PART I - FINANCIAL INFORMATION [Item 1. Condensed Financial Statements](index=5&type=section&id=Item%201.%20Condensed%20Financial%20Statements) The unaudited condensed financial statements for June 30, 2023, show a net loss and stockholders' deficiency, with going concern issues mitigated by a subsequent $11.6 million IPO [Condensed Balance Sheets](index=5&type=section&id=Condensed%20Balance%20Sheets) As of June 30, 2023, total assets slightly decreased to $703,000, while total liabilities significantly increased to $3,122,000, worsening the stockholders' deficiency to $(3,019,000) Balance Sheet Comparison (in thousands) | Metric | June 30, 2023 (Unaudited) | December 31, 2022 | | :--- | :--- | :--- | | **Total Current Assets** | $115,000 | $331,000 | | **Total Assets** | $703,000 | $710,000 | | **Total Current Liabilities** | $3,105,000 | $2,166,000 | | **Total Liabilities** | $3,122,000 | $2,172,000 | | **Total Stockholders' Deficiency** | $(3,019,000) | $(1,882,000) | - Cash on hand decreased sharply from **$147,000** at the end of 2022 to just **$9,000** as of June 30, 2023[12](index=12&type=chunk) - Accrued payroll to executives was a major liability, increasing from **$1,095,000** to **$1,748,000** during the first six months of 2023[12](index=12&type=chunk) [Condensed Statements of Operations](index=6&type=section&id=Condensed%20Statements%20of%20Operations) For the six months ended June 30, 2023, net sales grew 26% to $137,000, and net loss narrowed to $(1,589,000) from $(2,434,000) year-over-year Three Months Ended June 30, (in thousands, except per share data) | Metric | 2023 | 2022 | | :--- | :--- | :--- | | Net Sales | $47 | $44 | | Gross Profit | $15 | $21 | | Loss from Operations | $(650) | $(1,711) | | Net Loss | $(672) | $(2,290) | | Net Loss per Share | $(0.06) | $(0.21) | Six Months Ended June 30, (in thousands, except per share data) | Metric | 2023 | 2022 | | :--- | :--- | :--- | | Net Sales | $137 | $109 | | Gross Profit | $59 | $66 | | Loss from Operations | $(1,547) | $(1,853) | | Net Loss | $(1,589) | $(2,434) | | Net Loss per Share | $(0.15) | $(0.24) | [Condensed Statements of Cash Flows](index=8&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2023, operating cash outflow increased to $(313,000), and net cash decreased by $(162,000), ending at $9,000 Cash Flow Summary for Six Months Ended June 30, (in thousands) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | $(313) | $(275) | | Net cash used in investing activities | $(3) | $(35) | | Net cash provided by financing activities | $154 | $526 | | **Net (decrease) increase in cash** | **$(162)** | **$216** | [Notes to Condensed Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Financial%20Statements) Notes detail operations, liquidity challenges, and accounting policies, with a 'Going Concern' warning mitigated by a subsequent $11.6 million IPO - The financial statements were prepared on a going concern basis, but management concluded there was substantial doubt about the Company's ability to continue as a going concern due to recurring losses and a stockholders' deficit[27](index=27&type=chunk) - Subsequent to the quarter end, on August 17, 2023, the company closed its IPO, selling 3,200,000 shares at $4.00 per share for net proceeds of **$11,594,000**, significantly improving its liquidity position[29](index=29&type=chunk)[76](index=76&type=chunk) Net Sales by Source - Six Months Ended June 30, (in thousands) | Net Sales Source | 2023 Revenue | 2022 Revenue | % Change | | :--- | :--- | :--- | :--- | | Distributors | $67 | $51 | 31% | | Online Sales | $105 | $87 | 21% | | **Total Net Sales** | **$137** | **$109** | **26%** | - The company's pro forma balance sheet after the IPO shows cash increasing to **$8.9 million** and total stockholders' equity becoming positive at **$8.8 million**, after repaying executive payroll, related party loans, and other notes[77](index=77&type=chunk)[81](index=81&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a 26% net sales increase, declining gross margin, and the resolution of going concern issues through an $11.6 million IPO [Results of Operations](index=23&type=section&id=Results%20of%20Operations) Net sales rose 26% to $137,000, but gross margin fell to 43%, leading to a narrowed net loss of $1.6 million for the six months ended June 30, 2023 - Net sales for the six months ended June 30, 2023, increased by **26%** to **$137,000**, primarily from first-time sales to a distributor in South Korea, which accounted for **31%** of net sales[105](index=105&type=chunk) - Gross margin declined to **43%** for the first six months of 2023, compared to **61%** in the same period of 2022, attributed to changes in inventory reserve and shrinkage[106](index=106&type=chunk) - The decrease in net loss for the six months to **$1.6 million** from **$2.4 million** was primarily driven by lower stock-based compensation costs, which more than offset the decreased gross profit and increased operating costs[114](index=114&type=chunk) [Liquidity and Capital Resources](index=25&type=section&id=Liquidity%20and%20Capital%20Resources) Critical liquidity issues as of June 30, 2023, were resolved by an $11.6 million IPO, providing working capital through June 2025 - The company's financial state at June 30, 2023, with a net loss of **$1,589,000** and cash of only **$9,000**, raised substantial doubt about its ability to continue as a going concern[125](index=125&type=chunk)[126](index=126&type=chunk) - The August 2023 IPO raised net proceeds of **$11,594,000**, which is estimated to provide sufficient working capital through approximately **June 2025**[127](index=127&type=chunk)[128](index=128&type=chunk) - Following the IPO, all outstanding related party loans and notes payable, totaling **$559,000** and **$404,000** respectively as of June 30, 2023, were paid in full[120](index=120&type=chunk)[122](index=122&type=chunk)[125](index=125&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, the company is exempt from providing market risk disclosures - As a smaller reporting company, Sacks Parente Golf, Inc. is not required to provide quantitative and qualitative disclosures about market risk[138](index=138&type=chunk) [Item 4. Controls and Procedures](index=30&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of June 30, 2023, with no material changes in internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by this report[139](index=139&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[140](index=140&type=chunk) PART II – OTHER INFORMATION [Item 1. Legal Proceedings](index=31&type=section&id=Item%201.%20Legal%20Proceedings) The company is not involved in any material legal proceedings outside the ordinary course of business - There are no pending or threatened material legal actions, suits, or proceedings against the company or its officers and directors[143](index=143&type=chunk) [Item 1A. Risk Factors](index=31&type=section&id=Item%201A.%20Risk%20Factors) As a smaller reporting company, the company is not required to provide risk factor information in this quarterly report - The company is a smaller reporting company and is not required to provide risk factor disclosures in this report[144](index=144&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=31&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities or use of proceeds to report for the period - There were no unregistered sales of equity securities or use of proceeds to report for the period[145](index=145&type=chunk)