High Times Holdings gets ‘A+’ in bid for IPO
HIGH
Times Holdings and its chairman, Adam Levin, are plotting a new route to an IPO.
Months of delays caused its original suitor, Origo Acquisiton Corp., a so-called shell corporation, to face delisting from Nasdaq.
This week, Levin said the company found a new route to go public and began soliciting public funds via a relatively new vehicle called a Regulation A+. “We think we’ll raise about $20 million,” he said.
The SEC regulation allows a company to raise up to $50 million from the public over the course of a year without a formal prospectus as a way to test the waters before doing an IPO.
“It’s a new path to an IPO,” said Levin. “We raised just over $1 mil- lion on Day One from 400 people.” He said High Times Holdings priced at $11 a share.
The solicitation came the same week as former Mexican president Vincente Fox, a strong advocate of legalized marijuana, joined the board.
In June 2017, Levin’s holding company, Oreva Capital, paid about $42 million to a family estate for a majority stake in the company, which publishes the 40year-old High Times magazine.
A month later, High Times caught the attention of Origo, a Cayman Islands-based company.
As a special purchase acquisition company, Origo was allowed to raise public money in a blind pool and hunt for a deal over a two-year period. Before High Times, Origo had walked away from at least two other potential targets in the biotech field.
But time was running out on the SPAC and as the Origo merger with High Times Holdings took longer than expected to close, Nasdaq suspended trading in Origo stock.
“We expect our securities to be delisted from Nasdaq in the near future,” Origo warned its shareholders in its latest proxy state- ment, filed before its June 12 shareholders meeting in the New York law offices of Ellenoff, Grossman & Schole,
Calls to Origo CEO Edward J. Fred were not returned by presstime.
Even though Origo stands to be in danger of imminent delisting, its shareholders still voted to extend the offer to merge with High Times Holdings until Sept. 12. If the deal is not completed by then, Origo must dissolve and give investors back their money.
In addition to High Times, Levin’s Oreva owns LBGTQ publications The Advocate and Out, and through a separate subsidiary, known as Dream Media, was a recent losing bidder for Penthouse.
But Dream Media did walk away with about a $3 million payout from the winning bidder thanks to its purchase of a bank loan to Penthouse at about 60 cents on the dollar. When the winning bid came in at $11.2 million, Dream Media was able to recoup 100 percent of the $10.5 million in principal.
Of his latest Reg A+ filing with High Times Holdings, Levin said, “We expect to keep it open for 30 to 45 days.”
He’s clearly hoping this time he’s able to capitalize on the anticipated boom in cannabis following the legalization of recreational marijuana in Canada this week and in eight US states and the District of Columbia over the past year. New York and 28 other states have relaxed laws to allow medical marijuana.
Some experts predict the cannabis industry will grow to a $20 billion market nationally by 2020.
No debt for Tronc
Tronc is now debt-free. The company, which is still said to be on the brink of changing its name back to Tribune Publishing, had long-term debt of $327 million before Dr. Patrick Soon-Shiong’s Nant Capital finally paid the $500 million to buy the Los Angeles Times and San Diego Union Tribune on Monday.
Now, Tronc is using the funds to pay back lenders. JPMorgan Chase and Bank of America were paid in full, according to an SEC filing days after the deal closed.
Despite being debt-free, the company took a hit on Thursday to close at $17.66, down 2.1 percent.
Three venture firms are still said to be in the hunt to buy the remaining papers, including the Chicago Tribune and the New York Daily News, while sources say Gannett and Hearst are interested in only a handful of titles — not the whole company.
Back in the game
Joe Lagani, last seen in the consumer magazine world as the chief revenue officer of Martha Stewart Living, just joined the European ad tech firm Adwanted Group, which is jumping into the US markket. He’s the president of Adwanted USA and is automating the ad buying of business-to-business publications. “We’re giving media buyers and brands a streamlined way to connect to targeted and specialty business audiences, eliminating a lot of unproductive activities,” he said. Lagani was a past publisher at Condé Nast’s House & Garden. Most recently, he was the head of client partnerships at Reelio, a video influencer platform.