Drew Field
Direct Public Offerings
Case StudiesDiamond Organics, Inc. Logo

Diamond Organics, Inc.

Diamond Organics has become the successful leader in two new business trends:

Marketing organic food 

Home delivery of food ordered from an online and printed catalog

Diamond Organics has also shown the way to finance growth through direct share offerings to customers and its other communities.

Jasch Hamilton and Kathleen Ucinski Hamilton started Diamond Organics in 1989 on an organic farm in Rockport, Maine, packaging and shipping produce they grew and purchased from their neighbors. In 1991 they relocated to Freedom, California to establish a year-round fulfillment operation.  Their first direct offering of shares was in 1996, when they sold 87,000 shares at $2.50 each (equal to $1.25 after a later stock split.) This placed a $2 million after-offering value on the entire business.

Diamond Organics’ second direct offering, in 1998, was at $4.50 per share ($2.25 after giving effect to the split.) The prospectus for the second offering reported:

“Since 1996, we have tripled the number of all-organic products we carry, our catalog has increased from 24 to 40 pages and we have moved to a facility with capacity for $8 million in sales. Sales have increased each year at over 20% from the previous year.”

The $5.00 (after-split) per share limited offerings in 2000 and 2001 were followed by one in 2003 for $7.00. In 2004, Diamond Organics moved into a 33,000 sq. ft. building constructed for it, with the capacity to do five times the average daily business in the year before the move.

Diamond Organics completed its initial public offering (for residents of California and New York) in April 2006, selling over $800,000 in shares at $8.00 each. This public offering was announced in local newspaper and radio ads and a big banner on the new building along Highway One. Two open houses brought neighbors from within about 50 miles.

Diamond Organics now has over 500 shareowners, all drawn from its own communities. After all the direct offerings, Jasch and Kathleen still own 80% of the shares. The most recent offering price would place a value on the business of nearly $10 million.