Market Overview - The total addressable market for golf products in 2022 was estimated at $1.4 billion, with a forecasted CAGR of 11.05%, expected to reach $3.8 billion by 2031[26]. - TruGolf currently maintains a 4.28% market share in the golf products market, with 69% of the total market derived from indoor golf simulators[26]. - In 2022, there were over 15.5 million golfers participating exclusively in off-course activities, marking a 13% year-over-year increase compared to a 2% rise in on-course participation[25]. - The off-course golf market in 2022 was approximately $27.9 million, which has for the first time eclipsed on-course play[25]. Product Development and Innovation - The Apogee launch monitor is designed for easy installation and maintenance, with auto-calibration that reduces setup time from approximately 20-30 minutes to under five minutes[40]. - The company is working with a video game company to utilize a new dynamic graphics engine for photorealistic golf courses through its E6 software[24]. - The company aims to unlock exclusive features in the forthcoming version of its E6 Connect software by providing its own Apogee launch monitor[42]. - The E6 Apex software features a powerful graphics engine that recreates golf courses with pixel accuracy within 2 inches on fairways and 2 centimeters on greens[47]. - The company plans to launch new products, including the next generation of Apogee and the Mini Trainer, while phasing out legacy products[73]. - The latest launch monitor, Apogee, features a voice command system and a laser indicator, enhancing user experience and accuracy[205]. - TruGolf's hardware offerings range from entry-level pricing just under $400 to over $100,000 for custom projects, catering to a wide consumer base[206]. Business Strategy and Growth - The company plans to launch a franchise solution to capitalize on the growing demand for commercial indoor golf offerings[28]. - The company plans to franchise indoor golf entertainment venues, requiring a minimum monthly recurring subscriber revenue to ensure profitability prior to operations[52]. - The company has signed a Joint Venture agreement in China to manage distribution across Asia, aiming to expand its market presence[215]. - International sales growth is a key element of the company's growth strategy, but it faces risks from corruption and regulatory compliance in foreign markets[118]. - The company has established the Virtual Golf Association, providing a gamified experience for users and enhancing community engagement[208]. - The company plans to continue significant investments in its sales and marketing organization to facilitate product adoption and brand awareness[215]. Financial Performance and Risks - The company expects first and fourth quarter seasonality to remain consistent due to persistent cold and wet weather patterns across North America, Europe, and Asia[85]. - The company anticipates increased sales during the fourth quarter due to holiday-related purchases and heightened demand from golfers[74]. - The company faces risks related to increasing costs of raw materials, labor, and freight, which could negatively affect gross margins and profitability[114]. - The company is sensitive to consumer spending and economic conditions, with potential adverse effects from geopolitical events and macroeconomic factors such as inflation and consumer confidence[140]. - A downturn in the global economy could disproportionately impact consumer purchases of discretionary premium sporting goods, adversely affecting financial position[141]. - The company has identified a material weakness in internal controls, which could lead to unreliable financial reporting and misinformation dissemination[143]. - The cost of maintaining public company requirements is estimated to exceed $250,000 per year, potentially affecting the company's ability to continue as a going concern[146]. - The company may face challenges in integrating new products with existing systems, which could inhibit sales and affect operating results[151]. Operational Insights - The company employs approximately 72 employees, with 71 being full-time and one part-time, many of whom work remotely[95]. - The company leases two facilities, with the primary facility in Centerville, Utah, housing over half of the staff and supporting research and development, manufacturing, and logistics[96]. - The company entered into a five-year lease for approximately 13,000 square feet in North Salt Lake, Utah, with a first-year monthly rent of $10,457 and a 3% annual escalation[99]. - The company maintains an insurance policy covering professional liability, general liability, and cybersecurity risks, including product liability coverage[101]. Market Competition - The company operates in a highly competitive market with key competitors like Trackman and FullSwing, which offer proprietary software solutions[76]. - The company's flagship software, E6 Connect, is compatible with nearly every major launch monitor, enhancing its competitive edge[80]. - The sports equipment industry is highly competitive, with intense competition affecting pricing, marketing, and consumer demand[130]. Consumer Engagement and Marketing - Approximately 80% of the company's marketing efforts focus on lead generation through various channels, including SEO and social media campaigns[66]. - TruGolf's software records an average of over 725,000 indoor golf shots per day, indicating strong user engagement[207]. - The company aims to attract new consumers, including female and young demographics, while retaining core consumer loyalty to avoid adverse effects on net sales[122]. Stock and Corporate Governance - As of April 14, 2025, the company had 29,881,672 shares of Class A common stock issued and outstanding, with current directors and executive officers owning approximately 16.8% of these shares[169]. - The company's stockholders' equity was reported at ($10,508,104), indicating non-compliance with Nasdaq's minimum stockholders' equity requirement of $10,000,000[173]. - The company received a notification for not maintaining a minimum bid price of $1 per share for 30 consecutive business days, with a compliance period ending on May 5, 2025[175]. - The company was notified that its market value of publicly held securities closed below the $15,000,000 threshold required for continued listing on Nasdaq, with a compliance period of 180 days from the notice date[176]. - The company has never declared or paid dividends on its common stock and does not anticipate doing so in the foreseeable future[198]. - The company is subject to significant stock price volatility, which may not correlate with its operating performance, exposing investors to potential losses[165]. - As of April 14, 2025, large shareholders, including officers and directors, held approximately 66.3% of the company's voting rights, potentially influencing corporate decisions[171]. Cybersecurity and Technology - The company has engaged an outside consulting firm to review its information systems and improve security measures[189]. - The company utilizes a Cloud-only architecture to minimize risks related to system downtime and data breaches[181]. - The company has not experienced any cybersecurity incidents that materially affected its business strategy or financial condition[187].
Deep Medicine Acquisition (DMAQ) - 2024 Q4 - Annual Report