Financial Performance and Position - As of March 31, 2023, the company had $127,765,000 in the trust account, invested in U.S. government securities[27]. - The company reported a working capital deficit of $2,179,125 as of March 31, 2023, with available cash of $595,536[28]. - As of March 31, 2023, the company had a net loss of $400,232, consisting of $2,167,122 in operating and formation costs, offset by an unrealized gain of $1,824,459 on marketable securities[189]. - The company generated non-operating income of $1,824,459 from interest on cash and cash equivalents for the year ended March 31, 2023[188]. - Cash used in operating activities amounted to $1,036,436 for the year ended March 31, 2023, primarily due to the net loss and changes in accrued expenses[194]. - As of March 31, 2023, the company had cash and marketable securities held in the trust account of $9,160,803, a significant decrease from $127,760,867 as of March 31, 2022[197]. - The company had total current liabilities of $2,795,069 and total current assets of $9,776,747 as of March 31, 2023, resulting in a working capital deficit of $2,179,125[191]. Business Combination and Agreements - The TruGolf Business Combination Agreement was entered into on March 31, 2023, with a total merger consideration of up to $125 million, including base consideration of $80 million and up to $45 million in Restricted Shares[36][37]. - The company must complete its initial business combination by July 29, 2023, or it will terminate and distribute the trust account funds[30]. - The TruGolf Merger Agreement requires approval from both the company's and TruGolf's stockholders for the business combination to proceed[45]. - The company aims for gross revenues of at least $50 million in 2025 to secure 50% of the Second Tranche, and $65 million to secure 100%[44]. - For 2026, gross revenues must reach at least $80 million for 50% of the Third Tranche to be secured, and $100 million for 100%[44]. - The company aims to complete business combinations with an aggregate fair market value of at least 80% of the trust account assets at the time of signing a definitive agreement[66]. - The fair market value of TruGolf was determined to be substantially in excess of 80% of the funds in the trust account, satisfying the 80% test[66]. IPO and Securities - The company completed its IPO on October 29, 2021, raising gross proceeds of $126.5 million from the issuance of 12,650,000 units at $10.00 per unit[24]. - The company has broad discretion in applying the net proceeds from the IPO, primarily intended for consummating a business combination[29]. - The company’s securities were transferred from the Nasdaq Global Market to the Nasdaq Capital Market on February 17, 2023[35]. - Following the Founder Conversion, as of March 31, 2023, the company had 4,613,410 shares of Class A common stock issued and outstanding[34]. Risks and Uncertainties - The company has identified a material weakness in its internal control over financial reporting as of March 31, 2023[157]. - The company has a substantial doubt about its ability to continue as a "going concern" due to various economic uncertainties[157]. - Risks include the inability to select a suitable target business or complete the initial business combination within the prescribed timeframe[153]. - Economic uncertainties, including inflation and interest rate increases, could adversely affect the company's ability to consummate a business combination[155]. - The company may face limitations in acquiring target businesses that do not meet financial statement requirements under GAAP or IFRS[150]. Redemption and Liquidation - Approximately $121 million was redeemed from the trust account by stockholders prior to the 2022 Special Meeting, resulting in a pro rata payment of approximately $10.24 per share[32]. - If the initial business combination is not completed, the company will redeem 100% of the outstanding public shares at a per-share price based on the trust account balance, which was approximately $10.83 as of March 31, 2023[130]. - The total amount available for redemption could be reduced due to claims from creditors, which would take priority over public stockholders' claims[130]. - The company intends to liquidate and dissolve if the business combination is not completed, with obligations to provide for claims of creditors as per Delaware law[126]. Governance and Management - The board of directors post-closing will consist of seven members, four of whom will be independent directors[47]. - The company will adopt an equity incentive plan providing for awards equal to 10% of the total shares outstanding post-closing[49]. - The company currently has two officers and does not plan to hire full-time employees until after completing its initial business combination[148]. Financing and Capital Structure - The company intends to complete its initial business combination using cash from the IPO proceeds, private placements, and potentially additional debt or equity financing[85]. - The company may seek to raise additional funds through private offerings to target larger businesses than those that can be acquired with the IPO net proceeds[87]. - The underwriters of the initial public offering are entitled to a deferred fee of $0.35 per unit, totaling $4,427,500, payable only if a business combination is completed[211]. - The company has access to approximately $500,000 from the IPO proceeds to cover potential claims and liquidation costs[136]. Compliance and Legal Matters - The company has not experienced any litigation currently pending or contemplated against it[165]. - The company is classified as an "emerging growth company," allowing it to take advantage of certain exemptions from reporting requirements until specific revenue or market value thresholds are met[79]. - The company is also a "smaller reporting company," which allows it to provide only two years of audited financial statements until certain market value or revenue thresholds are exceeded[82].
Deep Medicine Acquisition (DMAQ) - 2023 Q4 - Annual Report