Salon Media Group, a one-time digital darling, has fallen on hard times. It lost its CEO of the past three years last week and appears to be on the brink of a deal to sell itself for a fire sale price of $5 million.
The struggling company said in a Securities and Exchange Commission filing on May 8 that it reached a deal to sell itself to a company called Salon.com LLC.
The filing contained no further info on the mystery buyer or buyers but said the deal would only require a $550,000 payment at closing. It said $100,000 would go to an escrow account and $500,000 was already paid as a deposit.
The remaining $3.85 million would be a promissory note payable in two installments over two years.
Even with those favorable terms, Salon issued a dire warning in the filing: “There can be no guarantee that the asset sale will be completed and, if not completed, we may have to file for bankruptcy and liquidation.”
CEO Jordan Hoffner, a one-time NBC and You Tube executive, resigned suddenly on May 3, according to the filing. He remains a company director but could not be reached for comment.
The SEC is also threatening to delist the penny stock for failure to file financial disclosure documents for more than a year. The company said it expected to be in compliance with SEC filing rules by June 7, but acknowledged that was way past the 15-day deadline the SEC had imposed.
Richard MacWilliams, a managing partner of Vista Capital Advisors and the chairman of the board of Salon Media, was named acting CEO. Trevor Calhoun, another board member and a partner at Humilis Holdings Capital Management, was appointed acting CFO, replacing Elizabeth Hambrecht, who resigned back in October.
Neither MacWilliams nor Calhoun returned calls seeking comment.
The left-leaning Web site was launched in San Francisco in 1995, staffed largely by refugees from a newspaper strike at the San Francisco Examiner. It went public in June 1999 valued at $107 million, but has lost money ever since.
For years, John Warnock, co-founder of Adobe Systems, and William Hambrecht, a venture capitalist (and father of former CFO Elizabeth) who was involved in the IPOs of Google, Amazon, Apple and Adobe Systems, injected cash to offset mounting losses.
Calls and emails to Hoffner, MacWilliams and Calhoun were not returned.