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What changed in TruGolf Holdings, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of TruGolf Holdings, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+274 added−331 removedSource: 10-K (2026-04-15) vs 10-K (2025-04-15)

Top changes in TruGolf Holdings, Inc.'s 2025 10-K

274 paragraphs added · 331 removed · 88 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

30 edited+85 added−117 removed5 unchanged
Biggest changeAll proprietary hardware is assembled at this facility, with additional components, such as frames, fabric for simulator bays, turf, foam, and other technology, sourced from local and domestic suppliers. -15- The second facility, located in North Salt Lake, Utah, provides office space for the remainder of the Company’s staff, and serves as the primary location for finished goods inventory and logistics operations, including storage of assembled simulators.
Biggest changeOur second facility, located in North Salt Lake, Utah, consists of approximately 13,000 square feet and supports manufacturing, assembly, returns, repairs, inventory storage, and logistics operations. This facility also houses office space for the remainder of our staff. Proprietary hardware, finished goods inventory, and assembled simulator storage are maintained at this location.
ITEM 1. BUSINESS Unless otherwise indicated or the context requires otherwise, the terms “we,” “us,” “our,” and “our company” refer to TruGolf Holdings, Inc., a Delaware corporation (“TruGolf”), and its wholly owned subsidiaries, including TruGolf, Inc., a Nevada corporation (“TruGolf Nevada”) and TruGolf Links Franchising, LLC (“Links”), a Delaware limited liability company.
ITEM 1. BUSINESS Unless otherwise indicated or the context requires otherwise, the terms “we,” “us,” “our,” and “our company” refer to TruGolf Holdings, Inc., a Nevada corporation (“TruGolf”), and its wholly owned subsidiaries, including TruGolf, Inc., a Nevada corporation (“TruGolf Nevada”) and TruGolf Links Franchising, LLC (“Links”), a Delaware limited liability company.
Available Information Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, our proxy and information statements and all amendments to those reports will be available free of charge through our website at www.trugolf.com.com as soon as practicable after such material is electronically filed with, or furnished to, the SEC.
Available Information Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, our proxy and information statements and all amendments to those reports will be available free of charge through our website at www.trugolf.com as soon as practicable after such material is electronically filed with, or furnished to, the SEC.
We have elected to avail ourselves of this exemption from new or revised accounting standards and, therefore, we will not be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.
We have elected to avail ourselves of this exemption from new or revised accounting standards and, therefore, we will not be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies. -12-
The Company’s sales of golf simulators and related products are subject to oversight and regulation by various entities, including the Federal Trade Commission (FTC) and the Consumer Product Safety Commission (CPSC), as well as other federal, state, local, and foreign regulatory authorities. These laws primarily govern product labeling, advertising, marketing, manufacturing, safety, shipment, and disposal.
Our sales of golf simulators and related products are subject to oversight and regulation by various entities, including the Federal Trade Commission (FTC) and the Consumer Product Safety Commission (CPSC), as well as other federal, state, local, and foreign regulatory authorities. These laws primarily govern product labeling, advertising, marketing, manufacturing, safety, shipment, and disposal.
The policy also includes product liability coverage, which extends to claims arising from technology-related issues, such as customer data breaches, copyright infringement, misrepresentation, and fraud, as well as claims associated with physical products and services sold through the Company’s website.
The policy also includes product liability coverage, which extends to claims arising from technology-related issues, such as customer data breaches, copyright infringement, misrepresentation, and fraud, as well as claims associated with physical products and services sold through our website.
Further, there can be no assurance that the steps taken by the Company to protect its proprietary rights will be sufficient or that third parties will not infringe upon or misappropriate its copyrights, trademarks, patents, trade dress, or similar proprietary rights. Additionally, other parties may assert claims of intellectual property infringement against the Company.
Further, there can be no assurance that the steps taken by us to protect our proprietary rights will be sufficient or that third parties will not infringe upon or misappropriate our copyrights, trademarks, patents, trade dress, or similar proprietary rights. Additionally, other parties may assert claims of intellectual property infringement against us.
Although the Company seeks to maintain brand quality through such licenses, there is no assurance that licensees will not engage in conduct that could materially and adversely affect the value of the Company’s intellectual property or reputation, which may, in turn, have a material adverse effect on the Company’s business, prospects, financial condition, and results of operations.
Although we seek to maintain brand quality through such licenses, there is no assurance that licensees will not engage in conduct that could materially and adversely affect the value of our intellectual property or reputation, which may, in turn, have a material adverse effect on our business, prospects, financial condition, and results of operations.
However, effective protection of trademarks, service marks, copyrights, patents, and trade secrets may not be available in every jurisdiction where the Company’s products are offered. The Company has previously licensed, and may continue to license in the future, certain proprietary rights—such as trademarks and copyrighted materials—to third parties.
However, effective protection of trademarks, service marks, copyrights, patents, and trade secrets may not be available in every jurisdiction where our products are offered. We have previously licensed, and may continue to license in the future, certain proprietary rights—such as trademarks and copyrighted materials—to third parties.
The application, interpretation, and enforcement of these legal requirements are often uncertain, particularly given the emerging and rapidly evolving nature of the industries in which the Company operates. Additionally, these laws and regulations may be applied inconsistently across different jurisdictions and may not align with the Company’s current policies and practices.
The application, interpretation, and enforcement of these legal requirements are often uncertain, particularly given the emerging and rapidly evolving nature of the industries in which we operate. Additionally, these laws and regulations may be applied inconsistently across different jurisdictions and may not align with our current policies and practices.
As of the date of this filing, the Company is not a party to any legal proceedings that, in the opinion of management, if determined adversely, would individually or in the aggregate have a material adverse effect on the Company’s business, operating results, financial condition, or cash flows.
As of the date of this filing, we are not a party to any legal proceedings that, in the opinion of management, if determined adversely, would individually or in the aggregate have a material adverse effect on our business, operating results, financial condition, or cash flows.
The Company owns an issued U.S. patent which is expected to remain in force until 2038, and several pending patent applications that may ultimately be issued and would expire between 2042 and 2045. The Company has also registered or applied for registration of various U.S. domain names, trademarks, service marks, and copyrights.
We own an issued U.S. patent which is expected to remain in force until 2038, and several pending patent applications that may ultimately be issued and would expire between 2042 and 2045. We have also registered or applied for registration of various U.S. domain names, trademarks, service marks, and copyrights.
Government Regulation The Company is subject to a broad range of U.S. federal, state, and foreign laws and regulations, many of which are evolving and continue to be tested in courts. These laws and regulations may be interpreted in ways that could adversely impact the Company’s business and operations.
Government Regulation We are subject to a broad range of U.S. federal, state, and foreign laws and regulations, many of which are evolving and continue to be tested in courts. These laws and regulations may be interpreted in ways that could adversely impact our business and operations.
To protect these assets, the Company relies on a combination of trademark, copyright, and patent laws, as well as trade secret protections and confidentiality and/or license agreements with employees, customers, partners, and other third parties.
To protect these assets, we rely on a combination of trademark, copyright, and patent laws, as well as trade secret protections and confidentiality and/or license agreements with employees, customers, partners, and other third parties.
Upon the acquisition of Access Software by Microsoft Corp. in August 1999, the core programming and graphics team of the Links TM video game series were spun out to TruGolf Nevada.
TruGolf Nevada, was formed in 1995, and was a subsidiary of Access Software. Upon the acquisition of Access Software by Microsoft Corp. in August 1999, the core programming and graphics team of the Links TM video game series were spun out to TruGolf Nevada.
Implications of Being an Emerging Growth Company We qualify as an “emerging growth company” as the term is used in The Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and therefore, we may take advantage of certain exemptions from various public company reporting requirements, including: ● a requirement to only have two years of audited financial statements and only two years of related selected financial data and management’s discussion and analysis; ●- exemption from the auditor attestation requirement on the effectiveness of our internal controls over financial reporting; ● reduced disclosure obligations regarding executive compensation; and ● exemptions from the requirements of holding a nonbinding advisory stockholder vote on executive compensation and any golden parachute payments. -16- We may take advantage of these provisions for up to five years or such earlier time that we are no longer an emerging growth company.
Implications of Being an Emerging Growth Company We qualify as an “emerging growth company” as the term is used in The Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and therefore, we may take advantage of certain exemptions from various public company reporting requirements, including: ● a requirement to only have two years of audited financial statements and only two years of related selected financial data and management’s discussion and analysis; ● exemption from the auditor attestation requirement on the effectiveness of our internal controls over financial reporting; ● reduced disclosure obligations regarding executive compensation; and ● exemptions from the requirements of holding a nonbinding advisory stockholder vote on executive compensation and any golden parachute payments.
Insurance The Company maintains an insurance policy that provides customary coverage and protections, including professional liability, general liability, employee benefits liability, and coverage against claims related to technology products and services, as well as cybersecurity risks.
Insurance We maintain an insurance policy that provides customary coverage and protections, including professional liability, general liability, employee benefits liability, and coverage against claims related to technology products and services, as well as cybersecurity risks.
The Company has been subject to such claims in the past and expects that it may face similar legal proceedings and claims in the ordinary course of business, including allegations that the Company or its licensees have infringed upon the trademarks or other intellectual property rights of third parties.
We have been subject to such claims in the past and expect that we may face similar legal proceedings and claims in the ordinary course of business, including allegations that we or our licensees have infringed upon the trademarks or other intellectual property rights of third parties.
The adoption of new laws and regulations, or new interpretations of existing laws, could materially impact the Company’s operations and compliance requirements. To date, the costs of compliance with applicable laws and regulations have not had a material adverse effect on the Company’s operations, and the Company believes it is in substantial compliance with all current legal and regulatory requirements.
The adoption of new laws and regulations, or new interpretations of existing laws, could materially impact our operations and compliance requirements. To date, the costs of compliance with applicable laws and regulations have not had a material adverse effect on our operations, and we believe we are in substantial compliance with all current legal and regulatory requirements.
Domestically, we have an established reseller network across the United States and Canada, as well as a limited but developing presence in Latin America.
Domestically, we have an established reseller network across the United States and Canada, with a developing presence in Latin America.
Furthermore, because certain components used in the Company’s products are imported, the Company is subject to import regulations and international trade laws. -14- In addition to the foregoing, the Company is subject to other regulatory regimes, including environmental laws, employment regulations, privacy and cybersecurity laws, environmental health and safety regulations, licensing and operational requirements, the Foreign Corrupt Practices Act (FCPA), and similar anti-bribery and anti-kickback laws.
In addition to the foregoing, we are subject to other regulatory regimes, including environmental laws, employment regulations, privacy and cybersecurity laws, environmental health and safety regulations, licensing and operational requirements, the Foreign Corrupt Practices Act (FCPA), and similar anti-bribery and anti-kickback laws.
However, given the nature of the Company’s operations and the continually evolving regulatory landscape, the Company cannot predict with certainty whether future material capital expenditures or operating costs will be required to maintain compliance with applicable regulations.
However, given the nature of our operations and the continually evolving regulatory landscape, we cannot predict with certainty whether future material capital expenditures or operating costs will be required to maintain compliance with applicable regulations. -10- Intellectual Property We regard our trademarks, service marks, copyrights, patents, domain names, trade dress, trade secrets, proprietary technologies, and other forms of intellectual property as critical assets essential to our success.
Even claims that are without merit could result in the expenditure of significant financial and managerial resources, potentially impacting the Company’s operations and reputation. Human Resources We currently employ approximately 72 employees of which 71 are full-time and one is part-time, many of which started working remotely due to COVID-19 and continue to work remotely.
Even claims that are without merit could result in the expenditure of significant financial and managerial resources, potentially impacting our operations and reputation. Human Resources As of the date of this report, we employ approximately 68 employees, including 67 full-time and 1 part-time.
Legal Proceedings From time to time, the Company may become involved in legal proceedings or be subject to claims arising in the ordinary course of business.
Base monthly rent during the first year of the lease was $10,457 and increases by 3% annually over the lease term. -11- Legal Proceedings From time to time, we may become involved in legal proceedings or be subject to claims arising in the ordinary course of business.
Targeted sectors for sales growth include residential home construction, golf courses (both pro shops and private clubs), audio/visual integration firms, commercial real estate (including office spaces and shopping centers), government entities, educational institutions and municipalities, large national accounts (such as chain and warehouse retailers), and national entertainment and recreational centers.
Our sales strategy is focused on customer segments that we believe are aligned with demand for our hardware, software and facility solutions. These targeted sectors include golf courses, including pro shops and private clubs, residential home construction, audio/visual integration firms, commercial real estate developers, government entities, educational institutions, municipalities, and selected national accounts.
In addition to the marketing and sales outlined above, we complete all product development of both hardware and software in house, including some light manufacturing and assembly, simulator installations, customer service, and logistics. Facilities The Company currently leases two facilities to support its operations.
Our workforce supports a broad range of functions across the business, including marketing and sales, in-house hardware and software development, light manufacturing and assembly, simulator installation, customer service, and logistics. Our operating model enables us to maintain direct oversight of key product development and customer support functions. Facilities We currently lease two facilities in Utah to support our operations.
(f/k/a Deep Medicine Acquisition Corp.) (“TruGolf”, and together with its subsidiaries, the “Company”), was incorporated on July 8, 2020, as a Delaware corporation and formed for the purpose of effecting a business combination, with no material operation of its own.
Our Business Our Corporate and Acquisition History We were incorporated on July 8, 2020, as a Delaware corporation and formed for the purpose of effecting a business combination. On January 31, 2024, we consummated a business combination pursuant to which TruGolf Nevada became our wholly-owned subsidiary, and our name was changed from Deep Medicine Acquisition Corp. to TruGolf Holdings, Inc.
The internal sales team is responsible for managing both individual customer relationships and consulting with commercial facilities through a structured, territory-based system. The United States is divided into defined sales territories, enabling each representative to focus on building and maintaining a network of key relationships within their assigned regions.
Our internal sales team is responsible for managing direct customer relationships and consulting with commercial facilities through a structured sales process designed to support both direct sales and partner-driven growth.
The primary facility, located in Centerville, Utah, houses offices for more than half of the Company’s staff, along with space for research and development, manufacturing, assembly, returns, and repairs.
Our primary facility, located in Centerville, Utah, consists of approximately 19,381 square feet and serves as our corporate headquarters. This facility houses offices for more than half of our employees and supports administrative functions, sales, and research and development activities.
Market For Indoor Golf We believe that it is important to understand the macro-economic trends of indoor golf as a sport, as a culture, and as a movement, to better understand the market for our indoor golfing simulators and software.
Market For Indoor Golf Understanding broader participation and facility trends in golf is important to assessing the market for our indoor golf simulators, launch monitors, and software.
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Our Business Our Corporate and Acquisition History TruGolf Nevada, was formed as a Utah corporation on October 4, 1995, under the name TruGolf Incorporated, and was a subsidiary of Access Software. On June 9, 1999, TruGolf Nevada changed its name to TruGolf, Inc.
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On March 10, 2026, the Company completed its redomestication from a Delaware corporation to a Nevada corporation (the “Redomestication”) by filing a certificate of conversion with the Secretary of State of the State of Delaware and articles of conversion with the Nevada Secretary of State.
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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.
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The Redomestication was approved by the Company’s stockholders at the annual meeting held on February 17, 2026. General TruGolf is a golf technology company focused on indoor golf simulation hardware, software, and related services.
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TruGolf Nevada was the surviving corporation and, in connection with the Plan of Merger, TruGolf Nevada affected a four-for-one forward stock split of its outstanding common stock. TruGolf Holdings, Inc.
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Our roots trace to the golf simulation and software expertise developed through Access Software and the Links™ video game franchise, and since 1999, we have focused on helping establish residential and commercial golf simulation as a viable industry.
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On March 31, 2023, we entered into an Agreement and Plan Of Merger (the “Merger Agreement”) with Deep Medicine Acquisition Corp. (“DMAQ”), a Delaware Corporation, DMAQ Merger Sub Inc.
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Over time, we expanded from software-focused offerings into a broader integrated platform that includes proprietary launch monitors, simulator systems, software products, and custom installations. -3- Today, we offer a portfolio of golf technology products designed to help users play, improve, and enjoy golf in indoor environments.
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(“Merger Sub”), a Nevada corporation and a wholly-owned subsidiary of DMAQ, Bright Vision Sponsor LLC, a Delaware limited liability company, in the capacity as DMAQ’s representative, Christopher Jones, an individual, in the capacity as TruGolf Nevada’s representative, and TruGolf Nevada (together, the “Merger Parties”).
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Our hardware offerings include launch monitors such as APOGEE and LaunchBox, simulator systems ranging from compact and portable configurations to premium and custom installations, and related components and services. Our simulator lineup includes products such as STARTER, MAX, Signature, Premium, and Custom Golf Simulators for residential, commercial, and other specialized applications. Our software ecosystem includes E6 CONNECT and E6 GOLF.
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On July 21, 2023, the Merger Parties entered into an Amended and Restated Agreement and Plan of Merger (the “Restated Merger Agreement”), pursuant to which the Merger Agreement was amended and restated to provide, among other things, that (i) contingent earnout shares will be issued after the Closing, if and when earned, upon the Company meeting the milestones specified in the Restated Merger Agreement, rather than being issued at the closing of the merger and being placed into escrow subject to potential forfeiture; and (ii) the share price of the Company’s common stock used in the calculation of the number of shares to be issued to the Sellers as merger consideration shall be $10.00, as opposed to the price at which the Company redeems the shares of common stock held by its public stockholders in connection with the closing of this business combination. -3- On January 31, 2024, we consummated the business combination (the “Closing”) contemplated by the Restated Merger Agreement and Merger Agreement, dated as of July 21, 2023, by and among the Merger Parties.
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E6 CONNECT supports practice, course play, mini-games, online events, and commercial tools, while E6 GOLF is positioned as our next-generation improvement and simulation platform. These software offerings are designed to operate with TruGolf hardware and, in certain cases, with select third-party launch monitor platforms.
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As a result of the Closing and the transactions contemplated by the Merger Agreement, (i) Merger Sub merged with and into TruGolf Nevada, with TruGolf Nevada surviving the Merger as a wholly-owned subsidiary of TruGolf, and (ii) TruGolf’s name was changed from Deep Medicine Acquisition Corp. to TruGolf Holdings, Inc.
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Our products are intended to serve a market supported by continued growth in both traditional and off-course golf participation. According to recent National Golf Foundation reporting, total U.S. golf participation reached 48.1 million in 2025, including 29.1 million on-course golfers and 37.9 million off-course participants, while total rounds played reached a record 549 million in 2025.
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TruGolf’s Class A common stock commenced trading on the Nasdaq Global Market LLC under the ticker “TRUG” on February 1, 2024. General The Company has been creating indoor golf software for 40 years.
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In addition, the U.S. golf industry continues to benefit from sustained demand, growth in simulator and other off-course formats, and a stable base of golf facilities following years of industry correction.
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Since 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 with world-class software.
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Certain components and materials used in simulator and launch monitor products are specialized and may be sourced from a limited number of suppliers, while many other components are generally available from multiple sources. We continue to evaluate sourcing alternatives and production capabilities to support product availability, installations, and customer fulfillment.
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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.
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According to the National Golf Foundation (“NGF”), total golf participation in the United States reached 48.1 million people age 6 and older in 2025, including 29.1 million on-course golfers and 37.9 million off-course participants. NGF defines off-course participation to include golf entertainment venues, standalone driving ranges, and businesses with simulator and screen-golf setups.
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In addition, we have developed multiple sources and 3 rd 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.
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More than 19.0 million Americans participated exclusively off-course in 2025, compared to 10.1 million who participated exclusively on-course, reflecting the continued expansion of technology-enabled and alternative formats of the game. NGF also reports that simulator or screen-golf participation reached 9.2 million in 2025. NGF’s research further indicates that off-course golf complements traditional golf rather than replacing it.
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The availability of the frames and fabric from our principal provider, Allied ES&A (“Allied”), 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.
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In 2025, more than 19 million people participated both on and off course, representing approximately 65% of all on-course golfers. NGF reports that these participants tend to play more frequently, spend more, and seek instruction at higher rates than single-format participants.
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A third supplier, Impact Signs, has also been used in the past and the Company 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.
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NGF also reports that green-grass participation has increased for eight consecutive years and that total rounds played in the United States reached approximately 549 million in 2025. These participation trends are supported by an expanding off-course and simulator-based supply base.
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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 Apogee Launch Monitor (“Apogee”) unit to ensure the greatest availability possible.
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According to NGF, the U.S. market now includes approximately 120 large-scale golf entertainment venues, approximately 1,700 simulator businesses focused primarily on golf entertainment, approximately 700 commercial simulator locations focused primarily on club fitting, lessons, and game improvement, and approximately 1,600 green-grass facilities with tech-enabled ranges or indoor simulators.
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According to the National Golf Foundation (the “NGF”), golf is the largest participation sport in America, with 41 million active golfers over six years old, and has had a growth rate adding 3 million new golfers in each of 2021 and 2022.
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NGF also reports that there are just under 800 standalone driving ranges nationwide, including approximately 250 with integrated ball-tracking technology. This expanding infrastructure increases consumer exposure to simulator-based golf and supports long-term demand for indoor golf hardware, software, and related services. -4- Third-party industry research also indicates that the golf simulator market represents a growing addressable market.
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However, according to the NGF, in 2022, there were over 15.5 million golfers that participated exclusively in off-course golf activities, such as driving ranges, indoor golf simulators, or golf entertainment venues, and only 13 million people who played exclusively on a golf course.
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According to Grand View Research, the global golf simulator market was valued at approximately $1.74 billion in 2024 and is expected to grow at a compound annual growth rate of 9.4% from 2025 to 2030.
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According to NGF, a total of 17.8 million people who did not play golf in 2021 said they are “very interested” in playing golf on a golf course. According to a January 26, 2023, article from the NFG, the off-course golfers increased more significantly, with a 13% year-over-year jump, compared with a 2% rise in on-course participation.
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Grand View Research also reports that the U.S. golf simulator market generated approximately $682.7 million in revenue in 2024 and is expected to grow at a compound annual growth rate of 8.8% from 2025 to 2030, while the North America market generated approximately $818.5 million in revenue in 2024 and is expected to grow at a compound annual growth rate of 9.0% from 2025 to 2030.
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As reported, the total off-course market in 2022 of approximately $27.9 million has for the first time eclipsed on-course play. The total addressable market for golf products in 2022 was an estimated $1.4 USD Billion, and with a CAGR of 11.05% is forecast to reach $3.8 USD Billion by 2031.
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Our products are designed to serve multiple segments within this market, including simulator-based play, game improvement, instruction, club fitting, and venue-based entertainment. The continued growth of off-course participation, simulator engagement, and technology-enabled golf facilities supports our strategy of offering integrated hardware and software solutions for commercial and residential indoor golf environments.
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Econ Market Research estimates that North America represents 36%, Europe 28%, Asia Pacific 22%, and Middle East and Africa 7% of total global market share in 2022. In this same report they have found that TruGolf currently maintains a 4.28% market share.
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Current Operations We currently operate through three principal business channels: (i) the design, manufacture, marketing and sale of indoor golf simulator hardware and launch monitors under the TruGolf brand, generally bundled with proprietary software solutions; (ii) the sale and licensing of our E6 software platform for use with TruGolf hardware and certain third-party launch monitor platforms; and (iii) the development of commercial and franchise-oriented indoor golf solutions, including software, hardware, administration tools and related operating technologies.
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They also noted 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.
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Our current operations are focused on expanding adoption of our APOGEE launch monitor platform, increasing use of our E6 software ecosystem, and broadening our hardware lineup to address residential, commercial, instructional, entertainment and portable-use applications.
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While it is not directly stated in the Econ Market Research study, we consider revenue from both SaaS software and Data Analytics to be included in the overall total addressable market for golf products.
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We offer integrated simulator solutions across a range of price points and use environments, from portable launch monitors and compact simulator packages to premium permanent installations and custom commercial installations. These solutions generally combine launch monitor hardware, enclosures, projection systems, computer and display components, software and installation-related services.
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Our planned products are aligned directly with these findings as our Apogee launch monitor is an indoor only, and ceiling mounted device ideally for commercial facilities, yet equally beneficial to residential use. Our software, both E6 Connect and Apex have power tools for commercial facilities to make playing, improving and enjoying golf easier than ever.
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We also offer standalone software products and commercial tools that may be used independently or with selected third-party hardware platforms. We believe our business benefits from broader participation trends in both on-course and off-course golf. NGF materials also indicate that U.S. golf demand has remained elevated in recent years and that overall facility supply has stabilized.
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While our software is available on 90% of hardware in the market this allows us to access customers for use indoor, outdoor, and residential, as well as commercial.
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We believe these trends support continued demand for indoor golf hardware, software, practice tools and simulator-based entertainment experiences. In addition to our core hardware and software offerings, we continue to develop products and services for commercial operators, including league management, member messaging, analytics, simulator administration tools and multi-activity offerings designed to improve venue utilization and customer engagement.
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In addition to these hardware and software solutions targeting directly the market segments we will be launching a franchise solution to capitalize on the powerful demand for commercial offerings. -4- We believe there are many reasons for the decline in outdoor rounds of golf being played and the simultaneous increase of indoor rounds of golf, including (i) the major costs of running a golf course (and consequently the costs of playing outdoor golf), including environmental factors making outdoor golf increasingly costly and requiring more and more water for vegetations, as temperatures across the United States increase, even as available water has generally decreased, (ii) the closing of over 100 golf courses every year (NGF) and (iii) the challenge in finding available daylight hours with so many golfers and so few golf courses, especially in light of the lengthy time period required to play a full outdoor course (www.ngf.org).
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We also continue to evaluate opportunities related to organized online play, simulator-based competition and the use of data generated through our software ecosystem, although these initiatives remain complementary to our current core operations. Our Products Our products consist primarily of launch monitors, golf simulator systems, simulation software, commercial management software tools, and Multi-Sport Arcade entertainment add-ons. Hardware Launch Monitors.
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We believe that all of these factors combine to create a significant opportunity to capitalize on a growing sport, a growing segment of that sport, and a convergence of demand and popularity seldom seen in virtual participation athletics – indoor golf.
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Our hardware lineup is anchored by APOGEE, our ceiling-mounted launch monitor designed for indoor golf simulation. APOGEE is designed to support ease of installation and use, and includes features intended to enhance the user experience, including continuous calibration functionality, support for standard golf balls and clubs without specialty balls or marked clubs, point-of-impact replay, voice-enabled operation and rapid shot-to-screen response.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

45 edited+18 added−36 removed116 unchanged
Biggest changeWe may be subject to product liability lawsuits and claims that, individually or in the aggregate, could harm our business, prospects, results of operations and financial condition. We may face lawsuits or claims if our products do not perform as expected, malfunction or are used without complying with their specifications.
Biggest changeWe may become subject to product liability lawsuits or claims, which could harm our financial condition and liquidity if we are not able to successfully defend or insure against such claims. We may be subject to product liability lawsuits and claims that, individually or in the aggregate, could harm our business, prospects, results of operations and financial condition.
As defined in Exchange Act Rule 13a-15(f), internal controls over financial reporting is a process designed by, or under the supervision of, the principal executive and principal financial officer and effected by the board of directors of the Company (the “Board of Directors”), management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that: ● pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the Company; ● provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and/or directors of the Company; and ● provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
As defined in Exchange Act Rule 13a-15(f), internal controls over financial reporting is a process designed by, or under the supervision of, the principal executive and principal financial officer and effected by the board of directors of the Company, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that: ● pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the Company; ● provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and/or directors of the Company; and ● provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
If we do not effectively assist our users in deploying our products and services, succeed in helping our users quickly resolve post-deployment issues and provide effective ongoing support, or it potential customers perceive that we may not be able to achieve the foregoing, our ability to sell our products and services would be adversely affected, and our reputation with potential users could be harmed.
If we do not effectively assist our users in deploying our products and services, succeed in helping our users quickly resolve post-deployment issues and provide effective ongoing support, or if potential customers perceive that we may not be able to achieve the foregoing, our ability to sell our products and services would be adversely affected, and our reputation with potential users could be harmed.
However, our auditors will not be required to formally attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 until we are no longer a “smaller reporting company”. The cost of being a public company could result in us being unable to continue as a going concern.
Our auditors will not be required to formally attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 until we are no longer a “smaller reporting company”. The cost of being a public company could result in us being unable to continue as a going concern.
Any lawsuit or claim seeking monetary damages significantly exceeding our coverage or outside of our coverage may have a material adverse effect on our business and financial condition. Fluctuations in our tax obligations and effective tax rate may have a negative effect on our operating results. We may be subject to income taxes in multiple jurisdictions.
Any lawsuit or claim seeking monetary damages significantly exceeding our coverage or outside of our coverage may have a material adverse effect on our business and financial condition. -20- Fluctuations in our tax obligations and effective tax rate may have a negative effect on our operating results. We may be subject to income taxes in multiple jurisdictions.
We expect to derive substantially all of our sales from sales of branded products and services we own. The reputation and integrity of our brands are essential to the success of our business. We believe that our consumers value the status and reputation of brands we promote, and the superior quality, performance, functionality and durability that our brands represent.
We derive substantially all of our sales from sales of branded products and services we own. The reputation and integrity of our brands are essential to the success of our business. We believe that our consumers value the status and reputation of brands we promote, and the superior quality, performance, functionality and durability that our brands represent.
Our efforts to enforce our intellectual property rights can potentially be met with defenses and counterclaims attacking the validity and enforceability of our intellectual property rights. Unplanned increases in legal fees and other costs associated with protecting out intellectual property rights could result in higher operating expenses.
Our efforts to enforce our intellectual property rights can potentially be met with defenses and counterclaims attacking the validity and enforceability of our intellectual property rights. Unplanned increases in legal fees and other costs associated with protecting our intellectual property rights could result in higher operating expenses.
We compete domestically and internationally with a significant number of athletic and sports equipment companies and sports-related technology companies, including sports-related technology companies, including large companies having diversified lines of athletic and sports equipment and sports technology products. -21- Product offerings, technologies, marketing expenditures (including expenditures for advertising and endorsements), pricing, costs of production, customer service, digital commerce platforms and social media presence are areas of intense competition.
We compete domestically and internationally with a significant number of athletic and sports equipment companies and sports-related technology companies, including sports-related technology companies, including large companies having diversified lines of athletic and sports equipment and sports technology products. -16- Product offerings, technologies, marketing expenditures (including expenditures for advertising and endorsements), pricing, costs of production, customer service, digital commerce platforms and social media presence are areas of intense competition.
Our business depends, in part, on the following factors: ● Our ability to integrate E6 Connect and/or E6 Apex with multiple platforms and existing systems and to modify our product as new versions of packaged applications are introduced; ● Access to application program interfaces for the third-party software products that are integrated with our products; and ● Our ability to anticipate and support new standards.
Our business depends, in part, on the following factors: ● Our ability to integrate E6 Connect and/or E6 GOLF with multiple platforms and existing systems and to modify our product as new versions of packaged applications are introduced; ● Access to application program interfaces for the third-party software products that are integrated with our products; and ● Our ability to anticipate and support new standards.
If the Information Technology Systems suffer sever damage, disruption or shutdown and our business continuity plans, or those of our vendors, do not effectively resolve the issues in a timely manner, we could experience delays in reporting our financial results, which could result in lost revenues and profits, as well as reputational damage.
If the Information Technology Systems suffer severe damage, disruption or shutdown and our business continuity plans, or those of our vendors, do not effectively resolve the issues in a timely manner, we could experience delays in reporting our financial results, which could result in lost revenues and profits, as well as reputational damage.
If we fail to anticipate or respond to changes in consumer preferences or fail to bring products to market in a timely manner that satisfy new preferences, our market share and our net sales and profitability could be adversely affected. -19- We may be unable to appeal to new consumers while maintaining the loyalty of our core consumers.
If we fail to anticipate or respond to changes in consumer preferences or fail to bring products to market in a timely manner that satisfy new preferences, our market share and our net sales and profitability could be adversely affected. -14- We may be unable to appeal to new consumers while maintaining the loyalty of our core consumers.
Results of operations in any period should not be considered indicative of the results to be expected for any future period. -22- Failure to accurately forecast consumer demand could lead to excess inventories or inventory shortages, which could result in decreased operating margins, reduced cash flows and harm to our business.
Results of operations in any period should not be considered indicative of the results to be expected for any future period. -17- Failure to accurately forecast consumer demand could lead to excess inventories or inventory shortages, which could result in decreased operating margins, reduced cash flows and harm to our business.
This would certainly result in our being unable to continue as a going concern. -24- Our ability to sell our products and services will be dependent on the quality of our technical support and our failure to deliver high-quality technical support services could have a material adverse effect on our sales and results of operations.
This would certainly result in our being unable to continue as a going concern. -19- Our ability to sell our products and services will be dependent on the quality of our technical support and our failure to deliver high-quality technical support services could have a material adverse effect on our sales and results of operations.
Any interruption in the Information Technology Systems may impede our ability to engage in the digital space and result in lost revenues, damage to our reputation and loss of consumers. -20- In connection with various facets of our business, we collect and use a variety of personal data related to our customers.
Any interruption in the Information Technology Systems may impede our ability to engage in the digital space and result in lost revenues, damage to our reputation and loss of consumers. -15- In connection with various facets of our business, we collect and use a variety of personal data related to our customers.
This effect could be further compounded if the market price of the Company’s common stock does not increase proportionately as a result of the reverse stock split. -27- Our stock price may be volatile, or may decline regardless of our operating performance, and you could lose all or part of your investment as a result.
This effect could be further compounded if the market price of the Company’s common stock does not increase proportionately as a result of the reverse stock split. -21- Our stock price may be volatile, or may decline regardless of our operating performance, and you could lose all or part of your investment as a result.
It we are unable to maintain or enhance our brands in new markets, then our growth strategy could be adversely affected. -17- We will need to raise capital in order to realize our business plan and growth strategy, the failure of which could adversely impact our operations.
It we are unable to maintain or enhance our brands in new markets, then our growth strategy could be adversely affected. -13- We will need to raise capital in order to realize our business plan and growth strategy, the failure of which could adversely impact our operations.
Customer may experience difficulty in integrating E6 Connect or E6 Apex with third-party applications, which would inhibit sales. E6 Connect and E6 Apex may serve a customer base with a wide variety of constantly changing hardware, operating system software, packaged software applications and networking platforms.
Customer may experience difficulty in integrating E6 Connect or E6 GOLF with third-party applications, which would inhibit sales. E6 Connect and E6 GOLF may serve a customer base with a wide variety of constantly changing hardware, operating system software, packaged software applications and networking platforms.
Further, as a result of these scaled regulatory requirement, our disclosure may be more limited than that of other publicly reporting companies and you may not have the same protections afforded to shareholders of such companies.
Further, as a result of these scaled regulatory requirements, our disclosure may be more limited than that of other publicly reporting companies and you may not have the same protections afforded to shareholders of such companies.
If we are unable to maintain our current associations with professional athletes, or other public figures, or to do so at a reasonable cost, we could lose the high visibility or on-field authenticity associated with our products, and we may be required to modify and substantially increase our marketing investments.
If we are unable to maintain our current associations with public figures, or to do so at a reasonable cost, we could lose the high visibility or on-field authenticity associated with our products, and we may be required to modify and substantially increase our marketing investments.
If E6 Connect or E6 Apex fails to gain broad market acceptance due to its inability to support a variety of these platforms, our operating results may suffer.
If E6 Connect or E6 GOLF fails to gain broad market acceptance due to its inability to support a variety of these platforms, our operating results may suffer.
Failure to continue to obtain or maintain high-quality endorsers of our products could harm our business. We establish relationships with professional athletes, as well as other public figures such as teaching pros and influencers, to develop, evaluate and promote our products, as well as establish product authenticity with consumers.
Failure to continue to obtain or maintain high-quality endorsers of our products could harm our business. We establish relationships with public figures such as teaching pros and influencers, to develop, evaluate and promote our products, as well as establish product authenticity with consumers.
Actions taken by athletes or other endorsers, associated with our products that harm the reputations of those athletes or endorsers, could also seriously harm our brand image with consumers and, as a result, could have an adverse effect on our sales and financial condition.
Actions taken by endorsers associated with our products that harm the reputations of those endorsers could also seriously harm our brand image with consumers and, as a result, could have an adverse effect on our sales and financial condition.
To the extent we do not effectively address capacity constraints, upgrade our systems as needed and continually develop our technology and network architecture to accommodate actual and anticipated changes in technology, our business and operating results may be harmed.
To the extent we do not effectively address capacity constraints, upgrade our systems as needed and continually develop our technology and network architecture to accommodate actual and anticipated changes in technology, our business and operating results may be harmed. Our products face intense competition.
Actions taken by athletes or other endorsers, associated with our products that harm the reputations of those athletes or endorsers, could also seriously harm our brand image with consumers and, as a result, could have an adverse effect on our sales and financial condition.
Actions taken by endorsers, associated with our products that harm the reputations of endorsers could also seriously harm our brand image with consumers and, as a result, could have an adverse effect on our sales and financial condition.
We expect to continue to finance our operations with available net operating cash flows and will need to raise additional capital in the future by issuing equity or other forms of securities, which could significantly reduce the percentage ownership of our existing stockholders and substantially dilute the equity of purchasers of our common stock in this offering.
We expect to continue to finance our operations with available net operating cash flows and will need to raise additional capital in the future by issuing equity or other forms of securities, which could significantly reduce the percentage ownership of our existing stockholders and substantially dilute the equity of existing shareholders.
Our business may be adversely affected by the Ukraine-Russia war and the Israel-Hamas war, as well as macro-economic conditions such as inflation, employment levels, wage and salary levels, trends in consumer confidence and spending, reduction in consumer net worth, interest rates, the availability of consumer credit and taxation and tariff policies which may influence on public spending confidence.
Our business may be adversely affected by macro-economic conditions such as inflation, employment levels, wage and salary levels, trends in consumer confidence and spending, reduction in consumer net worth, interest rates, the availability of consumer credit and taxation and tariff policies which may influence on public spending confidence.
The COVID-19 pandemic, Ukraine war, the Israel-Hamas war, inflationary trends, shifts in consumer purchasing patterns, availability of transport, labor shortages in the shipping, trucking, and warehousing industries, port strikes, infrastructure congestion, equipment shortages and other factors have all contributed to delivery delays, greater costs and uncertainty in arranging and scheduling transport of our products.
Pandemic, wars, inflationary trends, shifts in consumer purchasing patterns, availability of transport, labor shortages in the shipping, trucking, and warehousing industries, port strikes, infrastructure congestion, equipment shortages and other factors have all contributed to delivery delays, greater costs and uncertainty in arranging and scheduling transport of our products.
Without adequate funding, a significant increase in revenue, and satisfaction of our outstanding payables, we may not be able to achieve profitability in the existing lines of business and attract further capital. As of April 14, 2025, we had available cash resources of approximately $9,000,000.
Without adequate funding, a significant increase in revenue, and satisfaction of our outstanding payables, we may not be able to achieve profitability in the existing lines of business and attract further capital. As of April 15, 2026, we had available cash resources of approximately $7,800,000.
Poor performance by our endorsers, a failure to continue to correctly identify future athletes, public figures or sports organizations, to use and endorse our products or a failure to enter into cost-effective endorsement arrangements with prominent athletes, public figures, and sports organizations could adversely affect our brand, sales and profitability. we are also subject to laws, regulations and industry standards relating to endorsements and influencer marketing.
Poor performance by our endorsers, a failure to continue to correctly identify future public figures or sports organizations, to use and endorse our products or a failure to enter into cost-effective endorsement arrangements with prominent public figures and sports organizations could adversely affect our brand, sales and profitability.
Many of these laws, regulations and industry standards are changing and may be subject to differing interpretations, are costly to comply with or inconsistent among jurisdictions. Our business may be affected by seasonality, which could result in fluctuations in our operating results. We expect to experience moderate fluctuations in aggregate sales volume during the year.
We are also subject to laws, regulations and industry standards relating to endorsements and influencer marketing. Many of these laws, regulations and industry standards are changing and may be subject to differing interpretations, are costly to comply with or inconsistent among jurisdictions. Our business may be affected by seasonality, which could result in fluctuations in our operating results.
Certain of the Company’s large shareholders, including our officers and directors, represented approximately 66.3% of the Company’s voting rights as of April 14, 2025.
Certain of the Company’s large shareholders, including our officers and directors, represented approximately 49.5% of the Company’s voting rights as of December 31, 2025.
We rely heavily on supply chain reliability and predictability in producing, transporting and delivering our products.
We rely heavily on supply chain reliability and predictability and continued disruption in our supply chain could have a material adverse impact on operations. We rely heavily on supply chain reliability and predictability in producing, transporting and delivering our products.
The results of audits or related disputes could have an adverse effect on our financial statements for the period or periods for which the applicable final determinations are made. -26- To the extent we may rely on endorsements or testimonials, we will review any relevant relationships for compliance with the Endorsement Guides and we will otherwise endeavor to follow the FTC Act and other legal standards applicable to our advertising.
To the extent we may rely on endorsements or testimonials, we will review any relevant relationships for compliance with the Endorsement Guides and we will otherwise endeavor to follow the FTC Act and other legal standards applicable to our advertising.
Moreover, a product lawsuit or claim, regardless of merit, could generate negative publicity about our products, which could have a material effect on our brand, business, prospects, results of operations and financial condition.
We may face lawsuits or claims if our products do not perform as expected, malfunction or are used without complying with their specifications. Moreover, a product lawsuit or claim, regardless of merit, could generate negative publicity about our products, which could have a material effect on our brand, business, prospects, results of operations and financial condition.
In addition, our customers may cancel orders, change delivery schedules or change the mix of products ordered with minimal notice. As a result, we may not be able to accurately predict our quarterly sales. Accordingly, our results of operations are likely to fluctuate significantly from period to period.
As a result, we may not be able to accurately predict our quarterly sales. Accordingly, our results of operations are likely to fluctuate significantly from period to period.
Additionally, legal regimes outside the U.S., particularly those in Asia, including China, may not always protect intellectual property rights to the same degree ad U.S. laws, or the time required to enforce our intellectual property rights under these legal regimes may be lengthy and delay our recovery. -25- We may become subject to product liability lawsuits or claims, which could harm our financial condition and liquidity if we are not able to successfully defend or insure against such claims.
Additionally, legal regimes outside the U.S., particularly those in Asia, including China, may not always protect intellectual property rights to the same degree as U.S. laws, or the time required to enforce our intellectual property rights under these legal regimes may be lengthy and delay our recovery.
A downturn in the global economy, or in a regional economy in which we have significant sales, could have a material adverse effect on consumer purchases of our products, our results of operations and our financial position, and a downturn adversely affecting our consumer base could have a disproportionate impact on our business. -23- There continues to be a significant and growing volatility and uncertainty in the global economy, which has gone on during and after the Coronavirus pandemic affecting all business sectors and industries.
A downturn in the global economy, or in a regional economy in which we have significant sales, could have a material adverse effect on consumer purchases of our products, our results of operations and our financial position, and a downturn adversely affecting our consumer base could have a disproportionate impact on our business. -18- We have a material weakness in our internal controls, which could cause our financial reporting to be unreliable and lead to misinformation being disseminated to the public.
We expect revenues in the first and fourth fiscal quarters to exceed those in the second and third fiscal quarters. However, the mix of product sales may vary considerably from time to time as a result of changes in seasonal and geographic demand for golf equipment and in connection with the timing of significant sporting events.
However, the mix of product sales may vary considerably from time to time as a result of changes in seasonal and geographic demand for golf equipment and in connection with the timing of significant sporting events. In addition, our customers may cancel orders, change delivery schedules or change the mix of products ordered with minimal notice.
They also say that if there is a connection between an endorser and the marketer that consumers would not expect and it would affect how consumers evaluate the endorsement, that connection should be disclosed. Another principle in the Endorsement Guides applies to ads that feature endorsements from people who achieved exceptional, or even above average, results from using a product.
The Endorsement Guides require endorsements to express the endorser’s genuine opinion and prohibit claims that the marketer could not legally. They also say that if there is a connection between an endorser and the marketer that consumers would not expect and it would affect how consumers evaluate the endorsement, that connection should be disclosed.
These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our common stock . -28- Certain of the Company’s large shareholders may be able to exert significant influence on the Company and their interest may conflict with the interest of its shareholders.
If the conversion price of the Series A Preferred Stock decreases, the number of shares underlying the Series A Preferred Stock will increase, which would materially dilute the ownership of our stockholders. -22- Certain of the Company’s large shareholders may be able to exert significant influence on the Company and their interest may conflict with the interest of its shareholders.
We do not currently use the derivative markets to hedge foreign currency fluctuations. If we are unable to respond effectively to changes in market trends and consumer preferences, our market share, net sales and profitability could be adversely affected.
Supply chain disruptions and adverse consequences from aggressive trade policies could have a material adverse impact on our profitability and financial performance. If we are unable to respond effectively to changes in market trends and consumer preferences, our market share, net sales and profitability could be adversely affected.
In addition, tax legislation enacted in the future could negatively impact our current or future tax structure and effective tax rates. We could be subject to changes in tax rates, adoption of new tax laws, additional tax liabilities or increased volatility in our effective tax rate. We are subject to the tax laws in the U.S. and numerous foreign jurisdictions.
In addition, tax legislation enacted in the future could negatively impact our current or future tax structure and effective tax rates.
If the Company’s common stock ceases to be listed for trading on the Nasdaq Market, the Company would expect its common stock would be traded on one of the three tiered marketplaces of the OTC Markets Group. -29- If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.
Further, we would likely become a “penny stock”, which would make trading of our common stock more difficult. -23- If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.
On August 19, 2024, the Company received a written notification from the Listing Qualifications Department (the “Staff”) of the Nasdaq Stock Market (“Nasdaq”) notifying the Company that, 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 “Equity Rule”).
On August 19, 2024, we received a delist notice from the Staff of Nasdaq notifying us that the listing of our Class A common stock was not in compliance with the minimum market value of publicly held securities requirement and the minimum shareholders’ equity requirement set forth in Nasdaq Listing Rules.
On November 5, 2024, 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 per share.
On November 5, 2024, we received a delist notice from the Staff of Nasdaq notifying us that the listing of our Class A common stock was not in compliance with the minimum bid price requirement of $1.00 per share set forth in Nasdaq Listing Rules.
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Our growth strategy is based upon increasing the number of our clients and our consolidated revenue by making successful acquisitions and integrating businesses that provide comparable or complementary cyber security services. As of December 31, 2024, our business was not profitable.
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Our growth strategy is based upon expanding sales of our golf simulator hardware and software products, developing our franchise operations, increasing recurring software subscription revenue, and pursuing strategic growth opportunities. As of December 31, 2025, our business was not profitable.
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Our international operations involve inherent risks which could result in harm to our business. As we expand our business internationally a larger volume of our products will begin to be sold outside of the U.S.
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We expect to experience moderate fluctuations in aggregate sales volume during the year. We expect revenues in the first and fourth fiscal quarters to exceed those in the second and third fiscal quarters.
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Accordingly, we are subject to the risks generally associated with global trade and doing business abroad, which include foreign laws and regulations, varying consumer preferences across geographic regions, political unrest, disruptions or delays in cross-border shipments and changes in economic conditions and countries in which our products are sold.
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Another principle in the Endorsement Guides applies to ads that feature endorsements from people who achieved exceptional, or even above average, results from using a product.
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This includes, for example, the uncertainty surrounding the effect of Brexit, including changes to the legal and regulatory framework that apply to the United Kingdom and its relationship with the European Union, as well as new and proposed changes affecting tax laws and trade policy in the U.S. and elsewhere as further described in other risks in this section.
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The conversion of our outstanding Series A Preferred Stock, or any additional shares of Series A Preferred Stock we issue in the future upon the exercise of the Series A Preferred Warrants, into Class A common stock will dilute the ownership interest of our stockholders.
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The U.S. presidential administration has indicated a focus on policy reforms that discourage U.S. corporations from outsourcing manufacturing and production activities to foreign jurisdictions, including tariffs or penalties on goods manufactured outside the U.S., which may require us to change the way we conduct business and adversely affect our results of operations. -18- We rely heavily on supply chain reliability and predictability and continued disruption in our supply chain could have a material adverse impact on operations.
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Our Series A Preferred Stock provide that if, while the Series A Preferred Stock are outstanding, we sell any Class A common stock and/or Class A common stock equivalents other than in connection with certain exempt issuances, at a purchase price per share less than the conversion price of the Series A Preferred Stock in effect immediately prior to such sale, then immediately after such sale the exercise price of the Series A Preferred Stock then in effect will be reduced to an amount equal to the new issuance price, and, the number of shares issuable upon conversion of the Series A Preferred Stock will be proportionately adjusted such that the aggregate price will remain unchanged, subject to the floor price provided for in the Series A Preferred Stock.
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Supply chain disruptions and adverse consequences from aggressive trade policies could have a material adverse impact on our profitability and financial performance. We face risks associated with operating in international markets. We operate in a global marketplace and international sales growth is a key element of our growth strategy.
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In addition, if on any six month anniversary after the date the Series A Preferred Stock are issued (each, a “Reset Date”), the conversion price then in effect is greater than the closing price of the Class A common stock as of such applicable Reset Date (each, a “Reset Price”), immediately after the close of trading on such applicable Reset Date the conversion price shall automatically lower to the Reset Price.
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We are subject to risks associated with our international operations, including but not limited to: ● Foreign currency exchange rates; ● Economic or governmental instability in foreign markets in which we operate or in those countries from which we source our merchandise; ● Unexpected changes in laws, regulatory requirements, taxes or trade laws; ● Increases in the cost of transporting goods globally; ● Acts of war, terrorist attacks, outbreaks of contagious disease and other events over which we have no control; and ● Changes in foreign or domestic legal and regulatory requirements resulting in the imposition of new or more onerous trade restrictions, tariffs, duties, taxes, embargoes, exchange or other government controls.
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The next Reset Date will be on April 22, 2026.
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Any of these risks could have an adverse impact on our results of operations, financial position or growth strategy. Furthermore, some of our international operations are conducted in parts of the world that experience corruption to some degree. Our employees and resellers could take actions that violate applicable anti-corruption laws and regulations.
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Finally, if at any time on or after the date of issuance there occurs any stock split, stock dividend, stock combination recapitalization or other similar transaction involving the Class A common stock, the conversion price shall be reduced to 120% of the quotient determined by dividing (x) the sum of the volume weighted average price of the Class A common stock for each of the five trading days with the lowest volume weighted average price of the Class A common stock during the fifteen consecutive trading day period ending and including the trading day immediately preceding the sixteenth trading day after such event date, divided by (y) five.
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Violations of these laws, or allegations of such violations, could have an adverse impact on our reputation, our results of operations or our financial position. Foreign exchange movements may also negatively affect the relative purchasing power of consumers and their willingness to purchase discretionary premium goods, such as our products, which would adversely affect our net sales.
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We have in the past failed to maintain compliance with all applicable continued listing requirements of the Nasdaq Stock Market, and if we fail to maintain compliance with all applicable continued listing requirements of the Nasdaq Capital Market in the future, we will not be afforded traditional cure periods under Nasdaq rules and our Class A common stock may be delisted from Nasdaq, which could have an adverse impact on the liquidity and market price of our common stock.
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Global economic, political and industry conditions constantly change and unfavorable conditions may have a material adverse effect on our business and results of operations. We are a global company with worldwide operations.
Added
We requested a hearing before a Nasdaq hearing panel (the “Panel”) to present a plan to regain compliance with all the continued listing requirements of Nasdaq and such hearing was held May 15, 2025.
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Volatile economic, political and market conditions, such as political or economic instability, civil unrest, trade sanctions, acts of terrorism in the regions or hostilities, including the recent conflict between Russia and Ukraine, may have a negative impact on our operating results and our ability to achieve our business objectives.
Added
On May 30, 2025, the Panel provided us an exception with various milestones to regain compliance, including with Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Rule”) until July 8, 2025, and the minimum shareholders’ equity requirement until July 30, 2025.
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We may not have insight into economic and political trends that could emerge and negatively affect our business. In addition, significant or volatile changes in exchange rates between the U.S. dollar and other currencies may have a material adverse impact upon our liquidity, revenues, costs and operating results. Our products face intense competition.
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In addition, the Panel directed that the listing of our Class A common stock be transferred to the Nasdaq Capital Market, effective at the open of business on June 3, 2025. On July 17, 2025, the Staff confirmed that we had regained compliance with the Bid Price Rule as required by the Panel’s decision.
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In addition, the on-going uncertainty in Europe and any resulting disruption could adversely impact our net sales in EMEA and globally unless and until economic conditions in that region improve and the prospects of national debt defaults in Europe decline.
Added
On August 1, 2025, we received a letter from Nasdaq notifying us that we had demonstrated compliance with Nasdaq Listing Rule 5550(b)(1) (the “Equity Rule”), as required by the Panel’s decision, and, following our phase down to the Nasdaq Capital Market on June 3, 2025, we demonstrated compliance with the minimum market value of publicly held securities required by Nasdaq Listing Rule 5550(a)(5).
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Further or future downturns may adversely affect traffic on our on-line sales portals and could materially impact and adversely affect our results of operations, financial position and growth strategy. we have a material weakness in our internal controls, which could cause our financial reporting to be unreliable and lead to misinformation being disseminated to the public.
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Pursuant to the letter, in application of Listing Rule 5815(d)(4)(B), we will be subject to a Mandatory Panel Monitor for a period of one year from the date of the letter.
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We estimate these costs to be in excess of $250,000 per year and may be higher if our business volume or business activity increases significantly.
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If, within that one-year monitoring period, the Staff finds us again out of compliance with the Equity Rule, notwithstanding Rule 5810(c)(2), we will not be permitted to provide the Staff with a plan of compliance with respect to that deficiency and Staff will not be permitted to grant additional time for us to regain compliance with respect to that deficiency, nor will we be afforded an applicable cure or compliance period pursuant to Rule 5810(c)(3).
Removed
Our current estimate of costs does not include the necessary expenses associated with compliance, documentation and specific reporting requirements of Section 404 as we will not be subject to the full reporting requirements of Section 404 until we no longer qualify as a “smaller reporting company”.
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Instead, Staff will issue a delist determination letter and we will have an opportunity to request a new hearing.
Removed
Current economic and political conditions make tax laws and regulations, or their interpretation and application, in any jurisdiction subject to significant change.
Added
Delisting from Nasdaq would adversely affect our ability to raise additional financing through the public or private sale of equity securities, may significantly affect the ability of investors to trade our securities and may negatively affect the value and liquidity of our common stock.
Removed
On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Tax Act”), which includes a number of significant changes to previous U.S. tax laws that impact us, including provisions for a one-time transition tax on deemed repatriation of undistributed foreign earnings, and a reduction in the corporate tax rate from 35% to 21% for tax years beginning after December 31, 2017, among other changes.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Company’s’ Cybersecurity Incident Response Policy provides specific steps for any employee that detects an attack to take to help stop the propagation of the threat and report the incident to their Superiors, the IT Team and the Security Manager. -30- While there are significant threats of all types in the modern connected world, studies show that phishing attacks and social engineering through email and other electronic means are of high concern.
Biggest changeThe Company’s’ Cybersecurity Incident Response Policy provides specific steps for any employee that detects an attack to take to help stop the propagation of the threat and report the incident to their Superiors, the IT Team and the Security Manager. -24- While there are significant threats of all types in the modern connected world, studies show that phishing attacks and social engineering through email and other electronic means are of high concern.
The Company’s’ Cybersecurity Policies are updated annually and reviewed by Independent 3rd Party Vendors to certify compliance. The Company requires Cybersecurity Awareness training for all new hires and a minimum of an annual review of such policies for all employees.
The Company’s’ Cybersecurity Policies are updated annually and reviewed by Independent Third Party Vendors to certify compliance. The Company requires Cybersecurity Awareness training for all new hires and a minimum of an annual review of such policies for all employees.
All 3rd party vendors’ security policies are reviewed and updated as part of our annual Security Risk Assessment. Access to sensitive data is strictly regulated and provided on a need to know basis.
All third party vendors’ security policies are reviewed and updated as part of our annual Security Risk Assessment. Access to sensitive data is strictly regulated and provided on a need to know basis.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES Our headquarters are located in Centerville, Utah, where we occupy an office space under a three-year lease that we entered into in December 2022. Pursuant to the lease agreement, the term of the lease ends in November 2025.
Biggest changeITEM 2. PROPERTIES Our headquarters are located in Centerville, Utah, where we occupy an office space under a three-year lease that we entered into in December 2022. During the year ended December 31, 2025, the Company entered into a lease extension agreement related to its office facility located in Centerville City, Utah.
Our warehouse is located in North Salt Lake City, Utah, which we occupy under a five-year lease that we entered into in June 2023. Pursuant to the lease agreement, the term of the lease ends in May 2028. We believe that our existing facilities are adequate for our current needs.
The amendment extended the lease term through November 30, 2026. Our warehouse is located in North Salt Lake City, Utah, which we occupy under a five-year lease that we entered into in June 2023. Pursuant to the lease agreement, the term of the lease ends in May 2028. We believe that our existing facilities are adequate for our current needs.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeHolders As of April 14, 2025, there were 32 holders of record of our Class A Common Stock which includes CEDE & Co., the nominee of the Depository Trust Company, with 29,881,672 shares of our Class A Common Stock issued and outstanding.
Biggest changeHolders As of April 15, 2026, there were 32 holders of record of our Class A Common Stock which includes CEDE & Co., the nominee of the Depository Trust Company.
Sale of Unregistered Securities All information related to equity securities sold by us during the period covered by this report that were not registered under the Securities Act have been included in our Form 10-Q filings and in our Form 8-K filings. Issuer Purchases of Equity Securities None. ITEM 6. [RESERVED]
Sale of Unregistered Securities All information related to equity securities sold by us during the period covered by this report that were not registered under the Securities Act have been included in our Form 10-Q filings and in our Form 8-K filings. Issuer Purchases of Equity Securities None. -26- ITEM 6. [RESERVED]
T here were 3 holders of record of our Class B Common Stock, with 1,716,860 shares of our Class B Common Stock issued and outstanding. Dividend Policy The Company has never declared or paid dividends on our Common Stock since our formation, and we do not anticipate paying dividends in the foreseeable future.
There were 3 holders of record of our Class B Common Stock, with 19,999 shares of our Class B Common Stock issued and outstanding. Dividend Policy The Company has never declared or paid dividends on our Common Stock since our formation, and we do not anticipate paying dividends in the foreseeable future.
Removed
For the year ended December 31, 2022, the Company recorded a charge related to the revaluation of certain warrants which is presents as a Dividend to Common Stockholders, however, no actual dividend was declared or paid.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeCash Flows Year Ended December 31, 2024 2023 Net cash used in operating activities $ (3,995,606 ) $ (6,133,221 ) Net cash provided by (used in) investing activities 741,143 (2,620,558 ) Net cash provided by financing activities 8,738,976 4,495,077 Increase (decrease) in cash $ 5,484,513 $ (4,258,702 ) Operating Activities Net cash used in operating activities was $3,995,606 for the year ended December 31, 2024, and was primarily due to the net loss of $8,795,419, which was partially offset by non-cash expenses of $3,683,361 and an increase in deferred revenue of $1,408,786.
Biggest changeSummary of Cash Flows The following table summarizes our cash flows for the years ended December 31 2025 and 2024: 2025 2024 Change Net cash used in operating activities $ (1,698,381 ) $ (3,995,606 ) $ 2,297,225 Net cash (used in) provided by investing activities (3,436,933 ) 741,143 (4,178,076 ) Net cash provided by financing activities 6,822,500 8,738,976 (1,916,476 ) Net increase in cash and cash equivalents $ 1,687,186 $ 5,484,513 $ (3,797,327 ) Operating Activities: During the year ended December 31, 2025, we used $1,698,381 in cash from operating activities, a decrease in use of $2,297,225 compared to the cash used in operating activities of $3,995,606 during the year ended December 31, 2024.
The preparation of our consolidated financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, costs and expenses, and the disclosure of contingent assets and liabilities in our consolidated financial statements.
Critical Accounting Estimates The preparation of our consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect reported amounts of assets, liabilities, revenues, and expenses.
Net cash used in investing activities was $2,620,558 for the year ended December 31, 2023, of which $2,493,145 the purchase of short-term investments. Financing Activities Net cash provided by financing activities was $8,738,976 for the year ended December 31, 2024, of which $8,902,681 was net proceeds from PIPE loans.
The prior year investing activities included cash inflows related to the sale of short-term investments held by the Company, which did not recur in 2025. Financing Activities Net cash provided by financing activities was $6,822,500 for the year ended December 31, 2025, compared to $8,738,976 for the year ended December 31, 2024, a decrease of $1,916,476.
This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains numerous forward-looking statements, all of which are based on our current expectations and could be affected by the uncertainties and risks described throughout this filing, particularly in “Item 1A.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following management’s discussion and analysis should be read in conjunction with our historical financial statements and the related notes thereto. This management’s discussion and analysis contains forward-looking statements, such as statements of our plans, objectives, expectations and intentions.
Removed
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our financial statements and the related notes contained elsewhere in this Annual Report on Form 10-K and is intended to provide information necessary to understand our audited consolidated financial statements for the year ended December 31, 2024 compared to the year ended December 31, 2023 and highlight certain other information which, will enhance a reader’s understanding of our financial condition, changes in financial condition, and results of operations.
Added
Any statements that are not statements of historical fact are forward-looking statements. When used, the words “believe,” “plan,” “intend,” “anticipate,” “target,” “estimate,” “expect” and the like, and/or future tense or conditional constructions (“will,” “may,” “could,” “should,” etc.), or similar expressions, identify certain of these forward-looking statements.
Removed
In particular, the discussion is intended to provide an analysis of significant trends and material changes in our financial position and the operating results of our business during the year ended December 31, 2024, as compared to the year ended December 31, 2023. These historical financial statements may not be indicative of our future performance.
Added
These forward-looking statements are subject to risks and uncertainties, including those under “Risk Factors” in our filings with the Securities and Exchange Commission (“SEC”) that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements.
Removed
Risk Factors.” -32- Our Business Since 1983, the Company has been passionate about driving the golf industry with innovative, indoor golf solutions. We build products that capture the spirit of golf. Our mission is to help grow the game by making it more available, more approachable and more affordable, through technology – because we believe golf is for everyone.
Added
Our actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors. See “Forward-Looking Statements; Risk Factor Summary.” References in this management’s discussion and analysis to “we,” “us,” “our,” “the Company,” “our Company” or “TruGolf” refer to TruGolf Holdings, Inc. and its subsidiaries.
Removed
Our team has built award-winning video games (including Links , a popular sports game for PC), innovative hardware solutions, and an all-new e-sports platform to connect golfers around the world with TruGolf E6 Connect Software, our premier software engine. Since TruGolf’s beginning, we have continued to define and redefine what is possible with golf technology.
Added
Overview Business We design, develop, manufacture, and sell golf simulators and related software for residential and commercial applications. Our product offerings include portable, professional, commercial, and custom simulators, as well as standalone software products including E6 Connect and E6 GOLF. We also offer multi-sport gaming applications.
Removed
In addition to offering a variety of custom, professional, and portable golf simulators, TruGolf’s latest launch monitor, Apogee, was created to improve accuracy and to make using the launch monitor easier.
Added
Our operations are conducted through our wholly-owned subsidiary, TruGolf, Inc., a Nevada corporation (“TruGolf Nevada”), which has been developing indoor golf simulation software and hardware since 1999. On January 31, 2024, we consummated a business combination pursuant to which TruGolf Nevada became our wholly-owned subsidiary, and our name was changed from Deep Medicine Acquisition Corp. to TruGolf Holdings, Inc.
Removed
Features of Apogee include: a unique Apogee Voice Assistant, a voice command system that allows users to navigate their TruGolf E6 Connect Software gameplay within rounds and practice sessions; Laser Launchpad, a laser indicator that shows users where to place the ball and when the system is ready to record a swing and Point-of-Impact (POI) slow-motion replay video.
Added
We commenced trading on the Nasdaq Capital Market under the ticker symbol “TRUG” on February 1, 2024. During the year ended December 31, 2025, several significant developments shaped our financial results and capital structure: Franchise Operations.
Removed
Our suite of hardware offerings in the golf technology space is expansive, offering something for virtually everyone from gamers to beginners to professionals, and all consumers in between. Hardware offerings are sold through a global network of authorized resellers, retail outlets and direct-to-consumer through a dedicated TruGolf sales team.
Added
Through our subsidiary TruGolf Links Franchising, LLC (“Links”), formed in May 2024, we continued to develop our indoor golf franchise model, generating $13,125 in franchise revenue during the year ended December 31, 2025. Reverse Stock Split. On June 23, 2025, we effected a 1-for-50 reverse stock split of our Class A and Class B common stock.
Removed
Our suite of hardware offerings ranges from entry level pricing at just under $400, to well over $100,000 for custom projects, creating a wide range of pricing options for nearly all consumers, and providing TruGolf with a competitive advantage in creating a wide consumer base as compared to its competitors (who often only focus in a narrow consumer price range).
Added
On March 27, 2026, we effected a 1-for-10 reverse stock split of our Class A and Class B common stock. All share and per share amounts in this discussion have been retroactively adjusted to reflect both reverse stock splits. Nasdaq Compliance.
Removed
TruGolf creates top golf technology software in the marketplace through its TruGolf E6 Connect and E6 Apex Software.
Added
Following a Nasdaq hearing panel process, we regained full compliance with all Nasdaq continued listing requirements by August 1, 2025. We are currently subject to a one-year Mandatory Panel Monitor through August 2026, during which any subsequent non-compliance with the Equity Rule would result in an expedited delisting determination. PIPE Note Extinguishment.
Removed
Importantly, TruGolf’s software is designed not only for use with our suite of hardware offerings in the golf technology space, but also integrates with more than twenty-four third party golf technology hardware manufacturers, translating to a market integration coverage equal to roughly 90% of golf technology hardware in the global market space, which allows peer-to-peer play across these golf technology hardware manufacturers, allowing for a unification of the golf technology space.
Added
In July 2025, we exchanged the entire outstanding principal balance of our PIPE Convertible Notes ($3,938,311) for 3,938 shares of our Series A Convertible Preferred Stock, reducing our total debt obligations and eliminating a significant source of dilution from note conversions. Dividend Note Settlement.
Removed
TruGolf’s software records, on average, over 725,000 indoor golf shots per day. TruGolf’s E6 Connect Software is both PC and iOS compatible and can be used both indoors and outdoors. TruGolf has leveraged its unique position as one of the industry leaders in both hardware and software golf technology solutions to organize and found the Virtual Golf Association (VGA).
Added
In April 2025, we settled approximately $3.9 million in outstanding dividend notes payable through the issuance of Class A and Class B common stock, eliminating these legacy obligations. -27- Results of Operations Year Ended December 31, 2025 Compared with Year Ended December 31, 2024 The following table sets forth our results of operations for each of the years set forth below: 2025 2024 Change Revenue $ 18,878,997 $ 21,282,649 $ (2,403,652 ) Cost of revenue 9,359,380 7,401,511 1,957,869 Gross profit 9,519,617 13,881,138 (4,361,521 ) Operating expenses: Salaries, wages and benefits 4,615,951 9,314,415 (4,698,464 ) Selling, general and administrative 11,006,020 6,669,684 4,336,336 Total operating expenses 15,621,971 15,984,099 (362,128 ) Loss from operations (6,102,354 ) (2,102,961 ) (3,999,393 ) Other income (expense): Interest income 265,708 106,400 159,308 Interest expense (3,256,687 ) (6,932,618 ) 3,675,931 Gain on fair value adjustment - 142,319 (142,319 ) Loss on extinguishment of debt (6,135,160 ) (270,594 ) (5,864,566 ) Loss on investment - 262,035 (262,035 ) Other income 600 - 600 Net loss $ (15,227,893 ) $ (8,795,419 ) $ (6,432,474 ) Revenue Revenue Category 2025 2024 Change Golf simulators (hardware and perpetual licenses) $ 14,681,994 $ 13,708,760 $ 973,234 Content software subscriptions 3,710,245 7,276,484 (3,566,239 ) Franchise revenue 13,125 - 13,125 Other (shipping, installation, and other income) 473,633 297,405 176,228 Total net revenue $ 18,878,997 $ 21,282,649 $ (2,403,652 ) Net revenues decreased $2,403,652, or 11.3%, to $18,878,997 for the year ended December 31, 2025, compared to $21,282,649 for the year ended December 31, 2024.
Removed
The VGA is a gamified virtual economy that takes place inside the TruGolf E6 Connect Software. Users have a chance to earn points through play, practice, and more – providing a worldwide leaderboard of connected indoor golfers. Each shot users take rewards them with points.
Added
The following discussion presents each revenue category separately. Golf Simulators: Golf simulator revenue, which includes hardware and perpetual software licenses, increased $973,234, or 7.1%, to $14,681,994 for the year ended December 31, 2025, compared to $13,708,760 for the year ended December 31, 2024, primarily driven by increased unit volumes in our commercial channels coupled with growth in residential installations.
Removed
These points can be used to purchase in-game enhancements, or to enter virtual golf tournaments with real world prizes. The VGA is broken into three models: ● Game Analysis – rewards TruGolf software users who measure their game. Users can set specific goals (e.g., shots hit per month, speed and distance gains, dispersion reduction) and earn points for hitting milestones.
Added
Content Software Subscriptions: Content software subscriptions revenue decreased $3,566,239, or 49.0%, to $3,710,245 for the year ended December 31, 2025, compared to $7,276,484 for the year ended December 31, 2024.
Removed
At the end of each month, users can see how they compared against all other users utilizing the Game Analysis features. ● Connected Golf – rewards users for joining with their friends and playing golf online.
Added
The decrease is due to how the Company sold its content subscription licenses during the year ended December 31, 2025, which has resulted in $1,329,184 in deferred revenue to be recognized over the next twelve months.
Removed
Earn points for playing a new course or linking up to play nine holes with another player utilising TruGolf software. ● Virtual Golf Association Events – events are worldwide leaderboard format, flighted by handicap, where users play and compete to shoot the lowest score. These contests include stroke play, closest to the pin, match play, stableford, and more.
Added
Franchise Revenue: Franchise revenue of $13,125 was recognized for the year ended December 31, 2025, representing initial fees from our TruGolf Links Franchising subsidiary, which was formed in May 2024. No franchise revenue was recognized in the prior year.
Removed
Users earn points based on how they finish in their division.
Added
Other Revenue: Other revenue, which includes shipping income, installation income, and other ancillary items, increased $176,228 to $473,633 for the year ended December 31, 2025, from $297,405 for the year ended December 31, 2024, primarily driven by an increase in sales of ancillary products used with our MultiSport Arcade system. -28- Cost of Goods Sold and Gross Profit Cost of goods increased by $1,957,869, or 26.5% to $9,359,380 for the year ended December 31, 2025, as compared to $7,401,511 for the year ended December 31, 2024.
Removed
In totality, TruGolf’s business model is designed to be positioned as the hub of golf technology, with groundbreaking hardware technologies that we believe can become the industry standard and unify the industry as a whole by serving as the leader of golf technology software solutions through its TruGolf’s software. -33- Principal External Factors Affecting Our Operating Results We believe that our performance and future success depend on many factors that present significant opportunities for us but also pose risks and challenges, including those discussed below and in the section entitled “Risk Factors”. ● Market acceptance.
Added
Substantially all of the increase was attributable to $2,199,985 in non-recurring inventory adjustments arising from the reconciliation of inventory records in connection with the Company’s transition to a new accounting system during the year. Management does not expect similar adjustments to recur following the completion of the system transition.
Removed
The growth of our business depends on our ability to gain broader acceptance of our current products by continuing to make users aware of the significant benefits of our products to generate increased demand and frequency of use, and thus increase our sales.
Added
Excluding these adjustments, cost of goods sold would have been $7,159,395, relatively flat year-over-year, consistent with prior year levels relative to revenue volume. Management believes this adjusted measure provides useful information to investors as it reflects the Company’s ongoing cost structure without the impact of the system transition-related adjustments.
Removed
Our ability to grow our business will also depend on our ability to expand our customer base in existing or new target markets, including international markets.
Added
Gross profit decreased $4,361,521, or 31.4%, to $9,519,617 for the year ended December 31, 2025, compared to $13,881,138 for the year ended December 31, 2024. Gross margin declined to 50.4% from 65.2%, primarily reflecting the impact of the inventory reconciliation adjustments described above and the decline in higher-margin content software subscription revenue.
Removed
Although we have increased the number of users of TruGolf hardware and software product offerings and continue to grow our channels globally through established relationships and focused sales efforts, we cannot provide assurance that our efforts will continue to increase the use of our products. ● Sales force size and effectiveness.
Added
Excluding the $2,199,985 inventory adjustments, adjusted gross profit of $11,719,602 and adjusted gross margin would have been approximately 62.1%, compared to 65.2% in the prior year. Management presents these adjusted measures to provide investors with additional insight into the Company’s underlying operating performance exclusive of the system transition-related adjustments.
Removed
The rate at which we grow our sales force and expansion channels and the speed at which newly hired salespeople and sales channels become effective can impact our revenue growth and our costs incurred in anticipation of such growth.
Added
Operating Expenses Total operating expenses decreased $362,128, or 2.3%, to $15,621,971 for the year ended December 31, 2025, compared to $15,984,099 for the year ended December 31, 2024. While the aggregate change was nominal, this overall stability masks significant and largely offsetting movements within individual expense categories, each of which is discussed below.
Removed
We intend to continue to make significant investments in our sales and marketing organization and channels by increasing the number of sales representatives and expanding our international programs to help facilitate further adoption of our products as well as broaden awareness of our products to new customers.
Added
Salaries, Wages and Benefits: Salaries, wages, and benefits decreased $4,698,464, or 50.4%, to $4,615,951 for the year ended December 31, 2025, compared to $9,314,415 for the year ended December 31, 2024. The decrease reflects a significant increase in the portion of employee compensation capitalized as software development costs during the year.
Removed
We are slowly expanding into EMEA through a quickly growing network of distributors that will each slowly develop their respective territories, sales from EMEA are still below 5% of total sales. We have also signed a Joint Venture agreement with a partner in China to manage all distribution needs across Asia.
Added
During the year ended December 31, 2025, the Company capitalized $3,231,490 in software development costs, including the associated employee compensation, representing a full year of capitalization activity compared to partial year in 2024, during which capitalization commenced on March 1, 2024.
Removed
We are not required to invest in any of these markets, and as such take a lower margin on products sold there, therefore we expect slowly growing impacts on top line revenue from these globalization efforts. ● Product and geographic mix; timing.
Added
The increase in capitalized compensation reduced the amount of salary expense recognized in the consolidated statements of operations and is consistent with the Company’s continued investment in its suite of software platforms. Total compensation costs incurred, including both expensed and capitalized amounts, were relatively consistent with prior year levels.
Removed
Our financial results, including our gross margins, may fluctuate from period to period based on the timing of orders, fluctuations in foreign currency exchange rates and the number of available selling days in a particular period, which can be impacted by a number of factors, such as holidays or days of severe inclement weather in a particular geography, the mix of products sold and the geographic mix of where products are sold.
Added
Selling, General and Administrative: SG&A increased $4,336,336, or 65.0%, to $11,006,020 for the year ended December 31, 2025, compared to $6,669,684 for the year ended December 31, 2024.
Removed
Principal Components of Revenues, Costs and Expenses Revenues Our revenues come from the sale of TruGolf software and hardware, which products are sold through a global network of authorized resellers, retail outlets and direct-to-consumer through a dedicated TruGolf sales team.
Added
The increase was primarily driven by the following: (i) outside contractor costs increased $1,329,017, reflecting the Company’s increased utilization of third-party contractors to supplement the internal capabilities following the shift of employee compensation to capitalized software development costs described above; (ii) amortization expense increased $976,600, all of which reflects the increase in amortization of capitalized software development costs from $161,350 in 2024 to $1,137,950 in 2025, as the Company’s software projects were completed and placed into operation during the year.
Removed
Cost of Revenues Cost of revenues consists primarily of costs that are directly related to the delivery of our TruGolf hardware and software products, excluding depreciation but including direct material, labor, manufacturing overhead, reserves for estimated warranty costs and charges to write-down the inventory carrying value when it exceeds the estimated net realizable value.
Added
The significant increase from the prior year reflects the fact that capitalization commenced on March 1, 2024, with the first full year of amortization recognized in 2025.
Removed
Operating Expenses Royalties We have agreements with certain software golf hardware vendors who bundle our tracking and golf course software with their hardware. We pay them a royalty based on the number of units or subscriptions they sell. The royalty percentages typically range between 20% to 30%.
Added
This amortization is expected to continue at similar or higher levels in future periods as the capitalized development portfolio continues to amortize over its estimated three-year useful lives; (iii) professional fees increased $280,797, reflecting higher legal and accounting costs associated with the Company’s public company compliance obligations and financial statement preparation; and (iv) credit card processing fees increased $140,763, consistent with changes in the Company’s revenue mix and payment processing activity during the year.
Removed
The royalty agreements are for one year, with automatic renewals unless each party gives a thirty-day written notice of the intent to cancel the contract prior to the renewal date. -34- Salaries, Wages and Benefits Salaries, wages and benefits are expenses earned by our employees in the executive, information technology, finance and accounting, human resources, administrative functions and outside contractors.
Added
Loss From Operations Loss from operations increased $3,999,393 to $(6,102,354) for the year ended December 31, 2025, compared to $(2,102,961) for the year ended December 31, 2024.
Removed
Also included in salaries, wages and benefits are employer payroll taxes, health, dental and life insurance expenses. Selling, General and Administrative Sales and marketing expenses consist primarily of advertising, training events, brand building, product marketing activities and installation and shipping costs.
Added
The widening operating loss was driven primarily by the $4,361,521 decline in gross profit, which was largely attributable to the inventory reconciliation adjustments and the decline in higher-margin software subscription revenue, while total operating expenses remained essentially flat year-over-year. -29- Other Income (Expense) Total other expense, net was $(9,125,539) for the year ended December 31, 2025, compared to $(6,692,458) for the year ended December 31, 2024, an increase in expense of $2,433,081.
Removed
We expect sales and marketing costs will continue to increase as we expand our international selling and marketing activities, hire additional personnel, and build brand awareness through advertising and training.
Added
The net change reflects significant offsetting movements within individual components, as described below. Interest Income: Interest income increased $159,308 to $265,708 for the year ended December 31, 2025, compared to $106,400 for the year ended December 31, 2024, reflecting higher average cash balances held during the year.
Removed
General and administrative expenses consist primarily of professional fees paid for legal, accounting, auditing, and consulting services, bad debt, licenses and association dues, facilities (including rent and utilities) bank and credit card processing fees and other expenses related to general and administrative activities.
Added
Interest Expense: Interest expense decreased $3,675,931, or 53.0%, to $3,256,687 for the year ended December 31, 2025, compared to $6,932,618 for the year ended December 31, 2024.
Removed
We anticipate that our general and administrative expenses will continue to increase as we continue hiring to support our growth. We also anticipate that we will incur increased accounting, audit, legal, regulatory, compliance, and investor and public relations expenses associated with operating as a public registrant.
Added
The decrease reflects the elimination of interest obligations associated with the PIPE Convertible Notes following their exchange for Series A Preferred Stock in July 2025, as well as the settlement of the dividend notes payable in April 2025, both of which significantly reduced the Company’s average interest-bearing debt balance during the year.
Removed
Interest Expense Interest expense consists of interest expenses associated with issuing notes and balances outstanding under our debt obligations and the gross sales royalty payable, the amortization of debt issuance costs and original issue discounts associated with such borrowings.
Added
Gain on Fair Value Adjustment: No gain on fair value adjustment was recorded for the year ended December 31, 2025, compared to a gain of $142,319 for the year ended December 31, 2024. The prior year gain related to the revaluation of derivative liabilities associated with the PIPE Warrants, which were exchanged in April 2025 and no longer exist.
Removed
Principal Cash Flows We generate cash primarily from our operating activities and, historically, we have used cash flows from operating activities and available borrowings under certain notes payable as the primary sources of funds to purchase inventory and to fund working capital and capital expenditures, growth and expansion opportunities (see also “Liquidity and Capital Resources” below).
Added
Loss on Extinguishment of Debt: Loss on extinguishment of debt was $6,135,160 for the year ended December 31, 2025, compared to $270,594 for the year ended December 31, 2024. The 2025 loss arose primarily from the exchange of the outstanding PIPE Convertible Notes for Series A Preferred Stock in July 2025.
Removed
The management of our working capital is closely tied to operating cash flows, as working capital can be impacted by, among other things, our accounts receivable activities, the level of inventories, which may increase or decrease in response to current and expected demand, and the size and timing of our trade accounts payable payment cycles.
Added
The improvement in interest expense discussed above is directly related to these same transactions, and both items should be considered together when evaluating the net economic impact of the debt restructuring activity completed during 2025.
Removed
Critical Accounting Policies and Significant Judgments and Estimates Our management’s discussion and analysis of financial condition and results of operations is based on our consolidated financial statements. Our consolidated financial statements are prepared in accordance with GAAP.
Added
Gain on Investment: No gain on investment was recorded for the year ended December 31, 2025, compared to a gain of $262,035 for the year ended December 31, 2024. The prior year gain related to short-term money market investments.
Removed
We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis.
Added
Net Loss Net loss was $15,227,893 for the year ended December 31, 2025, compared to $8,795,419 for the year ended December 31, 2024, an increase of $6,432,474.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Because we are a smaller reporting company, we are not required to provide the information called for by this Item. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The information called for by Item 8 is included beginning on page F-1 contained in this Annual Report on Form 10-K. ITEM 9.
Biggest changeITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Because we are a smaller reporting company, we are not required to provide the information called for by this Item. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The information called for by Item 8 is included beginning on page F-1 contained in this Annual Report on Form 10-K.
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CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.