This article has been corrected to reflect that TMTG's reported losses since launch were actually $31.6 million, not $73 million. A correction has been published here.
The parent company of Truth Social lost nearly $23 million in this year's first half, according to a new Securities and Exchange Commission filing.
Since the launch of Trump Media & Techology Group (TMTG) in 2021, it has lost a total of $31.6 million: a net loss of $59 million in 2021, a net profit of $50.5 million in 2022 and a net loss of almost $23 million the six months ending June 30, 2023. The Truth Social platform went live in February 2022.
The new filing was by Digital World Acquisition Corp. (DWAC), the SPAC that is supposed to merge with TMTG.
The filing, an amended S-4 proxy statement to DWAC stockholders for the proposed merger, also notes that, although the SEC in July approved a settlement in principle after finding that Digital World violated certain antifraud provisions of the Securities Act and the Exchange Act (the settlement included a civil penalty of about $18 million to be paid to the SEC if Digital World completes a merge with TMTG or any other entity), there remains a potential risk that more regulatory delays could interfere with a merger.
This October, following withdrawal of $467 million in commitments to the merger by some investors, DWAC returned a remaining $533 million of $1 billion raised to finance the venture, but indicated that it would continue to pursue the merger, and said that TMTG’s reduced need for capital was a positive development. The amended S-4 was also presented as a positive step toward the completion of the merger, and positive news for TMTG.
The new filing also states that TMTG’s independent registered accounting firm has indicated that the company’s financial condition “raises substantial doubt as to its ability to continue as a going concern” if it is unable to complete the proposed merger by Sept. 8, 2024 and that TMTG “believes that it may be difficult to raise additional funds through traditional financing sources in the absence of material progress toward completing its merger with Digital World.”
It also acknowledges that the factors that could adversely affect Truth Social’s business include if Trump “were to discontinue his relationship with TMTG due to death, disability, criminal conviction, incarceration, or any other reason, or limit his involvement with TMTG due to his ongoing candidacy for political office."
Despite a Rolling Stone report early this year that Trump had told people that he did not want to renew a clause that requires that he first post any comments on Truth Social and wait six hours before posting them elsewhere, the new SEC filing states that on Oct. 31, Trump "verbally affirmed" that he would abide by the clause at least until the merger's "outside" date or whatever date the parties involved might agree to if they extend the time to complete the merger.