What changed in this filing

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Item 1. Financial Statements

2025-08-19 compared with 2025-05-15 · 482 added, 1015 removed, 336 unchanged (82% of the section changed)

8 unchanged sentences

Prepaid expenses and other current assets

PIPE exchange consideration

Other current assets

4 unchanged sentences

Other long-term assets

LIABILITIES AND STOCKHOLDERS’ DEFICIT

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

Current Liabilities:

1 unchanged sentence

Deferred revenue

PIPE loan payable, net

Notes payable, current portion

17 unchanged sentences

Commitments and Contingencies

Stockholders’ Deficit:

Stockholders’ Equity (Deficit):

Preferred stock, $ 0.0001 par value, 10 million shares authorized

zero shares issued and outstanding, respectively

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:

11 unchanged sentences

( 21,155,496 )

Total Stockholders’ Deficit

( 4,565,249 )

Total Stockholders’ Equity (Deficit)

( 4,640,781 )

Total Liabilities and Stockholders’ Deficit

Total Liabilities and Stockholders’ Equity (Deficit)

accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended

March 31, 2025

March 31, 2024

Three Months Ended June 30,

Six Months Ended June 30,

Cost of revenue

6 unchanged sentences

( 1,870,026 )

Other (expenses) income:

( 3,104,250 )

( 1,728,726 )

Other income (expense):

Interest income

1 unchanged sentence

( 1,516,874 )

( 3,007,568 )

( 1,205,762 )

Loss on investment

Total other expense

Total other income (expense), net

( 1,451,444 )

Loss from operations before provision for income taxes

( 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

1 unchanged sentence

$ ( 1,569,329 )

$ ( 5,991,792 )

$ ( 2,871,192 )

Net loss per common share Series A – basic and diluted

3 unchanged sentences

accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.

TRUGOLF HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND 2024

Preferred Stock

Class A Common Stock

Class B Common Stock

Treasury Stock

HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

THE THREE AND SIX MONTHS ENDED JUNE 30, 2025 AND 2024

Comprehensive

15 unchanged sentences

$ ( 9,072,623 )

Revaluation of costs of Merger

( 1,569,329 )

Balance as of June 30, 2024

$ ( 2,037,000 )

$ ( 15,231,269 )

$ ( 10,508,104 )

Balance at December 31, 2024

5 unchanged sentences

$ ( 4,640,781 )

Issuance of common stock for interest and make good

Issuance of common stock for conversion of notes

Issuance of common stock for PIPE interest and make good

Issuance of common stock for conversion of PIPE notes

Stock-based compensation - options

8 unchanged sentences

$ ( 4,565,249 )

Issuance of common stock for PIPE interest and make good

Issuance of common stock for conversion of PIPE notes

Issuance of common stock for conversion of dividend note payable

Reverse stock split adjustment

Stock-based compensation - options

Issuance of Series A Preferred and associated warrants

( 3,321,470 )

Balance as of June 30, 2025

$ ( 2,037,000 )

$ ( 27,147,288 )

$ ( 2,037,000 )

$ ( 27,147,288 )

accompanying footnotes are an integral part of these unaudited condensed consolidated financial statements.

TRUGOLF HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended

March 31, 2025

March 31, 2024

HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

June 30, 2025

June 30, 2024

Six Months Ended

June 30, 2025

June 30, 2024

Cash flows from operating activities:

5 unchanged sentences

Amortization of right-of-use asset

Bad debt expense

Change in OCI

4 unchanged sentences

Inventory, net

( 1,503,632 )

Prepaid expenses

4 unchanged sentences

Accrued and other current liabilities

Other liabilities

Lease liability

Net cash provided by (used in) operating activities

( 1,354,546 )

Cash flows from investing activities:

1 unchanged sentence

Capitalized software, net

( 1,568,778 )

( 1,433,438 )

Reduction in long term assets

Net cash used in investing activities

( 1,614,744 )

( 1,433,513 )

Cash flows from financing activities:

1 unchanged sentence

Cash acquired in Merger

Increase in other liabilities

Costs of Merger paid from PIPE loan

13 unchanged sentences

PIPE note principal converted to Class A Common Stock

Dividend note principal converted to Class A and Class B Common Stock

Exchange of PIPE Notes and Series A and B Warrants for Series A Convertible

Preferred Stock and Warrants for Series A Convertible Preferred Stock

Notes payable assumed in Merger

6 unchanged sentences

1 – NATURE OF THE ORGANIZATION AND BUSINESS

of the Business

over 40 years, TruGolf Holdings, In.

(including its subsidiaries “the Company”, “we”, “us”, or “our”)

has been creating indoor golf software and hardware and are focused on both the residential and commercial golf simulation industries.

We design, develop, manufacture and sell golf simulators for residential and commercial applications.

We offer portable, professional,

commercial and custom simulators.

In addition, to bundling our software with our simulators, we offer our E6 Connect and E6 Apex software

as well as other gaming software on a standalone basis.

We have leveraged the power of our hardware and software platform to create a

collection of multi-sport games including football, soccer, soccer golf, frisbee golf, zombie dodgeball, and cowboy target practice.

Nevada has been creating indoor golf software for 40 years.

We began as a subsidiary of Access Software, Inc., a video game developer

based in Salt Lake City, Utah (“Access Software”), which was co-founded in November 1982, by Christopher Jones, the Company’s

largest stockholder, Chief Executive Officer, President and Chairman.

In April 1999, Access Software was purchased by Microsoft Corp.,

for its expertise in golf software development.

Following the acquisition, the core programming and graphics team of Links™, which

created Links LS 1999, one of the bestselling PC sports games of 1999, were spun out to TruGolf Nevada.

1999, we have focused on establishing residential and commercial golf simulation as a viable industry, and since 2007, we have focused

on fabricating custom golf simulators for luxury clients.

Part of our initial strategy included partnering with hardware inventors to

provide them world class software.

Over time, we found that it was not viable to rely on these early hardware inventors alone, we also

began building and selling our own hardware.

In addition, we are working with a video game company to utilize their new dynamic graphics

engine which will enable us to bring photorealistic golf courses to life through our E6 software (discussed below).

In addition, we have

developed multiple sources and 3rd party manufacturers for the raw materials or parts for our products, including but not limited to,

steel or aluminum frames, fabric, turf, screens, projectors, PCs, cameras, lasers, infrared sensors, and supporting subsystems.

The availability

of the frames and fabric from our principal provider, Allied ES&A, has been increased as they have moved into a much larger facility

directly located in a large employee base community and we have entered into negotiations with a second supplier in order to provide

alternative sourcing if needed.

A third supplier, Impact Signs, has also been used in the past and TruGolf Nevada believes that it could

purchase turf, and screen supplies from them as well if needed.

Both turf (Controlled Products), and screen suppliers (Allied), are so

specialized that we have come to rely on one vendor for each, respectively.

Turf particularly experienced some delivery delays in 2022

that have been rectified, additional inventory has been secured locally, and our highest volume portable simulators have been redesigned

to use less raw materials from that vendor, while adding an improved hitting surface from a second vendor, Real Feel, to mitigate risk.

Negotiations with a second supplier of screen materials is in progress.

Projectors (TV Specialists), PCs, lasers, IR sensors and other

systems come from multiple suppliers with no historical delay in supply.

We have 2 primary suppliers of cameras, IDS and Basler, and

have integrated products from both in the new Apogee unit to ensure the greatest availability possible.

Company is an “emerging growth company” as that term is used in the Jumpstart our Business Startups Act of 2012, and as such,

has elected to comply with certain reduced public company reporting requirements.

Holdings, Inc.

(f/k/a Deep Medicine Acquisition Corp.) (the “Company” or “TruGolf”, “we”, “us”)

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.

Our operations are conducted through our subsidiary TruGolf, Inc., a Nevada Corporation (“TruGolf Nevada”).

TruGolf Nevada was formed as a Utah corporation on October 4, 1995, under the name “TruGolf, Incorporated”.

TruGolf Nevada’s

original business plan was the creation of golfing video games.

On June 9, 1999, the TruGolf Nevada changed its name to “TruGolf,

Inc.” 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 in

In connection with the Plan of Merger, TruGolf Nevada affected a four-for-one forward stock split of its outstanding common

January 31, 2024 the Company completed the previously announced business combination pursuant to the terms of the Agreement and Plan

of Merger, dated as of July 21, 2023 (as amended, the “Merger Agreement”), which provided for, Merger Sub to merge with and

into TruGolf Nevada, with TruGolf Nevada surviving as a direct, wholly owned subsidiary of Deep Medicine Acquisition Corp.

a Delaware corporation and TruGolf’s predecessor company as a consequence of the merger (together with the other transactions contemplated

by the Merger Agreement, the “Business Combination”).

In connection with the consummation of the Business Combination, DMAQ

changed its name to TruGolf Holdings, Inc.

TruGolf Holdings, Inc.’s Class A common stock commenced trading on The Nasdaq Global

Market under the ticker symbol “TRUG” on February 1, 2024.

May 10, 2024 the Company formed TruGolf Links Franchising, LLC (“Links”), a wholly owned subsidiary in the state of Delaware.

Links has a sole member, TruGolf, Inc.

Links was formed to establish and sell franchises that would use the Company’s indoor golf

and recreational sports simulators and other equipment.

Links offers a Service Area franchise agreement for a single location.

offers a regional developer franchise agreement that allows the franchisee to sell franchises within its region.

The upfront fees range

from $ 45,000 to $ 100,000 .

Links has received proceeds of $ 500,000 from its CEO and $ 75,000 from a third party to purchase the franchise

rights to some regions yet to be determined.

As of September 30, 2024, the Company recorded $ 575,000 of deferred revenue and incurred

$ 306,539 of expenses that are included in selling, general and administrative category.

(the “Company” or “TruGolf”), is a Delaware corporation headquartered in Centerville, Utah.

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

The Company sells its software and custom hardware directly to customers and its franchise owners.

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.

July 15, 2024, the Company received a deficiency letter from the Listing Qualifications Department (the “Staff”) of the Nasdaq

5 unchanged sentences

ended March 31, 2024 and the Company regained compliance with the applicable Nasdaq rule.

August 19, 2024, the Company received a written notification (the “ Equity Notice”) from the Listing Qualifications Department

(the “Staff”) of the Nasdaq Stock Market (“Nasdaq”) notifying the Company that, based on the Company’s

Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, the Company’s stockholders’ equity was ($ 10,508,104 ),

and therefore, the Company was not in compliance with Nasdaq’s Listing Rule 5450(b)(1)(A), which requires a $ 10,000,000 minimum

stockholders’ equity standard (the “Global Equity Standard”).

to Nasdaq Marketplace Rule 5810(c)(2)(C), the Company was provided 45 calendar days, or until November 18, 2024, to supply a specific

plan to regain compliance with all Nasdaq Global Market listing requirements and the Company’s time frame to complete its plan.

The Company submitted its plan of compliance on November 18, 2024, which was accepted by the Staff, and Nasdaq granted an extension of

180 calendar days from the date of the Equity Notice, or until March 31, 2025, to evidence compliance.

On April 2, 2025, the Company

received a delist determination letter from the Staff (the “Nasdaq Notice”) advising the Company that the Staff had determined

that the Company had not regained compliance with the Global Equity Standard.

Accordingly, the Staff indicated that unless the Company

requests a hearing panel (a “Panel”) appeal of the delist determination by April 9, 2025, its securities would be delisted

on April 11, 2025.

April 9, 2025, the Company appealed Nasdaq’s determination to a Panel pursuant to the procedures set forth in the Nasdaq Listing

Rule 5800 Series to stay the suspension of the Company’s securities pending the Panel’s decision and the expiration of any additional extension period granted by the Panel following the hearing.

Such hearing has

been set for May 15, 2025.

November 5, 2024, the Company received a written notification (the “Bid Notice”) from the Staff notifying the Company that,

for the 30 consecutive business days ended November 4, 2024, the Company’s security did not maintain a minimum bid price of $ 1

Nasdaq stated in its letter that in accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has a compliance period

of 180 calendar days from the date of the Bid Notice (the “Compliance Period”), and that it may regain compliance if the

closing bid on the Company’s security is at least $1 for a minimum of ten consecutive days during the Compliance Period, which

will end May 5, 2025.

If the Company chooses to implement a reverse stock split, it must complete the split no later than 10 business

days prior to the expiration of the Compliance Period, in order to regain compliance.

November 5, 2024, the Company received an additional written notice (the “MVPHS Notice”) from the Staff notifying the Company

that, for 30 consecutive business days ended November 4, 2024, the Company’s market value of publicly held securities (“MVPHS”)

closed below the $15,000,000 MVPHS threshold required for continued listing on the Nasdaq Global Market under Nasdaq Listing Rule 5450(b)(2)(C)

(the “MVPHS Rule”).

Nasdaq stated in its letter that in accordance with Nasdaq Listing Rule 5810(c)(3)(D), the Company has

a compliance period of 180 calendar days from the date of the MVPHS Notice, and it may regain compliance if at any time during the Compliance

Period the MVPHS closes at $15,000,000 or more for a minimum of ten consecutive business days.

May 7, 2025, the Company received written notice (the “MVPHS Notice”) from Nasdaq stating that the Company had not regained

compliance with the MVPHS requirement or the bid price requirement.

The Company intends to present to the Panel at the hearing a plan

to regain compliance with all the continued listing requirements of Nasdaq, including the MVPHS requirement and the bid price requirement.

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

(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).

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).

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.

July 17, 2025, the Staff confirmed that the Company had regained compliance with the Bid Price Rule as required by the Panel’s

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).

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.

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 March 31, 2025,

the Company has an accumulated deficit of approximately $ 23.8 million and working capital surplus of approximately $ 30,000 .

For the three

months ended March 31, 2025, the Company had a loss from operations of approximately $ 1.2 million and negative cash flows from operations

of approximately $ 449,000 .

Although the Company is showing positive revenue growth and gross profit trends, the Company expects to incur

further losses through the end of 2025.

date the Company has been funding operations primarily through the reinvestment of free cash flows generated from our business operations,

sale of equity in private placements, PIPE convertible debt instruments and revenues generated by the Company’s services.

the three months ended March 31, 2025, the Company received $ 2,520,000 in proceeds from the issuance of PIPE Convertible Notes, net of

At June 30, 2025,

the Company has an accumulated deficit of approximately $ 27 million and working capital surplus of approximately $ 2.8 million.

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.

10 unchanged sentences

2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

of Presentation

accompanying unaudited condensed consolidated financial information as of and for the three months ended March 31, 2025 and 2024 has

been prepared in accordance with GAAP for interim financial information and with the instructions to Quarterly Report on Form 10-Q and

Article 10 of Regulation S-X.

In the opinion of management, such financial information includes all adjustments (consisting only of normal

recurring adjustments) considered necessary for a fair presentation of our financial position at such dates and the operating results

and cash flows for such periods.

Operating results for the three months ended March 31, 2025 are not necessarily indicative of the results

that may be expected for the entire year or for any other subsequent interim period.

information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted pursuant

to the rules of the U.S.

Securities and Exchange Commission (the “SEC”).

These unaudited financial statements and related

notes 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.

of Consolidation

Company prepares its financial statements in accordance with accounting principles generally accepted in the United States of America,

which requires management to use its judgment to make estimates and assumptions that affect the reported amounts of assets and liabilities

and related disclosures at the date of the financial statements and the reported amounts of expenses during the reported period.

assumptions and estimates could have a material effect on the financial statements.

Actual results may differ materially from those estimates.

The Company’s management periodically reviews estimates on an ongoing basis based on information currently available, and changes

in facts and circumstances may cause the Company to revise these estimates.

Significant estimates include estimates used in the valuation

allowance related to deferred tax assets and capitalized software costs.

Actual results may differ from these estimates.

condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries.

All significant intercompany

accounts and transactions have been eliminated in consolidation.

of Presentation and Principles of Consolidation

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 unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned

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.

Reclassifications

reclassifications have been made to the unaudited condensed consolidated financial statements for the three months ended March 31, 2024

to conform to the unaudited condensed consolidated financial statement presentation for the three months ended March 31, 2025.

reclassifications had no effect on net loss or cash flows as previously reported.

unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates, judgments, and assumptions

that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited

condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

On an ongoing

basis, management evaluates these estimates and judgments.

Actual results could differ from those estimates.

estimates relate primarily to determining the net realizable value and demand for inventory, useful lives associated with property and

equipment and capitalized software, valuation allowances with respect to deferred tax assets, contingencies, and the valuation and assumptions

underlying share-based compensation and equity warrants.

On an ongoing basis, management evaluates its estimates compared to historical

experience and trends, which form the basis for making judgments about the carrying value of assets and liabilities.

and Cash Equivalents

Company considers all highly liquid investments with an original maturity of 90 days or less to be cash equivalents.

Cash equivalents

primarily consist of institutional money market funds, U.S.

Treasury securities, certificates of deposit, and commercial paper and are

carried at cost, which approximates fair value.

Concentration

of Credit Risk

Company maintains the majority of its cash and cash equivalents in accounts with large financial institutions.

At times, balances in

these accounts may exceed federally insured limits;

however, to date, the Company has not incurred any losses on its deposits of cash

and cash equivalents.

Investment Securities

Company generally invests its excess cash in investments in corporate fixed income securities and U.S.

Treasury securities.

Such investments

are included in cash and cash equivalents or marketable investment securities on the accompanying consolidated balance sheets and are

classified based on original maturity.

The Company considers all highly liquid investments with an original maturity date of 90 days

or less to be cash equivalents and considers all highly liquid investments with an original maturity greater than 90 days and less than

one year to be marketable securities.

fixed income securities are classified as available-for-sale and reported at fair value with unrealized gains and losses included in

accumulated other comprehensive income (loss).

Realized gains and losses on the sale of marketable securities are determined using the

average cost method on a first-in, first-out basis and recorded in total other income (expense), net in the statements of operations

and comprehensive loss.

Each reporting period, the Company evaluates whether declines in fair value below carrying value are due to expected

credit losses, as well as its ability and intent to hold the investment until a forecasted recovery of the carrying value occurs.

credit losses are recorded as an allowance through other income (expense), net on the Company’s consolidated statements of operations.

the three months ended March 31, 2024, the Company sold and liquidated most of its marketable securities resulting in a gain of $ 1,662

recorded in the unaudited condensed consolidated statements of comprehensive gain (loss).

Marketable investment securities had a balance

of $ 10,114 as of March 31, 2025 and December 31, 2024, respectively, and are included with cash and cash equivalents on the unaudited

condensed consolidated balance sheets.

Receivable, net

receivable are reported at their outstanding unpaid principal balances, net of allowances for credit losses.

The Company periodically

assesses its accounts and other receivables for collectability on a specific identification basis.

The Company estimates its allowance

using a rate loss model based on delinquency.

The estimated loss rate is based on historical experience with specific customers, understanding

of the Company’s current economic circumstances, reasonable and supportable forecasts, and the Company’s judgment as to the

likelihood of ultimate payment based upon available data.

Management believes the Company’s credit risk is mitigated by the geographically

diverse customer base and its credit evaluation procedures.

The actual rate of future credit losses, however, may not be similar to past

The Company writes off accounts receivable against the allowance for credit losses when a balance is determined to be

uncollectable.

As of March 31, 2025 and December 31, 2024, the Company’s allowance for credit losses was $ 1,424,074 and $ 1,470,868 ,

respectively.

Company’s inventory consists of raw materials and are valued at the lower of historical cost or net realizable value, where net

realizable value is considered to be the estimated selling price in the ordinary course of business, less reasonably predictable cost

of completion, disposal and transportation.

Historic inventory costs are calculated on an average or specific cost basis.

records inventory write-downs for excess or obsolete inventories based upon assumptions on current and future demand forecasts.

both March 31, 2025 and December 31, 2024, the Company had $ 448,360 reserved for obsolete inventory.

and Equipment

and equipment are stated at cost less accumulated depreciation and amortization.

Depreciation is calculated over the estimated useful

lives of the related assets using the straight-line method.

Amortization of leasehold improvements is computed using the straight-line

method over the shorter of the remaining lease term (including renewals that are reasonably assured) or the estimated useful lives of

the improvements.

For internal-use software, external costs and employee payroll expenses directly associated with developing new or

enhancing existing software applications are capitalized subsequent to the preliminary stage of development.

Internal-use software costs

are amortized using the straight-line method over the estimated useful life of the software when the project is substantially complete

and ready for its intended use.

OF ESTIMATED USEFUL LIVES

equipment and software

for major additions and improvements are capitalized, and minor replacements, maintenance, and repairs are expensed as incurred.

property and equipment are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and

any resulting gains or losses are included in the Company’s results of operations for the respective period.

Software Development Costs

Company capitalizes certain costs related to the development of our software used in our simulators.

In accordance with authoritative

guidance, including the Financial Accounting Standards Board’s Accounting Standards Codification (“ASC”) 985-20, Software

– Costs of Software to be Sold, Leased, or Marketed, the Company began to capitalize these costs when the technological feasibility

was established and preliminary development efforts were successfully completed, management authorized and committed project funding,

and it was probable that the project would be completed and the software would be used as intended.

Such costs are amortized when placed

in service, on a straight-line basis over the estimated life of the related asset, estimated to be three years beginning on February

Costs incurred prior to meeting these criteria together with costs incurred for training and maintenance are expensed as incurred

and recorded in selling, general and administrative expenses on our consolidated statements of operations.

The Company does not capitalize

any testing or maintenance costs.

The accounting for these capitalized software costs requires management to make significant judgments,

assumptions and estimates related to the timing and amount of recognized capitalized software development costs.

Property and Equipment, Net for further details.

of Long-Lived Assets

Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such

assets may not be recoverable.

Conditions that would necessitate an impairment assessment include a significant decline in the observable

market value of an asset, a significant change in the extent or manner in which an asset is used, or any other significant adverse change

that would indicate that the carrying amount of an asset or group of assets may not be recoverable.

For asset groups held and used, the

carrying value of the asset group is considered recoverable when the estimated undiscounted future cash flows expected to be generated

from the use and eventual disposition of the asset group exceed the respective carrying value.

In the event the carrying value is not

recoverable, an impairment charge would be recognized for the asset group to be held and used equal to the excess of the carrying value

above the estimated fair value of the asset group.

Impairment charges are recognized within selling, general and administrative expenses

in the consolidated statements of operations.

The Company did not record a loss on impairment during the three months ended March 31,

2025 and 2024, respectively.

and Marketing Costs

Company expenses advertising and marketing costs as they are incurred.

Advertising and marketing expenses were $ 352,291 and $ 111,489

for the three months ended March 31, 2025 and 2024, respectively, and are recorded in operating expenses on the unaudited condensed consolidated

statements of operations.

with Warrants

accordance with ASC 470-20-25, when the Company issued debt with warrants, the Company treats the fair value of the warrants as a debt

discount, recorded as a contra-liability against the debt, and amortizes the balance over the life of the underlying debt as amortization

of debt discount expense in the unaudited condensed consolidated statements of operations using the straight-line method.

to the contra-liability is recorded as either equity or liability in the Company’s unaudited condensed consolidated balance sheets

depending on the accounting treatment of the warrants.

If the debt is retired early, the associated debt discount is then recognized

immediately as amortization of debt discount expense in the unaudited condensed consolidated statements of operations.

Value Measurements

defined in ASC 820, Fair Value Measurements and Disclosures, fair value is the price that would be received to sell an asset or paid

to transfer a liability in an orderly transaction between market participants at the measurement date (exit price).

The Company utilizes

market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and

the risks inherent in the inputs to the valuation technique.

These inputs can be readily observable, market corroborated, or generally

unobservable.

ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value.

The hierarchy gives

the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the

lowest priority to unobservable inputs (Level 3 measurement).

This fair value measurement framework applies at both initial and subsequent

prices are available in active markets for identical assets or liabilities as of the reporting date.

Active markets are those in

which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing

inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as

of the reported date.

Level 2 includes those financial instruments that are valued using models or other valuation methodologies.

These models are primarily industry-standard models that consider various assumptions, including quoted forward prices for commodities,

time value, volatility factors and current market and contractual prices for the underlying instruments, as well as other relevant

economic measures.

Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument,

can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace.

inputs include significant inputs that are generally less observable from objective sources.

These inputs may be used with internally

developed methodologies that result in management’s best estimate of fair value.

The significant unobservable inputs used in

the fair value measurement for nonrecurring fair value measurements of long-lived assets include pricing models, discounted cash

flow methodologies and similar techniques.

Value of Financial Instruments

carrying value of cash, accounts receivable, accounts payable and accrued expenses, and other current liabilities approximate their fair

values using Level 1 inputs, based on the short-term maturity of these instruments.

The carrying amount of notes payable approximate

the estimated fair value for this financial instrument as management believes that such debt and interest payable on the notes approximates

the Company’s incremental borrowing rate.

The following table shows the Company’s cash, cash equivalents, restricted cash,

marketable securities, and derivative liabilities by significant investment category as of March 31, 2025 and December 31, 2024:

OF FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair Value at December 31, 2023

Money market funds

Corporate fixed income securities

treasury securities

( 2,026,271 )

Derivative liability (1)

Fair value at December 31, 2024

Derivative liability (2)

Fair value at March 31, 2025

the year ended December 31, 2024, the Company recorded a derivative liability related to

the PIPE Warrants of $ 142,319 .

During the year ended December 31, 2024, the Company recorded

a gain on fair value remeasurement of $ 142,319 .

the three months ended March 31, 2025, the Company did not record a loss on fair value remeasurement.

lease is defined as a contract that conveys the right to control the use of identified property, plant or equipment for a period of time

in exchange for consideration.

accordance with ASC 842, Leases, the Company recognized a right-of-use (“ROU”) asset and corresponding lease liability on

its balance sheets for its office space and warehouse.

See Note 17 – Leases for further discussion, including the impact

on the Company’s unaudited condensed consolidated financial statements and related disclosures.

assets include any prepaid lease payments and exclude any lease incentives and initial direct costs incurred.

Lease expense for minimum

lease payments is recognized on a straight-line basis over the lease term.

The lease terms may include options to extend or terminate

the lease if it is reasonably certain that the Company will exercise that option.

in which the Company is the lessee are comprised of office and warehouse rental.

All of the leases are classified as operating leases.

The Company has two lease agreements with remaining terms of 3.1 years and 8 months.

tax assets and liabilities are recognized for the future tax consequences attributable to differences between the unaudited condensed

consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases.

Deferred tax assets,

including tax loss and credit carry forwards, and liabilities are measured using enacted tax rates expected to apply to taxable income

in the years in which those temporary differences are expected to be recovered or settled.

The effect on deferred tax assets and liabilities

of a change in tax rates is recognized in income in the period that includes the enactment date.

Company utilizes ASC 740, Income Taxes, which requires the recognition of deferred tax assets and liabilities for the expected future

tax consequences of events that have been included in the unaudited condensed consolidated financial statements or tax returns.

accounts for income taxes using the asset and liability method to compute the differences between the tax basis of assets and liabilities

and the related financial amounts, using currently enacted tax rates.

A valuation allowance is recorded when it is “more likely

than not” that a deferred tax asset will not be realized.

At March 31, 2025 and December 31, 2024, the Company’s net deferred

tax asset has been fully reserved.

uncertain tax positions that meet a “more likely than not” threshold, the Company recognizes the benefit of uncertain tax

positions in the unaudited condensed consolidated financial statements.

The Company’s practice is to recognize interest and penalties,

if any, related to uncertain tax positions in income tax expense in the unaudited condensed consolidated statements of operations when

a determination is made that such expense is likely.

Recognition Policy

is recognized upon satisfaction of all contractual performance obligations and transfer of control to the customer and is measured as

the amount of consideration to which the Company expects to be entitled to in exchange for corresponding goods or services.

transaction results in an implicit contract with the customer to deliver a product or service at the point of sale.

The Company has two

distinct revenue streams:

golf simulators and content software subscriptions.

obligations under our contracts consist of hardware, software consisting of perpetual licenses and subscription licenses, and support

within a single operating segment.

Simulators – Substantially all the Company’s sales are multiple performance obligation arrangements for its golf simulators,

for which the transaction price is equivalent to the stated price of the product or service, net of any stated discounts applicable at

a point in time.

Golf simulators are bundled and are comprised of both hardware, a software license (for the software to operate the

simulator), and a content software subscription license.

Revenue from golf simulators is recognized at the point in time when installation

(hardware and software) has occurred and has been accepted by the customer.

For transactions where the Company utilizes a third-party

to complete the installation, the Company recognizes revenue solely for the simulator hardware upon delivery to the customer or third-party

installer and then recognizes the remainder of the revenue upon installation and customer acceptance.

License – Golf simulators require specific proprietary software to run the simulations.

The Company records revenue from the proprietary

software products under perpetual licenses.

Revenue from the perpetual licenses is recognized at the time of installation and customer

Software Subscriptions – The Company offers content software subscriptions for one and twelve months.

We recognize revenue from

these transactions when control has passed to the customer and the performance obligations have been satisfied.

Control is considered

to have passed to the customer when the software license has been delivered and accepted by the customer.

The content software subscription

revenue is recognized over the term of the contract.

revenue represents either customer advance payments or performance obligations that have not yet been met.

from golf simulators and perpetual software licenses is deferred and primarily recognized upon the installation of the golf simulators

and acceptance from the customer.

Revenue from content software subscriptions is deferred and recognized ratably over the life of the

subscription (one or twelve months).

During the three months ended March 31, 2025, the Company recognized approximately $ 1.2 million

of golf simulator and subscription services revenue, respectively, that was included in deferred revenue balances at the beginning of

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

These reclassifications had no effect on net loss or cash flows as previously reported.

Performance Obligations

of March 31, 2025, approximately $ 4.1 million of revenue is expected to be recognized from remaining performance obligations.

of June 30, 2025, approximately $ 4.9 million of revenue is expected to be recognized from remaining performance obligations.

expects to recognize 100 % of this revenue over the next 12 months.

1 unchanged sentence

OF DISAGGREGATED REVENUE

Three Months Ended March 31,

Three Months Ended June 30,

Golf Simulators (1)

2 unchanged sentences

Total net revenue

Includes items such as hardware and proprietary perpetual licenses

Includes items such as shipping income and installation income

of revenue includes direct materials, labor, manufacturing overhead costs and reserves for estimated warranty cost (excluding depreciation).

Cost of revenues also includes charges to write down the carrying value of the inventory when it exceeds its estimated net realizable

value and to provide for on-hand inventories that are either obsolete or in excess of forecasted demand, as consistently reviewed by

During the three months ended March 31, 2025 and 2024, the Company recorded an expense of $ 0 and $ 171,502 in inventory write-down,

respectively.

Company has royalty agreements with certain software suppliers to pay royalties based on the number of units and subscriptions sold.

The royalty percentages range between 20 % and 30 %.

Royalty expense for the three months ended March 31, 2025 and 2024, was $ 225,320 and

$ 329,888 , respectively.

Loss Per Common Share

loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period.

All outstanding options and warrants are considered potentially outstanding common stock.

The dilutive effect, if any, of stock options

or warrants is calculated using the treasury stock method.

All outstanding convertible notes are considered common stock at the beginning

of the period or at the time of issuance, if later, pursuant to the if-converted method.

following table sets forth the computations of loss per share:

OF LOSS PER SHARE

Three Months Ended March 31,

$ ( 2,670,322 )

$ ( 1,301,864 )

Weighted-average common shares Series A outstanding, basic and diluted

Weighted-average common shares Series B outstanding, basic and diluted

Net loss per common share Series A, basic and diluted

Net loss per common share Series B, basic and diluted

the effect of common stock equivalents is anti-dilutive with respect to losses, the options, warrants and shares issuable upon conversion

have been excluded from the Company’s computation of net loss per common share for the three months ended March 31, 2025 and 2024.

following table summarizes the securities that were excluded from the diluted per share calculation because the effect of including these

potential shares was anti-dilutive due to the Company’s net loss position even though the exercise price could be less than the

average market price of the common shares:

items such as hardware and proprietary perpetual licenses

items such as shipping income and installation income

Six Months Ended June 30,

Golf Simulators (1)

Content Software Subscriptions

Franchise Revenue

Total net revenue

items such as hardware and proprietary perpetual licenses

items such as shipping income and installation income

3 – EARNINGS PER SHARE BASIC AND DILUTED

following potentially dilutive securities have been excluded from the computation of diluted weighted average shares outstanding as they

would be anti-dilutive:

OF POTENTIAL DILUTIVE SHARES

Stock Options

Three Months Ended June 30,

Six Months Ended June 30,

Options to purchase Common Stock

PIPE Convertible Notes (1)

Series A Preferred Shares

Common Stock - Series A Preferred Warrants

Common Stock - Series A Warrants

Common Stock - Series B warrants

Earnout shares - Earned in three Tranches over three years (assumes achievement of revenue and VWAP targets)

Underwriter warrants to I-Bankers convertible at $ 12.00 /common share

Total dilutive

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.

Company has the ability to grant employees a number of different stock-based awards, including restricted shares of common stock, restricted

stock units, stock options, and stock appreciation rights to purchase common stock, under the TruGolf Holdings, Inc.

2024 Incentive Plan

(the “2024 Plan”).

The Company records stock-based compensation expense based on the fair value of stock awards at the grant

date and recognizes the expense over the employees’ service periods.

For performance-based awards, recognition of stock-based compensation

expense also includes management’s estimate of the probability of performance criteria as of the end of each reporting period.

Stock-based compensation expense is recognized net of estimated forfeitures and expense is not recognized for awards that do not vest

if service or performance conditions are not satisfied.

to Accounting Standards Update (“ASU”) 2018-07, Compensation – Stock Compensation (Topic 718):

Improvements to Non-employee

Share-Based Payment Accounting, the Company accounts for stock options issued to non-employees for their services in accordance with

The Company uses valuation methods and assumptions to value the stock options that are in line with the process for valuing

employee stock options noted above.

Growth Company Status

Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).

the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of

the JOBS Act until those standards apply to private companies.

The Company has elected to use this extended transition period for complying

with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the

date that it is (i) no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period

provided in the JOBS Act.

As a result, these unaudited condensed consolidated financial statements may not be comparable to companies

that comply with the new or revised accounting pronouncements as of public company effective dates.

The JOBS Act does not preclude an

emerging growth company from early adopting new or revised accounting standards.

The Company expects to use the extended transition period

for any new or revised accounting standards during the period which the Company remains an emerging growth company.

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 unaudited condensed consolidated financial information regularly provided to the Company’s chief operating decision maker

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.

fair value of the warrants is estimated on the date of issuance using the Black-Scholes option pricing model, which requires the input

of subjective assumptions, including the expected term of the warrants, expected stock price volatility, and expected dividends.

estimates involve inherent uncertainties and the application of management’s judgment.

Expected volatilities used in the valuation

model are based on the average volatility of the comparable publicly traded on recognized stock exchanges.

The risk-free rate for the

expected term of the option is based on the United States Treasury yield curve in effect at the time of the grant.

Adopted Accounting Pronouncements

December 2023, the FASB issued Update 2023-09 - Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which enhances the

disclosure requirements for income tax rate reconciliation, domestic and foreign income taxes paid, and unrecognized tax benefits.

amendments of ASU 2023-09 are effective for annual periods beginning after December 15, 2024.

The Company adopted this new guidance on

January 1, 2025, and the adoption did not have a material effect on the Company’s unaudited condensed consolidated financial statements.

Accounting Pronouncements

January 2025, the FASB issued ASU 2025-01, Income Statement—Reporting Comprehensive

Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Clarifying the Effective Date ,

which amends ASU 2024-03 to clarify when public business entities (PBEs) and all other entities must begin providing the new expense-disaggregation

ASU 2025-01 does not change the underlying disclosure requirements introduced by

rather, it revises paragraph 220-40-65-1 to state explicitly that the amendments are effective for annual

periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027 .

Early adoption

continues to be permitted.

The Company is currently evaluating the impact of these amendments on its consolidated financial statements

and related disclosures.

Earnout shares

Underwriter warrants

Weighted Average Number of Shares Outstanding

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.

4 – ACCOUNTS RECEIVABLE

6 unchanged sentences

( 1,470,868 )

Total accounts

receivable, net

Total accounts receivable, net

5 – INVENTORY, NET

3 unchanged sentences

Inventory, net

5 – MARKETABLE INVESTMENT SECURITIES

February 2023, the Company entered into a brokerage agreement and deposited $ 2,500,000 .

In February 2023, the Company purchased $ 450,751

in corporate fixed income securities (corporate bonds) and $ 1,981,061 in government securities (Treasury securities).

The Company terminated

the brokerage agreement during the three months 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 March 31, 2025 and December 31, 2024,

respectively.

6 – PROPERTY AND EQUIPMENT, NET

5 unchanged sentences

Less accumulated depreciation

Total other long-term assets

Company recorded depreciation expense was $ 15,300 and $ 14,317 for the three months ended March 31, 2025 and 2024, respectively.

following summarizes capitalized software development costs as of March 31, 2025 and December 31, 2024:

Total property and equipment, net

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.

following summarizes capitalized software development costs as of June 30, 2025 and December 31, 2024:

OF CAPITALIZED SOFTWARE DEVELOPMENT COSTS

4 unchanged sentences

development costs, net

Company recorded amortization of capitalized software costs of $ 100,000 and $ 18,463 for the three months ended March 31, 2025 and 2024,

respectively.

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.

7 – ACCRUED AND OTHER CURRENT LIABILITIES

6 unchanged sentences

Total accrued and other current liabilities

Accrued liabilities and other current liabilities assumed in Merger:

liabilities and other current liabilities assumed in Merger:

SCHEDULE OF ACCRUED LIABILITIES AND OTHER CURRENT LIABILITIES ASSUMED IN MERGER

4 unchanged sentences

SCHEDULE OF NOTES PAYABLE

payable - Ethos Management Inc.

payable - Mercedez-Benz

current portion

payable long-term portion

Note payable - Ethos Management Inc.

Note payable - Mercedez-Benz

Less current portion

Note payable long-term portion

Management Inc.

23 unchanged sentences

leaving $ 589,619 , which is included in Accrued and other current liabilities on the unaudited condensed consolidated balance sheets at

March 31, 2025 and December 31, 2024, respectively (See Note 7 – Accrued and Other Current Liabilities ).

June 30, 2025 and December 31, 2024, respectively (See Note 7 – Accrued and Other Current Liabilities ).

Mercedes-Benz

3 unchanged sentences

and interest.

The outstanding principal on the note at March 31, 2025 and December 31, 2024, was $ 17,285 and $ 19,733 , respectively.

Assumed in Merger

a successor to DMAQ, the Company assumed notes payable from the Merger in the amount of $ 1,565,000 , which was comprised of:

(i) an unsecured

promissory note in the aggregate principal amount of $ 1,265,000 issued to two affiliates of the Sponsor on October 15, 2022, in connection

with the First Extensions, from October 29, 2022 to January 29, 2023, and (ii) an unsecured promissory note in the principal amount of

$ 300,000 issued to an affiliate of the Sponsor on February 9, 2023 in connection with the Second Extension, from January 29, 2023, to

July 29, 2023, pursuant to which a monthly payment of $ 50,000 had been deposited in the Trust Account after January 29, 2023 for six

Pursuant to the fully executed Promissory Notes, each of the Promissory Notes bears no interest and is due upon the earlier of

the consummation of DMA’s initial business combination or the date of the liquidation of DMAQ.

During the year ended December 31,

2024, the Company made a principal payment of $ 100,000 to one of the note holders.

December 31, 2024, using the proceeds from the November 7, 2024, funding of additional PIPE Convertible Notes (See Note 9 –

PIPE Convertible Notes ) the Company repaid the remaining balance of such notes in full.

The extinguishment of one of the convertible

notes resulted in extinguishment accounting.

See Note 9 – PIPE Convertible Notes for additional details.

The outstanding principal on the note at June 30, 2025 and December 31, 2024, was $ 14,805 and $ 19,733 , respectively.

9 – PIPE CONVERTIBLE NOTES

November 2, 2023 and December 7, 2023, DMAQ executed loan agreements with certain accredited investors (together, the “Prior Loan

Agreements”) pursuant to which such investors agreed to loan DMAQ up to an aggregate $ 11 million in exchange for the issuance of

convertible notes and warrants.

On February 2, 2024, the Company executed a securities purchase agreement (the “Purchase Agreement”)

with each of the investors that executed the Prior Loan Agreements, which replaced the Prior Loan Agreements in their entirety, and with

additional investors (together, the “PIPE Investors”).

Pursuant to the terms and conditions of the Purchase Agreement, the

PIPE Investors agreed to purchase from the Company (i) senior convertible notes in the aggregate principal amount of up to $ 15.5 million

(the “PIPE Convertible Notes”), (ii) Series A warrants to initially purchase 1,409,091 shares of the Company’s Class

A common stock (the “Series A Warrants”), and (iii) Series B warrants to initially purchase 1,550,000 shares of the Company’s

Class A common stock (the “Series B Warrants,” and collectively with the Series A Warrants, the “PIPE Warrants”)

(the “PIPE Financing”).

the terms of the Purchase Agreement, the Company had the right, but not the obligation, to require that the PIPE Investors purchase additional

PIPE Convertible Notes at up to two additional closings.

On February 6, 2024, the first additional closing (the “First Mandatory

Additional Closing”) occurred for the sale of $ 4.65 million in additional PIPE Convertible Notes with an Original Issue Discount

of $ 465,000 for gross proceeds of $ 4.185 million, subject to the filing of a registration statement and satisfaction of customary closing

addition, pursuant to the Purchase Agreement, as amended, each PIPE Investor had the right, but not obligation, to require the

Company to sell to such investor its pro rata share of up to an aggregate principal amount of $ 10.85

million of additional PIPE Convertible Notes in one or more “Additional Optional Closings,” provided that the principal

amount issued in each such closing is no less than $ 250,000 .

These optional rights expire on August 30, 2025.

August 13, 2024, the Company entered into waiver and amendment agreements (the “Waiver”) with the PIPE Investors.

Waiver, the parties agreed to, among other things:

to (i) waive any defaults caused by the Company’s failure to timely file SEC

reports through August 14, 2024, (ii) extend the deadline for Additional Optional Closings to 11 months following the effectiveness of

the initial registration statement, (iii) permit the Company to raise non-convertible, unsecured debt financing from its affiliates,

(iv) waive certain registration failures through September 3, 2024, and allow such failures to be cured through the issuance of common

stock, and (v) allow interest payments due April 1, July 1, and October 1, 2024, to be paid in shares of common stock or added to the

principal of the PIPE Convertible Notes, at the election of the applicable PIPE Investor.

In connection with the Waiver, the Company

issued 192,151 shares of Class A common stock to satisfy registration delay penalties and 157,582 shares of Class A common stock to satisfy

accrued interest obligations.

These issuances were made at the “Alternate Conversion Price” set forth in the PIPE Convertible

Notes, which is defined as the lesser of the fixed conversion price or 90% of the lowest volume weighted average price (VWAP) of the

Company’s Class A common stock over the five consecutive days prior to conversion.

Additionally, the Company issued 190,586 shares

to a PIPE Investor as a result of language in the PIPE Convertible Note related to ownership percentage prior to the Merger.

7, 2024, the Company and certain PIPE Investors entered into further amendments to the Waiver (the “Amendments”) under which

the PIPE Investors agreed to waive any breaches or defaults resulting from the Company’s failure to timely file SEC reports through

August 21, 2024, and extended the waiver for certain registration failures through October 3, 2024.

The PIPE Investors also waived defaults

related to the Company’s non-compliance with the continued listing requirements of the Nasdaq Stock Market, including (i) failure

to meet the minimum stockholders’ equity threshold, (ii) failure to meet the minimum market value of publicly held shares, and (iii)

failure to meet the minimum bid price requirement.

These waivers are effective through January 15, 2025, but may be extended through March

15, 2025, solely with respect to the bid price deficiency, provided the Company remains in compliance with all other listing requirement

and files a preliminary proxy statement to seek shareholder approval of a reverse stock split.

In connection with these Amendments, the

Company issued 116,959 shares of Class A common stock to satisfy additional registration delay penalties and 65,790 shares of Class A

common stock for unpaid interest, also at the Alternate Conversion Price.

November 7, 2024, certain PIPE Investors agreed to purchase an additional $ 3.3 million in principal amount of PIPE Convertible Notes with

an Original Issue Discount of $ 330,000 for gross proceeds of $ 2.97 million.

The Company used approximately $ 2.5 million of the proceeds

from this issuance to repay outstanding debt and cover related transaction expenses.

of the PIPE Notes issued on November 7, 2024 was purchased in exchange for a convertible note payable and an unsecured note payable

that were previously issued to the same PIPE Investor.

The exchange resulted in debt extinguishment accounting as the present value

of the future cash flows of the new PIPE Convertible Note was greater than 10% of the remaining present value of the cash flows of

the exchanged notes.

As a result, the Company recorded a loss on extinguishment of debt of $ 270,594

on the consolidated statements of operations for the year ended December 31, 2024.

16, 2024, a certain PIPE Investor agreed to purchase an additional $ 2.1 million in the principal amount of a PIPE Convertible Note with

an Original Issue Discount of $ 210,000 for gross proceeds of $ 1.89 million.

8, 2025, certain PIPE Investors agreed to purchase an additional $ 2.8 million in principal amount of PIPE Convertible Notes with an Original

Issue Discount of $ 280,000 for gross proceeds of $ 2.52 million.

the three months ended March 31, 2025, the Company converted an aggregate principal amount of $ 1,655,000 and $ 1,087,513 in accrued and

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.

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:

Convertible Notes payable consisted of the following:

OF PIPE CONVERTIBLE NOTES PAYABLE

PIPE Convertible Note Balance at January 1, 2024

PIPE Convertible Notes issued

Debt Discount associated with OID and Warrants

( 1,147,319 )

PIPE Convertible Notes, net

Gross PIPE Convertible Note principal converted into Class A common stock

( 5,832,600 )

Accretion of debt discount

Total PIPE Convertible Notes, net at December 31, 2024

5 unchanged sentences

Accretion of debt discount

Total PIPE Convertible Notes, net at March 31, 2025

the three months ended March 31, 2025 and 2024, amortization expense related to the Debt Discount of the PIPE Convertible Notes was $ 231,940

and $ 3,325 , respectively.

The principal balance of the PIPE Convertible Notes, net of Debt Discounts, and accrued interest related to

the PIPE Convertible Notes at March 31, 2025, was $ 5,165,893 and $ 0 , respectively.

The principal balance net of Debt Discounts and accrued

interest related to the PIPE Convertible Notes at December 31, 2024, was $ 4,068,953 and $ 154,500 , respectively.

NOTE 10 – RELATED PARTY

NOTES AND LOANS PAYABLE

Related party notes payable

consisted of the following:

Less current portion

Total PIPE Convertible Notes, net at June 30, 2025

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.

Exchange Agreements

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”).

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.

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

10 – RELATED PARTY NOTES AND LOANS PAYABLE

party notes payable consisted of the following:

SCHEDULE OF RELATED PARTY NOTES PAYABLE

8 unchanged sentences

Note payable long-term portion

Future maturities of related

party notes and loan payables as of March 31, 2025:

maturities of related party notes and loan payables as of June 30, 2025:

SCHEDULE OF FUTURE MATURITIES OF RELATED PARTY NOTES PAYABLE

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.

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.

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,

The Company is required to make monthly interest-only payments of $ 3,541 .

31, 2024 , the maturity date of the notes was extended to March

On March 31, 2025, the maturity date of the notes was extended to September

The Company made interest-only

payments of $ 13,812 and $ 10,901 during the three months ended March 31, 2025 and 2024, respectively.

The principal balance of the notes

was $ 650,000 at both March 31, 2025 and December 31, 2024.

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.

note is payable in annual installments of $ 250,000 due on December 21 of each year.

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 .

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 .

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.

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

If the annual

installment is not paid within 10 days of the due date a late fee of 5% is charged.

During the year ended December 31, 2024, the Company

paid the December 2024 and 2023 installments totaling $ 500,000 and $ 50,000 in a negotiated extension fee for the 2023 installment.

principal balance of the note payable was $ 800,000 at both March 31, 2025 and December 31, 2024.

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 has not made the required installments totaling $ 18,500 for the three months ended March 31, 2025 and $ 37,000 for the year

ended December 31, 2024.

The principal balance of the note payable was $ 111,000 at both March 31, 2025 and December 31, 2024.

During the year ended December

31, 2024, the Company chief executive officer loaned the Company an aggregate of $ 2 million for operating expenses.

The loaned amount

has a zero interest rate and no stated maturity date.

The Company made no payments towards the loan during the three months ended March

31, 2025, however, the Company expects to pay back the loan in full.

The principal balance of the loan payable was $ 2,000,000 at March

31, 2025 and December 31, 2024.

NOTE 11 – LINES OF

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.

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 March 31, 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

(See Note 5 – Marketable Investment Securities ).

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 March 31, 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.

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.

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.

principal balance of the note payable was $ 92,500 and $ 111,000 at June 30, 2025 and December 31, 2024, respectively.

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.

11 – LINES OF CREDIT

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 %.

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 %.

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.

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.

12 – DIVIDEND NOTES PAYABLE

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.

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.

Dividends declared, distributed,

and accrued are as follows:

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.

declared, distributed, and accrued are as follows:

SCHEDULE OF DIVIDENDS DECLARED, DISTRIBUTED, AND ACCRUED

1 unchanged sentence

Dividends payable

NOTE 13 – GROSS SALES

ROYALTY PAYABLE

In June 2015, the Company entered

into a Royalty Purchase Agreement (the “Royalty Agreement”) with a purchaser (“Purchaser”) for a gross sales royalty.

The Purchaser agreed to purchase a sales royalty for the sum of $ 1,000,000 plus applicable taxes.

Upon mutual agreement the Purchaser

may purchase one or more additional royalties in an aggregate amount of up to $ 1,000,000 .

For the period June 2015 through May 2017, the

Company paid a monthly payment of $ 20,833 .

Effective June 1, 2017, all subsequent monthly royalty payments has been equal to the greater

of $ 20,833 plus the amount determined in accordance with the following:

If the trailing twelve-month revenue of the Company is equal to or less than $ 6,110,000 , 3.60 % of the Company’s monthly revenues, in perpetuity (unless terminated in accordance with the Royalty Agreement);

If the trailing twelve-month revenue of the Company is equal to or greater than $ 17,200,000 , 1.30 % of the Company’s monthly revenues, in perpetuity (unless terminated in accordance with the Royalty Agreement);

If the trailing twelve-month revenue of the Company is greater than $ 6,110,000 but less than $ 17,200,000 , such percentage of monthly revenue determined by dividing $ 220,060 by the amount of the trailing twelve-month revenue and multiplying the result by 100, in perpetuity (unless terminated in accordance with the Royalty Agreement).

The royalty percentage was fixed

at 3.6 % based on the trailing twelve-month revenue at the time of executing the Royalty Agreement.

On June 1, 2017, the royalty percentage

was changed to 2.4 % based on the trailing twelve-month revenues at the time as outlined in the table above.

The Royalty Agreement contains

an option for a one-time buy down of the royalty rate.

At any time following the date on which the Purchaser has received royalty payments

that are, in the aggregate, equal to two times the then applicable Aggregate Installment Amount ($ 1,000,000 ) , the Company may purchase

and extinguish 75 % (but no more nor less) of all amounts owing or to become owing to the Purchaser hereunder.

In the event the Company

wants to exercise the buy down option, the Company would pay the Purchaser $ 750,000 .

The adjusted royalty rate going forward would then

be 0.6 % ( 75 % of the 2.4 %).

The Royalty Agreement also contains

an option for a buyout upon the change of control.

If pursuant to a proposed change of control the acquirer under such transaction requires,

as a condition to the completion of such transaction, that the Company purchase and extinguish all amounts owing or to become owing to

the Purchaser hereunder, the Company will pay the greater of:

An amount equal to two times the aggregate installment amount as at the date of the change of control buyout notice;

An amount equal to A multiplied by B multiplied by C, where:

A is equal to the aggregate installment amount as at the date of the change in control divided by $ 22,500,000 ;

B is equal to 0.8;

C is equal to the net equity value of the Company;

or in the case of a proposed asset sale, the proposed net purchase price of all or substantially all of the Company’s assets.

The Royalty Agreement does not

contain a stated maturity date or bear interest.

The agreement provides for a perpetual payment obligation, whereby the Company is required

to remit a royalty equal to either 2.4 % or 0.6 % of applicable revenue, depending on whether the royalty rate buy-down option has been

While the royalty percentage may be reduced pursuant to the terms of the buy-down provision, the only mechanism for terminating

the Royalty Agreement is through a buyout that may be required by an acquirer in connection with a change of control transaction.

absence of such a change of control, the Royalty Agreement remains in effect indefinitely.

Because the gross sales royalty

payable has no stated fixed interest rate or maturity date, it is considered variable interest perpetual debt.

The periodic variable payments

to the Purchaser are recorded in interest expense.

The outstanding balance at March 31, 2025 and December 31, 2024, was $ 1,000,000 .

the three months ended March 31, 2025 and 2024, the Company incurred interest expense of $ 38,911 and $ 96,509 , respectively.

NOTE 14 – STOCKHOLDERS’

Preferred Stock

The Company has authorized preferred

stock of 10,000,000 shares with a par value of $ 0.0001 .

As of March 31, 2025 and December 31, 2024, there were no shares of preferred

stock issued and outstanding.

Class A Common Stock

The Class A Common Stock has

voting rights of 1 vote per share and votes as a single class together with the Class B Common Stock .

Class B Common Stock

The Class B Common stock has

voting rights of 25 votes per share, and votes as a single class together with the Class A Common Stock .

Equity Transactions During

Class A Common Stock

During the three months ended

March 31, 2025, the Company issued an aggregate of 662,000 shares of Class A Common Stock with a fair value of $ 2.50 per share to PIPE

Convertible Note holders for conversion of an aggregate principal amount of $ 1,655,000 in PIPE Convertible Notes (See Note 9 –

13 – STOCKHOLDERS’ DEFICIT

Company has authorized preferred stock of 10,000,000 shares with a par value of $ 0.0001 .

A Convertible Preferred Stock

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).

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.

of June 30, 2025 and December 31, 2024, there were 1,885 and 0 shares of Series A Preferred issued and outstanding.

A Common Stock

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.

B Common Stock

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 .

Transactions During the Period

A Convertible Preferred Stock

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.

A Common Stock

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 ).

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

March 31, 2025, the Company issued an aggregate of 2,402,420 shares of Class A Common Stock with fair values ranging from $ 0.34 - $ 0.60

per share to PIPE Convertible Note holders in lieu of cash for interest and make whole provisions (See Note 9 – PIPE Convertible

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

During the three months ended

March 31, 2025, the Company did not issue any warrants.

Series A Warrants

On February 2, 2024, the Company

5 five year immediately vested warrants to purchase an aggregate of 1,409,092

shares of the Company’s Class A Common Stock in association with the issuance of the PIPE Convertible Notes (the “Series

A Warrants”).

The Series A Warrants have an exercise price of $ 13.00

The Series A Warrants had an aggregate grant date fair value of $ 126,819 .

The Series A Warrants met the definition of a liability per ASC 815 – Derivatives and Hedging.

In applying the Black-Scholes

option pricing model to the Series A Warrants granted or issued, the Company used the following assumptions:

SCHEDULE OF FAIR VALUE ASSUMPTIONS OF WARRANTS

Three Months Ended

Risk free interest rate

Expected term (years)

Expected volatility

Expected dividends

The weighted average estimated

fair value of the Series A Warrants granted during the three months ended March 31, 2024, was approximately $ 0.09 per share.

No Series A Warrants were issued

during the three months ended March 31, 2025.

Series B Warrants

On February 2, 2024, the Company

issued two-and-a-half-year 2.5 immediately vested

warrants to purchase an aggregate of 1,550,000

shares of the Company’s Class A Common Stock in association with the issuance of the PIPE Convertible Notes (the “Series

B Warrants”).

The Series B Warrants have an exercise price of $ 10.00

The Series B Warrants had an aggregate grant date fair value of $ 15,500 .

In applying the Black-Scholes

option pricing model to the Series B Warrants granted or issued, the Company used the following assumptions:

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 ).

B Common Stock

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 ).

and Option Valuation

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.

A Preferred Warrants

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

Three Months Ended

June 30, 2025

Risk free interest rate

2 unchanged sentences

Expected dividends

The weighted average estimated

fair value of the Series B Warrants granted during the three months ended March 31, 2024, was approximately $ 0.01 per share.

No Series B Warrants were issued

during the three months ended March 31, 2025.

A summary of the warrant activity

during the three months ended March 31, 2025, is presented below:

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 .

summary of the Series A Warrant Activity during the six months ended June 30, 2025, is presented below:

SCHEDULE OF WARRANT ACTIVITY

Outstanding, December 31, 2024

Outstanding, March 31, 2025

Exercisable, March 31, 2025

The following table presents

information related to stock warrants at March 31, 2025:

SCHEDULE OF INFORMATION RELATED TO STOCK WARRANTS

Warrants Outstanding

Warrants Exercisable

Remaining Life

NOTE 15 – STOCK-BASED

The Company accounts for its

stock-based compensation in accordance with the fair value recognition of ASC 718.

Outstanding, June 30, 2025

Exercisable, June 30, 2025

A and Series B Warrant

summary of the warrant activity during the six months ended June 30, 2025, is presented below:

SCHEDULE OF WARRANT ACTIVITY

Outstanding, December 31, 2024

Outstanding, June 30, 2025

Exercisable, June 30, 2025

14 – STOCK-BASED COMPENSATION

Company accounts for its stock-based compensation in accordance with the fair value recognition of ASC 718.

Stock Incentive Plan

The Company did not grant options

during the three months March 31, 2025 or 2024.

Compensation-based stock option

activity for qualified and unqualified stock options are summarized below:

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

Life In Years

Outstanding, December 31, 2024

Outstanding, March 31, 2025

Exercisable, March 31, 2025

The following table summarizes

information about options to purchase shares of the Company’s Class A common stock outstanding and exercisable at March 31, 2025:

Outstanding, June 30, 2025

Exercisable, June 30, 2025

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 Exerciseable

Options Exercisable

Exercise Price

Life In Years

Total compensation expense related

to options was $ 3,341 for the three months ended March 31, 2025.

As of March 31, 2025, there was future compensation cost of $ 7,798 with

a weighted average recognition period of 0 .75 years.

The aggregate intrinsic value

totaled $ 0 and was based on the Company’s closing stock price of $ 0.35 as of March 31, 2025, which would have been received by the

option holders had all option holders exercised their options as of that date.

Stock-Based Compensation

The following table presents

information related to stock-based compensation expense:

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.

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.

Compensation Expense

following table presents information related to stock-based compensation expense:

SCHEDULE OF STOCK-BASED COMPENSATION EXPENSE

Three Months Ended

Unrecognized at

Weighted Average

General and administrative

NOTE 16 – LEASES

The Company is party to two

(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

The Company has operating leases

for its corporate headquarters and warehouse.

The Company determines if an arrangement contains a lease at inception based on the ability

to control a physically distinct asset.

Operating lease right-of-use assets are recorded in the consolidated balance sheets on the initial

measurement of the lease liability as adjusted to include prepaid rent and initial direct costs less any lease incentives received.

liabilities are measured at the commencement date based on the present value of the lease payments over the lease term.

The Company separately

accounts for lease and non-lease components within lease agreements.

The Company uses its incremental borrowing rate to present value

the lease liability as key inputs to determine the interest rate implicit in the lease are not shared by lessors.

Operating lease expense is recorded

on a straight-line basis over the lease term.

Right-of-use assets and lease liabilities for short-term leases are not recognized in the

consolidated balance sheets.

Payments for short-term leases are recognized in the consolidated statements of operations on a straight-line

basis over the lease term.

When measuring lease liabilities

for leases that were classified as operating leases, the Company discounted lease payments using its estimated incremental borrowing rate

at lease inception point.

General and administrative

15 – FAIR VALUE MEASUREMENTS

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.

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.

following table sets forth a summary of the Company’s assets and liabilities that are measured at fair value on a recurring basis:

OF FAIR VALUE OF ASSETS AND LIABILITIES ON A NONRECURRING BASIS

June 30, 2025

December 31, 2024

Fair Value Level 1

Cash Equivalents

Money market funds

Total debt investments

Fair Value Level 2

Series A Preferred Stock

Series A Preferred Warrants

Series A Preferred Stock

Series A Preferred Warrants

Non-recurring fair value

Total non-recurring fair value

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

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.

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 March 31, 2025, the Company’s

leases had a remaining weighted average term of 2.15 years.

The following table presents

net lease cost and other supplemental lease information:

SCHEDULE OF LEASE COST AND SUPPLEMENTAL LEASE INFORMATION

As of June 30,

2025, the Company’s leases had a remaining weighted average term of 1.90 years.

following table presents net lease cost and other supplemental lease information:

OF LEASE COST AND OTHER SUPPLEMENTAL LEASE INFORMATION

Operating lease cost (cost resulting from lease payments)

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Non-current liabilities - operating lease liabilities

Future minimum payments under

non-cancelable leases for operating leases for the remaining terms of the leases following the three months ended March 31, 2025, are

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

4 unchanged sentences

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

For The Three Months Ended March 31,

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.

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

OF REVENUE BY SEGMENT INFORMATION

For The Three Months Ended June 30,

Consulting expenses

6 unchanged sentences

Total operating expenses

Other expenses is materially comprised of rent, insurance, stock-based compensation, depreciation and amortization, licenses, dues and subscriptions, travel and entertainment, and merchant fees.

NOTE 18 – COMMITMENTS

AND CONTINGENCIES

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 March 31, 2025 and December 31, 2024, the Company

had approximately $ 11,244,000 and $ 9,662,000 , respectively, in excess of the FDIC insured limit.

NOTE 20 – SUBSEQUENT

Dividend Notes Payable

On April 21, 2025, the Company

entered into agreements with the holders of approximately $ 3.9

million in outstanding notes payable (including accrued interest) originally issued in November 2022, including officers and

directors of the Company, pursuant to which such note holders converted all outstanding amounts payable to such note holders into

(i) 8,283,139

shares of the Company’s Class B common stock, with respect to $ 2.6

million in principal and interest of such notes payable, and into (ii) 4,233,077

shares of Class A common stock, with respect to $ 1.3

million in principal and interest of such notes payable, in each case at a conversion price of $ 0.31204

per share, which was above the closing price of the Company’s Common Stock prior to conversion.

PIPE Convertible Notes

On April 21, 2025, the Company agreed to cancel and

rescind the conversion of $ 300,000 of PIPE Convertible Notes, plus interest, as a result of such noteholder not being able to take possession

of such conversion shares prior to the expiration of a DWAC deposit by our transfer agent with the Depository Trust Company.

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 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

Pursuant to the Exchange Agreements, on the effective date of the Exchange Agreements, 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 such Series A Preferred Stock to be issued in the exchange of the PIPE Warrants, the “Initial New Exchange Preferred

Shares”, and such shares of Class A Common Stock (the “Common Stock”) issuable pursuant to the terms of the Certificate

of Designations, including, without limitation, upon conversion or otherwise, collectively, the “Initial New Exchange Conversion

Shares”), and (ii) a warrant to purchase up to 37,033 shares of Series A Preferred Stock.

The Note Exchange will occur on the Closing Date (as

defined in the Exchange Agreements), whereby the amounts owing under the PIPE Convertible Notes will be exchanged into shares 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.

Additionally, the Exchange Agreements amended the

Prior Purchase Agreement and contained certain covenants of the Company to, among other items, hold one or more stockholder meetings no

later than 90 days following the execution of the Exchange Agreements to approve the shares of the Company’s Common Stock issuable

underlying the Series A Preferred Stock upon conversion in compliance with the rules and regulations of the Nasdaq Stock Market.

Issuance of Common Stock

Subsequent to March 31, 2025, the Company issued an

aggregate of 2,182,159 shares of Class A common stock with fair values ranging from $ 0.221 - $ 1.00 per share to PIPE Convertible Note

holders in connection with the conversion of outstanding PIPE Convertible Notes, accrued interest, and make-good provisions.

On May 5, 2025, the Company issued 50,000 shares of

Class A common stock with a fair value of $ 0.284 per share to a PIPE Convertible Note holder in lieu of cash for accrued interest.

expenses is materially comprised of rent, insurance, stock-based compensation, depreciation and amortization, licenses, dues and

subscriptions, travel and entertainment, and merchant fees.

For The Six Months Ended June 30,

Consulting expenses

Contract labor

Personnel expenses

Business development expenses

Royalty expenses

Marketing expenses

Other expenses *

Total operating expenses

expenses is materially comprised of rent, insurance, stock-based compensation, depreciation and amortization, licenses, dues and

subscriptions, travel and entertainment, and merchant fees.

18 – COMMITMENTS AND CONTINGENCIES

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.

19 – CONCENTRATION OF CREDIT RISK

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.

20 – SUBSEQUENT EVENTS

Convertible Notes and Issuance of Series A Preferred Stock

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.

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.

of Common Stock

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.

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

What changed 10-Q

Item 1. Financial Statements