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Item 1. Financial Statements

2024-05-20 compared with 2023-11-22 · 983 added, 483 removed, 31 unchanged (98% of the section changed)

Financial Statements

DIGITAL WORLD ACQUISITION CORP.

BALANCE SHEETS

September 30, 2023

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As of March 31, 2024 and December 31, 2023 and for the three months

ending March 31, 2024 and March 31, 2023

TRUMP MEDIA & TECHNOLOGY GROUP CORP.

Unaudited Condensed Consolidated Balance Sheets

Unaudited Condensed Consolidated Statements of Operations

Unaudited Condensed Consolidated Statements of Stockholders’ Equity/(Deficit)

Unaudited Condensed Consolidated Statements of Cash Flows

Notes to Unaudited Condensed Consolidated Financial Statements

TRUMP MEDIA & TECHNOLOGY GROUP CORP.

Condensed Consolidated Balance Sheets

(in thousands except share data)

March 31, 2024

December 31, 2023

Current Assets:

Prepaid assets

Cash and cash equivalents

Restricted cash

Prepaid expenses and other current assets

Accounts receivable, net

Total current assets

Cash Held in Trust Account

LIABILITIES, REDEEMABLE COMMON STOCK AND STOCKHOLDERS’ DEFICIT

Property and equipment, net

Right-of-Use Assets, net

Liabilities and Stockholders’ Equity/ (Deficit)

Current Liabilities:

Accrued expenses

Note payable – Sponsor

Income taxes payable

Franchise tax payable

Working capital loans

Advances - related parties

Accounts payable and accrued expenses

Convertible promissory notes

Related party payables

Derivative liability

Unearned revenue

Current portion of operating lease liability

Total Current Liabilities

Deferred underwriter fee payable

Long-term operating lease liability

Convertible promissory notes

Derivative liability

Total liabilities

Commitments and Contingencies

Class A common stock subject to possible redemption, $ 0.0001 par value, 200,000,000 shares authorized;

28,715,597 and 28,744,342 shares outstanding, at redemption value ($ 10.66 and $ 10.40 per share), respectively

Stockholders’ Deficit

Preferred stock, $ 0.0001 par value;

1,000,000 shares authorized;

none issued and outstanding

Class A common stock, $ 0.0001 par value;

200,000,000 shares authorized;

1,277,234 issued and outstanding,

excluding 28,744,342 shares subject to redemption

Class B common stock, $ 0.0001 par value;

10,000,000 shares authorized;

7,187,500 issued and outstanding

Additional paid-in capital

Commitments and contingencies (Note 14)

Stockholders’ Equity/(Deficit):

Preferred Stock $ 0.0001 par value – 1,000,000 shares authorized, 0

shares issued and outstanding at March 31 , 2024 and December 31 , 2023

Common Stock $ 0.0001 par value – 999,000,000 shares authorized, 136,700,583

and 87,500,000 shares issued and outstanding at March 31 , 2024 and December 31 , 2023

Paid in Capital

Accumulated Deficit

Total Stockholders’ Deficit

TOTAL LIABILITIES, REDEEMABLE COMMON STOCK AND STOCKHOLDERS’ DEFICIT

The accompanying notes are an integral part of these unaudited condensed financial statements.

DIGITAL WORLD ACQUISITION CORP.

STATEMENTS OF OPERATIONS

For the Three months ended

For the Nine months ended

September 30,

Formation and operating costs

Legal investigations expense

Franchise tax expense

Loss from operation costs

Other income and expenses:

Insurance recoveries

( 2,871,920.6

Total stockholders’ equity/(deficit)

Total liabilities and Stockholders’ equity/(deficit)

The Notes to the Unaudited Condensed Consolidated Financial Statements are an integral part of these statements.

TRUMP MEDIA & TECHNOLOGY GROUP CORP.

Condensed Consolidated Statements of Operations

Periods Ended

(in thousands except share and per share data)

Cost of revenue

Cost of operating expenses (1)

Research and development

Sales and marketing

General and administration

Total costs and operating expenses

Loss from operations

Interest expense

Interest income

Interest earned on cash held in Trust Account

Loss on the extinguishment of debt

Change in fair value of derivative liabilities

Loss before income taxes

Income tax expense

Weighted average shares outstanding of Class A common stock

Basic and diluted net income (loss) per Class A common stock

Weighted average shares outstanding of Class B common stock

Basic and diluted net income (loss) per Class B common stock

The accompanying notes are an integral part of these unaudited condensed financial statements.

DIGITAL WORLD ACQUISITION CORP.

STATEMENTS OF CHANGES STOCKHOLDERS’ DEFICIT

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023

Stockholders’

Balance as of January 1, 2023

Remeasurement of Class A common stock to redemption value

Balance March 31, 2023

Fair value of Private Placement Units issued for legal services

Remeasurement of Class A common stock to redemption value

Balance June 30, 2023

Adjustment to fair value of Private Placement Units issued for legal services

Remeasurement of Class A common stock to redemption value

Balance September 30, 2023

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022

Income tax expense/(benefit)

Net loss per Share attributable to common stockholders:

Weighted Average Shares used to compute net profit/ loss per share attributable to common stockholders:

(1) Costs of operating expenses include stock based compensation expense as follows:

Research and development

General and administration

Total stock based compensation expense

* Loss per share attributable to common stockholders for diluted calculation is based on the

Basic weighted shares as these are not dilutive.

The Basic and diluted loss per share attributable to common stockholders are therefore the same.

The Notes to Unaudited Condensed Consolidated Financial Statements are an integral part of these statements.

TRUMP MEDIA & TECHNOLOGY GROUP CORP.

Condensed Consolidated Statements of Stockholders’ (Deficit)/Equity

(in thousands, except share data)

Number of Shares

Preferred Stock

Number of Shares

Paid in Capital

Accumulated Deficit

Stockholders’

Balance - January 1, 2022

Balance - March 31, 2022

Remeasurement of Class A common stock to

Balance - June 30, 2022

Remeasurement of Class A common stock to

Balance - September 30, 2022

The accompanying notes are an integral part of these unaudited condensed financial statements.

DIGITAL WORLD ACQUISITION CORP.

STATEMENTS OF CASH FLOWS

September 30,

(Deficit)/ Equity

Retroactive application of recapitalization to January 1, 2023

Net Profit/(Loss)

Balance at March 31, 2023

Net Profit/(Loss)

Balance at June 30, 2023

Net Profit/(Loss)

Balance as September 30, 2023

Net Profit/(Loss)

Balance as December 31, 2023

Fair value of TMTG earnout shares

( 2,477,550.2

Conversion of convertible notes into common stock upon Business Combination

Stock Based Compensation

Issuance of common stock upon Business Combination

Balance as of March 31, 2024

( 2,871,920.6

The Notes to the Unaudited Condensed Consolidated Financial Statements are an integral part of these statements.

TRUMP MEDIA & TECHNOLOGY GROUP CORP.

Condensed Consolidated Statements of Cash Flows

Three Month Periods Ended

(in thousands)

March 31, 2024

March 31, 2023

Cash flows from operating activities

Net income/(loss)

Adjustments to reconcile net loss to net cash used in operating activities:

Interest earned on cash and marketable securities held in Trust Account

Changes in operating assets and liabilities:

Accrued expenses and income taxes payable

Prepaid insurance

Franchise tax payable

Non-cash interest expense on debt

Change in fair value of derivative liability

Loss on extinguishment of debt

Stock based compensation

Non-cash charge for operating lease

Prepaid expenses and other current assets

Accounts receivable

Unearned revenue

Accounts payable

Net cash used in operating activities

Cash flows investing activities:

Cash deposited into Trust for extension

Cash withdrawn from Trust for taxes

Cash withdrawn from Trust for redemptions

Net cash provided by investing activities

Cash flows from financing activities:

Redemption of shares

Proceeds from working capital loan

Advances - related parties

Proceeds from sponsor note

Cash flows used in investing activities

Purchases of property and equipment

Net cash used in investing activities

Cash flows provided by financing activities

Proceeds from convertible promissory notes

Proceeds from merger

Net cash provided by financing activities

Net change in cash

Cash at beginning of period

Cash at end of period

Net change in cash and cash equivalents and restricted cash

Cash and cash equivalents and restricted cash, beginning of period

Cash and cash equivalents and restricted cash, end of period

Reconciliation of cash and cash equivalents and restricted cash to the condensed consolidated balance sheets

Cash and cash equivalents

Restricted cash

Total cash and cash equivalents and restricted cash, end of period

Supplemental disclosure of cash flow information

Cash paid for interest

Cash paid for taxes

Non cash investing and financing activities

Remeasurement of Class A common stock

The accompanying notes are an integral part of these unaudited condensed financial statements.

DIGITAL WORLD ACQUISITION CORP.

NOTES TO FINANCIAL STATEMENTS

DESCRIPTION OF ORGANIZATION, BUSINESS OPERATIONS AND GOING CONCERN

Digital World Acquisition Corp.

(the “Company”) is a blank check company incorporated in the State of Delaware on December 11, 2020.

The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses or entities (“Business Combination”).

Although the Company is not limited to a particular industry or geographic region for purposes of consummating a Business Combination, the Company intends to focus on middle-market emerging growth technology-focused companies in the Americas, in the SaaS and Technology or Fintech and Financial Services sector.

As of September 30, 2023, the Company had not yet commenced operations.

All activity through September 30, 2023 relates to the Company’s formation, the initial public offering (“Initial Public Offering”), which is described below and the search for targets for its initial Business Combination.

The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest.

The Company generates non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the Initial Public Offering and the concurrent Private Placement (as defined below).

The Company has selected December 31 as its fiscal year end.

The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies.

The registration statement for the Company’s Initial Public Offering was declared effective on September 2, 2021 (the “Registration Statement”).

On September 8, 2021, the Company consummated the Initial Public Offering of 28,750,000 units (the “Units” and, with respect to the shares of Class A common stock included in the Units sold, the “Public Shares”), at $ 10.00 per Unit, generating gross proceeds of $ 287,500,000 , and incurred offering costs of $ 23,566,497 , consisting of deferred underwriting commissions of $ 10,062,500 (see Note 2), fair value of the representative shares (as defined in Note 6) of $ 1,437,500 , fair value of shares issued to the anchor investors of the Company’s Initial Public Offering of $ 7,677,450 , fair value of shares transferred to officers and directors of $ 221,018 , and other offering costs of $ 4,168,029 .

The Units sold in the Initial Public Offering included Units that were subject to a 45 -day option granted to the underwriter to purchase up to an additional 3,750,000 Units at the Initial Public Offering price to cover over-allotment, which was exercised in full in connection with the consummation of the Initial Public Offering.

Simultaneously with the closing of the Initial Public Offering, the Company consummated the sale of 1,133,484 units (the “Placement Units”) at a price of $ 10.00 per Placement Unit in a private placement (“Private Placement”) to the Company’s sponsor, ARC Global Investments II LLC (the “Sponsor”), generating gross proceeds of $ 11,334,840 , which is described in Note 4.

Following the closing of the Initial Public Offering on September 8, 2021, an amount of $ 293,250,000 ($ 10.20 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Placement Units was placed in a trust account (the “Trust Account”) located in the United States and invested only in U.S.

government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less or in money market funds meeting the conditions of paragraph (d) of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earliest of:

(i) the completion of a Business Combination, (ii) the redemption of any Public Shares properly submitted in connection with a stockholder vote to amend the Company’s Amended and Restated Certificate of Incorporation (“Amended and Restated Certificate of Incorporation”) (A) to modify the substance or timing of the Company’s obligation to allow redemption in connection with its initial Business Combination or certain amendments to its Amended and Restated Certificate of Incorporation prior thereto or to redeem 100 % of the Public Shares if the Company does not complete its initial Business Combination within the Combination Period (as defined below) or (B) with respect to any other provision relating to stockholders’ rights or pre-Business Combination activity and (iii) the redemption of 100 % of the Public Shares if the Company is unable to complete an initial Business Combination within the Combination Period (subject to the requirements of applicable law).

DIGITAL WORLD ACQUISITION CORP.

NOTES TO FINANCIAL STATEMENTS

The Company will provide its stockholders with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer.

In connection with a proposed Business Combination, the Company may seek stockholder approval of a Business Combination at a meeting called for such purpose at which stockholders may seek to redeem their shares, regardless of whether they vote for or against a Business Combination.

The Company will proceed with a Business Combination only if the Company has net tangible assets of at least $ 5,000,001 upon such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the outstanding shares voted are voted in favor of the Business Combination, unless otherwise required by applicable law, regulation or stock exchange rules.

If the Company seeks stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Company’s Amended and Restated Certificate of Incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from seeking redemption rights with respect to 15 % or more of the Public Shares without the Company’s prior written consent.

The stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially $ 10.20 per share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations).

The per- share amount to be distributed to stockholders who redeem their Public Shares will not be reduced by the deferred underwriting commissions the Company will pay to the underwriter.

There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants.

All of the Public Shares contain a redemption feature which allows for the redemption of such Public Shares in connection with the Company’s liquidation, if there is a stockholder vote or tender offer in connection with the Company’s Business Combination and in connection with certain amendments to the Company’s Amended and Restated Certificate of Incorporation.

In accordance with the rules of the U.S.

Securities and Exchange Commission (the “SEC”) and its guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99, redemption provisions not solely within the control of a company require common stock subject to redemption to be classified outside of permanent equity.

Given that the Public Shares were issued with other freestanding instruments (i.e., public warrants), the initial carrying value of the shares of Class A common stock classified as temporary equity was the allocated proceeds determined in accordance with ASC 470-20.

Because of the redemption feature noted above, the shares of Class A common stock are subject to ASC 480-10-S99.

If it is probable that the equity instrument will become redeemable, the Company has the option to either (i) accrete changes in the redemption value over the period from the date of issuance (or from the date that it becomes probable that the instrument will become redeemable, if later) to the earliest redemption date of the instrument or (ii) recognize changes in the redemption value immediately as they occur and adjust the carrying amount of the instrument to equal the redemption value at the end of each reporting period.

The Company has elected to recognize the changes immediately.

The accretion or remeasurement is treated as a deemed dividend (i.e., a reduction to retained earnings, or in absence of retained earnings, additional paid-in capital).

While redemptions cannot cause the Company’s net tangible assets to fall below $ 5,000,001 , the Public Shares are redeemable and will be classified as such on the balance sheet until such date that a redemption event takes place.

DIGITAL WORLD ACQUISITION CORP.

NOTES TO FINANCIAL STATEMENTS

If a stockholder vote is not required and the Company does not decide to hold a stockholder vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation, offer such redemption pursuant to the tender offer rules of the SEC, and file tender offer documents containing substantially the same information as would be included in a proxy statement with the SEC prior to completing a Business Combination.

The Sponsor and the Company’s officers and directors have agreed (a) to vote any shares of Class B common stock of the Company (the “Founder Shares”), the shares of Class A common stock included within the Placement Units (the “Private Shares”) and any Public Shares purchased during or after the Initial Public Offering in favor of a Business Combination, (b) waive their redemption rights with respect to any Founder Shares, Private Shares held by them and any Public Shares purchased during or after the Initial Public Offering in connection with the completion of the Business Combination, (c) not to waive their redemption rights with respect to any Founder Shares, Private Shares held by them and any Public Shares purchased during or after the Initial Public Offering in connection with a stockholder vote to approve an amendment to the Amended and Restated Certificate of Incorporation (A) to modify the substance or timing of the Company’s obligation to allow redemption in connection with its initial Business Combination or certain amendments to its Amended and Restated Certificate of Incorporation prior thereto or to redeem 100 % of the Public Shares if the Company does not complete an initial Business Combination within the Combination Period or (B) with respect to any other provision relating to stockholders’ rights or pre-initial Business Combination activity and (iii) waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares and Private Shares held by them if the Company fails to complete its initial Business Combination within the Combination Period, although they will be entitled to liquidating distributions from the Trust Account with respect to any Public Shares they hold if the Company fails to complete its initial Business Combination within the Combination Period.

The Company’s anchor investors have agreed to (1) vote any Founder Shares held by them in favor of the initial Business Combination, (2) waive their redemption rights with respect to any Founder Shares held by them in connection with the completion of the Company’s initial Business Combination, and (3) waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares held by them if the Company fails to complete its initial Business Combination within the Combination Period.

On November 22, 2022, the Company held a special meeting of stockholders.

At the meeting, the Company’s stockholders approved an amendment to the Company’s Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware extending, upon the request of the Sponsor and approval by the Board, the period of time for the Company to consummate an initial business combination up to four times, each by an additional three months, for an aggregate of 12 additional months (from September 8, 2022 up to September 8, 2023).

On September 8, 2022, the Company issued a promissory note in the aggregate principal amount of $ 2,875,000 to the Sponsor, in connection with the extension of the termination date for the Company’s initial Business Combination from September 8, 2022 to December 8, 2022.

On December 19, 2022, the Company announced the second extension of the termination date for the Company’s initial Business Combination from December 8, 2022 from March 8, 2023.

On February 28, 2023, the Company announced the third extension of the termination date for the Company’s initial Business Combination from March 8, 2023 to June

On August 9, 2023, the Company and TMTG entered into the Second Amendment to the Merger Agreement (the “Second Amendment”).

Among other changes to governance and financial terms, the Second Amendment extends the Merger Agreement’s “Outside Date” to December 31, 2023, and provides for mutual supplemental due diligence ahead of the Company’s anticipated filing of an updated registration statement on Form S-4 with the SEC.

For further information on the Second Amendment, please see the Company’s current report on Form 8-K filed with the SEC on August 9, 2023 or the Company’s Amendment Number 1 to the Form S-4 Registration Statement filed with the SEC on November 13, 2023.

On September 5, 2023, the Company held a special meeting of stockholders (the “Meeting”).

At the Meeting, the Company’s stockholders approved the Extension Amendment extending, upon the approval by the Corporation’s board of directors, the date by which the Company has to consummate an initial business combination up to four times, each by an additional three months, for an aggregate of 12 additional months (i.e.

from September 8, 2023 up to September 8, 2024) or such earlier date as determined by the Board (the “Extension Amendment Proposal”).

In connection with the Meeting, stockholders holding 28,745 shares of the Company’s Class A common stock exercised their right to redeem such shares for a pro rata portion of the funds in the Company’s Trust Account.

result, $ 307,028 (approximately $ 10.68

per share) was removed from the Company’s T

ccount to pay such

On September 29, 2023, the Company and TMTG entered into the Third Amendment to the Merger Agreement (the “Third Amendment”).

The Third Amendment extends the period of time for the parties to complete mutual supplemental due diligence ahead of the Company’s anticipated filing of an updated registration statement on Form S-4 with the SEC.

DIGITAL WORLD ACQUISITION CORP.

NOTES TO FINANCIAL STATEMENTS

The Company has until September 8, 2024, to consummate a Business Combination (the “Combination Period”).

Company is unable to complete a Business Combination within the Combination Period, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but no more than five business days thereafter, redeem 100 % of the outstanding Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned (net of taxes payable and less interest to pay dissolution expenses up to $ 100,000 ), divided by the number of then outstanding Public Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining stockholders and the Company’s board of directors, proceed to commence a voluntary liquidation and thereby a formal dissolution of the Company, subject in each case to its obligations to provide for claims of creditors and the requirements of applicable law.

The underwriter has agreed to waive its rights to the deferred underwriting commission held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period and, in such event, such amounts will be included with the funds held in the Trust Account that will be available to fund the redemption of the Public Shares.

In the event of such distribution, it is possible that the per share value of the assets remaining available for distribution will be less than

The Sponsor has agreed that it will be liable to the Company, if and to the extent any claims by a vendor for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amounts in the Trust Account to below $ 10.20 per share (whether or not the underwriters’ over-allotment option is exercised in full), except as to any claims by a third party who executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”).

In the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims.

The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (except for the company’s independent registered accounting firm), prospective target businesses or other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.

Going Concern Consideration

In connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standard Board’s Account Standards Update (“ASU”) 2014-15, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” as stated above, the Company has until September 8, 2024 to consummate a Business Combination.

It is uncertain that the Company will be able to consummate a Business Combination by this time.

If a Business Combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution of the Company.

Additionally, the Company has incurred and expects to incur significant costs in pursuit of its acquisition plans.

The Company lacks the financial resources it needs to sustain operations for a reasonable period of time, which is considered to be one year from the date of the issuance of the financial statements.

As a result, these factors raise substantial doubt about the Company’s ability to continue as a going concern.

The financial statements do not include any adjustments that might result from the outcome of these uncertainties.

DIGITAL WORLD ACQUISITION CORP.

NOTES TO FINANCIAL STATEMENTS

Proposed Business Combination

The Company entered into an Agreement and Plan of Merger, dated as of October 20, 2021, as amended on May 11, 2022, on August 9, 2023, and on September 29, 2023, and as it may be further amended or supplemented from time to time, the “Merger Agreement”) with DWAC Merger Sub Inc., a Delaware corporation and a wholly-owned subsidiary of the Company (“Merger Sub”), Trump Media & Technology Group Corp., a Delaware corporation (“TMTG”), the Sponsor, in the capacity as the representative for certain stockholders of the Company, and TMTG’s General Counsel, in the capacity as the representative for stockholders of TMTG.

DIGITAL WORLD ACQUISITION CORP.

NOTES TO FINANCIAL STATEMENTS

Pursuant to the Merger Agreement, subject to the terms and conditions set forth therein, (i) upon the consummation of the transactions contemplated by the Merger Agreement (the “Closing”), Merger Sub will merge with and into TMTG (the “Merger” and, together with the other transactions contemplated by the Merger Agreement, the “Transactions”), with TMTG continuing as the surviving corporation in the Merger and a wholly- owned subsidiary of the Company.

In the Merger, (i) all shares of TMTG common stock (together, “TMTG Common Stock”) issued and outstanding immediately prior to the effective time of the Merger (the “Effective Time”) (other than those properly exercising any applicable dissenters rights under Delaware law) will be converted into the right to receive the Merger Consideration (as defined below);

(ii) each outstanding option to acquire shares of TMTG Common Stock (whether vested or unvested) will be assumed by the Company and automatically converted into an option to acquire shares of the Company common stock, with its price and number of shares equitably adjusted based on the conversion ratio of the shares of TMTG Common Stock into the Merger Consideration and (iii) each outstanding restricted stock unit of TMTG shall be converted into a restricted stock unit relating to shares of the Company’s common stock.

At the Closing, the Company will change its name to “Trump Media & Technology Group Corp.”

The aggregate merger consideration to be paid pursuant to the Merger Agreement to holders of TMTG Common Stock as of immediately prior to the Effective Time (“TMTG Stockholders” and, together with the holders of TMTG options and restricted stock units immediately prior to the Effective Time, the “TMTG Security Holders”) will be an amount equal to $ 875,000,000 , subject to adjustments for TMTG’s closing debt, net of cash and unpaid transaction expenses (the “Merger Consideration”), plus the additional contingent right to receive certain earnout shares after the Closing, provided that it shall exclude any additional shares issuable upon conversion of certain TMTG convertible notes.

The Merger Consideration to be paid to TMTG Stockholders will be paid solely by the delivery of new shares of the Company’s common stock, with each valued at the price per share at which each share of the Company’s common stock is redeemed or converted pursuant to the redemption by the Company of its public stockholders in connection with the Company’s initial Business Combination, as required by the Company’s Amended and Restated Certificate of Incorporation, by-laws and the Company’s Initial Public Offering prospectus.

The Merger Consideration will be subject to a post-Closing true up 90 days after the Closing.

As part of the Merger Consideration, the Company will create a new class of common stock (the “High Vote Common Stock”) to be issued to former President Donald J.

Trump (“Company Principal”) that will have the same voting, dividend, liquidation and other rights as one share of the Company’s Class A common stock, except that each share of High Vote Common Stock will entitle its holder to a number of votes equal to the greater of (i) one vote and (ii) the number of votes that would cause the aggregate number of shares issued to the Company Principal as consideration in the Merger (excluding any Earnout Shares) to represent 55 % of the voting power (to the maximum extent permitted by the rules and regulations of Nasdaq and applicable law, following the reasonable best efforts of the Company to obtain any necessary approvals) of (A) all shares of the Company’s common stock entitled to vote on the election of directors as of immediately following the Closing plus (B) the maximum number of shares of the Company’s common stock issuable upon the conversion of all convertible preferred stock or other convertible securities of the Company (if any) outstanding or with respect to which purchase agreements are in effect at Closing.

The shares of High Vote Common Stock will vote together with all other shares of the Company’s common stock on all matters put to a vote of the Company’s stockholders, entitled to vote on the election of directors as of immediately following closing of the merger and all other matters put to a vote of the Company’s stockholders.

Each TMTG convertible note that is issued and outstanding immediately prior to the Effective Time will convert immediately prior to the Effective Time into a number of shares of TMTG Common Stock in accordance with the terms of each note.

In addition to the Merger Consideration set forth above, the TMTG Stockholders will also have a contingent right to receive up to an additional 40,000,000 shares of the Company’s common stock (the “Earnout Shares”) after the Closing based on the price performance of the Company’s common stock during the three ( 3 ) year period following the Closing (the “Earnout Period”).

The Earnout Shares shall be earned and payable during the Earnout Period as follows:

if the dollar volume-weighted average price (“VWAP”) of the Company’s common stock equals or exceeds $ 12.50 per share for any 20 trading days within any 30 trading day period, the Company shall issue to the TMTG Stockholders an aggregate of 15,000,000 Earnout Shares;

if the VWAP of the Company’s common stock equals or exceeds $ 15.00

per share for any 20 trading days within any 30 trading day period, the Company shall issue to the TMTG Stockholders an aggregate of 15,000,000 Earnout Shares;

if the VWAP of the Company’s common stock equals or exceeds $ 17.50 per share for any 20 trading days within any 30 trading day period, the Company shall issue to the TMTG Stockholders an aggregate of 10,000,000 Earnout Shares.

If there is a final determination that the TMTG Stockholders are entitled to receive Earnout Shares, then such Earnout Shares will be allocated pro rata amongst the TMTG Stockholders.

The number of shares of the Company’s common stock constituting any earnout payment shall be equitably adjusted for stock splits, stock dividends, combinations, recapitalizations and the like after the Closing.

On December 4, 2021, in support of the Transactions, the Company entered into securities purchase agreements (the “SPAs”) with certain institutional accredited investors (the “PIPE Investors”), pursuant to which the investors agreed to purchase an aggregate of 1,000,000 shares of the Company’s Series A Convertible Preferred Stock (the “Preferred Stock”), at a purchase price of $ 1,000 per share of Preferred Stock, for an aggregate commitment of $ 1,000,000,000 in a private placement (the “PIPE”) to be consummated concurrently with the Transactions.

The shares of Preferred Stock have an initial conversion price per share of $ 33.60 and are initially convertible into an aggregate of 29,761,905 shares of common stock.

The closing of the PIPE is conditioned on the concurrent closing of the Transactions and other closing conditions as set forth in the SPA.

Pursuant to the SPAs, each of the PIPE Investors may terminate its respective SPA, among other things, if the closing of the PIPE has not occurred on or prior to September 20, 2022.

Due to certain regulatory conditions, among others, the Company expects that it will not be able to register the underlying the Company’s common shares concurrently with the consummation of the business combination (the “Registration Closing Condition”).

As such, unless both the Company and each PIPE Investor waive the Registration Closing Condition the parties are not obligated to consume the PIPE.

Furthermore, in connection with the Second Amendment, at the request of TMTG, the Company agreed to use its reasonable best efforts to discuss with the PIPE Investors a reduction or termination of the PIPE.

See Note 8 – Subsequent Events.

DIGITAL WORLD ACQUISITION CORP.

NOTES TO FINANCIAL STATEMENTS

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Shares issued for conversion of convertible notes

The Notes to the Unaudited Condensed Consolidated Financial Statements are an integral part of these statements.

TRUMP MEDIA & TECHNOLOGY GROUP CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data)

NOTE 1 - DESCRIPTION OF BUSINESS

The accompanying unaudited condensed consolidated financial statements include the historical accounts of Trump Media & Technology Group Corp.

(“TMTG”), which

changed its name from Trump Media Group Corp.

in October 2021.

The mission of TMTG is to end Big Tech’s assault on free speech by opening up the Internet and giving people their voices back.

operates Truth Social, a social media platform established as a safe harbor for free expression amid increasingly harsh censorship by Big Tech corporations.

On March 25, 2024, TMTG consummated the Merger Agreement dated October 20, 2021, between Digital World Acquisition Corp.

(“Digitial World” or

“DWAC”), DWAC Merger Sub, TMTG, ARC Global Investments II (“ARC”), LLC and TMTG’s General Counsel, as amended on May 11, 2022, August 9, 2023 and September 29, 2023.

Pursuant to the Merger Agreement, and subject to the terms and conditions set

forth therein, upon the Closing, Merger Sub merged with and into TMTG, with TMTG surviving as a wholly owned subsidiary of Digital World, and with TMTG’s stockholders receiving 87,500,000 shares of Digital World Class A common stock (excluding 40,000,000

Earnout Shares), subject to certain adjustments and earnout provisions, in exchange for TMTG common stock, which is in substance, a continuation of the TMTG shareholders’ equity interests in the TMTG business, plus up to an additional 7,854,534 shares of New Digital World common stock to be issued upon conversion of outstanding TMTG Convertible Notes immediately prior to the

Notwithstanding the legal form of the Business Combination pursuant to the Merger Agreement, the Business Combination has been accounted for

as a reverse recapitalization in accordance with U.S.

GAAP because TMTG is the operating company and has been determined to be the accounting acquirer under Financial Accounting Standards Board’s Accounting Standards Codification Topic 805,

Business Combinations (“ASC 805”), while Digital World is a blank check company.

The determination is primarily based on the evaluation of the following facts and circumstances:

The pre-combination equity holders of TMTG hold the majority of voting rights in Digital World after giving effect to the Business Combination (“the Combined Entity”, also referred to herein as “New

Digital World” or “the Company”);

The pre-combination equity holders of TMTG have the right to appoint the majority of the directors on the Combined Entity Board;

TMTG senior management (executives) are the senior management (executives) of the Combined Entity;

Operations of TMTG will comprise the ongoing operations of Combined Entity.

Under the reverse recapitalization model, the Business Combination was treated as TMTG issuing equity for the net assets of Digital World, with no goodwill or

intangible assets recorded.

While Digital World was the legal acquirer in the Business Combination, because Predecessor TMTG was deemed the accounting acquirer, the historical financial

statements of Predecessor TMTG became the historical financial statements of the combined company upon the consummation of the Business Combination.

As a result, the financial statements reflect (i) the historical operating results of

Predecessor TMTG prior to the Business Combination;

(ii) the combined results of Digital World and Predecessor TMTG following the closing of the Business Combination;

(iii) the assets and liabilities of Predecessor TMTG at their historical

and (iv) the Company’s equity structure for all periods presented.

In accordance with the applicable guidance, the equity structure has been retroactively restated in all comparative periods up to the Closing Date, to reflect the

number of shares of the Company’s common stock issued to Predecessor TMTG common shareholders and Predecessor TMTG convertible noteholders in connection with the Business Combination.

As such, the shares and corresponding capital amounts and

earnings per share related to Predecessor TMTG convertible notes and Predecessor TMTG common stock prior to the Business Combination have been retroactively restated as shares reflecting the exchange ratio established in the Business

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES

Basis of Presentation

The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (the “SEC”).

Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting.

Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows.

In the opinion of the Company’s management, the unaudited financial statements as of September 30, 2023 and for the three and nine months ended September 30, 2023 include all adjustments, which are only of a normal and recurring nature, necessary for a fair statement of the financial position of the Company as of September 30, 2023 and its results of operations and cash flows for the three and nine months ended September 30, 2023.

The results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for the full fiscal year ending December 31, 2023 or any future interim period.

Emerging Growth Company

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may 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 its 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.

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 irrevocable.

The Company 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, the Company, 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 the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

The accompanying unaudited condensed consolidated financial statements are presented in conformity with accounting principles generally accepted in the United

States of America (“U.S.

GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).

Our interim financial statements are unaudited, and in our opinion, include all adjustments of a normal recurring nature necessary for the fair presentation of the

periods presented.

The results for the interim periods are not necessarily indicative of the results to be expected for any subsequent period or for the year ending December 31, 2024.

These unaudited condensed consolidated financial

statements and related notes should be read in conjunction with our unaudited financial statements for the year ended December 31, 2023.

Reclassifications

Reclassifications of certain prior period amounts have been made to conform to the current period presentation.

Liquidity and going concern

TMTG commenced operations on February 8, 2021, and began the initial launch of its social media platform in the first quarter of 2022.

In October of 2021, TMTG

entered into a definitive merger agreement with DWAC, a special purpose acquisition corporation and a Delaware corporation.

The companies consummated the merger on March 25, 2024.

Company operations consumed $ 47,048.0 of cash from

February 8, 2021 (inception) through March 31, 2024, primarily funded by $ 48,155.0 of proceeds (net of repayments) from the issuance

of “Private TMTG” convertible promissory notes (the “Pre-Merger Notes”).

The March 25, 2024 Closing triggered the automatic conversion of the “Pre-Merger Notes” to common stock immediately prior to such closing, thus eliminating the liability.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Concurrently, TMTG received $ 273,017.5 of net cash proceeds from the Business Combination, comprised of $ 233,017.5 of cash and $ 40,000.0 of restricted cash.

Prior to Closing, on

February 8, 2024, Digital World agreed to issue up to $ 50,000.0 of convertible promissory notes (the “Convertible Notes”) to

certain institutional investors (the “Note Purchase Agreements”).

Principal plus accrued interest on the “Convertible Notes” is due in March 2025 ,

if the notes have not been converted to common stock.

In accordance with the Note Purchase Agreements, Digital World received $ 10,000.0

of proceeds (from these notes) prior to Closing, and the Company received the remaining $ 40,000.0 immediately after Closing.

The $ 40,000.0 of post-merger cash proceeds is held in a restricted account and will be released upon satisfaction of certain conditions, including the

registration of the underlying shares.

As a result, the Company had a total of $ 273,729.2 in cash (including restricted cash) and $ 50,157.8 of convertible promissory notes outstanding as of March 31, 2024.

See the note below titled, “NOTE 9 – CONVERTIBLE PROMISSORY NOTES,”

for a detailed description of the Company’s convertible notes.

The Company has experienced operating losses in preceding years and in the first quarter of 2024.

On average, Company operations consumed approximately $ 12,577.3 of cash per year from its inception (February 8, 2021) through year-end 2023.

In addition, for the three months ended March 31, 2024, and 2023, the Company had negative operating cash flows of $ 9,316.0 and $ 3,774.5 ,

respectively.

As of December 31, 2023, the Company had a negative working capital position, primarily due to the short-term nature of its “Pre-Merger Notes,” which converted to common stock immediately prior to the Closing.

receipt of proceeds from the Business Combination detailed above, and the resulting positive working capital position (i.e., $ 274,101.1

of current assets less $ 64,004.8 of current liabilities, including $ 50,157.8 of convertible notes as of March 31, 2024), management believes there is not substantial doubt regarding the Company’s ability to continue as a going concern as of March 31,

2024, and the substantial doubt as of December 31, 2023, has been mitigated.

The Company believes it has sufficient working capital to fund operations for at least the next twelve months from the date of issuance of these financial

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

DIGITAL WORLD ACQUISITION CORP.

NOTES TO FINANCIAL STATEMENTS

Making estimates requires management to exercise significant judgment.

It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events.

Accordingly, the actual results could differ significantly from those estimates.

Offering Costs Associated with the Initial Public Offering

Offering costs consist of underwriting, legal, accounting and other expenses incurred through the balance sheet date that are directly related to the Initial Public Offering.

These costs were charged to stockholders’ equity upon the completion of the Initial Public Offering.

On September 8, 2021, offering costs in the aggregate of $ 23,566,497 were charged to stockholders’ equity (consisting of deferred underwriting commission of $ 10,062,500 , fair value of the representative shares of $ 1,437,500 , fair value of shares issued to the anchor investors of the Company’s Initial Public Offering of $ 7,677,450 , fair value of shares transferred to officers and directors of $ 221,018 , and other cash offering costs of $ 4,168,029 ).

DIGITAL WORLD ACQUISITION CORP.

NOTES TO FINANCIAL STATEMENTS

Class A Common Stock Subject to Possible Redemption

As discussed in Note 3, all of the 28,750,000 shares of Class A common stock sold as part of the Units in the Initial Public Offering contain a redemption feature which allows for the redemption of such Public Shares in connection with the Company’s liquidation, if there is a stockholder vote or tender offer in connection with the Business Combination and in connection with certain amendments to the Company’s Amended and Restated Certificate of Incorporation.

The Company complies with the accounting and reporting requirements of ASC Topic 740, “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes.

Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income.

Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

ASC Topic 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return.

For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities.

The Company’s management determined United States is the Company’s only major tax jurisdiction.

The Company recognizes accrued interest and penalties related to unrecognized tax benefits, if any, as income tax expense.

There were no unrecognized tax benefits as of September 30, 2023 or December 31, 2022 and no amounts accrued for interest and penalties.

The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.

While ASC 740 identifies usage of the effective annual tax rate for purposes of an interim provision, it does allow for estimating individual elements in the current period if they are significant unusual or infrequent.

Computing the ETR for the Company is complicated due to the potential impact of the Company’s change in fair value of warrants for any other change in fair value of a complex financial instrument), the timing of any potential Business Combination expenses and the actual interest income that will be recognized during the year.

The Company has taken a position as to the calculation of income tax expenses in the current period based on 740-270-25-3 which states, “if an entity is unable to estimate a part of its ordinary income (or loss) or the related tax (or benefit) but is otherwise able to make a reliable estimate, the tax (or benefit) applicable to the item that cannot be estimated shall be reported in the interim period in which the item is reported.” The Company believes its calculation to be a reliable estimate and allows it to properly take into account the unusual elements that can impact its annualized book income and its impact on ETR.

As such, the Company is computing its taxable income (loss) and associated income tax provision based on actual results through September 30, 2023.

The Company’s effective tax rate was 8 % and 9 % for the three months ended September 30, 2023 and 2022, respectively.

The Company’s effective tax rate was 16 % and 4 % for the nine months ended September 30, 2023 and 2022, respectively.

The effective tax rate differs from the statutory tax rate of 21.0 % for the three and nine months ended September 30, 2023 and 2022, due to the changes in the valuation allowance in 2022.

Net Income (Loss) Per Share

The Company complies with accounting and disclosure requirements of FASB ASC Topic 260, “Earnings Per Share”.

Net income (loss) per share of common stock is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding for the period.

The Company applies the two-class method in calculating income (loss) per share of common stock.

Accretion associated with the redeemable shares of Class A common stock is excluded from income (loss) per common share as the redemption value approximates fair value.

The calculation of diluted income (loss) per share of common stock does not consider the effect of the warrants issued in connection with the (i) Initial Public Offering, and (ii) the private placement since the exercise of the warrants is contingent upon the occurrence of future events.

As of September 30, 2023 and December 31, 2022, the Company did not have any dilutive securities or other contracts that could, potentially, be exercised or converted into common stock and then share in the earnings of the Company.

As a result, diluted net loss per common share is the same as basic net loss per common share for the periods presented.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentration of credit risk consist of a cash account in a financial institution which, at times may exceed the Federal depository insurance coverage of $ 250,000 .

At September 30, 2023, the Company had not experienced losses on this account and management believes the Company is not exposed to significant risks on such account.

Fair Value of Financial Instruments

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the accompanying unaudited balance sheet, primarily due to their short-term nature.

DIGITAL WORLD ACQUISITION CORP.

NOTES TO FINANCIAL STATEMENTS

Derivative Financial Instruments

The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, “Derivatives and Hedging”.

The preparation of financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the reported amounts of

assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Actual results could differ from those estimates.

Material estimates and assumptions reflected in the unaudited condensed consolidated financial statements relate to and include, but are not limited to, the valuation of convertible promissory notes and derivative liabilities.

Principles of Consolidation

The unaudited condensed consolidated financial statements include the financial statements of the Company and its wholly owned subsidiaries and have been prepared

in accordance with U.S.

All intercompany transactions have been eliminated.

In October 2021, the Company acquired 100 % of the

ownership in T Media Tech LLC for a nominal value.

The results of T Media Tech LLC since October 13, 2021 are included in the Company’s Condensed Consolidated Statement of Operations.

Cash and cash equivalents and restricted cash

Cash represents bank accounts and demand deposits held at financial institutions.

Cash is held at major financial institutions with an original maturity of 90 days

or less and are subject to credit risk to the extent those balances exceed applicable Federal Deposit Insurance Corporation (FDIC) limitations.

No losses were incurred for those balances exceeding the limitations.

Restricted cash consist of a holdback from convertible notes which will be released upon satification of certain conditions, including the registration of the underlying shares.

Prepaid expenses and other current assets

Other current assets consist of prepaid rent, insurance and prepaid data costs.

Property and Equipment

Property and equipment are recorded at cost less accumulated depreciation.

Depreciation is calculated on the straight-line basis over the estimated useful lives of

Useful lives for property and equipment are as follows:

Furniture and computer equipment

Computer equipment

Expenditures which substantially increase value or extend useful lives are capitalized.

Expenditures for maintenance and repairs are charged to operations as

Gains and losses are recorded on the disposition or retirement of property and equipment based on the net book value and any proceeds received.

Long-lived fixed assets held and used are reviewed for impairment when events or changes in business circumstances indicate that the carrying amount of the assets

may not be fully recoverable.

Circumstances such as the discontinuation of a line of service, a sudden or consistent decline in the sales forecast for a product, changes in technology or in the way an asset is being used, a history of operating

or cash flow losses or an adverse change in legal factors or in TMTG climate, among others, may trigger an impairment review.

If such indicators are present, TMTG performs undiscounted cash flow analyses to determine if impairment exists.

asset value would be deemed impaired if the undiscounted cash flows generated did not exceed the carrying value of the asset.

If impairment is determined to exist, any related impairment loss is calculated based on fair value.

There were no

triggering events identified that necessitated an impairment test over property and equipment.

Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

See Note 4 - Property and equipment for

further detail.

Software Development Cost

We expense software development costs, including costs to develop software products or the software component products to be sold, leased, or marketed to external

users, before technological feasibility is reached.

Technological feasibility typically is reached shortly before the release of such products.

As a result, development costs that meet the criteria for capitalization were not material for the

periods presented.

Software development costs also includes costs to develop software to be used solely to meet internal needs and cloud-based applications used to deliver our

We capitalize development costs related to these software applications once the preliminary project stage is complete and it is probable that the project will be completed and the software will be used to perform the function

Costs capitalized for developing such software applications were not material for the periods presented.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Revenue recognition

The Company records revenue in accordance with ASC 606.

The Company determines the amount of revenue to be recognized through application of

the following steps- Identification of the contract, or contracts with a customer;

- Identification of the performance obligations in the contract;

- Determination of the transaction price;

- Allocation of the transaction price to the

performance obligations in the contract;

and - Recognition of revenue when or as the Company satisfies the performance obligations.

The Company entered into advertising contractual arrangements with advertising manager service companies.

The advertising manager service

companies provide advertising services through their Ad Manager Service Platform on the Truth Social website to customers.

The Company determines the number of Ad Units available on its Truth Social website.

The advertising manager service

companies have sole discretion over the terms of the auction and all payments and actions associated therewith.

Prices for the Ad Units are set by an auction operated and managed by these companies.

The Company has the right to block

specific advertisers at its sole reasonable discretion, consistent with applicable laws, rules, regulations, statutes, and ordinances.

The Company is an agent in these arrangements, and recognizes revenue for its share in exchange for

arranging for the specified advertising to be provided by the advertising manager service companies.

The advertising revenues are recognized in the period when the advertising services are provided.

Unearned revenue

Unearned revenue primarily consists of billings or payments received from customers in advance of revenue recognized for the services provided

to our customers or annual licenses and is recognized as services are performed or ratably over the life of the license.

We generally invoice customers in advance or in milestone-based installments.

Unearned revenue of $ 695.9 was recognized as revenue for the three months ended March 31, 2024, which was included in the deferred revenue balance as of December 31,

As of March 31, 2024, deferred revenue is expected to be recognized during the succeeding 12 -month period and is therefore

presented as current.

Cost of revenue

Cost of revenue primarily encompasses expenses associated with generating advertising revenue.

These costs are determined by allocating staff direct and indirect

costs proportionately, including depreciation, based on the time spent managing the agency relationships with external vendors.

These costs are confined to activities related to coordinating with these third-party vendors as the third-party

vendors are responsible to control and facilitate the delivery of advertising services.

Research and development

Research and development expenses consist primarily of personnel-related costs, including salaries, benefits and stock-based compensation, for our engineers and

other employees engaged in the research and development of our products and services.

In addition, research and development expenses include allocated facilities costs, and other supporting overhead costs.

Marketing and sales

Sales and marketing expenses consist primarily of personnel-related costs, including salaries, commissions, benefits and stock-based compensation for our employees

engaged in sales, sales support, business development and media, marketing, and customer service functions.

In addition, marketing and sales-related expenses also include advertising costs, market research, trade shows, branding, marketing,

public relations costs, allocated facilities costs, and other supporting overhead costs.

We expense marketing and sales cost in the period in which they are incurred.

For the three months ended March 31, 2024 and 2023, marketing and sales

expenses totaled $ 1,070.4 and $ 256.1 ,

respectively.

Selling, general and administrative expenses

General and administrative expenses consist primarily of personnel-related costs, including salaries, benefits, and stock-based compensation for our executive,

finance, legal, information technology, corporate communications, human resources, and other administrative employees.

In addition, general and administrative expenses include fees and costs for professional services (including third-party

consulting, legal, and accounting services), facilities costs, and other supporting overhead costs that are not allocated to other departments.

Income taxes are accounted for under the asset and liability method.

Deferred tax assets and liabilities are recognized for the future tax consequences

attributable to differences between the unaudited condensed consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards.

Deferred tax assets

and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

The effect on deferred tax assets and liabilities of a change in

tax rates is recognized in income in the period that includes the enactment date.

The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained.

Income tax amounts are therefore

recognized for all situations where the likelihood of realization is greater than 50%.

Changes in recognition or measurement are reflected in income tax expense in the period in which the change in judgment occurs.

Accrued interest expense and

penalties related to uncertain tax positions are recorded in Income Tax Expense/(Benefit).

See Note 7 - Income Taxes.

The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815,

“Derivatives and Hedging”.

Derivative instruments are initially recorded at fair value on the grant date and re-valued at each reporting date, with changes in the fair value reported in the statements of operations.

Derivative assets and liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the unaudited condensed balance sheet date.

The Company accounts for the warrants in accordance with the guidance contained in ASC 815-40.

The Company has determined that the warrants qualify for equity treatment in the Company’s financial statements.

Derivative assets and

liabilities are classified in the balance sheets as current or non-current based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.

The Company accounts for the

warrants and earnout in accordance with the guidance contained in ASC 815-40.

The Company has determined that the warrants qualify for equity treatment in the Company’s unaudited condensed consolidated financial statements.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Commitments and contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recorded when it is probable that a

liability has been incurred and the amount can be reasonably estimated.

The Company has no liabilities for loss contingencies.

Recently issued accounting standards

Management does not believe that any recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on the Company’s financial statements.

Risks and Uncertainties

Management is currently evaluating the impact of the COVID-19 pandemic and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, results of its operations, and/or search for a target company, the specific impact is not readily determinable as of the date of these financial statements.

The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Inflation Reduction Act of 2022

On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law.

The IR Act provides for, among other things, a new U.S.

federal 1 % excise tax on certain repurchases (including redemptions) of stock by publicly traded domestic (i.e., U.S.) corporations and certain domestic subsidiaries of publicly traded foreign corporations.

The excise tax is imposed on the repurchasing corporation itself, not its shareholders from which shares are repurchased.

The amount of the excise tax is generally 1 % of the fair market value of the shares repurchased at the time of the repurchase.

However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year.

In addition, certain exceptions apply to the excise tax.

Department of the Treasury (the “Treasury Department”) has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax.

The IR Act applies only to repurchases that occur after December 31, 2022.

Any redemption or other repurchase that occurs after December 31, 2022, in connection with a Business Combination, extension vote or otherwise, may be subject to the excise tax.

Whether and to what extent the Company would be subject to the excise tax in connection with a Business Combination, extension vote or otherwise would depend on a number of factors, including (i) the fair market value of the redemptions and repurchases in connection with the Business Combination, extension or otherwise, (ii) the structure of a Business Combination, (iii) the nature and amount of any “PIPE” or other equity issuances in connection with a Business Combination (or otherwise issued not in connection with a Business Combination but issued within the same taxable year of a Business Combination) and (iv) the content of regulations and other guidance from the Treasury.

In addition, because the excise tax would be payable by the Company and not by the redeeming holder, the mechanics of any required payment of the excise tax have not been determined.

The foregoing could cause a reduction in the cash available on hand to complete a Business Combination and in the Company’s ability to complete a Business Combination.

DIGITAL WORLD ACQUISITION CORP.

NOTES TO FINANCIAL STATEMENTS

INITIAL PUBLIC OFFERING

On September 8, 2021, the Company consummated its Initial Public Offering of 28,750,000 Units, at $ 10.00 per Unit, generating gross proceeds of

$ 287,500,000 .

Each Unit consists of one share of Class A common stock and one -half of one redeemable warrant (“Public Warrant”).

Each whole Public Warrant will entitle the holder to purchase one share of Class A common stock at an exercise price of $ 11.50 per share (see Note 7).

PRIVATE PLACEMENT

Simultaneously with the closing of the Initial Public Offering, the Sponsor purchased an aggregate of 1,133,484 Placement Units at a price of $ 10.00 per Placement Unit (or $ 11,334,840 in the aggregate).

The Sponsor initially transferred $ 13,203,590 to the Trust Account on September 8, 2021.

The excess proceeds ($ 1,869,110 ) over the proceeds of the Private Placement were subsequently transferred back to the Company’s operating account and returned to the Sponsor.

The proceeds from the sale of the Placement Units were added to the net proceeds from the Initial Public Offering held in the Trust Account.

The Placement Units are identical to the Units sold in the Initial Public Offering, except that the Placement Units and their component securities will not be transferable, assignable or salable until 30 days after the consummation of the initial Business Combination except to permitted transferees and are entitled to registration rights.

If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Placement Units will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law) and the warrants included in the Placement Units (the “Placement Warrants”) will expire worthless.

RELATED PARTY TRANSACTIONS

Class B Common stock

During the year ended December 31, 2021, the Company issued an aggregate of 8,625,000 shares of Class B common stock or Founder Shares to the Sponsor for an aggregate purchase price of $ 25,000 in cash.

On July 2, 2021, the Sponsor transferred 10,000 Founder Shares to its Chief Financial Officer and 7,500 Founder Shares to each of its independent directors.

The Company estimated the fair value of these transferred shares to be $ 221,000 .

On September 2, 2021, the Sponsor surrendered to the Company an aggregate of 1,437,500 shares of Class B common stock for cancellation for no consideration, resulting in an aggregate of 7,187,500 shares of Class B common stock issued and outstanding.

The number of Founder Shares issued represented 20 % of the Company’s issued and outstanding shares after the Initial Public Offering (assuming the initial stockholders do not purchase any Public Shares in the Initial Public Offering and excluding the Placement Units and underlying securities).

All shares and associated amounts have been retroactively restated to reflect the surrender of these shares.

With certain limited exceptions, the shares of Class B common stock are not transferable, assignable by the Sponsor until the earlier to occur of:

(A) six months after the completion of the Company’s initial Business Combination and (B) subsequent to the Company’s initial Business Combination, (x) if the reported last sale price of the Company’s Class A common stock equals or exceeds $ 12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30 -trading day period commencing at least 150 days after the Company’s initial Business Combination, or (y) the date on which the Company completes a liquidation, merger, capital stock exchange or other similar transaction that results in all of the Company stockholders having the right to exchange their shares of common stock for cash, securities or other property.

With certain limited exceptions, the Placement Units, Placement Shares, Placement Warrants and the Class A common stock underlying the Placement Warrants, will not be transferable, assignable or saleable by the Sponsor or its permitted transferees until 30 days after the completion of the initial Business Combination.

DIGITAL WORLD ACQUISITION CORP.

NOTES TO FINANCIAL STATEMENTS

In December 2023, the FASB issued Accounting Standards Update, or ASU, 2023-09 “Income Taxes (Topic 740):

Improvements to Income Tax

Disclosures,” or ASU 2023-09.

ASU 2023-09 requires additional disaggregated disclosures on an entity’s effective tax rate reconciliation and additional details on income taxes paid.

ASU 2023-09 is effective on a prospective basis, with the

option for retrospective application, for annual periods beginning after December 15, 2024 and early adoption is permitted.

We do not expect the adoption of ASU 2023-09 to have a material impact on our consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07 “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures,” or ASU 2023-07.

ASU 2023-07 enhances the disclosures required for reportable segments on an annual and interim basis.

ASU 2023-07 is effective on a retrospective basis for annual periods beginning after December 15, 2023, for interim periods within fiscal

years beginning after December 15, 2024, and early adoption is permitted.

We do not expect the adoption of ASU 2023-07 to have a material impact on our consolidated financial statements.

In August 2020, the FASB issued ASU 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and

Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40)—Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity”.

ASU 2020-06 reduces the number of accounting models for convertible debt instruments and convertible

preferred stock.

For convertible instruments with conversion features that are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in

capital, the embedded conversion features no longer are separated from the host contract.

ASU 2020-06 also removes certain conditions that should be considered in the derivatives scope exception evaluation under Subtopic 815-40, Derivatives and

Hedging—Contracts in Entity’s Own Equity, and clarify the scope and certain requirements under Subtopic 815-40.

In addition, ASU 2020-06 improves the guidance related to the disclosures and earnings-per-share (EPS) for convertible instruments

and contracts in an entity’s own equity.

ASU 2020-06 is effective for public smaller reporting companies for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years.

The Board specified that an entity

should adopt the guidance as of the beginning of its annual fiscal year.

The Company has adopted ASU 2020-06 effective as of January 1, 2024.

The adoption of ASU 2020-06 did not have a material effect on the Company’s consolidated financial

NOTE 3 - RECAPITALIZATION

As discussed in Note 1, following the Closing of the Business Combination, TMTG was deemed the accounting acquirer and the transaction was accounted for as a

reverse recapitalization.

Transaction Proceeds

Upon the Closing, the Company received gross proceeds of $ 233,017.5 .

The following table reconciles the elements of the Business Combination to the condensed consolidated

statements of cash flows and the condensed consolidated statement of changes in stockholders’ equity (deficit) for the period ended March 31, 2024:

Cash-trust and cash, net of redemptions

accrued expenses

notes payable

Reverse recapitalization, net

In connection with the Merger, TMTG incurred $ 1,640.2

in one-time direct and incremental transaction costs, consisting of legal and other professional fees, recorded in general and administration expenses.

TMTG also issued $ 6,130.0 of bonus payments to employees of the Company and a director of Private TMTG that were triggered by the Merger.

The Company recorded $ 5,530.0 and $ 600.0 in general and

administration expense and sales and marketing expense, respectively, for the three months ended March 31, 2024.

TMTG deems these to be non-recurring expenses that are not direct and incremental to the Merger.

The number of shares of common stock issued immediately following the consummation of the Business Combination were:

Digital World common stock, outstanding prior to the Business Combination

Shares issued to Digital World convertible noteholders, converted immediately prior to Business Combination

Predecessor TMTG Shares (1)

Shares Issued to TMTG convertible noteholders

Common stock immediately after the Business Combination (2)

Includes 614,640 shares outstanding and held in escrow.

Excludes 4,667,033 shares not outstanding and held in escrow.

The number of Predecessor TMTG shares was determined as follows:

Predecessor TMTG

Shares issued to

shareholders of

Predecessor TMTG

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Public and private placement warrants

In connection with Digital World’s initial public offering in 2021, 14,375,000 public warrants were issued (the “Public Warrants”) and 566,742

warrants were issued in a private placement (the “Private Placement Warrants”;

and the Private Placement Warrants together with the Public Warrants, collectively the “Warrants”) all of which warrants remained outstanding and became warrants

for the Common Stock in the Company.

Additionally, pursuant to warrant subscription agreements (each a “Warrant Subscription Agreement”) entered into by and between Digital World and certain

institutional investors on February 7, 2024, Digital World has agreed to issue an aggregate of 3,055,000 warrants (“Post-IPO

Warrants”), each warrant entitling the holder thereof to purchase one share of the Company’s Class A common stock for $ 11.50 per share.

The Post-IPO Warrants were issued concurrently with the closing of the Business Combination, and have substantially the same

terms as the public warrants issued by Digital World in connection with its initial public offering, except that such Post-IPO Warrants may only be transferred to the applicable holder’s affiliates.

TMTG Earnout Shares

As noted in Note 1, in connection with the Merger, TMTG shareholders are entitled to up to 40,000,000 shares if certain post merger per share market prices are achieved.

The Company utilized a Monte Carlo simulation analysis to determine the fair value of the Earnout Shares at the date of the merger, which

included the following assumptions:

The Monte Carlo simulation conclusion for each tranche of the Earnout Shares is the result of the average of 1,000,000 trial outcomes.

Within each trial of the simulation:

The stock price is simulated for the defined term ( 1.5 years, 2 years, and 3 years)

after the Merger date.

The vest date is determined as the date the stock price achieves the different stock price thresholds, which are $ 12.50 , $ 15.00 , and $ 17.50 .

The payoff is calculated as the number of shares issued per tranche ( 15

million, 15 million, and 10

million) multiplied by the simulated stock price at the vest date, which varies with each simulation.

The payoff is discounted to the present value using the interpolated risk-free rate ranging from 4.31 % to 4.70 %.

Volatility is calculated as the annualized standard deviation of daily returns from a set of Guideline Public Companies (GPC) over the

expected term for each tranche.

The 75th percentile of GPC volatilities was selected given the Company’s early stage life cycle relative to the GPC set.

The accounting for the Earnout Shares was first evaluated under ASC 718 to determine if

the arrangement represents a share-based payment arrangement.

Because there are no service conditions nor any requirement of the participants to provide goods or services, the Company determined that the Earnout Shares are not within the

scope of ASC 718.

Next, the Company determined that the Earnout Shares represent a freestanding equity-linked financial instrument to be evaluated under ASC

480 and ASC 815-40.

Based upon the analysis, the Company concluded that the Earnout Shares should not be classified as a liability under ASC 480.

The Company next considered the equity classification conditions in ASC 815-40-25 and concluded that all of the conditions were met.

Therefore, the Earnout Share arrangement is appropriately classified in equity.

As the merger has been accounted for as a reverse recapitalization, the fair value of the Earnout Shares arrangement has been accounted for

as an equity transaction as of the closing date of the merger.

NOTE 4 - PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

(in thousands)

March 31, 2024

December 31, 2023

Property and equipment

Furniture and equipment

Computer equipment

Accumulated depreciation

Property and equipment, net

Total depreciation expense was $ 5.6 and $ 16.5 for the three months ended March 31, 2024 and 2023, respectively

NOTE 5 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consisted of the following:

(in thousands)

March 31, 2024

December 31, 2023

Accounts payable

Other accrued expenses

Income tax payable

Franchise tax payable

Accounts payable and accrued expenses

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 6 - LEASES

Operating leases are included in the unaudited condensed consolidated Balance Sheets as follows:

(in thousands)

Classification

March 31, 2024

December 31, 2023

Operating lease cost ROU assets, net

Total lease assets

Lease liabilities

Operating lease liabilities, current

Current liabilities

Operating lease liabilities, non-current

Total lease liabilities

The components of lease costs, which are included in loss from operations in our unaudited condensed consolidated Statement of Operations we as follows:

Three Month Period Ended

(in thousands)

March 31, 2024

March 31, 2023

Operating lease costs

Total lease costs

(in thousands)

March 31, 2024

2024 (remainder of)

Total future minimum lease payments

Amount representing interest

Present value of net future minimum lease payments

NOTE 7 - INCOME TAXES

The estimated annual effective tax rate applied to the three month periods ended March 31, 2023 is 0 %, which differs from the US federal statutory rate of 21 % principally due to the projection of U.S.

net operating loss for fiscal 2024 with full application of a valuation allowance.

As of March 31, 2024, TMTG had US Federal net operating loss carryforwards

(“NOLs”) with a tax benefit of approximately $ 9,400.0 from December 31, 2023.

NOTE 8 – OTHER INCOME – RELATED PARTY, RELATED PARTY RECEIVABLE AND PAYABLE

Administrative Services Arrangement

An affiliate of the Sponsor has agreed, commencing from the date when the Company’s Registration Statement was declared effective through the earlier of the Company’s consummation of a Business Combination and its liquidation, to make available to the Company certain general and administrative services, including office space, utilities and administrative services, as the Company may require from time to time.

The Company has agreed to pay the affiliate of the Sponsor $ 15,000 per month for these services.

An affiliate of the Digital World sponsor ARC agreed, commencing from the date when Digital World’s Registration Statement was declared

effective through the earlier of Digital World’s consummation of a Business Combination and its liquidation, to make available to the Digital World certain general and administrative services, including office space, utilities and

administrative services, as Digital World required from time to time.

Digital World agreed to pay the affiliate of the Sponsor $ 15.0

per month for these services.

The agreement with the Sponsor was terminated on April 5, 2023.

$ 0 and $ 45,000 of expense was recorded for the three months ended September 30, 2023 and 2022, respectively.

$ 45,000 and $ 90,000 of expense was recorded for the nine months ended September 30, 2023 and 2022, respectively.

$ 221,000 and $ 176,000 was unpaid as of September 30, 2023 and December 31, 2022, respectively.

On April 5, 2023, Company entered into an Administrative Support Agreement with Renatus LLC (“Renatus”), an advisory group owned by Eric Swider, the Chief Executive Officer and director of the Company, pursuant to which, the Company agrees to pay Renatus a monthly fee of $ 15,000 for office space, utilities and secretarial and administrative support commencing from April 5, 2023 until the earlier of the consummation by the Company of an initial business combination or the Company’s liquidation.

$ 45,000 and $ 0 of expense was recorded for the three months ended September 30, 2023 and 2022, respectively.

$ 60,000 and $ 0 of expense was recorded for the nine months ended September

30, 2023 and 2022, respectively.

There was no unpaid balance as of September 30, 2023.

Related Party Loans

In order to finance transaction costs in connection with an initial business combination, the Sponsor or an affiliate of the Sponsor, or the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required using Digital World Convertible Notes.

“Digital World Convertible Notes” means up to $ 40,000,000 in non-interest bearing convertible promissory notes payable upon the stockholders’ approval of the Business Combination and, if applicable, the PIPE Investors’ approval, in either (i) Working Capital Units or (ii) cash or Working Capital Units, at the election of the holder.

Up to $ 30,000,000 of such convertible promissory notes may be issued to the Sponsor or its affiliates or the Company’s officers or directors in connection with any loans made by them to the Company prior to Closing.

Up to $ 10,000,000 of such convertible promissory notes may be issued to either third parties providing services or making loans to the Company or to the Sponsor or its affiliates or the Company’s officers or directors in connection with any loans made by them to the Company prior to Closing.

“Working Capital Units” means any units issuable pursuant to the Digital World Convertible Notes.

Each unit consists of one share of Digital World Class A common stock and one-half Warrant.

Each unit issuable pursuant to the Digital World Convertible Notes, subject to the terms and conditions of each applicable note, shall not have a price lower than $ 8.00 per unit.

In the event that an initial business combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Digital World Convertible Notes, but no proceeds held in the Trust Account would be used to repay the Digital World Convertible Notes.

In November 2021, the Sponsor committed to provide loans of up to an aggregate of $

to the Company through September 8, 2023, in the form of Digital World Convertible Notes.

On May 12, 2022, the Company entered into an amendment (the “Amendment to the Insider Letter”) to that certain letter agreement, dated September 2, 2021 (“Insider Letter”), with the Sponsor and the Company’s directors, officers or other initial shareholders named therein (the “Insiders”).

Pursuant to the Insider Letter, among other matters, the Sponsor and the Insiders agreed in Section 9 thereof, that the Sponsor, an affiliate of the Sponsor or certain of the Company’s officers and directors may make up to $ 30,000,000 loans against Digital World Convertible Notes with a conversion price of $ 10 per Working Capital Units.

On September 8, 2022, the Company issued a Digital World Convertible Note with a conversion price of $ 10 per Working Capital Units with an aggregate principal amount of $ 2,875,000 to the Sponsor, in connection with the extension of the termination date for the Company’s initial business combination from September 8, 2022 to December 8, 2022.

As of September 30, 2023 and December 31, 2022, there was $ 2,875,000 outstanding under this note.

On April 21, 2023, the Company issued two Digital World Convertible Notes

and the other for $

in the aggregate principal amount of

to the Sponsor to pay costs and expenses in connection with completing an initial business combination.

As of September 30, 2023, there were $ 1,275,000 outstanding in Digital World Convertible Notes with a conversion price of

per Working Capital Units (which exceeds the aggregate amount the Sponsor committed to provide).

On June 2, 2023, the Company issued a Digital World Convertible Note with a conversion price of $ 10 per Working Capital Units, with an aggregate principal amount of

to Renatus, of which Eric Swider, Chief Executive Officer and Director of the Company, is a founder and partner and another Digital World Convertible Notes in the aggregate principal amount of

Million Note,” together with the

Million Note, the “Renatus Notes”) to Renatus.

As of September 30, 2023,

outstanding in Digital World Convertible Note to Renatus.

The issuances of the Notes were made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended.

DIGITAL WORLD ACQUISITION CORP.

NOTES TO FINANCIAL STATEMENTS

Advances – related parties

During 2022 and the nine months ended September 30, 2023, the Sponsor paid, on behalf of the Company, $ 470,835 to a vendor for costs incurred by the Company.

As of September 30, 2023 and December 31, 2022, the Company’s obligation to the Sponsor for such payments was outstanding in the amount of $ 2,606 and $ 425,835 , respectively.

During 2022, a Board member paid, on behalf of the Company, $ 100,000 to a vendor for costs incurred by the Company.

As of September 30, 2023 and December 31, 2022, the Company’s obligation to the Board Member for such payment was $ 31,979 and $ 100,000 , respectively.

During 2023 the Company agreed to pay a law firm a fixed amount of $ 500,000

for services rendered through December 31, 2023.

As of September 30, 2023, the $ 500,000 was earned and payable and included in Note payable on the balance sheet.

On November 20, 2023, the law firm was issued $ 500,000 in a Digital World Convertible Note with a conversion price of $ 10 per Working Capital Units.

COMMITMENTS AND CONTINGENCIES

Registration Rights

The holders of the Founder Shares, the holders of representative shares as well as the holders of the Placement Units (and underlying securities) and any securities issued in payment of Digital World Convertible Notes made to the Company, are entitled to registration rights pursuant to an agreement signed on the effective date of the Initial Public Offering.

The holders of a majority of these securities are entitled to make up to

three demands that the Company register such securities.

In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation of a Business Combination.

Notwithstanding anything to the contrary, the underwriters (and/or their designees) may participate in a “piggy-back” registration only during the seven year period beginning on the effective date of the Initial Public Offering.

The Company will bear the expenses incurred in connection with the filing of any such registration statements.

Notwithstanding anything to the contrary, under FINRA Rule 5110, the underwriters and/or their designees may only make a demand registration (i) on one occasion and (ii) during the five-year period beginning on the effective date of the registration statement relating to the Initial Public Offering, and the underwriters and/or their designees may participate in a “piggy- back” registration only during the seven-year period beginning on the effective date of the registration statement relating to the Initial Public Offering.

Underwriting Agreement

The underwriters purchased the 3,750,000 additional Units to cover over-allotments at the Initial Public Offering price, less the underwriting discounts and commissions.

The underwriters are entitled to a cash underwriting discount of:

(i) one point twenty-five percent ( 1.25 %) of the gross proceeds of the Initial Public Offering, or $ 3,593,750 , with the underwriters’ over-allotment having been exercised in full;

(ii) zero point five percent ( 0.50 %) of the total number of shares of Class A common stock issued in the Initial Public Offering, or 143,750 shares of Class A common stock.

In addition, the underwriters are entitled to a deferred underwriting commissions of three point five percent ( 3.50 %) of the gross proceeds of the Initial Public Offering, or $ 10,062,500 upon closing of the Business Combination.

The deferred underwriting commissions will be paid in cash upon the closing of a Business Combination from the amounts held in the Trust Account, subject to the terms of the underwriting agreement.

Right of First Refusal

Subject to certain conditions, the Company granted the underwriter, for a period of 24 months after the date of the consummation of the Business Combination, a right of first refusal to act as sole book runner, and/or sole placement agent, at the representative’s sole discretion, for each and every future public and private equity and debt offering, including all equity linked financings for the Company or any of its successors or subsidiaries.

In accordance with FINRA Rule 5110(g)(6)(A), such right of first refusal shall not have a duration of more than three years from the effective date of the Registration Statement.

DIGITAL WORLD ACQUISITION CORP.

NOTES TO FINANCIAL STATEMENTS

Agreement with law firm

During 2023 the Company agreed to pay a law firm the greater of

million or 130 % of the actual fees incurred if the Company completes the Business Combination.

Such fees are subject to a downward adjustment in the event the Business Combination is not consummated.

Fees and expenses incurred

for the nine months ended September

30, 2023 related to the law firm were $ 2.3

Legal Matters

Except as indicated below, to the knowledge of the Company’s management team, there is no litigation currently pending or contemplated against the Company, or against any of its property.

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

According to FINRA’s request, the inquiry should not be construed as an indication that FINRA has determined that any violations of Nasdaq rules or federal securities laws have occurred, nor as a reflection upon the merits of the securities involved or upon any person who effected transactions in such securities.

$ 221.0 was unpaid as of March 31, 2024.

Advances – related party

During 2022 and the year ended December 31, 2023, the Digital World Sponsor paid, on behalf of Digital World, $ 470.8 to a vendor for costs incurred by Digital World and $ 41.0 directly to Digital World.

As of March 31, 2024, the Company’s obligation to the Sponsor for such payments was outstanding in the amount of $ 41.0 .

Effective June 13, 2022, Private TMTG entered into a Consulting Services Agreement with Trishul, LLC (“Trishul”).

Pursuant to such agreement and subsequent

performance by the parties thereto, Trishul provided consulting services to Private TMTG until the consulting relationship was terminated by Private TMTG effective March 25, 2024, upon the Closing of the Business Combination.

During the three

months ended March 31, 2024 and 2023, TMTG paid $ 30.0 and $ 40.0 , respectively, to Trishul.

As of March 31, 2024 and 2023, TMTG had an outstanding payable balance of zero and $ 10.0 , respectively to Trishul.

The outstanding

payable balance at December 31, 2023 was zero .

Trishul is owned by Kashyap “Kash” Patel, a director of TMTG since March 25, 2024,

and previously a director of Private TMTG from March 11, 2022, until March 26, 2024.

In August 2021, Private TMTG entered into a Consulting Services Agreement with Hudson Digital, LLC (“Hudson Digital”).

Pursuant to the agreement, which as amended

expires December 31, 2024, Hudson Digital provides consulting services to TMTG.

Hudson Digital also received a TMTG Executive Promissory Note in the principal amount of $ 4,000.0 , which converted into common shares immediately before the Closing (along with all other Private TMTG Convertible Notes), and a $ 600.0 retention bonus following the Closing.

During the three months ended March 31, 2024 and 2023, we paid $ 60.0 to Hudson Digital.

As of March 31, 2024 and 2023, TMTG had an outstanding payable balance of $ 600.0 and zero , respectively to Hudson Digital, recorded

within accounts payable and accrued liabilities on the condensed consolidated balance sheet.

Hudson Digital is owned by Daniel Scavino, who served as a director of Private TMTG from February 16, 2023, until March 25, 2024.

Scavino has not

served as an officer or director of TMTG.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTE 9 – CONVERTIBLE PROMISSORY NOTES AND WARRANTS

Notes 1 to 7 were Convertible Promissory Notes issued from May 2021 through October 2021 with a cumulative face value of $ 5,340.0 , maturity of 24 months from each respective issuance

date and interest was accrued at 5 % based on the simple interest method (365 days year) for each note.

Each of Notes 1-7

contemplated multiple plausible outcomes that include conversion upon a Qualified SPAC Business Combination (“SPAC”) and at least one of the following conversion triggers:

Qualified Initial Public Offering (“IPO”), private equity transaction

and/or change of control.

All outstanding principal of these Notes, together with all accrued but unpaid interest on such principal, will convert to equity.

The number of shares of Company stock to be issued to the Lender upon conversion of the

Notes in the event of a completed SPAC transaction would be the number of shares of the Company Stock (rounded to the nearest whole share) equal to the quotient of:

(a) the principal plus accrued interest on the Notes then outstanding, divided

In other, non-SPAC conversion scenarios, the number of shares of Company stock to be issued to the Lender upon conversion

of the Notes was variable based on the application of an automatic discounted share-settlement feature.

For Notes 1 and 2, the number of shares of Company stock to be issued to the Lender upon a non-SPAC conversion event would be the number of

shares of Company stock (rounded to the nearest whole share) equal to the quotient of:

(a) the principal plus accrued interest on the Notes then outstanding (b) divided by 40 % of the initial public offering price per share of a qualified initial public offering.

For Notes 3-7, the number of shares of Company stock to be issued to the Lender upon a non-SPAC

conversion event would be the number of shares of Company stock (rounded to the nearest whole share) equal to the quotient of:

(a) the principal plus accrued interest on the Notes then outstanding (b) divided by 40 % of (i) the initial public offering price per share of a qualified initial public offering, (ii) the price per share as determined by the

valuation of the Company in connection with a qualified private equity raise, or (iii) in the case of a change of control, the price per share determined in accordance with the Company’s then current fair value determined by an independent

valuation firm.

Notes 8 to 12 were Convertible Promissory Notes issued from November 2021 through December 2021 with a cumulative face value of $ 17,500.0 , maturity of between 18

months and 36 months and interest was accrued at a range between 5 % and 10 % based on the simple interest method (365 days year) for each

Notes 8 to 12 were convertible simultaneously with the completion of a SPAC merger agreement or IPO.

All outstanding principal of these Notes, together with all accrued but unpaid interest on such principal, would convert to equity.

number of shares of Company stock to be issued to the Lender upon conversion of the Notes would be the number of shares of the Company Stock (rounded to the nearest whole share) equal to the quotient of:

(a) the principal plus accrued interest

on the Notes then outstanding (b) divided by either US$ 25 , US$ 21 or US$ 20 subject to the respective conditions of the individual Notes;

provided, however, in the event that the stock price quoted for the Company on NASDAQ or The New York Stock Exchange (as applicable) at the time of the closing of the Qualified SPAC Business Combination (the “TMTG Stock Price”) is less than

either $ 50 per share, $ 42

per share, $ 40 per share subject to the respective conditions of the individual Notes, then the Conversion Price would be reset to 50 % of the then current TMTG Stock Price subject to a floor of $ 10 per share.

Notes 13 to 18 were Convertible Promissory Notes issued from January 2022 through March 2022.

Note 19 was issued on August 23, 2023.

Notes 13 to 19 were

Convertible Promissory Notes issued with a cumulative face value of $ 18,360.0 , maturity of 18 months and interest will be accrued at a range between 5 %

and 10 % based on the simple interest method (365 days year) for each note.

Notes 13 to 19 were convertible simultaneously with the

completion of a Qualified SPAC Business Combination (“SPAC”) merger agreement or Qualified Initial Public Offering (“IPO”).

All outstanding principal of these Notes, together with all accrued but unpaid interest on such principal, would convert

The number of shares of Company stock to be issued to the Lender upon conversion of the Notes would be the number of shares of the Company Stock (rounded to the nearest whole share) equal to the quotient of:

(a) the principal plus

accrued interest on the Notes then outstanding (b) divided by either US$ 25 or US$ 21 subject to the respective conditions of the individual notes.

Notes 20 to 23 were Convertible Promissory Notes issued from November 2023 through March 2024 with a cumulative face value of $ 7,955.0 , maturity of 18 months and

interest will be accrued at 10 % based on the simple interest method (365 days year) for each note.

Notes 20 to 23 were convertible

with the completion of a Qualified SPAC Business Combination (“SPAC”) merger agreement or Qualified Initial Public Offering (“IPO”).

The outstanding principal of the Notes, accrued but unpaid interest on such principal, would convert to equity.

The number of shares of Company stock to be issued to the Lender upon conversion of the Notes in the event of a SPAC transaction shall be the number of shares of the Company Stock (rounded to the nearest whole share) equal to the quotient of:

(a) the principal plus accrued interest on the Notes then outstanding (b) divided by US$ 10 .

The number of shares of Company stock to

be issued to the Lender upon conversion of the Notes in the event of an IPO would be the number of shares of the Company Stock (rounded to the nearest whole share) equal to the quotient of:

(a) the principal plus accrued interest on the Notes

then outstanding (b) divided by 50 % of the IPO price per share.

Convertible notes and warrants - February 8, 2024 - Pursuant to a note purchase agreement entered into by and between Digital World and certain institutional

investors on February 8, 2024 (the “Note Purchase Agreement”), Digital World agreed to issue up to $ 50,000.0 in convertible

promissory notes (the “Convertible Notes”).

The Convertible Notes:

(a) accrue interest at an annual rate of 8.00 % and are payable on

the earlier of (i) the date that is 12 months after the date on which the Company consummates the Business Combination, which interest is not payable to the extent the holder exercises the conversion right and (ii) the date that the winding up

of the Company is effective (such date, the “Maturity Date”);

(b) are convertible (i) at any time following the consummation of the Business Combination, but prior to the Maturity Date, redemption or otherwise the repayment in full of the

Convertible Notes, at each holder’s option, in whole or in part, and subject to the terms and conditions of the Convertible Notes, including any required shareholders’ approval upon the consummation of the Business Combination and (ii) into

that number of Digital World Class A common stock and warrants included in the units, each unit consisting of one share of Class A

common stock of the Company and one-half of one warrant of the Company (the “Conversion Units”), equivalent to (A) the portion of

the principal amount of the applicable Convertible Note (excluding any accrued interest, which shall not be payable with respect to the Convertible Note that was converted) being converted, divided by (B) $ 8.00 (the “Conversion Price”);

common stock issuable to the holders has been registered with the SEC, by providing a 10-day notice of such redemption (the

“Redemption Right”), which Redemption Right is contingent upon the trading price of the Digital World Class A common stock exceeding 130 %

of the applicable conversion price on at least 3 trading days, whether consecutive or not, within the 15 consecutive trading days ending on the day immediately preceding the day on which a redemption notice is issued by Digital World;

initially drawable for 20 % of the applicable investor’s commitment amount and a final drawdown for the remaining 80 % to occur upon the closing of the Business Combination, with the proceeds of such final drawdown to be deposited into a control account as

indicated by the Company (the “Control Account”).

The proceeds from such final drawdown deposited into the Control Account shall remain therein and may not be withdrawn by the Company until such time as (i) the Company exercises the Redemption

Rights using the proceeds in the Control Account, (ii) any portion of the applicable Convertible Note has been converted, at which time such portion shall be released from the Control Account or (iii) if prior to the conversion, a resale

registration statement of the Company covering all common stock issued pursuant to the Convertible Note has been declared effective by the Commission;

(e) are subject to specified events of default;

and (f) have registration rights pursuant to

the registration rights agreement entered into by the Company and the parties thereto as of September 2, 2021.

addition, pursuant to warrant subscription agreements (each a “Warrant Subscription Agreement”) entered into by and between Digital World and certain institutional investors on February 7, 2024, Digital World has agreed to issue an

aggregate of 3,055,000 warrants (“Post-IPO Warrants”), each warrant entitling the holder thereof to purchase one share of Digital World Class A common stock for $ 11.50 per share.

The Post-IPO Warrants were issued concurrently with the closing of the Business Combination, and have substantially the same terms as the public warrants issued by Digital World in

connection with its initial public offering, except that such Post-IPO Warrants may only be transferred to the applicable holder’s affiliates.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Investors funded $ 10,000.0 of the $ 50,000.0 available under the Note Purchase Agreement before the closing of the merger and $ 40,000.0 immediately after Closing.

The $ 40,000.0 of proceeds

is held in a restricted account and will be released upon satisfaction of certain conditions, including the registration of the underlying shares.

Conversion into Paid in Capital

At the closing of the merger, certain Digital World and TMTG convertible notes were converted into common stock of the Company.

The carrying value of the Digital

World notes converted was $ 8,228.6 and the carrying value of the TMTG notes converted was $ 300,426.0 , including the derivative liability.

The Company determined the automatic discounted share-settlement feature upon certain events (e.g., SPAC, IPO, change in control, etc.) is an embedded derivative

requiring bifurcation accounting as (1) the feature is not clearly and closely related to the debt host and (2) the feature meets the definition of a derivative under ASC 815 (Derivative and Hedging).

Subsequent changes to the fair value of the

embedded derivative flows through the Statement of Operations.

The Debt (net of initial debt discount and any related debt issuance costs recorded) is accreted using the effective interest rate method under ASC 835 (Interest) until maturity.

Convertible Promissory Notes (debt host) are not subject to Subtopic 480-10.

(in thousands)

March 31, 2024

December 31, 2023

Convertible Promissory Notes

Notes 8 to 12

Notes 13 to 20

Notes 21 to 23

Digital World Convertible Notes

Debt Issuance costs

Carrying value of Convertible Promissory Notes

Derivative liability component

Liability component at date of issue

Interest charged

Loss on extinguishment of debt

Total Liability component

Conversion to Paid in Capital

Short-term liability component

Liability component at March 31 , 2024 and December 31, 2023

Embedded feature component

Derivative liability component

Change in fair value of embedded derivative

Total Derivative Liability Component

Conversion to Paid in Capital

Short-term derivative liability component

Derivative Liability Component at March 31 , 2024 and December 31, 2023

The interest charged for the periods is calculated by applying the effective interest rate range of between 16.3 % to 100 %+ to the liability component for the period since the

respective notes were issued.

As of March 31, 2024, our future minimum payment of our note payable in the amount of $ 50,157.8

is due in March 2025.

NOTE 10 - FAIR VALUE MEASUREMENT

The Company uses a three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:

Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Significant other inputs that are directly or indirectly observable in the marketplace.

Significant unobservable inputs which are supported by little or no market activity.

The derivative liability component of Convertible promissory notes are classified as Level 3 due to significant unobservable inputs.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of March 31, 2024

(in thousands)

Quoted prices in

active markets for

identical assets

other observable

Significant unobservable inputs

Current Liabilites

Derivative liability

As of December 31, 2023

(in thousands)

Quoted prices in

active markets for

identical assets

other observable

Significant unobservable inputs

Current Liabilites

Derivative liability

The estimated fair value of the conversion feature of the Derivative liability is based on traditional valuation methods including Black-Scholes option pricing

models and Monte Carlo simulations.

NOTE 11 – LOSS PER SHARE

Basic loss per share is calculated by dividing net income by the weighted average number of shares of stock outstanding during the period.

Diluted loss per share is calculated by dividing net loss by the weighted average number of shares outstanding during the period adjusted for the effect of dilutive potential shares from convertible notes and warrants.

There were no dilutive potential common shares for three months ended March 31, 2024 and 2023, because the Company incurred a net loss and the potential

dilutive shares are anti-dilutive.

As such, basic and diluted losses per common share are the same.

Total common stock equivalents excluded from dilutive loss per share are as follows:

March 31, 2024

March 31, 2023

Convertible notes

Total common stock equivalents excluded from dilutive loss per share

As noted in Note 14, in connection with the litigation initiated by ARC against DWAC in the Delaware Court of Chancery and the Closing of the Business Combination, the Company deposited 4,667,033 shares into an escrow account, to be held until the action concludes.

While in escrow, such shares are generally not considered by the

Company to be issued and outstanding.

For purposes of basic and diluted loss per share (and the table above), these shares are not included until the contingency (litigation) is resolved.

NOTE 12 – STOCKHOLDERS’ EQUITY

At inception, the total number of shares of all classes of capital stock that the Company was authorized to issue was 11,000 shares of Company Stock, each having a par value of $ 0.000001 ,

of which 10,000 shares were issued and outstanding, and an additional 1,000 shares were authorized for issuance in connection with the Company’s Equity Incentive Plan.

In October 2021, the total number of shares of Common Stock authorized was increased to 110,000,000 , each having a par value of $ 0.000001 .

of the Company’s Common Stock, automatically and without any action on the part of the Company or any respective holders thereof, was reclassified into ten thousand ( 10,000 ) shares of the Company’s Common Stock, $ 0.000001 par value per share, resulting in 110,000,000 shares authorized, of which 100,000,000 shares were issued and outstanding , and an additional 7,500,000

shares were authorized for issuance in connection with the Company’s Equity Incentive Plan .

In January 2022, the total number of shares of the Company’s Common Stock authorized was increased to 120,000,000 , each having a par value of $ 0.000001 , of which 100,000,000 shares were issued and outstanding , and an additional 7,500,000 shares were authorized for issuance in connection with the Company’s Equity Incentive Plan .

In January 2024, the total number of shares of the Company’s Common Stock authorized was increased to 1,000,000,000 , each having a par value of $ 0.000001 ,

of which 100,000,000 shares were issued and outstanding.

100,000,000 of the additional authorized but unissued shares were classified as non-voting.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

On March 25, 2024, in connection with the merger, Digital World amended (the second amendment) and restated its certification of

incorporation.

Amoung other matters, Digital World’s name was changed to Trump Media and Technology Group Corp.

Additionally, the Company changed its authorized capital stock to 1,000,000,000 shares, each with a par value of $ 0.0001 per

share, consisting of (a) 999,000,000 shares of common stock and (b) 1,000,000 shares of preferred stock.

NOTE 13 – STOCK BASED COMPENSATION

2024 Equity Incentive Plan

In connection with the Business Combination, TMTG’s Board adopted, and our stockholders approved, the Digital World Acquisition Corp.

Equity Incentive Plan (the “2024 Equity Incentive Plan”), which became effective on March 25, 2024.

The total number of shares of our common stock reserved and available for delivery under the 2024 Equity Incentive Plan at any time during the

term of the 2024 Equity Incentive Plan will be equal to 13,252,544 No activity pursuant to the 2024 Equity Incentive Plan occurred for the three months ended March 31, 2024.

Executive Promissory Notes

In March 2024, we issued unsecured Executive Promissory Notes to certain executives, including each of our Named Executive Officers

(“NEOs”) in an aggregate amount of $ 10,900.0 , as consideration for their service to the Company through the Merger.

The Executive

Promissory Notes bore a zero -coupon interest rate, and became payable at the earlier of September 30, 2024 , an Event of Default, or upon a Change in Control Event.

The Maturity Date of the Executive Promissory Notes could be extended at the sole discretion of

each executive individually for any reason, including for the purpose of allowing the Executive Promissory Notes to convert to stock or other securities upon a Change of Control Event.

Upon a Change of Control Event, the Executive Promissory Notes automatically converted into either (a) shares of common stock at a fixed

conversion price of $ 10.00 per share upon consummating a merger with DWAC, or (b) a share amount equal to the quotient of the

principal amount divided by the price per share based upon the current fair value of the common stock of TMTG, for any other Change of Control Events.

On March 25, 2024, we consummated a merger between DWAC and TMTG at which time the Executive Promissory Notes automatically converted into

an aggregate of 1,090,000 shares of our common stock.

We accounted for the Executive Promissory Notes as a liability award under

ASC 718 as the Executive Promissory Notes could be converted into a variable number of shares upon a Change of Control event and the executives had the sole discretion to extend the Maturity Date which could result in the Company being required

to settle the Executive Promissory Notes in cash.

We remeasured the fair value of the Executive Promissory Notes at their settlement date and recorded stock-based compensation expense for these awards, within general and administration expense

in the Statement of Operations, totaling $ 54,445.5 for the three months ended March 31, 2024.

Vendor Convertible Notes

In March 2024, we issued unsecured convertible notes to certain vendors in exchange for research and development services provided.

Vendor Convertible Notes were issued with an aggregate face value of $ 7,500.0 , bore a zero -coupon interest rate, and had a maturity date in March 2027 .

The Vendor Convertible Notes were automatically convertible in to shares of our common stock upon consummating a merger between DWAC and

TMTG at a conversion price of $ 10.00 per share.

We measured the fair value of these Vendor Convertible Notes on their date of grant

and recorded $ 30,142.5 of stock based compensation expense, within research and development expense in the Statement of Operations

for the three months ended March 31, 2024.

NOTE 14 - COMMITMENTS AND CONTINGENCIES

From time-to-time, we are a party to litigation and subject to claims, suits, regulatory and government investigations, other proceedings and consent decrees in

the ordinary course of business, and other unasserted claims.

We investigate claims as they arise and accrue estimates for resolution of legal and other contingencies when losses are probable and reasonably estimable.

Based on current known

facts and circumstances, the Company currently believes that any liabilities ultimately resulting from ordinary course claims, and proceedings will not individually or in aggregate, have a material adverse effect on the Company’s financial

position, results of operations or cash flows.

However, the outcomes of claims legal proceedings or investigations are inherently unpredictable and subject to uncertainty, and may have an adverse effect on us because of defense costs,

diversion of management resources and other factors that are not known to us or cannot be quantified at this time.

We may also receive unfavorable preliminary or interim rulings in the course of litigation, and there can be no assurances that

favorable final outcomes will be obtained.

The final outcome of any current or future claims or lawsuits could adversely affect our business, financial position, results of operations or cash flows.

We periodically evaluate developments in

our legal matters that could affect the amount of liability that has previously been accrued or the reasonably possible losses that we have disclosed, and make adjustments as appropriate.

In connection with the litigation initiated by ARC against DWAC in the Delaware Court of Chancery (see below) and the Closing of the Business

Combination, the Company deposited 4,667,033 shares into an escrow account, to be held until the action concludes.

While in escrow,

such shares are generally not considered by the Company to be issued and outstanding.

On March 22, 2024, the Chancery Court entered a Scheduling Order setting the case for a single-day trial on June 26, 2024.

Except as indicated below, to the knowledge of our management team, there is no litigation currently pending or contemplated against us or

against any of our property.

We have cooperated with a FINRA inquiry concerning events (specifically, a review of trading) that preceded the public announcement of the

Merger Agreement and the consummation of the Business Combination.

According to FINRA’s request, the inquiry should not be construed as an indication that FINRA has determined that any violations of Nasdaq rules or federal securities laws have

occurred, or as a reflection upon the merits of the securities involved or upon any person who effected transactions in such securities.

Settlement in Principle

As previously disclosed in the Company’s Form 8-K filed with the SEC on July 3, 2023, the Company was the subject of an investigation (the “Investigation”) by the SEC with respect to certain statements, agreements and the timing thereof included in the Company’s registration statements on Form S-1 (the “Form S-1”) in connection with its IPO and Form S-4 relating to the business combination between the Company and TMTG.

On July 3, 2023, the Company reached an agreement in principle (the “Settlement in Principle”) in connection with the Investigation.

The Settlement in

Principle was subject to approval by the SEC.

On July 20, 2023, the SEC approved the Settlement in Principle, announcing settled charges against Digital World and entered a cease-and-desist order (the “Order”) finding that Digital World violated certain antifraud provisions of the Securities Act and the Exchange Act, in connection with Digital World’s IPO filings on Form S-1 and the Form S-4 concerning certain statements, agreements and omissions relating to the timing and discussions Digital World had with TMTG regarding the proposed business combination.

In the Order, Digital World agreed (i) that any amended Form S-4 filed by Digital World will be materially complete and accurate with respect to certain statements, agreements and omissions relating to the timing and discussions that Digital World had with TMTG regarding the proposed business combination and (ii) to pay a civil money penalty in an amount of $ 18 million to the SEC promptly after the closing of any merger or a comparable business combination or transaction, whether with TMTG or any other entity.

The Company recorded an expense related to this matter of $ 8 million and $ 18 million for the three months and nine months ended September 30, 2023.

DIGITAL WORLD ACQUISITION CORP.

NOTES TO FINANCIAL STATEMENTS

Directors’ and Officers’ Insurance Policy

The coverage under the D&O policy is $ 2.5 million in excess of a $ 5.0 million retention.

The Company has submitted a notice of loss related to the above noted DOJ and SEC actions to the insurance company and has begun submitting information to the insurance company.

Based on actual payments made to third parties under the D&O policy, the C

ompany has reduced its liabilities at September 30, 2023 by $ 1 million.

The Company is subject to litigation, disputes and claims in the normal course of its business.

Except as noted above, the Company is not aware of any matters which could be material to the financial statements.

Notice of delisting

On May 23, 2023, the Company received a notice from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) stating that the Company was not in compliance with Nasdaq Listing Rule 5250(c)(1) (the “Rule”) because it had not yet filed its Quarterly Report on Form 10-Q for the quarter ended March 31, 2023 (the “Q1 Form 10-Q”) with the SEC.

The Rule requires listed companies to timely file all required periodic financial reports with the SEC.

Pursuant to Nasdaq rules, on July 24, 2023, the Company submitted to Nasdaq a plan to regain compliance with the Rule.

On August 7, 2023, the Company received a notice from Nasdaq stating that Nasdaq had determined to grant an exception to enable the Company to regain compliance with the Rule and required the Company to file its amended Annual Report on Form 10-K for the year ended December 31, 2022 and its Q1 Form 10-Q, as required by the Rule, on or before November 20, 2023.

On October 30, 2023, the Company filed its amended Annual Report on Form 10-K.

On November 13, 2023, the Company filed its Q1 Form 10-Q.

On August 24, 2023, the Company announced that it received an expected letter from Nasdaq stating that the Company was not in compliance with the Rule because it had not yet filed its Quarterly Report on Form 10-Q for the period ended June 30, 2023 (the “Second Quarter Form 10-Q”) with the SEC.

The Company submitted to Nasdaq an updated compliance plan which required the Company to file its Second Quarter Form 10-Q by November 20, 2023.

On November 13, 2023, the Company filed its Second Quarter Form 10-Q.

STOCKHOLDERS’ DEFICIT

Preferred Stock—The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $ 0.0001 per share with such designation, rights and preferences as may be determined from time to time by the Company’s Board of Directors.

At September 30, 2023 and December 31, 2022, there were no shares of preferred stock issued or outstanding.

Class A Common Stock—The Company is authorized to issue 200,000,000 shares of Class A common stock with a par value of $ 0.0001 per share.

Holders of the Company’s Class A common stock are entitled to one vote for each share.

On September 8, 2021, the Company issued 143,750 shares of Class A common stock (“representative shares”) to the underwriter.

The Company accounts for the representative shares as an expense of the Initial Public Offering resulting in a charge directly to stockholders’ equity, at an estimated fair value of $ 1,437,500 .

At September 30, 2023 and December 31, 2022 , there were 28,715,597 shares of Class A common stock issued and outstanding that are subject to possible redemption, and accordingly, such shares have been classified outside of permanent equity.

At September 30, 2023 and December 31, 2022, there were 1,277,234 shares of Class A common stock included in stockholders’ deficit.

Class B Common Stock—The Company is authorized to issue 10,000,000 shares of Class B common stock with a par value of $ 0.0001 per share.

Holders of the Company’s Class B common stock are entitled to one vote for each share.

On September 2, 2021, the Sponsor surrendered an aggregate of 1,437,500 shares of Class B common stock for cancellation for no consideration.

At March 31, 2023 and December 31, 2022, there were 7,187,500 shares of Class B common stock issued and outstanding, of which 1,650,000 shares were transferred to qualified institutional buyers.

The shares of Class B Common Stock held by the Sponsor, officers and directors of the Company and institutional buyers represent 20 % of the issued and outstanding shares after the Initial Public Offering (assuming those initial stockholders do not purchase any Public Shares in the Initial Public Offering and excluding the Placement Shares).

Shares of Class B common stock will automatically convert into shares of Class A common stock at the time of the initial Business Combination on a one-for-one basis, subject to certain adjustments.

Warrants - The warrants will become exercisable 30 days after the consummation of a Business Combination.

The warrants will expire five years from the consummation of a Business Combination or earlier upon redemption or liquidation.

DIGITAL WORLD ACQUISITION CORP.

NOTES TO FINANCIAL STATEMENTS

The Company will not be obligated to deliver any Class A common stock pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act covering the issuance of Class A common stock issuable upon exercise of the warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration.

No warrant will be exercisable and the Company will not be obligated to issue shares of Class A common stock upon exercise of a warrant unless Class A common stock issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants.

Once the warrants become exercisable, the Company may redeem the warrants:

in whole and not in part;

at a price of $ 0.01 per warrant;

at any time after the warrants become exercisable;

upon not less than 30 days’ prior written notice of redemption to each warrant holder;

if, and only if, the reported last sale price of the Class A common stock equals or exceeds $ 18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, and recapitalizations) for any 20 trading days within a 30 -trading day period commencing at any time after the warrants become exercisable and ending on the third business day prior to the notice of redemption to warrant holders;

if, and only if, there is a current registration statement in effect with respect to the shares of Class A common stock underlying such warrants.

If the Company calls the warrants for redemption, management will have the option to require all holders that wish to exercise the warrants to do so on a “cashless basis,” as described in the warrant agreement.

The exercise price and number of shares of Class A common stock issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation.

However, except as described below, the warrants will not be adjusted for issuance of Class A common stock at a price below its exercise price.

Additionally, in no event will the Company be required to net cash settle the warrants.

If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants.

Accordingly, the warrants may expire worthless.

In addition, if (x) the Company issues additional shares of Class A common stock or equity-linked securities, for capital raising purposes in connection with the closing of a Business Combination at an issue price or effective issue price of less than $ 9.20 per share of Class A common stock (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors, and, in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the sponsor or its affiliates, as applicable, prior to such issuance) (the “Newly Issued Price”), (y) the aggregate gross proceeds from such issuances represent more than 60 % of the total equity proceeds, and interest thereon, available for the funding of a Business Combination on the date of the completion of a Business Combination (net of redemptions), and (z) the volume weighted average trading price of the Company’s Class A common stock during the 20 trading day period starting on the trading day after the day on which the Company completes a Business Combination (such price, the “Market Value”) is below $ 9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115 % of the greater of the Market Value and the Newly Issued Price, and the $ 18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180 % of the greater of the Market Value and the Newly Issued Price.

DIGITAL WORLD ACQUISITION CORP.

NOTES TO FINANCIAL STATEMENTS

SUBSEQUENT EVENTS

In accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued, the Company has evaluated all events or transactions that occurred after September 30, 2023.

Based upon this review the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements, except as noted below.

PIPE terminations

As of November 20, 2023, the Company had received termination notices from certain PIPE Investors, effectively cancelling approximately $

As a result, approximately

$ 525,500,000

remain in PIPE commitments.

The Company expects to continue to seek the termination of or significantly reduce such remaining PIPE commitments.

On October 20, 2023, Robert Lowinger (the “Plaintiff”) filed a complaint against Rocket One Capital, LLC (“Rocket One”), Michael Shvartsman, Bruce Garelick, and the Company in the U.S.

Digital World was the subject of an investigation by the SEC with respect to certain statements, agreements and the timing thereof included in Digital World’s

registration statements on Form S-1 in connection with its IPO and Form S-4 relating to the Business Combination (the “Investigation”).

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

On July 3, 2023, Digital World reached an agreement in principle (the “Settlement in Principle”) in connection with the Investigation.

Settlement in Principle was subject to approval by the SEC.

On July 20, 2023, the SEC approved the Settlement in Principle, announcing it settled its dispute with Digital World and entered an order (the

“Order”) finding that Digital World violated certain antifraud provisions of the Securities Act and the Exchange Act, in connection with Digital World’s IPO filings on Form S-1 and the Form S-4 concerning certain statements, agreements and

omissions relating to the timing and discussions Digital World had with Private TMTG regarding the proposed business combination.

In the Order, Digital World agreed (i) that any amended Form S-4 filed by Digital World would be materially

complete and accurate with respect to certain statements, agreements and omissions relating to the timing and discussions that Digital World had with Private TMTG regarding the proposed business combination and (ii) to pay a civil money penalty

in an amount of $ 18 million to the SEC promptly after the closing of any merger or a comparable business combination or transaction,

whether with Private TMTG or any other entity.

In connection with the consummation of the Business Combination, on March 25, 2024, Digital World paid the $ 18 million civil penalty to the SEC pursuant to the Order.

Section 16 Claim

On October 20, 2023, Robert Lowinger (the “Plaintiff”) filed a complaint against Rocket One Capital, LLC (“Rocket One”), Michael Shvartsman,

Bruce Garelick, and Digital World in the U.S.

District Court for the Southern District of New York.

According to the complaint, the Company has been named as a party in the lawsuit because the Plaintiff is seeking relief for the benefit of the Company.

According to the complaint, Digital World was named as a party in the lawsuit because the Plaintiff is seeking relief for the benefit of Digital

In the complaint, the Plaintiff contends that, in 2021, Mr.

Garelick and Rocket One were directors of the Company and that they purchased securities of the Company.

Garelick and Rocket One were directors of Digital World and that they purchased securities of Digital World.

The Plaintiff further alleges that within a six-month period from the date of their purchases, both Mr.

Garelick and Rocket One sold securities in the Company and realized profits from those sales.

Garelick and Rocket One sold securities in Digital World and realized profits from those

Additionally, the Plaintiff alleges that Mr.

Shvartsman had a financial interest in the profits resulting from Rocket One’s purchases and sales of the Company’s securities.

According to the Plaintiff, under Section 16(b) of the Exchange Act (15 U.S.C.

Shvartsman had a financial interest in the profits resulting from Rocket One’s purchases and sales of Digital World’s securities.

According to the Plaintiff, under Section 16(b) of the

Exchange Act (15 U.S.C.

§78p(b)), Rocket One, Mr.

Shvartsman, and Mr.

Garelick are each required to disgorge certain trading profits to the Company.

As of the date of this report, the Company has not filed a response to the complaint.

Garelick are each required to disgorge certain trading profits to Digital World.

On January 11, 2024, Digital World filed a pre-motion letter with the court, indicating

Digital World’s intention to file a motion to dismiss in relation to the matter.

This pre-motion letter was subsequently endorsed by the court on January 17, 2024.

The court provided a deadline of January 22, 2024 for the Plaintiff to respond

to Digital World’s pre-motion letter.

On March 1, 2024, Digital World filed a motion to dismiss the claims against Digital World.

On March 15, 2024, the Plaintiff filed an

opposition to Digital World’s motion to dismiss.

On March 22, 2024, Digital World filed a reply in support of its motion to dismiss the claims against Digital World.

The case is Lowinger v.

Rocket One Capital, LLC, et al., No.

1:23-cv-9243 (S.D.N.Y.

Convertible Promissory Notes

In November 2023, the Company entered into a total aggregate amount of up to $ 900,000 in Digital World Convertible Notes with a conversion price of $ 8.00 per Working Capital Unit.

The Company expects to use proceeds received from such notes to pay expenses associated with completing its initial business combination.

In November 2023, the Company issued a Digital World Convertible Not

e with a conversion price of $ 10 per Working Capital Unit for a fixed amount of $ 500,000 for payment of services rendered through December 31, 2023.

“Note payable” above.

Litigation with United Atlantic Ventures (“UAV”) in Delaware

On July 30, 2021, an attorney for the Trump Organization, on behalf of President Trump, declared void ab initio a services agreement that had

granted TMTG, among other things, extensive intellectual property and digital media rights related to President Trump for purposes of commercializing the various Private TMTG initiatives (the “Services Agreement”).

Neither Private TMTG nor

Digital World was a party to such agreement.

On each of January 18, 2024 and February 9, 2024, Digital World received letters from counsel to UAV, a party to the Services Agreement.

letters contained certain assertions and enclosed a copy of the Services Agreement that had been declared void two and a half years earlier.

Specifically, counsel for UAV claims that the Services Agreement grants UAV rights to (1) appoint two

directors to TMTG and its successors (i.e., TMTG after the Business Combination), (2) approve or disapprove of the creation of additional TMTG shares or share classes and anti-dilution protection for future issuances, and (3) a $ 1.0 million expense reimbursement claim.

In addition, UAV asserts that the Services Agreement is not void ab initio and claims that certain events

following the July 30, 2021 notification support its assertion that such Services Agreement was not void.

On February 6, 2024, a representative of UAV sent a text message to a representative of a noteholder of TMTG suggesting that UAV might seek to

enjoin the Business Combination.

On February 9, 2024, Private TMTG received from counsel to UAV a letter similar to those letters received by Digital World, which also threatened Private TMTG with legal action regarding UAV’s alleged rights in

Private TMTG, including, if necessary, an action to enjoin consummation of the Business Combination.

On February 28, 2024, UAV filed a verified complaint against Private TMTG in the Chancery Court seeking declaratory and injunctive relief

relating to the authorization, issuance, and ownership of stock in Private TMTG and filed a motion for expedited proceedings.

On March 4, 2024, UAV filed an amended complaint, converting their action from a direct action to a purported

derivative action, and adding members of the Private TMTG board as defendants.

On March 6, 2024, Private TMTG filed an opposition to UAV’s motion to expedite, and UAV filed its response on March 8, 2024.

On March 9, 2024,

the Chancery Court held a hearing to decide UAV’s motion to expedite proceedings.

During the oral argument, Private TMTG agreed that any additional shares of Private TMTG issued prior to or upon the consummation of the Business Combination

would be placed in escrow pending a resolution of the dispute between the parties.

The Chancery Court entered an order consistent with the foregoing on March 15, 2024, and scheduled a status conference for April 1, 2024.

On March 18, 2024,

Private TMTG and the former board filed a motion to dismiss the amended complaint for, among other things, failure to state a claim.

On April 2, 2024, UAV filed a motion for leave to file a second amended complaint together with a motion for preliminary injunction and a

motion for contempt and anti-suit injunction related to Private TMTG’s filing of a separate litigation against UAV and others in Florida state court.

Private TMTG maintains that the contempt claims are meritless.

Additionally, UAV filed a

motion for a case scheduling order seeking to expedite discovery in advance of a hearing scheduled for April 30, 2024.

On April 3, 2024, Defendants (Private TMTG and its former board) filed an opposition to the motion for scheduling order.

April 5, 2024, Defendants filed an opposition to the motion for leave to file a second amended complaint.

On April 8, 2024, Defendants filed a motion to stay discovery and for protective order.

The Chancery Court granted the motion for leave to

file a second amended complaint on April 9, 2024, but the Chancery Court also re-assigned the case to a new judicial officer.

On April 11, 2024, UAV filed its second amended complaint, naming the prior Defendants together with five new defendants—TMTG and the current

directors on the TMTG Board who were not on Private TMTG’s board of directors.

On April 22, 2024, all of the Defendants moved to vacate the Chancery Court’s prior order expediting the matter.

Additionally, all of the

Defendants moved to dismiss the second amended complaint.

Following briefing and oral argument on the motion to vacate, the Chancery Court vacated the prior provisions of the March 15 order expediting the matter.

On May 8, 2024, the Chancery

Court stayed discovery.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

This matter—including Defendants’ Motion to Dismiss and UAV’s Renewed Motion for Contempt—remains pending.

Lawsuit Against ARC and Patrick Orlando

On February 26, 2024, representatives of ARC Global Investments II, LLC (“ARC”) claimed to Digital World that after a “more comprehensive”

review, the conversion ratio for Digital World Class B common stock into Digital World Class A common stock upon the completion of the Business Combination was approximately 1.8 :1.

ARC’s new claim also contradicted the previous assertion by Patrick Orlando, the managing member of ARC, that the conversion ratio was 1.68 :1.

Digital World’s board of directors viewed these claims as an attempt by Mr.

Orlando to secure personal benefits, breaching his fiduciary duty to Digital World and

its shareholders.

Digital World and Private TMTG initiated a lawsuit against ARC (Case No.

192862534) in the Civil Division for the Twelfth Judicial Circuit

Court in Sarasota County, Florida, on February 27, 2024.

The complaint sought a declaratory judgment affirming the appropriate conversion ratio as 1.34 :1,

as previously disclosed, damages for tortious interference with the contractual and business relationship between Private TMTG and Digital World, and damages for conspiracy with unnamed co-conspirators to interfere with the same.

The complaint

also sought damages for Mr.

Orlando’s breach of fiduciary duty, which exposed Digital World to regulatory liability and resulted in an $ 18

million penalty, and for his continuous obstruction of Digital World’s merger with Private TMTG to extort various concessions that benefited only him and harmed Digital World and its shareholders.

Furthermore, the complaint sought damages for

the wrongful assertion of dominion over Digital World’s assets inconsistent with Digital World’s possessory rights over those assets.

On March 8, 2024, Digital World voluntarily dismissed its declaratory judgment claim against ARC.

2024, Digital World and Private TMTG filed an amended complaint, adding a claim for violation of Florida’s Deceptive and Unfair Trade Practices Act.

Digital World further alleged breach of fiduciary duty of loyalty, breach of fiduciary duty of

care, and conversion claims against Mr.

With respect to ARC, Digital World alleged aiding and abetting a breach of fiduciary duty.

Defendants ARC and Mr.

Orlando filed motions to dismiss the amended complaint and stay discovery in the

action on April 3, 2024.

No hearing has been set on the motions, and a case management conference is scheduled for June 17, 2024.

On the afternoon of February 28, 2024, ARC’s registered agent in Wilmington, Delaware, and Mr.

Orlando were served with the complaint filed by

Digital World and Private TMTG.

Later that day, ARC’s counsel electronically mailed Digital World’s counsel a lawsuit, filed in the Court of Chancery of the State of Delaware, alleging an impending violation of the Digital World Charter for

failure to commit to issue the number of conversion shares to ARC that ARC claims it is owed upon the consummation of the Business Combination (the “Delaware Lawsuit”).

The complaint claims a new conversion ratio of 1.78 :1 and seeks specific performance and damages for the alleged breach of the Digital World Charter, a declaratory judgment that the certain

derivative securities of Digital World should be included in the calculation of the conversion ratio, a finding that the directors of Digital World breached their fiduciary duties, and a preliminary injunction to enjoin the Business Combination

until Digital World “corrected” the conversion ratio.

We do not believe ARC’s 1.78 :1

conversion ratio and related claims are supported by the terms of the Digital World Charter.

As a result, we intend to vigorously defend Digital World’s calculation of the conversion ratio and related rights.

In addition to its complaint filed

on February 28, 2024, ARC also filed a motion with the Chancery Court requesting that the case schedule be expedited to enable the Chancery Court to conduct an injunction hearing prior to the March 22, 2024 shareholder vote.

On March 3, 2024,

Digital World filed an opposition to ARC’s motion to expedite, and ARC filed a reply on March 4, 2024.

On March 5, 2024, the Chancery Court conducted a hearing to consider ARC’s request to expedite the case schedule.

After hearing arguments

from both sides, the Vice Chancellor denied ARC’s motion, stating that the court would not conduct a merits or injunction hearing before March 22, 2024.

Consequently, the Vice Chancellor also denied ARC’s request to postpone the vote until

after a merits hearing.

The Chancery Court ruled that Digital World’s proposal to deposit disputed shares into an escrow account at the close of the Business

Combination was adequate to prevent potential irreparable harm related to ARC’s share conversion.

The court also found that Digital World’s public disclosures about ARC’s claims and possible conversion scenarios at the close of the Business

Combination further mitigated the risk of irreparable harm due to insufficient disclosure for the March 22, 2024 vote.

In its ruling, the Chancery Court ordered ARC and Digital World to propose a schedule by March 8, 2024, for resolving the

action within 150 days following the Business Combination.

The court also asked the parties to provide a stipulation by March 8,

2024, regarding ARC’s ability to maintain standing over its claim after voting in favor of the Business Combination.

The court further requested the parties to agree to the creation of an escrow account for the deposit of disputed shares after

the Business Combination, to be held until the action concludes.

Lastly, the court asked Digital World’s counsel to submit a letter by March 8, 2024, outlining how this litigation will proceed alongside the Florida litigation filed by Digital

World on February 27, 2024, in the Circuit Court of Sarasota County, Florida.

On March 8, 2024, Digital World submitted a letter to the Chancery Court, stating that it voluntarily had dismissed its claim for declaratory judgment in the Circuit

Court of Sarasota County, Florida.

On March 22, 2024, the Chancery Court entered a Scheduling Order setting the case for a single-day trial on June 26, 2024.

Discovery is ongoing.

In relation to the Delaware Lawsuit, Digital World notified its shareholders on March 14, 2024, of its intention to apply a conversion ratio

to all Digital World Class B common stock shares to ensure that ARC and the Non-ARC Class B Shareholders receive an equal number of common stock shares in the Company per share of Digital World Class B common stock.

Accordingly, on March 21,

2024, Digital World entered into the Disputed Shares Escrow Agreements with the Escrow Agent, pursuant to which TMTG deposited into escrow the number of shares of TMTG Common Stock representing the difference between the actual conversion

ratio, determined by Digital World’s board of directors upon closing of the Business Combination (which was determined to be 1.348 :1),

and a conversion ratio of 2.00 .

Any release of shares is subject to the terms and conditions of the Disputed Shares Escrow

The ultimate resolution as to whether none, a portion or all of the disputed conversion shares will be issued is not determinable at this

As a general matter, the pursuit of the claims may be costly and time consuming and could have a material adverse effect on TMTG’s reputation and its existing stockholders and may result in counterclaims.

Litigation With Patrick Orlando in Delaware

On March 15, 2024, Plaintiff Patrick Orlando brought a lawsuit against Digital World in the Chancery Court seeking advancement of legal fees

associated with Mr.

Orlando’s involvement in civil litigation against Digital World in Florida and certain other matters (the “Advancement Lawsuit”).

Orlando’s allegations relate to certain provisions in the Digital World Charter, Digital

World’s bylaws, and an indemnity agreement allegedly entered into between Mr.

Orlando and Digital World.

Orlando alleges that those certain provisions require Digital World to pay the legal fees Mr.

Orlando incurred and will incur in

connection with legal proceedings in which he is involved by reason of the fact that he is or was a director or officer of Digital World.

Orlando seeks a court order that (i) declares that he is entitled to legal fees for certain

proceedings described in the complaint, (ii) requires Digital World to pay for legal fees incurred and future legal fees to be incurred for those proceedings, (iii) requires Digital World to pay the fees incurred to bring the Advancement

Lawsuit, and (iv) requires Digital World to pay pre- and post-judgment interest on the amounts owed to Mr.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

On April 3, 2024, the Chancery Court entered a Stipulation and Advancement Order (“Stipulation”), stating that Mr.

Orlando is entitled to

advancement of attorneys’ fees and costs incurred with legal proceedings described in the Stipulation, subject to Digital World’s right to challenge the reasonableness of those attorneys’ fees and costs.

The Stipulation further states that Mr.

Orlando is entitled to fees incurred in connection with enforcement of advancement rights and sets forth procedures that will govern future requests for advancement of attorneys’ fees and costs.

As of May, 10, 2024, TMTG had paid or agreed to

pay a total of $ 235.1 thousand to Mr.

Orlando’s attorneys pursuant to such Stipulation.

On April 23, 2024, Mr.

Orlando filed a motion for leave to supplement the Advancement Lawsuit to add a claim for advancement of legal fees and

Orlando has incurred and will incur in connection with his defense of an action for declaratory judgment brought by members of ARC regarding Mr.

Orlando’s removal as the managing member of ARC.

Orlando also seeks reimbursement

for the legal fees and expenses incurred in connection with his supplement to the Advancement Lawsuit, and he seeks pre-judgment and post-judgment interest on the amounts he claims are owed to him.

Lawsuit Against ARC in New York

On March 19, 2024, Plaintiff Digital World filed a lawsuit against ARC in New York state court alleging breach of contract and seeking

injunctive relief.

Digital World’s claims related to an agreement between Digital World and ARC entered into in September 2021 (the “Letter Agreement”), whereby ARC promised to vote in favor of any merger agreement presented to Digital World

shareholders for a vote.

Digital World alleged that it presented a merger agreement to its shareholders, but ARC withheld its vote in favor of the merger in advance of the March 22, 2024 shareholder vote.

Digital World’s suit requested that the

court declare ARC’s obligation to vote its shares in favor of the merger, per the Letter Agreement, and an order compelling ARC to specifically perform its obligations under the Letter Agreement.

Digital World also sought an award of

consequential damages for breach of contract.

On March 22, 2024, Digital World voluntarily discontinued its action without prejudice after ARC cast its vote in favor of the Business Combination at the Special Meeting.

Lawsuit Against UAV, Litinksy, Moss, and Orlando in Florida

On March 24, 2024, Private TMTG filed a lawsuit in the Circuit Court of the Twelfth Judicial Circuit for Sarasota County, Florida (Case No.

2024 CA 001545 NC) against UAV, Andrew Litinsky, Wesley Moss, and Patrick Orlando.

In view of UAV’s repeated demands concerning its alleged stock ownership and director appointment rights, the complaint alleges claims for a declaratory judgment

against UAV determining that the Services Agreement is unenforceable against Private TMTG.

The complaint also asserts a claim for unjust enrichment against UAV based on its failure to competently provide services to the company.

complaint asserts claims for damages for (a) breach of the fiduciary duty of loyalty against Mr.

Litinsky and Mr.

Moss based on their dealings with Orlando, (b) aiding and abetting and conspiracy to breach fiduciary duty against Mr.

based on the same events, and (c) breach of the fiduciary duty of care against Mr.

Litinsky and Mr.

Moss for their gross negligence in managing the company.

On April 25, 2024, Private TMTG filed a motion to consolidate this lawsuit with the Lawsuit Against ARC and Patrick Orlando in Sarasota

County, Florida described above for purposes of discovery and pretrial proceedings.

That motion is currently pending before the court, as is Mr.

Litinsky, and UAV’s motion to stay proceedings—which is set for a hearing on June 5,

Litigation with Orlando and Benessere in Miami, Florida

On April 2, 2024, Patrick Orlando and Benessere Investment Group, LLC filed suit against TMTG in the Circuit Court of the Eleventh Judicial

District in Miami-Dade County, Florida.

Orlando and Benessere seek a declaratory judgment that TMTG is restricted from disclosing material exchanged with Orlando and Benessere pursuant to a joint defense agreement previously entered into by the

Parties in addition to a request for damages for any breach of the joint defense agreement.

Also on April 2, 2024, Orlando and Benessere filed a motion for preliminary injunction for enforcement of the joint defense agreement.

2024, the motion for preliminary injunction had not been set for hearing.

Litigation with ARC Noteholders in Miami, Florida

On May 8, 2024, a group of ARC noteholders (Edwin B.

Tucker et al.) filed suit against ARC and DWAC n/k/a TMTG in the Circuit Court of the

Eleventh Judicial District in Miami-Dade County, Florida.

The noteholders seek specific performance and compensatory damages from both defendants or, in the alternative, damages for breach of contract from ARC, in connection with shares of

TMTG to which the ARC noteholders assert they are entitled.

As of May 10, 2024, TMTG had not been served in this action.

NOTE 15 – SUBSEQUENT EVENTS

On April 15, 2024, TMTG filed a registration statement on form S-1, which, as of May 20, 2024, had not yet been declared effective and remained subject to

amendment and completion.

On April 16, 2024, TMTG announced that it had finished the research and development phase of its new live TV streaming platform and would begin scaling up its own

content delivery network.

On May 16 and 17, 2024, respectively, the Company signed agreements to obtain data center services and purchase servers and related equipment for the project.

On April 26, 2024, in accordance with the terms of the Merger Agreement, the Company officially determined that 40,000,000 Earnout Shares had been earned, after which such shares were issued.

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-Q

Item 1. Financial Statements