What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-09-21 compared with 2025-08-13 · 1224 added, 653 removed, 181 unchanged (91% of the section changed)

2 unchanged sentences

herein by reference.

TO AUDITED FINANCIAL STATEMENTS

SPORTS TECHNOLOGIES INC.

Report of Independent Registered Public Accounting Firm (PCAOB ID 6907 )

Balance Sheets as of April 30, 2025 and 2024

Statements of Operations and Comprehensive Income for the years ended April 30, 2025 and 2024

Statements of Shareholders’ Equity for the years ended April 30, 2025 and 2024

Statements of Cash Flows for the years ended April 30, 2025 and 2024

TO CONSOLIDATED FINANCIAL STATEMENTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB ID 6907 )

CONSOLIDATED BALANCE SHEETS AS OF APRIL 30, 2026 AND 2025

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME/(LOSS) FOR THE YEARS ENDED APRIL 30, 2026 AND 2025

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY FOR THE YEARS ENDED APRIL 30, 2026 AND 2025

CONSOLIDATED STATEMENTS OF CASH FLOW FOR THE YEARS ENDED APRIL 30, 2026 AND 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Board of Directors and Shareholders of

Sports Technologies Inc.

on the Financial Statements

have audited the accompanying consolidated balance sheets of Connexa Sports Technologies Inc.

and its subsidiary (the “Company”)

as of April 30, 2025 and 2024, and the related consolidated statements of operations and comprehensive income, changes in shareholders’

equity, and cash flows for the years ended April 30, 2025 and 2024, and the related notes (collectively referred to as the “consolidated

have audited the accompanying consolidated balance sheets of AiRWA Inc.

and its subsidiaries (the “Company”) as of April

30, 2026 and 2025, and the related consolidated statements of operations and comprehensive income(loss), changes in shareholders’

equity, and cash flow for each of the years ended April 30, 2026 and 2025, and the related notes (collectively referred to as the “consolidated

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, 2025 and 2024, and the results of its operations and its cash flows for the years ended April

30, 2025 and 2024, in conformity with accounting principles generally accepted in the United States of America (“U.S.

position of the Company as of April 30, 2026 and 2025, and the results of its operations and its cash flow for each of the years ended

April 30, 2026 and 2025, in conformity with accounting principles generally accepted in the United States of America (“U.S.

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

16 unchanged sentences

Such procedures included examining, on a test basis, evidence

regarding the amounts and disclosures in the consolidated financial statements.

regarding the amounts and disclosure in the consolidated financial statements.

Our audits also included evaluating the accounting principles

2 unchanged sentences

Audit Matters

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

The critical audit matters communicated below

are matters arising from the current period audit of the consolidated 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 consolidated financial statements and

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

We determined that there are no critical audit matters

The communication of critical audit matters does not alter

in any way our opinion on the consolidated 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.

As discussed in Note 14 to the consolidated financial

statements, on January 30, 2026, the Company completed the acquisition of 100% of the outstanding shares of Aberfeldy Holdings Limited,

the holding company that owns Rafael AI Sdn.

(known at the time as 26 Rafael Sdn.

Bhd.), for consideration of $140.0 million.

connection with the business combination, the Company recorded various intangible assets, which included development costs and customer

relationship assets with provisional fair values of $54.8 million and $42.0 million, respectively.

We identified the evaluation of the provisional

fair values of the development costs and customer relationships assets as a critical audit matter.

A high degree of subjective auditor

judgment was required to evaluate the significant assumptions, specifically:

revenue growth rates and the discount rate applied in the

valuation of the development costs;

and follow-on revenue, profitability, customer attrition rate and the discount rate applied in the

valuation of the customer relationship assets.

Changes in these assumptions could have a significant effect on the fair values.

Additionally, the evaluation

of the customer attrition rate and discount rates required specialized skills and knowledge.

The following are the primary

procedures we performed to address this critical audit matter:

We evaluated the design and tested the operating effectiveness of

certain internal controls related to the Company’s business combination process.

This included controls related to the

determination of revenue growth rates and the discount rate for development costs as well as controls related to follow-on revenue,

profitability, the customer attrition rate, and the discount rate for customer relationship assets.

We evaluated revenue growth

rates for development costs and follow-on revenue and profitability for customer relationships assets, by comparing them to the

acquiree’s historical results and relevant industry data.

And we involved valuation professionals with specialized skills and

knowledge who assisted in assessing the attrition rate by comparing it to historic customer attrition rates of the acquiree;

analyzing the discount rates by comparing them to independently developed ranges of discount rates using publicly available market

data for comparable entities;

and assessing revenue growth and margins by comparing past projections to actual performance.

have served as the Company’s auditor since 2025.

SPORTS TECHNOLOGIES INC.

BALANCE SHEETS

dollars, except for numbers of shares or as otherwise noted)

April 30, 2026

April 30, 2025

Current Assets:

and cash equivalents

Cash and cash equivalents

Accounts receivable

Amount due from related party

current assets

Current Assets

Non-Current Assets:

assets, net of amortization

Contract costs

Right-of-use asset

Digital assets

Other receivables

Total Current Assets

Non-Current Assets:

AND SHAREHOLDERS’ EQUITY

Property and equipment, net

Intangible assets, net

Total Non-Current Assets

$ 210,355,601

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current Liabilities:

Accounts payable

Accrued expenses

Contract liabilities

Amount due to related party

taxes payable

Current Liabilities

Income taxes payable

Total Current Liabilities

tax liabilities

Non-Current Liabilities

Total Liabilities

Commitments and contingency

SHAREHOLDERS’

Common stock, par value,

$ 0.001 , 1,000,000,000 and 300,000,000 shares authorized, 14,563,019 and 1,828,541 shares issued and outstanding as of April 30, 2025

and April 30, 2024, respectively

paid in capital

Connexa Sports Technologies Inc .

SHAREHOLDERS’ EQUITY

Non-controlling

Common stock, $ 0.001 par value;

1,000,000,000 shares authorized;

approximately 52,678

and 364 shares issued and outstanding as of April 30, 2026 and 2025, respectively.

Additional paid-in capital

(Accumulated deficit) retained earnings

( 11,437,406 )

Total AiRWA Inc.

shareholders’ equity

LIABILITIES AND SHAREHOLDERS’ EQUITY

Non-controlling interest

Total Shareholders’ Equity

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

$ 210,355,601

accompanying notes are an integral part of these consolidated financial statements.

SPORTS TECHNOLOGIES INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE

STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME/(LOSS)

dollars, except for numbers of shares or as otherwise noted)

For the Years Ended

and administrative expenses

April 30, 2026

April 30, 2025

COST OF REVENUE

OPERATING EXPENSES

NON-OPERATING

Selling and marketing expenses

General and administrative expenses

Total Operating Expenses

OPERATING (LOSS)/INCOME

( 6,122,805 )

NON-OPERATING INCOME

Overprovision of prior year income tax

Shares guarantee income

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Total Non-Operating Income

NON-OPERATING

Loss on financial assets at fair value through profit or loss

( 2,497,049 )

NON-OPERATING EXPENSE

Amortization of intangible assets

( 4,505,038 )

FROM OPERATIONS BEFORE PROVISION FOR INCOME OPERATIONS AND INCOME TAX EXPENSE

INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES EXPENSE

FROM OPERATIONS BEFORE INCOME TAX EXPENSE

Income tax expense

Impairment of intangible assets

( 7,532,712 )

Loss on write-off of investment

Impairment loss – amount due from a director

( 2,582,505 )

ATTRIBUTABLE TO NON-CONTROLLING INTEREST

Impairment loss – other receivables

Loss on investments at fair value, net

Total Non-Operating Expense

( 16,303,111 )

INCOME ATTRIBUTABLE TO CONTROLLING INTEREST

Other comprehensive income

currency translations adjustment

Comprehensive

income per share - basic

average common shares outstanding - basic

average common shares outstanding - diluted

NET (LOSS)/INCOME FROM OPERATIONS BEFORE INCOME TAX EXPENSE

( 18,641,729 )

Income tax benefit/(expense)

( 2,011,773 )

NET (LOSS)/INCOME

( 17,560,520 )

NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTEREST

( 1,142,160 )

NET (LOSS)/INCOME ATTRIBUTABLE TO CONTROLLING INTEREST

$ ( 17,560,520 )

Net (loss)/income per share - basic

Net (loss)/income per share - diluted

Weighted average common shares outstanding - basic

Weighted average common shares outstanding - diluted

accompanying notes are an integral part of these consolidated financial statements.

SPORTS TECHNOLOGIES INC.

STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

dollars, except for numbers of shares or as otherwise noted)

Connexa Sports Technologies

shareholders’

Non-Controlling

Shareholders’

as of - May 1, 2023

income for the year

as of - April 30, 2024

as of - May 1, 2024

merger adjustment

income for the year

as of - April 30, 2025

Balance as of - May 1, 2024

Reverse merger adjustment

Stock-based compensation

Net income for the year

Balance as of - April 30, 2025

Stock issued upon exercise of warrants

Private placement

At-the-market-transaction

Direct offering

Allotment of share

Acquisition of non-controlling interest

( 34,855,348 )

( 1,142,160 )

( 35,997,508 )

( 17,560,520 )

Net income (loss)

( 17,560,520 )

Balance as of - April 30, 2026

$ 182,000,909

$ ( 11,437,406 )

$ 170,563,555

$ 182,000,909

$ ( 11,437,406 )

$ 170,563,555

accompanying notes are an integral part of these consolidated financial statements.

SPORTS TECHNOLOGIES INC.

STATEMENTS OF CASH FLOWS

(Amounts in U.S.

dollars, except for numbers of shares

or as otherwise noted)

FROM OPERATING ACTIVITIES

to reconcile net income to net cash used in operating activities

Amortization and impairment expense

STATEMENTS OF CASH FLOW

dollars, except for numbers of shares or as otherwise noted)

CASH FLOW FROM OPERATING ACTIVITIES

Net (loss)/income

$ ( 17,560,520 )

Adjustments to reconcile net (loss)/income to net cash used in operating activities

Amortization expense on intangible assets

Depreciation of property and equipment

Depreciation of Right-of-use asset

Interest expense on lease liability

Change in fair value of derivative liability

Shares and warrants issued for services

Loss on Financial Assets at FVTPL

in assets and liabilities, net of acquired amounts

Deferred income tax benefit

Overprovision of income tax payable

( 3,283,634 )

Impairment of intangible assets credit loss expense

Loss on write-off of investment

Impairment loss - amount due from related party

Impairment loss - other receivable

Changes in assets and liabilities, net of acquired amounts

Accounts receivables

( 1,600,710 )

current assets

( 12,115,974 )

Other receivables

Prepayments and deposits

Digital assets

( 19,245,771 )

Contract costs

( 3,826,935 )

Account payable

Accrued expenses

taxes payable

Stock-based compensation

cash (used in)/provided by operating activities

FROM FINANCING ACTIVITY

due from related party

Contract liabilities

Lease liabilities

Income taxes payable

( 4,930,236 )

due to related party

Net cash (used

in)/provided by financing activity

Total adjustments

( 3,294,951 )

CASH AND CASH EQUIVALENTS

- BEGINNING OF YEAR

CASH AND CASH EQUIVALENTS

- END OF YEAR

SUPPLEMENTAL DISCLOSURES OF NON-CASH FLOW INFORMATION

Amount due from related party

( 5,012,835 )

Net cash used in operating activities

( 20,855,471 )

CASH FLOW FROM INVESTING ACTIVITIES

Payment of increase in investment in subsidiary

( 36,000,000 )

Payment of acquisition of investment in subsidiaries

( 128,122,025 )

Net cash used in investing activities

( 164,122,025 )

CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from private placement

Proceeds from At-the-market transaction

Proceeds from exercise of warrants for cash

Proceeds from direct offering

Proceeds from issue of shares

Amount due from related party

Amount due to related party

Net cash provided by financing activities

NET INCREASE IN CASH

CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR

CASH AND CASH EQUIVALENTS - END OF YEAR

accompanying notes are an integral part of these consolidated financial statements.

SPORTS TECHNOLOGIES INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

3 unchanged sentences

incorporation

Yuanyu Enterprise Management Co., Limited

November 11, 2021

Subsidiaries:

Enterprise Management Co., Limited

owned by the Company

Technology licensing

(“Lazex”) was incorporated under the laws of the State of Nevada on July 12, 2015.

Holdings Limited

of Seychelles

owned by the Company

January 30, 2026

owned by the Company

End-to-End Solutions

(“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 ., and in 2022 Slinger Bag

acquired various entities related to the manufacture and distribution of the Slinger Bag Launcher, a portable tennis ball, padel 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.;

In 2021 and 2022, Connexa acquired three companies:

Foundation Sports Systems, LLC, Flixsense Pty, Ltd.

(known as Gameface), and PlaySight

Interactive Ltd.

Over the course of 2022 and 2023, the Company disposed of and fully impaired the goodwill and intangible assets related

to all of these.

January 19, 2024, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with three

investors (the “January 2024 Investors”) for the issuance and sale to each investor of (i) 116,510

shares of Common Stock (the “January Shares”) and

(ii) pre-funded warrants to purchase an aggregate of 1,258,490

shares of Common Stock (the “Pre-Funded Warrants”)

at a combined purchase price of $ 4

per share of Common Stock for an aggregate amount of approximately

The Pre-Funded Warrants had an exercise price of $ 0.0002

per share of Common Stock and became exercisable beginning

on May 15, 2024, the date stockholder approval was received and effective, allowing exercisability of the Pre-Funded Warrants under Nasdaq

rules until they were exercised in full.

The aggregate number of shares issued to the January 2024 Investors was 349,530

and the aggregate number of Pre-Funded Warrants was 3,775,470 .

April 2024 through May 2024, the Company acknowledged and agreed to the entry into certain warrant purchase agreements by the January 2024 Investors and 10 purchasers (the “Pre-Funded Warrant Purchasers”) pursuant to which the January 2024

Investors sold all of the 3,775,470 Pre-Funded Warrants to Pre-Funded Warrant Purchasers for an aggregate amount of $ 18,877,350 in

May 28, 2024, the Company filed a registration statement in respect of 1,925,000 shares

of its common stock consisting of (a) 349,530 January

Shares and (b) 1,575,470 shares

of Common Stock issuable upon the exercise of the Pre-Funded Warrants and on August 21, 2024 the registration statement became

June 27, 2024, the Company (i) increased the number of authorized shares of common stock from 300,000,000 to 1,000,000,000 and (ii) effected

a 1-for-20 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;

all such fractional interests were rounded up to the nearest whole number

of shares of common stock.

Unless otherwise stated, all share and per share information in this prospectus has been adjusted to reflect

the Reverse Stock Split.

SPORTS TECHNOLOGIES INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

ORGANIZATION AND NATURE OF BUSINESS (cont.)

to this, on March 18, 2024, the Company had 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”)

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.

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 former shareholders of the Company, whose shares were acquired by the YYEM

Seller, own and control approximately 24.7 % of the shares and votes in the Company.

The management of the Company is drawn predominantly

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 the 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.

financial statements are the retained earnings and other equity balances of the 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 the 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.

(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 the YYEM.

the closing of the Acquisition and the disposal of the Slinger Bag business, YYEM has been the sole operating 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.

We believe 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.

is also developing a social networking vertical to produce content for live-streaming or for serving as videos to TikTok users in the

Middle East and North Africa (the “MENA region”), which the Company anticipates will provide an independent revenue stream

capitalizing on TikTok’s strength in the MENA region relative to the uncertainty the app faces in the United States.

The fees generated

by the arrangement with TikTok will depend on the rate of conversion by TikTok end-users.

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 $ 12.8 million for its

financial year ended April 30, 2025.

was registered in Hong Kong on November 11, 2021.

Its business purpose is to provide technology services.

YYEM’s registered office

is located at Rm 4, 16/F, Ho King Comm Ctr, 2-16 Fayuen St, Mongkok, Kowloon, Hong Kong.

details of all prior operations of Slinger Bag Inc., Slinger Bag Americas, Slinger Bag Canada, Slinger Bag UK, SBL, and Flixsense Pty,

please see the Company’s previous filing on Form 10-K for the year ended April 30, 2024, filed July 25, 2024.

SPORTS TECHNOLOGIES INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

and on September 30, 2025, Connexa Sports Technologies Inc.

changed its name to AiRWA, Inc.

November 21, 2024, the Company acquired 70 % of Yuanyu Enterprise Management Co., Limited (“YYEM”) from Mr.

Hongyu Zhou, the

sole shareholder of YYEM for a combined $ 56 million (the “Acquisition”), paid partly in cash and partly in shares.

transaction, the shareholders of YYEM became the controlling shareholders of the Company and appointed new directors to the Board.

Bag Americas Inc., the Company’s wholly owned subsidiary prior to the closing, was sold, taking with it responsibility for all

past and future liabilities related to the Slinger Bag business.

transaction was accounted for as a “reverse acquisition”, so 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.

the closing of the Acquisition and the disposal of the Slinger Bag business, YYEM was the sole operating subsidiary of the Company.

On October 22, 2025, the Company entered into a share purchase agreement with Mr.

Zhou, the then 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.

in November 2021, YYEM is based in Hong Kong and operates primarily in the emerging love and marriage market sector.

mission is to empower global connections through innovative matchmaking technology.

YYEM owns advanced patents and other proprietary

technology which it has licensed out, enabling licensees to create localized matchmaking experiences tailored to their specific

markets and cultures.

On account of economic challenges faced by the Company’s licensees, the agreements generating

royalty income were terminated in the course of fiscal year 2026, but the Company continues to believe in the merits of this

business model and is seeking replacement customers.

August 25, 2025, the Company announced a joint venture for the establishment of an RWA-focused exchange, which would initially focus

on tokenized U.S.

Following that announcement, development proceeded with partial funding and with successful test runs settling

trades of tokenized U.S.

However, after the end of the Company’s fiscal year, to protect the Company in the wake of media

reports that the Company’s joint venture partner was experiencing significant financial and legal problems, management terminated

the joint venture agreement, delivering formal notice on September 18, 2026.

January 30, 2026, the Company entered into and closed on a share purchase agreement with various sellers to acquire all the share

capital of Aberfeldy Holdings Limited, a Seychelles holding company owning 100 %

of Rafael AI Sdn.

(then known as 26 Rafael Sdn.

Bhd.), a Malaysian operating company (“Rafael AI”), for $ 140,000,000 ,

paid in USDT.

AI provides “data-to-AI” end-to-end solutions, which are full-cycle services designed to empower enterprises to transition

seamlessly from raw data to intelligent applications.

Its business is structured around five interconnected AI-related modules, together

forming a closed-loop system in which data generation, model refinement, and operational feedback continuously reinforce one another.

Its services are tailored to specialist industries such as healthcare, industrial manufacturing and autonomous driving.

July 30, 2026, after the end of fiscal year 2026, the Company completed the acquisition of Hongkong Best Life Trade Co., Limited.

further details of this acquisition, please refer to Note 20, Subsequent Events.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2 unchanged sentences

the United States of America (“U.S.

GAAP”) and applicable rules and regulations of the Securities and Exchange Commission

Significant accounting policies followed by the Company in the preparation of the accompanying consolidated financial

statements are summarized below.

Principles of consolidation

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.

accompanying consolidated financial statements include the consolidated financial statements of the Company and its wholly owned

GAAP”) and applicable rules and regulations of the Securities and Exchange

Commission (the “SEC”).

Significant accounting policies followed by the Company in the preparation of the accompanying

consolidated financial statements are summarized below.

of consolidation

accompanying consolidated financial statements include the consolidated financial statements of the Company and its wholly owned subsidiaries.

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.

Control is achieved when the Company (i) has power over the investee (including

when the Company directly or indirectly controls more than 50% of the voting power or when 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);

(ii) is exposed

to, or has rights to, variable returns from its involvement with the investee;

and (iii) has the ability to use its power to affect those

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.

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.

inter-company balances and transactions are eliminated upon consolidation.

1 unchanged sentence

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.

Non-controlling

accordance with ASC 810-10-45, “Noncontrolling Interests in Consolidated Financial

Statements,” the Company classifies non-controlling

interests as a component of equity within the consolidated balance sheet.

Effective with the purchase of the additional 50 % of YYEM on

November 21, 2024, the percentage that the Company owns in YYEM was increased to 70 %.

The remaining 30 % is reflected as non-controlling

interests in the consolidated financial statements.

Company’s non-wholly owned subsidiary, a non-controlling interest is recognized to reflect the portion of equity that is not

attributable, directly or indirectly to the Company.

Consolidated net income or loss in the-Consolidated Statements of Operations

and Comprehensive Income/(Loss) includes net income or loss attributable to non-controlling interests when applicable.

All significant transactions and balances between the

Company and its subsidiaries have been eliminated.

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

3 unchanged sentences

related to long-lived assets.

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

To the extent there are material differences between the estimates and the actual results, future results of operations will

Foreign currency

The Company’s reporting currency is the U.S.

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.

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.

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)

The functional currencies of its subsidiaries is also the U.S.

The determination of the respective functional currency is based on the criteria set out

by ASC 830, Foreign Currency Matters.

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 income/(loss).

and cash equivalents

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.

SPORTS TECHNOLOGIES INC.

TO THE CONSOLIDATED FINANCIAL STATEMENTS

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

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.

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 April

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).

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.

receivable are recorded at the gross billing amount less an allowance for any uncollectible accounts due from customers.

Accounts receivable

do not bear interest.

July 1, 2022, the Company early adopted Accounting Standards Update (“ASU”) 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 replaced 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 April 30, 2026.

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 years ended April 30, 2025 and

2024, the Company did not record any expected credit losses against accounts receivable.

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.

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.

the years ended April 30, 2026 and 2025, the Company did not record any expected credit losses against accounts receivable.

Prepayments and Other Receivables

prepayments and other receivables primarily consist of prepayments to vendors and service providers, advances to employees, refundable

deposits, and other receivables.

Prepayments are recognized as assets when payments are made in advance of the receipt of goods or services

and are expensed when the related goods or services are received.

Company evaluates deposits and other receivables that represent financial assets measured at amortized cost for expected credit losses

in accordance with ASC Topic 326, Financial Instruments—Credit Losses .

The allowance for credit losses reflects management’s

estimate of expected credit losses over the contractual life of the financial assets and is based on relevant available information,

including historical collection experience, current conditions, and reasonable and supportable forecasts, as applicable.

Changes in the

allowance are recognized as credit loss expense in the consolidated statements of operations.

Balances are written off against the allowance

when they are deemed uncollectible.

of April 30, 2026 and 2025, the Company recorded an allowance for credit losses of $ 300,000 and nil , respectively, against other receivables.

Company accounts for operating leases following ASC 842, Leases (“Topic 842”).

The Company, through its subsidiary,

leases its offices, which are classified as operating leases in accordance with Topic 842.

Operating leases are required to record in

the balance sheet as right-of-use assets and lease liabilities, initially measured at the present value of the lease payments.

has elected the package of practical expedients, which allows the Company not to reassess (1) whether any expired or existing contracts

as of the adoption date are or contain a lease, (2) lease classification for any expired or existing leases as of the adoption date,

and (3) initial direct costs for any expired or existing leases as of the adoption date.

The Company has elected the short-term lease

exemption for the lease terms that are 12 months or less.

inception of a contract, the Company assesses whether a contract is, or contains, a lease.

A contract is or contains a lease if it conveys

the right to control the use of an identified asset for a period of time in exchange for consideration.

To assess whether a contract

is or contains a lease, the Company assesses whether the contract involves the use of an identified asset, whether it has the right to

obtain substantially all the economic benefits from the use of the asset, and whether it has the right to control the use of the asset.

The right-of-use assets and related lease liabilities are recognized at the lease commencement date.

The Company recognizes operating

lease expenses on a straight-line basis over the lease term and had no finance leases for any of the periods stated herein.

right-of-use of asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease

payments made at or before the commencement date, plus any initial direct costs incurred and less any lease incentive received.

All right-of-use

assets are reviewed for impairment annually.

There was no impairment for right-of-use lease assets as of April 30, 2026 and 2025.

Company accounts for equity securities in accordance with ASC Topic 321, Investments—Equity Securities .

securities with readily determinable fair values are measured at fair value at each reporting date, with realized and unrealized gains

and losses resulting from changes in fair value recognized in earnings.

equity securities without readily determinable fair values that do not qualify for the equity method of accounting, the Company may elect

the measurement alternative permitted under ASC Topic 321.

Under the measurement alternative, such investments are measured at cost,

less impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar

investments of the same issuer.

The Company evaluates such investments at each reporting period for impairment and for observable transactions

that may require an adjustment to the carrying amount.

the sale, disposal, or other derecognition of an investment, the related carrying amount is removed from the consolidated balance sheet,

and any resulting gain or loss is recognized in earnings.

gains and losses are presented within other income/(expense) in the consolidated statements of operations and comprehensive income/(loss).

Company applies the principles of FASB ASC Topic 985-20, Accounting for the Costs of Computer Software to Be Sold, Leased, or Otherwise

Marketed (“ASC 985-20”).

ASC 985-20 requires that software development costs incurred in conjunction with product development

be charged to research and development expense until technological feasibility is established.

Thereafter, until the product is released

for sale, software development costs must be capitalized and reported at the lower of unamortized cost or net realizable value of the

related product.

At Rafael AI, the Company has invested significant capital into the research and development of new products

and features.

Company has adopted the “tested working model” approach to establish technological feasibility for its products.

approach, the Company does not consider a product in development to have passed the technological feasibility milestone until the Company

has completed a model of the product that contains essentially all the functionality and features of the final product and has tested

the model to ensure that it works as expected.

The Company capitalizes costs related to the development of software to be sold, leased,

or otherwise marketed as and when it believes such software has met the “tested working model” threshold.

Development costs

continue to be capitalized until the related software is released.

The Company considers the following factors in determining whether

costs can be capitalized:

the nature of the relevant market;

the uncertainty regarding a product’s revenue-generating

its lack of control over distribution channels, where applicable;

and its historical practice of canceling products at that stage of

the development process.

After products and features are released, all product maintenance costs are expensed.

Company also applies the principles of FASB ASC Topic 350-40, Accounting for the Cost of Computer Software Developed or Obtained for

Internal Use (“ASC 350-40”).

ASC 350-40 requires that software development costs incurred before the preliminary project

stage be expensed as incurred.

The Company capitalizes development costs related to these software applications once the preliminary

project stage is complete and it is probable that the project will be completed and the software will be used to perform the functions

software development costs, whether for software developed to be sold, leased, or otherwise marketed or for internal use, are generally

amortized over a 5 five-year

the years ended April 30, 2026 and 2025, the Company capitalized software development costs as more fully described in Note 11, Intangible Assets, net .

and Equipment, Net

and equipment are tangible assets which the Company holds for its own use and which are expected to be used for more than one year.

item of property and equipment is recognized as an asset when it is probable that future economic benefits associated with the item will

flow to the Company and the cost of the item can be measured reliably.

Property and equipment are initially measured at cost.

Cost includes

all the expenditure which is directly attributable to the acquisition or construction of the asset, including the capitalization of borrowing

costs on qualifying assets and adjustments in respect of hedge accounting, where appropriate.

incurred subsequently for major services, or for additions to or replacements of parts of property and equipment, are capitalized if

it is probable that future economic benefits associated with the expenditure will flow to the Company and the cost can be measured reliably.

Day-to-day servicing costs are expensed as incurred.

Subsequent to initial recognition, property and equipment are measured at cost less

accumulated depreciation and any accumulated impairment losses.

of an asset commences when the asset is available for use as intended by management.

Depreciation is charged to write off the asset’s

carrying amount over its estimated useful life to its estimated residual value, using a method that best reflects the pattern in which

the asset’s economic benefits are consumed by the Group.

Depreciation is not charged to an asset if its estimated residual value

exceeds or is equal to its carrying amount.

Depreciation of an asset ceases at the earlier of the date that the asset is classified as

held for sale or derecognized.

estimated useful lives of property and equipment have been assessed as follows:

OF ESTIMATED USEFUL LIVES OF PROPERTY AND EQUIPMENT

and equipment

consolidated financial statements include the operations of acquired businesses from the date of the acquisitions.

Company allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets

acquired based on their estimated fair values.

The excess of the fair value of purchase consideration over the fair values of these identifiable

assets and liabilities is recorded as goodwill.

Such valuations require management to make significant estimates and assumptions, especially

with respect to intangible assets.

Significant estimates in valuing certain intangible assets include, but are not limited to, estimated

replacement costs and future expected cash flow from acquired advertiser or publisher relationships, acquired technology, acquired patents.

Management’s estimates of fair value are based on assumptions believed

to be reasonable but which are inherently uncertain and unpredictable, and, as a result, actual results may differ from estimates.

of purchase consideration to identifiable assets and liabilities affects the Company’s amortization expense, as acquired finite-lived

intangible assets are amortized over their useful life, whereas any indefinite-lived intangible assets, including goodwill, are not amortized.

During the measurement period, which is not to exceed one year from the acquisition date, the Company records adjustments to the assets

acquired and liabilities assumed, with the corresponding offset to goodwill.

Upon the conclusion of the measurement period, any subsequent

adjustments are recorded to earnings.

represents the excess of purchase consideration over the acquisition date amounts of the identifiable tangible and intangible assets

acquired and liabilities assumed from the acquired entity as a result of the Company’s acquisitions of interests in its subsidiaries.

Goodwill is not amortized but is tested for impairment on an annual basis, or more frequently if events or changes in circumstances indicate

that it might be impaired.

In accordance with ASC 350, the Company may first assess qualitative factors to determine whether it

is necessary to perform the quantitative goodwill impairment test.

In the qualitative assessment, the Company considers factors such

as macroeconomic conditions, industry and market considerations, overall financial performance of the reporting unit, and other specific

information related to the operations, business plans and strategies of the reporting unit.

Based on the qualitative assessment, if it

is more likely than not that the fair value of a reporting unit is less than the carrying amount, the quantitative impairment test is

The Company may also bypass the qualitative assessment and proceed directly to perform the quantitative impairment test.

The Company adopted

ASU 2017-04, Intangibles—Goodwill and Other (Topic 350:

Simplifying the Test for Goodwill Impairment).

After adopting

this guidance, the Company performs the quantitative impairment test by comparing the fair value of each reporting unit to its carrying

amount, including goodwill.

If the fair value of the reporting unit exceeds its carrying amount, goodwill is not considered to be impaired.

If the carrying amount of a reporting unit exceeds its fair value, the amount by which the carrying amount exceeds the reporting unit’s

fair value is recognized as impairment.

Application of a goodwill impairment test requires significant management judgment, including

the identification of reporting units, allocation of assets, liabilities, and goodwill to reporting units, and determination of the fair

value of each reporting unit.

the years ended April 30, 2026 and 2025, no goodwill impairment charges were recorded.

assets are stated at cost, less accumulated amortization and impairment losses, if any.

Intangible assets acquired in a business combination

are initially recognized at their estimated fair values as of the acquisition date in accordance with ASC Topic 805, Business Combinations .

Company’s finite-lived intangible assets are amortized over their estimated useful lives.

The method of amortization reflects the

pattern in which the economic benefits of the intangible assets are expected to be consumed.

If such pattern cannot be reliably determined,

the Company uses the straight-line method.

The estimated useful lives and amortization methods are reviewed at each reporting period,

and changes in estimated useful lives or amortization methods are accounted for prospectively as changes in accounting estimates.

estimated useful lives of the Company’s intangible assets are as follows:

OF ESTIMATED USEFUL LIVES OF INTANGIBLE ASSETS

Development costs

relationships

Company reviews finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying

amount of an asset or asset group may not be recoverable.

Recoverability is assessed by comparing the carrying amount of the asset or

asset group with the undiscounted future cash flow expected to result from its use and eventual disposition.

If the carrying amount is

not recoverable, an impairment loss is measured as the amount by which the carrying amount exceeds its fair value.

Internally developed

software costs are recognized as an intangible asset when:

is technologically feasible to complete the asset so that it will be available for use or sale;

is an intention to complete and use or sell it;

is an ability to use or sell it;

will generate probable future economic benefits;

are available technical, financial, and other resources to complete the development and to use or sell the asset;

expenditure attributable to the asset during its development can be measured reliably.

begins when development is complete and the asset is available for use.

Development costs are amortized based on a useful life of five

Acquisition-related

costs, such as legal, accounting, valuation, and other professional fees, are expensed as incurred and are not included in consideration

Company’s digital assets consist primarily of U.S.

dollar-denominated stablecoins, mainly USDT, which is designed to maintain a

value of approximately one U.S.

dollar per token and is generally redeemable on a one-to-one basis for U.S.

The Company holds

these digital assets primarily for treasury management and settlement purposes.

USDT is accounted for as a financial instrument on the

consolidated balance sheets.

Company evaluates the contractual terms and rights associated with each digital asset, including whether the Company has an enforceable

right to redeem the digital asset directly with the issuer for U.S.

Based on the Company’s evaluation, the Company does

not maintain a direct account with the applicable issuers and does not have an unconditional contractual right to redeem the digital

assets directly with the issuers.

The Company generally realizes the value of its digital assets through transactions conducted on third-party

digital asset platforms.

the Company accounts for its digital assets under ASC Subtopic 350-60, Intangibles—Goodwill and Other—Crypto Assets.

Digital assets are measured at fair value as of each reporting date, with changes in fair value recognized in net income.

Digital assets

are presented separately as “digital assets” in the consolidated balance sheets.

Realized and unrealized gains and losses

are included in “other income/(expense), net” in the consolidated statements of operations and comprehensive income.

Company’s digital assets were maintained in a corporate account with Ju.com, a third-party digital asset trading platform, until

we withdrew our remaining deposits to terminate the relationship on August 10, 2026.

The Company did not directly control the private

keys associated with the digital assets held through the platform.

Accordingly, the Company was exposed to third-party custodial and

counterparty risks, including cybersecurity incidents, unauthorized access, suspension of withdrawals, platform insolvency, and regulatory

contract liability is recognized when the Company receives consideration from a customer, or the consideration is unconditionally due,

before the Company transfers goods or services to the customer.

Contract liabilities are recognized as revenue when the Company satisfies

the related performance obligation.

The recorded contract liabilities include advance payments and billings in excess of revenue recognized.

Contract liabilities are reported on a contract-by-contract basis at the end of each reporting period.

Company capitalizes costs incurred to fulfill a contract when such costs (i) relate directly to a contract or anticipated contract, (ii)

generate or enhance resources that will be used in satisfying future performance obligations, and (iii) are expected to be recovered.

These costs primarily consist of direct labor, direct materials, and allocations of directly attributable overhead.

contract fulfillment costs are amortized on a straight-line basis over the expected period of benefit, which is consistent with the pattern

of transfer of goods or services to which the asset relates.

Amortization expense is recorded in cost of revenue in the accompanying

consolidated statements of operations and comprehensive income/(loss).

Company assesses the carrying amount of capitalized contract costs for impairment at each reporting period.

An impairment loss is recognized

in the period in which it is identified, to the extent that the carrying amount of the asset exceeds the expected remaining consideration

for the related contract, less any costs expected to be incurred in fulfilling the contract.

of long-lived assets

assets are evaluated for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions

assets are evaluated for impairment whenever events or changes in circumstances (such as a significant adverse change in 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

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 years ended April 30, 2025 and 2024 was nil .

SPORTS TECHNOLOGIES INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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.

are based on management’s best estimates and are adjusted to actual amounts when the obligations are invoiced or settled.

When these events occur, the Company evaluates the impairment by comparing the

carrying value of the assets to an estimate of future undiscounted cash flow expected to be generated from the use of the assets and

their eventual disposition.

If the sum of the expected future undiscounted cash flow 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.

party and related-party transactions

parties, which can be a corporation or individual, are considered to be related if the one party 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.

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.

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.

payable consist of amounts owed to suppliers, vendors, and service providers for goods and services received in the ordinary course of

Such amounts are recorded at invoice value, or at management’s estimate of amounts due when invoices have not yet been

received, and are classified as current liabilities.

Due to the short-term nature of these obligations, the carrying value of accounts

payable approximates their fair value.

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.

value of financial instruments

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.

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:

Company measures fair value in accordance with ASC 820, Fair Value Measurement.

ASC 820 establishes a three-level fair value hierarchy

based on the inputs used to measure fair value:

inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

1 unchanged sentence

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:

Uses prices and other relevant information generated from market transactions involving identical or comparable assets

or liabilities.

Uses valuation techniques to convert future amounts to a single present value, based on current market expectations

about those future amounts.

Based on the amount that would currently be required to replace an asset.

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

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

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.

SPORTS TECHNOLOGIES INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

820 describes three main approaches to measuring the fair value of assets and liabilities:

prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities.

valuation techniques to convert future amounts to a single present value, based on current market expectations about those future

on the amount that would currently be required to replace an asset.

Company’s financial instruments primarily consist of cash and cash equivalents, accounts receivable, deposits, other receivables,

accounts payable, and certain accrued liabilities.

The carrying amounts of these financial instruments approximate their fair values

due to their short-term maturities.

Company’s digital assets are measured at fair value on a recurring basis.

Certain identifiable assets acquired and liabilities

assumed in a business combination are measured at fair value on a non-recurring basis as of the acquisition date in accordance with the

acquisition method described in Note 15, Business Combinations.

Transfers between levels of the fair value hierarchy, if any,

are recognized as of the date of the event or change in circumstances giving rise to the transfer.

carrying amounts of the Company’s cash and cash equivalents, accounts receivable, other receivables, amounts due from and due to

related parties, accounts payable, and accrued expenses approximate their respective fair values due to the short-term nature of these

financial instruments.

were no transfers between Level 1, Level 2, and Level 3 of the fair value hierarchy during the years ended April 30, 2026 and 2025.

connection with the acquisition of Aberfeldy Holdings Limited, certain identifiable intangible assets acquired, including customer relationships

and intellectual property, were measured at fair value on a non-recurring basis as of the acquisition date.

Such fair value measurements

were based on valuation techniques that utilized significant unobservable inputs and were classified within Level 3 of the fair value

See Note 15, Business Combinations .

following table presents the Company’s assets measured at fair value on a recurring basis:

OF FAIR VALUE ASSETS MEASURED ON RECURRING BASIS

Fair Value Measurements

as of April 30, 2026

Digital assets, at fair value

Fair Value Measurements

as of April 30, 2025

Digital assets, at fair value

represents the amount of consideration the Company is entitled to upon the transfer of promised goods or services in the ordinary course

1 unchanged sentence

The Company adopts the five steps for the revenue recognition:

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

the contracts with a customer;

(ii) identify the performance obligations in the contract;

(iii) determine the transaction price;

allocate the transaction price to the performance obligations in the contract;

and (v) recognize revenue when (or as) the entity satisfies

a performance obligation.

4 unchanged sentences

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.

(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.

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 receivables 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’s

terms and conditions vary by customer and typically provide net 90-day terms.

Company receives royalty income in the form of license fees from customers for the use of the Company’s technology rights by the

4 unchanged sentences

provided to the customers.

Company’s cost of revenue consists primarily of amortization charge of intangible assets – technology rights, which are

directly attributable to the revenue.

Company generates revenue from sales of various forms of advertising on streaming content by way of advertisement displays or the integration

of promotion activities in content to be streamed.

Advertising contracts are signed to establish the different contract prices for different

advertising scenarios, consistent with the advertising period.

The Company enters into advertising contracts directly with the advertisers

or the third-party advertising agencies that represent advertisers.

the contracts that involve third-party advertising agencies, the Company acts as principal as the Company is responsible for fulfilling

the promise of providing advertising services and has the discretion in establishing the price for the specified advertisement.

a framework contract, the Company receives separate purchase orders from advertising agencies before the broadcast.

Accordingly, each

purchase order is identified as a separate performance obligation, containing a bundle of advertisements that are substantially the same

and that have the same pattern of transfer to the customer.

Where collectability is reasonably assured, revenue is recognized monthly

over the service period of the purchase order.

contracts signed directly with the advertisers, the Company commits to display a series of advertisements which are substantially the

same or similar in content and transfer pattern, and the display of the whole series of advertisements is identified as the single performance

obligation under the contract.

The Company satisfies its performance obligations over time by measuring the progress toward the display

of the whole series of advertisements in a contract, and advertising revenue is recognized over time based on the number of advertisements

terms and conditions vary by contract types, and terms typically include a requirement for payment within a period from six to nine months.

Both direct advertisers and third-party advertising agencies are generally billed at the end of the display period and require the Company

to issue invoices in order to make their payments.

Company acquired Rafael AI Sdn.

(“Rafael AI”, known at the time as 26 Rafael Sdn.

Bhd.) on January 30, 2026.

AI generates revenue from the sale of customized “data-to-AI” end-to-end solutions directly to customers, which qualifies

Rafael AI is the sole legal and beneficial owner of the software, and enters into contracts with its customers as a principal

in the transactions.

The sale of customized “data-to-AI” end-to-end solutions is considered a distinct product as the product

is highly integrated, interdependent, and interrelated.

The customers cannot use any component on a standalone basis to obtain economic

The contracts contain a single performance obligation, which is to deliver a complete integrated software solution to its customers

in exchange for consideration, and the performance obligation is satisfied when the customers obtain control upon completion and delivery

of all software deliverables.

The customers do not simultaneously receive and consume benefits as the Company performs the contracts,

and do not control the software during development.

The software has no alternative use, and Rafael AI does not have an enforceable right

to payment for partial performance.

The terms of pricing and payment stipulated in the contract are fixed, without variable consideration,

significant financing component, non-cash consideration, and consideration payable to customers.

Upon delivery of products, Rafael AI

does not accept product returns or refunds except for quality issues, but it has obligations to issue refunds when the product has not

been delivered.

Rafael AI typically provides a one-year warranty for products delivered.

Revenue is recognized when the control of the

products has been transferred to customers.

The transfer of control is considered complete when products have been accepted and received

by customers.

Amounts received in advance are recorded as contract liabilities, which are recognized as revenue when the relevant products

are delivered and accepted by the customer.

This activity falls within the scope of ASC 606.

vs agent consideration

determine whether revenue should be reported based on the gross or net transaction price to customers, the Company must determine whether

it is acting as principal in its sales to customers.

An entity acts as principal if it controls a good or service before it is transferred

to the customer.

Key indicators that the Company uses in evaluating its role in these sales transactions include, but are not limited

to, the following:

underlying contract terms and conditions between the various parties to the transaction;

party is primarily responsible for fulfilling the promise to provide the specified good or service;

party has discretion in establishing the price for the specified good or service.

Company has discretion in establishing the price for the specified good or service, and, based on an evaluation of the above indicators,

the Company has determined that it acts as the principal to its customers and thus reports its revenue on a gross basis.

royalty income, 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.

advertising revenue, cost of revenue consists primarily of (i) media placement and platform consumption costs incurred to obtain advertising

inventory and related platform services from third-party digital advertising platforms and (ii) fees paid to third-party cooperating

platforms and service providers used to deliver, operate, measure, and optimize customer advertising campaigns (for example, ad networks,

demand-side platforms, data or measurement providers, tracking and verification services, and other campaign execution tools).

AI services, cost of revenue consists primarily of salaries, amortization charges of intangible assets, and depreciation of property

and equipment, which are directly attributable to the revenue.

The Company generally invoices customers for media and service fees in

connection with performance advertising arrangements.

and marketing expenses

and marketing expenses primarily consist of personnel-related costs, office expenses, travel expenses, rent, utilities, and other marketing-related

and administrative expenses

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.

SPORTS TECHNOLOGIES INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

fees for external legal, accounting, and other consulting services, travel expenses, and other general office and administrative expenses.

Company has adopted ASC 740, Income Taxes, which requires the use of the asset and liability method of accounting for income taxes.

3 unchanged sentences

those temporary differences are expected to be recovered or settled.

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.

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.

to its acquisition by the Company, YYEM was a limited liability company incorporated in Hong Kong.

YYEM is subject to Hong Kong profits

tax on its assessable profits arising in or derived from Hong Kong.

Provision for Hong Kong profits tax is made based on the estimated

assessable profit of YYEM in accordance with applicable tax laws and regulations in Hong Kong.

The tax positions taken by YYEM may be

subject to examination by the Hong Kong Inland Revenue Department, and any adjustments resulting from such examination could affect the

amount of tax expense and liabilities recognized in the financial statements.

Rafael AI is subject to income taxes in Malaysia under

applicable Malaysian tax laws.

Following its acquisition by the Company, Rafael AI’s results are included in the Company’s

consolidated income tax provision from the acquisition date.

Provisional income tax payments made by Rafael AI are recorded as prepaid

income taxes until applied against its final income tax liabilities and do not, by themselves, represent income tax expense.

and contingency

From time to time, the Company may be a party to various

legal actions arising in the ordinary course of business.

The Company accrues costs associated with these matters when they become probable

and the amounts can be reasonably estimated.

Legal costs incurred in connection with loss contingencies are expensed as incurred.

the years ended April 30, 2024 and 2025, 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.

time to time, the Company may be a party to various legal actions arising in the ordinary course of business.

The Company accrues costs

associated with these matters when they become probable and the amounts can be reasonably estimated.

Legal costs incurred in connection

with loss contingencies are expensed as incurred.

For the years ended April 30, 2026 and 2025, 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 flow.

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

3 unchanged sentences

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.

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 (“ASC 220”), 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

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.

per share as the effect is anti-dilutive.

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.

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

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 events and circumstances except those resulting from investments by shareholders and distributions

to shareholders.

operating segment is a component of the Company that engages in business activities from which it may earn revenue and incur expenses

and is identified on the basis of the internal financial reports that are provided to and regularly reviewed by the Company’s chief

operating decision maker in order to allocate resources and assess performance of the segment.

accordance with ASC 280, Segment Reporting, operating segments are defined as components of an enterprise about which separate

financial information is available that is evaluated regularly by the chief operating decision maker (the “CODM”) in deciding

how to allocate resources and in assessing performance.

The Company’s revenue segments have similar economic characteristics, and

they are managed as a single business unit.

The Company uses the “management approach” in determining reportable operating

The management approach considers the internal organization and reporting used by the Company’s CODM for making operating

decisions and assessing performance as the source for determining the Company’s reportable segments.

The Company’s CODM reviews

consolidated results when making decisions about allocating resources and assessing performance of the Company.

The Company has determined

that there is only one reportable operating segment.

accounting pronouncements

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.

SPORTS TECHNOLOGIES INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

In November 2023, the Financial

Accounting Standards Board issued Accounting Standards Update 2023-07 (“ASU 2023-07”).

ASU 2023-07 requires more detailed

information about reportable segments and expenses, including the requirement to disclose qualitative information about factors used

to identify reportable segments and quantitative information about profit and loss measures and significant expense categories.

became effective for public companies in fiscal years beginning after December 15, 2023.

The Company operates as a single reportable

The chief operating decision maker is the Company’s

chief executive officer, who assesses performance based on total revenue, expenses, cash flows, and progress made in the Company’s

ongoing development efforts.

All of the Company’s long-lived assets are located in Hong Kong.

The Company reports revenue by geographical

location as required under the standard.

The Company has analyzed ASU 2023-07 and determined that the required information is presented

within the consolidated financial statements and note disclosures herein.

The Company does not believe that ASU 2023-07 will have a material

impact on the consolidated financial statements.

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.

results of operations, cash flow, or disclosure.

November 2024, the FASB issued ASU 2024-03, Reporting Comprehensive Income—Expense Disaggregation Disclosures, which focuses

on improving disclosure 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, G&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.

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.

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

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 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, or cash flow.

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 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,

position, results of operations, or cash flow.

January 2025, the FASB issued ASU 2025-01, “ Income Statement—Reporting Comprehensive Income—Expense Disaggregation

” 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 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.

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 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

March 2025, the FASB issued ASU 2025-02, Liabilities (Topic 405):

Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin

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 flow.

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

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

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.

SPORTS TECHNOLOGIES INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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 flow.

May 2025, the FASB issued ASU 2025-04, Compensation—Stock Compensation (Topic 718) and Revenue from Contracts with Customers

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 these amendments and does not expect that the adoption of this guidance will have a material impact on its financial

position, results of operations, or cash flow.

July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts

Receivable and Contract Assets .

These 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 flow.

September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other (Topic 350:

Internal-Use Software) .

simplifies the accounting for internal-use software costs and is effective for fiscal years beginning after December 15, 2026.

does not expect adoption of this standard to have a material impact on its financial position, results of operations, or cash flow.

December 2025, FASB issued ASU 2025-11, Interim Reporting (Topic 270:

Improvements to Interim Disclosure Requirements) .

This standard

clarifies disclosure requirements for interim financial statements and is effective for interim periods beginning after December 15,

Early adoption is permitted.

The Company is currently evaluating the impact of this guidance and does not believe that it will

have a material effect on the Company’s financial position, results of operations, or cash flow.

April 2026, the FASB issued ASU 2026-01, which provides guidance on the initial measurement of paid-in-kind dividends on equity-classified

preferred stock.

The amendments require such dividends to be initially measured based on the paid-in-kind dividend rate stated in the

preferred stock agreement.

The amendments are effective for annual reporting periods beginning after December 15, 2026, including interim

periods within those annual reporting periods.

Early adoption is permitted.

The Company does not currently have equity-classified preferred

stock with paid-in-kind dividend provisions and therefore does not expect the adoption of this guidance to have a material effect on

its financial position, results of operations, or cash flow.

May 2026, the FASB issued ASU 2026-02, which establishes accounting and disclosure guidance for environmental credits and environmental

credit obligations.

For public business entities, the amendments are effective for annual reporting periods beginning after December

15, 2027, including interim periods within those annual reporting periods.

Early adoption is permitted.

The Company does not currently

have material environmental credits or environmental credit obligations and does not expect the adoption of this guidance to have a material

effect on its financial position, results of operations, or cash flow.

Company has reviewed other recently issued accounting pronouncements and does not believe that the adoption of such pronouncements is

expected to have a material effect on its consolidated financial statements or related disclosure.

CONCENTRATIONS OF RISK

1 unchanged sentence

of customer risk

each of the years ended April 30, 2025 and 2024, the Company did not derive a significant percentage of total revenue from a few customers.

The Company’s three largest customers (together with their respective affiliates) accounted, in the aggregate, for 44 %,

of total receivables for the year ended April 30, 2025, and 28 %, 22 %, and 17 % for the year ended April 30, 2024, respectively.

The Company’s

largest customer (together with its affiliate) accounted for 44 %

Company’s three largest customers (together with their respective affiliates) accounted for approximately 44 %, 26 %,

of total accounts receivable as of April 30, 2025, respectively, and approximately 44 %, 17 %

of total accounts receivable as of April 30, 2026, respectively.

The Company’s largest customer (together with its affiliate)

accounted for 44 %

of total receivables for the years ended April 30, 2025 and 2026, respectively.

7 unchanged sentences

Company is exposed to credit risk primarily through its cash and cash equivalents, accounts receivable, and revenue concentration.

of April 30, 2025 and 2024, the Company held cash and cash equivalents of $ 54,744 , $ 39,591 , substantially all of which were maintained

of April 30, 2026 and 2025, the Company held cash and cash equivalents of $ 12,780,208 and $ 54,744 , substantially all of which were maintained

with major financial institutions that management believes to have high credit quality.

receivable totaled $ 17,997,211 and $ 15,388,701 as of April 30, 2026 and April 30, 2025 respectively, and are derived from customer transactions.

The Company’s accounts receivable and revenues are concentrated among three major customers, which together accounted for approximately

100 % and 66 % of total accounts receivable and 100 % and 63 % of total revenues for the year ended April 30, 2025 and April 30, 2024 respectively.

The Company’s revenue was concentrated among several major customers.

For the year ended April 30, 2026, three customers each accounted

for more than 10% of total revenue, representing approximately 30 %, 15 %, and 14 % of total revenue, respectively.

For the year ended April

30, 2025, three customers accounted for approximately 42 %, 33 %, and 25 % of total revenue, respectively.

Company monitors the creditworthiness of these customers on an ongoing basis and establishes allowances for expected credit losses when

ACCOUNTS RECEIVABLE

receivable consisted of the following:

OF ACCOUNTS RECEIVABLE

April 30, 2026

April 30, 2025

Accounts receivable

of April 30, 2026 and 2025, all accounts receivable were due from third-party customers.

The provisions for credit losses were nil

as of April 30, 2026 and 2025.

As of the date of this report, $ 14.5 million of the accounts receivable outstanding as of April 30,

2026 had been collected.

of April 30, 2026, the Company had deposits totaling $ 310,576 , consisting primarily 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.

The Company’s

deposits were nil as of April 30, 2025.

The deposits as of April 30, 2026, related to ongoing operations and business expansion activities

and would be applied against future services or refunded in accordance with the terms of the related agreements.

of April 30, 2026, the Company had prepayments totaling $ 1,234,161 including advance payments and rental prepayments under existing lease

These amounts will be recognized as expenses over the applicable periods.

OF PREPAYMENTS

April 30, 2026

April 30, 2025

Advance tax payment in Malaysia

Prepaid rental

Total Prepayments

OTHER RECEIVABLES

of April 30, 2026, the Company had $ 1,341,413 of other receivables, primarily consisting of amounts due from another company for payments

made on such company’s behalf.

Such receivables are non-interest-bearing and are not loan receivables.

The Company expects to collect

the outstanding balance by December 2026.

SCHEDULE OF OTHER RECEIVABLES

April 30, 2026

April 30, 2025

Amount due from third party

Loan interest receivable

CONTRACT COSTS AND LIABILITIES

costs consist of costs to obtain and fulfill a contract.

Costs to fulfill a contract primarily consist of salaries and related costs,

amortization of intangible assets, and depreciation of property and equipment in developing customized “data-to-AI” solutions

for customers where such costs are expected to be recovered under existing contracts.

Contract costs are recognized as a cost of revenue

upon transfer of the customized “data-to-AI” solutions to customers.

movement of contract costs was as follows:

OF CONTRACT COSTS

For the Years Ended April 30,

Contract costs acquired in business combination

Cost of revenue

( 7,283,717 )

Costs accumulation

Company acquired Aberfeldy Holdings Limited (“Aberfeldy”) on January 30, 2026.

In accordance with ASC 805 and ASU 2021-08,

the Company recognized and measured the contract liabilities assumed from Aberfeldy in accordance with ASC 606, Revenue from Contracts

with Customers, as if the Company had originated the contracts at the acquisition date.

The contract liabilities assumed represent

amounts received up front from customers for customized “data-to-AI” solutions for which the underlying services had not

yet been delivered at the acquisition date.

The Company had no contract liabilities from its own operations prior to the acquisition

of Aberfeldy.

the Company delivers the related services to customers, the acquired contract liabilities are reclassified to revenue.

All performance

obligations related to these contract liabilities are expected to be satisfied within one year.

following table provides information about the Company’s contract liabilities arising from contracts with customers.

OF CONTRACT LIABILITIES ARISING FROM CONTRACTS WITH CUSTOMERS

For the Years Ended April 30,

Contract liabilities assumed in business combination

( 6,587,700 )

Collections from customers

Company’s remaining performance obligations represent the amount of the transaction price for which service has not been performed.

As of April 30, 2026, the aggregate amount of the transaction price allocated for the remaining performance obligations amounted to $ 10,802,800 .

The Company expects to recognize revenue of $ 10,802,800 arising from contract liabilities as of April 30, 2026, for the financial

year ending April 30, 2027.

Company previously recorded an investment in Brightstar Technology Group Co., Ltd.

(“Brightstar”), whose shares are listed

on The Stock Exchange of Hong Kong Limited.

During the year ended April 30, 2026, following a reassessment of the investment and the

related accounting treatment, the Company wrote off the carrying amount of the investment and recognized a loss of $ 955,038 .

loss was included in “Loss on write-off of investment” within other income (expense) in the consolidated statements

of operations and comprehensive income/(loss).

As of April 30, 2026, no amount related to the investment in Brightstar was recognized

in the consolidated balance sheet.

DIGITAL ASSETS

Company’s digital assets consisted primarily of USDT, stablecoins designed to maintain a value of approximately one U.S.

As of April 30, 2026 and 2025, the fair value of the Company’s digital assets was $ 19,245,771 and nil , respectively.

Company determined the fair value of its digital assets based on quoted prices in the principal market accessible to the Company as of

the applicable reporting date.

Changes in the fair value of the Company’s digital assets were not material during the years ended

April 30, 2026 and 2025.

Accordingly, the Company recognized no material gains or losses related to its digital assets during the years

INTANGIBLE ASSETS, NET

Company’s intangible assets consisted of the following:

OF INTANGIBLE ASSETS

April 30, 2026

April 30, 2025

Technology rights

Acquired Development costs, gross

Customer relationships, gross

accumulated amortization

( 12,859,256 )

( 4,374,980 )

accumulated impairment

Intangible Assets, net

Intangible Assets

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

of Acquisition of Intangible Asset – Technology Right

Hey Yuan metaverse

Marriage and Love social platform

Shangou secure shopping

Xinjudi creative base system

Safe transaction method

of payment with QR code

Multifunctional network

information security server

Internet of things trade

follow up method

Retail information management

Live scene video automatic

production system

Video chat method and other

storage media

Speech recognition and

other methods

processing method and other storage media

of Amortization of Intangible Asset – Technology Right

The Company’s finite-lived intangible assets consist of development costs and customer

relationships.

These intangible assets are amortized on a straight-line basis over their estimated useful lives of five

The Company reviews finite-lived intangible assets for impairment whenever events or changes in circumstances indicate

that the carrying amount of an asset may not be recoverable.

During the year ended April 30, 2026, the Company recognized an impairment loss of approximately $ 7,532,712 related

to its intangible assets.

This loss was included in “Impairment of intangible assets” in the consolidated statements of operations

and comprehensive income/(loss).

Intangible Assets

January 30, 2026, in connection with the acquisition of Aberfeldy, the Company recognized acquired intangible assets consisting of a

fair value adjustment related to development costs and $ 41,990,714

related to customer relationships.

acquired intangible assets are finite-lived and are amortized on a straight-line basis over an estimated useful life of five years .

expense related to these acquired intangible assets was approximately $ 5,507,352 for the period from the acquisition date through April

of April 30, 2026, the net carrying amount of these acquired intangible assets was $ 91,275,497 .

Note 14, Business Combinations for additional information regarding the acquisition and the allocation of the purchase consideration.

OF BUSINESS COMBINATION FOR ADDITIONAL INFORMATION

For the years ended April 30

PROPERTY AND EQUIPMENT, NET

and equipment, net, consists of the following:

OF PROPERTY AND EQUIPMENT, NET

April 30, 2026

April 30, 2025

Office equipment acquired in business combination

Accumulated depreciation

( 1,428,032 )

value of Intangible Asset – Technology Right as of April 30, 2025

expense for the years ended April 30, 2025 and 2024 was approximately $ 2,976,923 and $ 1,176,923 respectively.

These amounts are included

in cost of revenue in the consolidated statements of operations.

REVENUE – SEGMENT REPORTING BY GEOGRAPHIC REGION

Property and Equipment, net

expense for the years ended April 30, 2026 and 2025 was $ 305,603 and nil , respectively.

The depreciation expense for the year ended April

30, 2026, represents depreciation recognized from the acquisition date of January 30, 2026, through April 30, 2026.

following represents the Company’s revenue segmented by geographic region for the years ended April 30, 2026 and 2025.

OF REVENUE SEGMENT REPORTING BY GEOGRAPHIC REGION

the year ended April 30, 2025

the year ended April 30, 2024

of Revenue Segment Reporting by Geographic Region

the year ended April 30, 2025

the year ended April 30, 2024

Geographic Region

For the year ended

April 30, 2026

For the year ended

April 30, 2025

Geographic Region

For the year ended

April 30, 2026

For the year ended

April 30, 2025

United States of America

Total revenue

ACCOUNTS RECEIVABLE

receivable consisted of the following:

OF ACCOUNTS RECEIVABLE

of April 30, 2025 and 2024, all accounts receivable were due from third-party customers.

The provisions for credit losses were nil for the years ended April 30, 2024 and 2025.

As of April 30, 2025, 60 %

of the accounts receivable balances from customers had been subsequently collected.

SPORTS TECHNOLOGIES INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

This represents a quoted investment in Brightstar

Technology Group Co., Ltd.

as of April 30, 2025 and 2024, 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.

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”.

AMOUNT DUE FROM RELATED PARTY

OF RELATED PARTY TRANSACTIONS

of relationships with related party

with the Company

and director of the Company

with related party

As of April 30, 2025

As of April 30, 2024

Amount due from related party

Amount due to related party

The balances of $ 2,827,528 and $ 2,497,049 as of April

30, 2025 and 2024, 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 $ 775,406 and $ 50,145 as of April 30, 2025 and 2024, respectively,

represent amounts payable to a director for expenses paid on behalf of the Company.

OTHER CURRENT ASSET

current assets are for the use of technology from unrelated third parties.

The other current assets are to be expensed upon the Company using

the technology, which is expected to commence in the next financial year beginning on May 1, 2025.

United Kingdom

following represents the Company’s revenue segmented by revenue stream for the years ended April 30, 2026 and 2025.

OF REVENUE BY STREAM

Revenue Stream

the year ended

April 30, 2026

the year ended

April 30, 2025

Royalty income

BUSINESS COMBINATIONS

of Aberfeldy Holdings Limited

On January 30, 2026, the Company completed the acquisition

of 100 % of the outstanding shares of Aberfeldy Holdings Limited, the holding company that owns Rafael AI, a Malaysia-based provider of data-to-AI end-to-end solutions., for a consideration of $ 140.0 million.

The following table summarizes the provisional purchase

price allocation and fair value of the assets and liabilities acquired in this business acquisition:

OF PURCHASE CONSIDERATION

Book net assets / pre-acquisition equity

Development costs

Customer relationships

Deferred tax liabilities

( 21,624,181 )

Net identifiable assets

Purchase consideration

$ 140,000,000

Included within the intangible assets was a provisional amount of $ 96.8 million

of separately identifiable intangible assets, net comprising development costs and customer relationships, with the additional effect

of a deferred tax liability of $ 21.6 million arising from book and tax basis differences generated upon the acquisition.

The provisional fair value of development costs identified

amounted to $ 54.8 million and was estimated using the Multi-Period Excess Earnings Method.

Significant assumptions included:

(i) expectations

for the profitability and future after-tax cash flows arising from the acquired business;

(ii) an annual obsolescence factor of 14.3%

(iii) an overall discount rate of 16.0% for the acquired business;

and (iv) a risk premium of 0.5% of the development costs.

Development costs are amortized over their expected useful economic life of five years.

The fair value of customer relationships identified

was a provisional amount of $ 42.0 million and was estimated using the Multi-Period Excess Earnings Method.

Significant assumptions included:

(i) expectations for the profitability and future after-tax cash flows arising from the follow-on revenue from customer relationships

that existed on the acquisition date over their estimated lives;

(ii) an overall discount rate of 16.0% for the acquired business;

(iii) a risk premium of 0.5% of the customer relationships.

Customer relationships are being amortized over their expected useful economic

life of five years.

As of the date these consolidated financial statements

are issued, the purchase accounting related to the acquisition is incomplete because the evaluation necessary to assess the fair values

of certain intangible assets acquired is still in process.

As such, the above balances may be adjusted in a future period as the valuation

is finalized, and these adjustments may be material to the consolidated financial statements.

The Company expects to finalize the valuation

as soon as practicable, but not later than one year from the acquisition date.

The goodwill recognized is primarily attributable

to expected synergies from combining the operations of the Company and the acquired business, anticipated future growth opportunities,

the assembled workforce, and other benefits that do not qualify for separate recognition as identifiable assets.

Goodwill is not amortized and is tested for impairment

annually, or more frequently if events or changes in circumstances indicate that it is more likely than not that the fair value of the

applicable reporting unit is less than its carrying amount.

ACCRUED EXPENSES

1 unchanged sentence

SCHEDULE OF ACCRUED EXPENSES

derivative is related to

April 30, 2026

April 30, 2025

Accrued salaries and benefits

Accrued salaries and benefits – management

Accrued signing bonus

3 unchanged sentences

Accrued professional fees

reconciliation between the Company’s actual provision for income taxes and the provision calculated under the Hong Kong statutory

rate is as follows:

OF EFFECTIVE INCOME TAX RATE RECONCILIATION

For the Years Ended

Income before income tax

Tax expense at the Hong Kong profits tax rate of 16.5%

Income tax expenses at statutory rate

Tax effect on non-deductible items

Effect of tax exemption scheme and tax reduction

Income tax expenses

Accrued salaries and benefits – employees

Accrued utilities expenses

AMOUNT DUE FROM RELATED PARTY

of relationships with related party

OF AMOUNT DUE FROM RELATED PARTY

Relationship with the Company

Shareholder and director of the Company

with related party

As of April 30, 2026

As of April 30, 2025

Amount due from related party

Amount due to related party

amount due from related party as of April 30, 2025, represented amounts receivable from Mr.

Zhou under a downside guarantee arrangement

relating to the Company’s investment in Brightstar Technology Group Co., Ltd.

Under the guarantee arrangement, Mr.

Zhou was obligated

to compensate the Company for any decline in the fair value of the investment below the guaranteed amount upon sale of the investment.

Compensation arising under the guarantee arrangement was recognized as shares guarantee income.

The Company recognized shares guarantee

income of approximately $ 427,818 and $ 330,480 for the years ended April 30, 2026 and 2025, respectively.

Company recognized an impairment loss of approximately $ 2,582,505 related to the amount due from the director during the year ended April

As of April 30, 2026, no amount remained due from the related party.

amount due to related party as of April 30, 2025, represented expenses paid by Mr.

Zhou on behalf of the Company.

As of April 30, 2026,

no amount remained due to the related party.

reconciliation between the Company’s actual provision for income taxes and the provision calculated under the Hong Kong and

Malaysia statutory rate are as follows:

Income/(Loss)

Before Income Taxes

Income/(loss)

before income taxes was as follows:

OF INCOME LOSS BEFORE INCOME TAXES

For the Year Ended

April 30, 2026

April 30, 202 5

United States

$ ( 7,182,814 )

( 2,302,780 )

( 11,458,915 )

Loss before income taxes

$ ( 18,641,729 )

for Income Taxes

components of the provision for income taxes were as follows:

SCHEDULE OF COMPONENTS OF PROVISION FOR INCOME TAXES

For the Year Ended

April 30, 2026

For the Year Ended

April 30, 2025

federal and state

( 2,011,773 )

Total current income tax expense

( 2,011,773 )

federal and state

Total deferred income tax benefit

Income tax benefit/(expense)

$ ( 2,011,773 )

the year ended April 30, 2026, the Company reversed $ 3,283,634 of previously recorded income tax payable as a result of overprovison of tax payable.

The reversal was recognized as other income and, accordingly, is included in loss before income taxes.

Income Tax Rate Reconciliation

reconciliation of the income tax benefit computed at the U.S.

federal statutory income tax rate of 21 % to the Company’s actual

income tax expense for the year ended April 30, 2026 is as follows:

SCHEDULE OF EFFECTIVE RATE OF RECONCILIATION OF INCOME

Income tax benefit at U.S.

federal statutory rate

$ ( 3,774,439 )

Foreign tax effects

Tax effect of losses for which no tax benefit was recognized

Income tax benefit

$ ( 1,081,209 )

Company’s effective income tax rate differed from the U.S.

federal statutory income tax rate primarily because no tax benefit was

recognized for losses incurred in certain jurisdictions and the Company’s Malaysian operations are subject to a statutory corporate

income tax rate of 24 %.

Tax Positions

of April 30, 2026 and 2025, the Company had no material unrecognized tax benefits.

The Company recognizes interest and penalties related

to uncertain tax positions, if any, as a component of income tax expense.

SHAREHOLDERS’ EQUITY

Company has 1,000,000,000 shares of common stock authorized with a par value of $ 0.001 per share.

As of April 30, 2025 and 2024, the

Company had 14,563,019 and 1,828,541 shares of common stock issued and outstanding, respectively.

the period from August 1, 2024 through October 31, 2024, the Company issued 3,776,305 shares of common stock for the exercise of warrants.

the period from May 1, 2024 through July 31, 2024, the Company issued 830,608 shares of common stock to true-up shares related to the

February 22, 2022 acquisition of PlaySight Interactive Ltd.

( 10 ), for services rendered ( 214,128 ), for the exercise of warrants ( 505,680 ),

and for fractional shares as part of the 1-for-20 reverse stock split ( 110,790 ).

the period from May 1, 2023 through July 31, 2023, the Company issued 189,718 shares of common stock to brand ambassadors under their

agreements ( 188 ), to vendors in settlement of accounts payable ( 67,500 ), for settlement with former owners of Foundation Sports Systems,

LLC ( 1,350 ), for the exercise of warrants ( 27,000 ), and to satisfy the profit guarantee on a note ( 93,680 ).

SPORTS TECHNOLOGIES INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

the period from August 1, 2023 through October 31, 2023, the Company issued 1,844,506 shares of common stock for services rendered ( 13,707 ),

for settlement with former owners of Flixsense Pty, Ltd.

and as remaining contingent consideration ( 1,964 ), for the exercise of warrants

( 1,708,152 ), and to satisfy the profit guarantee on a note ( 85,000 ).

In addition, we issued 35,683 to satisfy our requirement under the

1-for-40 reverse stock split that occurred in this period.

the period November 1, 2024 through April 30, 2025, the Company issued 8,127,572 shares of common stock to complete the acquisition of

Stock Issuances

Company is authorized to issue 1,000,000,000 shares of common stock, par value $ 0.001 per share.

May 18, 2026, and August 17, 2026, the Company effected reverse stock splits of its common stock at ratios of 1-for-40 and 1-for-20 ,

respectively.

The reverse stock splits did not change the par value of the Company’s common stock or the number of authorized shares.

All share and per-share amounts presented in these consolidated financial statements and accompanying notes have been retrospectively

adjusted to reflect the reverse stock splits for all periods presented, unless otherwise indicated.

giving retrospective effect to the reverse stock splits, the Company had approximately 52,678 and 364 shares of common stock issued and

outstanding as of April 30, 2026 and 2025, respectively.

SCHEDULE OF RETROSPECTIVE EFFECT TO REVERSE STOCK SPLITS

Split-Adjusted Shares Issued

Private placement

At-the-market offerings

Exercise of warrants / other common stock issuances

Registered direct offering

Share allotment

$ 197,702,960

Company’s common stock outstanding reconciles as follows:

SCHEDULE OF COMMON STOCK OUTSTANDING RECONCILES

Shares outstanding as of April 30, 2025, as retrospectively adjusted

Shares issued during the year ended April 30, 2026, as retrospectively adjusted

Shares outstanding as of April 30, 2026

the time of the respective transactions and prior to giving effect to the subsequent reverse stock splits:

private placement consisted of 20,000,000 units at $ 0.23 per unit and generated gross proceeds

of $ 4,600,000 ;

Company sold common stock pursuant to its at-the-market offering program and generated aggregate

gross proceeds of approximately $ 172.6 million;

registered direct offering consisted of 15,382,378 shares at $ 1.02 per share and generated

net proceeds of $ 14,773,528 ;

Company issued 4,215,000 shares of common stock at $ 1.37 per share for proceeds of $ 5,774,550 .

historical share and per-share amounts in the preceding paragraph are presented on the basis applicable at the time of the respective

transactions and have not been adjusted for subsequent reverse stock splits.

Stock Split during the Year

October 27, 2025, the Company effected a 1-for-50 reverse stock split of its common stock.

The reverse stock split reduced the number

of issued and outstanding shares of common stock without changing the par value per share or the number of authorized shares.

shares were treated in accordance with the terms of the applicable reverse stock split.

share and per-share amounts in these notes and the accompanying consolidated financial statements, unless otherwise indicated, have been retrospectively adjusted

for this reverse stock split and for the reverse stock splits that occurred subsequent to the financial year end.

(See Note 20, Subsequent

CONTINGENCIES AND COMMITMENTS

Company is subject to legal proceedings and regulatory actions in the ordinary course of business.

2 unchanged sentences

however, the Company does not anticipate that the final outcome of any such matter will have a material

adverse effect on the Company’s consolidated financial position, cash flows, or results of operations taken as a whole.

adverse effect on the Company’s consolidated financial position, results of operations, or cash flow, taken as a whole.

30, 2026, the Company is not a party to any material legal or administrative proceedings.

SUBSEQUENT EVENTS

June 30, 2025, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with certain

investors (the “Investors”), providing for the private placement (“Private Placement”) of 20,000,000

units (“Unit”), each unit consisting of one (1)

share of common stock, par value $ 0.001

per share (the “Common Stock”) and two warrants

(“Warrants,” and the shares of Common Stock underlying the Warrants, the “Warrant Shares”), both of such Warrants

with identical terms.

Each Unit were offered at a price of $ 0.23

per Unit and each Warrant has a five 5 -year

exercise period, with an exercise price of $ 0.89 (“Exercise Price”).

The total gross proceeds from the Private Placement

without taking into account any exercise of the Warrants will be $ 4,600,000 .

May 15, 2026, the Company filed a Certificate of Amendment to the Certificate of Incorporation of the Company, as amended, with the Secretary

of State of the State of Delaware, to effect a reverse stock split of the Common Stock at a ratio of 1-for-40 (the “May Reverse

Split”), which became effective on May 18, 2026.

forty shares of the Company’s issued and outstanding Common Stock were automatically combined into one issued and outstanding share

of Common Stock, without any change in par value per share.

No fractional shares were issued in connection with the May Reverse Split.

Stockholders at the participant level of the Depository Trust Company who otherwise would have been entitled to a fraction of one share

as a result of the May Reverse Split instead received one whole share of Common Stock in lieu of such fractional share.

The May Reverse

Split did not otherwise modify any rights or preferences of the Company’s Common Stock.

The Common Stock began trading on a split-adjusted

basis on the Nasdaq Capital Market at market open on May 18, 2026.

July 30, 2026, after the end of fiscal year 2026, the Company completed the acquisition of 97% of Hongkong Best Life Trade Co.,

Limited (“Best Life”), an international trading company, by paying $ 30

million in USDT toward the $ 50

million base purchase price, with the balance due within 90 days and earn-outs payable if Best Life achieves certain performance

Best Life is a cross-border consumer-goods distribution and e-commerce business, leveraging direct brand sourcing,

import expertise, bonded warehousing, platform operations, offline retail access, and select private-label development to sell

Japanese and other international consumer products across China and other overseas markets.

It has in place business relationships

with prominent brand owners and manufacturers upstream and with e-commerce platforms, supermarkets, specialty retailers, and online

resellers downstream.

While Best Life historically has focused on Asia, it has recently launched an international expansion program

to the UK, the U.S., Canada, and New Zealand.

August 15, 2026, the Company filed a Certificate of Amendment to the Certificate of Incorporation of the Company with the Secretary of

State of the State of Delaware to effect a reverse stock split of the Common Stock at a ratio of 1-for-20 (the “August Reverse

Split”), which became effective on August 17, 2026.

twenty shares of the Company’s issued and outstanding Common Stock were automatically combined into one issued and outstanding

share of Common Stock, without any change in par value per share.

No fractional shares were issued in connection with the August Reverse

Stockholders at the participant level of the Depository Trust Company who would have otherwise been entitled to a fraction of

one share as a result of the August Reverse Split instead received one whole share of Common Stock in lieu of such fractional share.

The August Reverse Split did not otherwise modify any rights or preferences of the Company’s Common Stock.

The Common Stock began

trading on a split-adjusted basis on the Nasdaq Capital Market at market open on August 17, 2026.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

March 24, 2025, the Board of Directors and the audit committee of Connexa Sports Technologies Inc.

(the “Company”) approved

the engagement of Enrome LLP (“Enrome”) as the Company’s independent registered public accounting firm for the fiscal

year ended April 30, 2025 and dismissed Bush & Associates CPA (“B&A”) as the Company’s independent registered

public accounting firm.

the engagement of Enrome, B&A was the Company’s auditor, although it had not yet audited any of the Company’s consolidated

financial statements, as the Company’s previous auditor, Olayinka Oyebola & Co., had audited the Company’s consolidated

financial statements for the fiscal years ended April 30, 2023 and 2024.

The Company’s quarterly report on Form 10-Q filed on March

24, 2025 was filed after the Board’s decision to engage Enrome.

The substitution of Enrome for B&A was to address challenges

of the Company and B&A communicating in an effective and timely manner, given B&A’s location in Henderson, Nevada, and

the Company’s management being based in Hong Kong.

have been no disagreements with B&A, whether or not resolved, on any matter of accounting principles or practices, financial statement

disclosure, or auditing scope or procedure, which, if not resolved to the satisfaction of B&A, would have caused B&A to make

reference to the subject matter of the disagreement in connection with its reports;

and there were no reportable events (as that term

is described in Item 304(a)(1)(v) of Regulation S-K) during the period B&A was engaged as the Company’s auditor.

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data