It’s not a high time for High Times magazine just yet.
High Times Holding Corp., the media and events company built around the 44-year-old magazine, raised only $5.3 million in its initial public offering so far and is still wrestling with a mountain of debt.
The money raised is just over the minimum $5 million level the SEC required it to reach to continue with its crowdsource-funded IPO — technically known as a Regulation A+ filing.
But the ride has been bumpy at best. A last-minute extension enabled the company to escape a default on a $28.5 million note after it failed to make a $9.7 million payment on its principal and interest due Sept. 12.
The payment was owed to the foundation that sold the magazine two years ago to Los Angeles-based Oreva Capital, headed by Adam Levin.
On the plus side, the company said this week that more than 6,000 people have purchased stock at $11 a share.
“We are so touched that the cannabis community is jumping on board for the High Times future,” the company said in a statement. “Cannabis is finally on the cusp of becoming a major industry.”
Levin, the chairman and CEO of High Times, initially said he expected to raise $20 million in an IPO launching in June. Instead, regulatory proceedings stalled the IPO until Aug. 13.
More On:
high times
High Times accepting cryptocurrency for IPO
High Times plots new path to IPO
Penthouse may be bought by High Times suitor
How weed magazines are preparing you for 4/20
The current IPO was necessary because the Cayman Islands-based Origo Acquisition Corp.—a special acquisition firm that last year was stalking High Times to take it public — acknowledged in a filing last month that, after a year of delays, it was unable to close its deal on High Times and was instead going to dissolve and return its untapped $28.98 million to its original investors. Nasdaq had already moved to delist the shell company.
Levin anticipated that IPO effort flopping when he began preparing his own Regulation A+ filing earlier this year.
About 45 percent of the stock sold so far was purchased by entities controlled by Levin. And the company admitted in an SEC filing that, contrary to reports, the company decided against allowing purchase of stock with cryptocurrencies.
Of the $5.3 million raised so far, $2.8 million went to pay back loans and $2.4 was to cover operating expenses.
The cash-strapped company acknowledges it is a high-risk endeavor. “The investment is suitable only for persons who can afford to lose their entire investment,” says the offering circular. “Furthermore, investors must understand that such investment could be illiquid for an indefinite period of time.”
The company acknowledged it would need to receive a minimum of $14.7 million from the offering — nearly triple the amount it’s raised so far — in order to meet Nasdaq listing requirements. While it extended the stock sale deadline to Oct. 31, it remains a public company technically — but one not yet listed on any exchange.
Source: Read Full Article