Newton Golf Company, Inc.
For the period ended Dec 31, 2025. Filed Mar 31, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 31, 2026
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-K
Period ended 2024-12-31; filed 2025-04-04.
0001641172-25-002840
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-03-31.
0001493152-26-014164
Item 7. 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 85 previous paragraphs and 160 current paragraphs.
32 unchanged; 14 reworded; 110 added; 39 removed; 0 previous and 4 current paragraphs rearranged.
Tables are not compared: 3 previous and 2 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 (110)
Current report
Executive Summary
Current report
During 2024, 2025 and early 2026, several factors influenced the Company’s operations and financial position, including:
Current report
●Expansion of the Newton Motion shaft product line. The Company continued to expand its premium shaft offerings, including the introduction of the Motion fairway wood shaft in 2024, the Fast Motion driver shaft in 2025, and additional product development across the fairway wood and hybrid shaft categories set to launch in 2026.
Current report
●Increased market adoption of Newton shafts. More than 60 professional golfers have placed Newton shafts into tournament play across multiple professional tours, including the PGA TOUR Champions, contributing to increased awareness of the Newton brand and growth in shaft-related revenue.
Current report
●Capital raising activities. On March 16, 2026, the Company issued to entities affiliated with and controlled by Brett Hoge, one of the Company’s directors, an unsecured convertible promissory note with an aggregate principal amount of $500,000, which bears interest at a rate of 10% per annum and matures in 18 months, along with a five-year warrant to purchase 50,000 shares of common stock at an exercise price of $1.75 per share. The convertible promissory note, including accrued interest, is convertible into shares of common stock at maturity at a conversion price of $1.60 per share.
Current report
During 2024, the Company completed two public offerings generating approximately $7.8 million in net proceeds, strengthening liquidity and supporting product development, manufacturing expansion, and working capital.
Current report
We design, manufacture, and sell performance golf equipment, including premium golf shafts and putters, and focus on developing technology-driven golf products intended to enhance player performance. Our Newton Motion™ shaft product line represents a core component of our product strategy and has contributed significantly to recent revenue growth.
Current report
In April 2022, we expanded our manufacturing capabilities by opening a shaft manufacturing facility in St. Joseph, Missouri to support the production of advanced carbon fiber golf shafts. We seek to manufacture and assemble substantially all of our products in the United States where economically feasible, which management believes provides supply chain advantages and supports product quality, engineering control, and operational flexibility.
Current report
We sell our products through a combination of direct-to-consumer channels, including our websites, as well as through resellers, professional club fitters, distributors, and golf retailers. We currently distribute products primarily in the United States, with additional distribution in international markets including Japan and South Korea.
Current report
Product Introduction
Current report
In November 2023, the Company expanded its product portfolio through the introduction of the Newton Motion driver shaft, marking the Company’s entry into the premium golf shaft market. The Newton Motion driver shaft is a carbon fiber golf shaft designed to improve performance and consistency for golfers. In April 2024, the Company further expanded its product line with the introduction of the Newton Motion fairway wood shaft. In April 2025, the Company introduced the Fast Motion driver shaft, an updated premium shaft design that expands the Company’s driver shaft product lineup. The drivers and fairway wood shafts are manufactured at the Company’s facility in St. Joseph, Missouri.
Current report
The Newton Motion shafts utilize the Company’s proprietary “DOT” system, which replaces traditional shaft flex categories with a numerical system ranging from one to seven dots designed to provide golfers with a more precise fit based on swing characteristics. The Company believes this system simplifies shaft selection and allows golfers to match driver, fairway wood, and hybrid shafts across its product lines.
Current report
Product Development and Pipeline
Current report
The Company continues to refine and expand its shaft product lineup. In March 2026, the Company introduced an updated version of its Fast Motion Driver shaft. Updated versions of the Motion driver shaft and Motion fairway wood shaft are expected to be released in late March and April 2026. The Company is also developing additional shaft products, including a Fast Motion fairway wood shaft expected to launch in the second quarter of 2026 and hybrid shafts for both the Motion and Fast Motion product lines expected to launch during the second and third quarters of 2026.
Current report
The Company has focused product development on shaft designs tailored to specific club types, including shafts designed specifically for fairway woods rather than using a single shaft design across both drivers and fairway woods.
Current report
Market Adoption
Current report
Since the launch of the Newton Motion shaft line, the Company has seen increasing adoption among professional golfers across several tours, including the PGA TOUR Champions, Korn Ferry Tour, LPGA Tour, and other international tours. More than 60 professionals have put Newton shafts in play in tournament competitions across these tours. The Company believes that professional adoption is an indicator of product performance, as professional golfers typically select equipment based on its ability to improve performance.
Current report
During the 2025 golf season, Newton shafts were used in three tournament victories on the PGA TOUR Champions.
Current report
The expansion of the Newton Motion shaft product line has been a significant contributor to the Company’s recent revenue growth. The Company believes its premium golf-shaft products represent a core component of its long-term growth strategy. Increased adoption of Newton shafts by professional golfers, club fitters, and retail partners has expanded awareness of the Newton brand and helped facilitate broader distribution opportunities for the Company’s products.
Current report
Newton Gravity Putters
Current report
The Company also offers a line of putters under the Newton Gravity brand. During 2025, the Company reduced marketing expenditures directed toward the direct-to-consumer channel after determining that the return on advertising spend did not meet internal targets. As a result, the Company has shifted its near-term focus toward expanding distribution through wholesale and retail channels, including professional club fitters and golf retailers.
Current report
The Company’s growing presence in the premium golf shaft market has helped facilitate introductions to retail and fitter partners, which may create additional opportunities to expand distribution of other Newton-branded products. As the Company continues to develop these retail relationships, it expects the Gravity putter line to benefit from increased product visibility and broader distribution through these channels.
Current report
Golf equipment sales are generally seasonal, with demand typically increasing during the spring and summer months when golf activity is highest in many regions. As a result, the Company historically experiences stronger sales during the second and third quarters of the year when weather conditions are more favorable for outdoor play. Conversely, sales may be lower during the first and fourth quarters when cold weather in certain regions reduces outdoor golf activity.
Current report
Golf participation increased significantly during the COVID-19 pandemic as the sport was widely viewed as a socially distanced outdoor activity. Although the initial pandemic-driven surge has moderated, participation levels have remained elevated relative to historical levels, and the Company believes the sport has benefited from increased engagement among new and returning golfers.
Current report
In addition, the continued growth of off-course golf experiences, including golf entertainment venues such as Topgolf, and the increasing popularity of golf simulators and indoor golf facilities have expanded opportunities for individuals to participate in the sport. These venues and technologies allow consumers to experience golf in non-traditional environments, including urban locations, indoor facilities, and residential settings.
Current report
Golf simulators and indoor golf facilities have also expanded opportunities for participation in regions where weather conditions limit traditional outdoor play during portions of the year. As a result, golf enthusiasts in colder climates are increasingly able to practice and remain engaged with the sport on a year-round basis.
Current report
The Company believes that sustained participation in golf and increased engagement through both traditional and non-traditional golf experiences may support continued demand for golf equipment; however, future participation trends and consumer demand remain subject to economic conditions and other factors beyond the Company’s control.
Current report
Since listing our common stock on The Nasdaq Capital Market in August 2023, we have incurred additional expenses associated with operating as a public company. These costs include compliance with SEC reporting requirements, internal control compliance, director and officer liability insurance, board compensation, and increased accounting, legal, and audit fees. As a result, we expect our operating expenses to remain higher than those incurred prior to becoming a public company.
Current report
Inflation has resulted in moderate increases in the cost of certain raw materials and component parts used in the manufacture of our products. To date, we have largely absorbed these increases and have not significantly raised prices. If inflationary pressures persist, our manufacturing costs may increase and could adversely affect gross margins unless we are able to offset these increases through pricing adjustments, cost reductions, or operational efficiencies.
Current report
We continue to expand our network of qualified domestic suppliers to diversify sourcing and mitigate potential supply chain disruptions.
Current report
Overview of Operating Results
Current report
The Company’s operating results for the year ended December 31, 2025 were primarily driven by the following factors:
Current report
●Expansion of the Newton Motion shaft product line. Revenue growth during 2025 was primarily driven by the launch of the Fast Motion driver shaft, an updated premium shaft design that expands the Company’s driver shaft product lineup, full-year sales of the Newton Motion fairway wood shaft launched in April 2024 and continued expansion of the Newton Motion driver shaft launched in November 2023. The Company has continued to expand the platform with additional shaft configurations, including the introduction of the Fast Motion driver shaft and the planned launch of the Fast Motion fairway wood shaft, Fast Motion hybrid shaft, and Motion hybrid shaft. The Company manufactures its shafts at its facility in St. Joseph, Missouri, which management believes provides meaningful production capacity to support continued growth.
Current report
●Growth in direct-to-consumer sales. The Company continued to expand its direct-to-consumer channel through its websites, supported by improvements in digital marketing efficiency, higher conversion rates, and repeat customer purchases.
Current report
●Increased adoption by professional club fitters. Newton shafts gained increased visibility and adoption within the professional fitting channel, including recognition as the No. 1 selling shafts for both drivers and fairway woods at Club Champion Golf during 2025.
Current report
●Investment in marketing and operational infrastructure. The Company increased spending on marketing, personnel, and operational systems to support revenue growth and the scaling of the Newton brand.
Current report
These factors are discussed in greater detail below in the Company’s analysis of results of operations.
Current report
Net sales increased approximately $4.7 million, or 136%, to approximately $8.1 million for the year ended December 31, 2025, compared to $3.4 million for the year ended December 31, 2024, driven primarily by strong demand for the Newton Motion shaft product line and growth in the Company’s direct-to-consumer channel.
Current report
The increase in net sales was primarily driven by the introduction and expansion of the Newton Motion shaft product line. The Company launched the Newton Motion driver shaft in November 2023 and the Newton Motion fairway wood shaft in April 2024. As a result, the year ended December 31, 2025 reflects the first full year of sales for the Newton Motion fairway shaft product line.
Current report
During the year ended December 31, 2025, the Newton Motion shaft product line generated approximately $8.0 million of net sales and represented approximately 99% of the Company’s total revenue.
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Removed paragraphs (39)
Previous report
We are a technology-forward golf company, with a growing portfolio of golf products, including putting instruments, golf shafts, golf grips, and other golf related products. In consideration of our growth opportunities in shaft technologies, in April of 2022, we expanded our manufacturing business to include advanced premium golf shafts by opening a new shaft manufacturing facility in St. Joseph, MO. It is our intent to manufacture and assemble substantially all products in the United States. We anticipate expansion into golf apparel and other golf related product lines to enhance our growth. Our future expansions may include broadening our offerings through mergers, acquisitions or internal developments of product lines that are complementary to our premium brand.
Previous report
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 10,667 shares of common stock, at a price of $1,200.00 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 report
Recent Events
Previous report
Secondary Public Offering
Previous 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 12,200 shares of the Company’s common stock at a public offering price of $60.00 per share. The offering closed on October 10, 2024. The net proceeds to the Company for the offering were $467,000, after deducting the underwriting discounts and commissions and estimated offering expenses.
Previous report
On December 12, 2024, we entered into an underwriting agreement with Aegis Capital Corp. as the sole underwriter relating to the sale of up to 233,333 Common Units, each consisting of one (1) share of Common Stock, one (1) Series A Common Warrant to purchase one (1) share of Common Stock per warrant, and one (1) Series B Common Warrant to purchase one (1) share of Common Stock per warrant. The public offering price per Common Unit is $36.00. The initial exercise price of each Series A Common Warrant is $72.00 per share of Common Stock. The Series A Common Warrants are exercisable following stockholder approval and expire 60 months thereafter. The initial exercise price of each Series B Common Warrant is $72.00 per share of Common Stock or pursuant to an alternative cashless exercise option. The Series B Common Warrants are exercisable following stockholder approval and expire 30 months thereafter. The offering closed on December 13, 2024. The net proceeds to us for the offering were approximately $7,326,000, after deducting underwriting discounts and commissions and estimated offering expenses.
Previous report
On November 20, 2023, we announced a significant expansion of our product portfolio. We introduced “Newton,” the Company’s latest business division and the Company’s first foray into the world of golf club shafts. The Newton Motion driver shaft, the first Newton shaft to debut in the market, is a carbon fiber shaft designed to enhance a golfer’s performance by promoting straighter and longer shots with reduced effort.
Previous report
On April 4, 2024, we announced another expansion of our product portfolio, the Newton Motion fairway wood shaft, which like the Newton Motion driver shaft discussed above, is a carbon fiber shaft designed to enhance a golfer’s performance by promoting straighter and longer shots with reduced effort.
Previous report
The Newton Motion shafts are manufactured at our manufacturing and assembly facility in St. Joseph, Missouri
Previous report
Gravity Putters
Previous report
As part of the rebranding to Newton Golf Company, we introduced a new line of putters under the Newton Gravity brand.
Previous report
Nasdaq Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard
Previous report
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 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.
Previous 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. 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 report
On January 29, 2025, the Company received a written notice (the “Notice”) from Nasdaq notifying the Company that it is not in compliance with the minimum bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2) due to the Company’s common stock not maintaining a closing bid price of at least $1.00 per share 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.
Previous report
Normally, a company would be afforded a 180-day calendar period to demonstrate compliance with the minimum bid price requirement. However, pursuant to Nasdaq Listing Rule 5810(c)(3)(A)(iv), the Company is not eligible for any compliance period due to the fact that the Company has affected a reverse split within the prior one-year period.
Previous report
The Company requested a hearing a Panel, as provided in the Nasdaq Rules. The hearing request automatically stayed any suspension or delisting action pending the hearing. On March 11, 2025, the hearing was held and the Company requested an extension based on the reverse split occurring on March 17, 2025. The Panel has granted an extension to the Company to regain compliance.
Previous report
Additionally, as of December 31, 2024, the Company had a negative Shareholders’ Equity of $4,4142,000 resulting from the derivative liability from the issuance of the Company’s Series A and Series B Warrants in December 2025 as part of the Company’s public offering. However, because most of the Series B Warrants were exercised on or before March 31, 2025, the issuance of the shares upon such exercise will be accountedfor as additional paid-in capital. The effect of the exercised warrants and corresponding adjustment to the warrant liability and additional paid-in-capital on a pro forma basis, is that as of December 31, 2024, the stockholder’s equity is $6,653,000. Accordingly, as of March 31, 2025, the Company believes it will be in full compliance with the continuing listing requirement for stockholders’ equity.
Previous 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 affect a reverse stock split of the Company’s common stock at a ratio of 1-for-10 shares (the “First Reverse Stock Split”). The First 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. As a result of the First 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 First Reverse Stock Split. No fractional shares were issued in connection with the First Reverse Stock Split, as all fractional shares were rounded up to the next whole share.
Previous report
On March 4, 2025, the Company filed a Certificate of Amendment to amend its Certificate of Incorporation with the Secretary of State of Delaware to affect a reverse stock split of the Company’s common stock at a ratio of 1-for-30 shares (the “Second Reverse Stock Split”). The Second Reverse Stock Split became effective as of 12:01 a.m. Eastern Time on March 17, 2025 and the Company’s common stock began trading on The Nasdaq Capital Market on a post-split basis under its existing trading symbol.
Previous report
As a result of the Second Reverse Split, every thirty 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 Second Reverse Stock Splits. No fractional shares were issued in connection with the Second 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 First and Second Reverse Stock Splits for all periods presented. Proportionate adjustments for the First and Second Reverse Stock Splits 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 First and the Second Reverse Stock Splits did not change the par value of the common stock or modify any voting rights or other terms of common stock.
Previous report
Because golf is a seasonal sport, our sales are cyclical and unlikely to remain consistent from quarter to quarter. Further, if golf participation decreases or the number of rounds of golf played decreases generally, for any or no reason, sales of our products may be adversely affected. In the future, the overall dollar volume of the market for golf-related products may not grow or may decline. The recent COVID-19 pandemic has resulted in a surge in golf participation and growth for our industry, but such a trend may not continue, and future trends are difficult to predict.
Previous report
Effective August 17, 2023, our Common Stock was registered with the SEC and listed on The Nasdaq Capital Market, which requires us to hire additional personnel and implement public company procedures and processes. We incur additional annual expenses as a public company for internal controls compliance and public company reporting obligations, directors’ and officers’ liability insurance, director fees and additional internal and external accounting and legal and administrative resources, including increased audit and legal fees.
Previous report
Recent inflationary trends have led to a moderate increase in some of the component parts used to manufacture our products. To date, we have not passed the increase in cost to our consumers. Continued prolonged periods of inflationary pressure on some or all costs may result in increased costs to produce our products that could have an adverse effect on profits from sales of these products or require us to increase prices for our products that could adversely affect consumer demand for our products.
Previous report
While we have not had significant other disruptions that materially impacted our financial results, we continue to seek and expand the number of qualified domestic vendors used to source materials.
Previous report
Our net sales increased $3.1 million, or 887%, to approximately $3.5 million during the year ended December 31, 2024, compared to $349,000 during the year ended December 31, 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 year ended December 31, 2024, we generated $2.9 million of net sales from the Newton Motion shafts, and we generated approximately 84% of our net sales through our websites.
Previous report
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 $2.0 million to $6.5 million during the year ended December 31, 2024, compared to $4.5 million during the year ended December 31, 2023. The increase in selling, general and administrative expenses were 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 report
During the year ended December 31, 2024, the Company recorded financing cost of $6,913,000 and a change in the fair value of warrant liabilities of $22,000 (see Note 8 of the accompanying financial statements), both of which did not occur in the prior year period. Interest income, net was $161,000 for the year ended December 31, 2024, compared to interest income, net of $8,000 for the year ended December 31, 2023. The increase in interest income 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 report
Net loss
Previous report
Net cash used in operating activities for the year ended December 31, 2024 totalled $4,929,000, compared to net cash used in operating activities for the year ended December 31, 2023 of $5,047,000. The decrease in net cash used in operations for the year ended December 31, 2024, was primarily related to cash used to repay our accrued payroll to officers.
Previous report
Net cash provided by financing activities for the year ended December 31, 2024 was $7,743,000, which included net proceeds after commissions and expenses of $7.8 million from our initial public offering, offset by $50,000 for repayment of our software licensing obligation. Net cash provided by financing activities for the year ended December 31, 2023 was $10.5 million, which included net proceeds after commissions and expenses of $11.0 million from our initial public offering, proceeds of $180,000 received in the private placement of common stock, proceeds of $81,000 from loans, $230,000 for deferred offering costs related to our initial public offering, offset by loan repayments to related parties of $557,000, repayment of notes payables of $445,000, and $15,000 repayment of our equipment purchase obligation.
Previous 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 12,200 shares of the Company’s common stock at a public offering price of $60.00 per share. The offering closed on October 10, 2024. The net proceeds to the Company for the offering were $467,000, after deducting the underwriting discounts and commissions and estimated offering expenses.
Previous report
On December 12, 2024, we entered into an underwriting agreement with Aegis Capital Corp. as the sole underwriter relating to the sale of up to 233,333 Common Units, each consisting of one (1) share of Common Stock, one (1) Series A Common Warrant to purchase one (1) share of Common Stock per warrant, and one (1) Series B Common Warrant to purchase one (1) share of Common Stock per warrant. The public offering price per Common Unit is $36.00. The initial exercise price of each Series A Common Warrant is $72.00 per share of Common Stock. The Series A Common Warrants are exercisable following stockholder approval and expire 60 months thereafter. The initial exercise price of each Series B Common Warrant is $72.00 per share of Common Stock or pursuant to an alternative cashless exercise option. The Series B Common Warrants are exercisable following stockholder approval and expire 30 months thereafter. The offering closed on December 13, 2024. The net proceeds to us for the offering were approximately $7,326,000, after deducting underwriting discounts and commissions and estimated offering expenses.
Previous report
At December 31, 2024, we had cash and cash equivalents on hand in the amount of $7.7 million. Management expects its cash on hand on December 31, 2024, to last for at least the next 12 months.
Previous report
For so long as we are an emerging growth company, we will not be required to:
Previous report
In addition, Section 107 of the JOBS Act also provides that an EGC can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. As a result, the Company may adopt new or revised accounting standards by the date private companies are required to comply.
Previous report
Management believes the critical accounting estimates discussed below affect its more significant estimates and assumptions used in the preparation of its consolidated financial statements.
Previous report
The Company periodically issues stock options to employees and non-employees in non-capital raising transactions for services and for financing costs. The Company accounts for such grants issued and vesting based on ASC 718,Compensation-Stock Compensation whereby the value of the award is measured on the date of grant and recognized for employees as compensation expense on the straight-line basis over the vesting period. The Company recognizes the fair value of stock-based compensation within its Statements of Operations with classification depending on the nature of the services rendered.
Reworded paragraphs (14)
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 $944,000 to $1.2 million for the year ended December 31, 2024, compared to $227,000 for the year ended December 31, 2023, due to our increase in net sales. Our gross margin was 66% and 35% for the year ended December 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 consists primarily of materials, labor, components, and changes in inventory reserves for slow-moving or potentially obsolete products.
Previous wording
Research and development costs include employee costs, consultants, licensing fees, and product design and development costs. Research and development expenses increased $485,000 to $742,000 during the year ended December 31, 2024, compared to $258,000 during the year ended December 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 expenses consist primarily of employee compensation, consulting expenses, licensing fees, and product design and development costs.
Previous wording
Loss from operations increased to $5.0 million for the year ended December 31, 2024, compared to $4.6 million for the year ended December 31, 2023. The increase in our net loss was due to our increased operating expenses, offset by increased gross profit, as discussed above.
Current wording
Loss from operations increased approximately $2.5 million to $7.5 million for the year ended December 31, 2025, compared to $5.0 million for the year ended December 31, 2024.
Previous wording
Net loss increased to $11.8 million for the year ended December 31, 2024, compared to $4.6 million for the year ended December 31, 2023. The increase in our net loss was due to the short-term warrant liability of $14,261,000, of which $6,676,000 was attributed to financing costs, with an additional $259,000 due to the change in fair value of the warrant liability. Additional operating expenses and other expenses were offset by increased gross profit, as discussed above.
Current wording
Net loss was $6.0 million for the year ended December 31, 2025, compared to $11.8 million for the year ended December 31, 2024.
Previous wording
Net cash used in investing activities for the year ended December 31, 2024 totalled $502,000, and was for the purchase of property and equipment. Net cash used in investing activities for the year ended December 31, 2023 totaled $289,000, and was for the purchase of property and equipment.
Current wording
Net cash used in investing activities for the year ended December 31, 2025 totaled $469,000, primarily related to purchases of property and equipment associated with the expansion and support of the Company’s manufacturing operations. Net cash used in investing activities for the year ended December 31, 2024 totaled $502,000, also related primarily to purchases of property and equipment.
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 year ended December 31, 2024, we incurred a net loss of $11,752,000 and used cash in operations of $4,929,000. 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. 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, 2024, expressed substantial doubt about the Company’s ability to continue as a going concern.
Current wording
As reflected in the accompanying financial statements, during the year ended December 31, 2025, the Company incurred a net loss of $6,020,000 and used cash in operations of $5,166,000. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the financial statements are issued. In addition, the Company’s independent registered public accounting firm expressed substantial doubt about the Company’s ability to continue as a going concern in its report on the Company’s financial statements for the year ended December 31, 2025.
Previous wording
The continuation of the Company as a going concern is dependent upon its ability to obtain necessary debt or equity financing to continue operations until it begins generating positive cash flow. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing or cause substantial dilution for our stockholders, in case or equity financing.
Current wording
The continuation of the Company as a going concern is dependent upon its ability to obtain additional debt or equity financing until it begins generating positive cash flow. No assurance can be given that such financing will be available or, if available, that it will be on terms acceptable to the Company. Any additional financing may contain restrictive covenants, in the case of debt financing, or result in substantial dilution to existing stockholders, in the case of equity financing.
Previous wording
We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, which we refer to as the JOBS Act. We would cease to be an emerging growth company upon the earliest of: (i) the last day of the first fiscal year in which our annual gross revenues are $1.07 billion or more; (ii) the end of any fiscal year in which the market value of our common stock held by non-affiliates exceeded $700 million as of the end of the second quarter of that fiscal year; or (iii) the date on which we have, during the previous three-year period, issued more than $1.07 billion in non-convertible debt securities. An emerging growth company may take advantage of specified reduced reporting and other burdens that are otherwise applicable generally to public companies. We have elected to take advantage of these reduced disclosure obligations and may elect to take advantage of other reduced reporting obligations in the future.
Current wording
We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As an emerging growth company, we are eligible to take advantage of certain exemptions from various reporting requirements applicable to other public companies.
Previous wording
Our discussion and analysis of our results of operations, financial condition and liquidity are based upon our consolidated financial statements, which have been prepared and audited in accordance with GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, stockholders’ equity, revenues and expenses, as well as related disclosures of contingent assets and liabilities. We base our estimates on historical experience and various other assumptions that management believes to be reasonable under the circumstances. Actual results may materially differ from these estimates under different assumptions or conditions. On an ongoing basis, we review our estimates to ensure that the estimates appropriately reflect changes in our business and new information as it becomes available.
Current wording
Our discussion and analysis of our results of operations, financial condition, and liquidity are based upon our financial statements, which have been prepared and audited in accordance with U.S. generally accepted accounting principles (“GAAP”). The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, stockholders’ equity, revenues, and expenses, as well as the related disclosures of contingent assets and liabilities.
Previous wording
We may offer short-term sales program incentives, which include sell-through promotions and price concessions or price reductions. Sell-through promotions are generally offered throughout a product’s life cycle, which varies from two to three years but could be shorter or longer. Price concessions or price reductions are generally offered at the end of the product’s life cycle. The estimated variable consideration related to these potential programs will be based on a rate that includes historical and forecasted data. We may record a reduction to net revenues using this rate at the time of the sale. We will monitor this rate against actual results and forecasted estimates and adjusts the rate as necessary in order to reflect the amount of consideration it expects to receive from its customers.
Current wording
We may offer short-term sales incentives, which include sell-through promotions and price concessions or price reductions. Sell-through promotions are generally offered throughout a product’s life cycle, which varies from two to three years but could be shorter or longer. Price concessions or price reductions are generally offered at the end of the product’s life cycle. The estimated variable consideration related to these potential programs will be based on a rate that includes historical and forecasted data. We may record a reduction to net revenues using this rate at the time of the sale. We will monitor this rate against actual results and forecasted estimates and adjusts the rate as necessary in order to reflect the amount of consideration it expects to receive from its customers.
Previous wording
Prior to August 14, 2023, the common shares of the Company were not publicly traded. As such, during the period, the Company estimated the fair value of common stock using an appropriate valuation methodology, in accordance with the framework of the American Institute of Certified Public Accountants’ Technical Practice Aid, Valuation of Privately-Held Company Equity Securities Issued as Compensation. Each valuation methodology includes estimates and assumptions that require the Company’s judgment. These estimates and assumptions include a number of objective and subjective factors, including external market conditions, guideline public company information, the prices at which the Company sold its common stock to third parties in arms’ length transactions, the rights and preferences of securities senior to the Company’s common stock at the time, and the likelihood of achieving a liquidity event such as an initial public offering or sale. Significant changes to the assumptions used in the valuations could result in different fair values of stock options at each valuation date, as applicable.
Current wording
Prior to the Company’s initial public offering on August 14, 2023, the Company’s common stock was not publicly traded. As a result, the Company estimated the fair value of its common stock using valuation methodologies consistent with the framework outlined in the AICPA Practice Aid, Valuation of Privately-Held Company Equity Securities Issued as Compensation. These valuations incorporated various objective and subjective factors, including external market conditions, guideline public company information, arm’s-length transactions involving the Company’s securities, the rights and preferences of securities senior to the Company’s common stock, and the probability of achieving a liquidity event such as an initial public offering or sale of the Company.
Previous wording
The fair value of each option or warrant grant is estimated using the Black-Scholes option-pricing model. The Company was a private company through August 14, 2023, and lacks company-specific historical and implied volatility information. Therefore, it estimates its expected stock volatility based on the historical volatility of a publicly traded set of peer companies within the consumer products industry with characteristics similar to the Company. The expected term of the Company’s stock options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options. The expected term of stock options granted to non-employees is equal to the contractual term of the option award. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. The expected dividend yield is zero, based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future.
Current wording
The expected term of stock options granted to employees is determined using the “simplified method” for awards that qualify as plain-vanilla options. The expected term of stock options granted to non-employees is generally based on the contractual term of the award. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant for time periods approximately equal to the expected term of the award. The expected dividend yield is zero, based on the fact that the Company has never paid dividends and does not currently expect to pay dividends in the foreseeable future.
Previous wording
The Company accounts for common stock warrants as either equity-classified or liability-classified instruments based on an assessment of the specific terms of the warrants and the guidance provided by the Financial Accounting Standards Board (FASB) in ASC 480, Distinguishing Liabilities from Equity (ASC 480) and ASC 815, Derivatives and Hedging (ASC 815). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own stock and whether the holders of the warrants could potentially require net cash settlement in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.
Current wording
The Company accounts for common stock warrants as either equity-classified or liability-classified instruments based on an evaluation of the specific terms of the warrants and the applicable guidance in ASC 480, Distinguishing Liabilities from Equity, and ASC 815, Derivatives and Hedging.
Previous wording
See Note 2 of the Notes to Condensed Financial Statements for a discussion of recent accounting pronouncements.
Current wording
See Note 2 of the Notes to Financial Statements for a discussion of recent accounting pronouncements.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
(i) the last day of the fiscal year in which our annual gross revenues exceed $1.235 billion;
Current report — wording carried from elsewhere
(ii) the last day of the fiscal year in which the market value of our common stock held by non-affiliates exceeds $700 million as of the end of the second quarter of that fiscal year;
Current report — wording carried from elsewhere
(iii) the date on which we have issued more than $1.0 billion in non-convertible debt during the previous three-year period; or
Current report — wording carried from elsewhere
This evaluation includes determining whether the warrants are freestanding financial instruments, whether they meet the definition of a liability under ASC 480, and whether they satisfy the criteria for equity classification under ASC 815. In particular, the Company assesses whether the warrants are indexed to the Company’s own stock and whether the terms of the warrants could require net cash settlement in circumstances outside the Company’s control, among other conditions required for equity classification.