Trump’s Truth Social Announces Merger ‘Milestone’ As Filings Show $73 Million Loss

Authored by Katabella Roberts via The Epoch Times (emphasis ours),

Former President Donald Trump’s company, Trump Media & Technology Group (TMTG) has reached another “important milestone” in its merger with Digital World Acquisition Corp., officials announced on Nov. 13.

Former President Donald Trump sits in the courtroom during his civil fraud trial at New York State Supreme Court in New York City on Nov. 6, 2023. (Curtis Means/Pool/Getty Images)

In a press release, the two firms unveiled the filing of “Amendment No. 1” to its Form S-4 Registration statement with the Securities and Exchange Commission (SEC).

Publicly traded companies are required to file an SEC form S-4 to register any material information related to a merger or acquisition.

The latest filing included a “preliminary proxy statement” and a prospectus “concerning the proposed merger between TMTG, the parent company of social media platform Truth Social, and Digital World, a special purpose acquisition company,” and “marks an important milestone in the proposed business combination,” officials said.

Digital World entered into a merger agreement with TMTG in October 2022, but the deal has yet to be finalized amid multiple delays, including investigations by the SEC and the Department of Justice (DOJ).

Earlier this year, Digital World reached a tentative settlement of a penalty of $18 million with the SEC to settle charges alleging that the company violated anti-fraud provisions relating specifically to its IPO filings on form S-1 and the S-4 form.

The DOJ also announced charges against a former Digital World board member, Bruce Garelick, and two others who were arrested in June for insider trading related to the proposed merger with TMTG.

A phone screen displays the Truth Social app in Washington on Feb. 21, 2022. (Stefani Reynolds/AFP via Getty Images)

‘Crucial Milestone’

Digital World has previously called on Congress to investigate the SEC over delays to the merger, which it claims are being caused by politicization.

Monday’s announcement represents a “crucial milestone in our journey towards the potential merger with TMTG,” said Eric Swider, CEO of Digital World.

“This development highlights our ongoing efforts to provide clear and detailed information throughout this process. Our teams have worked tirelessly to reach this stage, and this achievement reflects their dedication and expertise. We are excited to continue our collaboration with TMTG to bring this merger to fruition,” he added.

TMTG CEO Devin Nunes also called the filing a “monumental milestone,” adding that the company looks forward to working with the SEC to bring the deal to a close as “quickly as possible.”

“Truth Social aims to be more than a social media platform—we aspire to become the centerpiece of a movement, as well as a method for Americans to invest in their freedom,” Mr. Nunes added.

However, the amended S-4 filing also raises concerns regarding the future of the merger.

In a section titled “Risks Related to TMTG,” it notes that “TMTG’s independent registered public accounting firm has indicated that TMTG’s financial condition raises substantial doubt as to its ability to continue as a going concern.”

Former President Donald Trump sits in the courtroom with attorneys Christopher Kise and Alina Habba during his civil fraud trial at New York State Supreme Court in New York City on Nov. 6, 2023. (Brendan McDermid-Pool/Getty Images)

Truth Social Posts Losses

According to the filing, Truth Social posted a loss of $50 million in 2022, with net sales of just $1.4 million.

It also lost $23 million in the first six months of this year, with net sales of $2.3 million. Overall, the social media platform has lost $73 million since its launch in early 2022, according to the financial disclosure.

The filing also states that as of June 30, 2023 and Dec. 31, 2022, “management has substantial doubt that TMTG will have sufficient funds to meet its liabilities as they fall due, including liabilities related to promissory notes previously issued by TMTG.”

“Sufficient funds during this period are directly conditional on completion of the Business Combination by the Outside Date,” the form notes.

“TMTG believes that it may be difficult to raise additional funds through traditional financing sources in the absence of material progress toward completing its merger with Digital World,” the form concludes.

The form also indicates much of Truth Social’s success hinges on President Trump, who controls 90 percent of TMTG and is currently facing a string of legal challenges, including a lawsuit filed by New York State Attorney General Letitia James’s office against the Trump family business.

According to the financial disclosure, if the platform “fails to develop and maintain followers or a sufficient audience, if adverse trends develop in the social media platforms generally, or if President Trump were to cease to be able to devote substantial time to Truth Social, TMTG’s business would be adversely affected.”

Despite the financial disclosure, Digital World shares were up 4.22 percent after hours at $15.82.

The Epoch Times has contacted a spokesperson for Trump Media & Technology Group for further comment.


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