Company: RAYA
Filing Date: 2025-08-01
Form Type: 424B5
Source: 0001213900-25-070321
Chunk: 101

Company: Erayak Power Solution Group Inc.
Filing Date: 2025-08-01
Form: 424B5
Chunk 101
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 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 59 of the 2022 Annual Report 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