UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C.  20549





FORM
10-Q





(Mark
One)





x
            Quarterly
      Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
      1934





For the
quarterly period ended March 31, 2010


or


o
            Transition
      Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
      1934





For the
transition period from to





Commission
File Number:  001-33978





ADAMS
GOLF, INC.


(Exact
name of registrant as specified in its charter)





Delaware
                
                75-2320087(State
      or other jurisdiction of incorporation or organization)
                
                (I.R.S.
      Employer Identification No.)2801
      E. Plano Pkwy, Plano, Texas
                
                75074(Address
      of principal executive offices)
                
                (Zip
      Code)





(972)-673-9000


(Registrant's
telephone number, including area code)





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.


x Yes   o No





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).


o Yes   o No





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See the definitions of "large accelerated filer",
"accelerated filer" and "smaller reporting company" in Rule 12b-2 of the
Exchange Act.





Large
accelerated filer o      Accelerated
filer o       Non-accelerated
filer x        Smaller
reporting company o





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).


o Yes   x No





The
number of outstanding shares of the registrant's common stock, par value $0.001
per share, was 7,054,497 on May 7, 2010.





ADAMS
GOLF, INC. AND SUBSIDIARIES





TABLE
OF CONTENTS





PagePART
      I
                                
                                FINANCIAL
      INFORMATIONItem
      1.
                                Financial
      StatementsCondensed
      Consolidated Balance Sheets -March
      31, 2010 (unaudited) and December 31, 2009
                                
                                3Unaudited
      Condensed Consolidated Statements of Operations -Three
      months ended March 31, 2010 and 2009
                                
                                4Unaudited
      Condensed Consolidated Statement of Stockholders' Equity -Three
      months ended March 31, 2010
                                
                                5Unaudited
      Condensed Consolidated Statements of Cash Flows -Three
      months ended March 31, 2010 and 2009
                                
                                6Notes
      to Unaudited Condensed Consolidated Financial Statements
                                
                                7-14Item
      2.
                                Management's
      Discussion and Analysis of Financial Condition and Results of
      Operations
                                
                                15-22Item
      3.
                                Quantitative
      and Qualitative Disclosures About Market Risk
                                
                                22Item
      4T.
                                Controls
      and Procedures
                                
                                23PART
      II
                                
                                OTHER
      INFORMATIONItem
      1.
                                Legal
      Proceedings
                                
                                24-25Item
      1A.
                                Risk
      Factors
                                
                                25Item
      2.
                                Unregistered
      Sales of Equity Securities and Use of Proceeds
                                
                                N/AItem
      3.
                                Defaults
      Upon Senior Securities
                                
                                N/AItem
      4.
                                (Removed
      and Reserved)
                                
                                N/AItem
      5.
                                Other
      Information
                                
                                N/AItem
      6.
                                Exhibits
                                
                                25Signatures
                                
                                25


2


Item
1.


ADAMS
GOLF, INC. AND SUBSIDIARIES





CONDENSED
CONSOLIDATED BALANCE SHEETS


(in
thousands, except share amounts)





March
      31,
                                  
                                  
                                  December
      31,2010
                                  
                                  
                                  2009(unaudited)ASSETSCurrent
      assets:Cash
      and cash equivalents
                                  
                                  $
                                  6,922
                                  
                                  
                                  $
                                  12,562Trade
      receivables, net of allowance for doubtful accounts of $1,803 (unaudited)
      and $1,625 in 2010 and 2009, respectively
                                  
                                  
                                  22,945
                                  
                                  
                                  
                                  13,136Inventories,
      net
                                  
                                  
                                  17,314
                                  
                                  
                                  
                                  19,721Prepaid
      expenses
                                  
                                  
                                  733
                                  
                                  
                                  
                                  378Other
      current assets
                                  
                                  
                                  22
                                  
                                  
                                  
                                  22Total
      current assets
                                  
                                  
                                  47,936
                                  
                                  
                                  
                                  45,819Property
      and equipment, net
                                  
                                  
                                  841
                                  
                                  
                                  
                                  934Deferred
      tax assets, net
                                  
                                  
                                  10,228
                                  
                                  
                                  
                                  10,228Other
      assets, net
                                  
                                  
                                  211
                                  
                                  
                                  
                                  238$
                                  59,216
                                  
                                  
                                  $
                                  57,219LIABILITIES
      AND STOCKHOLDERS' EQUITYCurrent
      liabilities:Accounts
      payable
                                  
                                  $
                                  6,852
                                  
                                  
                                  $
                                  5,479Accrued
      expenses and other current liabilities
                                  
                                  
                                  10,124
                                  
                                  
                                  
                                  11,228Total
      current liabilities
                                  
                                  
                                  16,976
                                  
                                  
                                  
                                  16,707Other
      liabilities
                                  
                                  
                                  1
                                  
                                  
                                  
                                  2Total
      liabilities
                                  
                                  
                                  16,977
                                  
                                  
                                  
                                  16,709Stockholders'
      equity:Preferred
      stock, $0.01 par value; authorized 1,250,000 shares; none
      issued
                                  
                                  
                                  —
                                  
                                  
                                  
                                  —Common
      stock, $0.001 par value; authorized 12,500,000 shares; 7,399,809 and
      7,387,309 shares issued and 6,988,872 and 6,976,372 shares outstanding at
      March 31, 2010 (unaudited) and December 31, 2009,
    respectively
                                  
                                  
                                  7
                                  
                                  
                                  
                                  7Additional
      paid-in capital
                                  
                                  
                                  93,824
                                  
                                  
                                  
                                  93,576Accumulated
      other comprehensive income
                                  
                                  
                                  1,903
                                  
                                  
                                  
                                  2,074Accumulated
      deficit
                                  
                                  
                                  (48,741
                                  )
                                  
                                  
                                  (50,393
                                  )Treasury
      stock, 410,937 common shares at March 31, 2010 and December 31, 2009, at
      cost
                                  
                                  
                                  (4,754
                                  )
                                  
                                  
                                  (4,754
                                  )Total
      stockholders' equity
                                  
                                  
                                  42,239
                                  
                                  
                                  
                                  40,510$
                                  59,216
                                  
                                  
                                  $
                                  57,219Contingencies





See
accompanying notes to unaudited condensed consolidated financial
statements.


3


ADAMS
GOLF, INC. AND SUBSIDIARIES





CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS


(in
thousands, except per share amounts)


(unaudited)





Three Months EndedMarch 31,2010
                                      
                                      
                                      2009Net
      sales
                                      
                                      $
                                      22,358
                                      
                                      
                                      $
                                      23,475Cost
      of goods sold
                                      
                                      
                                      12,291
                                      
                                      
                                      
                                      14,467Gross
      profit
                                      
                                      
                                      10,067
                                      
                                      
                                      
                                      9,008Operating
      expenses:Research
      and development expenses
                                      
                                      
                                      628
                                      
                                      
                                      
                                      853Selling
      and marketing expenses
                                      
                                      
                                      5,693
                                      
                                      
                                      
                                      5,951General
      and administrative expenses
                                      
                                      
                                      2,105
                                      
                                      
                                      
                                      1,841Total
      operating expenses
                                      
                                      
                                      8,426
                                      
                                      
                                      
                                      8,645Operating
      income
                                      
                                      
                                      1,641
                                      
                                      
                                      
                                      363Other
      income (expense):Interest
      expense, net
                                      
                                      
                                      (9
                                      )
                                      
                                      
                                      (16
                                      )Other
      income, net
                                      
                                      
                                      —
                                      
                                      
                                      
                                      47Income
      before income taxes
                                      
                                      
                                      1,632
                                      
                                      
                                      
                                      394Income
      tax expense (benefit)
                                      
                                      
                                      (20
                                      )
                                      
                                      
                                      28Net
      income
                                      
                                      $
                                      1,652
                                      
                                      
                                      $
                                      366Net
      income  per common share - basic
                                      
                                      $
                                      0.24
                                      
                                      
                                      $
                                      0.06- diluted
                                      
                                      $
                                      0.21
                                      
                                      
                                      $
                                      0.05





See
accompanying notes to unaudited condensed consolidated financial
statements.


4


ADAMS
GOLF, INC. AND SUBSIDIARIES





CONDENSED
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY


(in
thousands, except share amounts)





Three
Months Ended March 31, 2010


(unaudited)





Shares of
                              
                              
                              
                              
                              
                              Additional
                              
                              
                              Accumulated Other
                              
                              
                              
                              
                              
                              
                              
                              
                              Cost of
                              
                              
                              TotalCommon
                              
                              
                              Common
                              
                              
                              Paid-in
                              
                              
                              Comprehensive
                              
                              
                              Accumulated
                              
                              
                              Comprehensive
                              
                              
                              Treasury
                              
                              
                              Stockholders'Stock
                              
                              
                              Stock
                              
                              
                              Capital
                              
                              
                              Income
                              
                              
                              Deficit
                              
                              
                              Income (Loss)
                              
                              
                              Stock
                              
                              
                              EquityBalance,
      December 31, 2009
                              
                              
                              7,387,309
                              
                              
                              $
                              7
                              
                              
                              $
                              93,576
                              
                              
                              $
                              2,074
                              
                              
                              $
                              (50,393
                              )
                              
                              
                              
                              
                              $
                              (4,754
                              )
                              
                              $
                              40,510Comprehensive
      income:Net
      income
                              
                              
                              —
                              
                              
                              
                              —
                              
                              
                              
                              —
                              
                              
                              
                              —
                              
                              
                              
                              1,652
                              
                              
                              $
                              1,652
                              
                              
                              
                              —
                              
                              
                              
                              1,652Foreign
      currency translation
                              
                              
                              —
                              
                              
                              
                              —
                              
                              
                              
                              —
                              
                              
                              
                              (171
                              )
                              
                              
                              —
                              
                              
                              
                              (171
                              )
                              
                              
                              —
                              
                              
                              
                              (171
                              )Comprehensive
      income
                              
                              
                              —
                              
                              
                              
                              —
                              
                              
                              
                              —
                              
                              
                              
                              —
                              
                              
                              
                              —
                              
                              
                              $
                              1,481
                              
                              
                              
                              —
                              
                              
                              
                              —Stock
      options exercised
                              
                              
                              12,500
                              
                              
                              
                              —
                              
                              
                              
                              —
                              
                              
                              
                              —
                              
                              
                              
                              —
                              
                              
                              
                              
                              
                              
                              
                              —
                              
                              
                              
                              —Compensatory
      stock and stock options
                              
                              
                              —
                              
                              
                              
                              —
                              
                              
                              
                              248
                              
                              
                              
                              —
                              
                              
                              
                              —
                              
                              
                              
                              
                              
                              
                              
                              —
                              
                              
                              
                              248Balance,
      March 31, 2010
                              
                              
                              7,399,809
                              
                              
                              $
                              7
                              
                              
                              $
                              93,824
                              
                              
                              $
                              1,903
                              
                              
                              $
                              (48,741
                              )
                              
                              
                              
                              
                              
                              $
                              (4,754
                              )
                              
                              $
                              42,239





See
accompanying notes to unaudited condensed consolidated financial
statements.


5


ADAMS
GOLF, INC. AND SUBSIDIARIES





CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS


(in
thousands)


(unaudited)




Three
      Months EndedMarch
      31,2010
                          
                          
                          2009Cash
      flows from operating activities:Net
      income
                          
                          $
                          1,652
                          
                          
                          $
                          366Adjustments
      to reconcile net income to net cash used in operating
      activities:Depreciation
      and amortization
                          
                          
                          134
                          
                          
                          
                          158Amortization
      of deferred compensation
                          
                          
                          248
                          
                          
                          
                          217Provision
      for doubtful accounts
                          
                          
                          382
                          
                          
                          
                          238Provision
      for inventory reserve
                          
                          
                          59
                          
                          
                          
                          —Changes
      in operating assets and liabilities:Trade
      receivables
                          
                          
                          (10,191
                          )
                          
                          
                          (9,922
                          )Inventories
                          
                          
                          2,348
                          
                          
                          
                          365Prepaid
      expenses
                          
                          
                          (355
                          )
                          
                          
                          (629
                          )Other
      current assets
                          
                          
                          —
                          
                          
                          
                          (20
                          )Accounts
      payable
                          
                          
                          1,373
                          
                          
                          
                          190Accrued
      expenses and other current liabilities
                          
                          
                          (1,101
                          )
                          
                          
                          129Net
      cash used in operating activities
                          
                          
                          (5,451
                          )
                          
                          
                          (8,908
                          )Cash
      flows from investing activities:Purchases
      of equipment
                          
                          
                          (8
                          )
                          
                          
                          (196
                          )Net
      cash used in investing activities
                          
                          
                          (8
                          )
                          
                          
                          (196
                          )Cash
      flows from financing activities:Principal
      payments under capital lease obligation
                          
                          
                          (4
                          )
                          
                          
                          (5
                          )Debt
      financing costs
                          
                          
                          (6
                          )
                          
                          
                          —Proceeds
      from debt
                          
                          
                          —
                          
                          
                          
                          6,013Net
      cash provided by (used in) financing activities
                          
                          
                          (10
                          )
                          
                          
                          6,008Effects
      of exchange rate changes
                          
                          
                          (171
                          )
                          
                          
                          (245
                          )Net
      decrease in cash and cash equivalents
                          
                          
                          (5,640
                          )
                          
                          
                          (3,341
                          )Cash
      and cash equivalents at beginning of period
                          
                          
                          12,562
                          
                          
                          
                          5,960Cash
      and cash equivalents at end of period
                          
                          $
                          6,922
                          
                          
                          $
                          2,619Supplemental
      disclosure of cash flow informationInterest
      paid
                          
                          $
                          9
                          
                          
                          $
                          20Income
      taxes paid
                          
                          $
                          3
                          
                          
                          $
                          28





See
accompanying notes to unaudited condensed consolidated financial
statements.


6


ADAMS
GOLF, INC. AND SUBSIDIARIES





NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS





1.   Basis
of Presentation





The
unaudited condensed consolidated financial statements of Adams Golf, Inc. and
its subsidiaries (the "Company", "Adams Golf", "we", "us", or "our") for the
three months ended March 31, 2010 and 2009 have been prepared by us pursuant to
the rules and regulations of the Securities and Exchange Commission ("SEC"). The
information included reflects all adjustments (consisting only of normal
recurring accruals and adjustments) which are, in the opinion of management,
necessary to fairly state the operating results for the respective
periods.   However, these operating results are not necessarily
indicative of the results expected for the full fiscal
year.   Certain information and footnote disclosures normally
included in annual consolidated financial statements prepared in accordance with
generally accepted accounting principles have been omitted pursuant to SEC rules
and regulations.  The notes to the unaudited condensed consolidated
financial statements should be read in conjunction with the notes to the
consolidated financial statements contained in our 2009 Annual Report on Form
10-K filed with the SEC on March 9, 2010.  The condensed consolidated
balance sheet of Adams Golf, Inc. as of December 31, 2009 has been derived from
the audited consolidated balance sheet as of that date.





We
design, assemble, market and distribute premium quality, technologically
innovative golf clubs for all skill levels.  Our recently launched
products include Idea a7 and a7 OS irons and hybrids, Speedline Fast 10 and
Speedline 9032 drivers, Speedline Fast 10 hybrid fairway woods, Idea Pro Black
I-woods, Idea Tech a4 and a4 OS I-woods and irons, Insight Tech a4 and a4 OS
drivers and hybrid-fairway woods.  We also continue to develop new
products under the name of Women's Golf Unlimited, the Lady Fairway and Square 2
brands.  We continue to sell certain older product lines, including
the Idea a3 and a3 OS I-woods and irons, the Tight Lies family of fairway woods,
the Puglielli series of wedges, and certain accessories.





The
consolidated financial statements include the accounts of the Company and its
subsidiaries, all of which are wholly-owned.  All significant
intercompany accounts and transactions have been eliminated in
consolidation.





2.   Inventories





Inventories
consisted of the following on the dates indicated (in thousands):





March 31,
                            
                            
                            December 31,2010
                            
                            
                            2009(unaudited)Finished
      goods
                            
                            $
                            10,799
                            
                            
                            $
                            13,057Component
      parts
                            
                            
                            8,619
                            
                            
                            
                            8,708Allowance
      for inventory obsolescence
                            
                            
                            (2,104
                            )
                            
                            
                            (2,044
                            )Total
      inventory
                            
                            $
                            17,314
                            
                            
                            $
                            19,721





Inventory
is determined using the first-in, first-out method and is recorded at the lower
of cost or market value.  The inventory balance is comprised of
purchased raw materials or finished goods at their respective purchase costs;
labor, assembly and other capitalizable overhead costs, which are then applied
to each unit completed; retained costs representing the excess of manufacturing
and other overhead costs that are not yet applied to finished goods; and an
estimated allowance for obsolete inventory. At March 31, 2010 and December 31,
2009, inventories included $852,000 and $708,000 of consigned inventory,
respectively.


7


ADAMS
GOLF, INC. AND SUBSIDIARIES





NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS





3.   Accrued
Expenses





Accrued
expenses consisted of the following on the dates indicated (in
thousands):





March 31,
                            
                            
                            December 31,2010
                            
                            
                            2009(unaudited)Payroll
      and commissions
                            
                            $
                            1,047
                            
                            
                            $
                            284Product
      warranty and sales returns and allowances
                            
                            
                            3,485
                            
                            
                            
                            2,209Professional
      services
                            
                            
                            35
                            
                            
                            
                            25Accrued
      settlement expense
                            
                            
                            —
                            
                            
                            
                            5,000Accrued
      sales promotions
                            
                            
                            1,439
                            
                            
                            
                            1,060Deferred
      revenue
                            
                            
                            1,691
                            
                            
                            
                            1,273Other
                            
                            
                            2,427
                            
                            
                            
                            1,377Total
      accrued expenses
                            
                            $
                            10,124
                            
                            
                            $
                            11,228





4.   Financial
Instruments





The
carrying amounts of cash and cash equivalents, accounts receivable, accounts
payable, and accrued expenses approximate fair value due to the short maturity
of these instruments.





5.   Net
Income per Common Share





The
weighted average common shares used for determining basic and diluted income per
common share were6,981,372
and  7,812,703, respectively, for the three months ended March 31,
2010, and 6,553,880 and 7,488,059, respectively, for the three months ended
March 31, 2009.





The
effect of all warrants and options to purchase shares of our common stock for
the three months ended March 31, 2010 resulted in additional dilutive shares of
831,331.  The effect of all warrants and options to purchase shares of
our common stock for the three months ended March 31, 2009 resulted in
additional dilutive shares of 934,179.





6.   Geographic
Segment and Data





We
generate substantially all revenues from the design, assembly, marketing and
distribution of premium quality, technologically innovative golf clubs and
accessories.  Our products are distributed in both domestic and
international markets.  Net sales for these markets consisted of the
following during the periods indicated (in thousands):





Three Months Ended March 31,2010
                                  
                                  
                                  2009(unaudited)United
      States
                                  
                                  $
                                  18,244
                                  
                                  
                                  $
                                  19,583Rest
      of World
                                  
                                  
                                  4,114
                                  
                                  
                                  
                                  3,892Total
      net sales
                                  
                                  $
                                  22,358
                                  
                                  
                                  $
                                  23,475





Foreign
net sales are generated in various regions including, but not limited to, Canada
(a majority of our foreign sales), Europe, Japan, Australia, South Africa, and
South America.  A change in our relationship with one or more of our
customers or distributors could negatively impact the volume of foreign
sales.


8




ADAMS
GOLF, INC. AND SUBSIDIARIES





NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS





7.   Income
Taxes





We
account for income taxes in accordance with FASB ASC 740, Income Taxes.  
FASB ASC 740 prescribes the use of the liability method whereby deferred tax
assets and liabilities are recognized for the future tax consequences
attributable to the differences between the financial statement carrying amounts
of existing assets and liabilities and their respective tax bases and operating
loss and tax credit carryforwards.  Deferred tax assets and
liabilities are measured using enacted rates expected to apply to taxable income
in the years in which those temporary differences are expected to be recovered
or settled.  The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date.  In assessing the realizability of deferred income tax
assets, we consider whether it is more likely than not that some portion or all
of the deferred income tax assets will be realized.  The ultimate
realization of deferred income tax assets is dependent upon the generation of
future taxable income during the periods in which those temporary differences
become deductible.  Due to our historical operating results,
management is unable to conclude on a more likely than not basis that all
deferred income tax assets generated from net operating losses and other
deferred tax assets will be realized.   However, due to our earnings
history over the past years and projected future earnings, we have concluded
that it is more likely than not that a portion of the deferred tax asset will be
realized.  We have recognized a valuation allowance equal to a portion
of the deferred income tax asset for which realization is
uncertain.  Our estimate of the realizability of the net deferred tax
asset is a significant estimate that is subject to change in the near
term.  We file tax returns with U.S. federal jurisdictions and are no
longer subject to income tax examinations for years before 2006.





8.   Comprehensive
Income





Comprehensive
income for the three months ended March 31, 2010 was approximately $1.5
million.





9.   Stock-Based
Compensation





We
maintain the 2002 Equity Incentive Plan (the "Plan") for employees, outside
directors and consultants.  At March 31, 2010, 878,544 options were
outstanding under the Plan with exercise prices ranging from $0.04 to $4.80 per
share.  The requisite service periods for the options to vest vary
from six months to four years and the options expire ten years from the date of
grant.  At March 31, 2010, 415,655 shares remained available for
grant, including forfeitures.





During
the three months ended March 31, 2010, no options were
granted.  During the three months ended March 31, 2009, 100,000
options were granted with an exercise price equal to the fair market value of
the underlying common stock at the date of grant.  The per share
weighted-average fair value of stock options granted during the quarter ended
March 31, 2009 was $2.70 on the date of grant using the Black Scholes option
pricing model with the following weighted-average assumptions:  risk
free interest rate, 3.5%; expected life, 10 years; expected dividend yield, 0%;
and expected volatility, based on historical daily annualized volatility of
96.34%.  We use historical data to estimate option exercise and
employee termination factors within the valuation model.


9


ADAMS
GOLF, INC. AND SUBSIDIARIES





NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS





9.   Stock-Based
Compensation (continued)





Operating
expenses included in the consolidated statements of operations for the three
months ended March 31, 2010 and 2009 include total compensation expense
associated with stock options and restricted stock grants of $248,000 and
$217,000, respectively.





Weighted
                  
                  
                  AggregateNumber
      of
                  
                  
                  Average
                  
                  
                  IntrinsicOptions
                  
                  
                  Exercise Price
                  
                  
                  Value of OptionsOptions
      outstanding at December 31, 2009
                  
                  
                  891,044
                  
                  
                  $
                  0.52
                  
                  
                  
                  —Options
      granted
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  —Options
      forfeited / expired
                  
                  
                  —
                  
                  
                  
                  —
                  
                  
                  
                  —Options
      exercised
                  
                  
                  (12,500
                  )
                  
                  
                  0.04
                  
                  
                  
                  37,000Options
      outstanding at March 31, 2010
                  
                  
                  878,544
                  
                  
                  
                  0.53
                  
                  
                  
                  2,125,564Options
      exercisable at March 31, 2010
                  
                  
                  800,419
                  
                  
                  
                  0.28
                  
                  
                  
                  2,136,344





The
weighted average remaining contractual life of the options outstanding at March
31, 2010 was 3.59 years and for those outstanding options that were exercisable
at March 31, 2010 was 3.09 years.





As of
March 31, 2010, compensation costs related to non-vested awards totaled $1.2
million, which is expected to be recognized over a weighted average period of
1.5 years.





As of
March 31, 2010, there were $1.1 million of unrecognized compensation costs
related to non-vested restricted stock grants awarded.  The
compensation costs of restricted stock awards were determined based on the fair
value of our common stock on the date of grant and expensed over the vesting
period.  Restricted stock vesting periods vary from six months to four
years from the date of grant.  No restricted shares were granted
during the three months ended March 31, 2010, 100,000 shares of restricted stock
were granted, with a fair market value of $3.30 per share, during the three
months ended March 31, 2009.





A summary
of restricted stock grant activity follows:





WeightedNumber
      of
                  
                  
                  AverageShares
                  
                  
                  Grant Date PriceStock
      unvested at December 31, 2009
                  
                  
                  336,870
                  
                  
                  $
                  4.12Stock
      granted
                  
                  
                  —
                  
                  
                  
                  —Stock
      vested
                  
                  
                  (12,626
                  )
                  
                  
                  3.02Stock
      unvested at March 31, 2010
                  
                  
                  324,244
                  
                  
                  $
                  4.16


10





ADAMS
GOLF, INC. AND SUBSIDIARIES





NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS





9.   Stock-Based
Compensation (continued)





Due to
the passage of The American Jobs Creation Act and the subsequent IRS Section
409A rules, stock options that were issued at a strike price less than market
value at the date of grant will now be considered deferred compensation by the
IRS and the individual who was granted the options will incur adverse tax
consequences, including, but not limited to excise taxes, unless the individual
designated a specific future exercise date of the unvested stock options at
December 31, 2004 and made this election before December 31, 2005.  As
a result of the compliance with the American Job Creation Act, a summary of
these designated future exercise dates is as follows:





Period of Exercise
                      
                      Total Options to be
    Exercised2010
                      
                      
                      15,0002011
                      
                      
                      27,5002012
                      
                      
                      28,2092013
                      
                      
                      13,750Beyond
      2013
                      
                      
                      15,000Total
      Options
                      
                      
                      99,459





10.   New
Accounting Pronouncement





There
have been no new material accounting pronouncements that are applicable to our
business for this period.





11.   Liquidity





Our
credit facility is a $15.0 million revolving credit agreement with Wells Fargo,
NA (as successor to Wachovia Bank, NA), which was entered into in November 2007
and expires in November 2012.  The agreement is collateralized by all
of our assets and requires us, among other things, to maintain certain financial
performance levels relative to the fixed charge coverage ratio.  This
agreement was amended in June 2009 so that the ratio is only calculated when we
have less than $5.0 million in availability on the facility, and it was further
amended in December 2009 to provide that our debt covenant ratio is only
calculated if we have less than $2.0 million in availability on the facility
between March and June of each year.  Interest on outstanding balances
accrues at a rate of LIBOR plus 2.50% and is payable monthly.  As of
March 31, 2010 and May 10, 2010, we had no outstanding borrowings on our credit
facility and we were in compliance with the terms of our
agreement.





Our
anticipated sources of liquidity over the next twelve months are expected to be
cash reserves, projected cash flows from operations, and available borrowings
under our credit facility.  We anticipate that operating cash flows,
current cash reserves, and available borrowings also will fund capital
expenditure programs.  These capital expenditure programs can be
suspended or delayed at any time with minimal disruption to our operations if
cash is needed in other areas of our operations.  In addition, cash
flows from operations and cash reserves will be used to support ongoing
purchases of component parts for our current and future product
lines.  The expected operating cash flows, current cash reserves and
borrowings available under our credit facility are expected to allow us to meet
working capital requirements during periods of low cash flows resulting from the
seasonality of the industry.





If
adequate funds are not available or not available on acceptable terms, we may be
unable to continue operations; develop, enhance and market products; retain
qualified personnel; take advantage of future opportunities; or respond to
competitive pressures, any of which could have a material adverse effect on our
business, operating results, financial condition and/or
liquidity.


11





ADAMS
GOLF, INC. AND SUBSIDIARIES





NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS





12.   Contingencies





On
October 29, 2009, we reached a settlement in principle regarding the
consolidated securities class action filed in June 1999 in the United States
District Court of the District of Delaware.   The complaints
alleged violations of Sections 11, 12(a)(2) and 15 of the Securities Act of
1933, as amended, in connection with our initial public offering ("IPO") and
sought rescissory or compensatory damages in an unspecified
amount.  In particular, the complaints alleged that our prospectus,
which became effective July 9, 1998, was materially false and
misleading.  The court preliminarily approved the settlement, but
remains subject to a final court approval, shareholder class approval,
and appeal.   The proposed settlement provides for a total payment to
the class of $16.5 million in cash and a payment of the first $1.25 million,
after attorneys fees and costs, actually received (if any) by us in connection
with our litigation against our former insurance broker Thilman & Filipini,
LLC (“T&F”) and our former insurance carrier, Zurich American Insurance
Company ("Zurich").  Of the $16.5 million cash settlement amount, $5
million was to be paid by us, which we accrued as a liability during the quarter
ended September 30, 2009 and was paid to the settlement fund in March
2010.  If approved, the settlement will lead to a dismissal with
prejudice of all claims against all defendants in the litigation.  As
part of the settlement, the underwriters for the IPO have agreed to release us
from any indemnification obligation.  Although defendants continue to
deny plaintiffs' allegations, we believe it is in the best interests of its
stockholders to proceed with this settlement.





We
maintain directors' and officers' ("D&O") and corporate liability insurance
to cover certain risks associated with these securities claims filed against us
or our directors and officers. During the period covering the class action
lawsuit, we maintained insurance from multiple carriers, each insuring a
different layer of exposure, up to a total of $50 million. In addition, we have
met the financial deductible of our directors' and officers' insurance policy
for the period covering the time the class action lawsuit was filed. On March
30, 2006, Zurich, which provided insurance coverage totaling $5 million for the
layer of exposure between $15 million and $20 million, notified us that it was
denying coverage due to the fact that it was allegedly not timely notified of
the class action lawsuit. On October 11, 2007, we filed a suit against our
former insurance broker, T&F, asserting various causes of action arising out
of T&F's alleged failure to notify Zurich of the class action lawsuit. On
March 18, 2008, the suit against T&F was amended to also name as defendants
certain alleged successor entities to T&F. All of the defendants moved to
dismiss our lawsuit on the basis that our suit was premature in that we had not
been damaged by the alleged conduct of the defendants because we had not paid
any sums in satisfaction of a judgment or settlement of the class action
securities litigation. Those motions were denied pursuant to a Memorandum
Opinion and Order dated September 26, 2008. T&F's successor entities also
moved to dismiss the claims brought against them on the grounds that, as
purchasers of solely T&F's assets, they could not be held liable for the
T&F debts or liabilities. The court struck our complaint solely against the
successor entity defendants on the grounds that we had not alleged sufficient
facts triggering an exception to the general rule that the purchaser of an
entity's assets is not liable for the entity's liabilities and ordered us to
replead our claims against the successor entity defendants. We and T&F have
engaged in preliminary written discovery efforts, but substantial discovery
remains to be completed. On November 16, 2009, we filed a Second Amended
Complaint reasserting our causes of action against the previously-named
defendants. The Second Amended Complaint also added Zurich as a defendant to the
lawsuit, asserting various causes of action against it arising out of its denial
of coverage for the class action lawsuit.


12





ADAMS
GOLF, INC. AND SUBSIDIARIES





NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS





12.   Contingencies
(continued)





Beginning
April 2008, we received communications from the Estate of Anthony Antonious
alleging that our products infringed a patent of Anthony Antonious concerning an
aerodynamic metal wood golf club head.  On May 28, 2008, we filed a
declaratory judgment lawsuit against the Anthony Antonious Trust in the United
States District Court for the Southern District of the State of Ohio, alleging
non-infringement of the Antonious patent.  On June 30, 2008, the Estate of
Anthony Antonious filed a lawsuit against us in the United States District Court
in the State of New Jersey seeking damages and injunctive relief alleging
infringement of the patent.  On September 2, 2008, we filed a Request
for Ex Parte Reexamination with the United States Patent and Trademark Office
("USPTO") requesting that the USPTO reexamine the Antonious patent at
issue.  The USPTO issued an order granting our Request for Ex Parte
Reexamination on November 7, 2008 after finding that a substantial new question
of patentability affecting the claims had been raised.   As a result,
both the Ohio lawsuit and the New Jersey lawsuit were stayed pending the outcome
of the USPTO's reexamination proceeding.  On October 9, 2009, the
USPTO issued a Notice of Intent to Issue Ex Parte Reexamination Certificate
concerning claims amended during the reexamination procedure.  A
Reexamination Certificate was issued on January 5, 2010 and litigation has now
resumed in the New Jersey action and the Ohio action.  A trial is
expected to occur in 2011.  At this point in the legal proceedings, we
cannot predict the outcome of the matter with any certainty, and thus cannot
reasonably estimate future liability on the conclusion of the events, if
any.





From time
to time, we are engaged in various other legal proceedings in the normal course
of business.  The ultimate liability, if any, for the aggregate
amounts claimed cannot be determined at this time.





13.   Reclassifications





Certain
prior period amounts have been reclassified to conform to current period
presentation.





14.   Business and Credit
Concentrations





We are
currently dependent on one customer, which collectively comprised approximately
25.3% of net sales for the three months ended March 31, 2010.  Other
than this one customer, no other customers individually represented greater than
10% of net sales for the three months ended March 31, 2010.  For the
three months ended March 31, 2009, we were dependent on two customers, which
collectively comprised approximately 28% of net sales.  One customer
individually represented greater than 5% but less than 10% of net sales, and one
customer represented greater than 10% of net sales but less than
25%. Additionally, we have one customer with an outstanding accounts
receivable balance that is greater than 10% but less than 30% of total accounts
receivable at March 31, 2010.  The loss of this individual customer or
a combination of customers or a significant impairment or reduction in such
customers' business, including, but not limited to, as a result of the current
global economic recession, would have a material adverse effect on consolidated
revenues, results of operations, financial condition and competitive market
position of the Company.





A
significant portion of our inventory purchases are from one supplier in China;
approximately 29% and 45% of our total inventory purchased for the three months
ended March 31, 2010 and at December 31, 2009, respectively, was from this one
Chinese supplier.  Many of our industry suppliers are located in
China.  We do not anticipate any changes in the relationships with our
suppliers.  If such change were to occur, we have alternative sources
available; however, a loss of our primary supplier or significant impairment to
its business, including, but not limited to, due to the global economic
recession, could adversely affect our business during the period in which we
would have to find an alternative source for such supplies.


13





ADAMS
GOLF, INC. AND SUBSIDIARIES





NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS





15.   Product
Warranty Reserve





Our golf
equipment is sold under warranty against defects in material and workmanship for
a period of one year.  An allowance for estimated future warranty
costs is recorded in the period products are sold.  In estimating our
future warranty obligations, we consider various relevant factors, including our
stated warranty policies, the historical frequency of claims, and the cost to
replace or repair the product.  Accounting for product warranty
reserve could be adversely affected if one or more of our products were to fail
(i.e. suffer a broken shaft, head, etc.) to a significant degree above and
beyond our historical product failure rates, which determine the product
warranty accruals.





Beginning
                      Balance
                    
                    
                    Charges
      for
                      Warranty
      Claims
                    
                    
                    Estimated
                      Accruals
                    
                    
                    Ending
                      BalanceQuarter
      ended December 31, 2009
                    
                    $
                    407
                    
                    
                    
                    (97
                    )
                    
                    
                    55
                    
                    
                    $
                    365Quarter
      ended March 31, 2010
                    
                    $
                    365
                    
                    
                    
                    (72
                    )
                    
                    
                    198
                    
                    
                    $
                    491


14


Item
2.


MANAGEMENT'S
DISCUSSION AND ANALYSIS OF


FINANCIAL
CONDITION AND RESULTS OF OPERATIONS





The
following discussion and analysis should be read in conjunction with (i) the
attached unaudited condensed consolidated financial statements and notes thereto
for the three months ended March 31, 2010, and with our consolidated financial
statements and notes thereto for the year ended December 31, 2009 included in
our Annual Report on Form 10-K filed with the SEC on March 9, 2010 and (ii) the
discussion under the caption "Risk Factors" in our Annual Report on Form 10-K
filed with the SEC on March 9, 2010 and any material changes from the risk
factors as previously disclosed in the Annual Report on Form 10-K set forth in
Item 1A of Part II below.





Forward
Looking Statements





This
Quarterly Report on Form 10-Q (this "Quarterly Report") contains "forward
looking statements" made under the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995, including, without limitation, in the
notes to the consolidated financial statements included in this Quarterly Report
and under the caption "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and elsewhere in this Quarterly
Report.  Any and all statements contained in this Quarterly Report
that are not statements of historical fact may be deemed forward-looking
statements.  The statements include, but are not limited to: pending
litigation, statements regarding liquidity and our ability to increase revenues
or achieve satisfactory operational performance, statements regarding our
ability to satisfy our cash requirements and our ability to satisfy our capital
needs, including cash requirements during the next twelve months, statements
regarding our ability to produce products commercially acceptable to consumers,
estimated and assumptions used in determining and realizing open orders, and
statements using terminology such as "may," "might," "will," "would," "should,"
"could," "project," "pro forma," "predict," "potential," "strategy," "attempt,"
"develop," "continue," "future,"  "expect," "intend," "estimate,"
"anticipate," "plan," "seek" or "believe."  Such statements reflect
our current view with respect to future events and are subject to certain risks,
uncertainties and assumptions related to certain factors including, without
limitation, the following:





—The
ability to maintain historical growth in revenue and profitability;


—The
impact of changing economic conditions;


—The
global economic uncertainty;


—Business
conditions in the golf industry;


—Product
development difficulties;


—The
uncertainty of the results of pending litigation;


—The
adequacy of the allowance for doubtful accounts, obsolete inventory and warranty
reserves;


—Product
approval and conformity to governing body regulations;


—Assembly
difficulties;


—Product
introductions;


—Patent
infringement risks;


—Uncertainty
of the ability to protect intellectual property rights;


—Market
demand and acceptance of products;


—The
future market for our capital stock;


—The
uncertainty in the debt and equity markets;


—The
success of our marketing strategy;


—The
success of our tour strategy;


—Our
dependence on one supplier for a majority of our inventory
products;


—Our
dependence on suppliers who are concentrated in one geographic
region;


—Our
dependence on one or a limited number of customers;


—Solvency
of, and reliance on, third parties, including suppliers, customers, and freight
transporters;


—The
actions of competitors, including pricing, advertising and product development
risks in technology;


—Investor
audience, interest or valuation;


—The
management of sales channels and re-distribution;


—The
risk associated with events that may prove unrecoverable under existing
insurance policies; and


15




—
            The
      impact of operational restructuring on operating results and liquidity and
      one-time events and other factors detailed under "Risk Factors", Item 1A
      of our Annual Report on Form 10-K filed with the SEC on March 9,
      2010.





Although
we believe that the expectations reflected in such forward-looking statements
are reasonable, we can give no assurance that such expectations will prove to be
correct.  Based upon changing conditions, should any one or more of
these risks or uncertainties materialize, or should any underlying assumptions
prove incorrect, actual results may differ materially from those described
herein.  Except as required by federal securities laws, we undertake
no obligation to publicly update or revise any written or oral forward-looking
statements, whether as a result of new information, future events, changed
circumstances or any other reason after the date of this Quarterly
Report.  All subsequent written and oral forward-looking statements
attributable to us or persons acting on our behalf are expressly qualified in
their entirety by the applicable cautionary statements.





Overview





We
design, assemble, market and distribute premium quality, technologically
innovative golf clubs for all skill levels.  Our net sales are
primarily derived from sales to on- and off-course golf shops and sporting goods
retailers and, to a lesser extent, international distributors and mass
merchandisers.  No assurances can be given that demand for our current
products, or the introduction of new products, will allow us to achieve
historical levels of sales in the future.  Our net sales are typically
driven by product lifecycles.  Several factors affect a product's life
including, but not limited to, customer acceptance, competition and
technology.  As a result, each product family's life cycles generally
range from six months to three years.





Our
business, financial condition, cash flows and results of operations are subject
to seasonality resulting from factors such as weather and spending
patterns.  Due to the seasonality of our business, one quarter's
financial results are not indicative of the full fiscal year's expected
financial results.  A majority of our revenue is earned in the first
and second quarters of the year and revenues generally decline in the third and
fourth quarters.





Costs of
our clubs consist primarily of component parts, including the head, shaft and
grip.  To a lesser extent, our cost of goods sold includes labor,
occupancy and shipping costs in connection with the inspection, testing,
assembly and distribution of our products and certain promotional and
advertising costs given in the form of additional merchandise as consideration
to customers.


16


Key
Performance Indicators





Our
management team has defined and tracks performance against several key sales,
operational and balance sheet performance indicators.  Key sales
performance indicators include, but are not limited to, the
following:





—Daily
sales by product group


—Daily
sales by geography


—Sales by
customer channel


—Gross
margin performance


—Market
share by product at retail


—Inventory
share by product at retail





Tracking
these sales performance indicators on a regular basis allows us to understand
whether we are on target to achieve our internal sales plans.





Key
operational performance indicators include, but are not limited to, the
following:





—Product
returns (dollars and percentage of sales)


—Product
credits (dollars and percentage of sales)


—Units
shipped per man-hour worked


—Orders
shipped on time


—Expenses
by department


—Inbound
and outbound freight cost by mode (dollars and dollars per unit)


—Inbound
freight utilization by mode (ocean vs. air)


—Vendor
purchase order cycle time





Tracking
these operational performance indicators on a regular basis allows us to
understand whether we are on target to achieve our expense targets and
efficiently satisfy customer demand.





Key
balance sheet performance indicators include, but are not limited to, the
following:





—Days of
sales outstanding


—Days of
inventory (at cost)


—Days of
payables outstanding





Tracking
these balance sheet performance indicators on a regular basis allows us to
understand our working capital performance and forecast cash flow and
liquidity.


17


Results
of Operations





The
following table sets forth operating results expressed as a percentage of net
sales for the periods indicated.  All information is derived from the
accompanying unaudited condensed consolidated financial
statements.  Results for any one or more periods are not necessarily
indicative of annual results or continuing trends.





Three Months Ended March 31,2010
                                    
                                    
                                    2009(unaudited)Net
      sales
                                    
                                    
                                    100.0
                                    %
                                    
                                    
                                    100.0
                                    %Cost
      of goods sold
                                    
                                    
                                    55.0
                                    
                                    
                                    
                                    61.6Gross
      profit
                                    
                                    
                                    45.0
                                    
                                    
                                    
                                    38.4Operating
      expenses:Research
      and development expenses
                                    
                                    
                                    2.8
                                    
                                    
                                    
                                    3.6Sales
      and marketing expenses
                                    
                                    
                                    25.5
                                    
                                    
                                    
                                    25.4General
      and administrative expenses
                                    
                                    
                                    9.4
                                    
                                    
                                    
                                    7.8Total
      operating expenses
                                    
                                    
                                    37.7
                                    
                                    
                                    
                                    36.8Interest
      income (expense), net
                                    
                                    
                                    —
                                    
                                    
                                    
                                    (0.1
                                    )Other
      income, net
                                    
                                    
                                    —
                                    
                                    
                                    
                                    0.2Income
      before income taxes
                                    
                                    
                                    7.3
                                    
                                    
                                    
                                    1.7Income
      tax expense (benefit)
                                    
                                    
                                    (0.1
                                    )
                                    
                                    
                                    0.1Net
      income
                                    
                                    
                                    7.4
                                    %
                                    
                                    
                                    1.6
                                    %





Three
Months Ended March 31, 2010 Compared to Three Months Ended March 31,
2009





Total net
sales decreased to $22.4 million for the three months ended March 31, 2010 from
$23.5 million for the comparable period of 2009.  Our sales were
primarily driven by the product sales of recently launched Idea a7 and a7 OS
irons and hybrids along with Speedline Fast 10 drivers and hybrid-fairway
woods.  Several factors affect a product's life, including but not
limited to, customer acceptance, competition and technology.  As a
result, each product family's life cycles generally range from six months to
three years.  Due to the seasonality of our business, one quarter's
financial results are not indicative of the full fiscal year's expected
financial results.





At March
31, 2010, we had $4.9 million in orders on backorder and $13.2 million in orders
to be fulfilled at future dates not to exceed the current
year.  Comparatively, we had $1.0 million in backorders and $4.3
million in open orders with future dates at March 31, 2009.  We
believe this increase in backlog and future orders is primarily a result of more
forward looking planning by select retailers as well as delays in product
availability from various vendors.  We expect the product availability
delays to be resolved during the second quarter.





Net sales
of irons increased to $14.4 million, or 64.4% of total net sales, for the three
months ended March 31, 2010 from $13.7 million, or 58.3% of total net sales, for
the comparable period of 2009.  Current period iron net sales
primarily resulted from sales of the recently introduced Idea a7 and a7 OS irons
and a smaller portion of sales resulted from the close out of the Idea a3 OS
irons and integrated iron sets, while the comparable period of 2009 net sales
primarily resulted from sales of the Tech a4 and a4 OS irons, Idea a3 and a3 OS
irons coupled with a smaller portion of sales from integrated iron
sets.





Net sales
of fairway woods decreased to $4.6 million, or 20.7% of total net sales, for the
three months ended March 31, 2010, from $5.4 million, or 22.9% of total net
sales, for the comparable period of 2009.  Net sales of fairway woods
for the three months ended March 31, 2010 primarily were generated from sales of
Idea a7 and a7 OS hybrids and Speedline Fast 10 fairway woods.  Net
sales of fairway woods for the three months ended March 31, 2009 primarily were
generated from sales of Speedline hybrid-fairway woods, Tech a4 and a4 OS
hybrids and hybrid-fairway woods, and Idea a3 and a3 OS and Idea Pro Gold
I-woods.


18


Net sales
of drivers decreased to $3.9 million, or 17.4% of total net sales, for the three
months ended March 31, 2010 from $4.4 million, or 18.9% of total net sales, for
the comparable period of 2009.  A large portion of the driver net
sales for the three months ended March 31, 2010 was generated by the sales of
the Speedline Fast 10 driver, while in the comparable period of 2009, net sales
were primarily driven by the sales of the original Speedline
driver.





We were
dependent on one customer, which collectively comprised approximately 25% of net
sales for the three months ended March 31, 2010.  Should this customer
or our other customers fail to meet their obligations to us, our results of
operations and cash flows would be adversely impacted.





Net sales
of our products outside the United States increased to $4.1 million, or 18.4% of
total net sales, from $3.9 million, or 16.6% of total net sales, for the three
months ended March 31, 2010 and 2009, respectively.  Net sales
resulting from countries outside the United States and Canada decreased to 4.0%
of total net sales for the three months ended March 31, 2010 from 5.1% for the
comparable period of 2009.





Cost of
goods sold decreased to $12.3 million, or 55.0% of total net sales, for the
three months ended March 31, 2010 from $14.5 million, or 61.6% of total net
sales, for the comparable period of 2009.  The decrease as a
percentage of total net sales was primarily due to changes in our product mix
and a decrease in component pricing and inbound freight costs.





Selling
and marketing expenses decreased to $5.7 million for the three months ended
March 31, 2010 from $6.0 million for the comparable period in
2009.  The decrease was primarily the result of a decrease in
marketing and tour expense during the period.





General
and administrative expenses increased to $2.1 million for the three months ended
March 31, 2010 from $1.8 million for the comparable period in
2009.  The increase was primarily the result of an increase in
compensation expense and bad debt expense.





Research
and development expenses, primarily consisting of costs associated with
development of new products, decreased to $0.6 million for the three months
ended March 31, 2010 from $0.9 million for the comparable period in
2009.  The decrease was primarily the result of a decrease in
compensation expense.





Our net
accounts receivable balances were approximately $22.9 million and $13.1 million
at March 31, 2010 and December 31, 2009, respectively.  The increase
was consistent with the seasonality of our business; historically, sales in the
golf industry are stronger in the first half of the year as compared to the
second half of the year.





Our
inventory balances were approximately $17.3 million and $19.7 million at March
31, 2010 and December 31, 2009, respectively.  The decrease in
inventory levels was primarily due to continued sales of older product lines and
a backlog of recent purchases that are expected to arrive in the second
quarter.





Liquidity
and Capital Resources





Our
principal sources of liquidity are cash reserves, cash flows provided by
operations and our credit facilities in effect from time to
time.  Cash inflows from operations are generally driven by
collections of accounts receivables from customers, which generally increase in
our second quarter and continue into the third quarter and then begin to
decrease during the fourth quarter.  As necessary, we could use our
credit facility to supplement our cash inflows from operations as well as effect
other investing activities such as potential future
acquisitions.  Cash outflows are primarily tied to procurement of
inventory which typically begins to build during the fourth quarter and
continues heavily into the first and second quarters in order to meet demands
during the height of the golf season.





Cash and
cash equivalents decreased to $6.9 million at March 31, 2010 compared to $12.6
million at December 31, 2009.  During the period, the primary changes
in cash flow used in operations were a decrease in inventory of $2.4 million, an
increase in accounts receivable of $10.2 million and a payment of $5.0 million
in liabilities resulting from the settlement of the shareholder lawsuit to cover
the layer of exposure on our directors' and officers' corporate liability
insurance that our former insurance carrier will not cover at this
time.  See the Legal Proceedings section of this Form 10-Q for further
details.


19


We have a
$15.0 million revolving credit agreement with Wells Fargo, NA (as successor to
Wachovia Bank, NA), which was entered into in November 2007 and expires in
November 2012.  The agreement is collateralized by all of our assets
and requires us, among other things, to maintain certain financial performance
levels relative to the fixed charge coverage ratio.  This agreement
was amended in June 2009 so that the ratio is only calculated when we have less
than $5.0 million in availability on the facility, and it was further amended in
December 2009 to provide that our debt covenant ratio is only calculated if we
have less than $2.0 million in availability on the facility between March and
June of each year.  Interest on outstanding balances accrues at a rate
of LIBOR plus 2.50% and is payable monthly.  As of March 31, 2010 and
May 10, 2010, we had no outstanding borrowings on our credit facility and we
were in compliance with the terms of our agreement.





Working
capital increased at March 31, 2010 to $31.0 million compared to $29.1 million
at December 31, 2009.   Approximately 48% of our current assets were
comprised of accounts receivable at March 31, 2010 compared to 29% at December
31, 2009.  Due to industry sensitivity to consumer buying trends and
available disposable income, we have in the past extended payment terms for
specific purchase transactions.  Issuance of these terms (i.e. greater
than 30 days or specific dating) is dependent on our relationship with the
customer and the customer's payment history.  Payment terms are
extended to selected customers typically during off-peak times in the year in
order to promote our brand name and to assure adequate product availability and
to coincide with planned promotions or advertising campaigns.  We
generate cash flow from operations primarily by collecting outstanding trade
receivables.  Because we have limited cash reserves, if collections of
a significant portion of trade receivables are unexpectedly delayed, we would
have a limited amount of funds available to further expand production until such
time as we could collect such trade receivables.  If our cash needs in
the near term exceed the available cash and cash equivalents on hand and the
available borrowing under our credit facility, we would be required to obtain
additional financing, which may not be available at all or in the full amounts
necessary, or limit expenditures to the extent of available cash on hand, all of
which could adversely affect our current growth plans.





Our
anticipated sources of liquidity over the next twelve months are expected to be
cash reserves, projected cash flows from operations and available borrowings
under our credit facility.  The expected operating cash flows, current
cash reserves and borrowings available under our credit facility are expected to
allow us to meet working capital requirements during periods of low cash flows
resulting from the seasonality of the industry.  We anticipate that
operating cash flows, current cash reserves and available borrowings also will
fund our capital expenditure programs.  These capital expenditure
programs can be suspended or delayed at any time with minimal disruption to our
operations if cash is needed in other areas of our operations.  In
addition, cash flows from operations and cash reserves will be used to support
ongoing purchases of component parts for our current and future product
lines.





If
adequate funds are not available or are not available on acceptable terms, we
may be unable to continue operations; develop, enhance and market products;
retain qualified personnel; take advantage of future opportunities, or respond
to competitive pressures, any of which could have a material adverse effect on
our business, operating results, financial condition and/or
liquidity.





Critical
Accounting Policies and Estimates





Our
discussion and analysis of our results of operations, financial condition and
liquidity are based upon our consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States.  The preparation of these financial statements requires
us to make estimates and judgments that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and expenses
during the period.  We base our estimates on historical experience and
on various other assumptions that we believe to be reasonable under the
circumstances.  Actual results may materially differ from these
estimates under different assumptions or conditions.  On an on-going
basis, we review our estimates to ensure that the estimates appropriately
reflect changes in our business.


20


Inventories





Inventories
are valued at the lower of cost or market and primarily consist of finished golf
clubs and component parts.  Cost is determined using the first-in,
first-out method.  The inventory balance, which includes material,
labor and assembly overhead costs, is recorded net of an estimated allowance for
obsolete inventory.  The estimated allowance for obsolete inventory is
based upon management's understanding of market conditions and forecasts of
future product demand.  Accounting for inventories could result in
material adjustments if market conditions and future demand estimates are
significantly different than original assumptions, causing the reserve for
obsolescence to be materially adversely affected.





Revenue
Recognition





We
recognize revenue when the product is shipped.  At that time, the
title and risk of loss transfer to the customer and the ability to collect is
reasonably assured.  The ability to collect is evaluated on an
individual customer basis taking into consideration historical payment trends,
current financial position, results of independent credit evaluations and
payment terms.  If the ability to collect decreases significantly,
including but not limited to, due to the current global economic recession, our
revenue would be adversely affected.  Additionally, an estimate of
product returns and warranty costs are recorded when revenue is
recognized.  Estimates are based on historical trends taking into
consideration current market conditions, customer demands and product
sell-through.  We also record estimated reductions in revenue for
sales programs such as co-op advertising and spiff
incentives.  Estimates in the sales program accruals are based on
program participation and forecast of future product demand.  If actual
sales returns and sales programs significantly exceed the recorded estimated
allowances, our sales would be adversely affected.  We recognize
deferred revenue as a result of sales that have extended terms and a right of
return of the product under a specified program.  Once the product
under the deferred revenue program is paid for and all revenue recognition
criteria have been met, we record revenue.





Allowance for
Doubtful Accounts





We
maintain an allowance for doubtful accounts for estimated losses resulting from
the inability of our customers to make required payments.  An estimate
of uncollectable amounts is made by management using an evaluation methodology
involving both overall and specific identification.  We evaluate each
individual customer and measure various key aspects of the customer such as, but
not limited to, their overall credit risk (via Experian and Dun & Bradstreet
reports), payment history, track record for meeting payment plans, industry
communications, the portion of the customer's balance that is past due and other
various items.  From an overall perspective, we also look at the aging
of the receivables in total and aging relative to prior periods to determine the
appropriate reserve requirements.   Fluctuations in the reserve
requirements will occur from period to period as the change in customer mix or
strength of the customers could affect the reserve disproportionately compared
to the total change in the accounts receivable balance.  Based on
management's assessment, we provide for estimated uncollectable amounts through
a charge to earnings and a credit to the valuation
allowance.  Balances which remain outstanding after we have used
reasonable collection efforts are written off through a charge to the valuation
allowance and a credit to accounts receivable.  We generally do not
require collateral.  Accounting for an allowance for doubtful accounts
could be significantly affected as a result of a deviation in our assessment of
any one or more of our customers' financial strength.





Product
Warranty





Our golf
equipment is sold under warranty against defects in material and workmanship for
a period of one year.  An allowance for estimated future warranty
costs is recorded in the period products are sold.  In estimating our
future warranty obligations, we consider various relevant factors, including our
stated warranty policies, the historical frequency of claims, and the cost to
replace or repair the product.  Accounting for product warranty
reserve could be adversely affected if one or more of our products were to fail
(i.e. broken shaft, broken head, etc.) to a significant degree above and beyond
our historical product failure rates, which determine the product warranty
accruals.


21


Income
Taxes





We
account for income taxes in accordance with FASB ASC 740, Income Taxes.  
FASB ASC 740 prescribes the use of the liability method where by deferred tax
assets and liabilities are recognized for the future tax consequences
attributable to the differences between the financial statement carrying amounts
of existing assets and liabilities and their respective tax bases and operating
loss and tax credit carryforwards.  Deferred tax assets and
liabilities are measured using enacted rates expected to apply to taxable income
in the years in which those temporary differences are expected to be recovered
or settled.  The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in income in the period that includes the
enactment date.  In assessing the realizability of deferred income tax
assets, we consider whether it is more likely than not that some portion or all
of the deferred income tax assets will be realized.  The ultimate
realization of deferred income tax assets is dependent upon the generation of
future taxable income during the periods in which those temporary differences
become deductible.  Due to our historical operating results,
management is unable to conclude on a more likely than not basis that all
deferred income tax assets generated from net operating losses and other
deferred tax assets will be realized.   However, due to our recent
earnings history, we have concluded that it is more likely than not that a
portion of the deferred tax asset will be realized.  We have
recognized a valuation allowance equal to a portion of the deferred income tax
asset for which realization is uncertain.





Impairment
of Long-Lived Assets





We review
long-lived assets for impairment whenever events or circumstances indicate that
the carrying amount of an asset may not be
recoverable.  Recoverability of assets to be held and used is measured
by a comparison of the carrying amount of an asset to future net cash flows
expected to be generated by the asset.  If the carrying amount is
greater than the future cash flows, such assets are considered to be
impaired.  The impairment to be recognized is measured by the amount
by which the carrying amount of the asset exceeds the fair value of the
asset.  Assets to be disposed of are reported at the lower of their
carrying amount or fair value less costs to sell.  During the three
months ended March 31, 2010 and 2009, there was no impairment of long-lived
assets.





Item
3. Quantitative and Qualitative Disclosures About Market Risk





Interest
Rates





In the
normal course of doing business, we are exposed to market risk through changes
in interest rates with respect to our cash equivalents.  Cash and cash
equivalents at March 31, 2010, were $6,922,000 as compared to $12,562,000 at
December 31, 2009.  The average annualized interest rate earned for
the period ended March 31, 2010, was 0.03%.





Additionally,
we are exposed to interest rate risk from our Line of Credit. Outstanding
borrowings accrue interest, at the Libor rate plus 2.50%; therefore we are
exposed to risk related to changes in the Libor rate.  As of March 31,
2010 and May 7, 2010, we had no outstanding borrowings on our credit
facility.





Foreign Currency
Fluctuations





In the
normal course of business, we are exposed to foreign currency exchange rate
risks that could impact our results of operations.  We are exposed to
foreign currency exchange rate risk inherent primarily in our sales commitments,
anticipated sales and assets and liabilities denominated in currencies other
than the U.S. dollar.  We transact business in several countries
worldwide, however all foreign transactions are transacted in U.S. dollar except
for Canadian activities.  The functional currency of our Canadian
operations is Canadian dollars.  The accompanying consolidated
financial statements have been expressed in United States dollars, our reporting
currency.  Reporting assets and liabilities of our foreign operations
are translated at the rate of exchange at the end of each
period.  Revenues and expenses are translated at the monthly average
rate of exchange in effect during the respective period.  Gains and
losses resulting from translation are accumulated in other comprehensive income
(loss) in stockholders' equity.  Inventory purchases are invoiced by
suppliers in U.S. dollars.


22


Item
4T.  Controls and Procedures





Introduction





"Disclosure
Controls and Procedures" are defined in Rules 13a -15(e) and 15d -15(e)
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), as the controls and procedures of an issuer that are designed to ensure
that information required to be disclosed by the issuer in the reports that it
files or submits under the Exchange Act is recorded, processed, summarized and
reported, within the time periods specified by the SEC's rules and
forms.  Disclosure Controls and Procedures include, without
limitation, controls and procedures designed to ensure that information required
to be disclosed by us in the reports that we file or submit under the Exchange
Act are accumulated and communicated to our management, including our principal
executive and principal financial officers, as appropriate, to allow timely
decisions regarding disclosure.





"Internal
Control Over Financial Reporting" is defined in Exchange Act Rules 13a -15(f)
and 15d -15(f) as a process designed by, or under the supervision of, our
principal executive and principal financial officers, or persons performing
similar functions, and effected by our board of directors, management, and other
personnel, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles.  It includes those policies and procedures that (1)
pertain to the maintenance of records that in reasonable detail accurately and
fairly reflect the transactions and dispositions of an issuer; (2) provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the issuer are
being made only in accordance with authorizations of management and directors of
the issuer; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the issuer's
assets that could have a material adverse effect on the financial
statements.





We have
endeavored to design our Disclosure Controls and Procedures and Internal
Controls Over Financial Reporting to provide reasonable assurances that our
objectives will be met.  All control systems are subject to inherent
limitations, such as resource constraints, the possibility of human error, lack
of knowledge or awareness, and the possibility of intentional circumvention of
these controls.  Furthermore, the design of any control system is
based, in part, upon assumptions about the likelihood of future events, which
assumptions may ultimately prove to be incorrect.  As a result, no
assurances can be made that our control system will detect every error or
instance of fraudulent conduct, including an error or instance of fraudulent
conduct, which could have a material adverse impact on our operations or
results.





Evaluation
of Disclosure Controls and Procedures





Our
management, with the participation of our Chief Executive Officer and Interim
Chief Financial Officer, has evaluated the effectiveness of our Disclosure
Controls and Procedures as of the end of the period covered by this report and
has concluded that our Disclosure Controls and Procedures as of the end of the
period covered by this report were designed to ensure that material information
relating to us is made known to the Chief Executive Officer and Interim Chief
Financial Officer by others within our Company, and, based on their evaluations,
our controls and procedures were effective as of the end of the period covered
by this report.





Changes
in Internal Controls over Financial Reporting





There
were no changes in our Internal Controls Over Financial Reporting identified in
connection with the evaluation required by paragraph (d) of Rule 13a-15 or Rule
15d-15 under the Exchange Act that occurred during the three months ended March
31, 2010 that have materially affected or are reasonably likely to materially
affect our Internal Controls Over Financial Reporting.


23


PART
II.  OTHER INFORMATION




Item
1.  Legal Proceedings





On
October 29, 2009, we reached a settlement in principle regarding the
consolidated securities class action filed in June 1999 in the United States
District Court of the District of Delaware.   The complaints
alleged violations of Sections 11, 12(a)(2) and 15 of the Securities Act of
1933, as amended, in connection with our initial public offering ("IPO") and
sought rescissory or compensatory damages in an unspecified
amount.  In particular, the complaints alleged that our prospectus,
which became effective July 9, 1998, was materially false and
misleading.  The court preliminarily approved the settlement, but
remains subject to a final court approval, shareholder class approval,
and appeal.   The proposed settlement provides for a total payment to
the class of $16.5 million in cash and a payment of the first $1.25 million,
after attorneys fees and costs, actually received (if any) by us in connection
with our litigation against our former insurance broker Thilman & Filipini,
LLC (“T&F”) and our former insurance carrier, Zurich American Insurance
Company ("Zurich").  Of the $16.5 million cash settlement amount, $5
million was to be paid by us, which we accrued as a liability during the quarter
ended September 30, 2009 and was paid to the settlement fund in March
2010.  If approved, the settlement will lead to a dismissal with
prejudice of all claims against all defendants in the litigation.  As
part of the settlement, the underwriters for the IPO have agreed to release us
from any indemnification obligation.  Although defendants continue to
deny plaintiffs' allegations, we believe it is in the best interests of its
stockholders to proceed with this settlement.





We
maintain directors' and officers' ("D&O") and corporate liability insurance
to cover certain risks associated with these securities claims filed against us
or our directors and officers.  During the period covering the class
action lawsuit, we maintained insurance from multiple carriers, each insuring a
different layer of exposure, up to a total of $50 million.  In
addition, we have met the financial deductible of our directors' and officers'
insurance policy for the period covering the time the class action lawsuit was
filed.  On March 30, 2006, Zurich, which provided insurance coverage
totaling $5 million for the layer of exposure between $15 million and $20
million, notified us that it was denying coverage due to the fact that it was
allegedly not timely notified of the class action lawsuit.  On October
11, 2007, we filed a suit against our former insurance broker, T&F,
asserting various causes of action arising out of T&F's alleged failure to
notify Zurich of the class action lawsuit.  On March 18, 2008, the
suit against T&F was amended to also name as defendants certain alleged
successor entities to T&F.  All of the defendants moved to dismiss
our lawsuit on the basis that our suit was premature in that we had not been
damaged by the alleged conduct of the defendants because we had not paid any
sums in satisfaction of a judgment or settlement of the class action securities
litigation.  Those motions were denied pursuant to a Memorandum
Opinion and Order dated September 26, 2008.  T&F's successor
entities also moved to dismiss the claims brought against them on the grounds
that, as purchasers of solely T&F's assets, they could not be held liable
for the T&F debts or liabilities.  The court struck our complaint
solely against the successor entity defendants on the grounds that we had not
alleged sufficient facts triggering an exception to the general rule that the
purchaser of an entity's assets is not liable for the entity's liabilities and
ordered us to replead our claims against the successor entity
defendants.  We and T&F have engaged in preliminary written
discovery efforts, but substantial discovery remains to be completed. On
November 16, 2009, we filed a Second Amended Complaint reasserting our causes of
action against the previously-named defendants. The Second Amended Complaint
also added Zurich as a defendant to the lawsuit, asserting various causes of
action against it arising out of its denial of coverage for the class action
lawsuit.


24


Beginning
April 2008, we received communications from the Estate of Anthony Antonious
alleging that our products infringed a patent of Anthony Antonious concerning an
aerodynamic metal wood golf club head.  On May 28, 2008, we filed a
declaratory judgment lawsuit against the Anthony Antonious Trust in the United
States District Court for the Southern District of the State of Ohio, alleging
non-infringement of the Antonious patent.  On June 30, 2008, the Estate of
Anthony Antonious filed a lawsuit against us in the United States District Court
in the State of New Jersey seeking damages and injunctive relief alleging
infringement of the patent.  On September 2, 2008, we filed a Request
for Ex Parte Reexamination with the United States Patent and Trademark Office
("USPTO") requesting that the USPTO reexamine the Antonious patent at
issue.  The USPTO issued an order granting our Request for Ex Parte
Reexamination on November 7, 2008 after finding that a substantial new question
of patentability affecting the claims had been raised.   As a result,
both the Ohio lawsuit and the New Jersey lawsuit were stayed pending the outcome
of the USPTO's reexamination proceeding.  On October 9, 2009, the
USPTO issued a Notice of Intent to Issue Ex Parte Reexamination Certificate
concerning claims amended during the reexamination procedure.  A
Reexamination Certificate was issued on January 5, 2010 and litigation has now
resumed in the New Jersey action and the Ohio action.  A trial is
expected to occur in 2011.  At this point in the legal proceedings, we
cannot predict the outcome of the matter with any certainty, and thus cannot
reasonably estimate future liability on the conclusion of the events, if
any.





From time
to time, we are engaged in various other legal proceedings in the normal course
of business.  The ultimate liability, if any, for the aggregate
amounts claimed cannot be determined at this time.





Item
1A. Risk Factors





We have
included in our filings with the SEC, including Item 1A of our Annual Report on
Form 10-K for the year ended December 31, 2009, a description of certain risks
and uncertainties that could have an affect on our business, future performance,
or financial condition.  There are no material changes from the risk
factors previously disclosed in our Annual Report on Form 10-K for the year
ended December 31, 2009.





Item
6.  Exhibits





See the
Exhibit Index on pages 26-27.





Signatures





Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.





ADAMS
      GOLF, INC.Date:  May
      11, 2010
                By:
                /S/ OLIVER G. BREWER
      IIIOliver
      G. Brewer, IIIChief
      Executive Officer and President(Principal
      Executive Officer)Date:  May
      11, 2010
                By:
                /S/ PAMELA
  HIGHPamela
      J. HighInterim
      Chief Financial Officer(Principal
      Financial Officer)


25


EXHIBIT
INDEX




Exhibit
      3.1
                            
                            Amended
      and Restated Certificate of Incorporation
                            
                            Incorporated
      by reference to Form S-1 File No. 333-51715 (Exhibit
  3.1)Exhibit
      3.2
                            
                            Certificate
      of Amendment to the Restated
                              Certificate
      of Incorporation filed on February 14, 2008
                            
                            Incorporated
      by reference to the Annual Report on Form 10-K for the year ended December
      31, 2007 File No. 001-33978 (Exhibit 3.2)Exhibit
      3.3
                            
                            Amended
      and Restated By-laws
                            
                            Incorporated
      by reference to Form S-1 File No. 333-51715 (Exhibit
  3.2)Exhibit
      4.1
                            
                            1998
      Stock Incentive Plan of the Company dated February 26, 1998, as
      amended
                            
                            Incorporated
      by reference to Form S-8 File No. 333-68129 (Exhibit
  4.1)Exhibit
      4.2
                            
                            1996
      Stock Option Plan dated April 10, 1998
                            
                            Incorporated
      by reference to Form S-1 File No.333-51715 (Exhibit
4.2)Exhibit
      4.3
                            
                            Adams
      Golf, Ltd. 401(k) Retirement Plan
                            
                            Incorporated
      by reference to Form S-1 File No.333-51715 (Exhibit
4.3)Exhibit
      4.4
                            
                            1999
      Non-Employee Director Plan of Adams Golf, Inc.
                            
                            Incorporated
      by reference to 1999 Form 10-K File No. 000-24583 (Exhibit
      4.4)Exhibit
      4.5
                            
                            1999
      Stock Option Plan for Outside Consultants of Adams Golf,
    Inc.
                            
                            Incorporated
      by reference to Form S-8 File No. 333-37320 (Exhibit
  4.5)Exhibit
      4.6
                            
                            2002
      Stock Incentive Plan for Adams Golf, Inc.
                            
                            Incorporated
      by reference to Annex A of the 2002 Proxy Statement File No. 000-24583
      (Annex A)Exhibit
      4.7
                            
                            Form
      of Option Agreement under the 2002 Stock Option Plan of Adams Golf,
      Inc.
                            
                            Incorporated
      by reference to Form S-8 File No. 333-112622 (Exhibit
  4.7)Exhibit
      10.1
                            
                            Amendment
      dated September 1, 2003 to the Commercial Lease Agreement dated April 6,
      1998, between Jackson-Shaw Technology Center II and the
      Company
                            
                            Incorporated
      by reference to 2003 Form 10-K File No. 000-24583 (Exhibit
      10.12)Exhibit
      10.2*
                            
                            Golf
      Consultant Agreement - Thomas S. Watson
                            
                            Incorporated
      by reference to 2004 Form 10-K File No. 000-24583 (Exhibit
      10.17)Exhibit
      10.3*
                            
                            Asset
      Purchase Agreement of Women's Golf Unlimited
                            
                            Incorporated
      by reference to 2006 Form 10-K File No. 000-24583 (Exhibit
      10.11)Exhibit
      10.4
                            
                            Revolving
      line of Credit between Adams Golf, Inc and Wachovia Bank, National
      Association
                            
                            Incorporated
      by reference to the Report on From 8-K dated November 13, 2007 (Exhibit
      10.1)Exhibit
      10.5
                            
                            Commercial
      Lease Agreement dated December 15, 2007, between MDN/JSC -II Limited and
      the Company
                            
                            Incorporated
      by reference to 2007 Form 10-K File No 001-33978 (Exhibit
      10.9)


26





Exhibit
      10.6
                  
                  Commercial
      Lease Agreement dated April 10, 2008, between CLP Properties Texas, L.P.
      and the Company
                  
                  Incorporated
      by reference to the Report on From 8-K dated April 15, 2008 File No.
      001-33978 (Exhibit 10.1)Exhibit
      10.7
                  
                  Employment
      Agreement - Byron (Barney) H. Adams
                  
                  Incorporated
      by reference to the Report on From 8-K dated January 12, 2009 File No.
      001-33978 (Exhibit 10.1)Exhibit
      10.8
                  
                  Employment
      Agreement - Oliver G. (Chip) Brewer
                  
                  Incorporated
      by reference to the Quarterly Report on From 10-Q for the quarter ended
      March 31, 2009 File No. 001-33978 (Exhibit 10.9)Exhibit
      10.9
                  
                  Amendment
      to Revolving line of Credit between Adams Golf, Inc and Wachovia Bank,
      National Association
                  
                  Incorporated
      by reference to Third quarter 2009 Form 10-Q File No 001-33978 (Exhibit
      10.9)Exhibit
      10.10
                  
                  Stipulation
      of Settlement of In Re Adams Golf, Inc. Securities Litigation, dated
      December 9, 2009
                  
                  Incorporated
      by reference to 2009 Form 10-K File No 001-33978 (Exhibit
      10.10)Exhibit
      31.1
                  
                  Certification
      Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
                  
                  Included
      in this filingExhibit
      31.2
                  
                  Certification
      Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
                  
                  Included
      in this filingExhibit
      32.1
                  
                  Certification
      Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
                  
                  Included
      in this filing





* The
SEC has granted our request for confidential treatment of certain portions of
these agreements.


27