In the 131-page filing, Pure Play proposes issuing 4.7 million shares of common stock at a proposed maximum offering price of $2 per share.
The goal, according to CEO Richard Arnold, is to raise capital for growth, from expanding Pure Play’s existing ventures to pursuing new opportunities and acquiring other business.
Arnold said the SEC now has 40 days to respond. The agency could simply approve the request or may have additional questions. He estimates that, based on the SEC’s need for more information, the approval process could take up to nine months.
“We’re hoping that we can go through this [approval] period on the quicker side rather than the longer side,” Arnold told XBIZ. “We put a lot of work into this filing, so we feel we’re in very good shape.”
Only a handful of adult companies are publicly traded, including Playboy, Penthouse, New Frontier Media and Private, and all have seen mixed results. As XBIZ reported in June, few adult companies are a good match for the public money markets because their owners tend to prefer less publicity and scrutiny.
But Arnold said he welcomes any scrutiny of his company’s financials and business practices.
“We feel transparency is good for our business,” Arnold said. “It’s something that’s lacking in our industry. But if you look at all the deals we have to date, they are set up to be transparent. I think it provides a level of security for the companies we do business with.”
Arnold said he also has no fear of the potential for negative news stories that can follow less-than-stellar quarterly earnings statements.
“Any good company will tell you that you don’t govern by quarters,” Arnold said. “We have a long-term view and long-term goals. It’s definitely a little interesting to have people look at what you’ve done, the results you’re getting. But we’re comfortable with it.”
According to the filing, Pure Play had total revenue of $8.5 million and net income of $147,613 in the fiscal year ending July 31, 2005. For the nine-month period ending April 30, Pure Play had revenue of $8 million and net income of $21,854.
The company has released more than 620 movie titles and has a catalog of more than 1,110 movie titles. It claims gross revenue of $24 million through April 30. Studios and lines handled by Pure Play include Seymore Butts, Private USA, Swank, Score, Suze Randall, Naughty America, Cousin Stevie, Mr. X Productions and Asia Bootleg.
