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Trump Media and Technology Group (DJT), the parent entity of the Truth Social platform, has just entered into key agreements that not only pave the way for the company to substantially boost its liquidity but also acquire prime assets for its upcoming Content Delivery Network (CDN).
Trump Media's All-Equity Deal With WorldConnect Technologies And Its Affiliates
To wit, Trump Media and Technology Group has entered into an all-equity deal with WorldConnect Technologies, WorldConnect IPTV Solutions, and JedTec to acquire key assets, including the source code, for its upcoming Content Delivery Network (CDN).
Back in May, Trump Media had noted that it was done with the research and development phase of its new live TV streaming platform and that it would begin to scale up its own Content Delivery Network (CDN). In the first phase, Trump Media and Technology Group plans to introduce live streaming to the iOS, Android, and web versions of the Truth Social platform. In the second phase, the company intends to launch a dedicated OTT streaming app for smartphones and tablets, and then release a version of the app for smart TVs in the third phase.
Trump Media and Technology Group intends to leverage WorldConnect's existing agreements with the Perception Group to rollout CDN technology for the Truth Social platform. To do so, Trump Media will incorporate Perception's intellectual property assets that are already available to WorldConnect and its affiliates.
Under the terms of this deal, Trump Media will issue 5.1 million shares as consideration to WorldConnect IPTV Solutions and JedTec. Once the deal is closed, these shares will be subject to selling restrictions, whereby not more than 3 percent of Trump Media's Average Daily Trading Volume (ADTV) can be sold in any consecutive two-week period during the first 6 months following the closing of the deal. Thereafter, not more than 5 percent of the ADTV can be sold in any consecutive two-week period until 12 months after the closing of the deal.
Trump Media And Technology Group's Standby Equity Purchase Agreement (SEPA)
Separately, Trump Media and Technology Group has entered into a SEPA with a Cayman Islands exempt limited partnership, Yorkville. Under this agreement, Truth Social's parent entity can sell shares worth $2.5 billion to Yorkville from time to time during the duration of the SEPA. Accordingly, the company has filed a registration statement with the SEC to register 37.644 million shares for resale.
The filing notes:
"... the Company will have the right, but not the obligation, from time to time at its discretion until the first day of the month following the 36-month period after the date of the SEPA, to direct Yorkville to purchase a specified amount of shares (each such sale, an "Advance") by delivering written notice to Yorkville (each, an "Advance Notice")."
The company intends to use these funds for working capital and general corporate purposes. Do note that Trump Media and Technology Group's cumulative cash balance as of the 01st of July had swelled to $350 million.
