Digital World (NASDAQ:DWAC) naturally has one of the most attention-grabbing pending deals out with its combination with Trump Media (TMTG), but there has been some concern about the ability of the parties to complete the transaction given that the parties had not yet filed a proxy despite announcing the deal nearly seven months ago.

That has now changed with Digital World filing its first S-4 this morning, and although the SPAC’s transaction deadline is less than five months away on September 7, it can extend two times for three months each in exchange for a $0.10 per share contribution to the trust. This is just the first step, and other SPACs have found their deals under review for more than a year, so there is still no guarantee.

Nonetheless, for a deal that has driven fervent interest despite releasing relatively little information on its terms and target, it is certainly interesting finally get a look at its first proxy.

Below are some tidbits of note from the 259-page document plus appendices, starting with the quick ones.

• TMTG now has 40 full-time employees, up from 30 in December when it released a presentation showing the new hires’ first names and last initial only.
• For now, the company’s financial results for the year ending December 31, 2021 include $2.1 million in net sales to a “related party” and a net loss of -$59 million.
• Among the other potential targets Digital World talked to in its process was a technology platform for scheduling dog-walking and other petcare service. But, this company broke off negotiations once they entered into advanced discussions “with other groups and did not want to pursue separate SPAC discussions with Digital World at that time“. Pure speculation, but this sounds very much like Wag!, which ended up signing a definitive agreement with CHW Acquisition Corp. (NASDAQ:CHWA) a few months later.
• Digital World also considered a “crypto exchange and mining operation”, but was informed it was in exclusive talks with another SPAC.
•  TMTG approached “in excess of two dozen SPACs” before reaching a definitive agreement with Digital World, reaching the LOI stage with three other SPACs before those SPACs discontinued talks.
• In fact, TMTG first engaged with Digital World Chairman and CEO Patrick Orlando in his capacity as the same role with his other SPAC, Benessere (NASDAQ:BENE) in February 2021, before Digital World IPO’d. The two parties signed an NDA that month, and ultimately an LOI in June, but they mutually terminated this on September 1.
• Digital World priced its IPO the next day and entered into an NDA with TMTG on September 13. The two parties signed an LOI three days later and would sign their merger agreement October 20.
• Only on October 25, five days after this definitive agreement was signed, did Digital World decide to arrange a PIPE. It conducted a PIPE roadshow throughout November, engaging with about 20 institutional investors over this time.
• All prospectuses list potential risks, but for TMTG one risk that is both its boon and potential bane is the man at the center of it in former President Donald Trump. The risks associated with Trump specifically span five pages.
• In these pages, the parties acknowledge that TMTG’s success “depends in part” on Trump’s popularity and ability to freely mange the business. The S-4 lays out six active lawsuits or investigations Trump is currently involved in, which it notes “does not purport to be an exhaustive list”. It further cites a USA Today analysis that attempted to be comprehensive, which it found: “over the previous three decades President Trump and his businesses had been involved in 3,500 legal cases in U.S. federal and state courts. Of the 3,500 suits, President Trump or one of his companies were plaintiffs in 1,900; defendants in 1,450; and bankruptcy, third party, or other in 150. President Trump was named personally in at least 169 suits in federal court. Over 150 other cases were in the Seventeenth Judicial Circuit Court of Florida (covering Broward County, Florida) since 1983. In the 1,300 cases where the record establishes the outcome, President Trump settled 175 times, lost 38, won 450, and had another 137 cases end with some other outcome.“
• As an addendum to this score card, the S-4 notes Trump Hotels & Casino Resorts (THCR) was issued a cease and desist order from the SEC in 2002, which found that it violated anti-fraud provisions of the Exchange Act by “knowingly or recklessly” releasing an incorrect earnings report that indicated revenues and earnings were trending positively rather than negatively, and THCR settled.
• Much of this existing baggage was well-known, and points to the large amount of work the SEC will be picking through perhaps before even getting on to the operating business bit. On that count, the prospectus also outlines one significant risk moving forward with TMTG’s sometimes capricious chairman and largest shareholder with 46.8% of its voting power pre-redemptions.
• As a part of TMTG’s royalty-free license agreement with Trump, any time he posts on TMTG’s social media service Truth Social, he may still re-post on any other platform he has access to, but only after six hours. There is also a large caveat in that he may post from other accounts for anything related to “political messaging, political fundraising or get-out-the-vote efforts”, which may well be a large portion of his activity should he run for office again. The company also may not consider any post of his “offensive, dishonest, illegal, immoral, or unethical, or otherwise harmful to TMTG’s brand or reputation” under the license.
• Further under the license, if Trump is offered to participate in any outside podcasting or video-on-demand service, TMTG will have the right to try and beat the offer, but ultimately its up to the big man to choose. The six-hour exclusivity portion of the license agreement also only lasts for 18 months, but will automatically renew in perpetuity. However, if a force majeure lasting more than 30 days occurs, Trump and Trump alone can terminate this restriction. As an example of force majeure, the prospectus mentions Apple or Google removing the Truth Social app from their marketplaces – an event that one may consider likely considering such was the fate of fellow conservative social media platform Parler.
• As such, Trump’s persona is largely only exclusive to TMTG to the extent that he remains banned from other platforms and any third parties cannot outbid TMTG for his involvement. Naturally, the risks section also lists six previous ventures built around licenses to Trump’s name and persona ranging from Trump Shuttle to Trump Steaks that have since failed and ceased to exist.
• The name Truth Social, is also not yet patented and may indeed be unpatentable. The proxy discloses that Vero Labs, which runs a patented app called “Vero – True Social” filed a letter of protest in February 2022, and United States Patent and Trademark Office has notified TMTG that as it stands it will not allow it to trademark Truth Social. While it is currently appealing this decision, TMTG acknowledges it may have to change the name if it can’t trademark it.