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As filed with the U.S. Securities and Exchange Commission on February 14, 2024.

Registration No. 333-264965

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

AMENDMENT NO. 6

TO

FORM S-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

Digital World Acquisition Corp.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   6770   85-4293042

(State or Other Jurisdiction of

Incorporation or Organization)

 

(Primary Standard Industrial

Classification Code Number)

 

(I.R.S. Employer

Identification No.)

3109 Grand Ave., #450

Miami, Florida 33133

(305) 735-1517

(Address, including zip code, and telephone number, including area code, of  registrant’s principal executive offices)

Eric Swider

Chief Executive Officer

Digital World Acquisition Corp.

3109 Grand Ave., #450

Miami, Florida 33133

(305) 735-1517

(Name, address, including zip code, and telephone number, including area code,  of agent for service)

 

 

Copies to:

 

Brandon J. Bortner, Esq.

Brad Bondi, Esq.

Gil Savir, Esq.

Maria M. Larsen, Esq.

Paul Hastings LLP

2050 M Street NW,

Washington, DC 20036

(202) 551-1700

   

John F. Haley, Esq.

Jonathan H. Talcott, Esq.

Michael D. Bryan, Esq.

Nelson Mullins Riley & Scarborough LLP

2 South Biscayne Blvd., 21st Floor

Miami, Florida 33131

(305) 373-9400

 

 

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective and after all conditions under the Merger Agreement to consummate the proposed merger are satisfied or waived.

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box: ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer      Accelerated filer  
Non-accelerated      Smaller reporting company  
     Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border  Issuer Tender Offer) ☐

Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer) ☐

 

 

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

 

 

 


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The information in this preliminary proxy statement/prospectus is not complete and may be changed. These securities may not be issued until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary proxy statement/prospectus is not an offer to sell these securities and does not constitute the solicitation of offers to buy these securities in any jurisdiction where the offer or sale is not permitted.

 

PRELIMINARY — SUBJECT TO COMPLETION, DATED FEBRUARY 14, 2024

PROXY STATEMENT OF

DIGITAL WORLD ACQUISITION CORP.

PROSPECTUS FOR UP TO

135,869,509 SHARES OF COMMON STOCK

 

 

To the Stockholders of Digital World Acquisition Corp.:

We are pleased to provide this proxy statement/prospectus relating to the proposed merger (the “Merger”) of DWAC Merger Sub Inc., a Delaware corporation (“Merger Sub”) and a wholly owned subsidiary of Digital World Acquisition Corp., a Delaware corporation (“Digital World”), with and into Trump Media & Technology Group Corp., a Delaware corporation (“TMTG”), pursuant to an Agreement and Plan of Merger, dated as of October 20, 2021 (as amended by the First Amendment to Agreement and Plan of Merger, dated May 11, 2022, the Second Amendment to Agreement and Plan of Merger, dated August 9, 2023, the Third Amendment to Agreement and Plan of Merger, dated September 29, 2023, and as it may be further amended or supplemented from time to time, the “Merger Agreement”), by and among Digital World, Merger Sub, TMTG, ARC Global Investments II, LLC, a Delaware limited liability company, in the capacity as the representative of the stockholders of Digital World, and TMTG’s General Counsel in his capacity as the representative of the stockholders of TMTG. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Merger Agreement. If the Merger Agreement is adopted and the Merger and the other transactions contemplated thereby (collectively, the “Business Combination”) are approved by Digital World’s and TMTG’s stockholders, and the Business Combination is subsequently completed, the Merger Sub will merge with and into TMTG with TMTG surviving the Merger as a wholly owned subsidiary of Digital World. Upon the consummation of the Business Combination, Digital World will change its name to “Trump Media & Technology Group Corp.” As used in this proxy statement/prospectus, “New Digital World” refers to Digital World after giving effect to the consummation of the Business Combination. In addition, upon the consummation of the Business Combination, (a) all of the issued and outstanding TMTG common stock of TMTG immediately prior to the effective time of the Merger (the “Effective Time”) (other than those properly exercising any applicable appraisal rights under Delaware law or any shares of TMTG common stock issued upon the conversion of TMTG Convertible Notes immediately prior to the Effective Time pursuant to the terms of the Merger Agreement) will automatically be cancelled and will cease to exist, in exchange for the right to receive their pro rata portion of the Merger Consideration and the Earnout Shares, if any (each, as defined below), (b) all of the outstanding TMTG common stock that was issued upon the conversion of TMTG Convertible Notes immediately prior to the Effective Time pursuant to the terms of the Merger Agreement will automatically be cancelled and will cease to exist, in exchange for the right to receive shares of New Digital World common stock upon the terms set forth in the Merger Agreement, (c) each outstanding option to acquire shares of TMTG common stock (whether vested or unvested) will be assumed by New Digital World and automatically converted into an option to acquire shares of New Digital World common stock, with its price and number of shares equitably adjusted based on the conversion ratio of the shares of TMTG common stock into the Merger Consideration, and (d) each outstanding restricted stock unit of TMTG shall be converted into a restricted stock unit relating to shares of New Digital World common stock.

The Merger Agreement provides that (A) the aggregate merger consideration to be paid to TMTG securityholders (other than holders of TMTG Convertible Notes) as of immediately prior to the Effective Time will be an amount equal to $875,000,000, subject to adjustments for TMTG’s closing debt, net of cash and unpaid transaction expenses (the “Merger Consideration”), with each such TMTG securityholder receiving shares of New Digital World common stock for its TMTG securities, and (B) prior to the Effective Time, the issued and outstanding TMTG Convertible Notes will be converted into shares of TMTG common stock, such that, at the Effective Time, holders of such TMTG common stock will be entitled to receive from New Digital World a number of shares of New Digital World common stock equal to (i) the number of such shares of TMTG common stock multiplied by (ii) the conversion ratio applicable to the previously converted TMTG Convertible Notes. The Merger Consideration to be paid to TMTG securityholders will be paid solely by the delivery of new


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shares of New Digital World common stock, with each valued at $10.00 per share. See “Summary of the Proxy Statement/Prospectus — The Business Combination Proposal (Proposal 1) — Merger Consideration” for additional details. Because TMTG securityholders are expected to control a majority of the voting power of the outstanding New Digital World common stock, with President Trump beneficially owning at least 58.1% of the voting power of such New Digital World common stock, New Digital World will then be a “controlled company” within the meaning of applicable rules of the Nasdaq Global Market (“Nasdaq”) upon the Closing. Under these rules, a company of which more than 50% of the voting power for the election of directors is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements. TMTG intends to rely on these exemptions upon consummation of the Business Combination. As a result, New Digital World’s stockholders will not have the same protections afforded to stockholders of companies that are subject to all of the Nasdaq corporate governance requirements. See “Risk Factors — Risks Related to Digital World and the Business Combination — The Combined Entity will be a “controlled company” within the meaning of the applicable rules of Nasdaq and, as a result, qualifies for exemptions from certain corporate governance requirements. If the Combined Entity relies on these exemptions, its stockholders will not have the same protections afforded to stockholders of companies that are subject to such requirements.

The Merger Agreement also provides that TMTG stockholders (other than with respect to any shares of TMTG common stock received as a result of the conversion of TMTG Convertible Notes) will also have a contingent right to receive up to an aggregate of an additional 40,000,000 shares of New Digital World common stock (the “Earnout Shares”) after the Closing based on the price performance of the New Digital World common stock during the three (3) year period following the Closing (the “Earnout Period”). The Earnout Shares shall be earned and payable during the Earnout Period as follows:

 

   

if the dollar volume-weighted average price (“VWAP”) of New Digital World common stock equals or exceeds $12.50 per share for any 20 trading days within any 30 trading day period, New Digital World shall issue to the former TMTG stockholders an additional 15,000,000 Earnout Shares;

 

   

if the VWAP of New Digital World common stock equals or exceeds $15.00 per share for any 20 trading days within any 30 trading day period, New Digital World shall issue to the former TMTG stockholders an additional 15,000,000 Earnout Shares; and

 

   

if the VWAP of New Digital World common stock equals or exceeds $17.50 per share for any 20 trading days within any 30 trading day period, New Digital World shall issue to the former TMTG stockholders an additional 10,000,000 Earnout Shares.

Digital World’s Public Units, Digital World Class A common stock and Digital World’s Public Warrants are publicly traded on the Nasdaq. We will apply to list the New Digital World common stock issuable upon consummation of the Business Combination on Nasdaq under the symbols “DJT” and “DJTW,” respectively, upon the Closing. Upon the Closing, Digital World’s Public Units will be separated into their component securities and will cease to be listed on Nasdaq.

Digital World will hold a virtual special meeting of its stockholders in order to obtain the stockholder approvals necessary to complete the Business Combination. At the Digital World Special Meeting, which will be held exclusively via a live audio webcast, on   , 2024 at 10:00 a.m., Eastern Time, unless postponed or adjourned to a later date, Digital World will ask its stockholders to adopt the Merger Agreement and the related transactions, thereby approving the Business Combination, and to approve the other Proposals described in this proxy statement/prospectus. To participate in the virtual meeting, a Digital World stockholder of record will need the 12-digit control number included on such stockholder’s proxy card or instructions that accompanied such stockholder’s proxy materials. If a Digital World stockholder holds his, her or its shares in “street name,” which means his, her or its shares are held of record by a broker, bank or other nominee, such Digital World stockholder should contact his, her or its broker, bank or nominee to ensure that votes related to the shares he, she or it beneficially owns are properly counted. In this regard, such Digital World stockholder must provide the record holder of his, her or its shares with instructions on how to vote his, her or its shares or, if such Digital World stockholder wishes to attend the special meeting of Digital World and vote in person, obtain a proxy from his,


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her or its broker, bank or nominee. The live audio webcast of the Digital World special meeting will begin promptly at 10:00 a.m., Eastern Time. Digital World stockholders are encouraged to access the special meeting of Digital World prior to the start time. If you encounter any difficulties accessing the virtual meeting or during the meeting time, please call the technical support number that will be posted on the virtual meeting login page.

If you have any questions or need assistance with voting your Digital World common stock, please contact Alliance Advisors, Digital World’s proxy solicitor, by calling 877-728-4996 or by emailing dwac@allianceadvisors.com. This proxy statement/prospectus and the notice of the special meeting relating to the Business Combination will be available at www.proxyvote.com.

This proxy statement/prospectus provides you with detailed information about the Business Combination and other matters to be considered at the special meeting of Digital World’s stockholders. We encourage you to carefully read this entire proxy statement/prospectus, including all annexes attached hereto.

The accompanying proxy statement/prospectus provides stockholders of Digital World and TMTG with detailed information about the Business Combination and other matters to be considered at the special meeting of Digital World. We encourage you to read the entire accompanying proxy statement/prospectus, including the Annexes thereto and other documents referred to therein, carefully and in their entirety. You should also carefully consider the risk factors described in “Risk Factors” beginning on page 63 of the accompany proxy statement/prospectus.

NEITHER THE U.S. SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES REGULATORY AGENCY HAS APPROVED OR DISAPPROVED THE

TRANSACTIONS DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS OR ANY OF THE SECURITIES TO BE ISSUED IN THE BUSINESS COMBINATION, PASSED UPON THE MERITS OR FAIRNESS OF THE BUSINESS COMBINATION OR RELATED TRANSACTIONS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THE DISCLOSURE IN THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY CONSTITUTES A CRIMINAL OFFENSE.

 

 

This proxy statement/prospectus is dated     , 2024, and is first being mailed to stockholders of Digital World on or about     , 2024.

Very truly yours,

Eric Swider

Chief Executive Officer

Digital World Acquisition Corp.


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DIGITAL WORLD ACQUISITION CORP.

3109 Grand Ave., #450

Miami, Florida 33133

TO THE STOCKHOLDERS OF DIGITAL WORLD ACQUISITION CORP.:

NOTICE IS HEREBY GIVEN that a special meeting of stockholders (the “Digital World Special Meeting”) of Digital World Acquisition Corp., a Delaware corporation (“Digital World”), will be held virtually at 10:00 a.m., Eastern Time, on     , 2024. Details on how to participate are more fully described in this proxy statement/prospectus. At the Digital World Special Meeting, Digital World stockholders will be asked to consider and vote upon the following proposals (collectively, the “Proposals”).

You are cordially invited to attend the Stockholders Meeting, which will be held for the following purposes:

 

  (1)

The Business Combination Proposal (Proposal 1) — To approve and adopt the Agreement and Plan of Merger, dated as of October 20, 2021 (as amended by the First Amendment to the Agreement dated May 11, 2022, the Second Amendment to the Agreement, dated August 9, 2023, the Third Amendment to the Agreement, dated September 29, 2023, and as it may further be amended or supplemented from time to time, the “Merger Agreement”), by and among Digital World, DWAC Merger Sub Inc., a Delaware corporation and wholly owned subsidiary of Digital World (“Merger Sub”), Trump Media & Technology Group Corp., a Delaware corporation (“TMTG”), ARC Global Investments II, LLC, a Delaware limited liability company, in the capacity as the representative of the stockholders of Digital World, and TMTG’s General Counsel in the capacity as the representative of the stockholders of TMTG, and approve the transactions contemplated thereby, including the merger of Merger Sub with and into TMTG, with TMTG continuing as the surviving corporation and as a wholly owned subsidiary of Digital World (the “Merger” and, together with the other transactions contemplated by the Merger Agreement, the “Business Combination”). As used herein, “New Digital World” refers to Digital World after giving effect to the consummation of the Business Combination. Upon the consummation of the Business Combination, Digital World will change its name to “Trump Media & Technology Group Corp.” Subject to the terms and conditions set forth in the Merger Agreement, among other matters, at the effective time of the Merger (the “Effective Time”):

 

  (a)

the outstanding shares of Class A common stock, par value $0.0001 per share, of Digital World (“Digital World Class A common stock”), including any shares of Class B common stock, par value $0.0001 per share, of Digital World (“Digital World Class B common stock”, and together with the Digital World Class A common stock, the “Digital World common stock”) that are converted into Digital World Class A common stock in accordance with Digital World’s amended and restated certificate of incorporation (the “Digital World Charter”), will be redesignated as common stock, par value $0.0001 per share, of Trump Media & Technology Group Corp. (which will be the new name of Digital World after the Closing (referred to herein as “New Digital World common stock”);

 

  (b)

as consideration for the Merger, TMTG securityholders (other than holders of TMTG Convertible Notes) as of immediately prior to the Effective Time will be entitled to receive an amount equal to $875,000,000, subject to adjustments for TMTG’s closing debt, net of cash and unpaid transaction expenses (the “Merger Consideration”), with each such TMTG securityholder receiving shares of New Digital World common stock for its TMTG securities. In addition, prior to the Effective Time, the issued and outstanding TMTG Convertible Notes will be converted into shares of TMTG common stock, such that, at the Effective Time, holders of such TMTG common stock (as defined below) will be entitled to receive from New Digital World a number of shares of New Digital World common stock equal to (i) the number of such shares of TMTG common stock multiplied by (ii) the conversion ratio applicable to the previously converted TMTG Convertible Notes. Accordingly, at the Effective Time, (a) all of the issued and outstanding TMTG common

 

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  stock immediately prior to the Effective Time (other than those properly exercising any applicable appraisal rights under Delaware law or any shares of TMTG common stock issued upon the conversion of TMTG Convertible Notes immediately prior to the Effective Time pursuant to the terms of the Merger Agreement) will automatically be cancelled and will cease to exist, in exchange for the right to receive their pro rata portion of the Merger Consideration and the Earnout Shares (as defined below), if any, (b) all of the issued and outstanding common stock of TMTG immediately prior to the Effective Time that was issued upon the conversion of TMTG Convertible Notes pursuant to the terms of the Merger Agreement will automatically be cancelled and will cease to exist, in exchange for the right to receive shares of New Digital World common stock upon the terms set forth in the Merger Agreement, (c) each outstanding option to acquire shares of TMTG common stock (whether vested or unvested) will be assumed by New Digital World and automatically converted into an option to acquire shares of New Digital World common stock, with its price and number of shares equitably adjusted based on the conversion ratio of the shares of TMTG common stock into the Merger Consideration, and (d) each outstanding restricted stock unit of TMTG shall be converted into a restricted stock unit relating to shares of New Digital World common stock; and

 

  (c)

TMTG stockholders (other than with respect to any shares of TMTG common stock received as a result of the conversion of TMTG Convertible Notes) will also have a contingent right to receive up to an aggregate of an additional 40,000,000 shares of New Digital World common stock (the “Earnout Shares”) after the Closing based on the price performance of the New Digital World common stock during the three (3) year period following the Closing (the “Earnout Period”). The Earnout Shares shall be earned and payable during the Earnout Period as follows:

 

   

if the dollar volume-weighted average price (“VWAP”) of New Digital World common stock equals or exceeds $12.50 per share for any 20 trading days within any 30 trading day period, New Digital World shall issue to the former TMTG stockholders an additional 15,000,000 Earnout Shares;

 

   

if the VWAP of New Digital World common stock equals or exceeds $15.00 per share for any 20 trading days within any 30 trading day period, New Digital World shall issue to the former TMTG stockholders an additional 15,000,000 Earnout Shares; and

 

   

if the VWAP of New Digital World common stock equals or exceeds $17.50 per share for any 20 trading days within any 30 trading day period, New Digital World shall issue to the former TMTG stockholders an additional 10,000,000 Earnout Shares.

We refer to this proposal as the “Business Combination Proposal.” A copy of the Merger Agreement and the related agreements to be entered into pursuant to the Merger Agreement are attached to this proxy statement/prospectus as Annex A.

 

  (2)

Charter Amendment Proposals (Proposals 2 through 6) — To approve and adopt subject to and conditioned on (but with immediate effect therefrom) approval of each of the Business Combination Proposal, the Director Election Proposal, the Incentive Plan Proposal and the Nasdaq Proposal and the consummation of the Business Combination, a second amendment and restatement to the amended and restated of certificate of incorporation of Digital World (the “Digital World Charter”), as set out in the draft second amended and restated version of Digital World Charter appended to this proxy statement/prospectus as Annex B (the “Amended Charter”), for the following amendments (collectively, the “Charter Amendment Proposals”):

 

  (a)

Name Change — To provide that the name of Digital World shall be changed to “Trump Media & Technology Group Corp.” (Proposal 2);

 

  (b)

Board Structure and Composition — To provide for the structure of the board of directors after the Closing (the “Board”), split into three classes of as even size as practicable, Class I, II, and III,

 

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  each to serve a term of three (3) years, except for the initial term, for which the Class I directors will be up for reelection at the first annual meeting of stockholders occurring after the Closing, and for which the Class II directors will be up for reelection at the second annual meeting of stockholders occurring after the Closing. Directors will not be able to be removed during their term except for cause. The size of the Board shall be determined by resolution of the Board but will initially be seven (7) (Proposal 3);

 

  (c)

Amendment of Blank Check Provisions — To remove and change certain provisions in the Digital World Charter related to Digital World’s status as a special purpose acquisition company, including but not limited to the deletion of Article IX of the Digital World Charter in its entirety (Proposal 4);

 

  (d)

The Authorized Share Charter Amendment — To increase the number of authorized shares of common stock to accommodate any shares to be issued in connection with (i) the Business Combination, (ii) the conversion of securities issued in Post-IPO Financings, (iii) the exercise of any Warrants, (iv) the conversion of TMTG Convertible Notes immediately prior to the Effective Time in connection with the Closing, (v) the Equity Incentive Plan and (vi) any future issuances of shares of New Digital World common stock if determined by the New Digital World Board to be in the best interests of New Digital World after the consummation of the Business Combination without incurring the risk, delay and potential expense incident to obtaining stockholder approval to increase the authorized share capital (Proposal 5); and

 

  (e)

Amendment and Restatement of the Digital World Charter — Conditioned upon the approval of Proposals 2 through 5, to approve the proposed Amended Charter in the form attached as Annex B hereto, which includes the approval of all other changes in the proposed Amended Charter in connection with replacing the existing Digital World Charter with the proposed Amended Charter as of the Effective Time (Proposal 6).

 

  (3)

The Director Election Proposal (Proposal 7) — To consider and vote upon a proposal to elect seven (7) directors to serve on the board of directors of New Digital World, each effective from the consummation of the Business Combination and for a term as set forth under the proposed Amended Charter or until such director’s earlier death, resignation, retirement or removal (the “Director Election Proposal”);

 

  (4)

The Incentive Plan Proposal (Proposal 8) — To consider and vote upon a proposal to adopt the Trump Media & Technology Group Corp. 2024 Equity Incentive Plan (the “Equity Incentive Plan”), a copy of which is attached to this proxy statement/prospectus as Annex C and the issuance of common stock equal to 7.5% of the fully diluted, and as converted, amount of New Digital World common stock to be outstanding immediately following consummation of the Business Combination, taking into account any additional shares that may be issued pursuant to the Earnout Shares, if such plan is approved in accordance with the Incentive Plan Proposal (the “Incentive Plan Proposal”);

 

  (5)

The Nasdaq Proposal (Proposal 9) — To consider and vote upon a proposal to approve, assuming that each of the Business Combination Proposal, the Charter Amendment Proposals, the Director Election Proposal and the Incentive Plan Proposal are approved and adopted, for the purposes of complying with Nasdaq Listing Rule 5635, the issuance of (a) shares of New Digital World common stock in the Business Combination pursuant to the terms of the Merger Agreement, (b) any additional shares of New Digital World common stock to be issued pursuant to the conversion of securities issued in the Post-IPO Financings, the exercise of Post-IPO Warrants, the conversion of TMTG Convertible Notes immediately prior to the Effective Time in connection with the Closing and the Equity Incentive Plan (the “Nasdaq Proposal”); and

 

  (6)

The Adjournment Proposal (Proposal 10) — To consider and vote upon a proposal to adjourn the Digital World Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the Digital World Special Meeting, there

 

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  are not sufficient votes to approve the Business Combination Proposal, the Charter Amendment Proposals, the Director Election Proposal, the Incentive Plan Proposal, or the Nasdaq Proposal. We refer to this proposal as the “Adjournment Proposal.”

Only holders of record of Digital World common stock at the close of business on     , 2024 (the “Record Date”) are entitled to notice of the Digital World Special Meeting and to vote at the Digital World Special Meeting and any adjournments or postponements of the Digital World Special Meeting. A complete list of Digital World stockholders of record entitled to vote at the Digital World Special Meeting will be available for ten days before the Digital World Special Meeting at the principal executive offices of Digital World for inspection by stockholders during ordinary business hours for any purpose germane to the Digital World Special Meeting.

Pursuant to the Digital World Charter, Digital World is providing Digital World Public Stockholders with the opportunity to redeem, upon the Closing, shares of Digital World Class A common stock then held by them for cash equal to their pro rata share of the aggregate amount on deposit (as of two business days prior to the Closing) in the trust account of Digital World (the “Trust Account”) that holds the proceeds (including interest but less taxes payable) of the Digital World initial public offering (the “Digital World IPO”), including securities issued in connection with the underwriters’ over-allotment option after the Digital World IPO. For illustrative purposes, as of February 8, 2024, based on funds in the Trust Account of $312,083,428.12 as of such date, the pro rata portion of the funds available in the Trust Account for the Redemption of Public Shares of Digital World Class A common stock was approximately $10.85 per share. Digital World Public Stockholders are not required to affirmatively vote for or against the Business Combination in order to redeem their shares of common stock for cash. This means that Public Stockholders who hold shares of Digital World Class A common stock on or before     , 2024 (two (2) business days before the Digital World Special Meeting) will be eligible to elect to have their shares of Digital World Class A common stock redeemed for cash in connection with the Digital World Special Meeting, whether or not they are holders as of the Record Date, and whether or not such shares are voted at the Digital World Special Meeting. A Public Stockholder, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” (as defined under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming in the aggregate his, her or its shares or, if part of such a group, the group’s shares, with respect to more than 15% of the shares of Digital World common stock included in the Units of Digital World sold in the Digital World IPO (including over-allotment securities sold to Digital World’s underwriters after the Digital World IPO) without the prior consent of Digital World. Holders of Digital World’s outstanding Public Warrants and Units do not have Redemption Rights with respect to such securities in connection with the Business Combination. Holders of outstanding Digital World Units must separate the underlying shares of Digital World Class A common stock from the Public Warrants prior to exercising Redemption Rights with respect to the public Digital World Class A common stock. ARC Global Investments II LLC, the sponsor of Digital World (the “Sponsor”), Digital World’s then-officers and directors, in connection with their appointment and for an aggregate of 47,500 Founder Shares, and certain other current officers and directors, in connection with their appointment, agreed to waive their Redemption Rights with respect to any shares of Digital World common stock they may hold in connection with the consummation of the Business Combination. In addition, the anchor investors of Digital World have agreed to waive their Redemption Rights with respect to any shares of Digital World Class B common stock held by them in connection with the consummation of the Business Combination; holders of Digital World representative shares have agreed to waive their Redemption Rights with respect to such shares in connection with the consummation of the Business Combination; and all such shares will be excluded from the pro rata calculation used to determine the per-share Redemption price. Our Sponsor owns more than a majority of the outstanding shares of Class B common stock. Currently, the Sponsor and our directors and officers beneficially own 14.8% of the issued and outstanding shares of Digital World common stock and anchor investors beneficially own an aggregate of 4.4% of the issued and outstanding shares of Digital World Class B common stock. The Sponsor and Digital World’s directors and officers have agreed to vote any shares of Digital World common stock owned by them in favor of the Business Combination, which would include the Business Combination Proposal and the other Proposals. The anchor investors of Digital World have also agreed to vote any shares of Digital World Class B common stock held by them in favor of the Business Combination.

 

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The approval of the Charter Amendment Proposals requires the affirmative vote in person (which would include presence at a virtual meeting) or by proxy of the holders, as of the Record Date, a majority of the then issued and outstanding shares of Class A common stock and Class B common stock, voting together as a single class.

The approval of the Business Combination Proposal, the Incentive Plan Proposal and the Nasdaq Proposal requires the affirmative vote in person (which would include presence at a virtual meeting) or by proxy of the holders, as of the Record Date, of a majority of votes cast of Class A common stock and Class B common stock, voting together as a single class, entitled to vote thereon at the Digital World Special Meeting.

The approval of the Director Election Proposal requires a plurality vote of the shares of Digital World common stock cast by the stockholders represented in person or by proxy and entitled to vote thereon at the Digital World Special Meeting.

The approval of the Adjournment Proposal requires the affirmative vote of a majority of the votes cast by the stockholders represented in person or by proxy and entitled to vote thereon at the Digital World Special Meeting.

If the Business Combination Proposal is not approved, the Charter Amendment Proposals, the Director Election Proposal, the Incentive Plan Proposal and the Nasdaq Proposal will not be presented to the Digital World stockholders for a vote. The approval of the Business Combination Proposal, the Charter Amendment Proposals, the Director Election Proposal, the Incentive Plan Proposal and the Nasdaq Proposal are preconditions to the consummation of the Business Combination.

While the Board approved the Business Combination, the Merger Agreement contemplates that during the pendency of the transaction TMTG will provide Digital World updated due diligence information regarding the financial condition of TMTG’s businesses and that following receipt and review of such due diligence information the Board could have, from October 31, 2023 through November 21, 2023, terminated the Merger Agreement if it no longer believed in good faith that the Business Combination was in the best interests of Digital World or its stockholders. Given the duration of time between the initial execution of the Merger Agreement and the Second Amendment to the Agreement as well as the significant turnover on the Digital World Board since the Merger Agreement was first signed in 2021, during December 2023 in connection with exercising its fiduciary duties, the Board sought to refresh and complete its financial and business due diligence of TMTG, including with respect to the revised transaction terms contemplated by the Second Amendment to the Agreement. In reaching its determination and in support of its decision that the Business Combination and the other transactions contemplated by the Merger Agreement, including the Merger Consideration and the Earnout Shares, are fair and in the best interests of Digital World and its stockholders, the Digital World Board conducted a bring-down evaluation of TMTG’s business model, financial performance, growth opportunities and competitive positioning. As part of this evaluation process, the Digital World Board engaged Alvarez & Marsal Valuation Services, LLC, with which Digital World has not had a material relationship in the past two years, as an independent advisor to prepare a comparable company analysis (the “Comparable Company Analysis”).

The Comparable Company Analysis was based on certain publicly traded companies selected by Digital World’s management and the Digital World Board, which included Meta, X (formerly Twitter), Snapchat and Pinterest. However, while these companies may share certain characteristics similar to TMTG, the Digital World Board did not consider any of these companies to be identical in nature to TMTG, given its affiliation with former President Trump and unique market positioning, including purposeful differentiation from the current market offerings considered in its analysis.

In December 2023, Digital World concluded its renewed due diligence with respect to TMTG’s business plan. Digital World’s Board determined (i) that the Merger Agreement and the transactions contemplated thereby, including the Merger Consideration and the Earnout Shares, are fair and in the best interests of Digital

 

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World and (ii) to recommend that the Digital World stockholders adopt the Merger Agreement and approve the Business Combination and the other transactions contemplated by the Merger Agreement.

For illustrative purposes, as of February 8, 2024, there was approximately $312,083,428.12 in the Trust Account. Any Redemption of shares of Digital World Class A common stock by Digital World’s Public Stockholders will decrease the amount in the Trust Account. In accordance with the Digital World Charter, net tangible assets must be maintained at a minimum of $5,000,001 immediately prior to or upon consummation of the Business Combination.

Your attention is directed to this proxy statement/prospectus (including the annexes hereto) for a more complete description of the proposed Business Combination and related transactions and each of the Proposals. We encourage you to read this proxy statement/prospectus carefully. If you have any questions or need assistance voting your shares, please call us at 877-728-4996 or contact us by email dwac@allianceadvisors.com.

 

By Order of the Board of Directors of Digital World

Acquisition Corp.

 

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IF YOU RETURN YOUR PROXY CARD WITHOUT AN INDICATION OF HOW YOU WISH TO VOTE, YOUR SHARES WILL BE VOTED IN FAVOR OF EACH OF THE PROPOSALS.

TO EXERCISE YOUR REDEMPTION RIGHTS, YOU MUST, PRIOR TO 5:00 P.M., EASTERN TIME, ON     , 2024 (TWO (2) BUSINESS DAYS BEFORE THE DIGITAL WORLD SPECIAL MEETING), TENDER YOUR SHARES PHYSICALLY OR ELECTRONICALLY AND SUBMIT A REQUEST IN WRITING THAT WE REDEEM YOUR PUBLIC SHARES FOR CASH TO CONTINENTAL STOCK TRANSFER & TRUST COMPANY. PLEASE ALSO AFFIRMATIVELY CERTIFY IN YOUR REQUEST TO CONTINENTAL STOCK TRANSFER & TRUST COMPANY FOR REDEMPTION IF YOU “ARE” OR “ARE NOT” ACTING IN CONCERT OR AS A “GROUP” (AS DEFINED IN SECTION 13(D)(3) OF THE EXCHANGE ACT) WITH ANY OTHER STOCKHOLDER WITH RESPECT TO SHARES OF COMMON STOCK. YOU MUST ACT IN ACCORDANCE WITH THE PROCEDURES AND DEADLINES DESCRIBED IN THIS PROXY STATEMENT/PROSPECTUS. IF THE BUSINESS COMBINATION IS NOT CONSUMMATED, THEN THE PUBLIC SHARES WILL NOT BE REDEEMED FOR CASH. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BANK OR BROKER TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS. SEE “THE DIGITAL WORLD SPECIAL MEETING — REDEMPTION RIGHTS” IN THIS PROXY STATEMENT/PROSPECTUS FOR MORE SPECIFIC INSTRUCTIONS.

THIS PROXY STATEMENT/PROSPECTUS INCORPORATES IMPORTANT BUSINESS AND FINANCIAL INFORMATION ABOUT DIGITAL WORLD AND TMTG THAT IS NOT INCLUDED IN OR DELIVERED HEREWITH. THIS INFORMATION IS AVAILABLE WITHOUT CHARGE TO STOCKHOLDERS OF DIGITAL WORLD UPON WRITTEN OR ORAL REQUEST. IF YOU WOULD LIKE TO MAKE SUCH REQUEST, YOU SHOULD CONTACT DIGITAL WORLD IN WRITING AT ERIC SWIDER, DIGITAL WORLD ACQUISITION CORP., 3109 GRAND AVE., #450, MIAMI, FLORIDA 33133 OR BY TELEPHONE AT (305) 735-1517. TO OBTAIN TIMELY DELIVERY, YOU MUST REQUEST THE INFORMATION NO LATER THAN     , 2024, WHICH IS FIVE BUSINESS DAYS BEFORE THE DATE YOU MUST MAKE YOUR INVESTMENT DECISION.

 

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TABLE OF CONTENTS

 

     Page  

ABOUT THIS DOCUMENT

     1  

MARKET AND INDUSTRY DATA

     1  

TRADEMARKS

     1  

FREQUENTLY USED TERMS

     2  

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

     8  

QUESTIONS AND ANSWERS

     11  

SUMMARY OF THE PROXY STATEMENT/PROSPECTUS

     31  

SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION OF DIGITAL WORLD

     54  

SELECTED HISTORICAL FINANCIAL INFORMATION OF TMTG

     56  

SUMMARY UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     58  

UNAUDITED HISTORICAL COMPARATIVE AND PRO FORMA COMBINED PER SHARE

     60  

DIVIDENDS ON SECURITIES

     62  

RISK FACTORS

     63  

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     147  

INFORMATION ABOUT THE PARTIES TO THE BUSINESS COMBINATION

     158  

THE DIGITAL WORLD SPECIAL MEETING

     160  

THE BUSINESS COMBINATION PROPOSAL (PROPOSAL 1)

     168  

THE CHARTER AMENDMENT PROPOSALS (PROPOSALS 2 THROUGH 6)

     213  

THE DIRECTOR ELECTION PROPOSAL (PROPOSAL 7)

     215  

THE INCENTIVE PLAN PROPOSAL (PROPOSAL 8)

     217  

THE NASDAQ PROPOSAL (PROPOSAL 9)

     224  

THE ADJOURNMENT PROPOSAL (PROPOSAL 10)

     226  

INFORMATION ABOUT DIGITAL WORLD

     227  

DIGITAL WORLD’S MANAGEMENT

     232  

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF DIGITAL WORLD

     240  

INFORMATION ABOUT TMTG

     246  

EXECUTIVE OFFICERS AND DIRECTORS OF TMTG

     255  

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF TMTG

     259  

DESCRIPTION OF SECURITIES OF NEW DIGITAL WORLD

     283  

SECURITIES ACT RESTRICTIONS ON RESALE OF COMMON STOCK

     294  

COMPARISON OF STOCKHOLDER RIGHTS

     295  

BENEFICIAL OWNERSHIP OF SECURITIES

     307  

MANAGEMENT AFTER THE BUSINESS COMBINATION

     311  

EXECUTIVE AND DIRECTOR COMPENSATION OF TMTG

     319  

CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS

     325  

APPRAISAL RIGHTS

     329  

LEGAL MATTERS

     329  

EXPERTS

     329  

TRANSFER AGENT AND REGISTRAR

     329  

DELIVERY OF DOCUMENTS TO STOCKHOLDERS

     330  

SUBMISSION OF STOCKHOLDER PROPOSALS

     330  

STOCKHOLDER COMMUNICATIONS

     330  

CHANGE IN INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

     330  

WHERE YOU CAN FIND MORE INFORMATION

     332  

 

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ABOUT THIS DOCUMENT

This document, which forms part of a registration statement on Form S-4 filed with the SEC by Digital World, constitutes a prospectus of Digital World under the Securities Act of 1933, as amended (the “Securities Act”), with respect to the shares of common stock of Digital World to be issued to TMTG’s securityholders under the Merger Agreement. This document also constitutes a notice of meeting and a proxy statement of Digital World under Section 14(a) of the Exchange Act.

You should rely only on the information contained in, or incorporated by reference into, this proxy statement/prospectus. No one has been authorized to provide you with information that is different from that contained in, or incorporated by reference into, this proxy statement/prospectus. This proxy statement/prospectus is dated as of the date set forth on the cover hereof. You should not assume that the information contained in this proxy statement/prospectus is accurate as of any date other than that date. You should not assume that the information incorporated by reference into this proxy statement/prospectus is accurate as of any date other than the date of such incorporated document. Neither the mailing of this proxy statement/prospectus to Digital World stockholders nor the issuance by Digital World of its common stock in connection with the Business Combination will create any implication to the contrary.

Information contained in this proxy statement/prospectus regarding Digital World and its business, operations, management and other matters has been provided by Digital World and information contained in this proxy statement/prospectus regarding TMTG and its business, operations, management and other matters has been provided by TMTG.

This proxy statement/prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities, or the solicitation of a proxy or consent, in any jurisdiction to or from any person to whom it is unlawful to make any such offer or solicitation in such jurisdiction.

MARKET AND INDUSTRY DATA

This proxy statement/prospectus contains information concerning the market and industry in which TMTG conducts its business. TMTG operates in an industry in which it is difficult to obtain precise industry and market information. TMTG has obtained market and industry data in this proxy statement/prospectus from industry publications and from surveys or studies conducted by third parties that it believes to be reliable. TMTG cannot assure you of the accuracy and completeness of such information, and it has not independently verified the market and industry data contained in this proxy statement/prospectus or the underlying assumptions relied on therein. As a result, you should be aware that it is possible that any such market, industry and other similar data may not in fact be reliable. While TMTG is not aware of any misstatements regarding any industry data presented in this proxy statement/prospectus, such data involves risks and uncertainties and is subject to change based on various factors, including those discussed under the section entitled “Risk Factors” in this proxy statement/prospectus.

TRADEMARKS

This proxy statement/prospectus references the trademark and service mark applications of TMTG. Such applications include “Truth Social,” which was filed in the name of Trump Media & Technology Group Corp.; and “TMTG,” “TMTG+,” “POST A TRUTH,” “FOLLOW THE TRUTH” (word mark plus design), “RETRUTH,” “TRUTHSOCIAL,” “TRUTH SOCIAL” and “TRUTHPLUS,” which were filed in the name of T Media Tech LLC (TMTG’s wholly owned subsidiary that was acquired in October 2021). On February 14, 2023, a trademark for “Truth Social” in classes 21 and 25 was registered with the U.S. Patent and Trademark Office (“USPTO”) by T Media Tech LLC for use with mugs, cups and certain types of clothing. Trademark applications for “Truth Social” in classes 9 and 42; for “RETRUTH” in classes 9, 35, 38, 41, 42, and 45; for “TRUTHSOCIAL” in classes 9, 35, 38, 41, 42, and 45;

 

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and for “TRUTHPLUS” in classes 9, 35, 38, 41, and 42 are the subject of suspension notices received from the USPTO on October 24, 2022; January 13, 2023; February 14, 2023 and February 17, 2023, respectively, in each case based on alleged similarity to existing registered and pending trademarks. In particular, the USPTO has issued non-final rejections of all the foregoing applications to register marks for use with a social media network or a streaming video service. Although TMTG has pursued certain appeal rights, there can be no assurance that TMTG will be able to overcome the trademark examiner’s objections or that the challenged marks will be approved. The other trademark applications listed above remain pending, but have not been the subject of adverse action by the USPTO. This proxy statement/prospectus also contains trademarks, service marks, trade names and copyrights of other companies, which are the property of their respective owners. Trademarks and service marks are collectively referred to herein as “Trademarks.” Solely for convenience, trademarks and trade names referred to in this proxy statement/prospectus may appear without the ® or TM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the right of the applicable licensor to these trademarks and trade names.

FREQUENTLY USED TERMS

Unless otherwise stated or unless the context otherwise requires, the terms “we,” “us,” “our,” and “Digital World” refer to Digital World Acquisition Corp.

In this document:

Adeptus” means Adeptus Partners LLC, Digital World’s independent registered public accounting firm.

Amended Charter” means the second amended and restated certificate of incorporation of Digital World to be adopted by Digital World pursuant to the Charter Amendment Proposals.

anchor investors” are to (i) accounts or funds managed by Radcliffe Capital Management, L.P., (ii) Meteora Capital Partners, LP (an affiliate of Glazer Capital LLC), (iii) Castle Creek Strategies (and sub-funds associated with Castle Creek), (iv) The K2 Principal Fund L.P., (v) Context Partners Master Fund LP, (vi) Boothbay Absolute Return Strategies, LP (or its affiliate Boothbay Diversified Alpha Master Fund LP, commonly controlled by Boothbay Fund Management LLC), (vii) investment funds and accounts managed by Shaolin Capital Management, LLC, (viii) Hudson Bay Master Fund Ltd. and/or its affiliates, (ix) Saba Capital Master Fund, Ltd., Saba Capital Master Fund II, Ltd., Saba Capital Master Fund III, LP and Saba Capital SPAC Opportunities, Ltd., and/or its affiliates, (x) D. E. Shaw Valence Portfolios, L.L.C and (xi) Yakira Capital Management, Inc. (none of which are affiliated with any member of Digital World management, our sponsor or any other anchor investor), each of which entered into an investment agreement pursuant to which it expressed an interest to purchase up to 8.3% of the Public Units sold in the Digital World IPO.

Board” or “Digital World Board” means (i) prior to the consummation of the Business Combination, the board of directors of Digital World and (ii) at and following the Closing, the board of directors of the Combined Entity.

Borgers” means BF Borgers, TMTG’s independent registered public accounting firm.

Business Combination” means the Merger and the other transactions contemplated by the Merger Agreement.

Class A common stock” means the Class A common stock, par value $0.0001 per share, of Digital World.

Class B common stock” means the Class B common stock, par value $0.0001 per share, of Digital World, including the Founder Shares.

 

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Closing” means the closing of the Business Combination.

Code” means the Internal Revenue Code, as amended.

Combined Entity” or “New Digital World” means Digital World after giving effect to the Business Combination, and which will include TMTG and any other direct or indirect subsidiaries of Digital World to the extent reasonably applicable.

DGCL” means the General Corporation Law of the State of Delaware, as amended.

Digital World” means Digital World Acquisition Corp., a Delaware corporation, which will be renamed “Trump Media & Technology Group Corp.” in connection with the Closing.

Digital World Alternative Financing Notes” means up to $50,000,000 in 8.00% interest bearing convertible promissory notes due on the date that is twelve (12) months after the date of the stockholders’ approval of the Business Combination, in either (i) Working Capital Units, (ii) cash or (iii) a combination of both Working Capital Units and cash, in each case, at the election of the holder. Such Digital World Alternative Financing Notes may be redeemed by Digital World, in whole or in part, commencing on the date on which all New Digital World common stock issuable to the holders has been registered with the SEC, by providing a 10-day notice of such redemption (the “Alternative Notes Redemption Right”). This Alternative Notes Redemption Right is contingent upon the trading price of the New Digital World common stock exceeding 130% of the applicable conversion price on at least 3 trading days, whether consecutive or not, within the 15 consecutive trading days ending on the day immediately preceding the day on which a redemption notice is issued by Digital World. The redemption price will be the total of the principal amount redeemed under such note plus any applicable portion of accrued and unpaid interest up to, but excluding, the redemption date. The Digital World Alternative Financing Notes have a floor conversion price of $8.00 or greater.

Digital World Alternative Warrants” means up to 3,050,000 Post IPO-Warrants to be issued concurrently with the Closing to certain institutional investors in Post-IPO Financings.

Digital World Charter” or “Charter” means Digital World’s current amended and restated certificate of incorporation as filed with the Secretary of State of the State of Delaware as most recently amended and filed on September 6, 2023.

Digital World common stock” means any of the Class A common stock and the Class B common stock of Digital World.

Digital World Convertible Notes” means up to $40,000,000 in non-interest-bearing convertible promissory notes payable upon the stockholders’ approval of the Business Combination, in (A) either (i) Working Capital Units or (ii) cash or Working Capital Units, at the election of the holder or (B) in the case of such convertible promissory notes issued pursuant to the Convertible Note Compensation Plan, Class A common stock. Up to $30,000,000 of such convertible promissory notes may be issued to the Sponsor or its affiliates or Digital World’s officers or directors in connection with any loans made by them to Digital World prior to Closing. Up to $10,000,000 of such convertible promissory notes may be issued to either third parties providing services or making loans to Digital World or to the Sponsor or its affiliates or Digital World’s officers or directors in connection with any loans made by them to Digital World prior to Closing.

Digital World IPO,” “IPO” or “Initial Public Offering” means Digital World’s initial public offering that was consummated on September 8, 2021.

Digital World IPO Prospectus” means the final prospectus of Digital World, dated as of September 2, 2021, and filed with the SEC pursuant to Rule 424(b) under the Securities Act on September 8, 2021 (File No. 333-256472).

 

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Digital World Special Meeting” means the special meeting of the stockholders of Digital World, to be held virtually at 10:00 a.m., Eastern Time, on     , 2024.

Effective Time” means the effective time of the Merger in accordance with the Merger Agreement.

Equity Incentive Plan” means the Trump Media & Technology Group Corp. 2024 Equity Incentive Plan, as such may be amended, supplemented or modified from time to time, which shall be adopted by Digital World and approved in accordance with the Incentive Plan Proposal to be effective as of Closing.

Exchange Act” means the Securities Exchange Act of 1934, as amended.

First Amendment to the Agreement” means the First Amendment to Agreement and Plan of Merger, dated May 11, 2022, by and among Digital World, Merger Sub, TMTG, the Sponsor in the capacity as the representative of Digital World, and TMTG’s General Counsel in the capacity as the representative of TMTG.

Founder Shares” means Class B common stock initially purchased by the Sponsor on January 20, 2021.

Initial Stockholders” means the Sponsor and any other holders of the Founder Shares prior to the Digital World IPO (or their permitted transferees), if any.

Marcum” means Marcum LLP, Digital World’s former independent registered public accounting firm.

Merger” means the merger of Merger Sub with and into TMTG, with TMTG continuing as the surviving corporation and as a wholly owned subsidiary of Digital World, in accordance with the terms of the Merger Agreement.

Merger Agreement” means the Agreement and Plan of Merger, dated October 20, 2021, as amended by the First Amendment to the Agreement, the Second Amendment to the Agreement and the Third Amendment to the Agreement, and as it may further be amended or supplemented from time to time, by and among Digital World, Merger Sub, TMTG, the Sponsor in the capacity as the representative of Digital World, and TMTG’s General Counsel in the capacity as the representative of TMTG.

Merger Sub” means DWAC Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of Digital World.

New Digital World common stock” means the common stock, par value $0.0001 per share, of Digital World (which will be renamed Trump Media & Technology Group Corp.) following the Business Combination that was previously designated Class A common stock of Digital World. New Digital World common stock will include any shares of Class B common stock all of which will be converted into common stock of Digital World in connection with the Closing pursuant to the Digital World Charter.

PIPE Investment” means that certain private placement originally entered into in 2021 pursuant to certain securities purchase agreements (the “SPAs”) with certain institutional investors (the “PIPE Investors”), pursuant to which the PIPE Investors agreed to purchase shares of Digital World’s Series A Convertible Preferred Stock (the “Preferred Stock”) for a purchase price of $1,000 per share (the “PIPE”). The PIPE Investment was terminated in full as of January 10, 2024.

Placement Shares” means the shares of Digital World Class A common stock included within the Placement Units purchased by the Sponsor in the Private Placement.

Placement Units” means 1,133,484 units issued to the Sponsor in the Private Placement (including the additional units purchased after the Digital World IPO in connection with underwriters’ exercise of the over-allotment option to purchase additional securities). Each Placement Unit consists of one Placement Share and one-half of one Placement Warrant.

 

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Placement Warrants” means the warrants included within the Placement Units purchased by the Sponsor in the Private Placement. Each Placement Warrant entitles the holder thereof to purchase one share of Digital World Class A common stock for $11.50 per share.

Post-IPO Financing” means any financing transaction undertaken by Digital World following its IPO but prior to or concurrently with the Closing, pursuant to which Digital World Convertible Notes, Digital World Alternative Financing Notes or Digital World Alternative Warrants are issued.

Post-IPO Warrants” means any additional warrants issued or to be issued pursuant to the Warrant Agreement by the Company after the IPO, including any Digital World Alternative Warrants. Each Post-IPO Warrant entitles the holder thereof to purchase one share of Digital World Class A common stock for $11.50 per share and each Post-IPO Warrant, when and if issued, shall have substantially the same terms and be in the same form as the Public Warrants, except that such Post-IPO Warrants may only be transferred to the applicable holder’s affiliates.

Prior Amendments” means, collectively, the First Amendment to the Agreement, the Second Amendment to the Agreement and the Third Amendment to the Agreement.

Private Placement” means the private placement consummated simultaneously with the Digital World IPO in which Digital World issued to the Sponsor the Placement Units.

Proposals” means the Business Combination Proposal, the Charter Amendment Proposals, the Director Election Proposal, the Incentive Plan Proposal, the Nasdaq Proposal and the Adjournment Proposal.

Public Shares” means shares of Class A common stock included in the Public Units and shares of Class A common stock underlying the Public Warrants, each a “Public Share”.

Public Stockholders” means holders of Public Shares, each a “Public Stockholder”.

Public Units” means units issued in the Digital World IPO, including any over-allotment securities acquired by Digital World’s underwriters, consisting of one Public Share and one-half of one Public Warrant.

Public Warrants” means warrants underlying the Units issued in the Digital World IPO. Each whole Public Warrant entitles the holder thereof to purchase one share of Class A common stock for $11.50 per share.

Redemption” or “Redemption Rights” means the right of the holders of Class A common stock to have their shares redeemed in accordance with the procedures set forth in this proxy statement/prospectus and the Digital World Charter.

Required Proposals” means the Business Combination Proposal, the Charter Amendment Proposals, the Director Election Proposal, the Incentive Plan Proposal and the Nasdaq Proposal.

SEC” means the U.S. Securities and Exchange Commission.

Second Amendment to the Agreement” means the Second Amendment to Agreement and Plan of Merger, dated August 9, 2023, by and among Digital World, Merger Sub, TMTG, the Sponsor in the capacity as the representative of Digital World, and TMTG’s General Counsel in the capacity as the representative of TMTG.

Securities Act” means the Securities Act of 1933, as amended.

Sponsor” means ARC Global Investments II LLC.

 

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Third Amendment to the Agreement” means the Third Amendment to Agreement and Plan of Merger, dated September 29, 2023, by and among Digital World, Merger Sub, TMTG, the Sponsor in the capacity as the representative of Digital World, and TMTG’s General Counsel in the capacity as the representative of TMTG.

TMTG” means Trump Media & Technology Group Corp., a Delaware corporation, and includes the surviving corporation after the Merger. References herein to TMTG will include its subsidiaries to the extent reasonably applicable.

TMTG 2022 Plan” means the Trump Media & Technology Group Corp. 2022 Equity Incentive Plan, adopted by TMTG following the date of Merger Agreement and prior to the Closing.

TMTG Board” means the board of directors of TMTG.

TMTG common stock” means shares of common stock, par value $0.000001 per share, of TMTG.

TMTG Convertible Notes” means the (i) TMTG Executive Promissory Notes entered into in the ordinary course of TMTG’s business as compensation for certain of its directors and officers and (ii) series of convertible promissory notes in the aggregate principal amount of up to $60,000,000 issued by TMTG pursuant to those certain note purchase agreements, by and among TMTG and the holders party thereto including any additional convertible promissory notes (the “Additional TMTG Convertible Notes”) of like tenor entered into after the date of the Merger Agreement, which notes automatically convertible into TMTG common stock prior to the Effective Time. The number of shares of TMTG common stock to be issued to holders of the TMTG Convertible Notes will be equal to (A) (i) the principal amount of the applicable promissory note, divided by (ii) the applicable conversion price in such note (the “TMTG Convertible Note Base Shares”), (B) plus the number of shares of TMTG common stock equal to the product of (x) TMTG Convertible Note Base Shares multiplied by (y) 1 (one), minus the Conversion Ratio (as defined in the Merger Agreement). The Additional TMTG Convertible Notes are required to feature a floor conversion price of $8.00 or greater.

TMTG Convertible Securities” means, collectively, any TMTG Options, TMTG RSUs, warrants or rights to subscribe for or purchase any capital stock of TMTG or securities convertible into or exchangeable for, or that otherwise confer on the holder any right to acquire any capital stock of TMTG.

TMTG Executive Promissory Notes” means, collectively, the up to $9,200,000, in non-interest-bearing promissory notes entered into with certain TMTG directors and officers, automatically convertible into TMTG common stock prior to the Effective Time or otherwise payable on or before September 30, 2024. The number of shares of TMTG common stock to be issued to holders of the TMTG Executive Promissory Notes will be equal to (A) (i) the principal amount of the applicable promissory note, divided by (ii) $10.00 (the “TMTG Executive Note Base Shares”), plus (B) the number of shares of TMTG common stock equal to the product of (x) the TMTG Executive Note Base Shares multiplied by (y) one (1), minus the Conversion Ratio (as defined in the Merger Agreement). Any repayment of the TMTG Executive Promissory Notes (as well as any delivery of shares of TMTG common stock issued in settlement of the TMTG Executive Promissory Note) will be subject to applicable tax withholding.

TMTG Options” means, collectively, all outstanding options to purchase shares of TMTG common stock, whether or not exercisable and whether or not vested, immediately prior to the Effective Time under the TMTG 2022 Plan or otherwise.

TMTG RSUs” means all outstanding restricted stock units with respect to shares of TMTG common stock, whether or not vested, immediately prior to the Effective Time under the TMTG 2022 Plan or otherwise.

TMTG securities” means any of the TMTG common stock and any TMTG Convertible Securities.

 

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TMTG securityholders” means, collectively, the holders of TMTG securities (other than, and to the extent that, such TMTG securities were received as a result of the conversion of the TMTG Convertible Notes).

TMTG stockholders” means, collectively, the holders of TMTG common stock, each a “TMTG stockholder” (other than, and to the extent that, such TMTG common stock was received as a result of the conversion of the TMTG Convertible Notes).

Trust Account” means the trust account of Digital World, which holds the net proceeds of (i) the Digital World IPO, including from over-allotment securities sold by Digital World’s underwriters, (ii) the sale of the Placement Units and (iii) the additional funds deposited by the Sponsor to the Trust Account to extend the period of time to consummate an initial business combination, together with interest earned thereon, less amounts released to pay tax obligations and up to $100,000 for dissolution expenses, and amounts paid pursuant to Redemptions.

U.S. GAAP” means generally accepted accounting principles in the United States.

Units” means any of the Public Units, Placement Units, and the Working Capital Units.

Warrant Agreement” means that warrant agreement, dated September 2, 2021, by and between the Company and Continental Stock Transfer & Trust Company, as warrant agent, as filed with the SEC on September 9, 2021 on Form 8-K.

Warrants” means any of the Post-IPO Warrants, Public Warrants, the Placement Warrants and the warrants underlying the Working Capital Units, excluding any warrants of TMTG.

Working Capital Units” means any units issuable pursuant to the Digital World Convertible Notes or the Digital World Alternative Financing Notes, as applicable. Each unit consists of one share of Digital World Class A common stock and one-half Warrant. Each unit issuable pursuant to the applicable Digital World Convertible Notes or the Digital World Alternative Financing Notes, subject to the terms and conditions of each such applicable note, shall not have a price lower than $8.00 per unit.

 

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement/prospectus (including the documents incorporated by reference herein) contains forward-looking statements regarding, among other things, the plans, strategies and prospects, both business and financial, of Digital World and TMTG. These statements are based on the beliefs and assumptions of the management of Digital World and TMTG. Although Digital World and TMTG believe that their respective plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, neither Digital World nor TMTG can assure you that either will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Generally, statements that are not historical facts, including statements concerning possible or assumed future actions, business strategies, events or results of operations, are forward-looking statements. These statements may be preceded by, followed by or include the words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” or similar expressions, but the absence of these words does not mean that a statement is not forward-looking. Neither Borgers, TMTG’s independent auditor, nor Adeptus, Digital World’s independent auditor, has examined, compiled or otherwise applied procedures with respect to the accompanying forward-looking financial information presented herein and, accordingly, expresses no opinion or any other form of assurance on it. The report of Borgers included in this proxy statement/prospectus relates to historical financial information of TMTG, and the report of Adeptus included in this proxy statement/prospectus relates to historical financial information of Digital World. Neither report extends to the forward-looking information and should not be read as if it does. Forward-looking statements contained in this proxy statement/prospectus include, but are not limited to, statements about:

 

   

the ability of Digital World and TMTG prior to the Business Combination to meet the closing conditions to the Business Combination, including approval by stockholders of Digital World and TMTG of the Business Combination and related Proposals, and the availability of at least $5,000,001 in net tangible assets, after giving effect to Redemptions of Public Shares, if any;

 

   

the ability of the Combined Entity following the Business Combination to realize the benefits from the Business Combination;

 

   

the ability of Digital World to complete the Business Combination;

 

   

the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement;

 

   

the ability of Digital World and TMTG prior to the Business Combination, and the Combined Entity following the Business Combination, to obtain and/or maintain the listing of New Digital World common stock on Nasdaq following the Business Combination;

 

   

future financial performance following the Business Combination;

 

   

public securities’ potential liquidity and trading;

 

   

the use of proceeds not held in the Trust Account or available to Digital World from interest income on the Trust Account balance;

 

   

the impact from the outcome of any known and unknown litigation;

 

   

the ability of the Combined Entity to forecast and maintain an adequate rate of revenue growth and appropriately plan its expenses;

 

   

expectations regarding future expenditures of the Combined Entity following the Business Combination;

 

   

the future mix of revenue and effect on gross margins of the Combined Entity following the Business Combination;

 

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the attraction and retention of qualified directors, officers, employees and key personnel of Digital World and TMTG prior to the Business Combination, and the Combined Entity following the Business Combination;

 

   

the ability of the Combined Entity to compete effectively in a competitive industry;

 

   

the impact of the ongoing legal proceedings in which President Trump is involved on TMTG’s corporate reputation and brand;

 

   

expectations concerning the relationships and actions of TMTG and its affiliates with third parties;

 

   

the impact from future regulatory, judicial, and legislative changes in TMTG’s or the Combined Entity’s industry;

 

   

the ability to locate and acquire complementary products or product candidates and integrate those into TMTG’s or the Combined Entity’s business;

 

   

future arrangements with, or investments in, other entities or associations;

 

   

intense competition and competitive pressures from other companies in the industries in which the Combined Entity will operate; and

 

   

other factors detailed under the section entitled “Risk Factors.”

These forward-looking statements are based on information available as of the date of this proxy statement/prospectus, and current expectations, forecasts and assumptions, and involve a number of risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

In addition, statements that Digital World or TMTG “believes” and similar statements reflect such party’s beliefs and opinions on the relevant subject. These statements are based upon information available to such party as of the date of this proxy statement/prospectus, and while such party believes such information forms a reasonable basis for such statements, such information may be limited or incomplete, and these statements should not be read to indicate that either Digital World or TMTG has conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

You should not place undue reliance on these forward-looking statements in deciding how to grant your proxy or instruct how your vote should be cast or vote your shares on the Proposals set forth in this proxy statement/prospectus. As a result of a number of known and unknown risks and uncertainties, the actual results or performance of Digital World, TMTG and/or the Combined Entity may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause Digital World’s, TMTG’s or the Combined Entity’s actual results to differ include:

 

   

the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement;

 

   

the outcome of any legal or regulatory proceedings that have been, or may be, instituted in the future against Digital World, TMTG, the Combined Entity or others following announcement of the Merger Agreement and the transactions contemplated therein or following consummation of the Business Combination;

 

   

the inability to complete the transactions contemplated by the Merger Agreement due to the failure to obtain approval of the stockholders of Digital World or TMTG or other conditions to Closing;

 

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the risk that the proposed transaction disrupts current plans and operations as a result of the announcement and consummation of the Business Combination;

 

   

the ability to recognize the anticipated benefits of the Business Combination, which may be affected by, among other things, the ability of the Combined Entity to grow and manage growth profitably, maintain relationships with customers, compete within its industry and retain its key employees;

 

   

costs related to the proposed Business Combination;

 

   

the possibility that Digital World, TMTG or the Combined Entity may be adversely impacted by other economic, business, and/or competitive factors;

 

   

risks related to future pandemics and other macroeconomic or geopolitical developments, and government responses thereto;

 

   

future exchange and interest rates;

 

   

the risk that Digital World, or the Combined Entity fails to maintain an effective system of disclosure controls and internal controls over financial reporting, Digital World’s or the Combined Entity’s ability to produce timely and accurate financial statements or comply with applicable SEC or stock exchange regulations could be impaired;

 

   

the ability of the Combined Entity to remediate material weaknesses in internal controls over financial reporting identified in TMTG’s financial statements by TMTG management; and

 

   

other risks and uncertainties indicated in this proxy statement/prospectus, including those under “Risk Factors” herein, and other filings that have been made or will be made with the SEC by Digital World or the Combined Entity.

These and other factors that could cause actual results to differ from those implied by the forward-looking statements in this proxy statement/prospectus are more fully described under the heading “Risk Factors” and elsewhere in this proxy statement/prospectus. The risks described under the heading “Risk Factors” are not exhaustive. Other sections of this proxy statement/prospectus describe additional factors that could adversely affect the business, financial condition or results of operations of Digital World and TMTG prior to the Business Combination, and the Combined Entity following the Business Combination. New risk factors emerge from time to time and it is not possible to predict all such risk factors, nor can Digital World or TMTG assess the impact of all such risk factors on the business of Digital World and TMTG prior to the Business Combination, and the Combined Entity following the Business Combination, or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. Forward-looking statements are not guarantees of performance. This is particularly true for a company like TMTG that has a limited operating history to reference. All forward-looking statements attributable to Digital World or TMTG or persons acting on their behalf are expressly qualified in their entirety by the foregoing cautionary statements.

 

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QUESTIONS AND ANSWERS

The following questions and answers briefly address some commonly asked questions about the Proposals to be presented at the Digital World Special Meeting. The following questions and answers do not include all the information that is important to stockholders of Digital World. We urge the stockholders of Digital World to read carefully this entire proxy statement/prospectus, including the annexes and other documents referred to herein.

QUESTIONS AND ANSWERS ABOUT THE DIGITAL WORLD PROPOSALS

 

Q.

Why am I receiving this proxy statement/prospectus?

 

A.

Digital World stockholders are being asked to consider and vote upon a proposal to approve the Business Combination contemplated by the Merger Agreement, among other Proposals. Pursuant to the Merger set forth in the Merger Agreement, TMTG will become a wholly owned subsidiary of Digital World. A copy of the Merger Agreement is attached to this proxy statement/prospectus as Annex A.

This proxy statement/prospectus and its annexes contain important information about the proposed Business Combination and the other matters to be acted upon at the Digital World Special Meeting. You should read this proxy statement/prospectus and its annexes carefully and in their entirety.

THE VOTE OF DIGITAL WORLD STOCKHOLDERS IS IMPORTANT. DIGITAL WORLD STOCKHOLDERS ARE URGED TO SUBMIT THEIR PROXIES AS SOON AS POSSIBLE AFTER CAREFULLY REVIEWING THIS PROXY STATEMENT/PROSPECTUS AND ITS ANNEXES AND CAREFULLY CONSIDERING EACH OF THE PROPOSALS BEING PRESENTED AT THE MEETING.

Below are proposals on which Digital World stockholders are being asked to vote.

1) The Business Combination Proposal (Proposal 1).

Subject to the terms and conditions set forth in the Merger Agreement, at the Effective Time:

 

  (a)

the outstanding shares of Class A common stock, par value $0.0001 per share, of Digital World (“Digital World Class A common stock”), including any shares of Class B common stock, par value $0.0001 per share, of Digital World (“Digital World Class B common stock”, and together with the Digital World Class A common stock, the “Digital World common stock”) that are converted into Digital World Class A common stock in accordance with the Digital World Charter, will be redesignated as common stock, par value $0.0001 per share, of Trump Media & Technology Group Corp. (which will be the new name of Digital World after the Closing, as described below, “New Digital World”) (referred to herein as “New Digital World common stock”);

 

  (b)

as consideration for the Merger, TMTG securityholders (other than holders of TMTG Convertible Notes) as of immediately prior to the Effective Time will be entitled to receive an amount equal to $875,000,000, subject to adjustments for TMTG’s closing debt, net of cash and unpaid transaction expenses (the “Merger Consideration”), with each such TMTG securityholder receiving shares of New Digital World common stock for its TMTG securities. In addition, prior to the Effective Time, the issued and outstanding TMTG Convertible Notes will be converted into shares of TMTG common stock, such that, at the Effective Time, holders of such TMTG common stock will be entitled to receive from New Digital World a number of shares of New Digital World common stock equal to (i) the number of such shares of TMTG common stock multiplied by (ii) the conversion ratio applicable to the previously converted TMTG Convertible Notes. Accordingly, at the Effective Time, (a) all of the issued and outstanding TMTG common stock immediately prior to the Effective Time (other than those properly exercising any applicable appraisal rights under Delaware law or any shares of TMTG

 

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  common stock issued upon the conversion of TMTG Convertible Notes immediately prior to the Effective Time pursuant to the terms of the Merger Agreement) will automatically be cancelled and will cease to exist, in exchange for the right to receive their pro rata portion of the Merger Consideration and the Earnout Shares (as defined below), if any, (b) all of the issued and outstanding common stock of TMTG immediately prior to the Effective Time that was issued upon the conversion of TMTG Convertible Notes pursuant to the terms of the Merger Agreement will automatically be cancelled and will cease to exist, in exchange for the right to receive shares of New Digital World common stock upon the terms set forth in the Merger Agreement, (c) each outstanding option to acquire shares of TMTG common stock (whether vested or unvested) will be assumed by New Digital World and automatically converted into an option to acquire shares of New Digital World common stock, with its price and number of shares equitably adjusted based on the conversion ratio of the shares of TMTG common stock into the Merger Consideration, and (d) each outstanding restricted stock unit of TMTG shall be converted into a restricted stock unit relating to shares of New Digital World common stock.

 

  (c)

TMTG stockholders (other than with respect to any shares of TMTG common stock received as a result of the conversion of TMTG Convertible Notes) will also have a contingent right to receive up to an aggregate of an additional 40,000,000 shares of New Digital World common stock (the “Earnout Shares”) after the Closing based on the price performance of the New Digital World common stock during the three (3) year period following the Closing (the “Earnout Period”). The Earnout Shares shall be earned and payable during the Earnout Period as follows:

 

   

if the VWAP of New Digital World common stock equals or exceeds $12.50 per share for any 20 trading days within any 30 trading day period, New Digital World shall issue to the former TMTG stockholders an additional 15,000,000 Earnout Shares;

 

   

if the VWAP of New Digital World common stock equals or exceeds $15.00 per share for any 20 trading days within any 30 trading day period, New Digital World shall issue to the former TMTG stockholders an additional 15,000,000 Earnout Shares; and

 

   

if the VWAP of New Digital World common stock equals or exceeds $17.50 per share for any 20 trading days within any 30 trading day period, New Digital World shall issue to the former TMTG stockholders an additional 10,000,000 Earnout Shares.

The Merger Consideration will be subject to a post-Closing true up 90 days after the Closing.

In addition to the approval of the Proposals at the Digital World Special Meeting, unless waived by the parties to the Merger Agreement, in accordance with applicable law, the Closing is subject to a number of conditions set forth in the Merger Agreement including, among others, receipt of the requisite stockholder approval contemplated by this proxy statement/prospectus. For more information about the closing conditions to the Business Combination, see the section titled “The Business Combination Proposal (Proposal 1) — The Merger Agreement — Conditions to the Closing.”

The Merger Agreement may be terminated at any time prior to the Closing upon agreement of TMTG and Digital World, or by TMTG or Digital World acting alone, in specified circumstances. For more information about the termination rights under the Merger Agreement, see the section titled “The Business Combination Proposal (Proposal 1) — The Merger Agreement — Termination.”

Pursuant to the Digital World Charter, in connection with the Business Combination, holders of Public Shares may elect to have their shares redeemed for cash at the applicable Redemption price per share calculated in accordance with the Digital World Charter. For illustrative purposes, as of February 8, 2024, the pro rata portion of the funds available in the Trust Account for the Public Shares was approximately $10.85 per share. If a holder exercises its Redemption Rights in connection with the Business Combination, then such holder will be exchanging its Class A common stock for cash and will only have equity interests in the Combined Entity pursuant to its right to exercise its Public Warrants, to the extent it still holds Public Warrants. Such a holder will

 

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be entitled to receive cash for its Public Shares only if it properly demands Redemption and delivers its shares (either physically or electronically) to our transfer agent at least two business days prior to the Digital World Special Meeting. Holders of Public Shares may elect to redeem their shares whether or not such shares are voted at the Digital World Special Meeting. See the section titled “The Digital World Special Meeting — Redemption Rights.”

The transactions contemplated by the Merger Agreement will be consummated only if the Business Combination Proposal, the Charter Amendment Proposals, the Director Election Proposal, the Incentive Plan Proposal and the Nasdaq Proposal are approved at the Digital World Special Meeting. In addition, the Charter Amendment Proposals, the Director Election Proposal, the Incentive Plan Proposal and the Nasdaq Proposal are conditioned on the approval of the Business Combination Proposal (and each such Proposal is cross-conditioned on the approval of all Required Proposals). The Adjournment Proposal is not conditioned on the approval of any other proposal set forth in this proxy statement/prospectus.

The Combined Entity’s Board will increase to seven members upon the Closing. In accordance with the Amended Charter to be filed immediately after the Closing, the Board will be divided into three classes, with each director to serve for a three-year term, except for the initial terms after the Closing. At each annual meeting of stockholders of the Combined Entity, the successors to directors whose terms then expire will be elected to serve from the time of election and qualification until the third annual meeting following the election. See the Charter Amendment Proposals below for more information.

The Business Combination involves numerous risks. For more information about these risks, see the section titled “Risk Factors.”

2) The Charter Amendment Proposals (Proposals 2 through 6).

Digital World stockholders will be asked to approve and adopt, subject to and conditioned on (but with immediate effect therefrom) approval of each of the Business Combination Proposal, the Director Election Proposal, the Incentive Plan Proposal and the Nasdaq Proposal and the consummation of the Business Combination, a second amendment and restatement of the Digital World Charter, as set out in the Amended Charter appended to this proxy statement/prospectus as Annex B, for the following amendments (collectively, the “Charter Amendment Proposals”):

 

  (a)

Name Change – To provide that the name of New Digital World shall be changed to “Trump Media & Technology Group Corp.” (Proposal 2);

 

  (b)

Board Structure and Composition – To provide for the structure of the post-Closing Board, split into three classes of as even size as practicable, Class I, II, and III each to serve a term of three (3) years, except for the initial term, for which the Class I directors will be up for reelection at the first annual meeting of stockholders occurring after the Closing, and for which the Class II directors will be up for reelection at the second annual meeting of stockholders occurring after the Closing. Directors will not be able to be removed during their term except for cause, and then only by the affirmative vote of the holders of not less than two thirds (2/3) of the outstanding shares of capital stock then entitled to vote at an election of directors. The size of the Board of the Combined Entity shall be determined by resolution of such Board but will initially be seven (7) (Proposal 3);

 

  (c)

Amendment of Blank Check Provisions – To remove and change certain provisions in the Digital World Charter related to Digital World’s status as a special purpose acquisition company, including the deletion of Article IX of the Digital World Charter in its entirety (Proposal 4);

 

  (d)

The Authorized Share Charter Amendment – To increase the number of authorized shares of common stock to accommodate any shares to be issued in connection with (i) the Business Combination, (ii) the conversion of securities issued in Post-IPO Financings, (iii) the exercise of any Warrants, (iv) the conversion of TMTG Convertible Notes immediately prior to the Effective

 

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  Time in connection with the Closing, (v) the Equity Incentive Plan and (vi) any future issuances of shares of New Digital World common stock if determined by the New Digital World Board to be in the best interests of New Digital World after the consummation of the Business Combination without incurring the risk, delay and potential expense incident to obtaining stockholder approval to increase the authorized share capital (Proposal 5).

 

  (e)

Amendment and Restatement of the Digital World Charter – Conditioned on the approval of Proposals 2 through 5, a proposal to approve the proposed Amended Charter in the form attached as Annex B hereto, which includes the approval of all other changes in the proposed charter in connection with replacing the existing Digital World Charter with the proposed Amended Charter as of the Effective Time (Proposal 6).

3) The Director Election Proposal (Proposal 7)

To consider and vote upon a proposal to elect seven (7) directors to serve on the Combined Entity’s Board, each effective from the consummation of the Business Combination and for a term as set forth under the proposed Amended Charter or until such director’s earlier death, resignation, retirement or removal (Proposal 7).

4) The Incentive Plan Proposal (Proposal 8)

Digital World is proposing that its stockholders approve and adopt the Equity Incentive Plan, which will become effective upon the Closing.

The Equity Incentive Plan will reserve shares of New Digital World common stock equal to 7.5% of the fully diluted, and as converted, amount of New Digital World common stock to be outstanding immediately following consummation of the Business Combination, taking into account any additional shares that may be issued pursuant to the Earnout Shares. The purpose of the Equity Incentive Plan is to assist in attracting, retaining, motivating, and rewarding certain key employees, officers, directors, and consultants of New Digital World and its affiliates and promoting the creation of long-term value for stockholders of New Digital World by closely aligning the interests of such individuals with those of other stockholders. The Equity Incentive Plan authorizes the award of share-based incentives to encourage eligible employees, officers, directors, and consultants, as described below, to expend maximum effort in the creation of stockholder value.

A summary of the Equity Incentive Plan is set forth in the “The Incentive Plan Proposal (Proposal 8)” section of this proxy statement/prospectus and a complete copy of the Equity Incentive Plan is attached hereto as Annex C. You are encouraged to read the Equity Incentive Plan in its entirety.

5) The Nasdaq Proposal (Proposal 9)

To consider and vote upon a proposal to approve, for purposes of complying with Nasdaq Listing Rule 5635, (a) the issuance of up to 127,500,000 newly issued shares of New Digital World common stock in the Business Combination, which amount will be determined as described in more detail in the accompanying proxy statement/prospectus, (b) the issuance, if any, of up to 7,981,645 shares of New Digital World common stock in connection with the conversion of any Digital World Convertible Notes and Digital World Alternative Financing Notes entered into prior to the consummation of the Business Combination, (c) the issuance, if any, of up to 6,552,134 shares of New Digital World common stock in connection with the exercise of Post-IPO Warrants, (d) the issuance of up to 8,369,509 shares of New Digital World common stock issuable upon conversion of outstanding TMTG Convertible Notes immediately prior to the Effective Time in connection with the Closing and (e) the issuance under the Equity Incentive Plan of shares of New Digital World common stock equal to 7.5% of the fully diluted, and as converted, amount of New Digital World common stock to be outstanding immediately following consummation of the Business Combination, taking into account any additional shares that may be issued pursuant to the Earnout Shares.

 

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6) The Adjournment Proposal (Proposal 10)

To consider and vote upon a proposal to adjourn the Digital World Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the Digital World Special Meeting, there are not sufficient votes to approve the Business Combination Proposal, the Charter Amendment Proposals, the Director Election Proposal, the Incentive Plan Proposal or the Nasdaq Proposal.

 

Q:

When and where will the Digital World Special Meeting take place?

 

A:

The Digital World Special Meeting will be held on     , 2024, at 10:00 a.m., Eastern Time, via live audio webcast at      or such other date, time and place to which such meeting may be adjourned or postponed, to consider and vote upon the Proposals.

 

Q:

Are the Proposals conditioned on one another?

 

A:

Unless the Business Combination Proposal is approved, the Charter Amendment Proposals, the Director Election Proposal, the Incentive Plan Proposal, and the Nasdaq Proposal will not be presented to the stockholders of Digital World at the Digital World Special Meeting, insofar as the Charter Amendment Proposals, the Director Election Proposal, the Incentive Plan Proposal and the Nasdaq Proposal are conditioned on the approval of the Business Combination Proposal (and each such Proposal is cross-conditioned on the approval of all Required Proposals). The Adjournment Proposal is not conditioned on the approval of any other proposal set forth in this proxy statement/prospectus. It is important for you to note that if the Business Combination Proposal does not receive the requisite vote for approval, we will not consummate the Business Combination. If Digital World does not consummate the Business Combination and fails to complete an initial business combination by September 8, 2024, Digital World will be required, in accordance with the Digital World Charter, to dissolve and liquidate its Trust Account by returning the then remaining funds in such account (less amounts released to pay tax obligations and up to $100,000 for dissolution expenses, and amounts paid pursuant to Redemptions) to its Public Stockholders, unless it seeks and obtains again the approval of Digital World stockholders to amend the Digital World Charter to extend such date.

 

Q:

What will happen in the Business Combination?

 

A:

At the Closing, Merger Sub will merge with and into TMTG, with TMTG surviving such Merger, as a result of which (a) all of the issued and outstanding TMTG common stock immediately prior to the Effective Time (other than those properly exercising any applicable appraisal rights under Delaware law or any shares of TMTG common stock issued upon the conversion of TMTG Convertible Notes immediately prior to the Effective Time pursuant to the terms of the Merger Agreement) will automatically be cancelled and will cease to exist, in exchange for the right to receive their pro rata portion of the Merger Consideration and the Earnout Shares, if any, (b) all of the issued and outstanding common stock of TMTG immediately prior to the Effective Time that was issued upon the conversion of TMTG Convertible Notes pursuant to the terms of the Merger Agreement will automatically be cancelled and will cease to exist, in exchange for the right to receive shares of New Digital World common stock upon the terms set forth in the Merger Agreement, (c) each outstanding option to acquire shares of TMTG common stock (whether vested or unvested) will be assumed by New Digital World and automatically converted into an option to acquire shares of New Digital World common stock, with its price and number of shares equitably adjusted based on the conversion ratio of the shares of TMTG common stock into the Merger Consideration, and (d) each outstanding restricted stock unit of TMTG shall be converted into a restricted stock unit relating to shares of New Digital World common stock. Upon consummation of the Business Combination, TMTG will become a wholly owned subsidiary of Digital World and Digital World will change its name to Trump Media & Technology Group Corp. After the Closing, the cash held in the Trust Account will be released from the Trust Account and

 

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  used to pay each of Digital World’s and TMTG’s transaction expenses and other liabilities of Digital World due as of the Closing, and for working capital and general corporate purposes of the Combined Entity. A copy of the Merger Agreement is attached to this proxy statement/prospectus as Annex A.

 

Q:

What equity stake will current stockholders of Digital World, including anchor investors and TMTG securityholders and convertible noteholders hold in the Combined Entity after the Closing?

 

A:

It is anticipated that, upon the completion of the Business Combination, Digital World’s Public Stockholders will retain an ownership interest of approximately 21.2% of the outstanding capital stock of the Combined Entity, the Sponsor will retain an ownership interest of approximately 7.8% of the outstanding capital stock of the Combined Entity and holders of TMTG securities will own approximately 72.0% of the outstanding capital stock of the Combined Entity.

The foregoing ownership percentages with respect to the Combined Entity following the Business Combination (a) exclude the exercise of outstanding Warrants and the conversion of securities issued in the Post-IPO Financings and (b) assume that (i) there are no Redemptions of any shares by Digital World’s Public Stockholders in connection with the Business Combination and (ii) no awards are issued under the Equity Incentive Plan. If the actual facts are different than these assumptions (which they are likely to be), the percentage ownership retained by Digital World’s existing stockholders in the Combined Entity will be different.

 

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If any of Digital World’s Public Stockholders exercise their Redemption Rights, the percentage of the Combined Entity’s outstanding common stock held by Digital World’s Public Stockholders will decrease and the percentages of the Combined Entity’s outstanding common stock held by the Sponsor and by the holders of TMTG securities will increase, in each case relative to the percentage held if none of the Public Shares are redeemed. Upon the issuance of New Digital World common stock in connection with the Business Combination, the percentage ownership of the Combined Entity by Digital World’s Public Stockholders who do not redeem their Public Shares will be diluted. Digital World Public Stockholders that do not redeem their Public Shares in connection with the Business Combination will experience further dilution upon the exercise of Public Warrants that are retained after the Closing by redeeming Public Stockholders. The percentage of the total number of outstanding shares of New Digital World common stock that will be owned by Digital World’s Public Stockholders as a group will vary based on the number of Public Shares for which the holders thereof request Redemption in connection with the Business Combination and the number of shares of common stock issued upon conversion of the Preferred Stock (if any). The following table illustrates varying beneficial ownership levels in the Combined Entity, as well as possible sources and extent of dilution for non-redeeming Public Stockholders, excluding the conversion of the shares of Preferred Stock and assuming no Redemptions by Public Stockholders, 33.3% Redemption by Public Stockholders, 50% Redemption by Public Stockholders, and the maximum (77%) Redemptions by Public Stockholders:

 

     Minimum Redemption     33.33%
Redemption
    50%
Redemption
    Maximum (77%)
Redemption (1)
 

Digital World

                    

SPAC public shareholder shares

     28,745,952        21.2     19,164,926        15.2     14,372,976        11.9     6,744,940        5.9

SPAC private placement shares

     1,133,484        0.8     1,133,484        0.9     1,133,484        0.9     1,133,484        1.0

Underwriter IPO shares

     143,750        0.1     143,750        0.1     143,750        0.1     143,750        0.1

SPAC sponsor promote (primarily Founder Shares)

     9,631,250        7.1     9,631,250        7.6     9,631,250        7.9     9,631,250        8.5
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total Digital World

     39,654,436        29.3     30,073,410        23.9     25,281,460        20.9     17,653,424        15.6
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

TMTG

                    

Rollover equity shares for TMTG shareholders

     87,500,000        64.6     87,500,000        69.5     87,500,000        72.2     87,500,000        77.1

TMTG convertible note shares

     8,369,509        6.2     8,369,509        6.6     8,369,509        6.9     8,369,509        7.4
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total TMTG

     95,869,509        70.7     95,869,509        76.1     95,869,509        79.1     95,869,509        84.4
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total

     135,523,945        100.0     125,942,919        100.0     121,150,969        100.0     113,522,933        100.0
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

 

(1)

Digital World is required to have at least $5,000,001 in net tangible assets and $60 million in cash upon the closing of the Business Combination (the “Financial Closing Conditions”). The ability to meet the Financial Closing Conditions will not be known until the level of redemptions of Public Shares in connection with the Business Combination is known. As a result, if redemptions exceed $234.3 million (or 77% of the Trust Account assets before redemptions) the Business Combination would not close. As such, the Maximum Redemption scenario does not reflect the full amount of Public Shares that may be redeemed under Digital World’s Charter. Accordingly, if holders of more than 22,001,012 Public Shares seek to exercise such Redemption Rights, the Business Combination is not expected to close.

All of the relative percentages above are for illustrative purposes only and are based upon certain assumptions. See the section titled “Unaudited Pro Forma Condensed Combined Financial Information” for further information.

 

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Should one or more of the assumptions prove incorrect, actual beneficial ownership percentages may vary materially from those described in this proxy statement/prospectus as anticipated, believed, estimated, expected or intended.

 

Q:

What conditions must be satisfied to complete the Business Combination?

 

A:

There are a number of closing conditions in the Merger Agreement, including the approval by the stockholders of Digital World of the Business Combination Proposal, the Charter Amendment Proposals, the Director Election Proposal, the Incentive Plan Proposal and the Nasdaq Proposal. The Charter Amendment Proposals, the Director Election Proposal, the Incentive Plan Proposal and the Nasdaq Proposal are subject to and conditioned on the approval of the Business Combination Proposal. The Business Combination Proposal is subject to and conditioned on the approval of the Charter Amendment Proposals, the Director Election Proposal, the Incentive Plan Proposal and the Nasdaq Proposal. For a summary of the conditions that must be satisfied or waived prior to the Closing, see the section titled “The Business Combination Proposal (Proposal 1) — The Merger Agreement.”

 

Q:

Why is Digital World providing stockholders with the opportunity to vote on the Business Combination?

 

A:

Under the Digital World Charter, Digital World must provide all holders of its Public Shares with the opportunity to have their Public Shares redeemed upon the consummation of Digital World’s initial business combination either in conjunction with a tender offer or in conjunction with a stockholder vote. As such, Digital World has elected to provide its stockholders with the opportunity to have their Public Shares redeemed in connection with a stockholder vote rather than a tender offer. Therefore, Digital World is seeking to obtain the approval of its stockholders of the Business Combination Proposal in order to allow its Public Stockholders to effectuate Redemptions of their Public Shares in connection with the Closing.

 

Q:

Did the Digital World Board obtain a fairness opinion or a third-party valuation in determining whether or not to proceed with the Business Combination?

 

A:

The Digital World Board did not obtain a fairness opinion. However, given the duration of time between the initial execution of the Merger Agreement and the Second Amendment to the Agreement as well as the significant turnover on the Digital World Board since the Merger Agreement was first signed in 2021, during December 2023 in connection with exercising its fiduciary duties, the Board sought to refresh and complete its financial and business due diligence of TMTG, including with respect to the revised transaction terms contemplated by the Second Amendment to the Agreement. In reaching its determination and in support of its decision that the Business Combination and the other transactions contemplated by the Merger Agreement, including the Merger Consideration and the Earnout Shares, are fair and in the best interests of Digital World and its stockholders, the Digital World Board conducted a bring-down evaluation of TMTG’s business model, financial performance, growth opportunities and competitive positioning. As part of this evaluation process, the Digital World Board engaged an independent advisor to prepare a Comparable Company Analysis. The Comparable Company Analysis was based on certain publicly traded companies selected by Digital World’s management and the Digital World Board, which included Meta, X (formerly Twitter), Snapchat and Pinterest. However, while these companies may share certain characteristics that are similar to TMTG, the Digital World Board did not consider any of these companies to be identical in nature to TMTG, given its affiliation with former President Trump and unique market positioning, including purposeful differentiation from the current market offerings considered in its analysis. The Comparable Company Analysis was only one element of a broader due diligence process conducted by the Digital World Board, and the independent advisor was neither engaged for nor delivered a fairness opinion or other independent conclusion with respect to the terms of the Second Amendment to the Agreement. See “The Business Combination Proposal (Proposal 1) — The Board’s Reasons for Approval of the Business Combination.

 

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Q:

Are there any arrangements to help ensure that Digital World will have sufficient funds, together with the proceeds in its Trust Account, to consummate the Business Combination?

 

A:

Yes. On February 8, 2024, Digital World entered into subscription agreements with certain institutional investors for the issuance of the Digital World Alternative Financing Notes. Through the initial draw of such Digital World Alternative Financing Notes, on February 8, 2024, Digital World issued $10,000,000 to such institutional investors, and expects to issue the remaining up to $40,000,000 concurrently with the closing of the Business Combination (the “Final Drawdown”). The proceeds of such Final Drawdown will be deposited into an account subject to an account control agreement with a U.S. banking institution and such proceeds will be automatically released to New Digital World upon the filing of a resale registration statement with the SEC covering the underlying New Digital World common stock issuable upon conversion of the Digital World Alternative Financing Notes. Accordingly, as of the date of this proxy statement/prospectus and subject to Digital World’s compliance with its contractual obligations under the Digital World Alternative Financing Notes, Digital World expects, that together with the proceeds of the Final Drawdown and the Trust Account, it will have sufficient funds to satisfy the (i) $60,000,000 minimum liquidity condition under the Merger Agreement, and (ii) $5,000,001 minimum net tangible assets condition immediately prior to or upon consummation of the Business Combination. However, if Redemptions exceed 77%, Digital World may be unable to meet these conditions to the Closing in the absence of new sources of financing.

 

Q:

How many votes do I have at the Digital World Special Meeting?

 

A:

Digital World stockholders are entitled to one vote at the Digital World Special Meeting for each share of Digital World common stock held of record as of     , 2024, the record date for the Digital World Special Meeting (the “Record Date”). Each share of our Class A common stock and Class B common stock is entitled to one vote on each matter that comes before the Digital World Special Meeting. As of the close of business on the Record Date, there were 37,180,331 outstanding shares of Digital World common stock.

 

Q:

What vote is required to approve the Proposals presented at the Digital World Special Meeting?

 

A:

The approval of the Charter Amendment Proposals requires the affirmative vote in person (which would include presence at a virtual meeting) or by proxy of the holders, as of the Record Date, of a majority of the then issued and outstanding shares of Class A common stock and Class B common stock, voting together as a single class. Accordingly, a Digital World stockholder’s failure to vote by proxy or to vote in person at the Digital World Special Meeting or an abstention will have the same effect as a vote “AGAINST” the Charter Amendment Proposals.

The approval of the Business Combination Proposal, the Incentive Plan Proposal and the Nasdaq Proposal requires the affirmative vote in person (which would include presence at a virtual meeting) or by proxy of the holders, as of the Record Date, of a majority of the votes cast of Class A common stock and Class B common stock, voting together as a single class, entitled to vote thereon at the Digital World Special Meeting.

The approval of the Director Election Proposal requires a plurality vote of the shares of Digital World common stock cast by the stockholders represented in person or by proxy and entitled to vote thereon at the Digital World Special Meeting.

The approval of the Adjournment Proposal requires the affirmative vote of a majority of the votes cast by the stockholders represented in person or by proxy and entitled to vote thereon at the Digital World Special Meeting.

A Digital World stockholder’s failure to vote by proxy or to vote in person at the Digital World Special Meeting will not be counted towards the number of shares of Digital World common stock required to validly establish a quorum, and if a valid quorum is otherwise established, it will have no effect on the outcome of the vote on the Business Combination Proposal, the Incentive Plan Proposal, the Nasdaq

 

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Proposal or the Adjournment Proposal. Abstentions will be counted towards the number of shares of Digital World common stock required to validly establish a quorum but will have no effect on the outcome of the vote on the Business Combination Proposal, the Incentive Plan Proposal, the Nasdaq Proposal or the Adjournment Proposal.

The approval of the Director Election Proposal requires a plurality vote of the shares of Digital World common stock cast by the stockholders represented in person or by proxy and entitled to vote thereon at the Digital World Special Meeting. A plurality means that the individuals who receive the largest number of votes cast “FOR” are elected as directors. A Digital World stockholder’s failure to vote by proxy or to vote in person at the Digital World Special Meeting will have no effect on the Director Election Proposal. You may vote “FOR” or “WITHHOLD” authority to vote for each of the director nominees with respect to the Director Election Proposal. “WITHHOLD” votes will be counted towards the number of shares of Digital World common stock required to validly establish a quorum but will have no effect on the outcome of the vote on the Director Election Proposal.

If the Business Combination Proposal is not approved, the Charter Amendment Proposals, the Director Election Proposal, the Incentive Plan Proposal and the Nasdaq Proposal will not be presented to the Digital World stockholders for a vote. The approval of the Business Combination Proposal, the Charter Amendment Proposals, the Director Election Proposal, the Incentive Plan Proposal and the Nasdaq Proposal are preconditions to the consummation of the Business Combination.

 

Q:

What constitutes a quorum at the Digital World Special Meeting?

 

A:

Holders of a majority in voting power of Digital World common stock issued and outstanding and entitled to vote at the Digital World Special Meeting constitute a quorum. In the absence of a quorum, the chairman of the meeting has power to adjourn the Digital World Special Meeting. As of the Record Date,      shares of Digital World common stock would be required to achieve a quorum.

 

Q:

How will the Sponsor, directors, officers and anchor investors of Digital World vote?

 

A:

The Sponsor, directors, officers and the anchor investors of Digital World have agreed to vote any Founder Shares and Placement Shares they may hold, as applicable, in favor of the Business Combination, including the Business Combination Proposal and the other Proposals. The Sponsor and all of our current and former directors and officers are expected to vote any Digital World common stock over which they have voting control (including any Public Shares owned by them) in favor of the Business Combination and the other Proposals. Currently, our Sponsor and certain current and former officers and directors own approximately 3.8% of our issued and outstanding shares of Class A common stock, and 76.5% of our issued and outstanding Founder Shares (including 5,497,500 Founder Shares and 1,133,484 Placement Units). Our Sponsor and current directors and officers do not intend to purchase shares of Digital World Class A common stock in the open market or in privately negotiated transactions in connection with the stockholder vote on the Business Combination.

The approval of the Business Combination Proposal requires the affirmative vote in person (which would include presence at a virtual meeting) or by proxy of the holders, as of the Record Date, of a majority of the votes cast of Class A common stock and Class B common stock, voting together as a single class, entitled to vote thereon at the Digital World Special Meeting. As each Proposal is cross-conditioned on the approval of all Required Proposals, the approval of the Business Combination Proposal is also conditioned on the approval of the Charter Amendment Proposals. The approval of the Charter Amendment Proposals requires the affirmative vote in person (which would include presence at a virtual meeting) or by proxy of the holders, as of the Record Date, of a majority of the then issued and outstanding shares of Class A common stock and Class B common stock, voting together as a single class. Consequently, the affirmative vote of approximately 55.3% of the unaffiliated issued and outstanding shares of Class A common stock, along with the affirmative vote of all of the issued and outstanding shares of Class A common stock and Class B

 

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common stock held by the Sponsor, certain of our current and former directors, officers and the anchor investors, is required to approve the Charter Amendment Proposals.

 

Q:

What interests do Digital World’s current officers and directors have in the Business Combination?

 

A:

Eric Swider will remain as a director of the Combined Entity following the Business Combination. None of the Sponsor or current officers or directors of Digital World will receive any interest in the Business Combination other than the interests they owned prior to the Business Combination or as described below in “Risk Factors” and “The Business Combination Proposal (Proposal 1) — Interests of Digital World’s Directors and Officers in the Business Combination.” The interests of the Sponsor or current officers or directors of Digital World may be different from or in addition to (and which may conflict with) your interest. These interests include:

 

   

that unless Digital World consummates an initial business combination, Digital World’s officers and directors and the Sponsor will not receive reimbursement for any out-of-pocket expenses incurred by them to the extent that such expenses exceed the amount of available proceeds not deposited in the Trust Account.

 

   

the fact that our Sponsor holds 5,490,000 Founder Shares and 1,133,484 Placement Units, all such securities beneficially owned by Patrick Orlando, a director and former Chairman and Chief Executive Officer. In addition, Mr. Eric Swider, our Chief Executive Officer and a director, owns 7,500 Founder Shares; and the anchor investors own the remaining 1,650,000 Founder Shares. All of such investments would expire worthless if a business combination is not consummated; on the other hand, if an initial business combination is consummated, such investments could earn a positive rate of return on their overall investment in the Combined Entity even if other holders of our common stock experience a negative rate of return, due to each of the Sponsor and such individual anchor investors having initially purchased their respective Founder Shares for $25,000.

 

   

that as a condition to the Digital World IPO, the Founder Shares became subject to a lock-up whereby, subject to certain limited exceptions, the Founder Shares cannot be transferred until the earlier of (A) six months after the completion of Digital World’s initial business combination, (B) subsequent to Digital World’s initial business combination, when the reported last sale price of the Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at

  least 150 days after Digital World’s initial business combination and (C) such date after its initial business combination on which Digital World completes a liquidation, merger, stock exchange, reorganization or other similar transaction that results in all of the Digital World stockholders having the right to exchange their shares of Digital World common stock for cash, securities or other property.

 

   

that an aggregate of 1,133,484 Placement Units were issued to the Sponsor simultaneously with the consummation of the IPO and the underwriters’ exercise of their over-allotment option. Such Units had an aggregate market value of approximately $60.1 million based upon the closing price of Digital World’s Public Units of $53.00 per Unit on Nasdaq on February 9, 2024.

 

   

that the Sponsor has agreed that the Placement Units, and all of their underlying securities, will not be sold or transferred by it until 30 days after Digital World has completed an initial business combination, subject to limited exceptions.

 

   

that the Sponsor and directors and officers of Digital World have agreed not to redeem any shares of Digital World common stock they hold in connection with a stockholder vote to approve an initial business combination.

 

   

that the Sponsor may loan to Digital World additional funds for working capital purposes prior to the Business Combination. As of the date of this proxy statement/prospectus, there were $4,000,700 outstanding in Digital World Convertible Notes due to our Sponsor. If the Business Combination is not

 

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consummated and Digital World does not otherwise consummate another business combination prior to September 8, 2024, then there will likely be insufficient funds to pay the Digital World Convertible Notes.

 

   

the fact that on June 2, 2023, the Company issued two promissory notes to Renatus LLC (“Renatus”) in the aggregate principal amounts of (a) $2,000,000 and (b) $10,000,000. As of the date of this proxy statement/prospectus there were $1,232,000 outstanding in Digital World Convertible Notes due to Renatus, the proceeds of which are being used to pay working capital costs and expenses to enable Digital World to continue operating and complete an initial business combination. Mr. Swider is a founder and partner of Renatus.

 

   

that if Digital World does not complete an initial business combination by September 8, 2024, the 1,133,484 shares of Class A common stock underlying the Placement Units, the 566,742 shares of Class A common stock issuable upon conversion of the Placement Warrants and the 7,187,500 Founder Shares, of which 5,537,500 Founder Shares are held by Digital World’s Sponsor and certain current and former directors and officers, would be worthless because they are not entitled to participate in any Redemption or distribution with respect to such shares. Such Founder Shares and Placement Units had an aggregate market value of $338.0 million and $380.9 million, respectively, as of February 9, 2024, based on the closing price per Class A common stock of Digital World as of February 9, 2024 of $47.03 per share and the closing price of Digital World’s Public Units of $53.00 per Unit on Nasdaq on February 9, 2024.

 

   

that if the Trust Account is liquidated, including in the event Digital World is unable to complete an initial business combination within the required time period, the Sponsor has agreed to indemnify Digital World to ensure that the proceeds in the Trust Account are not reduced below $10.20 per Public Share by the claims of prospective target businesses with which Digital World has entered into an acquisition agreement or claims of any third party for services rendered or products sold to Digital World, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the Trust Account.

 

   

that the Sponsor (including its representatives and affiliates) and Digital World’s directors and officers, are, or may in the future become, affiliated with entities that are engaged in a similar business to Digital World. The Sponsor and Digital World’s directors and officers are not prohibited from sponsoring, or otherwise becoming involved with, any other blank check companies prior to Digital World completing its initial business combination. Digital World’s directors and officers also may become aware of business opportunities which may be appropriate for presentation to Digital World, and the other entities to which they owe certain fiduciary or contractual duties. Accordingly, they may have conflicts of interest in determining to which entity a particular business opportunity should be presented. These conflicts may not be resolved in Digital World’s favor and such potential business opportunities may be presented to other entities prior to their presentation to Digital World, subject to applicable fiduciary duties under DGCL. Digital World Charter provides that Digital World renounces its interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of Digital World and such opportunity is one Digital World is legally and contractually permitted to undertake and would otherwise be reasonable for Digital World to pursue, and to the extent the director or officer is permitted to refer that opportunity to Digital World without violating another legal obligation.

 

   

that Mr. Swider is expected to be appointed as a director of the Combined Entity after the consummation of the Business Combination, Mr. Swider may in the future receive cash fees, stock options or stock awards that the Combined Entity determines to pay to its directors.

 

   

that Digital World has issued Digital World Convertible Notes to certain officers, directors and affiliates pursuant to the convertible note compensation plan (the “Convertible Note Compensation Plan”), approved by the requisite holders of Class A common stock at the annual meeting of Digital World’s stockholders on December 19, 2023. These notes collectively represent an aggregate amount of $9,651,250 and may be convertible upon the Closing of the Business Combination into a maximum

 

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of 965,125 shares of Class A common stock, assuming each recipient chooses to convert their entire promissory note amount into Class A common shares. If we fail to close the Business Combination such notes would then be worthless. See the section entitled “Digital World’s Management — Officer and Director Compensation Equity Incentive Compensation.”

These interests may influence Digital World’s directors in making their recommendation that you vote in favor of the approval of the Business Combination.

 

Q:

What interests do TMTG’s current officers and directors have in the Business Combination?

 

A:

Members of the TMTG Board and its executive officers have interests in the Business Combination that may be different from or in addition to (and which may conflict with) your interest. These interests include, without limitation, the following:

 

   

Devin Nunes, Chief Executive Officer of TMTG, who currently serves on the TMTG Board, may serve as a director of the Combined Entity after consummation of the Business Combination and TMTG may nominate one or more of its existing directors to serve on the Board of the Combined Entity;

 

   

Upon consummation of the Business Combination, and subject to certain conditions, certain TMTG executive officers may be eligible to receive a retention bonus of up to $600,000 each for an aggregate amount of up to $1,800,000;

 

   

Upon consummation of the Business Combination, any outstanding TMTG Options and TMTG RSUs, if any, granted to TMTG’s executive officers and certain members of the TMTG Board under the TMTG 2022 Plan prior to the Closing of the Business Combination will be assumed and converted to options and RSUs under the Equity Incentive Plan effective as of the Closing the Business Combination; and

 

   

Upon consummation of the Business Combination, and subject to approval of the Incentive Plan Proposal, TMTG’s executive officers and directors are expected to receive grants of stock options and/or restricted stock units under the Equity Incentive Plan from time to time as determined by the compensation committee of the Combined Entity (the “Compensation Committee”).

 

   

Upon consummation of the Business Combination, and subject to approval of the Charter Amendment Proposals, the TMTG securityholders are expected to control a majority of the voting power of the outstanding New Digital World common stock, with President Trump beneficially owning at least 58.1% of the voting power of such New Digital World common stock. As a result, New Digital World will then be a “controlled company” within the meaning of applicable rules of the Nasdaq upon the Closing.

Please see the sections entitled “Risk Factors” and “The Business Combination Proposal (Proposal 1) — Interests of TMTG’s Directors and Officers in the Business Combination” and “Executive and Director Compensation of TMTG” of this proxy statement/prospectus for a further discussion of these and other interests.

 

Q:

What happens if I sell my shares of Class A common stock before the Digital World Special Meeting?

 

A:

The Record Date is earlier than the date of the Digital World Special Meeting. If you transfer your shares of Class A common stock after the Record Date, but before the Digital World Special Meeting, unless the transferee obtains from you a proxy to vote those shares, you will retain your right to vote at the Digital World Special Meeting. However, you will not be able to seek Redemption of your shares because you will no longer be able to deliver them for cancellation upon consummation of the Business Combination in accordance with the provisions described herein. If you transfer your shares of Class A common stock prior to the Record Date, you will have no right to vote those shares at the Digital World Special Meeting.

 

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Q:

What happens if a substantial number of the Public Stockholders vote in favor of the Business Combination and exercise their Redemption right?

 

A:

Digital World stockholders who vote in favor of the Business Combination may also nevertheless exercise their Redemption Rights. Accordingly, the Business Combination may be consummated even though the funds available from the Trust Account and the number of Public Stockholders are reduced as a result of Redemptions by Public Stockholders. Nonetheless, the consummation of the Business Combination is conditioned upon Digital World being able to fulfill the Financial Closing Conditions, as described herein. See “Questions and Answers — What equity stake will current stockholders of Digital World, including anchor investors and TMTG securityholders and convertible noteholders hold in the Combined Entity after the Closing?” In addition, with fewer Public Shares and Public Stockholders, the trading market for the Combined Entity’s stock may be less liquid than the market for Digital World common stock was prior to consummation of the Business Combination and the Combined Entity may not be able to meet the listing standards for Nasdaq. In addition, with less funds available from the Trust Account, the working capital infusion from the Trust Account into TMTG’s business will be reduced. As a result, the proceeds will be greater in the event that no Public Stockholders exercise Redemption Rights with respect to their Public Shares for a pro rata portion of the Trust Account as opposed to the scenario in which Digital World’s Public Stockholders exercise the maximum allowed Redemption Rights.

 

Q:

What happens if I vote against any of the Business Combination Proposal, the Charter Amendment Proposals, the Director Election Proposal, the Incentive Plan Proposal or the Nasdaq Proposal?

 

A:

If any of the Required Proposals are not approved, the Business Combination is not consummated and Digital World does not otherwise consummate an alternative business combination by September 8, 2024, pursuant to the Digital World Charter, Digital World will be required to dissolve and liquidate its Trust Account by returning the then remaining funds in such account to the Public Stockholders, unless (in the event the Business Combination is not consummated by September 8, 2024) Digital World seeks and obtains the consent of its stockholders to amend the Digital World Charter to extend the date by which it must consummate its initial business combination (an “Extension”).

 

Q:

Do I have Redemption Rights in connection with the Business Combination?

 

A:

Pursuant to the Digital World Charter, holders of Public Shares may elect to have their shares redeemed for cash at the applicable Redemption price per share calculated in accordance with the Digital World Charter. For illustrative purposes, as of February 8, 2024, based on funds in the Trust Account of $312,083,428.12 as of such date, the pro rata portion of the funds available in the Trust Account for the Redemption of Public Shares of Digital World Class A common stock was approximately $10.85 per share. If a holder exercises its Redemption Rights, then such holder will be exchanging its Class A common stock for cash and will only have equity interests in the Combined Entity pursuant to the exercise of its Public Warrants, to the extent it still holds Public Warrants. Such a holder will be entitled to receive cash for its Public Shares only if it properly demands Redemption and delivers its shares (either physically or electronically) to Digital World’s transfer agent prior to the Digital World Special Meeting. See the section titled “The Digital World Special Meeting — Redemption Rights” for the procedures to be followed if you wish to redeem your shares for cash.

 

Q:

Will how I vote affect my ability to exercise Redemption Rights?

 

A:

No. You may exercise your Redemption Rights whether or not you attend or vote your shares of Digital World common stock at the Digital World Special Meeting, and regardless of how you vote your shares. As a result, the Merger Agreement and the Required Proposals can be approved by stockholders who will redeem their shares and no longer remain stockholders, leaving stockholders who choose not to redeem their shares holding shares in a company with a potentially less liquid trading market, fewer stockholders, potentially less cash and the potential inability to meet the listing standards of Nasdaq.

 

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Q:

How do I exercise my Redemption Rights?

 

A:

In order to exercise your Redemption Rights, you must, prior to 5:00 p.m., Eastern Time, on     , 2024 (two (2) business days before the Digital World Special Meeting), tender your shares physically or electronically and submit a request in writing that we redeem your Public Shares for cash to Continental Stock Transfer & Trust Company, our transfer agent, at the following address:

Continental Stock Transfer & Trust Company

One State Street Plaza, 30th Floor

New York, New York 10004

Attn: Mark Zimkind

E-mail: mzimkind@continentalstock.com

Please also affirmatively certify in your request to Continental Stock Transfer & Trust Company for Redemption if you “ARE” or “ARE NOT” acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act) with any other stockholder with respect to shares of Class A common stock. A holder of the Public Shares, together with any affiliate of his or any other person with whom he is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Exchange Act) will be restricted from seeking Redemption Rights with respect to more than an aggregate of 15% of the Public Shares, which we refer to as the “15% threshold,” without the prior consent of Digital World. Accordingly, all Public Shares in excess of the 15% threshold beneficially owned by a Public Stockholder or group will not be redeemed for cash.

Stockholders seeking to exercise their Redemption Rights and opting to deliver physical certificates should allot sufficient time to obtain physical certificates from the transfer agent and time to effect delivery. It is Digital World’s understanding that stockholders should generally allot at least two weeks to obtain physical certificates from the transfer agent. However, Digital World does not have any control over this process and it may take longer than two weeks. Stockholders who hold their shares in street name will have to coordinate with their bank, broker or other nominee to have the shares certificated or delivered electronically.

Any demand for Redemption, once made, may be withdrawn at any time until the deadline for exercising Redemption requests and thereafter, with Digital World’s consent, until the vote is taken with respect to the Business Combination. If you delivered your shares for Redemption to Digital World’s transfer agent and decide within the required timeframe not to exercise your Redemption Rights, you may request that Digital World’s transfer agent return the shares (physically or electronically). You may make such request by contacting Digital World’s transfer agent at the phone number or address listed under the question “Who can help answer my questions?” below.

 

Q.

What are the U.S. federal income tax consequences of exercising my Redemption Rights?

 

A:

We expect that a U.S. holder (as defined herein) that exercises its Redemption Rights to receive cash from the Trust Account in exchange for its Public Shares will generally be treated as selling such Public Shares resulting in the recognition of capital gain or capital loss. There may be certain circumstances in which the Redemption may be treated as a distribution for U.S. federal income tax purposes depending on the amount of Public Shares that a U.S. holder owns or is deemed to own (including through the ownership of Public Warrants). For a more complete discussion of the U.S. federal income tax considerations of an exercise of Redemption Rights, see “The Business Combination Proposal (Proposal 1) — United States Federal Income Tax Considerations of the Redemption.

TAX MATTERS ARE COMPLICATED, AND THE TAX CONSEQUENCES OF EXERCISING YOUR REDEMPTION RIGHTS WILL DEPEND ON THE FACTS OF YOUR OWN SITUATION. YOU SHOULD CONSULT YOUR OWN TAX ADVISOR AS TO THE SPECIFIC TAX CONSEQUENCES OF THE EXERCISE OF REDEMPTION RIGHTS TO YOU IN YOUR PARTICULAR CIRCUMSTANCES.

 

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Q:

If I am a Warrant holder, can I exercise Redemption Rights with respect to my Warrants?

 

A:

No. The holders of Warrants have no Redemption Rights with respect to Warrants.

 

Q:

If I am a Public Unit holder, can I exercise Redemption Rights with respect to my Public Units?

 

A:

No. Holders of outstanding Public Units must separate the constituent Public Shares and Public Warrants prior to exercising Redemption Rights with respect to the Public Shares.

If you hold Public Units registered in your own name, you must deliver the certificate for such Public Units to Continental Stock Transfer & Trust Company, our transfer agent, with written instructions to separate such Public Units into Public Shares, and Public Warrants. This must be completed far enough in advance to permit the mailing of the Public Share certificates back to you so that you may then exercise your Redemption Rights upon the separation of the Public Shares from the Public Units. See “Questions and Answers — How do I exercise my Redemption Rights?” above. The address of Continental Stock Transfer & Trust Company is listed under the question “Who can help answer my questions?” below.

If a broker, dealer, commercial bank, trust company or other nominee holds your Public Units, you must instruct such nominee to separate your Public Units. Your nominee must send written instructions by facsimile to Continental Stock Transfer & Trust Company, Digital World’s transfer agent. Such written instructions must include the number of Public Units to be split and the nominee holding such Public Units. Your nominee must also initiate electronically, using The Depository Trust Company’s deposit withdrawal at custodian (DWAC) system, a withdrawal of the relevant Public Units and a deposit of an equal number of Public Shares and Public Warrants. This must be completed far enough in advance to permit your nominee to exercise your Redemption Rights upon the separation of the Public Shares from the Public Units. While this is typically done electronically the same business day, you should allow at least one full business day to accomplish the separation. If you fail to cause your Public Shares to be separated in a timely manner, you will likely not be able to exercise your Redemption Rights.

 

Q:

Do I have appraisal rights if I object to the proposed Business Combination?

 

A:

No. There are no appraisal rights available to holders of Digital World common stock in connection with the Business Combination.

 

Q:

What happens to the funds held in the Trust Account upon consummation of the Business Combination?

 

A:

If the Business Combination is consummated, the funds held in the Trust Account will be released to pay:

 

   

Digital World stockholders who properly exercise their Redemption Rights;

 

   

certain other fees, costs and expenses (including regulatory fees, legal fees, accounting fees, printer fees and other professional fees) that were incurred by Digital World or TMTG in connection with the transactions contemplated by the Business Combination and pursuant to the terms of the Merger Agreement;

 

   

any loans owed by Digital World to its Sponsor or affiliates for any Digital World transaction expenses, and other administrative expenses incurred by Digital World; and

 

   

for general corporate purposes including, but not limited to, working capital for operations.

Any remaining cash will be used for working capital and general corporate purposes of the Combined Entity.

 

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Q:

What happens if the Business Combination is not consummated?

 

A:

There are certain circumstances under which the Merger Agreement may be terminated. See the section titled “The Business Combination Proposal (Proposal 1) — The Merger Agreement” for information regarding the parties’ specific termination rights.

If, as a result of the termination of the Merger Agreement or otherwise, Digital World is unable to complete the Business Combination or another initial business combination transaction by September 8, 2024, the Digital World Charter provides that it will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible, subject to lawfully available funds therefor, redeem 100% of the Public Shares in consideration of a per-share price, payable in cash, equal to the quotient obtained by dividing (A) the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to it to pay taxes payable and up to $100,000 for dissolution expenses, by (B) the total number of then outstanding Public Shares, which Redemption will completely extinguish rights of the Public Stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such Redemptions, subject to the approval of the remaining stockholders and the Board in accordance with applicable law, dissolve and liquidate, subject (in the case of (ii) and (iii) above) to its obligations under the DGCL to provide for claims of creditors and other requirements of applicable law.

Digital World expects that the amount of any distribution its Public Stockholders will be entitled to receive upon its dissolution will be approximately the same as the amount they would have received if they had redeemed their shares in connection with the Business Combination, subject in each case to Digital World’s obligations under the DGCL to provide for claims of creditors and other requirements of applicable law. Holders of Founder Shares and Placement Shares have waived any right to any liquidation distribution with respect to those shares.

In the event of liquidation, there will be no distribution with respect to Digital World’s outstanding Warrants. Accordingly, the Warrants would then be worthless.

 

Q:

When is the Business Combination expected to be completed?

 

A:

The Closing is expected to take place (a) the second business day following the satisfaction or waiver of the conditions described below under the section titled “The Business Combination Proposal (Proposal 1) — The Merger Agreement — Conditions to the Closing,” or (b) such other date as agreed to by the parties to the Merger Agreement in writing, in each case, subject to the satisfaction or waiver of the Closing conditions. The Merger Agreement may be terminated by either Digital World or TMTG if the Closing has not occurred by December 31, 2023. For more information, see the section entitled “The Business Combination Proposal (Proposal 1) — The Merger Agreement — Termination.”

For a description of the conditions to the completion of the Business Combination, see the section titled “The Business Combination Proposal (Proposal 1).”

 

Q:

What do I need to do now?

 

A:

You are urged to read carefully and consider the information contained in this proxy statement/prospectus, including the annexes, and to consider how the Business Combination will affect you as a stockholder. You should then vote as soon as possible in accordance with the instructions provided in this proxy statement/prospectus and on the enclosed proxy card or, if you hold your shares through a brokerage firm, bank or other nominee, on the voting instruction form provided by the broker, bank or nominee.

 

Q:

How do I vote?

 

A:

If you are a stockholder of record of Digital World as of     , 2024, the Record Date, you may submit your proxy before the Digital World Special Meeting in any of the following ways, if available:

 

   

use the toll-free number shown on your proxy card;

 

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visit the website shown on your proxy card to vote via the Internet; or

 

   

complete, sign, date and return the enclosed proxy card in the enclosed postage-paid envelope.

Stockholders who choose to participate in the Digital World Special Meeting can vote their shares electronically during the meeting via live audio webcast by visiting www.proxyvote.com. You will need the control number that is printed on your proxy card to enter the Digital World Special Meeting. Digital World recommends that you log in at least 15 minutes before the meeting to ensure you are logged in when the Digital World Special Meeting starts.

If your shares are held in “street name” through a broker, bank or other nominee, your broker, bank or other nominee will send you separate instructions describing the procedure for voting your shares. “Street name” stockholders who wish to vote at the Digital World Special Meeting will need to obtain a proxy form from their broker, bank or other nominee.

Beneficial stockholders who wish to attend the online-only virtual meeting must obtain a legal proxy by contacting their account representative at the bank, broker, or other nominee that holds their shares and e-mail a copy (a legible photograph is sufficient) of their legal proxy to proxy@continentalstock.com. Beneficial stockholders who e-mail a valid legal proxy will be issued a meeting control number that will allow them to register to attend and participate in the online-only meeting. After contacting Digital World’s transfer agent, a beneficial holder will receive an e-mail prior to the Digital World Special Meeting with a link and instructions for entering the virtual meeting. Beneficial stockholders should contact Digital World’s transfer agent at least five business days prior to the meeting date.

 

Q:

What will happen if I abstain from voting or fail to vote at the Digital World Special Meeting?

 

A:

At the Digital World Special Meeting, Digital World will count a properly executed proxy marked “ABSTAIN” with respect to a particular proposal or marked “WITHHOLD” with respect to the Director Election Proposal as present for purposes of determining whether a quorum is present. Abstentions will have the same effect as a vote “AGAINST” the Charter Amendment Proposals. Abstentions will have no effect on the Business Combination Proposal, the Incentive Plan Proposal, the Nasdaq Proposal or the Adjournment Proposal. “WITHHOLD” votes will have no effect on the Director Election Proposal.

A “broker non-vote” occurs when shares held by a broker for the account of a beneficial owner are not voted for or against a particular proposal because the broker has not received voting instructions from that beneficial owner and the broker does not have discretionary authority to vote those shares in the absence of such instructions. If you do not provide instructions to your broker, your broker will not have discretionary authority to vote on any of the Proposals at the Digital World Special Meeting, because Digital World does not expect any of the Proposals to be considered a routine matter. Broker non-votes will not be counted as present for the purposes of establishing a quorum.

Broker non-votes will have the same effect as a vote “AGAINST” the Charter Amendment Proposals. Broker non-votes will have no effect on the Business Combination Proposal, the Director Election Proposal, the Incentive Plan Proposal, the Nasdaq Proposal or the Adjournment Proposal.

 

Q:

What will happen if I sign and return my proxy card without indicating how I wish to vote?

 

A:

Signed and dated proxies received by Digital World without an indication of how the stockholder intends to vote on a proposal will be voted “FOR” each proposal presented to the stockholders. The proxyholders may use their discretion to vote on any other matters which properly come before the Digital World Special Meeting.

 

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Q:

If I am not going to attend the Digital World Special Meeting in person, should I return my proxy card instead?

 

A:

Yes. Whether you plan to attend the Digital World Special Meeting or not, please read this entire proxy statement/prospectus, including the annexes, carefully, and vote your shares by completing, signing, dating and returning the enclosed proxy card in the postage-paid envelope provided.

 

Q:

If my shares are held in “street name,” will my broker, bank or nominee automatically vote my shares for me?

 

A:

No. Under the rules of various national and regional securities exchanges, your broker, bank or nominee cannot vote your shares with respect to non-discretionary matters unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank or nominee. Digital World believes the Proposals presented to the stockholders will be considered non-discretionary and therefore your broker, bank or nominee cannot vote your shares without your instruction. Your bank, broker or other nominee can vote your shares only if you provide instructions on how to vote. You should instruct your broker to vote your shares in accordance with directions you provide.

 

Q:

May I change my vote after I have mailed my signed proxy card?

 

A:

Yes. You may change your vote by sending a later-dated, signed proxy card to Digital World’s Chief Executive Officer at the address listed below so that it is received by Digital World’s Chief Executive Officer prior to the Digital World Special Meeting or attend the Digital World Special Meeting in person and vote. You also may revoke your proxy by sending a notice of revocation to Digital World’s Chief Executive Officer, which must be received by Digital World’s Chief Executive Officer prior to the Digital World Special Meeting.

 

Q:

What should I do if I receive more than one set of voting materials?

 

A:

You may receive more than one set of voting materials, including multiple copies of this proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive in order to cast your vote with respect to all of your shares.

 

Q:

Who will solicit and pay the cost of soliciting proxies?

 

A:

Digital World will pay the cost of soliciting proxies for the Digital World Special Meeting. Digital World has engaged Alliance Advisors to assist in the solicitation of proxies for the Digital World Special Meeting. Digital World has agreed to pay a fee of up to $  , plus disbursements. Digital World will reimburse Alliance Advisors for reasonable out-of-pocket expenses and will indemnify Alliance Advisors and its affiliates against certain claims, liabilities, losses, damages and expenses. Digital World will also reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of shares of Digital World common stock for their expenses in forwarding soliciting materials to beneficial owners of the Digital World common stock and in obtaining voting instructions from those owners. Digital World’s directors, officers and employees may also solicit proxies by telephone, by facsimile, by mail, on the Internet or in person. They will not be paid any additional amounts for soliciting proxies.

 

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Q:

Who can help answer my questions?

 

A:

If you have questions about the Proposals or if you need additional copies of this proxy statement/prospectus or the enclosed proxy card you should contact:

Eric Swider

Chief Executive Officer

3109 Grand Ave., #450

Miami, Florida 33133

(305) 735-1517

You may also contact our proxy solicitor, Alliance Advisor, at 877-728-4996 or by email at dwac@allianceadvisors.com.

To obtain timely delivery, Digital World stockholders must request the materials no later than     , 2024.

You may also obtain additional information about Digital World from documents filed with the SEC by following the instructions in the section titled “Where You Can Find More Information.”

If you intend to seek Redemption of your Public Shares, you will need to send a letter demanding Redemption and deliver your shares (either physically or electronically) to Digital World’s transfer agent prior to the Digital World Special Meeting in accordance with the procedures detailed under the question “How do I exercise my Redemption Rights?” If you have questions regarding the certification of your position or delivery of your stock, please contact:

Continental Stock Transfer & Trust Company

One State Street Plaza, 30th Floor

New York, New York 10004

Attn: Mark Zimkind

E-mail: mzimkind@continentalstock.com

 

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SUMMARY OF THE PROXY STATEMENT/PROSPECTUS

This summary, together with the section titled “Questions and Answers – Questions and Answers about the Digital World Proposals,” summarizes certain information contained in this proxy statement/prospectus and may not contain all of the information that is important to you. To better understand the Business Combination and the Proposals to be considered at the Digital World Special Meeting, you should read this entire proxy statement/prospectus carefully, including the annexes. See also the section titled “Where You Can Find More Information.”

Unless otherwise indicated or the context otherwise requires, references in this Summary of the proxy statement/prospectus to the “Combined Entity” or “New Digital World” refer to Digital World and its consolidated subsidiaries after giving effect to the Business Combination, including TMTG and its subsidiaries. References to the “Company” or “Digital World” refer to Digital World Acquisition Corp. and references to “TMTG” refer to Trump Media & Technology Group Corp., in each case, prior to the consummation of the Business Combination.

Unless otherwise specified, all share calculations assume no exercise of Redemption Rights by the Company’s Public Stockholders, and do not include any shares of Digital World common stock issuable upon the exercise of the Warrants.

The Parties to the Business Combination

Digital World Acquisition Corp.

Digital World is a special purpose acquisition company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. Digital World was incorporated under the laws of the State of Delaware on December 11, 2020.

On September 8, 2021, Digital World consummated its IPO of 28,750,000 Units, which included 3,750,000 Units issued pursuant to the full exercise by the underwriters of their over-allotment option, with each Unit consisting of one share of Class A common stock and one-half of one redeemable Warrant, with each Warrant entitling the holder thereof to purchase one share of Class A common stock for $11.50 per share. The Units were sold at a price of $10.00 per Unit, generating gross proceeds to Digital World of $287,500,000. Simultaneously with the closing of the IPO, Digital World completed the private sale of an aggregate of 1,133,484 Placement Units to the Sponsor at a purchase price of $10.00 per unit, generating gross proceeds of $11,334,840. A total of $293,250,000, comprised of $283,906,250 of the proceeds from the Digital World IPO (which amount includes $10,062,500 of the underwriter’s deferred discount) and $9,343,750 of the proceeds of the sale of the Placement Units, was placed in the Trust Account. Digital World’s IPO was conducted pursuant to a registration statement on Form S-1 (Registration No. 333- 256472) that became effective on September 2, 2021. Digital World Class A common stock, Units and Warrants are currently listed on Nasdaq under the symbols “DWAC,” “DWACU” and “DWACW,” respectively. The mailing address of Digital World’s principal executive offices is 3109 Grand Ave., #450, Miami, Florida 33133, and its telephone number at such address is (305) 735-1517.

Merger Sub

Merger Sub is a wholly owned subsidiary of Digital World, incorporated in Delaware on October 18, 2021 solely for the purpose of consummating the Business Combination. Merger Sub owns no material assets and does not operate any business.

The mailing address of Merger Sub’s principal executive offices is 3109 Grand Ave., #450, Miami, Florida 33133, and its telephone number at such address is (305) 735-1517.

 

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In the Business Combination, Merger Sub will merge with and into TMTG with TMTG surviving the Merger. As a result, Merger Sub will cease to exist, and TMTG will become a wholly owned subsidiary of Digital World.

Trump Media & Technology Group Corp.

TMTG, a Delaware corporation, aspires to build a media and technology powerhouse to rival the liberal media consortium and promote free expression. TMTG was founded to fight back against the big tech companies—Meta (Facebook, Instagram and Threads), X (formerly Twitter), Netflix, Alphabet (Google), Amazon and others—that may curtail debate in America and censor voices that contradict their woke ideology. As confirmed by the “Twitter Files” exposés, X has long suppressed conservative speech (including at the behest of U.S. government officials) through various means, including “shadow banning”—a surreptitious process in which users may not even know their posts are being hidden from other users. The company also outright banned conservative users such as TMTG’s Chairman, former U.S. President Donald J. Trump, who was banned for one year and ten months—even while it continued to allow the Taliban to freely post their views to the world.

In July 2023, a federal district court judge determined that Biden White House personnel likely colluded with big tech companies to violate Americans’ First Amendment rights. The opinion expressed that “targeted suppression of conservative ideas is a perfect example of viewpoint discrimination of political speech.” Big tech companies’ transformation into the arbiters of public speech and organs of state-sponsored censorship contradicts American values. Their suppression of dissident speech constitutes the most serious threat today to a free and democratic debate. Thus, TMTG aims to safeguard public debate and open dialogue, and to provide a platform for all users to freely express themselves.

TMTG’s first product, Truth Social, is a social media platform aiming to disrupt big tech’s control on free speech by opening up the Internet and giving the American people their voices back. It is a public, real-time platform where any user can create content, follow other users and engage in an open and honest global conversation without fear of being censored or cancelled due to their political viewpoints. TMTG does not restrict whom a user can follow, which greatly enhances the breadth and depth of available content. Additionally, users can be followed by other users without requiring a reciprocal relationship, enhancing the ability of TMTG users to reach a broad audience.

Truth Social was generally made available in the first quarter of 2022. The company prides itself on operating its platform, to the best of its ability, without relying on big tech companies. Partnering with pro-free-speech alternative technology firms, TMTG fully launched Truth Social for iOS in April 2022. TMTG debuted the Truth Social web application in May 2022, and the Truth Social Android App became available in the Samsung Galaxy and Google Play stores in October 2022. TMTG introduced direct messaging to all versions of Truth Social in 2022, released a “Groups” feature for users in May 2023 and announced the general availability of Truth Social internationally in June 2023. Since its launch, Truth Social has experienced substantial growth, from zero to an aggregate of approximately 8.9 million signups for Truth Social via iOS, Android and the web as of the date of this proxy statement/prospectus. However, investors should be aware that since its inception, TMTG has not relied on any specific key performance metric to make business or operating decisions. Consequently, it has not been maintaining internal controls and procedures for periodically collecting such information, if any. While many mature industry peers may gather and analyze certain metrics, given the early development stage of the Truth Social platform, TMTG’s management and board believe that such metrics are not critical in the near future for the business and operation of the platform. This stance is due to TMTG’s long-term commitment to implementing a robust business plan, which may involve introducing innovative features and potentially incorporating new technologies, such as advanced video streaming services on its platform. These initiatives may enhance the range of services and experiences TMTG can offer on its Truth Social platform.

At this juncture in its development, TMTG believes that adhering to traditional key performance indicators, such as signups, average revenue per user, ad impressions and pricing, or active user accounts including monthly

 

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and daily active users, could potentially divert its focus from strategic evaluation with respect to the progress and growth of its business. TMTG believes that focusing on these KPIs might not align with the best interests of TMTG or its shareholders, as it could lead to short-term decision-making at the expense of long-term innovation and value creation. Therefore, TMTG believes that this strategic evaluation is critical and aligns with its commitment to a robust business plan that includes introducing innovative features and new technologies. In connection with such an evaluation, and consistent with SEC guidance, TMTG will consider in the future the relevant key performance indicators for its then-current business operations and determine whether it has effective controls and procedures in place to process information related to the disclosure of key performance indicators and metrics. This will ensure consistency and accuracy over time, or assess the feasibility of implementing any such controls and procedures. Should this be the case, TMTG may decide to collect and report such metrics if they are deemed to significantly enhance investors’ understanding of TMTG’s financial condition, cash flows, and other aspects of its financial performance. However, TMTG may find it challenging or cost-prohibitive to implement such effective controls and procedures and may never collect, monitor, or report any or certain key operating metrics. As the platform evolves and new technologies and features are added, TMTG’s management and board expect to reevaluate whether TMTG will gather and monitor one or more metrics and rely on such information in making management decisions. At such time, TMTG expects to present such material key operating metrics appropriately in its periodic reports to enhance investors’ understanding of its financial condition, cash flows, and any other changes in financial condition and results of operations. See “Management’s Discussion and Analysis of Financial Condition and Results of Operation of TMTG — Key Operating Metrics” and “Risk Factors — Risk Factors Related to TMTG — TMTG does not currently, and may never, collect, monitor or report certain key operating metrics used by companies in similar industries.

TMTG was incorporated under the laws of the State of Delaware on February 8, 2021.

The mailing address of TMTG’s principal executive offices is 401 N. Cattlemen Rd., Ste. 200, Sarasota, Florida 34232, and its telephone number at such address is (800) 798-5754.

The Proposals

THE BUSINESS COMBINATION PROPOSAL (PROPOSAL 1)

Digital World and TMTG have agreed to the Business Combination under the terms of the Merger Agreement and Plan of Merger. Pursuant to the terms and subject to the conditions set forth in the Merger Agreement, at the Closing, Merger Sub will merge with and into TMTG, with TMTG continuing as the surviving entity and becoming a wholly owned subsidiary of Digital World. For more detailed information, see the section titled “The Business Combination Proposal (Proposal 1)” and the Merger Agreement, which is attached as Annex A to this proxy statement/prospectus.

Merger Consideration

Subject to the terms and conditions set forth in the Merger Agreement, at the Effective Time:

 

  (a)

the outstanding shares of Digital World Class A common stock, including any Digital World Class B common stock (all of which will be converted into Digital World Class A common stock in accordance with the Digital World Charter), will be redesignated as New Digital World common stock;

 

  (b)

as consideration for the Merger, TMTG securityholders (other than holders of TMTG Convertible Notes) as of immediately prior to the Effective Time will be entitled to receive the Merger Consideration, with each such TMTG securityholder receiving shares of New Digital World common stock for its TMTG securities. In addition, prior to the Effective Time, the issued and outstanding TMTG Convertible Notes will be converted into shares of TMTG common stock, such that, at the Effective Time, holders of such TMTG common stock will be entitled to receive from New Digital

 

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  World a number of shares of New Digital World common stock equal to (i) the number of such shares of TMTG common stock multiplied by (ii) the conversion ratio applicable to the previously converted TMTG Convertible Notes. Accordingly, at the Effective Time, (a) all of the issued and outstanding TMTG common stock immediately prior to the Effective Time (other than those properly exercising any applicable appraisal rights under Delaware law or any shares of TMTG common stock issued upon the conversion of TMTG Convertible Notes immediately prior to the Effective Time pursuant to the terms of the Merger Agreement) will automatically be cancelled and will cease to exist, in exchange for the right to receive their pro rata portion of the Merger Consideration and the Earnout Shares, if any, (b) all of the issued and outstanding common stock of TMTG immediately prior to the Effective Time that was issued upon the conversion of TMTG Convertible Notes pursuant to the terms of the Merger Agreement will automatically be cancelled and will cease to exist, in exchange for the right to receive shares of New Digital World common stock upon the terms set forth in the Merger Agreement, (c) each outstanding option to acquire shares of TMTG common stock (whether vested or unvested) will be assumed by New Digital World and automatically converted into an option to acquire shares of New Digital World common stock, with its price and number of shares equitably adjusted based on the conversion ratio of the shares of TMTG common stock into the Merger Consideration, and (d) each outstanding restricted stock unit of TMTG shall be converted into a restricted stock unit relating to shares of New Digital World common stock; and

 

  (c)

TMTG stockholders (other than with respect to any shares of TMTG common stock received as a result of the conversion of TMTG Convertible Notes) will also have a contingent right to receive the Earnout Shares after the Closing based on the price performance of the New Digital World common stock during the Earnout Period. The Earnout Shares shall be earned and payable during the Earnout Period as follows:

 

   

if the VWAP of New Digital World common stock equals or exceeds $12.50 per share for any 20 trading days within any 30 trading day period, New Digital World shall issue to the former TMTG stockholders an additional 15,000,000 Earnout Shares;

 

   

if the VWAP of New Digital World common stock equals or exceeds $15.00 per share for any 20 trading days within any 30 trading day period, New Digital World shall issue to the former TMTG stockholders an additional 15,000,000 Earnout Shares; and

 

   

if the VWAP of New Digital World common stock equals or exceeds $17.50 per share for any 20 trading days within any 30 trading day period, New Digital World shall issue to the former TMTG stockholders an additional 10,000,000 Earnout Shares.

The Merger Consideration will be subject to a post-Closing true up 90 days after the Closing.

Escrow Shares

At the Closing, shares of New Digital World common stock equal to the quotient obtained by dividing (i) three percent (3%) of the initial Merger Consideration (meaning $875,000,000) (as determined as of the Closing) (the “Escrow Amount”) by (ii) the share price of New Digital World common stock (together with any equity securities paid as dividends or distributions with respect to such shares or into which such shares are exchanged or converted, the “Escrow Shares”) otherwise issuable to the TMTG stockholders (allocated pro rata among the TMTG stockholders based on the Merger Consideration otherwise issuable to them at the Closing) will be deposited into a segregated escrow account with Continental Stock Transfer & Trust Company (or such other escrow agent reasonably acceptable to Digital World and TMTG), as escrow agent, and held in escrow together with any dividends, distributions or other income on the Escrow Shares (the “Escrow Property”) in accordance with an escrow agreement to be entered into in connection with the Business Combination (the “Escrow Agreement”). The Escrow Property will be held in the escrow account for a period of twelve (12) months after the Closing as the sole and exclusive source of payment for any post-Closing purchase price adjustments and indemnification claims (other than fraud claims). The TMTG stockholders will have the right to vote the Escrow Shares while they are held in escrow.

 

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Merger Closing Conditions

The Merger Agreement is subject to customary conditions to the Closing. The Closing is also subject to the following additional conditions (amongst others): (i) the approval of the Merger Agreement and the Business Combination by the requisite vote of Digital World’s stockholders and TMTG’s stockholders, (ii) Digital World having at least $5,000,001 in net tangible assets, after giving effect to the completion of its Redemption of Public Stockholders who redeem their shares in connection with the Business Combination, (iii) the election or appointment of members to the Combined Entity’s Board immediately after the Closing in accordance with the Merger Agreement, (iv) the effectiveness of the registration statement of which this proxy statement/prospectus forms a part, (v) the conditional approval of the Combined Entity’s initial listing application with Nasdaq with respect to the common stock to be issued pursuant to the Business Combination, and (vi) Digital World having cash and cash equivalents of at least equal to $60,000,000, including funds remaining in the Trust Account (after giving effect to the completion and payment of the Redemption).

In addition, unless waived by TMTG, the obligations of TMTG to consummate the Business Combination are subject to the fulfillment of certain closing conditions, including but not limited to the following (in addition to customary certificates and other closing deliverables):

 

   

The representations and warranties of Digital World being true and correct as of the date of the Merger Agreement and as of the Closing (subject to Material Adverse Effect (as defined below) with respect to Digital World);

 

   

Digital World having performed in all material respects their respective obligations and complied in all material respects with their respective covenants and agreements under the Merger Agreement required to be performed or complied with on or prior to the date of the Closing; and

 

   

TMTG having received a copy of a duly executed Escrow Agreement by Digital World.

Unless waived by Digital World, the obligations of Digital World and the Merger Sub to consummate the Business Combination are subject to the satisfaction of the following conditions (in addition to customary certificates and other closing deliverables):

 

   

The representations and warranties of TMTG being true and correct as of the date of the Merger Agreement and as of the Closing (subject to Material Adverse Effect);

 

   

TMTG having performed in all material respects its obligations and complied in all material respects with its covenants and agreements under the Merger Agreement required to be performed or complied with on or prior to the date of the Closing;

 

   

Absence of a Material Adverse Effect with respect to TMTG since the date of the Merger Agreement that is continuing and uncured;

 

   

TMTG and the TMTG securityholders specified therein having executed and delivered the Escrow Agreement (as described above);

 

   

TMTG shall have converted, terminated, extinguished and cancelled in full any outstanding TMTG Convertible Securities or commitments therefor, other than the TMTG Options, the TMTG RSUs and the TMTG Convertible Notes;

 

   

Non-competition agreements (as described below) having been have been executed and delivered;

 

   

Lock-up agreements (as described below) having been have been executed and delivered, unless otherwise waived by Digital World prior to the Closing; and

 

   

Digital World shall have received a duly executed legal opinion from the TMTG’s counsel.

Merger Structure

Pursuant to the Merger Agreement, upon the Closing, Merger Sub, a wholly owned subsidiary of Digital World, will be merged with and into TMTG, with TMTG continuing as the surviving entity of the Merger and

 

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becoming a wholly owned subsidiary of Digital World. See “The Business Combination Proposal (Proposal 1) — The Merger Agreement — General Description of the Merger Agreement” and “The Business Combination Proposal (Proposal 1) — The Merger Agreement — Merger Consideration.”

Covenants

Each party to the Merger Agreement has agreed to use its reasonable best efforts to effect the Closing. The Merger Agreement also contains certain customary covenants by each of the parties during the period between the signing of the Merger Agreement and the earlier of the Closing or the termination of the Merger Agreement in accordance with its terms (the “Interim Period”), including, but not limited to covenants regarding (i) the provision of access to their offices, properties, books and records, (ii) the operation of their respective businesses in the ordinary course of business, (iii) provision of financial statements by TMTG; (iv) filing by Digital World of its reports required by the Exchange Act, and efforts regarding Nasdaq listing requirements, (v) no solicitation of other competing transactions, (vi) no trading in Digital World’s securities by TMTG using Digital World’s material non-public information, (vii) notifications of certain breaches, consent requirements or other matters, (viii) efforts to obtain third party and regulatory approvals and comply with all government authority requirements, (ix) further assurances to cooperate, (x) a requirement for TMTG to promptly hold its stockholder meeting or otherwise obtain the written consent of its stockholders to approve the Merger Agreement and related transactions, (xi) tax matters and transfer taxes, (xii) public announcements, (xiii) confidentiality, (xiv) post-Closing Digital World board of directors and executive officers, (xv) payment of extension expenses, (xvi) reasonable best efforts to obtain a waiver from President Trump of his right to terminate the License Agreement (the “License Agreement Waiver”), (xvii) provision of updated diligence materials, (xviii) efforts to reduce or eliminate the PIPE and (xix) modification of certain registration rights agreements by each party. There are also certain customary post-Closing covenants regarding (i) maintenance of books and records, (ii) indemnification of directors and officers and (iii) use of Trust Account proceeds.

Pursuant to the Merger Agreement, Digital World agreed to file a Registration Statement on Form S-4 with respect to the issuance of the shares of New Digital World common stock to be issued as consideration to the TMTG equity holders in the Business Combination, which will contain a proxy statement/prospectus for a special meeting of Digital World’s stockholders to consider the Merger Agreement and the related transactions and matters, including the Required Proposals described herein.

TMTG agreed that the ownership and position of its principal would be structured in such a way as to eliminate the need for restructuring of such ownership or the requirement to make changes in position of the principal upon the occurrence of certain specified material disruptive events.

Termination

The Merger Agreement may be terminated under certain customary and limited circumstances at any time prior to the Closing, including among other reasons, (i) by mutual consent of TMTG and Digital World, (ii) by either Digital World or TMTG if any of the conditions to the Closing have not been satisfied or waived by September 20, 2022 (which, for the avoidance of doubt, as of the date of this proxy statement/prospectus, has been extended to December 31, 2023, the “Outside Date”), provided that this termination right shall not be available to Digital World or TMTG if the breach by such party (i.e., either Digital World or Merger Sub on one hand, or TMTG, on the other hand) of the Merger Agreement was the cause of, or resulted in, the failure of the Closing to occur on or before the Outside Date, (iii) by either Digital World or TMTG if a governmental authority of competent jurisdiction shall have issued an order or taken any other action permanently restraining, enjoining or otherwise prohibiting, or if any law is in effect making illegal, the transactions contemplated by the Merger Agreement, (iv) by either Digital World or TMTG for the other party’s uncured breach (subject to certain materiality qualifiers and cure periods), (v) by Digital World if there has been an event after the signing of the Merger Agreement that has a Material Adverse Effect on TMTG (but excluding a qualifying settlement of certain litigation in which TMTG is involved) that is uncured and continuing, (vi) by TMTG if there has been an event

 

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after the signing of the Merger Agreement that has a Material Adverse Effect on Digital World that is uncured and continuing, (vii) by either Digital World or TMTG if approval for the Business Combination and the other Required Proposals are not obtained at the Digital World Special Meeting, (viii) by either Digital World or TMTG if a special meeting of TMTG’s stockholders is held and TMTG’s stockholder shall not have approved the Merger Agreement and the Business Combination and related matters, (ix) by the mutual and reasonable written consent of Digital World and TMTG in the event that that any required approval of the SEC or any other governmental authority cannot be obtained by the Outside Date, as such date may be extended by an extension, (x) by Digital World from October 31, 2023 through November 21, 2023 if the Digital World Board, following updated due diligence on TMTG no longer believes in good faith that the Business Combination and the transactions contemplated by the Merger Agreement are in the best interests of Digital World or its stockholders, (xi) by TMTG from October 31, 2023 through November 21, 2023 if the TMTG Board, following updated due diligence on Digital World no longer believes in good faith that the Business Combination and the transactions contemplated by the Merger Agreement are in the best interests of TMTG or its stockholders, and (xii) by TMTG on or prior to November 21, 2023 if Digital World has not filed an amendment to the Registration Statement by November 14, 2023.

In December 2023, Digital World concluded its renewed due diligence with respect to TMTG’s business plan. As such, on November 21, 2023, both Digital World and TMTG communicated that they would continue to cooperate with each other regarding updated due diligence and that should the merger not be completed by December 31, 2023, neither party intended to assert a breach or violation by the other party or its affiliates of any representation, warranty, covenant or obligation under the Merger Agreement as a basis for contesting or opposing such other party’s exercise of its right to terminate the Merger Agreement pursuant to Section 8.1(b) thereof, based on the information known as of such date.

Executive Officers and Directors of the Combined Entity

The following persons are expected to be elected or appointed by the Digital World Board to serve as executive officers and directors of the Combined Entity following the Business Combination. For biographical information concerning the executive officers and directors following the Business Combination, see “Management after the Business Combination — Management and Board of Directors.”

 

Name

   Age     

Position(s)

Devin G. Nunes

     50      Chief Executive Officer and Director nominee (2)

Phillip Juhan

     49      Chief Financial Officer

Andrew Northwall

     37      Chief Operating Officer

Vladimir Novachki

     35      Chief Technology Officer

Sandro De Moraes

     49     

Chief Product Officer

Scott Glabe

     40      General Counsel

Eric Swider

     50      Director nominee (1)

Donald J. Trump, Jr.

     46      Director nominee (2)

Kashyap “Kash” Patel

     43      Director nominee (2)

W. Kyle Green

     51      Independent Director nominee (2)

Robert Lighthizer

     76      Independent Director nominee (2)

Linda McMahon

     75      Independent Director nominee (2)

 

(1)

Digital World Designee

(2)

TMTG Designee.

Interests of TMTG’s and Digital World’s Directors and Officers in the Business Combination

When you consider the recommendation of the Digital World Board in favor of approval of the Business Combination Proposal and the other Proposals, you should keep in mind that the directors and executive officers of Digital World and of TMTG have interests in the Business Combination and other Proposals that may be

 

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different from, or in addition to, those of Digital World stockholders generally. These interests include, among other things, the fact that certain of TMTG’s directors and officers will become directors and officers of the Combined Entity, and certain of Digital World’s directors and officers will become directors of the Combined Entity, upon the consummation of the Business Combination.

Please see the sections entitled “Risk Factors” and “The Business Combination Proposal (Proposal 1) — The Merger Agreement — Interests of TMTG’s Directors and Officers in the Business Combination” and “The Business Combination Proposal (Proposal 1) — The Merger Agreement — Interests of Digital World’s Directors and Officers in the Business Combination” of this proxy statement/prospectus for a further discussion of this and other risks.

Classified Board of Directors

The Combined Entity’s Board will consist of seven (7) members upon the Closing. In accordance with the Amended Charter to be filed immediately after the Closing, the Board will be divided into three classes, Classes I, II and III, each to serve a three-year term, except for the initial term after the Closing, for which the Class I directors will be up for reelection at the first annual meeting of stockholders occurring after the Closing, for which the Class II directors will be up for reelection at the second annual meeting of stockholders occurring after the Closing and for which the Class III directors will be up for reelection at the third annual meeting of the stock holders occurring after Closing. At each annual meeting of stockholders of the Combined Entity, the successors to directors whose terms then expire will be elected to serve from the time of election and qualification until the third annual meeting following the election. Directors will not be able to be removed during their term except for cause. Digital World and TMTG will work in good faith to equitably allocate director designees among the three classes of directors, provided that Digital World’s designees will serve in the class of directors with the latest initial re-election date.

It is expected that that any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors. The division of the Combined Entity’s Board into three classes with staggered three-year terms may delay or prevent a change of the Combined Entity’s management or a change in control.

 

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Post-Business Combination Ownership of New Digital World

 

     Minimum
Redemption
    33.33%
Redemption
    50%
Redemption
    Maximum (77%)
Redemption (1)
 

Digital World

                    

SPAC public shareholder shares

     28,745,952        21.2     19,164,926        15.2     14,372,976        11.9     6,744,940        5.9

SPAC private placement shares

     1,133,484        0.8     1,133,484        0.9     1,133,484        0.9     1,133,484        1.0

Underwriter IPO shares

     143,750        0.1     143,750        0.1     143,750        0.1     143,750        0.1

SPAC sponsor promote (primarily Founder Shares)

     9,631,250        7.1     9,631,250        7.6     9,631,250        7.9     9,631,250        8.5
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total Digital World

     39,654,436        29.3     30,073,410        23.9     25,281,460        20.9     17,653,424        15.6
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

TMTG

                    

Rollover equity shares for TMTG shareholders

     87,500,000        64.6     87,500,000        69.5     87,500,000        72.2     87,500,000        77.1

TMTG convertible note shares

     8,369,509        6.2     8,369,509        6.6     8,369,509        6.9     8,369,509        7.4
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total TMTG

     95,869,509        70.7     95,869,509        76.1     95,869,509        79.1     95,869,509        84.4
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total

     135,523,945        100.0     125,942,919        100.0     121,150,969        100.0     113,522,933        100.0
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

 

(1)

Digital World is required to fulfill the Financial Closing Conditions. The ability to meet the Financial Closing Conditions will not be known until the level of redemptions of Public Shares in connection with the Business Combination is known. As a result, if redemptions exceed $243.3 million (or 77% of the Trust Account assets before redemptions) the Business Combination would not close. As such, the Maximum Redemption scenario does not reflect the full amount of Public Shares that may be redeemed under Digital World’s Charter. Accordingly, if holders of more than 22,001,012 Public Shares seek to exercise such Redemption Rights, the Business Combination is not expected to close.

Digital World’s Reasons for the Business Combination

The Digital World Board, in evaluating the Business Combination, consulted with Digital World’s management and its financial and legal advisors. In reaching its initial unanimous resolution (i) that the Merger Agreement and the transactions contemplated thereby, including the Merger Consideration and the Earnout Shares, are fair and in the best interests of Digital World and (ii) to recommend that the Digital World stockholders adopt the Merger Agreement and approve the Business Combination and the other transactions contemplated by the Merger Agreement, the Digital World Board considered the factors discussed below.

In light of the number and wide variety of factors considered in connection with its evaluation of the Business Combination, the Digital World Board did not consider it practicable to, and did not attempt to, quantify or otherwise assign relative weights to the specific factors that it considered in reaching its determination and supporting its decision. The Digital World Board viewed its decision as being based on any and all of the information available and the factors presented to and considered by it. In addition, individual

 

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directors may have given different weight to different factors. This explanation of Digital World’s reasons for the Business Combination and all other information presented in this section may be forward-looking in nature and, therefore, should be read in light of the factors discussed under “Cautionary Note Regarding Forward-Looking Statements.” Many factors were considered by Digital World, and the factors outlined herein may or may not have been considered by any particular directors, member of management, or advisor of Digital World. Notwithstanding whether any of these factors were considered by any individual board member, the Board voted unanimously to enter into the original Merger Agreement.

The officers and directors of Digital World have substantial experience in evaluating the operating and financial merits of companies from a wide range of industries and concluded that their experience and background, together with the experience and sector expertise of Digital World’s advisors, enabled them to make the necessary analyses and determinations regarding the Business Combination.

The Digital World Board considered the following factors pertaining to the Business Combination as generally supporting its decision to enter into the original Merger Agreement and the transactions contemplated thereby:

• Brand and Growth Prospects. Analytical data suggests that the consumer base is receptive to seeking alternative media sources, especially those differentiated from the current market offerings. Surveys have shown potential for a large adoption of media platforms associated with President Trump as legacy social media companies are seen to censor political speech. As the U.S. population continues to “cut the cord” that tethers devices to traditional cable and media companies, content and content distribution is becoming the key driving force behind capturing and retaining customers. After decades of growth and consolidation in the media and technology sectors, the users, creators and consumers of content can often feel there are fewer and fewer differentiated choices when looking at platforms they can choose to consume, create and distribute selected content and TMTG may successfully offer a differentiated choice.

The Digital World Board believes that TMTG, if properly capitalized, is very well positioned to grow a user base at an accelerated pace. In 2004 when Facebook launched, it obtained an estimated 1 million users within the first year. It then took an estimated three years to break through the 10 million user mark. In 2004, Facebook’s capitalization was limited to under $1 million, social media was not yet universally known or widely popular and only 61% of Americans accessed the internet (compared to 92% of Americans in 2023). Since 2004, social media platforms have evolved. Recent data demonstrates how popular social medial platforms have become — Threads (Meta’s new online social media and social networking platform) registered 2 million users in the first two hours after its launch, ChatGPT registered 1 million users within five days of launch in 2022 and Instagram registered 1 million users within 2.5 months of launch in 2010. Based on such historical growth of Facebook and other social media platforms since 2004, the unique figurehead and marketing proposition of TMTG’s platform in the existing social and political climate and the receipt of proceeds upon the consummation of the Business

Combination, the Digital World Board believes that the management of TMTG is positioned to exceed this initial growth trajectory. See “Unaudited Pro Forma Condensed Financial Information” regarding the capitalization scenarios, which are contingent of the redemption rate.

Broad and Diverse User Base. TMTG has a broad potential user base with demonstrated brand awareness, brand loyalty and eagerness to seek out change while making choices of where to spend their media dollars and attention. The Board believed that as TMTG management sought to broaden TMTG’s brand appeal, this could materially widen the field of potential customers and users the media platform can attract;

Due Diligence. Initial due diligence examinations of TMTG and discussions with TMTG’s management team and Digital World’s legal advisors during Digital World’s initial due diligence examination of TMTG led Digital World to believe that TMTG has assembled the elements necessary to create the foundation for a potentially very successful media and technology company;

Stockholder Liquidity. The obligation in the Merger Agreement to have the New Digital World common stock issued as Merger Consideration continue to be listed on Nasdaq, a major U.S. stock exchange, which the Digital World Board believes has the potential to offer stockholders enhanced liquidity;

 

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Financial Information and Comparable Company Analysis. The Digital World Board also considered factors related to TMTG’s financial outlook. In connection with Digital World’s initial review of the Business Combination, TMTG provided Digital World’s management with its internal financial analysis model. Although Digital World’s Board received TMTG’s financial model and considered it as a material factor in its decision to enter into the original Merger Agreement and the transactions contemplated thereby, its reliance on such financial model was limited due to the Digital World Board’s view that evaluating real world growth and financial projections related to a rapid growth company in a competitive industry can be challenging. The Board recognized that a properly capitalized technology company in the media and technology space should instead have a primary focus of user acquisition during its initial growth stages. This may initially hamper earnings and even topline revenues. However, the Board believes that if management of TMTG is successful in the user acquisition phase, this will ultimately drive the key performance indicators that are directly correlated to cash flow and income statements.

An additional financial consideration was management’s ability to attract sufficient pre-revenue capital investment to fuel user acquisition efforts. As of the October 2021 execution of the Merger Agreement, TMTG had already raised over $5 million in its first months of inception. The Digital World Board reviewed TMTG’s current prospects for user acquisition in its business plan. In reviewing these factors, the Digital World Board noted that TMTG’s brand recognition and President Trump’s strong social media following could well position the company to gain market share and expand its user base at an accelerated pace, allowing for a more rapid transition of focus to revenue expansion that benefits long-term EBITDA margin.

Digital World’s management, in consultation with EF Hutton, division of Benchmark Investments, LLC and representative to the underwriters in Digital World’s IPO (“EF Hutton”), acting solely in its capacity as placement agent to Digital World in connection with the PIPE, reviewed certain financial and operating information of certain publicly traded companies (the “Trading Comparables”), particularly, similar social media, content production and distribution, and media companies around the world. The selected companies included a group of companies operating in various global markets, including, among others, Twitter (now known as X), Facebook (now known as Meta), Netflix and Snapchat. None of the Trading Comparables has characteristics identical to TMTG. The Trading Comparables were selected because of their similarities to the potential offerings to be provided by TMTG.

At the time of evaluation, the median enterprise value of the available Trading Comparables surpassed $324 billion. Specifically, the enterprise value of Twitter (now known as X), the closest competitor to TMTG’s initial product, Truth Social, was $41 billion. Therefore, at such time, Digital World’s management concluded that an initial valuation of $875 million, with the potential for an additional earnout of $825 million, was a reasonable assessment for TMTG’s enterprise valuation in the Business Combination transaction. This analysis of Trading Comparables considered both the anticipated TMTG+ product and the launch of Truth Social in the short-term, and was based on the primary assumption that companies like Twitter, Facebook, Snapchat, Netflix, Roku, Peloton, and Spotify closely paralleled the expected business model and market segments of TMTG’s forthcoming offerings. This assessment relied on publicly available financial data from late 2020 and 2021. However, the reliability and usefulness of such methodology are inherently limited as a result of variances in company size, market maturity and the unpredictability of product offering success or trajectory. In addition, the

dynamic nature of the technology and media sectors, which are prone to and have historically undergone significant and rapid changes, make valuation of companies in the space highly susceptible to change in response to market and consumer trends.

In late 2021, Digital World’s management also reviewed TMTG’s financial model and certain revenue projections for TMTG’s first product, Truth Social, including projections of total users, monetizable users, and average revenue per user, and a potential TMTG streaming service including total subscribers and pricing models.

Experienced Management Team. The Digital World Board believes TMTG has a strong management team with significant experience.

 

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Lock-Up. Unless waived by Digital World prior to the Closing, key stockholders of TMTG (including its management team) agreed to be subject to a six-month lockup in respect of their Digital World common stock, subject to certain customary exceptions, which would provide important stability to the leadership and governance of TMTG. In addition, the Amended Charter will contain lock-up restrictions as described herein.

Other Alternatives. The Digital World Board believes, after a thorough review of other business combination opportunities reasonably available to Digital World, that the proposed Business Combination represents the best potential business combination for Digital World and the most attractive opportunity based upon the process utilized to evaluate and assess other potential acquisition targets. Given the potential number of users and accelerated adoption of Truth Social, as well as the additional business verticals in development, the Digital World Board believe TMTG offers its stockholders the most potential value when compared to other target candidates.

Negotiated Transaction. The financial and other terms of the Merger Agreement and the fact that such terms and conditions are reasonable and were the product of arm’s length negotiations between Digital World and TMTG.

The Digital World Board also considered a variety of uncertainties and risks and other potentially negative factors concerning the Business Combination including, but not limited to, the following:

Macroeconomic Risks. Macroeconomic uncertainty, including material adverse developments in domestic and global economic conditions, or the occurrence of other world events, and the effects it could have on TMTG’s revenues post-closing.

Business Plan May Not Be Achieved. The risk that TMTG may not be able to execute on the business plan, including but not limited to its rollout of Truth Social, and realize the financial performance as set forth in the financial model presented to Digital World’s management team and board of directors.

Redemption Risk. The potential that a significant number of Digital World Public Stockholders elect to redeem their Public Shares prior to the consummation of the Business Combination and pursuant to Digital World’s existing charter, which would potentially make the Business Combination more difficult or impossible to complete.

Stockholder Vote. The risk that Digital World’s stockholders may fail to provide the respective votes necessary to affect the Business Combination.

Closing Conditions. The fact that the completion of the Business Combination is conditioned on the satisfaction of certain closing conditions that are not within Digital World’s control, including the Financial Closing Conditions.

Litigation. The possibility of litigation challenging the Business Combination or that an adverse judgment granting permanent injunctive relief could indefinitely enjoin consummation of the Business Combination.

Listing Risks. The challenges associated with preparing TMTG, a private entity, for the applicable disclosure and listing requirements to which TMTG will be subject as a publicly traded company on the Nasdaq.

Benefits May Not Be Achieved. The risks that the potential benefits of the Business Combination may not be fully achieved or may not be achieved within the expected timeframe.

Liquidation of Digital World. The risks and costs to Digital World if the Business Combination is not completed, including the risk of diverting management focus and resources from other business combination opportunities, which could result in Digital World being unable to effect a business combination.

Growth Initiatives May Not be Achieved. The risk that TMTG’s growth initiatives may not be fully achieved or may not be achieved within the expected timeframe.

Board and Independent Committees. The risk that TMTG’s board of directors post-Closing and independent committees do not possess adequate skill sets within the context of TMTG operating as a public company.

 

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Digital World Stockholders Receiving a Minority Position in TMTG. The risk that Digital World stockholders will hold a minority position in TMTG.

Fees and Expenses. The fees and expenses associated with completing the Business Combination; and

Other Risk Factors. Various other risk factors associated with the business of TMTG, as described in the section entitled “Risk Factors” appearing elsewhere in this proxy statement/prospectus.

The Digital World Board concluded that the potential benefits expected to be achieved by Digital World and its stockholders resulting from the Business Combination outweighed the potentially negative factors associated with the Business Combination. Accordingly, at the time of entry into the Merger Agreement, the Digital World Board determined that the Business Combination was advisable, fair to, and in the best interests of, Digital World and its stockholders.

Nevertheless, since the entry into the Merger Agreement in October 2021, TMTG’s business plan and financial model have changed and as a result, the prior financial model provided to the Digital World Board is not reflective of the future expected performance. While the Digital World Board previously approved the Business Combination, the Merger Agreement contemplates that during the pendency of the transaction TMTG will provide Digital World updated due diligence information regarding the financial condition of TMTG’s businesses and that following receipt and review of such due diligence information the Board could have, from October 31, 2023 through November 21, 2023, terminated the Merger Agreement if it no longer believed in good faith that the Business Combination was in the best interests of Digital World or its stockholders.

In December 2023, Digital World concluded its renewed due diligence with respect to TMTG’s business plan. Digital World’s Board determined (i) that the Merger Agreement and the transactions contemplated thereby, including the Merger Consideration and the Earnout Shares, are fair and in the best interests of Digital World and (ii) to recommend that the Digital World stockholders adopt the Merger Agreement and approve the Business Combination and the other transactions contemplated by the Merger Agreement.

Given the duration of time between the initial execution of the Merger Agreement and the Second Amendment to the Agreement as well as the significant turnover on the Digital World Board since the Merger Agreement was first signed in 2021, during December 2023 in connection with exercising its fiduciary duties, the Board sought to refresh and complete its financial and business due diligence of TMTG, including with respect to the revised transaction terms contemplated by the Second Amendment to the Agreement. In reaching its determination and in support of its decision that the Business Combination and the other transactions contemplated by the Merger Agreement, including the Merger Consideration and the Earnout Shares, are fair and in the best interests of Digital World and its stockholders, the Digital World Board conducted a bring-down evaluation of TMTG’s business model, financial performance, growth opportunities and competitive positioning. As part of this evaluation process, the Digital World Board engaged Alvarez & Marsal Valuation Services, LLC as an independent advisor with which Digital World has not had a material relationship in the past two years, to prepare a Comparable Company Analysis.

The Comparable Company Analysis was based on certain publicly traded companies selected by Digital World’s management and the Digital World Board, which included Meta, X (formerly Twitter), Snapchat and Pinterest. However, while these companies may share certain characteristics similar to TMTG, the Digital World Board did not consider any of these companies to be identical in nature to TMTG, given its affiliation with former President Trump and unique market positioning, including purposeful differentiation from the current market offerings considered in its analysis.

The Comparable Company Analysis was only one element of a broader due diligence process conducted by the Digital World Board, and the independent advisor was neither engaged for nor delivered a fairness opinion or other independent conclusion with respect to the terms of the Second Amendment to the Agreement. Through a series of interactive teleconferences during December 2023, Digital World’s management and the Digital World Board considered different frameworks of analysis that could be applied to companies that may share similar

 

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financial and growth characteristics with TMTG to serve as a resource and assist the Digital World Board in conducting its due diligence process.

Since TMTG did not provide the Digital World Board with TMTG’s financial projections in connection with the Digital World Board’s bring-down due diligence process, the Comparable Company Analysis was based on information that was publicly available, as well as limited supplemental due diligence information supplied by TMTG to assist the independent advisor in making any required assumptions to develop a forward-looking financial and growth assessment of TMTG relative to TMTG’s current business model, financial performance, growth opportunities and competitive positioning.

 

 

Brand and Growth Prospects. In addition to the brand and growth prospects initially considered by the Digital World Board in 2021, the Digital World Board believes that the taking private transaction of Twitter (now known as X) created a market opportunity and strengthens the brand and growth prospects rationale discussed above. The Digital World Board continues to believe that TMTG, if properly capitalized, is very well positioned to grow a user base at an accelerated pace.

 

 

Broad and Diverse User Base. The Digital World Board continues to believe that TMTG has a broad potential user base with demonstrated brand awareness, established brand loyalty and eagerness to seek out change, while making choices of where to spend their media dollars and attention. The Digital World Board continues to believe that TMTG management is continuing its efforts to increase TMTG’s brand appeal, which could materially widen the field of potential customers and users the media platform can attract, particularly in light of the global sociopolitical context.

 

 

Due Diligence. The Digital World Board and management team engaged in a due diligence process with TMTG’s management team and Digital World’s legal advisors regarding its business and legal affairs. As a result of such renewed due diligence, the Digital World Board continues to believe that TMTG has assembled the elements necessary to create the foundation for a potentially very successful media and technology company.

 

 

Financial Information and Comparable Company Analysis. In addition to the financial information and comparable company analysis initially considered by the Digital World Board in 2021, in late 2023, the Digital World Board sought to refresh and complete its financial and business due diligence of TMTG, including with respect to the revised transaction terms contemplated by the Second Amendment to the Agreement. In doing so, the Digital World Board engaged an independent advisor to assist management and the Digital World Board in evaluating Truth’s business model, financial performance, growth opportunities and competitive positioning. In conducting such financial and business due diligence, the Digital World Board considered, in part, the comparative analysis as discussed above, together with the aforementioned considerations.

 

 

Experienced Management Team. The Digital World Board believes that TMTG continues to have a strong management team with significant experience and commitment to its growth strategy.

Accounting Treatment

The Business Combination is expected to be accounted for as a reverse recapitalization in accordance with U.S. GAAP. Under this method of accounting, Digital World will be treated as the acquired company and TMTG will be treated as the acquirer for financial statement reporting purposes. See section entitled “The Business Combination Proposal (Proposal 1) — Anticipated Accounting Treatment.”

No Delaware Appraisal Rights for Digital World Stockholders

Appraisal rights are statutory rights under the DGCL that enable stockholders who object to certain extraordinary transactions to demand that the corporation pay such stockholders the fair value of their shares instead of receiving the consideration offered to stockholders in connection with the extraordinary transaction.

However, appraisal rights are not available in all circumstances. Appraisal rights are not available to Digital World stockholders or Warrant holders in connection with the Business Combination.

 

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Impact of the Business Combination on Digital World’s Public Float

It is anticipated that, upon the completion of the Business Combination, Digital World’s Public Stockholders will retain an ownership interest of approximately 21.2% of the outstanding capital stock of the Combined Entity, the Sponsor will retain an ownership interest of approximately 7.8% of the outstanding capital stock of the Combined Entity and holders of TMTG securities will own approximately 70.70% of the outstanding capital stock of the Combined Entity.

Accordingly, the foregoing ownership percentages with respect to the Combined Entity following the Business Combination (A) exclude the exercise of outstanding Warrants and the conversion of securities issued in the Post-IPO Financings and (B) assume that (i) there are no Redemptions of any shares by Digital World’s Public Stockholders in connection with the Business Combination and (ii) no awards are issued under the Equity Incentive Plan. If the actual facts are different than these assumptions (which they are likely to be), the percentage ownership retained by Digital World’s existing stockholders in the Combined Entity will be different.

Upon consummation of the Business Combination, and subject to approval of the Incentive Plan Proposal, TMTG’s executive officers are expected to receive grants of stock options and restricted stock units under the Equity Incentive Plan from time to time as determined by the Compensation Committee. Each TMTG Convertible Note that is issued and outstanding immediately prior to the Effective Time will automatically convert immediately prior to the Effective Time into a number of shares of TMTG common stock as such TMTG Convertible Note would automatically convert upon the consummation of the Business Combination with Digital World, in accordance with each such TMTG Convertible Note.

The following table illustrates varying ownership levels in the Combined Entity, assuming the factors mentioned above, and excluding the exercise of above-mentioned Warrants or the issuance of any shares of common stock upon conversion of securities issued in Post-IPO Financings, in the event of (i) no Redemptions, (ii) 33.33% Redemptions, (iii) 50% Redemptions and (iv) maximum Redemptions (77%) of 28,750,000 Public Shares:

 

    Minimum
Redemption
    33.33%
Redemption
    50%
Redemption
    Maximum (77%)
Redemption (1)
 

DWAC SPAC public shareholder shares

    28,745,952       21.2     19,164,926       15.2     14,372,976       11.9     6,744,940       5.9

SPAC private placement shares

    1,133,484       0.8     1,133,484       0.9     1,133,484       0.9     1,133,484       1.0

Underwriter IPO shares

    143,750       0.1     143,750       0.1     143,750       0.1     143,750       0.1

SPAC sponsor promote (primarily Founder Shares)

    9,631,250       7.1     9,631,250       7.6     9,631,250       7.9     9,631,250       8.5
 

 

 

     

 

 

     

 

 

     

 

 

   

Total DWAC

    39,654,436       29.3     30,073,410       23.9     25,281,460       20.9     17,653,424       15.6
 

 

 

     

 

 

     

 

 

     

 

 

   

TMTG

               

Rollover equity shares for TMTG shareholders

    87,500,000       64.6     87,500,000       69.5     87,500,000       72.2     87,500,000       77.1

TMTG convertible note shares

    8,369,509       6.2     8,369,509       6.6     8,369,509       6.9     8,369,509       7.4
 

 

 

     

 

 

     

 

 

     

 

 

   

Total TMTG

    95,869,509       70.7     95,869,509       76.1     95,869,509       79.1     95,869,509       84.4
 

 

 

     

 

 

     

 

 

     

 

 

   

Total

    135,523,945       100.0     125,942,919       100.0     121,150,969       100.0     113,522,933       100.0
 

 

 

     

 

 

     

 

 

     

 

 

   

 

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(1)

Digital World is required to fulfill the Financial Closing Conditions. The ability to meet the Financial Closing Conditions will not be known until the level of redemptions of Public Shares in connection with the Business Combination is known. As a result, if redemptions exceed $234.3 million (or 77% of the Trust Account assets before redemptions) the Business Combination would not close. As such, the Maximum Redemption scenario does not reflect the full amount of Public Shares that may be redeemed under Digital World’s Charter. Accordingly, if holders of more than 22,001,012 Public Shares seek to exercise such Redemption Rights, the Business Combination is not expected to close.

THE CHARTER AMENDMENT PROPOSALS (PROPOSALS 2 THROUGH 6)

To approve and adopt subject to and conditioned on (but with immediate effect therefrom) approval of each of the Business Combination Proposal, the Director Election Proposal, the Incentive Plan Proposal and the Nasdaq Proposal and the consummation of the Business Combination, a second amendment and restatement of the Digital World Charter, as set out in the Amended Charter, for the following Charter Amendment Proposals to:

 

  (A)

Name Change — To provide that the name of Digital World shall be changed to “Trump Media & Technology Group Corp.” (Proposal 2);

 

  (B)

Board Structure and Composition — To provide for the structure of the post-Closing Board, split into three classes of as even size as practicable, Class I, II, and III, each to serve a term of three years, except for the initial term, for which the Class I directors will be up for reelection at the first annual meeting of stockholders occurring after the Closing, for which the Class II directors will be up for reelection at the second annual meeting of stockholders occurring after the Closing and for which the Class III directors will be up for reelection at the third annual meeting of stockholders occurring after the Closing. Directors will not be able to be removed during their term except for cause. The size of the Board shall be determined by resolution of the Board but will initially be seven (7) (Proposal 3);

 

  (C)

Amendment of Blank Check Provisions — To remove and change certain provisions in the Digital World Charter related to Digital World’s status as a special purpose acquisition company, including the deletion of Article IX of the Digital World Charter in its entirety (Proposal 4);

 

  (D)

The Authorized Share Charter Amendment — To increase the number of authorized shares of common stock, as set forth in the Amended Charter in the form attached as Annex B hereto, to accommodate any shares to be issued in connection with (i) the Business Combination, (ii) the conversion of securities issued in Post-IPO Financings, (iii) the exercise of any Warrants, (iv) the conversion of TMTG Convertible Notes immediately prior to the Effective Time in connection with the Closing, (v) the Equity Incentive Plan and (vi) any future issuances of shares of New Digital World common stock if determined by the New Digital World Board to be in the best interests of New Digital World after the consummation of the Business Combination without incurring the risk, delay and potential expense incident to obtaining stockholder approval to increase the authorized share capital (Proposal 5); and

 

  (E)

Amendment and Restatement of the Digital World Charter — Conditioned upon the approval of Proposals 2 through 5, a proposal to approve the Amended Charter in the form attached as Annex B hereto, which includes the approval of all other changes in the proposed Amended Charter in connection with replacing the Digital World Charter with the proposed Amended Charter as of the Effective Time (Proposal 6).

THE DIRECTOR ELECTION PROPOSAL (PROPOSAL 7)

To consider and vote upon a proposal to elect seven (7) directors to serve on the Combined Entity’s Board, each effective from the consummation of the Business Combination and for a term as set forth under the proposed Amended Charter or until such director’s earlier death, resignation, retirement or removal. If the

 

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nominees identified in this proxy statement/prospectus are elected, Kashyap “Kash” Patel and W. Kyle Green will be Class I directors, serving until the Combined Entity’s 2024 annual meeting of stockholders; Linda McMahon and Donald J. Trump, Jr. will be Class II directors, serving until the Combined Entity’s 2025 annual meeting of stockholders; and Eric Swider, Devin G. Nunes and Robert Lighthizer will be Class III directors, serving until the Combined Entity’s 2026 annual meeting of stockholders, and in each case, until their respective successors are duly elected and qualified.

THE INCENTIVE PLAN PROPOSAL (PROPOSAL 8)

The proposed Equity Incentive Plan will reserve shares of New Digital World common stock equal to 7.5% of the fully diluted, and as converted, amount of New Digital World common stock to be outstanding immediately following consummation of the Business Combination, taking into account any additional shares that may be issued pursuant to the Earnout Shares. The purpose of the Equity Incentive Plan is to assist in attracting, retaining, motivating, and rewarding certain key employees, officers, directors, and consultants of New Digital World and its affiliates and promoting the creation of long-term value for stockholders of New Digital World by closely aligning the interests of such individuals with those of other stockholders. The Equity Incentive Plan authorizes the award of share-based incentives to encourage eligible employees, officers, directors, and consultants, as described below, to expend maximum effort in the creation of stockholder value.

A summary of the Equity Incentive Plan is set forth in “The Incentive Plan Proposal (Proposal 8)” section of this proxy statement/prospectus and a complete copy of the Equity Incentive Plan is attached hereto as Annex C. You are encouraged to read the Equity Incentive Plan in its entirety.

THE NASDAQ PROPOSAL (PROPOSAL 9)

To consider and vote upon a proposal to approve, for purposes of complying with Nasdaq Listing Rule 5635, (a) the issuance of up to 127,500,000 newly issued shares of New Digital World common stock in the Business Combination, which amount will be determined as described in more detail in the accompanying proxy statement/prospectus, (b) the issuance, if any, of up to 7,981,645 shares of New Digital World common stock in connection with the conversion of any Digital World Convertible Notes and Digital World Alternative Financing Notes entered into prior to the consummation of the Business Combination, (c) the issuance, if any, of up to 6,552,134 shares of New Digital World common stock in connection with the exercise of Post-IPO Warrants, (d) the issuance of up to 8,369,509 shares of New Digital World common stock issuable upon conversion of outstanding TMTG Convertible Notes immediately prior to the Effective Time in connection with the Closing and (e) the issuance under the Equity Incentive Plan of shares of New Digital World common stock equal to 7.5% of the fully diluted, and as converted, amount of New Digital World common stock to be outstanding immediately following consummation of the Business Combination under, taking into account any additional shares that may be issued pursuant to the Earnout Shares.

THE ADJOURNMENT PROPOSAL (PROPOSAL 10)

Digital World is proposing that its stockholders approve and adopt a proposal to adjourn the Digital World Special Meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies if, based upon the tabulated vote at the time of the Digital World Special Meeting, there are not sufficient votes to approve the other Proposals.

Date, Time and Place of Digital World Special Meeting

The Digital World Special Meeting will be held virtually at 10:00 a.m., Eastern Time, on     , 2024, or at such other date and time to which such meeting may be adjourned or postponed, to consider and vote upon the Proposals. We will hold the Digital World Special Meeting solely by means of remote communication.

Proxy Solicitation

Proxies may be solicited by telephone, by facsimile, by mail, on the Internet or in person. We have engaged Alliance Advisors to assist in the solicitation of proxies. If a stockholder grants a proxy, it may still vote its

 

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shares in person if it revokes its proxy before the Digital World Special Meeting. A stockholder may also change its vote by submitting a later-dated proxy, as described in the section titled “Digital World Special Meeting — Revoking Your Proxy.”

Quorum and Required Vote for Stockholder Proposals

A quorum of Digital World stockholders is necessary to hold a valid meeting. A quorum will be present at the Digital World Special Meeting if a majority of the Digital World common stock issued and outstanding and entitled to vote at the Digital World Special Meeting is represented in person or by proxy at the Digital World Special Meeting. Abstentions and “WITHHOLD” votes will count as present for the purposes of establishing a quorum. Broker non-votes will not be counted for purposes of establishing a quorum.

The approval of the Charter Amendment Proposals requires the affirmative vote of the holders, as of the Record Date, of a majority of the then issued and outstanding shares of Class A common stock and Class B common stock, voting together as a single class. Accordingly, a Digital World stockholder’s failure to vote by proxy or to vote in person at the Digital World Special Meeting or an abstention will have the same effect as a vote “AGAINST” the Charter Amendment Proposals.

The approval of the Business Combination Proposal, the Incentive Plan Proposal and the Nasdaq Proposal requires the affirmative vote in person (which would include presence at a virtual meeting) or by proxy of the holders, as of the Record Date, of a majority of the votes cast of Class A common stock and Class B common stock, voting together as a single class, entitled to vote thereon at the Digital World Special Meeting.

The approval of the Adjournment Proposal requires the affirmative vote of a majority of the votes cast by the stockholders represented in person or by proxy and entitled to vote thereon at the Digital World Special Meeting. A Digital World stockholder’s failure to vote by proxy or to vote in person at the Digital World Special Meeting will not be counted towards the number of shares of Digital World common stock required to validly establish a quorum, and if a valid quorum is otherwise established, it will have no effect on the outcome of the vote on the Business Combination Proposal, the Incentive Plan Proposal, the Nasdaq Proposal or the Adjournment Proposal. Abstentions will be counted towards the number of shares of Digital World common stock required to validly establish a quorum but will have no effect on the outcome of the vote on the Business Combination Proposal, the Incentive Plan Proposal, the Nasdaq Proposal or the Adjournment Proposal.

The approval of the Director Election Proposal requires a plurality vote of the shares of Digital World common stock cast by the stockholders represented in person or by proxy and entitled to vote thereon at the Digital World Special Meeting. A plurality means that the individuals who receive the largest number of votes cast “FOR” are elected as directors. A Digital World stockholder’s failure to vote by proxy or to vote in person at the Digital World Special Meeting will have no effect on the Director Election Proposal. “WITHHOLD” votes will be counted towards the number of shares of Digital World common stock required to validly establish a quorum but will have no effect on the outcome of the vote on the Director Election Proposal.

The Charter Amendment Proposals, the Director Election Proposal, the Incentive Plan Proposal and the Nasdaq Proposal are conditioned on the approval of the Business Combination Proposal (and each such Proposal is cross-conditioned on the approval all the Required Proposals), and unless the Business Combination Proposal is approved, the Charter Amendment Proposals, the Director Election Proposal, the Incentive Plan Proposal and the Nasdaq Proposal will not be presented to the stockholders of Digital World at the Digital World Special Meeting.

The Adjournment Proposal is not conditioned on any other Proposal and does not require the approval of any other Proposal to be effective. It is important for you to note that in the event the Business Combination Proposal, the Charter Amendment Proposals, the Director Election Proposal, the Incentive Plan Proposal and the Nasdaq Proposal do not receive the requisite vote for approval, then Digital World will not consummate the

 

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Business Combination. If Digital World does not consummate the Business Combination and fails to complete an initial business combination by September 8, 2024, it will be required to dissolve and liquidate its Trust Account by returning the then remaining funds in such account to its Public Stockholders, unless it seeks and obtains the approval of Digital World stockholders to amend the Digital World Charter to extend such date.

Recommendation to Digital World Stockholders

Digital World Board believes that the Proposals to be presented at the Digital World Special Meeting are in the best interests of Digital World and its stockholders and unanimously recommends that Digital World stockholders vote “FOR” the Proposals.

When you consider the recommendation of the Digital World Board in favor of approval of these Proposals, you should keep in mind that Digital World directors and officers have interests in the Business Combination that may be different from or in addition to (and which may conflict with) your interests as a stockholder. These interests include, among other things, the fact that:

 

   

unless Digital World consummates an initial business combination, Digital World’s officers and directors and the Sponsor will not receive reimbursement for any out-of-pocket expenses incurred by them to the extent that such expenses exceed the amount of available proceeds not deposited in the Trust Account;

 

   

our Sponsor holds 5,490,000 Founder Shares and 1,133,484 Placement Units, all such securities beneficially owned by Patrick Orlando, a director and former Chairman and Chief Executive Officer. In addition, Mr. Eric Swider, our Chief Executive Officer and a director, owns 7,500 Founder Shares; the anchor investors own the remaining 1,650,000 Founder Shares. All of such investments would expire worthless if a business combination is not consummated; on the other hand, if an initial business combination is consummated, such investments could earn a positive rate of return on their overall investment in the Combined Entity even if other holders of our common stock experience a negative rate of return, due to having initially purchased the Founder Shares for $25,000;

 

   

as a condition to the Digital World IPO, the Founder Shares became subject to a lock-up whereby, subject to certain limited exceptions, the Founder Shares cannot be transferred until the earlier of (A) six months after the completion of Digital World’s initial business combination; (B) subsequent to Digital World’s initial business combination, when the reported last sale price of the Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after Digital World’s initial business combination; and (C) such date after its initial business combination on which Digital World completes a liquidation, merger, stock exchange, reorganization or other similar transaction that results in all of the Digital World stockholders having the right to exchange their shares of Digital World common stock for cash, securities or other property;

 

   

an aggregate of 1,133,484 Placement Units were issued to the Sponsor simultaneously with the consummation of the IPO and the underwriters’ exercise of their over-allotment option. Such Units had an aggregate market value of approximately $60.1 million based upon the closing price of Digital World’s Public Units of $53.00 per Unit on Nasdaq on February 9, 2024;

 

   

the Sponsor has agreed that the Placement Units, and all of their underlying securities, will not be sold or transferred by it until 30 days after Digital World has completed an initial business combination, subject to limited exceptions;

 

   

the Sponsor and directors and officers of Digital World have agreed not to redeem any shares of Digital World common stock they hold in connection with a stockholder vote to approve an initial business combination;

 

   

the Sponsor may loan to Digital World additional funds for working capital purposes prior to the Business Combination. As of the date of this proxy statement/prospectus, there were $4,000,700

 

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outstanding in Digital World Convertible Notes due to our Sponsor. If the Business Combination is not consummated and Digital World does not otherwise consummate another business combination prior to September 8, 2024, then there will likely be insufficient funds to pay the Digital World Convertible Notes;

 

   

on June 2, 2023, the Company issued two promissory notes to Renatus in the aggregate principal amounts of (a) $2,000,000 and (b) $10,000,000. As of the date of this proxy statement/prospectus there were $1,232,000 outstanding in Digital World Convertible Notes due to Renatus, the proceeds of which are being used to pay working capital costs and expenses to enable Digital World to continue operating and complete an initial business combination. Mr. Swider is a founder and partner of Renatus;

 

   

if Digital World does not complete an initial business combination by September 8, 2024, the 1,133,484 shares of Class A common stock underlying the Placement Unites, the 556,742 shares of Class A common stock issuable upon conversion of the Placement Warrants and the 7,187,500 Founder Shares, of which 5,537,500 Founder Shares are held by Digital World’s Sponsor and certain current and former directors and officers, would be worthless because they are not entitled to participate in any Redemption or distribution with respect to such shares. Such Founder Shares and Placement Units had an aggregate market value of $338.0 million and $380.9 million, respectively, as of February 9, 2024, based on the closing price per Class A common stock of Digital World as of February 9, 2024 of $47.03 per share and the closing price of Digital World’s Public Units of $53.00 per Unit on Nasdaq on February 9, 2024;

 

   

if the Trust Account is liquidated, including in the event Digital World is unable to complete an initial business combination within the required time period, the Sponsor has agreed to indemnify Digital World to ensure that the proceeds in the Trust Account are not reduced below $10.20 per Public Share by the claims of prospective target businesses with which Digital World has entered into an acquisition agreement or claims of any third party for services rendered or products sold to Digital World, but only if such a vendor or target business has not executed a waiver of any and all rights to seek access to the Trust Account;

 

   

the Sponsor (including its representatives and affiliates) and Digital World’s directors and officers are, or may in the future become, affiliated with entities that are engaged in a similar business to Digital World. The Sponsor and Digital World’s directors and officers are not prohibited from sponsoring, or otherwise becoming involved with, any other blank check companies prior to Digital World completing its initial business combination. Digital World’s directors and officers also may become aware of business opportunities which may be appropriate for presentation to Digital World, and the other entities to which they owe certain fiduciary or contractual duties. Accordingly, they may have conflicts of interest in determining to which entity a particular business opportunity should be presented. These conflicts may not be resolved in Digital World’s favor and such potential business opportunities may be presented to other entities prior to their presentation to Digital World, subject to applicable fiduciary duties under DGCL. Digital World Charter provides that Digital World renounces its interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of Digital World and such opportunity is one Digital World is legally and contractually permitted to undertake and would otherwise be reasonable for Digital World to pursue, and to the extent the director or officer is permitted to refer that opportunity to Digital World without violating another legal obligation;

 

   

Mr. Swider is expected to be appointed as a director of the Combined Entity after the consummation of the Business Combination, Mr. Swider may in the future receive cash fees, stock options or stock awards that the Combined Entity determines to pay to its directors; and

 

   

that Digital World has issued Digital World Convertible Notes to certain officers, directors and affiliates pursuant to the Convertible Note Compensation Plan approved by the requisite holders of Class A common stock at the annual meeting of Digital World’s stockholders on December 19, 2023. These notes collectively represent an aggregate amount of $9,651,250 and may be convertible upon the Closing of the Business Combination into a maximum of 965,125 shares of Class A common stock,

 

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assuming each recipient chooses to convert their entire promissory note amount into Class A common shares. If we fail to close the Business Combination such notes would then be worthless.

These interests may influence Digital World’s directors in making their recommendation that you vote in favor of the approval of the Business Combination.

Emerging Growth Company

Digital World is currently and, following the consummation of the Business Combination, the Combined Entity will be, an “emerging growth company,” as defined in the Securities Act, as modified by the Jumpstart Our Business Startups Act (“JOBS Act”). Digital World has taken, and the Combined Entity may continue to take, advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley Act”), reduced disclosure obligations regarding executive compensation in Digital World’s periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. As a result, stockholders of Digital World and the Combined Entity may not have access to certain information they may deem important.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. Digital World has not elected to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, Digital World (and, following the Business Combination, the Combined Entity), as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of Digital World’s and the Combined Entity’s financial statements with certain other public companies difficult or impossible because of the potential differences in accounting standards used.

Digital World (and following the Business Combination, the Combined Entity) will remain an emerging growth company until the earliest of: (i) the last day of the fiscal year following the fifth anniversary of the closing of the Digital World IPO; (ii) the last day of the fiscal year in which Digital World (and following the Business Combination, the Combined Entity) has total annual gross revenue of at least $1.07 billion; (iii) the last day of the fiscal year in which Digital World (and following the Business Combination, the Combined Entity) is deemed to be a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of Digital World’s (and following the Business Combination, the Combined Entity’s) common stock held by non-affiliates exceeded $700.0 million as of the last business day of the second fiscal quarter of such year; or (iv) the date on which Digital World (and following the Business Combination, the Combined Entity) has issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.

Summary Risk Factors

TMTG’s business and an investment in New Digital World common stock are subject to numerous risks and uncertainties. In evaluating the proposals set forth in this proxy statement/prospectus, you should carefully read this proxy statement/prospectus, including the financial statements and annexes attached hereto, and especially

 

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consider the factors discussed in the section entitled “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors.” Some of these risks include:

Risks Related to Digital World and the Business Combination

 

   

Changes in laws or regulations or how such laws or regulations are interpreted or applied, or a failure to comply with any laws or regulations, may adversely affect Digital World’s business.

 

   

The ability of Digital World’s Public Stockholders to exercise their Redemption Rights may not allow Digital World to complete the Business Combination.

 

   

Notwithstanding Digital World’s settlement with the SEC, the SEC may further delay declaring this registration statement effective or disapprove this transaction and issue a stop order or similar order which could materially delay or materially impede the consummation of the Business Combination.

 

   

Digital World has not obtained an opinion from an independent investment banking firm or another independent firm.

 

   

There is no assurance that Digital World’s diligence will reveal all material risks.

 

   

Digital World’s management has identified a material weakness in its internal control over financial reporting. If it is unable to develop and maintain an effective system of internal control over financial reporting, Digital World may not be able to accurately report its financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business and operating results.

 

   

Digital World was in the past, and continues to be, subject to inquiries, exams, pending investigations, or enforcement matters.

 

   

Patrick Orlando, Digital World’s former Chairman and Chief Executive Officer, a current member of our Board and a controlling affiliate of our Sponsor has, in recent weeks, expressed a desire for additional compensation (above his interest in the Founder Shares).

 

   

As a result of the prolonged delay due to the Investigation, Digital World has incurred significant unanticipated expenses well in excess of the working capital loans provided by our Sponsor, which have required Digital World to seek alternative sources of working capital to fund its day-to-day operations and such additional and unanticipated costs and expenses through Post-IPO Financings.

Risks Related to TMTG

 

   

TMTG has a limited operating history making it difficult to evaluate TMTG’s business and prospects and may increase the risks associated with your investment.

 

   

TMTG’s actual financial position and results of operations may differ materially from the expectations of TMTG’s management.

 

   

If Truth Social fails to develop and maintain followers or a sufficient audience, if adverse trends develop in the social media platforms generally, or if President Trump were to cease to be able to devote substantial time to Truth Social, TMTG’s business would be adversely affected.

 

   

TMTG has identified a material weaknesses in its internal control over financial reporting, and TMTG may identify additional material weaknesses in its previously issued financial statements and in the future, which may cause the Combined Entity to fail to meet its reporting obligations or result in material misstatements of its financial statements.

 

   

TMTG’s independent registered public accounting firm has indicated that TMTG’s financial condition raises substantial doubt as to its ability to continue as a going concern.

 

   

TMTG’s estimates of market opportunity and forecasts of market growth may be inaccurate.

 

   

TMTG’s business is subject to complex and evolving U.S. and foreign laws and regulations regarding privacy, data protection, and other matters.

 

 

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In the future, TMTG may be involved in numerous class action lawsuits and other litigation matters.

 

   

Computer malware, viruses, hacking, and phishing attacks, and spamming could harm TMTG’s business and results of operations.

Risks Related to TMTG’s Chairman President Donald J. Trump

 

   

TMTG’s success depends in part on the popularity of its brand and the reputation and popularity of its Chairman, President Donald J. Trump.

 

   

The terms of a license agreement with President Trump is not terminable by TMTG when it may be desirable to TMTG. The license agreement does not require President Trump to use Truth Social in certain circumstances, including in connection with posts that President Trump deems, in his sole discretion, to be politically related.

 

   

Because President Trump is a candidate for president, he may divest his interest in Truth Social and may cease any involvement in its management.

 

   

TMTG depends on numerous third-parties to operate successfully, and many of these third parties may not want to engage with TMTG to provide any services.

Risks Related to Ownership of New Digital World common stock

 

   

Nasdaq may delist New Digital World’s securities from trading on its exchange.

 

   

The Business Combination may decrease the market price of New Digital World’s common stock.

 

   

New Digital World stockholders may experience dilution in the future.

 

   

TMTG’s management team may not successfully manage its transition to being a public company.

 

   

President Trump will hold at least 58.1% of the outstanding shares of New Digital World common stock, which control limits or precludes other stockholders’ ability to influence the business.

Risks Related to Redemption

 

   

The ability to execute Digital World and TMTG’s strategic plan could be negatively impacted to the extent a significant number of stockholders choose to redeem their shares in connection with the Business Combination.

 

   

There is no guarantee that a Digital World Public Stockholder’s decision whether to redeem its shares of Digital World common stock for a pro rata portion of the Trust Account will put such stockholder in a better future economic position.

 

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION OF DIGITAL WORLD

The summary statements of operations data for the years ended December 31, 2022 and 2021 and the summary balance sheet data as of December 31, 2022 and 2021 are derived from Digital World’s audited financial statements included elsewhere in this proxy statement/prospectus. The summary statements of operations data for the nine month periods ended September 30, 2023 and September 30, 2022 and the summary balance sheet data as of September 30, 2023 are derived from Digital World’s unaudited interim condensed consolidated financial statements, each of which is included elsewhere in this proxy statement/prospectus. The unaudited interim condensed consolidated financial data set forth below has been prepared on the same basis as Digital World’s audited financial statements and, in the opinion of Digital World’s management, reflect all adjustments, consisting only of normal recurring adjustments, that are necessary for the fair statement of such data.

The historical results presented below are not necessarily indicative of the results to be expected for any future period. You should carefully read the following selected financial information in conjunction with the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Digital World” and Digital World’s financial statements and the related notes appearing elsewhere in this proxy statement/prospectus.

Statements of Operations Data:

 

     For the Nine Months Ended
September 30,
     Year Ended
December 31,
 
     2023      2022      (As restated)
2022
     2021  

Formation and operating costs

   $ 7,899,200      $ 3,377,588      $ 8,716,023      $ 1,191,593  

Franchise tax expense

     20,639,030        150,000        200,000        200,000  
  

 

 

    

 

 

    

 

 

    

 

 

 

Loss from operation costs

     (28,770,730      (11,491,796      18,499,257        (1,391,593

Other income and expenses:

           

Interest earned on cash held in Trust Account

     10,404,747        1,752,484        4,257,469        7,098  
  

 

 

    

 

 

    

 

 

    

 

 

 

Net loss

   $ (20,006,348    $ (10,096,571    $ (15,642,548    $ (1,384,495
  

 

 

    

 

 

    

 

 

    

 

 

 

Weighted average shares outstanding of Class A common stock

     30,019,049        30,027,234        30,026,769        9,404,134  

Basic and diluted net income per Class A common stock

   $ (0.51    $ (0.27    $ (0.42    $ (0.08
  

 

 

    

 

 

    

 

 

    

 

 

 

Weighted average shares outstanding of Class B common stock

     7,187,500        7,187,500        7,187,500        7,187,500  

Basic and diluted net income per Class B common stock

   $ (0.54    $ (0.27    $ (0.42    $ (0.08
  

 

 

    

 

 

    

 

 

    

 

 

 

 

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Statements of Balance Sheet Data:

 

     As of
September 30,
     As of
December 31,
 
     2023      (As restated)
2022
     2021  

Balance Sheet Data:

        

Total assets

   $ 310,481,457      $ 300,499,990      $ 293,990,852  

Total liabilities

   $ 63,818,265      $ 32,535,352      $ 10,746,035  

Class A common stock subject to possible Redemption

   $ 306,128,902      $ 298,951,176      $ 293,250,000  

Working capital (deficit)(1)

   $ (50,470,178)      $ 267,964,638      $ (114,832

Total stockholders’ deficit

   $ (59,465,710)      $ (31,974,608    $ (10,005,183

 

(1)

Working capital (deficit) is defined as total current assets minus total current liabilities

 

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SELECTED HISTORICAL FINANCIAL INFORMATION OF TMTG

The summary statements of operations data for the year ended December 31, 2022 and for the period from February 8, 2021 (date of inception) to December 31, 2021 and the summary balance sheet data as of December 31, 2022 and for the period from February 8, 2021 (date of inception) to December 31, 2021 are derived from TMTG’s audited financial statements included elsewhere in this proxy statement/prospectus. The summary statements of operations data for the nine month periods ended September 30, 2023 and September 30, 2022 and the summary balance sheet data as of September 30, 2023 are derived from TMTG’s unaudited interim condensed consolidated financial statements, each of which is included elsewhere in this proxy statement/prospectus. The unaudited interim condensed consolidated financial data set forth below has been prepared on the same basis as TMTG’s audited financial statements and, in the opinion of TMTG’s management, reflect all adjustments, consisting only of normal recurring adjustments, that are necessary for the fair statement of such data.

The historical results presented below are not necessarily indicative of the results to be expected for any future period. You should carefully read the following selected financial information in conjunction with the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of TMTG” and TMTG’s financial statements and the related notes appearing elsewhere in this proxy statement/prospectus.

Statement of Operations Data:

 

    For the Nine Months Ended
September 30,
    Year Ended
December 31,
    For the period
from February
8 (inception)
through
December 31,
 

in thousands, except share and per share data

  2023     2022     2022     (As restated)
2021
 

Total Revenue

  $ 3,379.6     $ 237.0     $ 1,470.5     $ —   

Cost of revenue

    123.9       —        54.5       — 

Gross profit

    3,255.7       237.0       1,416.0       —   

Operating costs and expenses:

       

Research and development

    7,212.1       10,469.9       13,633.1       2,571.3

Sales and marketing

    978.1       536.1       625.9       381.7

General and administrative

    5,666.6       8,527.6       10,345.6       3,419.2

Depreciation and Amortization

    47.6       42.6       58.7       6.5  
 

 

 

   

 

 

   

 

 

   

 

 

 

Loss from operations

  $ (10,648.7   $ (19,339.2   $ (23,247.3   $ (6,378.7  

Other income

    —        —        —        2,123.3  

Interest expense

    (37,702.5     (1,312.0     (2,038.7     (654.3 )

Change in fair value of derivative liabilities

    (660.2     62,156.0       75,809.9       (54,186.4 )
 

 

 

   

 

 

   

 

 

   

 

 

 

Profit/(loss) from operations before income taxes

    (49,011.4     41,504.8       50,523.8       (59,096.1 )

Income tax expense/(benefit)

    —        —        .2       — 
 

 

 

   

 

 

   

 

 

   

 

 

 

Net profit/(loss)

  $ (49,011.4   $ 41,504.8     $ 50,523.6     $ (59,096.1  
 

 

 

   

 

 

   

 

 

   

 

 

 

Weighted-average common shares used in net loss per share attributable to common stockholders, basic and diluted

 

 

100,000,000

 

 

 

100,000,000

 

 

 

100,000,000

 

 

 

100,000,000

 

Net loss per common share attributable to common stockholders, basic and diluted

    (0.49     .42       .51       (0.59
 

 

 

   

 

 

   

 

 

   

 

 

 

 

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Statement of Balance Sheet Data:

 

in thousands

   As of September 30,
2023
     As of December 31,
2022
     For the period from
February 8
(inception) through
December 31,
 
     2021  

Cash and cash equivalents

   $ 1,839.0      $ 9,808.4      $ 18,734.4  

Total assets

     2,910.7        11,236.7        19,251.2  

Total liabilities

     60,494.7        19,809.3        78,347.4  

Working capital(1)

     (55,050.4 )      (8,805.1      18,282.1  

Accumulated deficit

     (57,584.0      (8,572.6      (59,096.2

Total stockholders’ deficit

   $ (57,584.0    $ (8,572.6    $ (59,096.2

 

(1)

Working capital is defined as total current assets minus total current liabilities

 

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SUMMARY UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

Defined terms included below shall have the same meaning as terms defined and included elsewhere in this proxy statement/prospectus.

The following summary unaudited pro forma condensed combined financial data, (the “summary pro forma data”) gives effect to the Business Combination described in the section entitled “Unaudited Pro Forma Condensed Combined Financial Information.” The Business Combination is expected to be accounted for as a reverse recapitalization, with no goodwill or other intangible assets recorded, in accordance with U.S. GAAP. Under this method of accounting, Digital World will be treated as the “acquired” company for financial reporting purposes. The net assets of Digital World will be stated at historical cost, with no goodwill or other intangible assets recorded.

The summary unaudited pro forma condensed combined balance sheet data as of September 30, 2023 gives pro forma effect to the Business Combination and related transactions as if they had occurred on September 30, 2023. The summary unaudited pro forma condensed combined statement of operations data for the nine months ended September 30, 2023 and for the year ended December 31, 2022 give pro forma effect to the Business Combination and related transactions as if they had occurred on January 1, 2022.

The summary pro forma data have been derived from, and should be read in conjunction with, the unaudited pro forma condensed combined financial information of the Combined Entity appearing elsewhere in this proxy statement/prospectus and the accompanying notes. The unaudited pro forma condensed combined financial information is based upon, and should be read in conjunction with, the historical consolidated financial statements of Digital World and related notes and the historical financial statements of TMTG and related notes, in each case, included in this proxy statement/prospectus. The summary pro forma data have been presented for informational purposes only and are not necessarily indicative of what the Combined Entity’s financial position or results of operations actually would have been had the Business Combination and the other transactions contemplated by the Merger Agreement (described elsewhere in this proxy statement/prospectus) been completed as of the dates indicated. In addition, the summary pro forma data do not purport to project the future financial position or operating results of the Combined Entity.

For illustrative purposes the unaudited pro forma condensed combined financial information has been prepared assuming two alternative levels of additional Redemptions of Digital World Class A common stock:

 

   

Assuming Minimum Additional Redemptions (“Minimum Redemption”) — This scenario assumes that no shares of Digital World Class A common stock are redeemed; and

 

   

Assuming Maximum Redemptions (“Maximum Redemption”) — This scenario assumes the Redemption of 22,001,012 shares of Digital World Class A common stock, for aggregate payment of approximately $234.3 million from the Trust Account), so that Digital World retains at least $5,000,001 in net tangible assets and $60 million in cash immediately prior to or upon the consummation of the Business Combination.

Under both redemption scenarios, all issued and outstanding shares of TMTG common stock, as of the date of this proxy statement/prospectus are being exchanged for 87,500,000 shares of Digital World Class A common stock.

Assuming no Redemption, on a pro forma estimated basis, TMTG’s existing securityholders will hold 95,869,509 shares of Class A common stock of the Combined Entity immediately after the Closing, which approximates a 70.7% ownership level. Assuming Maximum Redemption, on a pro forma estimated basis, TMTG will hold common stock of the Combined Entity approximating an 84.4% ownership level.

 

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    Minimum
Redemption
    33.33%
Redemption
    50%
Redemption
    Maximum (77%)
Redemption (1)
 

DWAC SPAC public shareholder shares

    28,745,952       21.2     19,164,926       15.2     14,372,976       11.9     6,744,940       5.9

SPAC private placement shares

    1,133,484       0.8     1,133,484       0.9     1,133,484       0.9     1,133,484       1.0

Underwriter IPO shares

    143,750       0.1     143,750       0.1     143,750       0.1     143,750       0.1

SPAC sponsor promote (primarily Founder Shares)

    9,631,250       7.1     9,631,250       7.6     9,631,250       7.9     9,631,250       8.6
 

 

 

     

 

 

     

 

 

     

 

 

   

Total DWAC

    39,869,509       29.3     30,073,410       23.9     25,281,460       20.9     17,653,424       15.6
 

 

 

     

 

 

     

 

 

     

 

 

   

TMTG Rollover equity shares for TMTG shareholders

    87,500,000       64.6     87,500,000       69.5     87,500,000       72.2     87,500,000       77.1

TMTG convertible note shares

    8,369,509       6.2     8,369,509       6.6     8,369,509       6.9     8,369,509       7.4
 

 

 

     

 

 

     

 

 

     

 

 

   

Total TMTG . . . . . .

    95,869,509       70.7     95,869,509       76.1     95,869,509       79.1     95,869,509       84.4
 

 

 

     

 

 

     

 

 

     

 

 

   

Total

    135,523,945       100.0     125,942,919       100.0     121,150,969       100.0     113,522,933       100.0
 

 

 

     

 

 

     

 

 

     

 

 

   

 

(1)

Digital World is required to fulfill the Financial Closing Conditions. The ability to meet the Financial Closing Conditions will not be known until the level of redemptions of Public Shares in connection with the Business Combination is known. As a result, if redemptions exceed $234.3 million (or 77% of the Trust Account assets before redemptions) the Business Combination would not close. As such, the Maximum Redemption scenario does not reflect the full amount of Public Shares that may be redeemed under Digital World’s Charter. Accordingly, if holders of more than 22,001,012 Public Shares seek to exercise such Redemption Rights, the Business Combination is not expected to close.

The foregoing ownership percentages with respect to the Combined Entity following the Business Combination are based on the assumption that there are no adjustments for the outstanding Public Warrants or Placement Warrants issued by Digital World and (A) exclude the exercise of outstanding Warrants and the conversion of securities issued in the Post-IPO Financings and (B) assume that (i) there are no Redemptions of any shares by Digital World’s Public Stockholders in connection with the Business Combination and (ii) no awards are issued under the Equity Incentive Plan. If the actual facts are different than these assumptions (which they are likely to be), the percentage ownership retained by the Digital World’s existing stockholders in the Combined Entity will be different. Upon consummation of the Business Combination, and subject to approval of the Incentive Plan Proposal, TMTG’s executive officers are expected to receive grants of stock options and restricted stock units under the Equity Incentive Plan from time to time as determined by the Compensation Committee. Each TMTG Convertible Note that is issued and outstanding immediately prior to the Effective Time will automatically convert immediately prior to the Effective Time into a number of shares of TMTG common stock as such TMTG Convertible Note would automatically convert upon the consummation of the Business Combination, in accordance with each such TMTG Convertible Note.

If the actual facts are different than these assumptions, then the amounts and shares outstanding in the unaudited pro forma condensed combined financial information will be different.

 

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UNAUDITED HISTORICAL COMPARATIVE AND PRO FORMA COMBINED PER SHARE DATA OF DIGITAL WORLD AND TMTG

Defined terms included below shall have the same meaning as terms defined and included elsewhere in this proxy statement/prospectus.

The following table sets forth selected historical comparative share information of Digital World and TMTG and unaudited pro forma condensed combined per share information of the Combined Entity after giving effect to the Business Combination, assuming no Redemption and Maximum Redemption, respectively.

The unaudited pro forma combined book value information as of September 30, 2023 gives pro forma effect to the Business Combination and related transactions as if consummated on September 30, 2023. The selected unaudited pro forma condensed combined net loss per share and weighted average shares outstanding information for the nine months ended September 30, 2023 and for the year ended December 31, 2022 gives pro forma effect to the Business Combination and the other events as if consummated on January 1, 2022, the beginning of the earliest period presented.

The historical book value per share is computed by dividing total common stockholders’ equity by the number of shares of common stock outstanding at the end of the period. The pro forma combined book value per share is computed by dividing total pro forma common stockholders’ equity by the pro forma number of shares of common stock outstanding at the end of the period. The pro forma earnings per share of the Combined Entity is computed by dividing the pro forma income available to the New Digital World common stock by the pro forma weighted average number of shares outstanding over the period.

This information is only a summary and should be read together with the selected historical financial information included elsewhere in this proxy statement/prospectus, and the historical financial statements of Digital World and TMTG and related notes that are included elsewhere in this proxy statement/prospectus. The unaudited pro forma combined per share information of Digital World and TMTG is derived from, and should be read in conjunction with, the unaudited pro forma condensed combined financial statements and related notes included elsewhere in this proxy statement/prospectus.

The unaudited pro forma combined earnings per share information below does not purport to represent the earnings per share which would have occurred had the companies been combined during the periods presented, nor earnings per share for any future date or period. The unaudited pro forma combined book value per share information below does not purport to represent what the value of Digital World and TMTG would have been had the companies been combined during the periods presented.

Under both redemption scenarios, all issued and outstanding shares of TMTG common stock, as of the date of this proxy statement/prospectus are being exchanged for 87,500,000 shares of Digital World Class A common stock.

 

    TMTG     Digital     Minimum
Redemption
    33.33%
Redemption
    50%
Redemption
    Maximum (77%)
Redemption (1)
 

Book value per share

    (0.58     (1.60     1.79       1.20       0.83       0.50  

Weighted average shares outstanding - Common stock

    100,000,000            

Basic and diluted net income per share - Common stock

    (0.49          

Weighted average shares outstanding - Class A common stock

      30,021,576       135,523,945       125,942,919       121,150,969       113,522,933  

Basic and diluted net income per share - Class A common stock

      (0.21     (0.49     (0.52     (0.55     (0.58

Weighted average shares outstanding - Class B common stock

      7,187,500          

Basic and diluted net income per share - Class B common stock

      (0.21        

 

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(1)

Digital World is required to fulfill the Financial Closing Conditions. The ability to meet the Financial Closing Conditions will not be known until the level of redemptions of Public Shares in connection with the Business Combination is known. As a result, if redemptions exceed $243.3 million (or 77% of the Trust Account assets before redemptions) the Business Combination would not close. As such, the Maximum Redemption scenario does not reflect the full amount of Public Shares that may be redeemed under Digital World’s Charter. Accordingly, if holders of more than 22,001,012 Public Shares seek to exercise such Redemption Rights, the Business Combination is not expected to close.

 

    TMTG     Digital     Minimum
Redemption
    33.33%
Redemption
    50%
Redemption
    Maximum (77%)
Redemption(1)
 

Weighted average shares outstanding - Common stock

    100,000,000            

Basic and diluted net income per share - Common stock

    0.51            

Weighted average shares outstanding-Class A common stock

      30,002,669       135,523,945       125,942,919       121,150,969       112,532,273  

Basic and diluted net income per share-Class A common stock

      (0.42     (0.86     (0.93     (0.96     (1.03

Weighted average shares outstanding - Class B common stock

      7,187,500          

Basic and diluted net income per share-Class B common stock

      (0.42        

 

(1)

Digital World is required to fulfill the Financial Closing Conditions. The ability to meet the Financial Closing Conditions will not be known until the level of redemptions of Public Shares in connection with the Business Combination is known. As a result, if redemptions exceed $234.3 million (or 77% of the Trust Account assets before redemptions) the Business Combination would not close. As such, the Maximum Redemption scenario does not reflect the full amount of Public Shares that may be redeemed under Digital World’s Charter. Accordingly, if holders of more than 22,001,012 Public Shares seek to exercise such Redemption Rights, the Business Combination is not expected to close.

 

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DIVIDENDS ON SECURITIES

Digital World

Holders of Digital World

As of the Record Date, there were     holders of record of Digital World common stock, and     holders of record of Warrants and     holders of Units.

Dividend Policy of Digital World

Digital World has not paid any cash dividends on its common stock to date and does not intend to pay cash dividends prior to the completion of its initial business combination.

Dividend Policy of TMTG

TMTG has not paid any cash dividends on its stock to date and does not intend to pay cash dividends prior to the completion of the Business Combination. TMTG is also party to debt agreements with covenants that limit TMTG’s ability to pay dividends or make distributions with respect to its common stock. All of such debt agreements will convert to common stock immediately prior to the completion of the Business Combination and will no longer limit TMTG’s ability to pay dividends.

Dividend Policy of the Combined Entity Following the Business Combination

The Combined Entity intends to retain future earnings, if any, for future operations and expansion and there are no current plans to pay any cash dividends for the foreseeable future. The declaration, amount and payment of any cash dividends in the future will be at the sole discretion of the Combined Entity’s Board, and will depend upon the Combined Entity’s revenue earnings, if any, available cash, current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions, general financial condition subsequent to completion of the Business Combination and such other factors as the Combined Entity’s Board may deem relevant.

 

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RISK FACTORS

You should carefully consider all the following risk factors, together with all of the other information included or incorporated by reference in this proxy statement/prospectus, including the financial information, before deciding whether or how to vote or instruct your vote to be cast to approve the Proposals described in this proxy statement/prospectus.

The value of your investment following consummation of the Business Combination will be subject to significant risks affecting, among other things, the Combined Entity’s business, financial condition or results of operations. If any of the events described below occur, the Combined Entity’s post-Business Combination business and financial results could be adversely affected in material respects. This could result in a decline, which may be significant, in the trading price of the Combined Entity’s securities and you therefore may lose all or part of your investment. The risk factors described below are not necessarily exhaustive and you are encouraged to perform your own investigation with respect to the businesses of Digital World and TMTG. Any reference in this “Risk Factors” section to the “surviving entity” shall mean New Digital World.

Risks Related to Digital World and the Business Combination

Regulatory delays could cause us to be unable to consummate the Business Combination.

Digital World has experienced a number of regulatory delays since signing of the Merger Agreement and may continue to experience delays in the future. In connection with an SEC investigation, Digital World received a document request and subpoena from the SEC seeking various documents and information regarding, among other things, meetings of Digital World’s Board; communications with and the evaluation of potential targets, including TMTG; communications relating to TMTG; agreements with and payments made to certain advisors; investors, including investor meetings and agreements; the appointment of certain of Digital World’s officers and directors; policies and procedures relating to trading; and documents sufficient to identify banking, telephone, and email addresses.

On July 3, 2023, Digital World reached an agreement in principle with the Staff of the SEC’s Division of Enforcement (the “Settlement in Principle”) in connection with the SEC’s investigation of Digital World (the “Investigation”) with respect to certain statements, agreements and omissions and the timing thereof included in Digital World’s registration statements on Form S-1 (the “Form S-1”) in connection with its IPO and Form S-4 relating to the Business Combination (the “Form S-4”). The Settlement in Principle was subject to approval by the SEC.

On July 20, 2023, the SEC approved the Settlement in Principle, which settled its dispute with Digital World and entered a cease-and-desist order (the “Order”) finding that Digital World violated certain antifraud provisions of the Securities Act and the Exchange Act, in connection with Digital World’s IPO filings on Form S-1 and the Form S-4 concerning certain statements, agreements and omissions relating to the timing and discussions Digital World had with TMTG regarding the proposed business combination. In the Order, Digital World agreed (i) that any amended Form S-4 filed by Digital World will be materially complete and accurate with respect to those certain statements, agreements and omissions relating to the timing and discussions that Digital World had with TMTG regarding the Business Combination and (ii) to pay a civil money penalty in an amount of $18 million to the SEC promptly after the closing of any merger or a comparable business combination or transaction, whether with TMTG or any other entity.

Additionally, Digital World is not aware of any material regulatory approvals or actions that are required for completion of the Business Combination other than the approvals from the SEC and The Nasdaq Stock Market LLC (“Nasdaq”), as well as the expiration or early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “Hart-Scott-Rodino Act”). It is presently contemplated that if any additional regulatory approvals or actions are required, those approvals or actions will be sought, but there

 

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can be no assurance that any such additional approvals or actions will be obtained. This includes any potential review by a U.S. government entity, such as the Committee on Foreign Investment in the United States (“CFIUS”), on account of certain foreign ownership restrictions on U.S. businesses.

Changes in laws or regulations or how such laws or regulations are interpreted or applied, or a failure to comply with any laws or regulations, may adversely affect Digital World’s business, including its ability to negotiate and complete the Business Combination, and its results of operations.

Digital World is and will be subject to laws and regulations enacted by national, regional and local governments and, potentially, foreign jurisdictions. In particular, Digital World is required to comply with certain SEC, Nasdaq and other legal requirements and, as such, the Business Combination may be contingent on Digital World’s ability to comply with certain laws and regulations. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. For example, Nasdaq Listing Rule 5250(c)(1) requires listed companies to timely file all required periodic financial reports with the SEC. On May 23, 2023, Digital World received a notice from the Listing Qualifications Department of Nasdaq stating that Digital World was not in compliance with Nasdaq Listing Rule 5250(c)(1) because Digital World had not yet filed with the SEC its Quarterly Report on Form 10-Q for the quarter ended March 31, 2023 (the “First Quarter Form 10-Q”). Similarly, on August 24, 2023, Digital World received another such notice from the Listing Qualifications Department of Nasdaq in respect of its Quarterly Report on Form 10-Q for the quarter ended June 30, 2023. As a result of these delinquencies, the Nasdaq staff limited Digital World’s time period to regain compliance to a maximum of 180 calendar days from the due date of the First Quarter Form 10-Q, or November 20, 2023. Digital World filed the late quarterly reports prior to the November 20, 2023 deadline, however, it also filed its Quarterly Report on Form 10-Q for the quarter ended September 30, 2023 late but prior to any notification from the Listing Qualifications Department of Nasdaq. There can be no assurance that Digital World will be able to meet its timely obligations and maintain continued compliance with Nasdaq’s listing rules.

Failure to comply with applicable laws or regulations, as interpreted and applied, or Digital World’s reporting obligations with the SEC, could have a material adverse effect on Digital World’s business, including Digital World’s ability to negotiate and complete the Business Combination, and Digital World’s results of operations.

In addition, laws and regulations and their interpretation and application may also change from time to time, including as a result of changes in economic, political, social and government policies, and those changes could have a material adverse effect on Digital World’s business, including its ability to negotiate and complete its initial business combination, and results of operations. On January 24, 2024, the SEC adopted final rules (the “SPAC Final Rules”) relating to, among other items, enhancing disclosures in business combination transactions involving SPACs and private operating companies; amending the financial statement requirements applicable to transactions involving shell companies; effectively limiting the use of projections in SEC filings in connection with proposed business combination transactions; increasing the potential liability of certain participants in proposed business combination transactions; and the extent to which SPACs could become subject to regulation under the Investment Company Act of 1940, as amended (the “Investment Company Act”). The SPAC Final Rules will be effective 125 days following their publication in the Federal Register. If we are delayed in consummating the business combination past the effective date of the SPAC Final Rules, the SPAC Final Rules may materially adversely affect Digital World’s ability to negotiate and complete the Business Combination and may increase the costs and time related thereto. Additional extensions past September 8, 2024 may be required, which may subject us and our stockholders to additional risks and contingencies that would make it more challenging for us to complete the Business Combination or a transaction with an alternative target if we cannot complete the Business Combination with TMTG. See “Risk Factors — Risks Related to Digital World and the Business Combination – If we are deemed to be an investment company for purposes of the Investment Company Act, we would be required to institute burdensome compliance requirements and our activities would be severely restricted. As a result, in such circumstances, unless we are able to modify our activities so that we would not be deemed an investment company, we would expect to abandon our efforts to complete an initial business combination and instead to liquidate the Digital World.

 

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Moreover, although Digital World is currently not aware of any material regulatory approvals or actions that are required for completion of the Business Combination, other than the approvals from the SEC and Nasdaq, as well as the expiration or early termination of the waiting period under the Hart-Scott-Rodino Act, the Business Combination may require additional governmental approvals, which may include potential review by a U.S. government entity, such as CFIUS, on account of certain foreign ownership restrictions on U.S. businesses.

Although Digital World does not believe that either it or its Sponsor constitute a “foreign person” under CFIUS rules and regulations, CFIUS may take a different view and decide to block or delay the Business Combination, impose conditions to mitigate national security concerns with respect to the Business Combination, order Digital World to divest all or a portion of a U.S. business of the Combined Entity if it had proceeded without first obtaining CFIUS clearance, or impose penalties if CFIUS believes that the mandatory notification requirement applied. See “Risk Factors — Risks Related to Digital World and the Business Combination — Regulatory delays could cause us to be unable to consummate the Business Combination.” If Digital World were to seek an initial business combination other than the Business Combination, the pool of potential targets with which it could complete an initial business combination may be limited as a result of any such regulatory restriction. If any such additional regulatory approvals or actions are required, those approvals or actions will be sought, but there can be no assurance that any such additional approvals or actions will be obtained. Moreover, the process of any government review, whether by CFIUS or otherwise, could be lengthy, resulting in further delays in Digital World’s ability to consummate the Business Combination or any initial business combination.

The ability of Digital World’s Public Stockholders to exercise Redemption Rights with respect to a large number of Digital World’s Public Shares may not allow Digital World to complete the Business Combination or optimize its capital structure.

Because the Merger Agreement requires Digital World to have at least $5,000,001 in net tangible assets at Closing (after giving effect to Redemptions by Digital World’s Public Stockholders), Digital World will need to reserve a portion of the cash in the Trust Account to meet such requirements, unless such closing condition is waived by TMTG. In addition, if a larger number of shares are submitted for Redemption than Digital World currently expects, Digital World may need to seek to restructure the transaction to reserve a greater portion of the cash in the Trust Account. If the Business Combination is unsuccessful, you would not receive your pro rata portion of the Trust Account until Digital World liquidates the Trust Account or consummates an alternative initial business combination or upon the occurrence of an Extension or certain other corporation actions as set forth in the Digital World Charter. If you are in need of immediate liquidity, you could attempt to sell your Public Shares in the open market; however, at such time Digital World’s Class A common stock may trade at a discount to the pro rata amount per share in the Trust Account or there may be limited market demand at such time. In either situation, you may suffer a material loss on your investment or lose the benefit of funds expected in connection with Digital World’s Redemption until Digital World liquidates, consummates an alternative initial business combination, effectuates an Extension or takes certain other actions set forth in the Digital World Charter or you are able to sell your Public Shares in the open market.

Notwithstanding Digital World’s settlement with the SEC, the SEC may further delay declaring this registration statement effective or disapprove this transaction and issue a stop order or similar order with respect to this registration statement which could materially delay or materially impede the consummation of the Business Combination.

As described above, Digital World has experienced a number of regulatory delays since the signing of the Merger Agreement and may continue to experience delays in the future. The use of this proxy statement/prospectus would require the SEC to declare effective the registration statement of which it is a part. If further delays or a suspension arises out of, or is a result of, or is related to the SEC being unable or unwilling to declare the registration statement effective or if the SEC issues any stop order suspending the effectiveness of the registration statement or indicates the intention to initiate any proceedings for such purpose, it could materially delay or materially impede the consummation of the Business Combination.

 

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For a detailed discussion of regulatory delays to date, see “Risk Factors — Risks Related to Digital World and the Business Combination — Digital World was in the past, and continues to be, subject to inquiries, exams, pending investigations, or enforcement matters.”

Unless extended, the Merger Agreement may be terminated at any time in accordance with its terms, including by either Digital World or TMTG after December 31, 2023, and you may not have the chance to vote on the Business Combination or redeem Digital World’s shares until the liquidation date.

The Merger Agreement is subject to a number of conditions which must be satisfied or waived in order to complete the Business Combination and the Merger Agreement may be terminated at any time, under certain customary and limited circumstances. See the section entitled “Summary of the Proxy Statement/Prospectus — The Proposals — The Business Combination Proposal (Proposal 1) — Termination.”

For example, from October 31, 2023 through November 21, 2023, Digital World could have terminated the Merger Agreement if the Digital World Board, following updated due diligence on TMTG, no longer believed in good faith that the Business Combination and the transactions were in the best interests of Digital World or its stockholders. In addition, it could have also been terminated by TMTG from October 31, 2023 through November 21, 2023 if the TMTG Board, following updated due diligence on Digital World, no longer believed in good faith that the Business Combination and the transactions contemplated by the Merger Agreement were in the best interests of TMTG or its stockholders. In December 2023, Digital World concluded its renewed due diligence with respect to TMTG’s business plan. See “The Business Combination Proposal (Proposal 1) Background of the Business Combination.” Digital World’s Board determined (i) that the Merger Agreement and the transactions contemplated thereby, including the Merger Consideration and the Earnout Shares, are fair and in the best interests of Digital World and (ii) to recommend that the Digital World stockholders adopt the Merger Agreement and approve the Business Combination and the other transactions contemplated by the Merger Agreement. See “The Business Combination Proposal (Proposal 1) The Board’s Reasons for Approval of the Business Combination.”

Further, in the period leading up to the Closing, other events may occur that, pursuant to the Merger Agreement, would require Digital World to agree to amend the Merger Agreement to consent to certain actions or to waive rights that Digital World is entitled to under those agreements. Such events could arise because of changes in the course of TMTG’s business, a request by TMTG to undertake actions that would otherwise be prohibited by the terms of the Merger Agreement or the occurrence of other events that would have a material adverse effect on TMTG’s business and would entitle Digital World to terminate the Merger Agreement, as applicable. For example, Section 5.2 of the Merger Agreement provides that without the prior written consent of TMTG (such consent not to be unreasonably withheld, conditioned or delayed) Digital World may not settle or compromise any claim, action or proceeding, including any suit, action, claim, proceeding or investigation relating to the Merger Agreement or the transactions contemplated thereby, in excess of $100,000. As such, Digital World kept TMTG apprised of the discussions with the SEC and the Settlement in Principle. Nevertheless, TMTG is not a party to the Settlement in Principle or any related negotiation and it did not provide its consent to such settlement. Although Digital World believes that it has complied with Section 5.2 of the Merger Agreement, TMTG may disagree and try to terminate the Merger Agreement. In any of such circumstances, it would be in the discretion of Digital World, acting through its Board, to grant its consent or waive its rights. As of the date of this proxy statement, Digital World does not believe there will be any changes or waivers that Digital World’s directors and officers would be likely to make after stockholder approval of the Business Combination has been obtained. However, delays in Digital World’s ability to consummate the Business Combination as a result of regulatory delays, Department of Justice or other new or pending regulatory agencies’ investigations, which may lead TMTG to claim that Digital World breached the Merger Agreement, may lead to increased Redemptions, result in the occurrence of events that would have a material adverse effect on TMTG’s business or cause the parties to terminate the Merger Agreement. Additionally, the resolution of any such new or pending investigations could result in the imposition of significant penalties, injunctions, prohibitions on the conduct of Digital World’s business, termination of the Merger Agreement, damage to Digital World’s reputation and other sanctions against us, all of which, together with the delays, could materially impede or prevent the consummation of the Business Combination.

 

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Accordingly, in the event that the Merger Agreement is terminated or a special meeting of stockholders to approve the Business Combination is not held, you may not have the chance to vote on the Business Combination.

Digital World has not obtained an opinion from an independent investment banking firm or another independent firm, and consequently, you may have no assurance from an independent source that the terms of the Business Combination are fair to the stockholders of Digital World from a financial point of view.

The Digital World Board did not obtain a fairness opinion in connection with its determination to approve the Business Combination. Digital World is not required to obtain an opinion from an independent investment banking firm that is a member of Financial Industry Regulatory Authority, Inc. (“FINRA”) or from another independent firm that the price it is paying is fair to the stockholders of Digital World from a financial point of view. Digital World will not obtain a fairness opinion prior to closing the Business Combination. While the Digital World Board has previously approved the Business Combination, the Merger Agreement contemplates that that during the pendency of the transaction TMTG will provide Digital World updated due diligence information regarding the financial condition of TMTG’s businesses and that following receipt and review of such due diligence information the Board could have, from October 31, 2023 through November 21, 2023, terminated the Merger Agreement if it no longer believed in good faith that the Business Combination was in the best interests of Digital World or its stockholders.

In December 2023, Digital World concluded its renewed due diligence with respect to TMTG’s business plan. Digital World’s Board determined (i) that the Merger Agreement and the transactions contemplated thereby, including the Merger Consideration and the Earnout Shares, are fair and in the best interests of Digital World and (ii) to recommend that the Digital World stockholders adopt the Merger Agreement and approve the Business Combination and the other transactions contemplated by the Merger Agreement. Given the duration of time between the initial execution of the Merger Agreement and the Second Amendment to the Agreement as well as the significant turnover on the Digital World Board since the Merger Agreement was first signed in 2021, during December 2023 in connection with exercising its fiduciary duties, the Board sought to refresh and complete its financial and business due diligence of TMTG, including with respect to the revised transaction terms contemplated by the Second Amendment to the Agreement. In reaching its determination and in support of its decision that the Business Combination and the other transactions contemplated by the Merger Agreement, including the Merger Consideration and the Earnout Shares, are fair and in the best interests of Digital World and its stockholders, the Digital World Board conducted a bring-down evaluation of TMTG’s business model, financial performance, growth opportunities and competitive positioning. As part of this evaluation process, the Digital World Board engaged an independent advisor with which Digital World has not had a material relationship in the past two years, to prepare a Comparable Company Analysis.

The Comparable Company Analysis was based on certain publicly traded companies selected by Digital World’s management and the Digital World Board, which included Meta, X (formerly Twitter), Snapchat and Pinterest. However, while these companies may share certain characteristics that are similar to TMTG, the Digital World Board did not consider any of these companies to be identical in nature to TMTG, given its affiliation with former President Trump and unique market positioning, including purposeful differentiation from the current market offerings considered in its analysis. Accordingly, the assumptions and estimates used in, and the results derived from, the Comparable Company Analysis are inherently subject to substantial uncertainty. The discussed quantitative information, to the extent that it is based on market data, is not necessarily indicative of current market conditions. See “The Business Combination Proposal (Proposal 1) The Board’s Reasons for Approval of the Business Combination.”

Therefore, Digital World’s stockholders will be relying solely on the judgment of the Digital World Board’s assessment of such various factors in determining the value of the Business Combination, and the Digital World Board may not have properly valued such business. The lack of a fairness opinion may also lead an increased number of stockholders to vote against the Business Combination or demand Redemption of their shares, which could potentially impact our ability to consummate the Business Combination. For more information about our decision-making process, see the section entitled “The Business Combination Proposal (Proposal 1) — The Board’s Reasons for Approval of the Business Combination.”

 

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You may be unable to ascertain the merits or risks of TMTG’s operations.

If the Business Combination is consummated, the Combined Entity will be affected by numerous risks inherent in TMTG’s business operations. See “Risk Factors — Risks Related to TMTG.” Although Digital World’s management has endeavored to evaluate the risks inherent in the proposed Business Combination with TMTG, Digital World cannot assure you that it adequately ascertained or assessed all of the significant risk factors. Furthermore, some of these risks may be outside of Digital World’s control. Digital World also cannot assure you that an investment in Digital World’s securities will not ultimately prove to be less favorable to investors in Digital World than a direct investment, if an opportunity were available, in TMTG. In addition, if Digital World’s stockholders do not believe that the prospects for the Business Combination are promising, a greater number of stockholders may exercise their Redemption Rights, which may make it difficult for Digital World to consummate the Business Combination.

There is no assurance that Digital World’s diligence will reveal all material risks that may be present with regard to TMTG. Subsequent to the completion of the Business Combination, the Combined Entity may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on its financial condition and its share price, which could cause you to lose some or all of your investment.

Digital World cannot assure you that the due diligence Digital World has conducted on TMTG will reveal all material issues that may be present with regard to TMTG, or that it would be possible to uncover all material issues through a customary amount of due diligence or that risks outside of Digital World’s control will not later arise. TMTG is aware that Digital World must complete an initial business combination by September 8, 2024. Consequently, TMTG may have obtained leverage over Digital World in negotiating the Merger Agreement, including any subsequent or future amendments, knowing that if Digital World does not complete the Business Combination, Digital World may be unlikely to be able to complete an initial business combination with any other target business prior to such deadline. Because TMTG is a privately held company, Digital World therefore has made its decision to pursue an initial business combination with TMTG on the basis of limited and different information that would be available about other public companies or companies with a longer operating history, which may result in a business combination that is not as profitable as expected, if at all. As a result of these factors, the Combined Entity may be forced to later write-down or write-off assets, restructure operations, or incur impairment or other charges that could result in reporting losses. Even if Digital World’s due diligence successfully identified certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with Digital World’s preliminary risk analysis. Even though these charges may be non-cash items and would not have an immediate impact on Digital World’s liquidity, if Digital World were to report charges of such nature, this could contribute to negative market perceptions about Digital World or Digital World’s securities. In addition, charges of this nature may cause Digital World to violate leverage or other covenants to which it may be subject as a result of it obtaining post-combination debt financing. Accordingly, any stockholders of Digital World who choose to remain stockholders of the Combined Entity following the Business Combination could suffer a reduction in the value of their shares. Such stockholders are unlikely to have a remedy for such reduction in value unless they are able to successfully claim that the reduction was due to the breach by Digital World’s officers or directors of a duty of care or other fiduciary duty owed by them to Digital World, or if they are able to successfully bring a private claim under securities laws that the proxy statement/prospectus relating to the Business Combination contained an actionable material misstatement or material omission.

Potential claims and counterclaims related to TMTG may lead to legal disputes, which could prevent or delay the completion of the Business Combination or, if the Business Combination is completed, significantly impact the Combined Entity’s future performance, dilute existing and future investors, negatively impact investor confidence and market perception and materially and adversely affect the Combined Entity’s business, financial condition or results of operations.

As discussed more fully under the headings “The Business Combination Proposal (Proposal 1) -Background of the Business Combination -Timeline of the Business Combination Post-IPO Negotiations and

 

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Information About Digital World – Legal Proceedings – TMTG Related Potential Dispute,” Digital World and TMTG have been made aware of certain assertions by third parties, UAV and Mr. Cohen, relating to a Services Agreement. In connection with such recent assertions described in this proxy statement/prospectus, according to TMTG, it is possible that UAV and/or Mr. Cohen may seek to litigate as-yet-unspecified claims against a variety of parties (including against each other), including, without limitation, with respect to their alleged rights to: (1) appoint two directors to TMTG and its successors (i.e., the Combined Entity’s Board), (2) approve or disapprove of the creation of additional TMTG shares or share classes and anti-dilution protection for future issuances and (3) a $1.0 million expense reimbursement claim. In addition, UAV asserts that the Services Agreement is not void ab initio and claims that certain events following the July 30, 2021 notification supports its assertion that TMTG is a party to such Services Agreement and it was not voided. UAV also communicated to TMTG and to a holder of TMTG Convertible Notes that it may pursue an action to enjoin consummation of the Business Combination.

Although TMTG advised DWAC that it firmly believes that neither UAV nor Mr. Cohen possess any anti-dilution or consent rights with respect to the Business Combination, if such claims involve the issuance of additional shares in connection with the Business Combination and such claims were determined valid, settlement of such claims could have a material adverse effect from a monetary and dilutive impact (both from an economic and voting standpoint) on the Combined Entity and its stockholders. Should UAV and/or Cohen’s claims prevail, UAV may also become eligible for certain board rights in the Combined Entity. As these potential claims are in their preliminary stages, it is impossible at this time to predict the specific claims that UAV and/or Mr. Cohen might make with respect to their purported anti-dilution rights. However, considering the inherent risks of litigation, Digital World cannot guarantee that the potential claims by UAV and/or Mr. Cohen will be resolved in favor of TMTG and/or the Combined Entity.

Moreover, the assertions by UAV and Mr. Cohen, and the potential claims arising therefrom, 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. This could prevent or further delay the completion of the Business Combination or, if the Business Combination is achieved, impair the Combined Entity’s management’s ability to allocate adequate attention and resources to effectively implement TMTG’s business strategy. Such legal claims could severely impact the Combined Entity’s future performance and negatively affect investor confidence and market perception, potentially causing material and adverse effects on the Combined Entity’s business, financial condition, or operational results, and/or negatively impact the interests of stakeholders including, without limitation, existing Digital World shareholders and UAV and/or Mr. Cohen themselves.

In addition to the disputes with UAV and Mr. Cohen, the Combined Entity may also be subject to the risk of opportunistic shareholder litigation, which could arise from various corporate actions, decisions, or events that shareholders perceive as negatively affecting their investments. The securities price of the Combined Entity may be volatile and, in the past, companies that have experienced volatility in the market price of their stock have been subject to securities litigation, including class action litigation. For example, recently a minority shareholder holding only a few shares of Fortune 500 company prevailed in a lawsuit against a high profile controlling shareholder resulting in a decision obligating such controlling shareholder to repay of over $50 billion. Given the high profile of President Trump and other proposed directors and officers, the Combined Entity may be the target of similar types of litigation in the future. Litigation of this type could result in substantial costs and diversion of management’s attention and resources, which could have a material adverse effect on the Combined Entity’s business, financial condition, and results of operations. Any adverse determination in litigation could also subject Digital World, TMTG, and/or the Combined Entity to significant liabilities.

 

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Digital World may issue additional shares of common stock as a result of conversion of convertible notes issued in Post-IPO Financings or as otherwise required in connection with the consummation of the Business Combination or under the Equity Incentive Plan after completion of the Business Combination, any one of which would dilute the interest of Digital World’s stockholders and likely present other risks.

The Digital World Charter authorizes the issuance of up to 200,000,000 shares of Class A common stock, 10,000,000 shares of Class B common stock, and 1,000,000 shares of preferred stock, par value $0.0001 per share. There are currently 169,972,766 authorized but unissued shares of Class A common stock available for issuance, which amount does not take into account shares reserved for issuance upon exercise of outstanding Warrants. There are currently 2,812,500 authorized but unissued shares of Class B common stock available for issuance. There are currently no shares of preferred stock issued and outstanding. However, Digital World may issue a substantial number of additional shares of common stock as a result of the conversion of outstanding securities issued in Post-IPO Financings, the conversion of TMTG Convertible Notes immediately prior to the Effective Time in connection with the Closing and the issuance of shares under the Equity Incentive Plan.

For example, in order to finance transaction costs in connection with an intended initial business combination, the Sponsor or its affiliates or certain Digital World officers and directors may, but are not obligated, to loan Digital World funds as may be required. Up to $30,000,000 of such loans may be convertible into Working Capital Units at a price $10.00 per Unit at the option of the lender and an additional $10,000,000 of such loans may be convertible into Working Capital Units at a price $8.00 per Unit at the option of the lender. The additional Working Capital Units beyond the Working Capital Units underlying the initial $1,500,000 in working capital loans as described in Digital World’s IPO prospectus will only be issuable upon the approval of Digital World’s stockholders, which approval is included as part of Proposal 5 and Proposal 9 as described in this proxy statement/prospectus. As of the date of this proxy statement/prospectus, there were $4,000,700 outstanding in Digital World Convertible Notes due to our Sponsor and $1,232,000 outstanding in Digital World Convertible Notes due to Renatus, which notes, subject to certain conditions and the terms of each such applicable loan or note, as the case may be. The proceeds of such notes were used to pay costs and expenses in connection with completing the Business Combination, including certain employee expenses relating to the legal and regulatory delays in consummating the same.

In addition, on February 8, 2024, Digital World entered into subscription agreements with certain institutional investors for the issuance of the Digital World Alternative Financing Notes and issued $10,000,000 to such institutional investors. Digital World expects to issue the remaining up to $40,000,000 of such Digital World Alternative Financing Notes concurrently with the closing of the Business Combination.

The issuance of additional shares of common stock underlying any such Post-IPO Financings:

 

   

may significantly dilute the equity interest of existing investors;

 

   

could cause a change in control if a substantial number of common stock is issued, which may affect, among other things, Digital World’s ability to use its net operating loss carry forwards, if any, and could result in the resignation or removal of Digital World’s present officers and directors; and

 

   

may adversely affect prevailing market prices for Digital World’s Units, Class A common stock and/or Warrants.

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Digital World — Liquidity and Capital Resources.” See also “Unaudited Pro Forma Condensed Financial Information — Notes to Unaudited Pro Forma Combined Financial Statements — Note 3 — Transaction Accounting Adjustments to the Unaudited Pro Forma Combined Balance Sheet as of September 30, 2023.”

Finally, although the Digital World Charter provides, among other things, that prior to Digital World’s initial business combination, Digital World may not issue additional shares of capital stock that would entitle the holders thereof to (i) receive funds from the Trust Account or (ii) vote on any initial business combination, these provisions of the Digital World Charter, like all other provisions thereof, may be amended with a stockholder vote. Digital World’s executive officers and directors have agreed, pursuant to a written agreement with Digital

 

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World, that they will not propose any amendment to the Digital World Charter that would affect the substance or timing of Digital World’s obligation to redeem 100% of its Public Shares if Digital World does not complete the initial business combination by September 8, 2024, unless Digital World provides its Public Stockholders with the opportunity to redeem their shares of Class A common stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (which interest shall be net of taxes payable and working capital released to Digital World), divided by the number of then-outstanding Public Shares.

Digital World’s independent registered public accounting firm’s report contains an explanatory paragraph that expresses substantial doubt about Digital World’s ability to continue as a “going concern,” since Digital World will cease all operations except for the purpose of liquidating if it is unable to complete an initial business combination by September 8, 2024.

On February 8, 2024, Digital World had cash of $312,083,482.12 held in the Trust Account and $4,406,851.97 outside of the Trust Account. Further, Digital World incurred and expects to continue to incur significant costs in pursuit of its financing and acquisition plans. Management’s plans to address this need for capital is discussed in the section of this proxy statement/prospectus titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Digital World.” Digital World cannot assure you that its plans to raise capital or to consummate the Business Combination or any other initial business combination will be successful. As stated above, Digital World has until September 8, 2024 to consummate an initial business combination. It is uncertain that Digital World will be able to consummate an initial business combination by such time. If an initial business combination is not consummated by such date, there will be a mandatory liquidation and subsequent dissolution of Digital World. Additionally, Digital World has incurred and expects to incur significant costs in pursuit of its acquisition plans and it lacks the financial resources it needs to sustain operations for a reasonable period of time, which is considered to be one year from the date of the issuance of the financial statements, there is substantial doubt about Digital World’s ability to continue as a going concern. The financial statements contained elsewhere in this proxy statement/prospectus do not include any adjustments that might result from its inability to continue as a going concern.

Digital World’s management has identified a material weakness in its internal control over financial reporting. If it is unable to develop and maintain an effective system of internal control over financial reporting, Digital World may not be able to accurately report its financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business and operating results.

Digital World’s management has identified a material weakness in its internal control over financial reporting as of December 31, 2022. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of Digital World’s annual or interim financial statements will not be prevented or detected and corrected on a timely basis. Additionally, on May 18, 2023, the Digital World audit committee concluded that such audited financial statements as of and for the year ended December 31, 2022 (the “2022 Audited Financials”) included in the Digital World 2022 Annual Report on Form 10-K (the “2022 Form 10-K”) should no longer be relied upon due to an error related to the accounting for certain expenses in those financial statements and that those financials statements should be restated. As a result, Digital World determined a material weakness existed in its internal control over financial reporting. On October 10, 2023, in the process of the Company’s auditors’ review and re-audit of the 2022 Audited Financials and after discussion with the Company’s management and advisors, the Company’s audit committee concluded that the unaudited consolidated financial statements for the quarterly periods ended March 31, 2022, June 30, 2022, and September 30, 2022 (the “2022 Quarterly Financials”), originally included in the Company’s Quarterly Reports on Form 10-Q for such quarterly periods, and filed with the SEC on May 19, 2022, August 23, 2022, and November 21, 2022, respectively, included the same errors related to the accounting of expenses as those identified in the 2022 Audited Financials in the 2022 Form 10-K and such 2022 Quarterly Financials should also no longer be relied upon. As the Company’s auditors continued their review and re-audit of the 2022 Audited

 

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Financials and the 2022 Quarterly Financials for the restatement of these financials in an amended Annual Report on Form 10-K/A, on October 13, 2023, Digital World’s audit committee concluded that the Company’s audited financial statements as of and for the year ended December 31, 2021 (the “2021 Audited Financials”) included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 should also no longer be relied upon. In connection with such determination, after discussion with the Company’s management and its advisors, the Company’s audit committee also concluded that the Company’s 2021 Audited Financials included the same errors related to the accounting of expenses as discussed above in relation to the 2022 Audited Financials and, as such, determined that such errors resulted in a material weakness and such 2021 Audited Financials should also no longer be relied upon. As a result, the Company’s management concluded the Company’s internal control over financial reporting and that the Company’s disclosure controls and procedures were not effective.

Effective internal controls are necessary for us to provide reliable financial reports and prevent fraud. Digital World’s management continue to evaluate steps to remediate the material weakness, including assessing its resource needs as well as roles and responsibilities with a particular focus on accounting and financial reporting staff, but it cannot offer any assurance that its controls will not require additional review and modification in the future as industry accounting practice may evolve over time. These remediation measures may be time consuming and costly and there is no assurance that these initiatives will ultimately have the intended effects. In addition if Digital World’s management is unable to remediate the material weakness in a timely manner or it identifies additional material weaknesses, it may be unable to provide required financial information in a timely and reliable manner and it may incorrectly report financial information. The existence of a material weakness in internal control over financial reporting could adversely affect its reputation or investor perceptions of Digital World, which could have a negative effect on the trading price of its securities, its ability to consummate the Business Combination or find alternative target candidates. Digital World’s management can give no assurance that the measures they have taken and plan to take in the future will remediate the material weakness identified or that any additional material weaknesses or restatements of financial results will not arise in the future due to a failure to implement and maintain adequate internal control over financial reporting or circumvention of these controls. Even if they are successful in strengthening Digital World’s controls and procedures, in the future, as a combined entity, those controls and procedures may not be adequate to prevent or identify irregularities or errors or to facilitate the fair presentation of our financial statements. Likewise, if Digital World’s financial statements are not filed on a timely basis, Digital World could be subject to sanctions or investigations by the stock exchange on which its securities are quoted, the SEC or other regulatory authorities. See “Risk Factors — Risks Related to Digital World and the Business Combination — Changes in laws or regulations or how such laws or regulations are interpreted or applied, or a failure to comply with any laws or regulations, may adversely affect Digital World’s business, including its ability to negotiate and complete the Business Combination, and its results of operations.”

Furthermore, on July 27, 2023, Digital World’s former public accounting firm, Marcum notified the audit committee of its resignation, During the two most recent fiscal years ended December 31, 2022 and through the subsequent interim period up to and including the date of Marcum’s resignation, there were no “disagreements” (as that term is defined in Item 304(a)(1)(iv) of Regulation S-K of the Exchange Act) between Digital World and Marcum.

During the two most recent fiscal years ended December 31, 2022 and through the subsequent interim period preceding Marcum’s resignation, there were the following reportable events within the meaning set forth in Item 304(a)(1)(v) of Regulation S-K of the Exchange Act. As discussed above, there was a material weakness existing in Digital World’s internal control over financial reporting, which has been remedied on Digital World’s Annual Report on Form 10-K/A filed on October 30, 2023. Additionally, immediately after filing its 2022 Form 10-K, the Company’s management submitted documentation to Marcum for the filing of the Company’s Quarterly Report on Form 10-Q for the interim period ending March 31, 2023 (the “Q1 2023 Form 10-Q”). As part of the preparation of its Q1 2023 Form 10-Q, management provided Marcum with (i) two new invoices received during the first quarter of 2023, which were for certain services rendered in fiscal year 2022 and (ii) the board minutes for the first quarter of 2023. Upon review, Marcum notified management that the two invoices had

 

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been recorded incorrectly as they should have been reported under the 2022 Audited Financials included in the 2022 Form 10-K. Moreover, Marcum pointed out that some board of directors’ meeting minutes from the first quarter of 2023 were missing from the materials submitted for the audit of the 2022 Audited Financials. During the submission period for the 2022 Form 10-K, the Company’s management had provided all board of directors’ meeting minutes up until December 31, 2022, which process was consistent with both the Company’s prior practice and Marcum’s requests in previous audits. Accordingly, the Company’s new management understood Marcum’s request for review to only relate to the board of directors’ meeting minutes for fiscal year 2022, which were duly submitted. In April 2023, the Company submitted all available Digital World Board meeting minutes for fiscal year 2023. Since Marcum did not make any follow-up requests on such minutes, the Company’s management incorrectly concluded that the request had been fulfilled. See “Change In Independent Registered Public Accounting Firm.”

On August 8, 2023, Digital World engaged Adeptus as its independent public accounting firm to audit its consolidated financial statements for the fiscal years ended December 31, 2022 and 2021 and to review its quarterly consolidated financial statements beginning with the first quarter of the 2022 fiscal year.

If Digital World identifies any new material weaknesses in the future, any such newly identified material weakness could limit its ability to prevent or detect a misstatement of its accounts or disclosures that could result in a material misstatement of our annual or interim financial statements. In addition, to the extent there are future disagreements with Digital World’s auditors, Digital World’s ability to prepare and timely comply with its reporting obligations may be significantly impaired. In any of these occurrences were to materialize, Digital World may be unable to maintain compliance with securities law requirements and applicable stock exchange listing requirements regarding timely filing of periodic reports, investors may lose confidence in our financial reporting and the price of its securities may decline as a result. Digital World cannot assure you that any measures it has taken or may take in the future will be sufficient to avoid potential future material weaknesses or disagreements with its auditors.

Digital World is dependent upon its executive officers and directors and their departure could adversely affect Digital World’s ability to operate and to consummate the Business Combination; Digital World’s executive officers and directors also allocate their time to other businesses, thereby causing potential conflicts of interest that could have a negative impact on Digital World’s ability to complete the Business Combination.

Digital World’s operations and its ability to consummate the Business Combination are dependent upon a relatively small group of individuals and, in particular, its executive officers and directors. Digital World believes that its success depends on the continued service of its executive officers and directors, at least until the completion of the Business Combination. Digital World does not have an employment agreement with, or key-man insurance on the life of, any of its executive officers or directors. For example, throughout 2022, various directors resigned from Digital World, and on March 19, 2023, the Digital World Board terminated Patrick Orlando from his positions as Chairman and Chief Executive Officer of Digital World due to the Investigation. The unexpected loss of the services of one or more of Digital World’s executive officers or directors could have a detrimental effect on Digital World and the ability to consummate the Business Combination. In addition, Digital World’s executive officers and directors are not required to commit any specified amount of time to its affairs and, accordingly, will have conflicts of interest in allocating management time among various business activities, including monitoring the due diligence and undertaking the other actions required in order to consummate the Business Combination. Each of Digital World’s executive officers is engaged in several other business endeavors for which they may be entitled to substantial compensation and Digital World’s directors also serve as officers and board members for other entities. If Digital World’s executive officers’ and directors’ other business affairs require them to devote substantial amounts of time to such affairs in excess of their current commitment levels, it could limit their ability to devote time to Digital World’s affairs which may have a negative impact on Digital World’s ability to consummate the Business Combination.

 

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Certain of Digital World’s officers and directors are now, and all of them may in the future become, affiliated with entities engaged in business activities similar to those intended to be conducted by Digital World and, accordingly, may have conflicts of interest in allocating their time and determining to which entity a particular business opportunity should be presented.

Until Digital World consummates its initial business combination, it intends to engage in the business of identifying and combining with one or more businesses. The Sponsor and Digital World’s officers and directors are, and may in the future become, affiliated with entities (such as operating companies or investment vehicles) that are engaged in a similar business, including other special purpose acquisition companies with a class of securities registered under the Exchange Act.

Digital World’s officers and directors also may become aware of business opportunities which may be appropriate for presentation to us and the other entities to which they owe certain fiduciary or contractual duties. Digital World’s amended and restated certificate of incorporation provides that it renounces its interest in any corporate opportunity offered to any director or officer unless such opportunity is expressly offered to such person solely in his or her capacity as Digital World’s director or officer and such opportunity is one Digital World is legally and contractually permitted to undertake and would otherwise be reasonable for Digital World to pursue, and to the extent the director or officer is permitted to refer that opportunity to Digital World without violating any legal obligation.

In the absence of the “corporate opportunity” waiver in Digital World’s Charter, certain candidates would not be able to serve as an officer or director. Digital World believes it substantially benefits from having representatives who bring significant, relevant and valuable experience to its management, and, as a result, the inclusion of the “corporate opportunity” waiver in its amended and restated certificate of incorporation provides it with greater flexibility to attract and retain the officers and directors that Digital World feels are the best candidates.

However, the personal and financial interests of Digital World’s directors and officers may influence their motivation in timely identifying and selecting a target business and completing an initial business combination. The different timelines of competing business combinations could cause Digital World’s directors and officers to prioritize a different business combination over finding a suitable acquisition target for Digital World’s initial business combination. Consequently, Digital World’s directors’ and officers’ discretion in identifying and selecting a suitable target business may result in a conflict of interest when determining whether the terms, conditions and timing of a particular business combination are appropriate and in Digital World’s stockholders’ best interest, which could negatively impact the timing for a business combination. Digital World is not aware of any such conflicts of interest and does not believe that any such conflicts of interest impacted its search for an acquisition target.

For additional information about Digital World executive officers’ and directors’ business affiliations and the potential conflicts of interest that you should be aware of, please see “Digital World’s Management.”

Deferred underwriting fees in connection with the IPO and payable at the consummation of an initial business combination will not be adjusted to account for Redemptions by Digital World’s Public Stockholders; if Digital World’s Public Stockholders exercise their Redemption Rights, the amount of effective total underwriting commissions as a percentage of the aggregate proceeds from the IPO will increase.

The underwriters in the IPO are entitled to deferred underwriting commissions totaling $10,062,500 upon the consummation of an initial business combination, such amounts being held in the Trust Account until the consummation of Digital World’s initial business combination. Such amounts will not be adjusted to account for Redemptions of Public Shares by Digital World’s Public Stockholders. Accordingly, the amount of effective total underwriting commissions as a percentage of the aggregate proceeds from the IPO will increase as the number of Public Shares redeemed increases. Assuming no exercise of Digital World Warrants, if no Public Stockholders of Digital World exercise Redemption Rights with respect to their Public Shares, the effective deferred underwriting fee would be approximately $0.35 per Public Share on a pro forma basis (or 0.7% of the value of Public Shares assuming a trading price of $10.00 per Public Share). If Public Stockholders of Digital World

 

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exercise Redemption Rights with respect to 50% of Public Shares in connection with the Business Combination, the effective deferred underwriting fee would be approximately $3.5 per Public Share on a pro forma basis (or 7.0% of the value of shares assuming a trading price of $10.00 per Public Share). If holders of Digital World’s Public Shares exercise Redemption Rights with respect to the maximum number of Public Shares which would nevertheless allow Digital World to consummate the Business Combination, the effective deferred underwriting fee is $1.75 per Public Share on a pro forma basis (or 17.5% of the value of shares assuming a trading price of $10.00 per Public Share).

The Combined Entity’s ability to be successful following the Business Combination will depend upon the efforts of the Combined Entity’s Board and key personnel and the loss of such persons could negatively impact the operations and profitability of New Digital World’s post-Business Combination business.

The Combined Entity’s ability to be successful following the Business Combination will be dependent upon the efforts of the Combined Entity’s Board and key personnel. Digital World cannot assure you that New Digital World’s Board and key personnel will be effective or successful or remain with the Combined Entity. In addition to the other challenges they will face, such individuals may be unfamiliar with the requirements of operating a public company, which could cause the Combined Entity’s management to have to expend time and resources helping them become familiar with such requirements.

It is estimated that, pursuant to the Merger Agreement, Digital World’s Public Stockholders will own approximately 21.6% of the equity interests of the Combined Entity ((A) excluding the exercise of outstanding Warrants and the conversion of securities issued in the Post-IPO Financings and (B) assuming that (i) there are no Redemptions of any shares by Digital World’s Public Stockholders in connection with the Business Combination and (ii) no awards are issued under the Equity Incentive Plan). Furthermore, the Second Amendment to the Agreement permits Digital World to designate one (1) person to the Combined Entity’s Board and TMTG to designate six (6) persons to the Combined Entity’s Board. As such, Digital World’s management, other than Eric Swider, who is expected to serve on the Board, will not be engaged in the management of the Combined Entity’s business. Accordingly, the future performance of the Combined Entity will depend upon the quality of the post-Business Combination Board, management and key personnel of the Combined Entity.

Digital World’s key personnel may negotiate employment or consulting agreements with the Combined Entity in connection with the Business Combination. These agreements may provide for them to receive compensation following the Business Combination and as a result, may cause them to have conflicts of interest in determining whether the Business Combination is advantageous.

Digital World’s key personnel may be able to remain with the Combined Entity after the completion of the Business Combination only if they are able to negotiate employment or consulting agreements in connection with the Business Combination. Such negotiations may take place prior to the consummation of the Business Combination and could provide for such individuals to receive compensation in the form of cash payments and/or securities of the Combined Entity for services they would render to the Combined Entity after the completion of the Business Combination. The personal and financial interests of such individuals may influence their motivation in connection with the consummation of the Business Combination. However, Digital World believes the ability of such individuals to remain with the Combined Entity after the completion of the Business Combination will not be the determining factor in Digital World’s decisions regarding the consummation of the Business Combination. There is no certainty, however, that any of Digital World’s key personnel will remain with the Combined Entity after the consummation of the Business Combination. Digital World cannot assure you that any of its key personnel will remain in senior management or advisory positions with the Combined Entity.

 

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Because Digital World’s Sponsor, officers and directors will lose their entire investment in Digital World if the Business Combination or an alternative business combination is not completed, and because Digital World’s Sponsor, officers and directors will not be eligible to be reimbursed for their out-of-pocket expenses if the Business Combination is not completed, a conflict of interest may have arisen in determining whether TMTG was appropriate for Digital World’s initial business combination.

Digital World’s Sponsor and current and former officers and directors currently own 5,537,500 Founder Shares. In addition, the Sponsor purchased an aggregate of 1,133,484 Placement Units, the Placement Warrants underlying which will be worthless if Digital World does not complete an initial business combination. The Founder Shares are automatically convertible into the shares of Class A common stock at the Closing. However, the holders of Founder Shares and Placement Shares have agreed (A) to vote any shares owned by them in favor of any proposed initial business combination, (B) not to redeem any shares in connection with a stockholder vote to approve a proposed initial business combination, and (C) to waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares and Placement Shares held by them if Digital World fails to complete an initial business combination within the requisite time period.

In addition, in order to finance transaction costs in connection with an intended initial business combination, the Sponsor extended loans to Digital World, and Digital World issued Digital World Convertible Notes to the Sponsor and Renatus, which notes, subject to certain conditions, may be converted into Working Capital Units immediately prior to the consummation of the Business Combination. See “Risk Factors — Risks Related to Digital World and the Business Combination — Digital World may issue additional shares of common stock as a result of conversion of convertible notes issued in Post-IPO Financings or as otherwise required in connection with the consummation of the Business Combination or under the Equity Incentive Plan after completion of the Business Combination, any one of which would dilute the interest of Digital World’s stockholders and likely present other risks.” See also “Unaudited Pro Forma Condensed Combined Financial Information — Notes to Unaudited Pro Forma Combined Financial Statements — Note 3 — Transaction Accounting Adjustments to the Unaudited Pro Forma Combined Balance Sheet as of September 30, 2023.”

The personal and financial interests of Digital World’s officers and directors may have influenced their motivation in identifying and selecting a target business combination, completing an initial business combination and influencing the operation of the business following the initial business combination. At the closing of Digital World’s initial business combination, its Sponsor, officers and directors, or any of their respective affiliates, will be reimbursed for any out-of-pocket expenses (including any Digital World Convertible Notes) incurred in connection with activities on Digital World’s behalf such as identifying potential target businesses and performing due diligence on suitable business combinations. In the event the Business Combination or an alternative business combination is completed, there is no cap or ceiling on the reimbursement of out-of-pocket expenses incurred in connection with activities on Digital World’s behalf. However, Digital World’s Sponsor, officers and directors, or any of their respective affiliates will not be eligible for any such reimbursement if the Business Combination or an alternative business combination is not completed. Such financial interests of Digital World’s Sponsor, officers and directors may have influenced their motivation in approving the Business Combination and may influence their motivation for completing the Business Combination.

Some of the Digital World and TMTG officers and directors may be argued to have conflicts of interest that may influence them to support or approve the Business Combination without regard to your interests.

Certain officers and directors of Digital World and TMTG participate in arrangements that provide them with interests in the Business Combination that may be different from yours, including, among others, the continued service as an officer or director of New Digital World, severance benefits, equity grants, continued indemnification and the potential ability to sell an increased number of shares of common stock of New Digital World. If the Business Combination is not consummated and Digital World is forced to wind up, dissolve and liquidate in accordance with the Digital World Charter, the 5,537,500 Founder Shares currently held by the Sponsor and certain current and former directors and officers of Digital World, which were initially acquired prior to the Digital World IPO for an aggregate purchase price of $25,000, will be worthless (as the holders have

 

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waived liquidation rights with respect to such shares). Such Founder Shares, assuming conversion into shares of Class A common stock, had an aggregate market value of approximately $222.7 million based upon the closing price of Digital World’s common stock of $40.22 per share on Nasdaq on February 1, 2024. In addition, Digital World has issued Digital World Convertible Notes to certain officers, directors and affiliates pursuant to the Convertible Note Compensation Plan approved by the requisite holders of Class A common stock at the annual meeting of Digital World’s stockholders on December 19, 2023, which notes collectively represent an aggregate amount of $9,651,250 and may be convertible upon the Closing of the Business Combination into a maximum of 965,125 shares of Class A common stock. If Digital World fails to close the Business Combination such notes would then be worthless. Accordingly, the Sponsor and Digital World’s current officers and directors have interests that may be different from, or in addition to, your interests as a stockholder.

These interests, among others, may influence the officers and directors of Digital World and TMTG to support or approve the Merger. For a discussion of conflicts of interest and more information on the interests of Digital World and TMTG executive officers and directors, see the sections entitled “The Business Combination Proposal (Proposal 1) — Interests of Digital World’s Directors and Officers in the Business Combination,” “The Business Combination Proposal (Proposal 1) — Interests of TMTG Directors and Executive Officers in the Business Combination” and “Certain Relationships and Related Person Transactions in this proxy statement/prospectus.

Digital World’s stockholders and TMTG’s stockholders may not realize a benefit from the Business Combination commensurate with the ownership dilution they will experience in connection with the Business Combination.

If New Digital World is unable to realize the full strategic and financial benefits currently anticipated from the Merger, Digital World’s stockholders and TMTG’s stockholders will have experienced substantial dilution of their ownership interests in their respective companies without receiving any commensurate benefit, or only receiving part of the commensurate benefit to the extent New Digital World is able to realize only part of the strategic and financial benefits currently anticipated from the Business Combination.

During the pendency of the Business Combination, Digital World and TMTG may not be able to enter into a business combination with another party because of restrictions in the Merger Agreement, which could adversely affect their respective businesses. Furthermore, certain provisions of the Merger Agreement may discourage third parties from submitting alternative takeover proposals, including proposals that may be superior to the arrangements contemplated by the Merger Agreement.

Covenants in the Merger Agreement impede the ability of Digital World and TMTG to make acquisitions or complete other transactions that are not in the ordinary course of business pending completion of the Business Combination. As a result, if the Business Combination is not completed, the parties may be at a disadvantage to their competitors during that period. In addition, while the Merger Agreement is in effect, each party is generally prohibited from soliciting, initiating, encouraging or entering into certain extraordinary transactions, such as a merger, sale of assets or other business combination outside the ordinary course of business, with any third party. Any such transactions could be favorable to such party’s stockholders.

If the conditions to the Merger are not met, the Business Combination may not occur.

Even if the Business Combination is approved by the stockholders of Digital World (including each of the required approvals) and TMTG, specified conditions must be satisfied or waived to complete the Business Combination. These conditions are described in detail in the Merger Agreement and in addition to stockholder consent, include among other requirements, (i) receipt of requisite regulatory approvals and no law or order preventing the transactions, (ii) no pending litigation to enjoin or restrict the Closing, (iii) each party’s representations and warranties being true and correct as of the date of the Merger Agreement and as of the Closing (subject to Material Adverse Effect), (iv) each party complying in all material respects with its covenants

 

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and agreements, (v) no Material Adverse Effect with respect to a party since the date of the Merger Agreement which remains continuing and uncured, (vi) Digital World having net tangible assets of Digital World having at least $5,000,001 in net tangible assets, after giving effect to the Redemption of Digital World Public Stockholders, (vii) the members of the post-Closing board being elected or appointed, (viii) an effective registration statement, (ix) the conditional Nasdaq approval and (x) Digital World having cash and cash equivalents of at least equal to $60,000,000. See “The Business Combination Proposal (Proposal 1) — The Merger Agreement — Conditions to the Closing” below for a more complete summary. Digital World and TMTG cannot assure you that all of the conditions will be satisfied. If the conditions are not satisfied or waived, the Business Combination will not occur, or will be delayed and such delay may cause Digital World and TMTG to each lose some or all of the intended benefits of the Business Combination. If the Business Combination does not occur, Digital World may not be able to find another potential candidate for its initial business combination prior to Digital World’s deadline (currently September 8, 2024), and Digital World will be required to liquidate.

The process of taking a company public by means of a business combination with a SPAC is different from taking a company public through an underwritten offering and may create risks for our unaffiliated investors. You may not have the same benefits as an investor in an underwritten public offering.

Like other business combination transactions and spin-offs, in connection with the Business Combination, you will not receive the benefits of the diligence performed by the underwriters in an underwritten public offering. An underwritten offering involves a company engaging underwriters to purchase its shares and resell them to the public. An underwritten offering imposes statutory liability on the underwriters for material misstatements or omissions contained in the registration statement unless they are able to sustain the burden of providing that they did not know and could not reasonably have discovered such material misstatements or omissions. This is referred to as a “due diligence” defense. Due diligence entails engaging legal, financial and/or other experts to perform an investigation as to the accuracy of an issuer’s disclosure regarding, among other things, its business and financial results. Auditors of the issuer also will deliver a “comfort” letter with respect to the financial information contained in the registration statement. In making their investment decision, investors in underwritten public offerings have the benefit of such diligence. Investors in an underwritten public offering may benefit from the role of the underwriters in such an offering. Going public via a business combination with a SPAC does not involve any underwriters and does not generally necessitate the level of review required to establish a “due diligence” defense as would be customary on an underwritten offering.

In an underwritten public offering, an issuer initially sells its securities to the public market via one or more underwriters, who distribute or resell such securities to the public. Underwriters have liability under the U.S. securities laws for material misstatements or omissions in a registration statement pursuant to which an issuer sells securities.

In contrast, Digital World and TMTG engaged a financial advisor (rather than underwriters) in connection with the Business Combination. The role of a financial advisor typically differs from that of an underwriter. For example, financial advisors do not act as intermediaries in the public sale of securities and therefore do not face the same potential liability under the U.S. securities laws as underwriters. As a result, financial advisors typically do not undertake the same level of, or any, due diligence investigation of the issuer as is typically undertaken by underwriters.

In connection with this proxy statement/prospectus, no parties other than Digital World and TMTG have conducted an investigation of the disclosure contained herein. In addition, as an unaffiliated investor, you will not be afforded the opportunity to perform your own due diligence investigation of, or otherwise obtain information on, Digital World or TMTG beyond the information that is contained in this proxy statement/prospectus (or is otherwise publicly available). You therefore may not have the benefit of the same level of review as an investor in an underwritten public offering, who has the benefit of the underwriters’ evaluation and due diligence investigation of the issuer.

In addition, going public via a business combination with a SPAC does not involve a book-building process as is the case in an underwritten public offering. In any underwritten public offering, the initial value of a

 

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company is set by investors who indicate the price at which they are prepared to purchase shares from the underwriters. In the case of a SPAC transaction, the value of Digital World is established by means of negotiations between the target company, the SPAC and, in some cases, other investors who agree to purchase shares at the time of the business combination. The process of establishing the value of a company in a SPAC business combination may be less effective than the book-building process in an underwritten public offering and also does not reflect events that may have occurred between the date of the business combination agreement and the closing of the transaction. In addition, underwritten public offerings are frequently oversubscribed resulting in additional potential demand for shares in the aftermarket following the underwritten public offering. There is no such book of demand built up in connection with a SPAC transaction and no underwriters with the responsibility of stabilizing the share price which may result in the share price being harder to sustain after the transaction.

Digital World engaged one or more of the underwriters from its initial public offering to act as a financial advisor in connection with the initial business combination and as placement agent in connection with the PIPE. These financial incentives have caused them to have potential or actual conflicts of interest in rendering any such additional services to Digital World, including, for example, in connection with the sourcing and consummation of an initial business combination.

Digital World engaged one of the underwriters of its initial public offering to act as a financial advisor in connection with the initial business combination and as placement agent in connection with the PIPE. In connection with EF Hutton’s role as placement agent and capital market advisor of the PIPE, Digital World agreed to pay EF Hutton a fee ranging from 3.0% to 2.5% of the gross proceeds of the PIPE, depending on the final size of any such placement. As such, even though the PIPE has been terminated in full, pursuant to the terms of such engagement, Digital World has agreed to pay EF Hutton a fee equal to up to 2.5% of the gross proceeds of the Digital World Alternative Financing Notes. In addition, Digital World has agreed to indemnify EF Hutton for any legal proceedings related to the PIPE. Owing to the Investigation, Digital World anticipates reimbursing EF Hutton approximately $456,789. Further, as an underwriter in Digital World’s IPO, EF Hutton and the underwriters are also entitled to receive deferred commissions that are conditioned on the completion of an initial business combination. Such underwriters’ or their respective affiliates’ financial interests tied to the consummation of a business combination transaction have given rise to potential or actual conflicts of interest in providing any such additional services to Digital World, including potential conflicts of interest in connection with the sourcing and consummation of an initial business combination.

There are risks to Digital World stockholders who are not affiliates of the Sponsor, or of any directors or officers, of becoming stockholders of the Combined Entity through the Business Combination rather than acquiring securities of TMTG directly in an underwritten public offering, including no independent due diligence review by an underwriter and conflicts of interest of the Sponsor.

Because there is no independent third-party underwriter involved in the Business Combination or the issuance of common stock and Warrants in connection therewith, investors will not receive the benefit of an outside independent review of Digital World’s and TMTG’s respective finances and operations performed in an initial public securities offering. Underwritten public offerings of securities conducted by a licensed broker-dealer are subjected to a due diligence review by the underwriter or dealer manager to satisfy statutory duties under the Securities Act, the rules of FINRA and the national securities exchange where such securities are listed. Additionally, underwriters or dealer-managers conducting such public offerings are subject to liability for any material misstatements or omissions in a registration statement filed in connection with the public offering. As no such review will be conducted in connection with the Business Combination, our stockholders must rely on the information in this proxy statement/prospectus and will not have the benefit of an independent review and investigation of the type normally performed by an independent underwriter in a public securities offering.

In addition, the Sponsor and Digital World’s executive officers and directors have interests in the Business Combination that may be different from, or in addition to, the interests of Digital World’s stockholders generally.

 

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Such interests may have influenced Digital World’s directors in making their recommendation that you vote in favor of the Business Combination Proposal and the other Proposals described in this proxy statement/prospectus.

Digital World was in the past, and continues to be, subject to inquiries, exams, pending investigations, or enforcement matters.

Digital World is subject to regulation under federal, state, and applicable international laws. From time to time, Digital World may be threatened with or named as a defendant in lawsuits, arbitrations and administrative claims involving securities and other matters. Digital World is also subject to periodic regulatory examinations and inspections. Compliance and trading problems or other deficiencies or weaknesses that are reported to regulators, such as the SEC, FINRA or state regulators, or that are identified by regulators themselves, are investigated by such regulators, and may, if pursued, result in formal claims being filed against Digital World by stockholders or disciplinary action being taken against us by regulators or enforcement agencies.

To resolve issues raised in examinations or other governmental actions, Digital World may be required to take various corrective actions, including changing certain business practices, making refunds or taking other actions that could be financially or competitively detrimental to Digital World. Digital World expects to continue to incur costs to comply with governmental regulations. Any such claims or disciplinary actions that are decided against Digital World could have a material impact on its financial results.

Digital World is cooperating with a FINRA inquiry concerning events (specifically, a review of trading) that preceded the public announcement of the Merger Agreement. According to FINRA’s request, the inquiry should not be construed as an indication that FINRA has determined that any violations of Nasdaq rules or federal securities laws have occurred, nor as a reflection upon the merits of the securities involved or upon any person who effected transactions in such securities.

On July 3, 2023, Digital World reached a Settlement in Principle in connection with the Investigation with respect to certain statements, agreements and omissions and the timing thereof included in Digital World’s registration statements on Form S-1 in connection with its IPO and Form S-4. The Settlement in Principle was subject to approval by the SEC.

On July 20, 2023, the SEC approved the Settlement in Principle, which settled its dispute with Digital World and entered an Order finding that Digital World violated certain antifraud provisions of the Securities Act and the Exchange Act, in connection with Digital World’s IPO filings on Form S-1 and the Form S-4. See “Risk Factors — Risks Related to Digital World and the Business Combination — Regulatory delays could cause us to be unable to consummate the Business Combination.” See also “The Business Combination Proposal (Proposal 1) — Background of the Business Combination — SEC Settlement in Principle.”

Digital World has cooperated with the SEC and continues to cooperate with any regulatory authorities in relation to any inquiries or pending investigations. However, any resolution of the inquiry or investigation, as well as proceedings by the SEC, FINRA, or other governmental or regulatory authorities, could result in the imposition of significant fines, penalties, injunctions, prohibitions on the conduct of Digital World’s business, damage to its reputation and other sanctions against it, including restrictions on its activities. Further, such pending or new investigations could cause a delay to the effectiveness of the Form S-4, which could materially delay, materially impede, or prevent consummation of the Business Combination.

Delaware law and New Digital World’s certificate of incorporation and bylaws will contain certain provisions, including anti-takeover provisions, that limit the ability of stockholders to take certain actions and could delay or discourage takeover attempts that stockholders may consider favorable.

The Amended Charter and New Digital World’s bylaws that will be in effect upon consummation of the Business Combination, and the DGCL, contain provisions that could have the effect of rendering more difficult,

 

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delaying, or preventing an acquisition deemed undesirable by New Digital World’s Board and therefore depress the trading price of New Digital World’s common stock. These provisions could also make it difficult for stockholders to take certain actions, including electing directors who are not nominated by the current members of the TMTG Board or taking other corporate actions, including effecting changes in the management of the Combined Entity. Among other things, the Amended Charter and New Digital World’s bylaws would include provisions regarding:

 

   

a classified Board with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of New Digital World’s Board;

 

   

the ability of New Digital World’s Board to issue shares of preferred stock, including “blank check” preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer;

 

   

the limitation of the liability of, and the indemnification of, New Digital World’s directors and officers;

 

   

the exclusive right of New Digital World’s Board to elect a director to fill a vacancy created by the expansion of New Digital World’s Board or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on New Digital World’s Board;

 

   

the requirement that directors may only be removed from New Digital World’s Board for cause;

 

   

a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of stockholders and could delay the ability of stockholders to force consideration of a stockholder proposal or to take action, including the removal of directors;

 

   

the limitation that stockholders may only call a special meeting by the request, in writing, of stockholders owning individually or together ten percent (10%) or more of New Digital World’s entire capital stock, issued and outstanding and entitled to vote, which could delay the ability of stockholders to force consideration of a proposal or to take action, including the removal of directors;

 

   

the procedures for the conduct and scheduling of Board and stockholder meetings;

 

   

the requirement for the affirmative vote of holders of at least 2/3 of the voting power of all of the then-outstanding shares of the voting stock, voting together as a single class, to amend, alter, change or repeal any provision of the Amended Charter or New Digital World’s bylaws, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in New Digital World’s Board and also may inhibit the ability of an acquirer to effect such amendments to facilitate an unsolicited takeover attempt;

 

   

the ability of New Digital World’s Board to amend the bylaws, which may allow New Digital World’s Board to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the bylaws to facilitate an unsolicited takeover attempt; and

 

   

advance notice procedures with which stockholders must comply to nominate candidates to New Digital World’s Board or to propose matters to be acted upon at a stockholders’ meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in New Digital World’s Board and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of the Combined Entity.

These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in New Digital World’s Board or management.

Furthermore, the New Digital World Board may opt out of certain statutory “anti-takeover” provisions under Delaware law such as the provisions of Section 203 of the DGCL, an anti-takeover law. In general, Section 203 of the DGCL which may prohibit certain business combinations with stockholders owning 15% or more of

 

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the New Digital World’s outstanding voting stock. These anti-takeover provisions and other make it more difficult for stockholders or potential acquirers to obtain control of companies. If New Digital World opts out of Section 203 of the DGCL, it may be easier for such persons or entities to initiate actions that are opposed by the then-current Board and more difficult to delay or impede a merger, tender offer or proxy contest involving New Digital World. The lack of these provisions could lead to proxy contests and facilitate your and other stockholders’ ability to elect directors of your choosing or cause New Digital World to take other corporate actions you desire. Any of these actions could cause the market price of New Digital World’s common stock to decline or times of increased volatility. Nonetheless, New Digital World may enter into a stockholder rights plan, commonly known as a “poison pill,” that may delay or prevent a change of control.

Any provision of the Amended Charter, New Digital World’s bylaws or Delaware law that has the effect of delaying or preventing a change in control could limit the opportunity for stockholders to receive a premium for their shares of New Digital World’s capital stock, deprive stockholders from considering proposals they may believe to be in their best interests, and, consequently, could also affect the price that some investors are willing to pay for New Digital World’s common stock.

The Amended Charter will designate a state or federal court located within the State of Delaware as the exclusive forum for substantially all disputes between New Digital World and its stockholders, and also provide that the federal district courts will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act, each of which could limit the ability of New Digital World’s stockholders to choose the judicial forum for disputes with New Digital World or its directors, officers, or employees.

The Amended Charter, which will become effective upon the Closing, will provide that, unless New Digital World consents in writing to the selection of an alternative forum, the sole and exclusive forum for (i) any derivative action or proceeding brought on its behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of its directors, officers, or other employees to New Digital World or its stockholders, (iii) any action arising pursuant to any provision of the DGCL, or the certificate of incorporation or the bylaws or (iv) any other action asserting a claim that is governed by the internal affairs doctrine shall be the Court of Chancery of the State of Delaware except any claim (A) as to which the Court of Chancery of the State of Delaware determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), (B) which is vested in the exclusive jurisdiction of a Court or forum other than the Court of Chancery or (C) for which the Court of Chancery does not have subject matter jurisdiction (or, if the Court of Chancery does not have jurisdiction, the federal district court for the District of Delaware), in all cases subject to the court having jurisdiction over indispensable parties named as defendants. The Amended Charter will also provide that the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act. Specifically, New Digital World’s bylaws further provide that, unless New Digital World consents in writing to an alternative forum, the United States District Court for the Southern District of Florida will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act. New Digital World’s bylaws will also provide that any person or entity purchasing or otherwise acquiring any interest in shares of New Digital World’s capital stock will be deemed to have notice of and to have consented to this choice of forum provision. The exclusive forum provision will be applicable to the fullest extent permitted by applicable law, subject to certain exceptions. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. As a result, the exclusive forum provision will not apply to suits brought to enforce any duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. We note, however, that there is uncertainty as to whether a court would enforce this provision and that investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder. Section 22 of the Securities Act creates concurrent jurisdiction for state and federal courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder.

 

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Any person or entity purchasing or otherwise acquiring any interest in any of New Digital World’s securities shall be deemed to have notice of and consented to this provision. This exclusive-forum provision may limit a stockholder’s ability to bring a claim in a judicial forum of its choosing for disputes with New Digital World or its directors, officers, or other employees, which may discourage lawsuits against New Digital World and its directors, officers, and other employees. If a court were to find the exclusive-forum provision to be inapplicable or unenforceable in an action, New Digital World may incur additional costs associated with resolving the dispute in other jurisdictions, which could harm its results of operations.

In making your investment decision, you should note that we have not authorized anyone to provide any information other than that contained in this proxy statement/prospectus. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. Due to the high profile of our controlling shareholder, President Trump, information in public media that is published by third parties may be misleading and designed to damage the reputation of Digital World and/or President Trump. This information can often be repetitive, with certain narratives being recycled without new evidence, further negatively affecting the price of our stock and making us a target for investigation by certain agencies.

You should carefully evaluate all of the information in this proxy statement/prospectus. Each of Digital World and TMTG has in the past received, and may continue to receive, a high degree of media coverage, including coverage that is not directly attributable to statements made by Digital World or TMTG’s officers and employees, that incorrectly reports on statements made by Digital World or TMTG’s officers or employees, or that is misleading. Much of this media coverage expresses opinion on the viability of TMTG’s business, certain conspiracies associated with the merger, the likelihood of the Closing and other matters.

Investors should be aware of the potential risks associated with third-party media coverage. Each of TMTG and Digital World acknowledges that it has been, and may continue to be, the subject of significant media attention. This includes coverage that may not accurately reflect statements or intentions of the parties associated with the Business Combination, as well as reports that could be misleading or based on recycled information. Such media coverage has the potential to negatively influence the perception of TMTG’s business, affect the stock price, and may lead to increased scrutiny by governmental authorities. Specifically, articles and reports, including those that may recycle previous stories, could perpetuate misconceptions or highlight concerns that result in a continuing or heightened focus from regulatory bodies. This, in turn, could subject Digital World, TMTG and the Business Combination to investigations or inquiries that might not only divert resources but also impact investor confidence and the market value of our common stock. While Digital World strives to provide transparent and accurate information through official channels, including this proxy statement/prospectus, we cannot control the content or the repercussions of third-party reporting. It is important for investors to understand that Digital World does not accept liability for the accuracy, interpretation, or dissemination of information by external media. However, the potential for such coverage to influence market behavior, regulatory focus, and the valuation of Digital World’s (or after the merger TMTG) common stock exists and should be considered a material risk to TMTG’s business and operation and may negatively affect the price of the Combined Entity’s securities.

If third parties bring claims against Digital World, the proceeds held in trust could be reduced and the per-share Redemption price received by stockholders may be less than $10.20 per share.

Digital World’s placing of funds in trust may not protect those funds from third party claims against Digital World. Although Digital World has sought to have all vendors and service providers it engages and prospective target businesses it negotiated with execute agreements with Digital World waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account for the benefit of Digital World’s Public Stockholders, they may not execute such agreements. Furthermore, even if such entities execute such agreements with Digital World, they may seek recourse against the Trust Account. A court may not uphold the validity of such agreements. Accordingly, the proceeds held in trust could be subject to claims which could take priority over those of Digital World’s Public Stockholders. If Digital World is unable to complete an initial business

 

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combination and distribute the proceeds held in trust to Digital World’s Public Stockholders, the Sponsor has agreed (subject to certain exceptions described elsewhere in this proxy statement/prospectus) that it will be liable to ensure that the proceeds in the Trust Account are not reduced below $10.20 per share by the claims of target businesses or claims of vendors or other entities that are owed money by Digital World for services rendered or contracted for or products sold to Digital World. However, it may not be able to meet such obligation. Therefore, the per-share distribution from the Trust Account may be less than $10.20, plus interest, due to such claims.

Additionally, if Digital World is forced to file a bankruptcy case or an involuntary bankruptcy case is filed against Digital World which is not dismissed, the proceeds held in the Trust Account could be subject to applicable bankruptcy law, and may be included in Digital World’s bankruptcy estate and subject to the claims of third parties with priority over the claims of Digital World’s stockholders. To the extent any bankruptcy claims deplete the Trust Account, Digital World may not be able to return to Digital World’s Public Stockholders at least $10.20. The Sponsor may not have sufficient funds to satisfy its indemnity obligations, as its only assets are securities of Digital World. Digital World has not asked the Sponsor to reserve for such indemnification obligations. As a result, if any such claims were successfully made against the Trust Account, the funds available for Digital World’s initial business combination, including the Business Combination, and Redemptions could be reduced to less than $10.20 per Public Share.

Our directors may decide not to enforce the indemnification obligations of our Sponsor, resulting in a reduction in the amount of funds in the Trust Account available for distribution to our Public Stockholders.

In the event that the proceeds in the Trust Account are reduced below the lesser of (i) $10.20 per Public Share and (ii) the actual amount per share held in the Trust Account as of the date of the liquidation of the Trust Account if less than $10.20 per share due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, and our Sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our Sponsor to enforce its indemnification obligations. While we currently expect that our independent directors would take legal action on our behalf against our Sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment and subject to their fiduciary duties may choose not to do so in any particular instance if, for example, the cost of such legal action is deemed by the independent directors to be too high relative to the amount recoverable or if the independent directors determine that a favorable outcome is not likely. If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the Trust Account available for distribution to our Public Stockholders may be reduced below $10.20 per share.

If, before distributing the proceeds in the Trust Account to our Public Stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our stockholders and the per-share amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced.

If, before distributing the proceeds in the Trust Account to our Public Stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, the proceeds held in the Trust Account could be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to the claims of third parties with priority over the claims of our stockholders. To the extent any bankruptcy claims deplete the Trust Account, the per-share amount that would otherwise be received by our stockholders in connection with our liquidation may be reduced.

If, after we distribute the proceeds in the Trust Account to our Public Stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and we and our Board may be exposed to claims of punitive damages.

If, after we distribute the proceeds in the Trust Account to our Public Stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received

 

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by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover all amounts received by our stockholders. In addition, our Board may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing itself and us to claims of punitive damages, by paying Public Stockholders from the Trust Account prior to addressing the claims of creditors.

Even if Digital World consummates the Business Combination, there is no guarantee that the Warrants will ever be in the money; they may expire worthless or the terms of Warrants may be amended.

The exercise price for the Warrants is $11.50 per share of common stock. There is no guarantee that the Public Warrants will ever be in the money prior to their expiration, and as such, the Warrants may expire worthless.

In addition, Digital World’s Warrants were issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and Digital World. The warrant agreement provides that the terms of the Warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least a majority of the then outstanding Public Warrants to make any other change. Accordingly, Digital World may amend the terms of the Warrants in a manner adverse to a holder if holders of at least a majority of the then outstanding Public Warrants approve of such amendment. Although Digital World’s ability to amend the terms of the Warrants with the consent of at least a majority of the then outstanding Public Warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the Warrants, shorten the exercise period or decrease the number of shares and their respective affiliates and associates have of common stock purchasable upon exercise of a warrant.

Digital World’s warrant agreement designates the courts of the State of New York or the United States District Court for the Southern District of New York as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of Digital World’s Warrants, which could limit the ability of warrant holders to obtain a favorable judicial forum for disputes with Digital World.

Digital World’s warrant agreement will provide that, subject to applicable law, (i) any action, proceeding or claim against Digital World arising out of or relating in any way to the warrant agreement, including under the Securities Act, will be brought and enforced in the courts of the State of New York or the United States District Court for the Southern District of New York, and (ii) that Digital World irrevocably submits to such jurisdiction, which jurisdiction shall be the exclusive forum for any such action, proceeding or claim. Digital World will waive any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.

Notwithstanding the foregoing, these provisions of the warrant agreement will not apply to suits brought to enforce any liability or duty created by the Exchange Act or any other claim for which the federal district courts of the United States of America are the sole and exclusive forum. Any person or entity purchasing or otherwise acquiring any interest in any of Digital World’s Warrants shall be deemed to have notice of and to have consented to the forum provisions in Digital World’s warrant agreement. If any action, the subject matter of which is within the scope the forum provisions of the warrant agreement, is filed in a court other than a court of the State of New York or the United States District Court for the Southern District of New York (a “foreign action”) in the name of any holder of Digital World’s Warrants, such holder shall be deemed to have consented to: (x) the personal jurisdiction of the state and federal courts located in the State of New York in connection with any action brought in any such court to enforce the forum provisions (an “enforcement action”), and (y) having service of process made upon such warrant holder in any such enforcement action by service upon such warrant holder’s counsel in the foreign action as agent for such warrant holder.

This choice-of-forum provision may limit a warrant holder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with Digital World, which may discourage such lawsuits. Alternatively, if a court

 

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were to find this provision of Digital World’s warrant agreement inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, Digital World may incur additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect Digital World’s business, financial condition and results of operations and result in a diversion of the time and resources of Digital World’s management and board of directors.

Digital World has no obligation to net cash settle the Warrants.

In no event will Digital World have any obligation to net cash settle the Warrants. Furthermore, there are no contractual penalties for failure to deliver securities to the holders of Warrants upon consummation of an initial business combination, including the Business Combination, or exercise of the Warrants. Accordingly, the Warrants may expire worthless.

We may waive one or more of the conditions to the Business Combination.

We may agree to waive, in whole or in part, one or more of the conditions to our obligations to complete the Business Combination, to the extent permitted by our current amended and restated certificate of incorporation and bylaws and applicable laws. We may not waive the condition that our stockholders approve the Business Combination. See “The Business Combination Proposal (Proposal 1) — The Merger Agreement — Conditions to the Closing” for additional information.

The exercise of discretion by our directors and officers in agreeing to changes to the terms of or waivers of closing conditions in the Merger Agreement may result in a conflict of interest when determining whether such changes to the terms of the Merger Agreement or waivers of conditions are appropriate and in the best interests of our stockholders.

In the period leading up to the Closing, other events may occur that, pursuant to the Merger Agreement, would require Digital World to agree to amend the Merger Agreement to consent to certain actions or to waive rights that we are entitled to under those agreements. Such events could arise because of changes in the course of TMTG’s business, a request by TMTG to undertake actions that would otherwise be prohibited by the terms of the Merger Agreement or the occurrence of other events that would have a material adverse effect on TMTG’s business and would entitle Digital World to terminate the Merger Agreement, as applicable. In any of such circumstances, it would be in the discretion of Digital World, acting through its Board, to grant its consent or waive its rights. The existence of the financial and personal interests of the directors described elsewhere in this proxy statement/prospectus may result in a conflict of interest on the part of one or more of the directors between what he or she may believe is best for Digital World and our stockholders and what he or she may believe is best for himself or herself or his or her affiliates in determining whether or not to take the requested action. As of the date of this proxy statement/prospectus, we do not believe there will be any changes or waivers that our directors and officers would be likely to make after stockholder approval of the Business Combination has been obtained. While certain changes could be made without further stockholder approval, if there is a change to the terms of the Business Combination that would have a material impact on the stockholders, we will be required to circulate a new or amended proxy statement or supplement thereto and resolicit the vote of our stockholders with respect to the Business Combination Proposal.

The Combined Entity may redeem the unexpired Warrants prior to their exercise at a time that is disadvantageous to warrant holders, thereby making their Warrants worthless.

The Combined Entity has the ability to redeem outstanding Warrants at any time after they become exercisable and prior to their expiration, at a price of $0.01 per warrant, provided that the last reported sales price of the common stock equals or exceeds $18.00 per share for any 20 trading days within a 30 trading-day period ending on the third trading day prior to the date the Combined Entity sends the notice of Redemption to the warrant holders. If and when the Warrants become redeemable by the Combined Entity, the Combined Entity

 

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may exercise its Redemption right even if the Combined Entity is unable to register or qualify the underlying securities for sale under all applicable state securities laws. Additionally, ninety (90) days after the Warrants become exercisable, New Digital World may redeem all (but not less than all) of the outstanding Warrants at $0.01 per warrant upon a minimum of 30 days’ prior written notice of Redemption (during which time the holders may exercise their Warrants prior to Redemption for the number of shares set forth in the table under the section captioned “Description of Securities of New Digital World — Warrants”) if the following conditions are satisfied: (i) the last reported sale prices of the New Digital World common stock equals or exceeds $10.20 (as may be adjusted for stock splits, stock dividends, reorganizations, recapitalizations or the like) on the trading day prior to the date of the notice; (ii) the Placement Warrants are also concurrently exchanged at the same price as the outstanding Public Warrants; and (iii) there is an effective registration statement covering the issuance of the shares of New Digital World common stock issuable upon exercise of the Warrants and a current prospectus relating thereto available throughout the 30-day period after written notice of Redemption is given. In either case, Redemption of the outstanding Warrants could force you (i) to exercise your Warrants and pay the exercise price therefor at a time when it may be disadvantageous for you to do so, (ii) to sell your Warrants at the then-current market price when you might otherwise wish to hold your Warrants or (iii) to accept the nominal Redemption price which, at the time the outstanding Warrants are called for Redemption, is likely to be substantially less than the market value of your Warrants.

At this time, we have not registered the shares of common stock issuable upon exercise of the Public Warrants under the Securities Act or any state securities laws, and such registration may not be in place when an investor desires to exercise Public Warrants, thus precluding such investor from being able to exercise its Public Warrants except on a cashless basis and potentially causing such Public Warrants to expire worthless.

We have not registered the shares of Class A common stock issuable upon exercise of the Public Warrants under the Securities Act or any state securities laws at this time. However, under the terms of the warrant agreement, we have agreed that as soon as practicable, but in no event later than 15 business days after the closing of our initial business combination, we will use our best efforts to file with the SEC a registration statement for the registration under the Securities Act of the shares of common stock issuable upon exercise of the Warrants and thereafter will use our best efforts to cause the same to become effective within 60 business days following our initial business combination and to maintain a current prospectus relating to the common stock issuable upon exercise of the Public Warrants, until the expiration of the Public Warrants in accordance with the provisions of the warrant agreement. We cannot assure you that we will be able to do so if, for example, any facts or events arise which represent a fundamental change in the information set forth in the registration statement or prospectus, the financial statements contained or incorporated by reference therein are not current or correct or the SEC issues a stop order. If the shares issuable upon exercise of the Public Warrants are not registered under the Securities Act, we will be required to permit holders to exercise their Public Warrants on a cashless basis. However, no Public Warrant will be exercisable for cash or on a cashless basis, and we will not be obligated to issue any shares to holders seeking to exercise their Public Warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder or an exemption from registration is available. Notwithstanding the above, if our Class A common stock is at the time of any exercise of a Public Warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, we may, at our option, require holders of Public Warrants who exercise their Public Warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement, and in the event we do not so elect, we will use our best efforts to register or qualify the shares under applicable blue sky laws to the extent an exemption is not available. In no event will we be required to net cash settle any Public Warrant, or issue securities or other compensation in exchange for the Public Warrants in the event that we are unable to register or qualify the shares underlying the Public Warrants under applicable state securities laws and there is no exemption available. If the issuance of the shares upon exercise of the Public Warrants is not so registered or qualified or exempt from registration or qualification, the holder of such Public Warrant shall not be entitled to exercise such Public Warrant and such Public Warrant may have no value and expire worthless. In such event, holders who acquired their Public Warrants as part of a

 

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purchase of Public Units will have paid the full Unit purchase price solely for the shares of Class A common stock included in the Public Units. If and when the Public Warrants become redeemable by us, we may exercise our Redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws. We will use our best efforts to register or qualify such shares of Class A common stock under the blue sky laws of the state of residence in those states in which the Warrants were offered by us in the IPO. However, there may be instances in which holders of our Public Warrants may be unable to exercise such Public Warrants but holders of our Placement Warrants may be able to exercise such Placement Warrants.

The Combined Entity will be a “controlled company” within the meaning of the applicable rules of Nasdaq and, as a result, qualifies for exemptions from certain corporate governance requirements. If the Combined Entity relies on these exemptions, its stockholders will not have the same protections afforded to stockholders of companies that are subject to such requirements.

Upon the Closing, because the former TMTG equity holders are expected to control a majority of the voting power of the ourstanding New Digital World common stock, with President Trump beneficially owning at least 58.1% of the voting power of such New Digital World common stock, New Digital World will then be a “controlled company” within the meaning of applicable rules of Nasdaq upon the Closing. Under these rules, a company of which more than 50% of the voting power for the election of directors is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including the requirements:

 

   

that a majority of the board consists of independent directors;

 

   

for an annual performance evaluation of the nominating and corporate governance and compensation committees;

 

   

that the controlled company has a nominating and corporate governance committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and

 

   

that the controlled company has a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibility.

TMTG intends to rely on these exemptions upon consummation of the Business Combination. As a result, the Combined Entity’s stockholders will not have the same protections afforded to stockholders of companies that are subject to all of the Nasdaq corporate governance requirements.

For more information, see the section entitled “Risk Factors — Risks Related to our Chairman President Donald J. Trump — President Trump will hold at least 58.1% of the outstanding shares of New Digital World common stock, which control limits or precludes other stockholders’ ability to influence the outcome of matters submitted to stockholders for approval, including the election of directors, the approval of certain employee compensation plans, the adoption of amendments to our organizational documents and the approval of any merger, consolidation, sale of all or substantially all of our assets, or other major corporate transaction requiring stockholder approval.

The future exercise of registration rights may adversely affect the market price of our common stock.

Certain of our stockholders will have registration rights for restricted securities. We are obligated to register certain securities, including all of the shares of common stock held by the Sponsor and shares of common stock received by certain significant TMTG stockholders as part of the Business Combination. We are obligated to (i) file a resale “shelf” registration statement to register such securities (and any shares of TMTG common stock into which they may be exercised following the consummation of the Business Combination) within 15 business days after of the Closing and (ii) use reasonable best efforts to cause such registration statement to be declared effective by the SEC as soon as reasonably practicable after the filing. In addition, pursuant to the terms of the

 

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Digital World Convertible Notes, and the Digital World Alternative Warrants and Digital World Alternative Financing Notes, we are obligated to register all of the shares of Class A common stock issuable upon their conversion or exercise. Sales of a substantial number of shares of common stock pursuant to the resale registration statement in the public market could occur at any time the registration statement remains effective. In addition, certain registration rights holders can request underwritten offerings to sell their securities. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our common stock.

Although we do not have a specified maximum Redemption threshold, which may make it possible for us to complete an initial business combination with which a substantial majority of our stockholders do not agree, the ability of our Public Stockholders to exercise Redemption Rights with respect to a significant portion of Digital World’s shares and the amount of deferred underwriting commissions may not allow Digital World to complete the Business Combination.

Our current amended and restated certificate of incorporation does not provide a specified maximum Redemption threshold, except that we will not redeem our Public Shares in an amount that would cause Digital World’s net tangible assets to be less than $5,000,001 upon consummation of our initial business combination (such that we are not subject to the SEC’s “penny stock” rules). However, the Merger Agreement provides that the obligation of TMTG to consummate the Business Combination is conditioned on the amount of cash or cash equivalents that we have from any source equals or exceeds $60,000,000, including the cash available to Digital World from the Trust Account (after any Redemption by the Digital World stockholders and the payment of any deferred underwriting expenses of Digital World not related to the Business Combination). Although on February 8, 2024, Digital World entered into subscription agreements with certain institutional investors for the issuance of the Digital World Alternative Financing Notes and issued $10,000,000 to such institutional investors, and expects to issue the remaining up to $40,000,000 in Digital World Alternative Financing Notes concurrently with the Closing, if Digital World breaches its contractual obligations under the Digital World Alternative Financing Notes, it may be unable to issue the remaining amount under the Digital World Alternative Financing Notes in the Final Drawdown. If this occurrence were to materialize, it is possible that Digital World may not satisfy (i) the $60,000,000 minimum liquidity condition under the Merger Agreement if Redemptions exceed 77%, unless such condition is waived by TMTG, or (ii) the $5,000,001 minimum net tangible assets condition immediately prior to or upon consummation of the Business Combination, either of which may hinder Digital World’s ability to consummate the Business Combination and maintain its Nasdaq listing. There is no assurance that Digital World will be able to issue the remaining amount under the Digital World Alternative Financing Notes in the Final Drawdown or that Digital World will be able to secure any other alternative financing transactions to support the Business Combination if TMTG does not waive the $60,000,000 requirement and Redemptions by Digital World stockholders exceed 77%.

In the event the aggregate cash consideration we would be required to pay for all shares of common stock that are validly submitted for Redemption plus any amount required to satisfy cash conditions pursuant to the terms of the Merger Agreement exceeds the aggregate amount of cash available to us, we may not complete the Business Combination or redeem any shares, all shares of common stock submitted for Redemption will be returned to the holders thereof, and we instead may search for an alternate business combination.

There may be sales of a substantial amount of the New Digital World common stock after the Business Combination by Digital World’s current stockholders, and these sales could cause the price of the New Digital World common stock to fall.

After the Business Combination, on a pro forma basis, there will be approximately 135,523,945 shares of common stock outstanding. Of Digital World’s issued and outstanding shares that were issued prior to the Business Combination, all will be freely transferable, except for any shares held by Digital World’s “affiliates,” as that term is defined in Rule 144 under the Securities Act (“Rule 144”). Following completion of the Business Combination, approximately 7.8% of the Combined Entity’s outstanding common stock will be held by the

 

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Sponsor. This percentage (A) excludes the exercise of outstanding Warrants and the conversion of securities issued in the Post-IPO Financings and (B) assumes that (i) there are no Redemptions of any shares by Digital World’s Public Stockholders in connection with the Business Combination and (ii) no awards are issued under the Equity Incentive Plan.

At the time of the Digital World IPO, Digital World entered into a registration rights agreement, dated as of September 2, 2021, with respect to the Founder Shares, shares of Digital World common stock underlying the Placement Warrants and all shares issued to holders of such securities (the “Registration Rights Agreement”) with respect to the securities referred above by way of any stock split, stock dividend, recapitalization, combination of shares, acquisition, consolidation, reorganization, share exchange, or similar event, which securities Digital World collectively refer to as “registrable securities.” Under the Registration Rights Agreement, Digital World has agreed to register for resale under a registration statement all of the shares held by holders of Founder Shares and issuable upon conversion of Digital World Warrants. The Sponsor is also entitled to a number of demand registration rights. Holders of registrable securities will also have certain “piggyback” registration rights with respect to registration statements filed subsequent to the Business Combination. In addition, on February 7, 2024, Digital World entered into warrant subscription agreements with certain institutional investors for the issuance of the Digital World Alternative Warrants in settlement of the terminated PIPE Investment and on February 8, 2024, Digital World entered into a subscription agreement with certain institutional investors for the issuance of the Digital World Alternative Financing Notes, issuing $10,000,000 in Digital World Alternative Financing Notes to such institutional investors. Digital World expects to issue the remaining up to $40,000,000 of such Digital World Alternative Financing Notes concurrently with the Closing. The holders of the Digital World Convertible Notes, the Digital World Alternative Financing Notes and the Digital World Alternative Warrants have registration rights pursuant to the terms of the Registration Rights Agreement on the underlying New Digital World common stock and Post-IPO Warrants issuable upon conversion or exercise of such instruments.

Upon effectiveness of the registration statements Digital World files pursuant to the Registration Rights Agreement, the parties to this agreement may sell large amounts of New Digital World common stock in the open market or in privately negotiated transactions, which could have the effect of increasing the volatility in New Digital World’s stock price or putting significant downward pressure on the price of Digital World Class A common stock.

Future sales, of the New Digital World common stock, or the perception that such sales will occur, may cause the market price of its securities to drop significantly, even if its business is doing well. Sales of substantial amounts of the New Digital World common stock could adversely affect the market price of the common stock and make it difficult for it to raise funds through securities offerings in the future.

If the Adjournment Proposal is not approved, and an insufficient number of votes have been obtained to authorize the consummation of the Business Combination, the Board will not have the ability to adjourn the meeting to a later date in order to solicit further votes, and, therefore, the Business Combination will not be approved.

The Board is seeking approval to adjourn the meeting to a later date or dates if, at the meeting, the Business Combination proposal is not approved. If the Adjournment Proposal is not approved, the Board will not have the ability to adjourn the meeting to a later date and, therefore, the Business Combination would not be completed.

Digital World and TMTG have incurred and expect to incur significant costs associated with the Business Combination. Whether or not the Business Combination is completed, the incurrence of these costs will reduce the amount of cash available to be used for other corporate purposes by Digital World if the Business Combination is not completed.

Digital World and TMTG expect to incur significant transaction and transition costs, including in the form of convertible notes issued to directors, officers and affiliates associated with the Business Combination and

 

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operating as a public company following the Closing. Digital World and TMTG may also incur additional costs to retain key employees. Certain transaction expenses incurred in connection with the Merger Agreement, including all legal, accounting, consulting, investment banking and other fees, expenses and costs (including employment expenses), will be paid by New Digital World following the Closing. As disclosed in the notes to the Unaudited Pro Forma Condensed Combined Financial Information, expected transaction costs in consummating the Business Combination and related transactions are approximately $49.6 million, approximately $44.6 million of which are attributable to Digital World and approximately $5.0 million of which are attributable to TMTG. Even if the Business Combination is not completed, Digital World expects to incur approximately $30.0 million in expenses. These expenses will reduce the amount of cash available to be used for other corporate purposes by Digital World if the Business Combination is not completed. See “Risk Factors — Risks Related to Digital World and the Business Combination — Digital World may issue additional shares of common stock as a result of conversion of convertible notes issued in Post-IPO Financings or as otherwise required in connection with the consummation of the Business Combination or under the Equity Incentive Plan after completion of the Business Combination, any one of which would dilute the interest of Digital Worlds stockholders and likely present other risks.

If the funds held outside of Digital World’s Trust Account are insufficient to allow it to operate until at least September 8, 2024, Digital World’s ability to complete an initial business combination may be adversely affected.

Digital World believes the funds available to it outside of the Trust Account will be sufficient to allow it to operate until it completes its business combination; however, Digital World cannot assure you that its estimate is accurate. If Digital World is required to seek additional capital, it would need to borrow funds from the Sponsor, officers or other third parties to operate or may be forced to liquidate. Neither the Sponsor, members of Digital World’s management team nor any of their affiliates is under any obligation to advance funds to Digital World in such circumstances. Any such advances would be repaid only from funds held outside the Trust Account or from funds released to Digital World upon completion of Digital World’s initial business combination. Up to $30,000,000 of such loans may be convertible into Working Capital Units at a price $10.00 per Unit at the option of the lender and an additional $10,000,000 of such loans may be convertible into Working Capital Units at a price $8.00 per Unit at the option of the lender. The additional Working Capital Units beyond the Working Capital Units underlying the initial $1,500,000 in Digital World Convertible Notes as described in Digital World’s IPO prospectus will only be issuable upon the approval of Digital World’s stockholders, which approval is included as part of Proposal 5 and Proposal 9 as described in this proxy statement/prospectus. As of the date of this proxy statement/prospectus, there were $4,000,700 outstanding in Digital World Convertible Notes due to our Sponsor and $1,232,000 outstanding in Digital World Convertible Notes due to Renatus, which notes, subject to certain conditions and the terms of each such applicable loan or note, as the case may be. The proceeds of such notes were used to pay costs and expenses in connection with completing the Business Combination, including certain employee expenses relating to the legal and regulatory delays in consummating the same. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Digital World — Liquidity and Capital Resources.

If Digital World is unable to complete its initial business combination because it does not have sufficient funds available to it, Digital World will be forced to cease operations and liquidate the Trust Account. Consequently, Digital World’s Public Stockholders may only receive an estimated $10.85 per share, or possibly less, on its Redemption of its Public Shares, and its Warrants would then be worthless.

 

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Resources could be wasted in researching acquisitions that are not completed (including the proposed Business Combination), which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If Digital World has not completed its initial business combination within the required time period, its Public Stockholders may receive only approximately $10.20 per share, or less than such amount in certain circumstances, on the liquidation of its Trust Account and its Warrants would then be worthless.

Digital World anticipates that the investigation of each specific target business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention and substantial costs for accountants, attorneys and others. If Digital World decides not to complete a specific initial business combination, such as the proposed Business Combination, the costs incurred up to that point for the proposed transaction likely would not be recoverable. Furthermore, if we reach an agreement relating to a specific target business, such as TMTG, Digital World may fail to complete its initial business combination for any number of reasons including those beyond its control. Any such event will result in a loss to Digital World of the related costs incurred which could materially adversely affect subsequent attempts to locate and acquire or merge with another business. If Digital World is unable to complete its initial business combination, its Public Stockholders may receive only approximately $10.20 per share on the liquidation of its Trust Account and its Warrants would then be worthless.

Digital World’s ability to consummate an initial business combination may be adversely affected by economic uncertainty and volatility in the financial markets, including as a result of the armed conflicts in Europe and the Middle East.

Our ability to complete our initial business combination may be negatively impacted by general market conditions, volatility in the capital and debt markets and other events and uncertainties, including the ongoing armed conflicts in Europe and the Middle East, terrorist attacks, natural disasters, a significant outbreak of infectious diseases or the instability in the banking sector experienced in the first quarter of 2023. Such events could affect the global economy and result in increased price volatility for publicly traded securities, which thereby may negatively impact Digital World’s ability to consummate a business combination.

Digital World may not have sufficient funds to satisfy indemnification claims of its directors and executive officers.

Digital World has agreed to indemnify its officers and directors to the fullest extent permitted by law. However, its officers and directors have agreed to waive any right, title, interest or claim of any kind in or to any monies in the Trust Account and to not seek recourse against the trust account for any reason whatsoever (except to the extent they are entitled to funds from the Trust Account due to their ownership of Public Shares).

As of the date of this proxy statement/prospectus, Digital World does not have a directors’ and officers’ insurance policy. Changes in the market for directors’ and officers’ liability insurance, as well as the Investigation, have made it difficult and significantly expensive for us to be able to obtain such coverage. Our inability to provide such insurance could make it more difficult and more expensive for us to retain directors and officers through the consummation of the Business Combination. Accordingly, the post-business Combined Entity might need to incur greater expense, accept less favorable terms or both in order to obtain such liability insurance. Any failure to obtain adequate directors’ and officers’ liability insurance could have an adverse impact on the Combined Entity’s ability to attract and retain qualified officers and directors.

In addition, even after the Closing, our directors and officers could still be subject to potential liability from claims arising from conduct alleged to have occurred prior to the Business Combination. As a result, in order to protect our directors and officers, the Combined Entity may need to purchase additional insurance with respect to any such claims (“run-off insurance”). The need for run-off insurance would be an added expense for the Combined Entity, and could interfere with or frustrate our ability to consummate the Business Combination, or any other initial business combination on terms that are favorable to our stockholders.

 

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Accordingly, given the lack of directors’ and officers’ liability insurance, any indemnification provided will be able to be satisfied by Digital World only if (i) it has sufficient funds outside of the Trust Account or (ii) it consummates an initial business combination. Digital World’s obligation to indemnify its officers and directors may discourage stockholders from bringing a lawsuit against its officers or directors for breach of their fiduciary duty. These provisions also may have the effect of reducing the likelihood of derivative litigation against Digital World’s officers and directors, even though such an action, if successful, might otherwise benefit Digital World and its stockholders. Furthermore, a shareholder’s investment may be adversely affected to the extent we pay the costs of settlement and damage awards against its officers and directors pursuant to these indemnification provisions.

If we are deemed to be an investment company for purposes of the Investment Company Act, we would be required to institute burdensome compliance requirements and our activities would be severely restricted. As a result, in such circumstances, unless we are able to modify our activities so that we would not be deemed an investment company, we would expect to abandon our efforts to complete an initial business combination and instead to liquidate the Digital World.

As described further above, the SPAC Final Rules relate, among other matters, to the circumstances in which SPACs such as us could potentially be subject to the Investment Company Act and the regulations thereunder. The SPAC Final Rules decided not to adopt a safe harbor from the “investment company” definition under Section 3(a)(1)(A) of the Investment Company Act, for SPACs that complied with the safe harbor’s conditions regarding SPAC’s asset classes, activities, primary engagement, and duration (including that in order to rely on the safe harbor, the SPAC would need to enter into a definitive business combination agreement within 18 months after its IPO and close the transaction within 24 months). Rather, the SEC guides that the investment company determination must be considered in light of the facts and circumstances and provides further guidance regarding what actions might push a SPAC toward investment company status.

Because the SPAC Final Rules are not yet in effect (the rules will be effective 125 days following their publication in the Federal Register), there is currently uncertainty concerning the applicability of the Investment Company Act to SPACs. Given the delays discussed above, possible amendments to the Merger Agreement, and potential restructuring of the Business Combination, we requested a further extension, past September 8, 2023, to September 8, 2024 (i.e., 36 months from the date of our IPO), a date beyond 24 months after the effective date of the IPO’s registration statement. If we are delayed in consummating the business combination until the SPAC Final Rules are in effect, it is possible that a claim could be made that we have been operating as an unregistered investment company.

If we are deemed to be an investment company under the Investment Company Act, our activities would be severely restricted. In addition, we would be subject to burdensome compliance requirements. We do not believe that our principal activities will subject us to regulation as an investment company under the Investment Company Act. However, if we are deemed to be an investment company and subject to compliance with and regulation under the Investment Company Act, we would be subject to additional regulatory burdens and expenses for which we have not allotted funds. As a result, unless we are able to modify our activities so that we would not be deemed an investment company, we may be unable to consummate the initial business combination and instead be required to liquidate Digital World.

To mitigate the risk that we might be deemed to be an investment company for purposes of the Investment Company Act, the trustee was instructed to liquidate the securities held in the Trust Account before our 24-month anniversary and instead to hold the funds in the Trust Account in cash until the earlier of the consummation of the Business Combination or our liquidation, which may reduce the dollar amount our Public Stockholders would receive upon any Redemption or liquidation of Digital World.

The funds in the Trust Account have, since our IPO, been held only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds investing solely in U.S. government treasury obligations and meeting certain conditions under Rule 2a-7 under the Investment Company Act. However, to

 

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mitigate the risk of us being deemed to be an unregistered investment company (including under the subjective test of Section 3(a)(1)(A) of the Investment Company Act) and thus subject to regulation under the Investment Company Act, on August 31, 2023, we instructed Continental Stock Transfer & Trust Company, the trustee with respect to the Trust Account, to liquidate the U.S. government treasury obligations or money market funds held in the Trust Account and hold all funds in the Trust Account in cash until the earlier of consummation of the Business Combination or our liquidation. As a result, we are no longer receiving interest on the funds held in the Trust Account. However, interest previously earned on the funds held in the Trust Account still may be released to us to pay our taxes, if any, and certain other expenses as permitted. As a result, any decision to liquidate the securities held in the Trust Account and thereafter to hold all funds in the Trust Account in cash would reduce the dollar amount our Public Stockholders would receive upon any Redemption or liquidation of Digital World.

If our initial business combination involves a company organized under the laws of a state of the United States, it is possible a 1% U.S. federal excise tax will be imposed on us in connection with Redemptions of our common stock after or in connection with such initial business combination.

On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) became law in the United States, which, among other things, imposes a 1% excise tax on any publicly traded domestic corporation that repurchases its stock after December 31, 2021 (the “Excise Tax”). The Excise Tax is imposed on the fair market value of the repurchased stock, with certain exceptions. Because we are a Delaware corporation and our securities are publicly traded, we are a “covered corporation” within the meaning of the IR Act. While not free from doubt, absent any further guidance from the U.S. Department of the Treasury (the “Treasury”), which has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the Excise Tax, the Excise Tax may apply to any Redemptions of our Class A common stock after December 31, 2022, including Redemptions in connection with an initial business combination, extension vote or otherwise, unless an exemption is available. The Excise Tax would be payable by us and not by the redeeming holders. Generally, issuances of securities by us in connection with an initial business combination transaction, as well as any other issuances of securities not in connection with our initial business combination, would be expected to reduce the amount of the Excise Tax in connection with Redemptions occurring in the same calendar year, but the number of securities redeemed may exceed the number of securities issued.

Whether and to what extent we would be subject to the Excise Tax in connection with a business combination, extension vote or otherwise would depend on a number of factors, including (i) the fair market value of the Redemptions and repurchases in connection with a business combination, extension vote or otherwise, (ii) the structure of a business combination, (iii) the nature and amount of any “PIPE” or other equity issuances in connection with a business combination (or otherwise issued not in connection with a business combination but issued within the same taxable year of a business combination) and (iv) the content of regulations and other guidance from the Treasury. Consequently, the Excise Tax may make a transaction with us less appealing to potential business combination targets. Finally, based on recently issued interim guidance from the Internal Revenue Service and Treasury, subject to certain exceptions, the Excise Tax should not apply in the event of our liquidation.

The nominal purchase price paid by the Sponsor of Digital World for the Founder Shares may significantly dilute the implied value of the Public Shares in the event the parties complete an initial business combination. In addition, the value of the Founder Shares will be significantly greater than the amount the Sponsor of Digital World paid to purchase such shares in the event the parties complete an initial business combination, even if the Business Combination causes the trading price of the New Digital World common stock to materially decline.

The nominal purchase price paid by the Sponsor of Digital World for the Founder Shares may significantly dilute the implied value of the Public Shares in the event we complete an initial business combination. In addition, the value of the Founder Shares will be significantly greater than the amount the Sponsor of Digital World paid to purchase such shares in the event we complete an initial Business Combination, even if the

 

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Business Combination causes the trading price of the New Digital World common stock to materially decline. The Sponsor of Digital World invested an aggregate of $11,359,840, comprised of the $25,000 purchase price for the Founder Shares and the $11,334,840 purchase price for the Placement Units. The amount held in our Trust Account was approximately $312,083,428.12 as of February 8, 2024, implying a value of $10.85 per Public Share. Based on these assumptions, each share of New Digital World common stock would have an implied value of $10.85 per share upon completion of our initial Business Combination, representing a 8.5% increase from the initial implied value of $10.00 per Public Share. While the implied value of $10.85 per share upon completion of our initial Business Combination would represent a dilution to our Public Stockholders, this would represent a significant increase in value for the Sponsor and certain current and former directors and officers of Digital World relative to the price the Sponsor paid for each Founder Share. At $0.005 per share, the 7,187,500 shares of New Digital World common stock that the Sponsor and certain current and former directors and officers of Digital World holding Founder Shares would own upon completion of our initial Business Combination would have an aggregate implied value of $35,937.50. As a result, even if the trading price of the New Digital World common stock significantly declines, the value of the Founder Shares held by the Sponsor and the then-directors and officers of Digital World will be significantly greater than the amount the Sponsor paid to purchase such shares. In addition, the Sponsor of Digital World could potentially recoup its entire investment, inclusive of its investment in the Placement Units, even if the trading price of the New Digital World common stock after the Business Combination is as low as $1.37 per share. As a result, the Sponsor and such current or former directors and officers of Digital World holding Founder Shares are likely to earn a substantial profit upon disposition of shares of New Digital World common stock even if the trading price of the New Digital World common stock declines after the completion of the Business Combination. The Sponsor and such current or former directors and officers of Digital World holding Founder Shares may therefore be or have been economically incentivized to complete an initial business combination with a riskier, weaker-performing or less-established target business, or on terms less favorable to the Public Stockholders, rather than liquidating Digital World. This dilution would increase to the extent that Public Stockholders seek Redemptions from the Trust Account for their Public Shares.

Patrick Orlando, Digital World’s former Chairman and Chief Executive Officer, a current member of our Board and a controlling affiliate of our Sponsor has, in recent weeks, expressed a desire for additional compensation (above his interest in the Founder Shares), which we believe presents a risk to our ability to consummate the Business Combination on a timely basis (or at all) and could potentially have a material adverse effect on Digital World’s financial condition and stock price.

In recent weeks, Mr. Orlando, Digital World’s former Chairman and Chief Executive Officer, a current member of our Board and a controlling affiliate of our Sponsor, has expressed a desire for additional compensation in the form of common stock (above his interest in the Founder Shares), which request was denied by Digital World. As a result, the professional relationship between Mr. Orlando and Digital World has strained and there is no assurance that Mr. Orlando as a current member of our Board or as a controlling affiliate of the Sponsor will be cooperative in connection with the consummation of the Business Combination. Due to Digital World’s decision not to provide Mr. Orlando with any additional compensation, we believe a significant risk exists that Mr. Orlando may be uncooperative in approving any amendments to the Merger Agreement that may become necessary and/or in voting the Founder Shares in support of the Business Combination. In addition, Mr. Orlando may use his control over the Sponsor and the majority of the Founder Shares as leverage to raise further demands in exchange for performance of his contractual obligation. In the event Mr. Orlando proves uncooperative in either respect, the resultant delay could introduce material risk to the Business Combination, including with respect to TMTG, given its unilateral termination right. Even if TMTG does not terminate the Merger Agreement, due to historical delays, any potential prolonged or continued delay in consummating the Business Combination could result in a material increase in pre-Business Combination expenses, which could have a material adverse effect on the Combined Entity’s liquidity and capital resources. Mr. Orlando’s future refusal may impact our ability to effectively proceed with the planned merger activities or may limit our ability to consummate a Business Combination, which could lead to our liquidation.

 

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The Sponsor, which is controlled by Mr. Orlando, is a party to the Merger Agreement and holds a majority of the Founder Shares. Pursuant to the Lock-Up and Support Letter, Mr. Orlando, on behalf of the Sponsor, and other insiders, are contractually obligated to vote any shares of Digital World common stock owned by them, in favor of an initial business combination. The Sponsor owns 14.8% of the outstanding shares of Digital World common stock. If, notwithstanding the Sponsor’s contractual obligation to vote any shares of Digital World common stock, including the Founder Shares, in favor of an initial business combination in line with the Digital World Board’s recommendation, Mr. Orlando withholds the Sponsor’s vote in favor of the Business Combination, we would be solely dependent on our other shareholders, which represent 85.2% of Digital World’s common stock, to vote in favor of the Business Combination. Since the Business Combination requires approval by a majority of the votes cast of Class A common stock and Class B common stock, voting together as a single class, in order to reach such requisite approval threshold without an accompanying vote “FOR” by the Sponsor in connection with the common stock it controls, 58.5% of our Public Stockholders would need to cast votes “FOR” the Business Combination at the Digital World Special Meeting. Accordingly, it could prove difficult for us to obtain the requisite vote for approval of the Business Combination in a timely fashion or at all.

In the event the Business Combination is not consummated as a result of the inability to resolve the ongoing disagreements with Mr. Orlando, Public Stockholders could be forced to realize their investment in the Class A common stock at the redemption price. Even if the Business Combination does close after substantial additional delay, such delay and disagreements could involve additional legal expenses, management diversion, and other related costs, all of which could have a material adverse effect on the trading price of our Class A common stock and on the Combined Entity’s available resources to pursue its growth and business strategy.

As a result of the prolonged delay due to the Investigation, Digital World has incurred significant unanticipated expenses well in excess of the working capital loans provided by our Sponsor, which have required Digital World to seek alternative sources of working capital to fund its day-to-day operations and such additional and unanticipated costs and expenses through Post-IPO Financings. Unlike working capital loans provided by our Sponsor, Post-IPO Financings trigger the anti-dilution provision contained in our Charter adjusting the conversion ratio of our Class B common stock to Class A common stock for the benefit of holders of our Class B common stock, the majority of which is owned by the Sponsor. In the absence of a waiver of such anti-dilution by Mr. Orlando on behalf of the holders of Class B common stock, in addition to other potential sources of dilution, Public Stockholders who elect not to redeem their shares of Class A common stock, may suffer additional dilution.

As a result of the Investigation, Digital World incurred significant costs and expenses related to, among other things, legal fees related to such Investigation which resulted in an $18.0 million settlement with the SEC pursuant to the Order, two votes to extend the liquidation date, compliance with reporting obligations with the SEC, accounting fees, and additional transaction related legal fees, including with respect to unwinding the PIPE entered into during Mr. Orlando’s tenure as our Chairman and Chief Executive Officer, which was determined incapable of being fulfilled pursuant to its terms and the requirements of Section 5 of the Securities Act.

Notwithstanding this excessive delay, the Sponsor, which is controlled by Mr. Orlando, did not correspondingly provide additional working capital loans to fund costs and expenses during this time and, as a result, Digital World has been required to seek other sources of working capital to ensure it could offset, at least in part, such additional costs and expenses as well as continue working toward closing the Business Combination. Our Charter provides for an adjustment mechanism to the conversion ratio applicable to Class B common stock to the extent that additional shares of Class A common stock or equity-linked securities are issued in connection with the closing of an initial business combination. As such, unlike working capital loans provided by our Sponsor, Post-IPO Financings with third parties other than the Sponsor, trigger the anti-dilution provision contained in our Charter, adjusting the conversion ratio of our Class B common stock to Class A common stock for the benefit of holders of our Class B common stock, the majority of which is owned by the Sponsor. As of the date of this proxy statement/prospectus we expect the conversion ratio rate to be 1.34, which conversion ratio excludes the expected issuance of the Digital World Alternative Warrants in connection with the settlement of the PIPE Investment and the Digital

 

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World Convertible Notes issuable pursuant to the Convertible Notes Compensation Plan. However, when calculating the definitive conversion ratio, the Board may also decide to exclude any Post-IPO Financings, the proceeds of which were used to pay any costs and expenses associated with the Investigation, and not in connection with the Business Combination. As a result, the Board may find a different, lower conversion ratio to be acceptable at the time of the Closing. Since the Board is obligated to calculate the final conversion ratio upon the Closing, there is no assurance that the current conversion ratio will not materially differ at the time of the Closing, and investors should be cautioned when relying on such a preliminary conversion ratio. For example, if Digital World is required to continue to raise proceeds in the form of equity-linked securities, the conversion ratio may increase, and therefore, the number of shares issuable to Class B common stock holders upon conversion of those shares into New Digital World common stock.

Given the nature of the calculation and the unexpected expenses incurred by Digital World, certain holders of Class B common stock may disagree with the conversion ratio, particularly if the Board decides that other Post-IPO Financings should also be excluded resulting in a lower conversion ratio and therefore a lower number of shares of New Digital World common stock upon conversion of the Class B common stock. Such a determination by the Board could potentially lead to prolonged disputes with some holders of Class B common stock. For example, following recent interactions with Mr. Orlando, it is understood that Mr. Orlando’s position is that the conversion ratio should be 1.69. However, Digital World has not been able to confirm the basis for such a different conversion ratio. Should Mr. Orlando pursue these claims related to the adjustment and prevail, applying a 1.69 conversion ratio would result in the issuance of 4,959,375 shares of New Digital common stock compared to 2,443,750 shares of Class A common stock. If the conversion ratio were 1.34, Public Stockholders not redeeming their shares prior to the Closing are expected to bear the burden of this additional dilution.

Digital World cannot provide any assurances regarding its ability to defend its position on the anti-dilution provision or whether actions by the Sponsor might trigger prolonged proceedings due to counterclaims against the Sponsor and Mr. Orlando, related to the circumstances described above concerning the conversion ratio. Furthermore, TMTG may decide to terminate the Merger Agreement if the risk of significant dilution exists, potentially leading to litigation over the claims. In the absence of a waiver of the anti-dilution provision by Mr. Orlando, on behalf of the holders of Digital World Class B common stock, in addition to other potential sources of dilution, Public Stockholders who choose not to redeem their shares of Class A common stock will face further dilution due to the expected adjustment of the conversion ratio. Such an adjustment would decrease the Public Stockholders’ proportionate ownership interest and relative voting power in New Digital World, possibly leading to a decline in the market price of New Digital World common stock and Public Warrants.

Digital World’s Non-U.S. stockholders exercising their Redemption Rights should expect that brokers will likely withhold on the payment of gross proceeds to them.

As more fully described under “The Business Combination Proposal (Proposal 1) — United States Federal Income Tax Considerations of the Redemption” Non-U.S. holders exercising their Redemption Rights should expect that a withholding agent will likely withhold U.S. federal income tax on the gross proceeds payable to them at a rate of 30% unless the relevant Non-U.S. holder is eligible for a reduced rate of withholding tax under an applicable income tax treaty and provides proper certification of its eligibility for such reduced rate (usually on an IRS Form W-8BEN or W-8BEN-E, or other applicable IRS Form W-8). Each non-U.S. holder should consult with its own tax advisors as to the tax consequences to it of any Redemption of its New Digital World common stock, including its ability to obtain a refund of any amounts withheld by filing an appropriate claim for a refund with the IRS in the event that such Non-U.S. holder is not treated as receiving a dividend under the tests prescribed in Section 302 of the Code (as described below). For further information, see “The Business Combination Proposal (Proposal 1) — United States Federal Income Tax Considerations of the Redemption.”

 

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If the Business Combination does not qualify as a “reorganization” within the meaning of Section 368 of the Code, the Business Combination may be a taxable event, which would be taxable to holders of TMTG capital stock.

The U.S. federal income tax consequences of the Business Combination will depend primarily upon whether it qualifies as a “reorganization” within the meaning of Section 368 of the Code. Each of TMTG and Digital World intends that the Business Combination qualify as a “reorganization” for U.S. federal income tax purposes. Further, in the Merger Agreement, each of Digital World, Merger Sub and TMTG agrees not to take any action that could reasonably be expected to prevent, impair or impede such qualification. Based on customary assumptions and representations from Digital World, Merger Sub and TMTG, as well as certain covenants, undertakings and statements of intention (which we assume will be realized) by Digital World, Merger Sub and TMTG set forth or referred to in the section entitled “The Business Combination Proposal (Proposal 1) — United States Federal Income Tax Considerations of the Redemption” and in the opinion included as Exhibit 8.2 hereto, it is the opinion of Nelson Mullins Riley & Scarborough LLP that the Business Combination qualifies as a “reorganization” within the meaning of Section 368(a) of the Code. However, neither TMTG nor Digital World intends to or has sought any rulings from the IRS regarding the U.S. federal income tax consequences of the Business Combination. If any of the tax opinion representations and assumptions is incorrect, incomplete or inaccurate, or is violated or not fulfilled, the validity of the opinion described above may be affected and the tax consequences of the Business Combination could differ from those described in this proxy statement/prospectus. We also note that “reorganization” treatment depends on all New Digital World stock delivered to holders of Digital World capital stock in the Business Combination being voting stock, and guidance regarding the qualification of stock as voting stock in dual class structures is limited. Further, an opinion of counsel represents counsel’s best legal judgment but is not binding on the IRS or any court, and there can be no certainty that the IRS will not challenge the conclusions reflected in such opinion or that a court would not sustain such a challenge. Accordingly, no assurance can be given that the IRS will not assert, or that a court will not sustain, a position contrary to the intended U.S. federal income tax treatment of the Business Combination. If the Business Combination were determined not to qualify as a “reorganization” within the meaning of Section 368 of the Code, then, for U.S. federal income tax purposes, the Business Combination would produce taxable income for holders of TMTG capital stock who exchange such stock for New Digital World stock in the Business Combination. You are urged to consult your tax advisor regarding the tax consequences of the Business Combination to you. See the section titled The Business Combination Proposal — United States Federal Income Tax Considerations of the Redemption” for more information.

Risks Related to TMTG

Unless the context otherwise requires, references to “we”, “us” and “our” in this subsection — “Risks Related to TMTG” — generally refer to TMTG in the present tense and the Combined Entity from and after the Business Combination.

Investing in us involves a high degree of risk. Before you invest in us, you should carefully consider the following risks, as well as general economic and business risks, and all of the other information contained in this proxy statement/prospectus. Any of the following risks could have a material adverse effect on our business, operating results and financial condition and cause the trading price of our common stock to decline, which would cause you to lose all or part of your investment. When determining whether to invest, you should also refer to the other information contained in this proxy statement/prospectus, including our financial statements and the related notes thereto, and the other financial information concerning us included elsewhere in this proxy statement/prospectus.

 

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Risks Related to TMTG’s Business

TMTG has a limited operating history, making it difficult to evaluate TMTG’s business and prospects and may increase the risks associated with your investment.

TMTG was formed on February 8, 2021 and started formulating its business plan at that time. TMTG did not begin developing the Truth Social platform until June 2021. TMTG made Truth Social available for general use in the first quarter of 2022. TMTG prides itself on building Truth Social without relying on hostile technology companies. Working exclusively with alternative technology firms that share TMTG’s commitment to free speech, TMTG fully launched Truth Social for iOS in April 2022. TMTG debuted the Truth Social web application in May 2022, and the Truth Social Android App became available in the Samsung Galaxy and Google Play stores in October 2022. TMTG introduced direct messaging to all versions of Truth Social in 2022, released a new “Groups” feature for users in May 2023, and announced the general availability of Truth Social internationally in June 2023. TMTG cannot assure you that it will be able to operate its business successfully or implement its operating policies and strategies as described elsewhere in this proxy statement/prospectus. TMTG may encounter risks and challenges frequently experienced by growing companies in rapidly developing industries, including risks related to its ability to:

 

   

build a reputation for providing a superior platform and customer service, and for creating trust and long-term relationships with its potential customers;

 

   

implement a revenue model allowing it to develop predictable revenues;

 

   

distinguish itself from competitors and navigate political issues;

 

   

develop and offer a competitive platform that meets TMTG’s customers’ needs as they change;

 

   

improve TMTG’s current operational infrastructure and non-platform technology to support its growth and to respond to the evolution of TMTG’s market and competitors’ developments;

 

   

develop, maintain and expand TMTG’s relationships with suppliers of quality advertising;

 

   

respond to complex, evolving, stringent, contradictory industry standards and government regulation on an international scale that impact TMTG’s business;

 

   

prevent, detect, respond to, or mitigate failures or breaches of privacy and security; and

 

   

hire and retain qualified and motivated employees.

If TMTG is unable to do so, its business may suffer, its revenue and operating results may decline and TMTG may not be able to achieve further growth or sustain profitability.

Since inception, TMTG has continuously sought to improve its business model by developing its technology as an early stage company. TMTG expects to incur operating losses for the foreseeable future.

Truth Social has been generally available only since the first quarter of 2022. Further, although TMTG has targeted and assembled certain intellectual property and real or intangible property rights, its business plan is still developing. Accordingly, TMTG has no way to evaluate the likelihood that its business will be successful. Potential investors should be aware of the difficulties normally encountered by a new social media platform and the high rate of failure for such enterprises. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the operations that TMTG plans to undertake. These potential problems include, but are not limited to, unanticipated problems relating to the development of Truth Social, lack of widespread acceptance of Truth Social by users, and challenges attracting potential vendors to participate in TMTG’s development, and any additional costs and expenses that may exceed current estimates. TMTG expects to incur significant losses into the foreseeable future. TMTG recognizes that if the effectiveness of its business plan is not forthcoming it will not be able to continue business operations. There is limited operating history upon which to base any assumption as to the likelihood that TMTG will prove successful, and TMTG may never generate sufficient operating revenues to achieve profitable operations. If TMTG is unsuccessful in addressing these risks, its business will most likely fail.

 

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TMTG’s actual financial position and results of operations may differ materially from the expectations of TMTG’s management.

TMTG’s actual financial position and results of operations may differ materially from management’s expectations. As a result, TMTG’s revenue, net income and cash flow may differ materially from TMTG’s expected revenue, net income and cash flow. The process for estimating TMTG’s revenue, net income and cash flow requires the use of judgment in determining the appropriate assumptions and estimates. These estimates and assumptions may be revised as additional information becomes available and as additional analyses are performed.

For example, since the entry into the Merger Agreement in October 2021, TMTG’s business plan and financial model have changed and as a result, the prior financial model, as well as certain projections, provided at that time to the Digital World Board and to PIPE Investors are no longer reflective of future expected performance. While the Digital World Board previously approved the Business Combination, the Merger Agreement contemplates that during the pendency of the transaction TMTG will provide Digital World updated due diligence information regarding the financial condition of TMTG’s businesses and that following receipt and review of such due diligence information the Board could have, from October 31, 2023 through November 21, 2023, terminated the Merger Agreement if it no longer believed in good faith that the Business Combination was in the best interests of Digital World or its stockholders. The Merger Agreement is also subject to a number of other conditions which must be satisfied or waived in order to complete the Business Combination and the Merger Agreement may be terminated at any time, under certain customary and limited circumstances. See the section entitled “Summary of the Proxy Statement/Prospectus — The Proposals — The Business Combination Proposal (Proposal 1) — Termination.”

Accordingly, the assumptions used in planning may not prove to be accurate, and other factors may affect TMTG’s financial condition or results of operations, any of which could affect the ability to consummate the Business Combination.

TMTG does not currently, and may never, collect, monitor or report certain key operating metrics used by companies in similar industries.

Since its inception, TMTG has focused on developing Truth Social by enhancing features and user interface rather than relying on traditional performance metrics like average revenue per user, ad impressions and pricing, or active user accounts, including monthly and daily active users. While many industry peers may gather and report on these or similar metrics, given the early development stage of the TMTG platform, TMTG’s management and board has not relied on any particular key performance metric to make business or operating decisions. Concurrent with expected access to new capital and resources following the Business Combination, TMTG is actively evaluating the most relevant, reliable and appropriate key operating metrics that align with its evolving business model. At this juncture in its development, TMTG believes that adhering to traditional key performance indicators, such as signups, average revenue per user, ad impressions and pricing, or active user accounts including monthly and daily active users, could potentially divert its focus from strategic evaluation with respect to the progress and growth of its business. TMTG believes that focusing on these KPIs might not align with the best interests of TMTG or its shareholders, as it could lead to short-term decision-making at the expense of long-term innovation and value creation. Therefore, TMTG believes that this strategic evaluation is critical and aligns with its commitment to a robust business plan that includes introducing innovative features and new technologies.

In connection with such evaluation, and consistent with SEC guidance, TMTG will consider whether it has effective controls and procedures in place to process information related to the disclosure of key performance indicators and metrics to ensure consistency as well as accuracy period over period, or the feasibility of implementing any such controls and procedures. If so, TMTG may decide to collect and report such metrics if they are deemed to significantly enhance investors’ understanding of TMTG’s financial condition, cash flows, and other aspects of its financial performance. However, TMTG may find it difficult or resource-prohibitive to

 

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implement such effective controls and procedures and may never collect, monitor or report any or certain key operating metrics, which is likely to make it difficult it for stockholders in the Combined Entity to evaluate and compare TMTG’s performance to that of companies in similar industries. See “Management’s Discussion and Analysis of Financial Condition and Results of Operation of TMTG -Key Operating Metrics” and “Information About TMTG – About Trump Media & Technology Group.

If the use of third-party cookies or other tracking technology is restricted by third parties outside of TMTG’s control, rejected by Truth Social’s users, or otherwise subject to unfavorable regulation, TMTG’s ability to tailor, improve and provide a consistent experience to Truth Social’s users would be negatively impacted, which could materially and adversely affect TMTG’s growth prospects and financial performance.

TMTG’s Truth Social platform is still in an early development stage, however, as other similar companies in the space, TMTG expects to generate substantial revenue from advertisements. Accordingly, Truth Social’s ability to use third-party cookies to provide advertising companies relevant data for their advertisements is critical to its revenue generation potential. However, with increasing restrictions on third party cookies, Truth Social may lose the ability to track user behavior across its platform, which could negatively affect its ability to retain advertisers on its platform and effectively advertise their services.

Truth Social’s use of cookies aids its development and ability to improve its services in response to user preferences and to provide its users with relevant offers from advertisers. Recently, web and mobile browser developers, such as Apple, Microsoft or Google, have implemented and may continue to implement changes, including requiring additional user permissions, in their browsers or device operating systems that impair Truth Social’s ability to track cookies and improve the effectiveness of advertising on its platform. Such changes include limiting the use of first-party and third-party cookies and related tracking technologies, such as mobile advertising identifiers, and other changes that limit Truth Social’s ability to collect information that allows it to attribute members’ actions on advertisers’ websites to the effectiveness of advertising campaigns run on the platform. For example, Apple launched its Intelligent Tracking Prevention (“ITP”) feature in its Safari browser. ITP blocks some or all third-party cookies by default on mobile and desktop and ITP has become increasingly restrictive over time. Similarly, on January 4, 2024, Google began testing a new feature on its Chrome browser called “Tracking Protection.” This feature limits cross-site tracking by restricting website access to third-party cookies by default. Google is expected to implement the Tracking Protection Tool in all Chrome browsers by the end of the second quarter of 2024, essentially no longer supporting third-party cookies in its Google Chrome browser. Third-party cookies have been a fundamental part of the web for nearly three decades, aiding platforms in generating relevant ads, among other functions. These web and mobile browser developers have also implemented and may continue to implement changes and restrictions in browser or device functionality that limit TMTG’s ability to communicate with or understand its business and users. As such, the implementation of these changes could significantly impair TMTG’s ability to tailor, improve and provide a consistent experience to its users, which in turn could materially and adversely affect its growth prospects and financial performance.

In addition, federal, state and international governmental authorities continue to evaluate the privacy implications inherent in the use of proprietary or third-party cookies and other methods of online tracking for behavioral advertising and other purposes. U.S. and foreign governments have enacted, have considered or are considering legislation or regulations that could significantly restrict the ability of companies and individuals to engage in these activities, such as by regulating the level of consumer notice and consent required before a company can employ cookies or other electronic tracking tools or the use of data gathered with such tools. Additionally, some providers of consumer devices and web browsers have implemented, or announced plans to implement, means to make it easier for Internet users to prevent the placement of cookies or to block other tracking technologies, which could if widely adopted significantly reduce the effectiveness of such practices and technologies. The regulation of the use of cookies and other current online tracking and advertising practices or a loss in TMTG’s ability to make effective use of services that employ such technologies could increase its costs of operations and limit its ability to acquire new customers on cost-effective terms and consequently, materially adversely affect its business, financial condition and operating results.

 

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TMTG’s reputation, competitive advantage, financial position and relationships with its users could be materially harmed if TMTG is unable to comply with complex and evolving data protection and privacy, security, and breach of notification laws and regulations, and the costs and resources required to achieve compliance may have a materially adverse impact.

TMTG’s reputation, competitive advantage, financial position and relationships with its users could be materially harmed if TMTG is accused of a violation or is unable to comply with complex and evolving data protection and privacy, security, and breach of notification laws and regulations, and the costs and resources required to achieve compliance on an international scale may have a materially adverse impact on its business. In the course of delivering TMTG’s product(s), TMTG expects to use, disclose, control, process, collect, transmit and store information that is related to and seeks to correlate internet-connected devices, user activity and the advertisements it places. Federal, state, and international laws and regulations govern the protection, collection, use, processing, retention, sharing, privacy, and security of data that TMTG may access, use, disclose, transfer, store, and collect across TMTG’s operational and advertising solutions. TMTG strives to comply with all applicable laws, regulations, policies and legal obligations relating to privacy, security, and data protection, collection, processing use, disclosure, transmission, and storage. However, the applicability of specific laws may be unclear in some cases and domestic and foreign government laws, regulations, and enforcement of data practices and data tracking technologies is expansive, poorly defined and rapidly evolving. In addition, it is possible that these requirements may be interpreted and applied in a manner that is new or inconsistent from one jurisdiction to another and may conflict with other laws, regulations, or rules or TMTG’s practices. Any actual or perceived failure by TMTG to comply with U.S. federal, state or international laws, including laws and regulations regulating data privacy, security or consumer protection, or use, disclosure or unauthorized access to or by third parties to this information, could result in proceedings or actions against TMTG by government entities, competitors, private parties or others. Any proceedings or actions against TMTG alleging violations of consumer or data protection laws or asserting privacy-related or security-related theories could hurt TMTG’s reputation, force TMTG to cease operations or force TMTG to spend significant amounts in defense of these proceedings, distract its management, increase its costs of doing business, adversely affect the demand for its solutions and ultimately result in the imposition of monetary liability. TMTG may also be contractually liable to indemnify and hold harmless TMTG’s customers, vendors or third parties from the costs or consequences of litigation resulting from using TMTG’s solutions or from the disclosure of confidential information, which could damage TMTG’s reputation among its current and potential customers, and may require significant expenditures of capital and other resources that could cause it to lose significant business and revenue.

The collection, protection and use of personal information, personally identifiable information and/or personal data (collectively referred to as “personal data” for ease of reference) is governed by data protection, privacy, security and breach laws and regulations enacted in the United States and other jurisdictions around the world in which TMTG operates or plans to operate. These laws and regulations continue to evolve and may be inconsistent from one jurisdiction to another. Compliance with applicable privacy, security and breach laws and regulations may increase TMTG’s costs of doing business and adversely impact its ability to conduct its business and market its solutions, products and services to its users and potential users.

In the U.S., there is not one comprehensive data protection, consumer protection, data privacy, security, or breach notification law. Rather, numerous state and federal laws must be complied with by TMTG simultaneously across U.S. jurisdictions. Various types of companies and their data are regulated by stringent industry specific regulations and standards based on data type and sensitivity. All fifty (50) states and four U.S. territories have enacted consumer protection laws that require notice of data breaches. Many U.S. states (at least 27) require comprehensive data protection, privacy and/or security compliance programs. These include, but are not limited to, the California Consumer Privacy Act, as amended by the California Privacy Rights Act, the Arkansas Social Media Safety Act, and the Utah Social Media Regulation Act may affect TMTG. There are also a number of legislative proposals pending before the U.S. Congress, various state legislative bodies, and foreign governments concerning data protection that could affect TMTG. At this time some states have laws restricting the use and disclosure of minor’s user data, biometric data and/or health information without notice and/or express consent of a natural person of the age of majority with appropriate legal authority to consent. If TMTG

 

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fails to comply with the federal and/or state data protection and data privacy laws, or if regulators or plaintiffs assert TMTG has failed to comply with them, it may lead to court orders, injunctions, regulatory enforcement actions, private lawsuits, a reduction in revenue, and/or reputational damage.

All fifty U.S. states and some territories have adopted and/or are likely to adopt in the near future state privacy laws similar to stringent European privacy laws that require data mapping, consumer rights to erasure, deletion, and portability that will be materially costly for TMTG to interpret, implement and maintain. If TMTG fails to comply with federal or state data protection and data privacy laws, or if regulators or plaintiffs assert TMTG has failed to comply with them, it may lead to regulatory enforcement actions, private lawsuits and/or reputational damage. For example, in June 2018, California was the first U.S. state to pass the California Consumer Privacy Act (“CCPA”), which provides data privacy rights for consumers and operational requirements for companies like TMTG. The CCPA gives California residents new rights to access and requires deletion of their personal information, opt out of certain personal information sharing, and receipt of detailed information about how their personal information is collected, used, and shared, among other stringent requirements. The CCPA provides for civil penalties for violations, and creates a private right of action for privacy and security violations/breaches that could lead to consumer class actions and other litigation against TMTG. Additionally, the California Privacy Rights Act (“CPRA”), passed in November 2020. The CPRA imposes additional data protection obligations on companies doing business in California, including additional consumer rights processes and opt outs for certain uses of sensitive data. The majority of the provisions took effect on January 1, 2023. TMTG may be required to make additional compliance investments and changes to its business processes in order to comply with individual state privacy and security laws currently in effect and/or as they are enacted.

The FTC Act prohibits unfair and deceptive practices. The FTC has broad investigatory authority, including the authority to subpoena witnesses, demand civil investigation, and require businesses to submit written reports under oath. The FTC can and does engage in enforcement actions, issue rulings, and seek civil penalties in federal court. An FTC enforcement action may lead to court orders, injunctions, additional regulatory enforcement actions, consent decrees which are posted publicly on the FTC’s website, consent orders, a reduction in revenue, and/or reputational damage.

The Children’s Online Privacy Protection Act (“COPPA”) expands liability for the collection of information by operators of websites and other electronic solutions that are directed to children. Legal guardian consent is required for certain activities involving the data of children. Questions exist as to how regulators and courts may interpret the scope and circumstances for potential liability under COPPA, but this remains a significant focus of the FTC in light of mental health and other concerns over children’s use of social media. FTC continues to provide guidance and clarification regarding COPPA. FTC guidance or enforcement precedent may make it difficult or impractical for TMTG to provide advertising on certain websites, services or applications. In addition, the FTC has fined an advertising network for certain methods of collecting and using data from mobile applications, including certain applications directed at children, and failing to disclose the data collection to mobile application developers in its network.

TMTG is subject to the European Union’s General Data Protection Regulation (EU) 2016/679 (“GDPR”), which applies to all members of the European Economic Area (“EEA”) and, in some circumstances, to controllers and processors in a jurisdiction outside the EEA including any business, regardless of its location, that provides goods or services to data subjects located in the EEA, or monitors the behavior of EEA data subjects. The GDPR imposes significant restrictions, obligations and penalties on data controllers and data processors, including stringent requirements for the processing of personal data. If TMTG fails to comply with the GDPR, it may lead to regulatory investigation with possible enforcement of monetary penalties ranging from 10 million to 20 million euros, or 2% to 4% of annual worldwide revenue (whichever is higher), private or class action lawsuits and/or reputational damage.

Further, withdrawal of the United Kingdom (“UK”) from the European Union (“EU”) has led to legal uncertainty and divergent national laws and regulations. In particular, while the Data Protection Act of 2018,

 

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which supplements the GDPR, is now effective in the UK alongside the UK GDPR, it is still unclear whether transfer of data from the EEA to the UK will remain lawful under the GDPR without additional safeguards.

EU laws regulate transfers of EEA personal data to third countries, such as the United States, that have not been found to provide adequate protection of such personal data. Recent legal developments in the EU have created complexity and uncertainty regarding transfers of personal data from the EEA and the UK to the United States and other jurisdictions. For example, on July 16, 2020, the European Court of Justice (“CJEU”) invalidated the EU-U.S. Privacy Shield framework (“Privacy Shield”), which provided companies with a mechanism to comply with data protection requirements when transferring personal data from the EEA/UK to the United States. The same decision also cast doubt on the ability to use one of the primary alternatives to the Privacy Shield, namely, the European Commission’s Standard Contractual Clauses (“SCCs”), to lawfully transfer personal data from Europe to the United States and most other countries (though the SCCs currently remain a valid data transfer mechanism under the GDPR and UK GDPR). On July 10, 2023, the European Commission adopted an adequacy decision concluding that the United States ensures an adequate level of protection for personal data transferred from the European Union to organizations in the United States that are included in the “Data Privacy Framework List,” which is maintained by the U.S. Department of Commerce pursuant to the EU-U.S. Data Privacy Framework. The impact of the European Commission’s adequacy decision is complex, evolving, and may be reviewed by the CJEU. A future invalidation of the Privacy Shield by the CJEU will create additional uncertainty and will mean there are few if any viable alternatives to the Privacy Shield and the SCCs for the foregoing purposes, which may lead to government enforcement actions, litigation, fines and penalties or adverse publicity that could have an adverse effect on TMTG’s reputation, revenue, operations and business.

In Canada, TMTG is subject to the laws of the individual provinces, as well as Canada’s Personal Information and Protection of Electronic Documents Act (“PIPEDA”). PIPEDA provides Canadian residents with privacy protections and sets out rules for how companies may collect, use and disclose personal information in the course of commercial activities. The costs of compliance with, and other burdens imposed by, these and other international data privacy and security laws may limit the use and adoption of TMTG’s solutions, products and services and could have a materially adverse impact on its business. Any failure or perceived failure by TMTG or third-party service providers to comply with international data privacy and security laws may lead to regulatory enforcement actions, fines, private lawsuits or reputational damage.

Evolving definitions of personal data within the EU, especially relating to the classification of IP addresses, machine or device identifiers, geo-location data and other such information, may cause TMTG to change its business practices, diminish the quality of its data and the value of its solution, and hamper its ability to provide or expand its offerings. TMTG’s failure to comply with evolving interpretations of applicable laws and regulations, or to adequately protect personal data, could result in enforcement action against TMTG or reputational harm, which could have a material adverse impact on TMTG’s business, financial condition and results of operations.

In addition to compliance with government regulations, TMTG expects to participate in trade associations and industry self-regulatory groups that promulgate best practices or codes of conduct addressing the provision of internet advertising. TMTG could be adversely affected by changes to these guidelines and codes in ways that are inconsistent with its practices or in conflict with the laws and regulations of U.S. or international regulatory authorities. For instance, new guidelines, codes or interpretations, by self-regulatory organizations or government agencies, may require additional disclosures or additional consumer consents, such as “opt-in” permissions to share, link or use data, such as health data from third parties, in certain ways. If TMTG fails to abide by, or is perceived as not operating in accordance with, industry best practices or any industry guidelines or codes with regard to privacy, its reputation may suffer and TMTG could lose relationships with advertisers and digital media properties.

 

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Economic downturns and market conditions beyond TMTG’s control could adversely affect its business, financial condition and operating results.

TMTG’s business depends on the overall demand for advertising and on the economic health of advertisers that benefit from Truth Social. Economic downturns or unstable market conditions may cause advertisers to decrease their advertising budgets, which could reduce spend with Truth Social and adversely affect TMTG’s business, financial condition and operating results. For example, to the extent there is a disruption in economic activity globally, it could adversely affect our business, financial condition and operating results through prolonged decreases in advertising spend, credit deterioration of our customers, depressed economic activity, or declines in capital markets.

The loss of key personnel or the inability of replacements to quickly and successfully perform in their new roles could adversely affect TMTG’s business.

TMTG depends on the leadership and experience of its relatively small number of key executive management personnel. The pursuit of the merger and the preparation for the integration have placed a burden on TMTG’s management and internal resources. TMTG has experienced management departures, and may continue to experience management departures. Any significant diversion of management attention away from ongoing business concerns and any difficulties encountered in the transition and integration process could have a material adverse effect on TMTG’s business, financial condition and results of operations. The loss of the services of these key employees or TMTG’s executive management members could have a material adverse effect on TMTG’s business and prospects, as TMTG may not be able to find suitable individuals to replace such personnel on a timely basis or without incurring increased costs. Furthermore, if TMTG loses or terminates the services of one or more of its key employees or if one or more of TMTG’s current or former executives or key employees joins a competitor or otherwise competes with TMTG, it could impair TMTG’s business and its ability to successfully implement TMTG’s business plan. Additionally, if TMTG is unable to hire qualified replacements for its executive and other key positions in a timely fashion, its ability to execute its business plan would be harmed. Even if TMTG can quickly hire qualified replacements, TMTG could experience operational disruptions and inefficiencies during any such transition. TMTG believes that its future success will depend on its continued ability to attract and retain highly skilled and qualified personnel.

In addition, many of TMTG’s key technologies and systems will be custom-made for TMTG’s business by TMTG’s personnel. The loss of key engineering, product development, marketing and sales personnel could disrupt TMTG’s operations and have an adverse effect on TMTG’s business.

As TMTG continues to grow, TMTG cannot guarantee that it will continue to attract the personnel it needs to maintain its competitive position. In particular, TMTG intends to hire additional technically-skilled personnel following the Closing, and TMTG expects to face significant competition from other companies in hiring such personnel. As TMTG matures, the incentives to attract, retain and motivate employees provided by TMTG’s equity awards or by future arrangements, such as through cash bonuses, may not be effective. If TMTG does not succeed in attracting, hiring and integrating excellent personnel, or retaining and motivating existing personnel, TMTG may be unable to grow effectively.

If Truth Social fails to develop and maintain followers or a sufficient audience, if adverse trends develop in the social media platforms generally, or if President Trump were to cease to be able to devote substantial time to Truth Social, TMTG’s business would be adversely affected.

Social media platforms are speculative businesses because revenues and income derived from them depend primarily upon the continued acceptance of that platform. Public acceptance of a particular platform depends upon, among other things, the ease of use of the platform, promotion of that platform, and the quality and acceptance of competing platforms. A user decline could make it economically inefficient to continue providing for the use of the platform. If President Trump fails to retain the public’s interest, or if the customer base were to cease using Truth Social, it could result in a write-down of TMTG’s capitalized development costs. The amount of any write-down would vary depending on a number of factors, including when the product or service ceased.

 

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TMTG has placed emphasis on building a platform for all Americans to freely express themselves through Truth Social. In particular, President Trump has stated that this is a platform for all who have been censored by big tech. Failure to realize this vision would adversely affect TMTG’s brand and business prospects.

Truth Social is being developed as a global platform for public self-expression and conversation in real time, and the market for Truth Social is relatively new and may not develop as expected, if at all. People who are not Truth Social users may not understand the value of Truth Social. Convincing potential new users, especially users who oppose big tech censorship, of the value of Truth Social is critical to increasing TMTG’s user base and to the success of TMTG’s business. In addition, there are a number of other social media platforms that focus on the same audience that Truth Social will focus on. To the extent users prefer a platform that is not associated with President Trump, our ability to attract users may decrease. Additionally, as a private company under new ownership, X may demonstrate a sustained commitment to free speech principles that will heighten competition for users who prioritize such principles. Failure to attract a sufficient user base would adversely affect TMTG’s business prospects.

If TMTG’s users do not continue to contribute content or their contributions are not valuable to other users, TMTG may experience a decline in the number of users accessing its products and services and user engagement, which could result in the loss of advertisers and revenue.

TMTG’s success depends on its ability to provide users with products, which in turn for Truth Social depends on the content contributed by TMTG’s users. TMTG believes that one of Truth Social’s competitive advantages will be the quality, quantity and real-time nature of the content on Truth Social, and that access to unique or real-time content is one of the main reasons users may visit Truth Social. TMTG seeks to foster a broad and engaged user community, and TMTG intends to encourage high-profile individuals and entities to use TMTG’s products and services to freely express their views to broad audiences without the fear of being censored or cancelled for any unpopular or non-woke opinions. TMTG may also encourage media outlets to use its products and services to distribute their content. If users, including influential users, do not contribute content to Truth Social, and it is unable to provide users with valuable and timely content, TMTG’s user base and user engagement may decline. Additionally, if TMTG is not able to address user concerns regarding the safety and security of Truth Social or if TMTG is unable to successfully prevent abusive or other hostile behavior on Truth Social, the size of the Truth Social user base and user engagement may decline. TMTG may rely on the sale of advertising services for the substantial majority of TMTG’s revenue. If TMTG experiences a decline in the number of users or a decline in user engagement, including as a result of the loss of high-profile individuals and entities who generate content on Truth Social, advertisers may not view Truth Social as attractive for their marketing expenditures, and may reduce their spending with TMTG—which would harm TMTG’s business and operating results.

TMTG’s focus on product innovation and user engagement rather than short-term operating results may adversely affect TMTG’s revenues.

TMTG is committed to quickly developing and launching new and innovative features. TMTG intends to focus on improving the user experience for Truth Social and on developing new and improved products and services for the advertisers on Truth Social. TMTG intends to prioritize innovation and the experience for users and advertisers on Truth Social over short-term operating results. TMTG may frequently make product and service decisions that may reduce TMTG’s short-term operating results if it believes that the decisions are consistent with its goals to improve the user experience and performance for advertisers, which it believes will improve its operating results over the long term. These intended decisions may not be consistent with the short-term expectations of investors and may not produce the long-term benefits that TMTG expects, in which case Truth Social user growth and user engagement, its relationships with advertisers and its business and operating results could be harmed. In addition, TMTG’s intent to focus on the user experience may negatively impact TMTG’s relationships with prospective advertisers. This could result in a loss of advertisers, which could harm TMTG’s revenue and operating results.

 

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Truth Social user growth and engagement on mobile devices depend upon effective operation with mobile operating systems, networks, and standards that TMTG does not control.

TMTG intends to make its products and services available across a variety of operating systems and through websites. TMTG will be dependent on the interoperability of Truth Social with popular devices, desktop and mobile operating systems and web browsers that TMTG does not control, such as Mac OS, Windows, Android, iOS, Chrome and Firefox. Any changes in such systems, devices or web browsers that degrade the functionality of TMTG’s products and services or give preferential treatment to competitive products or services could adversely affect usage of TMTG’s products and services. Further, if the number of platforms for which TMTG develops its product expands, it will result in an increase in TMTG’s operating expenses. In order to deliver high-quality products and services, it is important that TMTG’s products and services work well with a range of operating systems, networks, devices, web browsers and standards that TMTG does not control. In addition, because a majority of TMTG’s future users may access TMTG’s products and services through mobile devices, TMTG is particularly dependent on the interoperability of its products and services with mobile devices and operating systems. TMTG may not be successful in developing relationships with key participants in the mobile industry or in developing products or services that operate effectively with these operating systems, networks, devices, web browsers and standards. In the event that it is difficult for TMTG’s users to access and use TMTG’s products and services, particularly on their mobile devices, TMTG’s user growth and engagement could be harmed, and its business and operating results could be adversely affected.

TMTG may not be successful in its efforts to grow and monetize Truth Social.

TMTG may not be successful in building products that maintain user engagement. If TMTG is not successful in its efforts to grow Truth Social and monetize such growth, TMTG’s user growth and user engagement and TMTG’s financial results may be adversely affected.

TMTG’s independent registered public accounting firm has indicated that TMTG’s financial condition raises substantial doubt as to its ability to continue as a going concern.

The combined financial statements which accompany this prospectus have been prepared assuming that TMTG will continue as a going concern. As discussed in the report of TMTG’s independent registered public accounting firm and the combined financial statements, TMTG has suffered negative cash flows and recurring losses from operations that raise substantial doubt about its ability to continue as a going concern.

To date, TMTG has financed its operations principally through loans or offerings of securities exempt from the registration requirements of the Securities Act. TMTG’s management believes that capital raised from the Business Combination will be sufficient to retire existing debt and to fund existing operations should projected cash flow be insufficient to fund operations. TMTG may require substantial additional financing at various intervals in order to continue to develop and promote Truth Social, including significant requirements for operating expenses including intellectual property protection and enforcement, for pursuit of regulatory approvals, and for commercialization of Truth Social. TMTG can provide no assurance that additional funding will be available on a timely basis, on terms acceptable to TMTG, or at all. In the event that TMTG is unable to obtain such financing, it will not be able to fully develop and commercialize Truth Social. If TMTG becomes unable to obtain additional capital and to continue as a going concern, it may have to liquidate its assets and the value TMTG receives for its assets in liquidation or dissolution could be significantly lower than the values reflected in TMTG’s financial statements.

TMTG’s estimates of market opportunity and forecasts of market growth may prove to be inaccurate.

Market opportunity estimates and growth forecasts, whether obtained from third-party sources or developed internally, are subject to significant uncertainty and are based on assumptions and estimates that may prove to be inaccurate. Any estimates and forecasts relating to the size and expected growth of the target market and market

 

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demand which may inform TMTG’s financial model may also prove to be inaccurate. The estimated addressable market may not materialize in the timeframe estimated by management, if ever, and even if the markets meet the size estimates and growth estimates considered in relation to TMTG’s financial model, our business could fail to grow at similar rates.

TMTG’s business depends on continued and unimpeded access to Truth Social on the Internet by TMTG’s users and advertisers. If TMTG’s users experience disruptions in Internet service or if Internet service providers are able to block, degrade or charge for access to TMTG’s products and services, TMTG could incur additional expenses and the loss of users and advertisers.

TMTG depends on the ability of TMTG’s users and advertisers to access the Internet. This access will be provided by companies—including hostile legacy technology companies—that have significant market power in the broadband and Internet access marketplace, including incumbent telephone companies, cable companies, mobile communications companies, government-owned service providers, device manufacturers and operating system providers, any of whom could take actions that degrade, disrupt or increase the cost of user access to TMTG’s products or services, which would, in turn, negatively impact TMTG’s business. The adoption of any laws or regulations that adversely affect the growth, popularity or use of the Internet, including laws or practices limiting Internet neutrality, could decrease the demand for, or the usage of, TMTG’s products and services, increase TMTG’s cost of doing business and adversely affect TMTG’s operating results. TMTG will also rely on other companies to maintain reliable network systems that provide adequate speed, data capacity and security to us and TMTG’s users. As the Internet continues to experience growth in the number of users, frequency of use and amount of data transmitted, the Internet infrastructure that TMTG and its users rely on may be unable to support the demands placed upon it. The failure of the Internet infrastructure that TMTG or TMTG’s users rely on, even for a short period of time, could undermine TMTG’s operations and harm TMTG’s operating results.

If TMTG fails to expand effectively in international markets, TMTG’s revenue and TMTG’s business will be harmed.

Notwithstanding Truth Social’s recent announcement of the general availability of Truth Social internationally, TMTG may not be able to monetize TMTG’s products and services internationally as a result of competition, advertiser demand, differences in the digital advertising market and digital advertising conventions, as well as differences in the way that users in different countries access or utilize TMTG’s products and services. Differences in the competitive landscape in international markets may impact TMTG’s ability to monetize TMTG’s products and services.

TMTG’s business is highly competitive. Competition presents an ongoing threat to the success of TMTG’s business. If TMTG is unable to compete effectively for users and advertiser spend, TMTG’s business and operating results could be harmed.

Competition for users of TMTG’s products and services is intense. Although TMTG has developed a global platform for public self-expression and conversation in real time, TMTG faces strong competition in its business. TMTG competes against many companies to attract and engage users, including companies which have greater financial resources and substantially larger user bases, such as X (formerly known as Twitter), Meta (including Facebook and Instagram), Alphabet/Google, Netflix, Disney+, Hulu, Microsoft (including LinkedIn), and Yahoo!, which offer a variety of Internet and mobile device-based products, services and content. For example, Facebook and X operate social networking sites with significantly more users than Truth Social may have in the future. Additionally, as a private company under new ownership, X may demonstrate a sustained commitment to free speech principles that will heighten competition for users who prioritize such principles.

TMTG believes that its ability to compete effectively for users depends upon many factors both within and beyond TMTG’s control, including:

 

   

the popularity, usefulness, ease of use, performance and reliability of TMTG’s products and services compared to those of TMTG’s competitors;

 

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the amount, quality and timeliness of content generated by TMTG’s users;

 

   

the timing and market acceptance of TMTG’s products and services;

 

   

the reduced availability of data used by ad targeting and measurement tools;

 

   

government restrictions on access to TMTG products, or other actions that impair our ability to sell advertising, in their states or countries;

 

   

adverse litigation, government actions, or legislative, regulatory, or other legal developments relating to advertising, including developments that may impact our ability to deliver, target, or measure the effectiveness of advertising;

 

   

the adoption of TMTG’s products and services internationally;

 

   

TMTG’s ability, and the ability of TMTG’s competitors, to develop new products and services and enhancements to existing products and services;

 

   

the frequency and relative prominence of the ads displayed by TMTG or TMTG’s competitors;

 

   

TMTG’s ability to establish and maintain relationships with platform partners that integrate with Truth Social;

 

   

changes mandated by, or that TMTG elects to make to address, legislation, regulatory authorities or litigation, including settlements and consent decrees, some of which may have a disproportionate effect on TMTG;

 

   

the application of antitrust laws both in the United States and internationally;

 

   

government action regulating competition;

 

   

TMTG’s ability to attract, retain and motivate talented employees, particularly engineers, designers and product managers;

 

   

TMTG’s ability to build, maintain, and scale technical infrastructure, and risks associated with disruptions in TMTG’s service, catastrophic events, cyber-attacks, and crises;

 

   

acquisitions or consolidation within TMTG’s industry, which may result in more formidable competitors; and

 

   

TMTG’s reputation and the brand strength relative to its competitors.

TMTG faces significant competition for advertiser spend. TMTG’s revenue has initially been generated through ads on Truth Social, and TMTG will compete against online and mobile businesses, including those referenced above, for advertising budgets. In order to grow TMTG’s revenue and improve TMTG’s operating results, TMTG may increase TMTG’s share of spending on advertising relative to TMTG’s competitors, many of which are larger companies that offer more traditional and widely accepted advertising products. In addition, some of TMTG’s larger competitors have substantially broader product or service offerings and user bases and leverage their relationships based on other products or services to gain additional share of advertising budgets.

TMTG believes that its ability to compete effectively for advertiser spend depends upon many factors both within and beyond TMTG’s control, including:

 

   

the size and composition of TMTG’s user base relative to those of TMTG’s competitors;

 

   

TMTG’s ad targeting capabilities, and those of TMTG’s competitors;

 

   

the timing and market acceptance of TMTG’s advertising services, and those of TMTG’s competitors;

 

   

the propensity of advertisers to support free speech-focused platforms like Truth Social

 

   

TMTG’s marketing and selling efforts, and those of TMTG’s competitors;

 

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the pricing for TMTG’s products relative to the advertising products and services of TMTG’s competitors;

 

   

the return TMTG’s advertisers receive from TMTG’s advertising services, and those of TMTG’s competitors;

 

   

TMTG’s reputation and the strength of TMTG’s brand relative to TMTG’s competitors;

 

   

the engagement of TMTG’s users with TMTG’s products;

 

   

TMTG’s ability to monetize Truth Social, including TMTG’s ability to successfully monetize mobile usage;

 

   

TMTG’s customer service and support efforts;

 

   

TMTG’s ability to establish and maintain developers’ interest in building Truth Social;

 

   

acquisitions or consolidations within TMTG’s industry, which may result in more formidable competitors; and

 

   

TMTG’s ability to cost-effectively manage and grow its operations.

In recent years, there have been significant acquisitions and consolidation by and among TMTG’s potential competitors. TMTG anticipates this trend of consolidation will continue, which will present heightened competitive challenges for TMTG’s business. Acquisitions by TMTG’s competitors may result in reduced functionality of Truth Social. Any elimination of integration with Truth Social in the future may adversely impact TMTG’s business and operating results.

Consolidation may also enable TMTG’s larger competitors to offer bundled or integrated products that feature alternatives to Truth Social. Reduced functionality of Truth Social, or TMTG’s competitors’ ability to offer bundled or integrated products that compete directly with TMTG, may cause TMTG’s user growth, user engagement and ad engagement to decline and advertisers to reduce their spending with TMTG. If TMTG is not able to compete effectively for users and advertiser spend its business and operating results would be materially and adversely affected.

Many of TMTG’s potential competitors have significantly greater resources and better competitive positions in certain markets than TMTG does. These factors may allow TMTG’s competitors to respond more effectively to new or emerging technologies and changes in market requirements. TMTG’s competitors may develop products, features, or services that are similar to TMTG’s or that achieve greater market acceptance, may undertake more far-reaching and successful product development efforts or marketing campaigns, or may adopt more aggressive pricing policies. In addition, platform partners may use information shared by TMTG’s users through Truth Social in order to develop products or features that compete with TMTG. If TMTG is not able to effectively compete, TMTG’s user base and level of user engagement may decrease, which could make TMTG less attractive to developers and advertisers and materially and adversely affect TMTG’s revenue and results of operations.

Truth Social exists to provide its users a true free speech platform and avoid cancellation or censorship by big tech. There is nothing preventing big tech from ceasing to cancel different voices. If that were to happen, the number of users on TMTG’s platform may decrease.

Action by governments to censor content on or restrict access to Truth Social in their countries could substantially harm TMTG’s business and financial results.

It is possible that governments of one or more countries may seek to censor content available on Truth Social in their country or impose other restrictions that may affect the accessibility of Truth Social in their country for an extended period of time or indefinitely. In addition, governments in other countries may seek to

 

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restrict access to Truth Social from their country entirely if they consider TMTG to be in violation of their laws. In the event that access to Truth Social is restricted, in whole or in part, in one or more countries or TMTG’s competitors are able to successfully penetrate geographic markets that TMTG cannot access, TMTG’s ability to retain or increase TMTG’s user base and user engagement may be adversely affected, TMTG may not be able to maintain or grow TMTG’s revenue as anticipated, and TMTG’s financial results could be adversely affected. See “Risk Factors — Risks Related to TMTG’s Business — TMTG may be subject to greater risks than typical social media platforms because of the focus of its offerings and the involvement of President Trump. These risks include active discouragement of users, harassment of advertisers or content providers, increased risk of hacking of TMTG’s platform, lesser need for Truth Social if First Amendment speech is not suppressed, criticism of Truth Social for its moderation practices, and increased stockholder suits.”

TMTG’s new products, services and initiatives and changes to existing products, services and initiatives could fail to attract sufficient users and advertisers or generate revenue.

TMTG’s ability to increase the size and engagement of Truth Social’s user base, attract advertisers and generate revenue will depend in part on TMTG’s ability to create successful new products and services, both independently and in conjunction with third parties. TMTG may introduce significant changes to TMTG’s existing products and services or develop and introduce new and unproven products and services, including technologies with which TMTG has little or no prior development or operating experience. If new or enhanced products or services fail to engage users and advertisers, TMTG may fail to attract or retain users or to generate sufficient revenue or operating profit to justify TMTG’s investments, and TMTG’s business and operating results could be adversely affected. In the future, TMTG may invest in new products, services, and initiatives to generate revenue, but there is no guarantee these approaches will be successful. If TMTG’s strategic initiatives do not enhance TMTG’s ability to monetize TMTG’s products and services or enable it to develop new approaches to monetization, TMTG may not be able to maintain or grow TMTG’s revenue or recover any associated development costs and TMTG’s operating results could be adversely affected.

If TMTG’s efforts to build and maintain strong brand identity, improve the user base for Truth Social, and develop additional products are not successful, TMTG may not be able to attract or retain users, and TMTG’s operating results will be affected adversely. If events occur that damage TMTG’s reputation and brand, TMTG’s ability to expand TMTG’s base of users, developers and advertisers may be impaired, and TMTG’s business and financial results may be harmed.

TMTG believes that the Trump brand will significantly contribute to the success of TMTG’s business. TMTG also believes that maintaining and enhancing TMTG’s brand is critical to expanding its base of users, developers and advertisers. Maintaining and enhancing TMTG’s brand will depend largely on TMTG’s ability to continue to provide useful, reliable, trustworthy and innovative products, which TMTG may not do successfully. TMTG may introduce new products or terms of service that users do not like, which may negatively affect TMTG’s brand. Additionally, the actions of TMTG’s platform developers may affect TMTG’s brand if users do not have a positive experience using third-party apps and websites integrated with Truth Social. TMTG’s brand may also be negatively affected by the actions of users that are hostile towards President Trump or towards other people, by users impersonating other people, by users identified as spam, by users introducing excessive amounts of spam on TMTG’s platform, by third parties obtaining control over users’ accounts or by unauthorized access to TMTG’s data or TMTG’s users’ data. TMTG expects that in the future TMTG may experience media, judicial, legislative, or regulatory scrutiny of TMTG’s decisions regarding user privacy, data use, encryption, content, product design, algorithms, advertising, or other issues, which may adversely affect TMTG’s reputation and brand. TMTG also may fail to provide adequate customer service, which could erode confidence in TMTG’s platform. Maintaining and enhancing TMTG’s platform may require it to make substantial investments and these investments may not be successful. If TMTG fails to successfully promote and maintain its platform or if it incurs excessive expenses in this effort, TMTG’s business and financial results may be adversely affected.

 

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Following the Business Combination, TMTG may need additional capital, and TMTG cannot be sure that additional financing will be available.

Although TMTG currently anticipates that the proceeds from the Business Combination, together with TMTG’s available funds and cash flow from operations, will be sufficient to meet TMTG’s cash needs for the foreseeable future, TMTG may eventually require additional financing. TMTG’s ability to obtain financing will depend, among other things, on TMTG’s development efforts, business plans, operating performance and condition of the capital markets at the time TMTG seeks financing. TMTG cannot assure you that additional financing will be available to it on favorable terms when required, or at all. If TMTG raises additional funds through the issuance of equity, equity-linked or debt securities, those securities may have rights, preferences, or privileges senior to the rights of New Digital World common stock, and the existing stockholders may experience dilution.

Any significant disruption in service on Truth Social or in TMTG’s information systems could result in a loss of users or subscribers.

Potential users and subscribers will access Truth Social through TMTG’s website and related mobile applications, where the title selection process may be integrated with TMTG’s delivery processing systems and software. TMTG’s reputation and ability to attract, retain and serve TMTG’s subscribers is dependent upon the reliable performance of TMTG’s website and related apps, network infrastructure and fulfillment processes. Interruptions in these systems could make TMTG’s website unavailable and hinder TMTG’s ability to fulfill selections. Some of TMTG’s software is proprietary, and TMTG may rely on the expertise of members of TMTG’s engineering and software development teams for the continued performance of TMTG’s software and computer systems. Service interruptions or the unavailability of TMTG’s website could diminish the overall attractiveness of TMTG’s subscription service to existing and potential subscribers.

TMTG’s servers may be vulnerable to computer viruses, physical or electronic break-ins and similar disruptions, which could lead to interruptions and delays in TMTG’s service and operations and loss, misuse or theft of data. TMTG’s website may periodically experience directed attacks intended to cause a disruption in service. Any attempts by hackers to disrupt TMTG’s website service or TMTG’s internal systems, if successful, could harm TMTG’s business, be expensive to remedy and damage TMTG’s reputation. Efforts to prevent hackers from entering TMTG’s computer systems may be expensive to implement and may limit the functionality of TMTG’s services. Any significant disruption to TMTG’s website or internal computer systems could result in a loss of subscribers and adversely affect TMTG’s business and results of operations.

TMTG’s industry is prone to cyber-attacks by third parties seeking unauthorized access to our data or users’ data or to disrupt our ability to provide service. TMTG’s products and services involve the collection, storage, processing, and transmission of a large amount of data. Any failure to prevent or mitigate security breaches and improper access to or disclosure of our data or user data, including personal information, content, or payment information from users, or information from marketers, could result in the loss, modification, disclosure, destruction, or other misuse of such data, which could harm our business and reputation and diminish TMTG’s competitive position. In addition, computer malware, viruses, social engineering (such as spear phishing attacks), scraping, and general hacking are prevalent in TMTG’s industry and are likely to occur on TMTG’s systems in the future. TMTG will also regularly encounter attempts to create false or undesirable user accounts, purchase ads, or take other actions on our platform for purposes such as spamming, spreading misinformation, or other illegal, illicit, or otherwise objectionable ends. As a result of our prominence, the prominence and involvement of President Trump, the size of TMTG’s user base, the types and volume of personal data and content on TMTG’s systems, and the evolving nature of TMTG’s products and services (including our efforts involving new and emerging technologies), TMTG believes that it is a particularly attractive target for such breaches and attacks, including from nation states and highly sophisticated, state-sponsored, or otherwise well-funded actors, and TMTG may experience heightened risk from time to time as a result of geopolitical events. TMTG’s efforts to address undesirable activity on our platform also increase the risk of retaliatory attacks. Such breaches and attacks may cause interruptions to the services TMTG provides, degrade the user experience, cause users or

 

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marketers to lose confidence and trust in TMTG products, impair TMTG’s internal systems, or result in financial harm to TMTG. TMTG’s efforts to protect its company data or the information it receives, and to disable undesirable activities on TMTG’s platform, may also be unsuccessful due to software bugs or other technical malfunctions; employee, contractor, or vendor error or malfeasance, including defects or vulnerabilities in TMTG’s vendors’ information technology systems or offerings; government surveillance; breaches of physical security of TMTG’s facilities or technical infrastructure; or other threats that evolve. In addition, third parties may attempt to fraudulently induce employees or users to disclose information in order to gain access to our data or our users’ data. Cyber-attacks continue to evolve in sophistication and volume, and inherently may be difficult to detect for long periods of time. Although TMTG has developed systems and processes that are designed to protect its data and user data, to prevent data loss, to disable undesirable accounts and activities on our platform, and to prevent or detect security breaches, TMTG cannot guarantee that such measures will provide absolute security, that TMTG will be able to react in a timely manner, or that TMTG’s remediation efforts will be successful. The changes in TMTG’s work environment as a result of certain personnel working remotely could also impact the security of our systems, as well as our ability to protect against attacks and detect and respond to them quickly. Furthermore, TMTG believes that it is a particularly attractive target for cyber-attacks and security breaches because of the prominence and involvement of President Trump in TMTG.

TMTG’s communications hardware and the computer hardware used to operate TMTG’s website will initially be hosted at the facilities of a third-party provider. Hardware for TMTG’s delivery systems is intended to be maintained in TMTG’s distribution centers. Fires, floods, earthquakes, adverse weather conditions, other natural disasters, power losses, telecommunications failures, cyber-attacks, public health crises, terrorism, geopolitical conflict, break-ins, and similar events could damage these systems and hardware or cause them to fail completely. Problems faced by TMTG’s third-party web hosting provider, with the telecommunications network providers with whom it contracts or with the systems by which it allocates capacity among its subscribers, including us, could impact adversely the experience of TMTG’s subscribers. Any of these problems could result in a loss of subscribers.

Privacy concerns could limit TMTG’s ability to leverage Truth Social user data.

In the ordinary case of business, TMTG may collect and utilize data supplied by Truth Social. TMTG may face certain legal obligations regarding the manner in which TMTG treats such information. These legal obligations are complex and rapidly evolving, other businesses have been criticized by privacy groups and governmental bodies for attempts to link personal identities and other information to data collected on the Internet regarding users’ browsing and other habits. Increased regulation of data utilization practices, including self-regulation, as well as increased enforcement of existing laws, could have an adverse effect on TMTG’s business.

Improper access to or disclosure of TMTG’s users’ information could harm TMTG’s reputation and adversely affect TMTG’s business.

TMTG’s efforts to protect the information that TMTG’s users have chosen to share using Truth Social may be unsuccessful due to the actions of third parties, software bugs or other technical malfunctions, employee error or malfeasance, or other factors. In addition, third parties may attempt to fraudulently induce employees or users to disclose information in order to gain access to TMTG’s data or TMTG’s users’ data. If any of these events occur, TMTG’s users’ information could be accessed or disclosed improperly. Truth Social’s Data Privacy Policy governs the use of information that users have chosen to share using Truth Social. Some platform developers may store information provided by TMTG’s users through apps on the Truth Social platform or websites integrated with Truth Social. If these third parties or platform developers fail to adopt or adhere to adequate data security practices or fail to comply with TMTG’s terms and policies, or in the event of a breach of their networks, TMTG’s users’ data may be improperly accessed or disclosed. Any incidents involving unauthorized access to or improper use of the information of TMTG’s users could damage TMTG’s reputation and TMTG’s brand and diminish TMTG’s competitive position. In addition, the affected users or government authorities could

 

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initiate legal or regulatory action against TMTG in connection with such incidents, which could cause TMTG to incur significant expense and liability or result in orders or consent decrees forcing TMTG to modify its business practices. Any of these events could have a material and adverse effect on TMTG’s business, reputation or financial results.

Unfavorable media coverage could negatively affect TMTG’s business.

TMTG may receive a high degree of media coverage around the world, including regarding, without limitation, TMTG’s privacy practices, product changes, product quality, litigation or regulatory activity, or the actions of TMTG’s platform or developers or TMTG’s users. For example, numerous media outlets reported on the fact that, in June 2022, TMTG received subpoenas from the SEC and a federal grand jury sitting in the Southern District of New York seeking documents relating to, among other things, Digital World and other potential counterparties. See “Risk Factors — Risks Related to Digital World and the Business Combination — Digital World was in the past, and continues to be, subject to inquiries, exams, pending investigations, or enforcement matters.” In or about October 2022, a now-former TMTG employee initiated a series of unauthorized leaks of TMTG’s confidential information to various media outlets, which resulted in the publication of numerous stories portraying TMTG and its management in a negative light. On May 20, 2023, TMTG filed a $3.8 billion defamation lawsuit against the Washington Post in connection with a May 13, 2023 article. On July 12, 2023, the Washington Post removed the case to federal court, where it remains pending as of December 11, 2023.

On November 20, 2023, in connection with reporting about TMTG’s financial results, TMTG filed a lawsuit for defamation and injurious falsehood in Florida state court against 20 media defendants. TMTG and one defendant — Nexstar Media, Inc. (“Nexstar”), which owns The Hill — subsequently agreed to resolve their dispute outside of court, to both parties’ mutual satisfaction. In connection with such resolution, The Hill retracted a November 13, 2023 article, and TMTG’s lawsuit was dismissed as to Nexstar on December 4, 2023. All other terms of TMTG’s settlement with Nexstar remain confidential, and TMTG’s lawsuit is proceeding against all other defendants.

Unfavorable and continued high-profile publicity could adversely affect TMTG’s reputation and its ability to transact with its third-party providers. Such negative publicity also could have an adverse effect on the size, engagement, and loyalty of TMTG’s user base and result in decreased revenue, which could adversely affect TMTG’s business and financial results. See “Risk Factors — Risks Related to TMTG’s Business — Donald J. Trump is the subject of numerous legal proceedings, the scope and scale of which are unprecedented for a former President of the United States and current candidate for that office. An adverse outcome in one or more of the ongoing legal proceedings in which President Trump is involved could negatively impact TMTG and its Truth Social platform.

TMTG’s intellectual property may be infringed upon and others have and may continue to accuse TMTG of infringing on their intellectual property, either of which could adversely affect TMTG’s business and result in protracted and expensive litigation.

In recent years, there has been significant litigation in the United States over patents and other intellectual property rights. Although TMTG is not engaged in such litigation, in the future TMTG or customers who use TMTG’s products may be alleged to be infringing the trademarks, copyrights, patents and other intellectual property rights of third parties, including allegations made by TMTG’s competitors or by non-practicing entities. TMTG cannot predict whether assertions of third-party intellectual property rights or claims arising from these assertions will substantially harm TMTG’s business and operating results. If TMTG is forced to defend any infringement claims, whether they are with or without merit or are ultimately determined in TMTG’s favor, TMTG may face costly litigation and diversion of technical and management personnel. Some of TMTG’s competitors have substantially greater resources than TMTG does and are able to sustain the cost of complex intellectual property litigation to a greater extent and for longer periods of time than TMTG could. Furthermore, an adverse outcome of a dispute may require TMTG: to pay damages, potentially including treble damages, and

 

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attorneys’ fees, if TMTG is found to have willfully infringed a party’s patent or other intellectual property rights; to cease making, licensing or using products that are alleged to incorporate or make use of the intellectual property of others; to expend additional development resources to redesign TMTG’s products; to rebrand its services; and to enter into potentially unfavorable royalty or license agreements in order to obtain the rights to use necessary technologies and current branding. Royalty or licensing agreements, if required, may be unavailable on terms acceptable to TMTG, or at all. In any event, TMTG may need to license intellectual property which would require TMTG to pay royalties or make one-time payments. Even if these matters do not result in litigation or are resolved in TMTG’s favo