Airwa (YYAI) risk factors, FY2025 10-K

Risks Related to Our Business, Operations, Industry, Legal, and Regulatory Requirements

1. 01We have in the past entered into, and may continue to enter into, licensing arrangements with third parties that we believe will commercialize our intellectual property and bolster our revenue
2. 02Disputes may arise between us and our licensees that interfere with the licensing arrangements or lead to the termination of the licensing agreements. Such disputes could result in costly litigation or arbitration that diverts management attention and resources
3. 03The love and marriage market sector, including matchmaking apps, is competitive, with low switching costs and a consistent stream of new services and entrants, and innovation by competitors may disrupt our business
4. 04The limited operating history and geographic reach of YYEM’s brands and services makes it difficult to evaluate our current business and future prospects
5. 05If our licensees fail to add users (or if we fail to do so after developing our own offerings for end users), our revenue, financial results, and business may be significantly harmed
6. 06If we develop our own offerings for end users, our growth and profitability will rely, in significant part, on our ability to attract and retain users through cost-effective marketing efforts. Any failure in those efforts could adversely affect our business, financial condition, and results of operations
7. 07The success of our services for end users, and those of our licensees, will depend in part on our ability, or our licensees’ ability, to access, collect, and use personal data about users and subscribers
8. 08Challenges properly managing the use of artificial intelligence could result in reputational harm, competitive harm, and legal liability
9. 09Foreign currency exchange rate fluctuations may adversely affect our results of operations
10. 10We depend on our key personnel
11. 11Our success may depend, in part, on the integrity of our systems and infrastructure and on our ability to enhance, expand, and adapt these in a timely and cost-effective manner
12. 12We may not be able to protect our systems and infrastructure from cyberattacks and may be adversely affected by cyberattacks experienced by third parties
13. 13Our success will depend, in part, on the integrity of third-party systems and infrastructure
14. 14If the security of personal and confidential or sensitive user information that we maintain and store is breached or otherwise accessed by unauthorized persons, it may be costly to mitigate the impact of such an event and our reputation could be harmed
15. 15Proposed or new legislation and regulations could also adversely affect our business. To the extent new or more stringent measures are required to be implemented, impose new liability, or limit or remove existing protections, our business, financial condition, and results of operations could be adversely affected
16. 16If we develop our own offerings for end users, we will be subject to a number of risks related to credit card payments, including data security breaches and fraud that we or third parties experience, any of which could adversely affect our business, financial condition, and results of operations
17. 17If we develop our own offerings for end users, inappropriate actions by certain of our users could be attributed to us and damage our reputation, which in turn could adversely affect our business
18. 18We may fail to adequately protect our intellectual property rights or may be accused of infringing the intellectual property rights of third parties
19. 19We intend to expand to various international markets, including markets in which we have limited experience, and as a result, we face additional risks in connection with those operations
20. 20We are subject to litigation, and adverse outcomes in such litigation could have an adverse effect on our financial condition
21. 21Our operations are subject to volatile global economic conditions, particularly those that adversely impact consumer confidence and spending behavior
22. 22Our financial results may be adversely affected if substantial investments in businesses and operations fail to produce the expected returns
23. 23We may need additional capital in the future to finance our planned growth, which we may not be able to raise or which may only be available on terms unfavorable to us or our stockholders, and this may result in our inability to fund our working capital requirements and harm our operational results
24. 24Our internal controls may be inadequate, which could cause our financial reporting to be unreliable and lead to misinformation being disseminated to the public
25. 25Our internal controls may be inadequate or ineffective, which could cause financial reporting to be unreliable and lead to misinformation being disseminated to the public. Investors relying upon this misinformation may make an uninformed investment decision
26. 26The costs of being a public company could result in us being unable to continue as a going concern
27. 27If we fail to maintain effective internal controls over financial reporting, then the price of the Common Stock may be adversely affected
28. 28The SEC’s charges against our former independent auditor, Olayinka Oyebola & Co., could impact the credibility of our financial statements and those of YYEM, potentially leading to restatements and other adverse effects
29. 29On October 30, 2024, the Board of Directors and the audit committee approved the engagement of B&A as the Company’s independent registered public accounting firm for the fiscal year ended April 30, 2025, effective immediately, and dismissed OOC as the Company’s independent registered public accounting firm
30. 30Fluctuations in our tax obligations and effective tax rate may have a negative effect on our operating results
31. 31We could be subject to changes in tax rates, adoption of new tax laws, additional tax liabilities, or increased volatility in our effective tax rate
32. 32We are subject to the periodic reporting requirements of the Exchange Act, requiring us to incur audit fees and legal fees in connection with the preparation of such reports. These additional costs could reduce or eliminate our ability to earn a profit

Risks Related to Doing Business in Hong Kong

1. 33On December 2, 2021, the SEC issued amendments to finalize interim final rules previously adopted in March 2021 to implement the submission and disclosure requirements of the HFCAA
2. 34The Chinese government, in general, could exercise significant oversight and discretion over the conduct of our business and has made statements indicating an intent to exert more oversight and control over offerings that are conducted overseas and over foreign investment in China-based issuers
3. 35Greater oversight by CAC over data security, particularly for companies seeking to list on a foreign exchange, could adversely impact our business and our offering
4. 36In the future, YYEM may be subject to PRC laws and regulations, including those regarding corporate structure, overseas listings, data- and cybersecurity, and anti-monopoly concerns, which could result in a material negative impact on its operations and the value of the securities we are registering for sale
5. 37Even though much of YYEM’s revenue is derived from licensees outside Hong Kong, any adverse changes in the economic, political, legal, and social conditions of Hong Kong could lead to an adverse impact on the demand for YYEM’s services and result in deteriorating financial performance of the Company
6. 38The Law of the PRC on Safeguarding National Security in the Hong Kong Special Administrative Region (the “Hong Kong National Security Law”) could impact YYEM’s operations in Hong Kong

Risks Related to Ownership of Our Shares

1. 39Our stock price may be volatile, or may decline regardless of our operating performance, and you could lose all or part of your investment as a result
2. 40If any of the foregoing occurs, it could cause our stock price to fall and may expose us to securities class action litigation that, even if unsuccessful, could be costly to defend and a distraction to management
3. 41Due to the Acquisition, our stockholders have a significantly lower ownership and voting interest in us than they had in Connexa prior thereto and exercise less influence over management and policies of Connexa
4. 42Although we expect that our Common Stock will remain listed on Nasdaq, there can be no assurance that we will be able to comply with the continued listing standards of Nasdaq
5. 43The price of our Common Stock may continue to be especially volatile, and if the Acquisition’s benefits do not meet the expectations of investors, stockholders, or financial analysts, the market price of our Common Stock may decline
6. 44We do not intend to pay dividends on the shares of our Common Stock
7. 45Our stockholders may not be able to enforce judgments entered by U.S. courts against our officers and directors
8. 46The market price of our Common Stock could decline due to sales of a large number of shares of Common Stock in the market or the perception that such sales could occur. This could make it more difficult to raise funds through future offerings of Common Stock
9. 47If securities or industry analysts do not publish research, or they publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline
10. 48Certain of the Company’s large shareholders may be able to exert significant influence on the Company and their interests may conflict with the interests of its other shareholders
11. 49Our stockholders may not be able to enforce judgments entered by United States courts against certain of our officers and directors
12. 50If our shares of common stock become subject to the penny stock rules, it would become more difficult to trade our shares