WINDSOR MILLS, MD - Connexa Sports Technologies Inc. (NASDAQ:YYAI), known for its Slinger Bag and Gameface AI brands, has announced its plan to execute a 1-for-20 reverse stock split. The move, subject to approval by Nasdaq, is slated for the morning of June 28, 2024, and aims to address the company's compliance with Nasdaq's minimum bid price requirement.
The decision follows a Delisting Notice received on June 11, 2024, due to the company's failure to meet the minimum bid price. Connexa's CEO, Mike Ballardie, expressed that the reverse split should rectify this issue, pending Nasdaq's green light. This strategic step was approved by shareholders at the annual general meeting on May 15, 2024.
Concurrently, Connexa is undergoing a change in control, with Yuanyu Enterprise Management poised to assume ownership. This transition will see the Slinger Bag business become privately held. Yuanyu Enterprise Management operates in the love and marriage sector, leveraging big data and matchmaking technologies.
The reverse stock split is a critical component of Connexa's efforts to maintain its listing on Nasdaq and to stabilize its market position. Shareholders and interested parties can find more information about Connexa Sports Technologies and its future endeavors on the company's website.
These developments are part of Connexa's broader strategic plans, which are detailed in documents filed with the SEC and available for public review. The company cautions that forward-looking statements involve risks and uncertainties, and actual results may differ materially.
This news is based on a press release statement and reflects the company's current plans regarding its stock compliance and business restructuring.
In other recent news, Connexa Sports Technologies Inc. has gained shareholder approval for a significant corporate restructuring, including the acquisition of Yuanyu Enterprise Management Co., Limited (YYEM) and a subsequent change-in-control.
This strategic move, pending Nasdaq's consent, will result in YYEM's operations becoming the new core operations of Connexa. Moreover, the transaction will involve the divestiture of all Slinger Bag assets and liabilities to a privately held entity, indicating a major shift in Connexa's business focus.
In a related development, Connexa announced its plans to acquire a 70% interest in YYEM, a company specializing in matchmaking services. The acquisition is valued at $56 million and is part of Connexa's strategy to expand into the emerging love & marriage sector. The deal will proceed in two stages, with the initial 20% stake acquired for $16.5 million in cash, and the remaining 50% to be obtained through the issuance of common stock.
YYEM, established in November 2021 and based in Hong Kong, operates in the love & marriage market and holds numerous patents and technologies. These technologies have allowed YYEM to establish a significant presence in China, where it has partnered with a licensee to operate 200 Hand-in-Hand branded retail stores.
For the fiscal year ending January 31, 2024, YYEM reported royalty revenues of approximately $1.9 million and has secured licensing agreements projected to generate over $70 million in the next three years.
InvestingPro Insights
As Connexa Sports Technologies Inc. (NASDAQ:YYAI) embarks on a critical phase with its planned 1-for-20 reverse stock split, investors are closely monitoring the company's financial health and market performance. According to InvestingPro, Connexa holds a market capitalization of $23.29M, reflecting its size within the industry. Despite recent challenges, the company's stock has experienced a significant price uptick with a 193.55% return over the last three months and an even more impressive 240.46% increase over the past six months.
However, it is essential to note that the company has faced a decline in revenue, with a -15.93% change over the last twelve months as of Q3 2024. This decline is juxtaposed with a quarterly revenue growth of 28.88% in Q3 2024, indicating some degree of volatility in the company's revenue streams. Moreover, Connexa's stock trades at a high Price / Book multiple of 5.76, which could be a point of consideration for value-focused investors.
InvestingPro Tips highlight the company's financial position, noting that Connexa holds more cash than debt on its balance sheet, which may be a reassuring factor for investors considering the company's liquidity and financial resilience. On the flip side, the stock has been characterized by significant price volatility and has seen a notable decline over the last year, with a -90.71% total return, underscoring the risks associated with investing in the stock.
For investors seeking a deeper dive into Connexa's financials and performance metrics, additional tips are available on InvestingPro. There are 11 more InvestingPro Tips that can provide further insights into the company's valuation, profitability, and stock performance trends. To access these valuable tips and enhance your investment strategy, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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