At the SPAC of Dawn
Good morning! Watch this space moving forward as a roundup of evening filings as well as news nuggets to nibble on beside your morning coffee.
The updates contained within are less dramatic than some in the non-financial press might have thought. But, it paints a picture of a company whose main asset – the Trump-centric, Twitter-like Truth Social media platform – has yet to generate much revenue despite incurring high costs for getting off the ground.
Overall the company generated $1.4 million in revenue in 2022 and $2.3 million in the first six months of 2023, but racked up -$30.9 million in losses from operations during that time. Those figures may not buck overall expectations much, however, given this is essentially a social media startup that has had considerable uncertainty swirling around whether it would be able to successfully go public or not.
The more technical, but important, tidbits from the filing were on the SPAC’s ongoing efforts to dismantle its own PIPE and clear the path towards an eventual closing.
On the first point, Digital World conceded that it has still not secured a withdrawal from all PIPE investors and it will not be able to fulfill its securities purchase agreements with these parties. It plans to move forward with the assumption that it will be receiving no PIPE funds in the final accounting, but until those last PIPE investors drop their commitments it is unclear whether this deal can close.
Time is still of the essence as well. According to a deal tweak the parties agreed to in August, Digital World was supposed to have resolved the PIPE issues by August 31 and have submitted this new S-4 by October 9. TMTG did not take the opportunity to terminate after that deadline blew past and the next opportunity will come at the the deal’s new December 31 outside date.
There won’t be too much time available after that point as May 26, 2024 is Digital World’s third birthday and the final drop-dead date for all SPACs by rule.
To help at least ease the votes at the end of this process, Digital World has set the quorum requirements for its final completion vote to a simple majority of shares and only a majority of yes votes will be required on each ballot proposal.
This could prove an important point it was forced to mount a significant PR campaign to make sure shareholders cast votes for its last extension, which required 65% of shares to participate.
News and Rumors
Best Stocks: Genius Sports (NYSE:GENI), which completed its combination with dMY Technology Group, Inc. II in 2021, announced an upward revision in its group revenue forecast for FY23. The revised outlook now stands at $412 million, surpassing the consensus estimate of $410.47 million by a slight margin.
- Transport Topic: Volvo Group announced that it intends to acquire the battery business of Proterra Inc. and Proterra Operating Co. (NADAQ:PTRA), which combined with ArcLight Clean Transition in 2021.
- L Catterton Asia (NASDAQ:LCAA) amended its sponsor support agreement to remove the sponsor shares forfeiture mechanism. Additionally, the amended version provides that, in addition to the sponsor earn-out shares, all or a portion of an additional 20% of the shares would become vested upon each occurrence of any vesting event within eighteen months of closing.
- Battery Future Acquisition Corp. (NYSE:BFAC) and its sponsor entered into non-redemption agreements with unaffiliated third parties, pursuant to which the investors agreed to not redeem an aggregate of 5,000,500 Class A Ordinary Shares. In exchange for the foregoing commitments, the sponsor will transfer to the investors up to an aggregate of 1,000,100 Class B ordinary shares.
- Shuaa Partners Acquisition Corp I (NASDAQ:SHUA) has reportedly filed its intent to liquidate with the Dubai Financial Market, but has not yet done so with the SEC. Dubai-based investment bank Shuaa Capital, which backed the SPAC, also backed Vistas Media, which combined with music streamer Anghami in January 2022.
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SDCL EDGE (NYSE:SEDA) has entered into a definitive agreement to combine with copper alloy manufacturer cunova at an enterprise value of $736 million, or 9.4x its 2023E adjusted EBITDA. Osnabrück, Germany-based cunova manufactures copper casts, fittings and conductivity products for the industrial, defense and aerospace sectors. The combined company is expected to trade on the...
Deals and Funding Power & Digital (NASDAQ:XPDB) has secured a $10 million investment from Rice Investment Group into its combination with HVAC technology firm Montana under undisclosed terms. two (NYSE:TWOA) has secured a $15 million PIPE at $10 per share for its combination with LatAm Logistic Properties. News and Rumors PR: Adtech firm Banzai International...
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