Shares of Maase Inc. (NASDAQ:MAAS) fell sharply by 12.2% after the company revealed it had entered into a definitive agreement for a private placement expected to raise around $21 million in gross proceeds.
Under the terms of the deal, Maase will issue 10 million Class A ordinary shares at $2.08 each, accompanied by warrants to buy up to 20 million additional Class A shares. These warrants are divided into two groups: half can be exercised at twice the purchase price, while the other half require 2.5 times the price to be exercised.
The transaction is anticipated to close by the end of July 2025, resulting in roughly 25.9 million outstanding ordinary shares. The largest participant in this placement is projected to hold approximately 19.29% of the total shares outstanding, though their voting power will be limited to 0.73% due to Maase’s dual-class share structure.
Funds raised will be directed towards advancing the company’s operational goals, boosting working capital, and general corporate expenses. The private placement is being conducted under Section 4(a)(2) of the Securities Act of 1933, and the shares involved have not been registered with the SEC or relevant state regulators.
The steep drop in stock price indicates investor apprehension about the dilution effect from the new shares and the additional potential dilution from the warrants.