TruGolf Holdings, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 –NATURE OF THE ORGANIZATION AND BUSINESS

Organization and Business

TruGolf Holdings, Inc. (including its subsidiaries, “TruGolf”, “the Company,” “we,” “us,” or “our”) designs, develops, manufactures, and sells golf simulators and related software for residential and commercial applications.

On May 10, 2024, the Company formed TruGolf Links Franchising, LLC (“Links”), a wholly-owned subsidiary, to establish and sell franchises utilizing the Company’s indoor golf and recreational sports simulators.

On March 10, 2026, the Company completed its redomestication from Delaware to Nevada (the “Redomestication”). In connection with the Redomestication, the Company adopted new articles of incorporation and bylaws governed by Nevada law. At the effective time of the Redomestication, each outstanding share of the Company’s common stock and preferred stock converted into an equivalent corresponding share of the Nevada corporation, with no change in par value.

Reverse Stock Split

On March 27, 2026, the Company completed a 1-for-10 reverse stock split of the Class A common stock and Class B common stock of the Company’s issued and outstanding common stock, effective as of March 27, 2026 (the “2026 Reverse Stock Split”, and together with the 2025 Reverse Stock Split, the “Reverse Stock Split”) and began trading on a 2026 Reverse Stock Split-adjusted basis on Nasdaq on March 27, 2026. As a result of the 2026 Reverse Stock Split, the number of Class A common stock outstanding was reduced from 5,355,626 to approximately 535,563 and the number of Class B common stock outstanding was reduced from 199,999 to 19,999, and the number of authorized shares of common stock was reduced from 1,000,000,000 shares to 100,000,000 shares. All share amounts have been retroactively adjusted for the Reverse Stock Split.

Proportionate adjustments for the Reverse Stock Split were made to the exercise prices and number of shares issuable under the Company’s equity incentive plans, and the number of shares underlying outstanding equity awards and warrants, as applicable.

NOTE 2 –SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies of ours are described in Note 2 to the audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. The following policies are either new to the Company or have been updated to reflect changes in the current period.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of TruGolf have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with Article 8 of Regulation S-X and the related rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). These interim unaudited condensed financial statements should be read in conjunction with those audited financial statements included in the Form 10-K, as filed with the SEC on April 15, 2026 (“Form 10-K”). In the opinion of management, all adjustments considered necessary for a fair presentation of the financial statements, consisting of normal recurring accruals, have been made. Operating results for the three months ended March 31, 2026, are not necessarily indicative of the results that may be expected for the entire year.

Reclassifications

Certain reclassifications within the balance sheets and statements of operations have been made to the prior period’s financial statements to conform to the current period financial statement presentation. There is no impact in total on the results of operations and cash flows in all periods presented.

Recently Issued Accounting Pronouncements Not Yet Adopted

In September 2025, the FASB issued ASU 2025-06, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software,” which modernizes the guidance for capitalizing internal-use software costs to better reflect contemporary software development practices, including agile and iterative methodologies. The amendments remove all references to prescriptive project stages from the existing three-stage framework and replace them with a principles-based approach under which an entity begins capitalizing software costs when two criteria are met: (1) management has authorized and committed to funding the software project, and (2) it is probable that the project will be completed and the software will be used to perform its intended function. The standard also supersedes the existing guidance on website development costs under Subtopic 350-50 and incorporates those costs into the Subtopic 350-40 framework, and requires capitalized internal-use software costs to comply with the disclosure requirements of ASC 360-10, Property, Plant, and Equipment. ASU 2025-06 is effective for all entities for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted, and the standard may be applied on a retrospective, prospective, or modified retrospective basis. The Company is currently evaluating the impact this standard will have on its financial statements.

In November 2024, the FASB issued ASU 2024-03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses,” which requires the disaggregated disclosure of specific expense categories, including purchases of inventory, employee compensation, depreciation, and amortization included in each relevant expense caption presented on the statement of operations. The standard also requires disclosure of qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, as well as the total amount of selling expenses and an entity’s definition of selling expenses. ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. The Company is currently evaluating the impact this standard will have on its financial statements.

NOTE 3 –NET LOSS PER SHARE

Basic net loss per share is computed by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net loss per share is the same as basic net loss per share for the periods presented because all potentially dilutive securities were anti-dilutive.

Potentially dilutive securities excluded from the computation of diluted net loss per share consisted of the following:

NOTE 4 –CAPITALIZED SOFTWARE

Capitalized software development costs consist primarily of costs incurred for the development and enhancement of the Company’s proprietary software platform, E6 GOLF.

The following summarizes capitalized software development costs as of March 31, 2026:

Total amortization expense for the three months ended March 31, 2026 and 2025, was $469,213 and $100,000, respectively.

NOTE 5 –RELATED PARTY TRANSACTIONS

Related party notes payable consisted of the following:

ARJ Trust

In December 2008, the Company entered into a note payable with ARJ Trust, a trust that is indirectly controlled by the Company’s chief executive officer. The note had a principal amount of $500,000, an interest rate of 8.50% per annum, and an amended maturity date of September 30, 2026. The Company is required to make monthly interest-only payments of $3,541.

In June 2010, the Company entered into a second note payable with ARJ Trust. The note has a principal amount of $150,000, an interest rate of 8.50% per annum, and an amended maturity date of September 30, 2026. The Company is required to make monthly interest-only payments of $1,063.

The Company made interest-only payments of $13,812 during the three months ended March 31, 2026 and 2025, respectively. The principal balance of the notes was $650,000 at March 31, 2026 and December 31, 2025.

Chris Jones

During the year ended December 31, 2024, the Company chief executive officer loaned the Company an aggregate of $2 million for operating expenses. The loaned amount has a zero interest rate and no stated maturity date. The Company made no payments toward the loan during the three months ended March 31, 2026. During the year ended December 31, 2025, the Company repaid $400,000 of principal. The principal balance of the loan payable was $1,600,000 at March 31, 2026 and December 31, 2025.

NOTE 6 –STOCKHOLDERS’ EQUITY

Series A Convertible Preferred Stock

On April 22, 2025, in connection with the execution of certain exchange agreements, the Company designated 50,000 shares of authorized and unissued preferred stock as Series A Convertible Preferred Stock. Upon completion of the Redomestication, the Series A Convertible Preferred Stock was converted into Series A Convertible Preferred Stock of the redomesticated entity on the same terms (“Series A Preferred”).

Each share of Series A Preferred has an initial stated value of $1,000 per share, subject to adjustment in accordance with the Company’s Articles of Incorporation, including for stock splits, stock dividends, recapitalizations, reorganizations, reclassifications, combinations, subdivisions and similar events. The Series A Preferred ranks senior to the Company’s common stock with respect to dividends, distributions, and payments upon liquidation, dissolution, and winding up the Company.

The Series A Preferred accrues cash dividends at a rate of 10% per annum. Dividends may be paid in cash, shares of the Company’s Class A common stock at a rate of 15% per annum, through increases to the stated value of the Series A Preferred (“Capitalized Dividends”), or in a combination thereof, subject to the terms of the Articles of Incorporation. The conversion amount of the Series A Preferred may also include certain additional amounts, make-whole amounts and other amounts payable pursuant to the Articles of Incorporation. The increase in the gross stated value of the Series A Preferred primarily relates to capitalized dividends and other adjustments pursuant to the Articles of Incorporation.

The conversion price of the Series A Preferred is subject to periodic reset provisions based on the market price of the Company’s Class A common stock. The Series A Preferred also contains anti-dilution and stock combination event adjustment provisions, including adjustments based on an “Event Market Price,” as defined in the Articled of Incorporation, which may affect the conversion price and the number of shares issuable upon conversion. In connection with the Company’s 2026 reverse stock split, the conversion price was proportionately adjusted to $21.60 per share. As of March 31, 2026, certain market Event Price calculations remained subject to determination based on post-event measurement periods due to the 2026 Reverse Stock Split. On April 22, 2026, the conversion price was adjusted to $2.76 per share pursuant to the reset provisions.

Upon the voluntary conversion by the holders of the Series A Preferred, in addition to the issuance of Class A common stock issuable upon conversion of the stated value of the Series A Preferred, the Company shall issue to the holders of Class A common stock all dividends that would otherwise have accrued on such Series A Preferred is such share were held until the five-year anniversary of issuance (the “Make-Whole Amount”). The Make-Whole Amount is convertible into Class A common stock at the “Alternate Conversion Price” which is equal to the lesser of (i) the conversion price, and (ii) 90% of the lowest volume weighted average price (“VWAP”) of the Class A common stock during the five consecutive trading days immediately prior to such conversion (subject to the Floor Price of $35.00 (the “Floor Price”)) (the “Alternate Conversion Price”). If at the time of a conversion the Alternate Conversion Price is determined to the Floor Price because such Floor Price is greater than 90% of the then five-day VWAP of a share of Class A common stock, then the Conversion Amount, is automatically increased pro rata, by the applicable Alternate Conversion Floor Amount. The “Conversion Amount” means, on any date, the sum of (1) the stated value plus (2) any declared and unpaid dividends on the Series A Preferred plus (3) the Make-Whole Amount, if any, plus (4) any other amounts owed to such holder. The “Alternate Conversion Floor Amount” means an amount equal to the product obtained by multiplying (A) the higher of (I) the highest price that the Class A common stock trades at on the trading day immediately preceding the relevant date and (II) the applicable Alternate Conversion Price and (B) the difference obtained by subtracting (I) the number of shares of Class A common stock delivered to such holder from (II) the quotient obtained by dividing (x) the applicable Conversion Amount, by (y) the applicable Alternate Conversion Price without giving effect to the Floor Price.

Conversion of Series A Preferred Stock

During the three months ended March 31, 2026, the Company issued an aggregate of 129,616 shares of Class A common stock with fair values ranging from $8.08 - $21.60 per share for the conversion of 1,349 shares of Series A Preferred Convertible Stock.

During the three months ended March 31, 2026, the Company issued an aggregate of 97,212 shares of Class A common stock with fair values ranging from $8.08 - $21.60 per share to Series A Preferred Convertible shareholders in lieu of cash for unpaid dividends.

During the three months ended March 31, 2026, the Company reversed the conversion of 62 shares of Series A Preferred Stock into 8,721 shares of Class A common stock that had previously been reflected as converted as of December 31, 2025. Subsequent to year end, the related conversion transactions were cancelled because the corresponding Class A common stock were not issued or delivered to the holders.

As a result, during the three months ended March 31, 2026, the Company reversed the previously recorded conversion entries and reinstated the applicable preferred stock balances. The reversal resulted primarily in reductions to the Class A common stock and additional paid-in capital and a corresponding adjustment to accumulated deficit associated with the reversal of amounts previously recorded pursuant to the make-whole provisions of the Series A Preferred Stock conversion terms.

The Company evaluated the impact of the cancelled conversions on its previously issued financial statements, including the earnings per share, and concluded that the impact was not material.

NOTE 7 –REVENUE FROM CONTRACTS WITH CUSTOMERS

The Company’s revenues are disaggregated based on revenue type, including (i) golf simulators, (ii) content software subscriptions, (iii) franchise revenue, and (iv) other.

The Company’s net revenues for the three months ended March 31, 2026 and 2025, are disaggregated as follows:

NOTE 8 –SEGMENT INFORMATION

The Company currently operates as one business segment, which is also the sole reportable segment, focusing on the manufacturing and sales of indoor golf simulators. The Company’s business offerings have similar economic and other characteristics, including the nature of products, manufacturing, types of customers, and distribution methods. The determination of a single business segment is consistent with the consolidated financial information regularly provided to the Company’s chief operating decision maker (“CODM”). The Company’s CODM is its Principal Executive and Financial Officer and Director, who reviews and evaluates consolidated profit and loss and total assets for the purpose of assessing performance, making operating decisions, allocating resources, and planning and forecasting for future periods.

In addition to the significant expense categories included within net loss presented on the Company’s Consolidated Statements of Operations, see below for disaggregated amounts that comprise consulting, contract labor, personnel, business development, royalty, and marketing expenses:

NOTE 9 –COMMITMENTS AND CONTINGENCIES

From time to time, the Company may become involved in claims and legal proceedings arising in the ordinary course of business*.* Management is not currently aware of any matters that are expected to have material adverse effect on the Company’s financial position, results of operations, or cash flows.

NOTE 10 –SUBSEQUENT EVENTS

Appointment of Chief Financial Officer

On May 1, 2026, the Company entered into an employment letter (the “Employment Letter”) with Steven Passey to serve as the Company’s Chief Financial Officer effective May 20, 2026. The Employment Letter provides for an initial annual base salary of $225,000 for the initial three months, increasing to $250,000 thereafter, and eligibility for annual equity grants under the Company’s stock incentive plans, as determined by the Compensation Committee of the Board of Directors. MR. Passey is entitled to participate in the Company’s benefit plans and programs for similarly situated executives, expense reimbursement in accordance with Company policy, and other standard benefits.

Issuance of Common Stock

Subsequent to March 31, 2026, the Company issued an aggregate of 258,636 shares of Class A common stock with fair values ranging from $2.76 - $21.60 per share for the conversion of 1,003 shares of Series A Preferred Convertible Stock.

Subsequent to March 31, 2026, the Company issued an aggregate of 194,047 shares of Class A common stock with fair values ranging from $2.76 - $21.60 per share to Series A Preferred Convertible shareholders in lieu of cash for unpaid dividends.