Sacks Parente Golf, Inc. Announces Year End 2023 Financial Results and Provides Corporate Update
March 18 2024 - 8:00AM
Sacks Parente Golf, Inc. (NASDAQ:SPGC)
, (the
“Company” or “Sacks Parente”), a technology-forward golf company
with a growing portfolio of golf products, including putters, golf
shafts, golf grips, and other golf-related accessories, reports its
financial results for the year ended December 31, 2023 and provides
a business update.
FY 2023 Highlights
- Raised $11.6 million in net
proceeds from completed IPO in August 2023
- Recognized sequentially higher
revenue over last three quarters of 2023
- Made significant investment in
equipment and facility improvements for manufacturing and
distribution facility in St. Joseph, Mo.
- Launched Newton Motion product line
of ready-to-play replacement driver shafts in November 2023, which
is expected to generate in excess of 60% of Company revenue in
2024
- Invested in sales and marketing to
grow brand awareness of Sacks Parente premium putter family and
newly launched Newton Motion product line
- Hired Scott White, former CEO of
Ben Hogan Golf Equipment Company, as Chief Operating Officer
Recent Corporate Highlights
- Anticipating continued sequentially
higher revenue throughout 2024 with improved gross margins. The
Company is benefitting from accelerating Newton Motion shaft
shipments, including to multiple international customers, efficient
marketing ad spend on shafts, and the start of the seasonally
strong period of the year with warmer months ahead
- Announced that the Company’s
premium putters and Newton Motion driver shafts were available in
all 126 Club Champion retail stores nationwide. The Company expects
to see accelerated quarterly revenue from this relationship
begining in 2Q24
- Entered into player agreements for Newton Motion shaft
sponsorships with Ken Duke (PGA Tour Champions), and Fernandra Lira
(LET/LPGA/Epson Tours)
- Appointed golf-industry veteran
Jane Casanta to the Board of Directors
“We built a strong foundation in 2023 and are
positioned well to execute our strategic plan and grow our revenue
in 2024 and beyond,” commented Greg Campbell, Executive Chairman.
“Our IPO in August provided us the capital to bring on additional
talent to our team and complete the buildout of our Missouri
manufacturing facility, including recently transferring production
of our premium putter line from California to our Missouri facility
to improve efficiencies. In addition, we have increased our
marketing budget to help promote awareness of primarily our Newton
product line. We have been pleased with the initial reception and
order patterns, including from some international customers, for
our Newtwon shafts and see this momentum continuing, especially as
we begin the seasonally stronger spring months for the golf
industry. We anticipate sequentially record revenue throughout 2024
and see the expected success from the Newton product line as a key
component of that growth. Given our direct to consumer strategy, we
are encouraged by our current strong return on ad spending with
Newton and look for that trend to continue, especially given our
team’s proven marketing experience in the golf industry.
“The Sacks Parente foundation is in place, we
have the resources to execute, and we look forward to sharing our
milestones and successes as they unfold,” concluded Campbell.
About Sacks Parente Golf
Sacks Parente Golf, Inc. serves as the parent
entity of technology-forward golf companies that help golfers
elevate their game. With a growing portfolio of golf products,
including putters, golf shafts, golf grips, and other golf-related
accessories, the Company’s innovative accomplishments include: the
First Vernier Acuity putter, patented Ultra-Low Balance Point
(ULBP) putter technology, weight-forward Center-of-Gravity (CG)
design, and pioneering ultra-light carbon fiber putter shafts.
In consideration of its growth opportunities in
golf shaft technologies, the Company expanded its manufacturing
business in April of 2022 to develop the advanced Newton brand of
premium golf shafts by opening a new shaft manufacturing facility
in St. Joseph, MO. It is the Company’s intent to manufacture and
assemble substantially all products in the United States, while
also expanding into golf apparel and other golf-related product
lines to enhance its growth.
The Company’s future expansions may include
broadening its offerings through mergers, acquisitions or internal
developments of product lines that are complementary to its premium
brand. The Company currently sells its products through resellers,
the Company’s websites, Club Champion retail stores, and
distributors in the United States, Japan, and South Korea. For more
information, please visit the Company’s website at
https://sacksparente.com/. @sacksparentegolf @newtonshafts
Forward Looking Statements
This press release contains statements that
constitute “forward-looking statements,” including with respect to
the proposed initial public offering and the anticipated use of the
net proceeds. No assurance can be given that the offering discussed
above will be completed on the terms described, or at all, or that
the net proceeds of the offering will be used as indicated.
Forward-looking statements are subject to numerous conditions, many
of which are beyond the control of the Company, including those set
forth in the Risk Factors section of the Company’s registration
statement and preliminary prospectus for the Company’s offering
filed with the SEC. Copies of these documents are available on the
SEC’s website, www.sec.gov. The Company undertakes no obligation to
update these statements for revisions or changes after the date of
this release, except as required by law.
Contacts:
Company:Steve Handy, CFOSacks Parente Golf, Inc.Email:
investors@sacksparente.comwww.sacksparente.com
Investor Relations:CORE IREmail:
investors@sacksparente.comPhone: (516) 222-2560
SACKS PARENTE GOLF,
INC.BALANCE SHEETS(Amounts
rounded to nearest thousands, except share amounts)
|
|
December 31, 2023 |
|
|
December 31, 2022 |
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
5,338,000 |
|
|
$ |
147,000 |
|
Restricted cash |
|
|
- |
|
|
|
24,000 |
|
Accounts receivable |
|
|
53,000 |
|
|
|
2,000 |
|
Inventory, net of reserve for
obsolescence of $98,000 and $73,000, respectively |
|
|
248,000 |
|
|
|
142,000 |
|
Prepaid expenses and other
current assets |
|
|
196,000 |
|
|
|
16,000 |
|
Total Current Assets |
|
|
5,835,000 |
|
|
|
331,000 |
|
|
|
|
|
|
|
|
|
|
Property and equipment,
net |
|
|
379,000 |
|
|
|
122,000 |
|
Right-of-use asset, net |
|
|
65,000 |
|
|
|
22,000 |
|
Deferred software licensing
agreement |
|
|
110,000 |
|
|
|
- |
|
Deferred offering costs |
|
|
- |
|
|
|
230,000 |
|
Deposits |
|
|
5,000 |
|
|
|
5,000 |
|
Total
Assets |
|
$ |
6,394,000 |
|
|
$ |
710,000 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS’ EQUITY (DEFICIENCY) |
|
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
|
Accounts payable and accrued
expenses |
|
$ |
401,000 |
|
|
$ |
97,000 |
|
Accrued payroll to
executives |
|
|
- |
|
|
|
1,095,000 |
|
Lease liability, current |
|
|
31,000 |
|
|
|
17,000 |
|
Deferred software licensing
obligation |
|
|
41,000 |
|
|
|
- |
|
Equipment purchase
obligation |
|
|
- |
|
|
|
15,000 |
|
Loans payable – related
parties |
|
|
- |
|
|
|
537,000 |
|
Notes payable |
|
|
- |
|
|
|
384,000 |
|
Customer deposits |
|
|
2,000 |
|
|
|
21,000 |
|
Total Current Liabilities |
|
|
475,000 |
|
|
|
2,166,000 |
|
|
|
|
|
|
|
|
|
|
Software licensing fee
obligation, net of current |
|
|
95,000 |
|
|
|
- |
|
Lease liability, net of
current |
|
|
34,000 |
|
|
|
6,000 |
|
Total
Liabilities |
|
|
604,000 |
|
|
|
2,172,000 |
|
|
|
|
|
|
|
|
|
|
Common stock subject to
possible redemption (561,375 shares at redemption price of $1.07)
at December 31, 2022 |
|
|
- |
|
|
|
420,000 |
|
|
|
|
|
|
|
|
|
|
Commitments and
Contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ Equity
(Deficiency): |
|
|
|
|
|
|
|
|
Preferred stock $.01 par
value, 5,000,000 shares authorized, no shares issued and
outstanding |
|
|
- |
|
|
|
- |
|
Common stock, $.01 par value,
45,000,000 shares authorized, 14,595,870 and 10,784,495, shares
issued and outstanding, respectively, excluding 561,375 shares
subject to possible redemption at December 31, 2022 |
|
|
146,000 |
|
|
|
108,000 |
|
Additional
paid-in-capital |
|
|
15,961,000 |
|
|
|
3,702,000 |
|
Accumulated deficit |
|
|
(10,317,000 |
) |
|
|
(5,692,000 |
) |
Total Stockholders’
Equity (Deficiency) |
|
|
5,790,000 |
|
|
|
(1,882,000 |
) |
|
|
|
|
|
|
|
|
|
Total Liabilities and
Stockholders’ Equity (Deficiency) |
|
$ |
6,394,000 |
|
|
$ |
710,000 |
|
SACKS PARENTE GOLF,
INC.STATEMENTS OF OPERATIONSFor
the Years Ended December 31, 2023 and 2022(Amounts
rounded to nearest thousands, except share and per share
amounts)
|
|
Years Ended December 31, |
|
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
Net
Sales |
|
$ |
349,000 |
|
|
$ |
190,000 |
|
Cost of goods sold |
|
|
227,000 |
|
|
|
110,000 |
|
Gross
profit |
|
|
122,000 |
|
|
|
80,000 |
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
Selling, general and
administrative expense |
|
|
4,497,000 |
|
|
|
2,874,000 |
|
Research and development
expense |
|
|
258,000 |
|
|
|
73,000 |
|
Total operating
expenses |
|
|
4,755,000 |
|
|
|
2,947,000 |
|
|
|
|
|
|
|
|
|
|
Loss from
operations |
|
|
(4,633,000 |
) |
|
|
(2,867,000 |
) |
|
|
|
|
|
|
|
|
|
Loss on extinguishment of
debt |
|
|
- |
|
|
|
(574,000 |
) |
Interest income (expense),
net |
|
|
8,000 |
|
|
|
(64,000 |
) |
|
|
|
|
|
|
|
|
|
Net Loss |
|
$ |
(4,625,000 |
) |
|
$ |
(3,505,000 |
) |
|
|
|
|
|
|
|
|
|
Loss per share – basic
and diluted |
|
$ |
(0.38 |
) |
|
$ |
(0.34 |
) |
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding – basic and diluted |
|
|
12,237,395 |
|
|
|
10,433,820 |
|
SACKS PARENTE GOLF,
INC.STATEMENTS OF CASH FLOWSFor
the Years Ended December 31, 2023 and 2022(Amounts
rounded to nearest thousands)
|
|
Years Ended December 31, |
|
|
|
2023 |
|
|
2022 |
|
|
|
|
|
|
|
|
Cash Flows from Operating
Activities |
|
|
|
|
|
|
|
|
Net Loss |
|
$ |
(4,625,000 |
) |
|
$ |
(3,505,000 |
) |
Adjustments to reconcile net
loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
Depreciation |
|
|
32,000 |
|
|
|
11,000 |
|
Amortization |
|
|
26,000 |
|
|
|
- |
|
Change in reserve for inventory obsolescence |
|
|
25,000 |
|
|
|
(36,000 |
) |
Vesting of options |
|
|
443,000 |
|
|
|
1,383,000 |
|
Vesting of restricted stock |
|
|
- |
|
|
|
25,000 |
|
Modification of equity awards |
|
|
- |
|
|
|
28,000 |
|
Loss on extinguishment of debt |
|
|
- |
|
|
|
574,000 |
|
Shares issued for services |
|
|
225,000 |
|
|
|
- |
|
Changes in ROU asset |
|
|
30,000 |
|
|
|
12,000 |
|
Accrued interest |
|
|
- |
|
|
|
63,000 |
|
Changes in operating assets
and liabilities |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(51,000 |
) |
|
|
9,000 |
|
Inventory |
|
|
(131,000 |
) |
|
|
(62,000 |
) |
Prepaids and other current assets |
|
|
(180,000 |
) |
|
|
4,000 |
|
Deposits |
|
|
- |
|
|
|
(1,000 |
) |
Accounts payable and accrued expenses |
|
|
304,000 |
|
|
|
88,000 |
|
Accrued payroll to officers |
|
|
(1,095,000 |
) |
|
|
615,000 |
|
Lease liability |
|
|
(31,000 |
) |
|
|
(11,000 |
) |
Customer deposits |
|
|
(19,000 |
) |
|
|
18,000 |
|
Net cash used in
operating activities |
|
|
(5,047,000 |
) |
|
|
(785,000 |
) |
|
|
|
|
|
|
|
|
|
Cash Flows from Investing
Activities |
|
|
|
|
|
|
|
|
Purchase of property and
equipment |
|
|
(289,000 |
) |
|
|
(75,000 |
) |
Net cash used in
investing activities |
|
|
(289,000 |
) |
|
|
(75,000 |
) |
|
|
|
|
|
|
|
|
|
Cash Flows from Financing
Activities |
|
|
|
|
|
|
|
|
Payment of equipment purchase obligation |
|
|
(15,000 |
) |
|
|
(43,000 |
) |
Deferred offering costs |
|
|
230,000 |
|
|
|
(230,000 |
) |
Proceeds from private sale of common stock subject to possible
redemption |
|
|
180,000 |
|
|
|
420,000 |
|
Proceeds from public sale of common stock, net |
|
|
11,029,000 |
|
|
|
- |
|
Proceeds from notes payable |
|
|
61,000 |
|
|
|
350,000 |
|
Repayment of notes payable |
|
|
(445,000 |
) |
|
|
- |
|
Proceeds from loans payable – related party |
|
|
20,000 |
|
|
|
200,000 |
|
Repayment of loans payable – related party |
|
|
(557,000 |
) |
|
|
- |
|
Proceeds from convertible debt obligations |
|
|
- |
|
|
|
150,000 |
|
Net cash provided by
financing activities |
|
|
10,503,000 |
|
|
|
847,000 |
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in
cash |
|
|
5,167,000 |
|
|
|
(13,000 |
) |
Cash and cash equivalents and
restricted cash beginning of period |
|
|
171,000 |
|
|
|
184,000 |
|
Cash and cash equivalents and
restricted cash end of period |
|
$ |
5,338,000 |
|
|
$ |
171,000 |
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosures of cash flow information: |
|
|
|
|
|
|
|
|
Cash paid for interest |
|
$ |
- |
|
|
$ |
- |
|
Cash paid for income
taxes |
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL
DISCLOSURE OF NON-CASH INVESTING AND FINANCING
ACTIVITIES: |
|
|
|
|
|
|
|
|
Common shares issued on
conversion of convertible debt obligations |
|
$ |
- |
|
|
$ |
1,624,000 |
|
New right of use asset and
lease liability |
|
$ |
73,000 |
|
|
$ |
34,000 |
|
Recording of deferred software
licensing agreement |
|
$ |
136,000 |
|
|
$ |
- |
|
Property and equipment
purchased with debt |
|
$ |
- |
|
|
$ |
58,000 |
|
Reclass of common stock
subject to redemption to equity |
|
$ |
420,000 |
|
|
$ |
- |
|
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