AMASS BRANDS (NASDAQ: AMSS) has filed a 424B3 prospectus supplement registering 8,951,895 shares of common stock tied to a Series C preferred stock arrangement with Streeterville Capital, a lender known across micro-cap markets for structured prepaid-preferred financings.
The conversion mechanic
The core structural feature is a variable-rate conversion price set at 90% of the lowest daily volume-weighted average price (VWAP) over a trailing 10-trading-day window. That 10% discount to the worst recent trading session is the signature of what market-structure analysts call "toxic" or "death-spiral" financing: as the stock trades lower, the conversion price resets lower, entitling the holder to more shares per dollar of stated value converted — which in turn can pressure the stock further.
A $4.00 floor price provides a lower bound on the conversion rate, but only so long as the floor remains in effect. Filings of this type often contain provisions that suspend or eliminate floors upon triggering events, so the operative constraint may be narrower than it appears.
Warrant and default provisions
In addition to the convertible preferred, the filing covers a 3.5-million-share warrant that has been repriced downward to $5.00 per share. Warrant repricings are a common concession in renegotiated micro-cap financings and further expand the potential share count at a lower effective cost basis for the holder.
The preferred instrument carries paid-in-kind (PIK) dividends starting at 8%, escalating to 18% upon an event of default. Each qualifying default also triggers a 15% increase in the instrument's stated value — the principal balance on which conversion shares are calculated. Because conversion share counts are derived from stated value divided by the variable conversion price, a default simultaneously inflates the numerator (stated value) and can compress the denominator (conversion price), compounding dilution.
Float context
The 8,951,895 registered shares should be measured against the company's existing public float, which for issuers of this size is often in the single-digit millions. The filing also notes weighted-average anti-dilution and reset provisions among its adjustment mechanisms, both of which can further increase the conversion share count if the company issues equity at prices below certain thresholds.
The company reported approximately $1.0 million in cash at the time of the filing and disclosed covenant breaches under the Streeterville agreement. Those breaches are significant because they can activate the escalated 18% PIK rate and the 15% stated-value step-up, accelerating the dilution cycle described above.
Structural takeaway
The red-flag profile here — variable pricing, deep discount, anti-dilution resets, and repriced warrants — represents one of the more mechanically aggressive financing structures currently active in the micro-cap space. Each conversion tranche settles in newly issued common shares and adds to the freely tradable supply, meaning the dilution is not a single event but an ongoing process whose pace depends on Streeterville's conversion schedule and prevailing market prices.