TS

Truth Social SPAC Financial Model

Two planned products:

TRUTH Social

• Ad-supported social media platform positioned as a "Big Tent" free-speech alternative to Twitter/Facebook.
• Built on Mastodon open-source backend.
• Mobile app available on iOS (pre-order stage at time of deck).
• Catalytic user base: Trump's existing 146M cross-platform followers (89M Twitter, 33M Facebook, 24M Instagram as of Jan 2021).

TMTG+

• Planned on-demand streaming service: news, documentaries, sports, unscripted entertainment.
• Positioned vs. Netflix, Disney+, Hulu.
• Content lead: Scott St. John (Executive Producer, "Deal or No Deal", "America's Got Talent").
• No content library or live service shown in deck; entirely aspirational at presentation date.

No formal TAM/SAM/SOM funnel presented. Deck uses competitor revenue/user benchmarks as a proxy:

• Combined Twitter + Netflix + iHeartMedia: $35.5B revenue, 457M users.
• Twitter: $4.8B LTM revenue, 211M monetizable DAU (Q3 2021).
• Netflix: $27.5B LTM revenue, 214M paid subscribers (Q3 2021).
• iHeartMedia: $3.2B LTM revenue, 32M US monthly listeners (Q2 2021).
• US podcast audience: 155M listeners, 55% of population 12+ in 2020.

No independent market-size or CAGR figure cited for TMTG's addressable market. Deck implies the market is sized by the conservative/non-woke segment of the above platforms.

TRUTH Social - advertising

• Revenue driver: monetizable daily active users × ARPU.
• ARPU modeled as annual revenue per monetizable user (consistent with Twitter's metric).
• Monetizable user defined as accounts that log in on any given day to whom ads can be shown.

TMTG+ - subscription

• Revenue driver: total subscribers × average monthly fee.
• Monthly fee range benchmarked against Netflix ($11.73/mo) and Disney+ ($4.16/mo).

Podcast network referenced in slides 18 and 31 but no revenue model, launch timeline, or projections provided. Not modeled in deck financials.

Operating traction: none at presentation date. Company is pre-launch.

• Truth Social app: iOS pre-order only; "TRUTH is coming" message shown.
• No users, no revenue, no historical financials shown.
• Trump's prior social media following cited as seed audience: 146M total followers across Twitter (89M), Facebook (33M), Instagram (24M) as of January 2021.

Management projections (not audited actuals):

Revenue split by segment not explicitly broken out in table; total implied. Bar chart shows TMTG+ (light blue) becomes dominant from 2024E onward.

Competitors cited as benchmarks:

• Social: Twitter, Facebook (Meta), Parler (banned from app stores Jan 2021).
• Streaming: Netflix, Disney+, Hulu.
• Podcast/Audio: iHeartMedia.

Stated moat:

• Trump's personal brand and 146M follower base as catalytic user acquisition.
• "Non-cancellable" / free-speech positioning for conservatives.
• "Big Tent" inclusive framing intended to expand beyond initial conservative base.
• Redundant CDN/infrastructure across multiple independent (non-Big-Tech) cloud providers (Rumble Cloud, Rightforge, NS1, Cloudflare, Akamai, Al.net) to resist deplatforming.

Comps used for valuation benchmarking: Facebook (6.1x EV/Rev 2022E), Snap (14.6x), Twitter (6.6x), Netflix (9.3x), Spotify (4.7x), Roku (10.1x), Peloton (5.2x). Mean 8.1x, Median 6.6x. Twitter at 6.6x EV/2022E revenue = $41B EV cited as reference point.

SPAC sponsor: Patrick Orlando, Chairman & CEO of DWAC; prior: Deutsche Bank, JPMorgan, MIT degrees in Mechanical Engineering and Management Science.

TMTG technology team: ~30+ engineers across backend, frontend, mobile, product. CTO, CPO, CIO, CSO, VP Engineering named by first name/last initial only.

TMTG+ production: Scott St. John (EP, "Deal or No Deal", "America's Got Talent").

Transaction structure:

• DWAC acquires TMTG at initial purchase price of $875M in DWAC shares.
• Earnout: up to 40M additional shares (15M @ $15, 15M @ $20, 10M @ $30).
• PIPE: ~$1.0B at close.
• DWAC cash in trust: $293.3M (assumes no redemptions).
• Cash to balance sheet post-close: $1,254.4M.
• Pro forma EV (base, $10/share): $992.7M; total equity value $2,247.1M.
• Pro forma EV (full earnout at 10/28/21 market prices): $12,283.6M; total equity value $13,538.1M.
• TMTG stockholders: 87.5M shares (38.9%) base; 127.5M shares (65.9%) full earnout.
• PIPE investors: 100M shares (44.5%) base.
• Expected close: Q1 2022.

Advisors: EF Hutton (placement agent/banker), Nelson Mullins, Loeb & Loeb (legal), Ellenoff Grossman & Schole (SPAC counsel), Marcum (accountants), Withum (audit/tax).

Use of funds: $1,254.4M to balance sheet; stated use is building out TMTG and TMTG+. No detailed use-of-funds breakdown by category (product, content, marketing, G&A).

• Archetype + why: SPAC/de-SPAC deal model combined with a dual-segment operating forecast (social media ad + streaming subscription). This is not an operating startup raise - it is a reverse merger. The primary deal model should capture SPAC mechanics (trust, PIPE, redemptions, dilution, earnout), then flow into a 5-year operating revenue build that mirrors the management projections and allows sensitivity testing of their key assumptions.

• Forecast horizon & granularity: Deal close mechanics: transaction-date (2022). Operating model: annual 2022E–2026E (matches deck horizon). No quarterly data provided; annual is appropriate given early stage.

• Key drivers & assumptions:

*SPAC deal mechanics:*

• DWAC trust cash: $293.3M
• PIPE proceeds: $1,000.0M
• DWAC sponsor equity: $83.2M
• TMTG fixed equity: $875.0M
• Earnout tranches: 15M @ $15 / 15M @ $20 / 10M @ $30
• Redemption rate: 0% (base case in deck); sensitivity from 0% to 80% redemption is a key risk lever
• Fees & expenses: $38.8M
• Cash to balance sheet: $1,254.4M

*TRUTH Social - ad revenue drivers:*

• Total users 2026E: 81M - based on 2021 Politico poll of registered voters; ramp: 16M→41M→56M→69M→81M from deck table
• Monetizable % 2022E: 5%; stabilizing at 26% from 2023E onward
• ARPU 2022E: $5.90, growing to $13.50 in 2026E; linear interpolation between years
• Monetizable user → revenue: monetizable users × ARPU = Truth Social revenue (implied by table)
• Twitter ARPU benchmark: $23.76 (2021 LTM); 2026E ARPU represents 43% discount

*TMTG+ - subscription revenue drivers:*

• Subscribers 2026E: 40M; ramp: 0M→4M→11M→23M→40M
• Avg monthly fee 2026E: $9.00; ramp: $0→$5.56→$7.50→$8.00→$9.00
• Annualized TMTG+ revenue = subscribers × monthly fee × 12
• Netflix benchmark: $11.73/mo; Disney+: $4.16/mo; $9.00 = 23% discount to Netflix

*Cost structure (all assumed - nothing in deck):*

• Content/programming costs (TMTG+): ~40–60% of streaming revenue, benchmarked to Netflix content margin; this is the single biggest unknown
• Infrastructure / hosting: ~10–15% of revenue at scale; elevated in early years given redundant architecture
• S&M / user acquisition: heavy in 2022–2023 (launch phase), declining as % of revenue
• G&A: ~5–10% of revenue at scale
• EBITDA margin: negative through 2023E; positive from ~2024–2025E if projections achieved

*Valuation / comps:*

• Peer EV/Revenue 2022E: mean 8.1x, median 6.6x
• Twitter at 6.6x used as primary reference for Truth Social
• Apply range of 4x–10x to 2026E revenue for terminal value sensitivity

• Scenarios (Base / Bull / Bear - which variables flex):
• Base: Management projections as stated (81M users, 26% monetizable, $13.50 ARPU, 40M TMTG+ subs at $9/mo by 2026E).
• Bull: Faster monetizable % ramp (e.g., 35% by 2026E), higher ARPU ($16–18, closing gap to Twitter), TMTG+ at 55M subs.
• Bear: Low user acquisition (deck projections miss materially - e.g., 20M total users by 2026E), monetizable % stays at 5–10%, TMTG+ delayed or not launched; heavy redemptions at SPAC close reduce cash to balance sheet.
• Key flex variables: total user growth, monetizable %, ARPU, streaming subscriber ramp, monthly fee, redemption rate, content cost ratio.

• Required sheets / outputs:

1. Deal Summary - SPAC sources & uses, pro forma cap table (base and full earnout), EV bridge, redemption sensitivity table.
2. Assumptions - all drivers with Base/Bull/Bear toggles.
3. Truth Social Revenue Build - users → monetizable users → ARPU → revenue, 2022E–2026E.
4. TMTG+ Revenue Build - subscribers × monthly fee × 12, 2022E–2026E.
5. Consolidated P&L - combined revenue, assumed cost structure, EBITDA (largely inputs flagged clearly).
6. Comps / Valuation - EV/Revenue multiple applied to 2026E revenue; sensitivity table (revenue × multiple).
7. Earnout Waterfall - share issuance at each price threshold ($15/$20/$30) and dilution impact.
8. Dashboard - total revenue, users, subscribers, EV, equity value summary.