TruGolf Holdings Reports 81.74% Revenue Growth, Narrowed Net Loss in Latest Quarter

TruGolf Holdings, Inc. (formerly Deep Medicine Acquisition Corp.) reported significant financial developments in its latest 10-Q filing for the three and nine months ended September 30, 2024. The company, which specializes in indoor golf software and hardware, completed a business combination with TruGolf, Inc. on January 31, 2024, and began trading under the ticker symbol "TRUG" on February 1, 2024.

For the three months ended September 30, 2024, revenues reached $6.2 million, an increase of 81.74% from $3.4 million in the same period of 2023. Gross profit also saw a substantial rise, climbing to $4.3 million from $1.9 million, marking a 127.22% improvement. Operating expenses decreased to $3.4 million from $4.2 million, contributing to an income from operations of $872,281, a turnaround from a loss of $2.3 million in the prior year. The net loss for the quarter narrowed to $60,175, compared to a loss of $2.7 million in the same quarter of 2023.

For the nine-month period, revenues increased by 9.67% to $15.1 million from $13.8 million in 2023. Gross profit rose to $9.9 million, up 7.36% from $9.3 million. Operating expenses significantly decreased by 32.85% to $10.8 million, down from $16.1 million, primarily due to reduced salaries and noncash consulting fees. The net loss for the nine months was $2.9 million, a substantial improvement from a loss of $8.0 million in the same period last year.

The company reported net cash provided by operating activities of $3.1 million for the nine months ended September 30, 2024, compared to cash used of $6.1 million in 2023. Cash and cash equivalents at the end of the period stood at $7.5 million, up from $5.4 million a year earlier.

Strategically, TruGolf has established a wholly owned subsidiary, TruGolf Links Franchising, LLC, to sell franchises for indoor golf simulators, with upfront fees ranging from $45,000 to $100,000. The company recorded $575,000 in deferred revenue related to franchise agreements as of September 30, 2024.

TruGolf has also engaged in PIPE financing, securing up to $15.5 million in senior convertible notes and warrants. As of September 30, 2024, the company had $4.7 million in PIPE Convertible Notes payable, with an original issue discount of $465,000. Interest expenses related to these notes totaled $647,047 for the nine months.

Despite these positive developments, the company faces challenges, including a current working capital deficit of $1.7 million and compliance issues with Nasdaq listing requirements, which must be addressed by January 15, 2025, to avoid potential delisting.