What changed in this filing

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Item 1A. Risk Factors

2024-04-01 compared with 2023-04-26 · 1885 added, 62 removed, 1 unchanged (100% of the section changed)

Risk Factors.

As a smaller reporting company under Rule 12b-2 of the Exchange Act, we are not required to include risk factors in this Report.

However, below is a partial list of material risks, uncertainties and other factors that could have a material effect on the Company and its operations:

we are a blank check company with no revenue or basis to evaluate our ability to select a suitable business target;

we may not be able to select an appropriate target business or businesses and complete our initial business combination, including the TMTG Business Combination, in the prescribed time frame;

our expectations around the performance of a prospective target business or businesses, such as TMTG, may not be realized;

since our Board approved the Transactions, we have experienced a number of regulatory delays, and we and TMTG may continue to experience additional delays in the future.

These delays could cause us to be unable to consummate the Transactions;

the Company was in the past, and continues to be, subject to inquiries, exams, pending investigations, or enforcement matters.

We are cooperating with a FINRA inquiry concerning events (specifically, a review of trading) that preceded the public announcement of the Merger Agreement.

We are also cooperating with investigations by the SEC and the Department of Justice.

In addition, we and each member of our Board received grand jury subpoenas seeking certain of the same documents demanded in the SEC subpoenas.

Any resolution of the inquiry or investigation, as well as proceedings by the SEC, FINRA, or other governmental or regulatory authorities, could result in the imposition of significant fines, penalties, injunctions, prohibitions on the conduct of the Company’s business, damage to the Company’s reputation and other sanctions against it, including restrictions on its activities;

the SEC may delay declaring our S-4 Registration Statement effective or disapprove the Transactions and issue a stop order or similar order with respect to the S-4 Registration Statement, which could materially delay or materially impede the consummation of the TMTG Business Combination;

we may not be successful in retaining or recruiting required officers, key employees or directors following our initial business combination;

our officers and directors may have difficulties allocating their time between the Company and other businesses and may potentially have conflicts of interest with our business or in approving our initial business combination;

we may not be able to obtain additional financing to complete our initial business combination, including the TMTG Business Combination, or reduce the number of stockholders requesting redemption;

unless extended, the Merger Agreement may be terminated at any time in accordance with its terms, including by either Digital World or TMTG after September 20, 2022, the SPAs may be terminated upon the termination of the Merger Agreement, and stockholders not have the chance to vote on the TMTG Business Combination;

during the pendency of the TMTG Business Combination, Digital World will not be able to enter into a business combination with another party because of restrictions in the Merger Agreement.

Furthermore, certain provisions of the Merger Agreement will discourage third parties from submitting alternative takeover proposals, including proposals that may be superior to the arrangements contemplated by the Merger Agreement.

There can be no assurance that Digital World will find an alternative target if it is unable to consummate the TMTG Business Combination;

it is possible that the parties will restructure the PIPE or renegotiate such arrangements in view of the PIPE closing conditions, evolving market and regulatory conditions.

There is no assurance that such terms can be renegotiated on favorable terms, if at all, that we will be able to secure an alternative financing transaction to support the TMTG Business Combination, or that we will find an alternative target if we are unable to consummate the TMTG Business Combination;

we may issue our shares to investors in connection with our initial business combination at a price that is less than the prevailing market price of our shares at that time;

the shareholders may not be given the opportunity to choose the initial business target or to vote on the initial business combination;

trust account funds may not be protected against third party claims or bankruptcy;

an active market for our public securities may not develop and the shareholders will have limited liquidity and trading;

the availability to us of funds from interest income on the trust account balance may be insufficient to operate our business prior to the business combination;

our financial performance following a business combination with an entity may be negatively affected by their lack of an established record of revenue, cash flows and experienced management;

there may be more competition to find an attractive target for an initial business combination, which could increase the costs associated with completing our business combination;

changes in the market for directors and officers liability insurance could make it more difficult and more expensive for us to negotiate and complete an initial business combination;

we may attempt to simultaneously complete business combinations with multiple prospective targets, which may hinder our ability to complete our initial business combination and give rise to increased costs and risks that could negatively impact our operations and profitability;

we may engage one or more of our underwriters or one of their respective affiliates to provide additional services to us after the initial public offering, which may include acting as a financial advisor in connection with an initial business combination or as placement agent in connection with a related financing transaction.

Our underwriters are entitled to receive deferred underwriting commissions that will be released from the trust account only upon a completion of an initial business combination.

These financial incentives may cause them to have potential conflicts of interest in rendering any such additional services to us after the initial public offering, including, for example, in connection with the sourcing and consummation of an initial business combination;

we may attempt to complete our initial business combination with a private company about which little information is available, which may result in a business combination with a company that is not as profitable as we suspected, if at all;

since our initial stockholders will lose their entire investment in us if our initial business combination is not completed (other than with respect to any public shares they may acquire during or after our initial

public offering), and because our sponsor, officers and directors may profit substantially even under circumstances in which our public stockholders would experience losses in connection with their investment, a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial business combination;

changes in laws or regulations or how such laws or regulations are interpreted or applied, or a failure to comply with any laws or regulations, may adversely affect our business, including our ability to negotiate and complete our initial business combination, and results of operations;

the value of the founder shares following completion of our initial business combination is likely to be substantially higher than the nominal price paid for them, even if the trading price of our common stock at such time is substantially less than $10.00 per share;

resources could be wasted in researching acquisitions that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another business.

If we have not completed our initial business combination within the Combination Period, our public stockholders may receive only approximately $10.45 per share (which represents the amount in the trust account as of December 31, 2021 before deduction of any payment of tax obligations or up to $100,000 to be used for liquidation expenses from interest earned on the funds in the trust account), or less than such amount in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless;

in March 2022, the SEC issued proposed rules relating to certain activities of SPACs.

Certain of the procedures that we, a potential business combination target, or others may determine to undertake in connection with such proposals may increase our costs and the time needed to complete our initial business combination and may constrain the circumstances under which we could complete an initial business combination.

The need for compliance with such proposals may cause us to liquidate the funds in the trust account or liquidate the Company at an earlier time than we might otherwise choose;

if we are deemed to be an investment company for purposes of the Investment Company Act, we would be required to institute burdensome compliance requirements and our activities would be severely restricted.

As a result, in such circumstances, unless we are able to modify our activities so that we would not be deemed an investment company, we may abandon our efforts to complete an initial business combination and instead liquidate the Company;

to mitigate the risk that we might be deemed to be an investment company for purposes of the Investment Company Act, we may at any time instruct the trustee to liquidate the investments held in the trust account and instead to hold the funds in the trust account in an interest bearing demand deposit account until the earlier of the consummation of our initial business combination or our liquidation.

As a result, following the liquidation of investments in the trust account, we would likely receive less interest on the funds held in the trust account, which would likely reduce the dollar amount our public stockholders would receive upon any redemption or liquidation of the Company;

recent increases in inflation and interest rates in the United States and elsewhere could make it more difficult for us to consummate an initial business combination;

military conflict in Ukraine or elsewhere may lead to increased price volatility for publicly traded securities, which could make it more difficult for us to consummate an initial business combination;

federal excise tax may be imposed on us in connection with our redemptions of shares in connection with a business combination or other stockholder vote pursuant to which stockholders would have a right to submit their shares for redemption;

we may be deemed a “foreign person” under the regulations relating to CFIUS and our failure to obtain any required approvals within the requisite time period may require us to liquidate;

there is substantial doubt about our ability to continue as a “going concern”;

we have identified a material weakness in our internal control over financial reporting as of December 31, 2022.

If we are unable to develop and maintain an effective system of internal control

over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business and operating results.

For the complete list of risks relating to our operations, the TMTG Business Combination and the PIPE, see the section titled “Risk Factors” contained in our (i) Registration Statement, (ii) Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC on April 13, 2022, (iii) Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2022, June 30, 2022 and September 30, 2022, as filed with the SEC on May 19, 2022, August 23, 2022, and November 21, 2022, respectively, (iv) S-4 Registration Statement and (v) the definitive proxy statement filed with the SEC on August 25, 2022.

Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition.

Additional risks could arise that may also affect our business or ability to consummate an initial business combination.

We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC.

Unresolved Staff Comments.

Not applicable.

Summary of Risk Factors

Below is a summary of the principal factors that make an investment in our common stock speculative or risky.

This summary does not address all

of the risks that we face.

Additional discussion of the risks summarized in this risk factor summary, and other risks that we face, can be found below under the heading “Risk Factors” and should be carefully considered, together with other

information in this Form 10-K and our other filings with the SEC before making an investment decision regarding our common stock.

Risks Related to TMTG’s Business

TMTG has a limited operating history, making it difficult to evaluate TMTG’s business and prospects and may increase the risks associated

with your investment.

TMTG’s actual financial position and results of operations may differ materially from the expectations of TMTG’s management.

If Truth Social fails to develop and maintain followers or a sufficient audience, if adverse trends develop in the social media platforms

generally, or if President Trump were to cease to be able to devote substantial time to Truth Social, TMTG’s business would be adversely affected.

Digital World previously identified material weaknesses in its internal control over financial reporting, and TMTG may identify additional material weaknesses in its previously issued financial

statements and in the future, which may cause TMTG to fail to meet its reporting obligations or result in material misstatements of its financial statements.

TMTG’s independent registered public accounting firm has indicated that TMTG’s financial condition raises substantial doubt as to its

ability to continue as a going concern.

TMTG’s estimates of market opportunity and forecasts of market growth may be inaccurate.

TMTG’s business is subject to complex and evolving U.S.

and foreign laws and regulations regarding privacy, data protection, and other

In the future, TMTG may be involved in numerous class action lawsuits and other lawsuits and disputes.

Computer malware, viruses, hacking, and phishing attacks, and spamming could adversely affect TMTG’s business and results of operations.

Risks Related to President Donald J.

TMTG’s success depends in part on the popularity of its brand and the reputation and popularity of President Trump.

Adverse reactions to

publicity relating to President Trump, or the loss of his services, could adversely affect TMTG’s revenues and results of operations.

President Trump is the subject of numerous legal proceedings.

An adverse outcome in one or more of the ongoing legal could negatively

The terms of a license agreement with President Trump is not terminable by TMTG when it may be desirable to TMTG.

The license agreement

does not require President Trump to use Truth Social in certain circumstances, including in connection with posts that President Trump deems, in his sole discretion, to be politically related.

Because President Trump is a candidate for president, he may divest his interest in Truth Social and may cease any involvement in its

TMTG depends on numerous third-parties to operate successfully, and many of these third parties may not want to engage with TMTG to

provide any services.

Risks Related to Ownership of TMTG Common Stock

Nasdaq may delist TMTG’s securities from trading on its exchange, which could subject TMTG to trading restrictions.

The market price of TMTG’s common stock may decline as a result of the Business Combination.

TMTG has discretion in the use of the net proceeds post-Closing and may not use them effectively.

TMTG stockholders may experience dilution in the future.

President Trump holds approximately 57.6% of the outstanding TMTG Common Stock, which limits other stockholders’ ability to influence the

outcome of matters submitted to stockholders for approval.

We operate in a dynamic and rapidly changing environment that involves numerous risks and uncertainties.

Certain factors may have a material adverse

effect on our business, prospects, financial condition and results of operations, and you should carefully consider them.

Accordingly, in evaluating our business, we encourage you to consider the following discussion of risk factors in its

entirety, in addition to other information contained in this Form 10-K and our other public filings with the SEC.

Other events that we do not currently anticipate or that we currently deem immaterial may also affect our business, prospects,

financial condition and results of operations.

Risks Related to TMTG’s Business

TMTG has a limited operating history, making it difficult to evaluate TMTG’s business and prospects and may increase the risks associated with your investment.

Private TMTG was formed on February 8, 2021 and started formulating its business plan at that time.

TMTG did not begin developing the Truth Social platform until June 2021.

Private TMTG made Truth Social available for general use in the first quarter of 2022.

We pride ourselves on building Truth Social without relying on hostile

technology companies.

Working exclusively with alternative technology firms that share our commitment to free speech, Private TMTG fully launched Truth Social for iOS in April 2022.

Private TMTG debuted the Truth Social web application in

May 2022, and the Truth Social Android App became available in the Samsung Galaxy and Google Play stores in October 2022.

Private TMTG introduced direct messaging to all versions of Truth Social in 2022, released a new “Groups” feature

for users in May 2023, and announced the general availability of Truth Social internationally in June 2023.

TMTG cannot assure you that it will be able to operate its business successfully or implement its operating policies and

strategies as described elsewhere in this Report.

TMTG may encounter risks and challenges frequently experienced by growing companies in rapidly developing industries, including risks related to its ability to:

build a reputation for providing a superior platform and customer service, and for creating trust and long-term

relationships with its potential customers;

implement a revenue model allowing it to develop predictable revenues;

distinguish itself from competitors and navigate political issues;

develop and offer a competitive platform that meets TMTG’s customers’ needs as

improve TMTG’s current operational infrastructure and non-platform technology to support its growth and to respond to the

evolution of TMTG’s market and competitors’ developments;

develop, maintain and expand TMTG’s relationships with suppliers of quality

respond to complex, evolving, stringent, contradictory industry standards and government regulation on an international

scale that impact TMTG’s business;

prevent, detect, respond to, or mitigate failures or breaches of privacy and

hire and retain qualified and motivated employees.

If TMTG is unable to do so, its business may suffer, its revenue and operating results may decline and TMTG may not be able to achieve further growth or sustain

profitability.

Since inception,

Private TMTG has continuously sought to, and following the Closing TMTG will continue to seek to, improve its business model by developing its

technology as an early stage company.

TMTG expects to incur operating losses for the foreseeable future.

Truth Social has been generally available only since the first quarter of 2022.

Further, although Private TMTG targeted and assembled certain intellectual property and real or intangible property rights, our business plan is still developing.

Accordingly, TMTG has no way to evaluate the likelihood that its business

will be successful.

Potential investors should be aware of the difficulties normally encountered by a new social media platform and the high rate of failure for such enterprises.

The likelihood of success must be considered in light of the

problems, expenses, difficulties, complications and delays encountered in connection with the operations that TMTG plans to undertake.

These potential problems include, but are not limited to, unanticipated problems relating to the

development of Truth Social, lack of widespread acceptance of Truth Social by users, and challenges attracting potential vendors to participate in Truth Social’s development, and any additional costs and expenses that may exceed current

TMTG expects to incur significant losses into the foreseeable future.

TMTG recognizes that if the effectiveness of its business plan is not forthcoming it will not be able to continue business operations.

There is limited

operating history upon which to base any assumption as to the likelihood that TMTG will prove successful, and TMTG may never generate sufficient operating revenues to achieve profitable operations.

If TMTG is unsuccessful in addressing

these risks, its business will most likely fail.

TMTG’s actual financial position and results of operations may differ materially from the expectations of TMTG’s management.

TMTG’s actual financial position and results of operations may differ materially from management’s expectations.

As a result, TMTG’s revenue, net income and cash

flow may differ materially from TMTG’s expected revenue, net income and cash flow.

The process for estimating TMTG’s revenue, net income and cash flow requires the use of judgment in determining the appropriate assumptions and estimates.

These estimates and assumptions may be revised as additional information becomes available and as additional analyses are performed..

TMTG does not currently, and may never, collect, monitor or report certain key operating metrics used by companies in similar industries.

Since its inception, Private TMTG focused on developing Truth Social by enhancing features and user interface

rather than relying on traditional performance metrics like average revenue per user, ad impressions and pricing, or active user accounts, including monthly and daily active users.

While many industry peers may gather and report on these

or similar metrics, given the early development stage of Truth Social, Private TMTG’s management and board did not rely on, and TMTG’s management and board does not anticipate relying on, any particular key performance metric to make

business or operating decisions.

Concurrent with access to new capital and resources following the Business Combination, TMTG is actively evaluating the most relevant, reliable and appropriate key operating metrics that align with its

evolving business model.

At this juncture in its development, TMTG believes that adhering to traditional key performance indicators, such as signups, average revenue per user, ad impressions and pricing, or active user accounts including

monthly and daily active users, could potentially divert its focus from strategic evaluation with respect to the progress and growth of its business.

TMTG believes that focusing on these KPIs might not align with the best interests of

TMTG or its shareholders, as it could lead to short-term decision-making at the expense of long-term innovation and value creation.

Therefore, TMTG believes that this strategic evaluation is critical and aligns with its commitment to a

robust business plan that includes introducing innovative features and new technologies.

In connection with such evaluation, and consistent with SEC guidance, TMTG will consider whether it has effective controls and procedures in place to process

information related to the disclosure of key performance indicators and metrics to ensure consistency as well as accuracy period over period, or the feasibility of implementing any such controls and procedures.

If so, TMTG may decide to

collect and report such metrics if they are deemed to significantly enhance investors’ understanding of TMTG’s financial condition, cash flows, and other aspects of its financial performance.

However, TMTG may find it difficult or

resource-prohibitive to implement such effective controls and procedures and may never collect, monitor or report any or certain key operating metrics, which is likely to make it difficult it for stockholders in TMTG to evaluate and compare

TMTG’s performance to that of companies in similar industries.

If the use of third-party cookies or other tracking technology is restricted by third parties outside of TMTG’s control, rejected by Truth Social’s users, or

otherwise subject to unfavorable regulation, TMTG’s ability to tailor, improve and provide a consistent experience to Truth Social’s users would be negatively impacted, which could materially and adversely affect TMTG’s growth prospects and

financial performance.

TMTG’s Truth Social platform is still in an early development stage, however, as other similar companies in the space, TMTG expects to generate substantial revenue

from advertisements.

Accordingly, Truth Social’s ability to use third-party cookies to provide advertising companies relevant data for their advertisements is critical to its revenue generation potential.

However, with increasing

restrictions on third party cookies, Truth Social may lose the ability to track user behavior across its platform, which could negatively affect its ability to retain advertisers on its platform and effectively advertise their services.

Truth Social’s use of cookies aids its development and ability to improve its services in response to user

preferences and to provide its users with relevant offers from advertisers.

Recently, web and mobile browser developers, such as Apple, Microsoft or Google, have implemented and may continue to implement changes, including requiring

additional user permissions, in their browsers or device operating systems that impair Truth Social’s ability to track cookies and improve the effectiveness of advertising on its platform.

Such changes include limiting the use of

first-party and third-party cookies and related tracking technologies, such as mobile advertising identifiers, and other changes that limit Truth Social’s ability to collect information that allows it to attribute members’ actions on

advertisers’ websites to the effectiveness of advertising campaigns run on the platform.

For example, Apple launched its Intelligent Tracking Prevention (“ITP”) feature in its Safari browser.

ITP blocks some or all third-party cookies by

default on mobile and desktop and ITP has become increasingly restrictive over time.

Similarly, on January 4, 2024, Google began testing a new feature on its Chrome browser called “Tracking Protection.” This feature limits cross-site

tracking by restricting website access to third-party cookies by default.

Google is expected to implement the Tracking Protection Tool in all Chrome browsers by the end of the second quarter of 2024, essentially no longer supporting

third-party cookies in its Google Chrome browser.

Third-party cookies have been a fundamental part of the web for nearly three decades, aiding platforms in generating relevant ads, among other functions.

These web and mobile browser

developers have also implemented and may continue to implement changes and restrictions in browser or device functionality that limit TMTG’s ability to communicate with or understand its business and users.

As such, the implementation of

these changes could significantly impair TMTG’s ability to tailor, improve and provide a consistent experience to its users, which in turn could materially and adversely affect its growth prospects and financial performance.

In addition, federal, state and international governmental authorities continue to evaluate the privacy

implications inherent in the use of proprietary or third-party cookies and other methods of online tracking for behavioral advertising and other purposes.

and foreign governments have enacted, have considered or are considering

legislation or regulations that could significantly restrict the ability of companies and individuals to engage in these activities, such as by regulating the level of consumer notice and consent required before a company can employ

cookies or other electronic tracking tools or the use of data gathered with such tools.

Additionally, some providers of consumer devices and web browsers have implemented, or announced plans to implement, means to make it easier for

internet users to prevent the placement of cookies or to block other tracking technologies, which could if widely adopted significantly reduce the effectiveness of such practices and technologies.

The regulation of the use of cookies and

other current online tracking and advertising practices or a loss in TMTG’s ability to make effective use of services that employ such technologies could increase its costs of operations and limit its ability to acquire new customers on

cost-effective terms and consequently, materially adversely affect its business, financial condition and operating results.

TMTG’s reputation, competitive advantage, financial position and relationships with its users could be materially harmed if TMTG is unable to comply with complex and

evolving data protection and privacy, security, and breach of notification laws and regulations, and the costs and resources required to achieve compliance may have a materially adverse impact.

TMTG’s reputation, competitive advantage, financial position and relationships with its users could be materially harmed if TMTG is accused of a violation or is

unable to comply with complex and evolving data protection and privacy, security, and breach of notification laws and regulations, and the costs and resources required to achieve compliance on an international scale may have a materially

adverse impact on its business.

In the course of delivering TMTG’s product(s), TMTG expects to use, disclose, control, process, collect, transmit and store information that is related to and seeks to correlate internet-connected devices,

user activity and the advertisements it places.

Federal, state, and international laws and regulations govern the protection, collection, use, processing, retention, sharing, privacy, and security of data that TMTG may access, use,

disclose, transfer, store, and collect across TMTG’s operational and advertising solutions.

TMTG strives to comply with all applicable laws, regulations, policies and legal obligations relating to privacy, security, and data protection,

collection, processing use, disclosure, transmission, and storage.

However, the applicability of specific laws may be unclear in some cases and domestic and foreign government laws, regulations, and enforcement of data practices and data

tracking technologies is expansive, poorly defined and rapidly evolving.

In addition, it is possible that these requirements may be interpreted and applied in a manner that is new or inconsistent from one jurisdiction to another and may

conflict with other laws, regulations, or rules or TMTG’s practices.

Any actual or perceived failure by TMTG to comply with U.S.

federal, state or international laws, including laws and regulations regulating data privacy, security or

consumer protection, or use, disclosure or unauthorized access to or by third parties to this information, could result in proceedings or actions against TMTG by government entities, competitors, private parties or others.

Any proceedings

or actions against TMTG alleging violations of consumer or data protection laws or asserting privacy-related or security-related theories could hurt TMTG’s reputation, force TMTG to cease operations or force TMTG to spend significant

amounts in defense of these proceedings, distract its management, increase its costs of doing business, adversely affect the demand for its solutions and ultimately result in the imposition of monetary liability.

TMTG may also be

contractually liable to indemnify and hold harmless TMTG’s customers, vendors or third parties from the costs or consequences of litigation resulting from using TMTG’s solutions or from the disclosure of confidential information, which

could damage TMTG’s reputation among its current and potential customers, and may require significant expenditures of capital and other resources that could cause it to lose significant business and revenue.

The collection, protection and use of personal information, personally identifiable information and/or personal data (collectively referred to as “personal data” for

ease of reference) is governed by data protection, privacy, security and breach laws and regulations enacted in the United States and other jurisdictions around the world in which TMTG operates or plans to operate.

These laws and

regulations continue to evolve and may be inconsistent from one jurisdiction to another.

Compliance with applicable privacy, security and breach laws and regulations may increase TMTG’s costs of doing business and adversely impact its

ability to conduct its business and market its solutions, products and services to its users and potential users.

In the U.S., there is not one comprehensive data protection, consumer protection, data privacy, security, or breach notification law.

Rather, numerous state and federal laws must be

complied with by TMTG simultaneously across U.S.

jurisdictions.

Various types of companies and their data are regulated by stringent industry specific regulations and standards based on data type and sensitivity.

All fifty (50) states and

territories have enacted consumer protection laws that require notice of data breaches.

states (at least 27) require comprehensive data protection, privacy and/or security compliance programs.

These include, but are not

limited to, the California Consumer Privacy Act, as amended by the California Privacy Rights Act, the Arkansas Social Media Safety Act, and the Utah Social Media Regulation Act may affect TMTG.

There are also a number of legislative

proposals pending before the U.S.

Congress, various state legislative bodies, and foreign governments concerning data protection that could affect TMTG.

At this time some states have laws restricting the use and disclosure of minor’s user

data, biometric data and/or health information without notice and/or express consent of a natural person of the age of majority with appropriate legal authority to consent.

If TMTG fails to comply with the federal and/or state data

protection and data privacy laws, or if regulators or plaintiffs assert TMTG has failed to comply with them, it may lead to court orders, injunctions, regulatory enforcement actions, private lawsuits, a reduction in revenue, and/or

reputational damage.

All fifty U.S.

states and some territories have adopted and/or are likely to adopt in the near future state

privacy laws similar to stringent European privacy laws that require data mapping, consumer rights to erasure, deletion, and portability that will be materially costly for TMTG to interpret, implement and maintain.

If TMTG fails to comply

with federal or state data protection and data privacy laws, or if regulators or plaintiffs assert TMTG has failed to comply with them, it may lead to regulatory enforcement actions, private lawsuits and/or reputational damage.

example, in June 2018, California was the first U.S.

state to pass the California Consumer Privacy Act (“CCPA”), which provides data privacy rights for consumers and operational requirements for companies like TMTG.

The CCPA gives

California residents new rights to access and requires deletion of their personal information, opt out of certain personal information sharing, and receipt of detailed information about how their personal information is collected, used,

and shared, among other stringent requirements.

The CCPA provides for civil penalties for violations, and creates a private right of action for privacy and security violations/breaches that could lead to consumer class actions and other

litigation against TMTG.

Additionally, the California Privacy Rights Act (“CPRA”), passed in November 2020.

The CPRA imposes additional data protection obligations on companies doing business in California, including additional consumer

rights processes and opt outs for certain uses of sensitive data.

The majority of the provisions took effect on January 1, 2023.

TMTG may be required to make additional compliance investments and changes to its business processes in order

to comply with individual state privacy and security laws currently in effect and/or as they are enacted.

The FTC Act prohibits unfair and deceptive practices.

The FTC has broad investigatory authority, including the authority to subpoena witnesses, demand civil

investigation, and require businesses to submit written reports under oath.

The FTC can and does engage in enforcement actions, issue rulings, and seek civil penalties in federal court.

An FTC enforcement action may lead to court orders,

injunctions, additional regulatory enforcement actions, consent decrees which are posted publicly on the FTC’s website, consent orders, a reduction in revenue, and/or reputational damage.

The Children’s Online Privacy Protection Act (“COPPA”) expands liability for the collection of information by

operators of websites and other electronic solutions that are directed to children.

Legal guardian consent is required for certain activities involving the data of children.

Questions exist as to how regulators and courts may interpret

the scope and circumstances for potential liability under COPPA, but this remains a significant focus of the FTC in light of mental health and other concerns over children’s use of social media.

FTC continues to provide guidance and

clarification regarding COPPA.

FTC guidance or enforcement precedent may make it difficult or impractical for TMTG to provide advertising on certain websites, services or applications.

In addition, the FTC has fined an advertising network

for certain methods of collecting and using data from mobile applications, including certain applications directed at children, and failing to disclose the data collection to mobile application developers in its network.

TMTG is subject to the European Union’s General Data Protection Regulation (EU) 2016/679 (“GDPR”), which

applies to all members of the European Economic Area (“EEA”) and, in some circumstances, to controllers and processors in a jurisdiction outside the EEA including any business, regardless of its location, that provides goods or services

to data subjects located in the EEA, or monitors the behavior of EEA data subjects.

The GDPR imposes significant restrictions, obligations and penalties on data controllers and data processors, including stringent requirements for the

processing of personal data.

If TMTG fails to comply with the GDPR, it may lead to regulatory investigation with possible enforcement of monetary penalties ranging from 10 million to 20 million euros, or 2% to 4% of annual worldwide

revenue (whichever is higher), private or class action lawsuits and/or reputational damage.

Further, withdrawal of the United Kingdom (“UK”) from the European Union (“EU”) has led to legal uncertainty

and divergent national laws and regulations.

In particular, while the Data Protection Act of 2018, which supplements the GDPR, is now effective in the UK alongside the UK GDPR, it is still unclear whether transfer of data from the EEA

to the UK will remain lawful under the GDPR without additional safeguards.

EU laws regulate transfers of EEA personal data to third countries, such as the United States, that have not

been found to provide adequate protection of such personal data.

Recent legal developments in the EU have created complexity and uncertainty regarding transfers of personal data from the EEA and the UK to the United States and other

jurisdictions.

For example, on July 16, 2020, the European Court of Justice (“CJEU”) invalidated the EU-U.S.

Privacy Shield framework (“Privacy Shield”), which provided companies with a mechanism to comply with data protection

requirements when transferring personal data from the EEA/UK to the United States.

The same decision also cast doubt on the ability to use one of the primary alternatives to the Privacy Shield, namely, the European Commission’s Standard

Contractual Clauses (“SCCs”), to lawfully transfer personal data from Europe to the United States and most other countries (though the SCCs currently remain a valid data transfer mechanism under the GDPR and UK GDPR).

On July 10, 2023,

the European Commission adopted an adequacy decision concluding that the United States ensures an adequate level of protection for personal data transferred from the European Union to organizations in the United States that are included

in the “Data Privacy Framework List,” which is maintained by the U.S.

Department of Commerce pursuant to the EU-U.S.

Data Privacy Framework.

The impact of the European Commission’s adequacy decision is complex, evolving, and may be

reviewed by the CJEU.

A future invalidation of the Privacy Shield by the CJEU will create additional uncertainty and will mean there are few if any viable alternatives to the Privacy Shield and the SCCs for the foregoing purposes, which

may lead to government enforcement actions, litigation, fines and penalties or adverse publicity that could have an adverse effect on TMTG’s reputation, revenue, operations and business.

In Canada, TMTG is subject to the laws of the individual provinces, as well as Canada’s Personal Information

and Protection of Electronic Documents Act (“PIPEDA”).

PIPEDA provides Canadian residents with privacy protections and sets out rules for how companies may collect, use and disclose personal information in the course of commercial

The costs of compliance with, and other burdens imposed by, these and other international data privacy and security laws may limit the use and adoption of TMTG’s solutions, products and services and could have a materially

adverse impact on its business.

Any failure or perceived failure by TMTG or third-party service providers to comply with international data privacy and security laws may lead to regulatory enforcement actions, fines, private lawsuits or

reputational damage.

Evolving definitions of personal data within the EU, especially relating to the classification of IP addresses, machine or device identifiers, geo-location data and other such

information, may cause TMTG to change its business practices, diminish the quality of its data and the value of its solution, and hamper its ability to provide or expand its offerings.

TMTG’s failure to comply with evolving

interpretations of applicable laws and regulations, or to adequately protect personal data, could result in enforcement action against TMTG or reputational harm, which could have a material adverse impact on TMTG’s business, financial

condition and results of operations.

In addition to compliance with government regulations, TMTG expects to participate in trade associations and industry self-regulatory groups that promulgate best practices or codes of

conduct addressing the provision of internet advertising.

TMTG could be adversely affected by changes to these guidelines and codes in ways that are inconsistent with its practices or in conflict with the laws and regulations of U.S.

international regulatory authorities.

For instance, new guidelines, codes or interpretations, by self-regulatory organizations or government agencies, may require additional disclosures or additional consumer consents, such as “opt-in”

permissions to share, link or use data, such as health data from third parties, in certain ways.

If TMTG fails to abide by, or is perceived as not operating in accordance with, industry best practices or any industry guidelines or codes

with regard to privacy, its reputation may suffer and TMTG could lose relationships with advertisers and digital media properties.

Economic downturns and market conditions beyond TMTG’s control could adversely affect its business, financial condition and operating results.

TMTG’s business depends on the overall demand for advertising and on the economic health of advertisers that benefit from Truth Social.

Economic downturns or unstable market conditions

may cause advertisers to decrease their advertising budgets, which could reduce spend with Truth Social and adversely affect TMTG’s business, financial condition and operating results.

For example, to the extent there is a disruption in

economic activity globally, it could adversely affect our business, financial condition and operating results through prolonged decreases in advertising spend, credit deterioration of our customers, depressed economic activity, or

declines in capital markets.

The loss of key personnel or the inability of replacements to quickly and successfully perform in their new roles could adversely affect TMTG’s business.

TMTG depends on the leadership and experience of its relatively small number of key executive management personnel.

The pursuit of the merger and the preparation for the integration

have placed a burden on TMTG’s management and internal resources.

TMTG has experienced management departures, and may continue to experience management departures.

Any significant diversion of management attention away from ongoing

business concerns and any difficulties encountered in the transition and integration process could have a material adverse effect on TMTG’s business, financial condition and results of operations.

The loss of the services of these key

employees or TMTG’s executive management members could have a material adverse effect on TMTG’s business and prospects, as TMTG may not be able to find suitable individuals to replace such personnel on a timely basis or without incurring

increased costs.

Furthermore, if TMTG loses or terminates the services of one or more of its key employees or if one or more of TMTG’s current or former executives or key employees joins a competitor or otherwise competes with TMTG, it

could impair TMTG’s business and its ability to successfully implement TMTG’s business plan.

Additionally, if TMTG is unable to hire qualified replacements for its executive and other key positions in a timely fashion, its ability to

execute its business plan would be harmed.

Even if TMTG can quickly hire qualified replacements, TMTG could experience operational disruptions and inefficiencies during any such transition.

TMTG believes that its future success will

depend on its continued ability to attract and retain highly skilled and qualified personnel.

In addition, many of TMTG’s key technologies and systems will be custom-made for TMTG’s business by TMTG’s personnel.

The loss of key engineering, product development, marketing and

sales personnel could disrupt TMTG’s operations and have an adverse effect on TMTG’s business.

As TMTG continues to grow, TMTG cannot guarantee that it will continue to attract the personnel it needs to maintain its competitive position.

In particular, TMTG intends to hire

additional technically-skilled personnel following the Closing, and TMTG expects to face significant competition from other companies in hiring such personnel.

As TMTG matures, the incentives to attract, retain and motivate employees

provided by TMTG’s equity awards or by future arrangements, such as through cash bonuses, may not be effective.

If TMTG does not succeed in attracting, hiring and integrating excellent personnel, or retaining and motivating existing

personnel, TMTG may be unable to grow effectively.

If Truth Social fails to develop and maintain followers or a sufficient audience, if adverse trends develop in the social media platforms generally, or if President

Trump were to cease to be able to devote substantial time to Truth Social, TMTG’s business would be adversely affected.

Social media platforms are speculative businesses because revenues and income derived from them depend primarily upon the continued acceptance of that platform.

Public acceptance of a

particular platform depends upon, among other things, the ease of use of the platform, promotion of that platform, and the quality and acceptance of competing platforms.

A user decline could make it economically inefficient to continue

providing for the use of the platform.

If President Trump fails to retain the public’s interest, or if the customer base were to cease using Truth Social, it could result in a write-down of TMTG’s capitalized development costs.

of any write-down would vary depending on a number of factors, including when the product or service ceased.

TMTG has placed emphasis on building a platform for all Americans to freely express themselves through Truth Social.

In particular, President Trump has stated that

this is a platform for all who have been censored by big tech.

Failure to realize this vision would adversely affect TMTG’s brand and business prospects.

Truth Social is being developed as a global platform for public self-expression and conversation in real time, and the market for Truth Social is relatively new and may not develop as

expected, if at all.

People who are not Truth Social users may not understand the value of Truth Social.

Convincing potential new users, especially users who oppose big tech censorship, of the value of Truth Social is critical to

increasing TMTG’s user base and to the success of TMTG’s business.

In addition, there are a number of other social media platforms that focus on the same audience that Truth Social will focus on.

To the extent users prefer a platform that

is not associated with President Trump, our ability to attract users may decrease.

Additionally, as a private company under new ownership, X may demonstrate a sustained commitment to free speech principles that will heighten competition

for users who prioritize such principles.

Failure to attract a sufficient user base would adversely affect TMTG’s business prospects.

If TMTG’s users do not continue to contribute content or their contributions are not valuable to other users, TMTG may experience a decline in the number of users

accessing its products and services and user engagement, which could result in the loss of advertisers and revenue.

TMTG’s success depends on its ability to provide users with products, which in turn for Truth Social depends on the content contributed by TMTG’s users.

TMTG believes that one of Truth

Social’s competitive advantages will be the quality, quantity and real-time nature of the content on Truth Social, and that access to unique or real-time content is one of the main reasons users may visit Truth Social.

TMTG seeks to

foster a broad and engaged user community, and TMTG intends to encourage high-profile individuals and entities to use TMTG’s products and services to freely express their views to broad audiences without the fear of being censored or

cancelled for any unpopular or non-woke opinions.

TMTG may also encourage media outlets to use its products and services to distribute their content.

If users, including influential users, do not contribute content to Truth Social, and it

is unable to provide users with valuable and timely content, TMTG’s user base and user engagement may decline.

Additionally, if TMTG is not able to address user concerns regarding the safety and security of Truth Social or if TMTG is

unable to successfully prevent abusive or other hostile behavior on Truth Social, the size of the Truth Social user base and user engagement may decline.

TMTG may rely on the sale of advertising services for the substantial majority of

TMTG’s revenue.

If TMTG experiences a decline in the number of users or a decline in user engagement, including as a result of the loss of high-profile individuals and entities who generate content on Truth Social, advertisers may not

view Truth Social as attractive for their marketing expenditures, and may reduce their spending with TMTG—which would harm TMTG’s business and operating results.

TMTG’s focus on product innovation and user engagement rather than short-term operating results may adversely affect TMTG’s revenues.

TMTG is committed to quickly developing and launching new and innovative features.

TMTG intends to focus on improving the user experience for Truth Social and on developing new and

improved products and services for the advertisers on Truth Social.

TMTG intends to prioritize innovation and the experience for users and advertisers on Truth Social over short-term operating results.

TMTG may frequently make product and

service decisions that may reduce TMTG’s short-term operating results if it believes that the decisions are consistent with its goals to improve the user experience and performance for advertisers, which it believes will improve its

operating results over the long term.

These intended decisions may not be consistent with the short- term expectations of investors and may not produce the long-term benefits that TMTG expects, in which case Truth Social user growth and

user engagement, its relationships with advertisers and its business and operating results could be harmed.

In addition, TMTG’s intent to focus on the user experience may negatively impact TMTG’s relationships with prospective

This could result in a loss of advertisers, which could harm TMTG’s revenue and operating results.

Truth Social user growth and engagement on mobile devices depend upon effective operation with mobile operating systems, networks, and standards that TMTG does not

TMTG intends to make its products and services available across a variety of operating systems and through websites.

TMTG will be dependent on the interoperability of Truth Social with

popular devices, desktop and mobile operating systems and web browsers that TMTG does not control, such as Mac OS, Windows, Android, iOS, Chrome and Firefox.

Any changes in such systems, devices or web browsers that degrade the

functionality of TMTG’s products and services or give preferential treatment to competitive products or services could adversely affect usage of TMTG’s products and services.

Further, if the number of platforms for which TMTG develops its

product expands, it will result in an increase in TMTG’s operating expenses.

In order to deliver high- quality products and services, it is important that TMTG’s products and services work well with a range of operating systems, networks,

devices, web browsers and standards that TMTG does not control.

In addition, because a majority of TMTG’s future users may access TMTG’s products and services through mobile devices, TMTG is particularly dependent on the interoperability

of its products and services with mobile devices and operating systems.

TMTG may not be successful in developing relationships with key participants in the mobile industry or in developing products or services that operate effectively

with these operating systems, networks, devices, web browsers and standards.

In the event that it is difficult for TMTG’s users to access and use TMTG’s products and services, particularly on their mobile devices, TMTG’s user growth and

engagement could be harmed, and its business and operating results could be adversely affected.

TMTG may not be successful in its efforts to grow and monetize Truth Social.

TMTG may not be successful in building products that maintain user engagement.

If TMTG is not successful in its efforts to grow Truth Social and monetize such

growth, TMTG’s user growth and user engagement and TMTG’s financial results may be adversely affected.

TMTG’s independent registered public accounting firm has indicated that TMTG’s financial condition raises substantial doubt as to its ability to continue as a going

The combined financial statements which accompany this Report have been prepared assuming that TMTG will

continue as a going concern.

As discussed in the report of TMTG’s independent registered public accounting firm and the combined financial statements, TMTG has suffered negative cash flows and recurring losses from operations that raise

substantial doubt about its ability to continue as a going concern.

To date, TMTG has financed its operations principally through loans or offerings of securities exempt from the registration requirements of the Securities Act.

TMTG’s management

believes that capital raised from the Business Combination will be sufficient to retire existing debt and to fund existing operations should projected cash flow be insufficient to fund operations.

TMTG may require substantial additional

financing at various intervals in order to continue to develop and promote Truth Social, including significant requirements for operating expenses including intellectual property protection and enforcement, for pursuit of regulatory

approvals, and for commercialization of Truth Social.

TMTG can provide no assurance that additional funding will be available on a timely basis, on terms acceptable to TMTG, or at all.

In the event that TMTG is unable to obtain such

financing, it will not be able to fully develop and commercialize Truth Social.

If TMTG becomes unable to obtain additional capital and to continue as a going concern, it may have to liquidate its assets and the value TMTG receives for

its assets in liquidation or dissolution could be significantly lower than the values reflected in TMTG’s financial statements.

TMTG’s estimates of market opportunity and forecasts of market growth may prove to be inaccurate.

Market opportunity estimates and growth forecasts, whether obtained from third-party sources or developed internally, are subject to significant

uncertainty and are based on assumptions and estimates that may prove to be inaccurate.

Any estimates and forecasts relating to the size and expected growth of the target market and market demand

which may inform TMTG’s financial model may also prove to be inaccurate.

The estimated addressable market may not materialize in the timeframe estimated by management, if ever, and even if the markets meet the size estimates and growth

estimates considered in relation to TMTG’s financial model, our business could fail to grow at similar rates.

TMTG’s business depends on continued and unimpeded access to Truth Social on the internet

by TMTG’s users and advertisers.

If TMTG’s users experience disruptions in internet service or if internet service providers are able to block, degrade or charge for access to TMTG’s products and services, TMTG could incur additional

expenses and the loss of users and advertisers.

TMTG depends on the ability of TMTG’s users and advertisers to access the internet.

This access will be

provided by companies—including hostile legacy technology companies—that have significant market power in the broadband and internet access marketplace, including incumbent telephone companies, cable companies, mobile communications

companies, government-owned service providers, device manufacturers and operating system providers, any of whom could take actions that degrade, disrupt or increase the cost of user access to TMTG’s products or services, which would, in

turn, negatively impact TMTG’s business.

The adoption of any laws or regulations that adversely affect the growth, popularity or use of the internet, including laws or practices limiting internet neutrality, could decrease the demand

for, or the usage of, TMTG’s products and services, increase TMTG’s cost of doing business and adversely affect TMTG’s operating results.

TMTG will also rely on other companies to maintain reliable network systems that provide adequate

speed, data capacity and security to us and TMTG’s users.

As the internet continues to experience growth in the number of users, frequency of use and amount of data transmitted, the internet infrastructure that TMTG and its users rely

on may be unable to support the demands placed upon it.

The failure of the internet infrastructure that TMTG’s users rely on, even for a short period of time, could undermine TMTG’s operations and harm TMTG’s operating results.

If TMTG fails to expand effectively in international markets, TMTG’s revenue and TMTG’s business will be harmed.

Notwithstanding Truth Social’s recent announcement of the general availability of Truth Social internationally, TMTG may not be able to monetize TMTG’s products and services

internationally as a result of competition, advertiser demand, differences in the digital advertising market and digital advertising conventions, as well as differences in the way that users in different countries access or utilize TMTG’s

products and services.

Differences in the competitive landscape in international markets may impact TMTG’s ability to monetize TMTG’s products and services.

TMTG’s business is highly competitive.

Competition presents an ongoing threat to the success of TMTG’s business.

If TMTG is unable to compete effectively for users

and advertiser spend, TMTG’s business and operating results could be harmed.

Competition for users of TMTG’s products and services is intense.

Although TMTG has developed a global

platform for public self-expression and conversation in real time, TMTG faces strong competition in its business.

TMTG competes against many companies to attract and engage users, including companies which have greater financial

resources and substantially larger user bases, such as X (formerly known as Twitter), Meta (including Facebook and Instagram), Alphabet/Google, Netflix, Disney+, Hulu, Microsoft (including LinkedIn), and Yahoo!, which offer a variety of

internet and mobile device-based products, services and content.

For example, Facebook and X operate social networking sites with significantly more users than Truth Social may have in the future.

Additionally, as a private company

under new ownership, X may demonstrate a sustained commitment to free speech principles that will heighten competition for users who prioritize such principles.

TMTG believes that its ability to compete effectively for users depends upon many factors both within and beyond TMTG’s control, including:

the popularity, usefulness, ease of use, performance and reliability of TMTG’s products and services compared to those of TMTG’s competitors;

the amount, quality and timeliness of content generated by TMTG’s users;

the timing and market acceptance of TMTG’s products and services;

the reduced availability of data used by ad targeting and measurement tools;

government restrictions on access to TMTG products, or other actions that impair our ability to sell advertising, in their states or countries;

adverse litigation, government actions, or legislative, regulatory, or other legal developments relating to advertising, including developments that may impact our ability to deliver, target, or measure

the effectiveness of advertising;

the adoption of TMTG’s products and services internationally;

TMTG’s ability, and the ability of TMTG’s competitors, to develop new products and services and enhancements to existing products and services;

the frequency and relative prominence of the ads displayed by TMTG’s competitors;

TMTG’s ability to establish and maintain relationships with platform partners that integrate with Truth

changes mandated by, or that TMTG elects to make to address, legislation, regulatory authorities or litigation, including settlements and consent decrees, some of which may have a disproportionate effect

the application of antitrust laws both in the United States and internationally;

government action regulating competition;

TMTG’s ability to attract, retain and motivate talented employees, particularly engineers, designers and product managers;

TMTG’s ability to build, maintain, and scale technical infrastructure, and risks associated with disruptions in TMTG’s service, catastrophic events, cyber-attacks, and crises;

acquisitions or consolidation within TMTG’s industry, which may result in more formidable competitors;

TMTG’s reputation and the brand strength relative to its competitors.

TMTG faces significant competition for advertiser spend.

TMTG’s revenue has initially been generated through ads on Truth Social, and TMTG will compete against online and mobile

businesses, including those referenced above, for advertising budgets.

In order to grow TMTG’s revenue and improve TMTG’s operating results, TMTG may increase TMTG’s share of spending on advertising relative to TMTG’s competitors, many of

which are larger companies that offer more traditional and widely accepted advertising products.

In addition, some of TMTG’s larger competitors have substantially broader product or service offerings and user bases and leverage their

relationships based on other products or services to gain additional share of advertising budgets.

TMTG believes that its ability to compete effectively for advertiser spend depends upon many factors both within and beyond TMTG’s control, including:

the size and composition of TMTG’s user base relative to those of TMTG’s competitors;

TMTG’s ad targeting capabilities, and those of TMTG’s competitors;

the timing and market acceptance of TMTG’s advertising services, and those of TMTG’s competitors;

the propensity of advertisers to support free speech-focused platforms like Truth Social;

TMTG’s marketing and selling efforts, and those of TMTG’s competitors;

the pricing for TMTG’s products relative to the advertising products and services of TMTG’s competitors;

the return TMTG’s advertisers receive from TMTG’s advertising services, and those of TMTG’s competitors;

TMTG’s reputation and the strength of TMTG’s brand relative to TMTG’s competitors;

the engagement of TMTG’s users with TMTG’s products;

TMTG’s ability to monetize Truth Social, including TMTG’s ability to successfully monetize mobile usage;

TMTG’s customer service and support efforts;

TMTG’s ability to establish and maintain developers’ interest in building Truth Social;

acquisitions or consolidations within TMTG’s industry, which may result in more formidable competitors;

TMTG’s ability to cost-effectively manage and grow its operations.

In recent years, there have been significant acquisitions and consolidation by and among TMTG’s potential competitors.

TMTG anticipates this trend of consolidation will continue, which

will present heightened competitive challenges for TMTG’s business.

Acquisitions by TMTG’s competitors may result in reduced functionality of Truth Social.

Any elimination of integration with Truth Social in the future may adversely

impact TMTG’s business and operating results.

Consolidation may also enable TMTG’s larger competitors to offer bundled or integrated products that feature alternatives to Truth Social.

Reduced functionality of Truth Social, or

TMTG’s competitors’ ability to offer bundled or integrated products that compete directly with TMTG, may cause TMTG’s user growth, user engagement and ad engagement to decline and advertisers to reduce their spending with TMTG.

not able to compete effectively for users and advertiser spend its business and operating results would be materially and adversely affected.

Many of TMTG’s potential competitors have significantly greater resources and better competitive positions in certain markets than TMTG does.

These factors may allow TMTG’s competitors

to respond more effectively to new or emerging technologies and changes in market requirements.

TMTG’s competitors may develop products, features, or services that are similar to TMTG’s or that achieve greater market acceptance, may

undertake more far-reaching and successful product development efforts or marketing campaigns, or may adopt more aggressive pricing policies.

In addition, platform partners may use information shared by TMTG’s users through Truth Social

in order to develop products or features that compete with TMTG.

If TMTG is not able to effectively compete, TMTG’s user base and level of user engagement may decrease, which could make TMTG less attractive to developers and advertisers

and materially and adversely affect TMTG’s revenue and results of operations.

Truth Social exists to provide its users a true free speech platform and avoid cancellation or censorship by big tech.

There is nothing preventing big tech from ceasing to cancel

different voices.

If that were to happen, the number of users on TMTG’s platform may decrease.

Action by governments to censor content on or restrict access to Truth Social in their countries could substantially harm TMTG’s business and financial results.

It is possible that governments of one or more countries may seek to censor content available on Truth Social in their country or impose other restrictions that may

affect the accessibility of Truth Social in their country for an extended period of time or indefinitely.

In addition, governments in other countries may seek to restrict access to Truth

Social from their country entirely if they consider TMTG to be in violation of their laws.

In the event that access to Truth Social is restricted, in whole or in part, in one or more countries or TMTG’s competitors are able to

successfully penetrate geographic markets that TMTG cannot access, TMTG’s ability to retain or increase TMTG’s user base and user engagement may be adversely affected, TMTG may not be able to maintain or grow TMTG’s revenue as

anticipated, and TMTG’s financial results could be adversely affected.

See “ Risk Factors — Risks Related to TMTG’s Business — TMTG may be subject to greater risks than

typical social media platforms because of the focus of its offerings and the involvement of President Trump.

These risks include active discouragement of users, harassment of advertisers or content providers, increased risk of hacking

of TMTG’s platform, lesser need for Truth Social if First Amendment speech is not suppressed, criticism of Truth Social for its moderation practices, and increased stockholder suits .”

TMTG’s new products, services and initiatives and changes to existing products, services and initiatives could fail to attract sufficient users and advertisers or

generate revenue.

TMTG’s ability to increase the size and engagement of Truth Social’s user base, attract advertisers and generate revenue will depend in part on TMTG’s ability to create successful new

products and services, both independently and in conjunction with third parties.

TMTG may introduce significant changes to TMTG’s existing products and services or develop and introduce new and unproven products and services, including

technologies with which TMTG has little or no prior development or operating experience.

If new or enhanced products or services fail to engage users and advertisers, TMTG may fail to attract or retain users or to generate sufficient

revenue or operating profit to justify TMTG’s investments, and TMTG’s business and operating results could be adversely affected.

In the future, TMTG may invest in new products, services, and initiatives to generate revenue, but there is

no guarantee these approaches will be successful.

If TMTG’s strategic initiatives do not enhance TMTG’s ability to monetize TMTG’s products and services or enable it to develop new approaches to monetization, TMTG may not be able to

maintain or grow TMTG’s revenue or recover any associated development costs and TMTG’s operating results could be adversely affected.

If TMTG’s efforts to build and maintain strong brand identity, improve the user base for Truth Social, and develop additional products are not successful, TMTG may

not be able to attract or retain users, and TMTG’s operating results will be affected adversely.

If events occur that damage TMTG’s reputation and brand, TMTG’s ability to expand TMTG’s base of users, developers and advertisers may be

impaired, and TMTG’s business and financial results may be harmed.

TMTG believes that the Trump brand will significantly contribute to the success of TMTG’s business.

TMTG also believes that maintaining and enhancing TMTG’s brand is critical to

expanding its base of users, developers and advertisers.

Maintaining and enhancing TMTG’s brand will depend largely on TMTG’s ability to continue to provide useful, reliable, trustworthy and innovative products, which TMTG may not do

successfully.

TMTG may introduce new products or terms of service that users do not like, which may negatively affect TMTG’s brand.

Additionally, the actions of TMTG’s platform developers may affect TMTG’s brand if users do not have a

positive experience using third-party apps and websites integrated with Truth Social.

TMTG’s brand may also be negatively affected by the actions of users that are hostile towards President Trump or towards other people, by users

impersonating other people, by users identified as spam, by users introducing excessive amounts of spam on TMTG’s platform, by third parties obtaining control over users’ accounts or by unauthorized access to TMTG’s data or TMTG’s users’

TMTG expects that in the future TMTG may experience media, judicial, legislative, or regulatory scrutiny of TMTG’s decisions regarding user privacy, data use, encryption, content, product design, algorithms, advertising, or other

issues, which may adversely affect TMTG’s reputation and brand.

TMTG also may fail to provide adequate customer service, which could erode confidence in TMTG’s platform.

Maintaining and enhancing TMTG’s platform may require it to make

substantial investments and these investments may not be successful.

If TMTG fails to successfully promote and maintain its platform or if it incurs excessive expenses in this effort, TMTG’s business and financial results may be adversely

TMTG may need additional capital, and TMTG cannot be sure that additional financing will be available.

Although TMTG currently anticipates that the proceeds from the Business Combination, together with TMTG’s

available funds and cash flow from operations, are sufficient to meet TMTG’s cash needs for the foreseeable future, TMTG may eventually require additional financing.

TMTG’s ability to obtain financing will depend, among other things, on

TMTG’s development efforts, business plans, operating performance and condition of the capital markets at the time TMTG seeks financing.

TMTG cannot assure you that additional financing will be available to it on favorable terms when

required, or at all.

If TMTG raises additional funds through the issuance of equity, equity-linked or debt securities, those securities may have rights, preferences, or privileges senior to the rights of TMTG Common Stock, and the

existing stockholders may experience dilution.

Any significant disruption in service on Truth Social or in TMTG’s information systems could result in a loss of users or subscribers.

Potential users and subscribers will access Truth Social through TMTG’s website and related mobile applications, where the title selection process may be integrated with TMTG’s

delivery processing systems and software.

TMTG’s reputation and ability to attract, retain and serve TMTG’s subscribers is dependent upon the reliable performance of TMTG’s website and related apps, network infrastructure and fulfillment

Interruptions in these systems could make TMTG’s website unavailable and hinder TMTG’s ability to fulfill selections.

Some of TMTG’s software is proprietary, and TMTG may rely on the expertise of members of TMTG’s engineering

and software development teams for the continued performance of TMTG’s software and computer systems.

Service interruptions or the unavailability of TMTG’s website could diminish the overall attractiveness of TMTG’s subscription service

to existing and potential subscribers.

TMTG’s servers may be vulnerable to computer viruses, physical or electronic break-ins and similar disruptions, which could lead to interruptions and delays in TMTG’s service and

operations and loss, misuse or theft of data.

TMTG’s website may periodically experience directed attacks intended to cause a disruption in service.

Any attempts by hackers to disrupt TMTG’s website service or TMTG’s internal systems, if

successful, could harm TMTG’s business, be expensive to remedy and damage TMTG’s reputation.

Efforts to prevent hackers from entering TMTG’s computer systems may be expensive to implement and may limit the functionality of TMTG’s

Any significant disruption to TMTG’s website or internal computer systems could result in a loss of subscribers and adversely affect TMTG’s business and results of operations.

TMTG’s industry is prone to cyber-attacks by third parties seeking unauthorized access to our data or users’ data or to disrupt our ability to provide service.

TMTG’s products and

services involve the collection, storage, processing, and transmission of a large amount of data.

Any failure to prevent or mitigate security breaches and improper access to or disclosure of our data or user data, including personal

information, content, or payment information from users, or information from marketers, could result in the loss, modification, disclosure, destruction, or other misuse of such data, which could harm our business and reputation and

diminish TMTG’s competitive position.

In addition, computer malware, viruses, social engineering (such as spear phishing attacks), scraping, and general hacking are prevalent in TMTG’s industry and are likely to occur on TMTG’s systems in

TMTG will also regularly encounter attempts to create false or undesirable user accounts, purchase ads, or take other actions on our platform for purposes such as spamming, spreading misinformation, or other illegal, illicit,

or otherwise objectionable ends.

As a result of our prominence, the prominence and involvement of President Trump, the size of TMTG’s user base, the types and volume of personal data and content on TMTG’s systems, and the evolving nature

of TMTG’s products and services (including our efforts involving new and emerging technologies), TMTG believes that it is a particularly attractive target for such breaches and attacks, including from nation states and highly

sophisticated, state-sponsored, or otherwise well-funded actors, and TMTG may experience heightened risk from time to time as a result of geopolitical events.

TMTG’s efforts to address undesirable activity on our platform also increase

the risk of retaliatory attacks.

Such breaches and attacks may cause interruptions to the services TMTG provides, degrade the user experience, cause users or marketers to lose confidence and trust in TMTG products, impair TMTG’s internal systems, or result in financial harm to TMTG.

TMTG’s efforts to protect its company data or the information it receives, and to disable undesirable

activities on TMTG’s platform, may also be unsuccessful due to software bugs or other technical malfunctions;

employee, contractor, or vendor error or malfeasance, including defects or vulnerabilities in TMTG’s vendors’ information

technology systems or offerings;

government surveillance;

breaches of physical security of TMTG’s facilities or technical infrastructure;

or other threats that evolve.

In addition, third parties may attempt to fraudulently induce

employees or users to disclose information in order to gain access to our data or our users’ data.

Cyber-attacks continue to evolve in sophistication and volume, and inherently may be difficult to detect for long periods of time.

Although TMTG has developed systems and processes that are designed to protect its data and user data, to prevent data loss, to disable undesirable accounts and activities on our platform, and to prevent or detect security breaches, TMTG

cannot guarantee that such measures will provide absolute security, that TMTG will be able to react in a timely manner, or that TMTG’s remediation efforts will be successful.

The changes in TMTG’s work environment as a result of certain

personnel working remotely could also impact the security of our systems, as well as our ability to protect against attacks and detect and respond to them quickly.

Furthermore, TMTG believes that it is a particularly attractive target for

cyber-attacks and security breaches because of the prominence and involvement of President Trump in TMTG.

TMTG’s communications hardware and the computer hardware used to operate TMTG’s website will initially be hosted at the facilities of a third-party provider.

Hardware for TMTG’s

delivery systems is intended to be maintained in TMTG’s distribution centers.

Fires, floods, earthquakes, adverse weather conditions, other natural disasters, power losses, telecommunications failures, cyber-attacks, public health crises,

terrorism, geopolitical conflict, break-ins, and similar events could damage these systems and hardware or cause them to fail completely.

Problems faced by TMTG’s third-party web hosting provider, with the telecommunications network

providers with whom it contracts or with the systems by which it allocates capacity among its subscribers, including us, could impact adversely the experience of TMTG’s subscribers.

Any of these problems could result in a loss of

Privacy concerns could limit TMTG’s ability to leverage Truth Social user data.

In the ordinary case of business, TMTG may collect and utilize data supplied by Truth Social.

TMTG may face

certain legal obligations regarding the manner in which TMTG treats such information.

These legal obligations are complex and rapidly evolving, other businesses have been criticized by privacy groups and governmental bodies for attempts

to link personal identities and other information to data collected on the internet regarding users’ browsing and other habits.

Increased regulation of data utilization practices, including self-regulation, as well as increased

enforcement of existing laws, could have an adverse effect on TMTG’s business.

Improper access to or disclosure of TMTG’s users’ information could harm TMTG’s reputation and adversely affect TMTG’s business.

TMTG’s efforts to protect the information that TMTG’s users have chosen to share using Truth Social may be unsuccessful due to the actions of third parties, software bugs or other technical malfunctions,

employee error or malfeasance, or other factors.

In addition, third parties may attempt to fraudulently induce employees or users to disclose information in order to gain access to TMTG’s data or TMTG’s users’ data.

If any of these events

occur, TMTG’s users’ information could be accessed or disclosed improperly.

Truth Social’s Data Privacy Policy governs the use of information that users have chosen to share using Truth Social.

Some platform developers may store

information provided by TMTG’s users through apps on the Truth Social platform or websites integrated with Truth Social.

If these third parties or platform developers fail to adopt or adhere to adequate data security practices or fail to

comply with TMTG’s terms and policies, or in the event of a breach of their networks, TMTG’s users’ data may be improperly accessed or disclosed.

Any incidents involving unauthorized access to or improper use of the information of TMTG’s

users could damage TMTG’s reputation and TMTG’s brand and diminish TMTG’s competitive position.

In addition, the affected users or government authorities could initiate legal or regulatory action against TMTG in connection with such incidents, which could cause TMTG to incur significant expense and liability or result in orders or consent decrees forcing TMTG to modify its business

Any of these events could have a material and adverse effect on TMTG’s business, reputation or financial results.

Unfavorable media coverage could negatively affect TMTG’s business.

TMTG may receive a high degree of media coverage around the world, including regarding, without limitation,

TMTG’s privacy practices, product changes, product quality, litigation or regulatory activity, or the actions of TMTG’s platform or developers or TMTG’s users.

For example, numerous media outlets reported on the fact that, in June 2022,

TMTG received subpoenas from the SEC and a federal grand jury sitting in the Southern District of New York seeking documents relating to, among other things, Digital World and other potential counterparties.

In or about October 2022, a

now-former TMTG Sub employee initiated a series of unauthorized leaks of Private TMTG’s confidential information to various media outlets, which resulted in the publication of numerous stories portraying Private TMTG and its management in

a negative light.

On May 20, 2023, Private TMTG filed a $3.8 billion defamation lawsuit against the Washington Post in connection with a May 13, 2023 article.

On July 12, 2023, the Washington Post removed the case to federal court, where

it remains pending as of December 11, 2023.

On November 20, 2023, in connection with reporting about Private TMTG’s financial results, Private TMTG filed a

lawsuit for defamation and injurious falsehood in Florida state court against 20 media defendants.

Private TMTG and one defendant — Nexstar Media, Inc.

(“Nexstar”), which owns The Hill — subsequently agreed to resolve their dispute

outside of court, to both parties’ mutual satisfaction.

In connection with such resolution, The Hill retracted a November 13, 2023 article, and Private TMTG’s lawsuit was dismissed as to Nexstar on December 4, 2023.

All other terms of

TMTG’s settlement with Nexstar remain confidential, and TMTG’s lawsuit is proceeding against all other defendants.

Unfavorable and continued high-profile publicity could adversely affect TMTG’s reputation and its ability to transact with its third-party providers.

Such negative publicity also could

have an adverse effect on the size, engagement, and loyalty of TMTG’s user base and result in decreased revenue, which could adversely affect TMTG’s business and financial results.

See “ Risk Factors —

Risks Related to TMTG’s Business — President Donald J.

Trump is the subject of numerous legal proceedings, the scope and scale of which are unprecedented for a former President of the United

States and current candidate for that office.

An adverse outcome in one or more of the ongoing legal proceedings in which President Trump is involved could negatively impact TMTG and its Truth Social platform.

TMTG’s intellectual property may be infringed upon and others have and may continue to accuse TMTG of infringing on their intellectual property, either of which

could adversely affect TMTG’s business and result in protracted and expensive litigation.

In recent years, there has been significant litigation in the United States over patents and other intellectual property rights.

Although TMTG is

not engaged in such litigation, in the future TMTG or customers who use TMTG’s products may be alleged to be infringing the trademarks, copyrights, patents and other intellectual property rights of third parties, including allegations

made by TMTG’s competitors or by non-practicing entities.

TMTG cannot predict whether assertions of third-party intellectual property rights or claims arising from these assertions will substantially harm TMTG’s business and operating

If TMTG is forced to defend any infringement claims, whether they are with or without merit or are ultimately determined in TMTG’s favor, TMTG may face costly litigation and diversion of technical and management personnel.

of TMTG’s competitors have substantially greater resources than TMTG does and are able to sustain the cost of complex intellectual property litigation to a greater extent and for longer periods of time than TMTG could.

Furthermore, an

adverse outcome of a dispute may require TMTG:

to pay damages, potentially including treble damages, and attorneys’ fees, if TMTG is found to have willfully infringed a party’s patent or

other intellectual property rights;

to cease making, licensing or using products that are alleged to incorporate or make use of the intellectual property of others;

to expend additional development resources to redesign TMTG’s

to rebrand its services;

and to enter into potentially unfavorable royalty or license agreements in order to obtain the rights to use necessary technologies and current branding.

Royalty or licensing agreements, if required, may

be unavailable on terms acceptable to TMTG, or at all.

In any event, TMTG may need to license intellectual property which would require TMTG to pay royalties or make one-time payments.

Even if these matters do not result in litigation or

are resolved in TMTG’s favor or without significant cash settlements, the time and resources necessary to resolve them could harm TMTG’s business, operating results, financial condition and reputation.

The USPTO previously issued a non-final rejection of Private TMTG’s or its affiliate’s applications to

register the trademarks “Truth Social” and “TRUTHSOCIAL” for use with a social media network based on its view that such use of these trademarks by Private TMTG would be likely to confuse consumers because of the similarity of these

trademarks to existing registered and pending trademarks.

On that basis, the owners of those registered trademarks may bring claims against TMTG alleging trademark infringement.

If such claims were successful, TMTG may be forced to

rebrand, to pay substantial monetary damages or to enter into a trademark license agreement on unfavorable terms.

In addition, if TMTG’s advertising customers do not own the copyright for advertising content included in their advertisements or if digital media property owners do not own the

copyright for content to the digital media next to which the advertisements appear, advertisers and digital media properties could receive complaints from copyright owners, which could harm TMTG’s reputation and TMTG’s business.

As such, litigation diverts the time and resources of management, regardless of the merits of the claim.

There can be no assurance that TMTG would prevail in any future litigation

relating to TMTG’s licensing agreements.

If TMTG were to lose such a case and be required to cease the sale of certain products or the use of certain technology or branding or were forced to pay monetary damages, the results could

adversely affect TMTG’s business and reputation.

TMTG must comply with licenses related to the use of free, publicly-available software incorporated in Truth Social products;

failure to do so could cause the loss

of the ability to use such software which could in turn adversely affect TMTG’s revenues and results of operations.

In October 2021, Software Freedom Conservancy policy fellow Bradley M.

Kuhn accused TMTG of violating the licensing agreement for the free, publicly available software platform,

Although any entity can use the code from Mastodon, according to the licensing agreement (AGPLv3), each user of the software must receive “an opportunity to receive the entire Corresponding Source for the website based on that

code.” Early users of Truth Social, Kuhn alleged, did not receive the source code.

On October 26, 2021, Mastodon sent a letter requesting that the Truth Social source code be made publicly

available in compliance with the license.

Private TMTG took action to resolve this issue by publishing its source code.

TMTG may face similar risks in the future, and failure to comply with such licenses could cause the loss of the ability to use such software, which could in turn adversely affect

TMTG’s revenues and results of operations.

TMTG operates in new and evolving industries.

TMTG may not be able to respond to changes in market conditions or to new or emerging technologies.

You should take into account the risks and uncertainties frequently encountered by new companies in rapidly evolving markets.

TMTG’s financial results in any given quarter can be

influenced by numerous factors, many of which TMTG is unable to predict or is outside of TMTG’s control, including:

TMTG’s ability to maintain and grow TMTG’s user base and user engagement;

TMTG’s ability to attract and retain advertisers in a particular period;

seasonal fluctuations in spending by TMTG’s advertisers;

the number of ads shown to users;

the pricing of TMTG’s ads and other products;

TMTG’s ability to increase payments and other fees revenue;

the diversification and growth of revenue sources beyond advertising and payments;

the development and introduction of new products or services by us or TMTG’s competitors;

increases in marketing, sales, and other operating expenses that TMTG may incur to grow and expand TMTG’s operations and to remain competitive;

TMTG’s ability to maintain gross margins and operating margins;

TMTG’s ability to obtain equipment and components for TMTG’s data centers and other technical infrastructure in a timely and cost-effective manner;

system failures or breaches of security or privacy;

inaccessibility of Truth Social due to third-party actions;

adverse litigation judgments, settlements, or other litigation-related costs;

changes in the legislative or regulatory environment, including with respect to privacy, or enforcement by government regulators, including fines, orders, or consent decrees;

fluctuations in currency exchange rates and changes in the proportion of TMTG’s revenue and expenses denominated in foreign currencies;

fluctuations in the market values of TMTG’s portfolio investments and in interest rates;

changes in U.S.

changes in business or macroeconomic conditions.

TMTG’s business is subject to complex and evolving U.S.

and foreign laws and regulations regarding privacy, data protection, and other matters.

Many of these laws

and regulations are subject to change and uncertain interpretation, and could result in claims, changes to TMTG’s business practices, increased cost of operations, or declines in user growth or engagement, or otherwise harm TMTG’s

TMTG is subject to a variety of laws and regulations in the United States and abroad that involve matters central to TMTG’s business, including user privacy, rights of publicity, data protection, content,

intellectual property, distribution, electronic contracts and other communications, competition, protection of minors, consumer protection, taxation, and online payment services.

Foreign data protection, privacy, and other laws and

regulations are often more restrictive than those in the United States.

federal and state and foreign laws and regulations are complex, constantly evolving and can be subject to significant and rapid change.

In addition, the

application and interpretation of these laws and regulations are often uncertain, particularly in the new and rapidly evolving industry in which TMTG operates.

For example, the interpretation of some laws and regulations that govern the

use of names and likenesses in connection with advertising and marketing activities is unsettled and developments in this area could affect the manner in which TMTG designs TMTG’s products, as well as TMTG’s terms of use.

proposals are pending before federal, state, and foreign legislative and regulatory bodies that could significantly affect TMTG’s business.

Similarly, there have been a number of recent legislative

proposals in the United States, at both the federal and state level, that would impose new obligations in areas such as privacy and liability for copyright infringement by third parties.

These existing and proposed laws and regulations

can be costly to comply with and can delay or impede the development of new products, result in negative publicity, increase TMTG’s operating costs, require significant management time and

attention, and subject us to claims or other remedies, including fines or demands that TMTG modify or cease existing business practices.

For more information, see the section entitled “ Risk Factors — Risks Related to TMTG’s Business — TMTG’s reputation, competitive advantage, financial

position and relationships with its users could be materially harmed if TMTG is unable to comply with complex and evolving data protection and privacy, security, and breach notification laws and regulations, and the costs and resources

required to achieve compliance may have a materially adverse impact.

If TMTG’s security measures are breached, or if TMTG’s products and services are subject to attacks that degrade or deny the ability of users to access TMTG’s

products and services, TMTG’s products and services may be perceived as not being secure, users and advertisers may curtail or stop using TMTG’s products and services and TMTG’s business and operating results could be harmed.

TMTG’s industry is prone to cyber-attacks by third parties seeking unauthorized access to TMTG’s data, TMTG’s users’ data, or TMTG’s advertisers’ data.

In addition, computer malware,

viruses, social engineering (such as spear phishing attacks), scraping, and general hacking continue to be prevalent in TMTG’s industry and are likely to occur on TMTG’s systems in the future.

TMTG’s products and services involve the

storage and transmission of users’ and advertisers’ information, and security breaches expose it to a risk of loss of this information, litigation and potential liability.

TMTG may experience cyber-attacks and other cybersecurity risks of

varying degrees on a regular basis, and as a result, unauthorized parties may obtain access to TMTG’s data or TMTG’s users’ or advertisers’ data.

TMTG’s security measures may also be breached due to employee error, malfeasance or

Additionally, outside parties may attempt to fraudulently induce employees, users or advertisers to disclose sensitive information in order to gain access to TMTG’s data or TMTG’s users’ or advertisers’ data or accounts, or may

otherwise obtain access to such data or accounts.

Since TMTG’s users and advertisers may use their Truth Social accounts to establish and maintain online identities, unauthorized communications from Truth Social accounts that have been

compromised may damage their reputations and brands as well as TMTG’s.

Any such breach or unauthorized access could result in significant legal and financial exposure, damage to TMTG’s reputation and a loss of confidence in the security

of TMTG’s products and services that could have an adverse effect on TMTG’s business and operating results.

Because the techniques used to obtain unauthorized access, disable, or degrade service or sabotage systems change frequently and

often are not recognized until launched against a target, TMTG may be unable to anticipate these techniques or to implement adequate preventative measures.

If an actual or perceived breach of TMTG’s security occurs, the market perception

of the effectiveness of TMTG’s security measures could be harmed, TMTG could lose users and advertisers and TMTG may incur significant legal and financial exposure, including legal claims and regulatory fines and penalties.

actions could have a material and adverse effect on TMTG’s business, reputation, and operating results.

TMTG may face lawsuits or incur liability as a result of content published on Truth Social.

TMTG may face claims relating to content that is published or made available through TMTG’s products and services or third-party products or services.

In particular, the nature of TMTG’s business exposes it

to claims related to defamation, intellectual property rights, rights of publicity and privacy, illegal content, content regulation and personal injury torts.

The law relating to the liability of providers of online products or services for activities of their users remains somewhat unsettled, both within the United States and internationally.

This risk may be enhanced in certain jurisdictions outside the United States where TMTG may be

less protected under local laws than TMTG is in the United States.

In addition, the public nature of communications on TMTG’s network exposes it to risks arising from the creation of impersonation accounts intended to be attributed to

TMTG’s users or advertisers.

TMTG could incur significant costs investigating and defending these claims.

If TMTG incurs costs or liability as a result of these events occurring, TMTG’s business, financial condition and operating

results could be adversely affected.

See “Risk Factors — Risks Related to TMTG’s Business — TMTG may be subject to greater risks than typical social media platforms

because of the focus of its offerings and the involvement of President Trump.

These risks include active discouragement of users, harassment of advertisers or content

providers, increased risk of hacking of TMTG’s platform, lesser need for Truth Social if First Amendment speech is not suppressed, criticism of Truth Social for its moderation practices, and increased stockholder suits.”

Many of TMTG’s products and services rely on, incorporate, and/or license open source software, which may pose particular risks to TMTG’s proprietary software,

products, and services in a manner that could have a negative effect on TMTG’s business.

TMTG uses and plans to continue using open-source software in its products and services.

For example, Truth

Social was built using an AGPLv3 license (also referred to “copyleft” or a “viral license”).

In addition, TMTG may contribute software source code to existing open-source projects, such as Mastodon, pursuant to applicable licenses or

release internal software projects under open-source licenses and anticipate doing so in the future.

The terms of many licenses to which TMTG is or is likely to become subject to have not been interpreted by U.S.

or foreign courts, and

there is a risk that open-source software licenses could be construed in a manner that imposes unanticipated conditions or restrictions on TMTG’s ability to provide or distribute TMTG’s products or services.

Additionally, TMTG may from

time-to-time face claims from third parties claiming ownership of, or demanding release of, the open-source software or derivative works that TMTG developed using such software (which could include TMTG’s proprietary source code), or

otherwise seeking to enforce the terms of an applicable license in a manner adverse to TMTG’s interests.

TMTG is proactively working to mitigate these risks by developing technical solutions to these potential challenges.

However, this

re-engineering process could require significant additional research and development resources, and TMTG may not be able to complete it successfully or at a reasonable cost.

In addition to risks related to license requirements, use of

certain open- source software can lead to greater risks than use of third-party commercial software, as open-source licensors generally do not provide warranties or controls on the origin of software.

Additionally, because any software

source code TMTG contributes to open-source projects is publicly available, TMTG’s ability to protect TMTG’s intellectual property rights with respect to such software source code may be limited or lost entirely, and TMTG is unable to

prevent TMTG’s competitors or others from using such contributed software source code.

Any of these risks could be difficult to eliminate or manage, and, if not addressed, could have a negative effect on TMTG’s business, financial

condition, and operating results.

TMTG may rely in part on application marketplaces and internet search engines to drive

traffic to TMTG’s products and services, and if TMTG fails to appear high up in the search results or rankings, traffic to Truth Social could decline and TMTG’s business and operating results could be adversely affected.

Although TMTG offers a web application for Truth Social, TMTG may rely on application marketplaces, such as

Apple’s App Store and Google’s Play, to drive downloads of TMTG’s mobile application.

In the future, Apple, Google, or other operators of application marketplaces may make changes to their marketplaces which make access to TMTG’s products

and services more difficult or impossible.

Additionally, third parties may attempt to pressure Apple and Google to remove Truth Social from their application marketplaces, and such removal may constitute a force majeure event under the

operative version of the License, Likeness, Exclusivity and Restrictive Covenant Agreement that Private TMTG entered into with President Trump (the “License Agreement”), which allows TMTG to use “Trump Media & Technology Group Corp.”

as its name and to use the name and likeness of President Trump, subject to certain limitations.

Such a force majeure event may relieve President Trump of any obligation to post on or otherwise use Truth Social for so long as such event

See the section titled “ Risk Factors — Risks Related to TMTG’s Business — TMTG may be subject to greater risks than typical social

media platforms because of the focus of its offerings and the involvement of President Trump.

These risks include active discouragement of users, harassment of advertisers or content providers, increased risk of hacking of TMTG’s

platform, lesser need for Truth Social if First Amendment speech is no longer believed to be suppressed by other similar platforms, criticism of Truth Social for its moderation practices, and increased stockholder suits .”

TMTG may also depend in part on internet search engines, such as Google, Bing, and Yahoo!, to drive traffic

to Truth Social.

For example, when a user types an inquiry into a search engine, TMTG may rely on a high organic search result ranking of TMTG’s web pages in these search results to refer the user to Truth Social.

However, TMTG’s

ability to maintain high organic search result rankings is not within TMTG’s control.

TMTG’s competitors’ search engine optimization (“SEO”) efforts may result in their websites receiving a higher search result page ranking than TMTG’s,

or Internet search engines could revise their methodologies in a way that would adversely affect TMTG’s search result rankings.

For example, Google has integrated its social networking offerings, including Google+, with certain of its

products, including search, which could negatively impact the organic search ranking of TMTG’s web pages.

If internet search engines modify their search algorithms in ways that are detrimental to us, or if TMTG’s competitors’ SEO

efforts are more successful than TMTG’s, the growth in Truth Social’s user base could slow.

TMTG anticipates fluctuations in search result rankings in the future.

Any reduction in the number of users directed to TMTG’s mobile

applications or website through application marketplaces and search engines could harm TMTG’s business and operating results.

More people are using devices other than personal computers to access the internet and

new platforms to produce and consume content, and TMTG needs to promote the adoption of TMTG’s mobile applications, and TMTG’s business and operating results may be harmed if TMTG is unable to do so.

The number of people who access the internet through devices other than personal computers, including mobile

phones, smartphones, handheld computers such as net books and tablets, video game consoles and television set-top devices, has increased dramatically in the past few years.

There are 7.26 billion smart and feature phone users worldwide,

including 6.65 billion smartphone users worldwide in 2022.

Since TMTG may generate a majority of TMTG’s advertising revenue through users on mobile devices, TMTG must continue to drive adoption of TMTG’s mobile applications.

addition, mobile users frequently change or upgrade their mobile devices.

TMTG’s business and operating results may be harmed if TMTG’s users do not install Truth Social application when they change or upgrade their mobile device.

addition, as new devices and platforms are continually being released, users may consume content in a manner that is more difficult to monetize.

It is difficult to predict the problems TMTG may encounter in adapting TMTG’s products and

services and developing competitive new products and services that are compatible with new devices or platforms.

If TMTG is unable to develop products and services that are compatible with new devices and platforms, or if TMTG is unable

to drive continued adoption of TMTG’s mobile applications, TMTG’s business and operating results may be harmed.

If TMTG fails to maintain an effective system of disclosure controls and internal controls over financial reporting, TMTG’s ability to produce

timely and accurate financial statements or comply with applicable regulations could be impaired.

As a public company, TMTG is subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act and the listing standards of Nasdaq.

TMTG expects that the requirements

of these rules and regulations will continue to increase TMTG’s legal, accounting, and financial compliance costs, make some activities more difficult, time consuming and costly, and place significant strain on TMTG’s personnel, systems,

and resources.

The Sarbanes-Oxley Act requires, among other things, that TMTG maintain effective disclosure controls and procedures and internal control over financial reporting.

TMTG intends to

develop and refine TMTG’s disclosure controls and other procedures that are designed to ensure that information required to be disclosed by TMTG in the reports that TMTG will file with the SEC is recorded, processed, summarized and

reported within the time periods specified in SEC rules and forms, and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated to TMTG’s principal executive and financial officers.

intends to improve TMTG’s internal control over financial reporting.

In order to maintain and improve the effectiveness of TMTG’s disclosure controls and procedures and internal control over financial reporting, TMTG anticipates that TMTG

will continue to expend significant resources, including accounting-related costs and significant management oversight.

TMTG’s controls may be inadequate because of changes in conditions in TMTG’s business.

Further, weaknesses in TMTG’s disclosure controls or TMTG’s internal control over

financial reporting may continued to be discovered in the future.

Any failure to remediate, develop or maintain effective controls, or any difficulties encountered in their implementation or

improvement, could harm TMTG’s operating results or cause us to fail to meet TMTG’s reporting obligations and may result in a restatement of TMTG’s financial statements for prior periods.

Any failure to implement and maintain effective

internal control over financial reporting also could adversely affect the results of management evaluations and independent registered public accounting firm audits of TMTG’s internal control over financial reporting that TMTG will

eventually be required to include in TMTG’s periodic reports that will be filed with the SEC.

Ineffective disclosure controls and procedures and internal control over financial reporting could also cause investors to lose confidence in

TMTG, which would likely have a negative effect on the trading price of TMTG’s common stock.

In addition, if TMTG is unable to continue to meet these requirements, TMTG may not be able to remain listed on Nasdaq.

In connection with the preparation of its financial statements as of and for the nine

months ended September 30, 2023, Digital World identified material weaknesses in its internal control over financial reporting, and TMTG may identify additional material weaknesses in its previously issued financial statements that, in

the future, may cause TMTG to fail to meet its reporting obligations or result in material misstatements of its financial statements.

Digital World historically had limited accounting and financial reporting personnel and other resources with which to address its internal controls and procedures.

In connection with the preparation of its

financial statements as of and for the nine months ended September 30, 2023, Digital World's management identified a material weakness in its internal control over financial reporting.

A “material weakness” is a deficiency, or a

combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of an entity’s financial statements will not be prevented or detected on a timely basis.

Digital World's management determined that there were errors related to the classification of income in the previously issued financial statements for the years ended December 31, 2021 and 2022.

In accordance with SEC Staff Accounting

99, “Materiality,” and SEC Staff Accounting Bulletin No.

108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements,” Digital World determined that the

errors were material to its previously issued financial statements.

Therefore, Digital World concluded that the previously issued financial statements should be restated.

The material weaknesses identified by Digital World's management related to material errors over its financial

reporting, which required the restatement of its financial statements for the years ended December 31, 2021 and 2022.

Specifically, Digital World's management determined the material weaknesses related to a material error in classifying

income from a licensing arrangement in 2021 as net sales from related parties rather than the proper classification as other income from related parties.

Digital World's management determined that the restatement matters primarily related

to its failure to design and maintain formal accounting policies, processes, and controls to analyze, account for and properly disclose income recordation as well as a need for additional accounting personnel who have the requisite

experience in SEC reporting regulation.

TMTG is committed to remediating the material weaknesses described above and commencing remediation efforts during 2024.

TMTG intends to initiate and implement several

remediation measures including, but not limited to hiring additional accounting staff with the requisite background and knowledge, engaging third parties to assist in complying with the accounting and financial reporting requirements

related to significant and complex transactions as well as adding personnel to assist TMTG with formalizing its business processes, accounting policies and internal control documentation, strengthening supervisory reviews by its management, and evaluating the effectiveness of its internal controls in accordance with the framework established by Internal Control –

Integrated Framework (2013) published by the Committee of Sponsoring Organizations of the Treadway Commission.

While TMTG’s efforts are ongoing, TMTG plans to continue to take additional

steps to remediate the material weaknesses, improve its financial reporting systems, and implement new policies, procedures, and controls;

however, TMTG cannot guarantee those measures will prevent or detect material weaknesses in the

Although TMTG intends to pursue the remediation efforts mentioned above, all identified material weaknesses continue to exist as of the date of this Report and we cannot provide any

assurance that TMTG, or its independent registered accounting firm, will not identify new material weaknesses in TMTG’s internal controls over financial reporting in the future.

While we are undertaking efforts to remediate these material

weaknesses, the material weaknesses will not be considered remediated until our remediation plan has been fully implemented, the applicable controls operate for a sufficient period of time, and we have concluded through testing, that the

newly implemented and enhanced controls are designed and operating effectively.

We are working to remediate the material weaknesses as efficiently and effectively as possible but expect that full remediation could potentially go beyond

December 31, 2024.

At this time, we cannot provide an estimate of costs expected to be incurred in connection with implementing this remediation plan;

however, these remediation measures will be time consuming, incur significant costs,

and place significant demands on our financial and operational resources.

If currency exchange rates fluctuate substantially in the future, TMTG’s operating results, which are reported in U.S.

dollars, could be adversely affected.

Private TMTG recently announced the general availability of Truth Social internationally.

As a result, TMTG

may become more exposed to the effects of fluctuations in currency exchange rates.

TMTG may incur expenses for employee compensation and other operating expenses at TMTG’s international locations in the local currency and accept payment

from advertisers or data partners in currencies other than the U.S.

Since TMTG may conduct business in currencies other than U.S.

dollars but report TMTG’s operating results in U.S.

dollars, TMTG faces exposure to fluctuations

in currency exchange rates.

Consequently, exchange rate fluctuations between the U.S.

dollar and other currencies could have a material impact on TMTG’s operating results.

TMTG’s business is subject to the risks of earthquakes, fire, power outages, floods, and other catastrophic events, and to interruption by man-made problems such as

A significant natural disaster, such as an earthquake, fire, flood, cyber-attacks, terrorism, geopolitical conflict or significant power outage could have a

material adverse impact on TMTG’s business, operating results, and financial condition.

TMTG does not carry business interruption insurance sufficient to compensate us for the potentially significant losses, including the potential harm

to TMTG’s business that may result from interruptions in TMTG’s ability to provide TMTG’s products and services.

If TMTG’s trademarks and other proprietary rights are not adequately protected to prevent

use or appropriation by TMTG’s competitors, the value of TMTG’s brand and other intangible assets may be diminished, and TMTG’s business may be materially adversely affected.

The USPTO has issued a non-final rejection of TMTG’s or its

affiliate’s applications to register the trademarks “Truth Social” and “TRUTHSOCIAL” for use with a social media network because of alleged similarity to other registered and pending trademarks.

If TMTG is unable to overcome the

objections of the trademark examiner to successfully register the pending “Truth Social” and “TRUTHSOCIAL” trademarks with the USPTO and otherwise protect TMTG’s intellectual property, the value of TMTG’s brand and other intangible

assets may be diminished, TMTG may be forced to rebrand its offerings, and TMTG’s business may be materially adversely affected.

TMTG intends to rely on a combination of confidentiality and license agreements with TMTG’s employees, consultants, and third parties with whom TMTG develops

relationships, as well as trademark, copyright, patent, trade secret, and domain name protection laws, to protect TMTG’s proprietary rights.

TMTG has filed various applications for protection

of certain aspects of TMTG’s intellectual property.

However, third parties may knowingly or unknowingly infringe TMTG’s proprietary rights, third parties may challenge any proprietary rights held by TMTG, and pending and future

trademark and patent applications may not be approved.

On February 14, 2023, a trademark for “TRUTH SOCIAL” in classes 21 and 25 was registered with the USPTO by T

Media Tech LLC, a wholly owned subsidiary of TMTG Sub, for use with cups, mugs and certain types of clothing.

Trademark applications for “Truth Social” in classes 9 and 42;

for “RETRUTH” in classes 9, 35, 38, 41, 42, and 45;

“TRUTHSOCIAL” in classes 9, 35, 38, 41, 42, and 45;

and for “TRUTHPLUS” in classes 9, 35, 38, 41, and 42 are the subject of suspension notices received from USPTO on October 24, 2022;

January 13, 2023;

February 14, 2023 and February 17,

2023, respectively, in each case based on alleged similarity to existing registered and pending trademarks.

In particular, the USPTO has issued non-final rejections of all of the foregoing applications to register marks for use with a

social media network or a streaming video service.

Although TMTG has pursued certain appeal rights, there can be no assurance that TMTG will be able to overcome the objections of the trademark examiner or that the challenged marks will

In addition, effective intellectual property protection may not be available in every country in which TMTG operates or intends to operate TMTG’s business, and TMTG is currently evaluating its options with respect to

apparent bad faith registrations of the Truth Social trademark in the European Union and Sweden.

In any or all of these cases, TMTG may be required to expend significant time and expense in order to prevent infringement or to enforce TMTG’s rights.

Although TMTG intends to take

measures to protect TMTG’s proprietary rights, there can be no assurance that others will not offer products or concepts that are, or use branding that is, substantially similar to TMTG’s and compete with TMTG’s business.

TMTG may contribute software source code under open source licenses and may make other technology developed by it available under other open licenses, and TMTG may include open source software in TMTG’s products.

As a result of any future

TMTG’s open source contributions and the use of open source in TMTG’s products, TMTG may license or be required to license innovations that turn out to be material to TMTG’s business and may also be exposed to increased litigation risk.

If the protection of TMTG’s proprietary rights is inadequate to prevent unauthorized use or appropriation by third parties, the value of TMTG’s brand and other intangible assets may be diminished and competitors may be able to more

effectively mimic TMTG’s branding, service and methods of operations.

Any of these events could have an adverse effect on TMTG’s business and financial results.

Trademark, copyright, patent,

and other intellectual property rights are important to TMTG and other companies.

TMTG’s intellectual property rights extend to TMTG’s technology, business processes and the content on TMTG’s website.

TMTG intends to use the

intellectual property of third parties in merchandising TMTG’s products and marketing TMTG’s service through contractual and other rights.

If there is any claim against TMTG for infringement, misappropriation, misuse or other

violation of third party intellectual property rights, and TMTG is unable to obtain sufficient rights or develop non-infringing intellectual property or otherwise alter TMTG’s business practices, as appropriate, on a timely basis,

TMTG’s business and competitive position may be affected adversely.

Many companies are devoting significant resources to developing patents that could potentially affect many aspects of TMTG’s business.

There are numerous patents that

broadly claim means and methods of conducting business on the internet.

TMTG has not exhaustively searched patents relative to TMTG’s technology.

TMTG may be accused of infringing certain of these patents.

In addition, other parties

may assert infringement or unfair competition, or other intellectual property claims against TMTG that could relate to any aspect of TMTG’s technology, business processes, branding, merchandizing, and marketing activities or TMTG’s

intellectual property rights.

TMTG cannot predict whether third parties will assert claims of infringement against it, the subject matter of any of these claims or whether these assertions or prosecutions will adversely affect TMTG’s

If TMTG is forced to defend itself against any of these claims, whether they are with or without merit or are determined in TMTG’s favor, TMTG may face costly litigation, diversion of technical and management personnel,

inability to use TMTG’s current branding or website technology or inability to market TMTG’s service or merchandise TMTG’s products.

As a result of a dispute, TMTG may have to develop non-infringing technology, rebrand, enter into royalty or licensing agreements, adjust TMTG’s merchandizing or marketing activities or take other action to resolve the claims.

These actions, if required, may be

unavailable on terms acceptable to TMTG, costly or unavailable.

If TMTG is unable to protect TMTG’s domain names, TMTG’s reputation and brand could be affected adversely.

TMTG may hold various domain names relating to TMTG’s brand, including TMTGcorp.com and Truthsocial.com.

Failure to protect TMTG’s domain names could affect adversely TMTG’s reputation

and brand and make it more difficult for users to find TMTG’s website and TMTG’s service.

The acquisition and maintenance of domain names generally are regulated by governmental agencies and their designees.

The regulation of domain names

in the United States may change in the near future.

Governing bodies may establish additional top-level domains, appoint additional domain name registrars, or modify the requirements for holding domain names.

As a result, TMTG may be

unable to acquire or maintain relevant domain names.

Furthermore, the relationship between regulations governing domain names and laws protecting trademarks and similar proprietary rights is unclear.

TMTG may be unable to prevent third

parties from acquiring domain names that are similar to, infringe upon, or otherwise decrease the value of TMTG’s trademarks and other proprietary rights.

In the future, TMTG may be involved in numerous class action lawsuits and lawsuits and

disputes that are expensive and time consuming, and, if resolved adversely, could harm TMTG’s business, financial condition or results of operations.

In addition to intellectual property and licensing claims, TMTG may also be involved in numerous other

lawsuits, many of which typically include claims for statutory damages, including putative class action lawsuits brought by users and claims brought by contractual counterparties such as vendors, current or former employees, convertible

noteholders or advertising partners, many of which claim statutory damages.

Recent putative class action complaints against other companies in TMTG’s industry have included claims for violations of the Electronic Communications Privacy

Act, 18 U.S.C.

§§ 1030, the Computer Fraud and Abuse Act, 18 U.S.C.

§ 1030, The California Invasion of Privacy Act, Cal.

Penal Code § 631, the California Unfair Competition Law, Business and Professions Code §§ 17200, et seq ., the New York General Business Law §§ 349, et seq ., and tort claims for negligence, invasion of privacy, intrusion upon seclusion, larceny/receipt of stolen property, conversion, and unjust enrichment.

In fact, TMTG anticipates that TMTG will

continue to be a target for numerous lawsuits in the future, and that prospective or actual litigation involving TMTG may generate significant negative attention.

If TMTG is able to build an expansive user base, the plaintiffs in class

action cases filed against TMTG typically will claim enormous monetary damages even if the alleged per-user harm is small or non-existent.

Any litigation to which TMTG may in the future be a party may result in an onerous or unfavorable

judgment that may not be reversed upon appeal, or TMTG may decide to settle lawsuits on similarly unfavorable terms.

Any such negative outcome could result in payments of substantial monetary damages or fines, or changes to TMTG’s

products or business practices, and accordingly TMTG’s business, financial condition, or results of operations could be materially and adversely affected.

However, defending any future claims may be costly and can impose a significant

burden on management and employees, and TMTG may receive unfavorable preliminary or interim rulings in the course of litigation, which could adversely affect the market price of TMTG Common Stock.

There can be no assurances that a

favorable final outcome will be obtained in any cases in the future.

President Trump has significant influence over key decision making as a result of his control of a significant portion of TMTG’s voting stock.

President Trump beneficially owns approximately 57.6% of the voting power of the outstanding TMTG Common

As a result, President Trump has the ability to significantly influence the outcome of matters submitted to TMTG’s stockholders for approval, including the election of directors and any merger, consolidation, or sale of all or

substantially all of the TMTG’s assets.

In the event that President Trump controls the TMTG Board at the time of his death, control may be transferred to a person or entity that he designates as his successor.

As a board member,

President Trump will owe a fiduciary duty to TMTG’s stockholders and must act in good faith in a manner he reasonably believes to be in the best interests of TMTG’s stockholders.

As a stockholder, even a controlling stockholder,

President Trump is entitled to vote his shares in his own interests, which may not always be in the interests of TMTG’s stockholders generally.

TMTG cannot be certain that additional financing will be available on reasonable terms when required, or at all.

From time to time, TMTG may need additional financing.

TMTG’s ability to obtain additional financing, if and

when required, will depend on investor demand, TMTG’s operating performance, the condition of the capital markets, and other factors.

If TMTG raises additional funds through the issuance of equity, equity-linked or debt securities,

those securities may have rights, preferences, or privileges senior to the rights of the TMTG Common Stock and TMTG’s existing stockholders may experience dilution.

Certain financial-industry service providers have expressed, or may be

reasonably expected to express, an unwillingness or reluctance to work on TMTG’s products or provide services due to TMTG’s connection with President Trump.

Similarly, to the extent TMTG needs to raise additional capital, TMTG will need

to engage with investment bankers and investors and it is possible that some will not want to engage with TMTG for similar reasons.

Hostility from financial institutions could adversely affect TMTG’s ability to obtain banking services,

including additional financing on reasonable terms when required, or at all, which could adversely affect TMTG’s business and financial results.

TMTG’s costs may grow more quickly than TMTG’s revenue, harming TMTG’s business and profitability.

TMTG expects its expenses to continue to increase in the future as it broadens its user base, as users increase the number of connections and amount of data they share with us, as TMTG

develops and implements new product features that require more computing infrastructure, and as TMTG hires additional employees.

TMTG expects to incur increasing costs, in particular for servers, storage, power, and data centers, to

support TMTG’s anticipated future growth.

TMTG expects to continue to invest in TMTG’s infrastructure in order to provide TMTG’s products rapidly and reliably to all users around the world, including in countries where TMTG does not

expect significant short-term monetization.

TMTG’s expenses may be greater than TMTG anticipates, and TMTG’s investments to make TMTG’s business and TMTG’s technical infrastructure more efficient may not be successful.

In addition, TMTG

may increase marketing, sales, and other operating expenses in order to grow and expand TMTG’s operations and to remain competitive.

Increases in TMTG’s costs may adversely affect TMTG’s business and profitability.

TMTG’s business is dependent on its ability to maintain and scale TMTG’s technical infrastructure, and any significant disruption in TMTG’s

service could damage TMTG’s reputation, result in a potential loss of users and engagement, and adversely affect TMTG’s financial results.

TMTG’s reputation and ability to

attract, retain and serve TMTG’s users is dependent upon the reliable performance of Truth Social and TMTG’s underlying technical infrastructure.

TMTG’s systems may not be adequately designed with the necessary reliability and

redundancy to avoid performance delays or outages or service disruptions that could be harmful to TMTG’s business.

If Truth Social is unavailable when users attempt to access it, or if it does not load as quickly as they expect, users

may not return to TMTG’s website as often in the future, or at all.

As TMTG’s user base and the amount and types of information shared on Truth Social continue to grow, TMTG will need an increasing amount of technical infrastructure, including network capacity, and

computing power, to continue to satisfy the needs of TMTG’s users.

It is possible that TMTG may fail to effectively scale and grow TMTG’s technical infrastructure to accommodate these increased demands.

In addition, as stated above,

TMTG’s business is subject to interruptions, delays, or failures resulting from earthquakes, other natural disasters, terrorism, or other catastrophic events.

A substantial portion of TMTG’s network infrastructure will be provided by third parties.

Any disruption or failure in the services TMTG receives from these providers could harm TMTG’s

ability to handle new or increased traffic and could significantly harm TMTG’s business.

Any financial or other difficulties these providers face may adversely affect TMTG’s business, and TMTG exercise little control over these providers,

which increases TMTG’s vulnerability to problems with the services they provide.

TMTG’s software is highly technical, and if it contains undetected errors, TMTG’s business could be adversely affected.

TMTG’s business and operating results may be

harmed by a disruption in TMTG’s service, or by TMTG’s failure to timely and effectively scale and adapt TMTG’s existing technology and infrastructure.

One of the reasons people will come to Truth Social is for real-time information.

TMTG in the future may experience service disruptions, outages, and other performance problems due to

a variety of factors, including infrastructure changes, human or software errors, hardware failure, capacity constraints due to an overwhelming number of people accessing TMTG’s products and services simultaneously, computer viruses and

denial of service or fraud or security attacks.

Although TMTG will invest significantly to improve the capacity, capability, and reliability of TMTG’s infrastructure, TMTG cannot guarantee that TMTG will serve all traffic equally through

data centers that support TMTG’s platform.

Accordingly, in the event of a significant issue at a data center supporting significant network traffic, some of TMTG’s products and services may become inaccessible to the public or the public

may experience difficulties accessing TMTG’s products and services.

Any disruption or failure in TMTG’s infrastructure could hinder TMTG’s ability to handle existing or increased traffic on TMTG’s platform, which could significantly harm

TMTG’s business.

As the number of TMTG’s users increases and TMTG’s users generate more content, including photos and videos hosted by Truth Social, TMTG may be required to expand and adapt TMTG’s

technology and infrastructure to continue to reliably store, serve and analyze this content.

It may become increasingly difficult to maintain and improve the performance of TMTG’s products and services, especially during peak usage times,

as TMTG’s products and services become more complex and TMTG’s user traffic increases.

In addition, because TMTG may lease TMTG’s data center facilities, TMTG cannot be assured that TMTG will be able to expand TMTG’s data center

infrastructure to meet user demand in a timely manner, or on favorable economic terms.

If TMTG users are unable to access Truth Social or TMTG is not able to make information available rapidly on Truth Social, users may seek other

channels to obtain the information, and may not return to Truth Social or use Truth Social as often in the future, or at all.

This would negatively impact TMTG’s ability to attract users and advertisers and increase engagement of TMTG’s

TMTG expects to continue to make significant investments to maintain and improve the capacity, capability, and reliability of TMTG’s infrastructure.

To the extent that TMTG does not effectively address capacity constraints, upgrade

TMTG’s systems as needed and continually develop TMTG’s technology and infrastructure to accommodate actual and anticipated changes in technology, TMTG’s business and operating results may be harmed.

TMTG’s products may incorporate software that is highly technical and complex.

TMTG’s software may now or in the future contain, undetected errors, bugs, or vulnerabilities.

errors in TMTG’s software code may only be discovered after the code has been released.

Any errors, bugs, or vulnerabilities discovered in TMTG’s code after release could result in damage to TMTG’s reputation, loss of users, loss of

revenue, or liability for damages, any of which could adversely affect TMTG’s business and financial results.

TMTG cannot assure you that TMTG will effectively manage its growth.

If TMTG fails to

effectively manage its growth, TMTG’s business and operating results could be harmed.

TMTG may experience rapid growth in TMTG’s headcount and operations, which will place significant demands on

TMTG’s management and operational and financial infrastructure.

TMTG intends to make substantial investments to expand TMTG’s operations, research and development, sales and marketing and general and administrative organizations, as

well as TMTG’s international operations.

TMTG may face significant competition for employees, particularly engineers, designers and product managers, from other internet and high-growth companies, which include both publicly-traded and

privately-held companies, and TMTG may not be able to hire new employees quickly enough to meet TMTG’s needs.

To attract highly skilled personnel, TMTG believes it will need to offer highly competitive compensation packages.

continues to grow, TMTG may be subject to the risks of over-hiring, over-compensating TMTG’s employees and over- expanding TMTG’s operating infrastructure, and to the challenges of integrating, developing, and motivating a rapidly

growing employee base in various countries around the world.

In addition, TMTG may not be able to innovate or execute as quickly as a smaller, more efficient organization.

If TMTG fails to effectively manage TMTG’s hiring needs and

successfully integrate TMTG’s new hires, TMTG’s efficiency and ability to meet TMTG’s forecasts and TMTG’s employee morale, productivity and retention could suffer, and TMTG’s business and operating results could be adversely affected.

The growth and expansion of TMTG’s business and products create significant challenges for TMTG’s management, operational, and financial resources, including managing multiple

relations with users, advertisers, platform developers, and other third parties.

In the event of continued growth of TMTG’s operations or in the number of TMTG’s third-party relationships, TMTG’s information technology systems or TMTG’s

internal controls and procedures may not be adequate to support TMTG’s operations.

In addition, some members of TMTG’s management do not have significant experience managing a large global business operation, so TMTG’s management may not

be able to manage such growth effectively.

To effectively manage TMTG’s growth, TMTG must continue to improve TMTG’s operational, financial, and management processes and systems and to effectively expand, train, and manage TMTG’s employee

As TMTG’s organization continues to grow, and TMTG is required to implement more complex organizational management structures, TMTG may find it increasingly difficult to maintain the benefits of TMTG’s corporate culture, including

TMTG’s ability to quickly develop and launch new and innovative products.

This could negatively affect TMTG’s business performance.

Computer malware, viruses, hacking, and phishing attacks, and spamming could harm TMTG’s business and results of operations.

Spam could diminish the user experience

on TMTG’s platform, which could damage TMTG’s reputation and deter TMTG’s current and potential users from using TMTG’s products and services.

Computer malware, viruses, hacking, and phishing attacks have become more prevalent in TMTG’s industry and may occur on TMTG’s systems in the future.

Because of TMTG’s prominence, and

the prominence and involvement of President Trump in TMTG, TMTG believes that TMTG is a particularly attractive target for such attacks.

Though it is difficult to determine what, if any, harm may directly result from any specific

interruption or attack, any failure to maintain performance, reliability, security, and availability of TMTG’s products and technical infrastructure to the satisfaction of TMTG’s users may harm TMTG’s reputation and TMTG’s ability to

retain existing users and attract new users.

“Spam” on Truth Social refers to a range of abusive activities that are prohibited by TMTG’s terms of service and is generally defined as

unsolicited, repeated actions that negatively impact other users with the general goal of drawing user attention to a given account, site, product or idea.

This includes posting large numbers of unsolicited mentions of a user,

duplicating content, misleading links (e.g., to malware or click- jacking pages) or other false or misleading content, and aggressively following and un-following accounts, adding users to lists, sending invitations, retruthing and

favoriting content to inappropriately attract attention.

TMTG’s terms of service also prohibit the creation of serial or bulk accounts, using automation, for disruptive or abusive purposes, such as to truth spam or to artificially

inflate the popularity of users seeking to promote themselves on Truth Social.

Although TMTG will continue to invest resources to reduce spam on Truth Social, TMTG expects spammers will

continue to seek ways to act inappropriately on TMTG’s platform.

In addition, TMTG expects that increases in the number of users on TMTG’s platform will result in increased efforts by spammers to misuse TMTG’s platform.

guarantee you that TMTG will successfully and continuously combat spam, including by suspending or terminating accounts TMTG believes to be spammers and launching algorithmic changes focused on curbing abusive activities.

TMTG’s actions

to combat spam require the diversion of significant time and focus of TMTG’s engineering team from improving TMTG’s products and services.

If spam increases on Truth Social, this could hurt TMTG’s reputation for delivering

relevant content or reduce user growth and user engagement and result in continuing operational cost to us.

In addition, spammers attempt to use TMTG’s products to send targeted and untargeted spam messages to users, which may embarrass or annoy users and make Truth Social less

user-friendly.

TMTG cannot be certain that the technologies and employees tasked with defeating spamming attacks will be able to eliminate all spam messages from being sent on TMTG’s platform.

As a result of spamming activities, TMTG’s

users may use Truth Social less or stop using TMTG’s products altogether.

Misleading solicitations and digital advertisements, including solicitations that are unaffiliated with TMTG, could harm TMTG’s credibility or reputation.

Third-party Truth Social advertisers may seek to express or imply the endorsement of TMTG or President Trump in circumstances where no such endorsement exists.

People may solicit

customers to Truth Social, or purport to solicit customers to Truth Social, without TMTG’s knowledge and may even get paid in the process.

The fundraising committee of a U.S.

Senator’s campaign has sent several email solicitations which

claim to be an exclusive opportunity to sign up for a “brand-new social site” launched by President Trump.

The email solicitations specifically urge their recipients to join Truth Social with the message, “please don’t be the reason

Trump’s social site fails.” Misleading solicitations could adversely impact TMTG’s user base, which may find them undesirable.

It is possible that there are or will be more misleading advertisements or solicitations claiming affiliation

If these misleading solicitations and ads damage the reputation of TMTG or the desire of people to use Truth Social, TMTG’s results of operations may be adversely affected.

Bot networks could disrupt Truth Social’s operations or degrade the Truth Social’s user experience.

Bots—software applications that are programmed to do certain tasks and imitate the behavior of humans— often attempt to proliferate on social media networks.

TMTG prioritizes

preventing, detecting, and eliminating bots from Truth Social.

If these efforts are unsuccessful, bots could pose significant challenges to the smooth technical operation of the platform, impact the accuracy of certain data that TMTG may

collect regarding user statistics, or degrade Truth Social’s user experience, which seeks to promote genuine interaction among humans.

TMTG plans to expand its operations abroad where TMTG has limited operating experience and may be subject to increased business and economic risks that could affect

TMTG’s financial results.

TMTG plans to continue expanding TMTG’s business operations by offering TMTG’s products around the globe.

TMTG has recently entered new international markets where TMTG has limited or

no experience in marketing, selling, and deploying TMTG’s products.

If TMTG fails to deploy or manage its operations in international markets successfully, its business may suffer.

In addition, TMTG is subject to a variety of risks

inherent in doing business internationally, including:

political, social, or economic instability;

risks related to the legal and regulatory environment in foreign jurisdictions, including with respect to privacy, and unexpected changes in laws, regulatory requirements, and enforcement;

potential damage to TMTG’s brand and reputation due to compliance with local laws, including potential censorship or requirements to provide user information to local authorities;

fluctuations in currency exchange rates;

higher levels of credit risk and payment fraud;

enhanced difficulties of integrating any foreign acquisitions;

burdens of complying with a variety of foreign laws;

reduced protection for intellectual property rights in some countries;

difficulties in staffing and managing global operations and the increased travel, infrastructure, and legal compliance costs associated with multiple international locations;

compliance with the U.S.

Foreign Corrupt Practices Act, the U.K.

Bribery Act, and similar laws in other jurisdictions;

compliance with statutory equity requirements and management of tax consequences.

If TMTG is unable to manage the complexity of its global operations successfully, its financial results could be adversely affected.

TMTG plans to make acquisitions that could require significant management attention,

disrupt its business, result in dilution to its stockholders, and adversely affect its financial results.

As part of its business strategy, TMTG intends to make acquisitions to add specialized employees, complementary companies, products, or technologies.

However, TMTG has not made any

such strategic acquisitions to date.

As a result, its ability to successfully acquire and integrate larger or more significant companies, products, or technologies is unproven.

In the future, TMTG may not be able to find other suitable

acquisition candidates, and TMTG may not be able to complete acquisitions on favorable terms, if at all.

TMTG’s future acquisitions may not achieve its goals, and any future acquisitions that TMTG completes could be viewed negatively by

users, developers, advertisers, or investors.

In addition, if TMTG fails to successfully integrate any acquisitions, or the technologies associated with such acquisitions, into Truth Social, or any future product offerings, the revenue

and operating results of TMTG could be adversely affected.

Any integration process may require significant time and resources, and TMTG may not be able to manage the process successfully.

TMTG may not successfully evaluate or utilize the

acquired technology or personnel, or accurately forecast the financial impact of an acquisition transaction, including accounting charges.

TMTG may have to pay cash, incur debt, or issue equity securities to pay for any such acquisition,

any of which could adversely affect TMTG’s financial results.

The sale of equity or issuance of debt to finance any such acquisitions could result in dilution to TMTG’s stockholders.

The incurrence of indebtedness would result in

increased fixed obligations and could also include covenants or other restrictions that would impede TMTG’s ability to manage TMTG’s operations.

TMTG may be subject to greater risks than typical social media platforms because of the focus of its offerings and the involvement of President Trump.

include active discouragement of users, harassment of advertisers or content providers, increased risk of hacking of TMTG’s platform, lesser need for Truth Social if First Amendment speech is no longer believed to be suppressed by other

similar platforms, criticism of Truth Social for its moderation practices, and increased stockholder suits.

TMTG is aware that big tech platforms, such as YouTube, “de-monetize” certain content because they disagree with its message.

There have been numerous calls to ban or encourage

advertisers to boycott content providers who express or permit views contrary to the prevailing narrative.

It is likely that these same people calling for boycotts will seek to do the same for companies that may advertise on Truth Social.

To the extent these calls are successful, or the mere threat of them sufficient, to prevent advertisers from appearing on TMTG’s platform, TMTG may not generate the revenues TMTG anticipates and the price of TMTG’s stock could decline as

To foster a flourishing digital public forum, TMTG seeks to prevent illegal and other prohibited content from contaminating its platform.

In accordance with Truth Social’s terms of

service, illegal and prohibited content includes, but is not limited to, depictions or threats of violence, harassment, incitement of or threats of physical harm.

Using human moderators and an artificial intelligence vendor known as HIVE,

Truth Social has developed what TMTG believes is a robust, fair, and viewpoint-neutral moderation system and that its moderation practices are consistent with, and indeed help facilitate, TMTG’s objective of maintaining “a public,

real-time platform where any user can create content, follow other users, and engage in an open and honest global conversation without fear of being censored or cancelled due to their political viewpoints.” However, there is a risk that

TMTG’s moderation practices will be criticized as inconsistent with its promotion of free-speech principles or may result in inadvertent violations of Truth Social’s terms of use as Truth Social’s user base increases and becomes

increasingly more challenging to moderate adherence to such terms.

To the extent that TMTG is unable to prevent illegal or other prohibited content from appearing on the Truth Social platform, users and/or advertisers may find the Truth

Social platform less appealing, which could have an adverse effect on TMTG’s ability to attract grow its advertisers and user base, negatively impacting TMTG’s revenues and jeopardizing Truth Social’s access to the Apple and Google Play

stores, the latter of which delayed its initial approval of the app due to alleged violations of Google’s content-moderation policies.

In July 2023, U.S.

District Court Judge Terry Doughty issued a preliminary injunction barring numerous federal officials and agencies — including Surgeon General Vivek Murthy, Health

and Human Services Secretary Xavier Becerra, White House press secretary Karine Jean-Pierre and all employees of the Justice Department and FBI — from having any contact with social media firms for the purpose of discouraging or removing

First Amendment-protected speech.

The judge’s decision cites a wide range of topics that he found “were suppressed” on social media at the urging of administration officials, including opposition to COVID-19 vaccines, masking, lockdowns

and the lab-leak theory;

opposition to President Biden’s and other officials’ policies;

and the statements supporting the authenticity of the contents of a laptop abandoned by President Biden’s son, Hunter Biden, at a Delaware computer

(On October 20, 2023, the United States Supreme Court stayed Judge Doughty’s injunction, as modified by the United States Court of Appeals for the Fifth Circuit, pending a forthcoming Supreme Court ruling in this matter.) To the

extent that Judge Doughty’s opinion signals increasing judicial enforcement of free speech rights against big tech tyrants otherwise inclined to suppress them, such enforcement could reduce Truth Social’s comparative advantage.

media sites are subject to risks of hackers or people who try to disrupt their operations and post false or malicious information or make it seem as if innocent third persons are posting such information.

Such people may also try to steal

personal information about TMTG’s users.

TMTG believes it will be subject to greater risks in this regard than other social media companies currently are.

Accordingly, TMTG will have to spend more money to build more robust security to

protect against these attacks.

There can be no assurance that these efforts will be successful.

Any increase of expenditures to protect against attacks will increase TMTG’s expense and thus, decrease its ability to achieve and remain

In the event these attacks are successful, TMTG will have to devote resources to correct problems as well as possibly pay damages to its users for losses they suffer.

TMTG is a Delaware corporation which allows TMTG’s stockholders certain rights under Delaware law to information and to make inquiries of the TMTG Board.

It is possible that people

will invest in TMTG’s common stock simply with the intention to see such information and disrupt TMTG’s management and board’s attention on TMTG’s business.

The costs of these matters will increase TMTG’s expenses and thus decrease TMTG’s

ability to achieve profitability and remain profitable.

TMTG depends on numerous third-parties to operate successfully, and many of these third parties may not want to engage with TMTG to provide any services.

limit TMTG’s ability to operate, raise capital, or generate revenue.

To operate successfully, TMTG relies on third parties to provide services such as web hosting, content monitoring and technology development.

TMTG also partners with

third parties to provide various non-technical business services, and generates revenue from third-party advertisers who place advertisements on Truth Social via TMTG’s advertising partners.

To date, several potential third-party partners have expressed an unwillingness or reluctance to work on TMTG’s products or provide services for reasons including TMTG’s connection with President Trump.

To the extent TMTG needs to raise

additional capital or generate additional advertising revenue, TMTG will need to engage with investment bankers, investors, or prospective advertisers, and it is possible that some third parties will refuse to engage with TMTG.

example, it was widely reported that at least one of the initial investors of Digital World sold their stock rather than invest in a company associated with President Trump.

If TMTG is unable to successfully engage third parties, TMTG’s

ability to develop and improve its products, raise additional capital, or generate advertising revenue will be limited.

Additionally, if current technical or non-technical service providers discontinue an existing relationship with

TMTG, such discontinuity could disrupt or cause inconvenience to TMTG’s business operations until replacement service providers are identified and engaged.

Risks Related to President Donald J.

TMTG’s success depends in part on the popularity of its brand and the reputation and popularity of President Donald J.

The value of TMTG’s brand may diminish

if the popularity of President Trump were to suffer.

Adverse reactions to publicity relating to President Trump, or the loss of his services, could adversely affect TMTG’s revenues, results of operations and its ability to maintain or

generate a consumer base.

While TMTG believes there is sufficient demand for a true free speech platform, the image, reputation, popularity and talent of President Trump will be important factors to its

According to The Hill-HarrisX polls, only one-third of voters surveyed said they would use a social media site associated with President Trump.

In addition, according to a survey published in The New York Post, only 61% of

Republicans would use the Truth Social platform “a lot” or “some” of the time.

In order to be successful, TMTG will need millions of those people to register and regularly use TMTG’s platform.

If President Trump becomes less popular or

there are new controversies that damage his credibility or the desire of people to use a platform associated with him, and from which he will derive financial benefit, TMTG’s results of operations could be adversely affected.

The death, incarceration, or incapacity of President Trump, or discontinuation or limitation of his relationship with TMTG, may negatively impact TMTG’s business.

TMTG is highly dependent on the popularity and presence of President Trump, its largest stockholder.

President Trump has a significant influence on TMTG’s business plan.

TMTG believes

President Trump’s reputation and relationships are a critical element to the success of TMTG’s business.

TMTG’s future success will depend, to a significant extent, upon the continued presence and popularity of President Trump.

President Trump were to discontinue his relationship with TMTG due to death, disability, criminal conviction, incarceration, or any other reason, or limit his involvement with TMTG due to his ongoing candidacy for political office, TMTG

would be significantly disadvantaged.

President Donald J.

Trump is the subject of numerous legal proceedings, the scope and

scale of which are unprecedented for a former President of the United States and current candidate for that office.

An adverse outcome in one or more of the ongoing legal proceedings in which President Donald J.

Trump is involved could

negatively impact TMTG and its Truth Social platform.

On September 21, 2022, the Attorney General of the State of New York—who pledged to pursue President Trump even before taking office—launched a civil suit against President Trump and

affiliated individuals and entities.

Included among these affiliated entities was The Trump Organization.

Trump, Jr., who is a TMTG director, is the Executive Vice President of The Trump Organization.

The suit alleged business fraud relating to misrepresentations in the preparation of President Trump’s annual statements of financial condition in the years 2011 through 2021.

President Trump had previously been held in civil contempt in April 2022 for failing to comply with a subpoena for documents during the course of the New York Attorney General’s investigation related to these charges.

In June 2023, a New

York appeals court narrowed the fraud case, the trial for which commenced in October 2023 and closing oral arguments were concluded on January 11, 2024.

On March 30, 2023, the Manhattan District Attorney indicted President Trump on 34 counts of falsifying business records in the first degree under the New York

State Penal Law, in connection with a so-called “hush money” payment made before the 2016 presidential election.

President Trump has pleaded not guilty to all 34 charges, and a trial has been scheduled to begin in New York state court on

March 25, 2024.

On May 9, 2023, a jury found President Trump liable for both battery and defamation against E.

Jean Carroll, and Ms.

Carroll was awarded $5 million in total damages for both claims

(the latter of which arose from a 2022 post by President Trump on Truth Social).

The jury also determined that Ms.

Carroll did not prove, by a preponderance of the evidence, that President Trump raped her.

On July 19, 2023, a federal

district court judge denied President Trump’s request for a new trial and/or reduction in damages.

President Trump appealed, and a panel of the U.S.

Court of Appeals heard oral arguments on October 23, 2023.

On January 26, 2024, following

a second civil trial in the U.S.

District Court for the Southern District of New York, Ms.

Carroll was awarded an additional $83.3 million in connection with statements made by President Trump in 2019.

On February 7, 2024, the judge

denied President Trump’s motion for a mistrial.

President Trump’s countersuit against Ms.

Carroll for defamation was dismissed on August 7, 2023.

On June 8, 2023, President Trump was indicted on 37 federal charges, including willful retention of national defense information related to documents seized during an FBI raid at

Mar-a-Lago in August 2022.

The indictment did not address President Trump’s authority with respect to such information under the Presidential Records Act, and President Trump pleaded not guilty to all 37 charges.

On July 27, 2023, a

superseding indictment added three additional charges against President Trump.

A trial in the U.S.

District Court for the Southern District of Florida has been scheduled to begin on May 20, 2024.

On August 1, 2023, President Trump was indicted on four federal charges—conspiracy to violate rights, conspiracy to defraud the government, and one count each of obstructing an

official proceeding and conspiring to do so—in connection with the 2020 election and events related to the certification thereof on January 6, 2021.

President Trump pleaded not guilty, and a trial in the U.S.

District Court for the

District of Columbia was previously scheduled to begin on March 4, 2024.

However, in light of an ongoing appeal, that trial date was vacated on February 2, 2024.

On December 1, 2023, the U.S.

District Court for the District of Columbia

ruled that President Trump was not immune from prosecution in this matter, which was affirmed by a panel of the U.S.

Court of Appeals for the D.C.

Circuit on February 6, 2024.

Separately, on December 1, 2023, the U.S.

Court of Appeals for

the District of Columbia Circuit ruled that President Trump is not immune from certain civil claims in connection with the events of January 6, 2021.

On August 14, 2023, President Trump and 18 co-defendants were indicted on state racketeering charges brought by the district attorney in Fulton County, Georgia in connection with the

aftermath of the 2020 election.

In September and October 2023, four of President Trump’s co-defendants pleaded guilty.

President Trump pleaded not guilty.

In November 2023, the prosecutor requested an August 5, 2024 trial date.

25, 2024, President Trump filed a motion to join a co-defendant’s motion to dismiss the grand jury indictment and disqualify the district attorney.

As of February 9, 2024, no trial date for President Trump has been set.

The foregoing does not purport to be an exhaustive list of legal proceedings in which President Trump is or has been involved.

In June 2016, USA

Today published an analysis of litigation involving President Trump, which found that over the previous three decades President Trump and his businesses had been involved in at least 3,500 legal cases in U.S.

federal and state courts.

Of the approximately 3,500 suits, President Trump or one of his companies were plaintiffs in 1,900;

defendants in 1,450;

and bankruptcy, third party, or other in 150.

President Trump was

named personally in at least 169 suits in federal court.

Over 150 other cases were in the Seventeenth Judicial Circuit Court of Florida (covering Broward County, Florida) since 1983.

In the 1,300 cases where the record establishes the

outcome, President Trump settled 175 times, lost 38, won 450, and had another 137 cases end with some other outcome.

In the other 500 cases, judges dismissed plaintiffs’ claims against President Trump.

However, you should not

rely on or infer any trends based on the disposition of such prior cases against President Trump as no assurance can be given regarding the results of the pending legal proceedings.

Although TMTG is not a party to any of the above-referenced matters, TMTG cannot predict what effect, if any, an adverse outcome to such matters, or even their continued existence, may

have on President Trump’s personal reputation and TMTG’s business or prospects.

A publicly-traded entity controlled by President Trump has previously been subject to a cease and desist order issued by the Securities and Exchange Commission.

On January 16, 2002, the SEC issued a cease and desist order against Trump Hotels & Casino Resorts, Inc.

(“THCR”) for violations of the anti-fraud provisions of the Exchange Act.

As discussed in more detail in the SEC Release No.

45287, on October 25, 1999, THCR had issued a press release announcing its results for the third quarter of 1999

(the “Earnings Release”).

To announce those results, the Earnings Release used a net income figure that differed from net income calculated in conformity with U.S.

Using that non-GAAP figure, the Earnings Release touted THCR’s

purportedly positive operating results for the quarter and stated that the Company had beaten analysts’ earnings expectations.

The Earnings Release was materially misleading because it created the false and misleading impression that THCR

had exceeded earnings expectations primarily through operational improvements, when in fact it had not.

The Earnings Release expressly stated that the net income figure excluded a one-time charge.

The undisclosed one-time gain was

material, because it represented the difference between positive trends in revenues and earnings and negative trends in revenues and earnings, and the difference between exceeding analysts’ expectations and falling short of them.

stated that by knowingly or recklessly issuing a materially misleading press release, THCR violated Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.

The SEC accepted THCR’s offer of settlement.

Any failure to maintain effective disclosure controls and internal control over financial reporting could have

a material and adverse effect on its business and operating results and cause a decline in the price of TMTG Common Stock.

A number of companies that were associated with President Trump have filed for bankruptcy.

There can be no assurances that TMTG will not also become bankrupt.

Entities associated with President Trump have filed for bankruptcy protection in the past.

The Trump Taj Mahal,

which was built and owned by President Trump, filed for Chapter 11 bankruptcy in 1991.

The Trump Plaza, the Trump Castle, and the Plaza Hotel, all owned by President Trump at the time, filed for Chapter 11 bankruptcy in 1992.

was founded by President Trump in 1995, filed for Chapter 11 bankruptcy in 2004.

Trump Entertainment Resorts, Inc., the new name given to Trump Hotels & Casino Resorts after its 2004 bankruptcy, declared bankruptcy in 2009.

of the foregoing were in different businesses than TMTG, there can be no guarantee that TMTG’s performance will exceed the performance of those entities.

A number of companies that had license agreements with President Trump have failed.

There can be no assurances that TMTG will not also fail.

Trump Shuttle, Inc., launched by President Trump in 1989, defaulted on its loans in 1990 and ceased to exist by 1992.

Trump University, founded by President Trump in

2005, ceased operations in 2011 amid lawsuits and investigations regarding that company’s business practices.

Trump Vodka, a brand of vodka produced by Drinks Americas under license from The

Trump Organization, was introduced in 2005 and discontinued in 2011.

Trump Mortgage, LLC, a financial services company founded by President Trump in 2006, ceased operations in 2007.

GoTrump.com, a travel site founded by President Trump

in 2006, ceased operations in 2007.

Trump Steaks, a brand of steak and other meats founded by President Trump in 2007, discontinued sales two months after its launch.

While all these businesses were in different industries than TMTG,

there can be no guarantee that TMTG’s performance will exceed the performance of these entities.

The terms of a license agreement with President Trump is not terminable by TMTG when it may be desirable to TMTG.

The license agreement does not require President

Trump to use Truth Social in certain circumstances.

The License Agreement includes a provision that obligates President Trump to make any non-political social

media post from any of his personal (i.e., non-business) accounts on Truth Social and to refrain from making the same post on another social media site for 6 hours (the “Exclusivity Obligation”).

Thereafter, he is free to post on any

site to which he has access.

Thus, TMTG has limited time to benefit from his posts and followers may not find it compelling to use Truth Social to read his posts that quickly.

In addition, he may make any post that he deems, in his sole discretion, to be politically-related on any social media site at any time, regardless of whether that post originates from

a personal account.

As a candidate for president, most or all of President Trump’s social media posts may be deemed by him to be politically related.

Consequently, TMTG may lack any meaningful remedy if President Trump minimizes his use

of Truth Social.

President Trump may terminate the Exclusivity Obligation upon thirty days prior written notice provided at any time on or after February 2, 2025.

From and after termination of the

Exclusivity Obligation, President Trump must make reasonable, good faith efforts to contemporaneously post on Truth Social any non-political posts that he makes from a personal account to another social media platform.

However, that

obligation is also subject to the exception for posts that President Trump deems, in his sole discretion, to be politically-related.

Under the License Agreement with President Trump, neither the personal nor political conduct of President

Trump, even if such conduct could negatively reflect on TMTG’s reputation or brand or be considered offensive, dishonest, illegal, immoral, or unethical, or otherwise harmful to TMTG’s brand or reputation, shall be considered a breach of

the license agreement.

TMTG expressly acknowledges the controversial nature of being associated with President Trump and the possibility of any associated controversies affecting TMTG adversely.

TMTG Sub may not terminate the License Agreement based on the personal or political conduct of President Trump,

even if such conduct could negatively reflect on TMTG’s reputation or brand or be considered offensive, dishonest, illegal, immoral, or unethical, or otherwise harmful to TMTG’s brand or reputation.

Further, TMTG Sub may be obligated to

indemnify President Trump for losses of any type that relate in any way to the License Agreement, including any such losses attributable to President Trump’s own offensive, dishonest, illegal, immoral, unethical or otherwise harmful

Risks Related to Ownership of TMTG Common Stock

Nasdaq may delist TMTG’s securities from trading on its exchange, which could limit investors’ ability to make transactions in TMTG’s securities and subject

TMTG to additional trading restrictions.

TMTG’s securities are currently listed on Nasdaq.

However, TMTG cannot assure you that its securities will continue to be listed on Nasdaq in the future.

In order to continue

listing its securities on Nasdaq, TMTG must maintain certain financial, distribution and stock price levels.

Generally, TMTG must maintain a minimum number of holders of its securities (generally 400 public holders).

Additionally,

TMTG is required to demonstrate compliance with Nasdaq’s initial listing requirements, which are more rigorous than Nasdaq’s continued listing requirements, in order to continue to maintain the listing of our securities on Nasdaq.

instance, TMTG’s stock price would generally be required to be at least $4.00 per share and TMTG will be required to have a minimum of 400 public holders (with at least 50% of such round lot holders holding securities with a market

value of at least $2,500) in order to remain listed on Nasdaq.

TMTG cannot assure you that TMTG will be able to meet those requirements.

If Nasdaq delists TMTG’s securities from trading on its exchange and TMTG is not able to list its securities on another national securities exchange, TMTG expects its securities

could be quoted on an over-the-counter market.

If this were to occur, TMTG could face significant material adverse consequences, including:

a limited availability of market quotations for its securities;

reduced liquidity for its securities;

a determination that TMTG’s common stock is a “penny stock” which will require brokers trading in the common stock to adhere to more stringent rules and possibly result in a reduced level of

trading activity in the secondary trading market for TMTG’s securities;

a limited amount of news and analyst coverage;

a decreased ability to issue additional securities or obtain additional financing in the future.

The market price of TMTG’s common stock may decline as a result of the Business Combination.

The market price of TMTG’s common stock may decline as a result of the Business Combination for a number of reasons including if:

investors react negatively to the prospects of TMTG’s business;

the effect of the Business Combination on TMTG’s business and prospects is not consistent with the expectations of financial or industry analysts;

TMTG does not achieve the perceived benefits of the Business Combination as rapidly or to the extent anticipated by financial or industry analysts.

TMTG has broad discretion in the use of the net proceeds post-Closing and may not use them effectively.

TMTG cannot specify with any certainty the particular uses of the net proceeds that TMTG received pursuant to the Business Combination.

TMTG’s Management has broad discretion in

the application of the net proceeds, including working capital, possible acquisitions, and other general corporate purposes, and TMTG may spend or invest these proceeds in a way with which the stockholders disagree.

The failure by

TMTG’s Management to apply these funds effectively could harm TMTG’s business and financial condition.

Pending their use, TMTG may invest the net proceeds from the offering in a manner that does not produce income or that loses value.

President Trump will have the right to terminate the License Agreement if any products or services ever fail to satisfy the highest standards for quality and

reputation unless such failure is cured immediately (but not later than 30 days) after notification, regardless of whether TMTG is listed on a public stock exchange.

The License Agreement provides that, if it is not sooner terminated, the term of the License Agreement will continue in perpetuity, except that it may be terminated by TMTG Sub

for convenience or by President Trump for a breach of TMTG Sub’s obligation to ensure that any products or services offered or marketed using President Trump’s name or likeness meet the highest standards of quality and reputation if

such breach is not cured immediately (but not later than 30 days) after notification.

TMTG may inadvertently trigger President Trump’s right to terminate the License Agreement.

TMTG may inadvertently violate the foregoing requirement regarding quality and reputation, because that requirement is phrased in highly subjective terms, and it may not be

practicable to cure any such violation within the 30-day period specified in the License Agreement.

President Trump holds approximately 57.6% of the outstanding TMTG Common Stock,

which control limits or precludes other stockholders’ ability to influence the outcome of matters submitted to stockholders for approval, including the election of directors, the approval of certain employee compensation plans,

the adoption of amendments to our organizational documents and the approval of any merger, consolidation, sale of all or substantially all of our assets, or other major corporate transaction requiring stockholder approval.

President Trump beneficially owns approximately 57.6% of the voting power of the outstanding TMTG

Common Stock.

Accordingly, where a majority or plurality vote is required, as applicable, President Trump will be able to determine the outcome of matters submitted to our stockholders for approval, including the election of

directors, amendments to our organizational documents and any merger, consolidation, sale of all or substantially all of our assets or other major corporate transactions.

President Trump may have interests that differ from yours

and may vote in a way with which you disagree and which may be adverse to your interests.

This concentrated control may have the effect of delaying, preventing or deterring a change in control of TMTG, could deprive our

stockholders of an opportunity to receive a premium for their common stock as part of a sale of TMTG and might ultimately affect the value of TMTG Common Stock.

President Trump will, as a controlling stockholder, be entitled to vote his shares in his own interests, which may not always be in the interests of TMTG’s stockholders

An active market for TMTG’s securities may not develop, which would adversely affect the liquidity and price of TMTG’s securities.

The price of TMTG’s securities may vary significantly due to factors specific to TMTG as well as to general market or economic conditions.

Furthermore, an active trading market

for TMTG securities may never develop or, if developed, it may not be sustained.

You may be unable to sell your securities unless a market can be established and sustained.

TMTG’s common stock price may change significantly and you could lose all or part of your investment as a result.

The trading price of TMTG Common Stock is likely to be volatile.

The stock market recently has

experienced extreme volatility.

This volatility often has been unrelated or disproportionate to the operating performance of particular companies.

You may not be able to resell your shares of TMTG Common Stock at an attractive price

due to a number of factors such as those listed in “ Risks Related to TMTG ” and the following:

results of operations that vary from the expectations of securities analysts and investors;

results of operations that vary from TMTG’s competitors;

changes in expectations as to TMTG’s future financial performance, including financial estimates and investment recommendations by securities analysts and investors;

declines in the market prices of stocks generally;

strategic actions by TMTG or its competitors;

announcements by TMTG or its competitors of significant contracts, acquisitions, joint ventures, other strategic relationships or capital commitments;

announcements of estimates by third parties of actual or anticipated changes in the size of TMTG’s user base or the level of user engagement;

any significant change in TMTG’s management;

changes in general economic or market conditions or trends in TMTG’s industry or markets;

changes in business or regulatory conditions, including new laws or regulations or new interpretations of existing laws or regulations applicable to TMTG’s business;

additional shares of TMTG securities being sold or issued into the market by TMTG or any of the existing stockholders or the anticipation of such sales, including if TMTG issues shares to

satisfy restricted stock unit related tax obligations or if existing stockholders sell shares into the market when applicable “lock-up” periods end;

investor perceptions of the investment opportunity associated with TMTG Common Stock relative to other investment

alternatives;

the public’s response to press releases or other public announcements by TMTG or third parties, including TMTG’s filings with the SEC;

litigation involving TMTG, TMTG’s industry, or both, or investigations by regulators into TMTG’s operations or those of TMTG’s competitors;

guidance, if any, that TMTG provides to the public, any changes in this guidance or TMTG’s failure to meet this guidance;

the development and sustainability of an active trading market for TMTG Common Stock;

actions by institutional or activist stockholders;

developments in new legislation and pending lawsuits or regulatory actions, including interim or final rulings by judicial or regulatory bodies;

changes in accounting standards, policies, guidelines, interpretations or principles;

other events or factors, including those resulting from pandemics, natural disasters, war, acts of terrorism or responses to these events.

These broad market and industry fluctuations may adversely affect the market price of TMTG Common Stock,

regardless of TMTG’s actual operating performance.

In addition, price volatility may be greater if the public float and trading volume of TMTG Common Stock is low.

In the past, following periods of market volatility, stockholders have instituted securities class action litigation.

If TMTG was involved in securities litigation, it could have a

substantial cost and divert resources and the attention of executive management from TMTG’s business regardless of the outcome of such litigation.

Because there are no current plans to pay cash dividends on TMTG Common Stock for the

foreseeable future, you may not receive any return on investment unless you sell your TMTG Common Stock at a price greater than what you paid for it.

TMTG intends to retain future earnings, if any, for future operations, expansion and debt repayment, and

there are no current plans to pay any cash dividends for the foreseeable future.

The declaration, amount and payment of any future dividends on shares of TMTG’s common stock will be at the sole discretion of TMTG’s Board.

Board may take into account general and economic conditions, TMTG’s financial condition and results of operations, TMTG’s available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and

regulatory restrictions, implications of the payment of dividends by TMTG to its stockholders or by its subsidiaries to it and such other factors as TMTG’s Board may deem relevant.

As a result, you may not receive any return on an

investment in TMTG Common Stock unless you sell your TMTG Common Stock for a price greater than that which you paid for it.

TMTG stockholders may experience dilution in the future.

The percentage of shares of TMTG Common Stock owned by current stockholders may be diluted in the future

because of equity issuances for acquisitions, capital market transactions or otherwise, including, without limitation, equity awards that TMTG may grant to its directors, officers and employees, exercise of the TMTG Warrants.

issuances may have a dilutive effect on TMTG’s earnings per share, which could adversely affect the market price of TMTG Common Stock.

If securities or industry analysts do not publish research or reports about TMTG’s

business, if they change their recommendations regarding TMTG Common Stock or if TMTG’s operating results do not meet their expectations, the TMTG Common Stock price and trading volume could decline.

The trading market for TMTG Common Stock will depend in part on the research and reports that securities or

industry analysts publish about TMTG or its businesses.

If no securities or industry analysts commence coverage of TMTG, the trading price for TMTG Common Stock could be negatively impacted.

In the event securities or industry

analysts initiate coverage, if one or more of the analysts who cover TMTG downgrade its securities or publish unfavorable research about its businesses, or if TMTG’s operating results do not meet analyst expectations, the trading

price of TMTG Common Stock would likely decline.

If one or more of these analysts cease coverage of TMTG or fail to publish reports on TMTG regularly, demand for TMTG’s common stock could decrease, which might cause TMTG’s common

stock price and trading volume to decline.

Future sales, or the perception of future sales, by TMTG or its stockholders in the

public market could cause the market price for TMTG’s common stock to decline.

The sale of shares of TMTG Common Stock in the public market, or the perception that such sales could

occur, could harm the prevailing market price of shares of TMTG Common Stock.

These sales, or the possibility that these sales may occur, also might make it more difficult for TMTG to sell equity securities in the future at a time and

at a price that it deems appropriate.

In connection with the Merger, certain existing TMTG stockholders, who own 70.7% shares of TMTG Common

Stock following the Closing agreed, subject to certain exceptions, not to dispose of or hedge any of their shares of TMTG Common Stock or securities convertible into or exchangeable for shares of TMTG Common Stock during the period

from the date of the Closing continuing through the earliest of:

(i) the six-month anniversary of the Closing, (ii) the date on which the Closing price of TMTG Common Stock equals or exceeds $12.00 per share for any 20 trading days

within any 30 trading day period commencing at least 150 days after the Closing, and (iii) such date on which TMTG completes a liquidation, merger, stock exchange, reorganization or other similar transaction that results in all of

TMTG’s stockholders having the right to exchange their shares of TMTG Common Stock for cash, securities or other property.

In addition, the shares of TMTG Common Stock reserved for future issuance under the 2024 Plan will become

eligible for sale in the public market once those shares are issued, subject to any applicable vesting requirements, lockup agreements and other restrictions imposed by law.

A total number of shares representing 7.5% of the fully

diluted, and as converted, outstanding shares of TMTG Common Stock immediately following the Closing of the Merger, taking into account any additional shares that may be issued pursuant to the Earnout Shares, are expected to be

reserved for future issuance under the Equity Incentive Plan.

TMTG is expected to file one or more registration statements on Form S-8 under the Securities Act to register shares of TMTG Common Stock or securities convertible into or

exchangeable for shares of TMTG Common Stock issued pursuant to the Equity Incentive Plan.

Any such Form S-8 registration statements will automatically become effective upon filing.

Accordingly, shares registered under such

registration statements will be available for sale in the open market.

In the future, TMTG may also issue its securities in connection with investments or acquisitions.

amount of shares of TMTG Common Stock issued in connection with an investment or acquisition could constitute a material portion of the then-outstanding shares of TMTG Common Stock.

Any issuance of additional securities in connection

with investments or acquisitions may result in additional dilution to TMTG stockholders.

TMTG is an emerging growth company within the meaning of the Securities Act, and if TMTG takes advantage of certain exemptions from disclosure requirements

available to emerging growth companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.

TMTG is an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act.

continue to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply

with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in periodic reports and proxy statements, and exemptions from the requirements of

holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

As a result, TMTG stockholders may not have access to certain information they may deem

We cannot predict whether investors will find securities issued by TMTG less attractive because TMTG will rely on these exemptions.

If some investors find those securities less attractive as a result of its reliance on

these exemptions, the trading prices of TMTG’s securities may be lower than they otherwise would be, there may be a less active trading market for TMTG’s securities and the trading prices of TMTG’s securities may be more volatile.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private

companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial

accounting standards.

The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is

TMTG has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, TMTG, as an emerging growth

company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.

This may make comparison of TMTG’s financial statements with another public company that is neither an emerging growth

company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because of the potential differences in accountant standards used.

TMTG will remain an emerging growth company until the earliest of:

(i) the last day of the fiscal year

following the fifth anniversary of the closing of the Digital World IPO, (ii) the last day of the fiscal year in which TMTG has total annual gross revenue of at least $1.07 billion;

(iii) the last day of the fiscal year in which TMTG

is deemed to be a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of TMTG Common Stock held by non-affiliates exceeded $700.0 million as of the last business day of the

second fiscal quarter of such year;

or (iv) the date on which TMTG has issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.

TMTG may redeem unexpired Public Warrants prior to their exercise at a time that is disadvantageous for TMTG warrant holders.

TMTG has the ability to redeem outstanding Public Warrants at any time after they become exercisable and

prior to their expiration, at a price of $0.01 per warrant, provided that the last reported sales price of TMTG Common Stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations,

recapitalizations and the like) for any 20 trading days within a 30 trading-day period ending on the third trading day prior to the date TMTG sends the notice of Redemption to the warrant holders.

If and when the Public Warrants

become redeemable by TMTG, it may exercise its Redemption right if there is a current registration statement in effect with respect to the shares of TMTG Common Stock underlying such Warrants.

If you are a holder of Public Shares and you exercise your Redemption Rights, such redemption will not result in

the loss of any Public Warrants that you may hold.

In the maximum redemption scenario in which 18,150,318 Public Shares are redeemed, such redeeming Public Stockholders will retain an aggregate of 5,297,012 Public Warrants,

which have an aggregate value of approximately $145,138,129 based on the closing price of our Public Warrants on the Nasdaq of $27.40 on March 28, 2024.

Each such Public Warrant will become exercisable to purchase one share of

TMTG Common Stock at an exercise price of $11.50 per share 30 days after the Closing.

To the extent such Public Warrants are exercised, additional shares of TMTG Common Stock will be issued, which will result in dilution to the

then existing holders of TMTG Common Stock and increase the number of shares eligible for resale in the public market.

Sales of substantial numbers of such shares in the public market could adversely affect the market price of

TMTG Common Stock and may result in volatility in the trading price of our securities.

The Public Warrants expire five years after the completion of the Business Combination or earlier upon redemption or liquidation.

In addition, once the Public Warrants become

exercisable, TMTG may redeem the outstanding Public Warrants at a price of $0.01 per warrant, if the last sale price of TMTG Common Stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading-day period

ending on the third business day before TMTG sends the notice of redemption to the Public Warrant holders.

For context, as of the close of trading on March 28, 2024, the trading price of the TMTG Common Stock on the Nasdaq was $61.96.

Redemption of the outstanding Public Warrants could force a holder thereof to:

(i) exercise its Warrants and pay the

related exercise price at a time when it may be disadvantageous for it to do so;

(ii) sell its Warrants at the then-current market price when you might otherwise wish to hold your Warrants;

or (iii) accept the nominal Redemption

price which, at the time the outstanding Public Warrants are called for Redemption, is likely to be substantially less than the market value of its Public Warrants.

TMTG’s disclosure controls and procedures may

not prevent or detect all errors or acts of fraud.

TMTG is subject to certain reporting requirements of the Exchange Act.

disclosure controls and procedures will be designed to reasonably assure that information required to be disclosed in reports to file or submit under the Exchange Act is accumulated and communicated to management, recorded, processed,

summarized and reported within the time periods specified in the rules and forms of the SEC.

TMTG believes that any disclosure controls and procedures or internal controls and procedures, no matter how well conceived and operated, can

provide only reasonable, not absolute, assurance that the objectives of the control system are met.

These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur

because of simple error or mistake.

Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized override of the controls.

Accordingly, because of the

inherent limitations in the control system, misstatements, or insufficient disclosures due to error or fraud may occur and not be detected.

TMTG incurs and will

continue to incur significant increased expenses and administrative burdens as a public company, which could have an adverse effect on its business, financial condition and results of operations.

TMTG faces increased legal, accounting, administrative and other

costs and expenses as a public company that TMTG did not incur as a private company.

The Sarbanes-Oxley Act, including the requirements of Section 404, as well as rules and regulations subsequently implemented by the SEC, the

Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the rules and regulations promulgated and to be promulgated thereunder, Public Company Accounting Oversight Board (the “PCAOB”) and the securities exchanges, impose

additional reporting and other obligations on public companies.

Compliance with public company requirements will increase costs and make certain activities more time-consuming.

A number of those requirements require TMTG to carry out

activities TMTG had not previously done as a private company.

For example, TMTG created new board committees and adopted new internal controls and disclosure controls and procedures as a result of the Business Combination.

addition, expenses associated with SEC reporting requirements will be incurred.

Furthermore, if any issues in complying with those requirements are identified, TMTG could incur additional costs rectifying those issues, and the

existence of those issues could adversely affect TMTG’s reputation or investor perceptions of it.

It may also be more expensive to obtain director and officer liability insurance.

Risks associated with TMTG’s status as a public

company may make it more difficult to attract and retain qualified persons to serve on the TMTG Board or as executive officers.

The additional reporting and other obligations imposed by these rules and regulations will increase legal

and financial compliance costs and the costs of related legal, accounting and administrative activities.

Additionally, if TMTG’s directors and executive officers are not able to develop the necessary expertise, procedures and

processes, TMTG may be unable to report its financial information on a timely or accurate basis, which could subject TMTG to regulatory consequences.

These increased costs will require TMTG to divert a significant amount of money that

could otherwise be used to expand the business and achieve strategic objectives.

Advocacy efforts by stockholders and third parties may also prompt additional changes in governance and reporting requirements, which could further

increase costs.

TMTG is a “controlled company” within the meaning of the applicable rules of Nasdaq and, as a result,

qualifies for exemptions from certain corporate governance requirements.

TMTG relies on these exemptions, and as such its stockholders will not have the same protections afforded to stockholders of companies that are subject to such

requirements.

President Trump beneficially owns approximately 57.6% of the voting power of TMTG Common Stock and therefore TMTG is a “controlled company”

within the meaning of applicable rules of Nasdaq.

Under these rules, a company of which more than 50% of the voting power for the election of directors is held by an individual, group or another company is a “controlled company” and

may elect not to comply with certain corporate governance requirements, including the requirements:

that a majority of the board consists of independent directors;

for an annual performance evaluation of the nominating and corporate governance and compensation committees;

that the controlled company has a nominating and corporate governance committee that is composed entirely of independent directors

with a written charter addressing the committee’s purpose and responsibilities;

that the controlled company has a compensation committee that is composed entirely of independent directors with a written charter

addressing the committee’s purpose and responsibility.

TMTG intends to rely on these exemptions going forward.

As a result, TMTG’s stockholders will not have the same protections afforded to

stockholders of companies that are subject to all of the Nasdaq corporate governance requirements.

For more information, see the section entitled “ Risk Factors — Risks Related President Donald J.

Trump — President Trump will hold approximately 57.6% of the outstanding shares of TMTG Common Stock, which control limits or precludes other stockholders’ ability to influence the outcome of matters submitted to stockholders for approval, including the

election of directors, the approval of certain employee compensation plans, the adoption of amendments to our organizational documents and the approval of any merger, consolidation, sale of all or substantially all of our assets,

or other major corporate transaction requiring stockholder approval.

The future exercise of registration rights may adversely affect the market price of TMTG common

Certain of TMTG’s stockholders will have registration rights for restricted securities.

TMTG is obligated to register certain securities,

including all of the shares of TMTG Common Stock held by ARC and shares of common stock received by certain significant Private TMTG stockholders as part of the Business Combination.

TMTG is obligated to (i) file a resale “shelf”

registration statement to register such securities by April 15, 2024 and (ii) use reasonable best efforts to cause such registration statement to be declared effective by the SEC as soon as reasonably practicable after the filing.

In addition, pursuant to the terms of the Digital World Convertible Notes, and the Digital World Alternative Warrants and Digital World Alternative Financing Notes, we are obligated to register all of the shares of TMTG Common Stock

issuable upon their conversion or exercise.

Sales of a substantial number of shares of TMTG Common Stock pursuant to the resale registration statement in the public market could occur at any time the registration statement remains

In addition, certain registration rights holders can request underwritten offerings to sell their securities.

These sales, or the perception in the market that the holders of a large number of shares intend to sell

shares, could reduce the market price of TMTG Common Stock.

TMTG may redeem the unexpired Warrants prior to their exercise at a time that is disadvantageous to

warrant holders, thereby making their Warrants worthless.

TMTG has the ability to redeem outstanding Warrants at any time after they become exercisable and prior to their expiration, at a price of

$0.01 per warrant, provided that the last reported sales price of the common stock equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period ending on the third trading day prior to the date TMTG

sends the notice of Redemption to the warrant holders.

If and when the Warrants become redeemable by TMTG, TMTG may exercise its Redemption right even if TMTG is unable to register or qualify the underlying securities for sale under

all applicable state securities laws.

Additionally, 90 days after the Warrants become exercisable, TMTG may redeem all (but not less than all) of the outstanding Warrants at $0.01 per warrant upon a minimum of 30 days’ prior written

notice of Redemption if the following conditions are satisfied:

(i) the last reported sale prices of TMTG Common Stock equals or exceeds $10.20 (as may be adjusted for stock splits, stock dividends, reorganizations,

recapitalizations or the like) on the trading day prior to the date of the notice;

(ii) the Placement Warrants are also concurrently exchanged at the same price as the outstanding Public Warrants;

and (iii) there is an effective

registration statement covering the issuance of the shares of TMTG Common Stock issuable upon exercise of the Warrants and a current prospectus relating thereto available throughout the 30-day period after written notice of

Redemption is given.

In either case, Redemption of the outstanding Warrants could force a holder (i) to exercise its Warrants and pay the exercise price therefor at a time when it may be disadvantageous for it to do so, (ii) to sell

its Warrants at the then-current market price when it might otherwise wish to hold its Warrants or (iii) to accept the nominal Redemption price which, at the time the outstanding Warrants are called for Redemption, is likely to be

substantially less than the market value of its Warrants.

Delaware law and TMTG’s certificate of incorporation and bylaws contain certain provisions, including

anti-takeover provisions, that limit the ability of stockholders to take certain actions and could delay or discourage takeover attempts that stockholders may consider favorable.

The Amended Charter, TMTG’s bylaws, and the DGCL contain provisions that could have the effect of rendering more difficult, delaying or

preventing an acquisition deemed undesirable by the TMTG Board and therefore depress the trading price of TMTG’s Common Stock.

These provisions could also make it difficult for stockholders to take certain actions, including

electing directors who are not nominated by the TMTG Board or taking other corporate actions, including effecting changes in the management of TMTG.

Among other things, the Amended Charter and TMTG’s bylaws, as applicable, include

provisions regarding:

a classified Board with three-year staggered terms, which could delay the ability of stockholders to change the membership of a

majority of the TMTG Board;

the ability of the TMTG Board to issue shares of preferred stock, including “blank check” preferred stock and to determine the price

and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer;

the limitation of the liability of, and the indemnification of, TMTG’s directors and officers;

the exclusive right of the TMTG Board to elect a director to fill a vacancy created by the expansion of the Board or the

resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on the TMTG Board;

the requirement that directors may only be removed from the TMTG Board for cause;

a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting

of stockholders and could delay the ability of stockholders to force consideration of a stockholder proposal or to take action, including the removal of directors;

the limitation that stockholders may only call a special meeting by the request, in writing, of stockholders owning individually or

together 10% or more of TMTG’s entire capital stock, issued and outstanding and entitled to vote, which could delay the ability of stockholders to force consideration of a proposal or to take action, including the removal of

the procedures for the conduct and scheduling of TMTG Board and stockholder meetings;

the requirement for the affirmative vote of holders of at least 2/3 of the voting power of all of the then-outstanding shares of the

voting stock, voting together as a single class, to amend, alter, change or repeal any provision of the Amended Charter or TMTG’s bylaws, which could preclude stockholders from bringing matters before annual or special

meetings of stockholders and delay changes in the TMTG Board and also may inhibit the ability of an acquirer to effect such amendments to facilitate an unsolicited takeover attempt;

the ability of the TMTG Board to amend the bylaws, which may allow the TMTG Board to take additional actions to prevent an

unsolicited takeover and inhibit the ability of an acquirer to amend the bylaws to facilitate an unsolicited takeover attempt;

advance notice procedures with which stockholders must comply to nominate candidates to the TMTG Board or to propose matters to be

acted upon at a stockholders’ meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in the TMTG Board and also may discourage or deter a

potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of TMTG.

These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in the TMTG Board or

Furthermore, under the Amended Charter, TMTG expressly opted out of certain statutory “anti-takeover” provisions under the provisions of

Section 203 of the DGCL, an anti-takeover law.

In general, Section 203 of the DGCL which may prohibit certain business combinations with stockholders owning 15% or more of TMTG’s outstanding voting stock.

These anti-takeover

provisions and other make it more difficult for stockholders or potential acquirers to obtain control of companies.

Because of TMTG’s express opt out of these anti-takeover provisions, it may be easier for such persons or entities

to initiate actions that are opposed by the then-current TMTG Board and more difficult to delay or impede a merger, tender offer or proxy contest involving TMTG.

The lack of the applicability of these provisions could lead to proxy

contests and facilitate stockholders’ ability to elect directors of their choosing or cause TMTG to take other corporate actions desired by some but not all or a majority of stockholders.

Any of these actions could cause the market

price of TMTG’s Common Stock to decline or times of increased volatility.

Nonetheless, TMTG may enter into a stockholder rights plan, commonly known as a “poison pill,” that may delay or prevent a change of control.

Any provision of the Amended Charter, TMTG’s bylaws or Delaware law that has the effect of delaying or preventing a change in control could

limit the opportunity for stockholders to receive a premium for their shares of TMTG’s capital stock, deprive stockholders from considering proposals they may believe to be in their best interests, and, consequently, could also

affect the price that some investors are willing to pay for TMTG’s Common Stock.

The Amended Charter designates a state or federal court located within the State of Delaware as the

exclusive forum for substantially all disputes between TMTG and its stockholders, and also provides that the U.S.

District Court for the Southern District of Florida will be the exclusive forum for resolving any complaint asserting

a cause of action arising under the Securities Act, each of which could limit the ability of TMTG’s stockholders to choose the judicial forum for disputes with TMTG or its directors, officers, or employees.

The Amended Charter provides that, unless TMTG consents in writing to the selection of an alternative forum, the sole and exclusive forum

for (i) any derivative action or proceeding brought on its behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of its directors, officers, or other employees to TMTG or its stockholders, (iii) any

action arising pursuant to any provision of the DGCL, or the certificate of incorporation or the bylaws or (iv) any other action asserting a claim that is governed by the internal affairs doctrine id the Court of Chancery of the

State of Delaware except any claim (A) as to which the Court of Chancery of the State of Delaware determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party

does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), (B) which is vested in the exclusive jurisdiction of a Court or forum other than the Court of Chancery or (C) for

which the Court of Chancery does not have subject matter jurisdiction (or, if the Court of Chancery does not have jurisdiction, the federal district court for the District of Delaware), in all cases subject to the court having

jurisdiction over indispensable parties named as defendants.

The Amended Charter also provides that the U.S.

District Court for the Southern District of Florida is the exclusive forum for resolving any complaint asserting a cause of

action arising under the Securities Act.

TMTG’s bylaws also provide that any person or entity purchasing or otherwise acquiring any interest in shares of TMTG’s capital stock will be deemed to have notice of and to have consented to

this choice of forum provision.

The exclusive forum provision will be applicable to the fullest extent permitted by applicable law, subject to certain exceptions.

Section 27 of the Exchange Act creates exclusive federal jurisdiction

over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder.

As a result, the exclusive forum provision may not be held to apply to suits brought to enforce any duty or

liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction.

There is uncertainty as to the extent to which a court would enforce this provision and that investors cannot waive

compliance with the federal securities laws and the rules and regulations thereunder.

Section 22 of the Securities Act creates concurrent jurisdiction for state and federal courts over all suits brought to enforce any duty or

liability created by the Securities Act or the rules and regulations thereunder.

Any person or entity purchasing or otherwise acquiring any interest in any of TMTG’s securities shall be deemed to have notice of and consented to this

This exclusive-forum provision may limit a stockholder’s ability to bring a claim in a judicial forum of its choosing for disputes with TMTG or its directors, officers or other employees, which may discourage lawsuits

against TMTG and its directors, officers and other employees.

If a court were to find the exclusive forum provision to be inapplicable or unenforceable in an action, TMTG may incur additional costs associated with resolving the

dispute in other jurisdictions, which could harm our results of operations.

TMTG’s management team may not successfully or efficiently manage its transition to

being a public company.

As a public company, TMTG will incur new obligations relating to its reporting, procedures and internal

These new obligations and attendant scrutiny will require investments of significant time and energy from TMTG’s executives and could divert their attention away from the day-to-day management of TMTG’s business, which in

turn could adversely affect TMTG’s financial condition or operating results.

The members of TMTG’s management team have extensive experience leading complex organizations.

they have limited experience managing a publicly-traded company, interacting with public company investors, and complying with the increasingly complex laws, rules and regulations that specifically govern public companies.

TMTG has agreed to indemnify TMTG’s officers and directors against lawsuits to the

fullest extent of the law.

TMTG is a Delaware corporation.

Delaware law permits the indemnification of officers and directors against

expenses incurred in successfully defending against a claim.

Delaware law also authorizes Delaware corporations to indemnify their officers and directors against expenses and liabilities incurred because of their being or having been

an officer or director.

TMTG’s organizational documents provide for this indemnification to the fullest extent permitted by Delaware law.

On the Closing, TMTG obtained director and officer liability insurance to cover liabilities TMTG’s directors and key

executive officers may incur in connection with their services to TMTG.

There is no guarantee that such insurance coverage will protect TMTG from any damages or loss claims filed against it, or that such coverage will be available

on reasonable economic terms satisfactory and acceptable to TMTG.

If TMTG does not file and maintain a current and effective prospectus relating to the

TMTG Common Stock issuable upon exercise of the Warrants, holders will only be able to exercise such Warrants on a “cashless basis.”

If TMTG does not file and maintain a current and effective prospectus relating to the TMTG Common Stock

issuable upon exercise of the Warrants at the time that holders wish to exercise such Warrants, they will only be able to exercise them on a “cashless basis” provided that an exemption from registration is available.

the number of shares of TMTG Common Stock that holders will receive upon exercise of the Warrants will be fewer than it would have been had such holder exercised its warrant for cash.

Further, if an exemption from registration is

not available, holders would not be able to exercise on a cashless basis and would only be able to exercise their Warrants for cash if a current and effective prospectus relating to TMTG Common Stock issuable upon exercise of the

Warrants is available.

Under the terms of the warrant agreement, TMTG has agreed to use its best efforts to meet these conditions and to file and maintain a current and effective prospectus relating to TMTG Common Stock issuable

upon exercise of the Warrants until the expiration of the Warrants.

However, TMTG cannot assure you that it will be able to do so.

If TMTG is unable to do so, the potential “upside” of the holder’s investment in TMTG may be

reduced or the Warrants may expire worthless.

Future resales of TMTG’s common stock may cause the market price of TMTG’s securities to drop significantly, even if TMTG’s business is doing well.

In connection with the Business Combination, certain

TMTG stockholders and certain of TMTG’s officers and directors entered into a lock-up agreement pursuant to which they are contractually restricted from selling or transferring any of (i) their shares of TMTG Common Stock held

immediately following the Closing and (ii) any of their shares of TMTG’s common stock that result from converting securities held immediately following the Closing (the “Lock-Up Shares”).

Such restrictions began at the Closing

and end the earliest of:

(i) the six-month anniversary of the Closing, (ii) on the date on which the closing stock price for TMTG Common Stock equals or exceeds $12.00 per share for any 20 trading days within any 30-trading day

period commencing at least 150 days after the Closing, and (iii) such date on which TMTG completes a liquidation, merger, stock exchange, reorganization or other similar transaction that results in all of the TMTG stockholders

having the right to exchange their shares of TMTG Common Stock for cash, securities or other property (the “Lock-Up Trading Restrictions”).

In addition, subject to certain customary exceptions, the Amended Charter also includes

Lock-Up Trading Restrictions, which apply to holders who received shares TMTG Common Stock in connection with the Merger ( but excluding shares

of TMTG Common Stock issued to the former holders of TMTG Convertible Notes in connection with the conversion of such TMTG Convertible Notes into Private TMTG common stock prior to the Closing and exchanged for TMTG Common Stock

at the Closing) .

The Sponsor is subject to a lock-up pursuant to a letter agreement (the “ Lock-Up and Support Letter ”), entered into at the time of the IPO, among Digital World, the Sponsor and the other parties thereto, pursuant to which the

Sponsor is subject to a lock-up beginning on the Closing and end the earliest of:

(i) the six-month anniversary of the Closing, (ii) on the date on which the closing stock price for TMTG Common Stock equals or exceeds $12.00 per

share for any 20 trading days within any 30-trading day period commencing at least 150 days after the Closing, and (iii) such date on which Digital World completes a liquidation, merger, stock exchange, reorganization or other

similar transaction that results in all of the Digital World stockholders having the right to exchange their shares of Digital World common stock for cash, securities or other property.

However, following the

expiration of such lock-ups, the Sponsor and the holders of Lock-Up Shares will not be restricted from selling shares of TMTG’s common stock held by them, other than by applicable securities laws.

As such, sales of a substantial

number of shares of TMTG Common Stock in the public market could occur at any time, subject to compliance with applicable securities laws.

These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could

reduce the market price of TMTG Common Stock.

Excluding the exercise of outstanding Warrants and the conversion of securities issued in the Post-IPO Financings and assuming no awards are issued under the Equity Incentive Plan,

upon completion of the Business Combination, the Sponsor and the holders of Lock-Up Shares (including the shares of TMTG Common Stock issued as awards as a result of conversion of TMTG Common Stock that were reserved for issuance

pursuant to TMTG’s outstanding stock options and unvested restricted stock units outstanding as of immediately prior to the Closing) collectively beneficially own (i) approximately 78.4% of the outstanding shares of TMTG Common

Stock, and (ii) approximately 90.8%

of the outstanding shares of TMTG Common Stock.

The shares held by Sponsor and the holders of Lock-Up Shares may be sold after the expiration of their

applicable lock-up periods.

As restrictions on resale end and registration statements are available for use, the sale or possibility of sale of these shares could have the effect of increasing the volatility in TMTG’s share price or

the market price of TMTG Common Stock could decline if the holders of currently restricted shares sell them or are perceived by the market as intending to sell them.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors