Financial Performance - The company incurred a net loss of 11,752,000andusedcashinoperationsof4,929,000 for the year ended December 31, 2024[22]. - Net sales increased by 3.1million,or8873.5 million for the year ended December 31, 2024, compared to 349,000fortheyearendedDecember31,2023[209].−ThenetlossfortheyearendedDecember31,2024,was11.8 million, a 154% increase from a net loss of 4.6millionin2023[208].−GrossprofitfortheyearendedDecember31,2024,was2.3 million, representing a 1,764% increase from 122,000in2023[208].−Totaloperatingexpensesincreasedby537.3 million in 2024, up from 4.8millionin2023[208].−Financingcostswerereportedat6.9 million in 2024, reflecting a 100% increase as compared to the previous year[208]. - Interest income increased significantly to 161,000in2024from8,000 in 2023, marking a 1,900% rise[208]. - Gross margin improved to 66% in 2024 from 35% in 2023 due to changes in product mix and inventory reserves[210]. Cash and Liquidity - The company had cash and cash equivalents of 7,650,000asofDecember31,2024,whichisexpectedtolastforatleastthenext12months[23].−Thecompanyhassufficientcashonhandforcurrentoperationsforaminimumof12months,butmayneedtoraiseadditionalfundstoexecuteitsgrowthstrategy[141].MarketandCompetition−ThegolfequipmentmarketsizeisestimatedatUSD13.32billionin2023andisexpectedtoreachUSD17.64billionby2028,growingataCAGRof5.781.00 for 30 consecutive business days[160]. - The company was not eligible for a compliance period due to a reverse split within the prior year, but has requested a hearing for an extension[161]. - Any capital raised through equity sales will dilute the percentage ownership of existing shareholders, while debt financing may impose restrictive covenants[142]. - Increases in interest rates could raise the cost of servicing debt, adversely affecting profitability and cash flows[143]. - The company does not anticipate paying cash dividends in the foreseeable future, limiting returns to shareholders to potential increases in share price[152]. Strategic Growth Initiatives - The company plans to grow distribution centers in or near Tokyo, Japan, Seoul, South Korea, and Mexico City based on market needs[30]. - The company plans to expand its international business into Asia, Latin America, and Europe, which requires significant investment and poses risks if not managed effectively[117]. - The company has invested significantly in upgrading manufacturing facilities, including a new golf shaft manufacturing facility in St. Joseph, MO, to remain competitive[80]. Risks and Uncertainties - Economic downturns could adversely affect wholesale customers' financial conditions, impacting their ability to pay trade obligations[77]. - Changes in U.S. trade policies, including increased tariffs, could adversely affect the company's ability to obtain components and impact sales[99]. - Adverse publicity or legal actions could damage the company's brand image and consumer confidence, negatively impacting sales[89]. - The company relies on endorsements from professional athletes, and any loss of these endorsements could materially affect sales[97]. - Fluctuations in foreign currency exchange rates could significantly impact the company's financial results, as transactions are conducted in various currencies[109]. - The company may face significant costs or damages from intellectual property claims or lawsuits, which could affect its ability to sell products[103]. - Integration of newly acquired businesses or partnerships could strain resources and disrupt ongoing operations, potentially harming financial performance[113]. - Information systems are critical for operations, and any failure or cyber security breach could disrupt business and adversely affect financial performance[128].
