Aug 16, 2022 - Technology

SPAC looking to take Trump's media firm public delays earnings report

Donald Trump stands in front of a black background.

Former U.S. President Donald Trump speaks at the Conservative Political Action Conference (CPAC) held at the Hilton Anatole on August 06, 2022 in Dallas, Texas. (Photo by Brandon Bell/Getty Images)

Digital World Acquisition Group (DWAC), the blank check company that plans to merge with the parent company of former president Donald Trump's social media app Truth Social and take it public, has requested an extension from the SEC to file its second-quarter earnings results.

Why it matters: The success of Truth Social and its parent Trump Media and Technology Group (TMTG) rides on the financial health of its parent company and its SPAC.

Details: In a filing with the Securities and Exchange Commission (SEC) Tuesday, DWAC said it was unable to file its second-quarter earnings report "because additional time is needed to prepare the financial statements."

  • DWAC noted it would file its earnings report within the five-day grace period allotted by the SEC.
  • Asked in the filing whether the company anticipates "any significant change in results of operations from the corresponding period for the last fiscal year will be reflected by the earnings statements" that would be included in the report, DWAC checked a box that read "Yes."
  • The company said it lost roughly $4.7 million last quarter and around $6.5 million total for the first half of the year, but that those figures are still being reviewed by its accounting firm and could be subject to change with the official earnings report.

The big picture: DWAC has been riddled with issues for months.

  • The SPAC is under investigation by the SEC for possibly negotiating their deal prior to DWAC going public, which is illegal if true.
  • An investor sued the SPAC's CEO last year claiming fraud.
  • There's been confusion regarding whether or not certain members of the board are still on the board.
  • Last week DWAC asked shareholders to approve an extension of its merger agreement by a year.

What to watch: The FBI raid of Mar-a-Lago earlier this month has boosted downloads to Truth Social, per data from Apptopia.

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