S-1/A: Newsmax Files Amendment for Resale of Up to 121 Million Shares of Class B Common Stock

Sentiment:

S-1/A Filing 9 May 2025 4:30 PM

Newsmax Inc. has filed an amendment to its registration statement for the resale of up to 121,282,452 shares of Class B common stock by selling stockholders.

Capital raiseThe company completed an offering of its Series B Preferred Stock in a private placement pursuant to Regulation D of the Securities Act of 1933, as amended (the Private Placement).The Company issued 44,991 shares of Series B Preferred Stock at $5,000 per share for an aggregate offering amount of $224,955,000.On March 7, 2025, the company entered into a Selling Agency Agreement with Digital Offering, LLC, as selling agent, to sell up to 7,500,000 shares of its Class B Common Stock at a purchase price of $10.00 per share through a best-efforts offering pursuant to Regulation A under the Securities Act.On April 4, 2025, the company entered into a Standby Equity Purchase Agreement (SEPA) with YA II PN, LTD. Pursuant to the SEPA, the company has the right, but not the obligation, to sell to Yorkville up to $1,200,000,000 of its Class B Common Stock, subject to certain limitations and conditions set forth in the SEPA, from time to time during the term of the SEPA.

Summary

Newsmax Inc., a Florida corporation, has filed an amendment to its registration statement on Form S-1 with the SEC.
The amendment pertains to the resale of up to 121,282,452 shares of Class B common stock by selling stockholders.
These shares include 81,443,155 shares issued in connection with previous transactions, 39,239,297 shares issuable upon conversion of Class A common stock, and 600,000 shares issuable upon exercise of warrants.
The company will not receive any proceeds from the sale of Class B common stock by the selling stockholders, except for potential proceeds from the cash exercise of warrants.
The maximum proceeds from warrant exercises, assuming all warrants are exercised at $12.50, are estimated to be $7,500,000.
These proceeds, if received, will be used for general corporate purposes, including working capital.
The selling stockholders will bear all commissions and discounts related to their sale of Class B common stock.
Newsmax Inc. will cover all other costs, fees, and expenses related to the registration of the shares.
The company has filed exhibits, including opinions from legal counsel and consents from auditors, as part of the registration statement.

Sentiment

Score: 5

Explanation: The document is primarily a legal filing related to a stock resale. The sentiment is neutral as it mainly describes the mechanics of the offering and associated legal aspects.

Positives

Potential influx of $7.5 million in capital if all warrants are exercised, which would be used for general corporate purposes and working capital.

Negatives

The company will not receive any proceeds from the sale of Class B Common Stock by the Selling Stockholders.

Risks

The market price of the Class B Common Stock has been extremely volatile and may continue to be volatile due to numerous circumstances beyond the company's control.
The Selling Stockholders may sell a substantial number of shares of Class B Common Stock pursuant to this offering, which could cause the price of the Class B Common Stock to decline.
The company may issue and sell additional shares of Class B Common Stock in the public markets, which could depress the market price of the Class B Common Stock and impair the company's ability to raise capital through the sale of additional equity securities.
Investors may experience future dilution as a result of future equity offerings.
Information available in public media that is published by third parties may not be reliable or accurate and could materially impact the trading price of the Class B Common Stock.

Future Outlook

The company intends to use the net proceeds from any cash exercise of the Warrants for working capital and general corporate purposes.

Industry Context

The document notes that Newsmax differentiates itself in a crowded media marketplace through broad distribution of its content across linear cable, OTT streaming, and digital and print platforms, focusing on content related to politics, health, finance, and lifestyle for an audience primarily comprised of viewers who are 45 years old or older.

Comparison to Industry Standards

Nielsen reports that Newsmax is the fourth highest-rated cable news network in the United States, with 21 million regular viewers, and is one of the 15 most viewed basic cable programs.
In 2023, Nielsen reported that Newsmax was the only cable news channel with ratings growth across all dayparts, seeing a 42% increase in total viewership in prime time, 16% in daytime, 23% in total day, including a 69% increase in total day viewership among adults between age 35 and 64, and an 11% increase in access.
Meanwhile, competitor Fox News saw a 6% decline in viewership for total day and a 2% decline in prime during the same time period.
In the first half of 2024, Newsmaxs total viewership in prime time grew by 41%, including a 10% increase among adults between the ages of 35 and 64, and by 36% in total day, including a 16% increase among adults between 35 and 64.
In comparison, Fox News experienced a 10% increase in prime time viewership, including a 10% increase among adults between age 35 and 64, and a 2% increase in total day, including a 1% increase among adults between age 35 and 64.
Overall, Newsmaxs total day ratings grew by 36% in the first half of 2024 compared to the first half of 2023, compared to 7% growth for MSNBC, a 2% growth for Fox News, a 3% growth for CNN, a 7% decline for CNBC and a 36% decline for Newsnation.

Stakeholder Impact

The resale of a large number of shares could potentially dilute the value for existing shareholders.
The company's ability to raise capital in the future could be affected by the market's perception of the resale.

Key Dates

Date	Description
October 12, 2007	Date of the Christopher Ruddy Revocable Trust
March 7, 2025	Newsmax entered into a Selling Agency Agreement with Digital Offering, LLC.
March 28, 2025	Newsmax completed the offering and sold an aggregate of 7,500,000 shares of Class B Common Stock.
March 28, 2025	Newsmax amended and restated its Articles of Incorporation to implement a dual class of securities and effectuated a forward stock split.
March 31, 2025	Shares of Newsmax's Class B Common Stock began trading on the NYSE.
April 4, 2025	Newsmax entered into a Standby Equity Purchase Agreement (SEPA) with Yorkville.
May 8, 2025	Closing price of Newsmax on the NYSE was $23.57 per share.
May 9, 2025	Date of the prospectus.

Keywords

Class B Common Stock, resale, registration statement, Newsmax, shares, warrants, offering, securities

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