January 18 and February 9, 2024 on UAV’s behalf (collectively, the “Initial 2024 Letters”). The February 20 and 21 emails stated that such counsel no longer represents UAV in the potential disputes referenced within such letters. See “The Business Combination Proposal (Proposal 1) – Information About Digital World – Legal Proceedings – United Atlantic Ventures.”
On February 16, 2024, TMTG received a letter from a counsel to UAV that did not author the Initial 2024 Letters (the “February 16 Letter”). Additionally, prior to receipt of the February 16 Letter, neither Digital World nor TMTG had received correspondence from such counsel on UAV’s behalf. Within the February 16 Letter, such counsel stated that UAV had the right to appoint two individuals to the TMTG board of directors, attempted to appoint two specific individuals as such directors and requested TMTG confirm by Tuesday, February 20 that it accepts such appointments.
As previously disclosed, assertions made by UAV, and the potential claims arising therefrom, could lead to substantial legal costs, distract management, and have adverse effects on the business operations and financial health of TMTG and/or the Combined Entity. See “— Potential claims and counterclaims related to TMTG may lead to legal disputes, which could prevent or delay the completion of the Business Combination or, if the Business Combination is completed, significantly impact the Combined Entity’s future performance, dilute existing and future investors, negatively impact investor confidence and market perception and materially and adversely affect the Combined Entity’s business, financial condition or results of operations.”
The February 16 Letter also highlights the potential that, as Closing approaches, various parties, including parties who may have political, economic or non-economic motivations, may seek to make opportunistic assertions or claims with respect to TMTG and/or Digital World, and may attempt to interfere with, substantially delay or entirely prevent consummation of the Business Combination.
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The following disclosure is inserted in “Risk Factors – Risks Related to TMTG – Risks Related to our Chairman President Donald J. Trump – Donald J. Trump is the subject of numerous legal proceedings, the scope and scale of which are unprecedented for a former President of the United States and current candidate for that office. An adverse outcome in one or more of the ongoing legal proceedings in which President Trump is involved could negatively impact TMTG and its Truth Social platform” on page 130, immediately at the end of the second paragraph that starts with “The suit alleged business fraud relating to misrepresentations in the preparation of President Trump’s annual statements of financial condition in the years 2011 through 2021” on page 131. |
New York Supreme Court Justice Arthur Engoron, in a Decision and Order dated February 16, 2024, held President Trump and defendants liable under the following five causes of action. Specifically, (i) for repeatedly and persistently falsifying business records, thus violating Executive Law § 63(12) and New York Penal Law 175.05; (ii) for conspiracy to falsify business records; (iii) for repeatedly and persistently issuing false financial statements, thus violating Executive Law § 63(12) and New York Penal Law 175.45; (iv) for repeatedly and persistently committing insurance fraud in violation of Executive Law § 63(12) and New York Penal Law 176.05; and (v) for conspiracy to commit insurance fraud. The court ordered President Trump and defendants to pay approximately $354,868,768 in aggregate disgorgement of ill-gotten gains, including $168,040,168 with pre-judgment interest from March 4, 2019; $126,828,600, with pre-judgment interest from May 11, 2022, and $60,000,000, with pre-judgment interest from June 26, 2023. The court enjoined President Trump, among others, from serving as an officer or director of any New York corporation or other legal entity in New York for a period of three years, and from applying for loans from any financial institution chartered by or registered with the New York Department of Financial Services for a period of three years.
In its February 16, 2024 ruling, the court ordered Judge Barbara Jones (ret.) to continue in her role as an Independent Monitor, tasked with overseeing the Trump Organization’s financial disclosures to any third parties and any transfer or other dissipation of assets, for a period of no less than three years following the ruling. In addition to the continued monitorship, the court also ordered that an Independent Director of Compliance be installed at the Trump Organization, who shall be responsible for ensuring good financial and accounting practices, shall establish internal written protocols for financial reporting, and shall also approve any financial disclosures to third parties in advance of submission.
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The following disclosure is inserted in “Background of the Business Combination – Timeline of the Business Combination Post-IPO Negotiations” on page 197, after the second paragraph starting with “On February 8, 2024, the parties entered into the Retention Bonus Agreement.” |
On February 16, 2024, TMTG received a letter from a counsel to UAV (the “February 16 Letter”) that did not author the Initial 2024 Letters. Additionally, prior to receipt of the February 16 Letter, neither Digital World nor TMTG had received correspondence from such counsel on UAV’s behalf. Within the February 16 Letter, such counsel stated that UAV had the right to appoint two individuals to the TMTG board of directors, attempted to appoint two specific individuals as such directors and requested TMTG confirm by Tuesday, February 20 that it accepts such appointments. See “Risk Factors – Risks Related to Digital World and the Business Combination – We cannot assure you that the claims asserted against TMTG or Digital World are without the financial and/or human capital resources of operatives representing the interests of political opponents of President Trump focused on thwarting the Business Combination to prevent President Trump’s potential financial gain, which focus could further delay, or prevent, the completion of the Business Combination, and – We cannot assure you that the recent claims or future claims asserted against TMTG or Digital World will not further delay or prevent the completion of the Business Combination.”
On February 20, 2024 and February 21, 2024, Digital World and TMTG, respectively, received email correspondence from counsel to UAV that sent the Initial 2024 Letters. The February 20 and 21 emails stated that such counsel no longer represents UAV in the potential disputes referenced within the Initial 2024 Letters.