This is not investment advice. The author has no investments in any of the stocks mentioned. WCCF TECH INC has a disclosure and ethics policy.
Trump Media and Technology Group (DJT), the parent company of Truth Social Platform, has just signed a significant deal that will not only significantly increase the company’s liquidity but also pave the way for it to acquire key assets for its upcoming content delivery network (CDN).
Trump Media’s All-Stock Transaction with WorldConnect Technologies and its Affiliates
Specifically, Trump Media & Technology Group has entered into wholly-owned agreements with WorldConnect Technologies, WorldConnect IPTV Solutions and JedTech to acquire key assets, including the source code for their upcoming content delivery network (CDN).
Trump Media announced in May that it had completed the research and development phase of its new live TV streaming platform and would begin expanding its own content delivery network (CDN). In the first phase, Trump Media and Technology Group plans to introduce live streaming to iOS, Android and web versions of its Truth Social platform. In the second phase, it will launch a dedicated OTT streaming app for smartphones and tablets, and in the third phase, it plans to release an app version for smart TVs.
Trump Media and Technology Group intends to leverage existing agreements with WorldConnect and Perception Group to deploy CDN technology on the Truth Social platform, and to do so, Trump Media intends to incorporate Perception’s intellectual property assets already available to WorldConnect and its affiliates.
Under the terms of the transaction, Trump Media will issue 5.1 million shares as consideration to WorldConnect IPTV Solutions and JedTech. Upon closing, these shares will be subject to sales restrictions that limit sales of more than 3% of Trump Media’s average daily trading volume (ADTV) in any two consecutive weeks during the first six months following closing, and thereafter, limit sales of more than 5% of ADTV in any two consecutive weeks until 12 months following closing.
Trump Media and Technology Group Standby Stock Purchase Agreement (SEPA)
Separately, Trump Media & Technology Group entered into a SEPA with Yorkville, a Cayman Islands tax-exempt limited partnership, which allows Truth Social’s parent company to sell up to $2.5 billion worth of stock to Yorkville at any time during the term of the SEPA. Accordingly, the company filed a registration statement with the SEC to register the resale of 37,644,000 shares.
The application states:
“…the Company will have the right, but will not be obligated, from time to time, up until the first day of the month thirty-six months following the date of the SEPA, in its discretion, to instruct Yorkville to purchase a specified number of Shares (each a “Pre-Sale”) by giving Yorkville written notice (each a “Pre-Notice”).”
The company plans to use these funds for working capital and general corporate purposes. Note that as of July 1, Trump Media and Technology Group’s accumulated cash balance had ballooned to $350 million.
