Material Agreement Form 8 K

Item 1.01 Entry into Material Definitive Agreement.

Overview

As previously disclosed, on February 2, 2024, TruGolf Holdings, Inc. (the "Company") executed a securities purchase agreement (the "Purchase Agreement") with certain investors (together, the "PIPE Investors"), and pursuant to the terms and conditions of the Purchase Agreement, the PIPE Investors agreed to purchase from the Company (i) senior convertible notes in the aggregate principal amount of up to $15,500,000 (the "PIPE Convertible Notes"), (ii) Series A warrants to initially purchase 1,409,091 shares of the Company's Class A common stock (the "Series A Warrants"); and (iii) Series B warrants to initially purchase 1,550,000 shares of the Company's Class A common stock (the "Series B Warrants," and collectively with the Series A Warrants, the "PIPE Warrants") (the "PIPE Financing").

The Purchase Agreement contemplated funding of the investment (the "Investment") across multiple tranches. At the first closing, on February 6, 2024 (the "Initial Closing"), an aggregate principal amount of $4,650,000 of PIPE Convertible Notes was issued in exchange for aggregate gross proceeds of $4,185,000, representing an original issue discount of 10%. On such date (the "Initial Closing Date"), the Company also issued the PIPE Investors the Series A Warrants and the Series B Warrants.

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 Notes issued at each Additional Optional Closing must equal at least $250,000. On December 16, 2024, one PIPE Investor exercised such right with respect to an aggregate principal amount of $2,100,000 of additional PIPE Convertible Notes (the "Additional Notes") and on such date the Additional Notes were issued in exchange for aggregate gross proceeds of $1,890,000, representing an original issue discount of 10%.

Description of Additional Notes

General. The Additional Notes will mature on the date that is five years from the issuance date (the "Maturity Date"), unless earlier converted (only upon the satisfaction of certain conditions). The Maturity Date may be extended at the sole option of the holders, under certain circumstances specified therein. The Additional Notes have an original issue discount of 10%.

Ranking. The Additional Notes are our senior unsecured obligations and not the financial obligations of our subsidiaries. Until such date no Notes remain outstanding, all payments due under theAdditional Notes will be senior to all of our subordinated indebtedness and subordinated indebtedness of any of our subsidiaries and equal in right of payment with all of our other indebtedness and other indebtedness of any of our subsidiaries.

Interest. The Additional Notes bear interest at the rate of 10.0% per annum that (a) shall commence accruing on the date of issuance, (b) shall be computed on the basis of a 360-day year and twelve 30-day months, and (c) 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 an Additional 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 (the "Default Rate") upon the occurrence and continuance of an event of default (See "- Events of Default" below).

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