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Item 1. Financial Statements

2024-11-05 compared with 2024-08-09 · 497 added, 1300 removed, 690 unchanged (72% of the section changed)

1 unchanged sentence

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Sheets as of June 30, 2024 and December 31, 2023 and Statements of Operations, Stockholders’ (Deficit)/Equity and Cash Flows for the three and six months ending June 30 th , 2024 and June 30 th , 2023

Sheets as of September 30, 2024 and December 31, 2023 and Statements of Operations, Stockholders’ (Deficit)/Equity and Cash Flows for the three and nine months ending September 30 th , 2024 and September 30 th , 2023

TRUMP MEDIA & TECHNOLOGY GROUP CORP.

7 unchanged sentences

(in thousands except share data)

June 30, 2024

September 30, 2024

December 31, 2023

1 unchanged sentence

Cash and cash equivalents

Short-term investments

Prepaid expenses and other current assets

2 unchanged sentences

Property and equipment, net

Intangible asset, net

Right-of-Use Assets, net

6 unchanged sentences

Unearned revenue

Current portion of long-term debt

Current portion of operating lease liability

1 unchanged sentence

Long-term operating lease liability

Long-term debt - Other

Convertible promissory notes

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

shares issued and outstanding at June 30 , 2024 and December 31 , 2023

shares issued and outstanding at September 30 , 2024 and December 31 , 2023

Common Stock $ 0.0001 par value – 999,000,000 shares authorized, 214,389,622

and 87,500,000 shares issued and outstanding at June 30 , 2024 and December 31 , 2023

and 87,500,000 shares issued and outstanding at September 30 , 2024 and December 31 , 2023

Paid in Capital

Treasury Stock

Accumulated Deficit

6 unchanged sentences

(in thousands except share and per share data)

Cost of revenue

September 30,

Operating costs and expenses (1)

Cost of revenue

Research and development

1 unchanged sentence

General and administration

Depreciation and amortization

Total costs and operating expenses

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Change in fair value of derivative liabilities

Loss on the convertion of convertible debt

Loss on the conversion of convertible debt

Loss from operations before income taxes

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

(1) Costs of operating expenses include

stock based compensation expense as follows:

(1) Costs of operating expenses include stock-based compensation

expense as follows:

Research and development

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Number of Shares

Preferred Stock

Treasury Stock

Number of Shares

Treasury Stock

Paid in Capital

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Retroactive application of recapitalization to January 1, 2023

Net Profit/(Loss)

Balance at March 31, 2023

Net Profit/(Loss)

Balance at June 30, 2023

Balance at September 30, 2023

Balance as December 31, 2023

1 unchanged sentence

( 2,477,550.2

Conversion of convertible notes into common stock upon Business Combination

Conversion of convertible notes upon reverse capitalization

Stock Based Compensation

Issuance of common stock upon Business Combination

Issuance of common stock upon reverse capitalization

Balance as of March 31, 2024

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( 2,888,288.6

Exercise of warrants

Common stock issued for cash

Acquisition of WCT, net of offering costs

Issuance of common stock for services

Treasury stock

Common stock for ARC settlement

Balance at September 30, 2024

( 2,907,537.0

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

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Condensed Consolidated Statements of Cash Flows

Six Month Periods Ended

Nine Month Periods Ended

(in thousands)

June 30, 2024

June 30, 2023

September 30,

Cash flows from operating activities

2 unchanged sentences

Change in fair value of derivative liability

Depreciation and amortization

Loss on extinguishment of debt

Stock based compensation

Non-cash charge for operating lease

Operating lease amortization

Prepaid expenses and other current assets

1 unchanged sentence

Unearned revenue

Accounts payable

Accounts payable and operating lease liabilities

Net cash used in operating activities

1 unchanged sentence

Purchases of property and equipment

Purchase of intangible asset

Purchase of short-term investments

Net cash used in investing activities

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Proceeds from merger

Proceeds from warrant conversion

Repurchase of Common Stock

Proceeds from the issuance of Common Stock

Proceeds from the exercise of Warrants

Net cash provided by financing activities

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Cash paid for taxes

Non cash investing and financing activities

Noncash investing and financing activities

Shares issued for conversion of convertible notes

Operating lease assets obtained in exchange for operating lease obligations

Common Stock issued for business combination

Common Stock Issued for underwriter fees

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

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Reclassifications

In the third quarter of 2024, we revised the presentation

of our statement of operations to reclassify cost of revenue as a component of operating cost and expenses, and resulted in our gross profit no longer being presented within the statement of operations.

We revised the presentation of the

statement of operations to reflect changes in the way we manage and evaluate our business due to our launch of content streaming on Truth+.

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

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Use of Estimates

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

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, the fair value of assets acquired and liabilities assumed in business acquisitions, the assessment of recoverability of our goodwill and long-lived assets, and the reported amounts of revenues and expenses during the reporting

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, derivative liabilities, earn-out shares and stock-based compensation.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS (Continued)

promissory notes, derivative liabilities, recoverability of goodwill and intangibles, fair value of short-term investments, useful lives of property and equipment, earn-out shares and stock-based compensation.

Principles of Consolidation

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No losses were incurred for those balances exceeding the limitations.

Short-term investments

Our policy for short-term investments is to establish a high-quality portfolio that preserves principal, meets liquidity needs, avoids inappropriate concentrations and

delivers an appropriate yield in relationship to our investment guidelines and market conditions.

We utilize a repurchase agreement, which is used to purchase United States Treasury Bills from a third party seller, which are accounted for as

secured borrowings under which the seller pledges its securities as collateral to secure a loan from us, which is equal in value to the estimated fair value of the pledged collateral.

The seller retains beneficial ownership of the pledged

At the maturity of the repurchase agreement, the seller is required to repay the loan plus accrued interest and concurrently receives back its pledged collateral from us.

We may renew the agreement at the then prevailing financing rate

for the same or other securities.

We may be required to transfer additional cash in the event the fair value of the collateral pledged exceeds the loan balance.

Our repurchase agreement is based the September 1996 version of the Bond Market

Association Master Repurchase Agreement, which generally provides that the lender, as buyer, is responsible for obtaining collateral valuations from a generally recognized source agreed to by both the Company and the seller, or, in an instance when

such source is not available, the value determination is made by the lender.

Our repurchase agreement is expected to range from 1 to

3 days in duration and the purchase price will be equal to the repurchase price, reducing our exposure to significant market fluctuations

and other variables that may result in decline of the fair value of the securities purchased.

We intend to renew our repurchase agreement immediately upon the termination of the preceding repurchase agreement to increase our potential to generate

interest income.

The repurchase agreement is reported at the unpaid balance, net of any allowance for expected losses.

No expected credit losses were recorded as of September 30, 2024.

Prepaid expenses and other current assets

Other current assets consist of receivables for proceeds from warrant exercises, prepaid rent,

insurance and prepaid data costs.

Included in the prepaid expenses and other current assets are receivables related to warrant conversion of $ 3,956.9

as of June 30, 2024 and $0.

0 as of June 30, 2023.

This balance reflects proceeds from warrant exercises in transit from the transfer

Other current assets

consist of receivables for proceeds from warrant exercises, deferred cost associated with the issuance of our common stock, prepaid rent, insurance and prepaid data costs.

Prepaid and deferred costs are amortized proportionally to their

utilization in our operations.

Property and equipment

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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

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

See Note 5 - Property and equipment for further detail.

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

A dditionally, we acquired capitalized software through the business acquisition (see Note 4,

Business Acquisition) .

Goodwill and other intangible assets

We make estimates, assumptions and judgments when valuing goodwill and other intangible assets in connection with the initial purchase price allocation of business

acquisitions, as well as when evaluating the recoverability of our goodwill and other intangible assets on an ongoing basis.

We assess our goodwill and indefinite-lived intangible assets for impairment at least annually during the fourth

We will also perform an assessment at other times if and when events or changes in circumstances indicate the carrying value of these assets may not be recoverable.

We perform our impairment assessment based on qualitative analysis, which includes considering various factors including macroeconomic conditions and our historical

and projected operating results.

If, based on our qualitative analysis, we were to determine it is more-likely-than-not the fair value of one of our reporting units is less than its carrying amount, a quantitative impairment test would be performed

to determine if an impairment loss should be recorded.

As of September 30, 2024, we believe such assets are recoverable;

however, there can be no assurance these assets will not be impaired in future periods.

impairment charges could adversely impact our results of operations.

For the three and nine months ended September 30, 2024 we recognized $ 501.7 of

amortization expense on our intangible asset .

Revenue recognition

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milestone-based installments.

Unearned revenue of $ 1,488.5 was recognized as revenue for the six months ended June 30, 2024, which was

included in the deferred revenue balance as of December 31, 2023.

As June 30, 2024, deferred revenue is expected to be recognized during the succeeding 12 -month

period and is therefore presented as current liability on the unaudited condensed balance sheet.

Unearned revenue of $ 2,453.5 was recognized as revenue for the nine months ended September 30, 2024, which

was included in the deferred revenue balance as of December 31, 2023.

As September 30, 2024, deferred revenue is expected to be recognized during the succeeding 12 -month period and is therefore presented as current liability on the unaudited condensed balance sheet.

Cost of revenue

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

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.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS (Continued)

Cost of revenue

primarily encompasses expenses associated with generating advertising revenue and direct costs associated with the acquisition and licensing of content, and streaming delivery cost of our content delivery network, excluding depreciation and

amortization expense.

Research and development

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

Business combinations

We include the results of operations of acquired businesses

as of the respective acquisition dates.

Purchase price is allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values, with the excess recorded as goodwill.

If applicable, we estimate the

fair value of contingent consideration payments in determining the purchase price.

Measurement period adjustments to provisional purchase price allocations are recognized in the period in which they are determined, with the effect on earnings of

changes in depreciation, amortization or other income resulting from such changes calculated as if the accounting had been completed at the acquisition date.

Contingent consideration is adjusted to fair value in subsequent periods as an increase or

decrease in general and administration expenses.

Acquisition-related costs are expensed as incurred.

Commitments and contingencies

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effect on the Company’s unaudited condensed consolidated financial statements.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS (Continued)

NOTE 3 - RECAPITALIZATION

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

statements of cash flows and the condensed consolidated statements of changes in stockholders’ equity (deficit) for the period ended June 30, 2024:

statements of cash flows and the condensed consolidated statements of changes in stockholders’ equity (deficit) for the period ended September 30, 2024:

Cash-trust and cash, net of redemptions

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The Company recorded $ 5,530.0 and $ 600.0 in

general and administration expense and sales and marketing expense, respectively, for the three and six months ended June 30, 2024.

general and administration expense and sales and marketing expense, respectively, for the three and nine months ended September 30, 2024.

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

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Includes 614,640 shares outstanding and held in escrow.

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

Excludes 1,024,517 additional shares issued to former Digital World Class B shareholders in connection with a court order in September 2024.

The number of Predecessor TMTG shares was determined as follows:

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

NOTES TO CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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

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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 were appropriately classified in equity.

Therefore, the Earnout Share arrangement was 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

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On April 26, 2024, the Earnout Shares had been earned and such shares were issued.

NOTE 4 – BUSINESS ACQUISITION

Acquisition of World Connect Technologies, LLC

On August 9, 2024, we completed the acquisition of substantially all of the assets and liabilities of WorldConnect Technologies, LLC (“WCT”), which included the source

code, an option agreement dated February 5, 2024, by and between WCT, Perception Group, Inc., Perception TVCDN Ltd., and FORA FOrum RAčunalništva, d.o.o., as amended and restated (each of the parties

thereto other than WCT, collectively, “Perception”), as well as agreements related to the source code purchase and support and maintenance.

We incurred $ 942.6

in non-recurring transaction costs in connection with the acquisition, which were recogni zed within general and administration expense.

We believe the acquisition will allow us to provide ultra-fast streaming technology powered through

our custom-designed, multi-site CDN using our own servers, routers, and software stack, created with the goal of rendering the service uncancellable by Big Tech.

We funded the acquisition in exchange for an estimated aggregate consideration of up to $ 132,171.0 , consisting of:

2,600,000 newly-issued shares of our common stock, equal in

value to $ 68,146.0 at our common stock’s closing price on August 9, 2024.

Contingent consideration upon achieving operational milestones related to the opening of future data centers, as set forth in the Asset Acquisition Agreement, an estimated 2,442,770 newly-issued shares of our common stock, equal in value to $ 64,025.0 at our common stock’s closing price on August 9, 2024.

Each milestone is accounted for as a separate unit of account and the common stock to be issued meets

the criteria for equity classification pursuant to ASC 815.

Assumption of a $ 17,500.0 liability payable over three years to Perception for the exercise of the Source Code Purchase Agreement, with an estimated net present value of $ 16,313.2 .

$ 7,000.0 of the

assumed liability was paid upon closing.

We estimated 57,230 newly-issued

shares of our common stock will be issued to WCT pursuant to achieving operational milestones related to the opening of future data centers, which are compensatory in nature due to project management services WCT is providing related to opening our

future data centers outside the scope of our written agreement with them.

The estimated allocation of shares as compensation was based upon the estimated fair value of services to be provided divided by the closing price of our common stock on

August 9, 2024.

Compensation expense related to these shares will be recorded at the fair value of the common stock when the milestones are achieved.

The following table summarizes the preliminary estimated fair values of the WCT assets acquired and liabilities assumed:

Fair value of assets acquired:

Intangible asset, net

Amount attributable to assets acquired

Fair value of liability assumed:

Amount attributable to liability assumed

Total purchase price

The goodwill consists largely of the expected cash flows and future growth anticipated for the Company from acquiring the assets.

The goodwill is deductible for tax

Preliminary valuation of intangible assets was valued using the cost approach, which estimates value by determining the current cost of replacing an asset with another

of equivalent utility.

The cost to replace a given asset reflects the estimated reproduction or replacement cost for the acquired asset.

No preliminary fair value has been assigned to other intangible assets that may have been acquired through

the other agreements.

The entire preliminary valuation of intangible assets was assigned to purchased software and has an estimated amortization period of 5 years .

The determination of fair value requires considerable judgment and is sensitive to changes in the underlying assumptions.

Our estimates are preliminary and subject to

adjustment, which may result in material changes to the final valuation.

During the measurement period, which will not exceed one year from closing, we will continue to obtain information to assist us in finalizing the acquisition date fair

Any qualifying changes to our preliminary estimates will be recorded as adjustments to the respective assets and liabilities, with any residual amounts allocated to goodwill.

Pro forma financial information is not presented because the acquisition was not material to our financial statements pursuant to Rule 3-05 of Regulation S-X.

As of September 30, 2024, $ 9,433.5 of the assumed debt

remained outstanding and for the three and nine-months ended September 30, 2024, $ 120.2 of interest expense was accreted.

NOTE 5 - PROPERTY AND EQUIPMENT

1 unchanged sentence

(in thousands)

June 30, 2024

September 30, 2024

December 31, 2023

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Computer equipment

Computer equipment - work in progress

Accumulated depreciation

1 unchanged sentence

Total depreciation expense was $ 260.6

and $ 16.8 for the three months ended June 30, 2024 and 2023, respectively.

Total depreciation expense was $ 9.3 and $ 33.3 for the six months

ended June 30, 2024 and 2023, respectively

and $ 14.7 for the three months ended September 30, 2024 and 2023, respectively.

Total depreciation expense was $ 269.8 and $ 48.3 for the nine months

ended September 30, 2024 and 2023, respectively.

NOTE 6 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES

1 unchanged sentence

(in thousands)

June 30, 2024

September 30, 2024

December 31, 2023

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Classification

June 30, 2024

September 30, 2024

December 31, 2023

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Total lease liabilities

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

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

Three Month Period Ended

(in thousands)

June 30, 2024

June 30, 2023

September 30, 2024

September 30, 2023

Operating lease costs

1 unchanged sentence

Total lease costs

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (Continued)

Six Month Period Ended

Nine Month Period Ended

(in thousands)

June 30, 2024

June 30, 2023

September 30, 2024

September 30, 2023

Operating lease costs

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Total lease costs

Future minimum payments under non-cancelable leases for operating leases for the remaining terms of the leases following June 30, 2024 were as follows:

Future minimum payments under

non-cancellable leases for operating leases for the remaining terms of the leases following September 30, 2024 were as follows:

(in thousands)

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NOTE 8 - INCOME TAXES

The estimated annual effective tax rate applied to the six month period ended June 30, 2024 is 0 %, which differs from the US federal statutory rate of 21 %

principally due to the projection of U.S.

The estimated annual effective tax rate applied to the nine month period ended September 30, 2024 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 June 30, 2024, TMTG had US Federal net operating loss carryforwards (“NOLs”) with a tax benefit of approximately

$ 9,400.0 from December 31, 2023.

As of September 30, 2024, TMTG had US Federal net

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

NOTE 9 - OTHER INCOME - RELATED PARTY, RELATED PARTY RECEIVABLE AND PAYABLE

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per month for these services.

The agreement with the Sponsor was terminated on April 5, 2023, $ 221.0 was unpaid as of June 30, 2024.

The agreement with the Sponsor was terminated on April 5, 2023, $ 221.0 was unpaid as of September 30,

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 June 30, 2024, the Company’s obligation to the Sponsor for such payments was outstanding in the amount of $ 41.0 .

As of September 30, 2024, the Company’s obligation to the Sponsor for such payments was outstanding in the amount of $ 41.0 .

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

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the consulting relationship was terminated by Private TMTG effective March 25, 2024, upon the Closing of the Business Combination.

During the three months ended June 30, 2024 and 2023, TMTG paid $ 8.3 and $ 30.5 , respectively, and during the six months

ended June 30, 2024 and 2023 paid $ 38.3 and $ 70.5 , respectively, to Trishul.

As of June 30, 2024 and December 31, 2023, TMTG had an outstanding payable balance of zero to Trishul.

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.

During the three months ended September 30, 2024 and 2023, TMTG paid $ 0.0 and $ 31.1 , respectively, and during the nine months

ended September 30, 2024 and 2023 paid $ 38.3 and $ 101.7 , respectively, to Trishul.

As of September 30, 2024 and December 31, 2023, TMTG had an outstanding payable balance of zero to Trishul.

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 June 30, 2024 and 2023, we paid $ 60.0 and $ 60.0 , respectively, and for the six months ended

June 30, 2024, we paid $ 120.0 and $ 120.0 ,

respectively, to Hudson Digital.

As of June 30, 2024 and December 31, 2023, TMTG had an outstanding payable balances of zero

to Hudson Digital.

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

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 September 30, 2024 and 2023, we paid $ 60.0 and $ 60.0 , respectively, and for the nine months ended September 30, 2024 and 2023, we paid $ 780.0 and $ 180.0 , respectively, to Hudson Digital.

As of September 30,

2024 and December 31, 2023, TMTG had outstanding payable balances of zero to Hudson Digital.

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.

In June 2024, in connection with a company event, TMTG paid $ 78.2 to Mar-a-Lago Club LLC, which is owned by the Donald J.

In June 2024, in connection with a company event, TMTG paid $ 78.2

to Mar-a-Lago Club LLC, which is owned by the Donald J.

Trump Revocable Trust, dated April 7, 2014.

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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

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (Continued)

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.

(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:

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

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shares of TMTG common stock.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (Continued)

Conversion into Paid in Capital

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(in thousands)

June 30, 2024

September 30, 2024

December 31, 2023

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Short-term liability component

Liability component at June 30 , 2024 and December 31, 2023

Liability component at September 30 , 2024 and December 31, 2023

Embedded feature component

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Short-term derivative liability component

Derivative Liability Component at June 30 , 2024 and December 31, 2023

Derivative Liability Component at September 30 , 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

1 unchanged sentence

NOTE 11 - FAIR VALUE MEASUREMENT

Fair value is defined as an exit price, representing the amount that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction

between market participants.

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

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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.

Company had no assets or liabilities requiring classification as of June 30, 2024.

As of September 30, 2024

(in thousands)

Quoted prices in

active markets for

identical assets

other observable

Significant unobservable inputs

Repurchase agreement

Total assets measured at fair value

As of December 31, 2023

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Significant unobservable inputs

Current Liabilites

Current Liabilities

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.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (Continued)

Total liabilities measured at fair value

fair value of the repurchase agreement is based on quoted market prices of the counter-party collateral.

Our repurchase agreement exposes us to credit risk and is collateralized by U.S.

Treasury Bills.

We have not experienced any material

losses related to these securities.

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.

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

NOTE 12 - LOSS PER SHARE

1 unchanged sentence

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 the three and six months ended June 30, 2024 and 2023, because the Company incurred a net loss and the

There were no dilutive potential common shares for the three and nine months ended September 30, 2024 and 2023, because the Company incurred a net loss and the

potential dilutive shares are anti-dilutive.

1 unchanged sentence

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

June 30, 2024

September 30, 2024

December 31, 2023

1 unchanged sentence

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 13 – STOCKHOLDERS’ EQUITY

11 unchanged sentences

incorporation.

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

Among 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.

On July 3, 2024, the Company entered into the Standby Equity Purchase

Agreement (“ SEPA ”) with YA II PN, LTD., a Cayman Islands exempt limited

partnership (“ Yorkville ”).

Pursuant to the SEPA, the Company shall have the

right, but not the obligation, to sell to Yorkville up to $ 2,500,000.0 of its Common Stock, subject to certain limitations and

conditions set forth in the SEPA, from time to time during the term of the SEPA.

As consideration for Yorkville’s commitment to purchase shares at the Company’s direction upon the terms and subject to the conditions set forth in the SEPA,

on July 3, 2024 the Company agreed to pay YA Global II SPV, LLC, a subsidiary of Yorkville, (i) a structuring fee in the amount of $ 25.0

and (ii) a commitment fee in the form of 200,000 shares of Common Stock (the “ Commitment Shares ”).

The Company also issued to EF Hutton LLC 125,000 shares of Common Stock as consideration for acting as placement agent (the “ Placement

Agent Shares ”).

During the quarter ended September 30, 2024, Yorkville purchased 17,330,365 shares of Common Stock for prices between $ 14.31 and $ 36.13 per share, pursuant to the terms of the SEPA.

Proceeds of these equity sales under the terms of the SEPA were approximately $ 339,463.1 for the nine months ended September 30, 2024.

On August 22, 2024, our Board authorized the repurchase of an aggregate of 128,138 shares of our common stock from certain executive officers at the prevailing market price of $ 22.70

per share, for an aggregate purchase price of $ 2,908.7 .

As consideration for the repurchase, we remitted $ 2,908.7 to the U.S.

Internal Revenue Service and certain state taxing authorities in connection with share-based compensation awards.

Warrant Activity Summary – Issued and Outstanding

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Expired or cancelled

Outstanding at June 30, 2024

Exercisable at June 30, 2024

Outstanding at September 30, 2024

Exercisable at September 30, 2024

NOTE 14 - STOCK BASED COMPENSATION

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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 six months ended June 30, 2024.

No activity pursuant to the 2024 Equity Incentive Plan occurred for the nine months ended September 30, 2024.

Executive Promissory Notes

3 unchanged sentences

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

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (Continued)

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.

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

7 unchanged sentences

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 six months ended June, 2024.

in the Statement of Operations, totaling $ 54,445.5 for the nine months ended September, 2024.

Vendor Convertible Notes

5 unchanged sentences

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

for the six months ended June 30, 2024.

for the nine months ended September 30, 2024.

WCT Acquisition

We estimated 57,230 of the 2,600,000 newly-issued shares of our common stock that will be issued to WCT pursuant to achieving operational milestones related to the opening of future data centers, are compensatory in nature due to

project management services WCT is providing related to opening our future data centers outside the scope of our written agreement with them.

The estimated allocation of shares as compensation was based upon the estimated fair value of

services to be provided divided by the closing price of our common stock on August 9, 2024.

Compensation expense related to these shares will be recorded at the fair value of the common stock when the milestones are achieved.

NOTE 15 - COMMITMENTS AND CONTINGENCIES

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there is no further right of appeal that the indemnitee is not entitled to be indemnified.

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.

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

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”).

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.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (Continued)

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.

The case is Lowinger v.

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

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

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 World.

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

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 Digital World and realized profits from those sales.

Additionally, the Plaintiff alleges that Mr.

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

Digital World.

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

Digital World.

On June 5, 2024, the U.S.

District Court for the Southern District of New York granted a motion by Defendants Michael Shvartsman and Bruce Garelick to transfer the action to the U.S.

District Court for the Southern District of

In transferring the action, the U.S.

District Court for the Southern District of New York held that pending motions to dismiss, including the motion filed by Digital World, will be decided by the U.S.

District Court for the Southern

District of Florida (C.A.

24-CV-22429).

On July 17, 2024, Defendants Rocket One, Mr.

Shvartsman, and Mr.

Garelick moved to stay the case during the pendency of SEC v.

Garelick, et al., No.

23-CV-05567 (S.D.N.Y.) and USA v.

Shvartsman, et

1:23-CR-00307 (S.D.N.Y.).

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 Private 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 (C.A.

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 Private 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.

The 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 (C.A.

2024-0184-MTZ).

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

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 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 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.

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 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.

On April 9, 2024, the Chancery Court granted the motion for leave to file a second amended complaint on April 9, 2024 and

re-assigned the case to a new judge.

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.

On April 9, 2024, the Chancery Court granted the motion for leave to file a second amended complaint on April 9, 2024 and re-assigned the case to a new judge.

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, on April 30, 2024, the Chancery Court vacated the

prior provisions of the March 15 order expediting the matter.

On May 6, 2024, UAV filed its Renewed Motion for Contempt of the March 15,

2024 Order against Private TMTG (“First Contempt Motion”) seeking, among other things, to enjoin Private TMTG and related parties from prosecuting certain claims in Florida state court.

A hearing on this motion, which was previously set for

July 12, 2024, was cancelled by the Chancery Court after UAV failed to timely submit a reply brief.

On May 8, 2024, the Chancery Court stayed discovery and granted a protective order with respect to all discovery served on defendants and all

other persons from whom discovery was being sought.

Following briefing and oral argument on the motion to vacate, on April 30,

2024, the Chancery Court vacated the prior provisions of the March 15 order expediting the matter.

On May 6, 2024, UAV filed its Renewed Motion for Contempt of the March 15, 2024 Order against Private TMTG (“First Contempt Motion”) seeking,

among other things, to enjoin Private TMTG and related parties from prosecuting certain claims in Florida state court.

On May 8, 2024, the Chancery Court stayed discovery and granted a protective order with respect to all discovery served on

Defendants and all other persons from whom discovery was being sought.

On June 5, 2024, UAV filed for leave to again amend its complaint.

Chancery Court granted the motion for leave to amend on July 8, 2024, and UAV filed its Third Amended Complaint on July 9, 2024.

The Chancery Court granted the motion for leave to amend on July 8, 2024, and UAV filed its Third Amended

Complaint on July 9, 2024.

The Third Amended Complaint dismissed as defendants three current TMTG directors (W.

Kyle Green, Linda McMahon,

and Robert Lighthizer) and added four former Digital World directors (Frank J.

Kyle Green, Linda McMahon, and Robert Lighthizer) and added four former Digital World directors (Frank J.

Andrews, Patrick F.

1 unchanged sentence

Preble, and Jeffrey A.

On July 17, 2024, UAV filed a second contempt motion against Private TMTG

and TMTG (“Second Contempt Motion”) alleging additional violations of the March 15 Order.

On July 17, 2024, UAV filed a second contempt motion against Private TMTG and TMTG (“Second Contempt Motion”) alleging additional violations of the March 15 Order.

On August 27, 2024, the

Chancery Court denied both the First Contempt Motion and the Second Contempt Motion.

On July 23, 2024, all of the defendants with the exception of Patrick F.

Orlando moved to dismiss the Third Amended Complaint.

On September 17, 2024, Mr.

Orlando moved to dismiss the Third Amended Complaint.

On October 8, 2024, UAV voluntarily dismissed Mr.

Orlando with prejudice.

This matter remains pending.

Lawsuit Against ARC and Patrick Orlando in Florida

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.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (Continued)

Digital World and Private TMTG initiated a lawsuit against ARC in the Civil Division for the Twelfth Judicial Circuit Court in Sarasota

County, Florida, on February 27, 2024 (Docket No.

Lawsuit Against ARC, Patrick Orlando, UAV, Andrew Litinsky, and Wesley Moss in Florida

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 in the Civil Division for the Twelfth Judicial Circuit

Court in Sarasota County, Florida, on February 27, 2024 (Docket No.

2024-CA-001061-NC).

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.

unnamed co-conspirators to interfere with the same.

The complaint also sought damages for Mr.

4 unchanged sentences

voluntarily dismissed its declaratory judgment claim against ARC.

On March 17, 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.

On April 3, 2024, Defendants ARC and Mr.

Orlando filed a joint motion to

dismiss the amended complaint or, in the alternative, to stay the proceeding pending the Delaware Action.

On March 17, 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.

On April 3, 2024,

Defendants ARC and Mr.

Orlando also filed that same day a motion to stay discovery in the action.

On May 29, 2024, TMTG f/k/a Digital

World moved to compel discovery from ARC and Mr.

On July 15, 2024, the Court entered an order denying the foregoing discovery motions.

In an order dated July 29, 2024, the Court denied the motion to dismiss or, in the alternative,

stay the proceeding.

On July 30, 2024, Defendants ARC and Mr.

Orlando filed a notice of appeal regarding the Court’s denial of their joint motion to dismiss, and filed a motion for stay pending appeal on August 2, 2024.

On July 31, 2024, TMTG filed a motion for leave to file a second amended

complaint, which has been set for a hearing on September 10, 2024.

At a June 17, 2024, status hearing, the Court set a proposed trial date of

Orlando filed a joint motion to dismiss the amended complaint or, in the alternative, to stay the proceeding pending the Delaware Action.

Defendants ARC and Mr.

Orlando also filed that same day a motion to stay discovery

in the action.

On May 29, 2024, Digital World moved to compel discovery from ARC and Mr.

On July 15, 2024, following a July 10 hearing, the Court entered an order denying the motion to stay discovery and motion to compel.

ARC and Orlando have appealed that order.

On July 29, 2024, the Court entered an order denying the motion to dismiss or, in the alternative, to stay the proceeding.

On August 2, 2024, Defendants ARC and Mr.

Orlando filed a motion to stay

pending appeal.

On July 31, 2024, Digital World and Private TMTG filed a motion for leave to file a second amended complaint, which proposed to add allegations against ARC and Orlando related to pre-targeting and other misconduct as set forth

in the SEC Complaint against Orlando, and naming UAV, Andrew Litinsky and Wesley Moss as additional defendants.

On August 15, 2024, Digital World and Private TMTG filed a motion for temporary injunction seeking to enjoin the threatened sale of

Digital World stock by Defendant ARC and one of the new defendants proposed to be added through the motion for leave to file a second amended complaint.

On August 28, 2024, Digital World and Private TMTG filed a renewed motion to compel,

seeking prior productions to the SEC and DOJ and other documents from Defendants ARC and Mr.

On August 30, 2024, the Court held a hearing to address several motions.

During the hearing, the Court granted Digital World and Private

TMTG’s motion for leave to amend and denied their motion for temporary injunction.

The Court also denied the motion to stay pending appeal filed by Defendants ARC and Mr.

On September 4, 2024, Digital World and Private TMTG filed an

expedited motion to compel, seeking production of ARC’s capitalization table, supporting documents, and an order requiring ARC to cooperate with Digital World and Private TMTG in advance of the expiration of the lock-up restriction.

September 5, 2024, Defendants ARC and Mr.

Orlando filed a motion to stay pending appeal in the Second District Court of Appeal (C.A.

2D2024-1780).

On September 12, 2024, the Court granted in part and denied in part the expedited motion to

compel, ordering production of the capitalization table and supporting documents by September 13, 2024, at 12 p.m.

On that same day, Defendants ARC and Mr.

Orlando filed a notice of removal in the Middle District of Florida (C.A.

8:24-cv-02161).

On September 13, 2024, Digital World and Private TMTG filed an emergency motion to remand to state court in the Middle District of Florida, which the Middle District granted on September 17, 2024.

On September 18, 2024, Digital

World and Private TMTG filed an emergency motion for temporary injunction and contempt against ARC and Mr.

Orlando in the state court action.

On that same day, the Court held a hearing during which it granted Digital World and Private TMTG’s

motion for contempt, imposed a coercive sanction against ARC and Mr.

Orlando of $ 5,000 per day until they complied with the court’s

September 12 discovery order, and denied their motion for temporary injunction.

Defendants ARC and Orlando have appealed that order (C.A.

2D2024-02364).

On October 1, 2024, Digital World and Private TMTG filed a motion for an order to show

cause why ARC and Mr.

Orlando should not be held in further contempt and subject to increased sanctions for their failure to comply with the Court’s September 18 contempt order.

On October 18, 2024, the Second District Court of Appeal denied

Orlando’s motion to stay pending appeal.

At a June 17, 2024, status hearing, the court agreed to schedule a trial for August 2025.

Litigation with ARC in Delaware

On February 29, 2024, ARC filed a lawsuit in the Court of Chancery of the

State of Delaware (C.A.

2024-0186-LWW) against Digital World and its directors, 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 complaint claimed a new conversion ratio of 1.78 :1 and sought 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.

a result, we have vigorously defended Digital World’s calculation of the conversion ratio and related rights.

In addition to its complaint, 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 5, 2024, the court denied ARC’s motion, stating that it would not conduct a merits or injunction hearing before March 22, 2024.

Consequently, the Chancery Court 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.

On May 23, 2024, ARC filed a motion for leave to amend its complaint.

requested leave to add new factual allegations and legal theories, in addition to a cause of action for breach of implied covenant of good faith and fair dealing.

On June 5, 2024, the Court denied leave to add a cause of action for breach of

implied covenant of good faith and fair dealing, but granted leave in part to add new legal theories to existing claims and adjust its claimed conversion ratio from 1.78 :1 to 1.81 :1.

A one-day trial in this matter took place on July 29, 2024.

resolution as to whether none, a portion, or all of the disputed conversion shares will be issued remains to be determined as of August 8, 2024

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

Lawsuit 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”) (C.A.

2024-0264-LWW).

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.

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 August 8, 2024, TMTG had paid or agreed to

pay more than $ 800,000 to Mr.

Orlando’s attorneys pursuant to such Stipulation.

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS (Continued)

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 expenses Mr.

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 sought reimbursement for the legal fees and expenses incurred in connection with his supplement to the Advancement Lawsuit, as well as pre-judgment and post-judgment interest on the amounts he

claims are owed to him.

The Chancery Court granted Mr.

Orlando’s motion for leave, adding the additional claim to the Advancement Lawsuit.

A merits hearing in this matter has been scheduled for September 23, 2024.

Lawsuit Against UAV, Litinsky, 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 (Docket 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.

Finally, the complaint asserts claims for damages for (a) breach of the fiduciary duty of loyalty against Mr.

On February 29, 2024, ARC filed a lawsuit in the Court of Chancery of the State of Delaware (C.A.

2024-0186-LWW) against Digital World

and its directors, alleging an impending violation of the Digital World Charter.

ARC alleged that Digital World failed to commit to issue conversion shares to ARC that ARC claims it is owed upon the consummation of the Business Combination

pursuant to the Charter.

ARC claimed a conversion ratio of 1.81 :1 and sought 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.

TMTG vigorously defended Digital World’s calculation of the conversion ratio and related rights.

addition to its complaint, 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.

2024, the Chancery Court denied ARC’s motion, stating that it would not conduct a merits or injunction hearing before March 22, 2024.

Consequently, the Chancery Court also denied ARC’s request to postpone the Business Combination 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 Chancery 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.

As a result, on March 21, 2024, Digital World entered into two escrow agreements with Odyssey, as

(i) an escrow agreement for the benefit of ARC (the “ARC Escrow Agreement”), pursuant to which DWAC deposited into escrow 3,579,480

shares of TMTG shares of common stock (“Common Stock”), and (ii) an escrow agreement for the benefit of the Non-ARC Class B Shareholders (the “Non-ARC Class B Shareholders Escrow Agreement,” and together with the ARC Escrow Agreement, the

“Disputed Shares Escrow Agreements”), pursuant to which TMTG deposited into escrow 1,087,553 shares of TMTG Common Stock, which

amounts represent 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 .

16, 2024, the Chancery Court issued its order in this matter setting the conversion ratio at 1.4911 :1.

The Chancery Court ruled

against ARC on a substantial majority of its claims, reducing ARC’s proposed calculation of the conversion ratio of 1.81 :1 by

approximately 70 % and holding that the former board members of Digital World did not breach any fiduciary duties in setting the

conversion ratio calculation or in their public disclosures of the same.

As a result of the Chancery Court’s order, a portion of the disputed conversion Common Stock held in escrow were released to ARC.

The release of Common Stock is

subject to the terms and conditions of the ARC Escrow Agreement with the Escrow Agent and TMTG.

Accordingly, 785,825 shares of

TMTG Common Stock, which represents the Court’s calculation for the difference between a ratio of 1.348 :1 and 1.4911 :1, were released from escrow (the “Court Ratio”).

Both parties still retain the option to file an appeal within 30 days after the Chancery Court’s final order.

In connection with the Chancery Court’s final order, 238,692 Common Shares deposited in the Non-ARC Class B Shareholders Escrow Agreement, representing the Court Ratio, were released to the applicable holders, subject to

the terms and conditions of the Non-ARC Class B Shareholders Escrow Agreement and the Securities Act of 1933, as amended.

On October 23, 2024, ARC filed a motion for a $ 1,000.0 fee award.

Lawsuit Against UAV,

Litinsky, 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 (Docket 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.

Finally, the 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 Mr.

Orlando, (b) aiding

and abetting and conspiracy to breach fiduciary duty against Mr.

Orlando based on the same events, and (c) breach of the fiduciary duty of care against Mr.

Orlando, (b) aiding and abetting and conspiracy to breach fiduciary duty against Mr.

Orlando 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.

The motion to consolidate was denied without prejudice on August 2, 2024.

On April 25, 2024, Private TMTG filed a motion to consolidate this lawsuit with Docket No.

2024-CA-001061-NC (described above) for

purposes of discovery and pretrial proceedings, which was denied without prejudice on August 2, 2024.

On June 27, 2024, the court granted Mr.

Litinsky, and UAV’s motion

to stay proceedings pending resolution of the Delaware litigation involving UAV.

Litinsky, and UAV’s motion to stay proceedings pending resolution of the Delaware

litigation involving UAV.

The court also denied Private TMTG’s motion for an anti-suit injunction.

1 unchanged sentence

Orlando filed a motion to dismiss.

On July 15, 2024, UAV,

Litinsky, and Mr.

Moss filed a notice of inactive status, stating that the court should place the action on inactive status.

On July 17, 2024, Private TMTG sought review of the court’s order granting

UAV’s motion to stay in Florida’s Second District Court of Appeal by filing a petition for a writ of certiorari with that court (Case No.

On July 17, 2024, Private TMTG sought review of the court’s order granting UAV’s

motion to stay in Florida’s Second District Court of Appeal by filing a petition for a writ of certiorari with that court (Case No.

2D2024-1642).

On August 2, 2024, Private TMTG filed a motion to stay the stay pending certiorari review.

Lawsuit By 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 (Docket No.

The court subsequently denied UAV’s motion to enforce the stay and Private TMTG’s motion to

stay the stay pending certiorari review on September 2, 2024, and September 23, 2024, respectively.

Litigation With 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”) (C.A.

2024-0264-LWW).

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

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.

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 October 28, 2024, TMTG had paid or agreed to pay more than $ 1.9 M to Mr.

Orlando’s attorneys pursuant to such Stipulation and TMTG’s other advancement obligations to Mr.

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 expenses Mr.

Orlando had incurred and would 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 (the “ARC Removal Action”).

Orlando also sought reimbursement for the legal fees and expenses incurred in connection with his supplement to the Advancement Lawsuit, and he sought pre-judgment and post-judgment

interest on the amounts he claimed were owed to him.

On August 1, 2024, plaintiffs in the ARC Removal Action dismissed their complaint without prejudice.

On August 8, 2024, Mr.

Orlando dismissed his supplemental claims in the Advancement

Lawsuit without prejudice.

The Advancement Lawsuit remains open on the Chancery Court’s docket.

Litigation with Orlando and Benessere in Miami, Florida

On April 2, 2024,

Patrick Orlando and Benessere Investment Group, LLC (“Benessere”) filed suit against TMTG in the Circuit Court of the Eleventh Judicial District in Miami-Dade County Florida (Docket No.

2024-005894-CA-01).

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.

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.

As of August 8, 2024, the motion for preliminary injunction had not been

set for hearing.

On July 10, 2024, the Court scheduled a case management conference for September 16, 2024.

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 Digital World n/k/a TMTG in the Circuit Court of the Eleventh Judicial District in Miami-Dade County, Florida (Docket No.

2024-008668-CA-01).

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.

TMTG was served in this action on June 11, 2024, and filed a motion to

dismiss on July 26, 2024.

On July 11, 2024, ARC filed a motion to dismiss for, among other things, improper venue.

The court granted ARC’s motion to dismiss on August 7, 2024, indicating that the noteholders intend to refile in New York

County, New York.

Lawsuit filed in Small Claims Court – Pinellas County, Florida

On April 29, 2024, a small claims action (Case No.

24-003593-SC) was filed

in Pinellas County by Keith Rossignol and Richard Epp, appearing pro se, against “Digital World Acquisition, Inc.”, demanding the return of one hundred shares in Digital World to each Plaintiff (i.e., 200 shares total) or, alternatively, an $ 8,000 Judgment, plus court costs, if Digital World “fails to reinstate the 200 shares promptly.” The court granted TMTG’s motion to dismiss the action for lack of subject matter jurisdiction, improper venue, failure to state a claim, failure to

include an indispensable party, and failure to sue the right defendant.

On June 17, 2024, Rossignol filed an amended statement of claim, demanding that TMTG sell back one hundred shares in Digital World to Rossignol at the original price or, alternatively, an $ 8,000 Judgment.

On July 8, 2024, TMTG filed a motion to dismiss.

A pre-trial conference has been scheduled for August 21, 2024.

Litigation with Odyssey Transfer & Trust Company in Delaware

On June 20, 2024, TMTG’s transfer agent, Odyssey, filed an interpleader

action in the U.S.

As of August 22, 2024, the motion for preliminary injunction had not been set for

Litigation with

Odyssey Transfer & Trust Company in Delaware

On June 20, 2024, TMTG’s transfer agent, Odyssey filed an interpleader action in the U.S.

District Court of the District of Delaware (C.A.

24-CV-00729).

The complaint pertains to a dispute regarding share ownership between Michael Melkersen and ARC and includes TMTG as a nominal defendant.

Odyssey is seeking

an order from the Court discharging Odyssey of further liability and requiring ARC and TMTG to resolve their competing claims as to 716,140

Class A shares of TMTG and 25,000 TMTG warrants.

The complaint pertains to the ongoing

dispute regarding share ownership between Michael Melkersen and ARC and includes TMTG as a nominal defendant.

Odyssey is seeking an order from the Court discharging Odyssey of further liability and requiring ARC and TMTG to resolve their

competing claims as to 716,140 Class A shares of TMTG and 25,000 TMTG warrants.

On July 18, 2024, ARC filed a motion to dismiss for improper venue.

On July 22, 2024, TMTG filed a motion for discharge and dismissal.

matter remains pending.

On August 13, 2024, TMTG

filed its answer and crossclaims against Mr.

Melkersen and ARC.

On August 21, 2024, ARC filed a motion to dismiss for lack of subject matter jurisdiction.

This matter remains pending.

Litigation with

RejuveTotal LLC in New York

On October 21, 2024, RejuveTotal LLC (“Rejuve”) filed suit against TMTG and its Chief Financial Officer in the Supreme Court of the State of New York, New York County (Index No.

655551/2024).

The complaint alleged breach of contract, and sought equitable relief as well as indemnification and reimbursement of costs and expenses, in connection with Rejuve’s role as Purchaser Representative under the Merger Agreement.

October 29, 2024, defendants in this matter had not yet been served.

NOTE 16 - SUBSEQUENT EVENTS

On July 3, 2024, TMTG;

WorldConnect Technologies, L.L.C.

WorldConnect IPTV Solutions, LLC (“Solutions”) ;

and JedTec, L.L.C.

(“JedTec”) entered into an asset acquisition agreement, pursuant to which TMTG is to acquire substantially all

of the assets of WCT or its affiliate, which mainly included certain agreements, including an option agreement, dated February 5, 2024, by and between WCT, Perception Group, Inc., Perception TVCDN Ltd., and FORA, FOrum RAčunalništva,

d.o.o., as amended and restated (e ach of the parties thereto other than WCT, collectively, “Perception”), as well as ancillary agreements related to the source code purchase and support and maintenance.

The transaction closed on

August 9, 2024.

Pursuant to the asset acquisition agreement, TMTG agreed to issue to Solutions and JedTec as consideration up to 5,100,000 shares of TMTG common stock, 2,600,000 shares of which

were issuable on such closing date, and 2,500,000 shares of which will be issuable upon the satisfaction of certain Milestones

(as that term is defined in the asset acquisition agreement).

On July 3, 2024, TMTG entered into a Standby Equity Purchase Agreement (“SEPA”) with YA II PN, LTD., a Cayman Islands exempt limited partnership

(“Yorkville”).

Pursuant to the SEPA, TMTG shall have the right, but not the obligation, to sell to Yorkville up to $ 2.5 billion of

its Common Stock, subject to certain limitations and conditions set forth in the SEPA, from time to time during the term of the SEPA.

Sales of shares to Yorkville under the SEPA, and the timing of any such sales, are at TMTG’s option, and

TMTG is under no obligation to sell any securities to Yorkville under the SEPA.

A registration statement filed in accordance with the SEPA was declared effective by the SEC on July 15, 2024.

Management’s Discussion and Analysis of Financial Condition and Results of Operations 2

References in this report (this “ Quarterly Report ”) to “TMTG,” “we,” “us” or the “Company” refer to Trump Media &

Technology Group Corp.

References to our “management” or our “management team” refer to our officers and directors.

The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction

with the unaudited condensed consolidated financial statements and the notes thereto contained elsewhere in this Quarterly Report.

All amounts are in thousands, except per share data.

Certain information contained in the discussion and analysis

set forth below includes forward-looking statements that involve risks and uncertainties.

Our actual results could differ materially from such forward-looking statements.

Factors that could cause or contribute to those differences include, but are

not limited to, those identified below and those discussed in the sections titled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” included elsewhere in this report.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “ Securities

Act ”) and Section 21E of the Exchange Act of 1934, as amended (the “ Exchange Act ”) that are not historical facts, and involve risks and uncertainties that could cause actual results to differ

materially from those expected and projected.

All statements, other than statements of historical fact included in this Quarterly Report including, without limitation, statements under “Management’s Discussion and Analysis of Financial Condition

and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements.

When used in this Quarterly Report, words such as “expect,”

“believe,” “anticipate,” “intend,” “estimate,” “aim,” “plan,” “may,” “will,” “continue,” “should,” “seek” and variations and similar words and expressions identify forward-looking statements.

Such forward-looking statements are based on the

beliefs of management, as well as assumptions made by, and information currently available to management.

A number of factors could cause actual events, performance or results to differ materially from the events, performance and results

discussed in the forward-looking statements.

For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of

the Company’s Form 10-K filed with the U.S.

Securities and Exchange Commission (the “ SEC ”) on April 1, 2024, as amended by Amendment Number 1 to Form 10-K filed with the SEC on April 3, 2024, and other

documents filed with the SEC, which describe additional factors that could adversely affect our business, financial condition, or results of operations.

The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at

Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

TMTG aspires to build a media and technology powerhouse to rival the liberal media consortium and promote free expression.

TMTG was founded to fight back against the big tech

companies-Meta (Facebook, Instagram, and Threads), X (formerly Twitter), Netflix, Alphabet (Google), Amazon and others-that it believes collude to curtail debate in America and censor voices that contradict their “woke” ideology.

safeguard public debate and open dialogue, and to provide a platform for all users to freely express themselves.

TMTG Sub Inc.

(formerly known as Trump Media & Technology Group Corp.) (“ Private TMTG ”) was incorporated on February 8, 2021, and

launched its first product, Truth Social, which is a social media platform aiming to end big tech’s assault on free speech by opening up the internet and giving the American people their voices back.

It is a public, real-time platform where any

user can create content, follow other users, and engage in an open and honest global conversation without fear of being censored or cancelled due to their political viewpoints.

TMTG does not restrict whom a user can follow, which it believes will

greatly enhance the breadth and depth of available content.

Additionally, users can be followed by other users without requiring a reciprocal relationship, enhancing the ability of TMTG users to reach a broad audience.

Truth Social was generally made available in the first quarter of 2022.

TMTG prides itself on operating its platform, to the best of its ability, without relying on big tech

Partnering with pro-free-speech alternative technology firms, Private TMTG fully launched Truth Social for iOS in April 2022.

Private TMTG debuted the Truth Social web application in May 2022, and the Truth Social Android App became

available in the Samsung Galaxy and Google Play stores in October 2022.

Private TMTG introduced direct messaging to all versions of Truth Social in 2022, released a “Groups” feature for users in May 2023, and announced the general availability of

Truth Social internationally in June 2023.

Since its launch, Truth Social has experienced substantial growth, from zero to an aggregate of approximately 9.0 million signups for Truth Social via iOS, Android and the web as of mid-February 2024.

However, investors should be aware that since its inception, TMTG has not relied on any specific key performance metric to make business or operating decisions.

Consequently, it has not been maintaining internal controls and procedures for

periodically collecting such information, if any.

While many mature industry peers may gather and analyze certain metrics, given the early development stage of the Truth Social platform, TMTG’s management team believes that such metrics are not

critical in the near future for the business and operation of the platform.

This stance is due to TMTG’s long-term commitment to implementing a robust business plan, which may involve introducing innovative features and potentially incorporating

new technologies, such as advanced video streaming services on its platform.

These initiatives may enhance the range of services and experiences TMTG can offer on its Truth Social platform.

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

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

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

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

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

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

To foster a flourishing digital public forum, TMTG seeks to prevent illegal and other prohibited content from contaminating its platform.

In accordance with Truth Social’s terms of

service, illegal and prohibited content includes, but is not limited to a) sexual content or language;

b) content that includes sexual activity, sexual intercourse or any type of sexual act;

c) any content that portrays or suggest explicit sexual

acts or sexually suggestive positions or poses;

d) sexually suggestive (explicit or vague) statements, texts or phrases;

or e) content in which sexual acts are requested or offered, including pornography, prostitution, sugar babies, sex trafficking

or sexual fetishes.

Using human moderators and an artificial intelligence vendor known as HIVE, Truth Social has developed what TMTG believes is a robust, fair, and viewpoint-neutral moderation system and that its moderation practices are

consistent with, and indeed help facilitate, TMTG’s objective of maintaining “a public, real-time platform where any user can create content, follow other users, and engage in an open and honest global conversation without fear of being censored or

cancelled due to their political viewpoints.”

Prior to the Closing (as hereinafter defined), Private TMTG relied primarily on bridge financing, in the form of convertible promissory notes, to build the Truth Social platform.

TMTG aims to use the funds available as a result of the Business Combination (as hereinafter defined) to catalyze growth, including through strategic investments in marketing, advertising sales, and the technology described below, while continuing

to prioritize feature development and user experience.

Private TMTG has historically incurred operating losses and negative cash flows from operating activities.

For the reasons described below, TMTG expects to continue to incur operating losses

and negative cash flows from operating activities for the foreseeable future, as it works to expand its user base, attracting more platform partners and advertisers.

TMTG’s ability to become profitable and generate positive cash flow depends on

TMTG’s success in growing its user base, platform partners, and advertisers.

This growth is expected to come from the overall appeal of the Truth Social Platform.

TMTG may enhance this appeal through new initiatives or by acquiring new technologies.

Private TMTG conducted extensive technological due diligence and testing regarding a

particular, state-of-the-art technology that supports video streaming and provides a “home” for cancelled content creators, and which TMTG has worked to acquire and incorporate into its product offerings and/or services as soon as practicable.

April 16, 2024, TMTG announced that, after six months of testing on its Web and iOS platforms, the Company has finished the research and development phase of a new live TV streaming platform and expects to begin scaling up its own content delivery

network (“ CDN ”).

TMTG announced plans to roll out its streaming content in three phases:

Introduce Truth Social’s CDN for streaming live TV to the Truth Social app for Android, iOS, and Web.

On August 7, 2024, TMTG announced that TV streaming had become available via all three

Release stand-alone Truth Social over-the-top streaming apps for phones, tablets, and other devices.

Release Truth Social streaming apps for home TV.

Such initiatives and acquisitions are subject to material changes and risks, some of which are beyond TMTG’s control.

Given these uncertainties, TMTG believes it is premature for

TMTG to predict when it will attain profitability and positive cash flows from its operations.

In order to fund its operations prior to Closing, Private TMTG issued approximately two dozen convertible promissory notes in the aggregate principal amount of $48,155.0 (net of

repayments) from May 2021 through March 2024.

All Private TMTG convertible promissory notes (the “ Private TMTG Convertible Notes ”), including the foregoing, converted to shares of TMTG common stock

immediately before the Closing of the Business Combination.

See the section titled “— Liquidity and Capital Resources ” below.

The mailing address of TMTG’s principal executive office is 401 N.

Cattlemen Rd., Suite 200, Sarasota, Florida 34232.

Recent Developments

Business Combination

On October 20, 2021, Digital World Acquisition Corp.

(now known as Trump Media & Technology Group Corp.) (prior to the Closing, “ Digital World ”),

Merger Sub, Private TMTG, ARC Global Investments II, LLC (which was replaced and succeeded by RejuveTotal LLC, a New Mexico limited liability company effective as of March 14, 2024), in the capacity as the representative of the stockholders of

Digital World, and Private TMTG’s General Counsel in his capacity as the representative of the stockholders of Private TMTG, entered into an Agreement and Plan of Merger (as amended, the “ Merger Agreement ”),

pursuant to which, among other transactions, Merger Sub merged with and into Private TMTG, with Private TMTG continuing as the surviving corporation and as a wholly owned subsidiary of TMTG (the “ Merger ” and,

together with the other transactions contemplated by the Merger Agreement, the “ Business Combination ”).

On March 25, 2024 (the “ Closing Date ”), the Business Combination

was consummated (the “ Closing ”).

In connection with the Business Combination, all shares of Private TMTG common stock issued and outstanding immediately prior to the effective time of the Closing (the “ Effective Time ”) (other than those properly exercising any applicable dissenters’ rights under Delaware law) were exchanged for the Merger Consideration (as defined in the Merger Agreement) (or, as applicable,

the separate and additional consideration received by former holders of Private TMTG Convertible Notes issued by Private TMTG).

Each Private TMTG Convertible Note that was outstanding immediately prior to the Closing was automatically converted

immediately prior to the Effective Time into a number of shares of Private TMTG common stock, in accordance with each such Private TMTG Convertible Note as set forth therein.

At the Closing, Digital World Acquisition Corp.

changed its name to

“Trump Media & Technology Group Corp.” and Private TMTG changed its name to “TMTG Sub Inc.”

Notwithstanding the legal form of the Merger pursuant to the Merger Agreement, the Merger was accounted for as a reverse recapitalization in accordance with U.S.

Private TMTG was determined to be the accounting acquirer under ASC 805.

The determination was primarily based on the evaluation of the following facts and circumstances taking into consideration:

The pre-combination equity holders of Private TMTG hold the majority of voting rights in TMTG;

The pre-combination equity holders of Private TMTG have the right to appoint the majority of the directors on TMTG’s Board;

Private TMTG senior management (executives) are the senior management (executives) of TMTG;

Operations of Private TMTG comprise the ongoing operations of TMTG.

Under the reverse recapitalization model, the Merger is treated as Private TMTG issuing equity for the net assets of Digital World, with no goodwill or intangible assets recorded.

As of the Closing, (i) President Donald J.

Trump beneficially held approximately 57.6% of the outstanding shares of TMTG common stock and (ii) the public stockholders of TMTG held

approximately 21.9% of the outstanding shares of TMTG common stock.

As of the date of this Quarterly Report, President Donald J.

Trump beneficially holds approximately 59.9% of the outstanding shares of TMTG common stock, including 36,000,000

Earnout Shares (as defined in the Merger Agreement).

President Trump’s entitlement to the Earnout Shares was officially determined by TMTG on April 26, 2024 in accordance with the Merger Agreement, after which President Trump was issued the Earnout

Convertible Promissory Notes

Through March 31, 2024, Private TMTG issued Private TMTG Convertible Notes in the aggregate principal amount of $48,155.0 (net of repayments) that accrued interest at a range

between 5% and 10% per annum until converted.

See “Note 9 – Convertible Promissory Notes And Warrants,” in the accompanying financial statements for details.

Immediately prior to the Closing, all Private TMTG Convertible Notes were converted into

Private TMTG common stock.

WCT Asset Acquisition

On July 3, 2024, TMTG, WorldConnect Technologies, L.L.C.

(“ WCT ”), WorldConnect IPTV Solutions, LLC (“ Solutions ”) and

JedTec, L.L.C.

(“ JedTec ”) entered into an asset acquisition agreement (the “ Asset Acquisition Agreement ”), pursuant to which TMTG agreed to acquire substantially all

of the assets of WCT or its affiliate, which mainly included certain agreements, including an option agreement (the “ Option Agreement ”), dated February 5, 2024, by and between WCT, Perception Group, Inc.,

Perception TVCDN Ltd., and FORA, FOrum RAčunalništva, d.o.o., as amended (each of the parties thereto other than WCT, collectively, “ Perception ”), as well as ancillary agreements related to the source code

purchase (the “ Source Code Purchase Agreement ”) and support and maintenance (the “ Support and Maintenance Agreement ”, together with the Source Code Purchase

Agreement, the “ CDN Agreements ”).

The transaction closed on August 9, 2024, the date which is business days after the Company implemented the Perception Software and Network (as defined below) with all

back-end API services having become generally available on iOS, Google/Android, and web media services and with streaming enabled from at least one data-center (the “ Closing Date ”).

Pursuant to the Option Agreement, on the Closing Date, WCT assigned to the Company the CDN Agreements, which are expected to be used for the roll out of the CDN technology for the Truth platform (the

updated version of the Company’s Truth Social web and mobile application with streaming enabled using intellectual property obtained from Perception, the “ Perception Software and Network ”).

Perception and its affiliates agreed not to use or permit other parties to use the Source Code (as defined below) until August 9, 2029 for any purpose that competes, in the United States, with the Truth platform or commercialization of such

Source Code in the United States.

In addition, the Option Agreement grants the (i) option to purchase Perception, subject to a future negotiation of the price and terms of such acquisition and (ii) right of first refusal to purchase Perception in

the event of a bona fide written offer from an unaffiliated third party to purchase more than 50% of the assets of Perception.

The Company does not have any current intention to exercise those rights.

Pursuant to the Asset Acquisition Agreement, on the Closing Date, the Company agreed to issue to Solutions and JedTec as consideration up to 5,100,000 shares (the “ Shares ”)

of TMTG common stock, 2,600,000 shares of which were issued on the Closing Date and 2,500,000 shares of which will be issuable upon the satisfaction of certain Milestones (as defined in the Asset Acquisition Agreement).

In addition, with respect

to all of the Shares, for a period of 12 months after the Closing Date, neither JedTec, Solutions nor their respective affiliates will be permitted to collectively sell an amount of the Shares during any consecutive two trading week period (the “ Two Week Sale Period ”) exceeding the “Set Percentage.” For the purposes of this restriction, the “ Set Percentage ” means a percentage of the average daily trading volume

of the common stock during the immediately preceding two consecutive trading weeks as reported on primary exchange on which the common stock is traded (i.e., currently the NASDAQ) (the “ Prior Two Week ADTV ”).

Unsold amounts from a Two Week Sale Period do not carry over to a subsequent Two Week Sale Period.

The “Set Percentage” is 3% for the first six months after the Closing Date and 5% from six to 12 months after the Closing Date.

For example, if

during the first six months after the Closing date, a Prior Two Week ADTV is 5,000,000 shares, restricted holders cannot sell more than 150,000 shares during the following Two Week Sale Period.

Under the same fact pattern during six to 12 months

after the Closing Date, restricted holders could not sell more than 250,000 shares during such Two Week Sale Period.

Concurrently with the execution of the Asset Acquisition Agreement, and as a condition and inducement to the willingness of the Company to enter into it, WCT exercised the Option Agreement and entered

into the Source Code Purchase Agreement and the Support and Maintenance Agreement, which agreements were assigned to the Company on the Closing Date.

Under the Source Code Purchase Agreement, Perception agreed to sell a copy of the source code of

the software related to the CDN technology (“ Source Code ”) and grant the WCT (which grant was assigned under the Asset Acquisition Agreement to the Company) an irrevocable, non-exclusive, worldwide,

perpetual right and license to forever retain, copy, reproduce, use, modify, enhance, create modifications and derivative works of, display, distribute, perform, compile, execute, sublicense, and otherwise exploit the Source Code and all

resulting compiled software for commercial exploitation.

The purchase price of $17,500,000 is payable by the Company in four installments to be completed by the third anniversary of the execution date of the Source Code Purchase Agreement.

Further to supplement the Source Code Purchase Agreement, WCT entered into a Support and Maintenance Agreement, under which Perception is to assist TMTG in commercializing the Source Code to develop, launch, and grow the platform.

The acquisition

of the Source Code is effective as of the Closing Date.

Pursuant to the Asset Acquisition Agreement, TMTG will assume on the Closing Date WCT’s rights and obligations under the Source Code Purchase Agreement and the Support and Maintenance

In connection with the Source Code Agreement, TMTG entered into a source code escrow agreement related to the sale of the Source Code.

Pursuant to such agreement, Perception will deposit a copy of the Source Code into an escrow

Subject to certain terms and conditions, immediately after the Closing Date, the escrow agent will hold the Source Code until Perception receives the full purchase price of $17,500,000 for the Source Code.

Upon full payment, the Source

Code and any modifications will be released to TMTG.

TMTG entered into a registration rights agreement with Solutions and JedTec on the Closing Date, pursuant to which the TMTG will file a registration statement with the SEC to register

for resale the Shares within 15 days following the Closing Date upon receiving a demand for registration from WCT.

TMTG will use its reasonable best efforts to cause such registration statement to

become effective and remain effective until all the Shares covered by such registration statement have been sold.

Key Factors Affecting Results of Operations

Executive Promissory Notes

Private TMTG issued TMTG Executive Promissory Notes to certain executives prior to the Closing Date.

The principal amounts of such notes were as follows:

$1,150.0 for Devin Nunes,

our Chief Executive Officer, $4,900.0 for Phillip Juhan, our Chief Financial Officer, and $200.0 for Andrew Northwall, our Chief Operating Officer, and the aggregate amount of such notes for other executives was $650.0.

Private TMTG was not

required to pay any interest pursuant to such notes.

Upon the closing of the Merger, such notes automatically converted in whole, without any further action by the holders thereof, into 625,000 shares of TMTG common stock.

Inflation and the Global Supply Chain

Currently the U.S.

economy is experiencing a bout of increased inflation, resulting in rising prices.

Federal Reserve, as well as its counterparts in other countries, have

engaged in a series of interest rate hikes in an effort to combat rising inflation.

Although inflation did not have a significant impact on our results of operations for the periods ended June 30, 2024 and 2023, we anticipate that inflation will

have an impact on our business going forward, including through a material increase in our cost of revenue and operating expenses in the coming years, if not permanently.

Continued or permanent rises in core costs could impact our growth

Current Economic Conditions

We are subject to risks and uncertainties caused by events with significant macroeconomic impacts, including, but not limited to, the COVID-19 pandemic, the Russian invasion of

Ukraine, the Israel-Hamas war, and actions taken to counter inflation.

Supply chain constraints, labor shortages, inflation, and rising interest rates and reduced consumer confidence have caused advertisers in a variety of industries to be cautious

in their spending and to either pause or slow their campaigns.

In order to manage our cost structure in light of the current macroeconomic environment and pending TMTG’s access to additional capital via the Business Combination, we sought

opportunities to reduce our expense growth.

Following the elimination of several positions in March 2023, we paused hiring in the second quarter of 2023.

We were subsequently more selective about the roles that we filled, resulting in some

We also reduced non-labor spend in areas such as travel, rent, consulting fees, and professional services.

The extent of the ongoing impact of these macroeconomic events on our business and on global economic activity is uncertain and may continue to adversely affect our business,

operations and financial results.

Our past results may not be indicative of our future performance, and historical trends in revenue, income (loss) from operations, net income (loss), and net income (loss) per share may differ materially.

Private TMTG’s Former Chairman President Donald J.

TMTG’s success depends in part on the popularity of our brand and the reputation and popularity of President Donald J.

The value of TMTG’s brand may diminish if the

popularity of President Donald J.

Trump were to suffer.

Adverse reactions to publicity relating to President Donald J.

Trump, or the loss of his services, could adversely affect TMTG’s revenues, results of operations and its ability to maintain or

generate a consumer base.

President Donald J.

Trump is involved in numerous lawsuits and other matters that could damage his reputation.

4 Additionally, TMTG’s business

plan relies on President Donald J.

Trump bringing his former social media followers to TMTG’s platform.

In the event any of these, or other events, cause his followers to lose interest in his messages, the number of users of our platform could

decline or not grow as we have assumed.

To the extent users prefer a platform that is not associated with President Donald J.

Trump, TMTG’s ability to attract users may decrease.

Growth in User Base

We currently rely on the sale of advertising services for all of our revenue.

If we experience a decline in the number of users or a decline in user engagement, including as a

result of the loss of high-profile individuals and entities who generate content on Truth Social, advertisers may not view Truth Social as attractive for their marketing expenditures, and may reduce their spending with us, which would harm our

business and operating results.

Truth Social is being developed as a global platform for public self-expression and conversation in real time and our business depends on continued and unimpeded access to Truth

Social on the internet by our users and advertisers.

We face strong competition to attract and engage users, including other social media platforms that focus on the same audience that Truth Social focuses on, competitors that develop products,

features, or services that are similar to ours or that achieve greater market acceptance, companies which have greater financial resources and substantially larger user bases, which offer a variety of internet and mobile device-based products,

services and content.

The growth of our user base depends upon many factors both within and beyond our control, including the popularity, usefulness, ease of use, performance and reliability of our

products and services compared to those of our competitors;

the amount, quality and timeliness of content generated by our users;

the frequency and relative prominence of the ads displayed by us or our competitors;

the safety and security of Truth

and whether there is improper access to or disclosure of our users’ information, which could harm our reputation.

To reviewed/updated as necessary by litigation counsel.

Prior to the Closing, Private TMTG relied primarily on bridge financing, in the form of convertible promissory notes, to build the Truth Social platform.

TMTG intends to use the

funds available as a result of the Business Combination to catalyze growth, including through strategic investments in marketing, advertising sales, and new technologies as described above, while continuing to prioritize feature development and

user experience.

Private TMTG has historically incurred operating losses and negative cash flows from operating activities.

For the reasons described below, TMTG expects to continue to incur operating losses and negative cash flows from operating

activities for the foreseeable future, as it works to expand its user base, attracting more platform partners and advertisers.

Attract, Retain and Motivate Talented Employees

Our results of operations rely on the leadership and experience of our relatively small number of key executive management personnel, and the loss of key personnel or the inability

of replacements to quickly and successfully perform in their new roles could adversely affect our business.

We have experienced management departures and may continue to experience management departures.

Any significant diversion of management

attention away from ongoing business concerns and any difficulties encountered in the transition and integration process could have a material adverse effect on our business, financial condition and results of operations.

The loss of the services

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

increased costs.

Furthermore, although the risk is somewhat mitigated by the non-competition agreements signed by certain key employees in connection with the Closing of the Business Combination, if

we lose or terminate the services of one or more of our key employees or if one or more of our current or former executives or key employees joins a competitor or otherwise competes with us, it could impair our business and our ability to

successfully implement our business plan.

Additionally, if we are unable to hire qualified replacements for our executive and other key positions in a timely fashion, our ability to execute our business plan would be harmed.

Even if we can quickly

hire qualified replacements, we could experience operational disruptions and inefficiencies during any such transition.

We believe that our future success will depend on our continued ability to attract and retain highly skilled and qualified

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

The loss of key engineering, product development, marketing and sales personnel could disrupt our operations and have an adverse

effect on our business.

Expansion into New Geographic Markets

We plan to continue expanding our business operations by offering our products around the globe, and Truth Social is generally available internationally.

As a result, we have

entered new international markets where we have limited or no experience in marketing, selling, and deploying our products and may be subject to increased business and economic risks.

We may not be able to monetize our products and services

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

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

It is possible that governments of one or more countries may seek to censor content available on Truth Social

in their country or impose other restrictions that may affect the accessibility of Truth Social in their country for an extended period of time or indefinitely.

In addition, governments in other countries may seek to restrict access to Truth Social from their country entirely if they consider us to be in violation of their laws.

event that access to Truth Social is restricted, in whole or in part, in one or more countries or our competitors are able to successfully penetrate geographic markets that we cannot access, our ability to retain or increase our user base and user

engagement may be adversely affected, we may not be able to maintain or grow our revenue as anticipated, and our financial results could be adversely affected.

We may be subject to greater risks than typical social media platforms because of the

focus of our offerings and the involvement of President Donald J.

If we fail to deploy or manage our operations in international markets successfully, our business may suffer.

Key Operating Metrics

From its inception through the Closing, Private TMTG focused on developing Truth Social by enhancing features and user interface rather than relying on traditional performance

metrics like average revenue per user, ad impressions and pricing, or active user accounts, including monthly and daily active users.

While many industry peers may gather and report on these or similar metrics, given the early development stage of

the Truth Social platform, TMTG’s management team has not relied on any particular key performance metric to make business or operating decisions.

TMTG believes that this evaluation is critical and in line with its commitment to implement a robust

business plan that may involve introducing innovative features and potentially incorporating new technologies.

At this juncture in its development, TMTG believes that adhering to traditional key performance indicators, such as signups, average

revenue per user, ad impressions and pricing, or active user accounts including monthly and daily active users, could potentially divert its focus from strategic evaluation with respect to the progress and growth of its business.

TMTG believes that

focusing on these key performance indicators might not align with the best interests of TMTG or its stockholders, as it could lead to short-term decision-making at the expense of long-term innovation and value creation.

Therefore, TMTG believes

that this strategic evaluation is critical and aligns with its commitment to a robust business plan that includes introducing innovative features and new technologies.

In connection with such an evaluation, and consistent with SEC guidance, TMTG will consider the relevant key performance indicators for its then-current business operations and

determine whether it has effective controls and procedures in place to process information related to the disclosure of key performance indicators and metrics.

Should this be the case, TMTG may decide to collect and report such metrics if they are

deemed to significantly enhance investors’ understanding of TMTG’s financial condition, cash flows, and other aspects of its financial performance.

However, TMTG may find it challenging or cost-prohibitive to implement such effective controls and

procedures and may never collect, monitor, or report any or certain key operating metrics.

As the platform evolves and new technologies and features are added, TMTG’s management team expects to reevaluate whether TMTG will gather and monitor one or

more metrics and rely on such information in making management decisions.

If TMTG determines to do so, TMTG expects to present such material key operating metrics appropriately in its periodic reports to enhance investors’ understanding of its

financial condition, cash flows, and any other changes in financial condition and results of operations.

Components of Results of Operations

As of the period ended June 30, 2024, all revenue has been derived from the advertising of products and services on the Truth Social platform.

Advertising revenue is generated by

displaying advertisements as posts (attributable to “ Truth Ads ”) in users’ Truth Social feeds.

On August 19, 2022, TMTG entered into an Advertising Publisher Agreement (“ Rumble Agreement ”) with Rumble USA, Inc.

(“ Rumble ”), pursuant to which Rumble was engaged to sell advertising space for the placement of advertisements on Truth Social by making Truth Social Ad units (“ Ad Unit ” or “ Ad Units ”) available for advertisers on an advertising manager service maintained by Rumble.

TMTG and Rumble executed a minimum guarantee advertising publisher agreement on October 30, 2023 (the “ Minimum Guarantee Rumble Agreement ”), which replaced the Rumble Agreement.

While TMTG determines the number of Ad Units available on our Truth Social platform, the prices for the Ad Units are set by an auction

operated and managed by Rumble.

Under the current agreement, 70% of the total aggregate gross revenues from the sale of Ad Units are allocated to TMTG, and the Ad Units will comprise at least 85% of the aggregate number of paid advertisements

directly into Truth Social feeds by TMTG each month.

We recognize advertising revenue during the period in which we satisfy our performance obligation by displaying advertisements in users’ Truth Social feeds.

We reimburse Rumble for the direct

out-of-pocket costs incurred by Rumble in the performance of the service covered by the Rumble Agreement, including processing fees and chargebacks/refunds paid to advertisers in relation to an Ad Unit.

On October 3, 2022, TMTG entered into a Publisher Agreement (the “ TAME Agreement ”) with The Affinity Media Exchange, Inc.

(“ TAME ”), pursuant to which TMTG engaged TAME as its non-exclusive agent and representative for the sale of Digital Advertising Inventory on Truth Social.

“Digital Advertising Inventory” means all advertising

opportunities on the Truth Social platform which are inserted or added to the TMTG website, app, ad stacks, or video exchange players of Truth Social.

Within 25 days of the end of each calendar month, TAME is required to provide TMTG with month end

sales reporting by platform and to pay TMTG the net revenues actually paid to TAME by the advertisers, after deducting TAME’s commissions equal to 10% of the Digital Advertising Inventory revenue actually collected on behalf of TMTG for Truth

The Rumble Agreement grants to Rumble a worldwide, non-exclusive, royalty-free license to use any and all trademarks, service marks, trade names, symbols, logos and other branding

identifiers of TMTG and Truth Social solely for purposes of performing the services covered by the Rumble Agreement, provided, however, that such license does not include permission to alter, modify, edit, denigrate, or distort Donald J.

name, photograph, likeness (including caricature), voice, and biographical information, or any reproduction or simulation thereof.

The TAME Agreement does not contain a license to intellectual property.

Neither the Rumble Agreement nor the TAME Agreement provide for access to TMTG’s platform or services.

For a description of TMTG’s revenue recognition policies, see Note 2, Significant Accounting Policies and Practices, in TMTG’s unaudited condensed consolidated financial statements

as of and for the three and six months ended June 30, 2024 and 2023, included in this Quarterly Report.

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, based on the time spent managing the agency relationships with external vendors.

These costs are mainly in connection with 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.

TMTG expects cost of revenue to increase in absolute dollars in the future and as a percentage of revenue as it expands its Truth Social platform.

Such increases will likely include

investment in infrastructure costs, other direct costs, including revenue share expenses, allocated facility costs as well as traffic acquisition costs (“ TAC ”).

Infrastructure costs allocated may include data center costs related to TMTG’s co-located facilities, lease and hosting costs, related support and maintenance costs and energy and

bandwidth costs, public cloud hosting costs;

and personnel-related costs, including salaries, benefits and stock-based compensation, for our operations teams.

TAC costs may include costs TMTG incurs with third parties in connection with the sale to advertisers of its advertising products that it places on third-party publishers’ websites and applications or

other offerings collectively resulting from acquisitions.

General and Administration Expenses

General and administration expenses consist primarily of personnel-related costs, including salaries, benefits and stock-based compensation for TMTG’s executive, finance, legal,

information technology, human resources and other administration employees.

In addition, general and administration expenses include fees and costs for professional services, including consulting, third-party legal and accounting services and

facilities costs and other supporting overhead costs that are not allocated to other departments.

We also expect to incur additional expenses as a result of operating as a public company, including expenses necessary to comply with rules and regulations applicable to companies

listed on a national securities exchange and related to compliance and reporting obligations pursuant to the rules and regulations of the SEC.

Sales and Marketing Expenses

Sales and marketing expenses consist 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, corporate communications 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.

Research and Development Expenses

Research and development expenses consist primarily of personnel-related costs, including salaries, benefits and stock-based compensation, for TMTG’s engineers and other employees

engaged in the research and development of its products and services.

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

Depreciation Expense

Depreciation expense consists primarily of depreciation of furniture, fixtures, and equipment.

Non-Operating Income and Other Items

Change in Fair Value of Derivative Liabilities

Private TMTG determined the automatic discounted share-settlement feature of its convertible promissory notes was an embedded derivative requiring bifurcation accounting as (1) the

feature was not clearly and closely related to the debt host and (2) the feature met the definition of a derivative under ASC 815 (Derivatives and Hedging).

The bifurcated embedded features of the Private TMTG Convertible Notes were initially recorded on the balance sheet at their fair value on the date of issuance.

After the initial

recognition, the fair value of the embedded derivative feature changed over time due to changes in market conditions.

The change in fair market value has been included in the statement of operations through the date the debt was converted.

Interest Expense

Interest expense consists of accreted interest expense on Private TMTG’s outstanding convertible promissory note obligations, amortization of deferred financing costs, other related

financing expenses and the post-merger interest expense related to DWAC’s Note Purchase Agreements.

The convertible promissory notes (net of any related debt issuance costs) accreted interest using the respective effective interest rate method

until the debt was extinguished.

Interest Income

Interest income consists of interest earned from banking institutions.

Income Tax Expense

TMTG is subject to income taxes in the United States.

The Company maintains a net operating loss (“ NOL ”) position but has not recognized a

benefit in future years.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

allowance is provided when it is more likely than not that the deferred tax assets will not be realized.

TMTG has established a full valuation allowance to offset its U.S.

net deferred tax assets due to the uncertainty of realizing future tax

benefits from our NOL carryforwards and other deferred tax assets.

The utilization of the net operating losses prior to the Merger will be limited as per IRC Section 382.

Results of Operations

Comparison of the three months ended June 30, 2024 and 2023.

The results of operations presented below should be reviewed in conjunction with TMTG’s unaudited condensed consolidated financial statements as of and for the three months ended

June 30, 2024 and 2023, together with the related notes thereto, included elsewhere in this Quarterly Report.

The following table sets forth TMTG’s unaudited statements of operations for the three months ended June 30, 2024 and 2023, and the dollar and percentage change between the two

(in thousands)

For the three months ended

June 30, 2024

For the three months ended

June 30, 2023

Cost of revenue

Operating costs and expenses:

Research and development

Sales and marketing

General and administration

Total operating costs and expenses

(in thousands)

For the three months ended

June 30, 2024

For the three months ended

June 30, 2023

Operating income/(loss)

Other income:

Interest expense

Interest income

Change in fair value of derivative liabilities

Loss before income tax expense

Income tax expense

Revenues decreased by approximately $355.2, or 30%, for the three months ended June 30, 2024 compared to revenue of approximately $1,192.1 for the three months ended June 30, 2023.

A significant portion of the decrease was attributable to a change in the revenue share with one of our advertising partners, in connection with an agreement intended to improve the Company’s short-term, pre-Business Combination financial position.

Additionally, revenue has varied as we selectively test a nascent advertising initiative on the Company’s Truth Social platform.

This very early-stage initiative resulted in advertising revenues of $836.9 for the three months ended June 30, 2024.

Cost of Revenue

Cost of revenue decreased by approximately $5.0, or 12%, to $36.2 for the three months ended June 30, 2024 compared to approximately $41.2 for the three months ended June 30, 2023.

The modest decline reflects lower personnel-related expenses in the second quarter of 2024 for TMTG employees who contributed to the early-stage testing of Truth Social’s nascent advertising initiative.

Research and Development Expense

Research and development expense increased by approximately $2,664.2, or 121%, to $4,861.6 for the three months ended June 30, 2024 compared to $2,197.4 for the three months ended June 30, 2023.

increase was primarily due to higher IT consulting and software related costs.

Sales and Marketing Expense

Sales and marketing expense increased by approximately $786.9, or 203%, to $1,175.3 for the three months ended June 30, 2024 compared to the three months ended June 30, 2023.

increase was primarily driven by an increase in marketing expense following access to additional capital.

General and Administration Expense

General and administration expense increased by approximately $11,097.2 or 478%, for the three months ended June 30, 2024 compared to $2,321.4 for the three months ended June 30,

The increase was primarily due to higher legal, license and registration, insurance, accounting, and finance fees during the second quarter of 2024.

Depreciation expense decreased by $12.9, or 78%, to $3.7 for the three months ended June 30, 2024 compared to $16.6 for the three months ended June 30, 2023.

The decrease in

depreciation expense reflects the fully depreciated book value of most of the Company’s computer equipment purchased in prior years.

Change in the Fair Value of Derivative Liabilities

The loss from the change in the fair value of the derivative liabilities of the Private TMTG Convertible Notes decreased 100% from $1,611.1 for the three months ended June 30, 2023.

All Private TMTG Convertible Notes were automatically converted into shares of our common stock immediately prior to Closing of the Business Combination on March 25, 2024.

The issuance of Private TMTG common stock upon conversion of the Private

TMTG Convertible Notes extinguished the derivative liabilities immediately prior to the Closing.

Therefore, there was no derivative liability as of June 30, 2024 and no adjustment to earnings pertaining to the Private TMTG Convertible Notes

derivative liabilities during the second quarter of 2024.

Interest Expense

Interest expense decreased approximately $20,764.1, or 101%, for the three months ended June 30, 2024 compared to interest expense of $20,606.3 for the three months ended June 30,

The decrease was due primarily to the conversion of Private TMTG convertible promissory notes to stockholders’ equity and not accruing accreted interest as compared for the three months ended June 30, 2023.

Interest Income

Interest income increased to approximately $2,132.7 for the three months ended June 30, 2024 compared to $0.0 for the three months ended June 30, 2023.

The increase was due

primarily to interest earned in the second quarter of 2024 on proceeds received from the Business Combination that closed March 25, 2024.

Income Tax Expense

TMTG did not record an income tax benefit for the three months ended June 30, 2024 and 2023 as no net credit was recognized due to the uncertainty of realizing future tax benefits

emanating from the NOL carryforwards and other deferred tax assets.

TMTG has established a full valuation allowance to offset its net deferred tax assets due to these uncertainties.

Comparison of the six months ended June 30, 2024 and 2023.

The results of operations presented below should be reviewed in conjunction with TMTG’s unaudited condensed consolidated financial statements as of and for the six months ended June

30, 2024 and 2023, together with the related notes thereto, included elsewhere in this Quarterly Report.

The following table sets forth TMTG’s unaudited statements of operations for the six months ended June 30, 2024 and 2023, and the dollar and percentage change between the two

(in thousands)

For the six months ended

June 30, 2024

For the six months ended

June 30, 2023

Cost of revenue

Operating costs and expenses:

Research and development

Sales and marketing

General and administration

Total operating costs and expenses

(in thousands)

For the six months ended

June 30, 2024

For the six months ended

June 30, 2023

Operating loss

Other income:

Interest expense

Interest income

Loss on the extinguishment of debt

Change in fair value of derivative liabilities

Loss before income tax expense

Income tax expense

Revenues decreased by approximately $700.9, or 30%, for the six months ended June 30, 2024 compared to revenue of approximately $2,308.3 for the six months ended June 30, 2023.

significant portion of the decrease was attributable to a change in the revenue share with one of our advertising partners, in connection with an agreement intended to improve the Company’s short-term, pre-Business Combination financial position.

Additionally, revenue has varied as we selectively test a nascent advertising initiative on the Company’s Truth Social platform.

This very early-stage initiative resulted in advertising revenues of $1,607.4 for the six months ended June 30, 2024.

Cost of Revenue

Cost of revenue increased by approximately $47.1, or 57%, to $129.6 for the six months ended June 30, 2024 compared to approximately $82.5 for the six months ended June 30, 2023.

Effectively all of the increase was due to an increase in personnel-related expenses, which reflect the allocation of a portion of salary and bonus expense for three TMTG employees who contributed to the early-stage testing of Truth Social’s

nascent advertising initiative.

Research and Development Expense

Research and development expense increased by approximately $33,010.7, or 659%, for the six months ended June 30, 2024 compared to $5,009.5 for the six months ended June 30, 2023.

The increase was primarily due to $30,142.5 of non-cash stock-based compensation expense recorded in the first quarter of 2024 related to the issuance of convertible notes to certain vendors engaged in the development of our planned live TV

streaming platform.

Sales and Marketing Expense

Sales and marketing expense increased by approximately $1,601.2, or 248%, to $2,245.7 for the six months ended June 30, 2024 compared to the six months ended June 30, 2023.

increase was primarily driven by a $600.0 bonus paid to an entity owned by a former director of and consultant to Private TMTG, as further described herein, and a $1,001.2 increase in marketing expense following access to additional capital.

General and Administration Expense

General and administration expense increased by approximately $74,056.0, or 1,781%, for the six months ended June 30, 2024 compared to $4,157.7 for the six months ended June 30,

The increase was primarily due to merger related costs including $54,445.5 of non-cash stock-based compensation expense recorded in the first quarter of 2024 in connection with the issuance of Private TMTG Promissory Notes issued to Company

executives (and one consultant) that converted into shares of our common stock upon execution of the Merger.

Depreciation expense decreased by $23.6, or 72%, to $9.3 for the six months ended June 30, 2024 compared to $32.9 for the six months ended June 30, 2023.

The decrease in

depreciation expense reflects the fully depreciated book value of most of the Company’s computer equipment purchased in prior years.

Change in the Fair Value of Derivative Liabilities

The loss from the change in the fair value of the derivative liabilities of the Private TMTG Convertible Notes increased by approximately $233,187.0, or 3,207%, for the six months

ended June 30, 2024, compared to the six months ended June 30, 2023.

All Private TMTG Convertible Notes were automatically converted into shares of our common stock immediately prior to Closing of the Business Combination, and pursuant to ASC 815,

the derivative liabilities were revalued immediately prior to the conversion of the Private TMTG Convertible Notes on March 25, 2024, when our closing share price was $49.95 per share.

The substantial increase in the value of our common stock when

combined with the certainty of our execution of the Merger were primarily responsible for the increase in the change in fair value of the derivative liabilities.

The increase in the fair value of the derivative liabilities is a non-cash expense and

the issuance of Private TMTG common stock upon conversion of the Private TMTG Convertible Notes extinguished the derivative liabilities immediately prior to the Closing.

Therefore, there were no derivative liability as of June 30, 2024 and there

will no longer be future earnings adjustments pertaining to the Private TMTG Convertible Notes derivative liabilities.

Interest Expense

Interest expense decreased by approximately $19,970.8, or 88%, to $2,659.8 for the six months ended June 30, 2024 compared to $22,630.6 for the six months ended June 30, 2023.

decrease was due primarily to the conversion of Private TMTG convertible promissory notes to stockholders’ equity and not accruing accreted interest as compared for the six months ended June 30, 2023.

Interest Income

Interest income increased to approximately $2,161.5 for the six months ended June 30, 2024 compared to $0.0 for the six months ended June 30, 2023.

The increase was due to interest

earned in the second quarter of 2024 on proceeds received from the Business Combination that closed March 25, 2024.

Income Tax Expense

TMTG did not record an income tax benefit for the six months ended June 30, 2024 and 2023 as no net credit was recognized due to the uncertainty of realizing future tax benefits

emanating from the NOL carryforwards and other deferred tax assets.

TMTG has established a full valuation allowance to offset its net deferred tax assets due to these uncertainties.

Liquidity and Capital Resources

Historically, Private TMTG financed operations primarily through cash proceeds from the Private TMTG Convertible Notes.

Our primary short-term requirements for liquidity and capital

are to fund general working capital.

TMTG is currently seeking to (1) grow its initial product, Truth Social;

(2) increase its product offerings and services, including through the acquisition of streaming technology;

and (3) pursue strategic acquisitions and/or partnership.

TMTG intends to fund these activities through a combination of deploying cash on hand, generating advertising revenues, issuing equity (including up to 5,100,000 shares in connection with an

asset acquisition agreement signed on July 3, 2024), and/or selling stock pursuant to that certain Standby Equity Purchase Agreement dated July 3, 2024.

Although TMTG anticipates that current cash on hand will be sufficient to fund its operations for the foreseeable future, TMTG cannot guarantee that it will not be required to

obtain additional financing, or that additional financing, if needed, will be available on terms acceptable to TMTG, or at all.

In addition, although there are no other present binding understandings, commitments, or agreements with respect to any

acquisition of other businesses, products, or technologies, TMTG will, from time to time, evaluate acquisitions of other businesses, products, and technologies.

If TMTG is unable to raise additional equity or debt financing, as and when needed, it

could be forced to forego such acquisitions or significantly curtail its operations.

As of June 30, 2024 and December 31, 2023, the cash and cash equivalents balance was approximately $343,954.4 and $2,572.7, respectively.

The $341,381.7 increase in the Company’s

cash and cash equivalents in the first six months of 2024 is primarily due to cash proceeds of $233,017.5 from the Business Combination, $47,455.0 from the issuance of convertible notes, and $93,805.4 from the exercise of warrants.

Cash and cash

equivalents consist of interest-bearing deposits held at financial institutions.

Cash deposits are held at major financial institutions and are subject to credit risk to the extent those balances exceed applicable Federal Deposit Insurance

Corporation (FDIC) limitations.

The following table shows our cash flows provided by (used in) operating activities, investing activities and financing activities for the stated periods:

(in thousands)

For the six months ended

June 30, 2024

For the six months ended

June 30, 2023

Net cash used in operating activities

Net cash used in investing activities

Net cash provided by financing activities

Net Cash Used in Operating Activities

Net cash used in operating activities for the six months ended June 30, 2024 was approximately $30,754.3 compared to $7,370.9 used in operating activities during the six months

ended June 30, 2023.

The increase in cash used in operating activities was primarily driven by $17,499.9 of higher operating expenses (i.e., higher legal, insurance, license and registration, accounting and finance, IT consulting, software, and

server costs) and $6,580.0 of cash bonuses.

Net Cash Used in Investing Activities

Net cash used in investing activities for the six months ended June 30, 2024 was approximately $2,141.9 compared to $2.2 used in investing activities during the six months ended

June 30, 2023.

The increase in cash used in investing activities was driven by investment in servers and network equipment.

Net Cash Provided by Financing Activities

Net cash provided by financing activities for the six months ended June 30, 2024 was approximately $374,277.9 compared to $0.0 provided by financing activities for the six months

ended June 30, 2023.

The increase was due to due to cash proceeds of $233,017.5 from the Business Combination, $47,455.0 from the issuance of convertible notes, and $93,805.4 from the exercise of warrants.

Convertible Promissory Notes

Notes 1 to 7 were Convertible Promissory Notes issued from May 2021 through October 2021 with a cumulative face value of $5,340.0 (including $240.0 of debt issuance costs), 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 to 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, 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 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 by $4.00.

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 to 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 note.

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.

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, US$21 or US$20 subject to the respective conditions of the individual

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 $17,360.0 (net of repayments), 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 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.

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 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 SPAC merger agreement 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 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 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.

Several of the Private TMTG Convertible Notes were amended, extended, and/or restated after their initial issuance and prior to their conversion.

Each Private TMTG Convertible Note that was issued and outstanding immediately prior to the Closing automatically converted immediately prior to the effective time of the Closing

into a number of shares of Private TMTG common stock as such Private TMTG Convertible Note would automatically have been converted into upon the Closing, in accordance with the Merger Agreement.

Additionally, pursuant to a note purchase agreement entered into by and between Digital World and certain institutional investors on February 8, 2024 (the “ Note Purchase Agreements ”), Digital World agreed to issue up to $50,000.0 in convertible promissory notes (the “ DWAC Convertible Notes ”).

The DWAC Convertible Notes:

(a) accrued 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 Digital World consummated 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 Digital World was effective (such date, the “ Maturity Date ”);

(b) were 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 DWAC Convertible Notes, at each holder’s option, in whole or in part, and subject to the terms and conditions of the DWAC Convertible Notes, including any required

shareholders’ approval upon the consummation of the Business Combination and (ii) into that number of shares of common stock of the Company and warrants included in the units, each unit consisting of one share of 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 DWAC Convertible Note (excluding any accrued interest, which shall not

be payable with respect to the DWAC Convertible Note that was converted) being converted, divided by (B) $8.00 (the “ Conversion Price ”);

commencing on the date on which all common stock of the Company 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 was contingent upon the trading price of the common stock of the Company 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 the Company;

(d) were 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 deposited into a control account as indicated by the Company (the “ Control Account ”).

The proceeds from such final drawdown deposited into the

Control Account remained therein and could not be withdrawn by the Company until such time as (i) the Company exercised the Redemption Rights using the proceeds in the Control Account, (ii) any portion of the applicable DWAC Convertible Note was

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 DWAC Convertible Notes had been

declared effective by the SEC.

The DWAC Convertible Notes were subject to specified events of default and had registration rights pursuant to the registration rights agreement entered into by the Company and the parties thereto as of September 2,

Following the effectiveness on June 18, 2024, of a resale registration statement covering all common stock issued pursuant to the DWAC Convertible Notes, all such notes were converted on or before June 20, 2024.

The proceeds of the final

drawdown were released from the Control Account on July 1, 2024.

Liquidity and Going Concern

Private 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, Private TMTG

entered into a definitive Merger Agreement with Digital World.

The companies consummated the Merger on March 25, 2024.

Company operations and investment activities consumed $70,783.5 of cash from February 8, 2021 (inception) through June 30, 2024, primarily funded by $47,915.0 of cash proceeds (net

of repayments and debt issuance cost) from the issuance of the Private TMTG Convertible Notes and cash proceeds from the Business Combination.

The March 25, 2024 Closing triggered the automatic conversion of the Private TMTG Convertible Notes to

Private TMTG common stock immediately prior to such Closing, thus eliminating the liability.

Concurrently with the Closing, Private TMTG received $273,017.5 of net cash proceeds from the Business Combination, comprised of $233,017.5 of unrestricted cash and $40,000.0 of

then-restricted cash.

Moreover, the Company received $93,805.4 of cash proceeds from the exercise of warrants during the second quarter of 2024.

As a result, the Company had a total of $343,954.4 in cash as of June 30, 2024.

As noted above,

following conversion of the DWAC Convertible Notes on or before June 20, 2024, the formerly-restricted cash was transferred to an unrestricted account on July 1, 2024.

Private TMTG experienced operating losses in preceding years and through the first half of 2024.

On average, Private TMTG operations consumed approximately $12,577.3 of cash per

year from its inception (February 8, 2021) through year-end 2023.

In addition, for the six months ended June 30, 2024, and 2023, the Company had negative operating cash flows of $30,754.3 (including transaction related cash disbursements) and

$7,370.9, respectively.

As of December 31, 2023, Private TMTG had a negative working capital position, primarily due to the short-term nature of the Private TMTG Convertible Notes, which converted to Private TMTG common stock immediately prior to

Based upon the receipt of cash proceeds related to the Business Combination, the resulting positive working capital position (i.e., $353,525.3 of current assets less $14,295.2 of current liabilities), and no debt on the balance sheet

as of June 30, 2024, management believes there is not substantial doubt regarding the Company’s ability to continue as a going concern as of June 30, 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 the accompanying financial statements.

Off-Balance Sheet Arrangements

As of June 30, 2024, TMTG did not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes

in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

The term “off-balance sheet arrangement” generally means any transaction, agreement or other

contractual arrangement to which an entity unconsolidated with TMTG is a party, under which it has any obligation arising under a guaranteed contract, derivative instrument or variable interest or a retained or contingent interest in assets

transferred to such entity or similar arrangement that serves as credit, liquidity or market risk support for such assets.

Quantitative and Qualitative Disclosures about Market Risk

We are exposed to market risks in the ordinary course of our business.

Market risk represents the risk of loss that may impact our financial position due to adverse changes in

financial market prices and rates.

Our market risk exposure is primarily interest rates, access to credit and funds to run day-to-day operations, and the result of fluctuations in foreign currency exchange rates if we expand internationally.

Failure to mitigate these risks could have a negative impact on revenue growth, gross margin, and profitability.

Interest Rate Risk

Our cash and cash equivalents are comprised of demand deposits in bank accounts held at financial institutions.

We do not enter into investments for trading or speculative purposes

and have not used any derivative financial instruments to manage our interest rate risk exposure.

As of June 30, 2024 and 2023, effectively all of our cash and cash equivalents were maintained with a large financial institution.

We have reviewed the financial statements of our

banking institution and believe it currently has sufficient assets and liquidity to conduct its operations in the ordinary course of business with little or no credit risk to us.

As of June 30, 2024 and 2023, two advertising partners combined represented in excess of 98% of accounts receivable.

Emerging Growth Company Status

In April 2012, the JOBS Act was enacted.

Section 107(b) of the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying

with new or revised accounting standards.

Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.

TMTG has elected to take advantage of the extended

transition period to comply with new or revised accounting standards and to adopt certain of the reduced disclosure requirements available to emerging growth companies.

As a result of the accounting standards election, TMTG will not be subject to

the same implementation timing for new or revised accounting standards as other public companies that are not emerging growth companies which may make comparison of our financials to those of other public companies more difficult.

Critical Accounting Policies and Significant Management Estimates

TMTG prepares its financial statements in accordance with GAAP.

The preparation of financial statements also requires TMTG to make estimates and assumptions that affect the reported

amounts of assets, liabilities, revenue, costs and expenses and related disclosures.

TMTG bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances.

Actual results could

differ significantly from the estimates made by TMTG’s management team.

To the extent that there are differences between TMTG’s estimates and actual results, its future financial statement presentation, balance sheet, results of operations and cash

flows will be affected.

TMTG believes that the accounting policies discussed below are critical to understanding its historical and future performance, as these policies relate to the more significant areas involving our management team’s judgments

and estimates.

Critical accounting policies and estimates are those that TMTG considers the most important to the portrayal of its balance sheet and results of operations because they require its most difficult, subjective, or complex judgments,

often as a result of the need to make estimates about the effects of matters that are inherently uncertain.

The preparation of TMTG’s financial statements in conformity with GAAP requires it to make estimates and judgments that affect the amounts reported in those financial statements and

accompanying notes.

Although TMTG believes that the estimates it uses are reasonable, due to the inherent uncertainty involved in making those estimates, actual results reported in future periods could differ from those estimates.

significant accounting policies are described in Note 2 to TMTG’s unaudited condensed consolidated financial statements as of and for the six months ended June 30, 2024 and 2023, included in this Quarterly Report.

TMTG’s critical accounting

policies are described below.

Revenue Recognition.

TMTG records revenue in accordance with ASC 606.

TMTG 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;

– Determining whether TMTG is the principal or the agent in arrangements where another party is involved in providing specified services to a customer;

and – Recognition of revenue when or as TMTG

satisfies the performance obligations.

Private TMTG entered into advertising contractual arrangements with advertising manager service companies.

The advertising manager service companies provide advertising services to

customers that facilitate the placement of ads on the Truth Social platform.

TMTG determines the number of Ad Units available on its Truth Social platform.

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 third-party companies.

TMTG has the right to block specific advertisers at its sole reasonable discretion, consistent

with applicable laws, rules, regulations, statutes, and ordinances.

TMTG 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.

TMTG determined that the contractual arrangements with Rumble and TAME, respectively, are agency arrangements as determined by ASC 606-10-55.

Rumble is an advertising manager service involved in providing advertising services through its Ad Manager Service Platform on the Truth Social website to customers.

make Truth Social Ad Units available for purchase by advertisers on the Ad Manager Service.

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

TMTG determined that the nature of its promise is to arrange for advertising

services to be provided by Rumble.

The distinct service is selling advertising space for the placement of advertisements (“ Ads ”) on Truth Social and not combined with any other service as contemplated in

paragraph ASC 606-10-55-36.

In evaluating the nature of its promise (as described in paragraph 606-10-55-36), TMTG determined that Rumble has sole discretion over the terms of the auction and all payments and

actions associated therewith.

Prices for the Ad Units will be set by an auction operated and managed by Rumble.

Rumble therefore controls (as described in paragraph ASC 606 -10-25-25) each specified Ad unit used by the customer.

The services are

not combined with any other services as contemplated in paragraph ASC 606-10-25-21(a).

ASC 606-10-55-38 is applicable as TMTG is an agent, its performance obligation is to arrange for the provision of advertising by Rumble.

TMTG does not control the advertising

provided by Rumble to satisfy the customer’s requirements.

TMTG therefore recognizes revenue in the amount of its share in exchange for arranging for the specified advertising to be provided by Rumble.

The share is reduced by any costs incurred by

The requirements of ASC 606-10-55-37 are not applicable as TMTG does not obtain control as outlined in this section.

Also refer to the analysis of control indicators in ASC 606-10-55-39.

ASC 606-10-55-39 (indicator of control before

advertising is sold to customers) is not applicable due to:

Rumble and not TMTG is primarily responsible for fulfilling the promise to provide the specified advertising;

the Company has no inventory risk related to advertising used by a customer or

TMTG has no discretion in establishing the price for the specified advertising.

ASC 606-10-55-40 is not applicable as no principal obligations were transferred.

The TAME contractual arrangement is significantly smaller in financial scope than the Rumble arrangement;

however, the nature of the promise is similar for both vendors.

has discretion over the terms of the auction and all payments and actions associated therewith.

ASC 606-10-55-38 is therefore applicable, and the Company recognizes revenue in the amount of its share in exchange for arranging for the specified

advertising to be provided by TAME.

ASC 606-10-55-39 is not applicable for similar reasons as outlined in the preceding paragraph.

Software Development Costs.

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 six months ended June 30, 2024.

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

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 intended.

Costs capitalized for

developing such software applications were not material for the six months ended June 30, 2024.

Stock Based Compensation .

TMTG measures the cost of services received in exchange for an award of equity instruments based on the fair value

of the award.

The fair value of the award is measured on the grant date for equity classified instruments, and liability classified awards are subject to remeasurement in accordance with ASC 718.

Awards granted to directors are treated on the same

basis as awards granted to employees.

Income Taxes .

TMTG is subject to income taxes in the United States.

Significant judgment is required in determining its provision (benefit)

for income taxes and income tax assets and liabilities, including evaluating uncertainties in the application of accounting principles and complex tax laws.

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 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.

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

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.

interest expense and penalties related to uncertain tax positions are recorded in income tax expense.

Convertible Promissory Notes .

Private TMTG issued the Private TMTG Convertible Notes, which contained a range of fixed rate conversion

features, whereby the outstanding principal and accrued interest would be converted into common shares at a fixed discount to the market price of the common stock at the time of conversion.

The Private TMTG Convertible Notes represented a financial

instrument other than an outstanding share that embodies a conditional obligation that Private TMTG must or may have settled by issuing a variable number of its equity shares.

The bifurcated embedded features of the convertible promissory notes

were initially recorded on the balance sheet at their fair value on the date of issuance.

After the initial recognition, the fair value of the convertible promissory notes (derivative feature component) may have changed over time due to changes in

market conditions.

The change in fair market value was included in the statement of operations.

The liability component of the bifurcated convertible promissory notes (net of any related debt issuance costs) accreted interest using the respective

effective interest rate method until maturity.

Fair Value of Financial Instruments .

TMTG 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 Private TMTG Convertible Notes were classified as Level 3 due to significant unobservable inputs.

Historically, the estimated fair value of the

conversion feature of the derivative liability has been based on traditional valuation methods including Black-Scholes option pricing models and Monte Carlo simulations.

Use of Estimates.

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

GAAP requires TMTG to make estimates and assumptions that

affect the reported amounts of assets and liabilities and disclosures 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 include assumptions used in the fair value of equity instruments, the valuation allowance against deferred tax assets, and the estimates of fair value of derivative liabilities, earn-out shares and

stock-based compensation.

Recent Accounting Pronouncements

See Note 2 to TMTG’s unaudited condensed consolidated financial statements for the six months ended June 30, 2024 and 2023.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Effective May 3, 2024, TMTG dismissed BF Borgers CPA PC (“ BF Borgers ”) as its independent registered public accounting firm.

On May 4, 2024,

TMTG engaged Semple, Marchal & Cooper, LLP (“ SMC ”) as BF Borgers’ replacement.

The decision to change independent registered public accounting firms was made with the recommendation and approval of the

Audit Committee.

BF Borgers’ audit reports on TMTG’s consolidated financial statements as of and for the fiscal years ended December 31, 2023 and December 31, 2022 did not contain an adverse opinion

or a disclaimer of opinion and were not qualified or modified as to audit scope or accounting principles.

During the fiscal years ended December 31, 2023 and 2022, and the subsequent interim period, there were no disagreements, as that term is defined in Item 304(a)(1)(iv) of Regulation

S-K, between TMTG and BF Borgers on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to BF Borgers’ satisfaction, would have caused BF Borgers to

make reference to such disagreements in its audit reports.

During the fiscal years ended December 31, 2023 and 2022, and the subsequent interim period, there were no reportable events within the meaning of Item 304(a)(1)(v) of Regulation

Interest Rate Fluctuation Risk

TMTG’s investment portfolio may consist of short-term and long-term interest-bearing obligations, including government and investment-grade debt securities and money market funds.

These securities may be classified as available-for-sale and, consequently, would be recorded on the unaudited condensed consolidated balance sheets at fair value with unrealized gains or losses reported as a separate component of accumulated other

comprehensive income (loss), net of tax.

TMTG’s investment policy and strategy will be focused on the preservation of capital and supporting its liquidity requirements.

TMTG does not intend to enter into investments for trading or speculative

Foreign Currency Exchange Risk

Transaction Exposure

TMTG may transact business in various foreign currencies and have international revenue, as well as costs denominated in foreign currencies.

This may expose us to the risk of

fluctuations in foreign currency exchange rates.

Accordingly, changes in exchange rates, and in particular a strengthening of the U.S.

dollar, could negatively affect our revenue and other operating results as expressed in U.S.

Financial Market Risk

The primary objective of any investment activities is to preserve principal, while at the same time maximizing income we receive from investments without significantly increased

Some of the securities TMTG may invest in may be subject to market risk.

This means that a change in prevailing interest rates may cause the principal amount of the investment to fluctuate.

For example, if TMTG holds a security that was

issued with a fixed interest rate at the then-prevailing rate and the prevailing interest rate later rises, the value of its investment will decline.

To minimize this risk in the future, TMTG may maintain its portfolio of cash equivalents and

investments in a variety of securities, including (but not limited to):

commercial paper, money market funds, government and non-government debt securities and certificates of deposit.

Quantitative and Qualitative Disclosures About Market Risk

Not applicable for smaller reporting companies.

On each of October 1, October 7, October 14, and October 29, 2024, TMTG issued contingent

consideration to WCT upon the achievement of operational milestones related to the opening of data centers, in accordance with the terms of the Asset Acquisition Agreement.

On October 3, 2024, the Company and its former Chief Operating Officer (“Former COO”) entered into a separation and release of claims agreement (the “Separation Agreement”) following the Former COO’s

resignation effective September 28, 2024 (“Separation Date”).

Pursuant to the Separation Agreement, the Former COO is entitled to certain payments over fourteen months following the Separation Date, subject to his compliance with the terms of the Separation

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