As filed with the U.S. Securities and Exchange Commission on November 16, 2022

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Approximate date of commencement of proposed sale to the public: Promptly after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box. ☒

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933

If an emerging growth company that prepares its financial statements in accordance with US GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

This is the initial public offering of our Class A ordinary shares of Erayak Power Solution Group Inc., a Cayman Islands exempted company, and we are offering $12,000,000 Class A ordinary shares, par value $0.0001 per share. We expect the offering price of our Class A ordinary shares in this offering to be US$4.00 per share. Prior to this offering, there has been no public market for our Class A ordinary shares ordinary shares.

We plan to list our Class A ordinary shares on the Nasdaq Capital Market, or Nasdaq, under the symbol “RAYA.” Nasdaq might not approve such application, and if our application is not approved, this offering cannot be completed.

Our issued and outstanding share capital is a dual class structure consisting of Class A ordinary shares and Class B ordinary shares. Holders of Class A ordinary shares and Class B ordinary shares vote together as one class on all matters submitted to a vote by the shareholders at any general meeting of the Company and have the same rights except each Class A Ordinary Share is entitled to one (1) vote and each Class B ordinary share is entitled to twenty (20) votes. Also, each Class B ordinary share is convertible into one (1) Class A ordinary share at any time at the option of the holder thereof but Class A ordinary shares are not convertible into Class B ordinary shares.

Investing in our Class A ordinary shares involves a high degree of risk. Before buying any Class A ordinary shares, you should carefully read the discussion of material risks of investing in our Class A ordinary shares in “Risk Factors” beginning on page 23 of this prospectus.

Erayak Power Solution Group Inc., or Erayak, is a holding company incorporated in Cayman Islands. As a holding company with no material operations, Erayak conducts a substantial majority of its operations through its subsidiaries established in the People’s Republic of China, or the PRC or China. Because of our corporate structure as a Cayman Islands holding company with operations conducted by our PRC subsidiaries, it involves unique risks to investors. Furthermore, Chinese regulatory authorities could change the rules and regulations regarding foreign ownership in the industry in which the company operates, which would likely result in a material change in our operations and/or a material change in the value of the securities we are registering for sale, including that it could cause the value of such securities to significantly decline or become worthless. Investors in our Class A ordinary shares should be aware that they will not and may never directly hold equity interests in the PRC operating entities, but rather purchasing equity solely in Erayak, our Cayman Islands holding company. Furthermore, shareholders may face difficulties enforcing their legal rights under United States securities laws against our directors and officers who are located outside of the United States. See “Risk Factors – Risks Related to Doing Business in China – Uncertainties in the interpretation and enforcement of Chinese laws and regulations could limit the legal protections available to us” on page 35 and “You may have difficulty enforcing judgments obtained against us” on page 49.

Because our operations are primarily located in the PRC through our subsidiaries, we are subject to certain legal and operational risks associated with our operations in China, including changes in the legal, political and economic policies of the Chinese government, the relations between China and the United States, or Chinese or United States regulations may materially and adversely affect our business, financial condition and results of operations. PRC laws and regulations governing our current business operations are sometimes vague and uncertain, and therefore, these risks may result in a material change in our operations and the value of our ordinary shares, or could significantly limit or completely hinder our ability to offer or continue to offer our securities to investors and cause the value of such securities to significantly decline or be worthless. Recently, the PRC government initiated a series of regulatory actions and statements to regulate business operations in China with little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using a variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. As confirmed by our PRC counsel, King & Wood Mallesons, we will not be subject to cybersecurity review with the Cyberspace Administration of China, or the CAC, after the Cybersecurity Review Measures became effective on February 15, 2022, since we currently do not have over one million users’ personal information and do not anticipate that we will be collecting over one million users’ personal information in the foreseeable future, which we understand might otherwise subject us to the Cybersecurity Review Measures; we are also not subject to network data security review by the CAC if the Draft Regulations on the Network Data Security Administration are enacted as proposed, since we currently do not have over one million users’ personal information and do not collect data that affects or may affect national security and we do not anticipate that we will be collecting over one million users’ personal information or data that affects or may affect national security in the foreseeable future, which we understand might otherwise subject us to the Security Administration Draft. See “Risk Factors – Risks Related to Doing Business in China – The Chinese government exerts substantial influence over the manner in which we must conduct our business activities. We are currently not required to obtain approval from Chinese authorities to list on U.S exchanges, however, if our subsidiaries or the holding company were required to obtain approval in the future and were denied permission from Chinese authorities to list on U.S. exchanges, we will not be able to continue listing on U.S. exchange, which would materially affect the interest of the investors” on page 23. According to our PRC counsel, King & Wood Mallesons, no relevant laws or regulations in the PRC explicitly require us to seek approval from the China Securities Regulatory Commission for our overseas listing plan. As of the date of this prospectus, we and our PRC subsidiaries have not received any inquiry, notice, warning, or sanctions regarding our planned overseas listing from the China Securities Regulatory Commission or any other PRC governmental authorities. However, since these statements and regulatory actions by the PRC government are newly published and official guidance and related implementation rules have not been issued, it is highly uncertain how soon legislative or administrative regulation making bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations will be modified or promulgated, if any, and the potential impact such modified or new laws and regulations will have on our daily business operation, the ability to accept foreign investments and list on an U.S. or other foreign exchange. The Standing Committee of the National People’s Congress, or the SCNPC, or other PRC regulatory authorities may in the future promulgate laws, regulations or implementing rules that requires our company or any of our subsidiaries to obtain regulatory approval from Chinese authorities before offering in the U.S. In other words, although the Company is currently not required to obtain permission from any of the PRC federal or local government to obtain such permission and has not received any denial to list on the U.S. exchange, our operations could be adversely affected, directly or indirectly; our ability to offer, or continue to offer, securities to investors would be potentially hindered and the value of our securities might significantly decline or be worthless, by existing or future laws and regulations relating to its business or industry or by intervene or interruption by PRC governmental authorities, if we or our subsidiaries (i) do not receive or maintain such permissions or approvals, (ii) inadvertently conclude that such permissions or approvals are not required, (iii) applicable laws, regulations, or interpretations change and we are required to obtain such permissions or approvals in the future, or (iv) any intervention or interruption by PRC governmental with little advance notice.

Pursuant to the Holding Foreign Companies Accountable Act, or the HFCAA, if the Public Company Accounting Oversight Board, or the PCAOB, is unable to inspect an issuer’s auditors for three consecutive years, the issuer’s securities are prohibited to trade on a U.S. stock exchange. The PCAOB issued a Determination Report on December 16, 2021 which found that the PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in: (1) mainland China of the People’s Republic of China because of a position taken by one or more authorities in mainland China; and (2) Hong Kong, a Special Administrative Region and dependency of the PRC, because of a position taken by one or more authorities in Hong Kong. Furthermore, the PCAOB’s report identified the specific registered public accounting firms which are subject to these determinations. On June 22, 2021, United States Senate has passed the Accelerating Holding Foreign Companies Accountable Act, which, if enacted, would decrease the number of “non-inspection years” from three years to two years, and thus, would reduce the time before our securities may be prohibited from trading or delisted if the PCAOB determines that it cannot inspect or investigate completely our auditor. As of the date of the prospectus, TPS Thayer, LLC (“TPS Thayer”), our auditor, is not subject to the determinations as to inability to inspect or investigate completely as announced by the PCAOB on December 16, 2021. The Company’s auditor is based in the U.S. Its registration with PCAOB took effect in September 2020 and is currently subject to PCAOB inspection, however, recently developments with respect to audits of China-based companies, create uncertainty about the ability of TPS Thayer to fully cooperate with the PCAOB’s request for audit workpapers without the approval of the Chinese authorities. In the event it is later determined that the PCAOB is unable to inspect or investigate completely the Company’s auditor because of a position taken by an authority in a foreign jurisdiction, then such lack of inspection could cause trading in the Company’s securities to be prohibited under the HFCAA, and ultimately result in a determination by a securities exchange to delist the Company’s securities. On August 26, 2022, the China Securities Regulatory Commission, the Ministry of Finance of the PRC, or the MOF, and the PCAOB signed a Statement of Protocol (the “Protocol”), governing inspections and investigations of audit firms based in China and Hong Kong. The Protocol remains unpublished and is subject to further explanation and implementation. Pursuant to the fact sheet with respect to the Protocol disclosed by the U.S. Securities and Exchange Commission, or the SEC, the PCAOB shall have independent discretion to select any issuer audits for inspection or investigation and has the unfettered ability to transfer information to the SEC. See “Risk Factors – Risks Related to Doing Business in China – The recent joint statement by the SEC and PCAOB, proposed rule changes submitted by Nasdaq, and the Holding Foreign Companies Accountable Act all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments could add uncertainties to our offering” on page 33.

Our corporate structure is a direct holding structure and do not have variable interest entity (VIE) structure. Erayak is permitted under the Cayman Islands laws to provide funding to our subsidiaries in the PRC and Hong Kong through loans or capital contributions without restrictions on the amount of the funds, subject to satisfaction of applicable government registration, approval and filing requirements. Current PRC regulations permit our PRC subsidiaries to pay dividends to the Company only out of their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. No dividend was declared for the years ended December 31, 2021 and 2020, and as of the date of this prospectus. We intend to retain all available funds and future earnings, if any, for the operation and expansion of our business and do not anticipate declaring or paying any dividends in the foreseeable future. See “Prospectus Summary - Transfers of Cash to and from Our Subsidiaries.”

We currently have not maintained any cash management policies that dictate the purpose, amount and procedure of cash transfers between the Company, our subsidiaries, or investors. Rather, the funds can be transferred in accordance with the applicable PRC laws and regulations. To the extent cash or assets in the business is in the PRC or Hong Kong or a PRC or Hong Kong entity, the funds or assets may not be available to fund operations or for other use outside of the PRC or Hong Kong due to interventions in or the imposition of restrictions and limitations on the ability of us or our subsidiaries by the PRC government to transfer cash or assets. See “Risk Factors - Risks Related to Doing Business in China – To the extent cash or assets of our business, or of our PRC or Hong Kong subsidiaries, is in the PRC or Hong Kong, such cash or assets may not be available to fund operations or for other use outside of the PRC or Hong Kong, due to interventions in or the imposition of restrictions and limitations by the PRC government to the transfer of cash or assets” on page 25.

The structure of cash flows within our organization, and as summary of the applicable regulations, is as follows:

1. Our corporate structure is a direct holding structure without a VIE structure, that is, the overseas entity to be listed in the U.S., Erayak Power Solution Group Inc., or Erayak, wholly owns Wenzhou Wenjie Information Technology Co. Ltd., or Erayak WFOE or the WFOE, and other domestic operating entities indirectly through holding of the BVI company, Erayak Power Solution Limited, or Erayak BVI, and Hong Kong company, Erayak Power Solution Hong Kong Limited, or Erayak HK. See “Corporate Structure” on page 80 for additional details.

2. Within our direct holding structure, the cross-border transfer of funds within our corporate group is legal and compliant with the laws and regulations of the PRC. After foreign investors’ funds enter Erayak at the close of this offering, the funds can be directly transferred to Erayak BVI and then Erayak HK, and then transferred to subordinate operating entities through the WFOE.

If the Company intends to distribute dividends, Zhejiang Leiya will transfer the dividends to Erayak WOFE, which then will transfer the dividends to Erayak HK in accordance with the laws and regulations of the PRC, and then Erayak HK will transfer the dividends to Erayak BVI, which will transfer the dividends to Erayak, and the dividends will be distributed from Erayak to all shareholders respectively in proportion to the shares they hold, regardless of whether the shareholders are U.S. investors or investors in other countries or regions.

3. In the reporting periods and as of the date of this prospectus, except for transfers and loans made by Zhejiang Leiya and Erayak WFOE on behalf of the holding company to fulfill certain maintenance requirements in Cayman Islands and legal expenses relating to this offering, no dividends or distributions have been made to date between the holding company and its subsidiaries, or to investors. See “Transfers of Cash to and from Our Subsidiaries” on page 7. Neither the holding company nor subsidiaries have declared dividends as of the date of this prospectus. For the foreseeable future, the Company intends to use the earnings for research and development, to develop new products and to expand its operations. As a result, we do not expect to pay any cash dividends. Also, as of the date of this prospectus, no cash generated from one subsidiary is used to fund another subsidiary’s operations and we do not anticipate any difficulties or limitations on our ability to transfer cash between subsidiaries. We have not installed any cash management policies that dictate the amount of such funding.

4. Our PRC subsidiaries’ ability to distribute dividends is based upon their distributable earnings. Current PRC regulations permit our PRC subsidiaries to pay dividends to their respective shareholders only out of their accumulated profits, if any, determined in accordance with PRC accounting standards and regulations. In addition, each of our PRC subsidiaries is required to set aside at least 10% of its after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of each of their registered capitals. These reserves are not distributable as cash dividends. See “Regulations Relating to Dividend Distributions” on page 98 for more information.

Under existing PRC foreign exchange regulations, payment of current account items, such as profit distributions and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior approval from the State Administration of Foreign Exchange, or the SAFE, by complying with certain procedural requirements. Therefore, our PRC subsidiaries are able to pay dividends in foreign currencies to us without prior approval from SAFE, subject to the condition that the remittance of such dividends outside of the PRC complies with certain procedures under PRC foreign exchange regulations, such as the overseas investment registrations by our shareholders or the ultimate shareholders of our corporate shareholders who are PRC residents. Approval from, or registration with, appropriate government authorities is, however, required where the RMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. The PRC government may also at its discretion restrict access in the future to foreign currencies for current account transactions. Current PRC regulations permit our PRC subsidiaries to pay dividends to the Company only out of their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. As of the date of this prospectus, there are no restrictions or limitations imposed by the Hong Kong government on the transfer of capital within, into and out of Hong Kong (including funds from Hong Kong to the PRC), except for transfer of funds involving money laundering and criminal activities. See “Risk Factors - Risks Related to Doing Business in China – To the extent cash or assets of our business, or of our PRC or Hong Kong subsidiaries, is in the PRC or Hong Kong, such cash or assets may not be available to fund operations or for other use outside of the PRC or Hong Kong, due to interventions in or the imposition of restrictions and limitations by the PRC government to the transfer of cash or assets” on page 25.

To address persistent capital outflows and the RMB’s depreciation against the U.S. dollar in the fourth quarter of 2016, the People’s Bank of China and SAFE have implemented a series of capital control measures in the subsequent months, including stricter vetting procedures for China-based companies to remit foreign currency for overseas acquisitions, dividend payments and shareholder loan repayments. The PRC government may continue to strengthen its capital controls and our PRC subsidiaries’ dividends and other distributions may be subject to tightened scrutiny in the future. The PRC government also imposes controls on the conversion of RMB into foreign currencies and the remittance of currencies out of the PRC. Therefore, we may experience difficulties in completing the administrative procedures necessary to obtain and remit foreign currency for the payment of dividends from our profits, if any. Furthermore, if our subsidiaries in the PRC incur debt on their own in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments.

We are an “emerging growth company” under the federal securities laws and will be subject to reduced public company reporting requirements. See “Prospectus Summary — Implications of Being an Emerging Growth Company” on page 20 for additional information.

We have a dual class capital structure, which will have the effect of concentrating voting control with our controlling shareholders with respect to matters requiring shareholder approval, including the election of directors, amendment of organizational documents, and approval of major corporate transactions, such as a change in control, merger, consolidation, or sale of assets. Our issued and outstanding share capital consists of Class A ordinary shares and Class B ordinary shares. Mr. Lingyi Kong, our chairman of the board of directors and our chief executive officer, will beneficially own 54.55% of our total issued and outstanding Class A ordinary shares and 100% of our total issued and outstanding Class B ordinary shares, representing 83.87% of our total voting power and as such, Mr. Kong will control matters subject to a vote by our shareholders, assuming that the underwriters do not exercise their over-allotment option. As a result, we will be a “controlled company” as defined under the Nasdaq Stock Market Rules. As a “controlled company,” we are permitted to elect not to comply with certain corporate governance requirements. Holders of Class A ordinary shares and Class B ordinary shares have the same rights except for voting, transfer and conversion rights. Each Class A ordinary share is entitled to one vote, and each Class B ordinary share is entitled to twenty votes and is convertible into one Class A ordinary share. Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances.

Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

We expect our total cash expenses for this offering to be approximately $1,155,000, exclusive of the above discounts and expenses payable to the underwriters. In addition, we will pay additional items of value in connection with this offering that are viewed by the Financial Industry Regulatory Authority, or FINRA, as underwriting compensation. These payments will further reduce proceeds available to us before expenses. See “Underwriting” beginning on page 137.

This offering is being conducted on a firm commitment basis. The underwriters have agreed to purchase and pay for all of the Class A ordinary shares offered by this prospectus if they purchase any Class A ordinary shares.

If we complete this offering, net proceeds will be delivered to us on the applicable closing date. We will not be able to use such proceeds in China, however, until we complete capital contribution procedures that require prior approval from each of the respective local counterparts of China’s Ministry of Commerce, the State Administration for Industry and Commerce, and the State Administration of Foreign Exchange. See remittance procedures described at page 21 in the risk factor, “We must remit the offering proceeds to PRC before they may be used to benefit our business in the PRC, and this process may take several months.”.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The Underwriter expects to deliver the Class A ordinary shares against payment as set forth under “Underwriting”, on page 137.

Neither we nor the underwriters have authorized anyone to provide any information or to make any representations other than those contained in this prospectus or in any free writing prospectuses we have prepared. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. We are offering to sell, and seeking offers to buy, shares of our ordinary share only in jurisdictions where offers and sales are permitted. The information in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of our Class A ordinary shares. Our business, financial condition, results of operations, and prospects may have changed since that date.

PROSPECTUS SUMMARY

This summary highlights information contained in greater detail elsewhere in this prospectus. This summary is not complete and does not contain all of the information you should consider in making your investment decision. You should read the entire prospectus carefully before making an investment in our Class A ordinary shares. You should carefully consider, among other things, our consolidated financial statements and the related notes and the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this prospectus.

Prospectus Conventions

	●	“China” or the “PRC” refer to the People’s Republic of China;

	●	“Erayak” refers to Erayak Power Solution Group Inc., a Cayman Islands exempted company;

	●	“Erayak BVI” refers to Erayak Power Solution Limited, a British Virgin Islands company and a wholly-owned subsidiary of Erayak;

	●	“Erayak HK” refers to Erayak Power Solution Hong Kong Limited, a Hong Kong company and a wholly-owned subsidiary or Erayak BVI;

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“Erayak WFOE” refers to Wenzhou Wenjie Information Technology Co. Ltd., a wholly foreign-owned enterprise (“WFOE”) incorporated in the PRC and a wholly-owned subsidiary of Erayak HK;

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“Zhejiang Leiya” refers to Zhejiang Leiya Electronics Co. Ltd., a PRC company and a wholly-owned subsidiary of Erayak WFOE;

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“Wenzhou New Focus” refers to Wenzhou New Focus Technology & Electronic Co., Ltd., a PRC company and a wholly-owned subsidiary of Zhejiang Leiya.

This prospectus contains translations of certain RMB amounts into US dollar amounts at specified rates solely for the convenience of the reader. All reference to “US dollars”, “USD”, “US$” or “$” are to United States dollars. The relevant exchange rates are listed below:

	June 30,		December 31,		December 31,
	2022		2021		2020

Period Ended RMB: USD exchange rate		6.6981		6.3726		6.9618
Period Average RMB: USD exchange rate		6.4791		6.4508		6.9081

We have relied on statistics provided by a variety of publicly-available sources regarding China’s expectations of growth. We did not directly or indirectly sponsor or participate in the publication of such materials, and these materials are not incorporated in this prospectus other than to the extent specifically cited in this prospectus. We have sought to provide current information in this prospectus and believe that the statistics provided in this prospectus remain up-to-date and reliable, and these materials are not incorporated in this prospectus other than to the extent specifically cited in this prospectus.

Overview

Erayak Power Solution Group Inc. was formed in 2019 under the laws of the Cayman Islands. We conduct business primarily through our wholly-owned subsidiaries, Zhejiang Leiya and Wenzhou New Focus, in the People’s Republic of China, or the PRC. Our company specializes in the manufacturing, research and development (“R&D”), and wholesale and retail of power solution products. Zhejiang Leiya’s product portfolio includes sine wave and off-grid inverters, inverter and gasoline generators, battery and smart chargers, and custom-designed products. Our products are used principally in agricultural and industrial vehicles, recreational vehicles (“RVs”), electrical appliances, and outdoor living products. Our primary office is located in Zhejiang province, where we serve a large customer base throughout PRC and expand our reach to international clients. Our goal is to be the premier power solutions brand and a solution for mobile life and outdoor living. We seek to leverage our flexibility and passion for quality to provide a personalized mobile living solution for each customer.

Since the founding of Zhejiang Leiya in 2009, it has grown to be a manufacturer that not only designs, develops and mass produces our own brand of premium power solution products, but has also established e-commerce channels in the retail chain. We, through our PRC subsidiaries, also offer our products in Japan, England, Germany, France, Spain, Switzerland, Sweden, the Netherlands, the U.S., Canada, Mexico, Australia, Dubai, and 9 other countries. Zhejiang Leiya manufactures all of our products in factories operating under quality management systems accredited by the International Organization for Standardization (ISO 9001:2015). Furthermore, our products have been tested for regulatory compliance and safety. Some of our compliance marks include: TÜV certification from Technischer Überwachungsverein, an internationally recognized service company; GS Mark for safety under the German Equipment and Product Safety Act; C-tick certification by the Australian Communications Media Authority; FCC Mark from the U.S. Federal Communications Commission, PAH certification mark for Polycyclic Aromatic Hydrocarbon concentrations; REACH Certification for substances of very high concern under the European Chemicals Agency; CE Mark certifying compliance with European Union safety, health and environmental protection standards; RoHs Mark for compliance with the Restriction of Hazardous Substances in the European Union; c ETL Certification for compliance with Canadian safety standards; and us ETL Mark for compliance with U.S. safety standards.

We generated revenue mostly from three types of products: (1) inverters constituted approximately 63% for the six months ended June 30, 2022, 82% and 86% of our total revenue for the fiscal years ended December 31, 2021, and 2020, respectively; (2) chargers, which generated approximately 3.49% for the six months ended June 30, 2022, 7.52% and 7.39% of our total revenue for the fiscal years ended December 31, 2021, and 2020, respectively; (3) gasoline generators generated approximately 32.95% for the six months ended June 30, 2022, 8.28% and 4.91% of our total revenue for the fiscal years ended December 31, 2021, and 2020, respectively.

Due to our substantial investment in research and development, Zhejiang Leiya was awarded High-Tech Enterprise status by the Zhejiang provincial government, which qualified us for China’s National High-Tech Enterprise Program, a national-level program. Specifically, companies in the China’s National High-Tech Enterprise Program are eligible for up to a 10% corporate income tax break and certain deductions related to intangible assets, such as obtaining patents in the R&D process. Additionally, our research and patents in the power solution space have brought us local recognition; we were awarded certificates by the provincial and city government that identifies us as a Zhejiang Science and Technology Enterprise, and a Wenzhou Science and Technology Innovation Enterprise. These certificates entitle us to certain preferential tax treatment and sometimes grants from the government to aid R&D efforts in furtherance of the business. Furthermore, we are a supplier for many international companies, including Einhell Germany AG, Canadian Tire Corporation Limited, Steren Electronics International, LLC, etc.

Zhejiang Leiya’s products are customized and built to order, or BOT. The BOT business model maximizes our flexibility in production scheduling, material procurement, and delivery to meet our customers’ unique demands. We have adopted a multi-step, full-service system to ensure quality and client satisfaction. Customers can choose from within our product portfolio and communicate specified requirements to the sales department. Our technical department will evaluate the request’s feasibility and coordinate with the customer to make adjustments. The production department will create samples that will undergo inspection by the quality inspection department for quality and material warranty. The sales department will submit the prototype, inspection report, quality assurance, and quote to the customer for verification. After confirmation by the customer, our procurement department will purchase the raw materials, and the production department will fulfill the order. Finally, our inspection department will inspect and issue a report affirming the quality before the production department pack and deliver the final product to the customer.

Our Competitive Strengths

We are committed to offering our customers product diversity, quality, and reliability. We offer a diversified portfolio of products to satisfy our customers’ specialized needs. We believe we have several competitive strengths that will enable us to maintain and increase our market position in the industry. Our competitive strengths include:

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Safety and Quality. Based on Amazon customer reviews, our brand has received initial recognition from Amazon customers in terms for quality and performance of our products. We have been tested and certified by Technischer Überwachungsverein, an internationally recognized service company specializing in the inspection of technical systems. Our products also meet the regulatory demands of the United States, Canada, Australia, the European Union, among other countries.

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Manufacturing Capacity. Our expertise and facilities enable us to standardize mass production, stabilize shipments, and initiate automated production transformation.

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Technological Superiority. We have a specialized technology R&D team that serves as the catalyst for developing new products, upgrading our production capacity, and maximizing our efficiency. Through R&D, industrial production, online and offline sales channels, and investment in equipment and corresponding infrastructure, the Company can develop new products to keep up with the changing marketplace. Our ability to increase production capacity, maintain operation facilities, retain a talented management team results in flexible production scale, low mechanization costs, and high efficiency.

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Experienced Management Team. Our management team has experience in the manufacturing and e-commerce industries. Additionally, we utilize a skilled and experienced production team and inspection team.

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Research and Development Autonomy. We own the design and utility patents, as well as software copyrights supporting our products. Our investment in research and development also enables us to further develop and refine our product portfolio to match the changing power-solutions landscape.

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Efficient Manufacturing Process and Strong Quality Control. We believe that our production technology, quality control, and management team can help us strengthen our position in the domestic and international markets.

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Customized Products. The Company offers products that are customized and built to order, or BOT, to meet its customers’ unique demands.

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Business Expansion Potential. Our products are already available in Australia, Europe, and North America. We also plan on expanding to the South America, Africa, and Southeast Asia markets. Additionally, the Company is involved in both retail and wholesale, which grants us access to a wide range of customers and more substantial profit opportunities.

Our Business Strategies

We hope to be a go-to brand and promoter of the mobile lifestyle by offering high-quality power solution products. Our primary objective is to create value by sustaining growth in earnings and cash flows from operating activities over various economic cycles. To achieve this objective, we strive to improve our cost structure, provide high-quality service and products, expand our product offerings and increase our market share. We do the following to accomplish our objective:

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Optimize our portfolio and product mix to be responsive to market conditions

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Provide superior quality products and customer service

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Focus on efficient manufacturing and cost management

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Strengthen key supplier relationships

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Execute pricing strategy to pass-through underlying costs

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Cooperation with prominent online-stores such as Amazon.com, Inc.

Update on Coronavirus (COVID-19)

Recently, an ongoing outbreak of a novel strain of coronavirus (COVID-19) was first identified in China and has since spread rapidly globally. The pandemic has resulted in quarantines, travel restrictions, and the temporary closure of stores and business facilities globally for the past few months. In March 2020, the World Health Organization declared the COVID-19 as a pandemic. Furthermore, the effects of a subvariant of the Omicron variant of COVID-19, which may spread faster than the original Omicron variant, as well as the effects of any new variants and subvariants which may develop, including any actions taken by governments, may have the effect of increasing the already-existing supply chain problems or slowing our sales. Moreover, China’s policy of effecting closures to avoid infections, including the recent lockdown in many provinces and municipalities in China, could affect our results of operations.

Given the rapidly expanding nature of the COVID-19 pandemic, and because substantially all of our business operations and workforce are in China, we believe there is a risk that our business, operations, and financial condition will be adversely affected. Potential impact to our results of operations will depend on future developments and new information that may emerge regarding the duration and severity of the COVID-19 and the actions taken by government authorities and other entities to contain the COVID-19 or mitigate its impact, almost all of which are beyond our control.

The impact of COVID-19 on our business, financial condition, and results of operations include, but is not limited to, the following:

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Wenzhou entered into a city-wide lockdown on February 3, 2020. We temporarily closed our offices and production facilities to adhere to the lockdown policy in the beginning of February 2020, as required by relevant PRC regulatory authorities. Our offices reopened on February 18, 2020, and production facilities have been fully operational since then.

●

Our workforce remains stable during the second half-year of 2020 and 2021. While the local government has provided funding to subsidize our labor cost, implementing various safety measures has increased the total cost of our operation. We are required to provide our employees with protective gear and regularly monitor and trace the health condition of our employees. Workers are also required to practice social distancing during mealtime at our cafeteria.

●

The global stock markets have experienced and may continue to experience a significant decline from the COVID-19 outbreak. The price of our Class A ordinary shares may decline significantly after the consummation of this offering, in which case you may lose part or all of your investment.

Because of the uncertainty surrounding the COVID-19 outbreak, the business disruption and the financial impact related to the outbreak of and response to the coronavirus cannot be reasonably estimated at this time. For a detailed description of the risks associated with the novel coronavirus, see “Risk Factors—Risks Related to Our Business and Industry—Our business could be materially harmed by the ongoing coronavirus (COVID-19) pandemic.”

In response to COVID-19, we have timely implemented corresponding and comprehensive measures as follows:

●

We arrange chartered flights, high-speed trains, buses, and other transportation methods for the personnel returning to work;

●

When returning personnel arrive at the Company for the first time, we implement necessary quarantine and observation and restrict contact among employees;

●

For personnel who enter and exit our plant daily, we require each person to have his or her body temperature taken and disclose information relevant for contact tracing;

●

We ensure that we have available epidemic prevention materials (such as masks, gloves, hand sanitizers and cleaning products) and monitoring sites for quarantine;

●

We take necessary control measures according to governmental guidelines and regulations;

●

We have implemented a more comprehensive automation transformation of the production workshop to reduce man-powered workload and improve production efficiency;

●

We have implemented a more efficient and streamlined administrative and business system to reduce human contact and reduce the chance of virus transmission.

Our business operations have resumed since February 18, 2020. There has been no outbreak of coronavirus cases within the Company.

Our orders had been significantly delayed in 2020 and continue to be delayed in 2021 due to the tightened global restrictions at the importing/exporting ports. In response to the pandemic, the Company gradually developed online sales channels in April 2020 and has achieved significant growth in sales revenue from Amazon Europe. As of the end of 2020, there has been a 10% increase in sales (including both online and offline sales) compared to 2019. The Company also strives to compensate for the delays and ensure timely local deliveries by shipping an estimated number of products to Europe a few months early, based on the number of sales in the previous quarter, to either local Amazon or third-party warehouses.

Due to the outbreak of the pandemic overseas between February and May 2020, our sales abroad had been significantly adversely affected because of the blockage in the cooperating businesses’ logistics and operations. A large number of planned orders were postponed as a result. Beginning in June 2020, as the pandemic in mainland China and Europe was brought under control, previously delayed orders were eventually fulfilled due to advanced planning.

Since 2021, our supply chain has been gradually and effectively resolving the delay issues and keep improving in 2022. However, the transportation of our goods could still be unpredictable and orders recently placed could still face months-long delays should local outbreaks occur again to prompt the authorities to install sweeping risk control policies, which could once again affect our exportation.

Russian-Ukrainian War Related Matters

Since none of the Company’s customers or suppliers is located in Ukraine and Russia, we do not foresee a suspension of the production, purchase, sale, or maintenance of our products in the near future. As of the date of this prospectus, the Company has not encountered a situation where it is unable to supply products at competitive prices or at all due to export restrictions. As the company has no business in Ukraine or Russia, there are no foreseeable risks associated with it. We also have not encountered or do not expect to (1) suspend the production, purchase, sale or maintenance of certain items; (2) experience higher costs due to constrained capacity or increased commodity prices or experience surges or declines in consumer demand for which we are unable to adequately adjust our supply; (3) be unable to supply products at competitive prices or at all due to export restrictions, sanctions, or the ongoing invasion; or (4) be exposed to supply chain risk in light of Russia’s invasion of Ukraine and/or related geopolitical tension.

Transfers of Cash to and from Our Subsidiaries

Erayak Power Solution Group Inc. is a holding company with no operations of its own. We conduct our operations in China primarily through our subsidiaries in China. We may rely on dividends to be paid by our PRC subsidiaries to fund our cash and financing requirements, including the funds necessary to pay dividends and other cash distributions to our shareholders, to service any debt we may incur and to pay our operating expenses. If our PRC subsidiaries incur debt on their own behalf in the future, the instruments governing the debt may restrict its ability to pay dividends or make other distributions to us.

Erayak Power Solution Group Inc. is permitted under the Cayman Islands laws to provide funding to our subsidiary in Hong Kong through loans or capital contributions without restrictions on the amount of the funds, subject to satisfaction of applicable government registration, approval and filing requirements. Erayak HK is also permitted under the laws of Hong Kong to provide funding to Erayak Power Solution Group Inc. and Erayak BVI through dividend distribution without restrictions on the amount of the funds. The PRC has currency and capital transfer regulations that require us to comply with certain requirements for the movement of capital. The Company is able to transfer cash (US Dollars) to its PRC subsidiaries through an investment (by increasing the Company’s registered capital in a PRC subsidiary). The Company’s subsidiaries within China can transfer funds to each other when necessary, through the way of current lending. We have not been notified of any other restriction which could limit our PRC subsidiaries’ ability to transfer cash between PRC subsidiaries. As of the date of this prospectus, there has been no distribution of dividends or assets among the holding company or the subsidiaries.

We currently intend to retain all available funds and future earnings, if any, for the operation and expansion of our business and do not anticipate declaring or paying any dividends in the foreseeable future. Any future determination related to our dividend policy will be made at the discretion of our board of directors after considering our financial condition, results of operations, capital requirements, contractual requirements, business prospects and other factors the board of directors deems relevant, and subject to the restrictions contained in any future financing instruments.

Subject to the Cayman Islands Companies Act and our bylaws, our board of directors may authorize and declare a dividend to shareholders at such time and of such an amount as they think fit if they are satisfied, on reasonable grounds, that immediately following the dividend the value of our assets will exceed our liabilities and we will be able to pay our debts as they become due.

Under the current practice of the Inland Revenue Department of Hong Kong, no tax is payable in Hong Kong in respect of dividends paid by us. The laws and regulations of the PRC do not currently have any material impact on transfer of cash from Erayak to Erayak HK or from Erayak HK to Erayak. There are no restrictions or limitation under the laws of Hong Kong imposed on the conversion of HK dollar into foreign currencies and the remittance of currencies out of Hong Kong or across borders and to U.S investors.

Current PRC regulations permit our PRC subsidiaries to pay dividends to Erayak HK only out of their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, each of our subsidiaries in China is required to set aside at least 10% of its after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. Each of such entity in China is also required to further set aside a portion of its after-tax profits to fund the employee welfare fund, although the amount to be set aside, if any, is determined at the discretion of its board of directors. Although the statutory reserves can be used, among other ways, to increase the registered capital and eliminate future losses in excess of retained earnings of the respective companies, the reserve funds are not distributable as cash dividends except in the event of liquidation.

To address persistent capital outflows and the RMB’s depreciation against the U.S. dollar in the fourth quarter of 2016, the People’s Bank of China and the State Administration of Foreign Exchange, or SAFE, have implemented a series of capital control measures in the subsequent months, including stricter vetting procedures for China-based companies to remit foreign currency for overseas acquisitions, dividend payments and shareholder loan repayments. The PRC government may continue to strengthen its capital controls and our PRC subsidiaries’ dividends and other distributions may be subject to tightened scrutiny in the future. The PRC government also imposes controls on the conversion of RMB into foreign currencies and the remittance of currencies out of the PRC. Therefore, we may experience difficulties in completing the administrative procedures necessary to obtain and remit foreign currency for the payment of dividends from our profits, if any. Furthermore, if our subsidiaries in the PRC incur debt on their own in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments. If we or our subsidiaries are unable to receive all of the revenues from our operations, we may be unable to pay dividends on our Class A ordinary shares.

The Company’s business is primarily conducted through its subsidiaries. The Company is a holding company and its material assets consist solely of the ownership interests held in its PRC subsidiaries. The Company may rely on dividends paid by its subsidiaries for its working capital and cash needs, including the funds necessary: (i) to pay dividends or cash distributions to its shareholders, (ii) to service any debt obligations and (iii) to pay operating expenses. Cash dividends, if any, on our Class A ordinary shares will be paid in U.S. dollars. If we are considered a PRC tax resident enterprise for tax purposes, any dividends we pay to our overseas shareholders may be regarded as China-sourced income and as a result may be subject to PRC withholding tax at a rate of up to 10.0%.

In order for us to pay dividends to our shareholders, we may rely on payments made from our PRC subsidiaries, i.e., Zhejiang Leiya and Wenzhou New Forcus, to Erayak WFOE, from Erayak WFOE to Erayak HK, from Erayak HK to Erayak BVI, and finally from Erayak BVI to Erayak. Certain payments from our PRC subsidiaries to Erayak HK are subject to PRC taxes, including business taxes and VAT. As of the date of this prospectus, except for the transfers and loans made by Zhejiang Leiya and Erayak WFOE on behalf of the holding company to fulfill certain maintenance requirements in Cayman Islands and legal expenses relating to this offering, our PRC subsidiaries have not made any other transfers, loans, or distributions.

Pursuant to the Arrangement between Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, or the Double Tax Avoidance Arrangement, the 10% withholding tax rate may be lowered to 5% if a Hong Kong resident enterprise owns no less than 25% of a PRC entity. However, the 5% withholding tax rate does not automatically apply and certain requirements must be satisfied, including, without limitation, that (a) the Hong Kong entity must be the beneficial owner of the relevant dividends; and (b) the Hong Kong entity must directly hold no less than 25% share ownership in the PRC entity during the 12 consecutive months preceding its receipt of the dividends. In current practice, a Hong Kong entity must obtain a tax resident certificate from the Hong Kong tax authority to apply for the 5% lower PRC withholding tax rate. As the Hong Kong tax authority will issue such a tax resident certificate on a case-by-case basis, we cannot assure you that we will be able to obtain the tax resident certificate from the relevant Hong Kong tax authority and enjoy the preferential withholding tax rate of 5% under the Double Taxation Arrangement with respect to dividends to be paid by our PRC subsidiary to its immediate holding company, Erayak HK. As of the date of this prospectus, Erayak WFOE currently does not have any plan to declare and pay dividends to Erayak HK and we have not applied for the tax resident certificate from the relevant Hong Kong tax authority. Erayak HK intends to apply for the tax resident certificate when Erayak WFOE plans to declare and pay dividends to Erayak HK. When Erayak WFOE plans to declare and pay dividends to Erayak HK and when we intend to apply for the tax resident certificate from the relevant Hong Kong tax authority, we plan to inform the investors through SEC filings, such as a current report on Form 6-K, prior to such actions. See “Risk Factors - Risks Related to Our Corporate Structure - We are a holding company, and may rely on dividends paid by our subsidiaries for our cash needs. Any limitation on the ability of our subsidiaries to make dividend payments to us, or any tax implications of making dividend payments to us, could limit our ability to pay our parent company expenses or pay dividends to holders of our Class A ordinary shares.”

The Company does not expect to pay any cash dividends in the foreseeable future as it intends to use the earnings for research and development, to develop new products and to expand its operations.

During the fiscal years ended December 31, 2021, 2020 and 2019, and the nine-month period ended September 30, 2022, cash transfers and/or transfers of other assets between our Company and our subsidiaries were as follows:

For the Nine Months Ended September 30, 2022
No.	Transfer From	Transfer To	Approximate Value ($)		Purpose
1	Zhejiang Leiya	Erayak WFOE		15,000	Director’s compensation
2	Erayak WFOE	Erayak		15,000	As a loan to pay for director’s compensation of Erayak
3	Wenzhou New Focus	Zhejiang Leiya		529,919	Payment for purchase of products from Zhejiang Leiya

For the Year Ended December 31, 2021
No.	Transfer From	Transfer To	Approximate Value ($)		Purpose
1	Zhejiang Leiya	Erayak WFOE		39,275	Payment of Erayak legal expenses
2	Erayak WFOE	Erayak		39,275	As a loan to pay for legal expenses of Erayak
3	Wenzhou New Focus	Erayak WFOE		9,456	Payment of Erayak legal expenses
4	Erayak WFOE	Erayak		9,456	As a loan to pay for legal expenses of Erayak
5	Wenzhou New Focus	Zhejiang Leiya		5,110,109	Payment for purchase of products from Zhejiang Leiya

For the Year Ended December 31, 2020
No.	Transfer From	Transfer To	Approximate Value ($)		Purpose
1	Wenzhou New Focus	Zhejiang Leiya		4,493,786	Payment for purchase of products from Zhejiang Leiya

For the Year Ended December 31, 2019
No.	Transfer From	Transfer To	Approximate Value ($)		Purpose
1	Zhejiang Leiya	Erayak WFOE		86,900	Payment of the expenses incurred by the incorporation of Erayak
2	Erayak WFOE	Erayak		86,900	As a loan to pay for the expenses incurred by the incorporation of Erayak

Implications of Holding Foreign Company Accountable Act (“HFCAA”)

On March 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure and documentation requirements of the HFCAA. An identified issuer will be required to comply with these rules if the SEC identifies it as having a “non-inspection” year under a process to be subsequently established by the SEC. In June 2021, the Senate passed the Accelerating Holding Foreign Companies Accountable Act, which, if signed into law, would reduce the time period for the delisting of foreign companies under the HFCAA to two consecutive years instead of three years. If our auditor cannot be inspected by the Public Company Accounting Oversight Board, or the PCAOB, for two consecutive years, the trading of our securities on any U.S. national securities exchanges, as well as any over-the-counter trading in the U.S., will be prohibited. On September 22, 2021, the PCAOB adopted a final rule implementing the HFCAA, which provides a framework for the PCAOB to use when determining, as contemplated under the HFCAA, whether the PCAOB is unable to inspect or investigate completely registered public accounting firms located in a foreign jurisdiction because of a position taken by one or more authorities in that jurisdiction. On December 2, 2021, the SEC issued amendments to finalize rules implementing the submission and disclosure requirements in the HFCAA. The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that PCAOB is unable to inspect or investigate completely because of a position taken by an authority in foreign jurisdictions. On December 16, 2021, the PCAOB issued a report on its determinations that it is unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China and in Hong Kong, because of positions taken by PRC authorities in those jurisdictions.

Our auditor, TPS Thayer, the independent registered public accounting firm of the Company, is headquartered in Sugar Land, Texas, with no branches or offices outside of the United States. TPS Thayer is currently subject to PCAOB inspections under a regular basis. Therefore, we believe our auditor is not subject to the determinations as to the inability to inspect or investigate registered firms completely announced by the PCAOB on December 16, 2021. However, recent developments with respect to audits of China-based companies create uncertainty about the ability of TPS Thayer to fully cooperate with the PCAOB’s request for audit workpapers without the approval of the Chinese authorities. Additionally, on August 26, 2022, the China Securities Regulatory Commission, the MOF, and the PCAOB signed the Protocol, governing inspections and investigations of audit firms based in China and Hong Kong. The Protocol remains unpublished and is subject to further explanation and implementation. Pursuant to the fact sheet with respect to the Protocol disclosed by the SEC, the PCAOB shall have independent discretion to select any issuer audits for inspection or investigation and has the unfettered ability to transfer information to the SEC. We cannot assure you whether Nasdaq or regulatory authorities would apply additional and more stringent criteria to us after considering the effectiveness of our auditor’s audit procedures and quality control procedures, adequacy of personnel and training, or sufficiency of resources, geographic reach or experience as it relates to the audit of our financial statements. In the event it is later determined that the PCAOB is unable to inspect or investigate completely the Company’s auditor because of a position taken by an authority in a foreign jurisdiction, then such lack of inspection could cause trading in the Company’s securities to be prohibited under the HFCAA ultimately result in a determination by a securities exchange to delist the Company’s securities. In addition, under the HFCAA, our securities may be prohibited from trading on the Nasdaq or other U.S. stock exchanges if our auditor is not inspected by the PCAOB for three consecutive years, which could be reduced to two consecutive years if the Accelerating Holding Foreign Companies Accountable Act is signed into law, and this ultimately could result in our ordinary shares being delisted by and exchange. See “The recent joint statement by the SEC and PCAOB, proposed rule changes submitted by Nasdaq, and the Holding Foreign Companies Accountable Act all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments could add uncertainties to our offering.” on page 33.

PRC Regulatory Permissions

As of the date of this prospectus, and as advised by our PRC counsel, King & Wood Mallesons, we and our subsidiaries, (i) are not required to obtain permissions from any PRC authorities to operate our business or issue our securities to foreign investors, (ii) are not subject to permission requirements from the China Securities Regulatory Commission, or the CSRC, the CAC, or any other PRC governmental agencies that is required to approve our PRC subsidiaries’ operations, and (iii) have not received or were denial such permission by any PRC authorities. Given the current PRC regulatory environment, it is uncertain when and whether we or our subsidiaries will be required to obtain permission from the PRC government to list on the U.S. exchanges in the future, and even when such permission is obtained, whether it will be denied or rescinded. We have been closely monitoring regulatory developments in China regarding any necessary approvals from the CSRC, CAC or other PRC governmental authorities. However, there remains significant uncertainty as to the enactment, interpretation and implementation of regulatory requirements related to overseas securities offerings and other capital market activities. If we and our subsidiaries (i) do not receive or maintain such permissions or approvals, should the approval be required in the future by the PRC government, (ii) inadvertently conclude that such permissions or approvals are not required, or (iii) applicable laws, regulations, or interpretations change and we are required to obtain such permissions or approvals in the future, our operations and financial conditions could be materially adversely affected, and our ability to offer securities to investors could be significantly limited or completely hindered and the securities currently being offered may substantially decline in value and be worthless.

On August 8, 2006, six PRC regulatory agencies jointly adopted the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the M&A Rules, which came into effect on September 8, 2006 and were amended on June 22, 2009. The M&A Rules requires that an offshore special purpose vehicle formed for overseas listing purposes and controlled directly or indirectly by the PRC citizens shall obtain the approval of the China Securities Regulatory Commission prior to overseas listing and trading of such special purpose vehicle’s securities on an overseas stock exchange. Based on our understanding of the Chinese laws and regulations in effect at the time of this prospectus, we will not be required to submit an application to the CSRC for its approval of this offering and the listing and trading of our Class A ordinary shares on the Nasdaq under the M&A Rules. However, there remains some uncertainty as to how the M&A Rules will be interpreted or implemented, and the opinions of our PRC counsel, King & Wood Mallesons, are subject to any new laws, rules and regulations or detailed implementations and interpretations in any form relating to the M&A Rules. We cannot assure you that relevant Chinese government agencies, including the CSRC, would reach the same conclusion.

Recently, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the Opinions on Strictly Cracking Down on Illegal Securities Activities (the “Opinions”), which were made available to the public on July 6, 2021. The Opinions on Strictly Cracking Down on Illegal Securities Activities emphasized the need to strengthen the administration over illegal securities activities, and the need to strengthen the supervision over overseas listings by Chinese companies. Pursuant to the Opinions, Chinese regulators are required to accelerate rulemaking related to the overseas issuance and listing of securities, and update the existing laws and regulations related to data security, cross-border data flow, and management of confidential information. Numerous regulations, guidelines and other measures are expected to be adopted under the umbrella of or in addition to the Cybersecurity Law and Data Security Law. As of the date of this prospectus, no official guidance or related implementation rules have been issued. As a result, the Opinions on Strictly Cracking Down on Illegal Securities Activities remain unclear on how they will be interpreted, amended and implemented by the relevant PRC governmental authorities.

On December 24, 2021, the CSRC, together with other relevant government authorities in China issued the Provisions of the State Council on the Administration of Overseas Securities Offering and Listing by Domestic Companies (Draft for Comments), and the Measures for the Filing of Overseas Securities Offering and Listing by Domestic Companies (Draft for Comments) (“Draft Overseas Listing Regulations”). The Draft Overseas Listing Regulations requires that a PRC domestic enterprise seeking to issue and list its shares overseas (“Overseas Issuance and Listing”) shall complete the filing procedures of and submit the relevant information to CSRC. The Overseas Issuance and Listing includes direct and indirect issuance and listing. Where an enterprise whose principal business activities are conducted in PRC seeks to issue and list its shares in the name of an overseas enterprise (“Overseas Issuer”) on the basis of the equity, assets, income or other similar rights and interests of the relevant PRC domestic enterprise, such activities shall be deemed an indirect overseas issuance and listing (“Indirect Overseas Issuance and Listing”) under the Draft Overseas Listing Regulations. Therefore, the proposed listing of our Class A ordinary shares on Nasdaq Capital Market would be deemed an Indirect Overseas Issuance and Listing under the Draft Overseas Listing Regulations. As such, the Company would be required to complete the filing procedures of and submit the relevant information to CSRC after the Draft Overseas Listing Regulations become effective.

On December 28, 2021, the CAC jointly with the relevant authorities formally published Measures for Cybersecurity Review (2021) which took effect on February 15, 2022 and replaced the former Measures for Cybersecurity Review (2020). Measures for Cybersecurity Review (2021) stipulates that operators of critical information infrastructure purchasing network products and services, and online platform operator (together with the operators of critical information infrastructure, the “Operators”) carrying out data processing activities that affect or may affect national security, shall conduct a cybersecurity review, any online platform operator who controls more than one million users’ personal information must go through a cybersecurity review by the cybersecurity review office if it seeks to be listed in a foreign country. Since we are not an Operator, nor do we control more than one million users’ personal information, we would not be required to apply for a cybersecurity review under the Measures for Cybersecurity Review (2021), as confirmed by our PRC counsel, King & Wood Mallesons. See Risk Factors—Risks Related to Doing Business in China on page 23 of this prospectus.

We are not operating in an industry that prohibits or limits foreign investment. As a result, as advised by our PRC counsel, King & Wood Mallesons, except for the requisite business licenses set forth below, we are not required to obtain any permission from Chinese authorities, including the CSRC, CAC or any other governmental agency that is required to operate our operations. However, if we do not receive or maintain the approvals, or we inadvertently conclude that such approvals are not required, or applicable laws, regulations, or interpretations change such that we are required to obtain approvals in the future, we may be subject to investigations by competent regulators, fines or penalties, ordered to suspend our relevant operations and rectify any non-compliance, prohibited from engaging in relevant business or conducting any offering, and these risks could result in a material adverse change in our operations, significantly limit or completely hinder our ability to offer or continue to offer securities to investors, or cause such securities to significantly decline in value or become worthless. See “Risk Factors – Risks Related to Doing Business in China – The M&A Rules and certain other PRC regulations establish complex procedures for some acquisitions of Chinese companies by foreign investors, making it more difficult for us to pursue growth through acquisitions in China on page 30 and Substantial uncertainties exist with respect to the enactment timetable and final content of draft China Foreign Investment Law and how it may impact the viability of our current corporate structure, corporate governance and business operations” on page 26.

As of the date of this prospectus, we and our PRC subsidiaries have received from PRC authorities all requisite licenses, permissions or approvals needed to engage in the businesses currently conducted in China, and no permission or approval has been denied. The following table provides details on the licenses and permissions held by our PRC subsidiaries.

Approval	Recipient	Issuing body	Date of grant	Validity
Business License	Wenzhou Wenjie Information Technology Co. Ltd.	Wenzhou Market Supervision and Administration Bureau	December 11, 2019	Until December 10, 2069
Business License	Zhejiang Leiya Electronics Co. Ltd.	Wenzhou Market Supervision and Administration Bureau	April 27, 2009	Long-term without an expiration date
Certificate of customs declaration unit registration	Zhejiang Leiya Electronics Co. Ltd.	Wenzhou Customs of PRC	September 19， 2014	Long-term without an expiration date

Business License	Wenzhou New Focus Technology & Electronic Co., Ltd.	Wenzhou Market Supervision and Administration Bureau	August 12, 2020	Long-term without an expiration date
Certificate of customs declaration unit registration	Wenzhou New Focus Technology & Electronic Co., Ltd.	Wenzhou Customs of PRC	September 7, 2018	Long-term without an expiration date

We have been closely monitoring regulatory developments in China regarding any necessary approvals from the CSRC or other PRC governmental authorities required for overseas listings, including this offering. As of the date of this prospectus, we have not received any inquiry, notice, warning, sanctions or regulatory objection to this offering from the CSRC or other PRC governmental authorities. However, there remains significant uncertainty as to the enactment, interpretation and implementation of regulatory requirements related to overseas securities offerings and other capital markets activities. If it is determined in the future that the approval of the CSRC, The CAC or any other regulatory authority is required for this offering, we may face sanctions by the CSRC, the CAC or other PRC regulatory agencies. These regulatory agencies may impose fines and penalties on our operations in China, limit our ability to pay dividends outside of China, limit our operations in China, delay or restrict the repatriation of the proceeds from this offering into China or take other actions that could have a material adverse effect on our business, financial condition, results of operations and prospects, as well as the trading price of our securities. The CSRC, the CACor other PRC regulatory agencies also may take actions requiring us, or making it advisable for us, to halt this offering before settlement and delivery of our ordinary shares. Consequently, if you engage in market trading or other activities in anticipation of and prior to settlement and delivery, you do so at the risk that settlement and delivery may not occur. In addition, if the CSRC, the CACor other regulatory PRC agencies later promulgate new rules requiring that we obtain their approvals for this offering, we may be unable to obtain a waiver of such approval requirements, if and when procedures are established to obtain such a waiver. Any uncertainties and/or negative publicity regarding such an approval requirement could have a material adverse effect on the trading price of our securities. See “Risk Factors – Risks Related to Doing Business in China – The Chinese government exerts substantial influence over the manner in which we must conduct our business activities. We are currently not required to obtain approval from Chinese authorities to list on U.S exchanges, however, if our subsidiaries or the holding company were required to obtain approval in the future and were denied permission from Chinese authorities to list on U.S. exchanges, we will not be able to continue listing on U.S. exchange, which would materially affect the interest of the investors” on page 23.

Summary of Financial Position and Cash Flows of Erayak Power Solution Group Inc. and Subsidiaries

The audited financial statements included in this Prospectus reflect financial position, results of operations, and cash flows of the registrant and Cayman Islands incorporated parent company, Erayak Power Solution Group Inc., together with those of its China-based subsidiaries, on a consolidated basis. The tables below are condensed consolidating schedules summarizing separately the financial position and cash flows of the registrant and Cayman Islands incorporated parent company, Erayak Power Solution Group Inc. (“Parent Company” in the tables below), and its China-based subsidiaries (“Subsidiaries” in the tables below), together with eliminating adjustments:

	As of June 30, 2022														As of December 31, 2021											As of December 31, 2020
	Parent		Subsidiaries			Subtotal			Elimination			Consolidated			Parent		Subsidiaries		Subtotal		Elimination			Consolidated		Parent		Subsidiaries		Subtotal		Elimination			Consolidated
Assets
Current assets
Cash		-		6,526,251			6,526,251			-			6,526,251			-		5,174,693		5,174,693		-			5,174,693		-		4,062,055		4,062,055		-			4,062,055
A/R, net		-		4,902,148			4,902,148			-			4,902,148			-		1,753,880		1,753,880		-			1,753,880		-		5,057,645		5,057,645					5,057,645
Inventories		-		3,929,161			3,929,161			-			3,929,161			-		3,902,067		3,902,067		-			3,902,067		-		1,682,588		1,682,588					1,682,588
Prepaids and other current assets		-		828,137			828,137			-			828,137			-		2,663,417		2,663,417		-			2,663,417		-		1,146,575		1,146,575					1,146,575
Due from related parties		-								-						-		-		-		-			-		-		-		-					-
Due from subsidiaries																											-						-
Due from parent		-								-						-		-		-		-			-		-		-		-					-
Total current assets		-		16,185,697			16,185,697			-			16,185,697			-		13,494,057		13,494,057		-			13,494,057		-		11,948,863		11,948,863		0			11,948,863
PPE, net		-		1,158,578			1,158,578			-			1,158,578			-		1,079,983		1,079,983		-			1,079,983		-		978,714		978,714					978,714
Intangibles, net		-		9,744			9,744			-			9,744			-		11,093		11,093		-			11,093		-		12,063		12,063					12,063
ROU		-		8,155,949			8,155,949			-			8,155,949			-		8,849,073		8,849,073		-			8,849,073		-		9,182,540		9,182,540					9,182,540
Deferred tax assets		-		34,486			34,486			-			34,486			-		36,247		36,247		-			36,247		-		5,116		5,116					5,116
Deffered expenses		-								-						-		-		-		-			-		-		-		-					-
Investment in subsidiaries		1,061,410					1,061,410			(1,061,410	)					1,061,410		-		1,061,410		(1,060,511	)		-		1,060,511		-		1,060,511		(1,060,511	)		-
Total assets		1,061,410		25,544,454			26,605,864			(1,061,410	)		25,544,454			1,061,410		23,470,453		24,531,863		(1,060,511	)		23,470,453		1,060,511		22,127,296		23,187,807		(1,060,511	)		22,127,296

Liabilities
Current liabilities
A/P		-		3,716,847			3,716,847			-			3,716,847			-		4,151,749		4,151,749		-			4,151,749		-		3,214,212		3,214,212		-			3,214,212
Accrued exp and other current liabilities		-		1,449,737			1,449,737			-			1,449,737			-		1,168,464		1,168,464		-			1,168,464		-		1,099,044		1,099,044		-			1,099,044
Notes payable		-		29,859			29,859			-			29,859			-		-		-		-			-		-		7,203,065		7,203,065		-			7,203,065
S/T borrowings		-		5,135,594			5,135,594			-			5,135,594			-		5,756,146		5,756,146		-			5,756,146		-		3,882,994		3,882,994		-			3,882,994
Tax payables		-		997,993			997,993			-			997,993			-		633,919		633,919		-			633,919		-		811,928		811,928		-			811,928
Due to related parties				648,384			648,384			-			648,384			-		158,198		158,198		-			158,198		-		1,007,109		1,007,109		-			1,007,109
Due to subsidiaries		-		-			-			-			-			-		-		-		-			-		-		-		-					-
Due to parent																													-		-		-			-
Long-term bank loans - current portion				4,675,811			4,675,811						4,675,811
Total current liabilities		-		16,654,225			16,654,225			-			16,654,225			-		11,868,476		11,868,476		-			11,868,476		-		17,218,352		17,218,352		-			17,218,352
Lease liability		-								-						-		-		-		-			-				-		-					-
L/T payable		-		211,858			211,858			-			211,858			-		4,707,655		4,707,655		-			4,707,655		-		1,532,567		1,532,567					1,532,567
Total liabilities		-		16,866,083			16,866,083			-			16,866,083			-		16,576,131		16,576,131		-			16,576,131		-		18,750,919		18,750,919		-			18,750,919

Shareholders’ equity
Ordinary shares, $0.0001 par, 500,000,000 shares authorized, 8,000,000 Class A and 1,000,000 Class B ordinary shares issued and o/s		900		1,060,510			1,062,310			(1,061,410	)		900			900		1,061,410		1,062,310		(1,061,410	)		900		1		1,060,511		1,060,512		(1,060,511	)		1
Additional paid in capital		1,060,510		-			1,060,510			-			1,060,510			1,060,510		-		1,060,510		-			1,060,510		1,060,510		-		1,060,510		-			1,060,510
Statutory surplus reserve		-		568,418			568,418			-			568,418			-		568,418		568,418		-			568,418		-		222,081		222,081		-			222,081
R/E		-		7,227,953			7,227,953			-			7,227,953			-		5,037,292		5,037,292		-			5,037,292		-		1,988,980		1,988,980		-			1,988,980
AOCI(loss)		-		(179,409	)		(179,409	)		-			(179,409	)		-		227,202		227,202		-			227,202		-		104,805		104,805		-			104,805
Total shareholders’ equity		1,061,410		8,677,471			9,739,781			(1,061,410	)		8,678,371			1,061,410		6,894,322		7,955,732		(1,061,410	)		6,894,322		1,060,511		3,376,377		4,436,888		(1,060,511	)		3,376,377
Total liabilities and shareholders’ equity		1,061,410		25,544,454			26,605,864			(1,061,410	)		25,544,454			1,061,410		23,470,453		24,531,863		(1,061,410	)		23,470,453		1,060,511		22,127,296		23,187,807		(1,060,511	)		22,127,296

	For the six months ended June 30, 2022													For the year ended December 31, 2021													For the year ended December 31, 2020
	Parent		Subsidiaries			Subtotal			Elimination		Consolidated			Parent		Subsidiaries			Subtotal			Elimination		Consolidated			Parent		Subsidiaries			Subtotal			Elimination		Consolidated
Cash flows from operating activities
Net income		-		2,190,661			2,190,661			-		2,190,661			-		3,394,649			3,394,649			-		3,394,649			-		2,213,372			2,213,372			-		2,213,372
Adj for items not affecting cash
Depreciation and amortization		-		121,817			121,817			-		121,817			-		215,121			215,121			-		215,121			-		148,194			148,194			-		148,194
Deferred tax assets		-								-					-		-			-			-		-			-		(648	)		(648	)		-		(648	)
Bad debt expense		-								-					-		2,649			2,649			-		2,649			-		15,112			15,112			-		15,112
Deferred expenses		-								-					-		-			-			-		-			-		30,744			30,744			-		30,744
Imputed interest expenses		-		28,553			28,553			-		28,553			-		70,195			70,195			-		70,195			-		56,987			56,987			-		56,987
Right of use lease asset		-		271,988			271,988			-		271,988			-		546,362			546,362			-		546,362			-		188,879			188,879			-		188,879
Loss on asset disposal				145			145					145
Lease liability		-								-					-		-			-			-		-			-		(6,437,325	)		(6,437,325	)		-		(6,437,325	)

Changes in operating assets and liabilities:
Accounts receivable		-		(3,342,794	)		(3,342,794	)		-		(3,342,794	)		-		3,380,552			3,380,552			-		3,380,552			-		(4,078,270	)		(4,078,270	)		-		(4,078,270	)
Inventories		-		(224,043	)		(224,043	)		-		(224,043	)		-		(2,200,180	)		(2,200,180	)		-		(2,200,180	)		-		(329,435	)		(329,435	)		-		(329,435	)
Advances to suppliers		-		1,948,325			1,948,325			-		1,948,325			-		(1,109,383	)		(1,109,383	)		-		(1,109,383	)		-		(730,042	)		(730,042	)		-		(730,042	)
Prepaid expenses and Other receivables		-		(184,818	)		(184,818	)		-		(184,818	)		-		(361,983	)		(361,983	)		-		(361,983	)		-		(96,160	)		(96,160	)		-		(96,160	)
Accounts payable		-		(325,467	)		(325,467	)		-		(325,467	)		-		803,612			803,612			-		803,612			-		274,724			274,724			-		274,724
Accrued expenses and other current liabilities		-		145,677			145,677			-		145,677			-		356,061			356,061			-		356,061			-		(90,921	)		(90,921	)		-		(90,921	)
Advances from customers		-		175,253			175,253			-		175,253			-		(276,454	)		(276,454	)		-		(276,454	)		-		338,968			338,968			-		338,968
Tax payable		-		408,227			408,227			-		408,227			-		(195,033	)		(195,033	)		-		(195,033	)		-		569,330			569,330			-		569,330

Net cash provided by (used in) operating		-		1,213,524			1,213,524			-		1,213,524			-		4,642,893			4,642,893			-		4,642,893	)		-		(7,926,491	)		(7,926,491	)		-		(7,926,491	)

Cash flows from investing activities
Purchases of property, plant and equipment		-		(172,192	)		(172,192	)		-		(172,192	)		-		(244,018	)		(244,018	)		-		(244,018	)		-		(176,649	)		(176,649	)		-		(176,649	)
Purchases of intangible assets		-		-			-			-		-			-		(155	)		(155	)		-		(155	)		-		(9,357	)		(9,357	)		-		(9,357	)
Net cash provided by (used in) investing		-		(172,192	)		(172,192	)		-		(172,192	))		-		(244,173	)		(244,173	)		-		(244,173	)		-		(186,006	)		(186,006	)		-		(186,006	)

Cash flows from financing activities
Proceeds from short-term borrowings		-		3,992,074			3,992,074			-		3,992,074			-		4,284,208			4,284,208			-		4,284,208			-		3,692,217			3,692,217			-		3,692,217
Repayments on short-term borrowings		-		(4,344,422	)		(4,344,422	)		-		(4,344,422	))		-		(4,182,881	)		(4,182,881	)		-		(4,182,881	)		-		(799,373	)		(799,373	)		-		(799,373	)
Proceeds from related parties		-		14,769,886			14,769,886			-		14,769,886			-		15,311,425			15,311,425			-		15,311,425			-		6,882,563			6,882,563			-		6,882,563
Repayments to related parties		-		(14,255,139	)		(14,255,139	)		-		(14,255,139	)		-		(16,172,950	)		(16,172,950	)		-		(16,172,950	)		-		(5,651,853	)		(5,651,853	)		-		(5,651,853	)
Proceeds(repayment) of notes payable		-		30,868			30,868			-		30,868			-		(7,285,918	)		(7,285,918	)		-		(7,285,918	)		-		6,807,451			6,807,451			-		6,807,451
Proceeds from long-term loans		-		765,538			765,538			-		765,538
Repayments to long-term loans		-		(342,934	)		(342,934	)		-		(342,934	)
Proceeds from government loan		-		-			-			-					-		4,650,586			4,650,586			-		4,650,586			-		-			-			-		-

Net cash provided by (used in) financing		-		615,871			615,871			-		615,871			-		(3,395,530	)		(3,395,530	)		-		(3,395,530	)		-		10,931,005			10,931,005			-		10,931,005

Effect of foreign exchange		-		(305,645	)		(305,645	)		-		(305,645	)		-		109,448			109,448			-		109,448			-		231,547			231,547			-		231,547
Net increase (decrease) in cash		-		1,351,558			1,351,558			-		1,351,558			-		1,003,190			1,003,190			-		1,003,190			-		2,818,508			2,818,508			-		2,818,508
Cash, beginning		-		5,174,693			5,174,693			-		5,174,693			-		4,062,055			4,062,055			-		4,062,055			-		1,012,000			1,012,000			-		1,012,000
Cash, end		-		6,526,251			6,526,251			-		6,526,251			-		5,174,693			5,174,693			-		5,174,693			-		4,062,055			4,062,055			-		4,062,055

Cash paid during the period for:
Interest		-		217,398			217,398			-		217,398			-		99,690			99,690			-		99,690			-		26,669			26,669			-		26,669
Income taxes		-		94,541			94,541			-		94,541			-		365,752			365,752			-

Cayman Islands		3621		Not Applicable
(State or other jurisdiction of incorporation or organization)		(Primary Standard Industrial Classification Code Number)		(IRS. Employer Identification Number)

	PER SHARE		TOTAL⁽³⁾
Initial public offering price	$	4.00	$	12,000,000
Underwriting Discounts and Commissions⁽¹⁾	$	0.3	$	900,000
Proceeds to us, before expenses⁽²⁾	$	3.70	$	11,100,000

		Page
PROSPECTUS SUMMARY		1

SELECTED FINANCIAL DATA		22

RISK FACTORS		23

SPECIAL NOTES REGARDING FORWARD-LOOKING STATEMENTS		56

USE OF PROCEEDS		57

DIVIDEND POLICY		58

CAPITALIZATION		59

DILUTION		60

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		61

BUSINESS		74

CHINESE LAWS AND REGULATIONS		95

MANAGEMENT		107

EXECUTIVE COMPENSATION		111

PRINCIPAL SHAREHOLDERS		112

RELATED PARTY TRANSACTIONS		113

DESCRIPTION OF SHARE CAPITAL		114

SHARES ELIGIBLE FOR FUTURE SALE		128

TAXATION		129

ENFORCEABILITY OF CIVIL LIABILITIES		135

UNDERWRITING		137

EXPENSES RELATING TO THIS OFFERING		146

LEGAL MATTERS		146

EXPERTS		146

WHERE YOU CAN FIND ADDITIONAL INFORMATION		147

INDEX TO FINANCIAL STATEMENTS		F-1


Craft Capital Management LLC	R.F. Lafferty & Co. Inc.