Deep Medicine Acquisition Corp. *

PROPOSED BUSINESS COMBINATION: TruGolf, Inc.

ENTERPRISE VALUE: $125 million

ANTICIPATED SYMBOL: TRUG

Deep Medicine Acquisition Corp. proposes to combine with TruGolf, Inc.

The Company builds products that capture the spirit of golf. Their mission is to help grow the game of golf by making it more available, approachable, and affordable through technology because the Company believes golf is for everyone. The TruGolf team has built video games (e.g., “Links”), hardware solutions, and an all-new e-sports platform to connect golfers around the world with E6 CONNECT, the brand’s industry-leading software. Since TruGolf’s beginning, it has continued to define and redefine what is possible with golf technology.

SUBSEQUENT EVENT – 11/2/23 – LINK

Convertible Note Agreement

• On November 2, 2023, Deep Medicine Acquisition Corp. (DMAQ) entered into a Loan Agreement with PIPE Investors, granting them up to $8,000,000 in convertible notes and warrants to purchase 727,273 shares of Class A common stock upon the completion of DMAQ’s business combination with TruGolf, Inc.
  • (i) The first closing of $2,110,000 will occur upon the completion of the Business Combination, resulting in Convertible Notes issued by New TruGolf in the principal amount of $2,400,000, along with Warrants, all on the First Closing Date.
  • (ii) The second closing of $2,160,000 will take place within three business days after New TruGolf files the Registration Statement, resulting in Convertible Notes issued by New TruGolf in the principal amount of $2,400,000, provided that certain conditions are met, contingent on Stockholder Approval.
  • (iii) The third closing of $2,880,000 will occur within three business days of the Registration Statement being declared effective, leading to Convertible Notes issued by New TruGolf in the principal amount of $3,200,000, contingent on Stockholder Approval and New TruGolf’s discretion.
• Each Convertible Note has a maturity date five years from its respective closing date (the “Maturity Date”) and can be converted at the holder’s discretion at a conversion price, which is either $10 per share or the lowest VWAP of New TruGolf for 10 consecutive trading days after the Business Combination closing, with adjustments and a floor price of $5.00 per share (the “Conversion Price”).
• Upon each conversion, New TruGolf will issue “Make-Whole Shares” in Class A Common Stock to the PIPE Investors, equal to the sum of
  • (A) all accrued interest on the Convertible Notes up to that date and
  • (B) the interest that would accrue if the converted principal were held until the Maturity Date (the “Make-Whole Amount”) at the Interest Conversion Rate (as defined below).
    • However, New TruGolf may choose to pay the Make-Whole Amount in cash or Make-Whole Shares at the Interest Conversion Rate if New TruGolf’s Class A Common Stock’s VWAP is below $6.00 per share for five consecutive trading days, ending on the day before the make-whole payment.
• Interest will accrue on the outstanding principal of the Convertible Notes at a rate of 10% annually, payable quarterly, and if New TruGolf’s Class A Common Stock’s VWAP reaches or exceeds $6.00 per share for five consecutive trading days before an interest payment date, PIPE Investors may choose to receive interest in cash or Class A Common Stock with a 15% annual interest rate and a conversion rate based on the lowest VWAP for the 5 consecutive trading days prior to the interest payment date.
• As part of the Convertible Notes purchase, PIPE Investors will receive Warrants to buy 727,273 Class A Common Stock shares at an exercise price of $13.00 per share, with provisions for price adjustments based on future stock sales by New TruGolf or its subsidiaries.
  • The Warrants are exercisable for five years, and after 90 days from the issue date, they can be exercised without a cash payment if there’s no effective registration statement available for resale.

SUBSEQUENT EVENT – 7/18/23 – LINK

• The SPAC entered into a non-redemption agreement with several unaffiliated third parties in exchange for them agreeing not to redeem an aggregate of 514,773 shares
  • The Sponsor will transfer 185,179 Class B shares to the non-redeeming shareholders

EXTENSION – 7/14/23 – LINK

• The SPAC approved the extension from July 29, 2023 to January 29, 2024.
  • 255,446 shares were redeemed at the meeting for $11.41 per share.
  • No contribution will be made into the trust account.

SUBSEQUENT EVENT – 7/12/23 – LINK

• The SPAC entered into a non-redemption agreement with two unaffiliated third parties in exchange for them agreeing not to redeem an aggregate of 22,606 shares
  • The Sponsor will transfer 8,138 Class B shares to the non-redeeming shareholders

TRANSACTION

• TruGolf stockholders will receive consideration in the form of newly issued shares of common stock DMAQ, valued based on an aggregate implied enterprise value for TruGolf of $125 million
  • Including up to approximately $45 million of contingent consideration, subject to customary adjustments for TruGolf’s closing working capital, cash and debt and any unpaid transaction expenses.
• Upon completion of the transaction, assuming no redemptions by DMAQ’s stockholders, the combined company is expected to have a total pro forma equity value of approximately $134.1 million.
• It is currently anticipated that the transaction will close by the end of the third quarter of 2023.

SPAC FUNDING.

• Convertible Note Agreement – LINK
  • On November 2, 2023, Deep Medicine Acquisition Corp. (DMAQ) entered into a Loan Agreement with PIPE Investors, granting them up to $8,000,000 in convertible notes and warrants to purchase 727,273 shares of Class A common stock upon the completion of DMAQ’s business combination with TruGolf, Inc.
    • (i) The first closing of $2,110,000 will occur upon the completion of the Business Combination, resulting in Convertible Notes issued by New TruGolf in the principal amount of $2,400,000, along with Warrants, all on the First Closing Date.
    • (ii) The second closing of $2,160,000 will take place within three business days after New TruGolf files the Registration Statement, resulting in Convertible Notes issued by New TruGolf in the principal amount of $2,400,000, provided that certain conditions are met, contingent on Stockholder Approval.
    • (iii) The third closing of $2,880,000 will occur within three business days of the Registration Statement being declared effective, leading to Convertible Notes issued by New TruGolf in the principal amount of $3,200,000, contingent on Stockholder Approval and New TruGolf’s discretion.
  • Each Convertible Note has a maturity date five years from its respective closing date (the “Maturity Date”) and can be converted at the holder’s discretion at a conversion price, which is either $10 per share or the lowest VWAP of New TruGolf for 10 consecutive trading days after the Business Combination closing, with adjustments and a floor price of $5.00 per share (the “Conversion Price”).
  • Upon each conversion, New TruGolf will issue “Make-Whole Shares” in Class A Common Stock to the PIPE Investors, equal to the sum of
    • (A) all accrued interest on the Convertible Notes up to that date and
    • (B) the interest that would accrue if the converted principal were held until the Maturity Date (the “Make-Whole Amount”) at the Interest Conversion Rate (as defined below).
      • However, New TruGolf may choose to pay the Make-Whole Amount in cash or Make-Whole Shares at the Interest Conversion Rate if New TruGolf’s Class A Common Stock’s VWAP is below $6.00 per share for five consecutive trading days, ending on the day before the make-whole payment.
  • Interest will accrue on the outstanding principal of the Convertible Notes at a rate of 10% annually, payable quarterly, and if New TruGolf’s Class A Common Stock’s VWAP reaches or exceeds $6.00 per share for five consecutive trading days before an interest payment date, PIPE Investors may choose to receive interest in cash or Class A Common Stock with a 15% annual interest rate and a conversion rate based on the lowest VWAP for the 5 consecutive trading days prior to the interest payment date.
  • As part of the Convertible Notes purchase, PIPE Investors will receive Warrants to buy 727,273 Class A Common Stock shares at an exercise price of $13.00 per share, with provisions for price adjustments based on future stock sales by New TruGolf or its subsidiaries.
    • The Warrants are exercisable for five years, and after 90 days from the issue date, they can be exercised without a cash payment if there’s no effective registration statement available for resale.

EARNOUT

• Company
  • 4,500,000 shares will be held in escrow until certain thresholds are met
    • 1,000,000 shares 
      • (i) in the event that the gross consolidated gross revenue of DMAQ for 2024 equals or exceeds $30,000,000 but is less than $42,000,000, then 50% of the First Tranche shall no longer be subject to forfeiture or
        • (y) in the event that the Gross Revenues for 2024 equals or exceeds $42,000,000, then 100% of the First Tranche shall no longer be subject to forfeiture; or
      • (ii) in the event that the dollar VWAP of the shares of DMAQ’s Class A common stock is at least $13.00 per share for at least 20/30 trading days in the specified period, then 100% of the First Tranche shall no longer be subject to forfeiture
      • In the event that 10 or more Qualified Franchise Locations are opened prior to the end of the calendar year 2024, then 100% of the First Tranche shall no longer be subject to forfeiture.
    • 1,500,000 shares
      • (i) in the event that the gross consolidated gross revenue of DMAQ for 2025 equals or exceeds $50,000,000 but is less than $65,000,000, then 50% of the Second Tranche shall no longer be subject to forfeiture or
        • (y) in the event that the Gross Revenues for 2025 equals or exceeds $65,000,000, then 100% of the Second Tranche shall no longer be subject to forfeiture; or
      • (ii) in the event that the dollar VWAP of the shares of DMAQ’s Class A common stock is at least $15.00 per share for at least 20/30 trading days in the specified period, then 100% of the First Tranche shall no longer be subject to forfeiture
      • In the event that 30 or more Qualified Franchise Locations are opened prior to the end of the calendar year 2025, then 100% of the Second Tranche shall no longer be subject to forfeiture.
    • 2,000,000 shares
      • (i) in the event that the gross consolidated gross revenue of DMAQ for 2026 equals or exceeds $80,000,000 but is less than $100,000,000, then 50% of the Third Tranche shall no longer be subject to forfeiture or
        • (y) in the event that the Gross Revenues for 2026 equals or exceeds $100,000,000, then 100% of the Third Tranche shall no longer be subject to forfeiture; or
      • (ii) in the event that the dollar VWAP of the shares of DMAQ’s Class A common stock is at least $17.00 per share for at least 20/30 trading days in the specified period, then 100% of the Third Tranche shall no longer be subject to forfeiture
      • In the event that 50 or more Qualified Franchise Locations are opened prior to the end of the calendar year 2026, then 100% of the Second Tranche shall no longer be subject to forfeiture.

LOCK-UP

• Company and Sponsor
  • 50% Six Months after the Closing Date
  • 50% Six months after the Closing Date or if the share price equals or exceeds $12.50 for 20/30 trading days

NOTABLE CONDITIONS TO CLOSING

• Upon the Closing DMAQ shall have cash, including funds remaining in DMAQ’s trust account and the proceeds of any PIPE Investment, after giving effect any Redemptions, payment of amounts owed to the DMAQ’s sponsor and its affiliates but prior to the payment of DMAQ’s unpaid expenses or liabilities in an aggregate amount not to exceed $1,600,000, of at least equal to $10,000,000

NOTABLE CONDITIONS TO TERMINATION

• By either DMAQ or TruGolf if any of the conditions to Closing have not been satisfied or waived by July 29, 2023 (the “Outside Date”)

ADVISORS

• ArentFox Schiff LLP and Sichenzia Ross Ference Carmel LLP are serving as legal advisors to TruGolf.
• Ellenoff Grossman & Schole, LLP is serving as legal advisor to DMAQ.
• I-Bankers is serving as financial advisor to DMAQ.

EXTENSION – 10/20/22 – LINK

• On December 23, 2022, Deep Medicine Acquisition Corp. extended the date by which the Company must consummate its initial business combination from January 29, 2023, to July 29, 2023.
• Stockholders holding 11,819,790 shares of the Company’s Class A common stock exercised their right to redeem such shares for a pro-rata portion of the funds in the Company’s trust account.
• As a result, approximately $121,034,649.60 million (approximately $10.24 per share) will be removed from the Company’s trust account to pay such holders.
• Following redemptions, the Company will have 830,210 Public Shares outstanding.

EXTENSION – 10/20/22 – LINK

• Deep Medicine Acquisition Corp., announced that an aggregate of $1,265,000 has been deposited into the Company’s trust account for its public shareholders, representing $0.10 per public share, which enables the Company to extend the period of time it has to consummate its initial business combination by three months from October 29, 2022, to January 29, 2023.
• The Extension is the first of up to two three-month extensions permitted under the Company’s governing documents.

The below-announced combination was terminated on 9/26/22.  It will remain on the page for reference purposes only. Once a new combination is announced it will be added to the top of the page.

PROPOSED BUSINESS COMBINATION: Chijet Motor Company, Inc. [TERMINATED – 9/26/22 – LINK]

ENTERPRISE VALUE: $2.55 billion

ANTICIPATED SYMBOL: tbd

Deep Medicine Acquisition Corp. proposes to combine with Chijet Motor Company, Inc., a Chinese automaker, which is developing electric vehicles and expanding its manufacturing capabilities.

• Chijet is currently focusing on expanding the business of electric vehicles while manufacturing, selling and servicing traditional fuel vehicles.
• Currently, the Company sells vehicles to more than 300 dealerships in China and the rest of Southeast Asia, and produces a variety of models through its Chinese subsidiary FAW Jilin Automobile Co., Ltd., including 3 SUV models sold under the Senya brand and 4 light truck models sold under the Jiabao brand.
• Chijet partners with FAW Group, one of the ‘Big Four’ auto manufacturers in China.
• With over three million cars produced and over $100 billion in annual revenue in 2021, FAW ranked 66th on the Fortune 500 Global list in 2021.
• In 2019, Chijet indirectly purchased a 64.28% interest in FAW Jilin from FAW. In addition, Chijet is building a 5.15 million-square-foot factory in Yantai, China, dedicated to electric vehicle production and a new planned headquarters.
• The FAW Jilin production subsidiary has passed IATF16949 quality management system certification, ISO45001 occupational health and safety management system certification, ISO14001 environmental management system certification and ISO50001 energy management system certification.
• These certification registrations cover the design and manufacture of the sedan and minicar range.

TRANSACTION

• The business combination attributes an implied enterprise value to Chijet’s operating companies of $2.55 billion in the aggregate, including Chijet’s 85.17% ownership interest in Shandong Baoya New Energy Vehicle Co., Ltd., the Chinese company that is developing new EV models, and 64.82% interest in FAW Jilin, the Chinese company producing and selling traditional fuel vehicles.
• Upon completion of the transaction, Chijet is expected to have approximately $127.8 million in cash, assuming no redemptions by DMAQ public shareholders.
• The cash proceeds raised in the transaction are currently anticipated to be used for the construction of Chijet’s Yantai electric vehicle manufacturing base and to fund company operations, support its growth, and for general company operating purposes.
• Following completion of the proposed transaction, Chijet plans to raise additional capital to further its planned expansion of production capacity and product offering to include new models of electric vehicles.

PIPE

• There is no PIPE for this transaction.

LOCK-UP

Company Lock-Up:

• At or before the Closing, and effective as of the Closing, certain Sellers holding approximately 78% of Chijet’s capital stock will enter into a Lock-Up Agreement with Pubco.
• The Sellers to be parties thereto will agree that they will not sell shares held by them, during the period commencing from the Closing and ending on the 6-month anniversary of the Closing.
• Notwithstanding the foregoing, solely with respect to 50% of such Exchange Shares, the Lock-Up Period will be deemed to terminate on the date on which the closing price of Pubco’s publicly traded Ordinary Shares equals or exceeds $12.50 per share for any 20 days within a 30-day trading period after the Closing.

Sponsor Lock-up:

• Same terms as Sellers.

NOTABLE CONDITIONS TO CLOSING

• The obligations of the parties to consummate the Business Combination are subject to the Company having upon the Closing cash and cash equivalents (including funds remaining in the trust account after completion and payment of the Redemption and the proceeds of any private placement financing), net of the Company’s unpaid expenses and liabilities, at least equal to $10,000,000.

NOTABLE CONDITIONS TO TERMINATION

• The Business Combination Agreement may be terminated at any time prior to the Closing by either the Company or Chijet if the Closing has not occurred on or prior to October 28, 2022 (the “Outside Date”).
  • If the Company elects to extend the date by which it must consummate its initial business combination (by up to an additional 6 months in two extensions of 3 months each), Chijet will fund the aggregate amount that the Company is required to deposit into its trust account in order to accomplish any such Extension (up to a maximum aggregate purchase price of $2,600,000 for both 3-month Extensions together).
• Or by either the Company or Chijet if a governmental authority of competent jurisdiction has taken any action permanently restraining, enjoining, or otherwise prohibiting the Business Combination, and such action has become final and non-appealable.

ADVISORS

• No advisors have been listed.

MANAGEMENT & BOARD

Executive Officers

Humphrey P. Polanen, 72
Chief Executive Officer and Chairman of the Board

Humphrey P. Polanen is the Chief Executive Officer and managing member of NeoVista Ventures LLC, a private equity investment fund. Mr. Polanen was the director of Heritage Commerce Corp (Nasdaq: HTBK), a bank holding company offering a wide array of business and personal banking services, from 1994 to April 2016. Since 1999, Mr. Polanen has been actively involved as an investor and director in various venture capital backed companies in the technology industry, and has served as a director of various private equity funds. He was the Managing Director of Internet Venture Partners BV, an investment firm, from 2000 to 2004. Prior to joining Internet Ventures, he served in various executive positions with Sun Microsystems and Tandem Computers. Mr. Polanen is a director (and former Chairman of the Board) of St. Bernard Software, a publicly traded Internet security company. Mr. Polanen practiced corporate law for over 10 years at the beginning of his career. He has a Bachelor of Arts degree from Hamilton College and a Juris Doctor degree from Harvard University.

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Weixuan Luo, 48
Chief Financial Officer

Weixuan Luo is a founding partner of L&L CPAS, PA, a PCAOB registered public accounting firm since October 2013. She has also been serving as the President of American Aeolian Travel Inc., a travel agency, since May 2012. She has been a Senior Manager at Greentree Financial Group Inc. providing financial advisory services to public companies since May 2003. Ms. Luo was a founder and Chief Financial Officer of Proficient Alpha Acquisition Corp. (Nasdaq: PAAC), which completed its initial business combination in June 2020. Ms. Luo has worked with publicly traded companies for over a decade in a broad array of services, including audits, tax preparation, risk assessment, financial analysis and financial statements preparation. Ms. Luo is Certified Public Accountant in North Carolina and Florida and a member of American Institute of CPAs. Ms. Luo received her Master’s degree in Economics and Finance from the University of North Carolina.

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Board of Directors

John Chiang, — [Appointed 10/24/22]
Director

Mr. Chiang has been serving as a member of the board of directors of Apollo Medical Holdings, Inc. since January 2019 and on the corporate advisory boards of Pasadena Private Lending, LLC since February 2019, Adept Urban since January 2021, and Calyx Peak Companies since February 2019. From January 2015 to January 2019, Mr. Chiang served as the California State Treasurer, where he oversaw financial transactions, investments and the sale of bonds. Prior to that, Mr. Chiang served as California State Controller from January 2007 to January 2015.

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Ronald M. Razmi, MD, 51
Director

Ronald M. Razmi, MD is the founder and Chief Executive Officer of Kinders, a medical AI advisory and technology company with focus on applications of AI in life sciences and healthcare delivery systems, which was founded in September 2016. Prior to that, Dr. Razmi was the founder and Chief Executive Officer of Acupera, Inc., a software platform to enable population health management at scale and intelligent automation of clinical workflows. From 2009 to August 2011, he was an associate director of Navigant, a management consulting company. From 2007 to 2009, he was a consultant at McKinsey & Company, a management consultant company, with focus on strategy and commercialization of novel technologies in clinical environments. Dr. Razmi was a cardiologist at the Care Group, LLC from September 2003 to December 2006. He completed his medical training at the Mayo Clinic and holds a B.S. in biology from Southern Methodist University and an MBA from Northwestern University’s Kellogg School of Management.

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Tina Spires, 44
Director

Tina Spires is an emergency medicine physician at The Cleveland Clinic in Florida. Prior to The Cleveland Clinic, she was clinical faculty for the emergency medicine program for the University of Miami at Jackson Memorial Hospital. Dr. Spires was core and clinical faculty for the Emergency Medicine residency at Mount Sinai Medical Center. She is a National Board examiner for emergency medicine boards. She attended Baylor University followed by Nova Southeastern College of Osteopathic Medicine where she simultaneously earned her Master’s degree in public health and medical degree.

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HongLiang Ren, 41
Director

HongLiang Ren is the founder and Chief Executive Officer of Orient Excellent Asset Management Co., Ltd., an asset management company which was founded in December 2017. Prior to that, he was the U.S. Chief Executive Officer and Overseas Smart Terminal President of Le.com, an internet information and technology company, from June 2016 to June 2017. From August 2004 to April 2016, he served as Regional President at Huawei Consumer Business Group and was responsible for smartphones and other consumer products. He was the General Manager of ODM Department at Shenzhen Interchange Data Technology Co., Ltd., an internet technology company in China from September 2003 to July 2004. He served as the General Manager of Nanjing Branch of Konka Telecommunication Technology Co., Ltd., a manufacturer of electronics products in China, from July 2001 to August 2003. He received his Bachelor’s degree in business administration from Nanjing University.

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Bryant E. Fong, 48
Director

Bryant E. Fong is a founding Managing Director and General Partner at Biomark Capital Fund, a life sciences private equity firm formed in 2013 (“Biomark Capital”). Mr. Fong is the co-founder and interim Chief Executive Officer of i2Dx, a Biomark Capital portfolio company, that has developed a proprietary AI/Machine Learning target discovery/validation platform using real world outcomes in Alzheimer’s Disease to identify novel targets based on human genetics. Prior to Biomark Capital, Mr. Fong was a Managing Director and General Partner of Burrill & Company, where he spent almost 16 years investing in and managing investments in private and public companies in the biotechnology industry. Mr. Fong currently serves on the Boards of Directors of a number of life science companies, including ADMA Biologics, Inc. (Nasdaq: ADMA), Eden Biologics and i2Dx. Mr. Fong earned his Bachelor’s degree with honors in Molecular and Cell Biology-Biochemistry from the University of California, Berkeley.

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Marc A. Hamer, 48
Director

Marc A. Hamer has been the Executive Vice President, CIO and CTO of Orgill, Inc., a hardlines distributor. From 2016 to 2019, Mr. Hamer was the Corporate VP, Customer Experience, CIO and CDO of Sealed Air Corporation, a packaging company. Prior to that, Mr. Hamer was the Global Chief Information Officer at Babcock & Wilcox, a provider of energy and environmental technologies and services for power, renewable and industrial markets, from 2013 to 2016. From 2007 to 2013, Mr. Hamer was Vice President of Thermo Fisher Scientific Inc. (NYSE: TMO), a biotechnology company. Mr. Hamer sits on Advisory boards for the Global CIO Executive Summit, PTC, Insight Venture Management, FireMon and Nutanix. He is also a member of the CNBC Technology Executive Council. Mr. Hamer earned his Bachelor’s degree in management information system from Pennsylvania State University and his Master’s degree in business administration specializing in finance from the University of Phoenix.

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Wanlei Miao, 37
Director

Wanlei Miao which is a subsidiary company of SAIF Partners, private equity firm. Prior to that, Mr. Miao was the general manager and head of the Beijing branch of Bank of Huaxing from January 2016 to August 2015. From December 2014 to January 2016, Mr. Miao was the general manager at the financial market department of Lion Asset Management Company. Mr. Miao received his Bachelor’s degree in international business management from University of Westminster and his Master’s degree in Msc-Marketing Management from University of Surrey.

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