Hempacco, which manufactures nicotine-free cigarettes made from hemp, lowered the proposed deal size and guided to the high end of the range for its upcoming IPO on Monday.
The San Diego, CA-based company now plans to raise $6 million by offering 1 million shares at a price of $6. The company had previously filed to offer 3 million shares at a range of $4 to $6. At the revised price, Hempacco will raise -60% less in proceeds than previously anticipated and command a market value of $138 million (+20% vs. original terms). The post-IPO float of 1.0 million shares represents just 4% of shares outstanding.
The company produces nicotine-free and tobacco-free smokable hemp and herb products for its in-house brand of hemp-based cigarettes, The Real Stuff Smokables, as well as hemp-based cigarettes for private label customers in the cannabis and tobacco alternatives industries. Launched in 2020, its smokable CBD brands are currently sold in over 200 retail locations in San Diego, California in addition to 600 kiosk vending machines. Hempacco's cigarette production facility has the capacity to produce up to 30 million cigarettes monthly with in-house processing, packing, and shipping capabilities.
Hempacco was founded in 2019 and booked $2 million in revenue for the 12 months ended March 31, 2022. It plans to list on the Nasdaq under the symbol HPCO. Boustead Securities is the sole bookrunner on the deal.
