S-1: TruGolf Holdings Files for Resale of Over 74 Million Shares Following Business Combination

TruGolf Holdings registers for the potential resale of over 74 million shares of Class A common stock by selling securityholders, including shares underlying warrants and convertible notes, after completing its business combination with Deep Medicine Acquisition Corp.

Summary

• TruGolf Holdings has filed a registration statement for the offer and sale of up to 4,246,702 shares of Class A common stock by selling securityholders.
• The filing also covers the potential issuance of 29,245,684 shares of Class A common stock upon exercise of warrants and 40,185,185 shares upon conversion of convertible promissory notes.
• The registration aims to satisfy certain registration rights granted by the company.
• Selling securityholders may offer these securities publicly or privately at prevailing market or negotiated prices.
• TruGolf will not receive proceeds from the sale of shares by the selling securityholders, but may receive proceeds from cash exercises of warrants.
• The company completed its business combination with Deep Medicine Acquisition Corp. on January 31, 2024, resulting in Deep Medicine changing its name to TruGolf Holdings, Inc.
• The company is an emerging growth company and may elect to comply with reduced reporting requirements.
• The last quoted sale price for TruGolf's Class A Common Stock on February 13, 2024, was $1.75 per share.

Sentiment

Score: 4

Explanation: The document presents a mixed sentiment. While the business combination is a positive step, the company's financial performance has declined, and there are risks associated with its operations and the market. The potential for dilution from the issuance of shares and the presence of material weaknesses in internal control also contribute to a lower sentiment score.

Positives

• The registration statement allows selling securityholders to potentially realize value from their holdings.
• The company has completed its business combination, marking a significant milestone.
• The company may receive proceeds from the exercise of warrants, strengthening its financial position.

Negatives

• TruGolf will not receive any proceeds from the sale of shares by the selling securityholders.
• The company is an emerging growth company, which may make its stock less attractive to some investors.
• The market price of the company's common stock is volatile and may decline.
• The company has identified material weaknesses in its internal control over financial reporting.

Risks

• The market price of TruGolf Common Stock may decline.
• TruGolf may be required to take actions that could have a significant negative effect on TruGolfs financial condition, results of operations and the price of TruGolfs securities, which could cause you to lose some or all of your investment.
• TruGolf Nevada has a limited operating history and has been growing rapidly over the last several years, which makes it difficult to forecast our future results of operations and increases the risk of your investment.
• TruGolf has identified material weaknesses in its internal control over financial reporting.

Future Outlook

TruGolf Nevada expects sales to increase as its new generation software and hardware are launched and plans to use a portion of the proceeds to expand its manufacturing capabilities.

Industry Context

The document notes the growing trend of indoor golf, with off-course golf activities surpassing on-course play in popularity, and estimates the total addressable market for golf products to reach $3.8 USD Billion by 2031.

Comparison to Industry Standards

• Econ Market Research estimates that North America represents 36%, Europe 28%, Asia Pacific 22%, and Middle East and Africa 7% of total Capital Market share in 2022.
• Econ Market Research estimates that TruGolf Nevada currently maintains a 4.28% market share.
• Econ Market Research estimates that 69% of the total market is from Indoor Golf Simulators, while 31% is from Outdoor Golf Simulators in 2022 with a slight shift of 1% towards Outdoor Golf Simulators by 2031.
• Econ Market Research estimates that only 21% of sales were for Residential application, and 78% sold for Commercial applications, with a small increase in Residential to 22% by 2031.

Related Party Transactions

• As of June 30, 2023 and March 31, 2023, we had loans payable to Purchaser Representative and its affiliates in the amount of $2,065,000 and $1,865,000 (the Sponsor Note), respectively.
• We paid Weixuan Luo, our former chief financial officer, monthly fees of $5,000 for her services commencing on August 1, 2020.
• Our audit committee reviews on a quarterly basis all payments that were made to Purchaser Representative, officers, directors or our or their affiliates and determines which expenses and the amount of expenses that are reimbursed.

Stakeholder Impact

• The dual class structure of the TruGolf Common Stock will have the effect of concentrating voting power with TruGolfs founders, which will limit an investors ability to influence the outcome of important transactions, including a change in control.

Next Steps

• The Selling Securityholders will determine when and how they will dispose of the shares of Class A Common Stock registered under this prospectus for resale.

Key Dates

Keywords

TruGolf Holdings, Class A Common Stock, Registration Statement, Business Combination, Warrants, Convertible Notes, Selling Securityholders, Deep Medicine Acquisition Corp, Resale, Securities