Hightimes Holdings Corp. (“High Times”) has filed a Reg A to raise $50 million, selling up to 4,545,454 shares of Hightimes Class A voting stock at $11. On a fully-diluted basis, upon completion of the Reg A+ offering, the company’s fully-diluted common stock will be between 27,071,740 and 31,162,649 which would put the implied valuation at $297 million to $342 million.

The company said in its filing it intends to apply for listing on Nasdaq under the symbol “HITM”, noting that it will need to receive a minimum of $17.2 million in net proceeds from the offering. It said if it doesn’t clear that hurdle, it may seek to have its Class A Common Stock quoted on the OTQX over-the-counter exchange.

Typically, the rule of thumb is to go public with some momentum. Hightimes doesn’t have that. It’s filing reports that during the 2014-2016 period, net income declined from $3.4 million to a net loss of $2.9 million, and for the nine months ended September 30, 2017, it had a $15.9 million net loss ($6.6 million coming rom a non-recurring non-cash stock compensation chart and an additional $2.7 million non-cash charge for debt discount and a change in derivative value for the same period). Hardly seems compelling support for a $300+ million valuation.

To put it another way, investors paying $11 per share, would be receiving shares in return with a net tangible book value ranging from $(0.1095) per share if it raises $12.5 million to $1.11 per share if it raises $50 million.