TRUTH Social, the new social media launched by Donald Trump’s Trump Media & Technology Group (TMTG), has raised $1bn from investors, after entering into a subscription agreement with Digital World Acquisition Corporation (DWAC).
Former US President Donald J. Trump, Chairman of TMTG, stated that the “$1 billion sends an important message to Big Tech that censorship and political discrimination must end. America is ready for TRUTH Social, a platform that will not discriminate on the basis of political ideology. As our balance sheet expands, TMTG will be in a stronger position to fight back against the tyranny of Big Tech”.
Patrick Orlando, Chairman and CEO of Digital World Acquisition Corp., expressed optimism that the capital raised will help TMTG develop its business.
“Our focus on delivering public shareholder value drives our decision-making and by accepting these commitments for a strategic infusion of growth capital, we believe the combined company can grow on an incredibly strong foundation. The liquidity that will be provided to the combined company balance sheet, in excess of the up to $293 million (less expenses) that DWAC may provide, should fortify the strategic positioning of TMTG.
“I am confident that TMTG can effectively deploy this capital to accelerate and strengthen the execution of its business, including by continuing to attract top talent, hire top technology providers, and roll out significant advertising and business development campaigns”.
Patrick Orlando
Estimated proceeds
Together, the transaction will provide estimated proceeds of approximately $1.25 billion (after deducting estimated deal expenses), assuming full delivery of the amount of cash held in trust by DWAC, to be used to fund operations of the combined entity, the partners stated in a press statement.
The per-share conversion price of the fully committed convertible preferred stock PIPE transaction represents a 20% discount to DWAC’s volume-weighted average closing price (VWAP) for the five trading days prior to and including December 1, 2021, subject to downward adjustment.
If the VWAP of the combined entity for the 10 trading days after the closing of the business combination (Closing VWAP) is at or above $56, no downward adjustment will occur. If the Closing VWAP is below $56, then the conversion price shall be adjusted to the greater of a 40% discount to the Closing VWAP and the floor price of $10.00. The PIPE financing is subject to customary closing conditions, including stockholder and regulatory approval, and is expected to close upon or shortly after the consummation of the business combination.
The statement disclosed that EF Hutton, division of Benchmark Investments LLC, is serving as exclusive placement agent and capital markets advisor to DWAC.
Trump Media & Technology Group Corp.
Trump Media & Technology Group Corp. is a social media and technology company. TRUTH Social, TMTG’s forthcoming social media platform, will provide an outlet that encourages open global conversation without discrimination on the basis of political ideology. TMTG+, the company’s subscription-based video streaming service, is expected to include access to non-woke entertainment, news, documentaries, podcasts and more.
Digital World Acquisition Corp. completed its initial public offering in September 2021, raising approximately $293 million in cash proceeds for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. DWAC’s strategy is to identify and complete business combinations with technology-focused, market leading companies.
Proposed Business Combination
DWAC announced a definitive merger agreement with TMTG on October 20, 2021. Upon a successful merger completion, DWAC shareholders will become shareholders in the public company, TMTG.
DWAC, TMTG and their respective directors, executive officers, other members of management and employees may be deemed participants in the solicitation of proxies from the Company’s stockholders with respect to the proposed business combination.
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