References in this report (the "Quarterly Report") to "we," "us" or the "Company" refer to Digital World Acquisition Corp. References to our "management" or our "management team" refer to our officers and directors, and references to the "Sponsor" refer to ARC Global Investments II LLC. The following discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act") that are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Quarterly Report including, without limitation, statements in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" regarding the Company's financial position, business strategy and the plans, objectives of management for future operations and the proposed Transactions with TMTG (as described below), are forward-looking statements. Words such as "expect," "believe," "anticipate," "intend," "estimate," "seek" and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management's current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Company's final prospectus filed with the U.S. Securities and Exchange Commission (the "SEC") on September 8, 2021. The Company's securities filings can be accessed on the EDGAR section of the SEC's website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

Overview

We are a blank check company formed under the laws of the State of Delaware on December 11, 2020, for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses (the "Business Combination"). We intend to effectuate our Business Combination using cash from the proceeds of our initial public offering (the "Initial Public Offering") and the sale of the private placement units (the "Private Placement Units"), our capital stock, debt or a combination of cash, stock and debt.

We expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a Business Combination will be successful.

Proposed Business Combination

The Company entered into the Merger Agreement, dated as of October 20, 2021 (as amended by the First Amendment to Agreement and Plan of Merger, dated May 11, 2022, and as it may be further amended or supplemented from time to time) with Merger Sub, TMTG, the Sponsor in the capacity as the representative for certain stockholders of the Company, and TMTG's General Counsel, in the capacity as the representative for stockholders of TMTG. Subject to the terms and conditions set forth therein, (i) upon the consummation of the transactions contemplated by the Merger Agreement (the "Closing"), Merger Sub will merge with and into TMTG (the "Merger" and, together with the other transactions contemplated by the Merger Agreement, the "Transactions"), with TMTG continuing as the surviving corporation in the Merger and a wholly-owned subsidiary of the Company. In the Merger, (i) all shares of TMTG common stock (together, "TMTG Stock") issued and outstanding immediately prior to the effective time of the Merger (the "Effective Time") (other than those properly exercising any applicable dissenters rights under Delaware law) will be converted into the right to receive the Merger Consideration; (ii) each outstanding option to acquire shares of TMTG common stock (whether vested or unvested) will be assumed by the Company and automatically converted into an option to acquire shares of the Company common stock, with its price and number of shares equitably adjusted based on the conversion ratio of the shares of TMTG common stock into the Merger Consideration and (iii) each outstanding restricted stock unit of TMTG shall be converted into a restricted stock unit relating to shares of the Company's common stock. At the Closing, the Company will change its name to "Trump Media & Technology Group Corp.".


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The aggregate Merger Consideration to be paid pursuant to the Merger Agreement
to the TMTG Stockholders as of immediately prior to the Effective Time will be
an amount equal to $875,000,000, subject to adjustments for TMTG's closing debt,
net of cash and unpaid transaction expenses, plus the additional contingent
right to receive certain earnout shares after the Closing, provided that it
shall exclude any additional shares issuable upon conversion of certain TMTG
convertible notes. The Merger Consideration to be paid to TMTG Stockholders will
be paid solely by the delivery of new shares of the Company's common stock, with
each valued at the price per share at which each share of the Company's common
stock is redeemed or converted pursuant to the redemption by the Company of its
public stockholders in connection with the Company's initial Business
Combination, as required by the Company's Amended and Restated Certificate of
Incorporation and
by-laws
and the Company's Initial Public Offering prospectus. The Merger Consideration
will be subject to a post-Closing true up 90 days after the Closing.

The Merger Agreement contains a number of representations and warranties by each of the Company and TMTG as of the date of the Merger Agreement and as of the date of the Closing. Each party agreed in the Merger Agreement to use its commercially reasonable efforts to effect the Closing. The Merger Agreement also contains certain customary covenants by each of the parties during the period between the signing of the Merger Agreement and the earlier of the Closing or the termination of the Merger Agreement.

Consummation of the Transactions is subject to customary conditions of the respective parties, including the approval of the Transactions by the Company's stockholders in accordance with the Company's Amended and Restated Certificate of Incorporation and the completion of a redemption offer whereby the Company will be providing its public stockholders with the opportunity to redeem their shares of Class A common stock for cash equal to their pro rata share of the aggregate amount on deposit in the Company's Trust Account.

Simultaneously with the execution of the Merger Agreement, the majority stockholder of TMTG entered into a voting agreement (the "Voting Agreement") with the Company and TMTG. Under the Voting Agreement, the TMTG Stockholder agreed to vote all of his shares of TMTG Stock in favor of the Merger Agreement and related transactions and to otherwise take certain other actions in support of the Merger Agreement and related transactions and the other matters submitted to the TMTG Stockholders for their approval.



Upon Closing, (i) certain senior executive officers of TMTG who own shares of
TMTG and (ii) stockholders of TMTG who own more than 10% of the issued and
outstanding shares of TMTG Stock immediately prior to the Effective Time (each,
a "Significant Stockholder") shall entered into a
Lock-Up
Agreement with the Company and the Sponsor (each, a
"Lock-Up
Agreement"). Pursuant to the
Lock-Up
Agreement, with respect to the shares received as merger consideration, each
Significant Stockholder shall agree not to, during the period commencing from
the Closing and ending on the earliest of (a) the
six-month
anniversary of the Closing, (b) the date on which the closing price of the
Company's common stock equals or exceeds $12.00 per share for any 20 trading
days within any 30 trading day period commencing at least 150 days after the
Closing and (c) the date that the Company consummates a liquidation, merger,
share exchange or other similar transaction with an unaffiliated third party
that results in all of the Company stockholders having the right to exchange
their equity holdings in the Company for cash, securities or other property:
(i) lend, offer, pledge, hypothecate, encumber, donate, assign, sell, contract
to sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase, or otherwise
transfer or dispose of, directly or indirectly, any restricted securities,
(ii) enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of the
restricted securities, or (iii) publicly disclose the intention to do any of the
foregoing.

The Merger Agreement and related agreements are further described in the
registration statement on Form
S-4
(as amended, the "Form
S-4"),
which was filed with the SEC on May 16, 2022 and includes a preliminary proxy
statement of the Company, and a prospectus in connection with the proposed
Transactions. For additional information regarding the Merger Agreement and the
Transactions contemplated therein, including a discussion of risks and
uncertainties associated with the Merger and TMTG, please see the Form
S-4,
which was initially filed with the SEC on May 16, 2022.

Results of Operations

We have neither engaged in any operations nor generated any revenues to date. Our only activities from inception through March 31, 2022 were organizational activities and those necessary to prepare for the Initial Public Offering and the search for targets for our initial Business Combination, including the proposed Merger with TMTG. We do not expect to generate any operating revenues until after the completion of our initial Business Combination. We generate non-operating income in the form of interest income on marketable securities held in the Trust Account. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence in connection with our search for targets for our initial Business Combination.


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For the three months ended March 31, 2022, we had a net loss of $1,884,389, which consists primarily of general and administrative costs of $1,863,920. For the three months ended March 31, 2021, we had a net loss of $485, which consists of general and administrative costs of $485.

Liquidity and Capital Resources

Until the consummation of the Initial Public Offering, our only source of liquidity was an initial purchase of Class B common stock by the Sponsor and loans from our Sponsor.

On September 8, 2021, we consummated the Initial Public Offering of 28,750,000 Units, at a price of $10.00 per Unit, generating gross proceeds of $287,500,000. Simultaneously with the closing of the Initial Public Offering, we consummated the sale of 1,133,484 Placement Units at a price of $10.00 per Placement Unit in a private placement to our Sponsor, generating gross proceeds of $11,334,840.

Following the Initial Public Offering and the sale of the Placement Units, a total of $293,250,000 was placed in a U.S.-based trust account ("Trust Account"), maintained by Continental Stock Transfer & Trust Company, acting as trustee. We incurred $15,668,029 in transaction costs, including $3,593,750 of underwriting fees, $10,062,500 of deferred underwriting fees, fair value of representative shares of $1,437,500 and $574,279 of other offering costs.


For the three months ended March 31, 2022, net decrease in cash was $286,239 and
was comprised of net cash used in operating activities of $586,239 and net cash
provided by financing activities of
$300,000.
Net cash used in operating activities of $586,239 consisted of a net loss of
$1,884,389 partially offset by a change in accrued expenses of $1,281,263. Net
cash provided by financing activities of
$300,000
consisted of proceeds from working capital loans.

For the three months ended March 31, 2021, net increase in cash was $25,000 and was comprised of net cash provided by financing activities of $25,000. Net cash provided by financing activities of $25,000 consisted of proceeds from issuance of Class B common stock to Sponsor.

As of March 31, 2022, we had cash of $293,286,629 held in the Trust Account. We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account to complete our initial Business Combination. We may withdraw interest to pay taxes. To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our initial Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.

As of March 31, 2022, we had cash of $41,492 outside of the Trust Account. We intend to use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a Business Combination.



In order to fund working capital deficiencies or finance transaction costs in
connection with a Business Combination, our Sponsor or an affiliate of our
Sponsor or certain of our officers and directors may, but are not obligated to,
loan us funds as may be required. If we complete a Business Combination, we may
repay such loaned amounts out of the proceeds of the Trust Account released to
us. In the event that a Business Combination does not close, we may use a
portion of the working capital held outside the Trust Account to repay such
loaned amounts, but no proceeds from our Trust Account would be used for such
repayment. Initially up to $1,500,000 of such loans may be convertible into
units, at a price of $10.00 per unit, at the option of the lender. The amount of
such loans that can be converted to Working Capital Units has subsequently been
increased to $30,000,000. The units would be identical to the Placement Units.
In November 2021, our Sponsor committed to provide loans of up to an aggregate
of $1,000,000 to the Company through September 8, 20
22 (or up to March 8, 2023 if the Company extends the maximum time to complete a
Business Combination), wh
ich loans will be
non-interest
bearing, unsecured and will be payable upon the consummation of a Business
Combination. At March 31, 2022, $300,000 was outstanding under this commitment.

We believe we will need to raise additional funds in order to meet the expenditures required for operating our business. Additionally, if our estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating a Business Combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our Business Combination. Moreover, we may need to obtain additional financing either to complete our Business Combination or because we become obligated to redeem a significant number of our public shares upon consummation of our Business Combination, in which case we may issue additional securities or incur debt in connection with such Business Combination. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of our Business Combination. If we are unable to complete our Business Combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the Trust Account. In addition, following our Business Combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.


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Management believes that the Company has sufficient working capital and borrowing capacity to meet its needs through the earlier of the consummation of a Business Combination or September 8, 2022 (or up to March 8, 2023 if the Company extends the maximum time to complete a Business Combination), the liquidation date should a Business Combination not be consummate. Over this time period, the Company will be using the funds held outside of the Trust Account and additional funds it will need to raise for paying existing accounts payable, identifying and evaluating prospective initial Business Combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the Business Combination.

The Company has until September 8, 2022 (or up to March 8, 2023 if the Company extends the maximum time to complete a Business Combination) to consummate a Business Combination. It is uncertain that the Company will be able to consummate a Business Combination by this time. If a Business Combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution of the Company. Additionally, the Company has incurred and expects to incur significant costs in pursuit of its acquisition plans. The Company lacks the financial resources it needs to sustain operations for a reasonable period of time, which is considered to be one year from the date of the issuance of the financial statements. As a result, these factors raise substantial doubt about the Company's ability to continue as a going concern.



Off-Balance
Sheet Arrangements

We did not have any
off-balance
sheet arrangements as of March 31, 2022.

Contractual Obligations

We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay an affiliate of our Sponsor a monthly fee of $15,000 for office space, administrative and support services to us. We will incur these fees monthly until the earlier of the completion of our initial Business Combination and our liquidation.

The underwriters are entitled to a deferred fee of $0.35 per unit, or $10,062,500 in the aggregate. The deferred fee will become payable to the underwriters solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.

Critical Accounting Policies

Class A Common Stock Subject to Possible Redemption

We account for our Class A common stock subject to possible redemption in accordance with the guidance in Accounting Standards Codification ("ASC") Topic 480 "Distinguishing Liabilities from Equity." Class A common stock subject to mandatory redemption is classified as a liability instrument and is measured at fair value. Conditionally redeemable common stock (including common stock that features redemption rights that is either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) is classified as temporary equity. At all other times, shares of common stock are classified as stockholders' equity. Our shares of Class A common stock feature certain redemption rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, Class A common stock subject to possible redemption is presented as temporary equity, outside of the stockholders' equity section of our condensed interim balance sheets.

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