Digital Media Acquisition Corp., which plans to merge with the parent company of Donald Trump’s Truth Social platform, received a warning last week from regulators finding accounting errors in its last financial report, threatening to delist the firm from Nasdaq, on top of two investigations that have delayed the deal with Trump.
The SPAC looking to buy Donald Trump's Truth Social is at risk of Nasdaq delisting.
In a May 18 filing, the Securities and Exchange Commission found Digital Media Acquisition, a special purpose acquisition company (SPAC) that signed a deal in 2021 to merge with Trump’s media company to take Truth Social public, had made accounting errors in its annual financial report for 2022.
The year-end report can “no longer be relied upon,” SEC regulators said, and Digital Media is now developing a remediation plan to address the “material weakness” in its “internal control over financial reporting,” per the filing.
Digital Media Acquisition also has not filed an earnings report for the first quarter of 2023, which is required for all companies listed on Nasdaq.
The company has until July 24 to submit a plan or be delisted from the stock exchange—the SEC can then accept or deny the company’s plan, and if it rejects it, Digital Media can appeal.
In a public statement on Thursday addressing the SEC’s filing, Digital Media said the warning was “expected” and it was working “diligently” to file its earnings before July 24.
This is a developing story.
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SPAC Tied to Trump Media Rushes to Complete Deal (New York Times)