Filing identity and period
The supplied filing is Deep Medicine Acquisition Corp.’s unaudited Form 10-Q for the quarter and six months ended September 30, 2021, signed November 15, 2021. It is not a TruGolf Holdings, Inc. filing, despite the request metadata; verify the issuer before relying on this summary.
Business context
Deep Medicine was a blank-check company formed to pursue a business combination, potentially in digital healthcare and AI in medicine. It had not begun operations, generated revenue, selected a target, or started substantive discussions with a target as of the report. Its IPO closed on October 29, 2021, after the reporting-period end.
Financial results and liquidity
- Revenue: None. The company reported no operating activity or revenue.
- Net loss: $78,774 for the three months and $95,273 for the six months ended September 30, 2021. Basic and diluted loss per share were each $0.03 for both periods.
- Expenses: Three-month operating expenses were $78,774, including $15,000 of officer compensation and $63,774 of general and administrative expenses. Six-month expenses totaled $95,273.
- Cash flow: Six-month cash used in operations was $173,596; cash decreased $173,696 to $326,371. No cash interest or income taxes were paid.
- Balance sheet: At September 30, cash was $326,371 and prepaid expenses were $75,000, for total assets of $401,371. Current liabilities were $39; non-current liabilities were $506,000, including a $500,000 non-interest-bearing sponsor loan. Stockholders’ deficit was $104,668.
- Working capital: Management reported $326,332 at September 30. No operating margins are meaningful because the company had no revenue.
Changes, outlook, and risks
- Compared with March 31, 2021, cash fell from $500,067 to $326,371, prepaid expenses rose from $37,500 to $75,000, and total liabilities fell from $546,962 to $506,039. The filing provides no prior-year operating results for comparison.
- After quarter-end, the company completed an IPO of 12.65 million units at $10 each and a private placement of 519,500 units, raising gross proceeds of $126.5 million and $5.195 million, respectively. It placed $127.765 million in a trust account; transaction costs were $7.283 million. These are subsequent events, not September 30 balance-sheet cash.
- The company had 12 months from the IPO closing to complete a business combination, subject to a possible extension to 18 months. If unsuccessful, it generally must redeem public shares and liquidate.
- Management said the company had lacked sufficient liquidity before the IPO, but concluded post-IPO capital was sufficient for at least one year and that substantial doubt about continuing as a going concern was alleviated. It expected increased public-company and target-search expenses and did not rule out needing additional financing.
- COVID-19 could adversely affect the company or its target search, but the impact was not determinable. The filing warns of possible dilution, financing needs, and transaction failure. No legal proceedings or off-balance-sheet arrangements were reported.
- Management concluded disclosure controls and procedures were not effective as of September 30, 2021. No material change in internal control over financial reporting was reported during the quarter.
Important facts to verify
- Confirm the filing issuer: this document is for Deep Medicine Acquisition Corp., not TruGolf Holdings, Inc.
- Confirm the reporting period: the filing covers the quarter and six months ended September 30, 2021, rather than a period identified as “2021 Q2” in the request metadata.
- Distinguish September 30 cash of $326,371 from IPO proceeds and trust assets raised after quarter-end.
- Review the subsequent IPO disclosures, sponsor loan terms, business-combination deadline, and stated control deficiencies.