Slinger Announces Third Quarter Fiscal 2021 Results

BALTIMORE, March 21, 2022 (GLOBE NEWSWIRE) — – Slinger (OTCQB:SLBG), a leading connected sports technology company, today announced financial results for its third-quarter fiscal 2021, ended January 31, 2022.

“We delivered a solid quarter, selling over 7,200 Slinger Bag launchers despite macro headwinds,” said Mike Ballardie, Slinger CEO. “Revenue comparisons to the third quarter of 2020 were skewed due to a backlog buildup of $700,000 in orders last year related to demand outstripping supply in the first and second quarters of 2020. Excluding this, quarterly revenue would have been up approximately 23% from last year. Margins were also restrained this quarter due to increased global logistics costs related to inbound freight from China as we built up inventory ahead of the Chinese New Year and the impact of our increased promotions around the holidays.

“Year-to-date revenue growth has been strong at over 66%, demonstrating continued global demand for the Slinger Bag launcher which has sold 20,000 units through the end of the third quarter versus approximately 19,000 for all of fiscal 2020.”

Fiscal 2021 Commentary

Ballardie continued, “We closed the transformational PlaySight and GAMEFACE.AI acquisitions at the beginning of the fourth quarter that will now enable our ‘Watch, Play, Learn’ strategy and transform Slinger into a truly connected sports technology company. We are working to quickly integrate the technologies and launch this connected platform, starting with our new app in the coming few months. In addition, we have been working to identify financial synergies across the new group, and we expect to see the early signs of these during the fourth quarter. Still, the majority of the benefit will be in fiscal 2022. For the fourth quarter, given the uncertainty around global macro events, including the ongoing impact of COVID on core distribution markets such as South Africa, India and China, the ongoing conflict in Ukraine and inflation, we are taking a more cautious view on our sales forecasts for the Slinger Bag launcher over the near-term. As such, we are looking to total revenue for fiscal 2021 to be in the $16 – 17 million range, representing 48 – 57% growth year-on-year.”

Fiscal 2022 Commentary and Strategic Update

“Looking forward to fiscal 2022, we have several products and initiatives that we expect to impact the business positively. Over the next few weeks, we are targeting the next phase of our ‘Watch, Play, Learn’ strategy with the beta release of the Slinger App powered by the GAMEFACE.AI artificial intelligence engine. The Slinger App will provide unique artificial intelligence-driven player analysis coupled with professional-level insights and drills to improve the performance of tennis players of all abilities. When this product is released commercially, it will be available for both iOS and Android in both a free version and a multi-tiered subscription offering.

“Around this fall, we are targeting the introduction of the Slinger Bag launcher for both the Pickleball and Padel markets. These products are already in global markets for final consumer testing, and the feedback to date is incredibly positive for both sports. Additionally, while the consolidated company works towards developing our connected platform, each entity will continue to build its existing business around recurring SaaS, services and device revenue. Early indications are that we will continue our aggressive revenue growth trajectory for fiscal 2022, of which around one-third should be recurring SaaS and Services revenue. Our objective as a business will be to end fiscal 2022, at a break-even adjusted EBITDA run rate,” concluded Ballardie.

Third Quarter Fiscal 2021 Financial Highlights (versus Fiscal 2020):

• Revenue of $4.2 million versus $4.1 million;
• Gross profit of $1.0 million versus $0.9 million;
• GAAP net loss and loss per share of ($2.4) million and ($0.06) versus ($1.3) million and ($0.05), respectively;
• Non-GAAP net loss and loss per share of ($2.3) million and ($0.05) versus ($0.7) million and ($0.02), respectively.

Third Quarter Fiscal 2021 Business Highlights:

• Signed Exclusive 4-Year Global Tennis Ball Partnership Agreement with Dunlop;
• Racquet Sports Industry Magazine Recognized Slinger CEO Mike Ballardie as Business Executive of the Year;
• Extended Asia Distribution Agreement with Tennis Bot in the Philippines and Indonesia;
• Framework Sports, Slinger’s UK distributor, expanded its distribution into Poland;
• Expanded distribution into Ecuador;
• Expanded distribution to Puerto Rico;
• Expanded distribution to Romania.

Year-to-date Fiscal 2021 Financial Highlights (versus Fiscal 2020):

• Revenue of $12.1 million versus $7.3 million;
• Gross profit of $3.8 million versus $1.5 million;
• GAAP net loss and loss per share of ($44.6) million and ($1.19) versus ($5.2) million and ($0.20), respectively;
• Non-GAAP net loss and loss per share of ($4.8) million and ($0.13) versus ($2.1) million and ($0.08), respectively.

We define non-GAAP net loss as GAAP net loss, excluding items used to calculate non-GAAP operating loss, which include share-based compensation, shares and warrants issued in connection with services, amortization of acquired intangible assets, and acquisition-related expenses 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; and interest expense. Please see reconciliations of all non-GAAP financial measures after the financial statements.

The Slinger Bag is available to order through or to find out more about Slinger Bag, visit https://slingerbag.com.

Webcast Information

The Company will be hosting a webcast to review its 3^rd Fiscal Quarter Results. It is recommended to submit questions ahead of time to [email protected], but investors will also be able to submit questions through the live webcast.

Slinger 3^rd Quarter Fiscal 2021 Earnings Results Webcast
Date: Wednesday, March 23, 2022
Time: 10:00 AM EDT
Participant Link: https://viavid.webcasts.com/starthere.jsp?ei=1538294&tp_key=d8a54e6a7e

About Slinger:

Slinger is a connected sports company delivering products and technologies across the ‘Watch, Play, Learn’ commercial activities of sport. Slinger makes sports more fun, accessible and connected through its ball launchers, AI technology, performance video, live streaming and club management software capabilities.

Slinger initially built its brand in the global tennis market, through its revolutionary Slinger Tennis Ball Launcher and accessories, with over $250 million of retail value in global distribution agreements and has grown to become one of the world’s largest connected sports companies with its acquisitions of PlaySight Interactive, GAMEFACE.AI and Foundation Tennis. With its enhanced product, performance video and live streaming media capabilities, Slinger has positioned itself as an industry-leading, disruptive company in the global sports market.

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 [email protected] or 443-407-7564

For Slinger media inquiries, please contact the press office at [email protected] or 443-407-7564

SLINGER BAG INC.
CONDENSED CONSOLIDATED BALANCE SHEETS

		January 31, 2022				April 30, 2021
			(Unaudited)
Assets
Current assets
Cash and cash equivalents		$	1,082,446			$	928,796
Accounts receivable, net			1,209,253				762,487
Inventories, net			8,669,721				3,693,216
Prepaid inventory			1,777,905				140,047
Loan and interest receivable			2,355,349				–
Prepaid expenses and other current assets			99,785				60,113
Total current assets			15,194,459				5,584,659
Goodwill			1,240,000				–
Other intangible assets, net			2,200,105				112,853
Total assets		$	18,634,564			$	5,697,512
Liabilities and Shareholders’ Deficit
Current liabilities
Accounts payable and accrued expenses		$	7,942,523			$	2,050,476
Accrued payroll and bonuses			1,612,531				1,283,464
Deferred revenue			18,508				99,531
Accrued interest – related party			850,092				747,636
Notes payable – related party, net			2,000,000				6,143,223
Convertible notes payable, net			7,577,778				–
Derivative liabilities			8,926,083				13,813,449
Total current liabilities			28,927,515				24,137,779
Long-term liabilities
Note payable, net			–				10,477
Total liabilities			28,927,515				24,148,256
Commitments and contingencies
Shareholders’ deficit
Common stock, $0.001 par value, 300,000,000 shares authorized, 41,888,372 and 27,642,828 shares issued and outstanding as of January 31, 2022 (unaudited) and April 30, 2021, respectively; 0 and 6,921,299 shares issuable as of January 31, 2022 (unaudited) and April 30, 2021, respectively			41,888				27,643
Additional paid-in capital			63,166,203				10,365,056
Accumulated other comprehensive loss			(46,976	)			(20,170	)
Accumulated deficit			(73,454,066	)			(28,823,273	)
Total shareholders’ deficit			(10,292,951	)			(18,450,744	)
Total liabilities and shareholders’ deficit		$	18,634,564			$	5,697,512

SLINGER BAG INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE LOSS

		For the Three Months Ended								For the Nine Months Ended
		January 31,				January 31,				January 31,				January 31,
		2022				2021				2022				2021
		(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)
Net sales		$	4,201,745			$	4,123,648			$	12,139,860			$	7,308,701
Cost of sales			3,234,430				3,245,493				8,302,386				5,762,143
Gross income			967,315				878,155				3,837,474				1,546,558
Operating expenses:
Selling and marketing expenses			920,161				351,845				2,515,067				1,051,785
General and administrative expenses			2,942,501				1,385,626				41,535,188				2,974,404
Research and development costs			275,908				137,156				553,274				180,705
Total operating expenses			4,138,570				1,874,627				44,603,529				4,206,894
Loss from operations			(3,171,255	)			(996,472	)			(40,766,055	)			(2,660,336	)
Other expense (income):
Amortization of debt discounts			2,750,000				39,175				5,400,285				325,426
Loss on extinguishment of debt			–				95,760				7,096,730				1,528,580
Induced conversion loss			–				–				–				51,412
Gain on change in fair value of derivatives			(5,943,967	)			–				(15,074,880	)			–
Loss on issuance of convertible notes			2,200,000				–				5,889,369				–
Interest expense – related party			28,167				137,480				106,895				454,029
Interest expense, net			164,669				22,199				446,339				169,455
Total other expense (income)			(801,131	)			294,614				3,864,738				2,528,902
Loss before income taxes			(2,370,124	)			(1,291,086	)			(44,630,793	)			(5,189,238	)
Provision for income taxes			–				–				–				–
Net loss			(2,370,124	)			(1,291,086	)			(44,630,793	)			(5,189,238	)
Other comprehensive gain (loss), net of tax
Foreign currency translation adjustments			(34,630	)			816				(26,806	)			(2,121	)
Total other comprehensive gain (loss), net of tax			(34,630	)			816				(26,806	)			(2,121	)
Comprehensive loss		$	(2,404,754	)		$	(1,290,270	)		$	(44,657,599	)		$	(5,191,359	)
Net loss per share, basic and diluted		$	(0.06	)		$	(0.05	)		$	(1.19	)		$	(0.20	)
Weighted average number of common shares outstanding, basic and diluted			41,873,698				26,795,030				37,360,953				26,497,184

SLINGER BAG INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

		For the Nine Months Ended
		January 31,				January 31,
		2022				2021
		(Unaudited)				(Unaudited)
Cash flows from operating activities
Net loss		$	(44,630,793	)		$	(5,189,238	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization expense			222,748				1,299
Gain on change in fair value of derivatives			(15,074,880	)			–
Shares and warrants issued with services			1,712,068				447,478
Share-based compensation			32,569,112				–
Loss on extinguishment of debt			7,096,730				1,528,580
Induced conversion loss			–				51,412
Amortization of debt discounts			5,400,285				325,426
Loss on issuance of convertible notes			5,889,369				–
Changes in operating assets and liabilities:
Accounts receivable, net			(447,101	)			(1,433,312	)
Inventories, net			(4,981,916	)			(1,401,782	)
Prepaid expenses and other current assets			(1,783,155	)			82,099
Accounts payable and accrued expenses			5,893,935				1,352,468
Accrued payroll and bonuses			329,067				708,328
Deferred revenue			(81,023	)			(66,074	)
Accrued interest – related party			102,456				454,030
Net cash from operating activities			(7,783,098	)			(3,139,286	)
Cash flows from investing activities
Purchase of trademark			–				(30,000	)
Note receivable issuance			(2,250,000	)			–
Net cash from investing activities			(2,250,000	)			(30,000	)
Cash flows from financing activities
Proceeds from convertible notes			11,000,000				–
Debt issuance costs from convertible notes			(800,251	)			–
Proceeds from notes – related party			3,000,000				2,300,000
Repayments of notes – related party			(1,000,000	)			–
Repayment of note payable			(2,000,000	)			–
Proceeds from note payable			–				1,120,000
Other financing activities			9,671				–
Net cash from financing activities			10,209,420				3,420,000
Effect of exchange rate			(22,672	)			(120	)
Net change in cash and cash equivalents			153,650				250,594
Cash and cash equivalents, beg of period			928,796				79,847
Cash and cash equivalents, end of period		$	1,082,446			$	330,441

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; and interest expense.

Reconciliation of GAAP to Non-GAAP Net Loss and Loss Per Share			3Q21				3Q20				YTD FY21				YTD FY20
GAAP Net Loss		($	2.4	)		($	1.3	)		($	44.6	)		($	5.2	)
Excluding the Following Other Expenses (Income):
Amortization of debt discounts		$	2.8			$	0.0			$	5.4			$	0.3
Loss on extinguishment of debt			–			$	0.1			$	7.1			$	1.5
Induced conversion loss			–				–				–			$	0.1
Gain on change in fair value of derivatives		($	5.9	)			–			($	15.1	)			–
Loss on issuance of convertible notes		$	2.2				–			$	5.9				–
Excluding the Following Operating Expenses:
Share-based compensation			–				–			$	32.6				–
Shares and warrants issued in connection with services		$	0.3			$	0.3			$	1.7			$	0.5
Amortization of acquired intangible assets		$	0.1			$	0.0			$	0.2			$	0.0
Acquisition-related expenses		$	0.5				–			$	1.5				–
Interest expense		$	0.2			$	0.2			$	0.6			$	0.6
Non-GAAP net loss *		($	2.3	)		($	0.7	)		($	4.8	)		($	2.1	)
Non-GAAP loss per share		($	0.05	)		($	0.02	)		($	0.13	)		($	0.08	)

*numbers may not add due to rounding

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