What changed in this filing

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Item 1A. Risk Factors

2025-05-09 compared with 2024-11-05 · 10 added, 267 removed, 2 unchanged (99% of the section changed)

Risk Factors.

Factors that could cause our actual results to differ materially from those in this Quarterly Report are any of the risks described in our Annual Report on Form 10-K filed with the SEC on April 1, 2024, as amended

by Amendment Number 1 to Form 10-K filed with the SEC on April 3, 2024 (the “ Annual Report ”).

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

financial condition.

Factors that could cause our actual results to differ materially from those in this Quarterly Report are any of the risks described in our Annual Report on Form 10-K for the year ended December 31,

2024, filed with the SEC on February 14, 2025 (the “ Annual Report ”).

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

Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations.

Other than as disclosed below, as of the date of this Quarterly Report, there have

been no material changes to the risk factors disclosed in our Annual Report filed with the SEC.

Risks Related to TMTG’s Business

In connection with the preparation of its financial statements as of and for the year ended December 31, 2023, Private TMTG identified material weaknesses in its internal

control over financial reporting, and TMTG may identify additional material weaknesses in its previously issued financial statements that, in the future, may cause TMTG to fail to meet its reporting obligations or result in material misstatements

of its financial statements.

As a privately-held company, Private TMTG was not required to evaluate its internal control over financial reporting in a manner that meets the standards of publicly traded companies required by Section 404(a) of

the Sarbanes-Oxley Act.

As a public company, TMTG will be required to provide management’s attestation on internal control over financial reporting.

If TMTG is unable to establish or maintain appropriate internal control over financial reporting

or implement these additional requirements in a timely manner or with adequate compliance, it could result in material misstatements in our consolidated financial statements, failure to meet our reporting obligations on a timely basis, increases

in compliance costs, and subject us to adverse regulatory consequences, all of which may adversely affect investor confidence in TMTG and the value of our common stock.

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

In connection with the preparation of its financial

statements as of and for the year ended December 31, 2023 and 2022, Private TMTG’s management identified a material weakness in its internal control over financial reporting.

A “material weakness” is a deficiency, or a combination of

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

The following material

weaknesses were identified:

TMTG did not maintain a sufficient complement of personnel with accounting knowledge, experience and training to appropriately analyze, record and disclose accounting matters to provide reasonable assurance of preventing material

misstatements;

TMTG did not perform risk assessment procedures on internal controls to detect financial reporting risks in a timely manner, and also lacked documentation on policies and procedures that are critical to the accomplishment of financial

reporting objectives.

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

TMTG is implementing several remediation measures including, but not limited to hiring

additional accounting staff with the requisite background and knowledge, engaging third parties to assist in complying with the accounting and financial reporting requirements related to significant and complex transactions as well as adding

personnel to assist TMTG with formalizing its business processes, accounting policies and internal control documentation, strengthening supervisory reviews by our Management Team, and evaluating the effectiveness of its internal controls in

accordance with the framework established by Internal Control — Integrated Framework (2013) published by the Committee of Sponsoring Organizations of the Treadway Commission.

While TMTG’s efforts are

ongoing, TMTG plans to continue to take additional steps to remediate the material weaknesses, improve its financial reporting systems, and implement new policies, procedures, and controls;

however, TMTG cannot guarantee those measures will

prevent or detect material weaknesses in the future.

Although TMTG intends to continue with its remediation efforts mentioned above, all identified material weaknesses continue to exist as of the date of this prospectus and we cannot provide any assurance that TMTG,

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

While we are undertaking efforts to remediate these material weaknesses, the material

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

controls are designed and operating effectively.

We are working to remediate the material weaknesses as efficiently and effectively as possible but expect that full remediation could potentially go beyond December 31, 2024.

At this time, we

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

however, these remediation measures will be time consuming, incur significant costs, and place significant demands on our financial

and operational resources.

If TMTG identifies any new material weaknesses in the future, any such newly identified material weakness could limit its ability to prevent or detect a misstatement of its accounts or disclosures that could result

in a material misstatement of its annual or interim financial statements.

In addition, to the extent there are future disagreements with or required changes to TMTG’s auditors, TMTG’s ability to prepare and timely comply with its reporting

obligations may be significantly impaired.

In any of these occurrences were to materialize, TMTG may be unable to maintain compliance with securities law requirements and applicable stock exchange listing requirements regarding timely filing of

periodic reports, investors may lose confidence in our financial reporting and the price of our securities may decline as a result.

TMTG cannot assure you that any measures it has taken or may take in the future will be sufficient to remediate

the existing material weaknesses, avoid potential future material weaknesses or disagreements with its auditors.

If TMTG encounters issues with the rollout and implementation of its streaming content plans, TMTG may delay or decide not to fully implement the service, which may affect

TMTG’s growth strategy and operation.

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

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

Release stand-alone

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

Release Truth Social streaming apps for home TV.

As part of the roll out of its own CDN, TMTG expects to obtain data center services and purchase e-servers

and related equipment for the project.

On July 3, 2024, TMTG;

and JedTec entered into the Asset Acquisition Agreement, as well as ancillary agreements, relating to streaming technology.

The transaction closed on August 9, 2024.

Management’s Discussion and Analysis of Financial Condition and Results of Operations—Recent Developments—WCT Asset Acquisition.”

TMTG expects to fully launch Phase 1 by the end of 2024.

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

TMTG is developing Beta versions of Phases 2 and 3 to

follow shortly after the launch of the beta version of Phase 1.

As of October 21, 2024, TMTG had announced that Truth+ streaming had been released as a standalone product on Android, iOS, and Web.

As of October 23, 2024, TMTG had announced that

Truth+ streaming had been released on Apple TV, Android TV, and Amazon Fire TV.

TMTG anticipates starting to generate revenue from this technology during 2025, contingent upon the successful implementation of all three phases.

The foregoing timeline and revenue generation expectations are preliminary and depend on several factors, including TMTG’s ability to economically launch its CDN technology.

This may depend on TMTG’s ability to

develop, negotiate improved licensing terms for, or acquire CDN technology, integrate such technology, successfully complete beta testing, and list the relevant apps on leading app stores.

Any delays or challenges in these areas could materially

affect the timeline and/or implementation of the CDN technology.

If TMTG is unable to address these challenges effectively, it could result in significant delays, increased costs, and the inability to meet revenue timeline expectations.

these risks may lead to TMTG deciding to cease the implementation of the rollout of TMTG’s streaming content and CDN technology altogether, which would have a material adverse effect on TMTG’s growth strategy and may result in a material adverse

effect on the results and operations of TMTG.

Risks Related to President Donald J.

President Donald J.

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

candidate for that office.

An adverse outcome in one or more of the ongoing legal proceedings in which President Donald J.

Trump is involved could negatively impact TMTG and its Truth Social platform.

On September 21, 2022, the Attorney General of the State of New York—who pledged to pursue President Donald J.

Trump even before taking office—launched a civil suit against President Donald J.

Trump and affiliated

individuals and entities.

Included among these affiliated entities was The Trump Organization.

Trump, Jr., who is a TMTG director, is the Executive Vice President of The Trump Organization.

The suit alleged business fraud relating to misrepresentations in the preparation of President Donald J.

Trump’s annual statements of financial condition in the years 2011 through 2021.

President Donald J.

had previously been held in civil contempt in April 2022 for failing to comply with a subpoena for documents during the course of the New York Attorney General’s investigation related to these charges.

In June 2023, a New York appeals court

narrowed the fraud case, the trial for which commenced in October 2023 and closing oral arguments were concluded on January 11, 2024.

New York Supreme Court Justice Arthur Engoron, in a Decision and Order dated February 16, 2024, held President

Trump and defendants liable under the following five causes of action.

Specifically, (i) for repeatedly and persistently falsifying business records, thus violating Executive Law § 63(12) and New York Penal Law 175.05;

conspiracy to falsify business records;

(iii) for repeatedly and persistently issuing false financial statements, thus violating Executive Law § 63(12) and New York Penal Law 175.45;

(iv) for repeatedly and persistently committing insurance fraud

in violation of Executive Law § 63(12) and New York Penal Law 176.05;

and (v) for conspiracy to commit insurance fraud.

The court ordered President Donald J.

Trump and defendants to pay approximately $354,868,768 in aggregate disgorgement of

ill-gotten gains, including $168,040,168 with pre-judgment interest from March 4, 2019;

$126,828,600, with pre-judgment interest from May 11, 2022, and $60,000,000, with pre-judgment interest from June 26, 2023.

The trial court enjoined President

Trump, among others, from serving as an officer or director of any New York corporation or other legal entity in New York for a period of three years, and from applying for loans from any financial institution chartered by or registered

with the New York Department of Financial Services for a period of three years.

However, the foregoing injunctions were subsequently stayed pending appeal, and a five-judge panel of the Appellate Division, First Judicial Department heard oral

arguments on September 26, 2024.

In its February 16, 2024 ruling, the court ordered Judge Barbara Jones (ret.) to continue in her role as an Independent Monitor, tasked with overseeing the Trump Organization’s financial disclosures to any third

parties and any transfer or other dissipation of assets, for a period of no less than three years following the ruling.

In addition to the continued monitorship, the court also ordered that an Independent Director of Compliance be installed at

the Trump Organization, who will be responsible for ensuring good financial and accounting practices, will establish internal written protocols for financial reporting, and will also approve any financial disclosures to third parties in advance

of submission.

On March 30, 2023, the Manhattan District Attorney indicted President Donald J.

Trump on 34 counts of falsifying business records in the first degree under the New York State Penal Law, in connection with a

so-called “hush money” payment made before the 2016 presidential election.

On May 30, 2024, President Trump was found guilty on all 34 counts.

President Trump subsequently filed a motion to set aside the jury verdict and dismiss the indictment

following the U.S.

Supreme Court’s decision regarding presidential immunity (described below).

The decision on the motion is scheduled to be handed down on November 12, 2024, with sentencing, if necessary, to follow on November 26, 2024.

On May 9, 2023, a jury found President Donald J.

Trump liable for both battery and defamation against E.

Jean Carroll, and Ms.

Carroll was awarded $5 million in total damages for both claims (the latter of which

arose from a 2022 post by President Donald J.

Trump on Truth Social).

The jury also determined that Ms.

Carroll did not prove, by a preponderance of the evidence, that President Donald J.

Trump raped her.

On July 19, 2023, a federal district

court judge denied President Donald J.

Trump’s request for a new trial and/or reduction in damages.

President Donald J.

Trump appealed, and a panel of the U.S.

Court of Appeals for the Second Circuit heard oral arguments on September 6, 2024.

January 26, 2024, following a second civil trial in the U.S.

District Court for the Southern District of New York, Ms.

Carroll was awarded an additional $83.3 million in connection with statements made by President Donald J.

Trump in 2019.

February 7, 2024, the judge denied President Donald J.

Trump’s motion for a mistrial.

An appeal is pending.

President Donald J.

Trump’s countersuit against Ms.

Carroll for defamation was dismissed on August 7, 2023.

On June 8, 2023, President Donald J.

Trump was indicted by a special counsel appointed by the U.S.

Attorney General on 37 federal charges, including willful retention of national defense information related to

documents seized during an FBI raid at Mar-a-Lago in August 2022.

On July 15, 2024, a judge in the U.S.

District Court for the Southern District of Florida dismissed the superseding indictment based on a finding that the special counsel’s

appointment violated the Appointments Clause of the U.S.

Constitution.

The court also found the special counsel’s use of a permanent indefinite appropriation violated the Appropriations Clause.

On July 15, 2024, the special counsel filed a notice

of appeal of the district court’s dismissal.

On August 1, 2023, President Donald J.

Trump was indicted by the special counsel on four (4) additional federal charges—conspiracy to violate rights, conspiracy to defraud the government, and one count each of

obstructing an official proceeding and conspiring to do so—in connection with the 2020 election and events related to the certification thereof on January 6, 2021.

President Donald J.

Trump pleaded not guilty, and moved to dismiss the indictment

based on presidential immunity.

On July 1, 2024, the U.S.

Supreme Court held that the President is entitled to absolute immunity from criminal prosecution for acts within his conclusive and preclusive constitutional authority, and at least

presumptive immunity from prosecution for all his official acts.

Supreme Court determined that President Trump was absolute immune from prosecution for certain conduct alleged in the indictment, but remanded the case to the U.S.

Court for the District of Columbia for further proceedings consistent with its opinion.

On August 27, 2024, the special counsel filed a superseding indictment.

On August 14, 2023, President Donald J.

Trump and 18 co-defendants were indicted on state racketeering charges brought by the district attorney in Fulton County, Georgia in connection with the aftermath of the 2020

In September and October 2023, four of President Donald J.

Trump’s co-defendants pleaded guilty.

President Donald J.

Trump pleaded not guilty.

In November 2023, the prosecutor requested an August 5, 2024 trial date.

On January 25, 2024,

President Donald J.

Trump filed a motion to join a co-defendant’s motion to dismiss the grand jury indictment and disqualify the district attorney.

On March 13, 2024, the judge dismissed three counts against President Trump.

On March 15, 2024,

the judge declined to disqualify the district attorney, provided that a special prosecutor with whom she had a romantic relationship left the case.

President Donald J.

Trump and several of his co-defendants have filed an appeal and are continuing

to seek the district attorney’s disqualification.

The Georgia Court of Appeals has scheduled oral argument of the appeal for December 5, 2024, and no trial date for President Donald J.

Trump has been set.

The foregoing does not purport to be an exhaustive list of legal proceedings in which President Donald J.

Trump is or has been involved.

In June 2016, USA Today published an analysis of litigation involving

President Donald J.

Trump, which found that over the previous three decades President Donald J.

Trump and his businesses had been involved in at least 3,500 legal cases in U.S.

federal and state courts.

Of the approximately 3,500 suits, President

Trump or one of his companies were plaintiffs in 1,900;

defendants in 1,450;

and bankruptcy, third party, or other in 150.

President Donald J.

Trump was named personally in at least 169 suits in federal court.

Over 150 other cases were

in the Seventeenth Judicial Circuit Court of Florida (covering Broward County, Florida) since 1983.

In the 1,300 cases where the record establishes the outcome, President Donald J.

Trump settled 175 times, lost 38, won 450, and had another 137

cases end with some other outcome.

In the other 500 cases, judges dismissed plaintiffs’ claims against President Donald J.

However, you should not rely on or infer any trends based on the disposition of such prior cases against President

Trump as no assurance can be given regarding the results of the pending legal proceedings.

Although TMTG is not a party to any of the above-referenced matters, TMTG cannot predict what effect, if any, an adverse outcome to such matters, or even their continued existence, may have on President Donald J.

Trump’s personal reputation and TMTG’s business or prospects.

The terms of a license agreement with President Donald J.

Trump are not terminable by TMTG when it may be desirable to TMTG.

In addition, the license agreement does not

require President Donald J.

Trump to use Truth Social in certain circumstances, including with respect to posts that he determines, in his sole discretion, to be politically-related.

If TMTG disagrees with President Donald J.

Trump about the

scope of his obligation to use, or first post on, Truth Social, TMTG lacks any meaningful remedy with respect to such disagreement — which could have a material adverse effect on the business and/or operations of TMTG.

The operative version of a License, Likeness, Exclusivity and Restrictive Covenant Agreement that Private TMTG entered into with President Donald J.

Trump (the “ License Agreement ”)

allows TMTG to use “Trump Media & Technology Group Corp.” as its name and to use the name and likeness of President Donald J.

Trump, subject to certain limitations.

The License Agreement includes a provision that obligates President Donald

Trump to make any non-political social media post from any of his personal (i.e., non-business) accounts on Truth Social and to refrain from making the same post on another social media site for 6 hours (the “ Exclusivity

Obligation ”).

Thereafter, he is free to post on any site to which he has access.

Thus, TMTG has limited time to benefit from his posts and followers may not find it compelling to use Truth Social to read his posts that quickly.

In addition, he may make any post that he deems, in his sole discretion, to be politically-related (“ Political Related Posts ”) on any social media site at any time,

regardless of whether that post originates from a personal account.

Most or all of President Donald J.

Trump’s social media posts as a candidate for president may be deemed by him to be politically related.

For example, certain video posts

initially made by his campaign to other social media platforms in June 2024 were not posted in exactly the same form on Truth Social.

Consequently, TMTG may lack any meaningful remedy if President Donald J.

Trump minimizes his future use of Truth

Social and/or broadly construes the definition of Political Related Posts.

President Donald J.

Trump may terminate the Exclusivity Obligation upon thirty days prior written notice provided at any time on or after February 2, 2025.

From and after termination of the Exclusivity Obligation,

President Donald J.

Trump must make reasonable, good faith efforts to contemporaneously post on Truth Social any non-political posts that he makes from a personal account to another social media platform.

However, that obligation is also subject

to the exception for Political Related Posts.

Under the License Agreement with President Donald J.

Trump, neither the personal nor political conduct of President Donald J.

Trump, even if such conduct could negatively reflect on TMTG’s reputation or brand or be

considered offensive, dishonest, illegal, immoral, or unethical, or otherwise harmful to TMTG’s brand or reputation, will be considered a breach of the license agreement.

TMTG expressly acknowledges the controversial nature of being associated

with President Donald J.

Trump and the possibility of any associated controversies affecting TMTG adversely.

TMTG Sub may not terminate the License Agreement based on the personal or political conduct of President Donald J.

Trump, even if such conduct could negatively reflect on TMTG’s reputation or brand or be considered

offensive, dishonest, illegal, immoral, or unethical, or otherwise harmful to TMTG’s brand or reputation.

Further, TMTG Sub may be obligated to indemnify President Donald J.

Trump for losses of any type that relate in any way to the License

Agreement, including any such losses attributable to President Donald J.

Trump’s own offensive, dishonest, illegal, immoral, unethical or otherwise harmful conduct.

As of the date of this Quarterly Report, there have been no material changes to the risk factors disclosed

in our Annual Report filed with the SEC.

Unregistered Sales of Equity Securities and Use of Proceeds.

(b) Not applicable.

Defaults Upon Senior Securities.

Mine Safety Disclosures.

Not Applicable.

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 1A. Risk Factors