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 announced a securities class action against TruGolf Holdings alleging misleading disclosures related to its Series A preferred financing, share dilution, financial reporting and Nasdaq-listing compliance. The complaint alleges TruGolf overstated outstanding Class A shares by 480,504 shares, or roughly 52%, in its April 15, 2026 Form 10-K and that its Class A share count more than doubled in under five months. It further alleges the dilution and related disclosures contributed to a split-adjusted share-price decline of more than 98% and required two reverse stock splits; investors have until September 28, 2026 to seek lead-plaintiff status.

Analysis

This is not primarily a litigation event; it is a capital-structure and listing-survival event. The alleged floating-price preferred conversion mechanics create a reflexive “death-spiral” dynamic: lower common-stock prices generate more conversion shares, which increases selling supply and raises the probability of another authorization amendment, reverse split, or financing. For a micro-cap with impaired disclosure credibility, equity value should be treated as a residual claim behind preferred holders rather than valued on operating milestones.

The September 28 lead-plaintiff deadline is unlikely to be a standalone catalyst, but any amended filing, Nasdaq deficiency notice, restatement, revised share-count disclosure, or request to expand authorized shares could reprice the stock sharply over the next 1-3 months. A settlement years from now would not repair current common-holder economics; the near-term determinant is whether remaining preferred stated value and conversion-price protections can be quantified. Until that cap-table information is independently reconciled, apparent price declines or post-split “cheapness” are not a valuation signal.

Consensus may overemphasize the lawsuit headline after the prior collapse, but the underappreciated risk is liquidity: repeated dilution can leave a nominally listed security with limited borrow, wide spreads, and episodic short squeezes even while fundamentals deteriorate. That makes a directional short unattractive unless borrow cost, utilization, daily dollar volume, authorized-share headroom, and remaining preferred obligations are verified. The relevant falsifier would be a fully reconciled capitalization table showing preferred overhang is retired or fixed-price, alongside restored Nasdaq compliance and no further equity issuance.

Second-order read-through to broader software, golf, or consumer-discretionary peers is negligible. The actionable signal is governance-screen related: avoid companies financed with variable-price convertibles, insufficient authorized-share capacity, or repeated reverse splits, especially where reported basic shares cannot be reconciled across filings.

Key Decisions for Investors

• Avoid or maintain zero exposure to TRUG for at least the next 1-3 months; do not average down based on split-adjusted price declines. Reassess only after a filing quantifies remaining Series A obligations, conversion terms, issued shares, and authorized-share capacity.
• Do not initiate a naked TRUG short without confirming borrow availability, annualized borrow cost, utilization, and average daily dollar volume. If borrow is available and a new share-authorization or conversion disclosure emerges, use a small, tightly risk-limited short with a 2-10 trading-day horizon; cover on any financing resolution or listing-compliance announcement.
• Set event alerts for SEC amendments, Nasdaq notices, proxy proposals to increase authorized shares, preferred-conversion disclosures, and additional reverse-split proposals. Treat any unambiguous confirmation of fixed-price conversion or preferred retirement as thesis-invalidating.
• Apply a portfolio-level exclusion screen to issuers with floating/ratchet convertible preferred instruments and repeated reverse splits; require explicit dilution modeling before participating in any financing or momentum trade.