Trump Media & Technology Group Corp and Crypto.com announced that they have entered into a definitive business combination agreement with Yorkville Acquisition Corp, a Special Purpose Acquisition Company ("SPAC") sponsored by Yorkville Acquisition Sponsor LLC.
Under the agreement, Trump Media and Crypto.com will form and bring to the exchange a new company, Trump Media Group CRO Strategy, Inc., a digital treasury company with a primary strategy focused on acquiring and retaining CROs, the token native to the Cronos ecosystem.
CRO focused treasury and validator strategy
At closing, Trump Media, Crypto.com and Yorkville will each hold a stake in the company. Anticipated treasury assets will include:
- $1 billion in CROs ($6,313,000,212 CROs, or approximately 19% of CRO's total current market capitalization)
- $200 million in cash
- $220 million in mandatory exercise warrants
- A $5 billion equity line of credit from YA II PN, Ltd, an affiliate of Yorkville.
This combination is intended to form the first and largest public treasury CRO, with the largest market capitalisation ever achieved for a digital treasury company.
YA II PN, Ltd. has entered into a backstop agreement to purchase up to an amount of Class A common shares of Yorkville Acquisition Corp. that would result in an effective 9.9% interest in Yorkville. Prior to the transaction, Yorkville's Class A shares will trade on Nasdaq under the ticker "MCGA," a symbol that will be transferred to Trump Media Group CRO Strategy upon closing.
The three founding shareholders - Trump Media, Crypto.com and Yorkville - have signed a one-year mandatory lock-up for all founding shares and warrants, followed by a three-year release plan.
Trump Media Group CRO Strategy will focus on a digital treasury and validator strategy focused on CRO. The company will use almost all of its cash reserves to purchase CROs. In addition, it will operate a validator node, participating directly in the security and governance of the Cronos network, reinvesting staking rewards to further strengthen its position.
Cronos: Blockchain Foundation for Growth
Cronos, the blockchain on which CRO is based, enables interoperability, low-cost smart contract distribution and scalability. Powered by Crypto.com's global infrastructure ecosystem, the Cronos network hosts decentralised finance (DeFi) protocols, marketplaces, infrastructure and tokenization services. It is also designed to comply with US regulatory requirements.
"This is further evidence of how digital treasuries are rapidly becoming a standard, and we are proud to build one of the first large-scale ones in partnership with Crypto.com and Yorkville," said Devin Nunes, CEO of Trump Media. "This transaction will further democratise access to CRO for millions of shareholders and show just how impactful this asset can be for treasuries."
"We are executing a transaction seven times larger than any other in the industry. We are creating the first CRO treasury on a blockchain built with scalability and institutional security at its core. We chose Yorkville and its team as our partner in the public markets because of their experience and expertise," said Kris Marszalek, CEO of Crypto.com.
"Over 90% of the treasury is allocated in CRO, more than its current market capitalisation. In addition to our other $400 million in committed cash, we also have a $5 billion credit facility," Marszalek added.
Clear Street is acting as capital markets advisor to Trump Media and Crypto.com. DLA Piper LLP is providing legal counsel to Yorkville and its affiliates, while Skadden, Arps, Slate, Meagher & Flom LLP is legal counsel to Crypto.com.
Yorkville Acquisition Corp. will file a Registration Statement S-4 with the U.S. Securities and Exchange Commission ("SEC"), which will include informational and prospectus materials for its shareholders.
