INVESTOR ALERT: Pomerantz Law Firm Reminds Investors with Losses on their Investment in TruGolf Holdings, Inc. of Class Action Lawsuit and Upcoming Deadlines

Pomerantz LLP filed a securities class action against TruGolf Holdings, alleging that the company concealed the dilutive mechanics of its Series A convertible preferred stock, misstated share counts and omitted material ownership and Nasdaq-listing-risk disclosures. The complaint alleges TruGolf's April 15, 2026 Form 10-K overstated Class A shares outstanding by 480,504 shares, or about 52%, while the Class A share count more than doubled in under five months. The alleged dilution forced two reverse stock splits and contributed to a more than 98% decline in TruGolf's split-adjusted Class A share price; investors seeking lead-plaintiff status have until September 28, 2026.

Analysis

TRUG’s relevant investable issue is not litigation damages but financing reflexivity: a floating-price convertible can turn falling equity into mechanically accelerating share issuance, impairing any per-share valuation anchor. If the alleged disclosure failures prove directionally correct, the next financing is likely to be priced for survival rather than growth, raising the probability of further reverse splits, authorization increases, or a move to less liquid trading venues. The near-term legal notice itself is unlikely to alter enterprise value; the capital-structure overhang does.

Over the next 1-3 months, the decisive catalysts are an updated fully diluted share count, remaining preferred stated value, conversion notices, share-reserve availability, and Nasdaq compliance communications—not plaintiff-leadership deadlines. A clean disclosure that quantifies all conversion mechanics and demonstrates that the preferred is substantially extinguished would remove the principal short thesis. Conversely, any new equity authorization, going-concern language, delayed filing, or additional financing would likely trigger another liquidity-driven repricing because microcap holders have limited capacity to absorb uncertain issuance.

The contrarian case is that the equity has already discounted near-total impairment and that a settlement will be economically immaterial relative to the financing structure. That does not make TRUG attractive absent independently verifiable evidence of normalized operating cash generation sufficient to retire or avoid dilutive capital; at this stage, a low quoted price is not evidence of cheapness because the denominator remains unstable.

Key Decisions for Investors

• Avoid initiating fundamental long exposure in TRUG until the company publishes a reconciled basic and fully diluted share roll-forward, preferred balance, conversion-price formula, and remaining authorized-share capacity. Reassess only after two reporting cycles show no material incremental issuance.
• For accounts able to borrow, maintain a small tactical TRUG short only after confirming borrow availability and cost; size for gap risk and treat it as a 1-3 month catalyst trade around financing/listing disclosures, not a long-duration valuation short. Cover on evidence that the preferred has been extinguished or on a definitive non-dilutive capital raise.
• Do not buy puts unless open interest and spreads permit defined-risk execution; distressed microcap options can embed more liquidity premium than expected downside. A short-equity position with hard gross limits is the cleaner expression if borrow is reliable.
• Set immediate alerts for SEC filings involving Form 8-K financing amendments, proxy requests for additional authorized shares, late-filing notices, Nasdaq deficiency updates, and quarterly share-count reconciliation. Any one of these is a higher-signal event than developments in the shareholder suit.
• Avoid using sector peers as a hedge: TRUG’s risk is issuer-specific capital-structure impairment rather than a broad golf-simulation demand signal. If shorting, hedge market beta separately with a liquid small-cap index instrument rather than a consumer-leisure peer basket.