Paranovus Entertainment Technology Ltd. (NASDAQ:PAVS) shares are trending on Tuesday night.
PAVS Spikes After Equity Sales Agreement
PAVS shares jumped 15.66% to $1.18 after the bell on Tuesday after the company filed a prospectus supplement to sell up to $194.9 million worth of Class A Ordinary Shares through Florida-based boutique investment bank AC Sunshine Securities LLC as sales agent for a 3.5% gross commission.
According to the Tuesday filing, the company may sell shares through an "at-the-market" offering under Rule 415 of the Securities Act. This flexible fundraising mechanism allows companies to sell shares gradually on the open market. However, it also poses a genuine risk of dilution for existing shareholders.
The move marks a reversal of actions taken in March, when Paranovus terminated a prior ATM sales agreement under which it had sold 5.88 million Class A shares and executed a 1-for-12 reverse stock split.
