Filing identity and business context
Important: The supplied filing is Deep Medicine Acquisition Corp.’s Form 10-Q, not a filing by TruGolf Holdings, Inc. It covers the quarter and nine months ended December 31, 2021; the company’s fiscal year ends March 31. Deep Medicine was a blank-check company seeking a business combination, potentially in digital healthcare and AI in medicine. It had not begun operations or generated operating revenue.
Financial results and position
| Metric | Period or date | Value |
|---|---|---|
| Operating revenue | Three and nine months ended December 31, 2021 | None |
| Operating expenses | Three months / nine months ended December 31, 2021 | $137,605 / $232,878 |
| Net loss | Three months / nine months ended December 31, 2021 | $135,423 / $230,696 |
| Trust-account investment gain | Three and nine months ended December 31, 2021 | $2,182 |
| Cash outside trust | December 31, 2021 | $977,197 |
| Prepaid expenses | December 31, 2021 | $376,530 |
| Working capital | December 31, 2021 | $832,727 |
| Trust-account cash and marketable securities | December 31, 2021 | $127,767,182 |
| Related-party loan payable | December 31, 2021 | $500,000, interest-free and unsecured |
| Deferred underwriting commission | December 31, 2021 | $4,427,500, payable upon a completed business combination |
Operating cash used during the nine-month period was $597,770; investing cash used was $127,765,000, principally the initial trust-account deposit. Financing cash provided was $128,839,900, largely from the IPO and private placement. No cash interest or income taxes were paid. The filing provides no meaningful operating margins, and no conventional operating business comparisons apply.
Material changes and financing
The company completed its IPO on October 29, 2021, selling 12,650,000 units at $10 each for $126.5 million gross proceeds, including full exercise of the underwriters’ over-allotment option. It also sold 519,500 private-placement units for $5.195 million. Of the proceeds, $127.765 million was placed in trust. Total transaction costs were $7.283 million, including the $4.428 million deferred marketing fee. On December 2, 2021, the units separated into Class A shares and rights.
At December 31, 12.65 million public Class A shares, valued at $127.765 million, were classified as temporary equity subject to possible redemption. The company also reported 620,700 Class A shares outside that classification and 3,162,500 Class B shares. The quarter’s loss was $135,423; the comparable three months ended December 31, 2020 had no reported loss or operations. The nine-month loss was $230,696; the comparable inception-to-December 2020 period had no reported loss.
Outlook, risks, and unusual items
- The company had until October 29, 2022 to complete a business combination, with a possible extension to April 29, 2023. If it failed to complete a transaction within the permitted period, it generally would have to redeem public shares from the trust and liquidate; rights could expire worthless.
- Management said cash outside the trust was expected to cover needs, but the filing’s liquidity descriptions are not fully consistent: one note characterizes the expected runway as less than one year from issuance, while MD&A says management believed funds would sustain operations for at least one year and that substantial doubt had been alleviated.
- Additional financing might be needed if expenses exceeded estimates, redemptions were significant, or a target exceeded available funds. Sponsor and affiliates could provide additional working-capital loans but were not obligated to do so; up to $1.5 million of such loans could be convertible into private-placement-equivalent units.
- A business combination could involve substantial dilution or debt. Management also disclosed transaction-related conflicts and obligations, including sponsor founder shares, officer and director compensation shares, and a deferred underwriter marketing fee.
- Management said COVID-19 could adversely affect the company’s position, results, or target search, but the impact was not determinable; no related adjustment was recorded.
- Management reported effective disclosure controls as of December 31, 2021, with no material change in internal control over financial reporting during the quarter. No legal proceedings were reported, and no material risk-factor changes from the IPO prospectus were identified.
Key facts for investors to verify
- Confirm the issuer: this filing is for Deep Medicine Acquisition Corp., not TruGolf Holdings, Inc.
- Check whether a business combination was announced or completed before the October 29, 2022 deadline or any extension, and review subsequent filings for the outcome.
- Verify trust assets, public-share redemptions, and cash available outside the trust after December 31, 2021.
- Review related-party loan repayment terms, any additional sponsor financing, and the potential dilution from founder shares, rights, warrants, and convertible loans.
- Reconcile management’s differing statements about the company’s expected cash runway and liquidity.