What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2023-11-22 compared with 2023-11-13 · 29 added, 28 removed, 82 unchanged (41% of the section changed)

31 unchanged sentences

Pursuant to the Merger Agreement, subject to the terms and conditions set forth therein, (i) upon the Closing, Merger Sub will merge with and into TMTG, with TMTG continuing as the surviving corporation in the Merger and a wholly-owned subsidiary of the Company.

In the Merger, (i) all shares of TMTG Stock issued and outstanding immediately prior to 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;

(ii) each outstanding option to acquire shares of TMTG Stock (whether vested or unvested) will be assumed by the Company and automatically converted into an option to acquire shares of the Company’s common stock, with its price and number of shares equitably adjusted based on the conversion ratio of the shares of TMTG 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.

In the Merger, (i) all shares of TMTG Common Stock issued and outstanding immediately prior to 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;

(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’s 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.

At the Closing, the Company will change its name to “Trump Media & Technology Group Corp.”

Consummation of the TMTG Business Combination is subject to customary conditions of the respective parties, including regulatory approval and the approval of the Merger by our stockholders in accordance with our amended and restated certificate of incorporation and the completion of a redemption offer whereby we will be providing our public stockholders with the opportunity to redeem their shares of our Class A common stock for cash equal to their pro rata share of the aggregate amount on deposit in our Trust Account.

The Merger Agreement can be terminated by

either party if any of the closing conditions have not been satisfied or waived by September 20, 2022, which has been extended to June 8, 2023 (the “Outside Date”), provided that the Company shall have the right to extend the Outside Date if it obtains an extension of the deadline by which it must complete its business combination (an “Extension”) for the shortest of (i) three months, (ii) the period ending on the last day for the Company to consummate a business combination after such Extension and (iii) such period as determined by the Company.

On December 4, 2021, in support of the TMTG Business Combination, the Company entered into certain SPAs with certain PIPE Investors, pursuant to which the PIPE Investors agreed to purchase up to an aggregate of 1,000,000 shares of the Company’s Series A Convertible Preferred Stock for a purchase price of $1,000 per share for an aggregate commitment of up to $1,000,000,000 in a PIPE to be consummated concurrently with the TMTG Business Combination.

The shares are currently convertible into 29,761,905 shares of the Company’s common stock, subject to upward adjustment.

The PIPE is conditioned on the concurrent closing of the TMTG Business Combination and other customary closing conditions and is terminable by the PIPE Investors if the TMTG Business Combination has not closed by the Outside Date.

Pursuant to the SPA, each of the PIPE Investors may terminate its respective SPA, among other things, if the closing of the PIPE has not occurred on or prior to September 20, 2022.

As a result, the Company received termination notices from certain PIPE Investors, who originally agreed to purchase up to 251,500 shares of the Company’s Series A Convertible Preferred Stock.

As indicated in the accompanying financial statements, on March 31, 2023, we had approximately $152,704 in cash.

The Merger Agreement can be terminated, under certain customary and limited circumstances at any time prior to the Closing, including by

either party if any of the closing conditions have not been satisfied or waived by December 31, 2023 (the “Outside Date”).

On December 4, 2021, in support of the TMTG Business Combination, the Company entered into certain SPAs with the PIPE Investors, pursuant to which the PIPE Investors agreed to purchase up to an aggregate of 1,000,000 shares of the Company’s Series A Convertible Preferred Stock (the “Preferred Stock”) for a purchase price of $1,000 per share for an aggregate commitment of up to $1,000,000,000 in a PIPE to be consummated concurrently with the Closing.

The Preferred Stock have an initial conversion price per share of $33.60 and such number of shares of Preferred Stock were initially expected to be convertible into 29,761,905 shares of New Digital World Class A common stock, subject to upward adjustment.

Pursuant to the SPA, each of the PIPE Investors may terminate its respective SPA, among other things, if the closing of the PIPE had not occurred on or prior to September 20, 2022.

Furthermore, in connection with the Second Amendment to the Merger Agreement, at the request of TMTG, the Company agreed to use its reasonable best efforts to discuss with the PIPE Investors a reduction or termination of the SPAs and the PIPE.

As a result, as of November 20, 2023, the Company received termination notices from certain PIPE Investors, effectively cancelling approximately $474,500,000 of the PIPE.

The Company expects to continue to seek the termination of or significantly reduce such PIPE commitments.

As indicated in the accompanying financial statements, as of September 30, 2023, we had approximately $3.3 million in cash.

We have incurred and continue to incur significant costs in the pursuit of our initial business combination.

2 unchanged sentences

We have neither engaged in any operations nor generated any revenues to date.

Our activities from inception through March 31, 2023 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.

Our activities from inception through September 30, 2023 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.

1 unchanged sentence

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.

For the three months ended March 31, 2023, we had net income of $1,450,593, which consists primarily of $3,186,658 of interest earned on cash held in Trust Account, partially offset by general and administrative costs of $221,942, legal investigation costs of $669,137 and income tax expense of $794,986.

For the three months ended March 31, 2022, we had a net loss of $3,202,814, which consists primarily of general and administrative costs of $397,734 and legal investigation costs of $2,742,708.

For the three months ended September 30, 2023, we had a net loss of $12,192,367, which consists of general and administrative costs of $4,057,852, legal investigations expense of $11,639,030 and income tax expense of $899,687, partially offset by $3,599,760 of interest earned on cash held in Trust Account and insurance recoveries of $1,046,653.

Legal investigations expense includes $10 million related to the SEC settlement of $18 million.

For the three months ended September 30, 2022, we had a net loss of $3,818,711, which consists primarily of general and administrative costs of $2,165,260 and legal investigations expense of $2,656,763 partially offset by interest earned on the cash held in the Trust Account of $1,326,957.

For the nine months ended September 30, 2023, we had a net loss of $20,006,348, which consists of general and administrative costs of $8,131,700, legal investigations expenses of $20,639,030 and income tax expense of $2,687,493, partially offset by $10,405,222 of interest earned on cash held in Trust Account and insurance recoveries of $1,046,653.

Legal investigations expense includes $10 million related to the SEC settlement of $18 million.

For the nine months ended September 30, 2022, we had a net loss of $10,096,571, which consists primarily of general and administrative costs of $3,527,588 and legal investigations expenses of $7,964,208, partially offset by interest earned on the cash held in the Trust Account of $1,752,484.

Factors That May Adversely Affect Our Results of Operations

8 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.

For the three months ended March 31, 2023, net increase in cash was $151,714 and was comprised of net cash used in operating activities of $414,286 and net cash provided by financing activities of $566,000.

Net cash used in operating activities of $414,286 consisted of net income of $1,450,593 and a change of accrued expense of $469,875, partially offset by interest earned on assets held in the Trust Account of $3,186,658.

Net cash provided by financing activities of $541,000 consisted of proceeds from working capital loans.

For the three months ended March 31, 2022, net decrease in cash was $286,238 and was comprised of net cash used in operating activities of $646,388 and net cash provided by financing activities of $360,150.

For the nine months ended September 30, 2023, net increase in cash was $3,284,598 and was comprised of net cash used in operating activities of $1,702,985, net cash provided by investing activities and net cash provided by financing activities of $1,448,055.

Net cash used in operating activities of $1,702,985 consisted of a net loss of $20,006,348 and a change of accrued expense of $28,539,760, partially offset by interest earned on assets held in the Trust Account of $10,404,747.

Net cash provided by investing activities of $3,539,528 consisted of withdrawals to pay taxes and withdrawals for redemptions.

Net cash provided by financing activities of $1,448,055 consisted of proceeds from loans.

For the nine months ended September 30, 2022, net decrease in cash was $324,762 and was comprised of net cash used in operating activities of $897,582 and net cash provided by financing activities of $572,820.

Net cash used in operating activities of $897,582 consisted of a net loss of $6,277,860 partially offset by a change in accrued expenses of $5,586,968.

Net cash provided by financing activities of $572,820 consisted of proceeds from working capital loans and advances from related parties.

As of March 31, 2023, we had cash of $303,517,309 held in the trust account.

As of September 30, 2023, we had cash of $307,195,870 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.

On April 21, 2023, the Company issued two promissory notes (one for $625,700 and the other for $500,000) in the aggregate principal amount of $1,125,700 to the sponsor to pay costs and expenses in connection with completing an initial business combination.

Each of the two notes bears no interest and is repayable in full upon the earlier of (i) the date on which the Company consummates its initial business combination and (ii) the date that the winding up of the Company is effective.

At the election of the sponsor and subject to certain conditions, all of the unpaid principal amount of each of the two notes may be converted into units of the Company (the “Conversion Units”) immediately prior to the consummation of an initial business combination with the total Conversion Units so issued equal to:

(x) the portion of the principal amount of the respective note being converted divided by (y) the conversion price of ten dollars ($10.00), rounded up to the nearest whole number of units.

The issuances of the two notes were made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.

As of March 31, 2023, we had cash of $152,704 outside of the trust account.

We intend to use the funds held outside the trust account primarily to complete the TMTG Business Combination, or if the TMTG Business is not consummated, 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.

In connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standard Board’s Account Standards Update (“ASU”) 2014-15, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” as stated above, the Company has until June 8, 2023 (or up to September 8, 2023 if the Company extends the maximum time to complete a Business Combination) to consummate a Business Combination.

As of September 30, 2023, we had cash of $3,285,587 outside of the Trust Account.

We intend to use the funds held outside the Trust Account primarily to complete the TMTG Business Combination, or if the TMTG Business Combination is not consummated, 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.

In connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standard Board’s Account Standards Update (“ASU”) 2014-15, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” as stated above, the Company has until September 8, 2024 to consummate a Business Combination.

It is uncertain that the Company will be able to consummate a Business Combination by this time.

5 unchanged sentences

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements as of March 31, 2023.

We did not have any off-balance sheet arrangements as of September 30, 2023.

Contractual Obligations

We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay the Working Capital Loans, and each of Renatus and an affiliate of our sponsor a monthly fee of $15,000 for office space, administrative and support services to us.

We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities, other than an agreement to pay the Digital World Convertible Notes, and each of Renatus and an affiliate of our sponsor a monthly fee of $15,000 for office space, administrative and support services to us.

We will incur these fees monthly until the earlier of the completion of our initial business combination and our liquidation.

17 unchanged sentences

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.

What changed 10-Q

Item 2. Management’s Discussion and Analysis