Truth Social’s hopes for a much-needed cash-infusion suffered a setback Thursday after the founders of a blank-check company were again forced to delay a vote on extending a merger agreement with Donald Trump’s site.
The founders of Digital World, a special purpose acquisitions company, instead ponied up an additional $3 million to prevent the company from dissolving for three months. The new vote is slated for Oct. 10.
The SPAC needs 65% of shareholders to agree to extend the deal by a year with the former president’s right-leaning social media site. The two agreed to merge last October, a month after Digital World launched its IPO.
However, the deal has been in limbo after the Securities and Exchange Commission launched a probe late last year into whether Digital World’s founders possibly had advance knowledge of what it was buying before listing its shares — a violation of securities laws.
Digital World CEO Patrick Orlando raised the $3 million from outside investors in exchange for options in the company that would come good if the merger with Truth Social goes through, sources said.
Digital World’s founders can extend the deal for another 90 days after the three months are up by shelling out another $3 million into a shareholder account before the extensions run out if they never win the vote.
The merger would net Truth Social $1.25 billion.
The SEC can continue investigating until the SPAC dissolves, a Digital World shareholder said.
Shares of Digital World closed at $22.75 Thursday after having reached as high as $175 this year. The SPAC had an IPO of $10.
Truth Social is reportedly hemorrhaging money and has been accused of not paying a key vendor. Last week, Google banned the app from its Play store because of shoddy moderation by the site.
The site has about 4 million users, a fraction of the nearly 400 million who use Twitter.
“Truth Social is continuing to grow rapidly, driven by extraordinary user engagement and the recent launch of ads on the platform,” a spokeswoman for the social media site told The Post this week.
Trump had backed away from promoting Truth Social’s merger because insiders believe the embattled former president wanted to avoid another fight with the government, a source familiar with Trump’s thinking told The Post.
He has said he doesn’t need the deal to go through for his site survive.
“SEC trying to hurt company doing financing [Digital World]. Who knows? In any event, I don’t need financing, I’m really rich! Private company anyone???” he posted on Truth Social on Saturday.