Connexa Sports Reports Material Agreement, Unregistered Equity Sales, Control Change

TL;DR

**Connexa Sports just sold a bunch of stock and changed control, expect potential dilution and strategic shifts.**

AI Summary

Connexa Sports Technologies Inc. filed an 8-K on January 24, 2024, reporting events from January 19, 2024, including entering into a material definitive agreement and unregistered sales of equity securities. This filing also indicates a change in control of the registrant. For investors, this matters because significant equity sales and a change in control can dilute existing shareholders and signal a major shift in the company's strategic direction or ownership structure, potentially impacting future stock performance.

Why It Matters

This filing signals significant changes in Connexa Sports' ownership and financial structure, which could lead to dilution for current shareholders and a new strategic direction for the company.

Risk Assessment

Risk Level: high — Unregistered sales of equity securities and a change in control often lead to significant dilution for existing shareholders and introduce uncertainty about future company direction.

Analyst Insight

A smart investor would carefully evaluate the terms of the material definitive agreement and the impact of the unregistered equity sales and change in control on share value and future company strategy before making any investment decisions.

Key Players & Entities

• Connexa Sports Technologies Inc. (company) — the registrant filing the 8-K
• January 19, 2024 (date) — date of the earliest event reported
• January 24, 2024 (date) — date the 8-K was filed

Forward-Looking Statements

• The unregistered sales of equity securities will lead to significant dilution for existing shareholders. (Connexa Sports Technologies Inc. shareholders) — high confidence, target: Q1 2024
• The change in control will result in a new strategic direction or management team for the company. (Connexa Sports Technologies Inc.) — medium confidence, target: Q2 2024

FAQ

Key Financial Figures

• $0.001 — nge on which registered Common Stock, $0.001 par value CNXA Nasdaq Capital Mark
• $0.20 — ares ") at a combined purchase price of $0.20 per share of the common stock for an ag
• $16.5 million — or an aggregate amount of approximately $16.5 million (the " Offering "). The Pre-Funded Warr
• $0.00001 — nded Warrants have an exercise price of $0.00001 per share of common stock and are exerc
• $5.5 million — whom acquired for a cash investment of $5.5 million (i) 19.99% of the Company's issued and

Filing Documents

• form8-k.htm (8-K) — 49KB
• ex4-1.htm (EX-4.1) — 86KB
• ex10-1.htm (EX-10.1) — 196KB
• ex10-2.htm (EX-10.2) — 7KB
• ex10-3.htm (EX-10.3) — 68KB
• ex10-3_001.jpg (GRAPHIC) — 5KB
• ex10-3_002.jpg (GRAPHIC) — 5KB
• ex10-3_003.jpg (GRAPHIC) — 5KB
• ex10-3_004.jpg (GRAPHIC) — 5KB
• ex10-3_005.jpg (GRAPHIC) — 5KB
• 0001493152-24-003556.txt ( ) — 681KB
• cnxa-20240119.xsd (EX-101.SCH) — 3KB
• cnxa-20240119_lab.xml (EX-101.LAB) — 33KB
• cnxa-20240119_pre.xml (EX-101.PRE) — 22KB
• form8-k_htm.xml (XML) — 3KB

From the Filing

UNITED SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934 January 19, 2024 Date of Report (Date of earliest event reported) CONNEXA SPORTS TECHNOLOGIES INC. (Exact name of registrant as specified in its charter) Delaware 1-41423 61-1789640 (State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Identification No.) 2709 N. Rolling Road , Suite 138 Windsor Mill , MD 21244 (Address of principal executive offices, including Zip Code) (443) 407-7564 (Registrant's telephone number, including area code) N/A (Former name or former address, if changed since last report.) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, $0.001 par value CNXA Nasdaq Capital Market Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (240.12b-2 of this chapter). Emerging growth company If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. Item 1.01 Entry into a Material Definitive Agreement Securities Purchase Agreements On January 19, 2024, Connexa Sports Technologies Inc. (the " Company ") entered into securities purchase agreements (the " Securities Purchase Agreement ") with three investors (the " Investors ") for the issuance and sale to each investor of (i) 2,330,200 shares of common stock (the " Common Stock Shares ") and (ii) pre-funded warrants (the " Pre-Funded Warrants ") to purchase an aggregate of 25,169,800 shares of its common stock (the " Pre-funded Warrant Shares ", together with the Common Stock Shares, the " Shares ") at a combined purchase price of $0.20 per share of the common stock for an aggregate amount of approximately $16.5 million (the " Offering "). The Pre-Funded Warrants have an exercise price of $0.00001 per share of common stock and are exercisable beginning on the date stockholder approval is received and effective allowing exercisability of Pre-Funded Warrants under Nasdaq rules until the Pre-Funded Warrants are exercised in full. The aggregate number of Common Stock Shares to be issued is 6,990,600 and the aggregate number of Pre-Funded Warrant Shares is 75,509,400. Copies of the Securities Purchase Agreement and Pre-Funded Warrants are included as exhibits to this current report on Form 8-K. In connection with the Securities Purchase Agreement, the Company and the Investors entered into voting rights agreements (the " Voting Rights Agreement "), pursuant to which the Investors have agreed to vote in favor of any resolution presented to the shareholders of the Company to approve (i) the issuance of the Pre-Funded Warrant Shares which will allow the issuance to each of the three investors of more than 19.99% of the number of shares of common stock of the Company outstanding on the date of closing pursuant to the Securities Purchase Agreements (which will be considered a change in control pursuant to Nasdaq Listing Rule 5635(b)) and the other agreements entered into in connection therewith or as otherwise may be required by the applicable rules and regulations of the Nasdaq Stock Market and (ii) increasing the shares available to be issued pursuant to the Company's incentive plan by up to 20 million shares of common stock. The description of the terms of the Securities Purchase Agreement, Pre-Funded Warrants, and Voting Rights Agreement are not intended to be complete and are qualified in its entirety by reference to such exhibits. Consulting Agreement On January 21, 2024, the Company entered into a consulting agreement with Smartsports LLC (" Smartsports ") pursuant to which Smartsports has agreed to provide the Company certain consulting services in exchange for 200,000 shares of its common stock (the " Smartsports Shares ") which the Company has agreed to use its commercially reasonable efforts to prepare and file with the Securities Exchange Commission a registration statement covering t

View Full Filing

View this 8-K filing on SEC EDGAR