UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
For
the Quarterly Period Ended
For the transition period from ___________ to ___________
Commission
file number:
(Exact name of registrant as specified in its charter)
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State or Other Jurisdiction of Incorporation or Organization |
(I.R.S. Employer Identification No.) |
(Address of Principal Executive Offices) (Zip Code)
Registrant’s
telephone number, including area code:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
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The
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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.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
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☒ | Smaller reporting company |
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| Emerging growth company |
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If
an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No
As of August 19, 2025, the latest practicable date, shares of Class A common stock and shares of Class B common stock outstanding.
TRUGOLF HOLDINGS, INC.
FORM 10-Q
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024
TABLE OF CONTENTS
| 2 |
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
TRUGOLF HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ |
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$ |
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| Restricted cash |
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| Accounts receivable, net |
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| Inventory, net |
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| Prepaid expenses and other current assets |
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| PIPE exchange consideration |
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| Other current assets |
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| Total Current Assets |
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| Property and equipment, net |
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| Capitalized software development costs, net |
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| Right-of-use assets |
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| Other long-term assets |
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| Total Assets | $ |
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$ |
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| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ |
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$ |
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| Deferred revenue |
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PIPE loan payable, net |
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| Notes payable, current portion |
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| Notes payable to related parties, current portion |
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| Line of credit, bank |
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| Dividend notes payable |
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| Accrued interest |
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| Accrued and other current liabilities |
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| Accrued and other current liabilities - assumed in Merger |
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| Lease liability, current portion |
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| Total Current Liabilities |
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| Non-current Liabilities: | ||||||||
| Notes payable, net of current portion |
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| Note payables to related parties, net of current portion |
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| PIPE loan payable, net |
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| Gross sales royalty payable |
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| Lease liability, net of current portion |
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| Total Liabilities |
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| Commitments and Contingencies | ||||||||
| Stockholders’ Equity (Deficit): | ||||||||
| Preferred stock, $ par value, million shares authorized | ||||||||
| Series A Convertible Preferred Stock, $ par value per share; authorized – shares; and shares issued and outstanding, respectively | ||||||||
| Common stock, $ par value, shares authorized: | ||||||||
| Common stock - Series A, $ par value, million shares authorized; and shares issued and outstanding, respectively |
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| Common stock - Series B, $ par value, million shares authorized; and shares issued and outstanding, respectively |
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| Treasury stock at cost, shares of common stock held, respectively |
(
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(
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| Additional paid-in capital |
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| Accumulated deficit |
(
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(
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| Total Stockholders’ Equity (Deficit) |
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(
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) | |||||
| Total Liabilities and Stockholders’ Equity (Deficit) | $ |
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$ |
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The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.
| 3 |
TRUGOLF HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Revenue, net | $ |
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$ |
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$ |
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$ |
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| Cost of revenue |
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| Total gross profit |
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| Operating expenses: | ||||||||||||||||
| Royalties |
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| Salaries, wages and benefits |
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| Selling, general and administrative |
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| Total operating expenses |
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| Loss from operations |
(
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| Other income (expense): | ||||||||||||||||
| Interest income |
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| Interest expense |
(
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| Loss on investment |
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| Other income |
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| Total other income (expense), net |
(
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(
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| Net loss prior to provision for income taxes | $ |
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(
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| Provision for income taxes | ||||||||||||||||
| Net loss | $ |
(
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) | $ |
(
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) | $ |
(
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) | $ |
(
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) | ||||
| Net loss per common share Series A – basic and diluted | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| Net loss per common share Series B – basic and diluted | $ | ) | $ | ) | $ | ) | $ | ) | ||||||||
| Weighted average shares outstanding Series A – basic and diluted | ||||||||||||||||
| Weighted average shares outstanding Series B – basic and diluted | ||||||||||||||||
The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.
| 4 |
TRUGOLF HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024
(Unaudited)
| Accumulated | ||||||||||||||||||||||||||||||||||||||||||||||||
| Series A | Class A | Class B | Additional | Other | ||||||||||||||||||||||||||||||||||||||||||||
| Preferred Stock | Common Stock | Common Stock | Treasury Stock | Paid-in | Comprehensive | Accumulated | ||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Capital | Gain (Loss) | Deficit | Total | |||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2023 | $ |
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$ |
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$ |
(
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) | $ |
(
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) | $ |
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$ |
(
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) | $ |
(
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| Realized gain in fair value of short-term investments | - | - | - | - |
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| Common stock exchanged in Merger | - |
(
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(
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) | - | - |
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(
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| Issuance of common stock - Series A exchanged in Merger | - |
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- | - |
(
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| Issuance of common stock - Series B issued in Merger | - | - |
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- |
(
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| Net loss | - | - | - | - |
(
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| Balance as of March 31, 2024 | $ |
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$ |
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$ |
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(
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) | $ |
(
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) | $ |
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$ | $ |
(
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) | $ |
(
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| Revaluation of costs of Merger | - | - | - | - |
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(
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| Net loss | - | - | - | - |
(
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(
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| Balance as of June 30, 2024 | $ |
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$ |
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$ |
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(
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) | $ |
(
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) | $ |
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$ | $ |
(
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) | $ |
(
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) | |||||||||||||||||||||||||||
| Balance at December 31, 2024 | $ |
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$ |
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$ |
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(
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) | $ |
(
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) | $ |
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$ | $ |
(
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) | $ |
(
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| Issuance of common stock for PIPE interest and make good | - |
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- | - |
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| Issuance of common stock for conversion of PIPE notes | - |
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- | - |
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| Stock-based compensation - options | - | - | - | - |
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| Net loss | - | - | - | - |
(
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) |
(
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| Balance as of March 31, 2025 | $ |
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$ |
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$ |
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(
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) | $ |
(
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) | $ |
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$ | $ |
(
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) | $ |
(
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) | |||||||||||||||||||||||||||
| Issuance of common stock for PIPE interest and make good | - |
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- | - |
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| Issuance of common stock for conversion of PIPE notes | - |
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- | - |
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| Issuance of common stock for conversion of dividend note payable | - |
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- |
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| Reverse stock split adjustment | - |
(
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| Stock-based compensation - options | - | - | - | - |
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| Issuance of Series A Preferred and associated warrants |
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- | - | - |
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| Net loss | - | - | - | - |
(
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(
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) | ||||||||||||||||||||||||||||||||||||||||
| Balance as of June 30, 2025 |
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$ |
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$ |
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$ |
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(
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) | $ |
(
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) | $ |
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$ | $ |
(
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) | $ |
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The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.
| 5 |
TRUGOLF HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| For the | For the | |||||||
| Six Months Ended | Six Months Ended | |||||||
| June 30, 2025 | June 30, 2024 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ |
(
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) | $ |
(
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) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization |
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| Amortization of convertible notes discount |
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| Amortization of right-of-use asset |
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| Bad debt expense |
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| Change in OCI |
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| Stock issued for make good provisions on debt conversion |
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| Stock options issued to employees |
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| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable, net |
(
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| Inventory, net |
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| Prepaid expenses |
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| Other current assets |
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| Accounts payable |
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| Deferred revenue |
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| Accrued interest payable |
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| Accrued and other current liabilities |
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| Other liabilities |
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| Lease liability |
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| Net cash provided by (used in) operating activities |
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| Cash flows from investing activities: | ||||||||
| Purchases of property and equipment |
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| Capitalized software, net |
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| Reduction in long term assets |
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| Net cash used in investing activities |
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| Cash flows from financing activities: | ||||||||
| Proceeds from PIPE loans, net of discount |
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| Cash acquired in Merger |
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| Costs of Merger paid from PIPE loan |
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| Repayments of line of credit |
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| Repayments of liabilities assumed in Merger |
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| Repayments of notes payable |
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| Repayments of notes payable - related party |
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| Net cash provided by financing activities |
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| Net change in cash , cash equivalents and restricted cash |
(
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| Cash, cash equivalents and restricted cash - beginning of year |
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| Cash, cash equivalents and restricted cash - end of year | $ |
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$ |
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| Supplemental cash flow information: | ||||||||
| Cash paid for: | ||||||||
| Interest | $ |
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$ |
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| Income taxes | $ | $ | ||||||
| Non-cash investing and financing activities: | ||||||||
| PIPE note principal converted to Class A Common Stock | $ |
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$ | |||||
| Dividend note principal converted to Class A and Class B Common Stock | $ |
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$ | |||||
| Exchange of PIPE Notes and Series A and B Warrants for Series A Convertible Preferred Stock and Warrants for Series A Convertible Preferred Stock | $ |
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$ | |||||
| Notes payable assumed in Merger | $ | $ |
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| Accrued liabilities assumed in Merger | $ | $ |
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| Remeasurement of common stock exchanged/issued in Merger | $ | $ |
(
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) | ||||
T he accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.
| 6 |
TRUGOLF HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 – NATURE OF THE ORGANIZATION AND BUSINESS
TruGolf Holdings, Inc. (the “Company” or “TruGolf”), is a Delaware corporation headquartered in Centerville, Utah. The Company and its wholly-owned subsidiary, have historically been engaged in creating indoor golf software and custom hardware as well as establishing and selling franchises that would use the Company’s indoor golf and recreational sports simulators and other equipment. The Company sells its software and custom hardware directly to customers and its franchise owners.
Reverse Stock Split
On
June 23, 2025, the Company filed a Certificate of Amendment to the Company’s Amended and restated Certificate of Incorporation
with the Secretary of the State of Delaware to effect a
Proportionate adjustments for the Reverse Stock Split were made to the exercise prices and number of shares issuable under the Company’s equity incentive plans, and the number of shares underlying outstanding equity awards and warrants, as applicable. See Note 13 - Stockholders’ Equity for information and disclosures relating to adjustments related to the Reverse Stock Split.
Nasdaq Compliance
On July 15, 2024, the Company received a deficiency letter from the Listing Qualifications Department (the “Staff”) of the Nasdaq Stock Market (“Nasdaq”) notifying the Company that since it failed to file its Form 10-Q for the period ended March 31, 2024 it no longer complied with Nasdaq Listing Rule 5250(c)(1). The deficiency letter did not result in the immediate delisting of the Company’s common stock from the Nasdaq Capital Market. On August 14, 2024, the Company filed its Quarterly Report in the Form 10-Q for the period ended March 31, 2024 and the Company regained compliance with the applicable Nasdaq rule.
On August 19, 2024, the Company received a delist notice from the staff of the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that the listing of its Class A common stock was not in compliance with: (i) the minimum Market Value of Publicly Held Shares requirement set forth in Nasdaq Listing Rule 5450(b)(2)(C); and (ii) the minimum shareholders’ equity requirement set forth in Nasdaq Listing Rule 5450(b)(1)(A).
On November 5, 2024, the Company received a delist notice from the Staff notifying the Company that the listing of its Class A common stock was not in compliance with the minimum bid price requirement of $ per share set forth in Nasdaq Listing Rule 5450(a)(1).
The Company requested a hearing before a Nasdaq hearing panel (the “Panel”) to present a plan to regain compliance with all the continued listing requirements of Nasdaq and such hearing was held May 15, 2025. On May 30, 2025, the Panel provided the Company an exception with various milestones to regain compliance, including with Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Rule”) until July 8, 2025 and the minimum Market Value of Publicly Held Shares requirement and minimum shareholders’ equity requirement until July 30, 2025. In addition, the Panel directed that the Company’s listing be transferred to the Nasdaq Capital Market, effective at the open of business on June 3, 2025.
| 7 |
On July 17, 2025, the Staff confirmed that the Company had regained compliance with the Bid Price Rule as required by the Panel’s decision.
On August 1, 2025, the Company received a letter from Nasdaq notifying the Company that it had demonstrated compliance with Nasdaq Listing Rule 5550(b)(1) (the “Equity Rule”), as required by the Panel’s decision, and, following the Company’s phase down to the Nasdaq Capital Market on June 3, 2025, the Company demonstrated compliance with the minimum market value of publicly held securities required by Nasdaq Listing Rule 5550(a)(5).
Pursuant to the letter, in application of Listing Rule 5815(d)(4)(B), the Company will be subject to a Mandatory Panel Monitor for a period of one year from the date of the letter. If, within that one-year monitoring period, the Staff finds the Company again out of compliance with the Equity Rule, notwithstanding Rule 5810(c)(2), the Company will not be permitted to provide the Staff with a plan of compliance with respect to that deficiency and Staff will not be permitted to grant additional time for the Company to regain compliance with respect to that deficiency, nor will the company be afforded an applicable cure or compliance period pursuant to Rule 5810(c)(3). Instead, Staff will issue a delist determination letter and the Company will have an opportunity to request a new hearing.
Liquidity
The
accompanying unaudited condensed consolidated financial statements have been prepared on the basis that the Company will continue as
a going concern, which contemplates realization of assets and satisfying liabilities in the normal course of business. At June 30, 2025,
the Company has an accumulated deficit of approximately $
To date the Company has been funding
operations primarily through the reinvestment of free cash flows generated from its business operations, sale of equity in private
placements, convertible debt instruments and revenues generated by the Company’s services. During the six months ended June
30, 2025, the Company received $
Based on its current cash resources and commitments, the Company believes it will be able to maintain its current planned development and corresponding level of expenditure for at least twelve months from the date of the issuance of these consolidated financial statements, although no assurance can be given that it will not need additional funds prior to such time.
The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which contemplate continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the unaudited condensed consolidated financial statements do not necessarily purport to represent realizable or settlement values. The accompanying unaudited condensed consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Principles of Consolidation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP and in conformity with the instructions on Form 10-Q and Rule 8-03 of Regulation S-X and the related rules and regulations of the Securities and Exchange Commission (the “SEC”). The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation. The unaudited condensed consolidated financial statements reflect all adjustments consisting of normal recurring accruals, which are, in the opinion of management, necessary for a fair presentation of such statements. The results of operations for the three and six months ended June 30, 2025, are not necessarily indicative of the results that may be expected for the entire year. The significant accounting policies used in preparing these unaudited condensed consolidated are consistent with those described in the audited financial statements included in the Company’s Form 10-K for the year ended December 31, 2024, except as disclosed below. These unaudited financial statements and related should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2024, included in the Company’s Annual Report on Form 10-K filed with the SEC on April 15, 2025.
| 8 |
Reclassifications
Certain reclassifications have been made to the unaudited condensed consolidated financial statements for the three and six months ended June 30, 2024 to conform to the unaudited condensed consolidated financial statement presentation for the three and six months ended June 30, 2025. These reclassifications had no effect on net loss or cash flows as previously reported.
Revenue Recognition
Remaining Performance Obligations
As
of June 30, 2025, approximately $
Disaggregated Revenue
| Three Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Revenues: | ||||||||
| Golf Simulators (1) | $ |
|
$ |
|
||||
| Content Software Subscriptions |
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|
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| Franchise Revenue | ||||||||
| Other (2) |
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| Total net revenue | $ |
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$ |
|
||||
| (1) |
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| (2) |
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| Six Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Revenues: | ||||||||
| Golf Simulators (1) | $ |
|
$ |
|
||||
| Content Software Subscriptions |
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|
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| Franchise Revenue |
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| Other (2) |
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| Total net revenue | $ |
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$ |
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||||
| (1) |
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| (2) |
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| 9 |
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2025 | 2024 | 2025 | 2024 | |||||||||||||
| Options to purchase Common Stock |
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| PIPE Convertible Notes (1) |
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| Series A Preferred Shares |
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| Common Stock - Series A Preferred Warrants |
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| Common Stock - Series A Warrants |
|
|
||||||||||||||
| Common Stock - Series B warrants |
|
|
||||||||||||||
| Earnout shares |
|
|
|
|
||||||||||||
| Underwriter warrants |
|
|
|
|
||||||||||||
| Totals |
|
|
|
|
||||||||||||
| (1) |
|
NOTE 4 – ACCOUNTS RECEIVABLE
Accounts receivable and allowance for credit losses consisted of the following:
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Trade accounts receivable | $ |
|
$ |
|
||||
| Other |
|
|||||||
|
|
|
|||||||
| Less allowance for credit losses |
(
|
) |
(
|
) | ||||
| Total accounts receivable, net | $ |
|
$ |
|
||||
NOTE 5 – INVENTORY, NET
The following summarizes inventory:
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Inventory - raw materials | $ |
|
$ |
|
||||
| Less reserve allowance for obsolescence |
(
|
) |
(
|
) | ||||
| Inventory, net | $ |
|
$ |
|
||||
NOTE 6 – PROPERTY AND EQUIPMENT, NET
The following summarizes property and equipment:
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Software and computer equipment | $ |
|
$ |
|
||||
| Furniture and fixtures |
|
|
||||||
| Vehicles |
|
|
||||||
| Equipment |
|
|
||||||
|
|
|
|||||||
| Less accumulated depreciation |
(
|
) |
(
|
) | ||||
| Total property and equipment, net | $ |
|
$ |
|
||||
| 10 |
The
Company recorded depreciation expense was $
The following summarizes capitalized software development costs as of June 30, 2025 and December 31, 2024:
| Capitalized software, net - beginning balance, December 31, 2024 | $ |
|
||
| Capitalized software development costs - 2025 |
|
|||
| Less accumulated amortization |
(
|
) | ||
| $ |
|
The
Company recorded amortization of capitalized software costs of $
NOTE 7 – ACCRUED AND OTHER CURRENT LIABILITIES
Accrued and other current liabilities consist of the following amounts:
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Accrued payroll | $ | $ |
|
|||||
| Credit cards |
|
|
||||||
| Warranty reserve |
|
|
||||||
| Sales tax payable |
|
|
||||||
| Other accrued liabilities |
|
|
||||||
| Total accrued and other current liabilities | $ |
|
$ |
|
||||
Accrued liabilities and other current liabilities assumed in Merger:
| Accrued tax payable | $ |
|
||
| Total accrued and other current liabilities assumed in Merger | $ |
|
NOTE 8 – NOTES PAYABLE
Notes payable consisted of the following:
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Note payable - Ethos Management Inc. | $ | $ | ||||||
| Note payable - Mercedez-Benz |
|
|
||||||
|
|
|
|||||||
| Less current portion |
(
|
) |
(
|
) | ||||
| Note payable long-term portion | $ |
|
$ |
|
||||
Ethos Management Inc.
In
January 2023, the Company entered into a financing agreement with Ethos Asset Management Inc. (the “Ethos Loan” or “Ethos”)
in the principal amount of up to $
| 11 |
The
Ethos Loan stipulates that fundings should happen approximately every 30 banking days, subject to Ethos completing periodic internal
audits to ensure the Company was in compliance with the terms of the loan agreement. In August 2023, Ethos informed the Company that
unrelated to the Company, Ethos was undergoing a routine audit of its portfolio, and pending the close of the audit, borrowers may experience
delays in drawing on funds when requested. In February 2024, due to the lack of additional fundings and in accordance with the terms
of the Ethos Loan, the Company sent Ethos a notice of termination for materially breaching the Ethos Loan agreement. Based on the termination
for default clause in the Ethos Loan, the Company was entitled to retain all funds disbursed by Ethos and Ethos must release the Deposit
Collateral. At the date of the Ethos Loan termination the principal and accrued interest owed on the Ethos Loan was $
Mercedes-Benz
In
November 2020, the Company entered into a $
NOTE 9 – PIPE CONVERTIBLE NOTES
As previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 and in its Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, the Company entered into a securities purchase agreement with accredited investors for the issuance of PIPE Convertible Notes and Warrants.
During
the three months ended June 30, 2025, the Company converted an aggregate principal amount of $
PIPE Convertible Notes payable consisted of the following:
| Total PIPE Convertible Notes, net at December 31, 2024 | $ |
|
||
| PIPE Convertible Notes issued |
|
|||
| Less: Debt Discount associated with OID |
(
|
) | ||
| PIPE Convertible Notes, net |
|
|||
| Less: Gross PIPE Convertible Note principal converted into Class A common stock |
(
|
) | ||
| Add: Accretion of debt discount |
|
|||
|
|
||||
| Less current portion |
(
|
) | ||
| Total PIPE Convertible Notes, net at June 30, 2025 | $ |
During
the three and six months ended June 30, 2025 and 2024, amortization expense related to the Debt Discount of the PIPE Convertible Notes
was $
PIPE Exchange Agreements
On
April 22, 2025, the Company entered into Exchange Agreements, (the “Exchange Agreements” and each, an “Exchange
Agreement”), by and among the Company and each of the PIPE Convertible Note holders (the “Holders”)., pursuant to
which each such Holder would exchange (i) the amounts remaining outstanding under the PIPE Convertible Notes and certain other
amounts outstanding with respect thereto in the aggregate amount (the “Note Exchange”), and (ii) the PIPE Warrants.
Pursuant to the Exchange Agreements, on the effective date of the Exchange Agreements, which was April 22, 2025, the PIPE Warrants
were exchanged, in reliance on the exemption from registration provided by Section 3(a)(9) of the Securities Act of 1933, as amended
(the “Securities Act”), into an aggregate of
shares of the Company’s newly created Series A preferred stock (the “Series A Preferred Stock”, and (ii) warrants
to purchase up to
| 12 |
Pursuant to the Exchange Agreements, on the closing of the Note Exchange the amounts owing under the PIPE Convertible Notes were to be exchanged into share of the Company’s Series A Preferred Stock. From the date of the Exchange Agreements until the date of the Note Exchange, the conversion price of the PIPE Convertible Notes was reduced to $ per share, which was then adjusted to $ per share as a result of the Reverse Stock Split.
Due to the bundled nature of the Exchange Agreements transaction and that the PIPE Convertible Notes had not been exchanged as of June 30, 2025, the PIPE Convertible Notes remain outstanding and are classified as liabilities on the Company’s unaudited condensed consolidated balance sheet as of that date. The exchange of the PIPE Convertible Notes did not occur until July 21, 2025, and the associated issued Series A Preferred Stock and Series A Preferred Warrants are presented within equity as non-cash issuances, pending full settlement. See Note 13 – Stockholders’ Equity for the impact on the Company’s equity instruments.
NOTE 10 – RELATED PARTY NOTES AND LOANS PAYABLE
Related party notes payable consisted of the following:
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Note payable - ARJ Trust | $ |
|
$ |
|
||||
| Note payable - McKettrick |
|
|
||||||
| Note payable - Carver |
|
|
||||||
| Loan - Chris Jones |
|
|
||||||
|
|
|
|||||||
| Less current portion |
(
|
) |
(
|
) | ||||
| Note payable long-term portion | $ |
|
$ |
|
||||
Future maturities of related party notes and loan payables as of June 30, 2025:
| 2025 | $ |
|
||
| 2026 |
|
|||
| 2027 |
|
|||
| Total | $ |
|
ARJ Trust
In
December 2008, the Company entered into a note payable with ARJ Trust, a trust that is indirectly controlled by the Company’s chief
executive officer. The note has a principal amount of $
In
June 2010, the Company entered into a second note payable with ARJ Trust. The note has a principal amount of $
On
The
Company made interest-only payments of $
| 13 |
McKettrick
In
May 2019, the Company entered into a $
Carver
In
January 2021, the Company entered into a $
Chris Jones
During
the year ended December 31, 2024, the Company chief executive officer loaned the Company an aggregate of $
NOTE 11 – LINES OF CREDIT
JPMorgan Chase
In
December 2023, the Company entered into a $
On
January 1, 2025, the maturity date of the line of credit was extended to
The
line of credit is secured by a pledge of $
Morgan Stanley
During
February 2023, the Company entered into a variable rate line of credit with Morgan Stanley which was secured by the marketable securities
held in our brokerage account. The Company terminated the brokerage agreement during the year ended December 31, 2024, liquidated the
vast majority of its investments and has $
NOTE 12 – DIVIDEND NOTES PAYABLE
Prior
to the Merger, TruGolf Nevada filed its tax returns as an S Corporation. Historically, all income tax liabilities and benefits of TruGolf
Nevada are passed through to the shareholders annually through distributions.
dividends were declared during 2023 or 2022. During
2021, the Board of Directors declared $
in dividends to the shareholders, payable in cash as the Company’s liquidity allows.
During 2022, TruGolf Nevada paid the shareholders an aggregate amount of $
| 14 |
On
April 21, 2025, the Company entered into agreements with the shareholders owed approximately $
Dividends declared, distributed, and accrued are as follows:
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Accrued interest on dividends payable | $ |
|
$ |
|
||||
| Dividends payable | $ |
|
$ |
|
||||
NOTE 13 – STOCKHOLDERS’ DEFICIT
Preferred Stock
The Company has authorized preferred stock of shares with a par value of $ .
Series A Convertible Preferred Stock
On April 22, 2025, in connection with the signing of the Exchange Agreements, see Note 9 – PIPE Convertible Notes , the Company designated shares of the Company’s authorized and unissued preferred stock as Series A Convertible Preferred Stock (Series A Preferred).
Each
share of Series A Preferred has a stated value of $
per share. The Series A, with respect to dividends, distributions and payments
upon the liquidation, dissolution and winding up of the Company, ranks senior to all capital stock of the Company.
As of June 30, 2025 and December 31, 2024, there were and shares of Series A Preferred issued and outstanding.
Common Stock
Class A Common Stock
Class B Common Stock
| 15 |
Equity Transactions During the Period
Series A Convertible Preferred Stock
On April 22, 2025, in connection with the signing of the Exchange Agreements, see Note 9 – PIPE Convertible Notes , the Company issued an aggregate of shares of Series A Convertible Preferred Stock with a fair value of $ per share. See Note 15 – Fair Value Measurements for more information on the Company’s valuation methodology.
Class A Common Stock
During
the three months ended June 30, 2025, the Company issued an aggregate of
shares of Class A Common Stock with a fair value of $
per share to PIPE Convertible Note holders for conversion of an aggregate principal amount of $
During the three months ended June 30, 2025, the Company issued an aggregate of shares of Class A Common Stock with fair values ranging from $ - $ per share to PIPE Convertible Note holders in lieu of cash for interest and make whole provisions (See Note 9 – PIPE Convertible Notes ).
During the three months ended June 30, 2025, the Company issued an aggregate of shares of Class A Common Stock with a fair value of $ per share to dividend note payable holders in lieu of cash dividends (See Note 12 – Dividend notes payable ).
Class B Common Stock
During the three months ended June 30, 2025, the Company issued an aggregate of shares of Class B Common Stock with a fair value of $ per share to dividend note payable holders in lieu of cash dividends (See Note 12 – Dividend notes payable ).
Warrant and Option Valuation
The Company has computed the fair value of warrants and options granted using the Black-Scholes option pricing model. The expected term for warrants and options issued to non-employees is the contractual life and the expected term used for options issued to employees and directors is the estimated period of time that options granted are expected to be outstanding. The Company utilizes the “simplified” method to develop an estimate of the expected term of “plain vanilla” employee option grants. The Company is utilizing an expected volatility figure based on a review of the historical volatilities, over a period of time, equivalent to the expected life of the instrument being valued, of similarly positioned public companies within its industry. The risk-free interest rate was determined from the implied yields from U.S. Treasury zero-coupon bonds with a remaining term consistent with the expected term of the instrument being valued.
Warrant Offerings
Series A Preferred Warrants
In applying the Black-Scholes option pricing model to the Series A Preferred Warrants, the Company used the following assumptions:
|
For the Three Months Ended June 30, 2025 |
||||
| Risk free interest rate |
|
% | ||
| Expected term (years) |
|
|||
| Expected volatility |
|
% | ||
| Expected dividends |
|
% | ||
During
the three months ended June 30, 2025, in connection with the signing of the Exchange Agreements, see
Note 9 – PIPE Convertible
Notes
, PIPE Warrant holders exchanged their outstanding
Series A Warrants and
Series B Warrants for Series A Preferred Warrants to purchase
| 16 |
A summary of the Series A Warrant Activity during the six months ended June 30, 2025, is presented below:
| Weighted | ||||||||||||||||
| Weighted | Average | |||||||||||||||
| Average | Remaining | Aggregate | ||||||||||||||
| Number of | Exercise | Life | Intrinsic | |||||||||||||
| Warrants | Price | In Years | Value | |||||||||||||
| Outstanding, December 31, 2024 | $ | |||||||||||||||
| Granted |
|
|
||||||||||||||
| Exercised | ||||||||||||||||
| Forfeited | ||||||||||||||||
| Outstanding, June 30, 2025 |
|
$ |
|
$ | ||||||||||||
| Exercisable, June 30, 2025 |
|
$ |
|
$ | ||||||||||||
Series A and Series B Warrant
A summary of the warrant activity during the six months ended June 30, 2025, is presented below:
| Weighted | ||||||||||||||||
| Weighted | Average | |||||||||||||||
| Average | Remaining | Aggregate | ||||||||||||||
| Number of | Exercise | Life | Intrinsic | |||||||||||||
| Warrants | Price | In Years | Value | |||||||||||||
| Outstanding, December 31, 2024 |
|
$ |
|
|||||||||||||
| Granted | ||||||||||||||||
| Exercised | ||||||||||||||||
| Forfeited |
(
|
) |
|
|||||||||||||
| Outstanding, June 30, 2025 | $ | - | $ | |||||||||||||
| Exercisable, June 30, 2025 | $ | - | $ | |||||||||||||
The Company accounts for its stock-based compensation in accordance with the fair value recognition of ASC 718.
2024 Stock Incentive Plan
The Company did not grant options during the three months June 30, 2025 or 2024.
|
Number of Options |
Weighted Average Exercise Price |
Weighted Average Remaining Life In Years |
Intrinsic Value |
|||||||||||||
| Outstanding, December 31, 2024 |
|
$ |
|
|||||||||||||
| Granted |
|
|||||||||||||||
| Exercised |
|
|||||||||||||||
| Forfeited |
|
|||||||||||||||
| Outstanding, June 30, 2025 |
|
$ |
|
$ | ||||||||||||
| Exercisable, June 30, 2025 |
|
$ |
|
$ | ||||||||||||
| 17 |
| Options Outstanding | Options Exercisable | |||||||||||||
| Exercise Price |
Outstanding Number of Options |
Weighted Average Remaining Life In Years |
Exercisable Number of Options |
|||||||||||
| $ |
|
|
||||||||||||
|
|
|
|||||||||||||
Total compensation expense related to options was $ and $ for the three and six months ended June 30, 2025. As of June 30, 2025, there was future compensation cost of $ with a weighted average recognition period of years.
The aggregate intrinsic value totaled $ and was based on the Company’s closing stock price of $ as of June 30, 2025, which would have been received by the option holders had all option holders exercised their options as of that date.
Stock-Based Compensation Expense
|
For the Three Months Ended
|
Unrecognized at
|
Weighted Average Remaining Amortization
|
||||||||||
| June 30, 2025 | June 30, 2025 | Period (Years) | ||||||||||
| General and administrative | $ |
|
$ |
|
||||||||
| Total | $ |
|
$ |
|
||||||||
|
For the Six Months Ended
|
Unrecognized at
|
Weighted Average Remaining Amortization
|
||||||||||
| June 30, 2025 | June 30, 2025 | Period (Years) | ||||||||||
| General and administrative | $ |
|
$ |
|
||||||||
| Total | $ |
|
$ |
|
||||||||
NOTE 15 – FAIR VALUE MEASUREMENTS
Fair value measurements discussed herein are based upon certain market assumptions and pertinent information available to management as of and during the six months ended June 30, 2025. The carrying amounts of cash equivalents, accounts receivable, other current assets, other assets, accounts payable, and accrued expenses approximated their fair values as of the six months ended June 30, 2025, due to their short-term nature.
| 18 |
On
April 22, 2025, the Company entered into a bundled non-cash transaction in which it issued
shares
of Series A Preferred Stock (Series A Preferred) and warrants (Series A Preferred Warrants) to purchase
The following table sets forth a summary of the Company’s assets and liabilities that are measured at fair value on a recurring basis:
| June 30, 2025 | December 31, 2024 | |||||||
| Fair Value Level 1 | Cash Equivalents | Cash Equivalents | ||||||
| Money market funds | $ |
|
$ |
|
||||
| Total debt investments | $ |
|
$ |
|
||||
| Fair Value Level 2 | Series A Preferred Stock | Series A Preferred Warrants | Series A Preferred Stock | Series A Preferred Warrants | ||||||||||||
| Non-recurring fair value | $ |
|
$ |
|
$ | $ | ||||||||||
| Total non-recurring fair value | $ |
|
$ |
|
$ | $ | ||||||||||
NOTE 16 – LEASES
The Company is party to two leases: (i) office space in Centerville, Utah (the “Centerville Lease”) and (ii) a warehouse in North Salt Lake City, Utah (the “SLC Lease”). The Centerville lease is scheduled to expire in May 2028 and the SLC Lease is scheduled to expire in November 2025. There were no material changes to the Company’s lease arrangements during the six months ended June 30, 2025. Additional information regarding the Company’s lease arrangements is included in Note 20 – Leases the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.
When
measuring lease liabilities for leases that were classified as operating leases, the Company discounted lease payments using its estimated
incremental borrowing rate at lease inception point. The weighted average incremental borrowing rate applied was
The following table presents net lease cost and other supplemental lease information:
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Lease cost | ||||||||
| Operating lease cost (cost resulting from lease payments) | $ |
|
$ |
|
||||
| Net lease costs | $ |
|
$ |
|
||||
| Operating lease - operating cash flows (fixed payments) | $ |
|
$ |
|
||||
| Operating lease - operating cash flows (liability reduction) | $ |
|
$ |
|
||||
| Non-current leases - right-of-use assets | $ |
|
$ |
|
||||
| Current liabilities - operating lease liabilities | $ |
|
$ |
|
||||
| Non-current liabilities - operating lease liabilities | $ |
|
$ |
|
||||
| 19 |
Future minimum payments under non-cancellable leases for operating leases for the remaining terms of the leases following the six months ended June 30, 2025, are as follows:
| Fiscal Year | Operating Leases | |||
| 2025 | $ |
|
||
| 2026 |
|
|||
| 2027 |
|
|||
| 2028 |
|
|||
| Total future minimum lease payments | $ |
|
||
| Amount representing interest |
(
|
) | ||
| Present value of net future minimum lease payments | $ |
|
||
NOTE 17 – SEGMENT INFORMATION
The
Company currently operates as
In addition to the significant expense categories included within net loss presented on the Company’s Consolidated Statements of Operations, see below for disaggregated amounts that comprise consulting, contract labor, personnel, business development, royalty, and marketing expenses:
| For The Three Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Consulting expenses | $ |
|
$ |
|
||||
| Contract labor |
(
|
) |
|
|||||
| Personnel expenses |
|
|
||||||
| Business development expenses |
|
|
||||||
| Royalty expenses |
|
|
||||||
| Marketing expenses |
|
|
||||||
| Other expenses * |
|
|
||||||
| Total operating expenses | $ |
|
$ |
|
||||
| * |
|
| For The Six Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Consulting expenses | $ |
|
$ |
|
||||
| Contract labor |
|
|
||||||
| Personnel expenses |
|
|
||||||
| Business development expenses |
|
|
||||||
| Royalty expenses |
|
|
||||||
| Marketing expenses |
|
|
||||||
| Other expenses * |
|
|
||||||
| Total operating expenses | $ |
|
$ |
|
||||
| * |
|
| 20 |
NOTE 18 – COMMITMENTS AND CONTINGENCIES
Legal Claims
There are no material pending legal proceedings in which the Company or any of its subsidiaries is a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of its voting securities, or security holder is a party adverse to the Company, or has a material interest adverse to the Company.
NOTE 19 – CONCENTRATION OF CREDIT RISK
Cash Deposits
Financial
instruments that potentially subject the Company to concentrations of credit risk consist principally of cash deposits. Accounts at each
institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $
NOTE 20 – SUBSEQUENT EVENTS
PIPE Convertible Notes and Issuance of Series A Preferred Stock
On
July 21, 2025, in connection with the Exchange Agreements dated April 22, 2025, (i) holders of the Company’s PIPE Convertible Notes
agreed to waive the remaining closing condition to the Note Exchange, and the exchange was consummated. PIPE Convertible Notes with an
aggregate principal amount of $
On
July 21, 2025, a holder of Series A Preferred Warrants to purchase
Issuance of Common Stock
Subsequent to June 30, 2025, the Company issued an aggregate of shares of Class A common stock with fair values ranging from $ - $ per share to Series A Preferred Stockholders in connection with the conversion of outstanding Series A Preferred Stock, accrued interest, and make-good provisions.
| 21 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Note Regarding Forward-Looking Statements
The following discussion highlights the current operating environment and summarizes the financial position of Trugolf Holdings, Inc. and its subsidiaries as of June 30, 2025, and should be read in conjunction with (i) the unaudited interim condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q (“Quarterly Report”) and (ii) the audited consolidated financial statements and accompanying notes thereto included in our 2024 Annual Report on Form 10-K for the year ended December 31, 2024.
Unless the context otherwise requires, references in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” to “we”, “us”, “our”, and “the Company” are intended to refer to the business and operations of TruGolf.
This Form 10-Q contains certain forward-looking statements. Historical results may not indicate future performance. Our forward-looking statements reflect our current views about future events, are based on assumptions and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those contemplated by these statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” or “continue” or the negative of these terms or other comparable terminology. These statements include statements regarding the intent, belief or current expectations of us and members of our management team, as well as the assumptions on which such statements are based. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks set forth in the section entitled “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, as filed with the U.S. Securities and Exchange Commission (the “SEC”) on April 15, 2025, any of which may cause our company’s or our industry’s actual results, levels of activity, performance or achievements expressed or implied in our forward-looking statements. These risks and factors include, by way of example and without limitation:
| ● | the occurrence of any event, change, or other circumstances, including the outcome of any legal proceedings that may be instituted against us; | |
| ● | the ability to maintain the listing of our securities on Nasdaq, and the potential liquidity and trading of our securities; | |
| ● | the risk of disruption to our current plans and operations; | |
| ● | the ability to recognize the anticipated benefits of our business and the Business Combination, which may be affected by, among other things, competition and the ability to grow, manage growth profitably, and retain key employees; | |
| ● | costs related to our business; | |
| ● | changes in applicable laws or regulations; | |
| ● | our ability to meet future capital requirements to fund our operations, which may involve debt and/or equity financing, and to obtain such debt and/or equity financing on favorable terms, and our sources and uses of cash; | |
| ● | our ability to maintain existing license agreements; | |
| ● | our ability to achieve and maintain profitability in the future; | |
| ● | our financial performance; and | |
| ● | other factors disclosed under the section entitled “Risk Factors”. |
Company Overview
Corporate History
TruGolf Nevada, was formed as a Utah corporation on October 4, 1995, under the name TruGolf Incorporated, and was a subsidiary of Access Software. On June 9, 1999, TruGolf Nevada changed its name to TruGolf, Inc. Upon the acquisition of Access Software by Microsoft Corp. in August 1999, the core programming and graphics team of the LinksTM video game series were spun out to TruGolf Nevada.
Effective on April 26, 2016, TruGolf Nevada filed Articles of Merger with the State of Utah, Department of Commerce, and on April 28, 2016, TruGolf Nevada filed Articles of Merger with the Secretary of State of Nevada, pursuant to which TruGolf, Inc., a Utah corporation, merged with and into TruGolf Nevada, pursuant to a Plan of Merger. TruGolf Nevada was the surviving corporation and, in connection with the Plan of Merger, TruGolf Nevada affected a four-for-one forward stock split of its outstanding common stock.
TruGolf Holdings, Inc. (f/k/a Deep Medicine Acquisition Corp.) (“TruGolf”, and together with its subsidiaries, the “Company”), was incorporated on July 8, 2020, as a Delaware corporation and formed for the purpose of effecting a business combination, with no material operation of its own.
| 22 |
On March 31, 2023, we entered into an Agreement and Plan Of Merger (the “Merger Agreement”) with TruGolf Nevada, DMAQ Merger Sub Inc. (“Merger Sub”), a Nevada corporation and our wholly-owned subsidiary, Bright Vision Sponsor LLC, a Delaware limited liability company, in the capacity as representative for our stockholders at the time of the Merger Agreement, Christopher Jones, an individual, in the capacity as TruGolf Nevada’s representative, and TruGolf Nevada (together, the “Merger Parties”). On July 21, 2023, the Merger Parties entered into an Amended and Restated Agreement and Plan of Merger (the “Restated Merger Agreement”), pursuant to which the Merger Agreement was amended and restated to provide, among other things, that (i) contingent earnout shares will be issued after the Closing, if and when earned, upon the Company meeting the milestones specified in the Restated Merger Agreement, rather than being issued at the closing of the merger and being placed into escrow subject to potential forfeiture; and (ii) the share price of the Company’s common stock used in the calculation of the number of shares to be issued to the Sellers as merger consideration shall be $10.00, as opposed to the price at which the Company redeems the shares of common stock held by its public stockholders in connection with the closing of this business combination.
On January 31, 2024, we consummated the business combination (the “Closing”). As a result of the Closing and the transactions contemplated by the Merger Agreement, (i) Merger Sub merged with and into TruGolf Nevada, with TruGolf Nevada surviving the Merger as a wholly-owned subsidiary of TruGolf, and (ii) TruGolf’s name was changed from Deep Medicine Acquisition Corp. to TruGolf Holdings, Inc. TruGolf’s Class A common stock commenced trading on the Nasdaq Global Market LLC under the ticker “TRUG” on February 1, 2024.
Business Overview
Since 1983, the Company has been passionate about driving the golf industry with innovative, indoor golf solutions. We build products that capture the spirit of golf. Our mission is to help grow the game by making it more available, more approachable and more affordable, through technology – because we believe golf is for everyone.
Our team has built award-winning video games (including Links, a popular sports game for PC), innovative hardware solutions, and an all-new e-sports platform to connect golfers around the world with TruGolf E6 Connect Software, our premier software engine. Since TruGolf’s beginning, we have continued to define and redefine what is possible with golf technology.
In addition to offering a variety of custom, professional, and portable golf simulators, TruGolf’s latest launch monitor, Apogee, was created to improve accuracy and to make using the launch monitor easier. Features of Apogee include: a unique Apogee Voice Assistant, a voice command system that allows users to navigate their TruGolf E6 Connect Software gameplay within rounds and practice sessions; Laser Launchpad, a laser indicator that shows users where to place the ball and when the system is ready to record a swing and Point-of-Impact (POI) slow-motion replay video.
Our suite of hardware offerings in the golf technology space is expansive, offering something for virtually everyone from gamers to beginners to professionals, and all consumers in between. Hardware offerings are sold through a global network of authorized resellers, retail outlets and direct-to-consumer through a dedicated TruGolf sales team. Our suite of hardware offerings ranges from entry level pricing at just under $400, to well over $100,000 for custom projects, creating a wide range of pricing options for nearly all consumers, and providing TruGolf with a competitive advantage in creating a wide consumer base as compared to its competitors (who often only focus in a narrow consumer price range).
TruGolf creates top golf technology software in the marketplace through its TruGolf E6 Connect and E6 Apex Software. Importantly, TruGolf’s software is designed not only for use with our suite of hardware offerings in the golf technology space, but also integrates with more than twenty-four third party golf technology hardware manufacturers, translating to a market integration coverage equal to roughly 90% of golf technology hardware in the global market space, which allows peer-to-peer play across these golf technology hardware manufacturers, allowing for a unification of the golf technology space. TruGolf’s software records, on average, over 725,000 indoor golf shots per day. TruGolf’s E6 Connect Software is both PC and iOS compatible and can be used both indoors and outdoors.
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TruGolf has leveraged its unique position as one of the industry leaders in both hardware and software golf technology solutions to organize and found the Virtual Golf Association (VGA). The VGA is a gamified virtual economy that takes place inside the TruGolf E6 Connect Software. Users have a chance to earn points through play, practice, and more – providing a worldwide leaderboard of connected indoor golfers. Each shot users take rewards them with points. These points can be used to purchase in-game enhancements, or to enter virtual golf tournaments with real world prizes. The VGA is broken into three models:
| ● | Game Analysis – rewards TruGolf software users who measure their game. Users can set specific goals (e.g., shots hit per month, speed and distance gains, dispersion reduction) and earn points for hitting milestones. At the end of each month, users can see how they compared against all other users utilizing the Game Analysis features. | |
| ● | Connected Golf – rewards users for joining with their friends and playing golf online. Earn points for playing a new course or linking up to play nine holes with another player utilizing TruGolf software. | |
| ● | Virtual Golf Association Events – events are worldwide leaderboard format, flighted by handicap, where users play and compete to shoot the lowest score. These contests include stroke play, closest to the pin, match play, stableford, and more. Users earn points based on how they finish in their division. |
In totality, TruGolf’s business model is designed to be positioned as the hub of golf technology, with groundbreaking hardware technologies that we believe can become the industry standard and unify the industry as a whole by serving as the leader of golf technology software solutions through its TruGolf’s software.
Reverse Stock Split
On June 23, 2025, the Company filed a Certificate of Amendment to the Company’s Amended and restated Certificate of Incorporation with the Secretary of the State of Delaware to effect a 1-for-50 reverse stock split of the Class A and Class B shares of the Company’s issued and outstanding common stock, effective as of 12:01 a.m. Eastern Time on June 23, 2025 (the “Reverse Stock Split”) and began trading on a Reverse Stock Split-adjusted basis on Nasdaq on June 23, 2025. As a result of the Reverse Stock Split, the number of Class A common shares outstanding was reduced from 40,532,150 to 810,617 and the number of Class B common shares outstanding was reduced from 10,000,000 to 200,000, and the number of authorized shares of common stock remained unchanged. All share amounts have been retroactively adjusted for the Reverse Stock Split.
Revenue
The Company derives our revenue through the sales of our golf simulators, perpetual software licenses, content software subscriptions, and franchising.
Results of Operations
Comparison of the Six Months Ended June 30, 2025 to the Six Months Ended June 30, 2024
Our financial results for the six months ended June 30, 2025 are summarized as follows in comparison to the six months ended June 30, 2024.
| 2025 | 2024 | Variance | ||||||||||
| Revenue, net | $ | 9,700,094 | $ | 8,885,185 | $ | 814,909 | ||||||
| Cost of revenue | 4,125,158 | 3,259,234 | 865,924 | |||||||||
| Total gross profit | 5,574,936 | 5,625,951 | (51,015 | ) | ||||||||
| | ||||||||||||
| Operating Expenses: | ||||||||||||
| Royalties | 364,015 | 553,038 | (189,023 | ) | ||||||||
| Salaries, wages and benefits | 2,953,026 | 2,958,881 | (5,885 | ) | ||||||||
| Selling, general and administrative | 5,362,145 | 3,842,758 | 1,519,387 | |||||||||
| Operating loss | (3,104,250 | ) | (1,728,726 | ) | (1,375,524 | ) | ||||||
| Other income (expenses) | (2,887,542 | ) | (1,142,466 | ) | (1,745,076 | ) | ||||||
| Loss before income taxes | $ | (5,991,792 | ) | $ | (2,871,192 | ) | $ | (3,120,600 | ) | |||
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Revenues
Revenues increased by $814,909, or 9%, for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024. The increase is primarily attributable to the increase of our product acceptance and greater penetration in the industry market.
Cost of Revenues
Cost of revenues increased by $865,924, or 27%, for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024. The increase is primarily attributable to an increase in inventory adjustments of $170,982 and an increase in costs related to the Company’s TruTrack product of approximately $830,541.
Operating Expenses
Total operating expenses increased by $1,324,509, or 18%, for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024. Selling, general and administrative expenses increased by $1,519,387, or 40%, due primarily to an increase in amortization expense related to capitalized software of $296,138, an increase in marketing expense of $336,859, and an increase in professional fees of $601,256.
Other Income (Expenses)
Other income (expenses) increased by $1,745,076, or 153%, for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024. The increase is primarily attributable to interest expense, amortization expense of the PIPE Convertible Notes debt discount, the write-off of remaining debt discounts upon the conversion of related to the PIPE Convertible Notes, and the make-good interest expense upon the conversion of related PIPE Convertible Notes.
Comparison of the Three Months Ended June 30, 2025 to the Three Months Ended June 30, 2024
Our financial results for the three months ended June 30, 2025 are summarized as follows in comparison to the three months ended June 30, 2024.
| 2025 | 2024 | Variance | ||||||||||
| Revenue, net | $ | 4,310,864 | $ | 3,873,163 | $ | 437,701 | ||||||
| Cost of revenue | 2,398,959 | 1,300,212 | 1,098,747 | |||||||||
| Total gross profit | 1,911,905 | 2,572,951 | (661,046 | ) | ||||||||
| | ||||||||||||
| Operating Expenses: | ||||||||||||
| Royalties | 138,695 | 223,150 | (84,455 | ) | ||||||||
| Salaries, wages and benefits | 1,006,210 | 1,117,287 | (111,077 | ) | ||||||||
| Selling, general and administrative | 2,637,026 | 2,017,556 | 619,470 | |||||||||
| Operating loss | (1,870,026 | ) | (785,042 | ) | (1,084,984 | ) | ||||||
| Other income (expenses) | (1,451,444 | ) | (784,287 | ) | (667,157 | ) | ||||||
| Loss before income taxes | $ | (3,321,470 | ) | $ | (1,569,329 | ) | $ | (1,752,141 | ) | |||
Revenues
Revenues increased by $437,701, or 11%, for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024. The increase is primarily attributable to the increase of our product acceptance and greater penetration in the industry market.
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Cost of Revenues
Cost of revenues increased by $1,098,747, or 85%, for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024. The increase is primarily attributable to an increase in inventory adjustments of $248,624 and an increase in costs related to the Company’s TruTrack product of approximately $739,425.
Operating Expenses
Total operating expenses increased by $423,938, or 13%, for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024. Selling, general and administrative expenses increased by $619,470, or 31%, due primarily to an increase in marketing of $113,970, an increase in professional fees of $377,379, and an increase in amortization expense related to capitalized software of $130,169. This was offset by a decrease in salaries, wages and benefits of $111,077, or 10%, due primarily to an increase in salaries being capitalized for time spent on developing new versions of the Company’s platform software.
Other Income (Expenses)
Other income (expenses) increased by $667,157, or 85%, for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024. The increase is primarily attributable to interest expense, amortization expense of the PIPE Convertible Notes debt discount, the write-off of remaining debt discounts upon the conversion of related to the PIPE Convertible Notes, and the make-good interest expense upon the conversion of related PIPE Convertible Notes.
Liquidity and Capital Resources
As of June 30, 2025, we had cash on hand of $10,159,359 and a working capital surplus of $6,554,656, as compared to cash on hand of $10,882,077 and a working capital deficiency of $982,237 as of December 31, 2024. The increase in working capital surplus is primarily attributable to the recognition of the $5,651,310 current asset related to the fair value of Series A Preferred Stock and related Series A warrants issued in connection with the bundled PIPE Exchange Agreement transaction. These instruments are classified as current assets because they are expected to be used in the settlement of outstanding obligations within the next twelve months. The fair value was determined at the time of issuance based on the observable market price of the Company’s common stock and the contractual conversion provisions of the Series A Preferred Stock.
The Company’s operating activities consume the majority of its cash resources. The Company anticipates that it will continue to incur operating losses as it executed its development plans for 2025, as well as other potential strategic and business development initiatives. In addition, the Company has had and expects to have negative cash flows from operations, at least into the near future. The Company has previously funded, and plans to continue funding, these losses with the sale of equity and convertible notes. The accompanying unaudited condensed consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.
Working Capital
| June 30, | December 31, | |||||||
| 2025 | 2024 | |||||||
| Current assets | $ | 20,985,256 | $ | 14,792,931 | ||||
| Current liabilities | 18,165,590 | 15,775,168 | ||||||
| Working capital surplus (deficiency) | $ | 2,819,666 | $ | (982,237 | ) | |||
The increase in current assets is primarily due to the recording of the $5,651,310 asset related to the fair value of Series A Preferred Stock and Series A Warrants as noted above. The increase in current liabilities is primarily due to the reclass of $3,734,900 in PIPE Convertible Notes from non-current liabilities to current liabilities as a result of the PIPE Convertible Notes being extinguished on July 21, 2025 as part of the April 22, 2025 PIPE Exchange Agreements.
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Cash Flows
| For the Six Months Ended June 30, | ||||||||
| 2025 | 2024 | |||||||
| Cash Flows: | ||||||||
| Net cash provided by (used in) operating activities | $ | (1,354,546 | ) | $ | 2,615,975 | |||
| Net cash used in investing activities | $ | (1,614,778 | ) | $ | (1,433,513 | ) | ||
| Net cash provided by financing activities | $ | 2,246,572 | $ | 71,246 | ||||
Operating Activities
Net cash used in operating activities was $1,354,546 for the six months ended June 30, 2025, which was primarily due to the net loss of $5,991,792 and an increase in accounts receivable, net of $861,552, which was partially offset by non-cash expenses of $3,201,997, an increase in deferred revenue of $1,896,218, and an increase in accrued and other current liabilities of $773,570.
Net cash provided by operating activities was $2,615,975 for the six months ended June 30, 2024, which was primarily due to the net loss of $2,871,192 which was offset by the liquidation of the marketable securities account of $2,478,953 and an increase in accounts payable of $1,149,909, an increase in deferred revenue of $1,274,900, and an increase in accrued interest payable of $785,306. The change in the remaining operating assets and liabilities was $567,271 and non-cash expenses of $365,370.
Investing Activities
Net cash used in investing activities was $1,614,778 for the six months ended June 30, 2025, which was the result of an increase in capitalized software of $1,568,778 and the purchase of equipment of $45,966.
Net cash used in investing activities was $1,433,513 for the six months ended June 30, 2024, which was the result of an increase in capitalized software of $1,433,438.
Financing Activities
Net cash provided by financing activities was $2,246,572 for the six months ended June 30, 2025, which was primarily due to $2,520,000 of net proceeds from PIPE Convertible Notes.
Net cash provided by financing activities was $71,246 for the six months ended June 30, 2024, the Company received net proceeds from the Merger of $2,325,315, received net proceeds from PIPE Convertible Notes of $4,185,000, paid off the variable rate line of credit of $1,980,937 and made debt payments of $268,500.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes in market risk from the information provided in Item 7A “Quantitative and Qualitative Disclosures About Market Risk” of TruGolf Holdings Inc.’s Annual Report on Form 10-K for the year ended December 31, 2024.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer, who serves as our principal executive officer, and Chief Financial Officer, who serves as our principal accounting officer, as appropriate, to allow timely decisions regarding required disclosures. In designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives.
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Our management, with the participation of our Chief Executive Officer and acting Chief Financial Officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation and subject to the foregoing, our management concluded that, our disclosure controls and procedures were not effective due to the material weaknesses in internal control over financial reporting described below.
Management’s Annual Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is a process designed under the supervision of its principal executive and principal financial officers 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 its consolidated financial statements for external reporting purposes in accordance with U.S. generally accepted accounting principles.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.
Material Weaknesses in Internal Control over Financial Reporting
Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2024 based on the framework established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management has determined that our internal control over financial reporting as of June 30, 2025 was not effective.
A material weakness, as defined in the standards established by the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
The ineffectiveness of our internal control over financial reporting was due to the following material weaknesses which are indicative of many small companies with small number of staff:
| ● | lack of risk assessment procedures on internal controls to detect financial reporting risks in a timely manner; | |
| ● | inadequate segregation of duties due to limited personnel consistent with control objectives; | |
| ● | lack of documentation on policies and procedures that are critical to the accomplishment of financial reporting objectives; and | |
| ● | lack of a full time Chief Financial Officer and personnel with experience and expertise in public company accounting and internal control over financial reporting. |
Management’s Plan to Remediate the Material Weakness
Our management plans to implement measures designed to ensure that control deficiencies contributing to the material weakness are remediated, such that these controls are designed, implemented, and operating effectively. The remediation actions planned include:
| ● | identify gaps in our skills base and the expertise of our staff required to meet the financial reporting requirements of a public company; | |
| ● | develop policies and procedures on internal control over financial reporting and monitor the effectiveness of operations on existing controls and procedures; and | |
| ● | continue the search for a qualified individual to fill our Chief Financial Officer position. |
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Our management will continue to monitor and evaluate the relevance of our risk-based approach and the effectiveness of our internal controls and procedures over financial reporting on an ongoing basis and is committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.
Changes in Internal Control Over Financial Reporting
Other than described above there have been no changes in our internal control over financial reporting that occurred during our second quarter of 2025 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.
PART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We are not currently party to any lawsuit or proceeding which, in the opinion of management, is likely to have a material adverse effect on us or our business.
ITEM 1A. RISK FACTORS
Except as set forth below, there have been no material changes from the risk factors previously disclosed in “Item 1A. Risk Factors” of our 2024 Annual Report.
We have in the past failed to maintain compliance with all applicable continued listing requirements of the Nasdaq Stock Market, and if we fail to maintain compliance with all applicable continued listing requirements of the Nasdaq Capital Market in the future, we will not be afforded traditional cure periods under Nasdaq rules and our Class A common stock may be delisted from Nasdaq, which could have an adverse impact on the liquidity and market price of our common stock.
On August 19, 2024, we received a delist notice from the Staff of Nasdaq notifying us that the listing of our Class A common stock was not in compliance with the minimum market value of publicly held securities requirement and the minimum shareholders’ equity requirement set forth in Nasdaq Listing Rules. On November 5, 2024, we received a delist notice from the Staff of Nasdaq notifying us that the listing of our Class A common stock was not in compliance with the minimum bid price requirement of $1.00 per share set forth in Nasdaq Listing Rules.
We requested a hearing before a Nasdaq hearing panel (the “Panel”) to present a plan to regain compliance with all the continued listing requirements of Nasdaq and such hearing was held May 15, 2025. On May 30, 2025, the Panel provided us an exception with various milestones to regain compliance, including with Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Rule”) until July 8, 2025 and the minimum shareholders’ equity requirement until July 30, 2025. In addition, the Panel directed that the listing of our Class A common stock be transferred to the Nasdaq Capital Market, effective at the open of business on June 3, 2025.
On July 17, 2025, the Staff confirmed that we had regained compliance with the Bid Price Rule as required by the Panel’s decision. On August 1, 2025, we received a letter from Nasdaq notifying us that we had demonstrated compliance with Nasdaq Listing Rule 5550(b)(1) (the “Equity Rule”), as required by the Panel’s decision, and, following our phase down to the Nasdaq Capital Market on June 3, 2025, we demonstrated compliance with the minimum market value of publicly held securities required by Nasdaq Listing Rule 5550(a)(5).
Pursuant to the letter, in application of Listing Rule 5815(d)(4)(B), we will be subject to a Mandatory Panel Monitor for a period of one year from the date of the letter. If, within that one-year monitoring period, the Staff finds us again out of compliance with the Equity Rule, notwithstanding Rule 5810(c)(2), we will not be permitted to provide the Staff with a plan of compliance with respect to that deficiency and Staff will not be permitted to grant additional time for us to regain compliance with respect to that deficiency, nor will we be afforded an applicable cure or compliance period pursuant to Rule 5810(c)(3). Instead, Staff will issue a delist determination letter and we will have an opportunity to request a new hearing.
Delisting from Nasdaq would adversely affect our ability to raise additional financing through the public or private sale of equity securities, may significantly affect the ability of investors to trade our securities and may negatively affect the value and liquidity of our common stock. Delisting also could have other negative results, including the potential loss of employee confidence, the loss of institutional investors and general investors that will consider investing in our common stock, a reduction in the number of market makers in our common stock, a reduction in the availability of information concerning the trading prices and volume of our common stock, a reduction in the number of broker-dealers willing to execute trades in shares of our common stock or interest in business development opportunities. Further, we would likely become a “penny stock”, which would make trading of our common stock more difficult.
The conversion of our outstanding Series A Preferred Stock, or any additional shares of Series A PreferredStock we issue in the future upon the exercise of the Series A Preferred Warrants, into Class A common stock will dilute the ownership interest of our stockholders.
Our Series A Preferred Stock provide that if, while the Series A Preferred Stock are outstanding, we sell any Class A common stock and/or Class A common stock equivalents other than in connection with certain exempt issuances, at a purchase price per share less than the conversion price of the Series A Preferred Stock in effect immediately prior to such sale, then immediately after such sale the exercise price of the Series A Preferred Stock then in effect will be reduced to an amount equal to the new issuance price, and, the number of shares issuable upon conversion of the Series A Preferred Stock will be proportionately adjusted such that the aggregate price will remain unchanged, subject to the floor price provided for in the Series A Preferred Stock. In addition, if on any six month anniversary after the date the Series A Preferred Stock are issued (each, a “Reset Date”), the conversion price then in effect is greater than the closing price of the Class A common stock as of such applicable Reset Date (each, a “Reset Price”), immediately after the close of trading on such applicable Reset Date the conversion price shall automatically lower to the Reset Price. Finally, if at any time on or after the date of issuance there occurs any stock split, stock dividend, stock combination recapitalization or other similar transaction involving the Class A common stock, the conversion price shall be reduced to 120% of the quotient determined by dividing (x) the sum of the volume weighted average price of the Class A common stock for each of the five trading days with the lowest volume weighted average price of the Class A common stock during the fifteen consecutive trading day period ending and including the trading day immediately preceding the sixteenth trading day after such event date, divided by (y) five. If the conversion price of the Series A Preferred Stock decreases, the number of shares underlying the Series A Preferred Stock will increase, which would materially dilute the ownership of our stockholders.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Except as previously reported by us on our Current Report on Form 8-K, during the period covered by this Quarterly Report on Form 10-Q, the Company did not sell any unregistered securities.
During the three months ended June 30, 2025, the Company issued an aggregate of 225,970 shares of Class A common stock with a fair value ranging from $8.80 - $50.00 per share pursuant to the conversion of $1,558,000 in principal and $1,082,194 in make whole interest related to the conversion of PIPE Convertible Notes and approximately $1,300,000 in principal related to the conversion of dividend notes payable.
During the three months ended June 30, 2025, the Company issued an aggregate of 165,663 shares of Class B common stock with a fair value of $33.00 per share pursuant to the conversion of approximately $2,600,000 in principal related to the conversion of dividend nots payable.
The transactions described above were undertaken in reliance upon the exemptions from registration afforded by Section 4(a)(2) of the Securities Act of 1933, as amended.
On April 22, 2025, the Company issued 1,885 shares of its Series A Preferred Stock, and Series A Preferred Warrants to purchase 37,033 shares of Series A Preferred Stock in connection with a bundled transaction involving the future settlement of outstanding PIPE Convertible Notes, and no cash proceeds were received by the Company. The Series A Preferred Stock and Series A Preferred Warrants were issued in reliance on the exemption from registration by Section 3(a)(9) of the Securities Act.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
None.
ITEM 5. OTHER INFORMATION
During
the quarter ended June 30, 2025, no director or officer
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ITEM 6. EXHIBITS
* Filed herewith.
** Furnished herewith
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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.
TRUGOLF HOLDINGS, INC.
| By: | /s/ Christopher (Chris) Jones | |
| Name: | Christopher (Chris) Jones | |
| Title: | Chief Executive Officer, Director, Interim Chief Financial Officer | |
| (Principal Executive Officer, Interim Principal Financial Officer and Interim Principal Accounting Officer) | ||
| Date: | August 19, 2025 |
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