Company: RAYA
Filing Date: 2025-09-29
Form Type: 424B5
Source: 0001185185-25-001296
Chunk: 33

Company: Erayak Power Solution Group Inc.
Filing Date: 2025-09-29
Form: 424B5
Chunk 33
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 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., Ruike, 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