Elong Power Holding Ltd (NASDAQ: ELPW) experienced a dramatic decline in its share price Monday, tumbling 91.6% after the company announced the pricing of an underwritten public offering. The company set the offering at 2.4 million units priced at $3.16 per unit.
Proceeds from the transaction are expected to total approximately $7.6 million in gross proceeds prior to the deduction of underwriting discounts and other offering-related expenses. The structure of each unit comprises one Class A ordinary share, or alternatively one pre-funded warrant in lieu of the share, together with one common warrant to acquire an additional Class A ordinary share.
The common warrants included in the units carry a three-year lifespan from issuance and are initially exercisable at $3.16 per share. The exercise price is subject to scheduled adjustments on the 4th and 8th trading days following the closing of the offering - to 70% and 50% of the initial exercise price, respectively. Warrant holders also have the option to exercise via a zero exercise price mechanism that would deliver twice the number of ordinary shares without an additional cash payment.
Elong Power provides high power battery technologies designed for commercial and specialty alternative energy vehicles as well as for energy storage systems. The company indicated it intends to allocate the net proceeds from the offering to general corporate purposes, expansion of its sales network, and enhancements to production capacity.
Maxim Group LLC is acting as the exclusive underwriter for the offering, which is expected to close on February 3, 2026. In addition, the underwriters have been granted a 45-day option to purchase up to an additional 360,000 Class A ordinary shares and/or 360,000 common warrants, an allowance that could increase the number of securities issued under the transaction.
The market reaction was immediate and severe, reflected in the reported 91.6% plunge in the share price on the day the offering price was disclosed.