TruGolf Holdings, Inc. — financial distress indicators
Financial-health summary
TruGolf Holdings, Inc.'s reported numbers place it in the 'Very weak' financial-health band (distress score 73/100). The main indicators are market-implied default probability >20%, losses in each of the last 3 years and operations consume cash. Independently, the Ohlson accounting model puts its 1-year failure probability at 100% and the market-implied (Merton) default probability is 84.1%. In its favour: cash on hand covers all debt (net-cash balance sheet).
Stress by dimension
Share price — last 12 months
Indicators behind the score
Each red flag shows the evidence from the company’s own filings and the financial or legal principle behind it. Points add to the 0–100 score.
Merton distance-to-default -1.00 σ → PD 84%.
Structural (Merton/KMV) model: equity is a call option on assets; low distance-to-default means assets are close to the default point.
Net income negative in 3 of 3 fiscal years.
Persistent losses erode equity and the capacity to absorb shocks.
Operating cash flow negative in 3 of the last 3 years.
A business that cannot fund itself from operations depends on external capital to survive.
Price is -99% from its 52-week high.
Equity markets price distress early; collapses of this size usually reflect fear of wipe-out in a restructuring.
O-score 6.05 → model probability 100%.
Ohlson (1980) logit model of 1-year corporate failure; O > 0 (p > 50%) is the original failure cut-off.
Share count up +696% in a year.
Survival financing: repeated equity raises at depressed prices.
Current ratio is 0.92.
Short-term obligations exceed short-term resources — the company relies on rolling over credit.
Cash covers ~19 months of free-cash-flow burn.
Funding needs within two years make the company dependent on capital-market access.
Revenue vs net income
Cash generation
Debt vs cash vs equity
✅ Mitigating factors
- Cash on hand covers all debt (net-cash balance sheet).
📰 Recent news scan
- TruGolf Holdings (TRUG) Announces First TruGolf Range Installation Featuring AI CoachYahoo Finance · 2026-10-01
- TruGolf Range Debuts at Lucid Golf in New Albany, IndianaYahoo Finance · 2026-09-30
- TruGolf and Polymath to Present at The ThinkEquity Conference in New York on October 15Yahoo Finance · 2026-09-29
- TruGolf Announces Reverse Stock Split and Leadership ChangesYahoo Finance · 2026-09-28
- TruGolf Highlights September Milestones as Polymath Acquisition AdvancesYahoo Finance · 2026-09-28
- TruGolf Links Announces New Initiatives with Polymath to Develop Financing Opportunities for FranchiseesYahoo Finance · 2026-09-18
⚖️ U.S. legal pathway — Title 11, U.S. Code
Which chapter would apply?
- Chapter 11 — reorganisation. Management usually stays in control as debtor-in-possession; the automatic stay (§362) halts collection; a plan must meet the best-interests test (§1129(a)(7)) and the absolute priority rule (§1129(b)) — creditors are paid before shareholders, who are frequently wiped out.
- Chapter 7 — liquidation. A trustee sells assets and distributes proceeds by statutory priority (§§507, 726).
- Subchapter V (“Chapter 5”) is a fast track for small-business debtors under a statutory debt cap, but SEC-reporting companies are excluded (§101(51D)) — so it rarely applies to listed companies.
What typically triggers a filing
- Payment default or covenant breach lenders will not waive; a debt maturity that cannot be refinanced.
- Auditor going-concern doubt (ASC 205-40 / PCAOB AS 2415) — often itself a default trigger in loan agreements.
- Creditors can force a case with an involuntary petition (§303) if debts are not paid as they come due.
- Delisting after sustained sub-$1 prices or equity deficits cuts off equity funding.
Transactions shortly before filing can be clawed back (preferences — 90 days, §547; fraudulent transfers — 2 years, §548).
Frequently asked questions
What do TruGolf Holdings, Inc.'s financial-health indicators show?
As of 2026-10-08, TruGolf Holdings, Inc.'s public financial data places it in the 'Very weak' band with a distress score of 73/100, driven by market-implied default probability >20%, losses in each of the last 3 years and operations consume cash. This is a statistical screen of reported numbers — it does not mean the company is insolvent, has defaulted or will enter insolvency proceedings.
What is TruGolf Holdings, Inc.'s financial distress score?
73/100 ('Very weak'). Ohlson O-score 6.05 (model 1-year failure probability 100%). Merton distance-to-default -1.0 σ (model default probability 84.1%).
What works in TruGolf Holdings, Inc.'s favour?
Cash on hand covers all debt (net-cash balance sheet).
How are shareholders treated if a company enters insolvency?
In a Chapter 11 reorganisation the absolute priority rule pays secured lenders, then unsecured creditors, before shareholders — so existing shares are usually cancelled or heavily diluted. In Chapter 7 the company is liquidated and shareholders rarely recover anything.
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Methodology
Score = capped sum of rule-based red flags across seven dimensions (liquidity, solvency, profitability, cash flow, sales trend, market signal, news). Ohlson O-score (1980) gives an accounting-based 1-year failure probability; Merton distance-to-default (Bharath & Shumway 2008) gives a market-implied probability. Financial institutions use a capital-based rule set. Recalculated every trading day from the latest filings, prices and news.