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Donald Trump’s Truth Social app facing financial fallout

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Former President Donald Trump’s social media outfit, Truth Social, is locked in a bitter battle with certainly one of its vendors claiming that the platform is stiffing the corporate out of greater than $1 million in contractually obligated payments, FOX Business has learned.

If the allegations are true, they’d suggest that Truth Social’s funds are in significant disarray, individuals with direct knowledge of the matter say. Web infrastructure company RightForge is claimed to be amongst Truth Social’s largest vendors and creditors, these people say.

In October, RightForge announced it entered into an agreement to host Truth Social, which Trump helped create after he was banned by Twitter following the Jan. 6 riots. RightForge now contends that Truth Social has reneged on its contractually obligated monthly payments for organising the platform’s web-servicing infrastructure, in accordance with three individuals with direct knowledge of the matter.

These people say RightForge contends that Truth Social has made just three payments and ceased making any payments since around March. RightForge claims that Truth Social owes it around $1.6 million and is threatening legal motion to recoup the cash, these people add.

RightForge CEO Martin Avila declined to comment “on any private matters,” but wouldn’t deny the disagreement between the 2 entities. He added in an announcement: “Our founding vision is to make a second web to support American ideas online. RightForge believes within the mission of President Trump’s free speech platform and want to proceed supporting the president in his media endeavors.” 

Interest within the platform has peaked recently within the aftermath of the FBI raid on Trump’s Mar-a-Lago residence.AFP via Getty Images

A spokesman for Truth Social also wouldn’t deny the matter when contacted by FOX Business. A spokesman for Trump had no comment.

Since its launch in February, Truth Social has been the major conduit for the previous president to make public announcements and attack critics. While its reach pales compared to Twitter’s estimated 200-million-plus energetic each day users, interest within the platform has peaked recently within the aftermath of the FBI raid on Trump’s Mar-a-Lago residence.

Truth Social is an element of Trump Media and Technology Group, a holding company for the platform that, in accordance with regulatory filings, has broader plans to expand into streaming and other services to advertise Trump’s political brand. Trump is claimed to carry a controlling interest in Truth Social, though his monetary investment in it is claimed to be negligible to nonexistent, and he shouldn’t be answerable for its day-to-day operations.

In January, former Republican California Rep. Devin Nunes was named the CEO of Trump Media with Trump described in regulatory filings as its chair. Nunes didn’t return an email for comment.

But Truth Social’s launch has been anything but smooth. Its early rollout was plagued with technological glitches. More recently, its planned merger with Digital World Acquisition Corp., a special purpose acquisition company, or SPAC, has been postpone indefinitely amid various probes into its business dealings, including a Justice Department grand jury probe and an investigation by the Securities and Exchange Commission.

Digital World and Trump Media have said they’re cooperating with the probes even when they seem like a big stumbling block in completing the merger. In a recent regulatory filing, Digital World said it’s in search of shareholder approval to delay the Sept. 8 deadline for combining the businesses until next yr because the investigations swirl. 

In the identical filing, Digital World said: “If President Trump becomes less popular or there are further controversies that damage his credibility or the need of individuals to make use of a platform related to him, and from which he’ll derive financial profit, [Trump Media’s] results of operations, in addition to the end result of the proposed Business combination, might be adversely affected.”

A representative for Digital World didn’t return an email and telephone call for comment. Shares of Digital World have declined greater than 42% for the reason that starting of the yr.

Trump himself faces mounting legal woes including a Justice Department probe over his role within the Jan. 6 Capitol riot; a Latest York state civil probe into the funds of the Trump Organization, his real estate and branding business; and, most recently, a DOJ probe into whether he mishandled classified documents at his Mar-a-Lago estate that led to the recent FBI raid.

Trump says the investigations are politically motivated as he prepares for a possible White House bid in 2024. While traffic to Truth Social has been spiking amid the controversies, it’s unclear if any of this helps its bottom line.

Donald Trump earlier this month.A filing said Truth Social doesn’t yet generate revenues and “may begin to generate revenue from the Truth Social platform as early as 2023.”REUTERS

In a May regulatory filing, Digital World stated: “There isn’t a operating history upon which to base any assumption as to the likelihood that [Trump Media] will prove successful and [Trump Media] may never generate any operating revenues or ever achieve profitable operations. If TMTG is unsuccessful in addressing these risks, its business will almost definitely fail.” 

The filing added that Truth Social doesn’t yet generate revenues and “may begin to generate revenue from the Truth Social platform as early as 2023.”

People at RightForge consider that their business contretemps with Truth Social are rooted within the platform’s business problems, the three people tell FOX Business. RightForge bills itself as a web company that caters to conservatives, an alternative choice to the progressive elite that dominates Silicon Valley.

In an interview with Axios in October 2021 announcing his partnership with Truth Social, Avila said: “When you consider that the president must be de-platformed, we consider that you just’re not likely curious about living in a free country. And that’s really what we’re all about is ensuring that America stays true to its core ideas, and that the marketplace of ideas stays open.”

He added that RightForge was working toward creating an infrastructure in order that Truth Social could compete with Twitter and have greater than 75 million users. “We’re laying the groundwork for that,” Avila told the publication. “That’s why there might be servers in every single place.”

It’s unclear if Trump Social is having issues with other vendors over payment for services, these people add. One person with knowledge of the matter said Trump Social informed RightForge that it stopped making the payments over “breach of contract.” FOX Business couldn’t determine the alleged breach.

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