NewsMax, an upstart news group that leans conservative, is seeking to raise money using the Reg A securities exemption. The company reports an audience reaching over 40 million Americans each month through its television broadcasts and multi-platform content, including YouTube.
The funding follows a Reg D offering that sought to raise $225 million.
In a press release from last month, NewsMax shared that it had “successfully raised over $170 million” in preferred stock and was seeking an additional $25 million. As of January 31, 2025, NewsMax reports that it had raised net proceeds of $175,331,715.
Ostensibly, the goal is to pursue a public listing on the NYSE (NMAX) at some point in the future. Under Reg A, an issuer may immediately trade shares following a funding round.
The preferred shares offered under Reg D are convertible with a 7% accrued dividend. If the shares are converted, they will receive a 25% discount on the expected public offering price.
NewsMax worked with broker-dealer Digital Offering LLC on the Reg D funding.
While Reg D is only open to Accredited Investors, a Reg A securities offering is open to anyone but requires offering documents to be qualified by the Securities and Exchange Commission.
According to the Offering Circular, NewsMax is seeking the maximum amount allowable under the exemption of $75 million. Digital Offering is also aiding in this separate offering. If $75 million is raised NewsMax anticipates net proceeds of $68,375,000.
While the Reg D was for a convertible security, the Reg A is for common shares. The filing explains that there are two share classes: A Common Stock and B Common Stock. These are similar, except the B shares offer one vote per share and the A shares 10 votes. Investors will be purchasing the B shares at $5/each.
Like most early-stage firms, NewsMax is losing money. The company reported a net loss of $41.8 million for 2023. For the first six months of 2024, NewsMax lost $55 million. The company says it has sufficient money to operate for the next 12 months.
The use of proceeds is expected to primarily be for general and corporate expenses, including talent and programming, marketing, and expansion.
NewsMax is currently accepting indications of interest for the potential Reg A as it gauges investor interest.
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