 1, 2022, the Company early adopted Accounting Standards Update No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), using the modified retrospective transition method. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, resulting in more timely recognition of credit losses. Upon adoption, the Company changed its impairment model to utilize a forward-looking current expected credit loss (CECL) model in place of the incurred loss methodology for financial instruments measured at amortized cost and receivables resulting from the application of ASC 606, including contract assets. The adoption of this guidance had no impact on the allowance for credit losses for accounts receivable as of October 31, 2025. The Company maintains an allowance for credit losses, recorded as an offset to accounts receivable. Estimated credit losses charged to the allowance are classified as “General and administrative expenses” in the consolidated statements of operations and comprehensive income/(loss). The Company assesses collectability by reviewing accounts receivable aging schedules. In determining the allowance for credit losses, the Company considers historical collectability based on past due status, the age of the balances, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect the ability to collect from customers. Delinquent account balances are written off against the allowance after management determines that collection is not probable. For the three-month and six-month periods ended October 31, 2025 and 2024, the Company did not record any expected credit losses against accounts receivable. Intangible Assets Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired as additional paid-in capital is the fair value at the date of acquisition. Each intangible asset with a finite life is subsequently amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least at each year end. Impairment of long-lived assets Long-lived assets are evaluated for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value may not be fully recoverable or that the useful life is shorter than the Company had originally estimated. When these events occur, the Company evaluates the impairment by comparing carrying value of the assets to an estimate of future undiscounted cash flows expected to be generated from the use of the assets and their eventual disposition. If the sum of the expected future undiscounted cash flows is less than the carrying value of the assets, the Company recognizes an impairment loss based on the excess of the carrying value of the assets over the fair value of the assets. Impairment charge recognized for the three-month and six-month periods ended October 31, 2025 and 2024 was nil . F- 10 AiRWA, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) Related party and related-party transactions Related parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence, such as a family member or relative, shareholder, or a related corporation. Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free-market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated. It is not, however, practical to determine the fair value of amounts due to or from related parties due to their related-party nature. Accrued Expenses Accrued expenses consist of liabilities for goods and services that have been received or provided but not yet paid as of the balance sheet date, including payroll and related expenses, interest, professional fees, and other operating costs. Accruals are based on management’s best estimates and are adjusted to actual amounts when the obligations are invoiced or settled. Fair value of financial instruments Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be either recorded or disclosed at fair value, the Company considers the principal or most advantageous market in which it would transact, and it also considers assumptions that market participants would use when pricing the asset or liability. Accounting guidance establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Accounting guidance establishes three levels of inputs that may be used to measure fair value: Level 1 — Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 — Other inputs that are directly or indirectly observable in the marketplace. Level 3 — Unobservable inputs which are supported by little or no market activity. ASC 820 describes three main approaches to measuring the fair value of assets and liabilities: Market Approach — Uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. Income Approach — Uses valuation techniques to convert future amounts to a single present value, based on current market expectations about those future amounts. Cost Approach — Based on the amount that would currently be required to replace an asset. The Company’s financial instruments consist of cash and cash equivalents and accounts receivable. The carrying amount of these financial instruments approximates fair value due to their short-term maturity. As discussed in Note 7, the Company holds a Level 1 investment in a Hong Kong company that has a quoted market price. The contributor of this investment has provided a downside guarantee to ensure a minimum value, so the asset is carried at a consistent value during periods in which the per-share price of the investment is below the originally contributed amount. F- 11 AiRWA, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) Revenue recognition Revenue represents the amount of consideration the Company is entitled to upon the transfer of promised goods or services in the ordinary course of the Company’s activities and is recorded net of VAT. The Company adopts the five steps for the revenue recognition: (i) identify the contracts with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract and (v) recognize revenue when (or as) the entity satisfies a performance obligation. Consistent with the criteria of ASC 606, Revenue from Contracts with Customers, the Company recognizes revenue when performance obligations are satisfied by transferring control of a promised good or service to a customer. For performance obligations that are satisfied at a point in time, the Company also considers the following indicators to assess whether control of a promised good or service is transferred to the customer: (i) right to payment, (ii) legal title, (iii) physical possession, (iv) significant risks and rewards of ownership and (v) acceptance of the good or service. Royalty income In the case of royalty income, the Company recognizes revenue in an amount that reflects the consideration to which it expects to be entitled for its products and services. Accounts receivable are recorded when the right to consideration becomes unconditional. The Company’s terms and conditions vary by customer and typically provide net 90-day terms. The Company receives royalty income in the form of license fees from customers for the use of the Company’s technology rights by the customers. Royalty income is recognized over time when the Company’s technology rights are used by the customers in accordance with the terms and conditions of the relevant license agreement. Revenue is recognized by the Company not only when invoices have been signed and confirmed by customers but also at the end of each year over the term of the relevant license agreements as the service is provided to the customers. Cost of revenue The Company’s cost of revenue consists primarily of amortization charges of intangible assets, in particular technology rights, which are directly attributable to the revenue. General and administrative expenses General and administrative expenses primarily consist of salaries and benefits for employees involved in general corporate functions, professional fees for external legal, accounting and other consulting services, travelling expenses and other general office and administrative expenses. F- 12 AiRWA, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) Income taxes The Company has adopted ASC 740, Income Taxes, which requires the use of the asset and liability method of accounting for income taxes. Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary 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. Prior to the acquisition by YYAI, YYEM was a limited liability company. As a limited liability company, the Company’s taxable income or loss is allocated to members in accordance with their respective percentage ownership. Therefore, no provision or liability for federal income taxes has been included in the financial statements. In the event of an examination of the Company’s tax return, the tax liability of the members could be changed if an adjustment in the Company’s income is ultimately sustained by the taxing authorities. Share-Based Payment The Company accounts for share-based compensation in accordance with ASC 718, Compensation — Stock Compensation . 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. Commitments and contingencies The Company accrues costs associated with legal actions when such costs become probable and the amounts can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. For the six months ended October 31, 2025 and 2024, the Company did not have any material legal claims or litigation that, individually or in the aggregate, could have a material adverse impact on the Company’s financial position, results of operations, or cash flows. 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. All common stock equivalents such as shares to be issued for the conversion of warrants were excluded from the calculation of diluted earnings per share as the effect is antidilutive. F- 13 AiRWA, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) Basic net income per share is computed by dividing net income attributable to ordinary shareholders, after considering accretions to redemption value and deemed dividends on preferred shares, by the weighted average number of ordinary shares outstanding during the year using the two-class method. Under the two-class method, net income is allocated between ordinary shares and other participating securities based on their respective participating rights. The Company’s preferred shares are considered participating securities because they participate in undistributed earnings on an as-if-converted basis. The preferred shares have no contractual obligation to fund or otherwise absorb the Company’s losses. Accordingly, any undistributed net income is allocated on a pro rata basis to ordinary and preferred shares, whereas any undistributed net loss is allocated to ordinary shares only. Diluted net income per share is calculated by dividing net income attributable to ordinary shareholders, as adjusted for the accretion and allocation of net income related to preferred shares, if any, by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the period. Ordinary equivalent shares consist of shares issuable upon the conversion of preferred shares and convertible loans using the if-converted method, and ordinary shares issuable upon the vesting of restricted shares or exercise of outstanding share options, using the treasury stock method based on the most advantageous conversion rate or exercise price from the standpoint of the security holder. Ordinary equivalent shares are excluded from the denominator of the diluted earnings per share calculation when their inclusion would be anti-dilutive. Comprehensive income The Company applies ASC 220, Comprehensive Income, with respect to reporting and presentation of comprehensive income and its components in a full set of financial statements. Comprehensive income is defined to include all changes in equity of the Company during a period arising from transactions and other event and circumstances except those resulting from investments by shareholders and distributions to shareholders. Segment reporting ASC 280, Segment Reporting , (“ASC 280”), establishes standards for companies to report in their financial statements information about operating segments, products, services, geographic areas, and major customers. Based on the criteria established by ASC 280, the Company’s Chief Executive Officer, who reviews consolidated results when making decisions about allocating resources and assessing performance of the Company. As a whole and hence, the Company has only one reportable segment. The Company does not distinguish between markets or segments for the purpose of internal reporting. Substantially all of the Company’s long-lived assets are located in the PRC, no geographical segments are presented. Recent accounting pronouncements The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows, or disclosures. F- 14 AiRWA, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) In November 2024, the FASB issued ASU 2024-03, “Reporting Comprehensive Income — Expense Disaggregation Disclosures,” which focuses on improving the disclosures about a public business entity’s expenses and addresses requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion) in commonly presented expense captions (such as cost of sales, SG&A, and research and development). ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of adopting the standard and does not expect that the adoption of this guidance will have a material impact on its financial position, results of operations and cash flows. In November 2024, the FASB issued ASU 2024-04, Debt — Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments . The amendments provide guidance on accounting for induced conversions of convertible debt instruments. The amendments are effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted for entities that have adopted the amendments in ASU 2020-06. The Company is currently evaluating the impact of this amendment and does not expect that the adoption of this guidance will have a material impact on its financial position, results of operations, or cash flows. In January 2025, the FASB issued ASU 2025-01, “Income Statement — Reporting Comprehensive Income — Expense Disaggregation Disclosures.” The amendment in ASU 2025-01 amends the effective date of ASC 2024-03 to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption of is permitted. The Company is currently evaluating the impact of this amendment and does not expect that the adoption of this guidance will have a material impact on its financial position, results of operations and cash flows. In March 2025, the FASB issued ASU 2025-02, Liabilities (Topic 405): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 122 . The amendments are effective immediately and must be applied on a fully retrospective basis to annual periods beginning after December 15, 2024. The Company does not expect that the adoption of this guidance will have a material impact on its financial position, results of operations, or cash flows. In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity . The amendments provide guidance on identifying the accounting acquirer in transactions involving a variable interest entity. The amendments are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual periods. Early adoption is permitted as of the beginning of an interim or annual reporting period. The Company is currently evaluating the impact of this amendment and does not expect that the adoption of this guidance will have a material impact on its financial position, results of operations, or cash flows. In May 2025, the FASB issued ASU 2025-04, Compensation — Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Clarifications to Share-Based Consideration Payable to a Customer . The amendments clarify the accounting for share-based consideration payable to a customer under Topic 718 and Topic 606. The amendments are effective for annual reporting periods, including interim periods within those annual periods, beginning after December 15, 2026. Early adoption is permitted. The Company is currently evaluating the impact of this amendment and does not expect that the adoption of this guidance will have a material impact on its financial position, results of operations, or cash flows. F- 15 AiRWA, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets . The amendments provide a practical expedient and, if applicable, an accounting policy election to simplify the measurement of credit losses for certain receivables and contract assets. The amendments are effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted in any interim or annual period in which financial statements have not yet been issued or made available for issuance. The Company is currently evaluating the impact of this amendment and does not expect that the adoption of this guidance will have a material impact on its financial position, results of operations, or cash flows. In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other (Topic 350): Internal-Use Software . The standard simplifies the accounting for internal-use software costs and is effective for fiscal years beginning after December 15, 2026. The Company does not expect adoption of this standard to have a material impact on its financial statements. In December 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-11, Interim Reporting (Topic 270): Improvements to Interim Disclosure Requirements . The standard clarifies disclosure requirements for interim financial statements and is effective for interim periods beginning after December 15, 2026. Early adoption is permitted. The Company is currently evaluating the impact of this guidance on its condensed consolidated financial statements. The Company does not believe that any other recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures. F- 16 AiRWA, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 3: CONCENTRATIONS OF RISK Concentration of customer risk The following table sets forth a summary of single customers who represent 10% or more of the Company’s total accounts receivable: SCHEDULE OF CONCENTRATIONS OF CREDIT RISK As of October 31, 2025 As of April 30, 2025 Customer A 55 % 44 % Customer D 25 % 26 % Customer E 20 % 30 % Concentration of customer risk 20 % 30 % Concentration of credit risk The Company is exposed to credit risk primarily through its cash and cash equivalents, accounts receivable, and revenue concentration. As of October 31, 2025 and April 30, 2025, the Company held cash and cash equivalents of $ 105,508,149 and $ 54,744 , respectively, substantially all of which were maintained with major financial institutions that management believes to have high credit quality. Accounts receivable totaled $ 12,188,719 and $ 15,388,701 as of October 31, 2025 and April 30, 2025, respectively, and are derived from customer transactions. The Company’s accounts receivable and revenue are concentrated among three major customers, which together accounted for approximately 100 % of total accounts receivable and total revenue for the six-month periods ended, and the three-month periods ended, October 31, 2025 and October 31, 2024. The Company monitors the creditworthiness of these customers on an ongoing basis and establishes allowances for expected credit losses when necessary. Note 4: INTANGIBLE ASSETS Technology rights are stated at cost less accumulated amortization and impairment losses. Amortization is calculated on a straight-line basis over their estimated useful lives of five years . SCHEDULE OF ACQUISITION AND AMORTIZATION OF INTANGIBLE ASSETS Schedule of Acquisition of Intangible Asset – Technology Right Date Note Amount 02/01/2022 Hey Yuan metaverse Marriage and Love social platform $ 384,515 02/01/2023 Shangou secure shopping 1,200,000 02/01/2023 Xinjudi creative base system 1,300,100 01/31/2024 Safe transaction method of payment with QR code 1,500,000 01/31/2024 Multifunctional network information security server 1,500,000 01/31/2024 Internet of things trade follow up method 1,500,000 01/31/2024 Retail information management control 1,500,000 01/31/2024 Live scene video automatic production system 1,500,000 01/31/2024 Video chat method and other storage media 1,500,000 01/31/2024 Speech recognition and other methods 1,500,000 01/31/2024 Data processing method and other storage media 1,500,000 Total $ 14,884,615 F- 17 AiRWA, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 4: INTANGIBLE ASSETS (cont.) Schedule of Amortization of Intangible Asset – Technology Right Date Note Amount 10/31/2025 Cost $ 14,884,615 10/31/2025 Accumulated amortization ( 5,863,441 ) Net value of Intangible Asset – Technology Right as of October 31, 2025 $ 9,021,174 Schedule of Amortization of Intangible Asset – Technology Right Date Note Amount 4/30/2025 Cost $ 14,884,615 4/30/2025 Accumulated amortization ( 4,374,980 ) Net value of Intangible Asset – Technology Right as of April 30, 2025 $ 10,509,635 Amortization expense for the six months ended October 31, 2025 and 2024 was approximately $ 1,488,462 and $ 1,488,462 respectively. These amounts are included in cost of revenue in the consolidated statements of operations and comprehensive income. Note 5 : REVENUE – SEGMENT REPORTING BY GEOGRAPHIC REGION The following represents the Company’s revenue segmented by geographic region for the six months ended October 31, 2025 and 2024. SCHEDULE OF REVENUE SEGMENT REPORTING BY GEOGRAPHIC REGION Location For the six months ended October 31, 2025 For the six months ended October 31, 2024 Hong Kong $ 2,500,000 $ 2,727,273 United Kingdom 1,500,000 1,636,363 United States of America 2,000,000 2,181,818 Total $ 6,000,000 $ 6,545,454 Note 6: ACCOUNTS RECEIVABLE Accounts receivable consisted of the following: SCHEDULE OF ACCOUNTS RECEIVABLE As of As of October 31, 2025 April 30, 2025 Accounts receivable $ 12,188,719 $ 15,388,701 As of October 31, 2025 and April 30, 2025, all accounts receivable were due from third-party customers. The provisions for credit losses were nil as of October 31, 2025 and April 30, 2025. F- 18 AiRWA, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 7 : INVESTMENT This represents a quoted investment in Brightstar Technology Group Co., Ltd. as of October 31, 2025, a company listed on the Hong Kong Stock Exchange. The contributor of this investment has provided a downside guarantee to ensure a minimum value. The investment’s fair value is assessed annually, with gains or losses recognized in the financial statements. Losses are recorded under “Financial assets at fair value through profit or loss”. Where the fair value falls below the guaranteed amount, the shortfall is compensated by the director under the guarantee arrangement, and the compensation is recognized as “Shares guarantee income”. Note 8 : DEPOSITS As of October 31, 2025, the Company had deposits totaling $ 25,313,776 The Company’s deposits primarily consist of refundable advance payments made to marketing and advertising service providers, as well as a refundable advance payment made to a technology development vendor in Malaysia. These deposits relate to ongoing operations and business expansion activities and will be applied against future services or refunded in accordance with the terms of the related agreements. Management will continue to assess the Company’s business strategy and options in light of evolving market opportunities and circumstances and will adjust its plans or business strategy and the deployment of its working capital as it deems most appropriate and advantageous to the Company’s. Note 9 : PREPAYMENTS As of October 31, 2025, the Company had prepayments totaling $ 5,885,200 including advance payments for services and rental prepayments under existing lease agreements. These amounts will be recognized as expenses over the applicable periods. Note 10 : OTHER RECEIVABLES As of October 31, 2025, the Company had other receivables of $ 10,003,838 primarily representing interest-bearing loans to third parties. Interest income is recognized on the accrual basis in accordance with the contractual terms of the underlying loan agreements. Management will continue to assess the Company’s business strategy and options in light of evolving market opportunities and circumstances and will adjust its plans or business strategy and the deployment of its working capital as it deems most appropriate and advantageous to the Company. SCHEDULE OF OTHER RECEIVABLES As of October 31, 2025 As of April 30, 2025 Loans to third parties $ 9,737,929 $ 2,662,718 Loan interest receivable 98,324 79,611 Rental 167,585 - Total $ 10,003,838 $ 2,742,329 Note 11: AMOUNT DUE FROM RELATED PARTY Nature of relationships with related party SCHEDULE OF RELATED PARTY TRANSACTIONS Name Relationship with the Company Hongyu Zhou Shareholder and director of the Company Transaction with related party Name As of October 31, 2025 As of April 30, 2025 Amount due from related party Hongyu Zhou 2,670,000 2,827,528 Amount due to related party Hongyu Zhou 784,091 775,406 The balances of $ 2,670,000 and $ 2,827,528 as of October 31, 2025 and April 30, 2025, respectively, represent amounts receivable from a director under the downside guarantee arrangement relating to the Company’s investment in Brightstar Technology Group Co., Ltd. Under the guarantee arrangement, the director is obligated to compensate the Company for any decline in the investment’s fair value below the guaranteed amount. Such compensation is recognized as Shares guarantee income in the statement of profit or loss. Management expects this receivable to be fully settled in the normal course of business. The balances of $ 784,091 and $ 775,406 as of October 31, 2025 and April 30, 2025, respectively, represent amounts payable to a director for expenses paid on behalf of the Company. F- 19 AiRWA, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 12: ACCRUED EXPENSES The following is a summary of accrued expenses as of October 31, 2025 and April 30, 2025, respectively. SCHEDULE OF ACCRUED EXPENSES As of October 31, 2025 As of April 30, 2025 Accrued salaries and benefits – management $ 517,500 $ 477,500 Accrued signing bonus 300,000 300,000 Accrued success fee 1,000,000 1,000,000 Amount due from bank - 2,488 Accrued directors’ fees 160,000 150,000 Accrued professional fees 162,775 498,143 Total $ 2,140,275 $ 2,428,131 Note 13: SHAREHOLDERS’ EQUITY The Company has 1,000,000,000 shares of common stock authorized with a par value of $ 0.001 per share. As of October 31, 2025 and 2024, the Company had 18,981,535 and 128,709 shares of common stock issued and outstanding, respectively (on a split-adjusted basis). F- 20 AiRWA, INC. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 13: SHAREHOLDERS’ EQUITY (cont.) For the period from May 1, 2024 through July 31, 2024, the Company issued 16,613 shares of common stock to true-up shares related to the February 22, 2022 acquisition of PlaySight Interactive Ltd., for services rendered, for the exercise of warrants, and to round up fractional shares as part of a 1-for-20 reverse stock split. For the period from August 1, 2024 through October 31, 2024, the Company issued 75,527 shares of common stock for the exercise of warrants. For the period from November 1, 2024 through July 31, 2025, the Company issued 162,552 shares of common stock to complete the acquisition of YYEM. On August 19, 2025, in connection with a private placement entered into on June 30, 2025, the Company issued 400,000 shares of common stock (together with five-year warrants to purchase 800,000 shares of common stock at an exercise price of $ 44.50 ). At $ 11.50 per unit (each consisting of a share and two warrants), the private placement raised $ 4,600,000 for the Company. For the period from August 1, 2025 through October 31, 2025, apart from the private placement, the Company issued 39,268 shares to round up fractional shares as part of a reverse stock split of the Company’s common stock at a ratio of 1-for-50 , which became effective on October 27, 2025 (the “Reverse Stock Split”). In this period, the Company also sold 18,290,063 shares in “at the market offerings”, generating gross proceeds of $ 175,614,186 (approximately $ 168,576,574 after the payment of commission, fees and expenses). All share figures in these financial statements and notes are adjusted to reflect the Reverse Stock Split except where stated otherwise. Note 14: COMMITMENTS AND CONTINGENCIES The Company was not subject to any legal proceedings during the six months ended October 31, 2025, and there are currently no legal proceedings, to which it is a party, which could have a material adverse impact on its financial position, results of operations, or liquidity. Note 15: SUBSEQUENT EVENTS In the month of November 2025, the Company sold 3,516,625 shares under its ATM facility, generating $ 3,604,594 of gross proceeds ($ 3,485,598 after the payment of commission, fees and expenses). On December 22, 2025, the Company closed a registered direct offering, selling 15,382,378 shares at $ 1.02 and raising $ 15,689,990 (approximately $ 14,773,528 after the payment of commission, fees and expenses). F- 21