Sacks Parente Golf Inc
For the period ended Jun 30, 2024. Filed Aug 5, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 5, 2024
NWTG$0.71-5.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-04-30.
0001493152-24-017176
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-05.
0001493152-24-030203
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 71 previous paragraphs and 90 current paragraphs.
55 unchanged; 14 reworded; 13 added; 2 removed; 0 previous and 8 current paragraphs rearranged.
Tables are not compared: 3 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (13)
Current report
On June 4,2024, the Company received a staff determination letter (the “Determination Letter”) from the Staff notifying the Company that it had not regained compliance with the Bid Price Requirement by June 3, 2024, and is not eligible for a second 180-day period due to the Company’s failure to comply with the minimum stockholders’ equity initial listing requirement of The Nasdaq Capital Market.
Current report
Pursuant to the Determination Letter, the Company requested a hearing before a Hearings Panel (the “Panel”). The hearing request automatically stayed any suspension or delisting action pending the hearing and the expiration of any additional extension period granted by the Panel following the hearing. By letter dated June 24,2024, the Company was notified that the Panel granted the Company a temporary exception to regain compliance with the Bid Price Requirement subject to the following milestones: (1) on or before July 31,2024, the Company must effect a reverse stock split and, thereafter maintain a $1.00 closing bid price for a minimum of ten consecutive business days; and (2) on or before August 13,2024, the Company must demonstrate compliance with the Bid Price requirement by evidencing a closing bid price of $1.00 or more for a minimum of ten consecutive trading sessions. As set forth below, the Company effected a reverse stock split on July 30,2024.
Current report
Reverse Stock Split
Current report
On July 18, 2024, the Company filed a Certificate of Amendment to amend its Certificate of Incorporation with the Secretary of State of Delaware to effect a reverse stock split of the Company’s common stock at a ratio of 1-for-10 shares (the “Reverse Stock Split”). The Reverse Stock Split became effective as of 12:01 a.m. Eastern Time on July 30, 2024 and the Company’s common stock began trading on The Nasdaq Capital Market on a post-split basis under its existing trading symbol.
Current report
As a result of the Reverse Split, every ten shares of common stock were automatically combined into one share of common stock. The authorized number of shares of common stock was not affected by the Reverse Stock Split. No fractional shares were issued in connection with the Reverse Stock Split, as all fractional shares were rounded up to the next whole share. Accordingly, all share and per share amounts presented herein with respect to common stock have been retroactively adjusted to reflect the Reverse Stock Split for all periods presented. Proportionate adjustments for the Reverse Stock Split have been made to the per share exercise price and the number of shares issuable upon the exercise of warrants, the number of shares reserved for issuance under the Company’s equity plans, and all the then outstanding awards under the Company’s equity plans. The Reverse Stock Split will not change the par value of the common stock or modify any voting rights or other terms of common stock.
Current report
Comparison of the Six Months Ended June 30, 2024 Compared to the Six Months Ended June 30, 2023
Current report
Net Sales
Current report
Our net sales increased $1.0 million, or 749%, to approximately $1.2 million during the six months ended June 30, 2024, compared to $137,000 during the six months ended June 30, 2023. The increase in net sales was from the introduction of our Newton Motion driver shaft product line in November 2023, and our Newton Motion fairway shaft product line in April 2024. For the six months ended June 30, 2024, we generated $938,000 of net sales from the Newton Motion shafts, and we generated approximately 79% of our net sales through our websites.
Current report
Cost of goods sold
Current report
Operating expenses
Current report
Loss from operations
Current report
Interest income (expense), net
Removed paragraphs (2)
Previous report
In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company is provided a compliance period of 180 calendar days from the date of the Notice, or until June 3, 2024, to regain compliance with the minimum closing bid price requirement. If the Company does not regain compliance during the compliance period ending June 3, 2024, the Company may be afforded a second 180 calendar day period to regain compliance. To qualify for the second compliance period, the Company must (i) meet the continued listing requirement for market value of publicly-held shares and all other initial listing standards for the Nasdaq Capital Market, with the exception of the minimum closing bid price requirement, and (ii) notify Nasdaq of its intent to cure the deficiency. The Company can achieve compliance with the minimum closing bid price requirement if, during either compliance period, the minimum closing bid price per share of the Company’s common stock is at least $1.00 for a minimum of 10 consecutive business days. The Company anticipates that its shares of common stock will continue to be listed and traded on the Nasdaq Capital Market during the compliance period(s).
Previous report
The Company plans to carefully assess potential actions to regain compliance. However, the Company may be unable to regain compliance with the minimum closing bid price requirement during the compliance period(s), in which case the Company anticipates Nasdaq would provide a notice to the Company that its shares of common stock are subject to delisting, and the Company’s common shares would thereupon be delisted.
Reworded paragraphs (14)
Previous wording
On August 14, 2023, we entered into an underwriting agreement with The Benchmark Company for the purchase of shares of the Company’s common stock, in an offering of securities registered under an effective registration statement filed with the Securities and Exchange Commission. In the offering, the Company sold 3,200,000 shares of common stock, at a price of $4.00 per share. The offering closed on August 17, 2023, and total proceeds received, net of fees, were $11,594,000 including an underwriting discount of 7% and a non-accountable expenses allowance of 1% based on the aggregate proceeds of the offering.
Current wording
On August 14, 2023, we entered into an underwriting agreement with The Benchmark Company for the purchase of shares of the Company’s common stock, in an offering of securities registered under an effective registration statement filed with the Securities and Exchange Commission. In the offering, the Company sold 3,200,000 shares of common stock, at a price of $4.00 per share. The offering closed on August 17, 2023, and total proceeds received, net of fees, were $11.6 million including an underwriting discount of 7% and a non-accountable expenses allowance of 1% based on the aggregate proceeds of the offering.
Previous wording
On December 5, 2023, the Company received a written notice (the “Notice”) from the NASDAQ Stock Market LLC (“Nasdaq”) that the Company has not been in compliance with the minimum bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2) for a period of 30 consecutive business days. Nasdaq Listing Rule 5550(a)(2) requires listed securities to maintain a minimum closing bid price of $1.00 per share, and Nasdaq Listing Rule 5810(c)(3)(A) provides that a failure to meet the minimum closing bid price requirement exists if the deficiency continues for a period of 30 consecutive business days. The Notice has no immediate effect on the listing of the Company’s common stock on the Nasdaq Capital Market.
Current wording
On December 5, 2023, the Company received a deficiency letter from the Listing Qualifications Department of The NASDAQ Stock Market LLC (“Nasdaq”) notifying the Company that, for the preceding 30 consecutive business days, the closing bid price of the Company’s common stock remained below the minimum $1.00 per share requirement for continued listing on The Nasdaq Capital Market as set forth in Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Requirement”). The Company was provided a compliance period of 180 calendar days from the date of the letter, or until June 3, 2024, to regain compliance with the Bid Price Requirement.
Previous wording
Our net sales increased $260,000, or 289%, to $350,000 during the three months ended March 31, 2024, compared to $90,000 during the three months ended March 31, 2023. The increase in net sales was from the introduction of our Newton Motion driver shaft product line in November 2023. For the three months ended March 31, 2024, we generated through our websites $290,000 of net sales from the Newton Motion driver shaft.
Current wording
Our net sales increased $766,000, or 1,630%, to $813,000 during the three months ended June 30, 2024, compared to $47,000 during the three months ended June 30, 2023. The increase in net sales was from the introduction of our Newton Motion driver shaft product line in November 2023, and our Newton Motion fairway shaft product line in April 2024. For the three months ended June 30, 2024, we generated $648,000 of net sales from the Newton Motion shafts, and we generated approximately 74% of our net sales through our websites.
Previous wording
Selling, general and administrative expenses include employee costs, legal and professional fees, sales and marketing expenses, stock based compensation, public company expenses, rent, depreciation and other general expenses. Our selling, general and administrative expenses increased approximately $355,000 to $1.3 million during the three months ended March 31, 2024, compared to $916,000 during the three months ended March 31, 2023. The increase in selling, general and administrative expenses was from increased employee related expenses, increased public company related costs, increased advertising expense, and from routine changes in our selling, general and administrative expenses accounts to support our operations, as compared to the prior year period.
Current wording
Selling, general and administrative expenses include employee costs, legal and professional fees, sales and marketing expenses, stock based compensation, public company expenses, rent, depreciation and other general expenses. Our selling, general and administrative expenses increased approximately $837,000 to $1.5 million during the three months ended June 30, 2024, compared to $647,000 during the three months ended June 30, 2023. The increase in selling, general and administrative expenses was from increased employee related expenses, increased public company related costs, increased advertising expense, and from routine changes in our selling, general and administrative expenses accounts to support our operations, as compared to the prior year period.
Previous wording
Research and development costs include employee costs, consultants, licensing fees, and product design and development costs. Research and development expenses increased $165,000 to $190,000 during the three months ended March 31, 2024, compared to $25,000 during the three months ended March 31, 2023. The increase in research and development costs were due to costs incurred to test and refine prior to the commercialization of our Newton Motion fairway wood shaft product, which was launched in early April 2024. In addition, beginning in October 2023, the employment costs of our Chief Technology Officer and Vice President of Research & Development were recorded as a component of our research and development expenses, which we previously recorded to selling general and administrative expenses.
Current wording
Research and development costs include employee costs, consultants, licensing fees, and product design and development costs. Research and development expenses increased $189,000 to $207,000 during the three months ended June 30, 2024, compared to $18,000 during the three months ended June 30, 2023. The increase in research and development costs were due to costs incurred to test and refine prior to the commercialization of our Newton Motion fairway wood shaft product, which was launched in early April 2024. In addition, beginning in October 2023, the employment costs of our Chief Technology Officer and Vice President of Research & Development were recorded as a component of our research and development expenses, which we previously recorded to selling general and administrative expenses.
Previous wording
Loss from operations increased to $1.3 million for the three months ended March 31, 2024, compared to $897,000 million for the three months ended March 31, 2023. The increase in our loss from operations was due to our increased operating expenses, offset by increased gross profit, as discussed above.
Current wording
Loss from operations increased to $1.2 million for the three months ended June 30, 2024, compared to $650,000 for the three months ended June 30, 2023. The increase in our loss from operations was due to our increased operating expenses, offset by increased gross profit, as discussed above.
Previous wording
Interest income was $62,000 for the three months ended March 31, 2024, compared to interest expense of $20,000 for the three months ended March 31, 2023. The decrease in interest expense was due to our paying off our debt with the proceeds received from our initial public offering in August 2023, and the interest earned on our bank balances, as compared to the prior year period.
Current wording
Interest income was $47,000 for the three months ended June 30, 2024, compared to interest expense of $22,000 for the three months ended June 30, 2023. The decrease in interest expense was due to our paying off our debt with the proceeds received from our initial public offering in August 2023, and the interest earned on our bank balances, as compared to the prior year period.
Previous wording
Net loss increased $276,000 to $1.2 million during the three months ended March 31, 2024, compared to $917,000 for the three months ended March 31, 2023. The increase in net loss was due to increased operating expenses, offset by increased gross profit and decreased interest expense, as discussed above.
Current wording
Net loss increased $483,000 to $1.2 million during the three months ended June 30, 2024, compared to $672,000 for the three months ended June 30, 2023. The increase in net loss was due to increased operating expenses, offset by increased gross profit and decreased interest expense, as discussed above.
Previous wording
Cost of goods sold represents primarily our material, labor, components, and changes in inventory reserves for slow-moving or potentially obsolete products. Our cost of goods sold increased by $98,000 to $144,000 for the three months ended March 31, 2024, compared to $46,000 for the three months ended March 31, 2023 due to our increase in net sales. Our gross margin was 59% and 49% for the three months ended March 31, 2024 and 2023, respectively. The increase in gross margin was due to the change in product mix sold and changes to our inventory reserves as compared to the prior year period.
Current wording
Cost of goods sold represents primarily our material, labor, components, and changes in inventory reserves for slow-moving or potentially obsolete products. Our cost of goods sold increased by $390,000 to $468,000 for the six months ended June 30, 2024, compared to $78,000 for the six months ended June 30, 2023, due to our increase in net sales. Our gross margin was 60% and 43% for the six months ended June 30, 2024 and 2023, respectively. The increase in gross margin was due to the change in product mix sold and changes to our inventory reserves as compared to the prior year period.
Previous wording
Net cash used in operating activities for the three months ended March 31, 2024 totaled $1,151,000, compared to net cash used in operating activities for the three months ended March 31, 2023 of $186,000. The increase in net cash used in operations for the three months ended March 31, 2024, was primarily to fund our net loss adjusted by changes in stock based compensation expense, and routine changes to our working capital accounts.
Current wording
Net cash used in operating activities for the six months ended June 30, 2024 totaled $2.3 million, compared to net cash used in operating activities for the six months ended June 30, 2023 of $313,000. The increase in net cash used in operations for the six months ended June 30, 2024, was primarily to fund our net loss adjusted by changes in stock-based compensation expense, and routine changes to our working capital accounts.
Previous wording
Net cash used in investing activities for the three months ended March 31, 2024 totaled $104,000, and was for the purchase of software licensing and property and equipment. We had no investing activities during the three months ended March 31, 2023.
Current wording
Net cash used in investing activities for the six months ended June 30, 2024 totaled $188,000, and was for the purchase of property and equipment. Net cash used in investing activities for the six months ended June 30, 2023 totaled $3,000, and was for the purchase of property and equipment.
Previous wording
We had no financing activities during the three months ended March 31, 2024. Net cash provided by financing activities for the three months ended March 31, 2023 was $45,000, which included proceeds of $60,000 received in the private placement of common stock, and $15,000 repayment of our equipment purchase obligation.
Current wording
Net cash used in investing activities for the six months ended June 30, 2024 totaled $23,000, and was for repayment of our software licensing obligation. Net cash provided by financing activities for the six months ended June 30, 2023 was $154,000, which included proceeds of $180,000 received in the private placement of common stock, offset by $11,000 paid for deferred offering costs related to our planned initial public offering, and $15,000 repayment of our equipment purchase obligation.
Previous wording
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying financial statements, during the three months ended March 31, 2024, we incurred a net loss of $1,193,000 and used cash in operations of $1,151,000. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date of the financial statements being issued.
Current wording
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying financial statements, during the six months ended June 30, 2024, we incurred a net loss of $2.3 million and used cash in operations of $2.3 million. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date of the financial statements being issued. In addition, the Company’s independent registered public accounting firm, in its report on the Company’s consolidated financial statements for the year ended December 31, 2023, expressed substantial doubt about the Company’s ability to continue as a going concern.
Previous wording
At March 31, 2024, we had cash and cash equivalents on hand in the amount of $4,083,000. Management expects its cash on hand on March 31, 2024, to last for at least the next 10 months.
Current wording
At June 30, 2024, we had cash and cash equivalents on hand in the amount of $2.8 million. Management expects its cash on hand on June 30, 2024, to last for at least the next 7 months.
Rearranged current paragraphs (8)
Current report — wording carried from elsewhere
Cost of goods sold represents primarily our material, labor, components, and changes in inventory reserves for slow-moving or potentially obsolete products. Our cost of goods sold increased by $292,000 to $324,000 for the three months ended June 30, 2024, compared to $32,000 for the three months ended June 30, 2023 due to our increase in net sales. Our gross margin was 60% and 32% for the three months ended June 30, 2024 and 2023, respectively. The increase in gross margin was due to the change in product mix sold as compared to the prior year period.
Current report — wording carried from elsewhere
Our sales, cost of goods sold, operating expenses, and net loss from operations for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023 were as follows (amounts are rounded to nearest thousands):
Current report — wording carried from elsewhere
Operating expenses include selling, general and administrative expenses, and research and development costs.
Current report — wording carried from elsewhere
Selling, general and administrative expenses include employee costs, legal and professional fees, sales and marketing expenses, stock-based compensation, public company expenses, rent, depreciation and other general expenses. Our selling, general and administrative expenses increased approximately $1.2 million to $2.8 million during the six months ended June 30, 2024, compared to $1.6 million during the six months ended June 30, 2023. The increase in selling, general and administrative expenses was from increased employee related expenses, increased public company related costs, increased advertising expense, and from routine changes in our selling, general and administrative expenses accounts to support our operations, as compared to the prior year period.
Current report — wording carried from elsewhere
Research and development costs include employee costs, consultants, licensing fees, and product design and development costs. Research and development expenses increased $354,000 to $397,000 during the six months ended June 30, 2024, compared to $43,000 during the six months ended June 30, 2023. The increase in research and development costs were due to costs incurred to test and refine prior to the commercialization of our Newton Motion fairway wood shaft product, which was launched in early April 2024. In addition, beginning in October 2023, the employment costs of our Chief Technology Officer and Vice President of Research & Development were recorded as a component of our research and development expenses, which we previously recorded to selling general and administrative expenses.
Current report — wording carried from elsewhere
Loss from operations increased to $2.5 million for the six months ended June 30, 2024, compared to $1.5 million for the six months ended June 30, 2023. The increase in our loss from operations was due to our increased operating expenses, offset by increased gross profit, as discussed above.
Current report — wording carried from elsewhere
Interest income was $109,000 for the six months ended June 30, 2024, compared to interest expense of $42,000 for the six months ended June 30, 2023. The decrease in interest expense was due to our paying off our debt with the proceeds received from our initial public offering in August 2023, and the interest earned on our bank balances, as compared to the prior year period.
Current report — wording carried from elsewhere
Net loss increased $759,000 to $2.3 million during the six months ended June 30, 2024, compared to a $1.6 million net loss for the six months ended June 30, 2023. The increase in net loss was due to increased operating expenses, offset by increased gross profit and decreased interest expense, as discussed above.