Erayak Power Solution Group (NASDAQ: RAYA) Shares Plunge 107.7% on $7 Million Offering

Erayak Power Solution Group (NASDAQ: RAYA) has announced a $7 million registered direct offering through the sale of 107,692,307 Class A ordinary shares at $0.065 per share. The offering includes pre-funded warrants with an exercise price of $0.0001 per share. The transaction, managed by Craft Capital Management as the sole placement agent, is expected to close around August 1, 2025. The offering is being conducted under a previously filed and effective shelf registration statement on Form F-3.

Erayak's $7 million offering at $0.065 per share represents significant 107.7 million share dilution, raising capital but at substantial cost to shareholders. The sheer number of new shares being issued—107.7 million—is particularly noteworthy when considering the company's market capitalization and outstanding share count. This level of dilution suggests the company urgently needs capital, potentially to address operational challenges or fund growth initiatives.

The use of pre-funded warrants as an alternative to direct shares gives institutional investors flexibility in their investment timing while securing the capital for Erayak. Craft Capital Management's involvement as the sole placement agent indicates this was likely a targeted offering to select institutional investors rather than a broader market offering.

While the $7 million infusion strengthens Erayak's balance sheet in the short term, the substantial dilution at this price point raises questions about the company's alternatives for financing and its current financial position. Investors should carefully consider how management plans to deploy this capital and whether it will generate returns sufficient to offset the significant ownership dilution.

Erayak Power Solution Group Inc. is a leading manufacturer, designer, and exporter of high-quality products in the power supply industry. The company specializes in the manufacturing, research and development, and wholesale and retail of power solution products. Erayak’s product portfolio includes sine wave and off-grid inverters, inverter and gasoline generators, battery and smart chargers, and custom-designed products. These products are used principally in agricultural and industrial vehicles, recreational vehicles, electrical appliances, and outdoor living products. The company aims to be the premier power solutions brand and a solution for mobile life and outdoor living.