☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
85-4293042
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
Title of each class
|
Trading
Symbol(s)
|
Name of each exchange
on which registered
|
||
Common Stock, par value $0.0001 per share
|
DJT
|
The Nasdaq Stock Market LLC
|
||
Warrants, each exercisable for one share of Common Stock for $11.50 per share
|
DJTW
|
The Nasdaq Stock Market LLC
|
Large accelerated filer
|
☐
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☒
|
Smaller reporting company
|
☒
|
Emerging growth company
|
☒
|
Page
|
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1 |
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Item 1.
|
1 |
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3 |
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4 |
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5 |
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6 |
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7 |
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Item 2.
|
24 |
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Item 3.
|
47 |
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Item 4.
|
48 |
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49 |
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Item 1.
|
49 |
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||
Item 1A.
|
49 |
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Item 2.
|
54 | |
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Item 3.
|
54 | |
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Item 4.
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54 | |
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Item 5.
|
54 | |
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Item 6.
|
54 | |
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56 |
Item 1. |
Financial Statements
|
Page
|
|
3 |
|
4 |
|
5 |
|
6 | |
7 |
(in thousands except share data)
|
September 30, 2024
(Unaudited)
|
December 31, 2023
(Audited)
|
||||||
Assets
|
||||||||
Current Assets:
|
||||||||
Cash and cash equivalents
|
$
|
372,135.7
|
$
|
2,572.7
|
||||
Short-term investments
|
300,742.5 | - | ||||||
Prepaid expenses and other current assets
|
9,233.5
|
327.5
|
||||||
Accounts receivable, net
|
14.8
|
81.0
|
||||||
Total current assets
|
682,126.5
|
2,981.2
|
||||||
Property and equipment, net
|
4,790.6
|
29.2
|
||||||
Intangible asset, net
|
15,811.6 | - | ||||||
Right-of-Use Assets, net
|
2,855.1
|
353.2
|
||||||
Goodwill
|
132,171.0 | - | ||||||
Total assets
|
837,754.8
|
3,363.6
|
||||||
Liabilities and Stockholders’ Equity/ (Deficit)
|
||||||||
Current Liabilities:
|
||||||||
Accounts payable and accrued expenses
|
6,657.4
|
1,600.7
|
||||||
Convertible promissory notes
|
-
|
41,818.8
|
||||||
Related party payables
|
262.0
|
-
|
||||||
Derivative liability
|
-
|
17,282.5
|
||||||
Unearned revenue
|
1,959.7
|
4,413.1
|
||||||
Current portion of long-term debt
|
4,749.9 | - | ||||||
Current portion of operating lease liability
|
734.0
|
160.3
|
||||||
Total current liabilities
|
14,363.0
|
65,275.4
|
||||||
Long-term operating lease liability
|
2,175.1
|
201.6
|
||||||
Long-term debt - Other
|
4,683.6 | - | ||||||
Convertible promissory notes
|
-
|
3,528.2
|
||||||
Derivative liability
|
-
|
1,120.3
|
||||||
Total liabilities
|
21,221.7
|
70,125.5
|
||||||
Commitments and contingencies (Note 15)
|
||||||||
Stockholders’ Equity/(Deficit):
|
||||||||
Preferred Stock $0.0001 par value – 1,000,000 shares authorized, 0
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 September 30, 2024 and December 31, 2023
|
21.5
|
8.8
|
||||||
Paid in Capital
|
3,726,957.3
|
-
|
||||||
Treasury Stock
|
(2,908.7 | ) | - |
|
||||
Accumulated Deficit
|
(2,907,537.0
|
)
|
(66,770.7
|
)
|
||||
Total stockholders’ equity/(deficit)
|
816,533.1
|
(66,761.9
|
)
|
|||||
Total liabilities and stockholders’ equity/(deficit)
|
$
|
837,754.8
|
$
|
3,363.6
|
Three Month
|
Nine Month | |||||||||||||||
Period Ended
|
Period Ended |
|||||||||||||||
(in thousands except share and per share data)
|
September 30,
2024
|
September 30,
2023
|
September 30,
2024
|
September 30,
2023 |
||||||||||||
Net sales |
$
|
1,010.9
|
$
|
1,071.3
|
$ | 2,618.3 | $ | 3,379.6 | ||||||||
Operating costs and expenses(1)
|
||||||||||||||||
Cost of revenue
|
123.3 | 41.3 | 252.9 | 123.8 | ||||||||||||
Research and development
|
3,893.7
|
2,202.7
|
41,913.9 | 7,212.2 | ||||||||||||
Sales and marketing
|
2,189.4
|
333.6
|
4,435.1 | 978.1 | ||||||||||||
General and administration
|
17,697.0
|
1,509.0
|
95,910.7 | 5,666.7 | ||||||||||||
Depreciation and amortization
|
762.2
|
14.7
|
771.5 | 47.6 | ||||||||||||
Total costs and operating expenses
|
24,665.6
|
4,101.3
|
143,284.1 | 14,028.4 | ||||||||||||
Loss from operations
|
(23,654.7
|
)
|
(3,030.0
|
)
|
(140,665.8 | ) | (10,648.8 | ) | ||||||||
Interest income
|
4,653.0
|
-
|
6,814.5 | - | ||||||||||||
Interest expense
|
(246.7
|
)
|
(15,071.9
|
)
|
(2,906.5 | ) | (37,702.5 | ) | ||||||||
Change in fair value of derivative liabilities
|
-
|
(7,931.2
|
)
|
(225,916.0 | ) | (660.2 | ) | |||||||||
Loss on the conversion of convertible debt |
- | - | (542.3 | ) | - | |||||||||||
Loss from operations before income taxes
|
(19,248.4
|
)
|
(26,033.1
|
)
|
(363,216.1 | ) | (49,011.5 | ) | ||||||||
Income tax expense
|
-
|
-
|
- | - | ||||||||||||
Net loss
|
$
|
(19,248.4
|
)
|
$
|
(26,033.1
|
)
|
$ | (363,216.1 | ) | $ | (49,011.5 | ) | ||||
Loss per Share attributable to common stockholders:
|
||||||||||||||||
Basic
|
(0.10
|
)
|
(0.30
|
)
|
(2.37 | ) | (0.56 | ) | ||||||||
Diluted*
|
(0.10
|
)
|
(0.30
|
)
|
(2.37 | ) | (0.56 | ) | ||||||||
Weighted Average Shares used to compute net loss per share attributable to common stockholders:
|
||||||||||||||||
Basic
|
200,833,835
|
87,500,000
|
152,943,536 | 87,500,000 | ||||||||||||
Diluted
|
200,833,835
|
87,500,000
|
152,943,536 | 87,500,000 | ||||||||||||
(1)Costs of operating expenses include stock-based compensation
expense as follows: |
||||||||||||||||
Research and development
|
$ | - | $ | - | $ | 30,142.5 | $ | - | ||||||||
General and administration
|
45.7 | - | 54,491.2 | - | ||||||||||||
Total stock-based compensation expense
|
$ | 45.7 | $ | - | $ | 84,633.7 | $ | - |
(in thousands, except share data)
|
Common Stock
Number of Shares
|
Par Value
$0.0001
|
Treasury Stock
Number of Shares
|
Treasury Stock
|
Paid in Capital
|
Accumulated Deficit
|
Total
Stockholders’
(Deficit)/ Equity
|
|||||||||||||||||||||
Retroactive application of recapitalization to January 1, 2023
|
87,500,000
|
$
|
8.8
|
-
|
$
|
-
|
$
|
-
|
$
|
(8,581.3
|
)
|
$
|
(8,572.5
|
)
|
||||||||||||||
Net Loss
|
-
|
-
|
-
|
-
|
-
|
(210.3
|
)
|
(210.3
|
)
|
|||||||||||||||||||
Balance at March 31, 2023
|
87,500,000
|
8.8
|
-
|
-
|
-
|
(8,791.6
|
)
|
(8,782.8
|
)
|
|||||||||||||||||||
Net Loss
|
-
|
-
|
-
|
-
|
(22,768.1
|
)
|
(22,768.1
|
)
|
||||||||||||||||||||
Balance at June 30, 2023
|
87,500,000
|
$
|
8.8
|
-
|
$
|
-
|
$
|
-
|
$
|
(31,559.7
|
)
|
$
|
(31,550.9
|
)
|
||||||||||||||
Net Loss |
|
- |
|
|
(26,033.1 | ) | (26,033.1 | ) | ||||||||||||||||||||
Balance at September 30, 2023 | 87,500,000 | $ | 8.8 | - | $ | - | $ | - | $ | (57,592.8 | ) | $ | (57,584.0 | ) | ||||||||||||||
Balance as December 31, 2023
|
87,500,000
|
$
|
8.8
|
-
|
$
|
-
|
$
|
-
|
$
|
(66,770.7
|
)
|
$
|
(66,761.9
|
)
|
||||||||||||||
Net Loss
|
-
|
-
|
-
|
-
|
(327,599.7
|
)
|
(327,599.7
|
)
|
||||||||||||||||||||
Fair value of TMTG earnout shares
|
2,477,550.2
|
(2,477,550.2
|
)
|
-
|
||||||||||||||||||||||||
Conversion of convertible notes upon reverse capitalization
|
6,014,534
|
0.6
|
-
|
-
|
300,425.4
|
-
|
300,426.0
|
|||||||||||||||||||||
Stock Based Compensation
|
1,840,000
|
0.2
|
-
|
-
|
84,587.8
|
- |
84,588.0
|
|||||||||||||||||||||
Issuance of common stock upon reverse capitalization
|
41,346,049
|
4.1
|
-
|
-
|
219,617.5
|
- |
219,621.6
|
|||||||||||||||||||||
Balance as of March 31, 2024
|
136,700,583
|
13.7
|
-
|
-
|
3,082,180.9
|
(2,871,920.6
|
)
|
210,274.0
|
||||||||||||||||||||
Exercise of warrants |
8,526,792 | 0.9 | - | - | 97,761.4 | - | 97,762.3 | |||||||||||||||||||||
Issuance of earnout shares |
40,000,000 | 4.0 | - | - | (4.0 | ) | - | - | ||||||||||||||||||||
Conversion of convertible notes in common stock
|
6,250,000 | 0.6 | - | - | 49,999.4 | - | 50,000.0 | |||||||||||||||||||||
Net loss |
(16,368.0 | ) | (16,368.0 | ) | ||||||||||||||||||||||||
Balance as of June 30, 2024 | 191,477,375 | $ | 19.2 | - | $ | - | $ | 3,229,937.7 | $ | (2,888,288.6 | ) | $ | 341,668.3 | |||||||||||||||
Exercise of warrants |
1,758,501 | 0.2 | - | - | 20,222.6 | - | 20,222.8 | |||||||||||||||||||||
Common stock issued for cash |
17,655,365 | 1.7 | - | - | 344,742.5 | - | 344,744.2 | |||||||||||||||||||||
Acquisition of WCT, net of offering costs
|
2,600,000 | 0.3 | - | - | 132,009.1 | - | 132,009.4 | |||||||||||||||||||||
Issuance of common stock for services
|
2,002 | 0.0 | - | - | 45.5 | - | 45.5 | |||||||||||||||||||||
Treasury stock |
- | - | (128,138 | ) | (2,908.7 | ) | - | - | (2,908.7 | ) | ||||||||||||||||||
Common stock for ARC settlement |
1,024,517 | 0.1 | - | - | (0.1 | ) | - | - | ||||||||||||||||||||
Net Loss | - | - | - | - | - | (19,248.4 | ) | (19,248.4 | ) | |||||||||||||||||||
Balance at September 30, 2024 | 214,517,760 | $ |
21.5 | |
(128,138 | ) | $ |
(2,908.7 | ) | $ | 3,726,957.3 | $ |
(2,907,537.0 | ) | $ |
816,533.1 |
Nine Month Periods Ended
|
||||||||
(in thousands)
|
September 30,
2024
|
September 30,
2023
|
||||||
Cash flows from operating activities
|
||||||||
Net loss
|
$
|
(363,216.1
|
)
|
$
|
(49,011.5
|
)
|
||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Non-cash interest expense on debt
|
2,780.1
|
37,702.5
|
||||||
Change in fair value of derivative liability
|
225,916.0
|
660.2
|
||||||
Depreciation and amortization
|
771.5
|
48.3
|
||||||
Loss on extinguishment of debt
|
542.3
|
-
|
||||||
Stock based compensation
|
84,633.7
|
-
|
||||||
Operating lease amortization
|
201.2
|
3.8
|
||||||
Prepaid expenses and other current assets
|
(3,751.4
|
)
|
(1.6
|
)
|
||||
Accounts receivable
|
66.1
|
197.2
|
||||||
Unearned revenue
|
(2,453.5
|
)
|
-
|
|||||
Accounts payable and operating lease liabilities
|
1,870.1
|
(66.1
|
)
|
|||||
Net cash used in operating activities
|
(52,640.0
|
)
|
(10,467.2
|
)
|
||||
Cash flows used in investing activities
|
||||||||
Purchases of property and equipment
|
(5,031.2
|
)
|
(2.2
|
)
|
||||
Purchase of intangible asset
|
(7,000.0 | ) | - | |||||
Purchase of short-term investments |
(300,742.5 | ) | - | |||||
Net cash used in investing activities
|
(312,773.7
|
)
|
(2.2
|
)
|
||||
Cash flows provided by financing activities
|
||||||||
Proceeds from convertible promissory notes
|
47,455.0
|
2,500.0
|
||||||
Proceeds from merger
|
233,017.5
|
-
|
||||||
Repurchase of Common Stock |
(2,908.7 | ) | - | |||||
Proceeds from the issuance of Common Stock |
339,463.1 | - | ||||||
Proceeds from the exercise of Warrants
|
117,949.8 | - | ||||||
Net cash provided by financing activities
|
734,976.7
|
2,500.0
|
||||||
Net change in cash and cash equivalents
|
369,563.0
|
(7,969.4
|
)
|
|||||
Cash and cash equivalents, beginning of period
|
2,572.7
|
9,808.4
|
||||||
Cash and cash equivalents, end of period
|
$
|
372,135.7
|
$
|
1,839.0
|
||||
Supplemental disclosure of cash flow information
|
||||||||
Cash paid for interest
|
$
|
126.4
|
$
|
-
|
||||
Cash paid for taxes
|
$
|
1,897.7
|
$
|
-
|
||||
Noncash investing and financing activities
|
||||||||
Shares issued for conversion of convertible notes
|
$
|
350,426.0
|
$
|
-
|
||||
Operating lease assets obtained in exchange for operating lease obligations
|
$ | 2,703.0 | $ | - | ||||
Common Stock issued for business combination
|
$ | 132,171.0 | $ | - | ||||
Common Stock Issued for underwriter fees
|
$ | 10,107.5 | $ | - |
• |
The pre-combination equity holders of TMTG hold the majority of voting rights in Digital World after giving effect to the Business Combination (“the Combined Entity”, also referred to herein as “New
Digital World” or “the Company”);
|
|
• |
The pre-combination equity holders of TMTG have the right to appoint the majority of the directors on the Combined Entity Board;
|
|
• |
TMTG senior management (executives) are the senior management (executives) of the Combined Entity; and
|
•
|
Operations of TMTG will comprise the ongoing operations of Combined Entity.
|
Asset Type
|
Range
|
Furniture and equipment
|
2
- 5 years
|
Computer equipment
|
3
years
|
Cash-trust and cash, net of redemptions
|
233,017.5
|
|||
Add: other assets
|
-
|
|||
Less: accrued expenses
|
(3,292.9
|
)
|
||
Less: notes payable
|
(10,103.0
|
)
|
||
Reverse recapitalization, net
|
219,621.6
|
Digital World common stock, outstanding prior to the Business Combination
|
39,636,904
|
|||
Shares issued to Digital World convertible noteholders, converted immediately prior to Business Combination
|
1,709,145
|
|||
Predecessor TMTG Shares (1)
|
87,500,000
|
|||
Shares issued to former TMTG convertible noteholders
|
7,854,534
|
|||
Common stock immediately after the Business Combination (2)
|
136,700,583
|
(1) |
Includes 614,640 shares outstanding and held in escrow.
|
|
(2) |
Excludes 1,024,517 additional shares issued to former Digital World Class B shareholders in connection with a court order in September 2024.
|
Predecessor TMTG
Shares
|
Shares issued to
shareholders of
Predecessor TMTG
|
|||||||
Common stock
|
100,000,000
|
87,500,000
|
||||||
100,000,000
|
$
|
87,500,000
|
|
1. |
The stock price was simulated for the defined term (1.5 years, 2 years, and 3 years)
after the Merger date.
|
|
2. |
The vest date was determined as the date the stock price achieved the different stock price thresholds, which were $12.50, $15.00, and $17.50.
|
|
3. |
The payoff was calculated as the number of shares issued per tranche (15
million, 15 million, and 10
million) multiplied by the simulated stock price at the vest date, which varied with each simulation.
|
|
4. |
The payoff was discounted to the present value using the interpolated risk-free rate ranging from 4.31% to 4.70%.
|
1.
|
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.
|
2.
|
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.
|
3.
|
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.
|
Fair value of assets acquired:
|
||||
Intangible asset, net
|
$
|
16,313.2
|
||
Goodwill
|
132,171.0
|
|||
Amount attributable to assets acquired
|
148,484.2
|
|||
Fair value of liability assumed:
|
||||
Assumed debt
|
16,313.2
|
|||
Amount attributable to liability assumed
|
16,313.2
|
|||
Total purchase price
|
$
|
132,171.0
|
(in thousands)
|
September 30, 2024
|
December 31, 2023
|
||||||
Property and equipment
|
||||||||
Furniture and equipment
|
$
|
34.5
|
$
|
34.5
|
||||
Computer equipment
|
5,152.0
|
120.8
|
||||||
Accumulated depreciation
|
(395.9
|
)
|
(126.1
|
)
|
||||
Property and equipment, net
|
$
|
4,790.6
|
$
|
29.2
|
(in thousands)
|
September 30, 2024
|
December 31, 2023
|
||||||
Accounts payable
|
$
|
1,495.9
|
$
|
1,600.7
|
||||
Other accrued expenses
|
3,920.7
|
-
|
||||||
Income tax payable
|
732.6
|
-
|
||||||
Franchise tax payable
|
508.2
|
-
|
||||||
Accounts payable and accrued expenses
|
$
|
6,657.4
|
$
|
1,600.7
|
(in thousands)
|
Classification
|
September 30, 2024
|
December 31, 2023
|
|||||||
Lease assets
|
||||||||||
Operating lease cost ROU assets, net
|
Assets
|
$
|
2,855.1
|
$
|
353.2
|
|||||
Total lease assets
|
$
|
2,855.1
|
$
|
353.2
|
||||||
Lease liabilities
|
||||||||||
Operating lease liabilities, current
|
Current liabilities
|
$
|
734.0
|
$
|
160.3
|
|||||
Operating lease liabilities, non-current
|
Liabilities
|
2,175.1
|
201.6
|
|||||||
Total lease liabilities
|
$
|
2,909.1
|
$
|
361.9
|
Three Month Period Ended
|
||||||||
(in thousands)
|
September 30, 2024
|
September 30, 2023
|
||||||
Lease costs
|
||||||||
Operating lease costs
|
$ |
60.9
|
$ |
44.9
|
||||
Short-term lease costs |
152.6 | 34.4 | ||||||
Total lease costs
|
$
|
213.5
|
$
|
79.3
|
Nine Month Period Ended
|
|||||||
(in thousands)
|
September 30, 2024
|
September 30, 2023
|
|||||
Lease costs
|
|||||||
Operating lease costs
|
$ |
172.5
|
$ |
134.6
|
|||
Short-term lease costs |
234.4 | 110.1 | |||||
Total lease costs
|
$
|
406.9
|
$
|
244.7
|
(in thousands)
|
|
|||
2024 (remainder of)
|
$
|
250.8
|
||
2025
|
915.3
|
|||
2026
|
782.6
|
|||
2027 |
771.2 | |||
2028 |
577.1 | |||
Thereafter |
87.9 | |||
Total future minimum lease payments
|
3,384.9
|
|||
Amount representing interest
|
475.8
|
|||
Present value of net future minimum lease payments
|
$
|
2,909.1
|
(in thousands)
|
September 30, 2024
|
December 31, 2023
|
||||||
Convertible Promissory Notes
|
||||||||
Notes 1 to 7
|
$
|
5,340.0
|
$
|
5,340.0
|
||||
Notes 8 to 12
|
17,500.0
|
17,500.0
|
||||||
Notes 13 to 20
|
17,860.0
|
17,860.0
|
||||||
Notes 21 to 23
|
7,455.0
|
-
|
||||||
Digital World Convertible Notes
|
50,103.0
|
-
|
||||||
Total
|
98,258.0
|
40,700.0
|
||||||
Debt Issuance costs
|
(240.0
|
)
|
(240.0
|
)
|
||||
Carrying value of Convertible Promissory Notes
|
98,018.0
|
40,460.0
|
||||||
Less: Derivative liability component
|
(37,234.8
|
)
|
(37,234.8
|
)
|
||||
Liability component at date of issue
|
60,783.2
|
3,225.2
|
||||||
Interest charged
|
44,781.6
|
42,121.8
|
||||||
Loss on extinguishment of debt
|
542.3
|
-
|
||||||
Total liability component
|
|
106,107.1
|
|
45,347.0
|
||||
Less: Conversion to Paid in Capital
|
(106,107.1
|
)
|
-
|
|||||
Less: Short-term liability component
|
-
|
(41,818.8
|
)
|
|||||
Liability component at September 30, 2024 and December 31, 2023
|
$
|
-
|
$
|
3,528.2
|
||||
|
||||||||
Embedded feature component
|
||||||||
Derivative liability component
|
$
|
37,234.8
|
$
|
37,234.8
|
||||
Change in fair value of embedded derivative
|
207,084.1
|
(18,832.0
|
)
|
|||||
Total Derivative Liability Component
|
244,318.9
|
18,402.8
|
||||||
Less: Conversion to Paid in Capital
|
(244,318.9
|
)
|
-
|
|||||
Less: Short-term derivative liability component |
- | (17,282.5 | ) | |||||
Derivative Liability Component at September 30, 2024 and December 31, 2023
|
$
|
-
|
$
|
1,120.3
|
As of September 30, 2024
|
||||||||||||
(in thousands)
|
Quoted prices in
active markets for
identical assets
(Level 1)
|
Significant
other observable
inputs
(Level 2)
|
Significant unobservable inputs
(Level 3)
|
|||||||||
Repurchase agreement
|
$ | 300,742.5 | $ | - |
$
|
-
|
||||||
Total assets measured at fair value
|
$ | 300,742.5 | $ | - | $ | - |
As of December 31, 2023
|
||||||||||||
(in thousands)
|
Quoted prices in
active markets for
identical assets
(Level 1)
|
Significant
other observable
inputs
(Level 2)
|
Significant unobservable inputs
(Level 3)
|
|||||||||
Current Liabilities
|
||||||||||||
Derivative liability
|
$ | - | $ | - |
$
|
17,282.5
|
||||||
Liabilities
|
||||||||||||
Derivative liability
|
- |
- |
1,120.3
|
|||||||||
Total liabilities measured at fair value |
$ | - | $ | - | $ | 18,402.8 |
September 30, 2024
|
December 31, 2023
|
|||||||
Convertible notes
|
-
|
-
|
||||||
Warrants
|
11,205,934
|
-
|
||||||
Total common stock equivalents excluded from dilutive loss per share
|
11,205,934
|
-
|
Warrants
|
Weighted
Average
Exercise
Price
|
Weighted Average
Remaining
Contractual Life
(in years)
|
Aggregate
Intrinsic
Value
|
|||||||||||||
Outstanding at January 1, 2024
|
18,366,228
|
$
|
11.50
|
5.40
|
-
|
|||||||||||
Granted
|
3,124,999
|
11.50
|
-
|
-
|
||||||||||||
Exercised
|
(10,285,293
|
)
|
11.50
|
-
|
-
|
|||||||||||
Expired or cancelled
|
-
|
-
|
-
|
-
|
||||||||||||
Outstanding at September 30, 2024
|
11,205,934
|
$
|
11.50
|
4.56
|
$
|
51,211,118
|
||||||||||
Exercisable at September 30, 2024
|
11,205,934
|
$
|
11.50
|
4.56
|
$
|
51,211,118
|
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
• |
Phase 1: 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 via Truth Social had become available via all three modalities.
|
|
• |
Phase 2: Release stand-alone Truth Social over-the-top streaming apps for phones, tablets, and other devices. As of October 21, 2024, TMTG had announced that Truth+ streaming had been released as a standalone product on Android, iOS,
and Web.
|
|
• |
Phase 3: Release Truth Social streaming apps for home TV. As of October 23, 2024, TMTG had announced that Truth+ streaming had been released on Apple TV, Android TV, and Amazon Fire TV.
|
|
• |
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.
|
(in thousands)
|
For the three months ended
September 30, 2024
|
For the three months ended
September 30, 2023
|
Variance,
$
|
Variance,
%
|
||||||||||||
|
(unaudited)
|
|||||||||||||||
Revenue
|
$
|
1,010.9
|
$
|
1,071.3
|
$
|
(60.4
|
)
|
(6
|
%)
|
|||||||
Operating costs and expenses:
|
||||||||||||||||
Cost of Revenue
|
123.3
|
41.3
|
82.0
|
199
|
%
|
|||||||||||
Research and development
|
3,893.7
|
2,202.7
|
1,691.0
|
77
|
%
|
|||||||||||
Sales and marketing
|
2,189.4
|
333.6
|
1,855.8
|
556
|
%
|
|||||||||||
General and administration
|
17,697.0
|
1,509.0
|
16,188.0
|
1,073
|
%
|
|||||||||||
Depreciation and amortization
|
762.2
|
14.7
|
747.5
|
5,085
|
%
|
|||||||||||
Total operating costs and expenses
|
24,665.6
|
4,101.3
|
20,564.3
|
501
|
%
|
(in thousands)
|
For the three months ended
September 30, 2024
|
For the three months ended
September 30, 2023
|
Variance,
$
|
Variance,
%
|
||||||||||||
|
(unaudited)
|
|||||||||||||||
Operating income/(loss)
|
(23,654.7
|
)
|
(3,030.0
|
)
|
(20,624.7
|
)
|
681
|
%
|
||||||||
Other income:
|
||||||||||||||||
Interest expense
|
(246.7
|
)
|
(15,071.9
|
)
|
14,825.2
|
(98
|
%)
|
|||||||||
Interest income
|
4,653.0
|
-
|
4,653.0
|
-
|
||||||||||||
Change in fair value of derivative liabilities
|
-
|
(7,931.2
|
)
|
7,931.2
|
(100
|
%)
|
||||||||||
Loss before income tax expense
|
(19,248.4
|
)
|
(26,033.1
|
)
|
6,784.7
|
(26
|
)%
|
|||||||||
Income tax expense
|
-
|
-
|
-
|
-
|
||||||||||||
|
||||||||||||||||
Net Loss
|
$
|
(19,248.4
|
)
|
$
|
(26,033.1
|
)
|
$
|
6,784.7
|
(26
|
)%
|
(in thousands)
|
For the nine months ended
September 30, 2024
|
For the nine months ended
September 30, 2023
|
Variance,
$
|
Variance,
%
|
||||||||||||
|
(unaudited)
|
|||||||||||||||
Revenue
|
$
|
2,618.3
|
$
|
3,379.6
|
$
|
(761.3
|
)
|
(23
|
%)
|
|||||||
Operating costs and expenses:
|
||||||||||||||||
Cost of revenue
|
252.9
|
123.8
|
129.1
|
104
|
%
|
|||||||||||
Research and development
|
41,913.9
|
7,212.2
|
34,701.7
|
481
|
%
|
|||||||||||
Sales and marketing
|
4,435.1
|
978.1
|
3,457.0
|
353
|
%
|
|||||||||||
General and administration
|
95,910.7
|
5,666.7
|
90,244.0
|
1,593
|
%
|
|||||||||||
Depreciation and amortization
|
771.5
|
47.6
|
723.9
|
1,521
|
%
|
|||||||||||
Total operating costs and expenses
|
143,284.1
|
14,028.4
|
129,255.7
|
921
|
%
|
(in thousands)
|
For the nine months ended
September 30, 2024
|
For the nine months ended
September 30, 2023
|
Variance,
$
|
Variance,
%
|
||||||||||||
|
(unaudited)
|
|||||||||||||||
Operating loss
|
(140,665.8
|
)
|
(10,648.8
|
)
|
(130,017.0
|
)
|
1,221
|
%
|
||||||||
Other income:
|
||||||||||||||||
Interest expense
|
(2,906.5
|
)
|
(37,702.5
|
)
|
34,796.0
|
(92
|
%)
|
|||||||||
Interest income
|
6,814.5
|
-
|
6,814.5
|
-
|
||||||||||||
Loss on the extinguishment of debt
|
(542.3
|
)
|
-
|
(542.3
|
)
|
-
|
||||||||||
Change in fair value of derivative liabilities
|
(225,916.0
|
)
|
(660.2
|
)
|
(225,255.8
|
)
|
34,119
|
%
|
||||||||
Loss before income tax expense
|
(363,216.1
|
)
|
(49,011.5
|
)
|
(314,204.6
|
)
|
641
|
%
|
||||||||
Income tax expense
|
-
|
-
|
-
|
-
|
||||||||||||
Net loss
|
$
|
(361,216.1
|
)
|
$
|
(49,011.5
|
)
|
$
|
(314,204.6
|
)
|
641
|
%
|
(in thousands)
|
For the nine months ended
September 30, 2024
|
For the nine months ended
September 30, 2023
|
Variance
|
Variance
%
|
||||||||||||
|
(unaudited)
|
|||||||||||||||
Net cash used in operating activities
|
(52,640.0
|
)
|
(10,467.2
|
)
|
(42,172.8
|
)
|
403
|
%
|
||||||||
Net cash used in investing activities
|
(312,773.7
|
)
|
(2.2
|
)
|
(312,771.5
|
)
|
>100
|
% | ||||||||
Net cash provided by financing activities
|
$
|
734,976.8
|
$
|
2,500.0
|
$
|
732,476.7
|
>100
|
% |
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4. |
Controls and Procedures
|
Item 1. |
Legal Proceedings.
|
Item 1A. |
Risk Factors.
|
|
• |
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; and
|
|
• |
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.
|
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds.
|
Item 3. |
Defaults Upon Senior Securities.
|
Item 4. |
Mine Safety Disclosures.
|
Item 5. |
Other Information.
|
Item 6. |
Exhibits
|
No.
|
Description of Exhibit
|
|
Agreement and Plan of Merger, dated as of October 20, 2021, as amended on May 11, 2022, August 8, 2023, and September 29, 2023 by and among Digital World Acquisition Corp., DWAC Merger Sub Inc. and Trump
Media & Technology Group Corp. (incorporated by reference to Annex A to the proxy statement/prospectus which is part of Amendment No. 6 to the Registration Statement on Form S-4, filed by Digital World Acquisition Corp. on February
14, 2024).
|
||
Second Amended and Restated Certificate of Incorporation of Trump Media & Technology Group Corp. (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K, filed by Trump Media &
Technology Group Corp. on April 1, 2024).
|
||
Amended and Restated Bylaws of Trump Media & Technology Group Corp. (incorporated by reference to Exhibit 3.3 to Post-Effective Amendment No. 2 to the Registration Statement on Form S-4, filed by
Digital World Acquisition Corp. on March 5, 2024).
|
||
Asset Acquisition Agreement, dated July 3, 2024, by and among the Company, WorldConnect Technologies, L.L.C., WorldConnect IPTV Solutions, LLC and JedTec, L.L.C. (incorporated by reference to Exhibit 10.1
to the Current Report on Form 8-K, filed by Trump Media & Technology Group Corp. on July 3, 2024).
|
||
Amended and Restated Option Agreement, dated July 3, 2024, by and between WorldConnect Technologies, L.L.C., Perception Group, Inc., Perception TVCDN Ltd., and FORA, FOrum RAčunalništva, d.o.o.
(incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K, filed by Trump Media & Technology Group Corp. on July 3, 2024).
|
||
Standby Equity Purchase Agreement, dated July 3, 2024, by and between the Company and YA II PN, LTD. (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K, filed by Trump Media &
Technology Group Corp. on July 3, 2024).
|
||
Form of Registration Rights Agreement, by and among the Company, WorldConnect IPTV Solutions, LLC and JedTec, L.L.C. (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K, filed by
Trump Media & Technology Group Corp. on July 3, 2024).
|
||
Registration Rights Agreement, dated August 9, 2024, by and among the Company, WorldConnect IPTV Solutions, LLC and JedTec, L.L.C. (incorporated by reference to Exhibit 10.1 to the Current Report on Form
8-K, filed by Trump Media & Technology Group Corp. on August 9, 2024).
|
||
Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
||
Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
||
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
||
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
||
101.INS*
|
Inline XBRL Instance Document
|
|
101.SCH*
|
Inline XBRL Taxonomy Extension Schema Document
|
|
101.CAL*
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document
|
|
101.DEF*
|
Inline XBRL Taxonomy Extension Definition Linkbase Document
|
|
101.LAB*
|
Inline XBRL Taxonomy Extension Labels Linkbase Document
|
|
101.PRE*
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
|
104*
|
Cover Page Interactive Data File.
|
TRUMP MEDIA & TECHNOLOGY GROUP CORP.
|
||
Date: November 5, 2024
|
By:
|
/s/ Devin Nunes
|
Name:
|
Devin Nunes
|
|
Title:
|
Chief Executive Officer
|
|
(Principal Executive Officer)
|
||
Date: November 5, 2024
|
By:
|
/s/ Phillip Juhan
|
Name:
|
Phillip Juhan
|
|
Title:
|
Chief Financial Officer
|
|
(Principal Financial and Accounting Officer)
|
1. |
I have reviewed this Quarterly Report on Form 10-Q of Trump Media & Technology Group Corp.;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of
the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results
of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4. |
The registrant’s other certifying officer(s) and I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information
relating to the registrant is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls
and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the
registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5. |
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors
and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the
registrant’s ability to record, process, summarize and report financial information; and
|
(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: November 5, 2024
|
By:
|
/s/ Devin Nunes
|
Devin Nunes
|
||
Chief Executive Officer
|
||
(Principal Executive Officer)
|
1. |
I have reviewed this Quarterly Report on Form 10-Q of Trump Media & Technology Group Corp.;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of
the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results
of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4. |
The registrant’s other certifying officer(s) and I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information
relating to the registrant is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls
and procedures, as of the end of the period covered by this report based on such evaluation; and
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d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the
registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5. |
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors
and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the
registrant’s ability to record, process, summarize and report financial information; and
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(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: November 5, 2024
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By:
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/s/ Phillip Juhan
|
Phillip Juhan
|
||
Chief Financial Officer
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||
(Principal Financial and Accounting Officer)
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1. |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
2. |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the
period covered by the Report.
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Date: November 5, 2024
|
By:
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/s/ Devin Nunes
|
Devin Nunes
|
||
Chief Executive Officer
|
||
(Principal Executive Officer)
|
1. |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
2. |
To my knowledge, the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company
as of and for the period covered by the report.
|
Date: November 5, 2024
|
By:
|
/s/ Phillip Juhan
|
Phillip Juhan
|
||
Chief Financial Officer
|
||
(Principal Financial and Accounting Officer)
|