TruGolf Holdings (TRUG) risk factors, FY2025 10-K

Risks Related to Our Business and Industry

1. 01We depend on the strength of our brands
2. 02We will need to raise capital in order to realize our business plan and growth strategy, the failure of which could adversely impact our operations31% rewritten
3. 03The cost of raw materials, labor and freight could lead to an increase in our cost of sales and cause our results of operations to suffer
4. 04We rely heavily on supply chain reliability and predictability and continued disruption in our supply chain could have a material adverse impact on operations
5. 05If we are unable to respond effectively to changes in market trends and consumer preferences, our market share, net sales and profitability could be adversely affected
6. 06We may be unable to appeal to new consumers while maintaining the loyalty of our core consumers
7. 07We depend on existing members of management and key employees to implement key elements in our strategy for growth, and the failure to retain them or to attract appropriately qualified new personnel could affect our ability to implement our growth strategy successfully
8. 08We do not employ traditional advertising channels, and if we fail to adequately market our brand through product introductions and other means of promotion, our business could be adversely affected
9. 09Our products face intense competition
10. 10We rely on technical innovation and high-quality products to compete in the market for our products
11. 11Failure to continue to obtain or maintain high-quality endorsers of our products could harm our business
12. 12Actions taken by endorsers associated with our products that harm the reputations of those endorsers could also seriously harm our brand image with consumers and, as a result, could have an adverse effect on our sales and financial condition26% rewritten
13. 13Our business may be affected by seasonality, which could result in fluctuations in our operating results
14. 14Failure to accurately forecast consumer demand could lead to excess inventories or inventory shortages, which could result in decreased operating margins, reduced cash flows and harm to our business
15. 15If the technology-based systems that give our consumers the ability to shop with us online do not function effectively, our operating results, as well as our ability to grow our digital commerce business globally, could be materially adversely affected
16. 16Our financial results may be adversely affected if substantial investments in business and operations fail to produce expected returns
17. 17Our business is sensitive to consumer spending and general economic conditions43% rewritten
18. 18We have a material weakness in our internal controls, which could cause our financial reporting to be unreliable and lead to misinformation being disseminated to the public
19. 19We currently have a material weakness in our internal controls, which could cause financial reporting to be unreliable and lead to misinformation being disseminated to the public. Investors relying upon this misinformation may make an uninformed investment decision
20. 20The cost of being a public company could result in us being unable to continue as a going concern46% rewritten
21. 21Our ability to sell our products and services will be dependent on the quality of our technical support and our failure to deliver high-quality technical support services could have a material adverse effect on our sales and results of operations
22. 22If we are not able to enhance or introduce new products that achieve market acceptance and keep pace with technological developments, our business, results of operations and financial condition could be harmed
23. 23Customer may experience difficulty in integrating E6 Connect or E6 GOLF with third-party applications, which would inhibit sales23% rewritten

Risk Related to the Company’s Legal and Regulatory Requirements

1. 24Failure to adequately protect our intellectual property and curb the sale of counterfeit merchandise could injure our brand and negatively affect our sales
2. 25We may become subject to product liability lawsuits or claims, which could harm our financial condition and liquidity if we are not able to successfully defend or insure against such claims
3. 26Fluctuations in our tax obligations and effective tax rate may have a negative effect on our operating results
4. 27To the extent we may rely on endorsements or testimonials, we will review any relevant relationships for compliance with the Endorsement Guides and we will otherwise endeavor to follow the FTC Act and other legal standards applicable to our advertising

Risks Related to Ownership of Our Shares

1. 28There is currently limited liquidity of shares of our common stock
2. 29Our stock price may be volatile, or may decline regardless of our operating performance, and you could lose all or part of your investment as a result
3. 30If any of the foregoing occurs, it could cause our stock price to fall and may expose us to securities class action litigation that, even if unsuccessful, could be costly to defend and a distraction to management
4. 31The conversion of our outstanding Series A Preferred Stock, or any additional shares of Series A Preferred Stock we issue in the future upon the exercise of the Series A Preferred Warrants, into Class A common stock will dilute the ownership interest of our stockholdersNew
5. 32Certain of the Company’s large shareholders may be able to exert significant influence on the Company and their interest may conflict with the interest of its shareholders87% rewritten
6. 33If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline
7. 34If our shares of common stock become subject to penny stock rules, it would become more difficult to trade our shares