DEF 14A: TruGolf Seeks Shareholder Approval for Nevada Move, Capital Boost

TruGolf Holdings, Inc. calls for its Annual Meeting to vote on key proposals including redomestication to Nevada, a new equity incentive plan, and a significant increase in authorized shares to facilitate future growth and financing.

Summary

• TruGolf Holdings, Inc. will hold its Annual Meeting of Stockholders online on February 9, 2026, at 10:00 a.m., Eastern Time.
• Stockholders of record as of January 20, 2026, are entitled to vote on seven proposals.
• The company proposes to redomesticate its incorporation from Delaware to Nevada, citing expected annual savings of approximately $79,000 in franchise taxes (reducing to $650 in Nevada fees) and greater flexibility in corporate governance.
• A new 2026 Equity Incentive Plan is proposed, authorizing 2,000,000 shares of common stock for issuance, with an evergreen increase of 5% of outstanding shares annually from January 1, 2027, to January 1, 2036.
• The company seeks to increase its authorized Class A common stock from 650,000,000 to 1,000,000,000 shares, and total authorized capital stock from 670,000,000 to 1,020,000,000 shares.
• Approval is sought for the issuance of more than 20% of outstanding common stock under an Equity Purchase Facility Agreement with SZOP Opportunities I LLC, allowing for up to $20 million in newly issued Class A common stock at 93% of the market price.
• As of January 20, 2026, TruGolf had 5,057,444 shares of common stock outstanding, comprising 4,857,445 Class A shares (one vote each) and 199,999 Class B shares (25 votes each).
• Christopher Jones, CEO, holds 2,601,088 shares (4.2% of common stock, 24.7% of total voting power), including 100,888 Class B shares and 4,000 option awards.
• Steven R. Johnson, Chief Hardware Officer, holds 1,214,825 shares (1.2% of common stock, 11.6% of total voting power), including 48,513 Class B shares and 2,000 option awards.
• David Ashby holds 1,303,220 shares (2.1% of common stock, 12.4% of total voting power), including 50,598 Class B shares and 400 option awards.
• Total compensation for Christopher Jones in 2024 was $167,091 ($72,000 salary, $95,091 stock awards), down from $150,000 salary in 2023.
• Brenner Adams, Chief Growth Officer, received $220,055 in 2024 ($84,000 salary, $57,055 option awards, $79,000 for consulting services), a decrease from $858,000 in 2023 ($168,000 salary, $690,000 stock awards).
• Nathan Larsen, Chief Experience Officer, received $220,055 in 2024 ($163,000 salary, $57,055 option awards), a decrease from $853,000 in 2023 ($163,000 salary, $690,000 stock awards).
• The company has several related party notes payable, including $650,000 to a trust indirectly controlled by the CEO, and a $1,650,000 zero-interest loan from CEO Christopher Jones for operating expenses as of September 30, 2025.

Sentiment

Score: 6

Explanation: The sentiment is moderately positive. The proposals address strategic growth, cost efficiency, and capital access, which are beneficial. However, the significant potential for shareholder dilution from the share increase and equity facility, along with notable related party transactions and a past compliance issue, temper the overall positive outlook.

Positives

• The proposed redomestication from Delaware to Nevada is expected to result in substantial annual savings of approximately $79,000 in franchise taxes, reducing state-level fees to an estimated $650 per year.
• Redomestication to Nevada may offer greater corporate governance flexibility and broader protection for directors and officers from unmeritorious lawsuits, potentially aiding in attracting and retaining qualified management.
• The proposed 2026 Equity Incentive Plan, authorizing 2,000,000 shares and an annual 5% evergreen increase, is designed to attract and retain talented employees and directors, aligning their interests with stockholder value.
• The Equity Purchase Facility Agreement with SZOP Opportunities I LLC provides a potential source of up to $20 million in capital for working capital and general corporate purposes, offering financial flexibility.
• The Board of Directors unanimously recommends and urges stockholders to vote FOR all proposals, indicating strong internal alignment on these strategic initiatives.

Negatives

• The proposed increase in authorized Class A common stock from 650,000,000 to 1,000,000,000 shares, and the issuance of shares under the Equity Purchase Facility, will result in significant dilution to existing stockholders' percentage equity ownership and could negatively impact the market price of Class A common stock.
• The Equity Purchase Facility allows for the sale of shares at 93% of the market price, which is a discount that could further dilute existing shareholder value.
• The company has several related party transactions, including a $1,650,000 zero-interest loan from the CEO for operating expenses, which could raise questions about corporate governance and financing practices.
• Christopher Jones and Steven R. Johnson had one late Form 4 filing on April 25, 2025, reporting a transaction that occurred on April 21, 2025, indicating a lapse in timely insider trading reporting.
• The shift to Nevada corporate law, while offering some benefits, may lead to less predictability due to a more limited body of case law compared to Delaware, potentially making some corporate affairs and stockholder rights less clear.

Risks

• Potential future dilution of existing stockholders' equity ownership and voting power due to the increase in authorized shares and the issuance of shares under the Equity Purchase Facility Agreement.
• Uncertainty regarding the impact of less developed Nevada case law on corporate affairs and stockholder rights compared to Delaware law.
• Perception by underwriters, financial services industry, and sophisticated investors that Nevada's corporate laws are less flexible or developed than Delaware's, potentially hindering future capital-raising transactions.
• Non-recurring costs associated with the redomestication, including legal and other transaction costs, which may exceed current estimates.
• The Equity Purchase Facility Agreement allows for the sale of shares at a discount (93% of market price), which could lead to a decline in the stock price or increased price volatility.
• The company's reliance on related party loans, such as the $1,650,000 zero-interest loan from the CEO, could present conflicts of interest or governance concerns.
• Failure to obtain stockholder approval for the Nasdaq Proposal (Proposal 6) would limit the company's ability to issue shares under the Equity Purchase Facility in excess of the Exchange Cap, potentially restricting access to capital.

Future Outlook

The company's proposals indicate a strategic focus on enabling future growth through enhanced capital access, flexible equity incentives for talent retention, and operational cost efficiencies. The increase in authorized shares and the new equity plan are designed to support future financings, investment opportunities, acquisitions, and employee motivation, signaling an intent for continued expansion in the virtual golf industry.

Management Comments

• The Board of Directors has determined that each of the proposals are in the best interests of the Company and its stockholders, and unanimously recommends and urges you to vote FOR the proposals.
• We thank you for your continued support.

Industry Context

TruGolf operates in the virtual golf industry, a niche within the broader gaming and simulation market. The company's executive team, including CEO Christopher Jones and Chief Experience Officer Nathan Larsen, have extensive backgrounds in video game development and 3D simulation, including pioneering the LINKS™ golf franchise. This deep industry experience positions TruGolf to leverage technological advancements and market trends in interactive entertainment. The emphasis on competitive equity compensation suggests operating in a talent-intensive sector where attracting and retaining skilled professionals is crucial for innovation and growth.

Comparison to Industry Standards

• The proposed redomestication to Nevada for tax savings and enhanced director/officer protection is a strategy employed by some companies, though Delaware remains a prevalent choice for public companies due to its well-established corporate law and extensive case precedent.
• The adoption of a new equity incentive plan with an evergreen provision is a common industry practice to align management and employee incentives with shareholder value and to attract and retain talent in competitive sectors like technology and gaming.
• Seeking shareholder approval for issuing more than 20% of outstanding common stock at a discount is a standard compliance requirement under Nasdaq Listing Rule 5635(d) for companies utilizing equity financing facilities.
• The dual-class share structure (Class A with one vote, Class B with 25 votes) is a governance model seen in some technology and founder-led companies (e.g., Google, Facebook) to maintain control, but it deviates from the one-share, one-vote standard favored by many institutional investors.
• The presence of significant related party transactions, such as zero-interest loans from the CEO, while disclosed, may be viewed with more scrutiny compared to standard arm's-length financing arrangements typically preferred by institutional investors.

Corporate Governance

Related Party Transactions

• Note Payable with ARJ Trust: The company has two notes payable to a trust indirectly controlled by CEO Christopher Jones. A $500,000 note at 8.50% annual interest (since Dec 2008) and a $150,000 note at 8.50% annual interest (since June 2010). Both balances remained unchanged as of December 31, 2024 and 2023.
• Note Payable with McKettrick: A $1,750,000 zero-interest note payable to a former shareholder (since May 2019) for share repurchase. The outstanding principal balance was $800,000 as of December 31, 2024, down from $1,300,000 in 2023, with payments of $500,000 in 2024 and $300,000 in 2023.
• Note Payable with Carver: A $220,000 zero-interest note payable to a former shareholder (since Jan 2021) for share repurchase. The outstanding principal balance was $111,000 as of December 31, 2024, down from $148,000 in 2023, with payments of $37,000 in both 2024 and 2023.
• Note Payable with Chris Jones: The CEO loaned the company an aggregate of $2 million for operating expenses during 2024, with a zero interest rate and no stated maturity date. The principal balance was $1,650,000 as of September 30, 2025, after $350,000 in payments.

Stakeholder Impact

• **Shareholders:** Potential for significant dilution from the proposed increase in authorized shares and the Equity Purchase Facility. However, these measures aim to provide capital for growth, which could benefit long-term shareholders. The redomestication offers potential tax savings and enhanced D&O protection, which could indirectly benefit shareholders by reducing corporate risk and costs.
• **Employees & Directors:** The 2026 Equity Incentive Plan is designed to attract, retain, and motivate key employees and directors by offering competitive equity compensation, aligning their interests with the company's success.
• **Creditors:** The capital raise through the Equity Purchase Facility could improve the company's liquidity and financial health, potentially benefiting creditors. The related party loans, while zero-interest, represent a significant portion of the company's financing and could be a factor in credit assessment.
• **Management:** Redomestication to Nevada offers broader protection from unmeritorious lawsuits for directors and officers, which could make the company more attractive to high-caliber management. The equity incentive plan provides a mechanism for performance-based compensation.

Next Steps

• Stockholders to vote on the election of five Board nominees at the Annual Meeting.
• Stockholders to vote on the ratification of Haynie & Company as the independent registered public accounting firm for the year ending December 31, 2026.
• Stockholders to vote on the approval of the 2026 Equity Incentive Plan.
• Stockholders to vote on the approval of the redomestication from Delaware to Nevada.
• Stockholders to vote on the approval of the increase in authorized Class A common stock.
• Stockholders to vote on the approval of the issuance of more than 20% of common stock under the Equity Purchase Facility Agreement.
• Stockholders to vote on the approval of an adjournment of the Annual Meeting, if necessary, to solicit additional proxies.
• If approved, the Board will proceed with filing the Nevada Charter to effectuate the redomestication and the increase in authorized shares.
• The company will file a Current Report on Form 8-K with the SEC within four business days after the Annual Meeting to disclose voting results.

Key Dates

Recommendation

The filing outlines several strategic initiatives aimed at strengthening TruGolf's financial and operational foundation, including a new equity incentive plan, a significant increase in authorized shares to support future growth and capital raises, and a redomestication to Nevada for tax savings and enhanced director protection. While these moves are proactive and necessary for long-term growth, the potential for substantial shareholder dilution from the proposed share increase and the equity purchase facility is a notable concern. The presence of significant related-party loans also warrants careful monitoring of corporate governance. Given the balance of strategic positives and dilution risks, a 'hold' recommendation is appropriate, suggesting investors maintain their current positions while observing the execution of these plans and their impact on the company's financial performance and share price.

Keywords

Proxy Statement, Annual Meeting, Redomestication, Nevada Incorporation, Delaware Corporation, Equity Incentive Plan, Authorized Shares Increase, Capital Raise, Stock Dilution, Corporate Governance, SEC Filing, Nasdaq Listing Rules, Virtual Golf Industry, Related Party Transactions