The firm responsible for auditing Trump Media & Technology Group was labeled as “so seriously deficient in its performance” that it was removed from a national peer review program.
BF Borgers was still Trump Media’s independent registered public accounting firm as of April 1, according to a Monday filing with the Securities and Exchange Commission. The auditor was first hired on Jan. 22 2022, when Trump Media was still a privately held company, according to internal documents reported by The Financial Times. Borgers received $150,000 for the first annual audit.
The Financial Times, citing unnamed sources familiar with the matter, reports that auditing firm Borgers was hired by Trump Media to audit its financial documents after WithumSmith+Brown — the company’s first choice, which it appointed in 2021 — resigned after only a few months.
On March 29, the audit committee of Trump Media’s board approved Borgers to stay on as the company’s independent registered public accounting firm to audit its consolidated financial statements for the 2024 fiscal year, according to SEC filings.
Adeptus, the auditor for Digital World Acquisition Corp. — the special purpose acquisition company, or SPAC, which merged with Trump Media to take it public last month — was informed that it would be dismissed as Trump Media’s auditor immediately after its filing its 2023 annual report.
Lakewood, Colorado-based Borgers has been the subject of scrutiny over its business practices across North America. The Canadian Public Accountability Board (CPAB) banned Borgers from accepting new audit clients in Canada, according to an enforcement action drafted in December. The company doesn’t have offices in Canada and audited fewer than 50 Canadian reporting issuers, according to the CPAB document.
Last November, the American Institute of Certified Public Accountants’ (AICPA) peer review program terminated Borgers’ enrollment in the program. effective immediately, for “failure to cooperate because the firm was found to be so seriously deficient in its performance that education and remedial, corrective actions are not adequate.”
Borgers is among the auditing firms with the worst inspection records under the purview of the Public Company Accounting Oversight Board, The FT has previously reported. And its founder, Ben Borgers, was censured in the company’s home state of Colorado over poor quality audits of some retirement plans.
Trump Media and Borgers did not immediately respond to requests for comment on Monday.
Trump Media, the company behind former President Donald Trump’s Truth Social platform, said in Monday’s regulatory filing that it is registering the resale of up to almost 21.5 million new shares of common stock issuable upon the exercise of warrants, up to about 146 million shares of common stock, and up to about 4 million warrants to purchase common stock. Certain shares held by insiders may still be restricted from trading until the expiration of a lock-up agreement 5-6 months after the date of the IPO.
The news sent the company’s already-falling stock price plunging even further. Shares in the company were down nearly 18% as of Monday afternoon, trading at $26.76 apiece.
Trump Media went public on the Nasdaq under the ticker DJT on March 26. At the peak of its first trading week, shares of Trump Media traded at almost $80 each, bringing its market cap to over $8 billion.
The stock began to nosedive after the company disclosed a loss from operations of almost $16 million in 2023, plus interest expense of $39.4 million, while bringing in just $4.1 million in revenue. That’s compared with a loss from operations of $23.2 million, plus interest expense of $2 million, on $1.5 million in revenue in 2022, according to the company’s Securities and Exchange Commission filings.
Trump Media revealed that it “lacks the financial resources it needs to sustain operations for a reasonable period of time,” raising “substantial doubt” as to its ability to continue operations. The company said in an SEC filing that it expects to continue incurring operating losses and negative cash flow “for the foreseeable future.”