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In this file photo taken on Sept. 3, former U.S. President Donald Trump arrives to speak during a campaign rally in support of Doug Mastriano for Governor and Mehmet Oz for U.S. Senate at Mohegan Sun Arena in Wilkes-Barre, Pennsylvania.ED JONES/AFP/Getty Images

The blank-cheque acquisition firm that agreed to merge with former U.S. President Donald Trump’s social media company failed on Tuesday to secure enough shareholder support for a one-year extension to complete the deal.

At stake is a $1.3 billion cash infusion that Trump Media & Technology Group (TMTG), which operates the Truth Social app, stands to receive from Digital World Acquisition Corp, the special purpose acquisition company (SPAC) that inked a deal in October to take TMTG public.

The transaction has been on ice amid civil and criminal probes into the circumstances around the deal. Digital World had been hoping that the U.S. Securities and Exchange Commission (SEC), which is reviewing its disclosures on the deal, would have given its blessing by now.

Digital World Chief Executive Patrick Orlando told a special meeting of his shareholders on Tuesday he would push back to noon on Thursday the deadline for the vote on extending the life of the SPAC by 12 months.

Digital World needs 65% of its shareholders to vote in favor of the proposal, but the support as of late Monday fell far short, Reuters reported. Digital World did not disclose the margin on Tuesday.

Digital World shares fell 17% to $20.74 in New York early Tuesday afternoon.

Digital World is set to liquidate on Thursday and return the money raised in its September 2021 initial public offering to shareholders unless action is taken.

Digital World shareholders had been given more than two weeks to vote on the SPAC’s extension and it is unclear if two additional days will make a difference. Most Digital World shareholders are individuals and getting them to vote through their brokers has been challenging, Orlando said last week.

If Digital World fails to get enough shareholder support, its management has the right to unilaterally extend the life of the SPAC by up to six months. It is unclear whether Digital World will pursue this option and if it would provide regulators enough time to conclude whether to allow the deal to proceed.

A TMTG spokesperson said the company will continue cooperating with all stakeholders on the merger and that it hoped “the SEC staff will expeditiously conclude its review free from political interference.”

An SEC spokesperson did not immediately respond to a request for comment.

Trump appeared to manage expectations for the deal with a post over the weekend on Truth Social: “I don’t need financing, ‘I’m really rich!’ Private company anyone???”

Digital World has disclosed that the SEC, the Financial Industry Regulatory Authority and federal prosecutors have been investigating the deal with TMTG, though the exact scope of the probes is unclear.

The information sought by regulators includes Digital World documents on due diligence of potential targets other than TMTG, relationships between Digital World and other entities, meetings of Digital World’s board, policies and procedures relating to trading, and the identities of certain investors, Digital World has said.

If the deal is completed, TMTG would receive $293 million that Digital World has on hand plus $1 billion committed from a group of investors in the form of a private investment in public equity (PIPE).

The PIPE is scheduled to expire on Sept. 20 unless the deal is completed. Investment bankers for Digital World have been reaching out to investors in the last few weeks to gauge their interest in extending the PIPE, a person familiar with the matter said.

It is unclear how TMTG is getting by without access to Digital World’s funding. It raised $22.6 million through convertible promissory notes last year and another $15.4 million through bridge financing in the first quarter. The agreement with Digital World caps the indebtedness that TMTG can assume prior to the deal closing at $50 million.

Digital World has said it believes TMTG will have “sufficient funds” until April 2023. TMTG said last week that Truth Social is “on strong financial footing” and would begin running advertisements soon.

Trump started using Truth Social in April, two months after it launched on Apple Inc’s app store. He has more than 4 million followers - a fraction of the 89 million he had on Twitter Inc before he was banned over his role in the January 2021 U.S. Capitol riots by thousands of his supporters.

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