Days after the merger between Truth Social and Digital World Acquisition Corporation went through, the new company, Trump Media and Technology Group, released its 8K. It described that it’s not sure Truth Social will make it a year.
In connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standard Board’s Account Standards Update (“ASU”) 2014-15, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern” as stated above, the Company has until September 8, 2024 to consummate a Business Combination. It is uncertain that the Company will be able to consummate a Business Combination by this time. If a Business Combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution of the Company. Additionally, the Company has incurred and expects to incur significant costs in pursuit of its acquisition plans. The Company lacks the financial resources it needs to sustain operations for a reasonable period of time, which is considered to be one year from the date of the issuance of the financial statements. As a result, these factors raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.
It further described that it is hemorrhaging cash. Josh Marshall did a thread on it and concluded the company is basically worthless. (Update: Now he has done a full post on it.)
TMTG tanked on the news.
As that was happening, something curious was happening in the case of Michael Schvartsman.
He was charged last summer with insider trading in conjunction with the merger between DWAC and Truth Social. In February, DOJ supserseded his indictment, adding a money laundering charge for laundering the proceeds of his insider trading to buy a yacht he has since renamed Provocateur.
As part of the pretrial motions, lawyers revealed that a Russian porn investor, Anton Postolnikov, had also participated in the insider trading.
A Russian-American businessman based in Miami is suspected of making nearly $23 million from alleged insider trading involving former President Donald Trump’s media company, according to federal court records.
The businessman, Anton Postolnikov, is the owner of a Caribbean bank that caters to the porn industry and also reportedly loaned $8 million to Trump’s media company. Postolnikov, who owns a few residences on exclusive Fisher Island in Miami, is the nephew of a former high-ranking Russian government official who at one time was a staffer for Russian President Vladimir Putin, according to media reports.
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One of Troiano’s affidavits includes an e-mail Garelick sent Postolnikov on June 24, 2021, about four months before the merger was announced.
“Anton, Good times last night! Following up on that Trump Media Group SPAC we mentioned. The deal is going to finalize this week. Please let us know if you are interested in investing. . . .,” Garelick wrote in the message, which was also copied to Michael Shvartsman.
In March, the judge in the case, Lewis Liman, rejected the motions to dismiss of Schvartsman and his co-defendants.
Today, Schvartsman and his brother, Gerald, docketed plans to change their plea on Wednesday.
Normally, that’d just be an interesting coincidence with Trump’s crashing social media empire.
Except for one detail. Also today, Schvartsman added a lawyer to his defense team: Alan Futerfas.
Futerfas has long done work for Trump Organization and was closely involved on Don Jr’s representation during the Mueller investigation.