Former President Donald J. Trump’s social media company is firing on all cylinders and could be at risk of bankruptcy if it doesn’t find new funding quickly.

in a regulatory document This week, auditors at Trump Media & Technology Group raised doubts about the company’s ability to continue as a “going concern” without new financing. The filing also made clear that Trump Media desperately needs to complete its long-delayed merger with a cash-rich shell company in order to raise $300 million in cash, especially if its flagship online platform, Truth Social, has any chance of surviving.

The document, which offers the first detailed look at Trump Media’s finances, was filed with regulators as part of the company’s pending deal with Digital World Acquisition Corporation, the publicly traded shell company it agreed to merge with in 2021.

If the transaction goes through, it could value Trump Media at $1 billion based on Digital World’s share price of $16.60. However, the rich valuation is no guarantee that the company, which relies heavily on advertising revenue from Truth Social (and Truth Social itself), is a viable business. Trump Media had little cash on hand at the end of June and has exhausted most of the $37 million in private financing it has raised since 2021, according to the filing.

“Contrary to the mainstream media’s relentless campaign to peddle false information about Truth Social, we have given a voice back to millions of Americans using technology run at a fraction of the cost of Big Tech platforms,” ​​said Shannon Devine, CEO. spokesperson for Truth Social. she said in a statement. Ms. Devine added that “Truth Social continues to make progress toward completing its merger, which we believe will enable important new projects for the company.”

Since its founding, Truth Social has been a personal megaphone for Trump, who frequently uses the platform to criticize his critics as he runs for president and faces a series of criminal and civil lawsuits. The platform is popular among some of his most ardent followers. But on any given day, much of the advertising on the platform comes from weight loss products, gold coins and “natural cures” for a variety of medical ailments.

During the first six months of this year, Trump Media earned just $2.3 million in advertising revenue, according to the document.

“Obviously, Truth Social doesn’t survive on advertising money,” said Shannon McGregor, a journalism and media professor at the University of North Carolina who has studied social media platforms. “And the ads that are sold are not solid or sustainable.”

The former president’s chosen platform remains relatively small in the social media universe. This year, the Truth Social app has been downloaded three million times, according to Sensor Tower, a data provider. By comparison, Elon Musk’s X, formerly known as Twitter, has been downloaded 144 million times and Meta’s Threads has been downloaded 171 million times in the nearly five months since its debut.

In total, Truth Social has been downloaded seven million times since its launch in early 2022, according to Sensor Tower.

Trump has 6.5 million followers on Truth Social, compared to the 87 million he had on Twitter when he was banned from posting on the platform after the attack on the Capitol on January 6, 2021. Musk, after purchasing Twitter, left for Trump to return to the platform, but the former president only posted a message on X.

McGregor said other social media platforms had tried to increase their audience reach by striking deals with media personalities and influencers who bring with them a ready-made group of followers.

If the merger is completed, Trump Media would have the cash on hand to enlist the services of conservative media influencers. But McGregor said some people might be reluctant to join a platform that was so identified with Trump, whose political future remained uncertain.

“What is the future vision of a platform that is based on being a microphone for a person?”, he said, is the obvious question for any social media influencer thinking about joining Truth Social.

The glimmer of good news for Trump is that this week’s filing of the updated merger document is an indication that the deal with Digital World is moving forward after being stalled for nearly two years due to a regulatory investigation.

Filing a revised prospectus was one of the requirements Digital World had agreed to as part of an $18 million regulatory settlement it reached this summer with the Securities and Exchange Commission. The deal resolved an investigation into an allegation that Digital World had violated securities rules governing special purpose acquisition companies by engaging in early merger talks with Trump Media before its initial public offering.

Trump Media, in a post on Truth Social, called the filing of the revised merger document “an important milestone toward the completion of our merger.”

The pressure to complete the merger comes as Trump’s New York real estate business is threatened by Attorney General Letitia James’ civil fraud lawsuit against the former president, his adult children and his family business. In September, a New York judge considering the challenge ruled that Trump had committed fraud by inflating the value of some of his real estate assets and stripped him of control over some of his signature properties.

Over the past few weeks, the same judge has been hearing testimony from witnesses, including Trump, to determine what kind of maximum punishment should be imposed.

With the future of some of his real estate businesses on shaky ground, Trump Media has suddenly become a bigger piece of the former president’s business empire and the calculation of his personal net worth. If the merger is completed, Trump, as president, will become Trump Media’s largest individual shareholder.

The company’s potential $1 billion valuation after the merger is a far cry from the roughly $10 billion price investors had given the deal shortly after its announcement in October 2021. Still, it’s significantly more higher than the $5 million to $25 million valuation Mr. Trump had submitted to Trump Media in a financial disclosure form this year.