WINDSOR MILLS, MD - Connexa Sports Technologies Inc. (NASDAQ:YYAI) has received approval from Nasdaq to continue its listing after securing an additional 50% ownership in Yuanyu Enterprise Management Limited (YYEM), a Hong Kong-based company specializing in the Love and Marriage sector. This acquisition raises Connexa's stake in YYEM to 70%, with the company's shares set to begin trading on Nasdaq under the existing ticker symbol YYAI at market open on November 22, 2024.
The deal, already backed by Connexa's shareholders, will result in a change of control, the appointment of new directors, and a spin-off of Connexa's Slinger Bag business. Connexa's CEO, Mike Ballardie, stated that the approval from Nasdaq confirms the strategic direction chosen by the company to enhance shareholder value through the acquisition of YYEM.
YYEM, established in November 2021, operates in the emerging Love and Marriage market sector and holds significant proprietary intellectual property, including six metaverse technologies and five AI matchmaking patents. These innovations allow YYEM to offer augmented and extended reality experiences, enhancing its growth potential. YYEM's AI technology is also designed to integrate with Big Data models, contributing to its business value by improving the effectiveness of matchmaking services.
The company has already demonstrated the viability of its business model, with one licensee partner incorporating YYEM's technology into their network of retail stores—a network expected to expand in the next two years. Mr. Zhou, Chairman of YYEM, expressed enthusiasm about the Nasdaq listing and the prospects it opens up for growth within the global Love and Marriage sector.
Completion of the acquisition remains subject to other closing conditions, and Connexa will provide further public updates regarding the transaction's finalization.
Connexa Sports Technologies is recognized as a leading connected sports company, delivering products and services across various sports verticals with a commitment to reinventing sports through technological innovation.
This news is based on a press release statement.
In other recent news, Connexa Sports Technologies Inc. announced a change in its auditor from Olayinka Oyebola & Co to Bush & Associates CPA, following charges against the former by the U.S. Securities and Exchange Commission. The company also secured a multi-million dollar exclusive licensing agreement with Guofu Enterprise Management Co., through its subsidiary, Yuanyu Enterprise Management Co. (YYEM). This deal is expected to bring in over $30 million in royalties by the end of 2026.
In addition, Connexa's stake in YYEM, a company specializing in AI matchmaking technology, has aided in the acquisition of an exclusive licensing agreement with UK-based Eternity Technology Limited. This agreement is projected to yield over $19 million in license income for YYEM by December 2026.
Connexa has regained compliance with Nasdaq listing requirements, following a 1-for-20 reverse stock split. The company also announced significant corporate restructuring, including the acquisition of YYEM. 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. These are among the recent developments at Connexa.
InvestingPro Insights
As Connexa Sports Technologies Inc. (NASDAQ:YYAI) prepares for its strategic shift with the acquisition of YYEM, investors should consider some key financial metrics and insights provided by InvestingPro.
According to InvestingPro data, YYAI's market capitalization stands at $34.04 million, reflecting its current position as a small-cap company. This valuation could see significant changes as the company integrates YYEM's Love and Marriage sector operations and intellectual property.
An InvestingPro Tip highlights that YYAI holds more cash than debt on its balance sheet, which could provide financial flexibility as it navigates this transition and potential growth opportunities in the new market sector. This strong cash position aligns with the company's strategic moves and could support future investments in YYEM's AI and metaverse technologies.
Another relevant InvestingPro Tip notes that YYAI has seen a significant return over the last week, with a 1-week price total return of 8.62%. This recent uptick might reflect market optimism about the Nasdaq approval and the upcoming changes in the company's business model.
It's worth noting that InvestingPro offers 8 additional tips for YYAI, providing a more comprehensive analysis for investors interested in deeper insights into the company's financial health and market performance.
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