DWAC seeks to delay merger with Trump’s Truth Social Company amid federal investigations

Topline

Digital World Acquisition Corp., the special purpose acquisition company that plans to merge with the company behind former President Donald Trump’s Truth Social platform, is asking its shareholders to extend the closing date of the deal through 2023, in part because of federal investigations into the deal. .

Highlights

As the usual two-year deadline since inception approaches for the blank check company to reach a deal or return its funding to investors, DWAC is asking for a one-year extension until September 8, 2023, according to a filing with the Securities and Exchange Commission on Friday.

DWAC warned that might not even be enough, noting that investigations could hamper its ability to gain regulatory approval, which it said “could force us to liquidate.”

DWAC announced plans in October to merge with a new company called Trump Media and Technology Group (TMGT) to publicly list the former president’s affiliate.

To monitor

The company warned in the filing that the investigations “could result in the imposition of significant penalties, injunctions, prohibitions on conducting our business, damage to our reputation and other sanctions against us.”

Key Context

The SEC launched an investigation into DWAC in December after allegations surfaced that company executives may have held talks with TMGT prior to DWAC’s initial public offering, which violates regulations prohibiting SPACs from enter into merger agreements before raising funds. The DWAC also revealed last month that it was the subject of a criminal investigation by the Department of Justice. It is stated in the regulatory filings that each member of the company’s board of directors received a grand jury subpoena requesting information about communications with “several people and information regarding Rocket One Capital,” a Little-known Miami-based private equity firm.

Further reading

Shares of Trump’s social truth SPAC plummet after federal grand jury issues subpoenas (Forbes)

SPAC shares behind social media company Trump jump 400% (Forbes)

Valerie J. Wallis