Business Description

NOTE 1 - DESCRIPTION OF BUSINESS The accompanying consolidated financial statements include the historical accounts of TMTG Sub Inc. f/k/a Trump Media & Technology Group Corp. (“Private TMTG” or “Predecessor TMTG” or, prior to the closing on March 25, 2024, “TMTG”), which changed its name from Trump Media Group Corp. in October 2021. The mission of TMTG is to end Big Tech’s assault on free speech by opening up the Internet and giving people their voices back. TMTG operates Truth Social, a social media platform established as a safe harbor for free expression amid increasingly harsh censorship by Big Tech corporations, as well as Truth+, a streaming platform focusing on family friendly live TV channels and on-demand content. TMTG has also launched Truth.Fi, a financial services and FinTech brand incorporating America First investment vehicles, and a digital asset strategy--including a bitcoin treasury--to help ensure our financial freedom and protect against discrimination by financial institutions. Merger On March 25, 2024, TMTG consummated the DWAC Merger Agreement dated October 20, 2021, between Digital World Acquisition Corp. (“Digital World” or “DWAC”), DWAC Merger Sub, TMTG, ARC Global Investments II (“ARC”), LLC and TMTG’s General Counsel, as amended on May 11, 2022, August 9, 2023 and September 29, 2023. Pursuant to the DWAC Merger Agreement, and subject to the terms and conditions set forth therein, upon the Closing, Merger Sub merged with and into TMTG, with TMTG surviving as a wholly owned subsidiary of Digital World, and with TMTG’s stockholders receiving 87,500,000 shares of Digital World Class A common stock (excluding 40,000,000 Earnout Shares), subject to certain adjustments and earnout provisions, in exchange for TMTG common stock, which is in substance, a continuation of the TMTG shareholders’ equity interests in the TMTG business, plus up to an additional 7,854,534 shares of New Digital World common stock to be issued upon conversion of outstanding TMTG Convertible Notes immediately prior to the Closing. Notwithstanding the legal form of the Initial Business Combination pursuant to the DWAC Merger Agreement, the Initial Business Combination has been accounted for as a reverse recapitalization in accordance with U.S. GAAP because TMTG is the operating company and has been determined to be the accounting acquirer under Financial Accounting Standards Board’s Accounting Standards Codification (“ASC”) Topic 805, Business Combinations (“ASC 805”), while Digital World is a blank check company. The determination is primarily based on the evaluation of the following facts and circumstances: • The pre-combination equity holders of 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; and • Operations of Private TMTG comprise the ongoing operations of TMTG. Under the reverse recapitalization model, the Initial Business Combination was treated as TMTG issuing equity for the net assets of Digital World, with no goodwill or intangible assets recorded. While Digital World was the legal acquirer in the Initial Business Combination, because Predecessor TMTG was deemed the accounting acquirer, the historical financial statements of Predecessor TMTG became the historical financial statements of the combined company upon the consummation of the Initial Business Combination. As a result, the financial statements reflect (i) the historical operating results of Predecessor TMTG prior to the Initial Business Combination; (ii) the combined results of Digital World and Predecessor TMTG following the closing of the Initial Business Combination; (iii) the assets and liabilities of Predecessor TMTG at their historical cost; and (iv) our equity structure for all periods presented. In connection with the consummation of the Initial Business Combination, Digital World was renamed “Trump Media & Technology Group Corp.” and TMTG was renamed “TMTG Sub Inc.” In accordance with the applicable guidance, the equity structure has been retroactively restated in all comparative periods up to the Closing Date, to reflect the number of shares of our common stock issued to Predecessor TMTG common shareholders and Predecessor TMTG convertible noteholders in connection with the Initial Business Combination.…