NWTG 10-K & 10-Q changes, risk factors and insider trading

We currently generate our revenue from the sale of golf putters,shafts, golf shafts,putters, golf grips and related gear. The demand for golf-related products products in general, as well as the demand for golf-related soft goods, is directly related to the number of golf participants and the number of rounds of golf being played by these participants. If golf participation decreases or the number of rounds of golf played decreases, 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.

Labor is a primary component in the cost of operating our business. If we face labor shortages or increased labor costs because of inflation, inflation, increased competition for employees, higher employee turnover rates, the impact of pandemics, increases in the federally-mandated or state-mandated minimum wage, changes in exempt and non-exempt status, the impact of pandemics, or other employee benefits costs (including costs associated with health insurance coverage or workers’ compensation insurance), our operating expenses could increase and our growth could be adversely affected. With specific regard to recent inflationary pressures, we have seen some increases in material costs for various metals and carbon fiber, and costs associated with shipping and receiving goods. We may see additional pressure on labor costs, both inside the Company and from suppliers as they face these same issues. For the moment, we are able to maintain the price point of all of our products without material reduction in margins.

In addition, immigration reform continues to attract significant attention in the public arena and the U.S. Congress. If new immigration legislation is enacted, such laws may contain provisions that could increase our costs in recruiting, training and retaining employees. Also,employees, althoughwhich could materially and adversely affect our hiringbusiness, practices comply with the requirementsresults of federaloperations, lawand infinancial reviewing employees’ citizenship or authority to work in the United States, changes or adaptations to these laws may negatively impact our business.condition.

Unfavorable economic conditions, including due to future pandemics, inflationinflation, tariffs, geopolitical conflicts or otherwise, could have a negative impact on consumer discretionary spending and therefore negatively impact our results of operations, financial condition and cash flows.

Our products are recreational in nature and are therefore discretionary purchases for consumers. Consumers are generally more willing to make discretionary purchases of golf products and to spend on leisure and out-of-home entertainment during favorable economic conditions conditions and when consumers are feeling confident and prosperous. Any actual or perceived deterioration or weakness in general, regional or local economic conditions, unemployment levels, the job or housing markets, consumer debt levels or consumer confidence, as well as other adverse economic or market conditions due to a pandemic, inflation, tariffs, geopolitical conflicts or otherwise may lead to customers having less discretionary income to spend on entertainment and recreational activities, and may result in significant fluctuations and spending patterns year to year. Discretionary spending is also affected by many other factors, including general business conditions, interest rates, the availability of consumer credit, taxes and consumer confidence in future economic conditions. Purchases of our products and services could decline during periods when disposable income is lower, or during periods of actual or perceived unfavorable economic conditions. A significant or prolonged decline in general economic conditions or uncertainties regarding future economic prospects that adversely affect consumer discretionary spending, whether in the United States or in our international markets, could result in reduced sales of our products, which in turn would have a negative impact on our results of operations, financial condition and cash flows.

We primarily sell our products to consumers online, through retailers and wholesalerswholesalers, directly,and through distribution and certain other outlets, outlets, like golf fitters. We perform credit evaluations of larger distribution customers’ financial condition and generally require no collateral from these customers. However, a severe or prolonged downturn in the general economy could adversely affect the retail market which in turn, would negatively impact the liquidity and cash flows of these distribution customers, including the ability of such customers to obtain credit to finance purchases of our products and to pay their trade obligations. This could result in increased delinquent or uncollectible accounts for some of our customers. A failure by these customers to pay on a timely basis a significant portion of outstanding account receivable balances would adversely impact our results of operations, financial condition and cash flows.

Our golf shaft products, golf putting instruments, golf shaft products, grips and other products exist in a highly competitive marketplace that is served by a number of well-established and well-financed companies with recognized brand names. In particular four major competitors enjoy the majority of U.S. market share in golf.

With respect to golf equipment sales, new product introductions, price reductions, consignment sales, extended payment terms, “close outs”, tour and advertising spending by competitors continuecontinues to generate intense market competition. Furthermore, downward pressure on pricing in the market for products like ours could have a significant adverse effect on our business.

With respect to golf shaft sales, our competitors do incur significant costs in the areas of advertising, tour and other promotional support. support. We believe toTo be competitive;competitive, we believe we also will need to incur significant expenses in tour, advertising and promotional support. In addition, we have invested, and may continue to invest in the future, significant capital into upgrades in our manufacturing and assembly facilities, including our new golf shaft manufacturing facility in St. Joseph, MOMissouri, to remainmaintain onwhat thewe forefrontbelieve ofto be our technological and competitive innovation.advantage. Unless there is a change in competitive conditions, these competitive pressures and increased costs could adversely affect theour profitability results of ouroperations business.and financial position.

Our golf products, like those of our competitors, generally have a life cycle. Depending on the product, it is considered typical,typical within the industry,industry that revenue from a new product rises and peaks within a three-year period, with sales occurring at a higher rate in the first two years than in the third. Factors driving a product life cycle include the rapid introduction of competitive products, consumer demands for the latest technology or a professional who uses the product and is victorious in a major tournament. In this marketplace, it is reasonable to assume our annual revenues can be affected each year by the introduction of new products, those that are in their first two years of the product life cycle, and successful professional use.

These marketplace conditions raise a number of issues that we must successfully manage. For example, we must properly anticipate consumer preferences and design products that meet those preferences while also complying with restrictions imposed on golf equipment by the Rules of Golf (see further discussion of the Rules of Golf below) or our new products will not achieve sufficient market success to compensate for the usual decline in sales experienced by products already in the market. Second, our research and development, third- partythird-party design and prototyping services and external suppliers will face constant pressures to design, develop, source and supply new products that perform better than thetheir predecessors, many of which incorporate new or otherwise untested technology, suppliers or materials. Third, for new products to generate equivalent or greater revenues than their predecessors, they must either maintain the same or higher sales levels with the same or higher pricing, or exceed the performance of their predecessors in one or both of those areas. Fourth, the relatively short window of opportunity for launching and selling new products requires great precision in forecasting demand and assuring that supplies are ready and delivered during the critical selling periods.

Our golfrevenue equipment,could golfbecome gearconcentrated among a limited number of customers, and other related golf business products could have a concentrated customer base. Thethe loss of a majorsignificant customer could haveadversely a significant effect on affect our sales.business.

In addition, adverse publicity about regulatory or legal action against us could damage our reputation and brand image, undermine consumer confidence and reduce demand for our products, even if the regulatory or legal action is unfounded or not material to our operations. Also, as we seek to grow our presence in existing, and expand into new, geographic or product markets, consumers in these markets may not accept our brand image and may not be willing to pay a premium to purchase our products as compared to other brands. We anticipate as we continue to grow our presence in existing markets and expansion into new markets, further developing our brand may become increasingly difficult and expensive. If we are unable to maintain or further develop the image of our brand, it could materially adversely affect our business, financial condition and results of our operations.

In addition, there has been a marked increase in the use of social media platforms and other forms of internet-based communications that provide individuals and businesses with access to a broad audience of consumers and other interested persons. The availability of information on social media platforms is virtually immediate, as is its potential impact to affected individuals and businesses. Many social media platforms immediately publish the content posted by their subscribers and participants, often without filters or checks on the accuracy of the content posted. Accordingly, ourthe use of social media vehicles,by whereby customers, Associates, franchisees, licenseescustomers or other third parties could usecreate negative publicity, damage our brand or our reputation and have a material adverse effect on our business, financial condition and results of operations.

Terrorist activities and armed conflicts, such as in Ukraine and the Middle East, including escalation of hostilities arising out of any global conflict, could have an adverse effect on the United States or worldwide economy and could cause decreaseddecrease demand for our products as consumers’ attention and interests are diverted from golf and become focused on issues relating to these events. If such events disrupt domestic or international air, ground or sea shipments, or the operation of our manufacturing facilities, our ability to obtain the materials and components necessary to manufacture products and to deliver customer orders would be harmed, which would have a significantmaterial adverse effect on our results of operations, financial condition and cash flows. Such events can also negatively impact tourism, which could adversely affect our sales to retailers at resorts and other vacation destinations. In addition, the occurrence of political instability and/or terrorist activities generally restricts travel to and from the affected areas, making it more difficult in general to manage our international relationships and operations. In particular, escalating political tensions could adversely impact macroeconomic conditions, give rise to regional instability and result in heightened economic sanctions from the U.S. and the international community in a manner that adversely affects our business.

The occurrence of a natural disaster, such as an earthquake, tornado, tsunami, fire, flood or hurricane, or the further outbreak of a pandemic pandemic disease, could significantly adversely affect our business. A natural disaster or a pandemic disease could significantly adversely affect the demand for our products, our ability to manufacture our products, as well as the supply of the components and materials used to make our products. Demand for golf products also could be negatively affected as consumers in the affected regions restrict their recreational activities and as tourism to those areas declines. If our suppliers experienced a significant disruption in their business as a result of a natural disaster or other emergency, our ability to obtain the necessary components to make our products could be significantly adversely affected. In addition, the occurrence of a natural disaster or the outbreak of a pandemic disease generally restricts travel to and from the affected areas, making it more difficult in general to manage operations.

In addition, due to the seasonality of our business, our business can be significantly adversely affected by unusual or severe weather conditions. Unfavorable weather conditions generally result in fewer golf rounds played, which generally results in reduced demand for all golf products. Furthermore, catastrophic storms can negatively affect golf rounds played both during the storms and afterward, as storm damaged golf courses are repaired and golfers focus on repairing the damage to their homes, businesses and communities.

We seek to have all our shafts, putting instruments, grips and shaftsgrips meet the standards published by the USGA and Thethe R&A in the Rules of Golf because these standards are generally followed by golfers, both professional and amateur, within their respective jurisdictions. The USGA publishes rules that are generally followed in the United States, Canada and Mexico, and the R&A publishes rules that are generally followed in most other countries throughout the world. However, the Rules of Golf as published by the R&A and the USGA are virtually the same and are intended to be so pursuant to a Joint Statement of Principles issued in 2001.

We have and willintend in the future to establish relationships with professional athletes, celebrities and other endorsers in order to evaluate and promote our branded products. We have currently and willintend in the future to enter into endorsement arrangements with members of the world’s various professional tours. These tours are known as the PGA Champions Tour, the PGA Tour, the LPGA Tour, the PGA European Tour, the Japan Golf Tour, the Korn Ferry Tour, the Epson Tour, and The PGA Latin America Tour. We willalso expect alsoto enter into endorsements with celebrities to promote our brand. While most endorsers fulfill their contractual obligations without issue, some have been known to stop using a sponsor’s products despite contractual commitments. If certain of our endorsers were to stop using our products contrary to their endorsement agreements, or if any such endorser is or becomes the subject of negative publicity, our business could be adversely affected in a material way by the negative publicity or lack of endorsement.

We believe that professional usage of our golf shafts, golf putting instruments, golf shafts and golf grips contributes to retail sales. We therefore spend a significant amount of money to secure professional usage of our products. Many other companies, however, also aggressively seek the patronage of these professionals and offer many inducements, including significant cash incentives and specially designed products. There is a great deal of competition to secure the representation of tour professionals. As a result, it is expensive to attract and retain such tour professionals. The inducements offered by other companies could result in a decrease in usage of our products by professional golfers or limit our ability to attract other tour professionals. A decline or refusal of use by professional players of our products, or a significant increase in the cost to attract or retain endorsers, could have a material adverse effect on our sales and our business.

Any significant changes in U.S. trade or other policies that block,block or restrict imports or increase import tariffs could have a material adverse adverse effect on results of operations.

The golf industry, in general, has been characterized by widespread imitation of designs, or technological improvements. We have an active program of monitoring, investigating and enforcing our proprietary rights against companies and individuals who market or manufacture counterfeits and “knockoff” products or copy intellectual property. We will assert our rights against infringers of our patents, copyrights, trademarks and trade dress. However, these efforts may not be successful in reducing sales of golf products by these infringers. Additionally, other golf club manufacturers may be able to produce successful golf clubs which imitate our designs without infringing any of our copyrights, patents, trademarks or trade dress. As an example, we have already successfully defended the Ultra Low Balance Point utility patent along with our license partners in 2020.

We may become subject to intellectual property claims or lawsuits that could cause itus to incur significant costs or pay significant damages or that could prohibit us from selling our products.

Competitors in the golf equipment industry seek to obtain patent, trademark, copyright or other protection of their proprietary rights and designs designs for golf equipment, golf shafts and other products as do we. From time to time, third parties have claimed or may claim in the future that our products infringe upon their proprietary rights. We have evaluated and would evaluate any such claims and, where appropriate, appropriate, would seek to obtainedobtain licenses or other business arrangements. To date, there have been no interruptions in our business as a result of any claims of infringement, and we do not believe that we materially infringe the intellectual property rights of third parties. However, in the future, intellectual property claims could force us to alter existing products or withdraw them from the market or could delay the introduction of new products.

Various patents have been issued to our competitors in the golf industryindustry, and these competitors may assert that our golf products infringe their patent or other proprietary rights. If our golf products were found to infringe third-party intellectual property rights, we may be unable to obtain a license to use such technology, and it could incur substantial costs to redesign products, withdraw them from the market, and/or to defend legal actions.

We are exposed to risks associated with doing business globally and manufacturing in the USA.U.S.

Currently we sell and distribute products in markets around the world, such as the Americas, Asia and Europe. These activities have and will continue to result in investments in inventory, accounts receivable, employees, corporate infrastructure and manufacturing facilities. There are a limited number of suppliers forthat the manufacturer ofmanufacture components in the United States, and we are dependent on these suppliers and vendors. We have some components provided by vendors located outside of the United States and if these components were unavailable, it could have a materially adverse effect on our operations, financial performance and condition. The operation of foreign distribution in our international markets, as well as our management of relationships with international suppliers and vendors, will require the dedication of our management and other Company resources. We currently assemble all of our products and manufacture some of our products in the United States.

●Increased difficulty in ensuring compliance by employees, agents and contractors with our policies as well as with the laws of multiple jurisdictions, including but not limited to the U.S. Foreign Corrupt Practices Act (the “FCPA”), localFCPA, international environmental, health and safety laws, and increasingly complex regulations relating to the conduct of international commerce, including import/export laws and regulations, economic sanctions laws and regulations and trade controlscontrols, including tariffs;

We may acquire companies, businesses and products or product lines that complement or augment our existing business or planned growth markets. Integrating any newly acquired business, or partnership, is typically expensive and time-consuming. Integration efforts often take a significant amount of time, place a significant strain on managerial, operational and financial resources and could prove to be more difficult or expensive than predicted. The diversion of management’s attention and any delay or difficulties encountered in connection with any such acquisitions could result in the disruption of on-goingongoing business or inconsistencies in standards and controls that could negatively affect our ability to maintain third-party relationships. Moreover, we may need to raise additional funds through public or private debt or equity financing, or issue additional shares, to continue operating the business, which may result in dilution for stockholders or the incurrence of indebtedness.

As part of our efforts to acquire companies, businesses or products or to enter into other significant transactions, we willintend to conduct business, legal and financial due diligence with the goal of identifying and evaluating material risks involved in such transactions. Despite our efforts, we ultimately may be unsuccessful in ascertaining or evaluating all such risks and, as a result, might not realize the intended advantages of the transaction. If we fail to realize the expected benefits from a transaction, whether as a result of unidentified risks, integration difficulties, complexities associated with managing the combined business, performance shortfalls at one or both of the companies as a result of the diversion of management’s attention caused by completing the transaction and integrating the companies’ operations, litigation with current or former employees and other events, our business, financial condition and results of operations could be adversely affected.

We plan our manufacturing capacity based upon forecasted demand for our products. Forecasting demand for our products is very difficult given the manufacturing lead times and the number of specifications involved. For example, we must forecast how many putting instruments we will sell, but also (1) the quantity of each model, (2) the quantity of the different components in each model, and (3) for each modelmodel, the style of grip, the number of left-handed and right-handed versions, and the style of shaft and hosel type. The nature of our business allows for some control over our manufacturing capacity if actual demand for a product or products exceed or are less than forecasted demand. However, if actual demand for a product or products exceeds the forecasted demand, we may not be able to produce sufficient quantities of products in time to fulfill actual demand, which could limit our sales and adversely affect financial performance. On the other hand, if actual demand is less than the forecasted demand for a product or products, we could produce excess quantities, resulting in excess inventories and related obsolescence charges that could adversely affect our financial performance.

Newton Gravity Putters

During the three and six months ended MarchJune 31,30, 2026, several factors influenced the Company’s operations and financial position, including:

● 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 thirdfourth quarter of 2026.2026 or the first quarter of 2027.

● Capital raising activitiesactivities. On March 16, 2026, the Company entered into the Purchase Agreement,Agreement pursuant to whichproviding for the Companyissuance, agreed to issue, atin one or more closings, unsecuredof promissoryConvertible notesNotes inwith an aggregate fundedprincipal amount of up to $2,000,000$2.0 andmillion, warrantstogether with Warrants to purchase shares of the Company’s common stock at an exercise price of $1.75 per share, subject to adjustmentadjustment. fromOn timeMay 28, 2026, the Company’s Board of Directors approved an amendment increasing the maximum aggregate principal amount of Convertible Notes available under the Purchase Agreement to time.$3.0 million.

SubsequentDuring tothe Marchsix 31,months ended June 30, 2026, the Company issued additional Convertible Notes in thean aggregate principal amount of $850,000$2.25 tomillion unrelatedof third-partyConvertible investorsNotes pursuant to the Purchase AgreementAgreement. (see Note 8). The Convertible Notes werebear issuedinterest at 10% per annum, mature 18 months from issuance, and are convertible, together with correspondingaccrued Warrantsinterest, to purchaseinto shares of the Company’s common stock at a conversion price of $1.60 per share at maturity. In connection with these issuances, the Company also issued five-year Warrants to purchase an aggregate of 225,000 shares of common stock onat substantially similaran termsexercise toprice thoseof previously$1.75 disclosed.per Theseshare. Net proceeds from these financings were intendedused to supportfor working capital and operationalgeneral initiativescorporate purposes (see Note Notes 8 and 9).

●As Manufacturing transitionpart activities.of Thethis transition, the Company implemented updates to certain shaft manufacturing recipes and related production processes, including recalibration of machining operations, modifications to finishing workflows, changes to paint mixtures, and maintenance activities intended designed to improve product quality, production 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.

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.

The Newton Motion™ shaft platform continues to represent the Company’s primary product category and the principal driver of revenue during the threesix months ended MarchJune 31,30, 2026.

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 thirdfourth quarter 2026 or the first quarter of 2026.2027.

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 ofwhen 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.

TheFuture 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.

During the three and six months ended MarchJune 31,30, 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, production consistency, and manufacturing scalability. These activities were undertaken in conjunction with the introduction of updated versions of the Company’s Fast Motion driver shaft and Motion driver and fairway shafts. During the same period, the Company also experienced temporary constraints in the availability of carbon fiber, which further limited manufacturing capacity. Collectively, these factors 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 the fulfillment of certain customer orders into subsequent periods.orders.

During the three and six months ended MarchJune 31,30, 2026, the Company did not implement any pricing changes in response to inflationary pressures.

Three Months Ended MarchJune 31,30, 2026 as Compared to the Three Months Ended MarchJune 31,30, 2025

The following is a comparison of our results of operations for the three months endingended MarchJune 31,30, 2026 and 2025 (amounts rounded to the nearest thousand):

NetOur net sales decreased approximately $0.2$0.8 million, or 18%,36%, to approximately $1.0$1.3 million forduring the three months ended MarchJune 31,30, 2026, compared to $1.2$2.1 million for during the three months ended MarchJune 31,30, 2025,2025. The decrease was driven primarily by reduced manufacturing capacity at the Company’s Company’s shaft production facility as the Company implementedcontinued implementing updates to certain existing shaft recipes and related production processes,processes in connection with the introduction of updated versions of its Fast Motion driver shaft and Motion driver and fairway shafts, including recalibration of machining operations, modifications to finishing workflows, changes to paint mixtures, and maintenance activities intended to improve product quality, production consistency, and manufacturing scalability. TheseIn addition, activitiestemporary temporarilyconstraints in the availability of carbon fiber further limited production capacity during the quarter. Collectively, these factors reduced production throughput and manufacturing utilization duringdelayed the quarter.shipment of certain customer orders.

GrossCost marginof wasgoods 63%sold decreased approximately $0.3 million, or 39%, to approximately $0.4 million for the three months ended MarchJune 31,30, 2026, compared to 70%approximately $0.7 million for the three months ended MarchJune 31,30, 2025. The decrease is was primarily attributedattributable to temporarilylower sales volumes resulting from reduced production throughput and manufacturing utilization during the quarter,Company’s whichmanufacturing adversely affectedtransition grossand margintemporary ascarbon fixedfiber productionsupply costs were absorbed over lower production volumes.constraints.

Selling, general and administrative expenses increaseddecreased approximately $0.4$0.7 million to $2.9$2.1 million for the three months ended MarchJune 31,30, 2026, compared to $2.5$2.8 million for the three months ended MarchJune 31,30, 2025. The increasedecrease was primarily attributable to approximately$1.0 $0.3 million of labor costs associated with a bonus accruallower sales and annualizationmarketing costs, partially offset by an increase of headcount added during 2025, approximately $0.2$0.3 million of manufacturing costs classified as operating expenses due to reduced production throughput and resulting idle capacity, and approximately $0.1 million of increased stock-based compensation expense, partially offset by a reduction of approximately $0.2 million in sales and marketing expenses and approximately $0.1 million in professional services expenses.expense.

Research and development expensescosts consist primarily ofinclude employee compensation,costs, consulting expenses,consultants, licensing fees, and product design and development costs.

OtherInterest income (expense), net

Interest expense, net was $2,000$43,000 for the three months ended MarchJune 31,30, 2026, compared to interest incomeincome, net of $45,000$29,000 for the three months ended MarchJune 31,30, 2025. The change from interest income to interest expense was primarily attributabledue to lower averageinterest income on cash balances and interest expense incurred on Convertible Notes issued during the threefirst months ended March 31, 2026 compared to the prior year period. The Company also incurred amortizationhalf of debt discount for the three months ended March 31, 2026 related to the Convertible Note offering of $2,000 (see Note 8, 9) that did occur in the prior year.2026.