Revenue increased 106% YoY to a record $5.4 million
BALTIMORE, Dec. 22, 2021 (GLOBE NEWSWIRE) -- Slinger (OTCQB: SLBG), a leading connected sports technology company, today announced financial results for its Q2 2021 fiscal quarter, ended October 31 2021.
“This was a momentous quarter for Slinger as we announced two transformational acquisitions that will enable the development of our Watch, Play, Learn connected technology platform strategy, while also reporting our first $5 million quarter for revenue, driven by strong Slinger Bag sales,” said Mike Ballardie, Slinger CEO.
Second Quarter Fiscal 2021 Financial Highlights (versus Fiscal 2020):
- Revenue of $5.4 million versus $2.6 million;
- Gross profit of $2.1 million versus $1.0 million;
- GAAP net loss and loss per share of ($38.8) million and ($0.95) versus ($2.5) million and ($0.10), respectively;
- Non-GAAP net loss and loss per share of ($1.1) million and ($0.03) versus ($0.2) million and ($0.01), respectively.
Second Quarter Fiscal 2021 Business Highlights:
- Announced the Watch, Play, Learn strategy driven by transformational deals to acquire PlaySight Interactive, a pioneer and leader across sports video technology, data capture, high-performance analytics and automated video production; and GAMEFACE.AI, a leading athletic performance AI company that is also building the analysis engine for the Slinger App;
- Foundation Tennis announced its partnership with Square;
- Expanded distribution into China and Brazil tennis markets;
- Partnered with the world-renowned Mouratoglou Academy and their locations in Nice, Dubai and Greece.
| Select Financial Metrics: Q2 Fiscal 2021 versus Fiscal 2020 as of 10/31/21* | ||||||
| (in $Ms) | 2Q21 | 2Q20 | Change | YTD FY21 | YTD FY20 | Change |
| Net sales | $5.4 | $2.6 | 106.1% | $7.9 | $3.2 | 149.2% |
| Gross income | $2.1 | $1.0 | 100.4% | $2.9 | $0.7 | 329.4% |
| Gross margin | 38.6% | 39.7% | 36.2% | 21.0% | ||
| GAAP operating loss | ($35.1) | ($0.2) | nm | ($37.6) | ($1.7) | nm |
| Non-GAAP operating loss | ($0.8) | ($0.1) | nm | ($2.5) | ($1.6) | nm |
| GAAP net loss | ($38.8) | ($2.5) | nm | ($42.3) | ($3.9) | nm |
| Non-GAAP net loss | ($1.1) | ($0.2) | nm | ($2.8) | ($2.0) | -40.0% |
| GAAP loss per share | ($0.95) | ($0.10) | nm | ($1.20) | ($0.15) | nm |
| Non-GAAP loss per share | ($0.03) | ($0.01) | nm | ($0.08) | ($0.07) | -14.3% |
| nm = not measurable/meaningful | ||||||
| *numbers may not add due to rounding | ||||||
We define non-GAAP operating income (loss) as the respective GAAP measure, excluding expenses related to share-based compensation, shares and warrants issued in connection of services, amortization of acquired intangible assets, and acquisition-related expenses.
We define non-GAAP net income (loss) as GAAP net income (loss), excluding items used to calculate non-GAAP operating income (loss), as well as other non-cash items, including gains/losses related to:
The extinguishment of debt; the amortization of debt discounts; inducement of conversions of equity; the change in the value of derivatives that are marked-to-market quarterly; the issuance of convertible notes.
Please see reconciliations of all non-GAAP financial measures after the financial statements.
Fiscal 2021 Commentary
“As we look to the second half of the fiscal year, we have several catalysts that will bring all the pieces together to enable our Watch, Play, Learn strategy. First, we expect to close our two transformational acquisitions in the weeks to come. Next, in early Spring, we anticipate introducing both the Slinger app with its AI-driven performance analytics and our unified, connected sports platform for tennis. Finally, we will bring our Watch, Play, Learn capabilities to new market segments, led by introducing Slinger Bag ball launchers for Pickleball and Padel Tennis after these product releases.
“Turning to our expected financial performance for fiscal year 2021, we expect revenue (not including revenue from pending acquisitions) to be $17 - $18 million, or an increase of 57% - 67% over the prior year’s revenue of $10.8 million. We anticipate our adjusted EBITDA run rate to be near break-even as we exit the year. Once the GAMEFACE.AI and PlaySight deals are closed, we will update our consolidated guidance.
“In conclusion, I am excited about Slinger's transformation into a sports tech business, driven by recurring SaaS, subscription and content revenue. I believe the connected sports vision we are implementing will bring our platform's unique value proposition to consumers and drive value for our shareholders in the years ahead,” Ballardie concluded.
The Slinger Bag is available to order or to find out more about Slinger Bag, visit https://slingerbag.com.
Webcast Information
The Company will be hosting a webcast and Q&A at 10:00 a.m. Eastern Time on Wednesday, December 22, 2021. The webcast will be available at https://viavid.webcasts.com/starthere.jsp?ei=1521010&tp_key=c8920e3fe9.
It is recommended to submit questions ahead of time to investors@slingerbag.com, but investors will also be able to submit questions through the live webcast.
About Slinger
Slinger is a new sports brand focused on delivering innovative, game improvement technologies and equipment across all ball sports categories. With the vision to become a leading connected sports company, Slinger enhances the skill and enjoyment levels of players of all ages and abilities. Slinger is initially focused on building its brand within the global tennis market through its Slinger Bag Tennis Ball Launcher and Accessories. Slinger Bag has underpinned its proof of concept with over $250M of retail value in global distribution agreements since the Spring of 2020. Slinger is primed to disrupt traditional global markets with its patented, highly transportable, and affordable Slinger Bag Launcher and its suite of connected app and SaaS services.
Forward-Looking Statements: This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and Private Securities Litigation Reform Act, as amended, including those relating to the Company's product development, clinical and regulatory timelines, market opportunity, competitive position, possible or assumed future results of operations, business strategies, potential growth opportunities and other statements that are predictive in nature. These forward-looking statements are based on current expectations, estimates, forecasts and projections about the industry and markets in which we operate and management's current beliefs and assumptions.
These statements may be identified by the use of forward-looking expressions, including, but not limited to, "expect," "anticipate," "intend," "plan," "believe," "estimate," "potential, "predict," "project," "should," "would" and similar expressions and the negatives of those terms. These statements relate to future events or our financial performance and involve known and unknown risks, uncertainties, and other factors which may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include those set forth in the Company's filings with the Securities and Exchange Commission. Prospective investors are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date of this press release. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.
Contacts:
For Slinger Investor Relations inquiries, please visit www.slingerbagir.com, or contact investors@slingerbag.com or 443-407-7564
For Slinger media inquiries, please contact the press office at press@slingerbag.com 443-407-7564
SLINGER BAG INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
| October 31, 2021 | April 30, 2021 | |||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 1,747,661 | $ | 928,796 | ||||
| Accounts receivable, net | 846,529 | 762,487 | ||||||
| Inventories, net | 8,578,431 | 3,693,216 | ||||||
| Prepaid inventory | 475,913 | 140,047 | ||||||
| Loan and interest receivable | 1,435,219 | - | ||||||
| Prepaid expenses and other current assets | 110,970 | 60,113 | ||||||
| Total current assets | 13,194,723 | 5,584,659 | ||||||
| Goodwill | 1,240,000 | - | ||||||
| Other intangible assets, net | 2,290,895 | 112,853 | ||||||
| Total assets | $ | 16,725,618 | $ | 5,697,512 | ||||
| Liabilities and Shareholders’ Deficit | ||||||||
| Current liabilities | ||||||||
| Accounts payable and accrued expenses | $ | 5,306,355 | $ | 2,050,476 | ||||
| Accrued payroll and bonuses | 1,210,805 | 1,283,464 | ||||||
| Deferred revenue | 71,242 | 99,531 | ||||||
| Accrued interest - related party | 821,925 | 747,636 | ||||||
| Notes payable - related party, net | - | 6,143,223 | ||||||
| Convertible notes payable, net | 2,627,778 | - | ||||||
| Derivative liabilities | 14,870,050 | 13,813,449 | ||||||
| Total current liabilities | 24,908,155 | 24,137,779 | ||||||
| Long-term liabilities | ||||||||
| Note payable, net | - | 10,477 | ||||||
| Total liabilities | 24,908,155 | 24,148,256 | ||||||
| Commitments and contingencies (Note 11) | ||||||||
| Shareholders’ deficit | ||||||||
| Common stock, $0.001 par value, 300,000,000 shares authorized, 41,869,622 and 27,642,828 shares issued and outstanding as of October 31, 2021 (unaudited) and April 30, 2021, respectively; 0 and 6,921,299 shares issuable as of October 31, 2021 (unaudited) and April 30, 2021, respectively | 41,870 | 27,643 | ||||||
| Additional paid-in capital | 62,871,881 | 10,365,056 | ||||||
| Accumulated other comprehensive loss | (12,346 | ) | (20,170 | ) | ||||
| Accumulated deficit | (71,083,942 | ) | (28,823,273 | ) | ||||
| Total shareholders’ deficit | (8,182,537 | ) | (18,450,744 | ) | ||||
| Total liabilities and shareholders’ deficit | $ | 16,725,618 | $ | 5,697,512 | ||||
SLINGER BAG INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE LOSS
| For the Three Months Ended | For the Six Months Ended | |||||||||||||||
| October 31, | October 31, | October 31, | October 31, | |||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||||
| Net sales | $ | 5,400,542 | $ | 2,620,068 | $ | 7,938,115 | $ | 3,185,053 | ||||||||
| Cost of sales | 3,315,605 | 1,579,750 | 5,067,956 | 2,516,650 | ||||||||||||
| Gross income | 2,084,937 | 1,040,318 | 2,870,159 | 668,403 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Selling and marketing expenses | 887,809 | 397,922 | 1,594,906 | 699,940 | ||||||||||||
| General and administrative expenses | 36,197,888 | 829,510 | 38,592,687 | 1,588,778 | ||||||||||||
| Research and development costs | 103,318 | 15,439 | 277,366 | 43,549 | ||||||||||||
| Total operating expenses | 37,189,015 | 1,242,871 | 40,464,959 | 2,332,267 | ||||||||||||
| Loss from operations | (35,104,078 | ) | (202,553 | ) | (37,594,800 | ) | (1,663,864 | ) | ||||||||
| Other expense (income): | ||||||||||||||||
| Amortization of debt discounts | 2,629,069 | 52,543 | 2,650,285 | 286,251 | ||||||||||||
| Loss on extinguishment of debt | 1,978,295 | 1,999,487 | 7,096,730 | 1,432,820 | ||||||||||||
| Induced conversion loss | - | 51,412 | - | 51,412 | ||||||||||||
| Gain on change in fair value of derivatives | (4,803,569 | ) | - | (9,130,913 | ) | - | ||||||||||
| Loss on issuance of convertible notes | 3,689,369 | - | 3,689,369 | - | ||||||||||||
| Interest expense - related party | 22,495 | 144,085 | 78,728 | 316,549 | ||||||||||||
| Interest expense, net | 205,620 | 74,046 | 281,670 | 147,256 | ||||||||||||
| Total other expense | 3,721,279 | 2,321,573 | 4,665,869 | 2,234,288 | ||||||||||||
| Loss before income taxes | (38,825,357 | ) | (2,524,126 | ) | (42,260,669 | ) | (3,898,152 | ) | ||||||||
| Provision for income taxes | - | - | - | - | ||||||||||||
| Net loss | (38,825,357 | ) | (2,524,126 | ) | (42,260,669 | ) | (3,898,152 | ) | ||||||||
| Other comprehensive gain (loss), net of tax | ||||||||||||||||
| Foreign currency translation adjustments | 20,852 | (1,544 | ) | 7,824 | (2,937 | ) | ||||||||||
| Total other comprehensive gain (loss), net of tax | 20,852 | (1,544 | ) | 7,824 | (2,937 | ) | ||||||||||
| Comprehensive loss | $ | (38,804,505 | ) | $ | (2,525,670 | ) | $ | (42,252,845 | ) | $ | (3,901,089 | ) | ||||
| Net loss per share, basic and diluted | $ | (0.95 | ) | $ | (0.10 | ) | $ | (1.20 | ) | $ | (0.15 | ) | ||||
| Weighted average number of common shares outstanding, basic and diluted | 41,080,733 | 26,420,584 | 35,104,580 | 26,255,603 | ||||||||||||
SLINGER BAG INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
| For the Six Months Ended | ||||||||
| October 31, | October 31, | |||||||
| 2021 | 2020 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Cash flows from operating activities | ||||||||
| Net loss | $ | (42,260,669 | ) | $ | (3,898,152 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Amortization expense | 131,958 | - | ||||||
| Gain on change in fair value of derivatives | (9,130,913 | ) | - | |||||
| Shares and warrants issued in connection with services | 1,417,728 | 183,845 | ||||||
| Share-based compensation | 32,569,112 | - | ||||||
| Loss on extinguishment of debt | 7,096,730 | 1,432,820 | ||||||
| Induced conversion loss | - | 51,412 | ||||||
| Amortization of debt discounts | 2,650,285 | 286,251 | ||||||
| Loss on issuance of convertible notes | 3,689,369 | - | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable, net | (84,262 | ) | (353,505 | ) | ||||
| Inventories, net | (4,886,227 | ) | (993,049 | ) | ||||
| Prepaid expenses and other current assets | (422,119 | ) | 110,455 | |||||
| Accounts payable and accrued expenses | 3,256,234 | 327,579 | ||||||
| Accrued payroll and bonuses | (72,659 | ) | 361,608 | |||||
| Deferred revenue | (28,289 | ) | 630,148 | |||||
| Accrued interest - related party | 74,289 | 316,549 | ||||||
| Net cash used in operating activities | (5,999,433 | ) | (1,544,039 | ) | ||||
| Cash flows from investing activities | ||||||||
| Note receivable issuance | (1,400,000 | ) | - | |||||
| Net cash used in investing activities | (1,400,000 | ) | - | |||||
| Cash flows from financing activities | ||||||||
| Proceeds from convertible notes payable | 11,000,000 | - | ||||||
| Debt issuance costs related to convertible notes payable | (800,251 | ) | - | |||||
| Proceeds from notes payable – related party | 1,000,000 | 2,000,000 | ||||||
| Repayments of notes payable – related party | (1,000,000 | ) | - | |||||
| Repayment of note payable | (2,000,000 | ) | - | |||||
| Proceeds from note payable | - | 120,000 | ||||||
| Other financing activities | 9,671 | - | ||||||
| Net cash provided by financing activities | 8,209,420 | 2,120,000 | ||||||
| Effect of exchange rate fluctuations on cash and cash equivalents | 8,878 | (2,937 | ) | |||||
| Net change in cash and cash equivalents | 818,865 | 573,024 | ||||||
| Cash and cash equivalents, beginning of the period | 928,796 | 79,847 | ||||||
| Cash and cash equivalents, end of the period | $ | 1,747,661 | $ | 652,871 | ||||
| Supplemental disclosure of cash flow information | ||||||||
| Interest paid | $ | 111,105 | $ | 140,180 | ||||
| Income taxes paid | 3,896 | - | ||||||
| Supplemental disclosure of non-cash investing and financing activities | ||||||||
| Shares issued for conversion of notes payable – related party | $ | 6,220,003 | $ | - | ||||
| Shares issued in connection with acquisition | 3,550,000 | - | ||||||
| Elimination of related party derivative liabilities | 8,754,538 | - | ||||||
| Derivative liabilities recorded as debt discounts of convertible notes | 10,199,749 | - | ||||||
| Conversion of note payable and accrued interest into common stock | - | 187,037 | ||||||
| Warrants issued with note payable | - | 70,130 | ||||||
Non-GAAP Financial Measures
In addition to our financial information presented in accordance with GAAP, we believe the following non-GAAP financial measures are useful in evaluating our operating performance. We use the following non-GAAP financial measures, collectively, to evaluate our ongoing operations and for internal planning and forecasting purposes, including the preparation of our annual operating budget and quarterly forecasts, to evaluate the effectiveness of our business strategies, and to communicate with our board of directors concerning our financial performance. We believe that non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, may be helpful to investors because they provide consistency and comparability with past financial performance and meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our business, results of operations, or outlook. The non-GAAP financial measures are presented for supplemental informational purposes only, have limitations as analytical tools, and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP and may be different from similarly-titled non-GAAP financial measures used by other companies. In addition, other companies, including companies in our industry, may calculate similarly-titled non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures, and not to rely on any single financial measure to evaluate our business, which it includes in press releases announcing quarterly financial results, including this press release.
We define non-GAAP operating income (loss) as the respective GAAP measure, excluding expenses related to share-based compensation, shares and warrants issued in connection of services, amortization of acquired intangible assets, and acquisition-related expenses.
We define non-GAAP net income (loss) as GAAP net income (loss), excluding items used to calculate non-GAAP operating income (loss), as well as other non-cash items, including gains/losses related to:
- The extinguishment of debt; the amortization of debt discounts; inducement of conversions of equity; the change in the value of derivatives that are marked-to-market quarterly; the issuance of convertible notes.
| Reconciliation of GAAP to Non-GAAP Operating Loss | 2Q21 | 2Q20 | YTD FY21 | YTD FY20 |
| GAAP Operating Loss | ($35.1) | ($0.2) | ($37.6) | ($1.7) |
| Excluding: | ||||
| Share-based compensation | $32.4 | - | $32.6 | - |
| Shares and warrants issued in connection with services | $0.8 | $0.1 | $1.4 | $0.1 |
| Amortization of acquired intangible assets | $0.1 | - | $0.1 | - |
| Acquisition-related expenses | $1.0 | - | $1.0 | - |
| Non-GAAP Operating Loss | ($0.8) | ($0.1) | ($2.5) | ($1.6) |
| Reconciliation of GAAP to Non-GAAP Net Loss and Loss Per Share | 2Q21 | 2Q20 | YTD FY21 | YTD FY20 |
| GAAP Net Loss | ($38.8) | ($2.5) | ($42.3) | ($3.9) |
| Excluding the Following Other Expenses (Income): | ||||
| Amortization of debt discounts | $2.6 | $0.1 | $2.7 | $0.3 |
| Loss on extinguishment of debt | $2.0 | $2.0 | $7.1 | $1.4 |
| Induced conversion loss | - | $0.1 | - | $0.1 |
| Gain on change in fair value of derivatives | ($4.8) | - | ($9.1) | - |
| Loss on issuance of convertible notes | $3.7 | - | $3.7 | - |
| Excluding the Following Operating Expenses: | ||||
| Share-based compensation | $32.4 | - | $32.6 | - |
| Shares and warrants issued in connection with services | $0.8 | $0.1 | $1.4 | $0.1 |
| Amortization of acquired intangible assets | $0.1 | - | $0.1 | - |
| Acquisition-related expenses | $1.0 | - | $1.0 | - |
| Non-GAAP net loss | ($1.1) | ($0.2) | ($2.8) | ($2.0) |
| Non-GAAP loss per share | ($0.03) | ($0.01) | ($0.08) | ($0.07) |
