Company: DJTWW
Filing Date: 2025-05-09
Form Type: 10-Q
Source: 0001140361-25-018209
Chunk: 11

Company: Trump Media & Technology Group Corp.
Filing Date: 2025-05-09
Form: 10-Q
Item: Part I, Item 2
Chunk 11
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 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 was 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 was no derivative liability recorded as of
          March 31, 2025, and there will no longer be future earnings adjustments pertaining to the Private TMTG Convertible Notes derivative liabilities.

        Income Tax Expense

        TMTG did not record an income tax benefit for the three months ended March 31, 2025 and 2024 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

        Overview

        Historically, as a private company, we financed operations primarily through cash proceeds from the issuance of Private TMTG Convertible Notes. During 2024, our
          capitalization was significantly enhanced through receipt of proceeds from the Business Combination, the conversion of warrants, and the issuance of common stock described in detail in the section below titled, “Standby Equity Purchase
          Agreement.”  As a result, we ended March 31, 2025 with $758,981.6 of cash, cash equivalents, and short-term investments and just $9,803.5 of debt (excluding lease liabilities).  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. Short-term investments
          consist of repurchase agreements in which we loan our cash over 1 to 3 days to a seller in exchange for interest earned on debt securities collateralizing the loan.  The seller retains a beneficial interest in the securities serving as
          collateral.

        22

        Our primary short-term requirements for liquidity and capital are to fund general working capital and to invest in our strategic growth initiatives. We currently seek to (1)
          grow our initial product, Truth Social; (2) increase additional product offerings and services, including through