AiRWA Inc. (YYAI) 10-K Summary: Fiscal Year Ended April 30, 2026
Business Context and Reporting Period
This Annual Report covers the fiscal year ended April 30, 2026. AiRWA Inc. (formerly Connexa Sports Technologies Inc.) underwent a significant transformation during the period, transitioning from a sports technology focus to a diversified holding company with operations in AI services, technology licensing, digital advertising, and international trading. The company is classified as a smaller reporting company and a non-accelerated filer. Key corporate actions included a reverse acquisition of Yuanyu Enterprise Management Co., Limited (YYEM) in November 2024 and the acquisition of Rafael AI in January 2026.
Key Financial Metrics
| Metric | Fiscal 2026 | Fiscal 2025 | Change |
|---|---|---|---|
| Revenue | $25.8 million | $12.8 million | +101% |
| Cost of Revenue | $22.5 million | $3.0 million | +655% |
| Gross Profit | $3.3 million | $9.8 million | -66% |
| Operating Loss | $(6.1) million | $6.6 million (Income) | Shift to Loss |
| Net Loss | $(17.6) million | $4.6 million (Income) | Shift to Loss |
| Cash and Equivalents (End of Period) | $12.8 million | $0.05 million | Significant Increase |
| Digital Assets (USDT) | $19.2 million | $0 | New Asset Class |
| Total Assets | $210.4 million | $32.9 million | +539% |
Note: The Net Loss includes significant non-cash items, including a $7.5 million impairment of intangible assets and a $2.6 million impairment of amounts due from a director.
Material Changes vs. Prior Period
- Revenue Composition Shift: Revenue doubled, driven by the addition of AI Services ($6.6 million) and Advertising ($12.0 million). This growth was partially offset by a decline in Technology Licensing royalties ($7.3 million) following the termination of three major license agreements in late 2025 due to industry challenges.
- Margin Compression: Gross profit margin collapsed from 77% in 2025 to 13% in 2026. This was primarily due to high media and platform costs in the new advertising business and increased R&D expenditures for the AI division.
- Acquisition Activity: The company acquired Rafael AI for $140 million (paid in USDT) in January 2026, resulting in significant goodwill ($58.3 million) and intangible assets ($96.8 million). Post-year-end, the company acquired 97% of Best Life (international trading) for $50 million.
- Capital Structure: The company raised approximately $197.7 million through financing activities (ATM offerings, direct offerings, and private placements) to fund acquisitions and operations. Two reverse stock splits (1-for-40 and 1-for-20) were executed in May and August 2026.
Guidance, Outlook, and Risks
Management Commentary & Outlook: Management is pivoting toward the "real economy" and AI. The strategy involves leveraging Rafael AI for "data-to-AI" solutions in healthcare and manufacturing, while Best Life (acquired post-year-end) provides exposure to cross-border consumer goods. The company terminated a joint venture for an RWA-focused exchange in September 2026 due to partner financial issues.
Key Risks and Contingencies:
- Internal Controls: The filing highlights risks regarding the remediation of material weaknesses in internal controls over financial reporting.
- Regulatory (PRC/HK): Significant risks exist regarding PRC regulatory oversight of Hong Kong-based subsidiaries (YYEM and Best Life), including potential restrictions on overseas listings, data security reviews, and capital controls.
- Customer Concentration: Revenue is highly concentrated; the top three customers accounted for approximately 61% of total revenue in 2026.
- Liquidity & Financing: While cash balances improved, the company relies on continued equity financing. The ATM program is currently suspended until at least August 2027 due to reporting status.
- Impairment: The company recorded a $7.5 million impairment on intangible assets and wrote off a $2.6 million receivable from a director, indicating potential valuation or collection risks.
Investor Verification Checklist
- Revenue Quality: Verify the sustainability of the new Advertising and AI revenue streams, given the high cost of revenue and the termination of previous licensing contracts.
- Intangible Asset Valuation: Scrutinize the $96.8 million in acquired intangible assets (development costs and customer relationships) from the Rafael AI acquisition, especially given the $7.5 million impairment already recognized.
- Digital Asset Exposure: Confirm the custody and valuation of the $19.2 million in USDT digital assets and the risks associated with third-party custodians.
- Related Party Transactions: Review the write-off of the $2.6 million amount due from a director and the $36 million cash payment to acquire the remaining stake in YYEM from a former chairman.
- Regulatory Compliance: Assess the impact of potential PRC regulatory actions on the operations of YYEM and Best Life, which could materially affect the company's ability to operate or list.