TruGolf Holdings, Inc. 10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended September 30, 2025 ☐ 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: 001-40970 TRUGOLF HOLDINGS, INC. (Exact name of registrant as specified in its charter) Delaware 85-3269086 State or Other Jurisdiction of Incorporation or Organization (I.R.S. Employer Identification No.) 60 North 1400 , West Centerville , Utah 84014 (Address of Principal Executive Offices) (Zip Code) Registrant’s telephone number, including area code: (801) 298-1997 Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Class A Common Stock, $0.0001 par value TRUG The Nasdaq Stock Market LLC 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. Yes ☒ No ☐ 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). Yes ☒ No ☐ 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 ☐ Non-accelerated filer ☒ Smaller reporting company ☒ Emerging growth company ☒ 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 November 13, 2025, the latest practicable date, 2,386,402 shares of Class A common stock and 200,000 shares of Class B common stock outstanding. TRUGOLF HOLDINGS, INC. FORM 10-Q FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 TABLE OF CONTENTS Page PART I. FINANCIAL INFORMATION 3 ITEM 1. Financial Statements 3 Condensed Consolidated Balance Sheets as of September 30, 2025 (unaudited) and December 31, 2024 3 Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2025 and 2024 (unaudited) 4 Condensed Consolidated Statements of Changes in Stockholders’ Deficit for the Three and Nine Months Ended September 30, 2025 and 2024 (unaudited) 5 Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024 (unaudited) 6 Notes to Condensed Consolidated Financial Statements (unaudited) 7 ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 21 ITEM 3. Quantitative and Qualitative Disclosures about Market Risk 27 ITEM 4. Controls and Procedures 27 PART II. OTHER INFORMATION 28 ITEM 1. Legal Proceedings 28 ITEM 1A. Risk Factors 28 ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds 29 ITEM 3. Defaults Upon Senior Securities 30 ITEM 4. Mine Safety Disclosures 30 ITEM 5. Other Information 30 ITEM 6. Exhibits 30 SIGNATURES 31 2 PART I – FINANCIAL INFORMATION Item 1. Financial Statements TRUGOLF HOLDINGS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS September 30, December 31, 2025 2024 (Unaudited) ASSETS Current Assets: Cash and cash equivalents $ 11,435,121 $ 8,782,077 Restricted cash 2,100,000 2,100,000 Accounts receivable, net 2,246,756 1,399,153 Inventory, net 2,675,839 2,349,345 Prepaid expenses and other current assets 701,123 116,619 Other current assets - 45,737 Total Current Assets 19,158,839 14,792,931 Property and equipment, net 246,349 143,852 Capitalized software development costs, net 3,183,751 1,540,121 Right-of-use assets 364,253 634,269 Other long-term assets 31,023 31,023 Total Assets $ 22,984,215 $ 17,142,196 LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) Current Liabilities: Accounts payable $ 2,813,124 $ 2,819,702 Deferred revenue 6,186,620 3,113,010 Notes payable, current portion 10,573 10,001 Notes payable to related parties, current portion 2,668,500 2,937,000 Notes payable, current portion 2,668,500 2,937,000 Line of credit, bank 802,738 802,738 Dividend notes payable 118,362 4,023,923 Accrued interest 600,233 661,376 Accrued and other current liabilities 1,594,330 999,307 Accrued and other current liabilities - assumed in Merger 45,008 45,008 Lease liability, current portion 159,834 363,102 Total Current Liabilities 14,999,322 15,775,167 Non-current Liabilities: Notes payable, net of current portion 1,716 9,732 Note payables to related parties, net of current portion 505,500 624,000 Note payables, net of current portion 505,500 624,000 PIPE loan payable, net - 4,068,953 Gross sales royalty payable 1,000,000 1,000,000 Lease liability, net of current portion 220,551 305,125 Total Liabilities 16,727,089 21,782,977 Commitments and Contingencies - Stockholders’ Equity (Deficit): Preferred stock, $ 0.0001 par value, 10 million shares authorized Series A Convertible Preferred Stock, $ 0.0001 par value per share; authorized - 50,000 shares; 8,189 and 0 shares issued and outstanding, respectively. Liquidation preference of $ 3,140,519 as of September 30, 2025. 1 - Preferred stock value 1 - Common stock, $ 0.0001 par value, 660,000,000 shares authorized: Common stock - Series A, $ 0.0001 par value, 650 million shares authorized; 1,894,519 and 522,411 shares issued and outstanding, respectively 189 52 Common stock - Series B, $ 0.0001 par value, 10 million shares authorized; 200,000 and 34,337 shares issued and outstanding, respectively 20 3 Common stock value 20 3 Treasury stock at cost, 94 shares of common stock held, respectively ( 2,037,000 ) ( 2,037,000 ) Additional paid-in capital 45,111,416 18,551,660 Accumulated deficit ( 36,817,500 ) ( 21,155,496 ) Total Stockholders’ Equity (Deficit) 6,257,126 ( 4,640,781 ) Total Liabilities and Stockholders’ Equity (Deficit) $ 22,984,215 $ 17,142,196 The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements. 3 TRUGOLF HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024 For the For the For the For the Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024 Revenue, net $ 4,105,965 $ 6,236,795 $ 13,806,059 $ 15,121,980 Cost of revenue 1,258,628 1,924,093 5,383,786 5,183,328 Total gross profit 2,847,337 4,312,702 8,422,273 9,938,652 Operating expenses: Royalties 56,465 166,631 420,480 719,668 Salaries, wages and benefits 564,624 1,695,678 3,517,650 4,654,560 Selling, general and administrative 3,339,742 1,578,112 8,701,887 5,420,872 Total operating expenses 3,960,831 3,440,421 12,640,017 10,795,100 Loss from operations ( 1,113,494 ) 872,281 ( 4,217,744 ) ( 856,448 ) Other (expenses) income: Interest income 78,725 38,592 198,151 105,800 Interest expense ( 108,315 ) ( 971,048 ) ( 3,115,883 ) ( 2,176,810 ) Loss on extinguishment of debt ( 6,135,160 ) - ( 6,135,160 ) - Loss on investment - - - ( 3,912 ) Other income - - 600 - Total other expense ( 6,164,750 ) ( 932,456 ) ( 9,052,292 ) ( 2,074,922 ) Loss from operations before provision for income taxes ( 7,278,244 ) ( 60,175 ) ( 13,270,036 ) ( 2,931,370 ) Provision for income taxes - - - - Net loss $ ( 7,278,244 ) $ ( 60,175 ) $ ( 13,270,036 ) $ ( 2,931,370 ) Net loss per common share Series A - basic and diluted $ ( 4.87 ) $ ( 0.00 ) $ ( 13.36 ) $ ( 0.28 ) Weighted average shares outstanding - basic and diluted 1,495,411 13,380,737 993,182 10,550,277 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 NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 (Unaudited) Shares Amount Shares Amount Shares Amount Shares Amount Capital Gain (Loss) Deficit Total Accumulated Series A Additional Other Preferred Stock Class A Common Stock Class B 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 - $ - 13,098 $ 120 - $ - ( 94 ) $ ( 2,037,000 ) $ 10,479,738 $ ( 1,662 ) $ ( 12,358,924 ) $ ( 3,917,728 ) Realized gain in fair value of short-term investments - - - - - - - - - 1,662 - 1,662 Common stock exchanged in Merger - - ( 13,098 ) ( 120 ) - - - - ( 3,854,573 ) - - ( 3,854,693 ) Issuance of common stock - Series A exchanged in Merger - - 230,765 23 - - - - ( 23 ) - - - Issuance of common stock - Series B issued in Merger - - - - 34,337 3 - - ( 3 ) - - - Net loss - - - - - - - - - - ( 1,301,864 ) ( 1,301,864 ) Balance as of March 31, 2024 - $ - 230,765 $ 23 34,337 $ 3 ( 94 ) $ ( 2,037,000 ) $ 6,625,139 $ - $ ( 13,660,788 ) $ ( 9,072,623 ) Revaluation of costs of Merger - - - - - - - - 135,000 - ( 1,152 ) 133,848 Net loss - - - - - - - - - - ( 1,569,329 ) ( 1,569,329 ) Balance as of June 30, 2024 - $ - 230,765 $ 23 34,337 $ 3 ( 94 ) $ ( 2,037,000 ) $ 6,760,139 $ - $ ( 15,231,269 ) $ ( 10,508,104 ) Common stock issued for interest - - 6,995 1 - - - - ( 341,694 ) ( 3 ) ( 341,696 ) Net loss - - - - - - - - - - ( 60,175 ) ( 60,175 ) Balance as of September 30, 2024 - $ - 237,760 $ 24 34,337 $ 3 ( 94 ) $ ( 2,037,000 ) $ 6,418,445 $ - $ ( 15,291,447 ) $ ( 10,909,975 ) Balance at December 31, 2024 - $ - 522,411 $ 52 34,337 $ 3 ( 94 ) $ ( 2,037,000 ) $ 18,551,660 $ - $ ( 21,155,496 ) $ ( 4,640,781 ) Issuance of common stock for PIPE interest and make good - - 48,048 5 - - - - 1,087,508 - - 1,087,513 Issuance of common stock for conversion of PIPE notes - - 13,240 1 - - - - 1,654,999 - - 1,655,000 Stock-based compensation - options - - - - - - - - 3,341 - - 3,341 Net loss - - - - - - - - - - ( 2,670,322 ) ( 2,670,322 ) Balance as of March 31, 2025 - $ - 583,699 $ 58 34,337 $ 3 ( 94 ) $ ( 2,037,000 ) $ 21,297,508 $ - $ ( 23,825,818 ) $ ( 4,565,249 ) Issuance of common stock for PIPE interest and make good - - 111,148 11 - - - - 1,082,183 - - 1,082,194 Issuance of common stock for conversion of PIPE notes - - 31,160 3 - - - - 1,557,997 - - 1,558,000 Issuance of common stock for conversion of dividend note payable - - 84,662 8 165,663 17 - - 3,905,536 - - 3,905,561 Reverse stock split adjustment - - ( 52 ) - - - - - - - - - Stock-based compensation - options - - - - - - - - 3,342 - - 3,342 Issuance of Series A Preferred and associated warrants 1,885 - - - - - - - 5,651,310 - - 5,651,310 Net loss - - - - - - - - - - ( 3,321,470 ) ( 3,321,470 ) Balance as of June 30, 2025 1,885 $ - 810,617 $ 80 200,000 $ 20 ( 94 ) $ ( 2,037,000 ) $ 33,497,876 $ - $ ( 27,147,288 ) $ 4,313,688 Balance 1,885 $ - 810,617 $ 80 200,000 $ 20 ( 94 ) $ ( 2,037,000 ) $ 33,497,876 $ - $ ( 27,147,288 ) $ 4,313,688 Issuance of Series A Preferred 3,938 - - - - - - - 4,218,840 - - 4,218,840 Issuance of Series A Preferred for conversion of warrants 5,555 1 - - - - - - 4,999,499 - - 4,999,500 Issuance of common stock for conversion of Series A Preferred ( 3,189 ) - 505,434 51 - - - - ( 51 ) - - - Issuance of common stock for conversion of Series A Preferred dividends - - 578,468 58 - - - - 2,391,910 - ( 2,391,968 ) - Stock-based compensation - options - - - - - - - - 3,342 - - 3,342 Stock-based compensation - options - - - - - - - - 3,342 - - 3,342 Net loss - - - - - - - - - - ( 7,278,244 ) ( 7,278,244 ) Balance as of September 30, 2025 8,189 $ 1 1,894,519 $ 189 200,000 $ 20 ( 94 ) $ ( 2,037,000 ) $ 45,111,416 $ - $ ( 36,817,500 ) $ 6,257,126 Balance 8,189 $ 1 1,894,519 $ 189 200,000 $ 20 ( 94 ) $ ( 2,037,000 ) $ 45,111,416 $ - $ ( 36,817,500 ) $ 6,257,126 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 Nine Months Ended Nine Months Ended September 30, 2025 September 30, 2024 Cash flows from operating activities: Net loss $ ( 13,270,036 ) $ ( 2,931,370 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 747,473 331,728 Amortization of convertible notes discount 359,037 47,447 Amortization of right-of-use asset 270,016 251,612 Bad debt expense 74,818 - Change in OCI - 1,662 Loss on extinguishment of debt 6,135,160 - Stock issued for make good provisions on debt conversion 2,169,707 - Stock options issued to employees 10,025 - Stock issued for interest - 341,696 Changes in operating assets and liabilities: Accounts receivable, net ( 922,416 ) ( 2,143,225 ) Inventory, net ( 326,494 ) ( 205,146 ) Prepaid expenses ( 584,504 ) 163,101 Other current assets 45,737 2,478,953 Accounts payable ( 6,579 ) 228,437 Deferred revenue 3,073,610 3,470,881 Accrued interest payable ( 61,143 ) 1,208,014 Accrued and other current liabilities 595,020 75,576 Other liabilities - ( 1,148 ) Lease liability ( 287,842 ) ( 246,437 ) Net cash provided by (used in) operating activities ( 1,978,411 ) 3,071,781 Cash flows from investing activities: Purchases of property and equipment ( 98,004 ) - Capitalized software, net ( 2,395,596 ) ( 1,967,418 ) Reduction in long term assets - ( 115 ) Net cash used in investing activities ( 2,493,600 ) ( 1,967,533 ) Cash flows from financing activities: Proceeds from PIPE loans, net of discount 2,520,000 4,185,000 Proceeds from exercise of Series A Preferred warrants 4,999,500 - Proceeds from notes payable - related party - 1,000,000 Cash acquired in Merger - 103,818 Costs of Merger paid from PIPE loan - ( 1,947,787 ) Repayments of line of credit - ( 1,980,937 ) Repayments of liabilities assumed in Merger - ( 15,716 ) Repayments of notes payable ( 7,445 ) ( 7,005 ) Repayments of notes payable - related party ( 387,000 ) ( 287,000 ) Repayment of notes payable assumed in Merger - ( 100,000 ) Net cash provided by financing activities 7,125,055 950,373 Net change in cash , cash equivalents and restricted cash 2,653,044 2,054,621 Cash, cash equivalents and restricted cash - beginning of year 10,882,077 5,397,564 Cash, cash equivalents and restricted cash - end of year $ 13,535,121 $ 7,452,185 Supplemental cash flow information: Cash paid for: Interest $ 108,993 $ 548,041 Income taxes $ - $ - Non-cash investing and financing activities: PIPE note principal converted to Class A Common Stock $ 3,213,000 $ - Dividend note principal converted to Class A and Class B Common Stock $ 3,905,561 $ - Exchange of PIPE Notes and Series A and B Warrants for Series A Convertible Preferred Stock and Warrants for Series A Convertible Preferred Stock $ 5,651,310 $ - Series A Convertible Preferred Stock issued in exchange of PIPE Notes $ 4,558,841 $ - Series A Convertible Preferred Stock dividends converted to Class A Common Stock $ 2,391,968 $ - Notes payable assumed in Merger $ - $ 1,565,000 Accrued liabilities assumed in Merger $ - $ 310,724 Remeasurement of common stock exchanged/issued in Merger $ - $ ( 1,875,724 ) The 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 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. 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 $ 1.00 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 September 30, 2025, the Company has an accumulated deficit of approximately $ 36.8 million and working capital surplus of approximately $ 4.2 million. For the three and nine months ended September 30, 2025, the Company had a loss from operations of approximately $ 1.1 million and $ 4.2 million, respectively, and negative cash flows from operations of approximately $ 2 million. Although the Company is showing positive revenue growth and gross profit trends, the Company expects to incur further losses through the end of 2025. 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 nine months ended September 30, 2025, the Company received $ 2.5 million in proceeds from the issuance of convertible notes (the “PIPE Convertible Notes”), net of $ 280,000 in original issue discounts, from a PIPE Convertible Note and $ 4,999,500 in proceeds from the exercise of Series A Preferred warrants. 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 nine months ended September 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 nine months ended September 30, 2024 to conform to the unaudited condensed consolidated financial statement presentation for the three and nine months ended September 30, 2025. These reclassifications had no effect on net loss or cash flows as previously reported. Revenue Recognition Remaining Performance Obligations As of September 30, 2025, approximately $ 6.2 million of revenue is expected to be recognized from remaining performance obligations. The Company expects to recognize 100 % of this revenue over the next 12 months. Disaggregated Revenue SCHEDULE OF DISAGGREGATED REVENUE 2025 2024 Three Months Ended September 30, 2025 2024 Revenues: Golf Simulators (1) $ 2,595,761 $ 4,873,839 Content Software Subscriptions 720,981 1,304,287 Franchise Revenue 150,000 - Other (2) 639,223 58,669 Total net revenue $ 4,105,965 $ 6,236,795 (1) Includes items such as hardware and proprietary perpetual licenses (2) Includes items such as shipping income and installation income 2025 2024 Nine Months Ended September 30, 2025 2024 Revenues: Golf Simulators (1) $ 9,394,232 $ 9,431,222 Content Software Subscriptions 2,222,129 5,584,982 Franchise Revenue 225,000 - Other (2) 1,964,698 105,776 Total net revenue $ 13,806,059 $ 15,121,980 (1) Includes items such as hardware and proprietary perpetual licenses (2) Includes items such as shipping income and installation income 9 NOTE 3 – EARNINGS PER SHARE BASIC AND DILUTED The following potentially dilutive securities have been excluded from the computation of diluted weighted average shares outstanding as they would be anti-dilutive: SCHEDULE OF POTENTIAL DILUTIVE SHARES 2025 2024 2025 2024 Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Options to purchase Common Stock 22,620 - 22,620 - PIPE Convertible Notes (1) - 134,000 - 134,000 Series A Preferred Shares 1,321,507 - 1,321,507 - Common Stock - Series A Preferred Warrants 4,989 - 4,989 - Common Stock - Series A Warrants - 28,182 - 28,182 Common Stock - Series B warrants - 77,500 - 77,500 Earnout shares 90,000 90,000 90,000 90,000 Underwriter warrants 12,650 12,650 12,650 12,650 Totals 1,451,766 342,332 1,451,766 342,332 Weighted Average Number of Shares Outstanding 1,451,766 342,332 1,451,766 342,332 (1) Does not include shares for interest or make-whole amounts as the number of shares is undeterminable since the calculation is based on variable floating factors. NOTE 4 – ACCOUNTS RECEIVABLE Accounts receivable and allowance for credit losses consisted of the following: SCHEDULE OF ALLOWANCE FOR CREDIT LOSSES September 30, December 31, 2025 2024 Trade accounts receivable $ 3,683,465 $ 2,870,021 Other 41,291 - Accounts receivable 3,724,756 2,870,021 Less allowance for credit losses ( 1,478,000 ) ( 1,470,868 ) Total accounts receivable, net $ 2,246,756 $ 1,399,153 NOTE 5 – INVENTORY, NET The following summarizes inventory: SCHEDULE OF INVENTORY September 30, December 31, 2025 2024 Inventory - raw materials $ 3,124,199 $ 2,797,705 Less reserve allowance for obsolescence ( 448,360 ) ( 448,360 ) Inventory, net $ 2,675,839 $ 2,349,345 NOTE 6 – PROPERTY AND EQUIPMENT, NET The following summarizes property and equipment: SCHEDULE OF PROPERTY AND EQUIPMENT September 30, December 31, 2025 2024 Software and computer equipment $ 865,381 $ 795,369 Furniture and fixtures 258,875 230,883 Vehicles 59,545 59,545 Equipment 15,873 15,873 Property and equipment, gross 1,199,674 1,101,670 Less accumulated depreciation ( 953,325 ) ( 957,818 ) Total property and equipment, net $ 246,349 $ 143,852 10 The Company recorded depreciation expense was $ 14,670 and $ 7,469 and $ 42,258 and $ 42,753 for the three and nine months ended September 30, 2025 and 2024, respectively. The following summarizes capitalized software development costs as of September 30, 2025 and December 31, 2024: SCHEDULE OF CAPITALIZED SOFTWARE DEVELOPMENT COSTS Capitalized software, net - beginning balance, December 31, 2024 $ 1,540,121 Capitalized software development costs - 2025 2,395,596 Less accumulated amortization ( 751,966 ) Capitalized software development costs, net $ 3,183,751 The Company recorded amortization of capitalized software costs of $ 317,912 and $ 163,952 , and $ 751,966 and $ 279,001 for the three and nine months ended September 30, 2025 and 2024, respectively. NOTE 7 – ACCRUED AND OTHER CURRENT LIABILITIES Accrued and other current liabilities consist of the following amounts: SCHEDULE OF ACCRUED AND OTHER CURRENT LIABILITIES September 30, December 31, 2025 2024 Accrued payroll $ - $ 108,945 Credit cards 259,594 55,180 Warranty reserve 140,000 140,000 Sales tax payable - 105,563 Other accrued liabilities 1,194,736 589,619 Total accrued and other current liabilities $ 1,594,330 $ 999,307 Accrued liabilities and other current liabilities assumed in Merger: SCHEDULE OF ACCRUED LIABILITIES AND OTHER CURRENT LIABILITIES ASSUMED IN MERGER Accrued tax payable $ 45,008 Total accrued and other current liabilities assumed in Merger $ 45,008 NOTE 8 – NOTES PAYABLE Notes payable consisted of the following: SCHEDULE OF NOTES PAYABLE September 30, December 31, 2025 2024 Note payable - Ethos Management Inc. $ - $ - Note payable - Mercedez-Benz 12,289 19,733 Note payable 12,289 19,733 Less current portion ( 10,573 ) ( 10,001 ) Note payable long-term portion $ 1,716 $ 9,732 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 $ 10 million. Pursuant to the terms of the Ethos Loan, the Company may draw down financing proceeds equal to $ 833,333 each month beginning in April 2023, up to the $ 10 million amount. Interest associated with the Ethos Loan is fixed at 4 % per annum and has a 3 three-year grace period for principal and interest payments. Annual principal and interest payments will commence in 2027 and continue through 2034 . As a condition to funding, the Company provided Ethos with a $ 1,875,000 deposit as collateral (the “Deposit Collateral”) for the note. 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 $ 2,383,059 and $ 81,560 , respectively. As a result of the Ethos Loan termination, the outstanding principal and accrued interest was offset by the Deposit Collateral leaving $ 589,619 , which is included in Accrued and other current liabilities on the unaudited condensed consolidated balance sheets at September 30, 2025 and December 31, 2024, respectively (See Note 7 – Accrued and Other Current Liabilities ). Mercedes-Benz In November 2020, the Company entered into a $ 59,545 , 5.90 % annual interest rate note payable with Mercedez-Benz for a delivery van. The note matures on November 20, 2026 , and is secured by the van. The Company makes a monthly payment of $ 908 , which includes both principal and interest. The outstanding principal on the note at September 30, 2025 and December 31, 2024, was $ 12,289 and $ 19,733 , respectively. 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 nine months ended September 30, 2025, the Company converted an aggregate principal amount of $ 1,558,000 and $ 1,082,194 in accrued and make-whole interest related to the PIPE Convertible Notes into 142,308 shares of the Company’s Class A common stock. On July 21, 2025, pursuant to the PIPE Exchange Agreements, the Company exchanged the outstanding $ 3,938,311 of principal related to the PIPE Convertible Notes in exchange for (i) 3,938 shares of the Company’s Series A Preferred Stock and (ii) the Company agreed to extend the expiration date of the Series A Preferred Warrants held by such holders by two years . PIPE Convertible Notes payable consisted of the following: SCHEDULE OF PIPE CONVERTIBLE NOTES PAYABLE Total PIPE Convertible Notes, net at December 31, 2024 $ 4,068,953 PIPE Convertible Notes issued 2,800,000 Less: Debt Discount associated with OID ( 280,000 ) PIPE Convertible Notes, net 6,588,953 Less: Gross PIPE Convertible Note principal converted into Class A common stock ( 3,213,000 ) Add: Accretion of debt discount 359,037 Less: Exchange for Series A Preferred Stock ( 3,734,990 ) Total PIPE Convertible Notes, net at September 30, 2025 $ - During the three and nine months ended September 30, 2025 and 2024, amortization expense related to the Debt Discount of the PIPE Convertible Notes was $ 0 and $ 23,250 and $ 359,037 and $ 47,447 , respectively. The principal balance of the PIPE Convertible Notes, net of Debt Discounts, and accrued interest related to the PIPE Convertible Notes at September 30, 2025, was $ 0 and $ 0 , respectively. The principal balance net of Debt Discounts and accrued interest related to the PIPE Convertible Notes at December 31, 2024, was $ 4,068,953 and $ 154,500 , respectively. 12 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 1,885 shares of the Company’s newly created Series A preferred stock (the “Series A Preferred Stock”, and (ii) warrants to purchase up to 37,033 shares of Series A Preferred Stock (the “Series A Preferred Warrants”). 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 $ 1.00 per share, which was then adjusted to $ 50.00 per share as a result of the Reverse Stock Split. 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: SCHEDULE OF RELATED PARTY NOTES PAYABLE September 30, December 31, 2025 2024 Note payable - ARJ Trust $ 650,000 $ 650,000 Note payable - McKettrick 800,000 800,000 Note payable - Carver 74,000 111,000 Loan - Chris Jones 1,650,000 2,000,000 Notes payable 3,174,000 3,561,000 Less current portion ( 2,668,500 ) ( 2,937,000 ) Note payable long-term portion $ 505,500 $ 624,000 Future maturities of related party notes and loan payables as of September 30, 2025: SCHEDULE OF FUTURE MATURITIES OF RELATED PARTY NOTES PAYABLE 2025 $ 2,550,000 2026 287,000 2027 337,000 Total $ 3,174,000 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 $ 500,000 , an interest rate of 8.50 % per annum, and a maturity date of March 31, 2024. The Company is required to make monthly interest-only payments of $ 3,541 . In June 2010, the Company entered into a second note payable with ARJ Trust. The note has a principal amount of $ 150,000 , an interest rate of 8.50 % per annum, and a maturity date of March 31, 2024 . The Company is required to make monthly interest-only payments of $ 1,063 . On March 31, 2024 , the maturity date of the notes was extended to March 31, 2025 . On March 31, 2025 , the maturity date of the notes was extended to September 30, 2025 . The Company made interest-only payments of $ 4,604 and $ 41,436 during the nine months ended September 30, 2025 and 2024, respectively. The principal balance of the notes was $ 650,000 at both September 30, 2025 and December 31, 2024. 13 McKettrick In May 2019, the Company entered into a $ 1,750,000 , zero interest rate note payable with a former shareholder to repurchase all their owned shares in the Company. The note is payable in annual installments of $ 250,000 due on December 21 of each year. The note matures on December 1, 2027 . If the annual installment is not paid within 10 days of the due date a late fee of 5% is charged . The principal balance of the note payable was $ 800,000 at both September 30, 2025 and December 31, 2024. Carver In January 2021, the Company entered into a $ 222,000 , zero interest rate note payable with a former shareholder to repurchase all their owned shares in the Company. The note is payable in semi-annual installments of $ 18,500 due on March 31 and September 30 each year and matures on October 1, 2027 . The Company made the required installments totaling $ 18,500 for the three months ended March 31, 2025 and September 30, 2025. The principal balance of the note payable was $ 74,000 and $ 111,000 at September 30, 2025 and December 31, 2024, respectively. Chris Jones During the year ended December 31, 2024, the Company chief executive officer loaned the Company an aggregate of $ 2 million for operating expenses. The loaned amount has a zero interest rate and no stated maturity date. The Company made $ 350,000 in payments towards the loan during the nine months ended September 30, 2025, however, the Company expects to pay back the loan in full. The principal balance of the loan payable was $ 1,650,000 and $ 2,000,000 at September 30, 2025 and December 31, 2024, respectively. NOTE 11 – LINES OF CREDIT JPMorgan Chase In December 2023, the Company entered into a $ 2,000,000 variable rate line of credit with JPMorgan. The purpose of the new line of credit was to consolidate the balances outstanding on the note payable and the previous line of credit, which had matured. The line of credit matured on December 31, 2024 . The line of credit had an annual interest rate of the Adjusted SOFR (Secured Overnight Financing Rate) Rate plus 3.00 %. On January 1, 2025, the maturity date of the line of credit was extended to December 31, 2025 . Upon the maturity date extension the annual interest rate was increased to the Adjusted SOFR Rate plus 3.50 %. The line of credit is secured by a pledge of $ 2,100,000 in the Company’s deposit accounts (restricted cash) at JPMorgan. The outstanding principal balance on the line of credit was $ 802,738 at September 30, 2025 and December 31, 2024. 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 $ 10,114 recorded in cash and cash equivalents on its unaudited condensed consolidated balance sheet as of September 30, 2025 and December 31, 2024. 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. No dividends were declared during 2023 or 2022. During 2021, the Board of Directors declared $ 7,395,694 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 $ 1,965,706 . In November 2022, each shareholder agreed to defer the accrued dividends payable by entering into 6.00 % interest rate dividend notes payable. All outstanding and accrued interest is due and payable when the dividend notes payable mature on December 31, 2025. Interest commenced accruing on January 1, 2023. 14 On April 21, 2025, the Company entered into agreements with the shareholders owed approximately $ 3.9 million in outstanding dividends notes payable, pursuant to which each shareholder converted all of their outstanding amounts payable into (i) 84,662 shares of the Company’s Class A common stock, with respect to approximately $ 1.3 million in principal and interest and (ii) 165,663 shares of the Company’s Class B common stock with respect to approximately $ 2.6 million in principal and interest. Dividends declared, distributed, and accrued are as follows: SCHEDULE OF DIVIDENDS DECLARED, DISTRIBUTED, AND ACCRUED September 30, December 31, 2025 2024 Accrued interest on dividends payable $ 586,766 $ 515,677 Dividends payable $ 118,362 $ 4,023,923 NOTE 13 – STOCKHOLDERS’ DEFICIT Preferred Stock The Company has authorized preferred stock of 10,000,000 shares with a par value of $ 0.0001 . 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 50,000 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 $ 1,000 per share. The Series A Preferred, 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. The holders of Series A Preferred will be entitled to 10% per annum dividends, payable in cash or shares of Class A common stock, provided that if the shares of Class A common stock are utilized to pay the dividends then the dividend rate will be recalculated to 15%. The Series A Preferred had a conversion rate of $ 6.31 per share and convert into Class A common stock. On each six-month anniversary of the initial issuance date of the Series A Preferred conversion price adjusted to the closing price of the Class A common stock on such date. On October 22, 2025, the conversion price was adjusted to $ 2.16 pursuant to such provisions. As of September 30, 2025 and December 31, 2024, there were 8,189 and 0 shares of Series A Preferred issued and outstanding. Common Stock Class A Common Stock The Class A Common Stock has voting rights of 1 vote per share and votes as a single class together with the Class B Common Stock. Class B Common Stock The Class B Common stock has voting rights of 25 votes per share, and votes as a single class together with the Class A Common Stock. Equity Transactions During the Period 15 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 1,885 shares of Series A Convertible Preferred Stock with a fair value of $ 2,742 per share. See Note 15 – Fair Value Measurements for more information on the Company’s valuation methodology. On July 21, 2025, in connection with the Exchange Agreements, the Company issued an aggregate of 3,938 shares of Series A Convertible Preferred Stock to PIPE Convertible Note holders for the exchange of PIPE Convertible Notes with an aggregate stated value of $ 3,938,311 (representing 100% of the remaining PIPE Convertible Notes). On July 21, 2025, the Company issued 5,555 shares of Series A Convertible Preferred Stock for the exercise of Series A Preferred Warrants and cash proceeds of $ 5 million. Class A Common Stock During the three months ended September 30, 2025, the Company issued an aggregate of 505,434 shares of Class A Common Stock with a fair value of $ 6.31 per share for the conversion of 3,189 shares of Series A Convertible Preferred Stock. During the three months ended September 30, 2025, the Company issued an aggregate of 578,468 shares of Class A Common Stock with fair values ranging from $ 3.50 - $ 5.36 per share to Series A Convertible Preferred Share holders in lieu of cash for unpaid dividends. There were no Class A Common Stock during the three months ended September 30, 2024. 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 No Series A Preferred Warrants were issued during the three months ended September 30, 2025. In applying the Black-Scholes option pricing model to the Series A Preferred Warrants, the Company used the following assumptions: SCHEDULE OF FAIR VALUE ASSUMPTIONS OF WARRANTS For the Nine Months Ended September 30, 2025 Risk free interest rate 3.76 % Expected term (years) 2 Expected volatility 148 % Expected dividends 0 % During the nine months ended September 30, 2025, in connection with the signing of the Exchange Agreements, see Note 9 – PIPE Convertible Notes , PIPE Warrant holders exchanged their outstanding 28,182 Series A Warrants and 31,000 Series B Warrants for Series A Preferred Warrants to purchase 37,033 shares of Series A Preferred Stock. The Series A Preferred Warrants are immediately vested, have an exercise price of $ 900 , and have a grant date fair value of $ 482,701 . 16 A summary of the Series A Warrant Activity during the nine months ended September 30, 2025, is presented below: SCHEDULE OF WARRANT ACTIVITY Weighted Weighted Average Average Remaining Aggregate Number of Exercise Life Intrinsic Warrants Price In Years Value Outstanding, December 31, 2024 - $ - Granted 37,033 900 Exercised ( 5,555 ) 900 Forfeited - - Outstanding, September 30, 2025 31,478 $ 900 1.6 $ - Exercisable, September 30, 2025 31,478 $ 900 1.6 $ - Series A and Series B Warrant A summary of the warrant activity during the nine months ended September 30, 2025, is presented below: SCHEDULE OF WARRANT ACTIVITY Weighted Weighted Average Average Remaining Aggregate Number of Exercise Life Intrinsic Warrants Price In Years Value Outstanding, December 31, 2024 59,182 $ 571.50 - Granted - - Exercised - - Forfeited ( 59,182 ) 571.50 Outstanding, September 30, 2025 - $ - - $ - Exercisable, September 30, 2025 - $ - - $ - NOTE 14 – STOCK-BASED COMPENSATION 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 September 30, 2025 or 2024. Compensation-based stock option activity for qualified and unqualified stock options are summarized below: SCHEDULE OF OPTION ACTIVITY Number of Options Weighted Average Exercise Price Weighted Average Remaining Life In Years Intrinsic Value Outstanding, December 31, 2024 22,620 $ 46.50 - Granted - 0 Exercised - 0 Forfeited - 0 Outstanding, September 30, 2025 22,620 $ 46.50 4.00 $ - Exercisable, September 30, 2025 22,070 $ 46.50 4.00 $ - 17 The following table summarizes information about options to purchase shares of the Company’s Class A common stock outstanding and exercisable at September 30, 2025: SCHEDULE OF STOCK OPTIONS OUTSTANDING AND EXERCISABLE Options Outstanding Options Exercisable Exercise Price Outstanding Number of Options Weighted Average Remaining Life In Years Exercisable Number of Options $ 46.50 22,620 4.00 22,070 22,620 22,070 Total compensation expense related to options was $ 3,342 and $ 10,025 for the three and nine months ended September 30, 2025. As of September 30, 2025, there was future compensation cost of $ 1,114 with a weighted average recognition period of 0.25 years. The aggregate intrinsic value totaled $ 0 and was based on the Company’s closing stock price of $ 2.42 as of September 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 The following table presents information related to stock-based compensation expense: SCHEDULE OF STOCK-BASED COMPENSATION EXPENSE For the Three Months Ended Unrecognized at Weighted Average Remaining September 30, 2025 September 30, 2025 Amortization Period (Years) General and administrative $ 3,342 $ 1,114 0.25 Total $ 3,342 $ 1,114 0.25 For the Nine Months Ended Unrecognized at Weighted Average Remaining September 30, 2025 September 30, 2025 Amortization Period (Years) General and administrative $ 10,025 $ 1,114 0.25 Total $ 10,025 $ 1,114 0.25 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 nine months ended September 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 nine months ended September 30, 2025, due to their short-term nature. The following table sets forth a summary of the Company’s assets and liabilities that are measured at fair value on a recurring basis: SCHEDULE OF FAIR VALUE OF ASSETS AND LIABILITIES ON A NONRECURRING BASIS September 30, 2025 December 31, 2024 Fair Value Level 1 Cash Equivalents Cash Equivalents Money market funds $ 10,114 $ 10,114 Total debt investments $ 10,114 $ 10,114 18 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 nine months ended September 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 8.39 %. As of September 30, 2025, the Company’s leases had a remaining weighted average term of 1.65 years. The following table presents net lease cost and other supplemental lease information: SCHEDULE OF LEASE COST AND OTHER SUPPLEMENTAL LEASE INFORMATION September 30, December 31, 2025 2024 Lease cost Operating lease cost (cost resulting from lease payments) $ 323,300 $ 403,109 Net lease costs $ 323,300 $ 403,109 Operating lease - operating cash flows (fixed payments) $ 323,300 $ 403,109 Operating lease - operating cash flows (liability reduction) $ 287,842 $ 334,254 Non-current leases - right-of-use assets $ 364,253 $ 634,269 Current liabilities - operating lease liabilities $ 159,834 $ 363,102 Non-current liabilities - operating lease liabilities $ 220,551 $ 305,125 Future minimum payments under non-cancellable leases for operating leases for the remaining terms of the leases following the nine months ended September 30, 2025, are as follows: SCHEDULE OF FUTURE MINIMUM PAYMENTS UNDER OPERATING LEASES Fiscal Year Operating Leases 2025 $ 83,690 2026 140,163 2027 144,227 2028 60,809 Total future minimum lease payments $ 428,889 Amount representing interest ( 48,504 ) Present value of net future minimum lease payments $ 380,385 NOTE 17 – SEGMENT INFORMATION The Company currently operates as one business segment, which is also the sole reportable segment, focusing on the manufacturing and sales of indoor golf simulators. The Company’s business offerings have similar economic and other characteristics, including the nature of products, manufacturing, types of customers, and distribution methods. The determination of a single business segment is consistent with the consolidated financial information regularly provided to the Company’s chief operating decision maker (“CODM”). The Company’s CODM is its Principal Executive and Financial Officer and Director, who reviews and evaluates consolidated profit and loss and total assets for the purpose of assessing performance, making operating decisions, allocating resources, and planning and forecasting for future periods. 19 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: SCHEDULE OF REVENUE BY SEGMENT INFORMATION 2025 2024 For The Three Months Ended September 30, 2025 2024 Consulting expenses $ 704,098 $ 293,838 Contract labor 691,717 422,064 Personnel expenses 564,624 1,695,678 Business development expenses 55,259 ( 8,778 ) Royalty expenses 56,465 166,631 Marketing expenses 152,389 138,827 Other expenses * 1,736,279 732,161 Total operating expenses $ 3,960,831 $ 3,440,421 * Other expenses is materially comprised of rent, insurance, stock-based compensation, depreciation and amortization, licenses, dues and subscriptions, travel and entertainment, and merchant fees. 2025 2024 For The Nine Months Ended September 30, 2025 2024 Consulting expenses $ 2,361,169 $ 1,349,653 Contract labor 1,127,952 903,243 Personnel expenses 3,517,650 4,654,560 Business development expenses 201,996 440,309 Royalty expenses 420,480 719,668 Marketing expenses 709,644 359,223 Other expenses * 4,301,126 2,368,444 Total operating expenses $ 12,640,017 $ 10,795,100 * Other expenses is materially comprised of rent, insurance, stock-based compensation, depreciation and amortization, licenses, dues and subscriptions, travel and entertainment, and merchant fees. 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 $ 250,000 . As of September 30, 2025 and December 31, 2024, the Company had approximately $ 12,051,504 and $ 9,662,000 , respectively, in excess of the FDIC insured limit. NOTE 20 – SUBSEQUENT EVENTS Issuance of Common Stock Subsequent to September 30, 2025, the Company issued an aggregate of 240,029 shares of Class A Common Stock with fair values ranging from $ 2.16 - $ 6.31 per share for the conversion of 550 shares of Series A Preferred Convertible Stock. Subsequent to September 30, 2025, the Company issued an aggregate of 165,873 shares of Class A Common Stock with fair values ranging $ 2.16 - $ 3.50 per share Series A Convertible Preferred Share holders in lieu of cash for unpaid dividends. 20 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 September 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. 21 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. 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). 22 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. 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. 23 Results of Operations Comparison of the Nine Months Ended September 30, 2025 to the Nine Months Ended September 30, 2024 Our financial results for the nine months ended September 30, 2025 are summarized as follows in comparison to the nine months ended September 30, 2024. 2025 2024 Variance Revenue, net $ 13,806,059 $ 15,121,980 $ (1,315,921 ) Cost of revenue 5,383,786 5,183,328 200,458 Total gross profit 8,422,273 9,938,652 (1,516,379 ) Operating Expenses: Royalties 420,480 719,668 (299,188 ) Salaries, wages and benefits 3,517,650 4,654,560 (1,136,910 ) Selling, general and administrative 8,701,887 5,420,872 3,281,015 Operating loss (4,217,744 ) (856,448 ) (3,361,296 ) Other income (expenses) (9,052,292 ) (2,074,922 ) (6,977,370 ) Loss before income taxes $ (13,270,036 ) $ (2,931,370 ) $ (10,338,666 ) Revenues Revenues decreased by $1,315,921, or 9%, for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024. The decrease is primarily attributable to the change in how the Company sold its content subscription licenses during the nine months ended September 30, 2025 as compared to prior years leading to an increase in deferred revenues. Cost of Revenues Cost of revenues increased by $200,458, or 4%, for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024. The increase is primarily attributable to an increase in simulator costs of $338,627 and a decrease in other costs of $163,184. Operating Expenses Total operating expenses increased by $1,844,917, or 17%, for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024. This was primarily due to (i) an increase of professional fees of $1,011,516, or 55%, due to an increase in fees related to the PIPE Exchange Agreements and other SEC filing requirements, and (ii) an increase in other selling, general and administrative expenses of $1,932,682, or 105%, due primarily to an increase in amortization expense related to capitalized software of $472,965, which is offset by a decrease in salaries, wages and benefits of $1,136,910, 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 $6,977,370, or 336%, for the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024. The increase is primarily attributable to a loss on extinguishment of debt of $6,135,160 that resulted from the PIPE Exchange Agreements and an increase in 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 September 30, 2025 to the Three Months Ended September 30, 2024 Our financial results for the three months ended September 30, 2025 are summarized as follows in comparison to the three months ended September 30, 2024. 2025 2024 Variance Revenue, net $ 4,105,965 $ 6,236,795 $ (2,130,830 ) Cost of revenue 1,258,628 1,924,093 (665,465 ) Total gross profit 2,847,337 4,312,702 (1,465,365 ) ‍ Operating Expenses: Royalties 56,465 166,631 (110,166 ) Salaries, wages and benefits 564,624 1,695,678 (1,131,054 ) Selling, general and administrative 3,339,742 1,578,112 1,761,630 Operating loss (1,113,494 ) 872,281 (1,985,775 ) Other income (expenses) (6,164,750 ) (932,456 ) (5,232,294 ) Loss before income taxes $ (7,278,244 ) $ (60,175 ) $ (7,218,069 ) 24 Revenues Revenues decreased by $2,130,830, or 34%, for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024. The decrease is primarily attributable to the change in how the Company sold its content subscription licenses during the three months ended September 30, 2025 as compared to prior years leading to an increase in deferred revenues. Cost of Revenues Cost of revenues decreased by $665,465, or 35%, for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024. The decrease is primarily attributable to the decrease in revenue. The gross profit margin remained consistent for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024. Operating Expenses Total operating expenses increased by $520,410, or 15%, for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024. Selling, general and administrative expenses increased by $1,761,630, or 111%, due primarily to an increase in professional fees of $410,260, an increase in contract labor of $269,653, and an increase in amortization expense related to capitalized software of $153,960. This was offset by a decrease in salaries, wages and benefits of $1,131,054, or 67%, 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 $5,232,069, or 561%, for the three months ended September 30, 2025, as compared to the three months ended September 30, 2024. The increase is primarily attributable to a loss on extinguishment of debt of $6,135,160 that resulted from the PIPE Exchange Agreements and is offset by a decrease in 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 due to the PIPE Convertible Notes being exchanged for Series A Preferred Convertible Stock and Series A Preferred Warrants as part of the PIPE Exchange Agreements. Liquidity and Capital Resources As of September 30, 2025, we had cash on hand of $13,535,121 and a working capital surplus of $4,159,517, 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 an increase in cash on hand of $2,653,044, an increase of accounts receivable, net of $847,603, an increase in prepaid expenses and other current assets of $584,504 and a decrease in dividend notes payable of $3,905,561 which was offset primarily by an increase in deferred revenue of $3,073,610. 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. 25 Working Capital September 30, December 31, 2025 2024 Current assets $ 19,158,839 $ 14,792,931 Current liabilities 14,999,322 15,775,168 Working capital surplus (deficiency) $ 4,159,517 $ (982,237 ) The increase in current assets is primarily due to an increase in cash on hand of $2,653,044, an increase of accounts receivable, net of $847,603, and an increase in prepaid expenses and other current assets of $584,504. The decrease in current liabilities is primarily due to a decrease in dividend notes payable of $3,905,561 which was offset primarily by an increase in deferred revenue of $3,073,610. Cash Flows For the Nine Months Ended September 30, 2025 2024 Cash Flows: Net cash provided by (used in) operating activities $ (1,978,411 ) $ 3,071,781 Net cash used in investing activities $ (2,493,600 ) $ (1,967,533 ) Net cash provided by financing activities $ 7,125,055 $ 950,373 Operating Activities Net cash used in operating activities was $1,978,411 for the nine months ended September 30, 2025, which was primarily due to the net loss of $13,270,036 and an increase in accounts receivable, net of $922,416, which was partially offset by non-cash expenses of $9,766,236, an increase in deferred revenue of $3,073,610, and an increase in accrued and other current liabilities of $595,020. Net cash provided by operating activities was $3,071,781 for the nine months ended September 30, 2024, which was primarily due to the net loss of $2,931,370 and an increase in accounts receivable, net of $2,143,225, which was partially offset by non-cash expenses of $974,145 and the liquidation of the marketable securities account of $2,478,953. Investing Activities Net cash used in investing activities was $2,493,600 for the nine months ended September 30, 2025, which was due to the increase in capitalized software of $2,395,596 and the purchase of equipment of $98,004. Net cash used in investing activities was $1,967,533 for the nine months ended September 30, 2024, which was the result of an increase in capitalized software of $1,967,418. Financing Activities Net cash provided by financing activities was $7,125,055 for the nine months ended September 30, 2025, which was primarily due to $2,520,000 of net proceeds from PIPE Convertible Notes and $4,999,500 of proceeds from the exercise of Series A Preferred Warrants. Net cash provided by financing activities was $950,373 for the nine months ended September 30, 2024, the Company received net proceeds from the Merger of $2,325,315, made debt payments of $294,005, paid $15,716 of assumed liabilities, paid $100,000 on a loan assumed in the Merger, and paid off the line of credit of $1,980,937. The Company received proceeds of $1,000,000 from the Company’s chief executive officer. 26 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. 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 September 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. 27 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. 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 third 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. 28 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 Preferred Stock 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. Pursuant to this provision, on October 22, 2025, the conversion price of our Series A Preferred Stock was lowered to $2.16. 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. 29 On July 21, 2025, in connection with the Exchange Agreements, the Company issued an aggregate of 3,938 shares of Series A Convertible Preferred Stock to PIPE Convertible Note holders for the exchange of PIPE Convertible Notes with an aggregate principal amount of $3,938,311 (representing 100% of the remaining PIPE Convertible Notes). On July 21, 2025, the Company issued 5,555 shares of Series A Convertible Preferred Stock for the exercise of Series A Preferred Warrants and cash proceeds of $5 million. During the three months ended September 30, 2025, the Company issued an aggregate of 505,434 shares of Class A Common Stock with a fair value of $6.31 per share for the conversion of 3,189 shares of Series A Convertible Preferred Stock. During the three months ended September 30, 2025, the Company issued an aggregate of 578,468 shares of Class A Common Stock with fair values ranging from $3.50 - $5.36 per share to Series A Convertible Preferred Share holders in lieu of cash for unpaid dividends. The transactions described above were undertaken in reliance upon exemptions from registration afforded by Section 4(a)(2) of the Securities Act of 1933, as amended. ITEM 3. DEFAULTS UPON SENIOR SECURITIES None. ITEM 4. MINE SAFETY DISCLOSURES None. ITEM 5. OTHER INFORMATION During the quarter ended September 30, 2025, no director or officer adopted or terminated any (i) “Rule 10b5-1 trading arrangement,” as defined in Item 408(a) of Regulation S-K intending to satisfy the affirmative defense conditions of Rule 10b5-1(c) or (ii) “no-Rule 10b5-1 trading arrangement,” as defined in Item 408(c) of Regulation S-K. ITEM 6. EXHIBITS Exhibit Incorporated by Reference Number Exhibit Description Form Exhibit Filing Date 3.1 Amendment to Third Amended and Restated Certificate of Incorporation of TruGolf Holdings, Inc. dated June 2, 2025 8-K 3.1 6/3/25 3.2 Amendment to Amended and Restated Certificate of Incorporation of TruGolf Holdings, Inc. dated June 17, 2025 8-K 3.1 6/24/25 10.1 Form of Waiver Agreement with Convertible Note holders 8-K 10.4 7/22/25 31.1* Rule 13a-14(a) / 15d-14(a) Certification of Principal Executive Officer and Principal Financial Officer 32.1** Section 1350 Certification of Principal Executive Officer and Principal Financial Officer 101.INS Inline XBRL Instance Document* ‍101.SCH Inline XBRL Taxonomy Extension Schema* 101.CAL‍ Inline XBRL Taxonomy Calculation Linkbase* ‍101.LAB Inline XBRL Taxonomy Label Linkbase* 101.PRE‍ Inline XBRL Taxonomy Linkbase Document* ‍101.DEF Inline XBRL Taxonomy Definition Linkbase Document* * Filed herewith. ** Furnished herewith 30 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: November 14, 2025 31