Topline
Digital World Acquisition Corp., the special purpose acquisition company planning to merge with the company behind former President Donald Trump’s Truth Social platform, is asking its shareholders to delay the deadline for completing the deal until 2023, in part because of federal investigations into the transaction.
This illustration photo shows a person checking the app store on a smartphone for “Truth Social”, … [+]
Key Facts
With the customary two-year deadline since its formation approaching for the blank check company to complete a deal or return its funding to investors, DWAC is asking for a one-year extension to September 8, 2023, according to a Securities and Exchange Commission filing Friday.
DWAC warned that may not even be enough time, though, noting the investigations might hamper its ability to win regulatory approval, which it said “may require us to liquidate.”
DWAC in October announced plans to merge with a new firm called the Trump Media and Technology Group (TMGT) to publicly list the company affiliated with the former president.
What To Watch For
The company warned in the filing that the investigations “could result in the imposition of significant penalties, injunctions, prohibitions on the conduct of our business, damage to our reputation and other sanctions against us.”
Key Background
The SEC launched an investigation into DWAC in December after allegations surfaced that company executives may have held talks with TMGT before DWAC’s initial public offering, which would violate regulations that prohibit SPACs from reaching merger agreements before raising funds. DWAC also revealed last month it’s the subject of a Justice Department criminal probe. It’s stated in regulatory filings that each member of the company’s board received a grand jury subpoena seeking information on communications with “multiple individuals, and information regarding Rocket One Capital,” a little-known Miami-based private equity firm.
Further Reading
Shares Of Trump’s Truth Social SPAC Tumble After Federal Grand Jury Issues Subpoenas (Forbes)
Shares Of SPAC Behind Trump Social Media Company Jump 400% (Forbes)
Source: https://www.forbes.com/sites/nicholasreimann/2022/08/05/dwac-seeks-to-delay-merger-with-trumps-truth-social-company-amid-federal-investigations/