Financial Performance - Net sales increased by $0.9 million, or 246%, to $1.2 million for the three months ended March 31, 2025, compared to $0.4 million for the same period in 2024[109]. - Gross profit rose to $852,000 for the three months ended March 31, 2025, representing a 314% increase from $206,000 in the same period in 2024[108]. - Operating expenses totaled $2.8 million for the three months ended March 31, 2025, a 93% increase from $1.5 million in the same period in 2024[108]. - Loss from operations increased to $2.0 million for the three months ended March 31, 2025, compared to $1.3 million for the same period in 2024[115]. - Net loss decreased to $525,000 for the three months ended March 31, 2025, down from $1.2 million in the same period in 2024, primarily due to changes in fair value of warrant liability[118]. - The company experienced a gross margin of 70% for the three months ended March 31, 2025, compared to 59% for the same period in 2024[110]. Cash Flow and Financing - Cash used in operating activities was $1.6 million for the three months ended March 31, 2025, compared to $1.2 million for the same period in 2024[120]. - For the three months ended March 31, 2025, the company incurred a net loss of $0.5 million and used cash in operations of $1.6 million, raising substantial doubt about its ability to continue as a going concern within one year[123]. - As of March 31, 2025, the company had cash and cash equivalents of $5.9 million, expected to last for at least the next 12 months[124]. - Net cash used in investing activities for the three months ended March 31, 2025 totaled $131,000, compared to $83,000 for the same period in 2024[121]. - Financing activities during the three months ended March 31, 2025 totaled $84,000, related to warrant exercises[122]. - The company is dependent on obtaining necessary debt or equity financing to continue operations until it begins generating positive cash flow[125]. Business Expansion and Operations - The company anticipates expansion into golf apparel and other related product lines to enhance growth opportunities[93]. - The company opened a new shaft manufacturing facility in St. Joseph, Missouri, in April 2022 to support growth in shaft technologies[93]. - The company is currently addressing compliance issues with Nasdaq regarding stock price and stockholders' equity requirements[94][100]. Accounting and Financial Reporting - Revenue recognition is accounted for in accordance with Accounting Standards Codification Topic 606, based on expected consideration from customers[129]. - The company periodically issues stock options and accounts for them based on ASC 718, recognizing the fair value of stock-based compensation over the vesting period[133]. - The fair value of stock options is estimated using the Black-Scholes option-pricing model, with expected stock volatility based on peer companies[134]. - The company assesses common stock warrants as either equity-classified or liability-classified instruments based on specific terms and guidance from the FASB[135]. - The company does not have any off-balance sheet arrangements as of March 31, 2025[126].
Sacks Parente Golf(SPGC) - 2025 Q1 - Quarterly Report