The following dialogue of our monetary situation and outcomes of operations
ought to be learn at the side of the monetary statements and associated notes
included elsewhere on this report and our Annual Report on Form 10-Ok for the
yr ended April 30, 2021. Certain statements on this dialogue and elsewhere
on this report represent forward-looking statements. See “Cautionary Statement
Regarding Forward Looking Information” elsewhere on this report. Because this
dialogue includes dangers and uncertainties, our precise outcomes might differ
materially from these anticipated in these forward-looking statements.
Overview and Description of Business
Lazex Inc. (“Lazex”) was integrated beneath the legal guidelines of the State of Nevada on
July 12, 2015. On August 23, 2019, the bulk proprietor of Lazex entered right into a
Stock Purchase Agreement with Slinger Bag Americas Inc., a Delaware company
(“Slinger Bag Americas”), which was 100% owned by Slinger Bag Ltd. (“SBL”), an
Israeli firm. In reference to the Stock Purchase Agreement, Slinger Bag
Americas acquired 20,000,000 shares of widespread inventory of Lazex for $332,239. On
September 16, 2019, SBL transferred its possession of Slinger Bag Americas to
Lazex in change for the 20,000,000 shares of Lazex acquired on August 23,
2019. As a consequence of these transactions, Lazex owned 100% of Slinger Bag
Americas and the only shareholder of SBL owned 20,000,000 shares of widespread inventory
(roughly 82%) of Lazex. Effective September 13, 2019, Lazex modified its
title to Slinger Bag Inc.
On October 31, 2019, Slinger Bag Americas acquired management of Slinger Bag
Canada, Inc., (“Slinger Bag Canada”) a Canadian firm integrated on November
3, 2017. There have been no property, liabilities or historic operational exercise of
Slinger Bag Canada at the moment.
On February 10, 2020, Slinger Bag Americas turned the 100% proprietor of SBL, alongside
with SBL’s wholly owned subsidiary Slinger Bag International (UK) Limited
(“Slinger Bag UK”), which was shaped on April 3, 2019. The proprietor of SBL
contributed it to Slinger Bag Americas for no consideration.
On June 21, 2021, Slinger Bag Americas entered right into a membership curiosity
buy settlement with Charles Ruddy to amass a 100% possession stake in
Foundation Sports Systems, LLC (“Foundation Sports”).
The operations of Slinger Bag Inc., Slinger Bag Americas, Slinger Bag Canada,
Slinger Bag UK, SBL and Foundation Sports are collectively known as the
“Company” or “Slinger.”
The Company operates within the sporting and athletic items enterprise. The Company is
the proprietor of the Slinger Launcher, a extremely transportable and inexpensive ball
launcher constructed into a simple to move wheeled trolley bag. The Slinger
Launcher permits anybody to easily and simply management the pace, frequency and
elevation of balls which can be launched for apply, coaching or health functions.
The Company has initially targeted all its energies on the tennis market
worldwide, however is within the early levels of growing ball launchers for different
ball sports activities.
For the common tennis participant, the Slinger Launcher is far more than a tennis
ball launcher. It additionally capabilities as a whole tennis bag with ample room for
racquets, footwear, towels, water bottles and different equipment and can cost
cell phones and different units.
Tennis ball machines have been round because the 1950’s once they have been launched
by Renne Lacoste. Improvements to efficiency have been made within the 1970’s when
Prince began its tennis enterprise on the again of its first product – Little
Prince – which was a vacuum operated ball machine. In the 1990’s the primary
battery operated machines got here to the market and since that point little or no, if
something, has modified within the construction of ball machine merchandise outdoors of added
computerization. Typically, the machines being marketed by conventional ball
machine manufacturers are massive, cumbersome and awkward to function. They are additionally very
costly – usually effectively above U.S. $1,000. Up till right now the overwhelming majority of
all tennis ball machines have bought to tennis services, with only some being
bought on to tennis taking part in customers.
According to the Tennis Industry Association (www.tia.org) the one largest
problem dealing with tennis participation is the truth that 34% of lapsed gamers
cited a “lack of taking part in associate” as the rationale for them stopping to play
tennis. The Slinger Launcher goes an extended approach to fixing this problem.
The international tennis market is regarded by business specialists, governing
organizations, tennis manufacturers and tennis-specific market analysis corporations as
having 100 million lively gamers globally, with as many customers once more being
avid followers of the game. Of this 100 million tennis participant market, 20 million
gamers are considered frequent or avid gamers – gamers who play commonly –
at the least 1 time per 30 days. These avid gamers drive the full tennis business
and account for 80% of all tennis revenues worldwide.
1
It is that this avid participant market that the Company is targeted on penetrating with
its Slinger Launcher and related tennis equipment.
The Company intends to disrupt this conventional tennis market by creating a brand new
ball machine class – known as Slinger Launcher – and advertising transportable and
inexpensive Slinger Launchers on to avid, common tennis gamers.
Constructed inside a wheeled trolley tennis bag, a Slinger Launcher weighs
round 15kgs / 34lbs when empty. If saved with 72 balls inside the load
will increase to 19kgs / 42lbs. It can simply be saved in a automobile trunk, wheeled to
the courtroom and arrange inside minutes to make use of. The Slinger Launcher is powered by a
6.6Ah Lithium battery that may last as long as 3.5 hours of play relying on the
settings getting used and frequency of use. The Slinger Launcher’s comfort as
a tennis bag mixed with its ease of operation and total efficiency as a
tennis ball launcher is the premise that the Company will goal direct gross sales
to
these avid gamers.
While the preliminary model focus is clearly on tennis, the Company is growing
related launchers to handle different types of tennis across the globe which can be
both quickly gaining new individuals or are already well-established sports activities
in their very own proper. These embody, however are usually not restricted to, Pickleball (U.S.),
Soft Tennis (Japan), and Paddle Tennis (International markets), all of that are
presently in both growth or testing and are deliberate for introduction
in
calendar 2022.
On December 3, 2020, Slinger signed an unique settlement with Flixsense Pty
Limited d/b/a Gameface for the event of a tennis particular synthetic
intelligence (AI) utility. The Company intends to introduce a market
disrupting tennis app for gamers of all ages and skills. This app will
present a variety of analytics and different providers and embody apply and
tennis health drills and actions, teaching ideas and recommendation and a full suite
of AI analytics. The Company will provide some providers free of cost and will
construct a tiered subscription mannequin for others. The app is predicted to be able to
launch to the market in calendar 2022.
In future years, the Company plans to enter new ball sport markets reminiscent of
baseball, softball, and cricket, that are presently deliberate for introduction in
calendar 2023.
The Company delivers Slinger Launchers instantly from the ultimate meeting facility
in Xiamen, China to prospects both by direct cargo from the port in China,
or to 3rd social gathering logistics services in Columbia, SC (U.S.) to assist our
U.S. enterprise, Belleville, Ontario, Canada, Rotterdam, The Netherlands to
assist smaller distributors in Canada, Europe, the Middle East, Africa, and
Israel.
Additionally, we ship full containers of our Slinger Triniti tennis balls from
Wilson (our provider) in Thailand to the United States and Belgium for onward
distribution.
The Company has contracted with unique distributors globally. These embody
Japan, UK, Ireland, Switzerland, Scandinavian markets (protecting Denmark, Sweden,
Norway, Finland), Australia, New Zealand, Bulgaria, Czech Republic, Singapore,
Morocco, Slovenia, Slovkian Republic, Hungary, Croatia, Germany, Austria,
France, Italy, Spain, Portugal, Netherlands, Belgium and Luxembourg, Russia,
Middle East GCC markets, Egypt, Bangladesh, Pakistan, Malaysia, Greece, Panama,
South Africa, Hong Kong, Macau, China, Indonesia, Philippines, Ecuador and
Poland and we’re in varied levels of negotiation with different potential market
distribution corporations throughout the globe.
Strategic Brand Partnerships
The Company is actively engaged on securing a quantity of extremely seen
ground-breaking strategic partnerships throughout tennis. These partnerships will
each present the Company with co-branded merchandise to complement the core product
providing and, on the similar time, are anticipated to drive mutually helpful
advertising campaigns geared toward reaching avid tennis gamers globally. Details of
such companions introduced and lively right now embody:
? Wilson Sporting Goods: North America: The Company has entered a strategic
partnership with the worldwide chief in tennis, Wilson, for the availability of
co-branded Triniti tennis balls within the U.S. and Canada markets.
? Professional Tennis Registry (PTR): PTR is the world’s most prestigious
instructing professional group with greater than 40,000 members. The Company has
partnered with PTR for the availability of Slinger Launchers to their membership.
? Peter Burwash International (PBI): A excessive profile group offering
teaching and tennis providers to excessive stage, prime quality motels, resorts and
tennis services throughout the globe. The Company is the official provider of
Slinger Launchers to PBI, which can be used at every location and PBI will provide
an online marketing program selling gross sales to its checklist of international shoppers.
? DSV Logistics USA and OSL Logistics: DSV is one of the world’s main
suppliers of warehousing, freight forwarding and logistics. The Company will use
DSV warehousing providers within the U.S. to optimize logistical actions. OSL are
presently offering all freight forwarding for the U.S. markets and Europe as
effectively as third social gathering warehousing logistics in Rotterdam for Europe.
2
Competition
There are presently no opponents with merchandise which can be much like the Slinger
Launcher, primarily based on its portability, affordability and tennis bag performance.
There are, nonetheless, different corporations that make tennis ball machines, together with
the next:
? Spinshot
? Lobster Sports
? Spinfire Pro 2
? Match Mate Rookie
? Sports Tutor
? Silent Partner
Raw Materials
All supplies used within the Slinger Launder can be found off-the-shelf. The
trolley bag is manufactured with 600D Polyester and has the CA65 certification
for the U.S. market. The launcher housing, Oscillator and Telescopic Ball Tube
components are produced utilizing an injection mould utilizing poly propylene blended with 30%
glass fibers. The digital motors, PCB boards and remote-control components are all
normal off-the-shelf objects.
Intellectual Property
As on the date hereof, the Company has utilized for worldwide design and
utility patent safety for its fundamental 3 merchandise: Slinger Launcher, Slinger
Oscillator and Slinger Telescopic Ball Tube. Patents have been utilized for in
all key markets together with the U.S., China, Taiwan, India, Israel and EU markets
and granted in China and Israel. Trademarks have been utilized for in all main
markets across the globe. Trademark safety has been utilized for and/or
acquired within the following international locations:
? U.S.
? Chile
? Taiwan
? Mexico
? EU
? Russia
? Poland
? Czech Republic
? Australia
? New Zealand
? China
? South Korea
3
? Vietnam
? Singapore
? India
? Canada
? Argentina
? Brazil
? United Arab Emirates*
? South Africa*
? Columbia*
? Israel*
? Japan*
? Switzerland*
? Indonesia*
? Malaysia*
? Thailand*
? Turkey*
*Protection is pending.
The Company is engaged in ongoing efforts to register extra logos throughout an
increasing checklist of merchandise, providers and purposes, that are in varied
levels of the registration course of.
Slinger Bag Inc. owns the rights to its Slingerbag.com area.
Strategy
The Company has a chance to disrupt the normal tennis market
globally. The Company expects to drive 80% of its international revenues by its
direct-to-consumer go-to-market technique, whether or not that be by its on-line
e-commerce platform at www.slingerbag.com or by related e-commerce
platforms established and managed by its distribution community. The stability of
revenues can be pushed by partnerships with main wholesalers,
federations and instructing professional organizations and different transactions throughout varied
markets. The Company will function a third-party distributor construction in all
markets with the exception of the United States, the biggest tennis market
globally, Canada and its founder’s house market of Israel. Distributor companions
can have unique territories and can have a acknowledged background inside the
tennis business for his or her market in addition to having the monetary capability and
service infrastructure to aggressively develop the Slinger model. Uniquely within the
sports activities business, all shopper orders acquired into Slingerbag.com from markets
outdoors the United States can be routed again to our native distribution companions
to meet and to service their native prospects. All distributor companions will
buy with superior orders, both primarily based on a vendor-direct FOB Asia direct
ship or by 1 of our 3 international third social gathering distribution services on an obligation
paid foundation and at premium price value. Currently, the Company has signed a quantity
of unique distribution agreements in key markets and has on-going discussions
with different key potential distributor companions in different markets across the globe.
The United States market will stay a direct to shopper marketplace for Slinger. As
the biggest tennis market on the earth with 17.4 million gamers of which 10.5
million are common / avid gamers, the United States is a key market each to
set up the Slinger model and to drive demonstrable progress. Recently the
business reported a big improve in U.S. tennis participation and
total quantity of tennis play events, one thing that has been replicated in
different key tennis markets across the globe. Direct to shopper gross sales can be
supplemented by a number of main tennis wholesalers who handle massive
databases of coach, participant, school, highschool and membership shoppers. This market
can be serviced out of a third-party logistics facility in West Columbia, SC
and operated by one of Slinger’s most well-liked international logistics companions, DSV, one
of the world’s main suppliers of freight-forwarding, logistics and
warehousing.
Brand Marketing
As a direct-to-consumer e-commerce model, all advertising exercise and promoting
media can be centered round pushing customers to www.slingerbag.com and
changing them to purchases. Slinger has engaged a quantity of main companies
to assist its international advertising efforts:
Brand Nation is a world class influencer advertising company primarily based in London. Brand
Nation will lead all influencer programming globally. Slinger has seeded about
50% of its deliberate 1,000 international influencers so far. Influencers focused are
extensive ranging and embody main sports activities, tennis, movie, TV, music and blogger
celebrities all recognized for the truth that they play tennis commonly and have a
fan base in extra of 10,000 followers. All influencer exercise is rolled again
as much as the Slinger social media platforms as a method of producing important
model consciousness and product curiosity.
4
Ad Venture Media Group is a New York primarily based main PPC (pay-per-click) company
whose work is grounded in refined scientific evaluation of shopper knowledge and
shopper developments and they’re acknowledged globally as leaders in paid search and
paid social media campaigns. Ad Venture Media will lead all Slinger PPC exercise
on a performance-based price construction and is briefed to drive shopper
engagement, by bespoke promoting campaigns which can be aligned to our
product profitability aims.
In the United States market, now we have partnered with a corporation known as Team
HQS who will handle an online marketing program throughout U.S. primarily based instructing
professionals, gamers, juniors and occasions. These associates can be offered
with distinctive online marketing codes to share with their social media followers
and different such communities that they’re related to and every will obtain an
online marketing price primarily based on revenues generated by customers buying
Slinger merchandise attributable to their distinctive code.
We proceed to guage every assist company on a month-to-month foundation and on the similar
time are regularly exploring new avenues to develop our attain to our core
prospects.
Each of our distributor companions world wide are establishing their Slinger
distribution enterprise as Slinger itself would do if it was establishing a
Slinger subsidiary in every market. As such, every distributor may also undertake all
types of Slinger model advertising applications in addition to initiating new native
ideas of their very own – all geared toward reaching the avid/common tennis participant
instantly and making certain that the Slinger model message is constant across the
globe. Slinger has agreed an area advertising funds construction with every
distributor as half of its distribution settlement. This advertising funds can be
primarily funded by the distributor associate with an extra contribution
coming from Slinger with the contribution being linked to the distributor’s
buy aims. Each distributor will execute native grassroots applications
together with demonstration days, native instructing professional partnerships, specialist tennis
community communications, seeding of Slinger product domestically as essential to native
key market tennis influencers to additional improve the depth of the
influencer effort. Marketing {dollars} may also be allotted to Google, Facebook,
YouTube and different social media promoting spend and, the place acceptable,
authorized and overseen by Ad Venture Media Group.
Distribution Agreements
Slinger Bag Americas has entered into unique distribution agreements for
Slinger’s line of merchandise, together with, however not restricted to, tennis ball launcher
units, tennis ball launcher equipment, sports activities baggage, tennis balls, tennis
courtroom equipment and different tennis associated merchandise within the following markets and
with the next distributors:
Minimum Purchase
Requirement of
Slinger Bag
Tennis Ball
Territory Distributor Launchers
32,500 by the
Japan Globeride Inc. finish of January 2025
Framework Sports & 9,000 by the
United Kingdom and Ireland Marketing Ltd finish of May 2025
3,000 by the
Switzerland Ace Distribution finish of May 2025
Frihavnskompagniet 6,500 by the
Denmark, Finland, Norway and Sweden ApS finish of December 2025
1,000 by the
Morocco Planet Sport Sarl finish of December 2025
Sportsman Warehouse 2,500 by the
Australia t/a Tennis Only finish of 2025
Sporting Goods 100 by the tip
New Zealand Specialists of 2025
950 by the tip
Bulgaria Ark Dream EOOD of 2025
165 by the tip
Chile Sporting Brands Ltda of 2025
380 by the tip
Croatia, Hungary and Slovenia Go 4 d.o.o. of 2025
Austria, Belgium, France, Germany,
Italy, Luxembourg, Portugal, Spain Dunlop International 120,000 by the
and The Netherlands Europe Ltd finish of 2025
950 by the tip
Singapore Tennis Bot Pte Ltd of 2025
10,000 by the
India Racquets4U finish of 2025
2,050 by the
Israel Eran Shine finish of 2025
Bahrain, Bangladesh, Egypt, Kuwait,
Maldives, Oman, Pakistan, Qatar,
Saudi Arabia, Sri Lanka, Tunisia 3,000 by
the
and United Arab Emirates Color Sports Inc finish of 2025
380 by the tip
Greece Elsol of 2025
50 by the tip
Panama Orange Pro of 2021
1,900 by the
Russia Neva Sport finish of 2025
500 by the tip
Malaysia Tennis Bot of 2025
3,000 by the
Czech and Slovak Republics RaketSport s.r.o finish of 2025
5,000 by the
South Africa Golf Racket Pty Ltd finish of 2025
750 by the tip
Hong Kong and Macau Tennis Bot of 2025
650 by the tip
Indonesia and Philippines Tennis Bot of 2026
Xiamen Powerway 17,500 by the
China Sports Co. Ltd finish of 2026
Frameworks Sports 1,850 by the
Poland Poland finish of 2026
Brandsinc SA / Siati 240 by the tip
Ecuador Express of 2026
Total 223,915
5
Brand Endorsements
We have reached agreements with a number of globally acknowledged tennis gamers and
coaches to change into model ambassadors.
Tommy Haas (former ATP #2 Player) has been appointed the Slinger Bag Chief
Ambassador. In this position Tommy will assist Slinger in constructing out its international
ambassador group targeted on figuring out ambassadors in our key international enterprise
markets of the U.S., Japan, Europe, Australia, China, Brazil and India. Tommy
may also be very lively supporting and selling Slinger throughout the globe with
private appearances at Slinger occasions and through on-line coaching and drill movies.
Mike and Bob Bryan (aka the Bryan Brothers – the foremost doubles group within the
tennis world) have prolonged their ambassador agreements and will proceed to
characteristic prominently in our advertising actions and messaging.
Additionally, now we have model endorsements with the next athletes and
coaches:
? Eugenie Bouchard
? Luke and Murphy Jensen (aka the Jensen Brothers)
? Darren Cahill
? Nick Bollettieri
? Patrick Mouratoglou
? Dustin Brown
Each of the foregoing athletes and coaches is or was both a world-ranked
singles or doubles tennis participant or, within the case of Nick Bollettieri and Patrick
Mouratoglou, the coach of a quantity of world-ranked tennis gamers, has a big
following of followers and supporters and is lively throughout many elements of tennis
right now.
The Professional Tennis Registry (PTR) – a United States-based instructing instructor
affiliation with roughly 40,000 members will change into a non-exclusive
strategic associate for Slinger with all their members in a position to entry an affiliate
member half of our web site.
Peter Burwash International (PBI) – a United States-based, extremely revered,
international tennis providers firm arrange by Peter Burwash some 35 years in the past. PBI
gives tennis applications and different tennis providers to as many as 56 of the
globes main motels and resorts. Slinger Launchers can be obtainable to make use of at
every resort and the PBI group can be actively selling Slinger as half of
our
online marketing exercise.
PTCA Central Europe – a European coach group of main touring professional
coaches and they, like others, will undertake an online marketing method.
Tie Break 10s – a world group that owns and operates Tie Break 10 occasions
each independently and in partnership with main international tour occasions, e.g.,
Indian Wells. These occasions contain prime gamers taking part in ‘tie-break’ matches with
the occasion totally accomplished in a single night and with a big money prize for
the winner. Slinger can be promoted at every of these occasions and can be
obtainable for followers to check out in addition to the Slinger model title being
prominently used on Tie Break 10s social media.
Tennis One App – a United States-based firm that has developed and
efficiently marketed an all-inclusive tennis app for gamers throughout the globe.
Slinger has engaged with Tennis One to assist its coaches nook phase – a
weekly podcast collection and in doing so advantages from the model publicity obtainable
by the attain of the customers utilizing the app frequently.
Functional Tennis – an Ireland primarily based social media tennis weblog website with an
extra of 250,000 followers. Slinger is engaged with Functional Tennis in a
selection of methods and is the presenting sponsor of its weekly Tennis Podcast.
We are presently in discussions with different organizations, occasions, outstanding
coaches and gamers and must date seeded Slinger merchandise to 12 of the Top 20
ATP male gamers, 5 of the highest 20 WTA ladies gamers, plus quite a few different
top-class touring and instructing professionals.
Throughout 2020 we sponsored a number of outstanding tennis occasions, e.g., Battle of
the Brits, Tie Break 10s (all proven stay throughout the globe).
Research and Development
The Company is concerned in further analysis and growth of transportable,
inexpensive and player-enhancing ball launching machines and related sport
enchancment merchandise for all ball sports activities. Following a profitable launch of its
tennis ball launcher, Slinger is presently discipline testing its new pickleball,
paddle and delicate tennis launchers, that are anticipated to be launched to the
market in calendar 2022. Slinger plans to introduce related transportable,
versatile and inexpensive ball launchers for baseball, softball, cricket,
badminton and different excessive participation ball sports activities over the course of the following 3
years. In this connection, on September 10, 2020, Slinger entered into an
settlement with Igloo Design, which is identical firm that designed the Slinger
Launcher for tennis, for a Slinger ball launcher for baseball and softball. This
growth commenced within the second half of 2020 and preliminary design concepts and
additional path have been offered.
We retain outdoors consultants to offer analysis and product design providers
and every guide has a particular experience (e.g., molding know-how,
electronics, product design, bag design, as examples). We are also working with
a choose group of extremely certified and resourceful third-party suppliers in
Asia. We are regularly striving to establish product enhancements, new ideas
and enchancment to the manufacturing course of on an on-going day by day foundation. In respect
of any new venture, administration gives detailed briefs, market knowledge, product
price targets, aggressive evaluation, timelines and venture price targets to both
the product consultants or distributors and manages them to agreed upon key
efficiency indicators (“KPIs”). These KPI’s embody, however are usually not restricted to:
(i) manufacturing to focus on prices; (ii) agreed growth timelines; (iii)
established high quality standards; and (iv) outlined efficiency standards.
We additionally retain specialist trademark and patent attorneys and work with these
attorneys on the initiatives, as wanted.
Government Regulation
Both Slinger Launcher and Slinger Oscillator meet all of the U.S. authorities
necessities for electrical, radio wave and battery requirements in addition to having
all mandatory and required certification to facilitate international advertising and
gross sales of these merchandise.
6
Results of Operations for the Three Months Ended January 31, 2022 and 2021
The following are the outcomes of our operations for the three months ended
January 31, 2022 as in comparison with 2021:
For the Three Months Ended
January 31, January 31,
2022 2021 Change
(Unaudited) (Unaudited)
Net gross sales $ 4,201,745 $ 4,123,648 $ 78,097
Cost of gross sales 3,234,430 3,245,493 (11,063 )
Gross earnings 967,315 878,155 89,160
Operating bills:
Selling and advertising bills 920,161 351,845
568,316
General and administrative bills 2,942,501 1,385,626
1,556,875
Research and growth prices 275,908 137,156
138,752
Total working bills 4,138,570 1,874,627 2,263,943
Loss from operations (3,171,255 ) (996,472 ) (2,174,783 )
Other expense (earnings):
Amortization of debt reductions 2,750,000 39,175
2,710,825
Loss on extinguishment of debt – 95,760 (95,760 )
Induced conversion loss – – –
Gain on change in truthful worth of
derivatives (5,943,967 ) – (5,943,967 )
Loss on issuance of convertible
notes 2,200,000 –
2,200,000
Interest expense – associated social gathering 28,167 137,480
(109,313 )
Interest expense, internet 164,669 22,199 142,470
Total different expense (earnings) (801,131 ) 294,614 (1,095,745 )
Loss earlier than earnings taxes (2,370,124 ) (1,291,086 ) (1,079,038 )
Provision for earnings taxes – – –
Net loss $ (2,370,124 ) $ (1,291,086 ) $ (1,079,038 )
Net gross sales
Net gross sales elevated $78,097, or 2%, in the course of the three months ended January 31,
2022 as in comparison with the three months ended January 31, 2021. The improve is due
to a rise within the quantity of new orders positioned on the Company’s web site and
from its worldwide distributors and fulfilled in the course of the three months ended
January 31, 2022 as in comparison with the three months ended January 31, 2021 when the
product was nonetheless comparatively new to the market. As of January 31, 2022, we had
deferred income of $18,508 representing quantities acquired for items which have
not been shipped to prospects. We anticipate these orders to be fulfilled and the
gross sales to be acknowledged within the Company’s subsequent fiscal quarter.
Cost of gross sales and Gross earnings
Cost of gross sales decreased $11,063 in the course of the three months ended January 31, 2022
as in comparison with the three months ended January 31, 2021, which is primarily due
to elevated delivery prices within the prior yr. Gross earnings elevated $89,160,
or 10%, in the course of the three months ended January 31, 2022 as in comparison with the three
months ended January 31, 2021 as a result of elevated gross sales and decrease price of
gross sales.
7
Selling and advertising bills
Selling and advertising bills elevated $568,316, or 162%, in the course of the three
months ended January 31, 2022 as in comparison with the three months ended January 31,
2021. This improve is essentially pushed by a rise in social media
promoting, sponsorships, and different investments in our public relations
presence within the present yr in an effort to drive gross sales and construct model consciousness.
General and administrative bills
General and administrative bills, which primarily consist of compensation
(together with share-based compensation) and different employee-related prices, as effectively
as authorized charges and charges for skilled providers, elevated $1,556,875 throughout
the three months ended January 31, 2022 as in comparison with the three months ended
January 31, 2021. This improve is primarily pushed by a $504,093 improve in
authorized charges associated to closing prices incurred as half of the acquisitions of
PlaySight Interactive Ltd. and Flixsense Pty Ltd. d/b/a Gameface in the course of the
three months ended January 31, 2022 and submitting charges associated to our S-1 that was
filed in January 2022 and different SEC filings. The the rest of the rise is
largely attributable to a rise in compensation expense attributable to elevated headcount to
assist the continued progress of the enterprise in addition to the acquisition of
Foundation Sports in 2021.
Research and growth prices
Research and growth prices elevated $138,752 in the course of the three months ended
January 31, 2022 as in comparison with the three months ended January 31, 2021. This
improve is primarily pushed by our funding in a brand new platform and app that
will combine synthetic intelligence (AI) know-how to supply extra worth to
our prospects, in addition to the continued growth and testing of launchers for
new ball sports activities which can be anticipated to be dropped at market sooner or later.
8
Other expense
Total different expense decreased $1,095,745 in the course of the three months ended January
31, 2022 as in comparison with the three months ended January 31, 2021. The lower in
expense was primarily as a result of elevated achieve on the change in truthful worth of
derivatives in addition to a lower within the loss on extinguishment of debt and
associated social gathering curiosity expense in consequence of decrease associated social gathering debt balances
yr over yr. These decreases have been partially offset by the loss on the
issuance of the Convertible Notes in addition to a rise in amortization of debt
reductions and curiosity expense, internet as a result of issuance of the Convertible
Notes
in the course of the present yr.
Results of Operations for the Nine Months Ended January 31, 2022 and 2021
The following are the outcomes of our operations for the Nine months ended
January 31, 2022 as in comparison with 2021:
For the Nine Months Ended
January 31, January 31,
2022 2021 Change
(Unaudited) (Unaudited)
Net gross sales $ 12,139,860 $ 7,308,701 $ 4,831,159
Cost of gross sales 8,302,386 5,762,143 2,540,243
Gross earnings 3,837,474 1,546,558 2,290,916
Operating bills:
Selling and advertising bills 2,515,067 1,051,785
1,463,282
General and administrative bills 41,535,188 2,974,404
38,560,784
Research and growth prices 553,274 180,705
372,569
Total working bills 44,603,529 4,206,894 40,396,635
Loss from operations (40,766,055 ) (2,660,336 ) (38,105,719 )
Other expense (earnings):
Amortization of debt reductions 5,400,285 325,426
5,074,859
Loss on extinguishment of debt 7,096,730 1,528,580
5,568,150
Induced conversion loss – 51,412 (51,412 )
Gain on change in truthful worth of
derivatives (15,074,880 ) – (15,074,880 )
Loss on issuance of convertible
notes 5,889,369 –
5,889,369
Interest expense – associated social gathering 106,895 454,029
(347,134 )
Interest expense, internet 446,339 169,455 276,884
Total different expense 3,864,738 2,528,902 1,335,836
Loss earlier than earnings taxes (44,630,793 ) (5,189,238 ) (39,441,555 )
Provision for earnings taxes – – –
Net loss $ (44,630,793 ) $ (5,189,238 ) $ (39,441,555 )
Net gross sales
Net gross sales elevated $4,831,159, or 66%, in the course of the 9 months ended January 31,
2022 as in comparison with the 9 months ended January 31, 2021. The improve is due
to a rise within the quantity of new orders positioned on the Company’s web site and
from its worldwide distributors and fulfilled in the course of the 9 months ended
January 31, 2022 as in comparison with the 9 months ended January 31, 2021 when a
massive portion of the orders in the course of the first three months of the yr have been
associated to the Kickstarter and Indiegogo crowdfunding campaigns initiated in
fiscal yr 2019.
Cost of gross sales and Gross earnings
Cost of gross sales elevated $2,540,243, or 44%, in the course of the 9 months ended January
31, 2022 as in comparison with the 9 months ended January 31, 2021, which was
primarily as a result of improve in internet gross sales. Gross earnings elevated $2,290,916,
or 148%, in the course of the 9 months ended January 31, 2022 as in comparison with the 9
months ended January 31, 2021.
9
The improve in gross margin is essentially as a result of first quarter of the prior
yr leading to a gross loss on internet gross sales attributable to (1) discounted pricing on the
preliminary crowdfunding orders, (2) as success was later than initially
scheduled we fulfilled orders with the “deluxe” model of launcher (together with
all options), in addition to tennis balls, each of which elevated price of gross sales,
and (3) attributable to sanctions by the U.S. in opposition to Chinese sourced merchandise, the
import obligation was raised on all launchers introduced into the U.S. growing our
price of gross sales. As a consequence, our price of gross sales exceeded preliminary gross sales values
raised in our crowdfunding campaigns. As of the start of the third quarter
within the prior yr, considerably all of the preliminary crowdfunding orders had
been
fulfilled.
Selling and advertising bills
Selling and advertising bills elevated $1,463,282, or 139%, in the course of the 9
months ended January 31, 2022 as in comparison with the 9 months ended January 31,
2021. This improve is essentially pushed by a rise in social media
promoting, sponsorships, and different investments in our public relations
presence within the present yr in an effort to drive gross sales and construct model consciousness.
General and administrative bills
General and administrative bills, which primarily consist of compensation
(together with share-based compensation) and different employee-related prices, as effectively
as authorized charges and charges for skilled providers, elevated $38,560,784 throughout
the 9 months ended January 31, 2022 as in comparison with the 9 months ended
January 31, 2021. This improve is primarily pushed by a rise of
$32,569,112 of share-based compensation associated to warrants granted to
staff, a $1,264,590 improve in expense associated to shares and warrants
issued in reference to providers the bulk of which relate to the warrants
issued to the lead placement agent as half of the issuance of the Convertible
Notes and shares and warrants issued to model ambassadors, and a $1,000,000
improve in authorized charges associated to closing prices incurred as half of the
acquisitions of PlaySight Interactive Ltd. and Flixsense Pty Ltd. d/b/a Gameface
in the course of the 9 months ended January 31, 2022. The the rest of the rise is
largely attributable to a rise in compensation expense attributable to elevated headcount to
assist the continued progress of the enterprise in addition to the acquisition of
Foundation Sports in 2021.
Research and growth prices
Research and growth prices elevated $372,569 in the course of the 9 months ended
January 31, 2022 as in comparison with the 9 months ended January 31, 2021. This
improve is primarily pushed by our funding in a brand new platform and app that
will combine synthetic intelligence (AI) know-how to supply extra worth to
our prospects, which we started growing in December 2020, in addition to the
continued growth and testing of launchers for brand spanking new ball sports activities which can be
anticipated to be dropped at market sooner or later.
Other expense
Total different expense elevated $1,335,836 in the course of the 9 months ended January
31, 2022 as in comparison with the 9 months ended January 31, 2021. The improve was
primarily as a result of loss on the issuance of the Convertible Notes, a rise
in loss on extinguishment of debt in consequence of the conversion of the notes
payable – associated social gathering, and will increase in amortization of debt reductions and
curiosity expense, internet as a result of issuance of the Convertible Notes in the course of the
9 months ended January 31, 2022. These will increase have been partially offset by an
elevated achieve on the change in truthful worth of derivatives in addition to a lower
in induced conversion loss and associated social gathering curiosity expense in consequence of
decrease associated social gathering debt balances yr over yr.
Liquidity and Capital Resources
Our monetary statements have been ready on a going concern foundation, which
assumes we can notice our property and discharge our liabilities in
the conventional course of enterprise for the foreseeable future. We had an amassed
deficit of $73,454,066 as of January 31, 2022, and extra losses are anticipated
within the growth of the enterprise. Accordingly, there’s substantial doubt
about our means to proceed as a going concern. Our monetary statements do
not embody any changes associated to the recoverability and classification of
property or the quantities and classification of liabilities that is likely to be mandatory
ought to we be unable to proceed as a going concern.
10
The means to proceed as a going concern depends upon our producing
worthwhile operations sooner or later and/or with the ability to get hold of the required
financing to fulfill our obligations and repay our liabilities arising from regular
enterprise operations once they change into due. Management intends to finance
working prices over the following twelve months with current money available, loans
from associated events, and/or personal placement of debt and/or widespread inventory. In
respect to further financing, consult with Notes 5, 6, 7, and 12. In the occasion
that the Company is unable to efficiently elevate capital and/or generate
revenues, the Company will possible scale back common and administrative bills,
and stop or delay its growth plan till it is ready to get hold of enough
financing. There will be no assurance that further funds can be obtainable on
phrases acceptable to the Company, or in any respect.
The following is a abstract of our money flows from working, investing and
financing actions for the 9 months ended January 31, 2022 and 2021:
For the Nine Months Ended
January 31, January 31,
2022 2021
Net money utilized in working actions $ (7,783,098 ) $ (3,139,286 )
Net money utilized in investing actions (2,250,000 ) (30,000 )
Net money offered by financing actions 10,209,420 3,420,000
We had money and money equivalents of $1,082,446 as of January 31, 2022, as
in comparison with $928,796 as of April 30, 2021.
Net money utilized in working actions was $7,783,098 in the course of the 9 months
ended January 31, 2022, as in comparison with $3,139,286 throughout the identical interval in
2021. Our internet money utilized in working actions in the course of the 9 months ended
January 31, 2022 was primarily the consequence of our internet loss of $44,630,793 for the
interval in addition to will increase in stock, pay as you go bills and different present
property, and accounts receivable in addition to decreases in deferred income throughout
the interval, which was partially offset by internet non-cash bills of $37,815,432
and will increase in accounts payable and accrued bills, accrued payroll and
bonuses and accrued curiosity – associated social gathering in the course of the interval. Our internet money
utilized in working actions in the course of the 9 months ended January 31, 2021 was
primarily the consequence of our internet loss of $5,189,238 for the interval in addition to
will increase in stock and accounts receivable in addition to decreases in deferred
income in the course of the interval, which was partially offset by internet non-cash bills
of $2,354,195, will increase in accounts payable and accrued bills, accrued
payroll and bonuses, and accrued curiosity – associated social gathering in addition to a lower
in pay as you go bills and different present property in the course of the interval.
Net money utilized in investing actions was $2,250,000 and $30,000 for the 9
months ended January 31, 2022 and 2021, respectively. Our internet money utilized in
investing actions in the course of the 9 months ended January 31, 2022 consisted of
$2,250,000 in issuances associated to a be aware receivable whereas our internet money utilized in
investing actions in the course of the 9 months ended January 31, 2021 associated to
our buy of the Slinger trademark
Net money offered by financing actions was $10,209,420 for the 9 months
ended January 31, 2022, as in comparison with $3,420,000 for a similar interval in 2021.
Cash offered by financing actions for the 9 months ended January 31, 2022
primarily consisted of proceeds of $11,000,000 from convertible notes payable
and proceeds of $3,000,000 from notes payable with a associated social gathering, which was
partially offset by a $2,000,000 compensation of a be aware payable, a $1,000,000
compensation of associated social gathering notes payable and $800,251 in debt issuance prices
associated to the convertible notes payable. Cash offered by financing actions
for the 9 months ended January 31, 2021 consisted of proceeds of $2,300,000
from notes payable with a associated social gathering and proceeds of $1,120,000 from a be aware
payable.
11
Description of Indebtedness
Notes Payable – Related Party
On January 14, 2022, the Company entered into two mortgage agreements with Yonah
Kalfa and Naftali Kalfa, every for $1,000,000, pursuant to which the Company
acquired a complete quantity of $2,000,000. The loans bear curiosity at a price of 8%
every year and are required to be repaid in full by April 30, 2022 or such different
date as could also be accepted by the lenders. The Company is just not permitted to make any
distribution or pay any dividends until or till the loans are repaid in full.
There was $2,000,000 in excellent borrowings from the Company’s associated
events as of January 31, 2022. Accrued curiosity attributable to these associated events as
of January 31, 2022 amounted to $850,092.
See Note 5 to the condensed consolidated monetary statements for added
data.
Convertible Notes Payable
On August 6, 2021, the Company consummated the closing (the “Closing”) of a
personal placement providing (the “Offering”) pursuant to the phrases and situations
of that sure Securities Purchase Agreement, dated as of August 6, 2021 (the
“Purchase Agreement”), between the Company and sure accredited traders (the
“Purchasers”). At the Closing, the Company bought to the Purchasers (i) 8% Senior
Convertible Notes (the “Convertible Notes”) in an mixture principal quantity of
$11,000,000 and (ii) warrants to buy as much as 7,333,334 shares of widespread inventory
of the Company (the “Warrants” and along with the Convertible Notes, the
“Securities”). The Company acquired an mixture of $11,000,000 in gross
proceeds from the Offering, earlier than deducting providing bills and commissions.
On December 31, 2021, the Purchase Agreement and Convertible Notes have been amended
in an Omnibus Amendment Agreement pursuant to which the holders of the
Convertible Notes agreed to make sure modifications to the phrases of the Purchase
Agreement and Convertible Notes in change for a rise within the principal
quantity of the Convertible Notes from $11,000,000 to $13,200,000 and such
elevated principal stability is mirrored on the alternative be aware issued to every
be aware holder. The full phrases of the Omnibus Amendment Agreement have been disclosed in
our present report on Form 8-Ok dated January 5, 2022.
Total excellent borrowings associated to the Convertible Notes as of January 31,
2022 have been $13,200,000. The excellent quantity is internet of whole reductions of
$5,622,222 for a internet ebook worth of $7,577,778 as of January 31, 2022.
See Note 6 to the condensed consolidated monetary statements for added
data.
Note Payable
On April 15, 2021, the Company entered right into a $2,000,000 be aware payable (the
“Note”). The Note matures April 14, 2023 and bears curiosity at fifteen p.c
(15%) per yr. The Company pays curiosity at maturity, at which period all
principal and unpaid curiosity is due.
On August 6, 2021, the Company used the web proceeds from the issuance of the
Convertible Notes to pay 100% of the excellent principal and accrued curiosity
of the Note.
See Note 7 to the condensed consolidated monetary statements for added
data.
Future quantities due as of January 31, 2022 are summarized as follows:
Payments due by interval
Total Less than 1 yr 1-3 years 3-5 years More than 5 years
Convertible notes payable $ 13,200,000 $ 13,200,000 $ – $ – $ –
Notes payable – associated social gathering 2,000,000 2,000,000
– – –
Total $ 15,200,000 $ 15,200,000 $ – $ – $ –
We anticipate that working capital necessities will proceed to be funded by a
mixture of our current funds, money flows from operations and additional
issuances of debt and/or securities. Our working capital necessities are
anticipated to extend consistent with the expansion of our enterprise.
Existing working capital, additional advances and debt devices, and anticipated
money stream are anticipated to be ample to fund our operations over the following
twelve months. We haven’t any traces of credit score or different financial institution financing preparations.
Generally, now we have financed operations so far by the proceeds of personal
placement of fairness and debt devices. In reference to our marketing strategy,
administration anticipates further will increase in working bills and capital
expenditures regarding the (i) acquisition of stock; (ii) developmental
bills related to a start-up enterprise; and (iii) advertising bills. We
intend to finance these bills with additional issuances of securities and debt
issuances. Thereafter, we anticipate we might want to elevate further capital and
generate revenues to fulfill long-term working necessities. Additional issuances
of fairness or convertible debt securities will end in dilution to our present
shareholders. Further, such securities may need rights, preferences or
privileges senior to our widespread inventory. Additional financing might not be obtainable
upon acceptable phrases, or in any respect. If ample funds are usually not obtainable or not
obtainable on acceptable phrases, we might not have the ability to take benefit of
potential new enterprise endeavors or alternatives, which may considerably
and materially limit our enterprise operations.
Off-Balance Sheet Arrangements
We haven’t any off-balance sheet preparations.
Effect of Inflation and Changes in Prices
We don’t imagine that inflation and modifications in costs can have a fabric
impact on our operations.
Going Concern
Our unbiased registered public accounting agency auditors’ report accompanying
our April 30, 2021 monetary statements contained an explanatory paragraph
expressing substantial doubt about our means to proceed as a going concern.
The monetary statements have been ready assuming that we are going to proceed as a
going concern, which contemplates that we are going to notice our property and fulfill
our liabilities and commitments within the odd course of enterprise.
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