The company planning to merge with Trump Media & Technology Group, owner of the Truth Social platform, has now walked away from two years of financial statements after informing the Securities and Exchange Commission on Monday that its audited financials for 2021 “should no longer be relied upon.”
In May, Digital World Acquisition Corp issued a similar notice to the SEC regarding its financial statements for the year ending Dec. 31, 2022.
The retractions began after Digital World’s management, audit committee and advisors concluded that an error mandated reissuing the company’s audited financial statements. Digital World’s filings don’t identify the mistake, but say it is indicative of “a material weakness” in the company’s “internal control over financial reporting,” and that “the company’s disclosure controls and procedures were not effective.”
Digital World plans to reissue the financial statements and also share a plan to address the issues. It did not provide a time frame.
Digital World registered with the SEC in May 2021 as a publicly traded special-purpose acquisition company. In October 2021, it announced plans to merge with former President Donald Trump’s Trump Media & Technology Group.
Two years later the deal still hasn’t closed. Monday’s filings are just the latest problem for the firm.
In June, the SEC charged a former Digital World board member and two others with insider trading of the stock. The following month, Digital World settled fraud charges with the commission for “making material misrepresentations” in its pre-IPO filings by failing to disclose that it already was pursuing the acquisition of Trump Media & Technology Group. The SPAC agreed to pay an $18 million penalty if the merger goes through.
On Thursday, Digital World disclosed that investors had backed out of $467 million in commitments and that the company was looking to cancel the remaining $533 million in planned investments. In a statement, Trump Media & Technology Group CEO Devin Nunes, a former Republican Congressman from California, said the move would be in the best interest of completing the merger as soon as possible.