TruGolf Holdings, Inc. 10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended June 30, 2025 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___________ Commission file number: 001-40970 TRUGOLF HOLDINGS, INC. (Exact name of registrant as specified in its charter) Delaware 85-3269086 State or Other Jurisdiction of Incorporation or Organization (I.R.S. Employer Identification No.) 60 North 1400 , West Centerville , Utah 84014 (Address of Principal Executive Offices) (Zip Code) Registrant’s telephone number, including area code: (801) 298-1997 Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Class A Common Stock, $0.0001 par value TRUG The Nasdaq Stock Market LLC Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☒ Emerging growth company ☒ If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒ As of August 19, 2025, the latest practicable date, 1,117,603 shares of Class A common stock and 200,000 shares of Class B common stock outstanding. TRUGOLF HOLDINGS, INC. FORM 10-Q FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024 TABLE OF CONTENTS Page PART I. FINANCIAL INFORMATION 3 ITEM 1. Financial Statements 3 Condensed Consolidated Balance Sheets as of June 30, 2025 (unaudited) and December 31, 2024 3 Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2025 and 2024 (unaudited) 4 Condensed Consolidated Statements of Changes in Stockholders’ Deficit for the Three and Six Months Ended June 30, 2025 and 2024 (unaudited) 5 Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2025 and 2024 (unaudited) 6 Notes to Condensed Consolidated Financial Statements (unaudited) 7 ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 22 ITEM 3. Quantitative and Qualitative Disclosures about Market Risk 27 ITEM 4. Controls and Procedures 27 PART II. OTHER INFORMATION 29 ITEM 1. Legal Proceedings 29 ITEM 1A. Risk Factors 29 ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds 29 ITEM 3. Defaults Upon Senior Securities 29 ITEM 4. Mine Safety Disclosures 29 ITEM 5. Other Information 29 ITEM 6. Exhibits 30 SIGNATURES 31 2 PART I – FINANCIAL INFORMATION Item 1. Financial Statements TRUGOLF HOLDINGS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS June 30, December 31, 2025 2024 (Unaudited) ASSETS Current Assets: Cash and cash equivalents $ 8,059,359 $ 8,782,077 Restricted cash 2,100,000 2,100,000 Accounts receivable, net 2,185,888 1,399,153 Inventory, net 2,698,310 2,349,345 Prepaid expenses and other current assets 290,389 116,619 PIPE exchange consideration 5,651,310 - Other current assets - 45,737 Total Current Assets 20,985,256 14,792,931 Property and equipment, net 210,463 143,852 Capitalized software development costs, net 2,674,845 1,540,121 Right-of-use assets 455,925 634,269 Other long-term assets 31,023 31,023 Total Assets $ 24,357,512 $ 17,142,196 LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) Current Liabilities: Accounts payable $ 3,209,831 $ 2,819,703 Deferred revenue 5,009,228 3,113,010 PIPE loan payable, net 3,734,990 - Notes payable, current portion 10,573 10,001 Notes payable to related parties, current portion 2,668,500 2,937,000 Notes payable, current portion 2,668,500 2,937,000 Line of credit, bank 802,738 802,738 Dividend notes payable 118,362 4,023,923 Accrued interest 564,947 661,376 Accrued and other current liabilities 1,772,877 999,307 Accrued and other current liabilities - assumed in Merger 45,008 45,008 Lease liability, current portion 228,536 363,102 Total Current Liabilities 18,165,590 15,775,168 Non-current Liabilities: Notes payable, net of current portion 4,232 9,732 Note payables to related parties, net of current portion 624,000 624,000 Note payables, net of current portion 624,000 624,000 PIPE loan payable, net - 4,068,953 Gross sales royalty payable 1,000,000 1,000,000 Lease liability, net of current portion 250,002 305,125 Total Liabilities 20,043,824 21,782,978 Commitments and Contingencies - - Stockholders’ Equity (Deficit): Preferred stock, $ 0.0001 par value, 10 million shares authorized - Series A Convertible Preferred Stock, $ 0.0001 par value per share; authorized – 50,000 shares; 1,885 and 0 shares issued and outstanding, respectively - - Preferred stock value - - Common stock, $ 0.0001 par value, 100,000,000 shares authorized: - - Common stock - Series A, $ 0.0001 par value, 90 million shares authorized; 810,617 and 522,411 shares issued and outstanding, respectively 80 52 Common stock - Series B, $ 0.0001 par value, 10 million shares authorized; 200,000 and 34,337 shares issued and outstanding, respectively 20 3 Common stock value 20 3 Treasury stock at cost, 4,692 shares of common stock held, respectively ( 2,037,000 ) ( 2,037,000 ) Additional paid-in capital 33,497,876 18,551,660 Accumulated deficit ( 27,147,288 ) ( 21,155,496 ) Total Stockholders’ Equity (Deficit) 4,313,688 ( 4,640,781 ) Total Liabilities and Stockholders’ Equity (Deficit) $ 24,357,512 $ 17,142,196 The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements. 3 TRUGOLF HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) 2025 2024 2025 2024 Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Revenue, net $ 4,310,864 $ 3,873,163 $ 9,700,094 $ 8,885,185 Cost of revenue 2,398,959 1,300,212 4,125,158 3,259,234 Total gross profit 1,911,905 2,572,951 5,574,936 5,625,951 Operating expenses: Royalties 138,695 223,150 364,015 553,038 Salaries, wages and benefits 1,006,210 1,117,287 2,953,026 2,958,881 Selling, general and administrative 2,637,026 2,017,556 5,362,145 3,842,758 Total operating expenses 3,781,931 3,357,993 8,679,186 7,354,677 Loss from operations ( 1,870,026 ) ( 785,042 ) ( 3,104,250 ) ( 1,728,726 ) Other income (expense): Interest income 64,830 36,621 119,426 67,208 Interest expense ( 1,516,874 ) ( 820,908 ) ( 3,007,568 ) ( 1,205,762 ) Loss on investment - - - ( 3,912 ) Other income 600 - 600 - Total other income (expense), net ( 1,451,444 ) ( 784,287 ) ( 2,887,542 ) ( 1,142,466 ) Net loss prior to provision for income taxes $ ( 3,321,470 ) ( 1,569,329 ) ( 5,991,792 ) ( 2,871,192 ) Provision for income taxes - - - - Net loss $ ( 3,321,470 ) $ ( 1,569,329 ) $ ( 5,991,792 ) $ ( 2,871,192 ) Net loss per common share Series A – basic and diluted $ ( 4.63 ) $ ( 6.80 ) $ ( 9.31 ) $ ( 11.53 ) Net loss per common share Series B – basic and diluted $ ( 19.69 ) $ ( 45.70 ) $ ( 59.02 ) $ ( 83.62 ) Weighted average shares outstanding Series A – basic and diluted 717,928 230,765 643,657 248,980 Weighted average shares outstanding Series B – basic and diluted 168,708 34,337 101,523 34,337 The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements. 4 TRUGOLF HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024 (Unaudited) Shares Amount Shares Amount Shares Amount Shares Amount Capital Gain (Loss) Deficit Total Accumulated Series A Class A Class B Additional Other Preferred Stock Common Stock Common Stock Treasury Stock Paid-in Comprehensive Accumulated Shares Amount Shares Amount Shares Amount Shares Amount Capital Gain (Loss) Deficit Total Balance at December 31, 2023 - $ - 13,098 $ 120 - $ - ( 94 ) $ ( 2,037,000 ) $ 10,479,738 $ ( 1,662 ) $ ( 12,358,924 ) $ ( 3,917,728 ) Realized gain in fair value of short-term investments - - - - - - - - - 1,662 - 1,662 Common stock exchanged in Merger - - ( 13,098 ) ( 120 ) - - - - ( 3,854,573 ) - - ( 3,854,693 ) Issuance of common stock - Series A exchanged in Merger - - 230,765 23 - - - - ( 23 ) - - - Issuance of common stock - Series B issued in Merger - - - - 34,337 3 - - ( 3 ) - - - Net loss - - - - - - - - - - ( 1,301,864 ) ( 1,301,864 ) Balance as of March 31, 2024 - $ - 230,765 $ 23 34,337 $ 3 ( 94 ) $ ( 2,037,000 ) $ 6,625,139 $ - $ ( 13,660,788 ) $ ( 9,072,623 ) Revaluation of costs of Merger - - - - - - - - 135,000 - ( 1,152 ) 133,848 Net loss - - - - - - - - - - ( 1,569,329 ) ( 1,569,329 ) Balance as of June 30, 2024 - $ - 230,765 $ 23 34,337 $ 3 ( 94 ) $ ( 2,037,000 ) $ 6,760,139 $ - $ ( 15,231,269 ) $ ( 10,508,104 ) Balance at December 31, 2024 - $ - 522,411 $ 52 34,337 $ 3 ( 94 ) $ ( 2,037,000 ) $ 18,551,660 $ - $ ( 21,155,496 ) $ ( 4,640,781 ) Balance - $ - 522,411 $ 52 34,337 $ 3 ( 94 ) $ ( 2,037,000 ) $ 18,551,660 $ - $ ( 21,155,496 ) $ ( 4,640,781 ) Issuance of common stock for PIPE interest and make good - - 48,048 5 - - - - 1,087,508 - - 1,087,513 Issuance of common stock for conversion of PIPE notes - - 13,240 1 - - - - 1,654,999 - - 1,655,000 Stock-based compensation - options - - - - - - - - 3,341 - - 3,341 Net loss - - - - - - - - - - ( 2,670,322 ) ( 2,670,322 ) Balance as of March 31, 2025 - $ - 583,699 $ 58 34,337 $ 3 ( 94 ) $ ( 2,037,000 ) $ 21,297,508 $ - $ ( 23,825,818 ) $ ( 4,565,249 ) Balance - $ - 583,699 $ 58 34,337 $ 3 ( 94 ) $ ( 2,037,000 ) $ 21,297,508 $ - $ ( 23,825,818 ) $ ( 4,565,249 ) Issuance of common stock for PIPE interest and make good - - 111,148 11 - - - - 1,082,183 - - 1,082,194 Issuance of common stock for conversion of PIPE notes - - 31,160 3 - - - - 1,557,997 - - 1,558,000 Issuance of common stock for conversion of dividend note payable - - 84,662 8 165,663 17 - - 3,905,536 - - 3,905,561 Reverse stock split adjustment - - ( 52 ) - - - - - - - - - Stock-based compensation - options - - - - - - - - 3,342 - - 3,342 Issuance of Series A Preferred and associated warrants 1,885 - - - - - - - 5,651,310 - - 5,651,310 Net loss - - - - - - - - - - ( 3,321,470 ) ( 3,321,470 ) Balance as of June 30, 2025 1,885 $ - 810,617 $ 80 200,000 $ 20 ( 94 ) $ ( 2,037,000 ) $ 33,497,876 $ - $ ( 27,147,288 ) $ 4,313,688 Balance 1,885 $ - 810,617 $ 80 200,000 $ 20 ( 94 ) $ ( 2,037,000 ) $ 33,497,876 $ - $ ( 27,147,288 ) $ 4,313,688 The accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements. 5 TRUGOLF HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) June 30, 2025 June 30, 2024 For the For the Six Months Ended Six Months Ended June 30, 2025 June 30, 2024 Cash flows from operating activities: Net loss $ ( 5,991,792 ) $ ( 2,871,192 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 413,409 173,200 Amortization of convertible notes discount 359,037 24,197 Amortization of right-of-use asset 178,344 166,311 Bad debt expense 74,818 - Change in OCI - 1,662 Stock issued for make good provisions on debt conversion 2,169,707 - Stock options issued to employees 6,682 - Changes in operating assets and liabilities: Accounts receivable, net ( 861,552 ) ( 231,385 ) Inventory, net ( 348,965 ) ( 216,701 ) Prepaid expenses ( 173,770 ) 143,471 Other current assets 45,737 2,478,953 Accounts payable 390,129 1,149,909 Deferred revenue 1,896,218 1,274,900 Accrued interest payable ( 96,429 ) 785,306 Accrued and other current liabilities 773,570 ( 99,165 ) Other liabilities - ( 1,153 ) Lease liability ( 189,689 ) ( 162,338 ) Net cash provided by (used in) operating activities ( 1,354,546 ) 2,615,975 Cash flows from investing activities: Purchases of property and equipment ( 45,966 ) - Capitalized software, net ( 1,568,778 ) ( 1,433,438 ) Reduction in long term assets - ( 75 ) Net cash used in investing activities ( 1,614,744 ) ( 1,433,513 ) Cash flows from financing activities: Proceeds from PIPE loans, net of discount 2,520,000 4,185,000 Cash acquired in Merger - 103,818 Costs of Merger paid from PIPE loan - ( 1,947,787 ) Repayments of line of credit - ( 1,980,937 ) Repayments of liabilities assumed in Merger - ( 15,716 ) Repayments of notes payable ( 4,928 ) ( 4,632 ) Repayments of notes payable - related party ( 268,500 ) ( 268,500 ) Net cash provided by financing activities 2,246,572 71,246 Net change in cash , cash equivalents and restricted cash ( 722,718 ) 1,253,708 Cash, cash equivalents and restricted cash - beginning of year 10,882,077 5,397,564 Cash, cash equivalents and restricted cash - end of year $ 10,159,359 $ 6,651,272 Supplemental cash flow information: Cash paid for: Interest $ 108,993 $ 302,095 Income taxes $ - $ - Non-cash investing and financing activities: PIPE note principal converted to Class A Common Stock $ 3,213,000 $ - Dividend note principal converted to Class A and Class B Common Stock $ 3,905,561 $ - Exchange of PIPE Notes and Series A and B Warrants for Series A Convertible Preferred Stock and Warrants for Series A Convertible Preferred Stock $ 5,651,310 $ - Notes payable assumed in Merger $ - $ 1,565,000 Accrued liabilities assumed in Merger $ - $ 310,724 Remeasurement of common stock exchanged/issued in Merger $ - $ ( 1,875,724 ) T he accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements. 6 TRUGOLF HOLDINGS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 1 – NATURE OF THE ORGANIZATION AND BUSINESS TruGolf Holdings, Inc. (the “Company” or “TruGolf”), is a Delaware corporation headquartered in Centerville, Utah. The Company and its wholly-owned subsidiary, have historically been engaged in creating indoor golf software and custom hardware as well as establishing and selling franchises that would use the Company’s indoor golf and recreational sports simulators and other equipment. The Company sells its software and custom hardware directly to customers and its franchise owners. Reverse Stock Split On June 23, 2025, the Company filed a Certificate of Amendment to the Company’s Amended and restated Certificate of Incorporation with the Secretary of the State of Delaware to effect a 1-for-50 reverse stock split of the Class A and Class B shares of the Company’s issued and outstanding common stock, effective as of 12:01 a.m. Eastern Time on June 23, 2025 (the “Reverse Stock Split”) and began trading on a Reverse Stock Split-adjusted basis on Nasdaq on June 23, 2025. As a result of the Reverse Stock Split, the number of Class A common shares outstanding was reduced from 40,532,150 to 810,617 and the number of Class B common shares outstanding was reduced from 10,000,000 to 200,000 , and the number of authorized shares of common stock remained unchanged. All share amounts have been retroactively adjusted for the Reverse Stock Split. Proportionate adjustments for the Reverse Stock Split were made to the exercise prices and number of shares issuable under the Company’s equity incentive plans, and the number of shares underlying outstanding equity awards and warrants, as applicable. See Note 13 - Stockholders’ Equity for information and disclosures relating to adjustments related to the Reverse Stock Split. Nasdaq Compliance On July 15, 2024, the Company received a deficiency letter from the Listing Qualifications Department (the “Staff”) of the Nasdaq Stock Market (“Nasdaq”) notifying the Company that since it failed to file its Form 10-Q for the period ended March 31, 2024 it no longer complied with Nasdaq Listing Rule 5250(c)(1). The deficiency letter did not result in the immediate delisting of the Company’s common stock from the Nasdaq Capital Market. On August 14, 2024, the Company filed its Quarterly Report in the Form 10-Q for the period ended March 31, 2024 and the Company regained compliance with the applicable Nasdaq rule. On August 19, 2024, the Company received a delist notice from the staff of the Listing Qualifications Department (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that the listing of its Class A common stock was not in compliance with: (i) the minimum Market Value of Publicly Held Shares requirement set forth in Nasdaq Listing Rule 5450(b)(2)(C); and (ii) the minimum shareholders’ equity requirement set forth in Nasdaq Listing Rule 5450(b)(1)(A). On November 5, 2024, the Company received a delist notice from the Staff notifying the Company that the listing of its Class A common stock was not in compliance with the minimum bid price requirement of $ 1.00 per share set forth in Nasdaq Listing Rule 5450(a)(1). The Company requested a hearing before a Nasdaq hearing panel (the “Panel”) to present a plan to regain compliance with all the continued listing requirements of Nasdaq and such hearing was held May 15, 2025. On May 30, 2025, the Panel provided the Company an exception with various milestones to regain compliance, including with Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Rule”) until July 8, 2025 and the minimum Market Value of Publicly Held Shares requirement and minimum shareholders’ equity requirement until July 30, 2025. In addition, the Panel directed that the Company’s listing be transferred to the Nasdaq Capital Market, effective at the open of business on June 3, 2025. 7 On July 17, 2025, the Staff confirmed that the Company had regained compliance with the Bid Price Rule as required by the Panel’s decision. On August 1, 2025, the Company received a letter from Nasdaq notifying the Company that it had demonstrated compliance with Nasdaq Listing Rule 5550(b)(1) (the “Equity Rule”), as required by the Panel’s decision, and, following the Company’s phase down to the Nasdaq Capital Market on June 3, 2025, the Company demonstrated compliance with the minimum market value of publicly held securities required by Nasdaq Listing Rule 5550(a)(5). Pursuant to the letter, in application of Listing Rule 5815(d)(4)(B), the Company will be subject to a Mandatory Panel Monitor for a period of one year from the date of the letter. If, within that one-year monitoring period, the Staff finds the Company again out of compliance with the Equity Rule, notwithstanding Rule 5810(c)(2), the Company will not be permitted to provide the Staff with a plan of compliance with respect to that deficiency and Staff will not be permitted to grant additional time for the Company to regain compliance with respect to that deficiency, nor will the company be afforded an applicable cure or compliance period pursuant to Rule 5810(c)(3). Instead, Staff will issue a delist determination letter and the Company will have an opportunity to request a new hearing. Liquidity The accompanying unaudited condensed consolidated financial statements have been prepared on the basis that the Company will continue as a going concern, which contemplates realization of assets and satisfying liabilities in the normal course of business. At June 30, 2025, the Company has an accumulated deficit of approximately $ 27 million and working capital surplus of approximately $ 2.8 million. For the three and six months ended June 30, 2025, the Company had a loss from operations of approximately $ 1.9 million and $ 3.1 million, respectively, and negative cash flows from operations of approximately $ 1.4 million. Although the Company is showing positive revenue growth and gross profit trends, the Company expects to incur further losses through the end of 2025. To date the Company has been funding operations primarily through the reinvestment of free cash flows generated from its business operations, sale of equity in private placements, convertible debt instruments and revenues generated by the Company’s services. During the six months ended June 30, 2025, the Company received $ 2.5 million in proceeds from the issuance of convertible notes (the “PIPE Convertible Notes”), net of $ 280,000 in original issue discounts, from a PIPE Convertible Note. Based on its current cash resources and commitments, the Company believes it will be able to maintain its current planned development and corresponding level of expenditure for at least twelve months from the date of the issuance of these consolidated financial statements, although no assurance can be given that it will not need additional funds prior to such time. The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which contemplate continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the unaudited condensed consolidated financial statements do not necessarily purport to represent realizable or settlement values. The accompanying unaudited condensed consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP and in conformity with the instructions on Form 10-Q and Rule 8-03 of Regulation S-X and the related rules and regulations of the Securities and Exchange Commission (the “SEC”). The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation. The unaudited condensed consolidated financial statements reflect all adjustments consisting of normal recurring accruals, which are, in the opinion of management, necessary for a fair presentation of such statements. The results of operations for the three and six months ended June 30, 2025, are not necessarily indicative of the results that may be expected for the entire year. The significant accounting policies used in preparing these unaudited condensed consolidated are consistent with those described in the audited financial statements included in the Company’s Form 10-K for the year ended December 31, 2024, except as disclosed below. These unaudited financial statements and related should be read in conjunction with the Company’s audited financial statements for the year ended December 31, 2024, included in the Company’s Annual Report on Form 10-K filed with the SEC on April 15, 2025. 8 Reclassifications Certain reclassifications have been made to the unaudited condensed consolidated financial statements for the three and six months ended June 30, 2024 to conform to the unaudited condensed consolidated financial statement presentation for the three and six months ended June 30, 2025. These reclassifications had no effect on net loss or cash flows as previously reported. Revenue Recognition Remaining Performance Obligations As of June 30, 2025, approximately $ 4.9 million of revenue is expected to be recognized from remaining performance obligations. The Company expects to recognize 100 % of this revenue over the next 12 months. Disaggregated Revenue SCHEDULE OF DISAGGREGATED REVENUE 2025 2024 Three Months Ended June 30, 2025 2024 Revenues: Golf Simulators (1) $ 3,210,559 $ 1,842,725 Content Software Subscriptions 341,443 2,029,996 Franchise Revenue - - Other (2) 758,862 442 Total net revenue $ 4,310,864 $ 3,873,163 (1) Includes items such as hardware and proprietary perpetual licenses (2) Includes items such as shipping income and installation income 2025 2024 Six Months Ended June 30, 2025 2024 Revenues: Golf Simulators (1) $ 6,798,471 $ 4,567,383 Content Software Subscriptions 1,501,148 4,280,695 Franchise Revenue 75,000 - Other (2) 1,325,475 37,107 Total net revenue $ 9,700,094 $ 8,885,185 (1) Includes items such as hardware and proprietary perpetual licenses (2) Includes items such as shipping income and installation income 9 NOTE 3 – EARNINGS PER SHARE BASIC AND DILUTED The following potentially dilutive securities have been excluded from the computation of diluted weighted average shares outstanding as they would be anti-dilutive: SCHEDULE OF POTENTIAL DILUTIVE SHARES 2025 2024 2025 2024 Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Options to purchase Common Stock 22,620 — 22,620 — PIPE Convertible Notes (1) 51,088 134,000 51,088 134,000 Series A Preferred Shares 298,732 — 298,732 — Common Stock - Series A Preferred Warrants 5,869 — 5,869 — Common Stock - Series A Warrants — 28,182 — 28,182 Common Stock - Series B warrants — 31,000 — 31,000 Earnout shares 90,000 90,000 90,000 90,000 Underwriter warrants 12,650 12,650 12,650 12,650 Totals 480,959 295,832 480,959 295,832 Weighted Average Number of Shares Outstanding 480,959 295,832 480,959 295,832 (1) Does not include shares for interest or make-whole amounts as the number of shares is undeterminable since the calculation is based on variable floating factors. NOTE 4 – ACCOUNTS RECEIVABLE Accounts receivable and allowance for credit losses consisted of the following: SCHEDULE OF ALLOWANCE FOR CREDIT LOSSES June 30, December 31, 2025 2024 Trade accounts receivable $ 3,622,597 $ 2,870,021 Other 41,291 - Accounts receivable 3,663,888 2,870,021 Less allowance for credit losses ( 1,478,000 ) ( 1,470,868 ) Total accounts receivable, net $ 2,185,888 $ 1,399,153 NOTE 5 – INVENTORY, NET The following summarizes inventory: SCHEDULE OF INVENTORY June 30, December 31, 2025 2024 Inventory - raw materials $ 3,146,670 $ 2,797,705 Less reserve allowance for obsolescence ( 448,360 ) ( 448,360 ) Inventory, net $ 2,698,310 $ 2,349,345 NOTE 6 – PROPERTY AND EQUIPMENT, NET The following summarizes property and equipment: SCHEDULE OF PROPERTY AND EQUIPMENT June 30, December 31, 2025 2024 Software and computer equipment $ 844,185 $ 795,369 Furniture and fixtures 228,033 230,883 Vehicles 59,545 59,545 Equipment 15,873 15,873 Property and equipment, gross 1,147,636 1,101,670 Less accumulated depreciation ( 937,173 ) ( 957,818 ) Total property and equipment, net $ 210,463 $ 143,852 10 The Company recorded depreciation expense was $ 12,588 and $ 20,967 and $ 27,588 and $ 35,284 for the three and six months ended June 30, 2025 and 2024, respectively. The following summarizes capitalized software development costs as of June 30, 2025 and December 31, 2024: SCHEDULE OF CAPITALIZED SOFTWARE DEVELOPMENT COSTS Capitalized software, net - beginning balance, December 31, 2024 $ 1,540,121 Capitalized software development costs - 2025 1,568,778 Less accumulated amortization ( 434,054 ) Capitalized software development costs, net $ 2,674,845 The Company recorded amortization of capitalized software costs of $ 334,054 and $ 119,453 , and $ 434,054 and $ 137,916 for the three and six months ended June 30, 2025 and 2024, respectively. NOTE 7 – ACCRUED AND OTHER CURRENT LIABILITIES Accrued and other current liabilities consist of the following amounts: SCHEDULE OF ACCRUED AND OTHER CURRENT LIABILITIES June 30, December 31, 2025 2024 Accrued payroll $ - $ 108,945 Credit cards 308,631 55,180 Warranty reserve 140,000 140,000 Sales tax payable 86,097 105,563 Other accrued liabilities 1,238,149 589,619 Total accrued and other current liabilities $ 1,772,877 $ 999,307 Accrued liabilities and other current liabilities assumed in Merger: SCHEDULE OF ACCRUED LIABILITIES AND OTHER CURRENT LIABILITIES ASSUMED IN MERGER Accrued tax payable $ 45,008 Total accrued and other current liabilities assumed in Merger $ 45,008 NOTE 8 – NOTES PAYABLE Notes payable consisted of the following: SCHEDULE OF NOTES PAYABLE June 30, December 31, 2025 2024 Note payable - Ethos Management Inc. $ - $ - Note payable - Mercedez-Benz 14,805 19,733 Note payable 14,805 19,733 Less current portion ( 10,573 ) ( 10,001 ) Note payable long-term portion $ 4,232 $ 9,732 Ethos Management Inc. In January 2023, the Company entered into a financing agreement with Ethos Asset Management Inc. (the “Ethos Loan” or “Ethos”) in the principal amount of up to $ 10 million. Pursuant to the terms of the Ethos Loan, the Company may draw down financing proceeds equal to $ 833,333 each month beginning in April 2023, up to the $ 10 million amount. Interest associated with the Ethos Loan is fixed at 4 % per annum and has a three-year grace period for principal and interest payments. Annual principal and interest payments will commence in 2027 and continue through 2034. As a condition to funding, the Company provided Ethos with a $ 1,875,000 deposit as collateral (the “Deposit Collateral”) for the note. 11 The Ethos Loan stipulates that fundings should happen approximately every 30 banking days, subject to Ethos completing periodic internal audits to ensure the Company was in compliance with the terms of the loan agreement. In August 2023, Ethos informed the Company that unrelated to the Company, Ethos was undergoing a routine audit of its portfolio, and pending the close of the audit, borrowers may experience delays in drawing on funds when requested. In February 2024, due to the lack of additional fundings and in accordance with the terms of the Ethos Loan, the Company sent Ethos a notice of termination for materially breaching the Ethos Loan agreement. Based on the termination for default clause in the Ethos Loan, the Company was entitled to retain all funds disbursed by Ethos and Ethos must release the Deposit Collateral. At the date of the Ethos Loan termination the principal and accrued interest owed on the Ethos Loan was $ 2,383,059 and $ 81,560 , respectively. As a result of the Ethos Loan termination, the outstanding principal and accrued interest was offset by the Deposit Collateral leaving $ 589,619 , which is included in Accrued and other current liabilities on the unaudited condensed consolidated balance sheets at June 30, 2025 and December 31, 2024, respectively (See Note 7 – Accrued and Other Current Liabilities ). Mercedes-Benz In November 2020, the Company entered into a $ 59,545 , 5.90 % annual interest rate note payable with Mercedez-Benz for a delivery van. The note matures on November 20, 2026 , and is secured by the van. The Company makes a monthly payment of $ 908 , which includes both principal and interest. The outstanding principal on the note at June 30, 2025 and December 31, 2024, was $ 14,805 and $ 19,733 , respectively. NOTE 9 – PIPE CONVERTIBLE NOTES As previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 and in its Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, the Company entered into a securities purchase agreement with accredited investors for the issuance of PIPE Convertible Notes and Warrants. During the three months ended June 30, 2025, the Company converted an aggregate principal amount of $ 1,558,000 and $ 1,082,194 in accrued and make-whole interest related to the PIPE Convertible Notes into 142,308 shares of the Company’s Class A common stock. PIPE Convertible Notes payable consisted of the following: SCHEDULE OF PIPE CONVERTIBLE NOTES PAYABLE Total PIPE Convertible Notes, net at December 31, 2024 $ 4,068,953 PIPE Convertible Notes issued 2,800,000 Less: Debt Discount associated with OID ( 280,000 ) PIPE Convertible Notes, net 6,588,953 Less: Gross PIPE Convertible Note principal converted into Class A common stock ( 3,213,000 ) Add: Accretion of debt discount 359,037 3,734,990 Less current portion ( 3,734,990 ) Total PIPE Convertible Notes, net at June 30, 2025 $ - During the three and six months ended June 30, 2025 and 2024, amortization expense related to the Debt Discount of the PIPE Convertible Notes was $ 127,097 and $ 20,872 and $ 359,037 and $ 24,197 , respectively. The principal balance of the PIPE Convertible Notes, net of Debt Discounts, and accrued interest related to the PIPE Convertible Notes at June 30, 2025, was $ 3,734,990 and $ 40,957 , respectively. The principal balance net of Debt Discounts and accrued interest related to the PIPE Convertible Notes at December 31, 2024, was $ 4,068,953 and $ 154,500 , respectively. 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”). 12 Pursuant to the Exchange Agreements, on the closing of the Note Exchange the amounts owing under the PIPE Convertible Notes were to be exchanged into share of the Company’s Series A Preferred Stock. From the date of the Exchange Agreements until the date of the Note Exchange, the conversion price of the PIPE Convertible Notes was reduced to $ 1.00 per share, which was then adjusted to $ 50.00 per share as a result of the Reverse Stock Split. Due to the bundled nature of the Exchange Agreements transaction and that the PIPE Convertible Notes had not been exchanged as of June 30, 2025, the PIPE Convertible Notes remain outstanding and are classified as liabilities on the Company’s unaudited condensed consolidated balance sheet as of that date. The exchange of the PIPE Convertible Notes did not occur until July 21, 2025, and the associated issued Series A Preferred Stock and Series A Preferred Warrants are presented within equity as non-cash issuances, pending full settlement. See Note 13 – Stockholders’ Equity for the impact on the Company’s equity instruments. NOTE 10 – RELATED PARTY NOTES AND LOANS PAYABLE Related party notes payable consisted of the following: SCHEDULE OF RELATED PARTY NOTES PAYABLE June 30, December 31, 2025 2024 Note payable - ARJ Trust $ 650,000 $ 650,000 Note payable - McKettrick 800,000 800,000 Note payable - Carver 92,500 111,000 Loan - Chris Jones 1,750,000 2,000,000 Notes payable 3,292,500 3,561,000 Less current portion ( 2,668,500 ) ( 2,937,000 ) Note payable long-term portion $ 624,000 $ 624,000 Future maturities of related party notes and loan payables as of June 30, 2025: SCHEDULE OF FUTURE MATURITIES OF RELATED PARTY NOTES PAYABLE 2025 $ 2,668,500 2026 287,000 2027 337,000 Total $ 3,292,500 ARJ Trust In December 2008, the Company entered into a note payable with ARJ Trust, a trust that is indirectly controlled by the Company’s chief executive officer. The note has a principal amount of $ 500,000 , an interest rate of 8.50 % per annum, and a maturity date of March 31, 2024. The Company is required to make monthly interest-only payments of $ 3,541 . In June 2010, the Company entered into a second note payable with ARJ Trust. The note has a principal amount of $ 150,000 , an interest rate of 8.50 % per annum, and a maturity date of March 31, 2024 . The Company is required to make monthly interest-only payments of $ 1,063 . On March 31, 2024 , the maturity date of the notes was extended to March 31, 2025 . On March 31, 2025 , the maturity date of the notes was extended to September 30, 2025 . The Company made interest-only payments of $ 27,624 and $ 24,713 during the six months ended June 30, 2025 and 2024, respectively. The principal balance of the notes was $ 650,000 at both June 30, 2025 and December 31, 2024. 13 McKettrick In May 2019, the Company entered into a $ 1,750,000 , zero interest rate note payable with a former shareholder to repurchase all their owned shares in the Company. The note is payable in annual installments of $ 250,000 due on December 21 of each year. The note matures on December 1, 2027 . I f the annual installment is not paid within 10 days of the due date a late fee of 5% is charged . The principal balance of the note payable was $ 800,000 at both June 30, 2025 and December 31, 2024. Carver In January 2021, the Company entered into a $ 222,000 , zero interest rate note payable with a former shareholder to repurchase all their owned shares in the Company. The note is payable in semi-annual installments of $ 18,500 due on March 31 and September 30 each year and matures on October 1, 2027 . The Company made the required installments totaling $ 18,500 for the three months ended March 31, 2025. The principal balance of the note payable was $ 92,500 and $ 111,000 at June 30, 2025 and December 31, 2024, respectively. Chris Jones During the year ended December 31, 2024, the Company chief executive officer loaned the Company an aggregate of $ 2 million for operating expenses. The loaned amount has a zero interest rate and no stated maturity date. The Company made a $ 250,000 payment towards the loan during the three months ended June 30, 2025, however, the Company expects to pay back the loan in full. The principal balance of the loan payable was $ 1,750,000 and $ 2,000,000 at June 30, 2025 and December 31, 2024, respectively. NOTE 11 – LINES OF CREDIT JPMorgan Chase In December 2023, the Company entered into a $ 2,000,000 variable rate line of credit with JPMorgan. The purpose of the new line of credit was to consolidate the balances outstanding on the note payable and the previous line of credit, which had matured. The line of credit matured on December 31, 2024 . The line of credit had an annual interest rate of the Adjusted SOFR (Secured Overnight Financing Rate) Rate plus 3.00 %. On January 1, 2025, the maturity date of the line of credit was extended to December 31, 2025 . Upon the maturity date extension the annual interest rate was increased to the Adjusted SOFR Rate plus 3.50 %. The line of credit is secured by a pledge of $ 2,100,000 in the Company’s deposit accounts (restricted cash) at JPMorgan. The outstanding principal balance on the line of credit was $ 802,738 at June 30, 2025 and December 31, 2024. Morgan Stanley During February 2023, the Company entered into a variable rate line of credit with Morgan Stanley which was secured by the marketable securities held in our brokerage account. The Company terminated the brokerage agreement during the year ended December 31, 2024, liquidated the vast majority of its investments and has $ 10,114 recorded in cash and cash equivalents on its unaudited condensed consolidated balance sheet as of June 30, 2025 and December 31, 2024. NOTE 12 – DIVIDEND NOTES PAYABLE Prior to the Merger, TruGolf Nevada filed its tax returns as an S Corporation. Historically, all income tax liabilities and benefits of TruGolf Nevada are passed through to the shareholders annually through distributions. No dividends were declared during 2023 or 2022. During 2021, the Board of Directors declared $ 7,395,694 in dividends to the shareholders, payable in cash as the Company’s liquidity allows. During 2022, TruGolf Nevada paid the shareholders an aggregate amount of $ 1,965,706 . In November 2022, each shareholder agreed to defer the accrued dividends payable by entering into 6.00 % interest rate dividend notes payable. All outstanding and accrued interest is due and payable when the dividend notes payable mature on December 31, 2025. Interest commenced accruing on January 1, 2023. 14 On April 21, 2025, the Company entered into agreements with the shareholders owed approximately $ 3.9 million in outstanding dividends notes payable, pursuant to which each shareholder converted all of their outstanding amounts payable into (i) 84,662 shares of the Company’s Class A common stock, with respect to approximately $ 1.3 million in principal and interest and (ii) 165,663 shares of the Company’s Class B common stock with respect to approximately $ 2.6 million in principal and interest. Dividends declared, distributed, and accrued are as follows: SCHEDULE OF DIVIDENDS DECLARED, DISTRIBUTED, AND ACCRUED June 30, December 31, 2025 2024 Accrued interest on dividends payable $ 586,766 $ 515,677 Dividends payable $ 118,362 $ 4,023,923 NOTE 13 – STOCKHOLDERS’ DEFICIT Preferred Stock The Company has authorized preferred stock of 10,000,000 shares with a par value of $ 0.0001 . Series A Convertible Preferred Stock On April 22, 2025, in connection with the signing of the Exchange Agreements, see Note 9 – PIPE Convertible Notes , the Company designated 50,000 shares of the Company’s authorized and unissued preferred stock as Series A Convertible Preferred Stock (Series A Preferred). Each share of Series A Preferred has a stated value of $ 1,000 per share. The Series A, 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 have a conversion rate of $ 6.31 per share and convert into Class A common stock. As of June 30, 2025 and December 31, 2024, there were 1,885 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 . 15 Equity Transactions During the Period Series A Convertible Preferred Stock On April 22, 2025, in connection with the signing of the Exchange Agreements, see Note 9 – PIPE Convertible Notes , the Company issued an aggregate of 1,885 shares of Series A Convertible Preferred Stock with a fair value of $ 2,742 per share. See Note 15 – Fair Value Measurements for more information on the Company’s valuation methodology. Class A Common Stock During the three months ended June 30, 2025, the Company issued an aggregate of 31,160 shares of Class A Common Stock with a fair value of $ 50.00 per share to PIPE Convertible Note holders for conversion of an aggregate principal amount of $ 1,558,000 in PIPE Convertible Notes (See Note 9 – PIPE Convertible Notes ). During the three months ended June 30, 2025, the Company issued an aggregate of 111,148 shares of Class A Common Stock with fair values ranging from $ 8.80 - $ 12.17 per share to PIPE Convertible Note holders in lieu of cash for interest and make whole provisions (See Note 9 – PIPE Convertible Notes ). During the three months ended June 30, 2025, the Company issued an aggregate of 84,662 shares of Class A Common Stock with a fair value of $ 16.50 per share to dividend note payable holders in lieu of cash dividends (See Note 12 – Dividend notes payable ). Class B Common Stock During the three months ended June 30, 2025, the Company issued an aggregate of 165,663 shares of Class B Common Stock with a fair value of $ 33.00 per share to dividend note payable holders in lieu of cash dividends (See Note 12 – Dividend notes payable ). Warrant and Option Valuation The Company has computed the fair value of warrants and options granted using the Black-Scholes option pricing model. The expected term for warrants and options issued to non-employees is the contractual life and the expected term used for options issued to employees and directors is the estimated period of time that options granted are expected to be outstanding. The Company utilizes the “simplified” method to develop an estimate of the expected term of “plain vanilla” employee option grants. The Company is utilizing an expected volatility figure based on a review of the historical volatilities, over a period of time, equivalent to the expected life of the instrument being valued, of similarly positioned public companies within its industry. The risk-free interest rate was determined from the implied yields from U.S. Treasury zero-coupon bonds with a remaining term consistent with the expected term of the instrument being valued. Warrant Offerings Series A Preferred Warrants In applying the Black-Scholes option pricing model to the Series A Preferred Warrants, the Company used the following assumptions: SCHEDULE OF FAIR VALUE ASSUMPTIONS OF WARRANTS For the Three Months Ended June 30, 2025 Risk free interest rate 3.76 % Expected term (years) 2 Expected volatility 148 % Expected dividends 0 % During the three months ended June 30, 2025, in connection with the signing of the Exchange Agreements, see Note 9 – PIPE Convertible Notes , PIPE Warrant holders exchanged their outstanding 28,182 Series A Warrants and 31,000 Series B Warrants for Series A Preferred Warrants to purchase 37,033 shares of Series A Preferred Stock. The Series A Preferred Warrants are immediately vested, have an exercise price of $ 900 , and have a grant date fair value of $ 482,701 . 16 A summary of the Series A Warrant Activity during the six months ended June 30, 2025, is presented below: SCHEDULE OF WARRANT ACTIVITY Weighted Weighted Average Average Remaining Aggregate Number of Exercise Life Intrinsic Warrants Price In Years Value Outstanding, December 31, 2024 - $ - - Granted 37,033 900 Exercised - - Forfeited - - Outstanding, June 30, 2025 37,033 $ 900 1.8 $ - Exercisable, June 30, 2025 37,033 $ 900 1.8 $ - Series A and Series B Warrant A summary of the warrant activity during the six months ended June 30, 2025, is presented below: SCHEDULE OF WARRANT ACTIVITY Weighted Weighted Average Average Remaining Aggregate Number of Exercise Life Intrinsic Warrants Price In Years Value Outstanding, December 31, 2024 59,182 $ 571.50 - Granted - - Exercised - - Forfeited ( 59,182 ) 571.50 Outstanding, June 30, 2025 - $ - - $ - Exercisable, June 30, 2025 - $ - - $ - NOTE 14 – STOCK-BASED COMPENSATION The Company accounts for its stock-based compensation in accordance with the fair value recognition of ASC 718. 2024 Stock Incentive Plan The Company did not grant options during the three months June 30, 2025 or 2024. Compensation-based stock option activity for qualified and unqualified stock options are summarized below: SCHEDULE OF OPTION ACTIVITY Number of Options Weighted Average Exercise Price Weighted Average Remaining Life In Years Intrinsic Value Outstanding, December 31, 2024 22,620 $ 46.50 - Granted - 0 Exercised - 0 Forfeited - 0 Outstanding, June 30, 2025 22,620 $ 46.50 4.25 $ - Exercisable, June 30, 2025 22,070 $ 46.50 4.25 $ - 17 The following table summarizes information about options to purchase shares of the Company’s Class A common stock outstanding and exercisable at June 30, 2025: SCHEDULE OF STOCK OPTIONS OUTSTANDING AND EXERCISABLE Options Outstanding Options Exercisable Exercise Price Outstanding Number of Options Weighted Average Remaining Life In Years Exercisable Number of Options $ 46.50 22,620 4.25 22,070 22,620 22,070 Total compensation expense related to options was $ 3,342 and $ 6,684 for the three and six months ended June 30, 2025. As of June 30, 2025, there was future compensation cost of $ 4,456 with a weighted average recognition period of 0.50 years. The aggregate intrinsic value totaled $ 0 and was based on the Company’s closing stock price of $ 5.72 as of June 30, 2025, which would have been received by the option holders had all option holders exercised their options as of that date. Stock-Based Compensation Expense The following table presents information related to stock-based compensation expense: SCHEDULE OF STOCK-BASED COMPENSATION EXPENSE For the Three Months Ended Unrecognized at Weighted Average Remaining Amortization June 30, 2025 June 30, 2025 Period (Years) General and administrative $ 3,342 $ 4,456 0.50 Total $ 3,342 $ 4,456 0.50 For the Six Months Ended Unrecognized at Weighted Average Remaining Amortization June 30, 2025 June 30, 2025 Period (Years) General and administrative $ 6,684 $ 4,456 0.50 Total $ 6,684 $ 4,456 0.50 NOTE 15 – FAIR VALUE MEASUREMENTS Fair value measurements discussed herein are based upon certain market assumptions and pertinent information available to management as of and during the six months ended June 30, 2025. The carrying amounts of cash equivalents, accounts receivable, other current assets, other assets, accounts payable, and accrued expenses approximated their fair values as of the six months ended June 30, 2025, due to their short-term nature. 18 On April 22, 2025, the Company entered into a bundled non-cash transaction in which it issued 1,885 shares of Series A Preferred Stock (Series A Preferred) and warrants (Series A Preferred Warrants) to purchase 37,033 shares of Series A Preferred Stock in anticipation of a future exchange for the outstanding PIPE Convertible Notes and previously issued Series A and Series B Warrants ( see Note 9 – PIPE Convertible Notes ). The fair value for the Series A Preferred Stock was determined based on the contractual conversion terms into common stock and the quoted price of the Company’s common stock on the date of issuance, in accordance with ASC 820. The Series A Preferred Warrants were valued using the Black-Scholes Model, including the market price of the Company’s common stock, expected volatility, expected term, and the risk-free interest rate. The Series A Preferred and Series A Warrants were measured using Level 2 inputs given the absence of an active market for the Series A Preferred, specifically the quoted market price of the Company’s common stock and the number of common shares contractually receivable upon conversion. The following table sets forth a summary of the Company’s assets and liabilities that are measured at fair value on a recurring basis: SCHEDULE OF FAIR VALUE OF ASSETS AND LIABILITIES ON A NONRECURRING BASIS June 30, 2025 December 31, 2024 Fair Value Level 1 Cash Equivalents Cash Equivalents Money market funds $ 10,114 $ 10,114 Total debt investments $ 10,114 $ 10,114 Fair Value Level 2 Series A Preferred Stock Series A Preferred Warrants Series A Preferred Stock Series A Preferred Warrants Non-recurring fair value $ 5,168,609 $ 482,701 $ — $ - Total non-recurring fair value $ 5,168,609 $ 482,701 $ — $ - NOTE 16 – LEASES The Company is party to two leases: (i) office space in Centerville, Utah (the “Centerville Lease”) and (ii) a warehouse in North Salt Lake City, Utah (the “SLC Lease”). The Centerville lease is scheduled to expire in May 2028 and the SLC Lease is scheduled to expire in November 2025. There were no material changes to the Company’s lease arrangements during the six months ended June 30, 2025. Additional information regarding the Company’s lease arrangements is included in Note 20 – Leases the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. When measuring lease liabilities for leases that were classified as operating leases, the Company discounted lease payments using its estimated incremental borrowing rate at lease inception point. The weighted average incremental borrowing rate applied was 8.39 %. As of June 30, 2025, the Company’s leases had a remaining weighted average term of 1.90 years. The following table presents net lease cost and other supplemental lease information: SCHEDULE OF LEASE COST AND OTHER SUPPLEMENTAL LEASE INFORMATION June 30, December 31, 2025 2024 Lease cost Operating lease cost (cost resulting from lease payments) $ 214,995 $ 403,109 Net lease costs $ 214,995 $ 403,109 Operating lease - operating cash flows (fixed payments) $ 214,995 $ 403,109 Operating lease - operating cash flows (liability reduction) $ 189,689 $ 334,254 Non-current leases - right-of-use assets $ 455,925 $ 634,269 Current liabilities - operating lease liabilities $ 228,536 $ 363,102 Non-current liabilities - operating lease liabilities $ 250,002 $ 305,125 19 Future minimum payments under non-cancellable leases for operating leases for the remaining terms of the leases following the six months ended June 30, 2025, are as follows: SCHEDULE OF FUTURE MINIMUM PAYMENTS UNDER OPERATING LEASES Fiscal Year Operating Leases 2025 $ 191,995 2026 140,163 2027 144,227 2028 60,809 Total future minimum lease payments $ 537,194 Amount representing interest ( 58,656 ) Present value of net future minimum lease payments $ 478,538 NOTE 17 – SEGMENT INFORMATION The Company currently operates as one business segment, which is also the sole reportable segment, focusing on the manufacturing and sales of indoor golf simulators. The Company’s business offerings have similar economic and other characteristics, including the nature of products, manufacturing, types of customers, and distribution methods. The determination of a single business segment is consistent with the consolidated financial information regularly provided to the Company’s chief operating decision maker (“CODM”). The Company’s CODM is its Principal Executive and Financial Officer and Director, who reviews and evaluates consolidated profit and loss and total assets for the purpose of assessing performance, making operating decisions, allocating resources, and planning and forecasting for future periods. In addition to the significant expense categories included within net loss presented on the Company’s Consolidated Statements of Operations, see below for disaggregated amounts that comprise consulting, contract labor, personnel, business development, royalty, and marketing expenses: SCHEDULE OF REVENUE BY SEGMENT INFORMATION 2025 2024 For The Three Months Ended June 30, 2025 2024 Consulting expenses $ 1,023,090 $ 645,711 Contract labor ( 177,105 ) 258,971 Personnel expenses 1,006,210 1,339,494 Business development expenses 27,127 185,243 Royalty expenses 138,695 223,150 Marketing expenses 222,877 108,907 Other expenses * 1,541,037 596,517 Total operating expenses $ 3,781,931 $ 3,357,993 * Other expenses is materially comprised of rent, insurance, stock-based compensation, depreciation and amortization, licenses, dues and subscriptions, travel and entertainment, and merchant fees. 2025 2024 For The Six Months Ended June 30, 2025 2024 Consulting expenses $ 1,657,071 $ 1,055,815 Contract labor 436,235 481,179 Personnel expenses 2,953,026 2,958,881 Business development expenses 146,737 449,087 Royalty expenses 364,015 553,038 Marketing expenses 557,255 220,396 Other expenses * 2,564,847 1,636,281 Total operating expenses $ 8,679,186 $ 7,354,677 * Other expenses is materially comprised of rent, insurance, stock-based compensation, depreciation and amortization, licenses, dues and subscriptions, travel and entertainment, and merchant fees. 20 NOTE 18 – COMMITMENTS AND CONTINGENCIES Legal Claims There are no material pending legal proceedings in which the Company or any of its subsidiaries is a party or in which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of any class of its voting securities, or security holder is a party adverse to the Company, or has a material interest adverse to the Company. NOTE 19 – CONCENTRATION OF CREDIT RISK Cash Deposits Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash deposits. Accounts at each institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $ 250,000 . As of June 30, 2025 and December 31, 2024, the Company had approximately $ 8,904,000 and $ 9,662,000 , respectively, in excess of the FDIC insured limit. NOTE 20 – SUBSEQUENT EVENTS PIPE Convertible Notes and Issuance of Series A Preferred Stock On July 21, 2025, in connection with the Exchange Agreements dated April 22, 2025, (i) holders of the Company’s PIPE Convertible Notes agreed to waive the remaining closing condition to the Note Exchange, and the exchange was consummated. PIPE Convertible Notes with an aggregate principal amount of $ 3,938,311 (representing 100% of the remaining PIPE Convertible Notes) were exchanged for 3,938 shares of the Company’s Series A Preferred Stock and (ii) the Company agreed to extend the expiration date of the Series A Preferred Warrants held by such holders by two years. On July 21, 2025, a holder of Series A Preferred Warrants to purchase 18,333 shares of Series A Preferred Stock partially exercised its warrants for cash proceeds of approximately $ 5.0 million and was issued 5,555 shares of Series A Preferred Stock. Issuance of Common Stock Subsequent to June 30, 2025, the Company issued an aggregate of 373,308 shares of Class A common stock with fair values ranging from $ 4.13 - $ 6.31 per share to Series A Preferred Stockholders in connection with the conversion of outstanding Series A Preferred Stock, accrued interest, and make-good provisions. 21 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations Note Regarding Forward-Looking Statements The following discussion highlights the current operating environment and summarizes the financial position of Trugolf Holdings, Inc. and its subsidiaries as of June 30, 2025, and should be read in conjunction with (i) the unaudited interim condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q (“Quarterly Report”) and (ii) the audited consolidated financial statements and accompanying notes thereto included in our 2024 Annual Report on Form 10-K for the year ended December 31, 2024. Unless the context otherwise requires, references in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” to “we”, “us”, “our”, and “the Company” are intended to refer to the business and operations of TruGolf. This Form 10-Q contains certain forward-looking statements. Historical results may not indicate future performance. Our forward-looking statements reflect our current views about future events, are based on assumptions and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those contemplated by these statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” or “continue” or the negative of these terms or other comparable terminology. These statements include statements regarding the intent, belief or current expectations of us and members of our management team, as well as the assumptions on which such statements are based. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks set forth in the section entitled “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, as filed with the U.S. Securities and Exchange Commission (the “SEC”) on April 15, 2025, any of which may cause our company’s or our industry’s actual results, levels of activity, performance or achievements expressed or implied in our forward-looking statements. These risks and factors include, by way of example and without limitation: ● the occurrence of any event, change, or other circumstances, including the outcome of any legal proceedings that may be instituted against us; ● the ability to maintain the listing of our securities on Nasdaq, and the potential liquidity and trading of our securities; ● the risk of disruption to our current plans and operations; ● the ability to recognize the anticipated benefits of our business and the Business Combination, which may be affected by, among other things, competition and the ability to grow, manage growth profitably, and retain key employees; ● costs related to our business; ● changes in applicable laws or regulations; ● our ability to meet future capital requirements to fund our operations, which may involve debt and/or equity financing, and to obtain such debt and/or equity financing on favorable terms, and our sources and uses of cash; ● our ability to maintain existing license agreements; ● our ability to achieve and maintain profitability in the future; ● our financial performance; and ● other factors disclosed under the section entitled “Risk Factors”. Company Overview Corporate History TruGolf Nevada, was formed as a Utah corporation on October 4, 1995, under the name TruGolf Incorporated, and was a subsidiary of Access Software. On June 9, 1999, TruGolf Nevada changed its name to TruGolf, Inc. Upon the acquisition of Access Software by Microsoft Corp. in August 1999, the core programming and graphics team of the LinksTM video game series were spun out to TruGolf Nevada. Effective on April 26, 2016, TruGolf Nevada filed Articles of Merger with the State of Utah, Department of Commerce, and on April 28, 2016, TruGolf Nevada filed Articles of Merger with the Secretary of State of Nevada, pursuant to which TruGolf, Inc., a Utah corporation, merged with and into TruGolf Nevada, pursuant to a Plan of Merger. TruGolf Nevada was the surviving corporation and, in connection with the Plan of Merger, TruGolf Nevada affected a four-for-one forward stock split of its outstanding common stock. TruGolf Holdings, Inc. (f/k/a Deep Medicine Acquisition Corp.) (“TruGolf”, and together with its subsidiaries, the “Company”), was incorporated on July 8, 2020, as a Delaware corporation and formed for the purpose of effecting a business combination, with no material operation of its own. 22 On March 31, 2023, we entered into an Agreement and Plan Of Merger (the “Merger Agreement”) with TruGolf Nevada, DMAQ Merger Sub Inc. (“Merger Sub”), a Nevada corporation and our wholly-owned subsidiary, Bright Vision Sponsor LLC, a Delaware limited liability company, in the capacity as representative for our stockholders at the time of the Merger Agreement, Christopher Jones, an individual, in the capacity as TruGolf Nevada’s representative, and TruGolf Nevada (together, the “Merger Parties”). On July 21, 2023, the Merger Parties entered into an Amended and Restated Agreement and Plan of Merger (the “Restated Merger Agreement”), pursuant to which the Merger Agreement was amended and restated to provide, among other things, that (i) contingent earnout shares will be issued after the Closing, if and when earned, upon the Company meeting the milestones specified in the Restated Merger Agreement, rather than being issued at the closing of the merger and being placed into escrow subject to potential forfeiture; and (ii) the share price of the Company’s common stock used in the calculation of the number of shares to be issued to the Sellers as merger consideration shall be $10.00, as opposed to the price at which the Company redeems the shares of common stock held by its public stockholders in connection with the closing of this business combination. On January 31, 2024, we consummated the business combination (the “Closing”). As a result of the Closing and the transactions contemplated by the Merger Agreement, (i) Merger Sub merged with and into TruGolf Nevada, with TruGolf Nevada surviving the Merger as a wholly-owned subsidiary of TruGolf, and (ii) TruGolf’s name was changed from Deep Medicine Acquisition Corp. to TruGolf Holdings, Inc. TruGolf’s Class A common stock commenced trading on the Nasdaq Global Market LLC under the ticker “TRUG” on February 1, 2024. Business Overview Since 1983, the Company has been passionate about driving the golf industry with innovative, indoor golf solutions. We build products that capture the spirit of golf. Our mission is to help grow the game by making it more available, more approachable and more affordable, through technology – because we believe golf is for everyone. Our team has built award-winning video games (including Links, a popular sports game for PC), innovative hardware solutions, and an all-new e-sports platform to connect golfers around the world with TruGolf E6 Connect Software, our premier software engine. Since TruGolf’s beginning, we have continued to define and redefine what is possible with golf technology. In addition to offering a variety of custom, professional, and portable golf simulators, TruGolf’s latest launch monitor, Apogee, was created to improve accuracy and to make using the launch monitor easier. Features of Apogee include: a unique Apogee Voice Assistant, a voice command system that allows users to navigate their TruGolf E6 Connect Software gameplay within rounds and practice sessions; Laser Launchpad, a laser indicator that shows users where to place the ball and when the system is ready to record a swing and Point-of-Impact (POI) slow-motion replay video. Our suite of hardware offerings in the golf technology space is expansive, offering something for virtually everyone from gamers to beginners to professionals, and all consumers in between. Hardware offerings are sold through a global network of authorized resellers, retail outlets and direct-to-consumer through a dedicated TruGolf sales team. Our suite of hardware offerings ranges from entry level pricing at just under $400, to well over $100,000 for custom projects, creating a wide range of pricing options for nearly all consumers, and providing TruGolf with a competitive advantage in creating a wide consumer base as compared to its competitors (who often only focus in a narrow consumer price range). TruGolf creates top golf technology software in the marketplace through its TruGolf E6 Connect and E6 Apex Software. Importantly, TruGolf’s software is designed not only for use with our suite of hardware offerings in the golf technology space, but also integrates with more than twenty-four third party golf technology hardware manufacturers, translating to a market integration coverage equal to roughly 90% of golf technology hardware in the global market space, which allows peer-to-peer play across these golf technology hardware manufacturers, allowing for a unification of the golf technology space. TruGolf’s software records, on average, over 725,000 indoor golf shots per day. TruGolf’s E6 Connect Software is both PC and iOS compatible and can be used both indoors and outdoors. 23 TruGolf has leveraged its unique position as one of the industry leaders in both hardware and software golf technology solutions to organize and found the Virtual Golf Association (VGA). The VGA is a gamified virtual economy that takes place inside the TruGolf E6 Connect Software. Users have a chance to earn points through play, practice, and more – providing a worldwide leaderboard of connected indoor golfers. Each shot users take rewards them with points. These points can be used to purchase in-game enhancements, or to enter virtual golf tournaments with real world prizes. The VGA is broken into three models: ● Game Analysis – rewards TruGolf software users who measure their game. Users can set specific goals (e.g., shots hit per month, speed and distance gains, dispersion reduction) and earn points for hitting milestones. At the end of each month, users can see how they compared against all other users utilizing the Game Analysis features. ● Connected Golf – rewards users for joining with their friends and playing golf online. Earn points for playing a new course or linking up to play nine holes with another player utilizing TruGolf software. ● Virtual Golf Association Events – events are worldwide leaderboard format, flighted by handicap, where users play and compete to shoot the lowest score. These contests include stroke play, closest to the pin, match play, stableford, and more. Users earn points based on how they finish in their division. In totality, TruGolf’s business model is designed to be positioned as the hub of golf technology, with groundbreaking hardware technologies that we believe can become the industry standard and unify the industry as a whole by serving as the leader of golf technology software solutions through its TruGolf’s software. Reverse Stock Split On June 23, 2025, the Company filed a Certificate of Amendment to the Company’s Amended and restated Certificate of Incorporation with the Secretary of the State of Delaware to effect a 1-for-50 reverse stock split of the Class A and Class B shares of the Company’s issued and outstanding common stock, effective as of 12:01 a.m. Eastern Time on June 23, 2025 (the “Reverse Stock Split”) and began trading on a Reverse Stock Split-adjusted basis on Nasdaq on June 23, 2025. As a result of the Reverse Stock Split, the number of Class A common shares outstanding was reduced from 40,532,150 to 810,617 and the number of Class B common shares outstanding was reduced from 10,000,000 to 200,000, and the number of authorized shares of common stock remained unchanged. All share amounts have been retroactively adjusted for the Reverse Stock Split. Revenue The Company derives our revenue through the sales of our golf simulators, perpetual software licenses, content software subscriptions, and franchising. Results of Operations Comparison of the Six Months Ended June 30, 2025 to the Six Months Ended June 30, 2024 Our financial results for the six months ended June 30, 2025 are summarized as follows in comparison to the six months ended June 30, 2024. 2025 2024 Variance Revenue, net $ 9,700,094 $ 8,885,185 $ 814,909 Cost of revenue 4,125,158 3,259,234 865,924 Total gross profit 5,574,936 5,625,951 (51,015 ) ‍ Operating Expenses: Royalties 364,015 553,038 (189,023 ) Salaries, wages and benefits 2,953,026 2,958,881 (5,885 ) Selling, general and administrative 5,362,145 3,842,758 1,519,387 Operating loss (3,104,250 ) (1,728,726 ) (1,375,524 ) Other income (expenses) (2,887,542 ) (1,142,466 ) (1,745,076 ) Loss before income taxes $ (5,991,792 ) $ (2,871,192 ) $ (3,120,600 ) 24 Revenues Revenues increased by $814,909, or 9%, for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024. The increase is primarily attributable to the increase of our product acceptance and greater penetration in the industry market. Cost of Revenues Cost of revenues increased by $865,924, or 27%, for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024. The increase is primarily attributable to an increase in inventory adjustments of $170,982 and an increase in costs related to the Company’s TruTrack product of approximately $830,541. Operating Expenses Total operating expenses increased by $1,324,509, or 18%, for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024. Selling, general and administrative expenses increased by $1,519,387, or 40%, due primarily to an increase in amortization expense related to capitalized software of $296,138, an increase in marketing expense of $336,859, and an increase in professional fees of $601,256. Other Income (Expenses) Other income (expenses) increased by $1,745,076, or 153%, for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024. The increase is primarily attributable to interest expense, amortization expense of the PIPE Convertible Notes debt discount, the write-off of remaining debt discounts upon the conversion of related to the PIPE Convertible Notes, and the make-good interest expense upon the conversion of related PIPE Convertible Notes. Comparison of the Three Months Ended June 30, 2025 to the Three Months Ended June 30, 2024 Our financial results for the three months ended June 30, 2025 are summarized as follows in comparison to the three months ended June 30, 2024. 2025 2024 Variance Revenue, net $ 4,310,864 $ 3,873,163 $ 437,701 Cost of revenue 2,398,959 1,300,212 1,098,747 Total gross profit 1,911,905 2,572,951 (661,046 ) ‍ Operating Expenses: Royalties 138,695 223,150 (84,455 ) Salaries, wages and benefits 1,006,210 1,117,287 (111,077 ) Selling, general and administrative 2,637,026 2,017,556 619,470 Operating loss (1,870,026 ) (785,042 ) (1,084,984 ) Other income (expenses) (1,451,444 ) (784,287 ) (667,157 ) Loss before income taxes $ (3,321,470 ) $ (1,569,329 ) $ (1,752,141 ) Revenues Revenues increased by $437,701, or 11%, for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024. The increase is primarily attributable to the increase of our product acceptance and greater penetration in the industry market. 25 Cost of Revenues Cost of revenues increased by $1,098,747, or 85%, for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024. The increase is primarily attributable to an increase in inventory adjustments of $248,624 and an increase in costs related to the Company’s TruTrack product of approximately $739,425. Operating Expenses Total operating expenses increased by $423,938, or 13%, for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024. Selling, general and administrative expenses increased by $619,470, or 31%, due primarily to an increase in marketing of $113,970, an increase in professional fees of $377,379, and an increase in amortization expense related to capitalized software of $130,169. This was offset by a decrease in salaries, wages and benefits of $111,077, or 10%, due primarily to an increase in salaries being capitalized for time spent on developing new versions of the Company’s platform software. Other Income (Expenses) Other income (expenses) increased by $667,157, or 85%, for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024. The increase is primarily attributable to interest expense, amortization expense of the PIPE Convertible Notes debt discount, the write-off of remaining debt discounts upon the conversion of related to the PIPE Convertible Notes, and the make-good interest expense upon the conversion of related PIPE Convertible Notes. Liquidity and Capital Resources As of June 30, 2025, we had cash on hand of $10,159,359 and a working capital surplus of $6,554,656, as compared to cash on hand of $10,882,077 and a working capital deficiency of $982,237 as of December 31, 2024. The increase in working capital surplus is primarily attributable to the recognition of the $5,651,310 current asset related to the fair value of Series A Preferred Stock and related Series A warrants issued in connection with the bundled PIPE Exchange Agreement transaction. These instruments are classified as current assets because they are expected to be used in the settlement of outstanding obligations within the next twelve months. The fair value was determined at the time of issuance based on the observable market price of the Company’s common stock and the contractual conversion provisions of the Series A Preferred Stock. The Company’s operating activities consume the majority of its cash resources. The Company anticipates that it will continue to incur operating losses as it executed its development plans for 2025, as well as other potential strategic and business development initiatives. In addition, the Company has had and expects to have negative cash flows from operations, at least into the near future. The Company has previously funded, and plans to continue funding, these losses with the sale of equity and convertible notes. The accompanying unaudited condensed consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern. Working Capital June 30, December 31, 2025 2024 Current assets $ 20,985,256 $ 14,792,931 Current liabilities 18,165,590 15,775,168 Working capital surplus (deficiency) $ 2,819,666 $ (982,237 ) The increase in current assets is primarily due to the recording of the $5,651,310 asset related to the fair value of Series A Preferred Stock and Series A Warrants as noted above. The increase in current liabilities is primarily due to the reclass of $3,734,900 in PIPE Convertible Notes from non-current liabilities to current liabilities as a result of the PIPE Convertible Notes being extinguished on July 21, 2025 as part of the April 22, 2025 PIPE Exchange Agreements. 26 Cash Flows For the Six Months Ended June 30, 2025 2024 Cash Flows: Net cash provided by (used in) operating activities $ (1,354,546 ) $ 2,615,975 Net cash used in investing activities $ (1,614,778 ) $ (1,433,513 ) Net cash provided by financing activities $ 2,246,572 $ 71,246 Operating Activities Net cash used in operating activities was $1,354,546 for the six months ended June 30, 2025, which was primarily due to the net loss of $5,991,792 and an increase in accounts receivable, net of $861,552, which was partially offset by non-cash expenses of $3,201,997, an increase in deferred revenue of $1,896,218, and an increase in accrued and other current liabilities of $773,570. Net cash provided by operating activities was $2,615,975 for the six months ended June 30, 2024, which was primarily due to the net loss of $2,871,192 which was offset by the liquidation of the marketable securities account of $2,478,953 and an increase in accounts payable of $1,149,909, an increase in deferred revenue of $1,274,900, and an increase in accrued interest payable of $785,306. The change in the remaining operating assets and liabilities was $567,271 and non-cash expenses of $365,370. Investing Activities Net cash used in investing activities was $1,614,778 for the six months ended June 30, 2025, which was the result of an increase in capitalized software of $1,568,778 and the purchase of equipment of $45,966. Net cash used in investing activities was $1,433,513 for the six months ended June 30, 2024, which was the result of an increase in capitalized software of $1,433,438. Financing Activities Net cash provided by financing activities was $2,246,572 for the six months ended June 30, 2025, which was primarily due to $2,520,000 of net proceeds from PIPE Convertible Notes. Net cash provided by financing activities was $71,246 for the six months ended June 30, 2024, the Company received net proceeds from the Merger of $2,325,315, received net proceeds from PIPE Convertible Notes of $4,185,000, paid off the variable rate line of credit of $1,980,937 and made debt payments of $268,500. Item 3. Quantitative and Qualitative Disclosures About Market Risk There have been no material changes in market risk from the information provided in Item 7A “Quantitative and Qualitative Disclosures About Market Risk” of TruGolf Holdings Inc.’s Annual Report on Form 10-K for the year ended December 31, 2024. Item 4. Controls and Procedures Evaluation of Disclosure Controls and Procedures We maintain disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer, who serves as our principal executive officer, and Chief Financial Officer, who serves as our principal accounting officer, as appropriate, to allow timely decisions regarding required disclosures. In designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives. 27 Our management, with the participation of our Chief Executive Officer and acting Chief Financial Officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation and subject to the foregoing, our management concluded that, our disclosure controls and procedures were not effective due to the material weaknesses in internal control over financial reporting described below. Management’s Annual Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control over financial reporting is a process designed under the supervision of its principal executive and principal financial officers and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of its consolidated financial statements for external reporting purposes in accordance with U.S. generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. Material Weaknesses in Internal Control over Financial Reporting Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2024 based on the framework established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management has determined that our internal control over financial reporting as of June 30, 2025 was not effective. A material weakness, as defined in the standards established by the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. The ineffectiveness of our internal control over financial reporting was due to the following material weaknesses which are indicative of many small companies with small number of staff: ● lack of risk assessment procedures on internal controls to detect financial reporting risks in a timely manner; ● inadequate segregation of duties due to limited personnel consistent with control objectives; ● lack of documentation on policies and procedures that are critical to the accomplishment of financial reporting objectives; and ● lack of a full time Chief Financial Officer and personnel with experience and expertise in public company accounting and internal control over financial reporting. Management’s Plan to Remediate the Material Weakness Our management plans to implement measures designed to ensure that control deficiencies contributing to the material weakness are remediated, such that these controls are designed, implemented, and operating effectively. The remediation actions planned include: ● identify gaps in our skills base and the expertise of our staff required to meet the financial reporting requirements of a public company; ● develop policies and procedures on internal control over financial reporting and monitor the effectiveness of operations on existing controls and procedures; and ● continue the search for a qualified individual to fill our Chief Financial Officer position. 28 Our management will continue to monitor and evaluate the relevance of our risk-based approach and the effectiveness of our internal controls and procedures over financial reporting on an ongoing basis and is committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow. Changes in Internal Control Over Financial Reporting Other than described above there have been no changes in our internal control over financial reporting that occurred during our second quarter of 2025 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting. PART II – OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS We are not currently party to any lawsuit or proceeding which, in the opinion of management, is likely to have a material adverse effect on us or our business. ITEM 1A. RISK FACTORS Except as set forth below, there have been no material changes from the risk factors previously disclosed in “Item 1A. Risk Factors” of our 2024 Annual Report. We have in the past failed to maintain compliance with all applicable continued listing requirements of the Nasdaq Stock Market, and if we fail to maintain compliance with all applicable continued listing requirements of the Nasdaq Capital Market in the future, we will not be afforded traditional cure periods under Nasdaq rules and our Class A common stock may be delisted from Nasdaq, which could have an adverse impact on the liquidity and market price of our common stock. On August 19, 2024, we received a delist notice from the Staff of Nasdaq notifying us that the listing of our Class A common stock was not in compliance with the minimum market value of publicly held securities requirement and the minimum shareholders’ equity requirement set forth in Nasdaq Listing Rules. On November 5, 2024, we received a delist notice from the Staff of Nasdaq notifying us that the listing of our Class A common stock was not in compliance with the minimum bid price requirement of $1.00 per share set forth in Nasdaq Listing Rules. We requested a hearing before a Nasdaq hearing panel (the “Panel”) to present a plan to regain compliance with all the continued listing requirements of Nasdaq and such hearing was held May 15, 2025. On May 30, 2025, the Panel provided us an exception with various milestones to regain compliance, including with Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Rule”) until July 8, 2025 and the minimum shareholders’ equity requirement until July 30, 2025. In addition, the Panel directed that the listing of our Class A common stock be transferred to the Nasdaq Capital Market, effective at the open of business on June 3, 2025. On July 17, 2025, the Staff confirmed that we had regained compliance with the Bid Price Rule as required by the Panel’s decision. On August 1, 2025, we received a letter from Nasdaq notifying us that we had demonstrated compliance with Nasdaq Listing Rule 5550(b)(1) (the “Equity Rule”), as required by the Panel’s decision, and, following our phase down to the Nasdaq Capital Market on June 3, 2025, we demonstrated compliance with the minimum market value of publicly held securities required by Nasdaq Listing Rule 5550(a)(5). Pursuant to the letter, in application of Listing Rule 5815(d)(4)(B), we will be subject to a Mandatory Panel Monitor for a period of one year from the date of the letter. If, within that one-year monitoring period, the Staff finds us again out of compliance with the Equity Rule, notwithstanding Rule 5810(c)(2), we will not be permitted to provide the Staff with a plan of compliance with respect to that deficiency and Staff will not be permitted to grant additional time for us to regain compliance with respect to that deficiency, nor will we be afforded an applicable cure or compliance period pursuant to Rule 5810(c)(3). Instead, Staff will issue a delist determination letter and we will have an opportunity to request a new hearing. Delisting from Nasdaq would adversely affect our ability to raise additional financing through the public or private sale of equity securities, may significantly affect the ability of investors to trade our securities and may negatively affect the value and liquidity of our common stock. Delisting also could have other negative results, including the potential loss of employee confidence, the loss of institutional investors and general investors that will consider investing in our common stock, a reduction in the number of market makers in our common stock, a reduction in the availability of information concerning the trading prices and volume of our common stock, a reduction in the number of broker-dealers willing to execute trades in shares of our common stock or interest in business development opportunities. Further, we would likely become a “penny stock”, which would make trading of our common stock more difficult. The conversion of our outstanding Series A Preferred Stock, or any additional shares of Series A PreferredStock we issue in the future upon the exercise of the Series A Preferred Warrants, into Class A common stock will dilute the ownership interest of our stockholders. Our Series A Preferred Stock provide that if, while the Series A Preferred Stock are outstanding, we sell any Class A common stock and/or Class A common stock equivalents other than in connection with certain exempt issuances, at a purchase price per share less than the conversion price of the Series A Preferred Stock in effect immediately prior to such sale, then immediately after such sale the exercise price of the Series A Preferred Stock then in effect will be reduced to an amount equal to the new issuance price, and, the number of shares issuable upon conversion of the Series A Preferred Stock will be proportionately adjusted such that the aggregate price will remain unchanged, subject to the floor price provided for in the Series A Preferred Stock. In addition, if on any six month anniversary after the date the Series A Preferred Stock are issued (each, a “Reset Date”), the conversion price then in effect is greater than the closing price of the Class A common stock as of such applicable Reset Date (each, a “Reset Price”), immediately after the close of trading on such applicable Reset Date the conversion price shall automatically lower to the Reset Price. Finally, if at any time on or after the date of issuance there occurs any stock split, stock dividend, stock combination recapitalization or other similar transaction involving the Class A common stock, the conversion price shall be reduced to 120% of the quotient determined by dividing (x) the sum of the volume weighted average price of the Class A common stock for each of the five trading days with the lowest volume weighted average price of the Class A common stock during the fifteen consecutive trading day period ending and including the trading day immediately preceding the sixteenth trading day after such event date, divided by (y) five. If the conversion price of the Series A Preferred Stock decreases, the number of shares underlying the Series A Preferred Stock will increase, which would materially dilute the ownership of our stockholders. ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS Except as previously reported by us on our Current Report on Form 8-K, during the period covered by this Quarterly Report on Form 10-Q, the Company did not sell any unregistered securities. During the three months ended June 30, 2025, the Company issued an aggregate of 225,970 shares of Class A common stock with a fair value ranging from $8.80 - $50.00 per share pursuant to the conversion of $1,558,000 in principal and $1,082,194 in make whole interest related to the conversion of PIPE Convertible Notes and approximately $1,300,000 in principal related to the conversion of dividend notes payable. During the three months ended June 30, 2025, the Company issued an aggregate of 165,663 shares of Class B common stock with a fair value of $33.00 per share pursuant to the conversion of approximately $2,600,000 in principal related to the conversion of dividend nots payable. The transactions described above were undertaken in reliance upon the exemptions from registration afforded by Section 4(a)(2) of the Securities Act of 1933, as amended. On April 22, 2025, the Company issued 1,885 shares of its Series A Preferred Stock, and Series A Preferred Warrants to purchase 37,033 shares of Series A Preferred Stock in connection with a bundled transaction involving the future settlement of outstanding PIPE Convertible Notes, and no cash proceeds were received by the Company. The Series A Preferred Stock and Series A Preferred Warrants were issued in reliance on the exemption from registration by Section 3(a)(9) of the Securities Act. ITEM 3. DEFAULTS UPON SENIOR SECURITIES None. ITEM 4. MINE SAFETY DISCLOSURES None. ITEM 5. OTHER INFORMATION During the quarter ended June 30, 2025, no director or officer adopted or terminated any (i) “Rule 10b5-1 trading arrangement,” as defined in Item 408(a) of Regulation S-K intending to satisfy the affirmative defense conditions of Rule 10b5-1(c) or (ii) “no-Rule 10b5-1 trading arrangement,” as defined in Item 408(c) of Regulation S-K. 29 ITEM 6. EXHIBITS Exhibit Incorporated by Reference Number Exhibit Description Form Exhibit Filing Date 3.1 Amendment to Third Amended and Restated Certificate of Incorporation of TruGolf Holdings, Inc. dated June 2, 2025 8-K 3.1 6/3/25 3.2 Amendment to Amended and Restated Certificate of Incorporation of TruGolf Holdings, Inc. dated June 17, 2025 8-K 3.1 6/24/25 10.1 Form of January Waiver, dated as of January 16, 2025 8-K 10.1 1/16/25 10.2 Form of Exchange Agreement 8-K 10.1 4/23/25 10.3 Form of Certificate of Designations of Rights and Preferences of Series A Convertible Preferred Stock 8-K 10.2 4/23/25 10.4 Form of Warrant to Purchase Series A Convertible Preferred Stock 8-K 10.3 4/23/25 10.5 Form of Registration Rights Agreement 8-K 10.4 4/23/25 10.6 Form of Equity Purchase Facility Agreement 8-K 10.1 5/15/25 10.7 Form of Registration Rights Agreement 8-K 10.2 5/15/25 10.8 Form of Amendment and Waiver Agreement, dated as of May 28, 2025 8-K 10.1 5/29/25 10.9 Form of Waiver Agreement with Convertible Note holders 8-K 10.4 7/22/25 31.1* Rule 13a-14(a) / 15d-14(a) Certification of Principal Executive Officer and Principal Financial Officer 32.1** Section 1350 Certification of Principal Executive Officer and Principal Financial Officer 101.INS Inline XBRL Instance Document* ‍101.SCH Inline XBRL Taxonomy Extension Schema* 101.CAL‍ Inline XBRL Taxonomy Calculation Linkbase* ‍101.LAB Inline XBRL Taxonomy Label Linkbase* 101.PRE‍ Inline XBRL Taxonomy Linkbase Document* ‍101.DEF Inline XBRL Taxonomy Definition Linkbase Document* * Filed herewith. ** Furnished herewith 30 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. TRUGOLF HOLDINGS, INC. By: /s/ Christopher (Chris) Jones Name: Christopher (Chris) Jones Title: Chief Executive Officer, Director, Interim Chief Financial Officer (Principal Executive Officer, Interim Principal Financial Officer and Interim Principal Accounting Officer) Date: August 19, 2025 31