DEF: Newton Golf Seeks Shareholder Votes on Directors, Equity Plan

Newton Golf Company, Inc. calls its 2025 Annual Meeting to elect directors, ratify auditors, and approve an amended equity incentive plan, while addressing Nasdaq compliance issues.

Summary

• The 2025 Annual Meeting of Stockholders will be held virtually on December 18, 2025, at 10:00 a.m. Pacific Time.
• Stockholders will vote on the election of four directors: Dr. Greg Campbell, Jane Casanta, Brett Hoge, and Akinobu Yorihiro.
• The appointment of Weinberg & Company, P.A. as the independent registered public accounting firm for fiscal year ending December 31, 2025, will be ratified.
• Approval is sought for the Amended and Restated 2022 Equity Incentive Plan, which proposes to increase the shares available for awards by 1,400,000, add an annual automatic share increase of 5% of fully diluted outstanding shares (or less as determined by the Board), and extend the plan's term.
• The company effected a one-for-ten reverse stock split on July 30, 2024, and a one-for-thirty reverse stock split on March 17, 2025. All share and per share amounts in the filing are retroactively adjusted.
• As of November 18, 2025, there were 4,752,463 shares of common stock outstanding and entitled to vote, with a closing sale price of $1.15 per share on Nasdaq.
• The company is not in compliance with Nasdaq Listing Rules 5605(b)(1) and 5605(c)(2) due to the resignation of Dottie Pepper, resulting in a lack of a majority of independent directors and an audit committee with fewer than three independent members. The Board is actively seeking a third independent director to regain compliance.

Sentiment

Score: 4

Explanation: The company is addressing essential corporate governance matters and seeking to bolster its equity compensation plan, which are positive steps for long-term stability and talent retention. However, the current non-compliance with Nasdaq listing rules, the fact that all outstanding stock options are underwater, and past delinquent SEC filings introduce significant concerns and risks. The proposed equity plan, while necessary, also carries a substantial dilution risk.

Positives

• The Board is actively taking steps to regain compliance with Nasdaq's Board and audit committee composition requirements.
• The proposed Amended and Restated 2022 Equity Incentive Plan aims to provide competitive compensation to attract, motivate, and retain key employees, aligning their interests with stockholders.
• The company has established a corporate Code of Business Conduct and Ethics and maintains key corporate governance documents publicly available.
• All directors attended at least 75% of Board and committee meetings in 2024, indicating active engagement.
• The company has a compensation clawback policy in place, emphasizing integrity and accountability.

Negatives

• The company is currently not in compliance with Nasdaq Listing Rule 5605(b)(1) (majority independent directors) and 5605(c)(2) (audit committee composition) following a director's resignation, which could lead to delisting.
• All outstanding stock options as of November 18, 2025, are underwater, with a weighted average exercise price of $48.39 compared to the stock price of $1.15.
• Several executive officers and a former director (Doug Samuelson, Akinobu Yorihiro, Dottie Pepper, Greg Campbell) failed to timely file Section 16(a) reports in 2024.
• The company previously engaged in related party transactions, including a line of credit with GML Holdings (owned by CTO Akinobu Yorihiro) and a secured promissory note with former CFO Michael Keller, although these loans were repaid in 2023.
• The significant increase in shares available for equity awards (1,400,000 new shares plus an annual 5% automatic increase) could lead to substantial stockholder dilution.

Risks

• Delisting from Nasdaq: Failure to regain compliance with Nasdaq Listing Rules regarding board and audit committee independence within the permitted cure period could result in delisting of the common stock.
• Inability to Attract and Retain Talent: If the Amended and Restated 2022 Equity Incentive Plan is not approved, the company may be at a severe disadvantage in recruiting and retaining key talent, potentially requiring increased cash compensation.
• Stockholder Dilution: The proposed increase of 1,400,000 shares for the equity incentive plan, along with an annual automatic increase of up to 5% of fully diluted outstanding shares, poses a risk of significant dilution to existing stockholders.
• Executive Compensation Clawback: Awards are subject to clawback policies, which could impact executive compensation if triggering events occur.
• Regulatory Scrutiny: Delinquent Section 16(a) reports by executive officers and directors could attract regulatory scrutiny.

Future Outlook

The company emphasizes that approval of the Amended and Restated 2022 Equity Incentive Plan is critical for its ability to attract, motivate, and retain key employees and align their interests with long-term stockholder value creation. Without the plan, the company anticipates being at a severe disadvantage in the competitive talent market and may need to consider other compensation alternatives, such as increasing cash compensation. The increased share reserve is expected to be sufficient for equity awards for approximately one to five years, though this is subject to various factors including stock price and hiring activity.

Management Comments

• Hosting a virtual meeting will enable greater stockholder attendance and participation from any location.
• The Board believes that it is in the best interests of our stockholders to increase the number of shares available under the Restated Plan to permit the award of equity-based compensation.
• If the Restated Plan is not approved, these awards will not become effective, and we will suffer substantial adverse consequences in the hiring and retention of executives and employees.
• We are also committed to effectively managing our share reserves for equity compensation while minimizing stockholder dilution.

Industry Context

This proxy statement reflects common corporate governance practices for publicly traded companies, including the need for regular director elections, auditor ratification, and management of equity incentive plans. The emphasis on attracting and retaining talent through equity compensation is a prevalent strategy across industries, particularly in competitive markets. The company's non-compliance with Nasdaq listing rules highlights the ongoing regulatory scrutiny and importance of maintaining robust corporate governance structures, a key trend for all listed entities.

Comparison to Industry Standards

• The company's current board composition, with only two independent directors out of four, falls short of Nasdaq's requirement for a majority of independent directors (Nasdaq Listing Rule 5605(b)(1)).
• The Audit Committee, consisting of only two independent members, does not meet Nasdaq's requirement for at least three independent members (Nasdaq Listing Rule 5605(c)(2)). This is a significant deviation from standard corporate governance for publicly traded companies.
• The proposal to significantly increase the equity incentive plan's share reserve and include an evergreen provision (annual 5% increase) is a common practice but requires careful consideration of potential dilution compared to industry peers.
• The disclosure of delinquent Section 16(a) reports indicates a lapse in compliance with SEC reporting requirements, which is generally not aligned with best practices for public companies.
• The existence of a compensation clawback policy and an insider trading policy aligns with modern corporate governance standards aimed at promoting accountability and preventing misuse of information.

Management Changes

Corporate Governance

Related Party Transactions

• A Line of Credit Agreement with GML Holdings, owned by Akinobu Yorihiro (CTO and Director), for up to $250,000 at 2.00% interest. The outstanding principal and accrued interest of $153,000 was fully repaid in 2023.
• A secured promissory note with Michael Keller, former Chief Financial Officer, for $200,000 at 20% interest. The outstanding principal and accrued interest of $250,000 was fully repaid in 2023.

Stakeholder Impact

• Shareholders: Will vote on key governance matters (directors, auditors) and a significant equity plan that could lead to dilution. Face risk of delisting due to Nasdaq non-compliance.
• Employees: The proposed equity incentive plan is crucial for attracting and retaining talent, offering long-term incentives.
• Management: Subject to new equity compensation structure (if approved), compensation clawback policy, and responsibilities to regain Nasdaq compliance.
• Customers/Suppliers/Creditors: No direct impact mentioned in this filing, but overall company stability and governance can indirectly affect relationships.

Next Steps

• Stockholders to vote on director elections, auditor ratification, and the Amended and Restated 2022 Equity Incentive Plan at the Annual Meeting on December 18, 2025.
• The Board is actively evaluating qualified candidates to appoint a third Independent Director to regain compliance with Nasdaq's Board and Audit Committee composition requirements within the cure period.
• Final voting results will be published in a Current Report on Form 8-K within four business days of the Annual Meeting.
• The Amended and Restated 2022 Equity Incentive Plan will become effective upon stockholder approval.

Key Dates

Recommendation

The company faces a critical juncture with its non-compliance with Nasdaq listing rules, which presents a material risk of delisting. While management is actively working to address this, the outcome is uncertain. The proposed Amended and Restated Equity Incentive Plan is vital for talent retention, especially given that all current stock options are underwater, but it also introduces significant potential for shareholder dilution. The recent reverse stock splits and the low current stock price ($1.15) suggest underlying challenges. Investors should hold to monitor the resolution of the Nasdaq compliance issue and the effectiveness of the new equity plan in stabilizing the company's talent base, as these factors will heavily influence future performance and share price.

Keywords

Newton Golf Company, NWTG, Proxy Statement, Annual Meeting, Director Election, Equity Incentive Plan, Stock Options, Restricted Stock Units, Nasdaq Compliance, Corporate Governance, Reverse Stock Split, Executive Compensation, Audit Committee, SEC Filing, Shareholder Vote, Golf Industry