UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

Mark One

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended JanuaryJuly 31, 20182021

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________ to _______________

COMMISSION FILE NO. Commission File Number: 333-214463

LAZEXSLINGER BAG INC.

 (Exact(Exact name of registrant as specified in its charter)

68/29 Husitska st.,

Zizkov, Prague, Czech Republic 130002709 NORTH ROLLING ROAD, SUITE 138

Tel. 775-800-4477WINDSOR MILL,

MARYLAND21244

(Address and telephone number of registrant'sprincipal executive office)     offices, including Zip Code)

(443)407-7564

(Registrant’s Telephone Number, including Area Code)

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Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by checkmarkcheck mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☒ No ☐

Indicate by check mark whether the issuer:registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the pastpreceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] ☒ No [  ]☐

The registrant is a voluntary filer of reports under Section 13 or 15(d) of the Securities Exchange Act of 1934 and has filed during the preceding 12 months all reports it would have been required to file by Section 13 or 15(d) of the Securities Exchange Act of 1934 if the registrant had been subject to one of such Sections.

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] ☒ No [  ]☐

Indicate by check mark whether the registrant is a large accelerated filed,filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company.

Large See the definitions of “large accelerated filer, [  ]

Accelerated” “accelerated filer, [   ]

Non-accelerated filer [   ]

Smaller” “smaller reporting company, [X]” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

(Do not check if a smaller reporting company) 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. YES [ ] NO [X]☐

Indicate by checkmarkcheck mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [   ] ☐ No [ X ] ☒

Applicable Only to Issuer Involved in Bankruptcy Proceedings During

The number of shares outstanding of the Preceding Five Years. N/Aregistrant’s Common Stock, $0.001 par value per share, as of August 31, 2021, was 42,517,540.

Indicate by checkmark whether

CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION

This quarterly report contains forward-looking statements within the issuer has filed all documentsmeaning of Section 27A of the Securities Act of 1933 and reports required to be filed by Section 12, 13 and 15(d)21E of the Securities Exchange Act of 1934 after the distribution1934. The words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “may,” “should,” “could,” “will,” “plan,” “future,” “continue,” and other expressions that are predictions of securities underor indicate future events and trends and that do not relate to historical matters identify forward-looking statements. These forward-looking statements are based largely on our expectations or forecasts of future events, can be affected by inaccurate assumptions, and are subject to various business risks and known and unknown uncertainties, a plan confirmed by a court.  Yes [   ] No [   ]

Applicable Only to Corporate Registrants

Indicate the number of shares outstandingwhich are beyond our control. Therefore, actual results could differ materially from the forward-looking statements contained in this document, and readers are cautioned not to place undue reliance on such forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of eachnew information, future events or otherwise. A wide variety of factors could cause or contribute to such differences and could adversely impact revenues, profitability, cash flows and capital needs. There can be no assurance that the issuer’s classesforward-looking statements contained in this document will, in fact, transpire or prove to be accurate. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors” that may cause our or our industry’s actual results, levels of common stock,activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by any forward-looking statements.

Important factors that may cause the actual results to differ from the forward-looking statements, projections or other expectations include, but are not limited to, the following:

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. You should not place undue reliance on these forward-looking statements, which speak only as of the most practicable date:date of this report. Except as required by law, we do not undertake to update or revise any of the forward-looking statements to conform these statements to actual results, whether as a result of new information, future events or otherwise.

As used in this quarterly report, the “Company,” “we,” “us,” or “our” refer to Singer Bag Inc. and its subsidiaries, unless otherwise indicated.

SLINGER BAG INC.

INDEX

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PART I - FINANCIAL INFORMATION

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Item 1. Consolidated Financial Statements

SLINGER BAG INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

The

See accompanying notes are an integral part of theseto unaudited condensed consolidated financial statements.statements

4 |PageSLINGER BAG INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND

COMPREHENSIVE LOSS

TheSee accompanying notes are an integral part of theseto unaudited condensed consolidated financial statements.statements

5 |PageSLINGER BAG INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ DEFICIT

TheSee accompanying notes are an integral part of theseto unaudited condensed consolidated financial statements.statements

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SLINGER BAG INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

See accompanying notes to unaudited condensed consolidated financial statements

SLINGER BAG INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – 1: ORGANIZATION AND BASIS OF PRESENTATION

Organization and Description of Business

LAZEX INC.

Lazex Inc. (“the Company”Lazex”) was incorporated under the laws of the State of Nevada U.S. on July 12, 2015. On August 23, 2019, the majority owner of Lazex entered into a Stock Purchase Agreement with Slinger Bag Americas Inc., a Delaware corporation (“Slinger Bag Americas”), which was 100% owned by Slinger Bag Ltd. (“SBL”), an Israeli company. In connection with the Stock Purchase Agreement, Slinger Bag Americas acquired 20,000,000 shares of common stock of Lazex for $332,239. On September 16, 2019, SBL transferred its ownership of Slinger Bag Americas to Lazex in exchange for the 20,000,000 shares of Lazex acquired on August 23, 2019. As a result of these transactions, Lazex owned 100% of Slinger Bag Americas and the sole shareholder of SBL owned 20,000,000 shares of common stock (approximately 82%) of Lazex. Effective September 13, 2019, Lazex changed its name to Slinger Bag Inc.

On October 31, 2019, Slinger Bag Americas acquired control of Slinger Bag Canada, Inc., (“Slinger Bag Canada”) a Canadian company incorporated on November 3, 2017. There were no assets, liabilities or historical operational activity of Slinger Bag Canada at that time.

On February 10, 2020, Slinger Bag Americas became the 100% owner of SBL, along with SBL’s wholly owned subsidiary Slinger Bag International (UK) Limited (“Slinger Bag UK”), which was formed on April 3, 2019. The owner of SBL contributed it to Slinger Bag Americas for no consideration.

On June 21, 2021, Slinger Bag Americas entered into a membership interest purchase agreement with Charles Ruddy to acquire a 100% ownership stake in Foundation Sports Systems, LLC (“Foundation Sports”) (see Note 4).

The operations of Slinger Bag Inc., Slinger Bag Americas, Slinger Bag Canada, Slinger Bag UK, SBL and Foundation Sports are collectively referred to as the “Company.”

The Company operates in the travel agencysporting and tours consultingathletic goods business. The Company is the owner of the Slinger Launcher, which is a portable tennis ball launcher, as well as other associated tennis accessories.

Effective February 25, 2020, the Company increased its number of authorized shares of common stock from 75,000,000 to 300,000,000 via a four-to-one forward split of its outstanding shares of common stock. All share and per share information contained in this report have been retroactively adjusted to reflect the impact of the stock split.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Company are presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”). As a result of the transactions described above, the accompanying consolidated financial statements include the combined results of Slinger Bag Inc., Slinger Bag Americas, Slinger Bag Canada, Slinger Bag UK, SBL and Foundation Sports for the periods presented. The contribution of the net assets of SBL is reflected as an equity contribution at historical cost on May 1, 2019, the beginning of the earliest period in which the entities were under common control. There was no historical activity in Slinger Bag Americas, Slinger Bag Canada or Slinger Bag UK prior to May 1, 2019. All intercompany accounts and transactions have been eliminated in consolidation.

NOTE 2: GOING CONCERN

The financial statements have been prepared on a going concern basis, which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The Company has an accumulated deficit since Inception (July 12, 2015) of $1,055 $32,258,585 as of JanuaryJuly 31, 20182021, and more losses are anticipated in the development of itsthe business. Accordingly, there is substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or being able to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they comebecome due. Management intends to finance operating costs over the next twelve months with existing cash on hand, and loans from directorsrelated parties, and/or private placement of debt and/or common stock.

NOTE 2 – 3: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of PresentationInterim Financial Statements

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America and are presented in US dollars. In the opinion of management, the accompanying unaudited interim financial statements contain all adjustments considered necessary to present fairly in all material respects the financial position as of January 31, 2018.

Interim Financial Statements

The accompanying unaudited financial statements of Lazex Inc.(the “Company”) have been prepared in accordance with generally accepted accounting principles generally accepted in the United States of America (“GAAP”) and rules of thebased upon Securities and Exchange Commission rules that permit reduced disclosure for interim periods. For a more complete discussion of significant accounting policies and certain other information, you should be read  in conjunction withrefer to the audited financial statements and notes thereto containedincluded in the Company’sSlinger Bag Inc.’s Annual Report on Form 10-K filed withfor the SEC. In the opinion of management,year ended April 30, 2021. These financial statements reflect all adjustments consisting of normal recurring adjustments,that are necessary for a fair presentation of financial position and results of operations and financial condition for the interim period presented have been reflected herein.periods shown, including normal recurring accruals and other items. The results for the interim periods are not necessarily indicative of results for the full year.

Use of estimatesEstimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date ofin the financial statements and the reported amounts of revenues and expenses during the reporting period.accompanying notes. Accordingly, actual results could differ from those estimates.

Financial Statement Reclassification

Certain prior year amounts have been reclassified in these consolidated financial statements to conform to current year presentation.

Cash and Cash Equivalents

For purposes of the statement of cash flows, the

The Company considers all highly liquid instruments purchasedinvestments with an original maturity of three months or less when purchased to be cash equivalents. The majority of payments due from banks for credit card transactions process within 24 to 48 hours and are accordingly classified as cash and cash equivalents. 

7 |PageAccounts Receivable

The Company’s accounts receivable are non-interest bearing trade receivables resulting from the sale of products and payable over terms ranging from 15 to 60 days. The Company provides an allowance for doubtful accounts at the point when collection is considered doubtful. Once all collection efforts have been exhausted, the Company charges-off the receivable with the allowance for doubtful accounts. The Company had 0 allowance for doubtful accounts as of July 31, 2021 or April 30, 2021.

Property and Equipment Depreciation Policy

Property and equipment are statedInventory

Inventory is valued at the lower of the cost (determined principally on a first-in, first-out basis) or net realizable value. The Company’s valuation of inventory includes inventory reserves for inventory that will be sold below cost and depreciatedthe impact of inventory shrink. Inventory reserves are based on the straight-line method over the estimated lifehistorical information and assumptions about future demand and inventory shrink trends. The Company’s inventory as of the asset, which is 3 years.July 31, 2021 consisted of $2,095,966of finished goods, $2,406,974 of component and replacement parts, $891,444of capitalized duty and freight, and a $224,390inventory reserve. The Company’s inventory as of April 30, 2021 consisted of $1,591,826of finished goods, $1,777,028of component and replacement parts, $347,362 of capitalized duty and freight, and a $23,000 inventory reserve.

Intangible assetsConcentration of Credit Risk

Computer Software is stated at cost and amortized on the straight-line method over the estimated life of 3 years.

Net (Loss) Per Share

The Company computes loss per sharemaintains its cash in bank deposit accounts, the balances of which at times may exceed insured limits. The Company continually monitors its banking relationships and consequently has not experienced any losses in such accounts. While we may be exposed to credit risk, we consider the risk remote and do not expect that any such risk would result in a significant effect on our results of operations or financial condition.

Revenue Recognition

The Company recognizes revenue in accordance with “ASC-260”, “Earnings per Share”Accounting Standards Codification (“ASC”) 606, the core principle of which requires presentationis that an entity should recognize revenue to depict the transfer of both basic and diluted earnings per sharepromised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to receive in exchange for those goods or services. The Company recognizes revenue for its performance obligation associated with its contracts with customers at a point in time once products are shipped. Amounts collected from customers in advance of shipping products ordered are reflected as deferred revenue on the faceaccompanying consolidated balance sheets. The Company’s standard terms are non-cancelable and do not provide for the right-of-return, other than for defective merchandise covered under the Company’s standard warranty. The Company has not historically experienced any significant returns or warranty issues.

Fair Value of Financial Instruments

Fair value of financial and non-financial assets and liabilities is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The three-tier hierarchy for inputs used in measuring fair value, which prioritizes the inputs used in the methodologies of measuring fair value for assets and liabilities, is as follows:

Level 1 — Quoted prices in active markets for identical assets or liabilities

Level 2 — Observable inputs other than quoted prices in active markets for identical assets and liabilities

Level 3 — Unobservable pricing inputs in the market

Financial assets and financial liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurements. Our assessment of the statementsignificance of operations. Basic loss per share is computed by dividing net loss availablea particular input to common shareholders by the weighted average numberfair value measurements requires judgment and may affect the valuation of outstanding common sharesthe assets and liabilities being measured and their categorization within the fair value hierarchy.

The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, and accounts payable. The carrying amount of these financial instruments approximates fair value due to their short-term maturity.

The Company’s derivative liabilities were calculated using Level 2 assumptions on the issuance and balance sheet dates via a Black-Scholes option pricing model and consisted of the following ending balances and gain (loss) amounts as of and for the three months ended July 31, 2021:

SUMMARY OF DERIVATIVE LIABILITIES

The Black-Scholes option pricing model assumptions for the derivative liabilities during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding duringthree months ended July 31, 2021 and 2020 consisted of the period.  Dilutive loss per share excludes all potential common shares if their effect is anti-dilutive.following:

SUMMARY OF WARRANTS GRANTED VALUATION USING BLACK-SCHOLES PRICING METHOD

Income Taxes

The Company follows

Income taxes are accounted for in accordance with the liability methodprovisions of accountingASC 740, Accounting for income taxes.  Under this method, deferred incomeIncome Taxes. Deferred tax assets and liabilities are recognized for the estimatedfuture tax consequences attributable to differences between the financial statement carrying valuesamounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income tax basis (temporary differences).in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amounts that are more likely than not to be realized.

Revenue Recognition

Goodwill

The Company recognizes revenue after tours have been completed, travel consulting services have been providedaccounts for goodwill and collection has been reasonably assuredother intangible assets in accordance with ASC 350, Intangibles - Goodwill and Other (“ASC 350”). ASC 350 requires that goodwill and intangible assets with indefinite lives not be amortized, but reviewed for impairment if impairment indicators arise and, at a minimum, annually.

The goodwill impairment test is a two-step test. In the recognition criteriafirst step, the Company compares the fair value of SAB 104. We record revenue when persuasive evidenceeach reporting unit with goodwill to its carrying value. The Company determines the fair value of an arrangement exists,its reporting units with goodwill using a combination of a discounted cash flow and a market value approach. If the services have been provided,fair value of the pricereporting unit exceeds the carrying value of the net assets assigned to that reporting unit, goodwill is not impaired and the Company is not required to perform further testing. If the carrying value of the net assets assigned to the customer is fixed or determinable and collectabilityreporting unit exceeds the fair value of the revenuereporting unit, then the Company must perform the second step of the goodwill impairment test in order to determine the implied fair value of the reporting unit’s goodwill and compare it to the carrying value of the reporting unit’s goodwill. The activities in the second step include valuing the tangible and intangible assets and liabilities. If the implied fair value of goodwill is reasonably assured. Asless than the carrying value, an impairment loss is recognized for the difference.

There was 0 impairment of goodwill during the three months ended JanuaryJuly 31, 2017 and 2018 ,2021 or 2020.

Intangible Assets

Intangible assets relate to the “Slinger” technology trademark, which the Company did not generated any revenue. Aspurchased on November 10, 2020, as well as the intangible assets related to the purchase of nineFoundation Sports on June 21, 2021 (see Note 4). The trademark is amortized over its expected life of 20 years. Amortization expense for the three months ended JanuaryJuly 31, 2018 we generated $13,2402021 and 2020 related to the trademark was $1,460 and zero, respectively.

Long-Lived Assets

In accordance with ASC 360-10, the Company evaluates long-lived assets for impairment whenever events or changes in revenues for tourscircumstances indicate that their net book value may not be recoverable. When such factors and travel consulting services.  Ascircumstances exist, the Company compares the projected undiscounted future cash flows associated with the related asset or group of nineassets over their estimated useful lives against their respective carrying amount. If those net undiscounted cash flows do not exceed the carrying amount, impairment, if any, is based on the excess of the carrying amount over the fair value based on the market value or discounted expected cash flows of those assets and is recorded in the period in which the determination is made. There was 0 impairment of long-lived assets identified during the three months ended JanuaryJuly 31, 2017  we generated $4,800  in revenues for tours and travel consulting services. None of these services were provided to related parties.  2021 or 2020.

Recent Accounting PronouncementsShare-Based Payments

The Company has reviewed allaccounts for share-based compensation in accordance with ASC Topic 718, Compensation-Stock Compensation (ASC 718). Under the recent accounting pronouncements issuedfair value recognition provisions of this topic, share-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as an expense on a straight-line basis over the requisite service period, which is the vesting period.

Warrants

The Company grants warrants to key employees and executives as compensation on a discretionary basis. The Company also grants warrants in connection with certain note payable agreements and other key arrangements. The Company is required to estimate the fair value of share-based awards on the measurement date and recognize as expense that value of the portion of the award that is ultimately expected to vest over the requisite service period. Warrants granted in connection with ongoing arrangements are more fully described in Note 6: Note Payable and Note 9: Shareholders’ Deficit.

The warrants granted during the three months ended July 31, 2021 and 2020 were valued using a Black-Scholes option pricing model on the date of grant using the issuancefollowing assumptions:

SUMMARY OF WARRANTS GRANTED VALUATION USING BLACK-SCHOLES PRICING METHOD

Foreign Currency Translation

A portion of these financial statements,SBL’s operations are conducted in Israel and does not believe anyits functional currency is the Israeli Shekel, the Company’s operations of these pronouncements willSlinger Bag Canada are conducted in its functional currency of Canadian Dollars, and the Company’s Slinger Bag UK operations are conducted in its functional currency of the British pound (“GBP”). The accounts of SBL, Slinger Bag Canada, and Slinger Bag UK have a material impactbeen translated into U.S. dollars (“USD”). Assets and liabilities are translated into USD at the applicable exchange rates at period-end. Shareholders’ equity is translated using historical exchange rates. Revenue and expenses are translated at the average exchange rates for the period. Any translation adjustments are included as foreign currency translation adjustments on the company.consolidated statements of operations and comprehensive loss.

NOTE 3 – CAPTIAL STOCKEarnings Per Share

Basic earnings per share are calculated by dividing income available to shareholders by the weighted-average number of common shares outstanding during each period. Diluted earnings per share are computed using the weighted average number of common and dilutive common share equivalents outstanding during the period.

The Company has 75,000,000had 6,921,299 common shares issuable as of July 31, 2021 and 2020, which were not included in the calculation of diluted earnings per share as the effect is antidilutive. The Company also had outstanding notes payable convertible into 0 and 723,901 shares of common stock authorizedas of July 31, 2021 and 2020, respectively, outstanding warrants exercisable into 24,507,796 and 13,000,000 shares of common stock as of July 31, 2021 and 2020, respectively, and 503,325 and 0 shares related to make-whole provisions as of July 31, 2021 and 2020, respectively, which were excluded from the calculation of diluted earnings per share as the effect is antidilutive. As a result, the basic and diluted earnings per share are the same for each of the periods presented.

Recent Accounting Pronouncements

In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”), 2019-12, Simplifying the Accounting for Income Taxes, which amends ASC 740, Income Taxes(“ASC 740”). This update is intended to simplify accounting for income taxes by removing certain exceptions to the general principles in ASC 740 and amending existing guidance to improve consistent application of ASC 740. This update is effective for fiscal years beginning after December 15, 2021. The guidance in this update has various elements, some of which are applied on a prospective basis and others on a retrospective basis with earlier application permitted. The Company is currently evaluating the effect of this ASU on the Company’s financial statements and related disclosures.

Other recently issued accounting pronouncements did not, or are not believed by management to, have a par value of $0.001 per share.  As of January 31, 2018, material effect on the Company’s present or future consolidated financial statements.

NOTE 4: ACQUISITIONS

On June 21, 2021, the Company had 6,155,000completed one immaterial acquisition by entering into a membership interest purchase agreement (“MIPA”) with Charles Ruddy (the “Seller”) to acquire a 100% ownership stake in Foundation Sports Systems, LLC (“Foundation Sports”) in exchange for 1,000,000 shares of common stock of the Company to be issued to the Seller and outstanding.

Fortwo other Foundation Sports employees in three tranches (the “Purchase Price”): (i) 600,000 shares of common stock on the nineclosing date, (ii) 200,000 shares of common stock on the first anniversary of the closing date and (iii) 200,000 shares of common stock on the second anniversary of the closing date (collectively, the “Shares”), provided that 10% of the Shares of each tranche will be held back by the Company and not delivered to the recipients for a period of 12 months ended January 31, 2018,from the date of their issuance.The Shares are subject to a 12-month lock-up from their date of delivery during which time they may not be offered or sold by the Seller or any other recipient thereof without the express written consent of the Company. On June 23, 2021, the Company issued 935,000 540,000 shares of its common stock to the receipts under the MIPA, which consisted of 600,000 shares less a hold-back of 10% (i.e., 60,000 shares).

The Company allocated the aggregated purchase price for the acquisition based upon the tangible and intangible assets acquired, net of liabilities. The allocation of the purchase price is detailed below:

SCHEDULE OF INTANGIBLE ASSETS ACQUIRED

The trade name, internally developed software, and customer relationships will be amortized over their expected lives of 6, 4, and 7 years, respectively. Amortization expense for the three months ended July 31, 2021 and 2020 related to the Foundation Sports intangibles was $39,709and zero, respectively.

NOTE 5: NOTES PAYABLE – RELATED PARTY

Beginning in October 2019, the Company has entered into several loan agreements with a related party entity controlled by the former shareholder of Slinger Bag Canada. Total outstanding borrowings from this related party as of April 30, 2021 amounted to $6,220,000, which was gross of total discounts of $76,777 and consisted of the following:

SUMMARY OF NOTES PAYABLE

On May 26, 2021, the Company and the related party lender entered into a note conversion agreement whereby the related party lender agreed to convert its total outstanding borrowings as of that date of $6,220,000 into 1,636,843 shares of the Company’s common stock. The note conversion agreement contains a guarantee that the aggregate gross sales of the shares by the related party will be no less than $6,220,000 over the next three years and if the aggregate gross sales are less than $6,220,000 the Company will issue additional shares of common stock to the related party for the difference between the total gross proceeds and $6,220,000, which could result in an infinite number of shares being required to be issued.  

The Company evaluated the conversion option of the notes payable to shares under the guidance in ASC 815-40, Derivatives and Hedging, and determined the conversion option qualified for equity classification. The Company also evaluated the profit guarantee under ASC 815, Derivatives and Hedging, and determined it to be a make-whole provision, which is an embedded derivative within the host instrument. As the economic characteristics are dissimilar to the host instrument, the profit guarantee was bifurcated from the host instrument and stated as a separate derivative liability, which is marked to market at $0.02the end of each reporting period with the non-cash gain or loss recorded in the period as a gain or loss on derivative.

On the date of conversion, the Company recognized a $5,118,435 loss on extinguishment of debt, which represented the difference between the $6,220,000 in notes payable that were converted and the fair value of the shares issued of $6,220,003, which were recorded in shares issued for conversion of notes payable – related party within shareholders’ deficit, the derivative liability of $5,052,934, which was valued using a Black-Scholes option pricing model, and the write-off of the unamortized debt discount of $65,498. Amortization of the debt discounts during the three months ended July 31, 2021 prior to the notes conversion was $11,279, which was recorded in amortization of debt discounts in the accompanying consolidated statements of operations.

The fair value of the derivative liability was $4,944,903 as of July 31, 2021, and the Company recognized a gain on change in fair value of $108,031 for the three months ended July 31, 2021.

Per the terms of the note conversion agreement the accrued interest related to the notes payable was not converted into shares and is still due to the related party. The Company and the related party agreed that interest will continue to accrue on the outstanding accrued interest at a rate of 9.5% per annum and will be paid in full by May 25, 2022.

On July 23, 2021, the Company entered into a loan agreement with its related party lender for borrowings of $500,000. The loan is to be repaid within 30 days of receipt and shall bear interest at a rate of 12% per annum.

Total outstanding borrowings from this related party as of July 31, 2021 amounted to $500,000. Interest expense related to this related party for the three months ended July 31, 2021 and 2020 amounted to $56,233 and $172,464, respectively. Accrued interest due to this related party as of July 31, 2021 and April 30, 2021 amounted to $803,869 and $747,636, respectively.

NOTE 6: NOTE PAYABLE

On April 15, 2021, the Company entered into a $2,000,000 note payable (the “Note”). The Note matures April 14, 2023 and bears interest at fifteen percent (15%) per year. The Company pays interest at maturity, at which time all principal and unpaid interest is due.

The Note is collateralized by all business assets, including patents, trademarks and other intellectual property. It is also collateralized by the ownership of Slinger Bag Americas, Slinger Bag Canada, SBL, and Slinger Bag UK.

In connection with the Note, the Company issued 2,200,000 warrants with an exercise price of $0.25. The exercise price has customary anti-dilution protection for stock splits, mergers, etc. Additionally, the warrants contain a stipulation that the Company will guarantee the value of the shares sold will be no less, on average, than $1.50 per share through April 15, 2023. If the average value of the shares sold is less than $1.50 per share, the Company will issue additional shares of common stock to compensate for total proceedsthe shortfall, which could result in an infinite number of $18,700.shares being required to be issued.

The Company evaluated the warrants and the profit guarantee under the guidance in ASC 815-40, Derivatives and Hedging, and determined they represent a derivative liability given the profit guarantee represents a make-whole provision that is not separated from the host instrument. The derivative liability is marked to market at the end of each reporting period with the non-cash gain or loss recorded in the period as a gain or loss on derivative (see Note 3).

Amortization of the debt discount during the three months ended July 31, 2021 was $9,937, which was recorded in amortization of debt discounts in the accompanying consolidated statements of operations. The unamortized debt discount balance was $1,979,586 as of July 31, 2021.

NOTE 4 – 7: NOTE RECEIVABLE

On July 21, 2021, the Company entered into a Convertible Loan Agreement with PlaySight Interactive Ltd (the “Borrower”) wherein the Company granted the Borrower a $2,000,000 line of credit with a six-month maturity date. Any borrowings under the line of credit bear interest at a rate of 15% per annum.

On July 26, 2021, the Company issued $300,000 to the Borrower under the line of credit, which was still outstanding as of July 31, 2021 and is included in prepaid expenses and other current assets on the consolidated balance sheets.

NOTE 8: RELATED PARTY TRANSACTIONS

In support of the Company’s efforts and cash requirements, it may rely on advances from related parties until such time that the Company can support its operations or attainsattain adequate financing through sales of its equity or traditional debt financing. There is no formal written commitment for continued support by officers, directors, or shareholders. Amounts represent advances, or amounts paid in satisfaction of liabilities.liabilities, or accrued compensation that has been deferred. The advances are considered temporary in nature and have not been formalized by a promissory note.

SinceAmounts due to related parties were $1,736,177 and $1,283,464 as of July 12, 2015 (Inception) through January 31, 2018,2021 and April 30, 2021, respectively, which represented unpaid salaries, bonuses and reimbursable expenses due to officers of the Company’s sole officerCompany.

The Company had outstanding notes payable of $500,000 and director loaned$6,220,000 and accrued interest of $803,869 and $747,636 due to a related party as of July 31, 2021 and April 30, 2021, respectively (see Note 5).

The Company recognized net sales of $8,931 and $57,556 during the three months ended July 31, 2021 and 2020, respectively, to a related party. As of July 31, 2021 and April 30, 2021 the related party had outstanding accounts receivable of $2,450 and $86,956 and deferred revenue of $85,956 and 0, respectively. 

NOTE 9: SHAREHOLDERS’ DEFICIT

Common Stock Transactions During the Three Months Ended July 31, 2021

On May 26, 2021, the Company $1,114issued 1,636,843 shares of its common stock for the conversion of related party notes payable (see Note 5). The fair value of the common stock was $6,220,003.

On June 23, 2021, the Company issued 540,000 shares of its common stock as partial consideration for the acquisition of Foundation Sports (see Note 4). The fair value of the total shares of common stock to pay for incorporation costs and operating expenses.  Asbe issued related to the acquisition was $3,550,000.

On July 6, 2021, the Company issued 50,215 shares of January 31, 2018, the amount outstanding was $1,114. The loan is non-interest bearing, due upon demand and unsecured.

The Company’s sole officer and director provided services and office space. The Company does not pay any rentits common stock to ortwo employees as compensation for services rendered byin lieu of cash, which resulted in $187,803 in share-based compensation expense for the three months ended July 31, 2021.

On July 11, 2021, the Company issued 18,750 shares of its sole officercommon stock to a vendor as compensation for marketing and director,other services rendered, which resulted in $16,875 of operating expenses for the three months ended July 31, 2021.

During the three months ended July 31, 2021, the Company granted an aggregate total of 90,937 shares of its common stock and thereequity options to purchase up to 60,000 shares (which are now expired) to six new brand ambassadors as compensation for services. The expense related to the issuance of the shares and equity options is no agreementbeing recognized over the service agreements, similar to pay any rent or compensationthe warrants and equity options issued to the four other brand ambassadors in the future.

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NOTE 5 - MAJOR CUSTOMERS

prior year. During ninethe three months ended JanuaryJuly 31, 20182021, the Company recognized $468,671 of operating expenses related to the shares, warrants and Januaryequity options granted to brand ambassadors.

Warrants Issued During the Three Months Ended July 31, 2017,2021

On October 28, 2020, the following customers represented more than 10%Company granted 400,000 warrants to a service provider for advertising services over the next year. The warrants have an exercise price of $0.75 per share, a contractual life of 10 years from the date of issuance, and vest quarterly over a year from the grant date. The warrants were valued using a Black-Scholes option pricing model and the expense related to the issuance of the warrants is being recognized over the service agreement. The Company recognized $109,095 of operating expenses related to this agreement during the three months ended July 31, 2021.

On October 29, 2020, the Company and the three members of its advisory board entered into agreements whereby each member will receive an aggregate number of warrants each quarter equal to $7,500 divided by the average closing price of the Company’s sales:stock for the five days prior to the Company’s most recently completed fiscal quarter. The warrants vest quarterly, have an exercise price of $0.001 per share and a contractual life of 10 years from the date of issuance. During the three months ended July 31, 2021, 4,689 warrants were issued under these agreements. The warrants were valued using a Black-Scholes option pricing model, which resulted in operating expenses of $23,913 during the three months ended July 31, 2021.

NOTE 6 – 10: COMMITMENTS AND CONTINGENCIES

Leases

The Company leases its office space under short-term leases with terms under a year. Total rent expense for the three months ended July 31, 2021 and 2020 amounted to $1,400 and $2,100, respectively.

Contingencies

From time to time, the Company may become involved in legal proceedings arising in the ordinary course of business. The Company is not presently a party to any legal proceedings that it currently believes would individually or taken together have a material adverse effect on the Company’s business or financial statements.

NOTE 11: SUBSEQUENT EVENTS

On August 4, 2021, the Company entered into a loan agreement with its related party lender for borrowings of $500,000. The loan is to be repaid within 30 days of receipt and shall bear interest at a rate of 12% per annum.

On August 6, 2021, the Company consummated the closing (the “Closing”) of a private placement offering (the “Offering”) pursuant to the terms and conditions of that certain Securities Purchase Agreement, dated as of August 6, 2021 (the “Purchase Agreement”), between the Company and certain accredited investors (the “Purchasers”). At the Closing, the Company sold to the Purchasers (i) 8% Senior Convertible Notes (the “Convertible Notes”) in an aggregate principal amount of $11,000,000 and (ii) warrants to purchase up to 7,333,334 shares of common stock of the Company (the “Warrants” and together with the Convertible Notes, the “Securities”). The Company received an aggregate of $11,000,000 in gross proceeds from the Offering, before deducting offering expenses and commissions.

The Convertible Notes mature on August 6, 2022 (the “Maturity Date”) and bear interest at 8% per annum payable on each conversion date (as to that principal amount then being converted), on each redemption date as well as mandatory redemption date (as to that principal amount then being redeemed) and on the Maturity Date, in cash. The Convertible Notes are convertible into shares of the Company’s common stock at any time following the date of issuance and prior to Mandatory Conversion (as defined in the Convertible Notes) at the conversion price equal to the lesser of: (i) $3.00, subject to adjustment set forth in the Convertible Notes and (ii) in the case of an uplist to the NASDAQ, the Uplist Conversion Price (as defined in the Convertible Notes) of the Company’s common stock during the two Trading Day (as defined in the Convertible Notes) period after each conversion date; provided, however, that at any time from and after December 31, 2021 or an Event of Default (as defined in the Convertible Notes), the holder of the Convertible Notes may, by delivery of written notice to the Company, elect to cause all, or any part, of the Convertible Notes to be converted, at any time thereafter, each an “Alternate Conversion”, pursuant to the Section 4(f) of the Convertible Notes, all, or any part of, the then outstanding aggregate principal amount of the Convertible Notes into shares of Common Stock at the Alternate Conversion price. The Convertible Notes rank pari passu with all other notes now or thereafter issued under the terms set forth in the Convertible Notes. The Convertible Notes contain certain price protection provisions providing for adjustment of the number of shares of common stock issuable upon conversion of the Convertible Notes in case of certain future dilutive events or stock-splits and dividends.

The Warrants are exercisable for five years from August 6, 2021, at an exercise price equal to the lesser of $3.00 or a 20% discount to the public offering price that a share of the Company’s common stock or unit (if units are offered) is offered to the public resulting in the commencement of trading of the Company’s common stock on the NASDAQ, New York Stock Exchange or NYSE American. The Warrants contain certain price protection provisions providing for adjustment of the amount of securities issuable upon exercise of the Warrants in case of certain future dilutive events or stock-splits and dividends.

In connection with the Closing, the lead placement agent for the Offering was granted 266,667 warrants that are exercisable for five years from August 6, 2021, at an exercise price of $3.30 (subject to adjustment as set forth in the Convertible Notes per the terms of the agreement).

The Company used the net proceeds from the sale of the Securities to pay 100% of the outstanding principal and accrued interest through August 6, 2021 of the $2,000,000 note payable (see Note 6) dated April 15, 2021 that bears interest at the rate of 15% per annum.

On August 6, 2021, the Note payable holder (see Note 6) exercised its right to convert its 2,200,000 outstanding warrants into shares of common stock of the Company. At the conversion date the Note payable holder also agree to cancel the guarantee that the value of the shares sold will be no less, on average, than $1.50 per share through April 15, 2023. In connection with the conversion of the warrants to common stock and the elimination of the profit guarantee the derivative liability ceased to exist and the value of the derivative as of July 31, 2021 of $8,357,476 will be derecognized from the consolidated balance sheets during the three months ended October 31, 2021.

On August 6, 2021, the Company’s related party lender exercised its right to convert its 2,750,000 outstanding warrants and 6,921,299 common shares issuable into 9,671,299 shares of common stock of the Company.

On August 11, 2021, the Company repaid the outstanding principal to its related party lender for the July 23, 2021 loan of $500,000 and the August 4, 2021 loan of $500,000.

On August 31, 2021, the Company’s related party lender cancelled its guarantee that the aggregate gross sales of its converted shares will be no less than $6,220,000 (see Note 5). In connection with the elimination of the profit guarantee the derivative liability ceased to exist and the value of the derivative as of July 31, 2021 of $4,944,903 will be derecognized from the consolidated balance sheets during the three months ended October 31, 2021.

On July 21, 2021, the Company entered into a Convertible Loan Agreement with PlaySight Interactive Ltd (the Borrower) wherein the Company granted the Borrower a $2,000,000 line of credit with a six-month maturity date. Any borrowings under the line of credit bear interest at a rate of 15% per annum. On August 26, 2021, the Company issued an additional $700,000 to the Borrower under the line of credit.

On August 30, 2021, four of the Purchasers of the Convertible Notes that were issued on August 6, 2021 converted $2,000,000 of principal as well as the related accrued interest into 666,668 shares of common stock of the Company.

In accordance with ASC 855-10 management has performedOn September 3, 2021, the Company granted an evaluationaggregate total of subsequent events10,100,000 stock options to key employees and officers of the Company as compensation. The stock options have an exercise price of $0.001 per share for 10,000,000 of the stock options and $3.42 for 100,000 of the stock options, a contractual life of 10 years from January 31, 2018 through the date of issuance and are vested immediately upon grant.

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements were issued and has determined that it does not have any material subsequent events to disclose in these financial statements.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

FORWARD LOOKING STATEMENTS

Statements maderelated notes included elsewhere in this report and our Annual Report on Form 10-Q that are not historical or current facts are "forward-looking statements" made pursuant to10-K for the safe harbor provisions of Section 27A of the Securities Act of 1933 (the "Act")year ended April 30, 2021. Certain statements in this discussion and Section 21E of the Securities Exchange Act of 1934. These statements often can be identified by the use of terms such as "may," "will," "expect," "believe," "anticipate," "estimate," "approximate" or "continue," or the negative thereof. We intend that suchelsewhere in this report constitute forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management's best judgment as to what may occurSee “Cautionary Statement Regarding Forward Looking Information’’ elsewhere in the future. However, forward-looking statements are subject tothis report. Because this discussion involves risks and uncertainties, and important factors beyond our control that could cause actual results and events tomay differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise anyin these forward-looking statements.

Overview and Description of Business

Lazex Inc. (“Lazex”) was incorporated under the laws of the State of Nevada on July 12, 2015. On August 23, 2019, the majority owner of Lazex entered into a Stock Purchase Agreement with Slinger Bag Americas Inc., a Delaware corporation (“Slinger Bag Americas”), which was 100% owned by Slinger Bag Ltd. (“SBL”), an Israeli company. In connection with the Stock Purchase Agreement, Slinger Bag Americas acquired 20,000,000 shares of common stock of Lazex for $332,239. On September 16, 2019, SBL transferred its ownership of Slinger Bag Americas to reflect eventsLazex in exchange for the 20,000,000 shares of Lazex acquired on August 23, 2019. As a result of these transactions, Lazex owned 100% of Slinger Bag Americas and the sole shareholder of SBL owned 20,000,000 shares of common stock (approximately 82%) of Lazex. Effective September 13, 2019, Lazex changed its name to Slinger Bag Inc.

On October 31, 2019, Slinger Bag Americas acquired control of Slinger Bag Canada, Inc., (“Slinger Bag Canada”) a Canadian company incorporated on November 3, 2017. There were no assets, liabilities or circumstances afterhistorical operational activity of Slinger Bag Canada at that time.

On February 10, 2020, Slinger Bag Americas became the 100% owner of SBL, along with SBL’s wholly owned subsidiary Slinger Bag International (UK) Limited (“Slinger Bag UK”), which was formed on April 3, 2019. The owner of SBL contributed it to Slinger Bag Americas for no consideration.

On June 21, 2021, Slinger Bag Americas entered into a membership interest purchase agreement with Charles Ruddy to acquire a 100% ownership 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 referred to as the “Company” or “Slinger.”

The Company operates in the sporting and athletic goods business. The Company is the owner of the Slinger Launcher, a highly portable and affordable ball launcher built into an easy to transport wheeled trolley bag. The Slinger Launcher allows anyone to simply and easily control the speed, frequency and elevation of balls that are launched for practice, training or fitness purposes.

The Company has initially focused all its energies on the tennis market worldwide, but is in the early stages of developing ball launchers for other ball sports. 

For the regular tennis player, the Slinger Launcher is much more than a tennis ball launcher. It also functions as a complete tennis bag with ample room for racquets, shoes, towels, water bottles and other accessories and can charge mobile phones and other devices.

Tennis ball machines have been around since the 1950’s when they were introduced by Renne Lacoste. Improvements to performance were made in the 1970’s when Prince started its tennis business on the back of its first product – Little Prince – which was a vacuum operated ball machine. In the 1990’s the first battery operated machines came to the market and since that time very little, if anything, has changed in the structure of ball machine products outside of added computerization. Typically, the machines being marketed by traditional ball machine brands are large, cumbersome and awkward to operate. They are also very expensive – often well above U.S. $1,000. Up until today the vast majority of all tennis ball machines have sold to tennis facilities, with only a few being sold directly to tennis playing consumers.

According to the Tennis Industry Association (www.tia.org) the single largest challenge facing tennis participation is the fact that 34% of lapsed players cited a “lack of playing partner” as the reason for them stopping to play tennis. The Slinger Launcher goes a long way to solving this issue.

The global tennis market is regarded by industry experts, governing organizations, tennis brands and tennis-specific market research companies as having 100 million active players globally, with as many consumers again being avid fans of the sport. Of this 100 million tennis player market, 20 million players are regarded as frequent or avid players – players who play regularly - at least 1 time per month. These avid players drive the total tennis industry and account for 80% of all tennis revenues worldwide.

It is this avid player market that the Company is focused on penetrating with its Slinger Launcher and associated tennis accessories.

The Company intends to disrupt this traditional tennis market by creating a new ball machine category – called Slinger Launcher – and marketing portable and affordable Slinger Launchers directly to avid, regular tennis players. Constructed within a wheeled trolley tennis bag, a Slinger Launcher weighs around 15kgs / 34lbs when empty. If stored with 72 balls inside the weight increases to 19kgs / 42lbs. It can easily be stored in a car trunk, wheeled to the court and set up within minutes to use. The Slinger Launcher is powered by a 6.6Ah Lithium battery that can last up to 3.5 hours of play depending on the settings being used and frequency of use. The Slinger Launcher’s convenience as a tennis bag combined with its ease of operation and overall performance as a tennis ball launcher is the basis that the Company will target direct sales to these avid players.

While the initial brand focus is clearly on tennis, the Company is developing similar launchers to address other forms of tennis around the globe that are either rapidly gaining new participants or are already well-established sports in their own right. These include, but are not limited to, Pickleball (U.S.), Soft Tennis (Japan), and Paddle Tennis (International markets), all of which are currently in either development or testing and are planned for introduction in calendar 2022 .

On December 3, 2020, Slinger signed an exclusive agreement with Flixsense Pty Limited d/b/a Gameface for the development of a tennis specific artificial intelligence (AI) application. The Company intends to introduce a market disrupting tennis app for players of all ages and abilities. This app will provide a wide range of analytics and other services and include practice and tennis fitness drills and activities, coaching tips and advice and a full suite of AI analytics. The Company will offer some services free of charge and will build a tiered subscription model for others. The app is expected to be ready to launch to the market later in calendar 2021.  

In future years, the Company plans to enter new ball sport markets such as baseball, softball, and cricket, which are currently planned for introduction in calendar 2023.

The Company delivers Slinger Launchers directly from the final assembly facility in Xiamen, China to customers either by direct shipment from the port in China, or to third party logistics facilities in Columbia, SC (U.S.) to support our U.S. business, Belleville, Ontario, Canada, Rotterdam, The Netherlands to support smaller distributors in Canada, Europe, the Middle East, Africa, and lastly to Israel.

Additionally, we ship full containers of our Slinger Triniti tennis balls from Wilson (our supplier) in Thailand to the United States and Belgium for onward distribution.

The Company has contracted with exclusive distributors globally. These include Japan, UK, Ireland, Switzerland, Scandinavian markets (covering 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 Czech and Slovak Republics, Greece, Panama, South Africa, Hong Kong, Macau and China and we are in various stages of negotiation with other potential market distribution companies across the globe.

Strategic Brand Partnerships

The Company is actively working on securing a number of highly visible ground-breaking strategic partnerships across tennis. These partnerships will both provide the Company with co-branded products to supplement the core product offering and, at the same time, are expected to drive mutually beneficial marketing campaigns aimed at reaching avid tennis players globally. Details of such partners announced and active today include: 

● Wilson Sporting Goods: North America: The Company has entered a strategic partnership with the global leader in tennis, Wilson, for the supply of co-branded Triniti tennis balls in the U.S. and Canada markets.

● Professional Tennis Registry (PTR): PTR is the world’s most prestigious teaching pro organization with more than 40,000 members. The Company has partnered with PTR for the supply of Slinger Launchers to their membership.

● Peter Burwash International (PBI): A high profile organization providing coaching and tennis services to high level, high quality hotels, resorts and tennis facilities across the globe. The Company is the official supplier of Slinger Launchers to PBI, which will be used at each location and PBI will offer an affiliate marketing program promoting sales to its list of global clients.

● DSV Logistics USA and OSL Logistics: DSV is one of the world’s leading suppliers of warehousing, freight forwarding and logistics. The Company will use DSV warehousing services in the U.S. to optimize logistical activities. OSL are currently providing all freight forwarding for the U.S. markets and Europe as well as 3^rd party warehousing logistics in Rotterdam for Europe.

Competition

There are currently no competitors with products that are similar to the Slinger Launcher, based on its portability, affordability and tennis bag functionality. There are, however, other companies that make tennis ball machines, including the following:

Raw Materials

All materials used in the Slinger Launder are available 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 Ball Collector tube parts are produced using an injection mold using poly propylene mixed with 30% glass fibers. The electronic motors, PCB boards and remote-control parts are all standard off-the-shelf items. 

Intellectual Property

As at the date of such statement hereof, the Company has applied for international design and utility patent protection for its main 3 products: Slinger Launcher, Slinger Oscillator and Slinger Telescopic Ball Tube. Patents have been applied for in all key markets including the U.S., China, Taiwan, India, Israel and EU markets and granted in China and Israel. Trademarks have been applied for in all major markets around the globe. Trademark protection has been applied for and/or to reflect the occurrence of anticipated or unanticipated events.

DESCRIPTION OF BUSINESS

We are an operating company which provides travel consulting and tour guide services. Our main function can be described as to consult customers and help them to arrange the itinerary, by building a route, which includes breweriesreceived in the regionfollowing countries:

*Protection is pending.

The Company is engaged in ongoing efforts to register more trademarks across an expanding list of products, services and applications, which are in various stages of the registration process.

Slinger Bag Inc. owns the rights to its Slingerbag.com domain.

Strategy

The Company has an opportunity to disrupt the traditional tennis market globally. The Company expects drive 80% of its global revenues through its direct-to-consumer go-to-market strategy, whether that be through its on-line e-commerce platform at www.slingerbag.com or through associated e-commerce platforms established and managed by its distribution network. The balance of revenues will be driven through partnerships with leading wholesalers, federations and teaching pro organizations and other transactions across various markets. The Company will operate a third-party distributor structure in all markets with the exception of the United States, the largest tennis market globally, Canada and its founder’s home market of Israel. Distributor partners will have exclusive territories and will have a recognized background within the tennis industry for their choice. We provide customers with information concerning transportation,market as well as having the cost of itfinancial capacity and how it operates. Whenever needed, we provide additional services on orientation, for instance, provide information concerning medical facilities, food stores, car repairs or additional entertainments, transportation and ways of using itservice infrastructure to aggressively grow the Slinger brand. Uniquely in the cases mentioned above. We also provide tour guide services specializingsports industry, all consumer orders received into Slingerbag.com from markets outside the United States will be routed back to our local distribution partners to fulfill and to service their local customers. All distributor partners will purchase with advanced orders, either based on a vendor-direct FOB Asia direct ship or through 1 of our 3 global 3^rd party distribution facilities on a duty paid basis and at premium cost price. Currently, the Company has signed a number of exclusive distribution agreements in arranging brewery tourskey markets and has on-going discussions with other key potential distributor partners in other markets around the globe and is looking to close these distribution arrangements in the coming months.

The United States market will remain a direct to consumer market for tourists visitingSlinger. As the Czech Republic. The highest rate of the beer consumption per capitalargest tennis market in the world with 17.4 million players of which 10.5 million are regular / avid players, the United States is a key market both to establish the Slinger brand and to drive demonstrable growth. Recently the industry reported a significant increase in U.S. tennis participation and overall number of tennis play occasions, something that has been replicated in other key tennis markets around the globe. Direct to consumer sales will be supplemented by one or more leading tennis wholesalers who manage large databases of coach, player, college, high school and club clients. This market will be serviced out of a third-party logistics facility in West Columbia, SC and operated by one of Slinger’s preferred global logistics partners, DSV, one of the world’s leading suppliers of freight-forwarding, logistics and warehousing.

Brand Marketing

As a direct-to-consumer e-commerce brand, all marketing activity and advertising media will be centered around pushing consumers to www.slingerbag.com and converting them to purchases. Slinger has engaged a number of leading agencies to support its global marketing efforts:

Brand Nation is a world class influencer marketing agency based in London. Brand Nation will lead all influencer programming globally. Slinger has seeded about 50% of its planned 1,000 global influencers to date. Influencers targeted are wide ranging and include leading sports, tennis, film, TV, music and blogger celebrities all known for the fact that they play tennis regularly and have a fan base in excess of 10,000 followers. All influencer activity is rolled back up to the Slinger social media platforms as a means of generating significant brand awareness and product interest.

Ad Venture Media Group is a New York based leading PPC (pay-per-click) agency whose work is grounded in sophisticated scientific analysis of consumer data and consumer trends and they are recognized globally as leaders in paid search and paid social media campaigns. Ad Venture Media will lead all Slinger PPC activity on a performance-based fee structure and is briefed to drive consumer engagement, through bespoke advertising campaigns that are aligned to our product profitability objectives.

In the United States market, we have partnered with an organization called Team HQS who will manage an affiliate marketing program across U.S. based teaching professionals, players, juniors and events. These affiliates will be provided with unique affiliate marketing codes to share with their social media followers and other such communities that they are connected to and each will receive an affiliate marketing fee based on revenues generated by consumers purchasing Slinger products attributable to their unique code.

We continue to evaluate each support agency on a monthly basis and at the same time are continually exploring new avenues to expand our reach to our core customers.

Each of our distributor partners around the world are establishing their Slinger distribution business as Slinger itself would do if it was establishing a Slinger subsidiary in each market. As such, each distributor will also adopt all forms of Slinger brand marketing programs as well as initiating new local concepts of their own – all aimed at reaching the avid/regular tennis player directly and ensuring that the Slinger brand message is consistent around the globe. Slinger has agreed a local marketing budget structure with each distributor as part of its distribution agreement. This marketing budget will be primarily funded by the distributor partner with an additional contribution coming from Slinger with the contribution being linked to the distributor’s purchase objectives. Each distributor will execute local grassroots programs including demonstration days, local teaching pro partnerships, specialist tennis network communications, seeding of Slinger product locally as necessary to local key market tennis influencers to further increase the intensity of the influencer effort. Marketing dollars will also be allocated to Google, Facebook, YouTube and other social media advertising spend and, where appropriate, approved and overseen by Ad Venture Media Group.

Distribution Agreements

Slinger Bag Americas has entered into exclusive distribution agreements for Slinger’s line of products, including, but not limited to, tennis ball launcher devices, tennis ball launcher accessories, sports bags, tennis balls, tennis court accessories and other tennis related products in the Czech Republic. There are many breweriesfollowing markets and beer museumswith the following distributors:

Brand Endorsements

We have reached agreement with several globally recognized tennis players and coaches to become brand ambassadors.

Tommy Haas (former ATP #2 Player) has been appointed the Slinger Bag Chief Ambassador. In this role Tommy will support Slinger in building out its global ambassador team focused on identifying ambassadors in our key global business markets of the U.S., Japan, Europe, Australia, China, Brazil and India. Tommy will also be very active supporting and promoting Slinger across the globe with personal appearances at Slinger events and via online training and drill videos.

Mike and Bob Bryan (aka the Bryan Brothers – the foremost doubles team in the Czech Republic. Our presidenttennis world) have extended their ambassador agreements and directorwill continue to feature prominently in our marketing activities and messaging.

Additionally, we have brand endorsements with the following athletes and coaches:

Each of the foregoing athletes and coaches is or was either a world-ranked singles or doubles tennis player or, in the case of Nick Bollettieri and Patrick Mouratoglou, the coach of a number of world-ranked tennis players, has agreementsa large following of fans and supporters and is active across many aspects of tennis today.

The Professional Tennis Registry (PTR) – a United States-based teaching teacher association with majorityapproximately 40,000 members will become a non-exclusive strategic partner for Slinger with all their members able to access an affiliate member part of our website.

Peter Burwash International (PBI) – a United States-based, highly respected, global tennis services company set up by Peter Burwash some 35 years ago. PBI provides tennis programs and other tennis services to as many as 56 of the globes leading hotels and resorts. Slinger Launchers will be available to use at each resort and the PBI team will be actively promoting Slinger as part of our affiliate marketing activity.

PTCA Central Europe – a European coach organization of leading touring pro coaches and they, like others, will undertake an affiliate marketing approach.

Tie Break 10s – a global organization that owns and operates Tie Break 10 events both independently and in partnership with major global tour events, e.g., Indian Wells. These events involve top players playing ‘tie-break’ matches with the event fully completed in one evening and with a significant cash prize for the winner. Slinger will be promoted at each of these events and will be available for fans to test out as well as the Slinger brand name being prominently used on Tie Break 10s social media.

Tennis One App – a United States-based company that has developed and successfully marketed an all-inclusive tennis app for players across the globe. Slinger has engaged with Tennis One to support its coaches corner segment – a weekly podcast series and in doing so benefits from the brand exposure available through the reach of the consumers using the app on a regular basis.

Functional Tennis – an Ireland based social media tennis blog site with an excess of 250,000 followers. Slinger is engaged with Functional Tennis in a variety of ways and is the presenting sponsor of its weekly Tennis Podcast.

We are currently in discussions with other organizations, events, prominent coaches and players and have to date seeded Slinger products to 12 of the Top 20 ATP male players, 5 of the top 20 WTA women players, plus numerous other top-class touring and teaching professionals.

Throughout 2020 we sponsored several prominent tennis events, e.g. Battle of the Brits, Tie Break 10s (all shown live across the globe).

Research and Development

The Company is involved in additional research and development of transportable, affordable and player-enhancing ball launching machines and associated game improvement products for all ball sports. Following a successful launch of its tennis ball launcher, Slinger is currently field testing its new pickleball, paddle and soft tennis launchers, which are expected to be introduced to the market in calendar 2022. Slinger plans to introduce similar transportable, versatile and affordable ball launchers for baseball, softball, cricket, badminton and other high participation ball sports over the course of the next 3 years. In this connection, on September 10, 2020, Slinger entered into an agreement with Igloo Design, which is the same company that designed the Slinger Launcher for tennis, for a Slinger ball launcher for baseball and softball. This development commenced during the three months ended October 31, 2020 and initial design ideas and further direction have been provided.

We retain outside consultants to provide research and product design services and each consultant has a specific expertise (e.g., molding technology, electronics, product design, bag design, as examples). We also are working with a select group of highly qualified and resourceful third-party suppliers in Asia. We are continually striving to identify product enhancements, new concepts and improvement to the production process on an on-going daily basis. In respect of any new project, management provides detailed briefs, market data, product cost targets, competitive analysis, timelines and project cost goals to either the product consultants or vendors and manages them regardingto agreed upon key performance indicators (“KPIs”). These KPI’s include but are not limited to: (i) manufacturing to target costs; (ii) agreed development timelines; (iii) established quality criteria; and (iv) defined performance criteria.

We also retain specialist trademark and patent attorneys and work with these attorneys on the projects, as needed.

Government Regulation

Both Slinger Launcher and Slinger Oscillator meet all the U.S. government requirements for electrical, radio wave and battery standards as well as having all necessary and required certification to facilitate global marketing and sales of these products.

Results of Operations for the Three Months Ended July 31, 2021 and 2020

The following are the results of our service delivery.operations for the three months ended July 31, 2021 as compared to 2020:

Net sales

Net sales increased $1,972,588, or 349%, during the three months ended July 31, 2021 as compared to the three months ended July 31, 2020. The increase is due to an increase in the number of new orders placed on the Company’s website and from its international distributors and fulfilled during the three months ended July 31, 2021 as compared to the three months ended July 30, 2020 when a large portion of the orders were related to the Kickstarter and Indiegogo crowdfunding campaigns initiated in fiscal year 2019. As of July 31, 2021, we had deferred revenue of $1,239,083 representing amounts received for units that have not been shipped to customers. We provide informationexpect these orders to be fulfilled and the sales to be recognized in the year ended April 30, 2022.

Cost of sales and Gross income (loss)

Cost of sales increased $815,451, or 87%, during the three months ended July 31, 2021 as compared to the three months ended July 31, 2020, which was primarily due to the increase in net sales. Gross income increased $1,157,137, or 311%, during the three months ended July 31, 2021 as compared to the three months ended July 31, 2020. The increase in gross income is largely due to the prior year gross loss on accommodations suitablenet sales being due to (1) discounted pricing on the initial crowdfunding orders, (2) as fulfillment was later than initially scheduled we fulfilled orders with the “deluxe” version of launcher (including all features), as well as tennis balls, both of which increased costs, and (3) due to sanctions by the U.S. against Chinese sourced products, the import duty was raised on all launchers brought into the U.S. increasing our cost of sales. As a result, our cost of sales exceeded initial sales values raised in our crowdfunding campaigns. As of the beginning of the third quarter in the prior year, substantially all of the initial crowdfunding orders had been fulfilled.

Selling and marketing expenses

Selling and marketing expenses increased $405,079, or 134%, during the three months ended July 31, 2021 as compared to the three months ended July 31, 2020. This increase is largely driven by an increase in social media advertising, sponsorships, and other investments in our public relations presence in order to drive sales and build brand awareness.

General and administrative expenses

General and administrative expenses, which primarily consist of compensation (including share-based compensation) and other employee-related costs, as well as legal fees and fees for professional services, increased $1,635,531, or 215%, during the three months ended July 31, 2021 as compared to the three months ended July 31, 2020. This increase is largely due to an increase in compensation expense due to increased headcount, as well as increased shares and warrants issued for services due to increased ambassadors, as a result of the continued growth of the business.

Research and development costs

Research and development costs increased $145,938, or 519%, during the three months ended July 31, 2021 as compared to the three months ended July 31, 2020. This increase is primarily driven by our investment in a new platform and app that will integrate artificial intelligence (AI) technology to offer more value to our customers, which we began developing in termsDecember 2020.

Other expenses (income)

Other expenses, net increased $1,031,875 during the three months ended July 31, 2021 as compared to the three months ended July 31, 2020. The increase was primarily due to the increase in loss on extinguishment of prices and location. We also alterdebt during the route of the itinerary dependingthree months ended July 31, 2021, which was partially offset by an increased gain on the longevitychange in fair value of the desired tour and the money our customers expect to spend. Expecting our customers to face difficulties in negotiating with locals, we may offer to provide assistance in either negotiating or provide the service of an interpreter. For instance, if clients accept it, we negotiate booking of apartments, details of car rental on behalf of our customers and in their interest, or we expect to be at service in any other case when customers might need assistance in negotiating. We generatederivatives as well as a route based on the following criteria listed in an application form: 1) regions the customers would like to visit 2) period of their staydecrease in the country 3) amountamortization of money they expect to spend ondebt discounts and related party interest expense as a tour. We pay attention to local craft breweries, barsresult of lower related party debt balances year over year.

Liquidity and pubs. We expect to continue working with worldwide famous craft breweries.Capital Resources

RESULTS OF OPERATIONS

Our financial statements have been prepared assuming thaton a going concern basis which assumes we will be able to realize our assets and discharge our liabilities in the normal course of business for the foreseeable future. We had an accumulated deficit of $32,258,585 as of July 31, 2021 and more losses are anticipated in the development of the business. Accordingly, there is substantial doubt about our ability to continue as a going concern and, accordingly,concern. Our financial statements do not include any adjustments relatingrelated to the recoverability and realizationclassification of assets or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern.

The ability to continue as a going concern is dependent upon our generating profitable operations in operation.

We expect we will require additional capitalthe future and/or being able to obtain the necessary financing to meet our long termobligations and repay our liabilities arising from normal business operations when they become due. Management intends to finance operating requirements. We expect to raise additional capital through, among other things,costs over the salenext twelve months with existing cash on hand, loans from related parties, and/or private placement of equity debt and/or debt securities.common stock.

Three months ended January 31, 2018 compared to three months January 31, 2017.

During three months ended January 31, 2018The following is a summary of our cash flows from operating, investing and 2017, we have not generated any revenue.

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During the three months ended January 31, 2018, we incurred expenses of $2,293 compared to $2,125 incurred during the three month period ended January 31, 2017.

Our net lossfinancing activities for the three months ended JanuaryJuly 31, 2018 was $2,2932021 and 2020:

We had cash and cash equivalents of $1,013,309 as of July 31, 2021, as compared to a net income of $2,125 during the three month period ended January 31, 2017.

Nine months ended January 31, 2018 compared to nine months January 31, 2017.

Revenue increased from $4,800 during the nine months ended January 31, 2017 to $13,240 during the nine months ended January 31, 2018 due to an increase in the number of tours conducted during the first and second quarter of the fiscal 2018.

During the nine months ended January 31, 2018, we incurred expenses of $17,273 compared to $5,645 incurred during the nine month period ended January 31, 2017. The incurred consulting expense of $4,000 for assistance in applying for DTC eligibility related to broker/dealer sales of its common stock. Videography expenses of $3,000 were incurred to create the Company tours' video portfolio. The Company had an increase of $3,148 in other administrative expenses due to depreciation of a computer and computer software purchased at the end of the prior fiscal year, additional bank fees incurred from sales of the company stock, and annual payments for registered agent services and business license.  The increase in professional fees was due to expenses incurred to auditor for reviews of the quarters ended July 31, 2017 and October 31, 2017, and for the tax return preparation for the year ended April 30, 2017.

Our net loss for the nine months ended January 31, 2018 was $4,033 compared to a net income of $845 during the nine month period ended January 31, 2017.

LIQUIDITY AND CAPITAL RESOURCES

As of January 31, 2018 our total assets were $28,159 compared to $19,365 in total assets at April 30, 2017. As of January 31, 2018, our total liabilities were $1,114 compared to $6,987 in total liabilities at April 30, 2017. The increase in total assets was due to proceeds received from issuance of common stock.

Stockholders’ equity increased from $12,378$928,796 as of April 30, 2017 to $27,045 as of January 31, 2018 due to issuance of common stock during the nine months period ended January 31, 2018.2021.

Cash Flows used by Operating Activities

For the nine month period ended January 31, 2018, netNet cash flows used in operating activities was $8,090. Net$104,683 during the three months ended July 31, 2021, compared with $1,594,486 during the same period in 2020. Our net cash flows used in operating activities during the three months ended July 31, 2021 was $655primarily the result of our net loss of $3,435,312 for the nine month period ended January 31, 2017. Netas well as increases in inventory and prepaid expenses and other current assets during the period, which was partially offset by net non-cash expenses of $1,659,833 and increases in accounts payable and accrued expenses, accrued payroll and bonuses, deferred revenue and accrued interest – related party as well as a decrease in accounts receivable during the period. Our net cash flow used in operating activities increased due toduring the three months ended July 31, 2020 was primarily the result of our net loss of $1,374,026 for the period as well as increases in operatinginventory and accounts receivable, net non-cash gains of $267,133, and decreases in accounts payable and accrued expenses. These items were partially offset by increases in accrued payroll and bonuses, deferred revenue and accrued interest – related party as well as a decrease in prepaid expenses and payment of accrued expenses.other current assets during the period.

Cash FlowsNet cash used by Investing Activities

We used $4,800 in investing activities was $300,000 and $0 for the nine month periodthree months ended JanuaryJuly 31, 2018 compared to $3,000 for the nine month period ended January 31, 2017. During the nine month period ended January 31, 2018 the Company purchased a computer software to make operations more efficient.

Cash Flows from Financing Activities

For the nine month period ended January 31, 2018,2021 and 2020. Our net cash flows fromused in investing activities during the three months ended July 31, 2021 consisted of a $300,000 issuance of a note receivable.

Net cash provided by financing activities was $18,700 received$500,000 for the three months ended July 31, 2021, compared with $1,620,000 for the same period in 2020. Cash provided by financing activities for the three months ended July 31, 2021 consisted of proceeds of $500,000 from a note payable with a related party. Cash provided by financing activities for the three months ended July 31, 2021 consisted of proceeds of $1,500,000 from notes payable with a related party and proceeds of $120,000 from a note payable.

Description of Indebtedness

Notes Payable – Related Party

Total outstanding borrowings from the Company’s related party lender as of July 31, 2021 amounted to $500,000. Accrued interest due to this related party as of July 31, 2021 amounted to $803,869.

On August 4, 2021, the Company entered into a loan agreement with its related party lender for borrowings of $500,000. The loan is to be repaid within 30 days of receipt and shall bear interest at a rate of 12% per annum.

On August 11, 2021, the Company repaid the outstanding principal to its related party lender for the July 23, 2021 loan of $500,000 and the August 4, 2021 loan of $500,000.

See Note 5 and Note 11 to the condensed consolidated financial statements for additional information.

Note Payable

On April 15, 2021, the Company entered into a $2,000,000 note payable (the “Note”). The Note matures April 14, 2023 and bears interest at fifteen percent (15%) per year. The Company pays interest at maturity, at which time all principal and unpaid interest is due.

On August 6, 2021, the Company used the net proceeds from issuancethe sale of common stock comparedthe Securities (see Note 11) to $0pay 100% of the outstanding principal and accrued interest through August 6, 2021 of the $2,000,000 Note.

See Note 6 and Note 11 to the condensed consolidated financial statements for the nine month period ended Januaryadditional information.

Future amounts due as of July 31, 2017.2021 are summarized as follows: