Business context and reporting period
Entity mismatch: The request identifies TruGolf Holdings, Inc., but the supplied filing is Deep Medicine Acquisition Corp.’s Form 10-Q. This summary reflects the filing provided, not TruGolf. It covers the quarter and nine months ended December 31, 2022; the company’s fiscal year ends March 31.
Deep Medicine is a blank-check company seeking a business combination and had no operating business or revenue. It had entered into a business combination agreement with Chijet Inc. in July 2022, but terminated it on September 26, 2022, without a termination penalty.
Financial results and liquidity
| Metric | Three months ended Dec. 31, 2022 | Nine months ended Dec. 31, 2022 | Prior-year comparable period |
|---|---|---|---|
| Operating revenue | None | None | None |
| Operating expenses | $415,358 | $1,402,914 | $137,605 and $232,878, respectively |
| Trust investment income | $1,061,124 | $1,728,701 | $2,182 in each period |
| Net income (loss) | $577,351 | $257,372 | $(135,423) and $(230,696), respectively |
| Operating cash flow | Not separately presented | $(669,795) | $(597,770) for nine months |
Margins are not meaningful because the company had no operating revenue. Net income reflected trust investment income, not operating earnings.
At December 31, 2022, cash was $962,177, including $754,873 released from the trust for tax payments; trust cash and marketable securities were $8,965,045. Total current liabilities were $2,369,573, including $1,765,000 in related-party loans, and deferred underwriting commissions were $4,427,500. The company reported a $1,325,763 working-capital deficit. Nine-month investing cash flow was $(510,127), financing cash flow was $1,265,000, and cash increased by $85,078.
Material changes versus prior comparable periods
- Net income replaced prior-year losses, primarily because trust investment income rose substantially; operating expenses also increased.
- Trust assets fell from $127,760,867 at March 31, 2022 to $8,965,045 at December 31, largely following shareholder redemptions.
- At the December 23, 2022 meeting, holders redeemed 11,819,790 public shares for $121,034,650, about $10.24 per share, leaving 830,210 public shares. Founder shares were converted one-for-one into Class A shares.
- Related-party borrowing increased: $1,265,000 was borrowed from sponsor affiliates and deposited into the trust to fund an extension.
Outlook, risks, and unusual items
Stockholders extended the business-combination deadline to July 29, 2023, with $50,000 to be added to the trust for each month after January 29. The company said it would continue seeking a transaction, but provided no transaction-specific operating forecast or assurance of completion.
Management disclosed substantial doubt about the company’s ability to continue as a going concern: it has no operating revenue, a working-capital deficit, and no committed source of additional financing. Management expected available cash and potential sponsor funding to cover needs through the transaction deadline, but sponsor funding beyond specified notes is not obligated. If no transaction is completed by the deadline, the company expects to cease operations and redeem public shares.
Subsequent to quarter-end, on February 9, 2023, a sponsor affiliate issued a $300,000 non-interest-bearing note in connection with the extension; $100,000 was deposited into the trust to extend the deadline to March 29, 2023. Other disclosed risks include possible dilution or debt burdens from a future transaction, economic and market uncertainty, COVID-19 impacts, and a potential 1% federal excise tax on certain redemptions. Management reported disclosure controls were effective and no material change in internal control over financial reporting; no pending or contemplated litigation was reported.
Key facts investors should verify
- Confirm the filing identity: the supplied 10-Q is for Deep Medicine Acquisition Corp., not TruGolf Holdings, Inc.
- Check subsequent filings for business-combination progress, deadline extensions, and whether the company completed a transaction or liquidated.
- Verify the post-redemption trust balance, public shares outstanding, and any later redemptions or required extension deposits.
- Review the terms and repayment source for sponsor-affiliate notes and any further financing, given the disclosed going-concern uncertainty.
- Assess the impact of the potential excise tax and any transaction-related dilution, debt, or deferred underwriting fees.