Company: DJTWW
Filing Date: 2025-08-01
Form Type: 10-Q
Source: 0001140361-25-028418
Chunk: 39

Company: Trump Media & Technology Group Corp.
Filing Date: 2025-08-01
Form: 10-Q
Item: Part I, Item 1
Chunk 39
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, 2024, “TMTG” or “New Digital World”), DWAC Merger Sub, Private TMTG, ARC Global Investments II (“ARC”), LLC and TMTG’s Chief Legal Officer, as amended on May 11, 2022, August 9, 2023 and September 29, 2023. Pursuant to the Merger Agreement, and subject to the terms and conditions set forth therein, upon the Closing, DWAC Merger Sub merged with and into TMTG, with TMTG surviving as a wholly owned subsidiary of Digital World. TMTG’s stockholders received 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. This was, 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 Business Combination pursuant to the Merger Agreement, the Business Combination was accounted for as a reverse recapitalization in accordance with U.S. GAAP because
      TMTG was the operating company and was determined to be the accounting acquirer under Financial Accounting Standards Board’s Accounting Standards Codification Topic 805, Business Combinations (“ASC 805”), while Digital World was a blank check
      company. The determination was 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 had 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 Business Combination was treated as TMTG issuing equity for the net assets of Digital World, with no goodwill or intangible assets recorded.

      7

While Digital World was the legal acquirer in the Business Combination, because Predecessor TMTG