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Finally, the news that Digital World investors were waiting for emerges! The SPAC has now cleared its last major hurdle and is all set to announce the date on which its shareholders will approve the proposed merger with Trump Media and Technology Group (TMTG), the entity behind the Truth Social platform.
The SEC has now declared Digital World’s Form S-4 effective, which is usually considered an “all engines go” signal from the apex financial regulator. Accordingly, the SPAC has announced that it will unveil the date for a special meeting of its shareholders “within two business days,” where the shareholders will be required to officially approve the proposed business combination with the Trump Media and Technology Group. Once the requisite approval has been accorded, the two entities will merge, paving the way for the shares of the merged entity to trade on the stock exchange.
Of course, the SPAC has given a number of signs in recent days that alluded to today’s development. After losing every cent of its original $1 billion in PIPE investments, Digital World issued promissory notes worth $50 million last week to bolster its liquidity. These notes offer annual interest of 8 percent and are eligible to be converted into equity, provided that qualifying conditions are met.
Digital World also entered into warrant subscription agreements with certain institutional investors last week, 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 Trump Media and Technology Group achieves closure.
Then, earlier this week, the SPAC announced $6.38 million in cumulative cash bonuses to attract and retain “employees and other personnel associated with TMTG.” Provided that certain conditions are met, Digital World has agreed to issue this cash bonus once its agreed-upon merger with the Trump Media and Technology Group stands consummated.
Finally, in a separate filing earlier this week, Digital World announced that it is now 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.
Bear in mind that Digital World’s planned merger with TMTG remained in limbo for nearly two years due to a number of federal investigations related to improper disclosures in the run-up to the formalization of the merger agreement between the two entities. Most of the legal hurdles now appear to have been resolved, paving the way for the two entities to finally move forward with their merger.