Connexa Sports Technologies Inc. (Nasdaq:CNXA)
today announced that, subject to shareholder approval, it has
signed definitive share purchase and share exchange agreements to
acquire a 70% stake in Yuanyu Enterprise Management Co., Limited
(YYEM) for a combined value of $56 million. The transaction will be
carried out in two steps, with an initial 20% stake having been
completed against payment of $16.5 million in cash, and the
residual 50% stake completing on the closing date through the
issuance of common stock. As part of this deal structure, there
will be a change-in-control of Connexa following the appointment of
a new board of directors, subsequent to which Slinger Bag Americas
will be divested to a newly established entity.
“Over the past year, the Connexa board and
management have been reviewing the company’s potential to directly
create meaningful enhancements in shareholder value, especially
considering the on-going challenges and costs faced by the company
while operating on Nasdaq and, as a result, the Board concluded
that this acquisition represented a clear short-term opportunity to
deliver shareholder value and, as such, it was clearly in the
interest of all shareholders to conclude this acquisition of a
majority stake in YYEM, accept a change-in-control of Connexa, as
well as divest the Slinger Bag business to a newly established
entity,” commented Mike Ballardie, CEO of Connexa.
“Having come to understand the emerging business
sector in which YYEM operates, and in realizing the scope of their
growth opportunity, which will be delivered through their plans for
organic Asia expansion coupled with an aggressive international
licensing program, I am in no doubt that YYEM will provide all
existing Connexa shareholders with an associated opportunity to
share in their success,” concluded Ballardie.
Established in November 2021, YYEM is based in
Hong Kong and operates in the emerging love & marriage market
sector, where it owns significant proprietary intellectual property
(IP) unique to this business sector, covering its online presence
and underpinning its matchmaker operations. Its matchmaker AI
application has the ability to integrate with existing Big Data
models and other larger AI models, such as Huawei Pangu 3, a
feature designed to operationalize its AI and hone its technologies
to create significant business value. Additionally, YYEM owns six
technologies related to the metaverse and nine AI matchmaking
patents, which together enable access to both Augmented Reality
(AR) and Extended Reality (XR), further enhancing its future
revenue growth potential.
Through interrogating and analyzing available
Big Data, the YYEM IP supports the identification of its target
subscriber base, while also providing subscriber profile analyses
and integrating seamlessly with YYEM’s patented matchmaker AI
platform — all of which combine to deliver YYEM’s unique
matchmaking events and help subscribers to find successful life
partnerships.
YYEM has already proven its business model in
the China market, where its licensee partner operates 200
Hand-in-Hand branded retail stores across 40 cities. One-time
subscriber matchmaker fees, of amounts as high as $1,500, provide
the subscriber with a bespoke matchmaking service delivered through
face-to-face interactions across their owned stores. YYEM’s retail
operation sets it apart from its prominent competitors, with
storefronts expected to grow to 1,000 in 2024 and to 10,000 within
three years, increasing the registered subscriber base to over 3
million in 2024 and, in turn, rapidly growing the revenue base.
YYEM collected royalties of around $1.9M in its
year ending January 31, 2024 and has already established license
agreements covering the UK/Europe, South East Asia and Sub-Saharan
Africa, with cumulative contracted revenue over the next three
years in excess of $70 million.
Mr. Zhou, Chairman of YYEM, commented, “I am
delighted to have reached this agreement to merge our love &
marriage business into Connexa and, ultimately, following the
shareholder vote process, become a Nasdaq-listed company. My vision
is to establish YYEM as a global leader in matching single adults
for marriage and lifelong partnerships, the world over, through our
unique matchmaker business model combining on-line activities with
retail store operations. Our current China license partner has a
successful and proven business model that provides a template for
future markets and licensees to follow. I am also excited to have
the opportunity to expand the YYEM footprint globally to drive
revenue growth that in turn will deliver significant improvements
in value for all current and future Connexa shareholders.”
About Connexa Sports Technologies:
Connexa Sports is a leading connected
sports company delivering products, technologies, and
Sport-as-a-Service across a range of sport verticals. Connexa’s
mission is to reinvent sports through technological innovation
driven by an unwavering focus on today’s sports consumer.
CNXA Contact
Information:investors@connexasports.comwww.connexasports.com
About Yuanyu Enterprise Management Co.,
Limited
Yuanyu Enterprise Management Co., Limited (YYEM)
operates across the rapidly emerging love & marriage sector.
YYEM owns numerous patents, technologies and algorithms that drive
its big data and matchmaking analyses, deriving its current
revenues from royalties. YYEM has multiple licensing agreements in
place for non-Asia regions and, in addition, plans to open
subsidiary companies in core Asia markets.
YYEM Contact Information:
info@yuanyuenterprise.comwww.yuanyuenterprise.com
Additional Information and Where to Find
It
In connection with the proposed Share Exchange
Transaction, the Company will prepare a proxy statement to be filed
with the SEC. When completed, a definitive proxy statement and a
form of proxy will be mailed to the stockholders of the Company.
THE COMPANY’S STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT
REGARDING THE PROPOSED SHARE EXCHANGE TRANSACTIONS BECAUSE IT WILL
CONTAIN IMPORTANT INFORMATION. The Company’s stockholders will be
able to obtain, without charge, a copy of the proxy statement (when
available) and other relevant documents filed with the SEC from the
SEC’s website at www.sec.gov. The Company’s stockholders will also
be able to obtain, without charge, a copy of the proxy statement
(when available) and other relevant documents from the Company’s
website at www.connexasports.com or by written request to the
Company at 2709 N. Rolling Road, Suite 138 Windsor Mill, MD
21244.
Forward-Looking Statements
This Current Report on Form 8-K contains
forward-looking statements. Statements that are not historical
facts, including statements about beliefs or expectations, are
forward-looking statements. These statements are based on plans,
estimates, expectations and projections at the time the statements
are made, and readers should not place undue reliance on them. In
some cases, readers can identify forward-looking statements by the
use of forward-looking terms such as “may,” “will,” “should,”
“expect,” “opportunity,” “intend,” “plan,” “anticipate,” “believe,”
“estimate,” “predict,” “potential,” or “continue,” or the negative
of these terms or other comparable terms. Forward-looking
statements involve inherent risks and uncertainties and readers are
cautioned that a number of important factors could cause actual
results to differ materially from those contained in any such
forward-looking statements. Factors that could cause actual results
to differ materially from those described in this press release
include, among others:
- uncertainties as to the completion
of the Share Exchange Transaction and the separation agreement,
including the risk that one or more of the transactions may involve
unexpected costs, liabilities or delays;
- the risks associated with the
Company’s relatively low public float, which may result in the
Common Stock experiencing significant price volatility;
- the possibility that competing
transaction proposals may be made;
- the effects that the announcement,
pendency or consummation of the proposed Share Exchange Transaction
and the separation agreement may have on the Company and its
current or future business and on the price of the Common
Stock;
- the possibility that various
closing conditions for the Share Exchange Agreement and the
separation agreement may not be satisfied or waived, or any other
required consents or approvals may not be obtained within the
expected timeframe, on the expected terms, or at all, including the
possibility that the Company may fail to obtain stockholder
approval for the transactions contemplated by the Share Exchange
Agreement;
- the effects that a termination of
the Shre Exchange Agreement may have on the Company, including the
risk that the price of the Common Stock may decline significantly
if the Share Exchange Transaction is not completed;
- uncertainties regarding the
Company’s focus, strategic plans and other management actions;
- the risks associated with potential
litigation related to the transactions contemplated by the Share
Exchange Agreement or related to any possible subsequent financing
transactions or acquisitions or investments;
- uncertainties regarding general
economic, business, competitive, legal, regulatory, tax and
geopolitical conditions;
- and other factors, including those
set forth in the Company’s filings with the U.S. Securities and
Exchange Commission, including its Annual Report on Form 10-K for
the fiscal year ended April 30, 2023 and subsequent Quarterly
Reports on Form 10-Q.
Forward-looking statements included in this
report speak only as of the date each statement is made. Neither
the Company nor any person undertakes any obligation to update any
of these statements in light of new information or future events,
except to the extent required by applicable law.
Connexa Sports Technolog... (NASDAQ:CNXA)
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Connexa Sports Technolog... (NASDAQ:CNXA)
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