Digital World Acquisition Corp. on Friday again amended its filing with the Securities and Exchange Commission regarding its planned merger with Trump Media and Technology Group, former President Donald Trump’s social-media company.
In the new filing, the special-purpose acquisition corporation
DWAC,
or SPAC, disclosed new lawsuits that seek to block the merger, as well as changes to its bylaws that specify that any complaints brought against it be directed to the U.S. District Court for the Southern District of Florida.
And on Thursday, the board extended the date by which the company has to complete the merger to June 8 from March 8. The extension is the third of four three-month extensions permitted.
The filing disclosed a lawsuit filed on Thursday by former DWAC chairman and chief executive Patrick Orlando, that seeks to block the deal unless he is awarded a larger number of shares than DWAC is currently proposing. The news was first reported by Reuters.
Orlando’s ARC investment vehicle said it should receive 1.78 class A shares for each class B share owned. DWAC said the ratio was 1.34. The difference between the two is equal to more than 2.5 million shares, DWAC said in a regulatory filing.
Read also: DWAC updates SEC filings to reflect new risk factors in plan to buy Trump Media & Technology Group
The filing also updated investors on the latest moves from Trump Media’s co-founders, Andy Litinsky and Wes Moss, whose investment company, United Atlantic Ventures, has threatened to block the deal. Litinsky and Moss were both contestants on Trump’s “The Apprentice” reality TV show.
UAV is now accusing Trump in a fresh lawsuit of trying to dilute the value of shares in TMTG held by Litinsky and Moss that could cost them millions of dollars in profit. The suit, which was first reported by the Washington Post, alleges that UAV’s current 8.6% stake in TMTG would be diluted to less than 1% if the TMTG board approves an eight-fold increase in the number of authorized shares, increasing them to 1 billion from 120 million.
“The only plausible reason for TMTG to authorize this massive new block of stock and create non-voting stock is so Trump can dilute UAV and take the lion’s share of merger consideration for himself,” the motion says.
UAV also recently sent letters to DWAC asserting that an early agreement with Trump from 2021 is still in effect and gives them the right to appoint two directors to the board.
DWAC launched merger talks with TMTG, which operates the conservative Truth Social platform, in October of 2021, but has struggled to consummate the deal amid regulatory pushback and challenges from the Justice Department.
Also read: Trump’s Truth Social merger partner settles fraud charges with SEC over misleading investors
DWAC shareholders are expected to vote on the merger in March and based on current prices, Trump’s stake could be worth more than $3 billion, at a time when he owes more than $500 million in civil judgments in New York.
In Friday’s filing, DWAC again warned that the UAV action “could lead to substantial legal costs, distract management, and have adverse effects on the business operations and financial health of TMTG and/or the combined entity.”
DWAC’s stock was down 5.6% Friday, but is up 123% in the year to date, while the S&P 500 has gained about 7%.
