TruGolf Holdings, Inc. announced that it has entered into securities purchase agreement with PIPE Investors to issue senior convertible notes in the aggregate principal amount of up to $15,500,000, Series A warrants to initially purchase 1,409,091 shares of the Company?s Class A common stock and Series B warrants to initially purchase 1,550,000 shares of the Company?s Class A common stock on February 2, 2024. The Purchase Agreement contemplates funding of the investment across multiple tranches. At the first closing, an aggregate principal amount of $4,650,000 of PIPE Convertible Notes will be issued upon the satisfaction of certain customary closing conditions in exchange for aggregate gross proceeds of $4,185,000, representing an original issue discount of 10%.

On such date he Company will also issue the PIPE Investors the Series A Warrants and the Series B Warrants. Subject to satisfying the conditions discussed below, the Company has the right under the Purchase Agreement, but not the obligation, to require that the PIPE Investors purchase additional Notes at up to two additional closings. Upon notice at any time after the 2nd trading day following the Initial Closing Date, the Company may require that the PIPE Investors purchase an additional aggregate principal amount of $4,650,000 of PIPE Convertible Notes, in exchange for aggregate gross proceeds of $4,185,000, if the Registration Statement has been filed; and certain customary closing conditions are satisfied.

Upon notice at any time after the 2nd trading day following the date that the First Mandatory Additional Closing is consummated, the Company may require that the PIPE Investors purchase an additional aggregate principal amount of $6,200,000 of PIPE Convertible Notes, in exchange for aggregate gross proceeds of $5,580,000, if the shareholder approval is obtained and the Registration Statement has been declared effective by the SEC; and certain customary closing conditions are satisfied. In addition, pursuant to the Purchase Agreement, each PIPE Investor has the right, but not the obligation, to require that, upon notice, the Company sell to such PIPE Investor at one or more additional closings such PIPE Investor?s pro rata share of up to a maximum aggregate principal amount of $10,850,000 in additional PIPE Convertible Notes (each such additional closing, an ?Additional Optional Closing?); provided that, the principal amount of the additional PIPE Convertible Notes issued at each Additional Optional Closing must equal at least $250,000. If a PIPE Investor has not elected to effect an Additional Optional Closing on or prior to August 2, 2024, such PIPE Investor shall have no further right to effect an Additional Optional Closing under the Purchase Agreement.

The PIPE Convertible Notes will mature on the date that is five years from each respective issuance date unless earlier converted. The Maturity Date may be extended at the sole option of the holders, under certain circumstances specified therein. The Notes will have an original issue discount of 10%.

The Notes will be our senior unsecured obligations and not the financial obligations of our subsidiaries. The Notes bear interest at the rate of 10.0% per annum that shall commence accruing on the date of issuance, shall be computed on the basis of a 360-day year and twelve 30-day months, and shall be payable in shares of our Class A common stock so long as certain conditions are met, provided that the Company may at its option pay such interest in cash or a combination of cash and shares of our Class A common stock; provided further that if such interest is being paid in shares of our Class A common stock it shall bear interest at the rate of 15.0% per annum. If a holder elects to convert or redeem all or any portion of a Note prior to the Maturity Date, all accrued and unpaid interest, any make-whole amount, and any late charges on the amount being converted or redeemed will also be payable.

The interest rate of the Notes will automatically increase to 15% per annum upon the occurrence and continuance of an event of default. Each holder of Notes may convert all, or any part, of the outstanding Notes, at any time at such holder?s option, into shares of our Class A common stock at an initial ?Conversion Price? of $10.00 per share, which is subject to proportional adjustment upon the occurrence of any stock split, stock dividend, stock combination and/or similar transactions.

Upon the voluntary conversion by the holders of the PIPE Convertible Notes, in addition to the issuance of the Class A common stock issuable upon conversion of the principal amount of PIPE Convertible Notes, the Company shall issue to the holders in Class A common stock the sum of all accrued interest on the PIPE Convertible Notes to date plus all interest that would otherwise accrued on such principal amount of the PIPE Convertible Notes if such converted principal would be held to the Maturity Date at the Conversion Price. The Series A Warrants shall expire five years after issuance and shall initially be exercisable for an aggregate of 1,409,091 shares of Class A common stock, which number of shares shall be increased each time the holder exercises any Series B Warrants in an amount equal to 91% of the shares of Class A common stock issued pursuant to such Series B Warrant exercise. The initial exercise price of the Series A Warrants shall be $13.00 per share; provided that if on the 45 the calendar day after issuance, and/or the date the Registration Statement is declared effective by the SEC the exercise price then in effect is greater than the greater of $4.00 and he lowest VWAP on any trading day during the five trading day period ended, and including, the trading day immediately prior to such applicable Warrant Adjustment Measuring Date, the exercise price shall automatically lower to such price.

The Series B Warrants shall expire 30 months after issuance and shall initially be exercisable for an aggregate of 1,550,000 shares of Class A common stock. The initial exercise price of the Series B Warrants shall be $10.00 per share. The Company shall not issue any shares of Class A common stock underlying the PIPE Convertible Notes or the PIPE Warrants if the issuance of such shares of Class A common stock would exceed the aggregate number of shares of Class A common stock which the Company may issue upon conversion of the PIPE Convertible Notes or exercise of the PIPE Warrants without breaching the Company?s obligations under the rules or regulations of the Nasdaq Stock Market.

The issuance of the PIPE Convertible Notes and the PIPE Warrants was made in reliance on the exemption provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the ?Securities Act?) for the offer and sale of securities not involving a public offering, and Regulation D promulgated under the Securities Act.