Digital World Acquisition Corp (NASDAQ:DWAC), the Special Purpose Acquisition Company (SPAC) set to merge with the Truth Network, headed by former President Donald Trump, announced on Friday that it has reached a preliminary agreement with the Enforcement Division of the U.S. Securities and Exchange Commission (SEC).
According to the proposed settlement, the company will make necessary revisions to its previously submitted Form S-4 to ensure its accuracy and alignment with the SEC's findings. Additionally, Digital World Acquisition Corp has agreed to pay an $18 million civil money penalty to the SEC promptly after the completion of any merger, business combination, or transaction, whether with the Truth Network or any other entity.
In addition to the proposed SEC settlement, the company also disclosed it received an email from Truth Network expressing disagreement regarding Section 8.1(b) of the Merger Agreement. According to the Company's interpretation, upon obtaining approval from its shareholders to extend the liquidation date by three additional months (totaling 12 additional months from September 8, 2023, to September 8, 2024), the Company has the right to extend the Outside Date of the Merger Agreement for the same period. However, Truth Network believes it is only bound by the Merger Agreement until September 8, 2023. Due to previous extensions of the liquidation date and Truth Network's acknowledgment of being bound until September 8, 2023, the Company aims to address this disagreement in good faith, considering the historical extensions and the delayed submission of required deliverables by Truth Network. DWAC remains interested in the transaction and hopes to resolve this discrepancy with Truth Network for the benefit of its shareholders.
Shares of DWAC are up 2.8% in pre-open trading Wednesday to $13.01.