Sacks Parente Golf Inc
For the period ended Sep 30, 2024. Filed Nov 14, 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.
Sep 30, 2024 · Filed Nov 14, 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 2024-06-30; filed 2024-08-05.
0001493152-24-030203
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-14.
0001493152-24-045401
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 90 previous paragraphs and 92 current paragraphs.
67 unchanged; 20 reworded; 5 added; 3 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 4 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 (5)
Current report
Secondary Public Offering
Current report
On October 8, 2024, the Company entered into an underwriting agreement with Aegis Capital Corp. as the sole underwriter relating to the offering, issuance and sale of up to 366,000 shares of the Company’s common stock, $0.01 par value per share, at a public offering price of $2.00 per share. The offering closed on October 10, 2024. The gross and net proceeds to the Company for the offering were approximately $732,000, and $536,000, respectively, after deducting the underwriting discounts and commissions and estimated offering expenses. The offering of the securities described above was made pursuant to the Company’s effective shelf registration statement on Form S-3 (Registration No. 333-281664), filed with the Securities and Exchange Commission (the “SEC”) on August 20, 2024 and amended on September 10, 2024, which was declared effective by the SEC on September 23, 2024, and the base prospectus included therein, as supplemented by the preliminary prospectus supplement filed with the SEC on October 8, 2024 and the final prospectus supplement with the SEC on October 10, 2024.
Current report
Net loss decreased from $1.2 million for the three months ended September 30, 2023, compared to $1.1 million for the three months ended September 30, 2024. The decrease in our net loss was due to our increased net sales and gross profit, offset by increased operating expenses, as discussed above.
Current report
Comparison of the Nine months Ended September 30, 2024 Compared to the Nine months Ended September 30, 2023
Current report
Net loss increased to $3.4 million for the nine months ended September 30, 2024, compared to $2.8 million for the nine months ended September 30, 2023. The increase in our net loss was due to our increased operating expenses, offset by increased gross profit, as discussed above.
Removed paragraphs (3)
Previous report
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 report
Comparison of the Six Months Ended June 30, 2024 Compared to the Six Months Ended June 30, 2023
Previous report
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.
Reworded paragraphs (20)
Previous wording
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 wording
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. By letter dated August 13,2024 from the Nasdaq Office of General Counsel, the Company was informed that it has regained compliance with the minimum bid price requirement of $1.00 per share under Nasdaq Listing Rule 5550(a)(2).
Previous 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.
Current wording
Our net sales increased $1,116,000, or 1,175%, to $1,211,000 during the three months ended September 30, 2024, compared to $95,000 during the three months ended September 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 September 30, 2024, we generated $1,182,000 of net sales from the Newton Motion shafts, and we generated approximately 95% of our net sales through our websites.
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 $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 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 $350,000 to $406,000 for the three months ended September 30, 2024, compared to $56,000 for the three months ended September 30, 2023 due to our increase in net sales. Our gross margin was 66% and 41% for the three months ended September 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.
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 $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.
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 $499,000 to $1.7 million during the three months ended September 30, 2024, compared to $1.2 million during the three months ended September 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 $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.
Current wording
Research and development costs include employee costs, consultants, licensing fees, and product design and development costs. Research and development expenses increased $186,000 to $201,000 during the three months ended September 30, 2024, compared to $15,000 during the three months ended September 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 $1.2 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.
Current wording
Loss from operations decreased from $1.2 million for the three months ended September 30, 2023, compared to $1.1 million for the three months ended September 30, 2024. The decrease in our loss from operations was due to our increased net sales and gross profit, offset by increased operating expenses as discussed above.
Previous wording
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 wording
Interest income was $30,000 for the three months ended September 30, 2024, compared to interest expense of $26,000 for the three months ended September 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 increase in interest income was due to interest earned on our bank balances, as compared to the prior year period.
Previous wording
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 wording
Our sales, cost of goods sold, operating expenses, and net loss from operations for the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023 were as follows (amounts are rounded to nearest thousands):
Previous wording
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 wording
Our net sales increased $2.1 million, or 923%, to approximately $2.4 million during the nine months ended September 30, 2024, compared to $232,000 during the nine months ended September 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 nine months ended September 30, 2024, we generated $2,120,000 of net sales from the Newton Motion shafts, and we generated approximately 89% of our net sales through our websites.
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 $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.
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 $740,000 to $874,000 for the nine months ended September 30, 2024, compared to $134,000 for the nine months ended September 30, 2023, due to our increase in net sales. Our gross margin was 63% and 42% for the nine months ended September 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
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 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 $1.7 million to $4.4 million during the nine months ended September 30, 2024, compared to $2.8 million during the nine months ended September 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 $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 wording
Research and development costs include employee costs, consultants, licensing fees, and product design and development costs. Research and development expenses increased $540,000 to $598,000 during the nine months ended September 30, 2024, compared to $58,000 during the nine months ended September 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 $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 wording
Loss from operations increased to $3.5 million for the nine months ended September 30, 2024, compared to $2.7 million for the nine months ended September 30, 2023. The increase in our net loss was due to our increased operating expenses, offset by increased gross profit, as discussed above.
Previous 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.
Current wording
Interest income was $139,000 for the nine months ended September 30, 2024, compared to interest expense of $68,000 for the nine months ended September 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 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.
Current wording
Net cash used in operating activities for the nine months ended September 30, 2024 totaled $3.4 million, compared to net cash used in operating activities for the nine months ended September 30, 2023 of $3.8 million. The decrease in net cash used in operations for the nine months ended September 30, 2024, was primarily related to cash used to repay our accrued payroll to officers.
Previous 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.
Current wording
Net cash used in investing activities for the nine months ended September 30, 2024 totaled $463,000, and was for the purchase of property and equipment. Net cash used in investing activities for the nine months ended September 30, 2023 totaled $101,000, and was for the purchase of property and equipment.
Previous 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.
Current wording
Net cash used in financing activities for the nine months ended September 30, 2024 totaled $131,000, and was for repayment of our software licensing obligation and deferred offering costs. Net cash provided by financing activities for the nine months ended September 30, 2023 was $10.5 million, which primarily related to proceeds of $11.1 million received from the public sale of our common stock.
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 320,000 shares of common stock, at a price of $40.00 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.
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 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.
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 nine months ended September 30, 2024, we incurred a net loss of $3.4 million and used cash in operations of $3.4 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 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.
Current wording
At September 30, 2024, we had cash and cash equivalents on hand in the amount of $1.3 million. Management expects its cash on hand on September 30, 2024, to last for at least the next 3 months.