What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-14 compared with 2025-08-19 · 123 added, 103 removed, 145 unchanged (61% of the section changed)

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following discussion highlights the current operating environment and summarizes the financial position of Trugolf Holdings, Inc.

its subsidiaries as of June 30, 2025, and should be read in conjunction with (i) the unaudited interim condensed consolidated financial

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

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by way of example and without limitation:

occurrence of any event, change, or other circumstances, including the outcome of any legal proceedings that may be instituted against

ability to maintain the listing of our securities on Nasdaq, and the potential liquidity and trading of our securities;

risk of disruption to our current plans and operations;

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;

related to our business;

in applicable laws or regulations;

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;

ability to maintain existing license agreements;

ability to achieve and maintain profitability in the future;

financial performance;

factors disclosed under the section entitled “Risk Factors”.

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;

other factors disclosed

under the section entitled “Risk Factors”.

Nevada, was formed as a Utah corporation on October 4, 1995, under the name TruGolf Incorporated, and was a subsidiary of Access Software.

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March 31, 2023, we entered into an Agreement and Plan Of Merger (the “Merger Agreement”) with TruGolf Nevada, DMAQ Merger

(“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

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

(“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.

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.

Class A common stock commenced trading on the Nasdaq Global Market LLC under the ticker “TRUG” on February 1, 2024.

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,

TruGolf’s Class A common stock commenced trading on the Nasdaq Global Market LLC under the ticker “TRUG” on February

1983, the Company has been passionate about driving the golf industry with innovative, indoor golf solutions.

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The VGA is broken into three models:

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.

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.

Golf Association Events – events are worldwide leaderboard format, flighted by handicap, where users play and compete to shoot

the lowest score.

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.

Users earn points based on how they finish

in their division.

totality, TruGolf’s business model is designed to be positioned as the hub of golf technology, with groundbreaking hardware technologies

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of Operations

of the Six Months Ended June 30, 2025 to the Six Months Ended June 30, 2024

financial results for the six months ended June 30, 2025 are summarized as follows in comparison to the six months ended June 30, 2024.

of the Nine Months Ended September 30, 2025 to the Nine Months Ended September 30, 2024

financial results for the nine months ended September 30, 2025 are summarized as follows in comparison to the nine months ended September

$ (1,315,921 )

Cost of revenue

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$ (10,338,666 )

increased by $814,909, or 9%, for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024.

is primarily attributable to the increase of our product acceptance and greater penetration in the industry market.

of revenues increased by $865,924, or 27%, for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024.

The increase is primarily attributable to an increase in inventory adjustments of $170,982 and an increase in costs related to the Company’s

TruTrack product of approximately $830,541.

operating expenses increased by $1,324,509, or 18%, for the six months ended June 30, 2025, as compared to the six months ended June

Selling, general and administrative expenses increased by $1,519,387, or 40%, due primarily to an increase in amortization expense related to capitalized software

of $296,138, an increase in marketing expense of $336,859, and an increase in professional fees of $601,256.

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.

of revenues increased by $200,458, or 4%, for the nine months ended September 30, 2025, as compared to the nine months ended September

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 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.

Income (Expenses)

income (expenses) increased by $1,745,076, or 153%, for the six months ended June 30, 2025, as compared to the six months ended June

The increase is primarily attributable to interest expense, amortization expense of the PIPE Convertible Notes debt discount,

the write-off of remaining debt discounts upon the conversion of related to the PIPE Convertible Notes, and the make-good interest expense

upon the conversion of related PIPE Convertible Notes.

of the Three Months Ended June 30, 2025 to the Three Months Ended June 30, 2024

financial results for the three months ended June 30, 2025 are summarized as follows in comparison to the three months ended June 30,

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.

of the Three Months Ended September 30, 2025 to the Three Months Ended September 30, 2024

financial results for the three months ended September 30, 2025 are summarized as follows in comparison to the three months ended September

$ (2,130,830 )

Cost of revenue

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$ (7,218,069 )

$ (1,752,141 )

increased by $437,701, or 11%, for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024.

is primarily attributable to the increase of our product acceptance and greater penetration in the industry market.

of revenues increased by $1,098,747, or 85%, for the three months ended June 30, 2025, as compared to the three months ended June 30,

The increase is primarily attributable to an increase in inventory adjustments of $248,624 and an increase in costs related to

the Company’s TruTrack product of approximately $739,425.

operating expenses increased by $423,938, or 13%, for the three months ended June 30, 2025, as compared to the three months ended June

Selling, general and administrative expenses increased by $619,470, or 31%, due primarily to an increase in marketing of $113,970,

an increase in professional fees of $377,379, and an increase in amortization expense related to capitalized software of $130,169.

was offset by a decrease in salaries, wages and benefits of $111,077, or 10%, due primarily to an increase in salaries being capitalized

for time spent on developing new versions of the Company’s platform software.

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.

of revenues decreased by $665,465, or 35%, for the three months ended September 30, 2025, as compared to the three months ended September

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 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

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.

Income (Expenses)

income (expenses) increased by $667,157, or 85%, for the three months ended June 30, 2025, as compared to the three months ended June

The increase is primarily attributable to interest expense, amortization expense of the PIPE Convertible Notes debt discount,

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.

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.

and Capital Resources

of June 30, 2025, we had cash on hand of $10,159,359 and a working capital surplus of $6,554,656, as compared to cash on hand of $10,882,077

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 the recognition of the $5,651,310 current asset related to the fair value of Series A Preferred Stock and related Series A warrants

issued in connection with the bundled PIPE Exchange Agreement transaction.

These instruments are classified as current assets because

they are expected to be used in the settlement of outstanding obligations within the next twelve months.

The fair value was determined

at the time of issuance based on the observable market price of the Company’s common stock and the contractual conversion provisions

of the Series A Preferred Stock.

The 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.

Company’s operating activities consume the majority of its cash resources.

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as a going concern.

September 30,

Current assets

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Working capital surplus (deficiency)

increase in current assets is primarily due to the recording of the $5,651,310 asset related to the fair value of Series A Preferred

Stock and Series A Warrants as noted above.

The increase in current liabilities is primarily due to the reclass of

$3,734,900 in PIPE Convertible Notes from non-current liabilities to current liabilities as a result of the PIPE Convertible Notes being

extinguished on July 21, 2025 as part of the April 22, 2025 PIPE Exchange Agreements.

For the Six Months Ended June 30,

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.

For the Nine Months Ended

September 30,

Net cash provided by (used in) operating activities

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Net cash provided by financing activities

cash used in operating activities was $1,354,546 for the six months ended June 30, 2025, which was primarily due to the net loss of $5,991,792

and an increase in accounts receivable, net of $861,552, which was partially offset by non-cash expenses of $3,201,997, an increase in

deferred revenue of $1,896,218, and an increase in accrued and other current liabilities of $773,570.

cash provided by operating activities was $2,615,975 for the six months ended June 30, 2024, which was primarily due to the net loss

of $2,871,192 which was offset by the liquidation of the marketable securities account of $2,478,953 and an increase in accounts payable

of $1,149,909, an increase in deferred revenue of $1,274,900, and an increase in accrued interest payable of $785,306.

The change in

the remaining operating assets and liabilities was $567,271 and non-cash expenses of $365,370.

cash used in investing activities was $1,614,778 for the six months ended June 30, 2025, which was the result of an increase in capitalized

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.

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.

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.

cash used in investing activities was $1,433,513 for the six months ended June 30, 2024, which was the result of an increase in capitalized

software of $1,433,438.

cash provided by financing activities was $2,246,572 for the six months ended June 30, 2025, which was primarily due to $2,520,000 of

net proceeds from PIPE Convertible Notes.

cash provided by financing activities was $71,246 for the six months ended June 30, 2024, the Company received net proceeds from the

Merger of $2,325,315, received net proceeds from PIPE Convertible Notes of $4,185,000, paid off the variable rate line of credit of $1,980,937

and made debt payments of $268,500.

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.

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.

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

Quantitative and Qualitative Disclosures About Market Risk

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis