United States securities and exchange commission logo
December 22, 2021
Lingyi Kong
Chief Executive Officer
Erayak Power Solution Group Inc.
No. 528, 4th Avenue
Binhai Industrial Park
Wenzhou, Zhejiang Province
People's Republic of China 325025
Re: Erayak Power
Solution Group Inc.
Amendment No. 2 to
Draft Registration Statement on Form F-1
Submitted December
2, 2021
CIK No. 0001825875
Dear Mr. Kong:
We have reviewed your amended draft registration statement and
have the following
comments. In some of our comments, we may ask you to provide us with
information so we
may better understand your disclosure.
Please respond to this letter by providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your
response.
After reviewing the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
Amendment No. 2 to Draft Registration Statement on Form F-1 submitted
December 2, 2021
General
1. Please clearly disclose
the voting rights of Class A shares and Class B shares.
Cover Page
2. We note your response
to prior comment 2 and reissue our comment in part. Your
disclosure should
address how recent statements and regulatory actions by China s
government, such as
those related to the use of variable interest entities and data security
or anti-monopoly
concerns, has or may impact the company s ability to conduct its
Lingyi Kong
Erayak Power Solution Group Inc.
December 22, 2021
Page 2
business, accept foreign investments, or list on an U.S. or other
foreign exchange.
3. Provide a description of how cash is transferred through your
organization and disclosure
regarding your intentions to distribute earnings or settle amounts
owed under your
agreements. State whether any transfers, dividends, or distributions
have been made to
date.
Prospectus Summary, page 1
4. Please disclose whether you are required to obtain any approvals to
offer securities to
foreign investors, whether you have received such approvals and the
consequences to you
and your investors if you do not receive or maintain the approvals,
inadvertently conclude
that such approvals are not required, or applicable laws, regulations,
or interpretations
change and you are required to obtain approval in the future.
Risk Factor Summary, page 6
5. Please revise both the Risk Factor Summary and the Risk Factors
section to move forward
the risks related to doing business in the PRC so that such risks are
prominently disclosed
within each section in relation to other identified material risks.
Risks Relating to Our Business and Industry, page 6
6. We note your risk factor disclosure on page 6 that you currently
qualify as
a smaller reporting company. Considering a foreign private issuer is
not eligible to use
the requirements for smaller reporting companies unless it uses the
forms and rules for
domestic issuers, please revise your disclosures accordingly. Refer to
SEC Release No.
34-88365.
Risks Related to Doing Business in the PRC, page 7
7. We note your response to prior comment 10. Please ensure that the
disclosure in this
section is consistent with the risk factor disclosure in the section
entitled "Risks Relating
to Doing Business in China on pages 27-38. For example, we note the
disclosure about
PRC regulations of loans in two separate bullet points on page 6.
However, it is unclear
which risk factor on pages 27-38 is related to disclosure about PRC
regulations of loans.
Please ensure that risk reflected in your summary are also reflected
in your risk factor
section. Please also revise to remove duplicative bullet points on
page 7. In that regard, we
note that the 7th and 18th bullet points appear to be identical.
8. It appears that in response to prior comment 10 you included the last
bullet point on page
FirstName LastNameLingyi Kong
7 about regulatory actions and statements to regulate business
operations in China
Comapany
withNameErayak
little advancePower
notice.Solution Group Inc.
Please ensure that you include in the
section beginning on page
27 a22,
December risk2021
factor to highlight
Page 2 the risk mentioned in the bullet point on
page 7.
FirstName LastName
Lingyi Kong
FirstName LastNameLingyi Kong
Erayak Power Solution Group Inc.
Comapany22,
December NameErayak
2021 Power Solution Group Inc.
December
Page 3 22, 2021 Page 3
FirstName LastName
We will be a controlled company within the meaning of the Nasdaq Stock Market
Rules, page 20
9. We note your disclosure that Mr. Kong beneficially owns 1,000,000
Class B shares, which
represents all of our issued and outstanding shares. This appears
inconsistent with
information on page F-24. Please reconcile or advise.
It is unclear whether we will be subject to the oversight of the Cyberspace
Administration of
China, page 26
10. We note that you have included in the exhibit index an opinion of King
& Wood
Mallesons regarding certain PRC tax matters. Please also include in
the exhibit index an
opinion from your PRC counsel regarding PRC law matters. In this
regard, we note your
disclosure about PRC counsel on the cover page and on pages 26 and 30.
The recent joint statement by the SEC and the PCAOB, page 36
11. We note from the audit opinion and your risk factor on page 37 that
you have a U.S. based
auditor that is registered with the PCAOB and currently subject to
PCAOB inspection.
Please disclose any material risks to the company and investors if it
is later determined
that the PCAOB is unable to inspect or investigate completely your
auditor because of a
position taken by an authority in a foreign jurisdiction. For example,
disclose the risk that
lack of inspection could cause trading in your securities to be
prohibited under the
Holding Foreign Companies Accountable Act and as a result an exchange
may determine
to delist your securities.
You may contact Heather Clark, Staff Accountant, at 202-551-3624 or
Andrew Blume,
Senior Accountant, at 202-551-3254 if you have questions regarding comments on
the financial
statements and related matters. Please contact Thomas Jones, Staff Attorney, at
202-551-3602 or
Asia Timmons-Pierce, Special Counsel, at 202-551-3754 with any other questions.
Sincerely,
Division of
Corporation Finance
Office of
Manufacturing
cc: William S. Rosenstadt, Esq.