Connexa Shareholders Approve Transaction to Acquire Yuanyu Enterprise Management
Connexa Sports Technologies (Nasdaq: YYAI) announced that its shareholders have approved the acquisition of Yuanyu Enterprise Management (YYEM) and a change-of-control transaction involving Slinger Bag. The approval was given at the AGM held on May 15, 2024. The completion of these transactions is pending Nasdaq approval. Post-approval, Connexa will issue approximately 162 million shares of common stock to Hongyu Zhou, the sole shareholder of YYEM, giving him a controlling interest in Connexa. Subsequently, Connexa will divest all Slinger Bag assets and liabilities to a privately held company. CEO Mike Ballardie expressed gratitude to the shareholders for their support.
- Shareholders approved the acquisition of Yuanyu Enterprise Management.
- The transaction allows for a controlling interest by Hongyu Zhou, potentially bringing new strategic direction.
- The deal involves issuing 162 million shares, potentially increasing market liquidity.
- Divesting Slinger Bag assets could streamline Connexa's focus and reduce liabilities.
- The transaction is pending Nasdaq approval, which introduces uncertainty.
- Issuing 162 million shares could lead to significant dilution of existing shareholders’ equity.
- Change-of-control might bring strategic risks and management challenges.
- Divesting Slinger Bag assets could mean loss of revenue streams associated with the brand.
The acquisition of Yuanyu Enterprise Management Co., Limited (YYEM) by Connexa Sports Technologies is a significant development. Investors should note that acquiring a new company often involves substantial costs and strategic shifts. Connexa's issuance of approximately 162 million shares to Hongyu Zhou, thereby giving him a controlling interest, dilutes the value of existing shares. This could lead to a short-term decline in share price.
However, acquiring YYEM could provide Connexa with new growth opportunities and markets. It is vital to evaluate YYEM’s financial health, profitability and potential synergies with Connexa's existing operations to gauge the long-term benefits. If YYEM is financially robust and complements Connexa's business, this transaction could enhance shareholder value over time.
Additionally, the divestiture of Slinger Bag assets and liabilities to a privately held company removes a segment that may have been underperforming or non-core to Connexa's strategic direction. This can lead to a more focused business structure and potentially higher profitability in the future.
This transaction introduces a change of control for Connexa, which has significant legal and regulatory implications. The approval from Nasdaq is a critical step, as the exchange must ensure that all regulatory and compliance requirements are met. Investors should monitor this approval process closely.
Moreover, the change of control to Hongyu Zhou raises corporate governance questions. The transition needs to be smooth to maintain stakeholder confidence. Any lapses in governance or regulatory compliance could result in legal challenges or penalties. It's also important to consider the legal aspects of divesting Slinger Bag assets and liabilities. Proper due diligence must be conducted to avoid any potential liabilities transferring back to Connexa.
The acquisition strategy signals Connexa’s intention to expand and potentially diversify its market reach. Investors should evaluate how YYEM fits within the broader market landscape and Connexa's strategic objectives. If YYEM operates in a high-growth sector or offers unique capabilities, this acquisition could position Connexa favorably in its industry.
Furthermore, with the removal of Slinger Bag from Connexa’s portfolio, it will be important to assess how this divestiture impacts the company's market positioning. If Slinger Bag was a significant revenue source, Connexa must ensure they can replace this revenue stream effectively. Conversely, if Slinger Bag was a drag on resources, its divestiture could streamline operations and improve market competitiveness.
- A change-of-control and spin-off of Slinger Bag
also receive shareholder consent - The close of these transactions remains subject to Nasdaq Approval
Windsor Mills, MD, May 17, 2024 (GLOBE NEWSWIRE) -- Connexa Sports Technologies Inc. (Nasdaq: YYAI), the owner of Slinger Bag and Gameface AI, announced that at its AGM, held on May 15, the company’s shareholders approved the acquisition of Yuanyu Enterprise Management Co., Limited (“YYEM”). Pending Nasdaq approval of the related change of control, Hongyu Zhou, the sole shareholder of YYEM, will own a controlling interest in Connexa.
“Following our recent announcement to acquire
“On receiving the approval of the company’s listing application from Nasdaq, Connexa will proceed to issue approximately 162 million shares of common stock to Hongyu Zhou, the sole shareholder of YYEM, to complete the transaction, leaving him with a controlling interest in Connexa. On the close of this transaction, Mr. Zhou will effect, and Connexa will accept, a change-of-control of Connexa, with all Slinger Bag assets and liabilities being divested to a privately held company,” concluded Ballardie.
Press release ends
More detailed information on Connexa Sports Technologies and Slinger Bag can be found at www.connexasports.com
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.com
www.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.com
www.yuanyuenterprise.com
Additional Information and Where to Find It
The Company’s stockholders will be able to obtain relevant documents filed with the SEC from the SEC’s website at www.sec.gov or from the Company’s website at https://www.connexasports.com/investor-relations/
Forward-Looking Statements
This press release 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 Nasdaq approval, the change of control and the share exchange 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 company’s 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 acquisition of YYEM and the spin-off of the Slinger Bag business 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 acquisition of YYEM and the spin-off of the Slinger Bag business 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;
- the effects that a termination or suspension of the acquisition of YYEM and the spin-off of the Slinger Bag business may have on the company, including the risk that the price of the common stock may decline significantly if the acquisition of YYEM and the spin-off of the Slinger Bag business 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 acquisition of YYEM and the spin-off of the Slinger Bag business 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.
FAQ
What was approved in Connexa's AGM on May 15, 2024?
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