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

Newsmax Inc. has filed a registration statement for the resale of up to 121,288,655 shares of its Class B common stock by selling stockholders.

Summary

• Newsmax Inc., a Florida corporation, has filed a registration statement with the SEC for the resale of up to 121,288,655 shares of Class B Common Stock.
• The shares are being offered by selling stockholders and include 81,449,358 shares, 600,000 shares issuable upon exercise of warrants, and 39,239,297 shares issuable upon conversion of Class A common stock.
• Newsmax will not receive any proceeds from the sale of these shares by the selling stockholders, except for proceeds from the cash exercise of warrants, which are estimated to be a maximum of $7,500,000 if all warrants are exercised at $12.50 per share.
• The company intends to use the net proceeds from any cash exercise of the Warrants for working capital and general corporate purposes.
• The Class B Common Stock is listed on the New York Stock Exchange (NYSE) under the symbol NMAX.
• On April 3, 2025, the closing price as reported on the NYSE was $62.12 per share.
• Newsmax is an emerging growth company and smaller reporting company under federal securities laws, subject to reduced public company reporting requirements.
• Christopher Ruddy, the CEO, holds approximately 81.5% of the voting stock, making Newsmax a controlled company under NYSE rules.

Sentiment

Score: 5

Explanation: The document is primarily factual and descriptive, outlining the details of the share resale and related corporate information. There is no strong positive or negative sentiment expressed, making it neutral overall.

Positives

• The company has access to potential funds of up to $7.5 million if all warrants are exercised for cash.
• Newsmax is listed on the NYSE, providing liquidity for investors.
• The company qualifies as an emerging growth company and smaller reporting company, allowing for reduced reporting requirements.

Negatives

• Newsmax will not receive any proceeds from the sale of shares by the selling stockholders, except from potential warrant exercises.
• The selling stockholders may sell a substantial number of shares, which could cause the price of the Class B Common Stock to decline.
• Christopher Ruddy's control of approximately 81.5% of the voting stock means that stockholders do not have the same protections afforded to stockholders of companies that are subject to certain corporate governance requirements.

Risks

• The Selling Stockholders may sell a substantial number of shares of our Class B Common Stock pursuant to this offering, which could cause the price of our Class B Common Stock to decline.
• We may issue and sell additional shares of Class B Common Stock in the public markets.
• You may experience future dilution as a result of future equity offerings.
• Neither we nor the Selling Stockholders have authorized any other party to provide you with information concerning us or this offering.

Future Outlook

The company intends to use the aggregate net proceeds from the exercise of the Warrants for general corporate purposes, including working capital. The actual allocation of proceeds realized from the exercise of these Warrants will depend upon the amount and timing of such exercises, our operating revenues and cash position at such time and our working capital requirements.

Industry Context

Newsmax Media differentiates itself in a crowded media marketplace, among other things, through broad distribution of Newsmax Medias content across linear cable, OTT streaming, and digital and print platforms, all with a focus 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

• Existing shareholders may experience dilution if a large number of shares are sold by the selling stockholders.
• The market price of the Class B Common Stock could be affected by the sales of shares by the selling stockholders.
• The company's ability to raise capital in the future could be affected by the availability of a large number of shares for sale in the public market.

Next Steps

• Selling Stockholders may offer and sell shares of Class B Common Stock from time to time.
• The company may receive proceeds from the exercise of warrants by the selling stockholders.
• The company will use any proceeds from warrant exercises for general corporate purposes and working capital.

Key Dates

Keywords

Newsmax, Class B Common Stock, Resale, Selling Stockholders, Registration Statement, Warrants, Conversion, NYSE, Emerging Growth Company, Controlled Company