Filing summary
Issuer and period: The provided filing is Deep Medicine Acquisition Corp.’s Form 10-K for the fiscal year ended March 31, 2023—not a filing by TruGolf Holdings, Inc. The filing describes TruGolf as a proposed merger target; the transaction had not closed as of the filing.
Business context and reporting period
Deep Medicine was a blank-check company with no operating business or operating revenue. Its activity consisted of formation, its 2021 IPO, and the search for a business combination. It entered into a merger agreement with TruGolf on March 31, 2023. The combined company was proposed to be named TruGolf, Inc., subject to approvals and closing conditions.
Financial results and liquidity
| Metric | Year ended March 31, 2023 | Year ended March 31, 2022 |
|---|---|---|
| Operating revenue | None | None |
| Operating expenses | $2.17 million | $409,912 |
| Trust investment income (loss) | $1.82 million | $(4,133) |
| Net loss | $400,232 | $414,045 |
| Net loss per share | $0.03 | $0.05 |
| Cash used in operating activities | $1.04 million | $697,868 |
- At March 31, 2023, reported cash was $595,536, trust-account cash and marketable securities were $9.16 million, total assets were $9.78 million, and total liabilities were $7.22 million.
- Current liabilities were $2.80 million, including $1.865 million of sponsor and affiliate loans, $866,500 of accrued expenses, and $57,569 of taxes payable. The filing reports a $2.18 million working capital deficit.
- The $1.865 million related-party loans were non-interest-bearing and repayable upon a business combination or liquidation. The company also had $4.43 million in deferred underwriting/marketing fees, payable only if a business combination is completed. It reported no long-term debt.
- Trust assets fell from $127.76 million to $9.16 million, principally after $121.03 million was paid to redeem 11,819,790 public shares in December 2022. The reported redemption value at March 31, 2023 was approximately $10.83 per public share.
- Margins are not meaningful because the company had no operating revenue.
Material changes, transaction terms, and outlook
- Operating expenses rose substantially, mainly reflecting higher general and administrative costs and due diligence activity. The net loss narrowed slightly as trust investment income increased.
- Stockholders extended the business-combination deadline to July 29, 2023. The company had 4,613,410 Class A shares outstanding at March 31, 2023 after founder-share conversion and public-share redemptions.
- The proposed TruGolf consideration was up to $125 million in shares, subject to adjustments for closing debt, cash, and unpaid transaction expenses. It included $80 million of base consideration and up to $45 million in escrowed restricted shares tied to revenue, share-price, or franchise-location milestones for 2024–2026.
- Closing required stockholder approvals and other conditions, including at least $5,000,001 in net tangible assets and at least $10 million in cash after redemptions and specified payments. The agreement could be terminated if conditions were not met by the outside date, subject to a possible extension.
- Management said it expected available resources and potential sponsor or other funding to support operations through a business combination or the deadline, but no additional financing commitment was in place.
Risks, contingencies, and unusual items
- The auditor and management identified substantial doubt about the company’s ability to continue as a going concern if it does not complete a business combination or obtain funding. Failure to complete a transaction by the deadline would require winding up and redeeming public shares; rights would expire worthless.
- Disclosure controls and internal control over financial reporting were ineffective at year-end due to inadequate segregation of duties and insufficient written accounting, IT, and reporting procedures. Management described remediation efforts but gave no assurance they would be effective.
- Trust funds could be exposed to creditor or bankruptcy claims. The sponsor’s indemnity is limited, and the filing says the sponsor has not reserved funds to meet it.
- Potential conflicts include the sponsor’s reported approximately 3% interest in TruGolf, sponsor and affiliate loans, founder economics, and compensation and share arrangements for insiders and the IPO underwriter. The filing says an independent financial advisory firm provided a fairness opinion.
- The filing also cites market volatility, inflation, interest rates, financing availability, regulatory and SPAC-related uncertainty, and a possible 1% federal excise tax on certain share redemptions.
Investor facts to verify
- Confirm the issuer identity: this is Deep Medicine Acquisition Corp.’s 10-K, not TruGolf Holdings, Inc.’s annual report.
- Check subsequent filings for whether the TruGolf merger closed, was amended, or was terminated, and for the final redemption and financing figures.
- Review TruGolf’s proxy materials and audited financial statements; this 10-K does not provide TruGolf’s operating results.
- Verify the company’s funding and liquidity against the $10 million closing-cash condition, sponsor-note repayments, taxes, and deferred fees.
- Track remediation of the disclosed material weakness and any later updates to the going-concern assessment.