TruGolf Holdings, Inc. 10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31 , 2025 or ☐ 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) Nevada 85-3269086 State or Other Jurisdiction (I.R.S. Employer of Incorporation or Organization 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 Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒ 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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐ If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐ Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b). ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒ The aggregate market value of the common stock held by non-affiliates of the registrant as of the last business day of the registrant’s most recently completed second fiscal quarter (June 30, 2025) was $ 3.2 million computed by reference to the price at which the common stock was last sold ($57.20 per share). The registrant had 1,394,771 shares of common stock outstanding as of April 15, 2026. DOCUMENTS INCORPORATED BY REFERENCE Portions of this registrant’s definitive proxy statement for its 2025 Annual Meeting of Stockholders to be filed with the SEC no later than 120 days after the end of the registrant’s fiscal year are incorporated herein by reference in Part III of this Annual Report on Form 10-K. TRUGOLF HOLDINGS, INC. 2025 FORM 10-K ANNUAL REPORT TABLE OF CONTENTS Page PART I ITEM 1. BUSINESS 3 ITEM 1A. RISK FACTORS 13 ITEM 1B. UNRESOLVED STAFF COMMENTS 24 ITEM 1C. CYBERSECURITY 24 ITEM 2. PROPERTIES 25 ITEM 3. LEGAL PROCEEDINGS 25 ITEM 4. MINE SAFETY DISCLOSURES 25 PART II ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 26 ITEM 6. [RESERVED] 27 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 27 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 34 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 34 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 34 ITEM 9A. CONTROLS AND PROCEDURES 35 ITEM 9B. OTHER INFORMATION 36 ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS 36 PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 37 ITEM 11. EXECUTIVE COMPENSATION 37 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS 37 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 37 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES 37 PART IV ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES 38 ITEM 16. FORM 10-K SUMMARY 38 SIGNATURES 39 - 1 - FORWARD-LOOKING STATEMENTS The information contained in this report should be read in conjunction with the financial statements and related notes contained elsewhere in this Annual Report on Form 10-K. Certain statements made in this report are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements are based upon beliefs of, and information currently available to, us as of the date hereof, as well as estimates and assumptions made by us. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used herein, the words “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “future,” “intend,” “plan,” “predict,” “project,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue” or the negative of these terms and similar expressions identify forward-looking statements. Such statements reflect our current view with respect to future events and are subject to risks, uncertainties, assumptions, and other factors, including the risks relating to our business, industry, and our operations and results of operations. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ materially from those anticipated, believed, estimated, expected, intended, or planned. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results. Our financial statements are prepared in accordance with accounting principles generally accepted in the United States. These accounting principles require us to make certain estimates, judgments, and assumptions. We believe that the estimates, judgments, and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments, and assumptions are made. These estimates, judgments, and assumptions can affect the reported amounts of assets and liabilities as of the date of the financial statements as well as the reported amounts of revenue and expenses during the periods presented. Our financial statements would be affected to the extent there are material differences between these estimates and actual results. The following discussion should be read in conjunction with our financial statements and notes thereto appearing elsewhere in this report. Forward-looking statements made in this Annual Report on Form 10-K include statements about: ● the outcome of any known and unknown litigation and regulatory proceedings, including the occurrence of any event, change or other circumstances, including the outcome of any legal proceedings that may be instituted against the Company; ● the ability to maintain compliance with and thereafter maintain the listing of the Company’s common stock on The Nasdaq Stock Market; ● changes adversely affecting the business in which the Company is engaged; ● the Company’s projected financial information, growth rate, strategies, and market opportunities; ● the ability of the Company to meet its future capital requirements to fund its operations, which may involve debt and/or equity financing, and to obtain such debt and/or equity financing on favorable terms, and its sources and uses of cash; ● the Company’s ability, assessment of, and strategies to compete with, its competitors; ● the Company’s reliance on third-party service providers; ● the Company’s estimates regarding expenses, future revenue, capital requirements, and needs for additional financing; ● the Company’s ability to maintain and protect its intellectual property; ● changes in applicable laws or regulations affecting the Company and/or its business; ● the risk of disruption to the Company’s current plans and operations, including, but not limited to, as a result of any business description due to political or economic instability, pandemics or armed hostilities or a business disruption resulting from a cybersecurity attack; and ● other factors disclosed under the section entitled “Item 1A - Risk Factors” in Part I of this Annual Report on Form 10-K. - 2 - These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled “Risk Factors” set forth in this Annual Report on Form 10-K for the year ended December 31, 2025, any of which may cause our or our industry’s actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by these forward-looking statements. These risks may cause our or our industry’s actual results, levels of activity, or performance to be materially different from any future results, levels of activity, or performance expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, or performance. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of these forward-looking statements. Except as required by law, we undertake no obligation to update any forward-looking statements after the date of this report to conform these statements to actual results. PART I ITEM 1. BUSINESS Unless otherwise indicated or the context requires otherwise, the terms “we,” “us,” “our,” and “our company” refer to TruGolf Holdings, Inc., a Nevada corporation (“TruGolf”), and its wholly owned subsidiaries, including TruGolf, Inc., a Nevada corporation (“TruGolf Nevada”) and TruGolf Links Franchising, LLC (“Links”), a Delaware limited liability company. Our Business Our Corporate and Acquisition History We were incorporated on July 8, 2020, as a Delaware corporation and formed for the purpose of effecting a business combination. On January 31, 2024, we consummated a business combination pursuant to which TruGolf Nevada became our wholly-owned subsidiary, and our name was changed from Deep Medicine Acquisition Corp. to TruGolf Holdings, Inc. TruGolf Nevada, was formed in 1995, and was a subsidiary of Access Software. Upon the acquisition of Access Software by Microsoft Corp. in August 1999, the core programming and graphics team of the Links TM video game series were spun out to TruGolf Nevada. On March 10, 2026, the Company completed its redomestication from a Delaware corporation to a Nevada corporation (the “Redomestication”) by filing a certificate of conversion with the Secretary of State of the State of Delaware and articles of conversion with the Nevada Secretary of State. The Redomestication was approved by the Company’s stockholders at the annual meeting held on February 17, 2026. General TruGolf is a golf technology company focused on indoor golf simulation hardware, software, and related services. Our roots trace to the golf simulation and software expertise developed through Access Software and the Links™ video game franchise, and since 1999, we have focused on helping establish residential and commercial golf simulation as a viable industry. Over time, we expanded from software-focused offerings into a broader integrated platform that includes proprietary launch monitors, simulator systems, software products, and custom installations. - 3 - Today, we offer a portfolio of golf technology products designed to help users play, improve, and enjoy golf in indoor environments. Our hardware offerings include launch monitors such as APOGEE and LaunchBox, simulator systems ranging from compact and portable configurations to premium and custom installations, and related components and services. Our simulator lineup includes products such as STARTER, MAX, Signature, Premium, and Custom Golf Simulators for residential, commercial, and other specialized applications. Our software ecosystem includes E6 CONNECT and E6 GOLF. E6 CONNECT supports practice, course play, mini-games, online events, and commercial tools, while E6 GOLF is positioned as our next-generation improvement and simulation platform. These software offerings are designed to operate with TruGolf hardware and, in certain cases, with select third-party launch monitor platforms. Our products are intended to serve a market supported by continued growth in both traditional and off-course golf participation. According to recent National Golf Foundation reporting, total U.S. golf participation reached 48.1 million in 2025, including 29.1 million on-course golfers and 37.9 million off-course participants, while total rounds played reached a record 549 million in 2025. In addition, the U.S. golf industry continues to benefit from sustained demand, growth in simulator and other off-course formats, and a stable base of golf facilities following years of industry correction. Certain components and materials used in simulator and launch monitor products are specialized and may be sourced from a limited number of suppliers, while many other components are generally available from multiple sources. We continue to evaluate sourcing alternatives and production capabilities to support product availability, installations, and customer fulfillment. Market For Indoor Golf Understanding broader participation and facility trends in golf is important to assessing the market for our indoor golf simulators, launch monitors, and software. According to the National Golf Foundation (“NGF”), total golf participation in the United States reached 48.1 million people age 6 and older in 2025, including 29.1 million on-course golfers and 37.9 million off-course participants. NGF defines off-course participation to include golf entertainment venues, standalone driving ranges, and businesses with simulator and screen-golf setups. More than 19.0 million Americans participated exclusively off-course in 2025, compared to 10.1 million who participated exclusively on-course, reflecting the continued expansion of technology-enabled and alternative formats of the game. NGF also reports that simulator or screen-golf participation reached 9.2 million in 2025. NGF’s research further indicates that off-course golf complements traditional golf rather than replacing it. In 2025, more than 19 million people participated both on and off course, representing approximately 65% of all on-course golfers. NGF reports that these participants tend to play more frequently, spend more, and seek instruction at higher rates than single-format participants. NGF also reports that green-grass participation has increased for eight consecutive years and that total rounds played in the United States reached approximately 549 million in 2025. These participation trends are supported by an expanding off-course and simulator-based supply base. According to NGF, the U.S. market now includes approximately 120 large-scale golf entertainment venues, approximately 1,700 simulator businesses focused primarily on golf entertainment, approximately 700 commercial simulator locations focused primarily on club fitting, lessons, and game improvement, and approximately 1,600 green-grass facilities with tech-enabled ranges or indoor simulators. NGF also reports that there are just under 800 standalone driving ranges nationwide, including approximately 250 with integrated ball-tracking technology. This expanding infrastructure increases consumer exposure to simulator-based golf and supports long-term demand for indoor golf hardware, software, and related services. - 4 - Third-party industry research also indicates that the golf simulator market represents a growing addressable market. According to Grand View Research, the global golf simulator market was valued at approximately $1.74 billion in 2024 and is expected to grow at a compound annual growth rate of 9.4% from 2025 to 2030. Grand View Research also reports that the U.S. golf simulator market generated approximately $682.7 million in revenue in 2024 and is expected to grow at a compound annual growth rate of 8.8% from 2025 to 2030, while the North America market generated approximately $818.5 million in revenue in 2024 and is expected to grow at a compound annual growth rate of 9.0% from 2025 to 2030. Our products are designed to serve multiple segments within this market, including simulator-based play, game improvement, instruction, club fitting, and venue-based entertainment. The continued growth of off-course participation, simulator engagement, and technology-enabled golf facilities supports our strategy of offering integrated hardware and software solutions for commercial and residential indoor golf environments. Current Operations We currently operate through three principal business channels: (i) the design, manufacture, marketing and sale of indoor golf simulator hardware and launch monitors under the TruGolf brand, generally bundled with proprietary software solutions; (ii) the sale and licensing of our E6 software platform for use with TruGolf hardware and certain third-party launch monitor platforms; and (iii) the development of commercial and franchise-oriented indoor golf solutions, including software, hardware, administration tools and related operating technologies. Our current operations are focused on expanding adoption of our APOGEE launch monitor platform, increasing use of our E6 software ecosystem, and broadening our hardware lineup to address residential, commercial, instructional, entertainment and portable-use applications. We offer integrated simulator solutions across a range of price points and use environments, from portable launch monitors and compact simulator packages to premium permanent installations and custom commercial installations. These solutions generally combine launch monitor hardware, enclosures, projection systems, computer and display components, software and installation-related services. We also offer standalone software products and commercial tools that may be used independently or with selected third-party hardware platforms. We believe our business benefits from broader participation trends in both on-course and off-course golf. NGF materials also indicate that U.S. golf demand has remained elevated in recent years and that overall facility supply has stabilized. We believe these trends support continued demand for indoor golf hardware, software, practice tools and simulator-based entertainment experiences. In addition to our core hardware and software offerings, we continue to develop products and services for commercial operators, including league management, member messaging, analytics, simulator administration tools and multi-activity offerings designed to improve venue utilization and customer engagement. We also continue to evaluate opportunities related to organized online play, simulator-based competition and the use of data generated through our software ecosystem, although these initiatives remain complementary to our current core operations. Our Products Our products consist primarily of launch monitors, golf simulator systems, simulation software, commercial management software tools, and Multi-Sport Arcade entertainment add-ons. Hardware Launch Monitors. Our hardware lineup is anchored by APOGEE, our ceiling-mounted launch monitor designed for indoor golf simulation. APOGEE is designed to support ease of installation and use, and includes features intended to enhance the user experience, including continuous calibration functionality, support for standard golf balls and clubs without specialty balls or marked clubs, point-of-impact replay, voice-enabled operation and rapid shot-to-screen response. APOGEE currently includes E6 CONNECT Practice software and a limited warranty. We also offer LaunchBox, a portable photometric launch monitor and simulator solution designed for indoor use and certain outdoor practice applications. LaunchBox is intended to provide a portable entry point into the TruGolf ecosystem and includes E6 CONNECT Home content. - 5 - Simulator Systems. We offer multiple simulator configurations designed for a range of customer needs and installation environments. These include the TruGolf STARTER, multiple TruGolf MAX configurations, and larger permanent installations including Signature, Premium and custom simulator offerings. These products generally combine launch monitor hardware, enclosures, turf systems, projectors, computers, touchscreens and our software platform. Certain models are designed to emphasize portability and ease of setup, while others are designed to emphasize immersive presentation, upgraded finishes or commercial durability. Custom Simulators. In addition to our standard product lineup, we design and deliver custom golf simulator installations for luxury residential, institutional and commercial applications. These projects may incorporate APOGEE, custom enclosure and flooring designs, upgraded audio/visual components, enhanced projection systems, touchscreen interfaces and multi-sport functionality. Our custom simulator process typically includes consultation, design coordination, installation oversight, calibration and training. Multi-Sport Products . We also offer Multi-Sport Arcade, an interactive sports and entertainment add-on designed to expand simulator use beyond golf. This offering includes Arcade-style games and activities intended to increase family, youth and group appeal in both residential and commercial settings. Software Our software products consist primarily of E6 GOLF and E6 CONNECT, which are internally developed golf simulation and practice platforms. E6 Apex has been renamed E6 GOLF, and references to E6 GOLF in this report refer to the product formerly marketed as E6 Apex. Our current software strategy is principally focused on the continued development, commercialization and deployment of E6 GOLF, while E6 CONNECT remains available for purchase and continues to support certain legacy home, commercial and cross-platform use cases. E6 GOLF is our current flagship software platform and the primary focus of our software roadmap. E6 GOLF is designed to provide an advanced simulation experience that combines course play, player development and visual presentation. Based on our current product materials and the product materials historically associated with E6 Apex, E6 GOLF includes practice and improvement tools such as full practice environments, club fitting, bag mapping and skills challenges, with course-play functionality available in certain configurations. Our software materials have also described the platform as supporting a broad library of courses, high-definition visual presentation and compatibility with multiple launch monitor platforms. Historically, our software descriptions for the E6 Apex platform emphasized realistic and customizable simulation, including detailed digital recreations of golf courses and environmental presentation features such as animated scenery, lighting, shadows, weather-related visual effects and time-of-day settings. These capabilities remain central to the value proposition of E6 GOLF as we continue to position the platform as our primary software offering for simulated golf, instruction and player development. We believe E6 GOLF represents the next phase of our software platform strategy and provides the foundation for continued enhancement of visual quality, simulation realism, training functionality and premium user experiences across our hardware ecosystem. Our current development focus is intended to expand the capabilities and adoption of E6 GOLF across our residential and commercial product offerings. E6 CONNECT remains an important part of our software portfolio, but it is a legacy platform relative to E6 GOLF. E6 CONNECT continues to be sold in owned and subscription-based configurations and, depending on the version, may not require an annual subscription. E6 CONNECT is offered in multiple configurations, including Practice, Home and Commercial Tools modules. Depending on the version, E6 CONNECT includes driving, chipping and putting practice environments, player profiles, online events, statistics tracking, traditional modes of play such as stroke, scramble, best ball and stableford, and certain mini-games and challenge formats. - 6 - We also offer commercial tools associated with E6 CONNECT that support league creation, event management, simulator administration, member messaging, security controls, remote system monitoring and usage analytics. These tools are intended to assist commercial operators in managing indoor golf facilities and increasing simulator utilization. E6 CONNECT has also historically provided compatibility with third-party launch monitor platforms, which has expanded the reach of our software offerings beyond TruGolf-branded hardware. While E6 CONNECT remains commercially available and continues to serve installed customers and channel relationships, our principal software emphasis is on the future development and broader adoption of E6 GOLF. Plans for Future Operations Expansion into Franchises We have developed and continue to evaluate a commercial franchise-oriented offering centered on indoor golf entertainment venues that may include simulator bays, golf range bays, food and beverage service, events, instruction, club sales, branded and non-branded merchandise, and other golf-related services. As of December 31, 2025, our efforts in this area had included concept development, supporting technology and operating tools for potential commercial operators, including a proprietary bay-booking and food-and-beverage ordering application. We believe indoor golf venues may offer operators a more flexible and lower-footprint format than traditional outdoor golf facilities. Our historical planning has contemplated a range of potential venue sizes, from smaller-format locations to larger entertainment-focused facilities, with substantially less land, infrastructure and development cost than a traditional golf course or stand-alone driving range. We also believe such locations may serve as experiential showrooms for our hardware and software products, which could support simulator, launch monitor, software and related commercial sales. Our evaluation of this opportunity is informed by continued growth in off-course golf participation and the expansion of technology-enabled golf venues. According to the NGF, total U.S. golf participation reached 48.1 million in 2025, including approximately 19.0 million participants who engaged exclusively in off-course forms of golf, and the number of simulator-focused entertainment venues and other off-course golf businesses continued to increase through year-end 2025. The NGF also reports approximately 1,700 simulator businesses focused primarily on golf entertainment, approximately 700 simulator businesses focused primarily on club fitting, instruction and game improvement, and approximately 1,600 green-grass facilities with golf simulators or range technology. Virtual Golf Association We plan to continue developing the Virtual Golf Association, or VGA, as a digital competition and engagement framework built around our connected software ecosystem. The VGA is intended to leverage our experience in networked gameplay and online golf simulation in order to facilitate competitive and recreational digital golf events among users across multiple locations. We contemplate the VGA to be a governing structure for digital golf events within the E6 ecosystem and as a means of supporting head-to-head play, organized events and broader online participation. We believe the ongoing expansion of off-course golf, simulator play and digitally connected golf experiences supports this strategy. NGF data indicates that screen and simulator golf participation reached approximately 9.2 million in 2025, representing a year-over-year increase of approximately 13%. In addition, our commercial software tools already include features for events, seasons, league administration, member messaging and usage reporting, which we believe provide a foundation for further development of structured competitive and community-based offerings. Going forward, we expect development in this area to remain focused on features intended to increase user engagement, support league and tournament play, and expand the utility of our software for both individual users and commercial operators. These efforts may include broader event management functionality, persistent player profiles, expanded scoring and results tools, and additional online competition capabilities, although the timing and commercial impact of such initiatives will depend on product development, adoption and available resources. - 7 - Data Analysis We intend to continue evaluating ways to use data generated through our software and launch monitor ecosystem to enhance product functionality, improve the user experience and support commercial operators. Our existing platform already includes data-driven features for player improvement, commercial usage reporting and member participation tracking. Our commercial tools currently include data and analytics capabilities that allow operators to review simulator usage, participation and trend information, and our software products include player profile, practice and session-related functionality designed to support instruction, improvement and retention. We believe these capabilities may support future enhancements in performance feedback, customer engagement, operator decision-making and other software-enabled services. We also believe broader market trends support continued investment in data-enabled software and commercial tools. The NGF reports that technology-enabled off-course venues continue to expand, and that operators increasingly use technology tools to improve customer experience, manage demand and generate additional revenue. While we believe our data assets and analytics capabilities may create additional opportunities over time, any such opportunities will depend on market adoption, product execution, regulatory considerations and the availability of capital and other resources. Sales Overview Our sales operations are centralized at our corporate headquarters in Centerville, Utah. Our internal sales team is responsible for managing direct customer relationships and consulting with commercial facilities through a structured sales process designed to support both direct sales and partner-driven growth. Rather than relying primarily on a geographic territory model, we are increasingly organizing our sales efforts around targeted industry verticals, which we believe allows our sales personnel to develop deeper expertise within specific customer segments, strengthen strategic relationships, and support repeat business and broader product adoption. Our sales strategy is focused on customer segments that we believe are aligned with demand for our hardware, software and facility solutions. These targeted sectors include golf courses, including pro shops and private clubs, residential home construction, audio/visual integration firms, commercial real estate developers, government entities, educational institutions, municipalities, and selected national accounts. We are also placing increased emphasis on opportunities that can support recurring and residual revenue, including expanded adoption of our software platforms, including E6 GOLF and related ecosystem services. We also intend to expand adoption of newer product offerings such as the RANGE by TruGolf platform, which is designed to provide golf facilities with technology-enabled driving range solutions, including in locations that may not have the land or infrastructure required for a traditional driving range. We believe this product line can increase our presence within golf facilities while also supporting software adoption, customer engagement, and long-term recurring revenue opportunities. This strategy aligns with broader industry trends, including continued growth in off-course and technology-enabled golf venues. According to NGF, there are approximately 1,700 simulator businesses focused primarily on golf entertainment, approximately 700 commercial simulator locations focused on instruction and club fitting, and approximately 1,600 green-grass facilities with golf simulators or range technology in the United States as of year-end 2025. In addition to our internal sales operations, we maintain and continue to expand a network of resellers, installers, and distribution partners that support the marketing, sale, installation and servicing of our products across domestic and international markets. We believe this partner-driven model extends our reach while leveraging local market expertise to support customer acquisition, installation, and ongoing client relationships. Domestically, we have an established reseller network across the United States and Canada, with a developing presence in Latin America. Internationally, we maintain reseller relationships in multiple regions, including Europe, Australia and Africa, and we continue to evaluate additional opportunities to support growth in other markets. - 8 - We intend to continue expanding our international presence by strengthening relationships with existing partners and identifying additional reseller and distribution partners capable of supporting growth in key regions, including Europe, the Middle East, Africa, South America and Canada. Subject to available capital, we may also pursue a more structured international distribution model, including potential regional support resources, to broaden market penetration and increase adoption of our hardware and software solutions in both established and emerging markets. No single customer accounted for 10% or more of our revenues during the fiscal year ended December 31, 2025, and we do not believe the loss of any single customer would have a material adverse effect on our business. Competition We operate in a highly competitive market for golf simulation hardware, launch monitors, simulator software, and related commercial solutions. Competitors include integrated hardware-and-software providers, launch monitor manufacturers, simulator package providers, and software-focused platforms. Key competitors include TrackMan, Full Swing, Foresight, Golfzon, Uneekor, Garmin, FlightScope, SkyTrak, and Voice Caddie. The competitive environment continues to evolve alongside broader growth in golf participation, particularly in off-course formats such as simulator venues, golf entertainment locations, and technology-enabled practice environments. NGF data indicates total off-course golf participation in the United States reached 37.9 million in 2025. These competitors generally fall into two primary categories: fixed indoor launch monitor and simulator systems, and portable or indoor/outdoor launch monitors. In addition, several competitors offer proprietary software platforms, subscription products, course content, training tools, and related services designed to increase customer retention and recurring revenue. We also face competition from software-only offerings, including GSPro, The Golf Club, and World Golf Tour, which compete on graphics, gameplay, course libraries, online features, compatibility, and price. Our own product portfolio includes APOGEE, LaunchBox, simulator packages, E6 CONNECT, and commercial software tools and analytics offerings. We believe competition in this market is driven principally by launch monitor accuracy, speed of shot registration, ease of installation and calibration, software quality, realism of graphics and course content, training and analytics features, commercial management functionality, interoperability with third-party hardware, customer support, and brand reputation. We believe our competitive strengths include our long operating history in golf simulation software, our ability to offer both hardware and software solutions, and E6 CONNECT’s compatibility with multiple third-party launch monitor platforms. TruGolf has developed and sold golf simulation software for nearly 40 years and has also designed, manufactured, and sold proprietary hardware for more than 20 years. We believe our integrated hardware and software platform, commercial tools, and long operating history position us competitively across residential, commercial, and entertainment-focused segments. Our Competitive Strengths We believe our competitive strengths are founded on our long history of innovation in golf simulation, our integrated hardware and software platform, and our ability to serve customers across residential, commercial, and entertainment markets. For decades, we have developed golf simulation software and related technologies and have expanded those capabilities to include launch monitors, simulator systems, installation, and connected digital experiences. We believe this operating history has provided us with significant industry knowledge, product development expertise, and brand recognition within the indoor golf market. We believe our integrated ecosystem is a key competitive advantage. Our product portfolio includes launch monitors, simulator hardware, and software solutions designed to work together to deliver a seamless user experience. This integrated approach enables us to serve a broad range of customer needs while also supporting opportunities for recurring software and service revenue. We also believe our software capabilities are a significant competitive strength. We have made substantial recent and ongoing investments in the complete overhaul, ground-up redesign, and continued enhancement of E6 GOLF, our flagship software platform. These investments are intended to modernize the platform’s architecture, improve performance and usability, expand content and feature capabilities, and establish a stronger technological foundation for future product development across our ecosystem. We believe this continued investment in innovation positions us to meet evolving customer expectations, support future growth, and strengthen its competitive position in the indoor golf market. - 9 - Seasonality Our business is subject to seasonal fluctuations. Demand for our indoor golf simulator hardware and software generally increases during periods when outdoor golf is less accessible due to cold, wet, or otherwise unfavorable weather conditions, particularly during the fall and winter months in many regions of the United States and certain international markets. As a result, we have historically experienced stronger sales activity and increased software usage during the fourth and first fiscal quarters. To support these seasonal demand patterns, we typically increase marketing and sales activities during the second half of the year and devote additional operational resources to manufacturing, fulfillment, installation, and customer support during periods of elevated demand. We expect seasonal trends to continue, although the timing and magnitude of these trends may vary from period to period due to factors such as product launch timing, customer purchasing cycles, supply chain conditions, macroeconomic factors, and weather patterns in key markets. Government Regulation We are subject to a broad range of U.S. federal, state, and foreign laws and regulations, many of which are evolving and continue to be tested in courts. These laws and regulations may be interpreted in ways that could adversely impact our business and operations. Key areas of regulation include, but are not limited to, user privacy, data protection, consumer information privacy, and laws governing unfair and deceptive trade practices. U.S. federal and state laws and regulations, some of which may be enforced by both governmental agencies and private parties, are constantly evolving and subject to significant change. The application, interpretation, and enforcement of these legal requirements are often uncertain, particularly given the emerging and rapidly evolving nature of the industries in which we operate. Additionally, these laws and regulations may be applied inconsistently across different jurisdictions and may not align with our current policies and practices. Our sales of golf simulators and related products are subject to oversight and regulation by various entities, including the Federal Trade Commission (FTC) and the Consumer Product Safety Commission (CPSC), as well as other federal, state, local, and foreign regulatory authorities. These laws primarily govern product labeling, advertising, marketing, manufacturing, safety, shipment, and disposal. Furthermore, because certain components used in our products are imported, we are subject to import regulations and international trade laws. In addition to the foregoing, we are subject to other regulatory regimes, including environmental laws, employment regulations, privacy and cybersecurity laws, environmental health and safety regulations, licensing and operational requirements, the Foreign Corrupt Practices Act (FCPA), and similar anti-bribery and anti-kickback laws. The adoption of new laws and regulations, or new interpretations of existing laws, could materially impact our operations and compliance requirements. To date, the costs of compliance with applicable laws and regulations have not had a material adverse effect on our operations, and we believe we are in substantial compliance with all current legal and regulatory requirements. However, given the nature of our operations and the continually evolving regulatory landscape, we cannot predict with certainty whether future material capital expenditures or operating costs will be required to maintain compliance with applicable regulations. - 10 - Intellectual Property We regard our trademarks, service marks, copyrights, patents, domain names, trade dress, trade secrets, proprietary technologies, and other forms of intellectual property as critical assets essential to our success. To protect these assets, we rely on a combination of trademark, copyright, and patent laws, as well as trade secret protections and confidentiality and/or license agreements with employees, customers, partners, and other third parties. We own an issued U.S. patent which is expected to remain in force until 2038, and several pending patent applications that may ultimately be issued and would expire between 2042 and 2045. We have also registered or applied for registration of various U.S. domain names, trademarks, service marks, and copyrights. However, effective protection of trademarks, service marks, copyrights, patents, and trade secrets may not be available in every jurisdiction where our products are offered. We have previously licensed, and may continue to license in the future, certain proprietary rights—such as trademarks and copyrighted materials—to third parties. Although we seek to maintain brand quality through such licenses, there is no assurance that licensees will not engage in conduct that could materially and adversely affect the value of our intellectual property or reputation, which may, in turn, have a material adverse effect on our business, prospects, financial condition, and results of operations. Further, there can be no assurance that the steps taken by us to protect our proprietary rights will be sufficient or that third parties will not infringe upon or misappropriate our copyrights, trademarks, patents, trade dress, or similar proprietary rights. Additionally, other parties may assert claims of intellectual property infringement against us. We have been subject to such claims in the past and expect that we may face similar legal proceedings and claims in the ordinary course of business, including allegations that we or our licensees have infringed upon the trademarks or other intellectual property rights of third parties. Even claims that are without merit could result in the expenditure of significant financial and managerial resources, potentially impacting our operations and reputation. Human Resources As of the date of this report, we employ approximately 68 employees, including 67 full-time and 1 part-time. Following the remote work arrangements adopted during the COVID-19 period, most of our employees have returned to full-time in-office work, although certain software development personnel currently work a hybrid schedule of three days in the office and two days remotely. Our workforce supports a broad range of functions across the business, including marketing and sales, in-house hardware and software development, light manufacturing and assembly, simulator installation, customer service, and logistics. Our operating model enables us to maintain direct oversight of key product development and customer support functions. Facilities We currently lease two facilities in Utah to support our operations. Our primary facility, located in Centerville, Utah, consists of approximately 19,381 square feet and serves as our corporate headquarters. This facility houses offices for more than half of our employees and supports administrative functions, sales, and research and development activities. Our second facility, located in North Salt Lake, Utah, consists of approximately 13,000 square feet and supports manufacturing, assembly, returns, repairs, inventory storage, and logistics operations. This facility also houses office space for the remainder of our staff. Proprietary hardware, finished goods inventory, and assembled simulator storage are maintained at this location. We source components and materials used in our products, including frames, fabric, turf, foam, and other technology inputs, from local and domestic suppliers. The Centerville facility is leased from Boulder Properties LLC pursuant to a three-year lease entered into in December 2022. During the year ended December 31, 2025, the Company entered into a lease extension agreement related to this office facility located in Centerville City, Utah. The amendment extended the lease term through November 30, 2026. Base monthly rent is $35,696, and we are also responsible for our proportionate share of operating expenses, which are currently approximately $3,000 per month. The facility includes tenant improvements designed to support our office, administrative, and research and development needs. In June 2023, we entered into a five-year triple-net lease for the North Salt Lake facility. Base monthly rent during the first year of the lease was $10,457 and increases by 3% annually over the lease term. - 11 - Legal Proceedings From time to time, we may become involved in legal proceedings or be subject to claims arising in the ordinary course of business. As of the date of this filing, we are not a party to any legal proceedings that, in the opinion of management, if determined adversely, would individually or in the aggregate have a material adverse effect on our business, operating results, financial condition, or cash flows. Insurance We maintain an insurance policy that provides customary coverage and protections, including professional liability, general liability, employee benefits liability, and coverage against claims related to technology products and services, as well as cybersecurity risks. The policy also includes product liability coverage, which extends to claims arising from technology-related issues, such as customer data breaches, copyright infringement, misrepresentation, and fraud, as well as claims associated with physical products and services sold through our website. Available Information Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, our proxy and information statements and all amendments to those reports will be available free of charge through our website at www.trugolf.com as soon as practicable after such material is electronically filed with, or furnished to, the SEC. Except as otherwise stated in these documents, the information contained on our website or available by hyperlink from our website is not incorporated by reference into this report or any other documents we file, with or furnish to, the SEC. Implications of Being an Emerging Growth Company We qualify as an “emerging growth company” as the term is used in The Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and therefore, we may take advantage of certain exemptions from various public company reporting requirements, including: ● a requirement to only have two years of audited financial statements and only two years of related selected financial data and management’s discussion and analysis; ● exemption from the auditor attestation requirement on the effectiveness of our internal controls over financial reporting; ● reduced disclosure obligations regarding executive compensation; and ● exemptions from the requirements of holding a nonbinding advisory stockholder vote on executive compensation and any golden parachute payments. We may take advantage of these provisions for up to five years or such earlier time that we are no longer an emerging growth company. We would cease to be an emerging growth company if we have more than $1.235 billion in annual revenue, have more than $700.0 million in market value of our capital stock held by non-affiliates or issue more than $1.0 billion of non-convertible debt over a three-year period. So long as we remain an emerging growth company, we may choose to take advantage of some, but not all, of the available benefits of the JOBS Act. We have taken advantage of some of the reduced reporting requirements in our filings. Accordingly, the information contained herein may be different than the information you receive from other public companies in which you hold stock. In addition, the JOBS Act provides that an emerging growth company can delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have elected to avail ourselves of this exemption from new or revised accounting standards and, therefore, we will not be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies. - 12 - ITEM 1A. RISK FACTORS An investment in our common stock involves a number of very significant risks. Readers of this Annual Report on Form 10-K should carefully consider the following risks and uncertainties in addition to other information in this Annual Report on Form 10-K in evaluating our company and its business before purchasing shares of our common stock. Our business, operating results and financial condition could be seriously harmed due to any of the following risks. An investor in our common stock could lose all or part of their investment due to any of these risks. Risks Related to Our Business and Industry We depend on the strength of our brands. We derive substantially all of our sales from sales of branded products and services we own. The reputation and integrity of our brands are essential to the success of our business. We believe that our consumers value the status and reputation of brands we promote, and the superior quality, performance, functionality and durability that our brands represent. Building, maintaining and enhancing the status and reputation of our brands’ image is important to expanding our consumer base. Our continued success and growth depend on our ability to protect and promote our brands, which, in turn, depends on factors such as quality, performance, functionality and durability of our products and services, our communication activities, including advertising and public relations, and our management of the consumer experience, including direct interfaces through customer service and warranty repairs. We may decide to make substantial investments in these areas in order to maintain and enhance our brand, and such investments may not be successful. Additionally, in order to expand our reach, we engage with third-party distributors. To the extent those third-party distributors fail to comply with our operating guidelines, we may not be successful in protecting our brand image. Product defects, product recalls, counterfeit products and ineffective marketing are among the potential threats to the strength of our brands and to protect our brands’ status we may need to make substantial expenditures to mitigate the impact of such threats. Moreover, if we fail to continue to innovate to ensure that our products are deemed to achieve superior levels of function, quality and design, or to otherwise be sufficiently distinguishable from our competitors’ products, or if we fail to manage the growth of our on-line sales in a way that protects the high-end nature of our brands, the value of our brands may be diluted, and we may not be able to maintain our premium position and pricing or sales volumes, which could adversely affect our financial performance and business. We believe that maintaining and enhancing our brands’ image in new markets where we have limited brand recognition is important to expanding our consumer base. It we are unable to maintain or enhance our brands in new markets, then our growth strategy could be adversely affected. - 13 - We will need to raise capital in order to realize our business plan and growth strategy, the failure of which could adversely impact our operations. Our growth strategy is based upon expanding sales of our golf simulator hardware and software products, developing our franchise operations, increasing recurring software subscription revenue, and pursuing strategic growth opportunities. As of December 31, 2025, our business was not profitable. Without adequate funding, a significant increase in revenue, and satisfaction of our outstanding payables, we may not be able to achieve profitability in the existing lines of business and attract further capital. As of April 15, 2026, we had available cash resources of approximately $7,800,000. We expect to continue to finance our operations with available net operating cash flows and will need to raise additional capital in the future by issuing equity or other forms of securities, which could significantly reduce the percentage ownership of our existing stockholders and substantially dilute the equity of existing shareholders. Furthermore, any newly issued securities could have rights, preferences, and privileges senior to those of our existing common stock and may have a dilutive impact on the ownership interest of existing stockholders. We may have difficulty obtaining additional funds as and when needed, and we may have to accept terms that would adversely affect our stockholders. In addition, any adverse conditions in the credit and equity markets may adversely affect our ability to raise funds when needed. Any failure to achieve adequate funding will delay our research & development and manufacturing efforts and could lead to difficulty in satisfying outstanding orders of our hardware and software, as well as prevent us from responding to competitive pressures or taking advantage of unanticipated acquisition opportunities. Any additional equity financing will likely be dilutive to stockholders, and certain types of equity financing, if available, may involve restrictive covenants or other provisions that would limit how we conduct our business or finance our operations. The cost of raw materials, labor and freight could lead to an increase in our cost of sales and cause our results of operations to suffer. Increasing costs for raw materials, labor or freight could make our sourcing processes more costly and negatively affect our gross margin and profitability. Wage and price inflation in our source countries could cause unanticipated price increases, which may be significant. Energy costs have fluctuated dramatically in the past and may fluctuate in the future. Rising energy costs may increase our costs of transporting our products for distribution and the costs of products we source from our independent suppliers. Our independent suppliers may attempt to pass their increased costs on to us, and our relationships with them may be harmed or lost if we refuse to pay such increases, which could lead to product shortages. If we pay such increases, we may not be able to offset them through increases in our pricing and other means, which could adversely affect our ability to maintain our targeted gross margins. If we attempt to pass the increases on to the consumers, our sales may be adversely affected. We rely heavily on supply chain reliability and predictability and continued disruption in our supply chain could have a material adverse impact on operations. We rely heavily on supply chain reliability and predictability in producing, transporting and delivering our products. Pandemic, wars, inflationary trends, shifts in consumer purchasing patterns, availability of transport, labor shortages in the shipping, trucking, and warehousing industries, port strikes, infrastructure congestion, equipment shortages and other factors have all contributed to delivery delays, greater costs and uncertainty in arranging and scheduling transport of our products. If we are unable to reliably and consistently arrange shipment and storage of our products, we may be unable to ship, deliver and store our products in which case, we will have to reverse sales and issue refunds to purchasers of our products. Changes in U.S. and international trade policies, including to import and export tariffs and trade policy agreements, to address supply chain issues or otherwise could also have a significant impact on our activities both in the United States and internationally. Supply chain disruptions and adverse consequences from aggressive trade policies could have a material adverse impact on our profitability and financial performance. If we are unable to respond effectively to changes in market trends and consumer preferences, our market share, net sales and profitability could be adversely affected. The success of our business depends on our ability to identify the key product and market trends and bring products to market in a timely manner that satisfy the current preferences of a broad range of consumers (either by enhancing existing products or by developing new product offerings). Consumer preferences differ across and within different parts of the world, and shift over time in response to changing aesthetics and economic circumstances. We believe that our success in developing products that are innovative and that meet our consumers’ functional needs is an important factor in our image as a premium brand, and in our ability to charge premium prices. We may not be able to anticipate or respond to changes in consumer preferences, and, even if we do anticipate and respond to such changes, we may not be able to bring to market in a timely manner enhanced or new products that meet these changing preferences. If we fail to anticipate or respond to changes in consumer preferences or fail to bring products to market in a timely manner that satisfy new preferences, our market share and our net sales and profitability could be adversely affected. - 14 - We may be unable to appeal to new consumers while maintaining the loyalty of our core consumers. Part of our growth strategy is to introduce new consumers, including female and young consumers, to our brands. If we are unable to attract new consumers, including female and young consumers, our business and results of operations may be adversely affected as our core consumers’ age increases and purchasing frequency decrease. Initiatives and strategies intended to position our brand appeal to new, female and young consumers may not appeal to our core consumers and may diminish the appeal of our brand to our core consumers, resulting in reduced core consumer loyalty. If we are unable to successfully appeal to new, female and young consumers while maintaining our brand’s image with our core consumers, then our net sales and our brand image may be adversely affected. We depend on existing members of management and key employees to implement key elements in our strategy for growth, and the failure to retain them or to attract appropriately qualified new personnel could affect our ability to implement our growth strategy successfully. The successful implementation of our growth strategy depends in part on our ability to retain our experienced management team and key employees and on our ability to attract appropriately qualified new personnel. For instance, our chief executive officer has extensive experience running and developing golf simulation software. The loss of any key member of our management team or other key employees could hinder or delay our ability to implement our growth strategy effectively. Further, if we are unable to attract appropriately qualified new personnel, including a chief financial officer, we may not be successful in implementing our growth strategy. In either instance, our profitability and financial performance could be adversely affected. We do not employ traditional advertising channels, and if we fail to adequately market our brand through product introductions and other means of promotion, our business could be adversely affected. Our marketing strategy depends on our ability to promote our brand’s message using online advertising and social media, and possibly the use of newspapers and magazines to promote new product introductions in a cost-effective manner. We do not employ traditional advertising channels such as billboards, television and radio. If our marketing efforts are not successful at attracting new consumers and increasing purchasing frequency by our existing consumers, there may be no cost-effective marketing channels available to us for the promotion of our brand. If we increase our spending on advertising, or initiate spending on traditional advertising, our expenses will rise, and our advertising efforts may not be successful. In addition, if we are unable to successfully and cost-effectively employ advertising channels to promote our brand to new consumers and new markets, our growth strategy may be adversely affected. We rely significantly on information technology to operate our business. Any significant security breach of our confidential information of our customers, applications, technology, networks, or other systems critical to our operations, or failure to comply with privacy and security laws and regulations could damage our reputation, brands and business. We are heavily dependent on information technology systems and networks, including the Internet and third-party services (“Information Technology Systems”), across our supply chain, including product design, production, forecasting, ordering, manufacturing, transportation, sales and distribution, as well as processing financial information for external and internal reporting purposes, operations and other business activities. Information Technology Systems are critical to many of our operating activities and our business processes, and they may be negatively impacted by any service interruption or shutdown. For example, our ability to effectively manage and maintain our inventory, manufacture, and ship products to customers on a timely basis depends significantly on the reliability of these Information Technology Systems. We rely on a third-party systems provider to manage all our company data and transactions, record our financial transactions and manage our operations. The failure of these systems to operate effectively, including s a result of security breaches, viruses, hackers, malware, natural disasters, vendor business interruptions or other causes, or failure to properly maintain, protect, repair or upgrade systems, or problems with transitioning to upgraded or replacement systems could cause delays in product fulfillment and reduced efficiency of our operations, could require additional capital to remediate the problem which may not be sufficient to cover all eventualities, and may have an adverse effect on our reputation, results of operations and financial condition. We also use Information Technology Systems to process financial information and results of operations for internal reporting purposes to comply with regulatory financial reporting, legal and tax requirement. If the Information Technology Systems suffer severe damage, disruption or shutdown and our business continuity plans, or those of our vendors, do not effectively resolve the issues in a timely manner, we could experience delays in reporting our financial results, which could result in lost revenues and profits, as well as reputational damage. Furthermore, we depend on Information Technology Systems and personal data collection for digital marketing, digital commerce, consumer engagement and the marketing and use of our digital products and services. We also rely on our ability to engage in electronic communications throughout the world between and among our employees as well as with other third-parties, including customers, suppliers, vendors and consumers. Any interruption in the Information Technology Systems may impede our ability to engage in the digital space and result in lost revenues, damage to our reputation and loss of consumers. - 15 - In connection with various facets of our business, we collect and use a variety of personal data related to our customers. Our failure to prevent security breaches could damage our reputation and brands and substantially harm our business and results of operations. On our website, a majority of the sales are billed to our consumers’ credit card accounts directly, orders are shipped to a consumer’s address, and consumers log on using their email address. In such transactions, maintaining compete security for the transmission of confidential information on our website, such as consumers’ credit card numbers and expiration dates, personal information and billing addresses is essential to maintaining consumer confidence. In addition, we hold certain private information about our consumers, such as their names, addresses, phone numbers and browsing and purchasing records. We rely on encryption and authentication technology licensed from third-parties to effect the secure transmission of confidential information, including credit card numbers. Advances in computer capabilities, new discoveries in the field of cryptography or other developments may result in a compromise or breach of the technology used by us to protect consumer transaction data. In addition, any party who is able to illicitly obtain a user’s password could potentially access the user’s transaction data or personal information. We may not be able to prevent third-parties, such as hackers or criminal organizations, from stealing information provided by our consumers through our website. In addition, our third-party merchants and delivery service providers may violate their confidentiality obligations and disclose information about our consumers. Any compromise of our security or material violation of a non-disclosure obligation could damage our reputation and brand and expose us to a risk of loss or litigation and possible liability, which could substantially harm our business and results of operations. In addition, anyone who is able to circumvent our security measures could misappropriate proprietary information or cause interruptions in our operations. Moreover, the platform and applications that we use to operate our business are highly technical and complex and may now or in the future contain undetected errors, bugs, or vulnerabilities. Some errors in our code may only be discovered after the code has been deployed. Any errors, bugs or vulnerabilities discovered in our c ode after deployment, inability to identify the cause or causes of performance problems within an acceptable period of time or difficulty maintaining and improving performance of our platform, particularly during peak usage times, could result in damage to our reputation or brand, loss of revenues, or liability for damages, any of which could adversely affect our business and financial results. To the extent we do not effectively address capacity constraints, upgrade our systems as needed and continually develop our technology and network architecture to accommodate actual and anticipated changes in technology, our business and operating results may be harmed. Our products face intense competition. We are a sports equipment and technology company delivering products and technologies and the relative popularity of indoor golf and other various sports activities and changing design trends affect the demand of our products. The sports equipment industry and sports-related technology industry are both are highly competitive both in the U.S. and worldwide. We compete domestically and internationally with a significant number of athletic and sports equipment companies and sports-related technology companies, including sports-related technology companies, including large companies having diversified lines of athletic and sports equipment and sports technology products. - 16 - Product offerings, technologies, marketing expenditures (including expenditures for advertising and endorsements), pricing, costs of production, customer service, digital commerce platforms and social media presence are areas of intense competition. This, in addition to rapid changes in technology and consumer preferences in the markets for athletic and sports equipment, constitute significant risk factors in our operations. In addition, the competitive nature of retail including shifts in the ways in which consumers are shopping, and the rising trend of digital commerce, constitutes a risk factor implicating our online and wholesale operations. If we do not adequately and timely anticipate and respond to our competitors, our costs may increase or the consumer demand for our products may decline significantly. We rely on technical innovation and high-quality products to compete in the market for our products. Research and development play a key role in technical innovation. We rely upon specialists in the fields of electrical and mechanical engineering, industrial design, sustainability and related fields, as well as other experts to develop and test cutting-edge performance products. While we strive to produce products that help to enhance player performance, if we fail to introduce technical innovation in our products, consumer demand for our products could decline, and if we experience problems with the quality of our products, we may incur substantial expenses to remedy the problems. Failure to continue to obtain or maintain high-quality endorsers of our products could harm our business. We establish relationships with public figures such as teaching pros and influencers, to develop, evaluate and promote our products, as well as establish product authenticity with consumers. However, as competition in our industry has increased, the costs associated with establishing and retaining such sponsorships and other relationships have increased. If we are unable to maintain our current associations with public figures, or to do so at a reasonable cost, we could lose the high visibility or on-field authenticity associated with our products, and we may be required to modify and substantially increase our marketing investments. Any substantial deterioration in these relationships, or substantial deterioration of our relationship with their talent managers or other key personnel, could adversely affect our business. As a result, our brands, net revenues, expenses and profitability could be harmed. If certain endorsers were to stop using our products contrary to their endorsement agreements, our business could be adversely affected. Actions taken by endorsers associated with our products that harm the reputations of those endorsers could also seriously harm our brand image with consumers and, as a result, could have an adverse effect on our sales and financial condition. Actions taken by endorsers, associated with our products that harm the reputations of endorsers could also seriously harm our brand image with consumers and, as a result, could have an adverse effect on our sales and financial condition. Poor performance by our endorsers, a failure to continue to correctly identify future public figures or sports organizations, to use and endorse our products or a failure to enter into cost-effective endorsement arrangements with prominent public figures and sports organizations could adversely affect our brand, sales and profitability. We are also subject to laws, regulations and industry standards relating to endorsements and influencer marketing. Many of these laws, regulations and industry standards are changing and may be subject to differing interpretations, are costly to comply with or inconsistent among jurisdictions. Our business may be affected by seasonality, which could result in fluctuations in our operating results. We expect to experience moderate fluctuations in aggregate sales volume during the year. We expect revenues in the first and fourth fiscal quarters to exceed those in the second and third fiscal quarters. However, the mix of product sales may vary considerably from time to time as a result of changes in seasonal and geographic demand for golf equipment and in connection with the timing of significant sporting events. In addition, our customers may cancel orders, change delivery schedules or change the mix of products ordered with minimal notice. As a result, we may not be able to accurately predict our quarterly sales. Accordingly, our results of operations are likely to fluctuate significantly from period to period. Our operating margins are also sensitive to several additional factors that are beyond our control, including transportation costs, shifts in product sales mix and geographic sales trends, all of which we expect to continue. Results of operations in any period should not be considered indicative of the results to be expected for any future period. - 17 - Failure to accurately forecast consumer demand could lead to excess inventories or inventory shortages, which could result in decreased operating margins, reduced cash flows and harm to our business. There is a risk we may be unable to sell excess products. Inventory levels in excess of customer demand may result in inventory write-downs, and the sale of excess inventory at discounted prices could significantly impair our brand image and have an adverse effect on our operating results, financial condition and cash flows. Conversely, if we underestimate consumer demand for our products or if our suppliers fail to supply products, we require at the time we need them, we may experience inventory shortages. Inventory shortages might delay shipments to customers, negatively impact distributor and consumer relationships and diminish brand loyalty. The difficulty in forecasting demand also makes it difficult to estimate our future results of operations, financial condition and cash flows from period to period. A failure to accurately predict the level of demand of our products could adversely affect our net revenues and net income, and we are unlikely to forecast such effects with any certainty in advance. If the technology-based systems that give our consumers the ability to shop with us online do not function effectively, our operating results, as well as our ability to grow our digital commerce business globally, could be materially adversely affected. Many of our customers shop with us through our digital platforms. Increasingly, consumers are using mobile-based devices and applications to shop online with us and with our competitors and to do comparison shopping. We are increasingly using social media and proprietary mobile applications to interact with our consumers and as a means to enhance their shopping experience. Any failure on our part to provide attractive, effective, reliable, user-friendly digital commerce platforms that offer a wide assortment of merchandise with rapid delivery options and that continually meet the changing expectations of online shoppers could place us at a competitive disadvantage result in the loss of digital commerce and other sales, harm our reputation with consumers, have a material adverse impact on the growth of our digital commerce business globally and could have a material adverse impact on our business and operations, some of which are beyond our control, pose risks and uncertainties. Risks include, but are not limited to, credit card fraud or data mismanagement. Our financial results may be adversely affected if substantial investments in business and operations fail to produce expected returns. From time to time, we may invest in technology, business infrastructure, new businesses, product offering and manufacturing innovation and expansion of existing businesses, such as our digital commerce operations, which require substantial cash investments and management attention. We believe cost-effective investments are essential to business growth and profitability; however, significant investments are subject to typical risks and uncertainties inherent in developing a new business or expanding an existing business. The failure of any significant investment to provide expected returns or profitability could have a material adverse effect on our financial results and divert management attention from more profitable operations. Our business is sensitive to consumer spending and general economic conditions. Our business may be adversely affected by macro-economic conditions such as inflation, employment levels, wage and salary levels, trends in consumer confidence and spending, reduction in consumer net worth, interest rates, the availability of consumer credit and taxation and tariff policies which may influence on public spending confidence. Recent dramatic downturns in the strength of the global stock markets, currencies and key economies have highlighted many, if not all, of these risks. Consumer purchases in general may decline during recessions, periods of prolonged declines in the equity markets or housing markets and periods when disposable income and perceptions of consumer wealth are lower, and these risks may be exacerbated due to our focus on discretionary premium sporting good items. A downturn in the global economy, or in a regional economy in which we have significant sales, could have a material adverse effect on consumer purchases of our products, our results of operations and our financial position, and a downturn adversely affecting our consumer base could have a disproportionate impact on our business. - 18 - We have a material weakness in our internal controls, which could cause our financial reporting to be unreliable and lead to misinformation being disseminated to the public. Our management is responsible for establishing and maintaining adequate internal control over our financial reporting. As defined in Exchange Act Rule 13a-15(f), internal controls over financial reporting is a process designed by, or under the supervision of, the principal executive and principal financial officer and effected by the board of directors of the Company, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that: ● pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the Company; ● provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and/or directors of the Company; and ● provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements. We currently have a material weakness in our internal controls, which could cause financial reporting to be unreliable and lead to misinformation being disseminated to the public. Investors relying upon this misinformation may make an uninformed investment decision. Failure to achieve and maintain an effective internal control environment could cause us to face regulatory action and also cause investors to lose confidence in our reported financial information, either of which could have a material adverse effect on the Company’s business, financial condition, results of operations and future prospects. Our auditors will not be required to formally attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 until we are no longer a “smaller reporting company”. The cost of being a public company could result in us being unable to continue as a going concern. As a public company, we are required to comply with numerous financial reporting and legal requirements, including those pertaining to audits and internal control. The costs of maintaining public company requirements could be significant and may preclude us from seeking financing or equity investment on terms acceptable to us and our shareholders. If our revenues are insufficient or non-existent, and/or we cannot satisfy many of these costs through the issuance of shares or debt, we may be unable to satisfy these costs in the normal course of business. This would certainly result in our being unable to continue as a going concern. - 19 - Our ability to sell our products and services will be dependent on the quality of our technical support and our failure to deliver high-quality technical support services could have a material adverse effect on our sales and results of operations. If we do not effectively assist our users in deploying our products and services, succeed in helping our users quickly resolve post-deployment issues and provide effective ongoing support, or if potential customers perceive that we may not be able to achieve the foregoing, our ability to sell our products and services would be adversely affected, and our reputation with potential users could be harmed. In addition, if we expand our operations internationally, our technical support team will face additional challenges, including those associated with delivering support, training and documentation in languages other than the English language. As a result, our failure to deliver and maintain high-quality technical support services to our users could result in customers choosing to use our competitors’ products or services in the future. If we are not able to enhance or introduce new products that achieve market acceptance and keep pace with technological developments, our business, results of operations and financial condition could be harmed. Our ability to attract new users and increase revenue from existing customers depends in part on our ability to enhance and improve our platforms, increase adoption and usage of our products and introduce new products and features. The success of any enhancements or new products depends on several factors, including timely completion, adequate quality testing, actual performance quality, market-accepted pricing levels and overall market acceptance and demand. Enhancements and new products that we develop may not be introduced in a timely or cost-effective manner, may contain defects, may have interoperability difficulties with our platform, or may not achieve the market acceptance necessary to generate significant revenue. If we are unable to successfully enhance our existing platform and capabilities to meet evolving customer requirements, increase adoption and usage of our platform, develop new products, or if our efforts to increase the usage of our products are more expensive than we expect, then our business, results of operations and financial condition could be harmed. Customer may experience difficulty in integrating E6 Connect or E6 GOLF with third-party applications, which would inhibit sales. E6 Connect and E6 GOLF may serve a customer base with a wide variety of constantly changing hardware, operating system software, packaged software applications and networking platforms. If E6 Connect or E6 GOLF fails to gain broad market acceptance due to its inability to support a variety of these platforms, our operating results may suffer. Our business depends, in part, on the following factors: ● Our ability to integrate E6 Connect and/or E6 GOLF with multiple platforms and existing systems and to modify our product as new versions of packaged applications are introduced; ● Access to application program interfaces for the third-party software products that are integrated with our products; and ● Our ability to anticipate and support new standards. Risk Related to the Company’s Legal and Regulatory Requirements Failure to adequately protect our intellectual property and curb the sale of counterfeit merchandise could injure our brand and negatively affect our sales. Our trademarks, copyrights, patents, designs and other intellectual property rights are important to our success and our competitive position. We devote significant resources to the registration and protection of our trademarks and patents. In spite of our efforts, counterfeiting and design copies may still occur. If we are unsuccessful in challenging the usurpation of these rights by third-parties, this could adversely affect our future sales, financial condition and results of operations. Our efforts to enforce our intellectual property rights can potentially be met with defenses and counterclaims attacking the validity and enforceability of our intellectual property rights. Unplanned increases in legal fees and other costs associated with protecting our intellectual property rights could result in higher operating expenses. Additionally, legal regimes outside the U.S., particularly those in Asia, including China, may not always protect intellectual property rights to the same degree as U.S. laws, or the time required to enforce our intellectual property rights under these legal regimes may be lengthy and delay our recovery. We may become subject to product liability lawsuits or claims, which could harm our financial condition and liquidity if we are not able to successfully defend or insure against such claims. We may be subject to product liability lawsuits and claims that, individually or in the aggregate, could harm our business, prospects, results of operations and financial condition. We may face lawsuits or claims if our products do not perform as expected, malfunction or are used without complying with their specifications. Moreover, a product lawsuit or claim, regardless of merit, could generate negative publicity about our products, which could have a material effect on our brand, business, prospects, results of operations and financial condition. Any lawsuit or claim seeking monetary damages significantly exceeding our coverage or outside of our coverage may have a material adverse effect on our business and financial condition. - 20 - Fluctuations in our tax obligations and effective tax rate may have a negative effect on our operating results. We may be subject to income taxes in multiple jurisdictions. We record tax expense based on our estimates of future payments, which include reserves for uncertain tax positions in multiple tax jurisdictions. At any one time, many tax years may be subject to audit by various taxing jurisdictions. The results of these audits and negotiations with taxing authorities may affect the ultimate settlement of these issues. As a result, we expect that throughout the year there could be ongoing variability in our quarterly tax rates as events occur and exposures are evaluated. Further, our effective tax rate in a given financial period may be materially impacted by changes in mix and level of earnings or by changes to existing accounting rules or regulations. In addition, tax legislation enacted in the future could negatively impact our current or future tax structure and effective tax rates. To the extent we may rely on endorsements or testimonials, we will review any relevant relationships for compliance with the Endorsement Guides and we will otherwise endeavor to follow the FTC Act and other legal standards applicable to our advertising. The Federal Trade Commission (“FTC”) regulates the use of endorsements and testimonials in advertising as well as relationships between advertisers and social media influencers pursuant to principles described in the FTC’s Guides Concerning the Use of Endorsements and Testimonials in Advertising, or the Endorsement Guides. The Endorsement Guides require endorsements to express the endorser’s genuine opinion and prohibit claims that the marketer could not legally. They also say that if there is a connection between an endorser and the marketer that consumers would not expect and it would affect how consumers evaluate the endorsement, that connection should be disclosed. Another principle in the Endorsement Guides applies to ads that feature endorsements from people who achieved exceptional, or even above average, results from using a product. If the advertiser doesn’t have proof that the endorser’s experience represents what people will generally achieve using the product as described in the ad, then an ad featuring that endorser must make clear to the audience what results they can generally expect to achieve and the advertiser must have a reasonable basis for its representations regarding those generally expected results. Although the Endorsement Guides are advisory in nature and do not operate directly with the force of law, they provide guidance about what the FTC staff generally believes the Federal Trade Commission Act, or FTC Act, requires in the context using of endorsements and testimonials in advertising and any practices inconsistent with the Endorsement Guides can result in violations of the FTC Act’s proscription against unfair and deceptive practices. To the extent we may rely on endorsements or testimonials, we will review any relevant relationships for compliance with the Endorsement Guides and we will otherwise endeavor to follow the FTC Act and other legal standards applicable to our advertising. However, if our advertising claims or claims made by our social media influencers or by other endorsers with whom we have material connection do not comply with the Endorsement Guides or any requirement of the FTC Act or similar state requirements, the FTC and state consumer protection authorities could subject us to investigations and enforcement actions, impose penalties, require us to pay monetary consumer redress, require us to revise our marketing materials and require us to accept burdensome injunctions, all of which harm our business, reputation, financial condition and results of operations. For as long as we are a “smaller reporting company” we will not be required to comply with certain requirements that apply to other publicly reporting companies. We cannot predict whether the reduced disclosure requirements applicable to smaller reporting companies will make our common shares less attractive to investors. We are currently a “smaller reporting company”. For as long as we continue to be a smaller reporting company, we may choose to take advantage of certain exemptions from reporting requirements applicable to other publicly reporting companies that are not smaller reporting companies. These include not being required to comply with the auditor attestation of our internal controls over financial reporting provided by Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, and not being required to provide certain disclosures regarding executive compensation required of larger publicly reporting companies. We cannot predict if investors will find our common shares less attractive if we choose to rely on these exemptions. If some investors find our common shares less attractive as a result of any choices to reduce future disclosure, there may be a less active trading market for our shares and our share price may be more volatile. Further, as a result of these scaled regulatory requirements, our disclosure may be more limited than that of other publicly reporting companies and you may not have the same protections afforded to shareholders of such companies. Risks Related to Ownership of Our Shares There is currently limited liquidity of shares of our common stock We can give no assurance that an active trading market for shares of our common stock will develop on the Nasdaq or if it develops, will be sustained, or that the shares of common stock will trade at or above the public offering price. Failure to develop or maintain a trading market could negatively affect its value and make it difficult or impossible for you to sell your shares. Even if a market for our common stock does develop, the market price of our common stock may be highly volatile. In addition to the uncertainties relating to future operating performance and the profitability of operations, factors such as variations in interim financial results or various, as yet unpredictable, factors, many of which are beyond our control, may have a negative effect on the market price of our common stock. The liquidity of the Company’s common stock may be adversely affected by a reverse stock split due to the reduced number of shares outstanding following such an action. This effect could be further compounded if the market price of the Company’s common stock does not increase proportionately as a result of the reverse stock split. - 21 - Our stock price may be volatile, or may decline regardless of our operating performance, and you could lose all or part of your investment as a result. You should consider an investment in our securities to be risky, and you should invest in our securities only if you can withstand a significant loss and wide fluctuation in the market value of your investment. The market price of our common shares could be subject to significant fluctuations in response to the factors described in this section and other factors, many of which are beyond our control. Among the factors that could affect our stock price are: ● Actual or anticipated variations in our quarterly and annual operating results or those of companies perceived to be similar to us; ● Weather conditions, particularly during holiday shopping periods; ● Changes in expectations as to our future financial performance, including financial estimates by securities analysts and investors, or differences between our actual results and those expected by investors and securities analysts; ● Fluctuations in the market valuations of companies perceived by investors to be comparable to us; ● The public’s response to our or our competitor’s filings with the SEC or announcements regarding new products or services, enhancements, significant contracts, acquisitions, strategic investments, litigations, restructurings or other significant matters; ● Speculation about our business in the press or the investment community; ● Future sales of our shares; ● Actions by our competitors; ● Additions or departures of members of our senior management or other key personnel; and ● The passage of legislation or other regulatory developments affecting us or our industry. In addition, the securities markets have experienced significant price and volume fluctuations that have affected and continue to affect market price of equity securities of many companies. These fluctuations have often been unrelated or disproportionate to the operating performance of particular companies. These broad market fluctuations, as well as general economic, systemic, political and market conditions, such as recessions, loss of investor confidence, interest rate changes, or international currency fluctuations, may negatively affect the market price of our shares. If any of the foregoing occurs, it could cause our stock price to fall and may expose us to securities class action litigation that, even if unsuccessful, could be costly to defend and a distraction to management. The trading market for our common shares will be influenced by the research and reports that equity research analysts publish about us and our business. The price of our common shares could decline if one or more securities analysts downgrade our common shares or if those analysts issue a sell recommendation or other unfavorable commentary or cease publishing reports about us or our business. If one or more of the analysts who elect to cover us downgrade our common shares, our share price could decline rapidly. If one or more of these analysts cease coverage of us, we could lose visibility in the market, which in turn could cause our common share price and trading volume to decline. 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. The next Reset Date will be on April 22, 2026. 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. - 22 - Certain of the Company’s large shareholders may be able to exert significant influence on the Company and their interest may conflict with the interest of its shareholders. Certain of the Company’s large shareholders, including our officers and directors, represented approximately 49.5% of the Company’s voting rights as of December 31, 2025. Therefore, these shareholders would be able to exert significant influence over certain matters, including matters that must be resolved by the general meeting of shareholders, such as the election of members to the board of directors or the declaration of dividends or other distributions. To the extent that the interests of these shareholders may differ from the interests of the Company’s other shareholders, the Company’s other shareholders may be disadvantaged by any actions that these shareholders may seek to pursue. We have in the past failed to maintain compliance with all applicable continued listing requirements of the Nasdaq Stock Market, and if we fail to maintain compliance with all applicable continued listing requirements of the Nasdaq Capital Market in the future, we will not be afforded traditional cure periods under Nasdaq rules and our Class A common stock may be delisted from Nasdaq, which could have an adverse impact on the liquidity and market price of our common stock. On August 19, 2024, we received a delist notice from the Staff of Nasdaq notifying us that the listing of our Class A common stock was not in compliance with the minimum market value of publicly held securities requirement and the minimum shareholders’ equity requirement set forth in Nasdaq Listing Rules. On November 5, 2024, we received a delist notice from the Staff of Nasdaq notifying us that the listing of our Class A common stock was not in compliance with the minimum bid price requirement of $1.00 per share set forth in Nasdaq Listing Rules. We requested a hearing before a Nasdaq hearing panel (the “Panel”) to present a plan to regain compliance with all the continued listing requirements of Nasdaq and such hearing was held May 15, 2025. On May 30, 2025, the Panel provided us an exception with various milestones to regain compliance, including with Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Rule”) until July 8, 2025, and the minimum shareholders’ equity requirement until July 30, 2025. In addition, the Panel directed that the listing of our Class A common stock be transferred to the Nasdaq Capital Market, effective at the open of business on June 3, 2025. On July 17, 2025, the Staff confirmed that we had regained compliance with the Bid Price Rule as required by the Panel’s decision. On August 1, 2025, we received a letter from Nasdaq notifying us that we had demonstrated compliance with Nasdaq Listing Rule 5550(b)(1) (the “Equity Rule”), as required by the Panel’s decision, and, following our phase down to the Nasdaq Capital Market on June 3, 2025, we demonstrated compliance with the minimum market value of publicly held securities required by Nasdaq Listing Rule 5550(a)(5). Pursuant to the letter, in application of Listing Rule 5815(d)(4)(B), we will be subject to a Mandatory Panel Monitor for a period of one year from the date of the letter. If, within that one-year monitoring period, the Staff finds us again out of compliance with the Equity Rule, notwithstanding Rule 5810(c)(2), we will not be permitted to provide the Staff with a plan of compliance with respect to that deficiency and Staff will not be permitted to grant additional time for us to regain compliance with respect to that deficiency, nor will we be afforded an applicable cure or compliance period pursuant to Rule 5810(c)(3). Instead, Staff will issue a delist determination letter and we will have an opportunity to request a new hearing. Delisting from Nasdaq would adversely affect our ability to raise additional financing through the public or private sale of equity securities, may significantly affect the ability of investors to trade our securities and may negatively affect the value and liquidity of our common stock. Delisting also could have other negative results, including the potential loss of employee confidence, the loss of institutional investors and general investors that will consider investing in our common stock, a reduction in the number of market makers in our common stock, a reduction in the availability of information concerning the trading prices and volume of our common stock, a reduction in the number of broker-dealers willing to execute trades in shares of our common stock or interest in business development opportunities. Further, we would likely become a “penny stock”, which would make trading of our common stock more difficult. - 23 - If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline. The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business. Securities and industry analysts do not currently, and may never, publish research on our company. If no securities or industry analysts commence coverage of our company, the trading price for our stock may be negatively impacted. In the event securities or industry analysts initiate coverage, or if one or more of the analysts who covers us downgrades our stock or publishes inaccurate or unfavorable research about our business, our stock price may decline. If one or more of these analysts ceases coverage of our company or fails to publish reports on us regularly, demand for our stock could decrease, which might cause our stock price and trading volume to decline. If our shares of common stock become subject to penny stock rules, it would become more difficult to trade our shares. The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or authorized for quotation on certain automated quotations systems, provided that current price and volume information with respect to transactions in such securities provided by the exchange or system. If we are unable to maintain or retain a listing on the Nasdaq and if the price of our common stock is less than $5.00, our common stock will be deemed a penny stock. The penny stock rules require a broker-dealer, before a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document containing specified information. In addition, the penny stock rules require that before effecting any transaction in a penny stock not otherwise exempt from those rules, a broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive (i) the purchase’s written acknowledgment of the receipt of a risk disclosure statement; (ii) a written agreement to transaction involving penny stocks; and (iii) a signed and dated copy of a written suitability statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our common stock, and therefore stockholders may have difficulty selling their shares. ITEM 1B. UNRESOLVED STAFF COMMENTS None. ITEM 1C. CYBERSECURITY Risk Management and Strategy We utilize a Cloud-only architecture which enables us to reduce risk by leveraging the scalability, high availability, and advanced security features of cloud platforms, thereby minimizing the potential for system downtime and data breaches while ensuring seamless disaster recovery options. All third party vendors’ security policies are reviewed and updated as part of our annual Security Risk Assessment. Access to sensitive data is strictly regulated and provided on a need to know basis. Access is granted for the express purpose of assisting our customers with technical and training issues related to the use of our SaaS products; or for the purpose of research, design and development of product related features and bugfixes. Risk management in software development involves identifying, assessing, and mitigating risks that could impact the project’s success. This strategy begins with a thorough risk identification process, where potential issues such as technical challenges, project scope changes, and resource constraints are recognized early. Each risk is then assessed for its probability of occurrence and potential impact on the project. Based on this assessment, risk mitigation strategies are developed and implemented. These strategies might include adopting flexible project management methodologies like Agile, investing in training for team members, implementing robust testing and quality assurance processes, and maintaining open communication channels with all stakeholders. Additionally, regular risk reviews are conducted throughout the project lifecycle to ensure that new risks are identified and managed promptly. The Company’s’ Cybersecurity Policies are updated annually and reviewed by Independent Third Party Vendors to certify compliance. The Company requires Cybersecurity Awareness training for all new hires and a minimum of an annual review of such policies for all employees. The Company created and deployed an extensive Learning Management System that tracks employee adherence to Cyber Security Awareness, HIPAA and other related content. The Company’s’ Cybersecurity Incident Response Policy provides specific steps for any employee that detects an attack to take to help stop the propagation of the threat and report the incident to their Superiors, the IT Team and the Security Manager. - 24 - While there are significant threats of all types in the modern connected world, studies show that phishing attacks and social engineering through email and other electronic means are of high concern. With the vast majority (some say as high as 95%) of such attacks originating via email, employee education on how to identify and handle suspicious email and other forms of communication is critical in protecting the data and infrastructure. To date, we have not experienced any cybersecurity incidents that have materially affected our business strategy, results of operations or financial condition. Governance The Board is responsible for general risk oversight. The Board reviews and evaluates management’s evaluation and mitigation of cyber risks as part of its oversight of the Company’s Risk Management program. Management periodically reviews cyber risks, incidents, and risk mitigation plans and activities with the Board. We engaged an outside consulting firm to conduct a review of our information systems environment and make recommendations to improve security where appropriate. Management shared the report’s findings with the Board and periodically updates the Board regarding our progress on implementing the report’s recommendations. ITEM 2. PROPERTIES Our headquarters are located in Centerville, Utah, where we occupy an office space under a three-year lease that we entered into in December 2022. During the year ended December 31, 2025, the Company entered into a lease extension agreement related to its office facility located in Centerville City, Utah. The amendment extended the lease term through November 30, 2026. Our warehouse is located in North Salt Lake City, Utah, which we occupy under a five-year lease that we entered into in June 2023. Pursuant to the lease agreement, the term of the lease ends in May 2028. We believe that our existing facilities are adequate for our current needs. When our leases expire, or if we need to hire more employees, we may exercise our renewal option or look for additional or alternate space for our operations and we believe that suitable additional or alternative space will be available in the future on commercially reasonable terms. ITEM 3. LEGAL PROCEEDINGS We are currently not a party to any material legal proceedings. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. - 25 - PART II ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our Class A Common Stock is listed on the Nasdaq Global Market under the symbol “TRUG”. Our Class B Common Stock is not listed or quoted on any market. Holders As of April 15, 2026, there were 32 holders of record of our Class A Common Stock which includes CEDE & Co., the nominee of the Depository Trust Company. Because many of our shares are held by brokers and other institutions on behalf of shareholders, we believe that the actual number of beneficial holders of our common stock is significantly greater than the number of record holders reflected in our stock records. There were 3 holders of record of our Class B Common Stock, with 19,999 shares of our Class B Common Stock issued and outstanding. Dividend Policy The Company has never declared or paid dividends on our Common Stock since our formation, and we do not anticipate paying dividends in the foreseeable future. Securities Authorized for Issuance under Equity Compensation Plans The information required by this item will be incorporated by reference from our definitive proxy statement to be filed with the SEC pursuant to Regulation 14A. Sale of Unregistered Securities All information related to equity securities sold by us during the period covered by this report that were not registered under the Securities Act have been included in our Form 10-Q filings and in our Form 8-K filings. Issuer Purchases of Equity Securities None. - 26 - ITEM 6. [RESERVED] ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following management’s discussion and analysis should be read in conjunction with our historical financial statements and the related notes thereto. This management’s discussion and analysis contains forward-looking statements, such as statements of our plans, objectives, expectations and intentions. Any statements that are not statements of historical fact are forward-looking statements. When used, the words “believe,” “plan,” “intend,” “anticipate,” “target,” “estimate,” “expect” and the like, and/or future tense or conditional constructions (“will,” “may,” “could,” “should,” etc.), or similar expressions, identify certain of these forward-looking statements. These forward-looking statements are subject to risks and uncertainties, including those under “Risk Factors” in our filings with the Securities and Exchange Commission (“SEC”) that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. Our actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors. See “Forward-Looking Statements; Risk Factor Summary.” References in this management’s discussion and analysis to “we,” “us,” “our,” “the Company,” “our Company” or “TruGolf” refer to TruGolf Holdings, Inc. and its subsidiaries. Overview Business We design, develop, manufacture, and sell golf simulators and related software for residential and commercial applications. Our product offerings include portable, professional, commercial, and custom simulators, as well as standalone software products including E6 Connect and E6 GOLF. We also offer multi-sport gaming applications. Our operations are conducted through our wholly-owned subsidiary, TruGolf, Inc., a Nevada corporation (“TruGolf Nevada”), which has been developing indoor golf simulation software and hardware since 1999. On January 31, 2024, we consummated a business combination pursuant to which TruGolf Nevada became our wholly-owned subsidiary, and our name was changed from Deep Medicine Acquisition Corp. to TruGolf Holdings, Inc. We commenced trading on the Nasdaq Capital Market under the ticker symbol “TRUG” on February 1, 2024. During the year ended December 31, 2025, several significant developments shaped our financial results and capital structure: Franchise Operations. Through our subsidiary TruGolf Links Franchising, LLC (“Links”), formed in May 2024, we continued to develop our indoor golf franchise model, generating $13,125 in franchise revenue during the year ended December 31, 2025. Reverse Stock Split. On June 23, 2025, we effected a 1-for-50 reverse stock split of our Class A and Class B common stock. On March 27, 2026, we effected a 1-for-10 reverse stock split of our Class A and Class B common stock. All share and per share amounts in this discussion have been retroactively adjusted to reflect both reverse stock splits. Nasdaq Compliance. Following a Nasdaq hearing panel process, we regained full compliance with all Nasdaq continued listing requirements by August 1, 2025. We are currently subject to a one-year Mandatory Panel Monitor through August 2026, during which any subsequent non-compliance with the Equity Rule would result in an expedited delisting determination. PIPE Note Extinguishment. In July 2025, we exchanged the entire outstanding principal balance of our PIPE Convertible Notes ($3,938,311) for 3,938 shares of our Series A Convertible Preferred Stock, reducing our total debt obligations and eliminating a significant source of dilution from note conversions. Dividend Note Settlement. In April 2025, we settled approximately $3.9 million in outstanding dividend notes payable through the issuance of Class A and Class B common stock, eliminating these legacy obligations. - 27 - Results of Operations Year Ended December 31, 2025 Compared with Year Ended December 31, 2024 The following table sets forth our results of operations for each of the years set forth below: 2025 2024 Change Revenue $ 18,878,997 $ 21,282,649 $ (2,403,652 ) Cost of revenue 9,359,380 7,401,511 1,957,869 Gross profit 9,519,617 13,881,138 (4,361,521 ) Operating expenses: Salaries, wages and benefits 4,615,951 9,314,415 (4,698,464 ) Selling, general and administrative 11,006,020 6,669,684 4,336,336 Total operating expenses 15,621,971 15,984,099 (362,128 ) Loss from operations (6,102,354 ) (2,102,961 ) (3,999,393 ) Other income (expense): Interest income 265,708 106,400 159,308 Interest expense (3,256,687 ) (6,932,618 ) 3,675,931 Gain on fair value adjustment - 142,319 (142,319 ) Loss on extinguishment of debt (6,135,160 ) (270,594 ) (5,864,566 ) Loss on investment - 262,035 (262,035 ) Other income 600 - 600 Net loss $ (15,227,893 ) $ (8,795,419 ) $ (6,432,474 ) Revenue Revenue Category 2025 2024 Change Golf simulators (hardware and perpetual licenses) $ 14,681,994 $ 13,708,760 $ 973,234 Content software subscriptions 3,710,245 7,276,484 (3,566,239 ) Franchise revenue 13,125 - 13,125 Other (shipping, installation, and other income) 473,633 297,405 176,228 Total net revenue $ 18,878,997 $ 21,282,649 $ (2,403,652 ) Net revenues decreased $2,403,652, or 11.3%, to $18,878,997 for the year ended December 31, 2025, compared to $21,282,649 for the year ended December 31, 2024. The following discussion presents each revenue category separately. Golf Simulators: Golf simulator revenue, which includes hardware and perpetual software licenses, increased $973,234, or 7.1%, to $14,681,994 for the year ended December 31, 2025, compared to $13,708,760 for the year ended December 31, 2024, primarily driven by increased unit volumes in our commercial channels coupled with growth in residential installations. Content Software Subscriptions: Content software subscriptions revenue decreased $3,566,239, or 49.0%, to $3,710,245 for the year ended December 31, 2025, compared to $7,276,484 for the year ended December 31, 2024. The decrease is due to how the Company sold its content subscription licenses during the year ended December 31, 2025, which has resulted in $1,329,184 in deferred revenue to be recognized over the next twelve months. Franchise Revenue: Franchise revenue of $13,125 was recognized for the year ended December 31, 2025, representing initial fees from our TruGolf Links Franchising subsidiary, which was formed in May 2024. No franchise revenue was recognized in the prior year. Other Revenue: Other revenue, which includes shipping income, installation income, and other ancillary items, increased $176,228 to $473,633 for the year ended December 31, 2025, from $297,405 for the year ended December 31, 2024, primarily driven by an increase in sales of ancillary products used with our MultiSport Arcade system. - 28 - Cost of Goods Sold and Gross Profit Cost of goods increased by $1,957,869, or 26.5% to $9,359,380 for the year ended December 31, 2025, as compared to $7,401,511 for the year ended December 31, 2024. Substantially all of the increase was attributable to $2,199,985 in non-recurring inventory adjustments arising from the reconciliation of inventory records in connection with the Company’s transition to a new accounting system during the year. Management does not expect similar adjustments to recur following the completion of the system transition. Excluding these adjustments, cost of goods sold would have been $7,159,395, relatively flat year-over-year, consistent with prior year levels relative to revenue volume. Management believes this adjusted measure provides useful information to investors as it reflects the Company’s ongoing cost structure without the impact of the system transition-related adjustments. Gross profit decreased $4,361,521, or 31.4%, to $9,519,617 for the year ended December 31, 2025, compared to $13,881,138 for the year ended December 31, 2024. Gross margin declined to 50.4% from 65.2%, primarily reflecting the impact of the inventory reconciliation adjustments described above and the decline in higher-margin content software subscription revenue. Excluding the $2,199,985 inventory adjustments, adjusted gross profit of $11,719,602 and adjusted gross margin would have been approximately 62.1%, compared to 65.2% in the prior year. Management presents these adjusted measures to provide investors with additional insight into the Company’s underlying operating performance exclusive of the system transition-related adjustments. Operating Expenses Total operating expenses decreased $362,128, or 2.3%, to $15,621,971 for the year ended December 31, 2025, compared to $15,984,099 for the year ended December 31, 2024. While the aggregate change was nominal, this overall stability masks significant and largely offsetting movements within individual expense categories, each of which is discussed below. Salaries, Wages and Benefits: Salaries, wages, and benefits decreased $4,698,464, or 50.4%, to $4,615,951 for the year ended December 31, 2025, compared to $9,314,415 for the year ended December 31, 2024. The decrease reflects a significant increase in the portion of employee compensation capitalized as software development costs during the year. During the year ended December 31, 2025, the Company capitalized $3,231,490 in software development costs, including the associated employee compensation, representing a full year of capitalization activity compared to partial year in 2024, during which capitalization commenced on March 1, 2024. The increase in capitalized compensation reduced the amount of salary expense recognized in the consolidated statements of operations and is consistent with the Company’s continued investment in its suite of software platforms. Total compensation costs incurred, including both expensed and capitalized amounts, were relatively consistent with prior year levels. Selling, General and Administrative: SG&A increased $4,336,336, or 65.0%, to $11,006,020 for the year ended December 31, 2025, compared to $6,669,684 for the year ended December 31, 2024. The increase was primarily driven by the following: (i) outside contractor costs increased $1,329,017, reflecting the Company’s increased utilization of third-party contractors to supplement the internal capabilities following the shift of employee compensation to capitalized software development costs described above; (ii) amortization expense increased $976,600, all of which reflects the increase in amortization of capitalized software development costs from $161,350 in 2024 to $1,137,950 in 2025, as the Company’s software projects were completed and placed into operation during the year. The significant increase from the prior year reflects the fact that capitalization commenced on March 1, 2024, with the first full year of amortization recognized in 2025. This amortization is expected to continue at similar or higher levels in future periods as the capitalized development portfolio continues to amortize over its estimated three-year useful lives; (iii) professional fees increased $280,797, reflecting higher legal and accounting costs associated with the Company’s public company compliance obligations and financial statement preparation; and (iv) credit card processing fees increased $140,763, consistent with changes in the Company’s revenue mix and payment processing activity during the year. Loss From Operations Loss from operations increased $3,999,393 to $(6,102,354) for the year ended December 31, 2025, compared to $(2,102,961) for the year ended December 31, 2024. The widening operating loss was driven primarily by the $4,361,521 decline in gross profit, which was largely attributable to the inventory reconciliation adjustments and the decline in higher-margin software subscription revenue, while total operating expenses remained essentially flat year-over-year. - 29 - Other Income (Expense) Total other expense, net was $(9,125,539) for the year ended December 31, 2025, compared to $(6,692,458) for the year ended December 31, 2024, an increase in expense of $2,433,081. The net change reflects significant offsetting movements within individual components, as described below. Interest Income: Interest income increased $159,308 to $265,708 for the year ended December 31, 2025, compared to $106,400 for the year ended December 31, 2024, reflecting higher average cash balances held during the year. Interest Expense: Interest expense decreased $3,675,931, or 53.0%, to $3,256,687 for the year ended December 31, 2025, compared to $6,932,618 for the year ended December 31, 2024. The decrease reflects the elimination of interest obligations associated with the PIPE Convertible Notes following their exchange for Series A Preferred Stock in July 2025, as well as the settlement of the dividend notes payable in April 2025, both of which significantly reduced the Company’s average interest-bearing debt balance during the year. Gain on Fair Value Adjustment: No gain on fair value adjustment was recorded for the year ended December 31, 2025, compared to a gain of $142,319 for the year ended December 31, 2024. The prior year gain related to the revaluation of derivative liabilities associated with the PIPE Warrants, which were exchanged in April 2025 and no longer exist. Loss on Extinguishment of Debt: Loss on extinguishment of debt was $6,135,160 for the year ended December 31, 2025, compared to $270,594 for the year ended December 31, 2024. The 2025 loss arose primarily from the exchange of the outstanding PIPE Convertible Notes for Series A Preferred Stock in July 2025. The improvement in interest expense discussed above is directly related to these same transactions, and both items should be considered together when evaluating the net economic impact of the debt restructuring activity completed during 2025. Gain on Investment: No gain on investment was recorded for the year ended December 31, 2025, compared to a gain of $262,035 for the year ended December 31, 2024. The prior year gain related to short-term money market investments. Net Loss Net loss was $15,227,893 for the year ended December 31, 2025, compared to $8,795,419 for the year ended December 31, 2024, an increase of $6,432,474. The increase in net loss was driven by the $4,361,521 decline in gross profit and the $6,135,160 loss on extinguishment of debt, partially offset by a $3,675,931 reduction in interest expense resulting from the debt restructuring transactions completed during the year. Liquidity and Capital Resources Our primary sources of liquidity are cash on hand, cash generated from operations, proceeds from equity financings, and available borrowings under our JP Morgan Chase line of credit. Our primary uses of cash are funding operations, capitalized software development costs, and scheduled debt service obligations. Cash Position The following table presents our cash position as of December 31, 2025 and 2024: 2025 2024 Change Cash and cash equivalents $ 10,469,263 $ 8,782,077 $ 1,687,186 Restricted cash 2,100,000 2,100,000 - Total cash $ 12,569,263 $ 10,882,077 $ 1,687,186 - 30 - As of December 31, 2025, we had cash and cash equivalents of $10,469,263, compared to $8,782,077 as of December 31, 2024. The $2,100,000 in restricted cash is pledged as collateral for our JP Morgan Chase line of credit and is presented separately on our consolidated balance sheets. Restricted cash is not available for general corporate purposes. Unrestricted cash available for operations as of December 31, 2025, was $10,469,263. Summary of Cash Flows The following table summarizes our cash flows for the years ended December 31 2025 and 2024: 2025 2024 Change Net cash used in operating activities $ (1,698,381 ) $ (3,995,606 ) $ 2,297,225 Net cash (used in) provided by investing activities (3,436,933 ) 741,143 (4,178,076 ) Net cash provided by financing activities 6,822,500 8,738,976 (1,916,476 ) Net increase in cash and cash equivalents $ 1,687,186 $ 5,484,513 $ (3,797,327 ) Operating Activities: During the year ended December 31, 2025, we used $1,698,381 in cash from operating activities, a decrease in use of $2,297,225 compared to the cash used in operating activities of $3,995,606 during the year ended December 31, 2024. Despite a net loss of $15,227,893, operating cash consumption was significantly reduced by large non-cash charges included in net loss. The most significant non-cash items were: (i) loss on extinguishment of debt of $6,135,160, which represented the non-cash accounting loss recognized upon the exchange of the PIPE Convertible Notes for Series A Preferred Stock. This charge had no cash impact on operating activities; (ii) inventory reconciliation adjustments of $2,199,985, which represented non-cash changes recorded in connection with the Company’s transition to a new accounting system, as described in the Cost of Revenue discussion above; (iii) amortization of capitalized software development costs of $1,137,950, which represented a non-cash charge for the amortization of software development costs capitalized in prior periods and placed into service during 2025. The improvement in operating cash flow compared to the prior year reflects the combined effect of these non-cash adjustments and changes in working capital, partially offset by the increase in operating loss from continuing operations. Investing Activities Net cash used in investing activities was $3,436,933 for the year ended December 31, 2025, compared to net cash provided by investing activities of $741,143 for the year ended December 31, 2024, a change of $4,178,076. The increase in cash used reflects the Company’s continued and expanded investment in capitalized software development costs, which totaled $3,231,490 for the year ended December 31, 2025, representing a full year of development activity compared to a partial year in 2024. The prior year investing activities included cash inflows related to the sale of short-term investments held by the Company, which did not recur in 2025. Financing Activities Net cash provided by financing activities was $6,822,500 for the year ended December 31, 2025, compared to $8,738,976 for the year ended December 31, 2024, a decrease of $1,916,476. The primary source of financing cash in 2025 was $4,999,500 received from the exercise of Series A Preferred Stock warrants. Additional financing activity during 2025 included $2,520,000 in PIPE loans, net of debt discounts which were offset by $687,000 in repayments of related party loans. - 31 - The following significant financing transactions during 2025 were non-cash in nature and therefore excluded from the statement of cash flows, but are material to understanding the Company’s capital structure: Non-Cash Financing Transaction Amount Exchange of PIPE Notes and Series A & Series B Warrants for Series A Convertible Preferred Stock and Warrants $ 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 4,693,111 PIPE 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 These non-cash transactions resulted in the elimination of all outstanding PIPE Convertible Note obligations and significantly all of the dividend note obligations, significantly improving the Company’s balance sheet and eliminating the associated interest burden going forward. Debt Obligation and Near-Term Maturities As of December 31, 2025, we have approximately $1,749,471 in scheduled debt payments due within the next twelve months. The JP Morgan Chase line of credit balance of $802,738 matures on December 31, 2026, and we intend to seek renewal or replacement of this facility prior to maturity. The ARJ Trust notes of $650,000 mature on March 3, 2026, and we expect to seek extension of this loan prior to maturity while we satisfy this obligation through available cash on hand. The two annual installments of the Carver Note for $37,000 each are due on March 31, 2026 and September 30, 2026. The McKettrick Note annual installment of $250,000 is due on December 21, 2026. We expect to fund all near-term debt obligations through unrestricted cash on hand and cash generated from operations. We maintain a $2,000,000 revolving line of credit with JP Morgan Chase, secured by $2,100,000 in restricted cash pledged as collateral. As of December 31, 2025, $802,738 was outstanding under the facility, leaving available borrowing capacity of $1,197,262. The Company has an outstanding loan of $1,600,000 from Chris Jones, our Chief Executive Officer, which bears no interest and has no stated maturity date. During the year ended December 31, 2025, the Company voluntarily repaid $400,000 of this obligation. Because this loan has no stated maturity or formal repayment schedule it is classified as a short-term obligation; however, as a related party arrangement with no documented terms, there can be no assurance as to the timing of any future repayment demands. The Company has a gross sales royalty representing a perpetual obligation requiring minimum monthly payments of the greater of $20,833 or a percentage of monthly revenues based on trailing twelve-month revenue levels, currently fixed at 2.4% of applicable revenues. The outstanding balance of this obligation was $1,000,000 as of December 31, 2025. During the year ended December 31, 2025, royalty payments totaled $663,014. This obligation has no stated maturity date and therefore no scheduled principal maturities; it will continue to require cash outlays in perpetuity unless terminated through a change of control buyout or reduced through the exercise of the one-time buy-down option, each as provided in the Royalty Agreement. Capital Expenditure Requirements Our capital expenditures consist primarily of capitalized software development costs associated with the continued development of our suite of software platforms. During the year ended December 31, 2025, we capitalized $3,231,490 in software development costs, compared to $1,701,471 in 2024, reflecting the expansion of our development program to a full annual cycle. We expect to continue investing in software development at similar levels in 2026 as we advance our product roadmap. These expenditures are expected to be funded through cash on hand and cash generated from operations. Sufficiency of Capital Resources Based on our current unrestricted cash position of $7,849,785, available borrowing capacity of $1,197,262 under our JP Morgan Chase line of credit, and management’s assessment of expected operating cash flows, we believe our existing resources will be sufficient to fund our operations, meet our debt service obligations as they come due, and continue our software development investment program for at least the next twelve months from the date of this filing. - 32 - However, our long-term liquidity depends on our ability to improve operating cash flows through revenue growth and cost management, and to access additional financing if required. We have historically funded our operations through a combination of revenue, debt financings, and equity issuances. While we have no committed financing arrangements in place beyond the JP Morgan Chase line of credit, we believe additional financing sources would be available to us if needed; however, there can be no assurance that such financing would be available on acceptable terms or at all. Our ability to raise equity capital is also subject to our continued compliance with Nasdaq listing requirements, including during the one-year Mandatory Panel Monitor period that runs through August 2026, as described in Note 1 to the consolidated financial statements. Off-Balance Sheet Arrangements As of December 31, 2025, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of SEC Regulation S-K. Known Trends, Events, and Uncertainties The emergence and effects of public health crises, such as pandemics and epidemics, along with geopolitical conflicts, including the consequences of the ongoing war between Russia and Ukraine and between Israel and various factors in the Middle East, including related sanctions and countermeasures, are difficult to predict, and could adversely impact geopolitical and macroeconomic conditions, the global economy, and contribute to increased market volatility, which may in turn adversely affect our business and operations. Other than as discussed above and elsewhere in this report, we are not aware of any trends, events or uncertainties that are likely to have a material effect on our financial condition. Critical Accounting Estimates The preparation of our consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts of assets, liabilities, revenues, and expenses. The following estimates involve the highest degree of judgment and uncertainty and have had or are reasonably likely to have a material impact on our financial condition or results of operations. These descriptions should be read in conjunction with Note 2 — Summary of Significant Accounting Policies, which describes the underlying accounting policies. Allowance for Current Expected Losses We estimate our allowance for current expected credit losses on accounts receivable using a rate loss model that considers customer payment history, aging, current economic conditions, and management’s judgment regarding ultimate collectability. As of December 31, 2025, we recorded an allowance of $1,553,000 against gross accounts receivable of $2,613,709, representing a reserve rate of 59.4%. The reserve rate reflects the concentration of our receivables among a limited number of commercial customers and the extended payment terms common in our industry. This estimate is inherently uncertain because it requires management to predict future customer behavior based on historical patterns that may not be indicative of future collections. A 10% increase or decrease in our reserve rate would change the allowance by approximately $261,000, with a corresponding impact on net income. Given the concentration of our receivable balance, the financial condition of a single significant customer could have a disproportionate effect on this estimate. Inventory Valuation We carry inventory at the lower of cost or net realizable value. Estimating net realizable value requires management to assess product demand, technological obsolescence, and the expected selling prices of inventory on hand. During the year ended December 31, 2025, we recorded $2,199,985 in inventory valuation adjustments in connection with our transition to a new accounting system, which required a comprehensive reconciliation of physical inventory counts to book records. These adjustments demonstrate the inherent uncertainty in this estimate. - 33 - Going forward, our inventory valuation is subject to risk from rapid changes in product technology and customer demand, particularly as we continue to evolve our simulator hardware lineup. A deterioration in demand for existing hardware models or the introduction of new products that render current inventory obsolete could require additional write-downs beyond those already recorded. Management reviews inventory for impairment indicators on a quarterly basis. Capitalized Software Development Costs and Technological Feasibility and Useful Life We capitalize software development costs once technological feasibility is established and cease capitalization when the product is available for general release. As of December 31, 2025, capitalized software development costs, net of accumulated amortization, were $3,633,661, and amortization expense was $1,137,950 for the year ended December 31, 2025, compared to $161,350 for the year ended December 31, 2024. Two estimates embedded in this balance involve significant judgment. First, the determination of when technological feasibility is achieved affects the amount of costs eligible for capitalization versus those that must be expensed as incurred. An earlier or later feasibility determination could materially change the amount capitalized in any given period. Second, we amortize capitalized software costs over an estimated useful life of three years. If the actual useful life of our software products proves shorter than three years due to technological change or loss of market relevance, we would be required to accelerate amortization or record an impairment charge. Conversely, if useful lives are longer than estimated, our amortization expense may be overstated. Given the $3,633,661 net balance subject to this estimate, a change in the estimated useful life from three years to two years would increase annual amortization expense by approximately $538,582, which would be material to our results of operations. Income Tax Valuation Allowance We maintain a full valuation allowance against all of our deferred tax assets due to uncertainty regarding our ability to generate sufficient future taxable income to realize those benefits. As of December 31, 2025, the cumulative valuation allowance was $5,633,400. The determination of whether a valuation allowance is required involves significant judgment about the weight of both positive and negative evidence regarding future taxable income, including our history of cumulative losses, current operating trends, and the feasibility of tax planning strategies. This estimate is highly sensitive to changes in management’s assessment of future profitability. If we were to conclude that it is more likely than not that some or all of our deferred tax assets will be realized, we would reduce the valuation allowance accordingly, resulting in a tax benefit and increase in net income in the period of the change. Conversely, if our deferred tax assets were to increase due to continued losses and we maintain a full valuation allowance, no additional income statement impact would result. Additionally, we have not completed an analysis under Section 382 of the Internal Revenue Code to determine whether ownership changes resulting from our 2025 equity transactions have limited our ability to utilize our net operating loss carryforwards. If a Section 382 limitation applies, a portion of our deferred tax assets related to net operating losses may need to be written off, which could be material. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Because we are a smaller reporting company, we are not required to provide the information called for by this Item. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The information called for by Item 8 is included beginning on page F-1 contained in this Annual Report on Form 10-K. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. - 34 - ITEM 9A. 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 and acting Chief Financial Officer, who serves as both our principal executive officer and 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 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 our principal executive and principal financial officer 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 our 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. - 35 - Material Weakness in Internal Control over Financial Reporting Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2025 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 December 31, 2025 was not effective. A material weakness, as defined in the standards established by the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. The ineffectiveness of our internal control over financial reporting was due to the following material weaknesses which are indicative of many small companies with small number of staff: ● lack of risk assessment procedures on internal controls to detect financial reporting risks in a timely manner; ● 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 full-time 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. This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Our management’s report was not subject to attestation by our registered public accounting firm pursuant to rules of the SEC that permit us to provide only management’s report in this Annual Report on Form 10-K, which may increase the risk that weaknesses or deficiencies in our internal control over financial reporting go undetected. Our independent registered public accounting firm will not be required to formally attest to the effectiveness of our internal controls over financial reporting for as long as we are a “non-accelerated filer”. Changes in Internal Control Over Financial Reporting There have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) during the year ended December 31, 2025 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting. ITEM 9B. OTHER INFORMATION During the three months ended December 31, 2025, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS. Not applicable. - 36 - PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE The information required by this item is incorporated by reference to our proxy statement for the 2026 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days of the fiscal year ended December 31, 2025, and is incorporated into this Annual Report on Form 10-K by reference. Our Board of Directors has adopted a written Code of Ethics applicable to all officers, directors and employees, which is available on our website (www.trugolf.com) under “Governance Documents” within the “Corporate Governance” section. We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding amendment to, or waiver from, a provision of this Code and by posting such information on the website address and location specified above. ITEM 11. EXECUTIVE COMPENSATION The information required by this item is incorporated by reference to our proxy statement for the 2026 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days of the fiscal year ended December 31, 2025 and is incorporated into this Annual Report on Form 10-K by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The information required by this item is incorporated by reference to our proxy statement for the 2026 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days of the fiscal year ended December 31, 2025 and is incorporated into this Annual Report on Form 10-K by reference. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE The information required by this item is incorporated by reference to our proxy statement for the 2026 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days of the fiscal year ended December 31, 2025, and is incorporated into this Annual Report on Form 10-K by reference. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES The information required by this item is incorporated by reference to our proxy statement for the 2026 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission within 120 days of the fiscal year ended December 31, 2025, and is incorporated into this Annual Report on Form 10-K by reference. - 37 - PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (a) The following documents are filed as a part of the report: (1) For a list of the financial statements included herein, see the index to the financial statements beginning on page F-1 of this Annual Report on Form 10-K, incorporated into this Item by reference. (2) Financial statement schedules have been omitted because they are either not required or not applicable or the information is included in the consolidated financial statements or the notes thereto. (b) Exhibits. Exhibit Incorporated by Reference Number Exhibit Description Form Exhibit Filing Date ‍2.1 Amended and Restated Agreement and Plan of Merger, dated as of July 21, 2023, by and among Deep Medicine Acquisition Corp., DMAC Merger Sub Inc., Bright Vision Sponsor LLC, Christopher Jones and TruGolf, Inc. 424B3 Annex C 12/29/23 ‍2.2 First Amendment to Agreement and Plan of Merger, dated as of December 7, 2023, by and among Deep Medicine Acquisition Corp., DMAC Merger Sub Inc., Bright Vision Sponsor LLC, Christopher Jones and TruGolf, Inc. 424B3 Annex B-2 12/29/23 2.3 Plan of Conversion of TruGolf Holdings, Inc. 8-K 2.1 3/13/26 3.1 Amended and Restated Articles of Incorporation of TruGolf Holdings, Inc. 8-K 3.1 3/13/26 3.2 Bylaws of TruGolf Holdings, Inc. 8-K 3.2 3/13/26 3.3* Certificate of Change 4.1 TruGolf Holdings, Inc. 2024 Stock Incentive Plan 10-K 4.4 4/15/25 4.2 TruGolf Holdings, Inc. 2026 Stock Incentive Plan 8-K 10.1 2/18/26 4.3 Form of Warrant to Purchase Series A Convertible Preferred Stock 8-K 10.3 4/23/25 4.4* Description of Securities 10.1 Securities Purchase Agreement 8-K 10.1 2/7/24 10.2 Indemnity Agreement 8-K 10.5 2/6/24 10.3 Employment Agreement between TruGolf, Inc. and Christopher Jones, dated as of January 18, 2024 10-K 10.6 4/15/25 10.4 Offer Letter, dated as of January 25, 2024, by and between TruGolf, Inc. and Brenner Adams 10-K 10.7 4/15/25 10.5 Offer Letter, dated as of January 18, 2024, by and between TruGolf, Inc. and Nate Larsen 10-K 10.8 4/15/25 10.6 Securities Purchase Agreement, dated February 2, 2024 8-K 10.1 2/7/24 10.7 Registration Rights Agreement, dated February 2, 2024 8-K 10.2 2/7/24 10.8*** Form of Exchange Agreement dated April 22, 2025 8-K 10.1 4/23/25 10.9 Form of Registration Rights Agreement dated April 22, 2025 8-K 10.4 4/23/25 10.10 Form of Equity Purchase Facility Agreement dated May 14, 2025 8-K 10.1 5/15/25 10.11 Form of Registration Rights Agreement dated May 14, 2025 8-K 10.2 5/15/25 10.12 Form of Amendment and Waiver Agreement, dated as of May 28, 2025 8-K 10.1 5/29/25 10.13 Form of Waiver Agreement dated July 21, 2025 8-K 10.4 7/22/25 19 Insider Trading Policy 10-K 19 4/15/25 21.1 Subsidiaries of the Registrant 10-K 21.1 4/15/25 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 97.1 Incentive Clawback Policy 10-K 97.1 4/15/25 101.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. *** Certain exhibits, schedules, and/or annexes to this Exhibit have been omitted in accordance with Item 601(a)(5) of Regulation S-K. the Company agrees to furnish a copy of any such omitted exhibit, schedule, or annex to the SEC upon its request. ITEM 16. FORM 10-K SUMMARY Not applicable. - 38 - SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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: April 15, 2026 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. 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: April 15, 2026 By: /s/ Brenner Adams Name: Brenner Adams Title: Director Date: April 15, 2026 By: /s/ Humphrey P. Polanen Name: Humphrey P. Polanen Title: Director Date: April 15, 2026 By: /s/ Riley Russell Name: Riley Russell Title: Director Date: April 15, 2026 By: /s/ AJ Redmer Name: AJ Redmer Title: Director Date: April 15, 2026 - 39 - ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TRUGOLF HOLDINGS, INC. CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2025 AND 2024 TABLE OF CONTENTS Page REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB ID # 457 ) F-2 CONSOLIDATED FINANCIAL STATEMENTS: Consolidated Balance Sheets as of December 31, 2025 and 2024 F-3 Consolidated Statements of Operations For the Years Ended December 31, 2025 and 2024 F-4 Consolidated Statements of Comprehensive Loss For the Years Ended December 31, 2025 and 2024 F-5 Consolidated Statements of Stockholders’ Equity (Deficit) For the Years Ended December 31, 2025 and 2024 F-6 Consolidated Statements of Cash Flows For the Years Ended December 31, 2025 and 2024 F-7 Notes to Consolidated Financial Statements For the Years Ended December 31, 2025 and 2024 F-8 F- 1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Trugolf Inc. Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Trugolf Inc. (the Company) as of December 31, 2025 and 2024, and the related consolidated statements of operations, comprehensive loss, stockholders’ equity (deficit), and cash flows for each of the years in the two-year period ended December 31, 2025, and the related notes (collectively referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ Haynie We have served as the Company’s auditor since 2024. Salt Lake City, Utah April 15, 2026 F- 2 TRUGOLF HOLDINGS, INC. CONSOLIDATED BALANCE SHEETS December 31, December 31, 2025 2024 ASSETS Current Assets: Cash and cash equivalents $ 10,469,263 $ 8,782,077 Restricted cash 2,100,000 2,100,000 Accounts receivable, net 1,060,709 1,399,153 Inventory, net 863,257 2,349,345 Prepaid expenses and other current assets 985,076 116,619 Other current assets - 45,737 Total Current Assets 15,478,305 14,792,931 Property and equipment, net 355,499 143,852 Capitalized software development costs, net 3,633,661 1,540,121 Right-of-use assets 682,648 634,269 Other long-term assets 31,023 31,023 Total Assets $ 20,181,136 $ 17,142,196 LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) Current Liabilities: Accounts payable $ 2,767,385 $ 2,819,702 Deferred revenue 5,560,725 3,113,010 Notes payable, current portion 9,733 10,001 Notes payable to related parties, current portion 2,537,000 2,937,000 Notes payable 2,537,000 2,937,000 Line of credit, bank 802,738 802,738 Dividend notes payable 118,362 4,023,923 Accrued interest 594,590 661,376 Accrued and other current liabilities 1,463,742 999,307 Accrued and other current liabilities - assumed in Merger 45,008 45,008 Lease liability, current portion 502,526 363,102 Total Current Liabilities 14,401,809 15,775,167 Non-current Liabilities: Notes payable, net of current portion - 9,732 Note payables to related parties, net of current portion 287,000 624,000 Note payables 287,000 624,000 PIPE loan payable, net - 4,068,953 Gross sales royalty payable 1,000,000 1,000,000 Lease liability, net of current portion 191,944 305,125 Total Liabilities 15,880,753 21,782,977 Commitments and Contingencies (Note 20) - - 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; 5,427 and 0 shares issued and outstanding, respectively. Liquidation preference of $ 1,821,410 as of December 31, 2025 1 - Preferred stock value 1 - Common stock, $ 0.0001 par value, 1,000,000,000 shares authorized: Common stock - Class A, $ 0.0001 par value, 90 million shares authorized; 422,899 and 52,241 shares issued and outstanding, respectively 41 5 Common stock - Class B, $ 0.0001 par value, 10 million shares authorized; 19,999 and 3,434 shares issued and outstanding, respectively 2 - Common stock, value 2 - Treasury stock at cost, 9 shares of common stock held, respectively ( 2,037,000 ) ( 2,037,000 ) Additional paid-in capital 47,413,839 18,551,710 Accumulated deficit ( 41,076,500 ) ( 21,155,496 ) Total Stockholders’ Equity (Deficit) 4,300,383 ( 4,640,781 ) Total Liabilities and Stockholders’ Equity (Deficit) $ 20,181,136 $ 17,142,196 The accompanying notes are an integral part of these consolidated financial statements. F- 3 TRUGOLF HOLDINGS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS For the For the Year Ended Year Ended December 31, 2025 December 31, 2024 Revenue, net $ 18,878,997 $ 21,282,649 Cost of revenue 9,359,380 7,401,511 Total gross profit 9,519,617 13,881,138 Operating expenses: Salaries, wages and benefits 4,615,951 9,314,415 Selling, general and administrative 11,006,020 6,669,684 Total operating expenses 15,621,971 15,984,099 Loss from operations ( 6,102,354 ) ( 2,102,961 ) Other (expenses) income: Interest income 265,708 106,400 Interest expense ( 3,256,687 ) ( 6,932,618 ) Gain on fair value adjustment - 142,319 Loss on extinguishment of debt ( 6,135,160 ) ( 270,594 ) Gain on investment - 262,035 Other income 600 - Total other expense ( 9,125,539 ) ( 6,692,458 ) Loss from operations before provision for income taxes ( 15,227,893 ) ( 8,795,419 ) Provision for income taxes - - Net loss $ ( 15,227,893 ) $ ( 8,795,419 ) Net loss per common share - basic and diluted $ ( 51.39 ) $ ( 377.98 ) Weighted average shares outstanding - basic and diluted 296,313 23,270 The accompanying notes are an integral part of these consolidated financial statements. F- 4 TRUGOLF HOLDINGS, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS For the For the Year Ended Year Ended December 31, 2025 December 31, 2024 Net loss $ ( 15,227,893 ) $ ( 8,795,419 ) Other comprehensive gain (loss): Unrealized gain (loss) in fair value of short-term investments - 1,662 Comprehensive loss $ ( 15,227,893 ) $ ( 8,793,757 ) The accompanying notes are an integral part of these consolidated financial statements. F- 5 TRUGOLF HOLDINGS, INC. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) FOR THE YEAR ENDED DECEMBER 31, 2025 AND 2024 Shares Amount Shares Amount Shares Amount Shares Amount Capital Gain (Loss) Deficit Total Accumulated Series A Preferred Stock Class A Common Stock Class B Common Stock Treasury Stock Additional Paid-in Other Comprehensive Accumulated Shares Amount Shares Amount Shares Amount Shares Amount Capital Gain (Loss) Deficit Total Balance at December 31, 2023 - $ - 1,310 $ - - $ - ( 9 ) $ ( 2,037,000 ) $ 10,479,858 $ ( 1,662 ) $ ( 12,358,924 ) $ ( 3,917,728 ) Common stock exchanged in Merger - - ( 1,310 ) - - - - - ( 3,854,693 ) - - ( 3,854,693 ) Issuance of common stock - Series A exchanged in Merger - - 23,077 2 - - - - ( 2 ) - - - Issuance of common stock - Series B issued in Merger - - - - 3,434 - - - - - - - Revaluation of costs of Merger - - - - - - - - 385,000 - ( 1,153 ) 383,847 Issuance of common stock for interest and make good - - 1,446 - - - - - 700,821 - - 700,821 Issuance of common stock for conversion of notes - - 27,575 3 - - - - 9,989,657 - - 9,989,660 Stock-based compensation - - common stock - - 144 - - - - - 119,959 - - 119,959 Stock-based compensation - common stock - - 144 - - - - - 119,959 - - 119,959 - options - - - - - - - - 538,323 - - 538,323 Stock-based compensation - options - - - - - - - - 538,323 - - 538,323 Debt refinance conversion - - - - - - - - 192,787 - - 192,787 Realized gain in fair value of short-term investments - - - - - - - - - 1,662 - 1,662 Net loss - - - - - - - - - - ( 8,795,419 ) ( 8,795,419 ) Balance as of December 31, 2024 - $ - 52,241 $ 5 3,434 $ - ( 9 ) $ ( 2,037,000 ) $ 18,551,710 $ - $ ( 21,155,496 ) $ ( 4,640,781 ) Issuance of Series A Preferred and associated warrants 5,823 $ - - $ - - $ - - $ - $ 9,870,150 $ - $ - $ 9,870,150 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 and dividends ( 5,951 ) - 341,837 34 - - - - 4,693,077 - ( 4,693,111 ) - Issuance of common stock for conversion of PIPE notes, interest and make good - - 20,360 1 - - - - 5,382,706 - - 5,382,707 Issuance of common stock for conversion of dividend note payable - - 8,466 1 16,566 2 - - 3,905,558 - - 3,905,561 Reverse stock split adjustment - - ( 5 ) - (1 ) - - - - - - - Stock-based compensation - - options - - - - - - - - 11,139 - - 11,139 Stock-based compensation - options - - - - - - - - 11,139 - - 11,139 Net loss - - - - - - - - - - ( 15,227,893 ) ( 15,227,893 ) Balance as of December 31, 2025 5,427 $ 1 422,899 $ 41 19,999 $ 2 ( 9 ) $ ( 2,037,000 ) $ 47,413,839 $ - $ ( 41,076,500 ) $ 4,300,383 The accompanying notes are an integral part of these consolidated financial statements. F- 6 TRUGOLF HOLDINGS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS For the For the Year Ended Year Ended December 31, 2025 December 31, 2024 Cash flows from operating activities: Net loss $ ( 15,227,893 ) $ ( 8,795,419 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 1,131,746 301,442 Amortization of convertible notes discount 359,037 728,278 Amortization of right-of-use asset 372,955 338,394 Change in fair value of derivative liability - ( 142,319 ) Bad debt expense 82,137 826,207 Change in OCI - 1,662 Loss on extinguishment of debt 6,135,160 270,594 Stock issued for make good provisions on debt conversion 2,169,707 700,821 Stock options issued to employees 11,139 538,323 Stock issued for services - 119,959 Changes in operating assets and liabilities: Accounts receivable, net 256,312 173,512 Inventory, net 1,486,088 ( 230,261 ) Prepaid expenses ( 868,457 ) 145,514 Other current assets 45,737 ( 45,737 ) Other assets - 50,001 Accounts payable ( 52,318 ) 444,961 Deferred revenue 2,447,715 1,408,786 Accrued interest payable ( 66,786 ) 201,504 Accrued and other current liabilities 464,432 ( 634,557 ) Other liabilities ( 50,000 ) ( 63,015 ) Lease liability ( 395,092 ) ( 334,256 ) Net cash used in operating activities ( 1,698,381 ) ( 3,995,606 ) Cash flows from investing activities: Purchases of property and equipment ( 205,443 ) ( 36,339 ) Capitalized software, net ( 3,231,490 ) ( 1,701,471 ) Sale of short-term investments - 2,478,953 Net cash provided by (used in) investing activities ( 3,436,933 ) 741,143 Cash flows from financing activities: Proceeds from PIPE loans, net of discount 2,520,000 8,902,681 Proceeds from exercise of Series A Preferred warrants 4,999,500 - Proceeds from notes payable - related party - 2,000,000 Proceeds from investment fund (PIPE) - 2,112,560 Cash acquired in Merger - 103,818 Debt refinance conversion - 192,787 Costs of Merger paid from PIPE loan - ( 1,947,787 ) Repayments of line of credit - ( 1,980,937 ) Repayments of liabilities assumed in Merger - ( 100,000 ) Repayments of notes payable ( 10,000 ) ( 9,146 ) Repayments of notes payable - related party ( 687,000 ) ( 535,000 ) Net cash provided by financing activities 6,822,500 8,738,976 Net change in cash, cash equivalents and restricted cash 1,687,186 5,484,513 Cash, cash equivalents and restricted cash - beginning of year 10,882,077 5,397,564 Cash, cash equivalents and restricted cash - end of year $ 12,569,263 $ 10,882,077 Supplemental cash flow information: Cash paid for: Interest $ 108,993 $ 923,975 Income taxes $ - $ - Non-cash investing and financing activities: PIPE note principal converted to Class A Common Stock $ 3,213,000 $ 5,832,600 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 $ 4,693,111 $ - Right-of-use assets obtained in exchange for operating lease liabilities (lease modification) $ 421,334 $ - Convertible notes exchanged for PIPE note $ - $ 2,419,622 Class A Common Stock exchanged in Merger $ - $ 3,854,573 Class A Common Stock issued in Merger $ - $ 1,154 Class B Common Stock issued in Merger $ - $ 172 Derivative liability related to warrants $ - $ 142,319 Termination of loan payable $ - $ 1,875,000 The accompanying notes are an integral part of these consolidated financial statements. F- 7 TRUGOLF HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 – NATURE OF THE ORGANIZATION AND BUSINESS Organization and Business TruGolf Holdings, Inc. (including its subsidiaries, “the Company,” “we,” “us,” or “our”) designs, develops, manufactures, and sells golf simulators and related software for residential and commercial applications. Our product offerings include portable, professional, commercial, and custom simulators, as well as standalone software products including E6 Connect and E6 GOLF. We also offer multi-sport gaming applications. Our operations are conducted through our wholly-owned subsidiary, TruGolf, Inc., a Nevada corporation (“TruGolf Nevada”), which has been developing indoor golf software and hardware since 1999. On January 31, 2024, we consummated a business combination pursuant to which TruGolf Nevada became our wholly-owned subsidiary, and our name was changed from Deep Medicine Acquisition Corp. to TruGolf Holdings, Inc. On May 10, 2024, the Company formed TruGolf Links Franchising, LLC (“Links”), a wholly-owned subsidiary, to establish and sell franchises utilizing the Company’s indoor golf and recreational sports simulators. As of December 31, 2025, Links had received $ 1,104,375 in franchise deposits, recorded as deferred revenue. The Company is an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 and has elected to comply with certain reduced public company reporting requirements. 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 “2025 Reverse Stock Split”) and began trading on a 2025 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 199,999 , and the number of authorized shares of common stock remained unchanged. On March 25, 2026, 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-10 reverse stock split of the Class A shares of the Company’s issued and outstanding common stock, effective as of 12:01 a.m. Eastern Time on March 27, 2026 (the “2026 Reverse Stock Split”, and together with the 2025 Reverse Stock Split, the “Reverse Stock Split”) and began trading on a 2026 Reverse Stock Split-adjusted basis on Nasdaq on March 27, 2026. As a result of the 2026 Reverse Stock Split, the number of Class A common shares outstanding as of December 31, 2025, was reduced from 4,228,985 to 422,899 and the number of Class B common shares outstanding was reduced from 199,999 to 19,999 , 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 16 - Stockholders’ Equity (Deficit) 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). F- 8 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. 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. NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the Unites States of America (“GAAP”) and in conformity with the instructions on Form 10-K and Article 8 of Regulation S-X and the related rules and regulations of the Securities and Exchange Commission (the “SEC”). The consolidated financial statements include the amounts of the Company and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. The 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. Reclassifications Certain reclassifications have been made to the financial statements for the year ended December 31, 2024, to conform to the financial statement presentation for the year ended December 31, 2025. These reclassifications had no effect on net loss or cash flows as previously reported. Use of Estimates The preparation of these consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as the disclosure of contingent assets and liabilities, at the date of and during the reported period of the consolidated financial statements. Actual results could differ from those estimates. The Company evaluates estimates and assumptions on an ongoing basis. F- 9 Cash and Cash Equivalents Cash and cash equivalents consist of cash on hand and highly liquid investments with original maturities of three months or less. The Company maintains deposits in several financial institutions, which may at times exceed amounts covered by insurance provided by the U.S. Federal Deposit Insurance Corporation (“FDIC”). The Company has not experienced any losses related to amounts in excess of FDIC limits. As of December 31, 2025 and 2024, the Company had cash in excess of FDIC limits of approximately $ 11,468,910 and $ 9,662,000 , respectively. Accounts Receivable, net Accounts receivable consist of trade receivables arising from credit sales to customers in the normal course of business. Accounts receivable are recorded at the time of sale, net of an allowance for current expected credit losses (“CECL”) in accordance with the Financial Accounting Standards Board’s Accounting Standards Codification (“ASC”) Topic 326, “ Financial Instruments – Credit Losses ”, The Company estimates CECL using a rate loss model based on delinquency. The estimated loss rate is based on historical experience with specific customers, understanding of the Company’s current economic circumstances, reasonable and supportable forecasts, and the Company’s judgment as to the likelihood of ultimate payment based upon available data. Management believes the Company’s credit risk is mitigated by the geographically diverse customer base and its credit evaluation procedures. Accounts receivable balances are written off when they are determined to be uncollectible. As of December 31, 2025 and 2024, the Company estimated an allowance for CECL of $ 1,553,000 and $ 1,470,868 , respectively. Inventory, net The Company’s inventory consists of raw materials and are valued at the lower of historical cost or net realizable value, where net realizable value is considered to be the estimated selling price in the ordinary course of business, less reasonably predictable cost of completion, disposal and transportation. Historic inventory costs are calculated on an average or specific cost basis. The Company records inventory write-downs for excess or obsolete inventories based upon assumptions on current and future demand forecasts. As of December 31, 2025 and 2024, the Company had $ 248,312 and $ 448,360 , respectively, reserved for obsolete inventory. Property and Equipment Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is calculated over the estimated useful lives of the related assets using the straight-line method. Amortization of leasehold improvements is computed using the straight-line method over the shorter of the remaining lease term (including renewals that are reasonably assured) or the estimated useful lives of the improvements. For internal-use software, external costs and employee payroll expenses directly associated with developing new or enhancing existing software applications are capitalized subsequent to the preliminary stage of development. Internal-use software costs are amortized using the straight-line method over the estimated useful life of the software when the project is substantially complete and ready for its intended use. SCHEDULE OF ESTIMATED USEFUL LIVES Category Estimated Useful Life Computer equipment and software 3 - 10 years Furniture and fixtures 3 - 15 years Vehicles 5 years Equipment 5 - 10 years Expenditures for major additions and improvements are capitalized, and minor replacements, maintenance, and repairs are expensed as incurred. When property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gains or losses are included in the Company’s results of operations for the respective period. F- 10 Capitalized Software Development Costs The Company capitalizes certain costs related to the development of our software used in our simulators. In accordance with authoritative guidance, including ASC 985-20, Software – Costs of Software to be Sold, Leased, or Marketed , the Company began to capitalize these costs when the technological feasibility was established and preliminary development efforts were successfully completed, management authorized and committed project funding, and it was probable that the project would be completed and the software would be used as intended. Such costs are amortized when placed in service, on a straight-line basis over the estimated life of the related asset, estimated to be three years beginning on February 1, 2024. Costs incurred prior to meeting these criteria together with costs incurred for training and maintenance are expensed as incurred and recorded in selling, general and administrative expenses on our consolidated statements of operations. The Company does not capitalize any testing or maintenance costs. The accounting for these capitalized software costs requires management to make significant judgments, assumptions and estimates related to the timing and amount of recognized capitalized software development costs. The balance of capitalized software development costs, net of accumulated amortization, at December 31, 2025 and 2024, was $ 3,633,661 and $ 1,540,121 , respectively. Advertising and Marketing Costs The Company expenses advertising and marketing costs as they are incurred. Advertising and marketing expenses were $ 776,316 and $ 736,744 for the years ended December 31, 2025 and 2024, respectively, and are recorded in operating expenses on the consolidated statements of operations. Debt with Warrants In accordance with ASC 470-20-25, when the Company issues debt with warrants, the Company treats the fair value of the warrants as a debt discount, recorded as a contra-liability against the debt, and amortizes the balance over the life of the underlying debt as amortization of debt discount expense in the consolidated statements of operations using the straight-line method. The offset to the contra-liability is recorded as either equity or liability in the Company’s consolidated balance sheets depending on the accounting treatment of the warrants. If the debt is retired early, the associated debt discount is then recognized immediately as amortization of debt discount expense in the consolidated statements of operations. Fair Value Measurements The fair value of a financial instrument is the amount the Company would receive to sell an asset, or pay to transfer a liability, in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. In the absence of such data, fair value is estimated using internal information consistent with what market participants would use in a hypothetical transaction. According to ASC Topic 820, “ Fair Value Measurement ,” the fair value hierarchy is based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value. The Company’s assessment of the significance of a particular input to the fair value measurements requires judgment and may affect the valuation of the assets and liabilities being measured and their placement within the fair value hierarchy. The Company uses appropriate valuation techniques based on available inputs to measure the fair value of its assets and liabilities. The fair value hierarchy is defined in the following three categories: Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or inputs that are corroborated by market data. Level 3: Unobservable inputs that are not corroborated by market data. The carrying amounts of financial assets and liabilities, such as cash and cash equivalents, accounts receivable, inventories, prepaid expenses, accounts payable and accrued expenses, and customer deposits approximate fair value, given their short-term nature. The carrying value of lease obligations and notes payable also approximates fair value given these instruments bear prevailing market interest rates. F- 11 Leases The Company accounts for leases in accordance with ASC Topic 842, “ Leases .” The Company determines whether a contract is a lease at contract inception or for a modified contract at the modification date. Contracts containing a lease are further evaluated for classification as a ROU operating lease or a finance lease. At inception or modification, the Company recognizes ROU assets and related lease liabilities on the balance sheet for all leases greater than one year in duration. Lease liabilities and their corresponding ROU assets are initially measured at the present value of the unpaid lease payments as of the lease commencement date. If the lease contains a renewal and/or termination option, the exercise of the option is included in the term of the lease if the Company is reasonably certain that a renewal or termination option will be exercised. As the Company’s leases do not provide an implicit rate, the Company uses an estimated incremental borrowing rate (“IBR”) based on the information available at the commencement date of the respective lease to determine the present value of future payments. The IBR is determined by estimating what it would cost the Company to borrow a collateralized amount equal to the total lease payments over the lease term based on the contractual terms of the lease and the location of the leased asset. Operating lease payments are recognized as an expense on a straight-line basis over the lease term in equal amounts of rent expense attributed to each period during the term of the lease, regardless of when actual payments are made. This generally results in rent expense in excess of cash payments during the early years of a lease and rent expense less than cash payments in later years. The difference between rent expense recognized and actual rental payments is typically represented as the spread between the ROU asset and lease liability. When calculating the present value of minimum lease payments, the Company accounts for leases as one single lease component if a lease has both lease and non-lease components. Variable lease and non-lease components are expensed as incurred. The Company does not recognize ROU assets and lease liabilities for short-term leases that have an initial lease term of 12 months or less. Income Taxes Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets, including tax loss and credit carry forwards, and liabilities measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company utilizes ASC 740, Income Taxes , which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. The Company accounts for income taxes using the asset and liability method to compute the differences between the tax basis of assets and liabilities and the related financial amounts, using currently enacted tax rates. A valuation allowance is recorded when it is “more likely than not” that a deferred tax asset will not be realized. At December 31, 2025 and 2024, the Company’s net deferred tax asset has been fully reserved. For uncertain tax positions that meet a “more likely than not” threshold, the Company recognizes the benefit of uncertain tax positions in the consolidated financial statements. The Company’s practice is to recognize interest and penalties, if any, related to uncertain tax positions in income tax expense in the consolidated statements of operations when a determination is made that such expense is likely. Revenue Recognition The Company records revenue in accordance with FASB ASC Topic 606, “ Revenue from Contracts with Customers .” Revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. To achieve this core principle, the Company applies the following five-step approach: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to performance obligations in the contract; and (5) recognize revenue when or as a performance obligation is satisfied. F- 12 The Company primarily recognizes revenue from: (i) golf simulators, (ii) content software subscriptions, and (iii) franchise operations, including regional developer territory fees, initial franchise fees, and ongoing royalty fees. Performance obligations under our contracts consist of hardware, software consisting of perpetual licenses and subscription licenses, support, and franchise rights within a single operating segment. Golf Simulators – Substantially all the Company’s sales are multiple performance obligation arrangements for its golf simulators, for which the transaction price is equivalent to the stated price of the product or service, net of any stated discounts applicable at a point in time. Golf simulators are bundled and are comprised of both hardware, a software license (for the software to operate the simulator), and a content software subscription license. Revenue from golf simulators is recognized at the point in time when installation (hardware and software) has occurred and has been accepted by the customer. For transactions where the Company utilizes a third-party to complete the installation, the Company recognizes revenue solely for the simulator hardware upon delivery to the customer or third-party installer and then recognizes the remainder of the revenue upon installation and customer acceptance. Perpetual License – Golf simulators require specific proprietary software to run the simulations. The Company records revenue from the proprietary software products under perpetual licenses. Revenue from the perpetual licenses is recognized at the time of installation and customer acceptance. Content Software Subscriptions – The Company offers content software subscriptions for one and twelve months. We recognize revenue from these transactions when control has passed to the customer and the performance obligations have been satisfied. Control is considered to have passed to the customer when the software license has been delivered and accepted by the customer. The content software subscription revenue is recognized over the term of the contract. Reseller Subscription Royalties – The Company has entered into reseller arrangements under which authorized resellers distribute and facilitate the sale or renewal of the Company’s content software subscriptions through their platforms. Pursuant to these arrangements, the Company pays each reseller a royalty calculated as a percentage of net subscription revenue attributable to subscriptions sold or renewed through the reseller’s platform. In accordance with ASC 606, these royalty payments represent consideration payable to a customer and are recorded as a reduction of content software subscription revenue (contra revenue) rather than as an operating expense, as the payments are not made in exchange for a distinct good or service transferred to the Company that has a reliably estimable fair value separate from the subscription revenue to which the royalty relates. The Company has determined that recognizing these royalties upon the occurrence of the related subscription purchase or renewal event does not produce a result that is materially different from ratable recognition over the related subscription terms, given the short settlement cycle and immaterial amounts involved. Accordingly, reseller subscription royalties are recognized as contra revenue in the period the related subscription purchase or renewal occurs. Royalty amounts payable but not yet remitted to the reseller are accrued as a liability within accrued expenses on the consolidated balance sheet. Regional Developer Territory Fees – The Company enters into Regional Developer Agreements (“RDAs”) that grant Regional Developers exclusive territorial rights to solicit and support franchisees within defined geographic areas in exchange for a nonrefundable upfront RD Territory Fee. Because the RDA prohibits subfranchising, the territorial exclusivity cannot be utilized independently of opening individual franchise locations. Accordingly, the upfront fee is recorded as deferred revenue and allocated on a pro rata basis to each franchise location contemplated in the Development Schedule. The allocated amount for each location is recognized as revenue on a straight-line basis over the term of the RDA, commencing upon execution of that agreement. Initial Franchise Fees – the Company enters into unit franchise agreements with individual franchisees for the operation of TruGolf Links Centers. Each agreement requires payment of a nonrefundable Initial Franchise Fee, which together with any allocated RD Territory Fee amount, is deferred upon receipt and recognized as revenue on a straight-line basis over the term of the franchise agreement. The franchise right constitutes a license of symbolic intellectual property whose value is derived from the Company’s ongoing brand, marketing, and system support activities. Franchise Royalty Fees – The Company earns ongoing royalties from franchisees as a percentage of franchisee gross sales. Royalty revenue is recognized when the underlying franchisee sales occur, consistent with the sales-based royalty exception under ASC 606. The Company estimates royalty revenue when franchisee sales data is unavailable at period end and records a true-up in the subsequent period. Regional Developer Compensation – Under each RDA, the Company remits to the Regional Developer a contractual percentage of Initial Franchise Fees collected (Sales Services Compensation) and Franchise Royalty Fees collected (Support Services Compensation) from franchisees within the territory. Sales Services Compensation is recognized as an operating expense ratably over the term of the related unit franchise agreement. Support Services Compensation is recognized as an operating expense in the same period as the related royalty revenue. Deferred Revenue Deferred revenue represents either customer advance payments or performance obligations that have not yet been met. Revenue from golf simulators and perpetual software licenses is deferred and primarily recognized upon the installation of the golf simulators and acceptance from the customer. Revenue from content software subscriptions is deferred and recognized ratably over the life of the subscription (one or twelve months). Revenue from franchise operations is deferred upon receipt. RD Territory Fees are recognized as the allocated portion of each material right is earned over the term of the corresponding RDA. Initial Franchise Fees are recognized on a straight-line basis over the term of each unit franchise agreement. During the years ended December 31, 2025 and 2024, the Company recognized $ 3,113,010 and $ 1,704,224 of golf simulator and subscription services revenue, respectively, that was included in deferred revenue balances at the beginning of the year. Revenue recognized from franchise deferred balances during the year ended December 31, 2025 was $ 13,125 . Remaining Performance Obligations As of December 31, 2025, approximately $ 4.5 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. Deferred revenue associated with franchise operations totaling approximately $ 1.1 million is expected to be recognized over the terms of the applicable franchise and regional developer agreements, which range up to ten years. Cost of Revenues Cost of revenue includes direct materials, labor, manufacturing overhead costs and reserves for estimated warranty cost (excluding depreciation). Cost of revenues also includes direct costs incurred to deliver its software products, content subscriptions, and integrated simulator solutions to customer, charges to write down the carrying value of the inventory when it exceeds its estimated net realizable value and to provide for on-hand inventories that are either obsolete or in excess of forecasted demand, as consistently reviewed by the Company. During the years ended December 31, 2025 and 2024, the Company recorded an expense of $ 295,547 and $ 0 in inventory write-down, respectively. Content Licensing Royalties – The Company pays royalties to third-party golf course owners and licensors for the right to include licensed course content in its software products and subscriptions. These royalties are recognized as cost of revenue in the period the related software or subscription revenue is recognized, as they represent direct costs of delivering licensed content to customers. Royalty rates and terms vary by course licensor and are governed by individual license agreements. F- 13 Loss Per Share Basic loss per share is calculated by dividing net loss by the weighted average number of shares of common stock outstanding during each period. Diluted loss per share is calculated by adjusting the weighted average number of shares of common stock outstanding for the dilutive effect, if any, of common stock equivalents. Common stock equivalents whose effect would be antidilutive are not included in diluted loss per share. The Company uses the treasury stock method to determine the dilutive effect, which assumes that all common stock equivalents have been exercised at the beginning of the period and that the funds obtained from those exercises were used to repurchase shares of common stock of the Company at the average closing market price during the period. All outstanding convertible notes are considered common stock at the beginning of the period or at the time of issuance, if later, pursuant to the if-converted method. Stock-based Compensation The Company has the ability to grant employees a number of different stock-based awards, including restricted shares of common stock, restricted stock units, stock options, and stock appreciation rights to purchase common stock, under the TruGolf Holdings, Inc. 2024 Incentive Plan (the “2024 Plan”). Stock-based awards granted to qualified employees, non-employee directors and consultants are measured at fair value and recognized as an expense in accordance with ASC Topic 718, “ Share-Based Payments. ” For service-based awards, stock-based compensation is recognized on a straight-line basis over the requisite service period, which is generally the vesting period. The fair value of stock options is estimated using a Black-Scholes option valuation model. Restricted stock awards are valued based on the closing stock price on the date of grant. The Company has elected to recognize forfeitures as they occur. Emerging Growth Company Status The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it is (i) no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. The JOBS Act does not preclude an emerging growth company from early adopting new or revised accounting standards. The Company expects to use the extended transition period for any new or revised accounting standards during the period which the Company remains an emerging growth company. Segment Reporting The Company identifies reporting segments based on how the chief operating decision maker (“CODM”) regularly reviews financial information to allocate resources and assess performance. Our CODM, who is our Chief Executive Officer, reviews financial information presented on a consolidated basis accompanied by disaggregated information about revenues and operating income by our sole reportable segment. As of December 31, 2025, the Company 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 Company measures segment performance based on operating income, which includes revenues and operating expenses directly attributable to each segment. Certain corporate expenses, including executive management, corporate finance, legal, compliance, information technology, and human resources, are allocated to the segments based on relative revenues, headcount, and management’s assessment of resources consumed by each segment. Corporate assets, including cash and cash equivalents, deferred tax assets, and corporate facilities, are not allocated to the reportable segments. There are no intersegment revenues or transfers between the Company’s reportable segments. F- 14 Warrants The fair value of the warrants is estimated on the date of issuance using the Black-Scholes option pricing model, which requires the input of subjective assumptions, including the expected term of the warrants, expected stock price volatility, and expected dividends. These estimates involve inherent uncertainties and the application of management’s judgment. Expected volatilities used in the valuation model are based on the average volatility of the comparable publicly traded on recognized stock exchanges. The risk-free rate for the expected term of the option is based on the United States Treasury yield curve in effect at the time of the grant. Acquisitions The Company accounts for acquisitions in accordance with ASC 805, “Business Combinations.” The Company evaluates each transaction to determine whether the acquired set of assets and activities constitute a business. If the acquired set meets the definition of a business, the transaction is accounted for as a business combination, and the Company recognizes the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest at their respective acquisition date fair values. Any excess of the purchase consideration over the fair value of the net identifiable assets acquired is recorded as goodwill. If the acquired set does not meet the definition of a business, the transaction is accounted for as an asset acquisition, and the cost of the group of assets acquired are allocated to the individual assets acquired or liabilities assumed based on their value without giving rise to goodwill. Related Parties The Company identifies related parties and transactions with such parties in accordance with ASC 850, “Related Party Disclosures.” Related parties include affiliates, principal owners, directors, executive officers, and entities under common control. Transactions with related parties are recorded at amounts that are considered to approximate arm’s length terms. The Company discloses all material related party transactions and outstanding balances in the accompanying consolidated financial statements and related footnotes. Recently Adopted Accounting Pronouncements In August 2023, the FASB issued ASU 2023-05, “ Business Combinations—Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement ,” which requires a newly-formed joint venture to apply a new basis of accounting to its contributed net assets, resulting in the joint venture initially measuring its contributed net assets at fair value on the formation date. ASU 2023-05 is effective for all joint venture formations with a formation date on or after January 1, 2025. The Company adopted ASU 2023-05 on January 1, 2025. The adoption of ASU 2023-05 did not have a material impact on the Company’s consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, “ Income Taxes (Topic 740): Improvements to Income Tax Disclosures ,” which enhances the transparency and decision usefulness of income tax disclosures by requiring; (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. These amendments are to be applied prospectively, with retrospective application permitted. The adoption of ASU 2023-09 did not have a material impact on the Company’s consolidated financial statements. Recent Accounting Pronouncements In September 2025, the FASB issued ASU 2025-06, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software,” which modernizes the guidance for capitalizing internal-use software costs to better reflect contemporary software development practices, including agile and iterative methodologies. The amendments remove all references to prescriptive project stages from the existing three-stage framework and replace them with a principles-based approach under which an entity begins capitalizing software costs when two criteria are met: (1) management has authorized and committed to funding the software project, and (2) it is probable that the project will be completed and the software will be used to perform its intended function. The standard also supersedes the existing guidance on website development costs under Subtopic 350-50 and incorporates those costs into the Subtopic 350-40 framework, and requires capitalized internal-use software costs to comply with the disclosure requirements of ASC 360-10, Property, Plant, and Equipment. ASU 2025-06 is effective for all entities for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted, and the standard may be applied on a retrospective, prospective, or modified retrospective basis. The Company is currently evaluating the impact this standard will have on its financial statements. In November 2024, the FASB issued ASU 2024-03, “ Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses ,” which requires the disaggregated disclosure of specific expense categories, including purchases of inventory, employee compensation, depreciation, and amortization included in each relevant expense caption presented on the statement of operations. The standard also requires disclosure of qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, as well as the total amount of selling expenses and an entity’s definition of selling expenses. ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. The Company is currently evaluating the impact this standard will have on its financial statements. F- 15 NOTE 3 – BUSINESS COMBINATION On January 19, 2024, TruGolf Holdings, Inc. (formerly known as Deep Medicine Acquisition Corp., “DMAQ”) completed a business combination (the “Business Combination”) with TruGolf, Inc. (“TruGolf Nevada”) pursuant to the terms of the Agreement and Plan of Merger dated May 26, 2023. Upon closing, TruGolf Nevada became a wholly-owned subsidiary of the Company, and the combined company was renamed TruGolf Holdings, Inc. The Business Combination was accounted for as a reverse recapitalization in accordance with U.S. GAAP. Under this method of accounting, DMAQ was treated as the acquired company for accounting purposes, with TruGolf Nevada as the accounting acquirer. Accordingly, the consolidated financial statements of the Company represent a continuation of the financial statements of TruGolf Nevada, with the assets and liabilities of DMAQ recognized at their historical carrying values at the closing date. No goodwill or other intangible assets were recorded as a result of the Business Combination. The aggregate consideration paid to TruGolf Nevada shareholders consisted of 14,934 shares of the Company’s Class A and Class B common stock, determined using an exchange ratio of approximately 1.14:1 based on 13,098 shares of TruGolf Nevada common stock outstanding immediately prior to closing. For a complete description of the Business Combination, including the purchase price allocation, transaction costs, and the composition of shares issued at closing, refer to Note 3 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. NOTE 4 – DISAGGREGATION OF REVENUES The Company’s revenues are disaggregated based on revenue type, including (i) golf simulators, (ii) content software subscriptions, (iii) franchise revenue, and (iv) other. The Company’s net revenues for the years ended December 31, 2025 and 2024, are disaggregated as follows: SCHEDULE OF DISAGGREGATED REVENUE 2025 2024 Year Ended December 31, 2025 2024 Revenues: Golf Simulators (1) $ 14,681,994 $ 13,708,760 Content Software Subscriptions 3,710,245 7,852,699 Franchise Revenue 13,125 - Other (2) 473,633 297,405 Total net revenue $ 18,878,997 $ 21,282,649 (1) Includes items such as hardware and proprietary perpetual licenses. (2) Includes items such as shipping income and installation income. NOTE 5 – ACCOUNTS RECEIVABLE, NET Accounts receivable and allowance for doubtful accounts consisted of the following as of December 31: SCHEDULE OF ALLOWANCE FOR CREDIT LOSSES 2025 2024 Trade accounts receivable $ 2,613,709 $ 2,870,021 Accounts receivable 2,613,709 2,870,021 Less allowance for doubtful accounts ( 1,553,000 ) ( 1,470,868 ) Total accounts receivable, net $ 1,060,709 $ 1,399,153 F- 16 NOTE 6 – INVENTORY, NET The following summarizes inventory as of December 31: SCHEDULE OF INVENTORY 2025 2024 Inventory - raw materials $ 1,111,569 $ 2,797,705 Less reserve allowance for obsolescence ( 248,312 ) ( 448,360 ) Inventory, net $ 863,257 $ 2,349,345 NOTE 7 – PROPERTY AND EQUIPMENT, NET The following summarizes property and equipment as of December 31: SCHEDULE OF PROPERTY AND EQUIPMENT 2025 2024 Software and computer equipment $ 877,381 $ 795,369 Furniture and fixtures 354,314 230,883 Vehicles 59,545 59,545 Equipment 15,873 15,873 Property and equipment, gross 1,307,113 1,101,670 Less accumulated depreciation ( 951,614 ) ( 957,818 ) Total other long-term assets $ 355,499 $ 143,852 Total depreciation expense was $ 38,470 and $ 76,794 for the years ended December 31, 2025 and 2024, respectively. The following summarizes capitalized software development costs as of December 31, 2025: SCHEDULE OF CAPITALIZED SOFTWARE DEVELOPMENT COSTS Capitalized software – December 31, 2024 $ 1,540,121 Capitalized software development costs - 2025 3,231,490 Less accumulated amortization ( 1,137,950 ) Capitalized software – December 31, 2025 $ 3,633,661 Total amortization expense for the years ended December 31, 2025 and 2024, was $ 1,137,950 and $ 161,350 , respectively. NOTE 8 – ACCRUED AND OTHER CURRENT LIABILITIES Accrued and other current liabilities consist of the following amounts as of December 31: SCHEDULE OF ACCRUED AND OTHER CURRENT LIABILITIES 2025 2024 Accrued payroll $ 1,478 $ 108,945 Credit cards 434,374 55,180 Warranty reserve 140,000 140,000 Sales tax payable - 105,563 Other accrued liabilities 887,890 589,619 Total accrued and other current liabilities $ 1,463,742 $ 999,307 NOTE 9 – NOTES PAYABLE Notes payable consisted of the following as of December 31: SCHEDULE OF NOTES PAYABLE 2025 2024 Note payable - Ethos Management Inc. $ - $ - Note payable - Mercedez-Benz 9,733 19,733 Note payable 9,733 19,733 Less deferred loan fees - Ethos Management Inc. - - Less current portion ( 9,733 ) ( 10,001 ) Note payable long-term portion $ - $ 9,732 F- 17 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. 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 consolidated balance sheets at both December 31, 2025 and 2024, respectively (See Note 8 – 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 December 31, 2025 and 2024, was $ 9,733 and $ 19,733 , respectively. NOTE 10 – PIPE CONVERTIBLE NOTES On February 2, 2024, the Company executed a securities purchase agreement (the “Purchase Agreement”) with various investors (together, the “PIPE Investors”). Pursuant to the terms and conditions of the Purchase Agreement, the PIPE Investors agreed to purchase from the Company (i) senior convertible notes in the aggregate principal amount of up to $ 15.5 million (the “PIPE Convertible Notes”), (ii) Series A warrants to initially purchase 140,909 shares of the Company’s Class A common stock (the “Series A Warrants”), and (iii) Series B warrants to initially purchase 155,000 shares of the Company’s Class A common stock (the “Series B Warrants,” and collectively with the Series A Warrants, the “PIPE Warrants”) (the “PIPE Financing”). During 2024, the Company completed additional closings under the Purchase Agreement, resulting in the issuance of PIPE Convertible Notes with aggregate principal amounts of $ 4.65 million (February 6, 2024), $ 3.3 million (November 7, 2024), and $ 2.1 million (December 16, 2024). The notes carried an Original Issue Discount of 10 % and bore interest at rates specified in the respective note agreements. On January 8, 2025, certain PIPE Investors agreed to purchase an additional $ 2.8 million in principal amount of PIPE Convertible Notes with an Original Issue Discount of $ 280,000 for gross proceeds of $ 2.52 million. During the year ended December 31, 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 14,230 shares of the Company’s Class A common stock. Conversions were made at the “Alternate Conversion Price” defined as the lesser of the fixed conversion price or 90% of the lowest volume weighted average price (“VWAP”) of the Company’s Class A common stock over the five consecutive trading days prior to conversion. F- 18 On July 21, 2025, pursuant to the PIPE Exchange Agreements (see below), the Company exchanged the entire outstanding principal balance of $ 3,938,311 related to the PIPE Convertible Notes in exchange for (i) 3,938 shares of the Company’s Series A Preferred Stock and (ii) an agreement to extend the expiration date of the Series A Preferred Warrants held by such holders by two years . This exchange was accounted for as an extinguishment of debt, and as a result, the outstanding principal and accrued interest balance of the PIPE Convertible Notes was reduced to $ 0 as of December 31, 2025. PIPE Convertible Notes payable consisted of the following as of December 31, 2025: SCHEDULE OF PIPE CONVERTIBLE NOTES PAYABLE PIPE Convertible Note - Tranche 1 - February 7, 2024 $ 4,650,000 PIPE Convertible Note - Tranche 2 - November 7, 2024 3,570,594 PIPE Convertible Note - Tranche 2 - December 16, 2024 2,100,000 PIPE Convertible Notes, net 10,320,594 Less: Debt Discount associated with OID and Warrants ( 1,147,319 ) PIPE Convertible Notes, net 9,173,275 Less: Gross PIPE Convertible Note principal converted into Class A common stock ( 5,832,600 ) Add accretion of debt discount 728,278 Total PIPE Convertible Notes, net at of 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 December 31, 2025 $ - During the years ended December 31, 2025 and 2024, amortization expense related to the Original Issue Discount of the PIPE Convertible Notes was $ 359,037 and $ 728,278 , respectively. The principal balance of the PIPE Convertible Notes, net of Debt Discounts, and accrued interest related to the PIPE Convertible Notes at December 31, 2025, was $ 0 and $ 0 , respectively. The principal balance of the PIPE Convertible Notes, 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. 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”). As a result of the exchange of the PIPE Warrants on April 22, 2025, the derivative liability previously associated with the PIPE Warrants was fully extinguished, and no derivative liabilities existed as of or during the year ended December 31, 2025. 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 and then again to $ 500.00 per share as a result of the Reverse Stock Split. See Note 16 – Stockholders’ Equity (Deficit) for the impact on the Company’s equity instruments. F- 19 NOTE 11 – RELATED PARTY NOTES AND LOANS PAYABLE Related party notes payable consisted of the following as of December 31: SCHEDULE OF RELATED PARTY NOTES PAYABLE 2025 2024 Note payable - ARJ Trust $ 650,000 $ 650,000 Note payable - McKettrick 500,000 800,000 Note payable - Carver 74,000 111,000 Loan - Chris Jones 1,600,000 2,000,000 Notes payable 2,824,000 3,561,000 Less current portion ( 2,537,000 ) ( 2,937,000 ) Note payable long-term portion $ 287,000 $ 624,000 Future maturities of related party notes and loan payables as of December 31, 2025: SCHEDULE OF FUTURE MATURITIES OF RELATED PARTY NOTES PAYABLE 2026 $ 2,537,000 2027 287,000 Total $ 2,824,000 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 had a principal amount of $ 500,000 , an interest rate of 8.50 % per annum, and an amended maturity date of September 30, 2025 . 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 an amended maturity date of September 30, 2025 . The Company is required to make monthly interest-only payments of $ 1,063 . On September 30, 2025 , the maturity date of the notes was extended to September 30, 2026 . The Company made interest-only payments of $ 55,248 during the years ended December 31, 2025 and 2024, respectively. The principal balance of the notes was $ 650,000 at December 31, 2025 and 2024. 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. During the year ended December 31, 2025, the Company paid the December 2025 installment. During the year ended December 31, 2024, the Company paid the December 2024 and 2023 installments totaling $ 500,000 and $ 50,000 in a negotiated extension fee for the 2023 installment. During the year ended December 31, 2025, the Company paid the required installment of $ 250,000 . The principal balance of the note payable was $ 500,000 and $ 800,000 at December 31, 2025 and 2024, respectively. 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 $ 37,000 for the years ended December 31, 2025 and 2024. The principal balance of the note payable was $ 74,000 and $ 111,000 at December 31, 2025 and 2024, respectively. F- 20 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 no payments towards the loan during the year ended December 31, 2024. The Company made $ 400,000 in payments towards the loan during the year ended December 31, 2025. The principal balance of the loan payable was $ 1,600,000 and $ 2,000,000 at December 31, 2025 and 2024. NOTE 12 – 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 matures on December 31, 2025 . The line of credit has an annual interest rate of the Adjusted SOFR (Secured Overnight Financing Rate) Rate plus 3.50 %. On December 17, 2025, the maturity date of the line of credit was extended to December 31, 2026 . 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 December 31, 2025 and 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 balance sheet as of December 31, 2025 and 2024. NOTE 13 – 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. 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) 8,466 shares of the Company’s Class A common stock, with respect to approximately $ 1.3 million in principal and interest and (ii) 16,566 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 as of December 31: SCHEDULE OF DIVIDENDS DECLARED, DISTRIBUTED, AND ACCRUED 2025 2024 Accrued interest on dividends payable $ 586,766 $ 515,677 Dividends payable $ 118,362 $ 4,023,923 F- 21 NOTE 14 – GROSS SALES ROYALTY PAYABLE In June 2015, the Company entered into a Royalty Purchase Agreement (the “Royalty Agreement”) with a purchaser (“Purchaser”) pursuant to which the Purchaser paid $ 1,000,000 to acquire a perpetual gross sales royalty. The Royalty Agreement has no stated maturity date and bears no fixed interest rate. Monthly royalty payments are equal to the greater of $ 20,833 or a percentage of monthly revenues based on trailing twelve-month revenue levels, currently fixed at 2.4 % of applicable revenues. The Royalty Agreement contains a one-time buy down option, exercisable after the Purchaser has received aggregate payments equal to two times the original $ 1,000,000 purchase price. Upon exercise, the Company would pay $ 750,000 to extinguish 75 % of all future obligations, reducing the ongoing royalty rate to 0.6 %. the Royalty Agreement also provided that in connection with a change of control transaction, if required by the acquirer as a condition to closing, the Company must purchase and extinguish all amounts owing to the Purchaser at a price equal to the greater of two times the original purchase price or a formula based on the net equity value of the Company at the time of the transaction. Because the gross sales royalty payable has no stated fixed interest rate or maturity date, it is classified as variable interest perpetual debt and the periodic variable payments are recorded as interest expense. The outstanding balance at December 31, 2025 and 2024, was $ 1,000,000 . During the years ended December 31, 2025 and 2024, the Company incurred interest expense related to the variable payments of $ 663,014 and $ 545,268 , respectively. NOTE 15 – FAIR VALUE MEASUREMENTS Fair value measurements discussed herein represent management’s best estimate of fair value as of and during the year ended December 31, 2025. Fair value represents the price that would be received to sell the investment in an orderly transaction in the principal market at the measurement date. The Company holds investments in money market funds which are classified as cash and cash equivalents. The fair value of money market funds is based on quoted prices in active markets, specifically the published net asset value of which the funds transact. Due to the fair value being derived from observable and unadjusted quoted prices in active markets for identical assets, the measurement is classified within Level 1 of the fair value hierarchy. The following tables present the Company’s assets measured at fair value on a recurring basis as of December 31, 2025: SCHEDULE OF FAIR VALUE OF ASSETS AND LIABILITIES ON A NONRECURRING BASIS Assets Level 1 Level 2 Level 3 Total Money market funds $ 9,689 $ - $ - $ 9,689 Total assets at fair value $ 9,689 $ - $ - $ 9,689 There were no transfers between Level 1, Level 2, or Level 3 during the periods presented. NOTE 16 – STOCKHOLDERS’ EQUITY (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 10 – 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 a result of the 2026 Reverse Stock Split, the conversion price was adjusted to $ 21.60 . F- 22 As of December 31, 2025 and December 31, 2024, there were 5,427 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 Series A Convertible Preferred Stock On April 22, 2025, in connection with the signing of the Exchange Agreements, see Note 10 – 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. 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 year ended December 31, 2025, the Company issued an aggregate of 4,440 shares of Class A Common Stock with fair values ranging from $ 500.00 - $ 1,250.00 per share to PIPE Convertible Note holders for the conversion of an aggregate principal amount of $ 1,655,000 in PIPE Convertible Notes (See Note 10 – PIPE Convertible Notes ). During the year ended December 31, 2025, the Company issued an aggregate of 15,920 shares of Class A Common Stock with fair values ranging from $ 88.00 - $ 300.00 per share to PIPE Convertible Note holders in lieu of cash for interest and make good provisions (See Note 10 – PIPE Convertible Notes ). During the year ended December 31, 2025, the Company issued an aggregate of 8,466 shares of Class A Common Stock with a fair value of $ 165.00 per share to dividend note payable holders in lieu of cash dividends (See Note 13 - Dividend Notes Payable ). Class B Common Stock During the year ended December 31, 2025, the Company issued an aggregate of 16,566 shares of Class B Common Stock with a fair value of $ 330.00 per share to dividend note payable holders in lieu of cash dividends (See Note 13 – Dividend Notes Payable ). F- 23 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 During the year ended December 31, 2025, in connection with the signing of the Exchange Agreements, see Note 10 – PIPE Convertible Notes , PIPE Warrant holders exchanged their outstanding 2,818 Series A Warrants and 3,100 Series B Warrants for Series A Preferred Warrants to purchase 37,033 shares of Series A Preferred Stock. The Series A Preferred Warrants were immediately vested, have an exercise price of $ 900 , and had a grant date fair value of $ 482,701 . 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 Year Ended December 31, 2025 Risk free interest rate 3.76 % Expected term (years) 2 Expected volatility 148 % Expected dividends 0 % A summary of the Series A Warrant Activity during the year ended December 31, 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, December 31, 2025 31,478 $ 900 1.35 $ - Exercisable, December 31, 2025 31,478 $ 900 1.35 $ - Series A Warrants and Series B Warrants During the year ended December 31, 2024, the Company issued 2 separate series of warrants as part of the PIPE Convertible Notes (see Note 10 – PIPE Convertible Notes); Series A Warrants and Series B Warrants. In applying the Black-Scholes option pricing model to Series A Warrants granted or issued, the Company used the following assumptions: SCHEDULE OF FAIR VALUE ASSUMPTIONS OF WARRANTS December 31, 2024 Risk free interest rate 4.03 % Expected term (years) 5.00 Expected volatility 53.12 % Expected dividends 0.00 % F- 24 On February 2, 2024, the Company issued five 5 -year immediately vested warrants to purchase an aggregate of 2,818 shares of the Company’s Class A Common Stock in association with the issuance of the PIPE Convertible Notes (the “Series A Warrants”). The Series A Warrants have an exercise price of $ 6,500.00 per share. The Series A Warrants had an aggregate grant date fair value of $ 126,819 . The Series A Warrants met the definition of a liability per ASC 815 – Derivatives and Hedging. During the year ended December 31, 2024, the Company recorded a gain on fair value adjustment of the derivative liability related to the Series A Warrants of $1 26,819 on the consolidated statements of operations. As part of the Series A Preferred Warrants issuance above the Series A Warrants and the associated derivative liability were derecognized. The weighted average estimated fair value of the Series A Warrants granted during the year ended December 31, 2024, was approximately $ 0.09 per share. In applying the Black-Scholes option pricing model to Series B Warrants granted or issued, the Company used the following assumptions: SCHEDULE OF FAIR VALUE ASSUMPTIONS OF WARRANTS December 31, 2024 Risk free interest rate 4.14 % Expected term (years) 2.50 Expected volatility 49.40 % Expected dividends 0.00 % On February 2, 2024, the Company issued two-and-a-half-year 2.5 immediately vested warrants to purchase an aggregate of 3,100 shares of the Company’s Class A Common Stock in association with the issuance of the PIPE Convertible Notes (the “Series B Warrants”). The Series B Warrants have an exercise price of $ 5,000.00 per share. The Series B Warrants had an aggregate grant date fair value of $ 15,500 . During the year ended December 31, 2024, the Company recorded a gain on fair value adjustment of the derivative liability related to the Series B Warrants of $ 15,500 on the consolidated statements of operations. As part of the Series A Preferred Warrants issuance above the Series B Warrants and the associated derivative liability were derecognized. The weighted average estimated fair value of the Series A Warrants granted during the year ended December 31, 2024, was approximately $ 0.01 per share. A summary of the warrant activity during the year ended December 31, 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 5,918 5,715 Granted - - Exercised - - Forfeited ( 5,918 ) 5,715 Outstanding, December 31, 2025 - $ - - $ - Exercisable, December 31, 2025 - $ - - $ - NOTE 17 – STOCK-BASED COMPENSATION 2024 Stock Incentive Plan On October 24, 2024, the Company filed a Form S-8 to register 3,200 shares of the Company’s Class A Common Stock to participants in the TruGolf Holdings, Inc. 2024 Stock Incentive Plan (the “2024 Plan”). Awards to be made under the 2024 Plan consist of covering up to the sum of (i) 3,200 shares; and (ii) an annual increase commencing on January 1, 2025 and continuing annually on each anniversary thereof through (and including) January 1, 2035, equal to the lesser of (A) 5% of the shares of Company Common Stock outstanding on a fully diluted basis on the last day of the immediately preceding fiscal year and (B) such smaller number of shares as determined by the Board or the Committee (the “Overall Share Limit”). Shares issued or delivered under the 2024 Plan may consist of authorized but unissued shares of common stock, shares purchased on the open market or treasury shares. F- 25 No stock options were granted by the Company during the year ended December 31, 2025. On October 11, 2024, the Company granted options to purchase an aggregate of 2,262 shares of Class A Common Stock at an exercise price of $ 465.00 per share and a fair value of $ 538,323 . Vesting terms of these options are as follows: (i) 2,152 options vest upon issuance and (ii) 110 options vest 50% upon issuance and 50% on the one-year anniversary of the grant date. The options were valued using the Black-Scholes option pricing model under the following assumptions as found in the table below. SCHEDULE OF OPTION ACTIVITY Number of Options Weighted Average Exercise Price Weighted Average Remaining Life In Years Intrinsic Value Outstanding, December 31, 2024 2,262 465.00 - Granted - - - Exercised - - - Forfeited - - - Outstanding, December 31, 2025 2,262 $ 465.00 3.75 $ - Exercisable, December 31, 2025 2,262 $ 465.00 3.75 $ - The weighted average grant date fair value of the options granted and vested during the year ended December 31, 2024, was $ 538,323 and $ 524,960 , respectively. The weighted average non-vested grant date fair value of non-vested options was $ 0 and $ 13,368 at December 31, 2025 and 2024. The following table summarizes information about options to purchase shares of the Company’s Class A Common Stock outstanding and exercisable at December 31, 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 $ 465.00 2,262 3.75 2,262 2,262 2,262 In applying the Black-Scholes option pricing model to stock options granted, the Company used the following assumptions: SCHEDULE OF STOCK OPTION GRANTED IN VALUATION ASSUMPTIONS For the Years Ended December 31, 2024 Risk free interest rate 3.88 % Expected term (years) 5.00 – 5.25 Expected volatility 53.49 % Expected dividends 0.00 % F- 26 Stock-Based Compensation Expense The following table presents information related to stock-based compensation expense: SCHEDULE OF STOCK-BASED COMPENSATION EXPENSE Weighted Average For the Year Ended December 31, Unrecognized at December 31, Remaining Amortization Period 2025 2025 (Years) General and administrative $ 11,139 $ - - Total $ 11,139 $ - - Weighted Average For the Year Ended December 31, Unrecognized at December 31, Remaining Amortization Period 2024 2024 (Years) General and administrative $ 538,323 $ 13,368 1.00 Total $ 538,323 $ 13,368 1.00 NOTE 18 – 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 2026. The Company has operating leases for its corporate headquarters and warehouse. The Company determines if an arrangement contains a lease at inception based on the ability to control a physically distinct asset. Operating lease right-of-use assets are recorded in the consolidated balance sheets on the initial measurement of the lease liability as adjusted to include prepaid rent and initial direct costs less any lease incentives received. Lease liabilities are measured at the commencement date based on the present value of the lease payments over the lease term. The Company separately accounts for lease and non-lease components within lease agreements. The Company uses its incremental borrowing rate to present value the lease liability as key inputs to determine the interest rate implicit in the lease are not shared by lessors. Operating lease expense is recorded on a straight-line basis over the lease term. Right-of-use assets and lease liabilities for short-term leases are not recognized in the consolidated balance sheets. Payments for short-term leases are recognized in the consolidated statements of operations on a straight-line basis over the lease term. 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 6.60 %. As of December 31, 2025, the Company’s leases had a remaining weighted average term of 1.54 years. The following table presents net lease cost and other supplemental lease information: SCHEDULE OF LEASE COST AND SUPPLEMENTAL LEASE INFORMATION 2025 2024 Lease cost Operating lease cost (cost resulting from lease payments) $ 420,548 $ 403,109 Net lease costs $ 420,548 $ 403,109 Operating lease - operating cash flows (fixed payments) $ 420,548 $ 403,109 Operating lease - operating cash flows (liability increase) $ ( 26,243 ) $ 334,254 Non-current leases - right-of-use assets $ 682,648 $ 634,269 Current liabilities - operating lease liabilities $ 502,526 $ 363,102 Non-current liabilities - operating lease liabilities $ 191,944 $ 305,125 F- 27 Future minimum payments under non-cancelable leases for operating leases for the remaining terms of the leases following the year ended December 31, 2025, are as follows: SCHEDULE OF FUTURE MINIMUM PAYMENTS UNDER OPERATING LEASES Fiscal Year Operating Leases 2026 $ 532,817 2027 144,227 2028 60,809 Total future minimum lease payments $ 737,853 Amount representing interest ( 43,383 ) Present value of net future minimum lease payments $ 694,470 Lease Modification During the year ended December 31, 2025, the Company entered into a lease extension agreement related to its office facility located in Centerville City, Utah. The amendment extended the lease term through November 30, 2026. The extension provides for monthly base rent of approximately $ 35,696 , beginning December 1, 2025. The Company also remains responsible for its proportionate share of certain operating costs of the building, including common area maintenance, property taxes, and insurance, which are treated as variable lease payments and are recognized as expense in the period in which the obligation for those payments is incurred. The lease extension was accounted for as a modification of the existing lease under ASC 842. Upon execution of the amendment, the Company remeasured the lease liability using the incremental borrowing rate at the modification date and recognized a corresponding adjustment to the right-of-use asset. As a result of the modification, the Company recorded an increase to both the operating lease right-of-use asset and the operating lease liability of approximately $ 421,334 , representing the present value of the additional lease payments associated with the extension. NOTE 19 – 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. 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 Years Ended December 31, 2025 2024 Consulting expenses $ 2,821,782 $ 1,226,900 Contract labor 1,425,166 1,365,640 Personnel expenses 4,615,951 9,314,415 Business development expenses 332,514 528,264 Marketing expenses 776,316 710,658 Other expenses * 5,650,242 2,838,222 Total operating expenses $ 15,621,971 $ 15,984,099 * Other expenses materially comprised of rent, insurance, stock-based compensation, depreciation and amortization, licenses, dues and subscriptions, travel and entertainment, and merchant fees. F- 28 NOTE 20 – 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 21 – INCOME TAXES The Company adopted ASU 2023-09 on January 1, 2025, on a prospective basis. Accordingly, the enhanced income tax disclosures required under the new standard are presented only for the year ended December 31, 2025. Prior period amounts have not been recast and are therefore not comparable. Components of Income Tax Expense (Benefit) The components of income tax expense (benefit) from continuing operations for the years ended December 31, 2025 and 2024, are as follows: SCHEDULE OF COMPONENTS OF INCOME TAX EXPENSE (BENEFIT) December 31, 2025 December 31, 2024 Current income tax expense (benefit): Federal $ — $ — State — — Foreign — — Total current income taxes $ — — Deferred income tax expense (benefit): Federal $ 2,758,300 $ 1,878,000 State 591,300 406,800 Foreign — — Total deferred income taxes 3,349,600 2,284,800 Change in valuation allowance ( 3,349,600 ) ( 2,284,800 ) Income tax expense (benefit) $ — $ — The Company recorded no current or deferred income tax expense for the years ended December 31, 2025 and 2024, primarily due to losses and a full valuation allowance on deferred tax assets. Enhanced Disclosures (ASU 2023-09 – 2025) Effective Tax Rate Reconciliation (2025) The following is a reconciliation of the statutory federal income tax rate applied to pre-tax net loss compared to the income taxes in the statement of operations for the year ended December 31, 2025. In accordance with ASU 2023-09, reconciling items greater than 5% of the statutory tax rate are presented separately. Amounts below this threshold are aggregated within “Other.” The 2025 reconciliation below is not presented on a comparable basis with prior periods due to the adoption of ASU 2023-09. SCHEDULE OF RECONCILIATION OF THE STATUTORY FEDERAL INCOME TAX RATE Amount % of Pretax Income Income tax benefit at statutory U.S. federal rate (21%) $ ( 3,150,608 ) ( 21.00 %) State income taxes, net of federal benefit ( 682,632 ) ( 4.55 %) Stock-based compensation Non-deductible derivative liability change Change in valuation allowance 3,349,600 22.32 % Other (1) 483,640 3.23 % Income tax expense (benefit) $ — 0.00 % (1) Includes equity-based compensation and other individually immaterial items. F- 29 Income Taxes Paid (Disaggregated) – 2025 SCHEDULE OF DISAGGREGATED OF INCOME TAXES PAID (in dollars) Amount U.S. federal $ — U.S. state — Foreign — Total income taxes paid $ — Legacy Disclosures (ASC 740 – 2024) The following is a reconciliation of the statutory federal income tax rate applied to pre-tax net loss compared to the income taxes in the statement of operations as of December 31, 2024. December 31, 2024 Income tax benefit at statutory U.S. federal rate ( 21.00 )% State income taxes, net of federal benefit ( 0.95 )% Stock-based compensation 0.60 % Non-deductible derivative liability change 0.40 % Change in valuation allowance 21 % Total tax expense 0.00 % Deferred Income Taxes Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The following table sets forth deferred income tax assets and liabilities as of the date shown: SCHEDULE OF DEFERRED INCOME TAX ASSETS AND LIABILITIES December 31, 2025 December 31, 2024 Deferred tax assets: Net operating losses $ 3,762,600 $ 1,628,300 Stock compensation expense 2,700 132,400 Accrued expenses 10,100 162,700 Extinguishment of debt 1,508,900 66,600 Depreciation 9,500 18,900 Amortization 279,900 179,100 Allowance for doubtful accounts 188,900 188,900 Deferred tax assets 5,762,600 2,376,900 Deferred tax liabilities Prepaid expenses ( 129,200 ) ( 28,700 ) Other - ( 64,400 ) Deferred tax liabilities ( 129,200 ) ( 93,100 ) Valuation allowance ( 5,633,400 ) ( 2,283,800 ) Net deferred tax asset/(liability) $ — $ — In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future rewrite taxable income during the periods in which the net operating losses and temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and projections for future taxable income over periods in which the deferred tax assets are deductible. Management believes it is more likely than not that the Company will not realize the benefits of these deductible differences. A valuation allowance has been applied to the amount of deferred tax assets management expects will be unrealized. F- 30 The Company’s policy is to record interest and penalties associated with unrecognized tax benefits as additional income taxes in the statement of operations. As of January 1, 2025, the Company had no unrecognized tax benefits and no charge during 2025, and accordingly, the Company did not recognize any interest or penalties during 2025 related to unrecognized tax benefits. There is no accrual for uncertain tax positions as of December 31, 2025. The Company has federal net operating loss carryforwards of $ 15,258,608 and $ 6,580,951 as of December 31, 2025 and 2024, respectively. $ 15,258,608 of the federal net operating loss has an indefinite carry forward period. The Company has State net operating loss carryforwards totaling $ 15,530,991 and $ 6,853,334 at December 31, 2025 and 2024. The Company has various state net operating loss carryforwards. The determination of the state net operating loss carryforwards is dependent upon apportionment percentages and state laws that can change from year to year and impact the amount of such carryforwards. If such net operating loss carryforwards are not utilized, they will begin to expire in 2031. The following table sets for the tax years subject to examination for the major jurisdictions where the Company conducted business in the prior years and as of December 31, 2025. SCHEDULE OF INCOME TAX EXAMINATION Federal 2024 to 2025 Utah 2024 to 2025 Tax years 2024 to 2025 Federal and state laws impose substantial restrictions on the utilization of NOL carryforwards in the event of an ownership change for income tax purposes, as defined in Section 382 of the Internal Revenue Code (“IRC”). Pursuant to IRC Section 382, annual use of the Company’s NOL carryforwards may be limited in the event a cumulative change in ownership of more than 50% occurs within a three-year period. The Company has not completed an IRC Section 382 analysis regarding the limitation of NOL carryforwards. However, it is possible that past ownership changes will result in the inability to utilize a significant portion of the Company’s NOL carryforward that was generated prior to any change of control. The Company’s ability to use its remaining NOL carryforwards may be further limited if the Company experiences an IRC Section 382 ownership change in connection with future changes in the Company’s stock ownership. The Tax Cuts and Jobs Act (“TCJA”) requires taxpayers to capitalize and amortize research and experimental expenditures under IRC Section 174 for tax years beginning after December 31, 2021. This rule became effective for the Company during the year ended December 31, 2022 and resulted in the capitalization of research and development costs of $ 3,231,490 and $ 2,745,033 during the years ended December 31, 2025 and 2024, respectively. Before the TCJA, businesses have had the option of deducting Section 174 expenses in the year incurred or capitalizing and amortizing the costs over five years. The Company will amortize these costs for tax purposes over five years if the research and development was performed in the U.S. and over 15 years if research and development was performed outside the U.S. NOTE 22 – CONCENTRATIONS Accounts Receivable At December 31, 2025, one customer accounted for approximately 23 % of outstanding accounts receivable. At December 31, 2024, there were no customer concentrations in accounts receivable. Purchasing During the year ended December 31, 2025, two manufacturers accounted for approximately 22 % of our purchases. During the year ended December 31, 2024, six manufacturers accounted for approximately 50 % of our purchases. NOTE 23 – SUBSEQUENT EVENTS Corporate Redomestication On March 10, 2026, the Company completed its redomestication from a Delaware corporation to a Nevada corporation (the “Redomestication”) by filing a certificate of conversion with the Secretary of State of the State of Delaware and articles of conversion with the Nevada Secretary of State. The Redomestication was approved by the Company’s stockholders at the annual meeting held on February 17, 2026. In connection with the Redomestication, the Company adopted new articles of incorporation and bylaws governed by the laws of the State of Nevada. At the effective time of the Redomestication, each outstanding share of Class A Common Stock, Class B Common Stock, and Series A Preferred Stock of the Delaware corporation was automatically converted into one corresponding share of the Nevada corporation, with no change in par value. Stockholders are not required to exchange their existing stock certificates. The Redomestication did not result in any change to the Company’s business, management, properties, employees, assets, liabilities, or net worth, other than costs incurred in connection with the Redomestication, and did not adversely affect the Company’s existing material contracts. Stock Repurchase Subsequent to December 31, 2025, the Company repurchased 67,240 shares of its Class A common stock in two separate transactions for an aggregate purchase price of $ 532,275 , including all fees and commissions, pursuant to the Company’s share repurchase program, under which the Board of Directors has authorized the repurchase of up to $ 2,000,000 of the Company’s common stock. As of the date of this filing, approximately $ 1.67 million remains available for future repurchases under the program. Reverse Stock Split On March 25, 2026, 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-10 reverse stock split of the Class A shares of the Company’s issued and outstanding common stock, effective as of 12:01 a.m. Eastern Time on March 27, 2026 and began trading on a Reverse Stock Split-adjusted basis on Nasdaq on March 27, 2026. F- 31