Company: DJTWW
Filing Date: 2025-11-07
Form Type: 10-Q
Source: 0001140361-25-040977
Chunk: 64

Company: Trump Media & Technology Group Corp.
Filing Date: 2025-11-07
Form: 10-Q
Item: Part I, Item 1
Chunk 64
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 $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%.   

    Volatility was calculated as the annualized standard deviation of daily returns from a set of Guideline Public Companies (GPC) over the expected term for each tranche. The 75th percentile of GPC
      volatilities was selected given our early stage life cycle relative to the GPC set. The accounting for the Earnout Shares was first evaluated under ASC 718 to determine if the arrangement represents a share-based payment arrangement. Because there
      were no service conditions nor any requirement of the participants to provide goods or services, we determined that the Earnout Shares were not within the scope of ASC 718.

    Next, we determined that the Earnout Shares represent a freestanding equity-linked financial instrument to be evaluated under ASC 480 and ASC 815-40. Based upon the analysis, we concluded that the
      Earnout Shares should not be classified as a liability under ASC 480.

    We next considered the equity classification conditions in ASC 815-40-25 and concluded that all of the conditions were met. Therefore, the Earnout Share arrangement was appropriately classified in
      equity.

    As the merger has been accounted for as a reverse recapitalization, the fair value of the Earnout Shares arrangement has been accounted for as an equity transaction as of the closing date of the merger.

      12

On April 26, 2024, the Earnout Shares had been earned and such shares were issued.

NOTE 4 - FAIR VALUE MEASUREMENT

    Fair value is defined as an exit price, representing the amount that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants. We use a
      three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value:

    Level 1. Quoted prices (unadjusted) in active markets for identical assets or liabilities.

    Level 2. Significant other inputs that are directly or indirectly observable in the marketplace.

    Level 3. Significant unobservable