WINDSOR MILLS, MD - Connexa Sports Technologies Inc. (NASDAQ:CNXA), which holds a 20% stake in Yuanyu Enterprise Management Co., Limited (YYEM), has entered into an exclusive licensing agreement with Guofu Enterprise Management Co., Limited. The deal, focusing on regions including Hong Kong, Japan, South Korea, and Southeast Asia, is expected to bring in over $30 million in royalties to YYEM by the end of December 2026.
Yuanyu, a company specializing in the Love & Marriage sector with patented AI matchmaking technology, aims to leverage the relatively untapped online dating and matchmaking markets in East and Southeast Asia. The agreement follows a similar deal earlier this week covering the UK and major European markets.
Mike Ballardie, CEO of Connexa, stated the Asia market for dating services holds significant growth potential, especially when compared to the $1.4 billion U.S. online dating market as of 2023. The agreement is part of Connexa's strategy to enhance shareholder value through YYEM's growth and expansion.
YYEM's proprietary technology includes six metaverse-related technologies and five AI matchmaking patents, which are expected to drive revenue growth and improve shareholder value. The technology has already been integrated successfully by one licensee partner across a retail store network, with expectations for expansion in the next two years.
Hongyu Zhou, Chairman of YYEM, expressed confidence in the business model, combining online and retail operations, and anticipates that the new licensing agreements will establish YYEM as a global leader in the matchmaking industry.
Connexa's acquisition of a greater stake in YYEM, pending Nasdaq approval, is seen as a strategic move to capitalize on YYEM's strong financial position and growth prospects.
The information in this article is based on a press release statement.
In other recent news, Connexa Sports Technologies Inc. has entered into an exclusive licensing agreement with UK-based Eternity Technology Limited, leveraging the AI matchmaking technology of Yuanyu Enterprise Management Limited (YYEM), a company in which Connexa holds a significant stake. The deal is projected to yield over $19 million in license income for YYEM by December 2026. This is part of a series of planned agreements targeted at establishing a global business structure for YYEM. Furthermore, Connexa is set to increase its ownership stake in YYEM from 20% to 70%, pending Nasdaq approval.
In other developments, Connexa has regained compliance with Nasdaq listing requirements, canceling a previously scheduled hearing. This comes after a 1-for-20 reverse stock split executed by the company. Additionally, Connexa has announced a significant corporate restructuring, which includes a change in control and the acquisition of YYEM. As part of this restructuring, Connexa plans to transition Slinger Bag into a private entity while making YYEM a subsidiary.
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:CNXA) expands its reach in the Asian market through its stake in Yuanyu Enterprise Management Co., Limited (YYEM), investors may find additional context from InvestingPro data and tips valuable.
InvestingPro data shows that CNXA has a market capitalization of $51.23 million USD, reflecting its current market valuation. This relatively small cap size suggests the company has significant room for growth, especially considering the potential of the Asian online dating market highlighted in the article.
An InvestingPro Tip indicates that CNXA holds more cash than debt on its balance sheet. This strong financial position aligns well with the company's expansion strategy and its ability to pursue growth opportunities through YYEM.
Another relevant InvestingPro Tip notes that CNXA has seen a significant return over the last week, with a 1-week price total return of 21.34%. This recent positive momentum could be related to investor optimism surrounding the new licensing agreement and expansion into Asian markets.
It's worth noting that InvestingPro offers 13 additional tips for CNXA, providing investors with a more comprehensive analysis of the company's financial health and market position. These insights can be particularly valuable when assessing the potential impact of strategic moves like the YYEM licensing agreement on CNXA's overall performance.
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