Product Development and Technology - TruGolf's latest launch monitor, Apogee, features a unique voice command system and is designed to improve accuracy, enhancing user experience [170]. - TruGolf E6 Connect Software records an average of over 725,000 indoor golf shots per day, integrating with approximately 90% of golf technology hardware globally [172]. - TruGolf's business model aims to unify the golf technology industry by providing both hardware and software solutions, positioning itself as a central hub [176]. - The company has established a global network of authorized resellers and retail outlets for its hardware offerings, enhancing market reach [171]. - The Virtual Golf Association (VGA) allows users to earn points through gameplay, with a worldwide leaderboard format and various competitive events [173][175]. Financial Performance - Revenues for the three months ended September 30, 2024, were $6,236,795, an increase of $2,805,060 or 81.74% compared to $3,431,735 for the same period in 2023 [210]. - Gross profit for the same period was $4,312,702, reflecting an increase of $2,414,658 or 127.22% from $1,898,044 in 2023 [210]. - Operating expenses decreased by $781,334 or 18.51% to $3,440,421 for the three months ended September 30, 2024, compared to $4,221,755 in 2023 [214]. - Revenues for the nine months ended September 30, 2024, were $15,121,980, an increase of $1,333,280 or 9.67% compared to $13,788,700 for the same period in 2023 [220]. - Net loss for the nine months ended September 30, 2024, was $2,931,370, a reduction of $5,080,519 or 63.41% compared to a net loss of $8,011,889 for the same period in 2023 [219]. Cost and Expenses - The cost of revenues increased by $390,402 or 25.46% to $1,924,093 for the three months ended September 30, 2024, from $1,533,691 in 2023 [213]. - Cost of revenues increased by $651,899 or 14.39% to $5,183,328 for the nine months ended September 30, 2024, primarily due to inflationary pricing pressures on materials and shipping costs [221]. - Operating expenses decreased by $5,279,827 or 32.85% to $10,795,100 for the nine months ended September 30, 2024, mainly due to reduced payroll and selling, general, and administrative expenses [222]. Financing and Capital - TruGolf secured PIPE financing of up to $15.5 million through the issuance of senior convertible notes and warrants, with an initial closing generating gross proceeds of $4.185 million [179]. - The company recorded a PIPE Convertible Note of $4,650,000 with an original issue discount of $465,000 from a business combination completed on January 31, 2024 [227]. - The company expects significant cash requirements of $7,000,000 to $8,000,000 for employee salaries and benefits over the next 12 months [242]. - The company may need to raise additional capital or issue debt to support ongoing operations due to continued net losses and negative operating cash flows [238]. Cash and Debt Management - As of September 30, 2024, the company had cash and cash equivalents totaling $7,452,185, primarily invested in low interest checking or savings accounts [250]. - The company has a total fixed rate debt outstanding of $14,509,137, with variable rate lines of credit having a balance of $802,738 as of September 30, 2024 [251]. - The amount exceeding the federally insured limits in bank deposit accounts was $6,125,053 as of September 30, 2024 [252]. Compliance and Risk Management - TruGolf's management emphasizes the importance of maintaining compliance with Nasdaq listing requirements to ensure liquidity and trading of its securities [167]. - The company has established an incident response plan and team to address cybersecurity risks, although there is no assurance that these efforts will fully mitigate such risks [253]. Market Trends - The simulator/screen golf market has seen a surge, with 6.2 million Americans using golf simulators in the past year, a 73% increase compared to pre-pandemic levels [191]. - The company is expanding its sales force and international programs, with EMEA sales currently below 5% of total sales [195].
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