Newton Golf Company, Inc.
For the period ended Mar 31, 2026. Filed May 14, 2026.
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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.
Mar 31, 2026 · Filed May 14, 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-Q
Period ended 2025-09-30; filed 2025-11-13.
0001493152-25-022293
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-14.
0001493152-26-023127
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.
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27 unchanged; 9 reworded; 96 added; 57 removed; 2 previous and 2 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 (96)
Current report
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes appearing elsewhere in this Quarterly Report. This discussion and analysis may contain forward-looking statements based on assumptions about our future business. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including but not limited to those set forth under “Risk Factors” in our Annual report on Form 10-K for the year ended December 31, 2025 and in this Quarterly Report.
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Executive Summary
Current report
During the three months ended March 31, 2026, several factors influenced the Company’s operations and financial position, including:
Current report
●New product introduction. The Company introduced the Fast Motion fairway wood shaft and hybrid shafts at the 2026 PGA Show, which are expected to launch commercially during the third quarter of 2026.
Current report
●Capital raising activities On March 16, 2026, the Company entered into the Purchase Agreement, pursuant to which the Company agreed to issue, at one or more closings, unsecured promissory notes in an aggregate funded amount of up to $2,000,000 and warrants to purchase shares of the Company’s common stock at an exercise price of $1.75 per share, subject to adjustment from time to time.
Current report
In connection with the initial closing on March 16, 2026, the Company issued a Convertible Note to entities affiliated with and controlled by Brett Hoge, one of the Company’s directors, in the 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
Subsequent to March 31, 2026, the Company issued additional Convertible Notes in the aggregate principal amount of $850,000 to unrelated third-party investors pursuant to the Purchase Agreement (see Note 8). The Convertible Notes were issued together with corresponding Warrants to purchase shares of the Company’s common stock on substantially similar terms to those previously disclosed. These financings were intended to support working capital and operational initiatives (see Note 9).
Current report
●**Manufacturing transition activities.**The Company implemented updates to certain shaft recipes and related production processes, including recalibration of machining operations, modifications to finishing workflows, changes to paint mixtures, and maintenance activities intended to improve product quality, consistency, and manufacturing scalability. These activities temporarily reduced production throughput and manufacturing utilization during the quarter, which adversely impacted gross profit and delayed shipment timing on certain customer orders.
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.
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.
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Management continues to focus on expanding distribution through professional club fitters, retail partners, and international distributors.
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Newton Motion Shafts
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Products
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The Newton Motion™ shaft platform continues to represent the Company’s primary product category and the principal driver of revenue during the three months ended March 31, 2026.
Current report
The Company also introduced the Fast Motion fairway wood shaft and hybrid shafts at the 2026 PGA Show, which are expected to launch commercially during the third quarter of 2026.
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Market Adoption
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The Company continues to see adoption of its shaft products among professional golfers and professional club fitters, which management believes supports brand awareness and demand for its products.
Current report
Sales during the quarter continued to be driven primarily by demand for the Newton Motion shaft platform across direct-to-consumer and professional fitting channels.
Current report
Newton Gravity Putters
Current report
The Company also offers a line of putters under the Newton Gravity brand.
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Management continues to evaluate expanded distribution opportunities for the Newton Gravity product line through professional club fitters and retail partners.
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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
The Company believes that sustained participation in golf could 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.
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Manufacturing Transition Activities
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During the three months ended March 31, 2026, the Company implemented updates to certain existing shaft recipes and related production processes, including recalibration of machining operations, modifications to finishing workflows, changes to paint mixtures, and maintenance activities intended to improve product quality, consistency, and manufacturing scalability. These activities temporarily reduced production throughput and manufacturing utilization during the quarter, which adversely affected gross profit as fixed production costs were absorbed over lower production volumes and delayed fulfillment of certain customer orders into subsequent periods.
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Public Company Costs
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.
Current report
These costs continue to impact operating expenses during the three months ended March 31, 2026.
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. 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.
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During the three months ended March 31, 2026, the Company did not implement any pricing changes in response to inflationary pressures.
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The Company continues to monitor supplier pricing and availability of key production inputs.
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Overview of Operating Results
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Net sales decreased approximately $0.2 million, or 18%, to approximately $1.0 million for the three months ended March 31, 2026, compared to $1.2 million for the three months ended March 31, 2025, driven primarily by reduced manufacturing capacity at the Company’s shaft production facility as the Company implemented updates to certain existing shaft recipes and related production processes, including recalibration of machining operations, modifications to finishing workflows, changes to paint mixtures, and maintenance activities intended to improve product quality, consistency, and manufacturing scalability. These activities temporarily reduced production throughput and manufacturing utilization during the quarter.
Current report
Reduced production throughput delayed shipment timing on certain customer orders during the quarter. As of March 31, 2026 the Company had $0.9 million in customer deposits and $0.3 million in open wholesale sales orders, which collectively represent approximately $1.2 million of expected future revenue upon shipment of the related orders. The increase in customer deposits compared to prior periods reflects advance payments on customer orders, including orders delayed during the manufacturing transition period.
Current report
Cost of goods sold was virtually flat for the three months ended March 31, 2026, compared to the prior year period.
Current report
Gross margin was 63% for the three months ended March 31, 2026, compared to 70% for the three months ended March 31, 2025. The decrease is primarily attributed to temporarily reduced production throughput and manufacturing utilization during the quarter, which adversely affected gross margin as fixed production costs were absorbed over lower production volumes.
Current report
The Company is also enhancing its manufacturing management and operational planning processes to support the continued scaling of production operations. In January 2026, the Company expanded the operational responsibilities of its Chief Financial Officer to include oversight of manufacturing and operational functions, strengthening coordination between financial management and factory operations. In addition, the Company hired a manufacturing executive in April with over 25 years of experience to support new product launches and production scaling initiatives.
Current report
As production volumes increase, the Company expects to benefit from improved manufacturing efficiencies and more stable production planning. However, gross margins may fluctuate in future periods based on production efficiency, product mix, and sales channel mix, including the relative contribution of direct-to-consumer and wholesale sales.
Current report
Management expects manufacturing utilization to improve in subsequent periods as these transition activities are completed, which may positively impact gross margin.
Current report
Selling, General and Administrative Expenses
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Removed paragraphs (57)
Previous report
Management’s Discussion and Analysis of Financial Condition and Results of Operations is designed to provide a reader of the financial statements with a narrative report on our financial condition, results of operations, and liquidity. This discussion and analysis should be read in conjunction with the attached unaudited condensed financial statements and notes thereto and our Annual Report on Form 10-K for the year ended December 31, 2024, including the audited financial statements and notes thereto. The following discussion contains forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations, and intentions. Our actual results could differ materially from those discussed in the forward-looking statements. Please also see the cautionary language at the beginning of this Quarterly Report regarding forward-looking statements.
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, Missouri. 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.
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Nasdaq Notice of Failure to Satisfy a Continued Listing Rule or Standard
Previous report
As a result of Dottie Pepper’s resignation from our Board of Directors on September 28, 2025, we are no longer in compliance with Nasdaq Listing Rule 5605(b)(1), which requires that a majority of the Board of Directors be comprised of “independent directors,” as that term is defined in Nasdaq Listing Rule 5605(a)(2) (each, an “Independent Director”), and Nasdaq Listing Rule 5605(c)(2), which requires that the audit committee consist of at least three members, each of whom must (i) be an Independent Director, (ii) meet the criteria for independence set forth in Rule 10A-3(b)(1) under the Securities Exchange Act of 1934, as amended, (iii) not have participated in the preparation of our financial statements or of any current subsidiary at any time during the past three years, and (iv) be able to read and understand fundamental financial statements.
Previous report
Nasdaq Listing Rules 5605(b)(1)(A) and 5605(c)(4) provide a cure period for these deficiencies until the earlier of (i) our next annual stockholders’ meeting or (ii) September 29, 2026; however, if our next annual stockholders’ meeting is held before March 27, 2026, then the cure period will continue through March 27, 2026. We intend to appoint an additional Independent Director to our Board of the Directors and the audit committee prior to the end of the cure period.
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Reverse Stock Splits
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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 Stock 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,” and together with the First Reverse Stock Split, the “Reverse Stock Splits”). 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. As a result of the Second Reverse Stock Split, every 30 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 Split. 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.
Previous report
Accordingly, all share and per share amounts presented herein with respect to common stock have been retroactively adjusted to reflect the Reverse Stock Splits for all periods presented. Proportionate adjustments for the 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 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.
Previous report
Although our products are built in the United States, with limited risk of recent tariffs, 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.
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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.
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Business Outlook and Market Positioning
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We believe we are entering a period of strong growth potential as the impact of our multi-year investment in sales, marketing, and brand development becomes increasingly evident in our revenue growth. Our recent revenue performance highlights growing consumer awareness of the Newton brand and rising demand for our Motion-based shaft technologies. Momentum on the professional tours continues to build, with more than 60 players now using Newton shafts across the PGA TOUR Champions, LPGA, and Korn Ferry Tours. This expanding presence among elite golfers underscores the performance characteristics of our products and is contributing to broader market interest. With only three commercial shaft families currently in the market, we intend to announce three additional premium shaft products for release next year. Although we are not providing forward-looking guidance, the planned expansion of our shaft lineup provides additional context for investors evaluating the scope of our product roadmap and the broader range of golfers our technology aims to serve.
Previous report
Our distribution mix is also beginning to evolve in ways that may support long-term growth and improved efficiency. For the nine months ending September 30, 2025, 90% of our net sales were generated through direct-to-consumer channels supported by substantial paid media. In recent quarters, we have seen increased inbound interest from national retailers, professional club fitters, and OEM partners. While these relationships remain in early stages, broader engagement across these channels may diversify our revenue mix, reduce reliance on paid media, and expand access to golfers who rely on traditional retail and fitting environments.
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Although our current product mix is concentrated with approximately 98% of sales generated from shafts and 2% from our putter line, we were founded on our patented putter technology. As brand awareness has increased and as potential new sales channels have opened, we believe more golfers may have the opportunity to evaluate our putter products. Recent trends in the putter category, including the commercial success of specialty putter manufacturers such as L.A.B. Golf, demonstrate continued consumer interest in differentiated putting technologies. While we cannot predict how broader market trends will influence demand for our putter products, increased channel access and rising brand visibility may contribute to greater awareness of our putter line over time.
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In October, we launched our dedicated Japanese e-commerce site, enabling direct access to Newton products in the world’s second-largest golf market. Japan represents approximately 8.8 million active golfers and one of the highest per-golfer equipment spend levels globally. Early consumer response and engagement from professional club fitters have been strong reflecting initial interest in Newton’s Motion-based shaft technologies within this market.
Previous report
Macro trends across the golf industry also continue to create a favorable backdrop for performance-driven equipment. According to the National Golf Foundation (“NGF”), the United States has approximately 28 million on-course golfers and 19 million off-course participants, representing sustained participation at or near historic highs. Globally, on-course participation is estimated at approximately 64 million golfers. The over-40 age demographic, which is the Company’s core customer profile, remains the highest-spending segment of the equipment market based on NGF demographic analyses. Third-party research from Grand View Research and Fact.MR estimates the global golf-equipment market at approximately $7 to $9 billion and growing at roughly a 5% compound annual rate through 2030, with the United States accounting for nearly half of global equipment spend.
Previous report
In addition, golfer engagement channels continue to expand. NGF reports that a growing percentage of committed golfers now utilize professional club fitters, and national fitting networks including Club Champion, GolfTec, 2nd Swing, and True Spec have expanded nationwide, increasing access to environments where golfers evaluate components such as shafts on a performance basis. Off-course golf has also grown significantly, with NGF reporting that off-course participants now nearly equal on-course golfers. Industry researchers, including Golf Datatech, have observed increased adoption of launch monitors and indoor golf simulators across commercial facilities, fitting bays, and home environments. These trends support year-round equipment evaluation, including in colder climates where traditional outdoor golf is seasonal, and may extend the periods during which golfers research, test, and purchase equipment.
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Regulatory developments may further contribute to equipment evaluation cycles. The USGA and R&A have adopted updated golf-ball testing standards that become effective in 2028 for professionals and 2030 for amateurs. While the impact on consumer behavior is uncertain, these updates may lead golfers to reassess equipment needs, including shaft performance characteristics aligned with desired launch and distance outcomes.
Previous report
Altogether, our expanding product-development roadmap, increasing engagement from retailers, professional club fitters, and OEMs, and the supportive participation and technological trends across the golf industry provide a constructive context for evaluating our long-term opportunity. While future performance will depend on our execution across product innovation, marketing, and distribution strategies, we believe we are well positioned within these industry tailwinds and remain focused on leveraging these developments to drive long-term value.
Previous report
Our net sales increased $1,371,000, or 113%, to $2,582,000 during the three months ending September 30, 2025, compared to $1,211,000 during the three months ending September 30, 2024. The increase in net sales was from the continued adoption of our Newton Motion driver shaft product line, our Newton Motion fairway shaft product line in April 2024, and our Newton Fast Motion driver product line in April 2025. For the three months ending September 30, 2025, we generated $2,553,000 of net sales from Newton Motion shafts, and we generated approximately 95% 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 $1,362,000, or 80% to $3,056,000 during the three months ending September 30, 2025, compared to $1,694,000 during the three months ending September 30, 2024. The increase in selling, general and administrative expense primarily reflects higher sales, marketing, and employee-related costs to support expanding demand and brand-building efforts. The increase also includes additional public-company costs and higher professional service expenses, including consulting and system-integration work related to the optimization of our enterprise systems, such as NetSuite, AfterShip, demand-planning tools, and related connectors intended to improve operational efficiency and support scalability. We also incurred higher professional and advisory fees associated with supporting the Company’s growth initiatives and overall operating infrastructure as compared to the prior-year period.
Previous report
Research and development costs include employee costs, consultants, licensing fees, and product design and development costs. Research and development expenses decreased $19,000, or 9% to $182,000 during the three months ending September 30, 2025, compared to $201,000 during the three months ending September 30, 2024. These costs reflect ongoing investment in product innovation as we continue to enhance and broaden our technology-driven product portfolio.
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Interest income, net
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Net interest income for the three months ending September 30, 2025 was $20,000, compared to $30,000 for the three months ending September 30, 2024. The decrease was primarily due to lower interest earned on bank balances during the current period.
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Loss from operations increased to $1.5 million for the three months ending September 30, 2025, compared to $1.1 million for the three months ending September 30, 2024. The increase in our loss from operations was primarily driven by an increase in selling, general, and administrative expenses, partially offset by the increase in gross profit.
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Change in Fair Value of Warrant Liability
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The change in fair value of warrant liability was due to an increase in the Series A Warrants of $18,000 and Series B Warrants of $78,000, for a total increase in fair value of $96,000.
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Net loss
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Net loss increased $520,000, or 49% to $1,580,000 during the three months ending September 30, 2025, compared to $1,060,000 for the three months ending September 30, 2024. The increase in our net loss was primarily driven by an increase in selling, general, and administrative expenses, partially offset by an increase in gross profit.
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Nine Months Ended September 30, 2025 as Compared to the Nine Months Ended September 30, 2024
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Net Sales
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Our net sales increased $3,486,000, or 147%, to $5,860,000 for the nine months ending September 30, 2025, compared to $2,374,000 for the nine months ending September 30, 2024. The increase in net sales was primarily from the continued adoption of our Newton Motion driver shaft product line in November 2023, our Newton Motion fairway shaft product line in April 2024, and our Newton Fast Motion driver product line in April 2025. We generated $5,754,000 of net sales from Newton Motion shafts, and we generated approximately 93% of our net sales through our websites.
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Cost of goods sold
Previous report
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 $1,001,000, or 115% to $1,875,000 for the nine months ending September 30, 2025, compared to $874,000 for the nine months ending September 30, 2024, primarily due to our increase in net sales. Our gross margin was 68% and 63% for the nine months ending September 30, 2025 and 2024, respectively. The increase in gross margin was primarily due to the change in product mix sold and additional volume lowering our per unit cost as compared to the prior year period
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Operating expenses
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 $3,911,000, or 88%, to $8,360,000 for the nine months ending September 30, 2025, compared to $4,449,000 for the nine months ending September 30, 2024. The increase in selling, general and administrative expense primarily reflects higher sales, marketing, and employee-related costs to support expanding demand and brand-building efforts. The period also reflects higher public-company operating costs, including legal expenses related to the special stockholder meeting and Series B Warrant exercises, increased accounting and audit fees associated with warrant valuation and accounting requirements, transfer agent costs in connection with the exercise of Series B Warrants, and proxy solicitation costs associated with the special stockholder meeting. In addition, the increase includes professional service costs associated with our enterprise systems, including NetSuite, AfterShip, demand-planning tools, and related connectors intended to improve operational efficiency and support scalability.
Previous report
Research and development costs include employee costs, consultants, licensing fees, and product design and development costs. Research and development expenses increased $9,000 to $607,000, or 2% during the nine months ending September 30, 2025, compared to $598,000 during the nine months ending September 30, 2024. These costs reflect ongoing investment in product innovation as we continue to enhance and broaden our technology-driven product portfolio.
Previous report
Loss from operations
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Reworded paragraphs (9)
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 $442,000, or 109%, to $848,000 for the three months ending September 30, 2025, compared to $406,000 for the three months ending September 30, 2024 due to our increase in net sales. Our gross margin was 67% and 66% for the three months ending September 30, 2025 and 2024, respectively. The increase in gross margin was due to the change in product mix sold, and additional volume lowering our per unit cost 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
On October 24, 2024, we entered into the ATM Offering Agreement, as sales agent, permitting the Company to offer and sell, from time to time, shares of its common stock having an aggregate offering price of up to $10.0 million pursuant to our effective shelf registration statement on Form S-3. The ATM provides a potential source of liquidity; however, the amount of capital we can raise under the program will depend on market conditions and investor demand.
Current wording
On October 24, 2025, the Company entered into an At-The-Market Sales Offering Agreement (“ATM Offering Agreement”) with Kingswood Capital Partners, LLC (“Kingswood”), which allows the Company to sell up to $10.0 million of its common stock from time to time pursuant to its effective shelf registration statement on Form S-3. The ATM program provides the Company with a source of potential liquidity, and the Company intends to utilize the program opportunistically, subject to market conditions, trading volume, and capital requirements. As of March 31, 2026, the Company had not sold any shares under the ATM program.
Previous wording
Net cash used in financing activities for the nine months ending September 30, 2025 totaled $616,000, and consisted of a stock repurchase of $500,000, deferred offering costs of $35,000 related to the Company’s ATM filing, and repayment of a software licensing obligation of $32,000. Net cash provided by financing activities for the nine months ending September 30, 2024 totaled $131,000 and related to repayment of a software licensing obligation.
Current wording
Net cash provided by financing activities for the three months ended March 31, 2026 was $477,000, compared to net cash used in financing activities of $84,000 for the three months ended March 31, 2025.
Previous wording
The accompanying condensed financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. As reflected in these condensed financial statements, during the nine months ending September 30, 2025, the Company incurred a net loss of $3,625,000 and used cash in operations of $4,101,000. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that these condensed financial statements are issued. The condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Current wording
As reflected in the accompanying financial statements, during the three months ended March 31, 2026, the Company incurred a net loss of $2,659,000, used cash in operations of $1,095,000, and had a stockholders’ deficit of $1,521,000. 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
Our discussion and analysis of our results of operations, financial condition and liquidity are based upon our condensed financial statements, which have been prepared and audited in accordance with GAAP. The preparation of these condensed 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
The amount of revenue we recognize is based on the amount of consideration we expect to receive from customers. The amount of consideration is the sales price adjusted for estimates of variable consideration, including sales returns, discounts and allowances as well as sales programs, sales promotions and price concessions that we offer, as described further below. These estimates are based on amounts earned or expected to be claimed by customers on the related sales, and are therefore recorded to the respective net sales, trade accounts receivable, and sales program liability accounts.
Current wording
The amount of revenue we recognize is based on the amount of consideration we expect to receive from customers. The amount of consideration is the sales price adjusted for estimates of variable consideration, including sales returns, discounts and allowances as well as sales programs, sales promotions and price concessions that we offer, as described further below. These estimates are based on amounts earned or expected to be claimed by customers on the related sales, and are therefore recorded to the respective net revenue, trade accounts receivable, and sales program liability accounts.
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 sales 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 we expect to receive from our 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
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 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.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
The accompanying condensed 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.
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.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
The following is a comparison of our results of operations for the nine months ending September 30, 2025 and 2024 (amounts are rounded to the nearest thousand):
Previous report — wording carried elsewhere
Operating expenses include selling, general and administrative expenses, and research and development costs.