Digital World Acquisition Corp. on Friday again amended its filing with the Securities and Exchange Commission regarding its planned merger with Trump Media and Technology Group, former President Donald Trump's social media company.
In the new file, the special purpose acquisition company DWAC,
The SPAC, or SPAC, has unveiled new lawsuits seeking to block the merger, as well as changes to its bylaws that mandate that any complaints against it be directed to the U.S. District Court for the Southern District of Florida.
On Thursday, the board of directors extended the date by which the company must complete the merger to June 8 from March 8. The extension is the third of four allowed three-month extensions.
The filing revealed a lawsuit filed Thursday by former DWAC Chairman and CEO Patrick Orlando, which seeks to block the deal unless he is awarded a greater number of shares than DWAC currently proposes. Reuters first reported the news.
Orlando investment firm ARC said it should receive 1.78 Class A shares for every Class B share owned. DWAC said the ratio was 1.34. The difference between the two equals more than 2.5 million shares, DWAC said in a regulatory filing.
Read also: DWAC updates SEC filings to reflect new risk factors in Trump Media & Technology Group purchase plan
The request also updated investors on the latest moves from Trump Media co-founders Andy Letinsky and Wes Moss, whose investment firm, United Atlantic Ventures, has threatened to block the deal. Both Letinsky and Moss were contestants on Trump's reality TV show “The Apprentice.”
Drones now accuses Trump in a new lawsuit of trying to dilute the value of shares in TMTG owned by Litinsky and Moss, which could cost them millions of dollars in profits. The lawsuit, first reported by The Washington Post, alleges that UAV's current 8.6% stake in TMTG would be diluted to less than 1% if TMTG's board approves an eight-fold increase in the number of authorized shares, increasing it to 1 billion from 120 million. .
“The only plausible reason for TMTG to allow this massive new block of stock and create non-voting stock is so Trump can dilute the drones and get the lion’s share of the merger consideration for himself,” the proposal says.
UAV also recently sent letters to DWAC confirming that an early agreement with Trump from 2021 remains in place and gives them the right to appoint directors to the board.
DWAC launched merger talks with TMTG, which operates conservative platform Truth Social, in October of 2021, but struggled to complete the deal amid regulatory opposition and challenges from the Justice Department.
Read also: Trump's Truth Social merger partner settled fraud charges with the Securities and Exchange Commission over misleading investors
DWAC shareholders are expected to vote on the merger in March, and based on current prices, Trump's stake could be worth more than $3 billion, while he owes more than $500 million in civil judgments in New York.
In a filing on Friday, DWAC again warned that the drone action “may result in significant legal costs, distraction of management, and have adverse impacts on the business operations and financial health of TMTG and/or the combined entity.”
DWAC stock was down 3.8% pre-market, but is up 135% year to date, while the S&P 500 is up about 7%.
Related: Stocks linked to Donald Trump's Truth Social platform are soaring. Read this before you invest.
