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The SPAC Digital World (NASDAQ: DWAC) is now rolling out the proverbial red carpet and offering various bells and whistles to the Trump Media and Technology Group (TMTG), the entity that controls the Truth Social platform, to entice its increasingly recalcitrant partner to continue to stick with their merger agreement.
As per a fresh filing with the SEC, Digital World is offering cumulative cash bonuses of $6.38 million to attract and retain “employees and other personnel associated with TMTG.” Provided that certain conditions are met, the SPAC has agreed to issue this cash bonus once the agreed-upon merger between Digital World and the Trump Media and Technology Group stands consummated.
Moreover, in a separate filing, Digital World has announced that it is offering 40 million additional “earnout” common shares to all TMTG shareholders, provided that certain stock price conditions are fulfilled within three years of the closing of its merger agreement with the Trump Media and Technology Group.
These developments come as Digital World announced last week that it has secured $50 million in new funding by issuing promissory notes that not only offer annual interest of 8 percent but are also eligible to be converted into equity.
Additionally, Digital World has also entered into warrant subscription agreements with certain institutional investors, where each warrant is convertible into one common share at a price of $11.50 per share. The SPAC intends to issue 3.05 million such warrants as soon as its merger agreement with the Trump Media and Technology Group achieves closure.
Digital World’s planned merger with TMTG has remained in limbo for nearly two years now due to a number of ongoing federal investigations related to improper disclosures in the run-up to the formalization of the merger agreement between the two entities. While the SEC has reached a settlement with the SPAC on this matter, FINRA is yet to provide a similar reprieve. Additionally, the Trump Media and Technology Group itself is being investigated by federal prosecutors in New York for allegedly violating statutes related to money laundering.
Of course, it remains to be seen whether Trump’s media-related enterprise will still adhere to its plans to go public by merging with the SPAC Digital World. After all, Truth Social continues to see lackluster activity, with just around 0.6 million active users.