Management’s Discussion and Analysis of Financial Condition and Results of Operations
−Removed: References in this report (the “Quarterly Report”) to “we,” “us” or the “Company” refer to Digital World Acquisition Corp.
+Added: References in this report (the “Quarterly Report”) to “we,” “us,” “Digital World” or the “Company” refer to Digital World Acquisition Corp.
References to our “management” or our “management team” refer to our officers and directors, and references to the “Sponsor” refer to ARC Global Investments II LLC.
18 unchanged sentences
Subject to the terms and conditions set forth therein, (i) upon the consummation of the transactions contemplated by the Merger Agreement (the “Closing”), Merger Sub will merge with and into TMTG (the “Merger” and, together with the other transactions contemplated by the Merger Agreement, the “Transactions”), with TMTG continuing as the surviving corporation in the Merger and a wholly-owned subsidiary of the Company.
−Removed: In the Merger, (i) all shares of TMTG common stock (together, “TMTG Stock”) issued and outstanding immediately prior to the effective time of the Merger (the “Effective Time”) (other than those properly exercising any applicable dissenters rights under Delaware law) will be converted into the right to receive the Merger Consideration;
+Added: In the Merger, (i) all shares of TMTG common stock (together, “TMTG Stock”) issued and outstanding immediately prior to the effective time of the Merger (the “Effective Time”) (other than those properly exercising any applicable
+Added: dissenters rights under Delaware law) will be converted into the right to receive the Merger Consideration;
(ii) each outstanding option to acquire shares of TMTG common stock (whether vested or unvested) will be assumed by the Company and automatically converted into an option to acquire shares of the Company 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 (iii) each outstanding restricted stock unit of TMTG shall be converted into a restricted stock unit relating to shares of the Company’s common stock.
23 unchanged sentences
We have neither engaged in any operations nor generated any revenues to date.
−Removed: Our only activities from inception through March 31, 2022 were organizational activities and those necessary to prepare for the Initial Public Offering and the search for targets for our initial Business Combination, including the proposed Merger with TMTG.
+Added: Our only activities from inception through June 30, 2022 were organizational activities and those necessary to prepare for the Initial Public Offering and the search for targets for our initial Business Combination, including the proposed Merger with TMTG.
We do not expect to generate any operating revenues until after the completion of our initial Business Combination.
2 unchanged sentences
We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence in connection with our search for targets for our initial Business Combination.
−Removed: For the three months ended March 31, 2022, we had a net loss of $1,884,389, which consists primarily of general and administrative costs of $1,863,920.
−Removed: For the three months ended March 31, 2021, we had a net loss of $485, which consists of general and administrative costs of $485.
+Added: For the three months ended June 30, 2022, we had a net loss of $4,341,387, which consists primarily of general and administrative costs of $4,702,670.
+Added: For the six months ended June 30, 2022, we had a net loss of $6,225,776, which consists primarily of general and administrative costs of $6,616,590.
Liquidity and Capital Resources
4 unchanged sentences
We incurred $15,668,029 in transaction costs, including $3,593,750 of underwriting fees, $10,062,500 of deferred underwriting fees, fair value of representative shares of $1,437,500 and $574,279 of other offering costs.
−Removed: For the three months ended March 31, 2022, net decrease in cash was $286,239 and was comprised of net cash used in operating activities of $586,239 and net cash provided by financing activities of $300,000.
+Added: For the six months ended June 30, 2022, net decrease in cash was $324,763 and was comprised of net cash used in operating activities of $776,463 and net cash provided by financing activities of $451,700 .
Net cash used in operating activities of $776,463 consisted of a net loss of $6,225,776 partially offset by a change in accrued expenses of $5,656,004.
1 unchanged sentence
consisted of proceeds from working capital loans.
−Removed: For the three months ended March 31, 2021, net increase in cash was $25,000 and was comprised of net cash provided by financing activities of $25,000.
−Removed: Net cash provided by financing activities of $25,000 consisted of proceeds from issuance of Class B common stock to Sponsor.
−Removed: As of March 31, 2022, we had cash of $293,286,629 held in the Trust Account.
+Added: As of June 30, 2022, we had cash of $293,682,625 held in the Trust Account.
We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account to complete our initial Business Combination.
1 unchanged sentence
To the extent that our capital stock or debt is used, in whole or in part, as consideration to complete our initial Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.
−Removed: As of March 31, 2022, we had cash of $41,492 outside of the Trust Account.
+Added: As of June 30, 2022, we had cash of $2,968 outside of the Trust Account.
We intend to use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate and complete a Business Combination.
3 unchanged sentences
Initially up to $1,500,000 of such loans may be convertible into units, at a price of $10.00 per unit, at the option of the lender.
−Removed: The amount of such loans that can be converted to Working Capital Units has subsequently been increased to $30,000,000.
The units would be identical to the Placement Units.
−Removed: In November 2021, our Sponsor committed to provide loans of up to an aggregate of $1,000,000 to the Company through September 8, 20 22 (or up to March 8, 2023 if the Company extends the maximum time to complete a Business Combination), wh
−Removed: ich loans will be non-interest
+Added: In November 2021, our Sponsor committed to provide loans of up to an aggregate of $1,000,000 to the Company through September 8, 2022 (or up to March 8, 2023 if the Company extends the maximum time to complete a Business Combination), which loans will be non-interest
bearing, unsecured and will be payable upon the consummation of a Business Combination.
−Removed: At March 31, 2022, $300,000 was outstanding under this commitment.
+Added: At June 30, 2022, $451,700 was outstanding under this commitment.
+Added: On May 12, 2022, we entered into an amendment (the “Amendment to the Insider Letter”) to that certain letter agreement, dated September 2, 2021 (“Insider Letter”), with the Sponsor and our directors, officers or other initial shareholders named therein (the “Insiders”).
+Added: Pursuant to the Insider Letter, among other matters, the Sponsor and the Insiders agreed in Section 9 thereof, that the Sponsor, an affiliate of the Sponsor or certain of our officers and directors may make non-interest bearing loans to us to finance transaction costs in connection with our Business Combination and that, at the option of the lender, up to $1,500,000 of such loans may be convertible into our units, at a price of $10.00 per unit, upon consummation of the Business Combination.
+Added: Under the Amendment to the Insider Letter, each of the Sponsor and the Insiders have agreed to revise the terms of the Insider Letter to increase the aggregate principal amount of loans by the Sponsor, its affiliates or our officers and directors that can be converted into our units from $1,500,000 to $30,000,000.
+Added: The securities issuable upon conversion of such loans are subject to stockholder approval at the special meeting of the Company’s stockholders to be held to approve the Business Combination.
We believe we will need to raise additional funds in order to meet the expenditures required for operating our business.
5 unchanged sentences
In addition, following our Business Combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.
−Removed: Management believes that the Company has sufficient working capital and borrowing capacity to meet its needs through the earlier of the consummation of a Business Combination or September 8, 2022 (or up to March 8, 2023 if the Company extends the maximum time to complete a Business Combination), the liquidation date should a Business Combination not be consummate.
+Added: Management anticipates that the $2,968 held outside of the Trust Account as of June 30, 2022 may not be sufficient to allow the Company to meet its needs through the earlier of the consummation of a Business Combination or September 8, 2022 (or up to March 8, 2023 if the Company extends the maximum time to complete a Business Combination), the liquidation date should a Business Combination not be consummate.
Over this time period, the Company will be using the funds held outside of the Trust Account and additional funds it will need to raise for paying existing accounts payable, identifying and evaluating prospective initial Business Combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or acquire, and structuring, negotiating and consummating the Business Combination.
7 unchanged sentences
We did not have any off-balance
−Removed: sheet arrangements as of March 31, 2022.
+Added: sheet arrangements as of June 30, 2022.
Contractual Obligations
10 unchanged sentences
Accordingly, Class A common stock subject to possible redemption is presented as temporary equity, outside of the stockholders’ equity section of our condensed interim balance sheets.
+Added: Factors That May Adversely Affect our Results of Operations
+Added: Our results of operations and our ability to complete an initial Business Combination may be adversely affected by various factors that could cause economic uncertainty and volatility in the financial markets, many of which are beyond our control.
+Added: Our business could be impacted by, among other things, downturns in the financial markets or in economic conditions, increases in oil prices, inflation, increases in interest rates, supply chain disruptions, declines in consumer confidence and spending, the ongoing effects of the COVID-19
+Added: pandemic, including resurgences and the emergence of new variants, and geopolitical instability, such as the military conflict in the Ukraine.
+Added: We cannot at this time fully predict the likelihood of one or more of the above events, their duration or magnitude or the extent to which they may negatively impact our business and our ability to complete an initial Business Combination.
Quantitative and Qualitative Disclosures About Market Risk
1 unchanged sentence
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.