2023 Q4 Form 20-F Financial Statement

#000121390024033441 Filed on April 16, 2024

View on sec.gov

Income Statement

Concept 2023 Q4 2023 2022
Revenue $10.87M $20.32M $26.91M
YoY Change -59.59% -24.48% 44.45%
Cost Of Revenue $8.680M $15.30M $20.29M
YoY Change -57.22% -24.59% 57.17%
Gross Profit $2.193M $5.023M $6.619M
YoY Change -66.87% -24.12% 15.72%
Gross Profit Margin 20.17% 24.71% 24.6%
Selling, General & Admin $1.348M $2.980M $1.650M
YoY Change -15.18% 80.67% 37.82%
% of Gross Profit 61.47% 59.34% 24.92%
Research & Development $682.5K $1.177M $932.3K
YoY Change -24.98% 26.25% -5.53%
% of Gross Profit 31.13% 23.43% 14.09%
Depreciation & Amortization $200.7K $388.0K $22.50K
YoY Change 35.6% 1624.53% -42.85%
% of Gross Profit 9.15% 7.73% 0.34%
Operating Expenses $2.108M $4.276M $2.550M
YoY Change -18.36% 67.67% 14.16%
Operating Profit $84.76K $746.8K $4.069M
YoY Change -97.9% -81.65% 16.72%
Interest Expense -$183.0K $402.7K $473.1K
YoY Change -61.32% -14.88% 13.27%
% of Operating Profit -215.87% 53.92% 11.63%
Other Income/Expense, Net $940.5K $665.2K -$154.8K
YoY Change 195.52% -529.6% -173.4%
Pretax Income $844.1K $1.412M $3.914M
YoY Change -78.43% -63.92% 5.87%
Income Tax $100.5K $193.2K $437.8K
% Of Pretax Income 11.91% 13.69% 11.19%
Net Earnings $743.5K $1.219M $3.476M
YoY Change -78.61% -64.94% 2.4%
Net Earnings / Revenue 6.84% 6.0% 12.92%
Basic Earnings Per Share $0.10 $0.38
Diluted Earnings Per Share $0.06 $0.10 $0.38
COMMON SHARES
Basic Shares Outstanding 12.00M shares 9.148M shares
Diluted Shares Outstanding 12.00M shares 9.148M shares

Balance Sheet

Concept 2023 Q4 2023 2022
SHORT-TERM ASSETS
Cash & Short-Term Investments $5.877M $5.877M $7.033M
YoY Change -16.43% -16.43% 35.9%
Cash & Equivalents $5.878M $5.877M $7.033M
Short-Term Investments
Other Short-Term Assets $2.749M $2.749M $4.751M
YoY Change -42.15% -42.15% 82.17%
Inventory $7.056M $7.056M $6.227M
Prepaid Expenses
Receivables $6.253M $6.253M $9.961M
Other Receivables $162.6K $162.6K $263.2K
Total Short-Term Assets $22.10M $22.10M $28.24M
YoY Change -21.74% -21.74% 109.25%
LONG-TERM ASSETS
Property, Plant & Equipment $1.925M $9.263M $9.327M
YoY Change 15.81% -0.68% -6.06%
Goodwill
YoY Change
Intangibles $31.85K
YoY Change 261.39%
Long-Term Investments
YoY Change
Other Assets $3.859M $3.892M $33.49K
YoY Change 11423.47% 11520.6% -7.61%
Total Long-Term Assets $13.19M $13.19M $9.369M
YoY Change 40.75% 40.75% -6.08%
TOTAL ASSETS
Total Short-Term Assets $22.10M $22.10M $28.24M
Total Long-Term Assets $13.19M $13.19M $9.369M
Total Assets $35.29M $35.29M $37.61M
YoY Change -6.17% -6.17% 60.22%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $5.689M $5.689M $4.729M
YoY Change 20.3% 20.3% 13.91%
Accrued Expenses $3.520M $3.520M $790.6K
YoY Change 345.18% 345.18% 26.2%
Deferred Revenue
YoY Change
Short-Term Debt $70.42K $70.42K $6.227M
YoY Change -98.87% -98.87% 8.18%
Long-Term Debt Due $225.4K $225.4K $4.350M
YoY Change -94.82% -94.82%
Total Short-Term Liabilities $13.21M $13.21M $18.04M
YoY Change -26.78% -26.78% 52.03%
LONG-TERM LIABILITIES
Long-Term Debt $1.872M $1.872M $217.5K
YoY Change 760.42% 760.42% -95.38%
Other Long-Term Liabilities $0.00 $0.00
YoY Change
Total Long-Term Liabilities $1.872M $1.872M $217.5K
YoY Change 760.42% 760.42% -95.38%
TOTAL LIABILITIES
Total Short-Term Liabilities $13.21M $13.21M $18.04M
Total Long-Term Liabilities $1.872M $1.872M $217.5K
Total Liabilities $15.08M $15.08M $18.26M
YoY Change -17.4% -17.4% 10.17%
SHAREHOLDERS EQUITY
Retained Earnings
YoY Change
Common Stock 5.000M cnies
YoY Change 0.0%
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $20.20M $20.20M $19.34M
YoY Change
Total Liabilities & Shareholders Equity $35.29M $35.29M $37.61M
YoY Change -6.17% -6.17% 60.22%

Cashflow Statement

Concept 2023 Q4 2023 2022
OPERATING ACTIVITIES
Net Income $743.5K $1.219M $3.476M
YoY Change -78.61% -64.94% 2.4%
Depreciation, Depletion And Amortization $200.7K $388.0K $22.50K
YoY Change 35.6% 1624.53% -42.85%
Cash From Operating Activities $1.275M $6.730M -$4.151M
YoY Change -123.77% -262.12% -189.41%
INVESTING ACTIVITIES
Capital Expenditures $320.4K $684.2K $694.8K
YoY Change -93.22% -1.53% 184.74%
Acquisitions
YoY Change
Other Investing Activities $3.287M -$668.2K
YoY Change
Cash From Investing Activities $2.966M -$1.378M -$4.896M
YoY Change -162.79% -71.85% 1905.21%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net $1.012M
YoY Change
Cash From Financing Activities -5.818M -$6.437M $11.32M
YoY Change -154.36% -156.87% -433.38%
NET CHANGE
Cash From Operating Activities 1.275M $6.730M -$4.151M
Cash From Investing Activities 2.966M -$1.378M -$4.896M
Cash From Financing Activities -5.818M -$6.437M $11.32M
Net Change In Cash -1.577M -$1.189M $1.893M
YoY Change -356.29% -162.82% 88.65%
FREE CASH FLOW
Cash From Operating Activities $1.275M $6.730M -$4.151M
Capital Expenditures $320.4K $684.2K $694.8K
Free Cash Flow $954.6K $6.046M -$4.846M
YoY Change -109.46% -224.75% -210.16%

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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>NOTE 1 – ORGANIZATION AND NATURE OF OPERATIONS</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Erayak Power Solution Group Inc. (“Erayak Group”)</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Erayak Group was incorporated on June 14, 2019 under the laws of Cayman Islands. Under its memorandum of association, Erayak Group was authorized to issue 500,000,000 ordinary shares of par value of $0.0001 each, comprising of: (i) 450,000,000 Class A Ordinary Shares of par value of USD0.0001 each, and (ii) 50,000,000 Class B Ordinary Shares of par value of USD0.0001 each. There are currently 11,000,000 issued and outstanding Class A Ordinary Shares and 1,000,000 issued and outstanding Class B Ordinary Shares, of which 6,000,000 Class A and 1,000,000 Class B Ordinary Shares are owned by Erayak International Limited, 1,400,000 Class A Ordinary Shares are owned by CEC Science and Innovation Co., Ltd., and 600,000 Class A Ordinary Shares are owned by Grand Merchant Incorporation Limited.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Erayak Group is a holding company and is currently not actively engaging in any business. Erayak Group’s registered agent is Harneys Fiduciary (Cayman) Limited, and its registered office is at 4th Floor, Harbour Place, 103 South Church Street, P.O. Box 10240, Grand Cayman, KY1-1002, Cayman Islands.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b> </b></p> <table cellpadding="0" cellspacing="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom"> <td style="border-bottom: black 1.5pt solid; text-indent: -0.125in; padding-left: 0.125in; white-space: nowrap; width: 34%; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Entity Name</b></span></td> <td style="white-space: nowrap; width: 2%; text-align: center"> </td> <td style="white-space: nowrap; width: 16%; border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Registered<br/> Location</b></span></td> <td style="white-space: nowrap; width: 2%; text-align: center"> </td> <td style="white-space: nowrap; width: 16%; border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Date of Incorporation</b></span></td> <td style="white-space: nowrap; width: 2%; text-align: center"> </td> <td style="white-space: nowrap; width: 28%; border-bottom: black 1.5pt solid; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt"><b>Ownership as of the<br/> issuance date of the report</b></span></td></tr> <tr style="background-color: rgb(204,238,255)"> <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Erayak Power Solution Group Inc. (“Erayak Group”)</span></td> <td style="text-align: center"> </td> <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Cayman Islands</span></td> <td style="text-align: center"> </td> <td style="padding-left: 6.5pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">June 14, 2019</span></td> <td style="text-align: center"> </td> <td style="padding-left: 7.7pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Parent</span></td></tr> <tr style="background-color: White"> <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Erayak Power Solution Limited<br/> (“Erayak BVI’)</span></td> <td style="text-align: center"> </td> <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">British Virgin Island</span></td> <td style="text-align: center"> </td> <td style="padding-left: 6.5pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">June 17, 2019</span></td> <td style="text-align: center"> </td> <td style="padding-left: 7.7pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">100% by the Parent</span></td></tr> <tr style="background-color: rgb(204,238,255)"> <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Erayak Power Solution Hong Kong Limited (“Erayak HK”)</span></td> <td style="text-align: center"> </td> <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Hong Kong</span></td> <td style="text-align: center"> </td> <td style="padding-left: 6.5pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">June 26, 2019</span></td> <td style="text-align: center"> </td> <td style="padding-left: 7.7pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">100% by Erayak BVI</span></td></tr> <tr style="background-color: White"> <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Ruike Electronics (Wenzhou) Co., Ltd. (“Ruike”)</span></td> <td style="text-align: center"> </td> <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Wenzhou, China</span></td> <td style="text-align: center"> </td> <td style="padding-left: 6.5pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">December 5, 2023</span></td> <td style="text-align: center"> </td> <td style="padding-left: 7.7pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">100% by Erayak HK</span></td></tr> <tr style="background-color: rgb(204,238,255)"> <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Wenzhou Wenjie Technology Limited (“Wenjie”)</span></td> <td style="text-align: center"> </td> <td style="text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Wenzhou, China</span></td> <td style="text-align: center"> </td> <td style="padding-left: 6.5pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">December 11, 2019</span></td> <td style="text-align: center"> </td> <td style="padding-left: 7.7pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">100% by Erayak HK</span></td></tr> <tr style="background-color: White"> <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Zhejiang Leiya Electronics Limited (“Leiya”)</span></td> <td style="padding-left: 6.5pt; text-align: center"> </td> <td style="padding-left: 6.5pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Wenzhou, China</span></td> <td style="padding-left: 6.5pt; text-align: center"> </td> <td style="padding-left: 6.5pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">March 5, 2009</span></td> <td style="padding-left: 6.5pt; text-align: center"> </td> <td style="padding-left: 7.7pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">100% by Wenjie</span></td></tr> <tr style="background-color: rgb(204,238,255)"> <td style="text-indent: -0.125in; padding-left: 0.125in; text-align: left"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Wenzhou New Focus Limited<br/> (“New Focus”)</span></td> <td style="text-align: center"> </td> <td style="padding-left: 6.5pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">Wenzhou, China</span></td> <td style="text-align: center"> </td> <td style="padding-left: 6.5pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">November 21, 2012</span></td> <td style="text-align: center"> </td> <td style="padding-left: 7.7pt; text-align: center"><span style="font-family: Times New Roman, Times, Serif; font-size: 10pt">100% by Leiya</span></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Erayak Power Solution Limited (“Erayak BVI”)</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Erayak BVI was incorporated on June 17, 2019 under the laws of British Virgin Islands. Under its memorandum of association, Erayak BVI is authorized to issue 50,000 ordinary shares of a single class, par value $1 per ordinary share. There are currently 100 issued and outstanding ordinary shares, of which 100% are owned by Erayak Power Solution Group Limited. Erayak BVI is a holding company and is currently not actively engaging in any business. Erayak BVI’s registered agent is Harneys Corporate Services Limited and its registered office is at Craigmuir Chambers, Road Town, Tortola, VG 1110, British Virgin Islands.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Erayak Power Solution Hong Kong Limited (“Erayak HK”)</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Erayak HK was incorporated on June 26, 2019 under the laws of Hong Kong and is a wholly owned subsidiary of Erayak Power Solution Limited. The paid in capital was $3,900,000 as of December 31, 2023. Erayak HK did not have any operations as of December 31, 2023.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Ruike Electronics (Wenzhou) Co., Ltd. (“Ruike”)</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Ruike was incorporated on December 5, 2023 in People’s Republic of China (“China” or “PRC”), and is a wholly owned subsidiary of Erayak Power Solution Hong Kong Limited. Ruike is a wholly-foreign owned enterprise organized under the laws of the PRC. The paid in capital was $5,010,035 as of December 31, 2023. Ruike did not have any operations as of December 31, 2023.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b> </b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Wenzhou Wenjie Technology Limited (“Wenjie”)</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Wenjie was incorporated on December 11, 2019 in People’s Republic of China (“China” or “PRC”), and is a wholly owned subsidiary of Erayak Power Solution Hong Kong Limited. Wenjie is a wholly-foreign owned enterprise organized under the laws of the PRC. The paid in capital was $3,000,000 as of December 31, 2023. Wenjie did not have any operations as of December 31, 2023.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> <b>  </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Zhejiang Leiya Electronics Limited (“Leiya”)</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Leiya was incorporated on March 5, 2009 under the laws of the People’s Republic of China. The paid in capital was RMB 6,900,000 as of December 31, 2023.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The registered principal activities of Leiya are mainly development, production and sales of inverters, chargers and gasoline generators.  </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Wenzhou New Focus Limited (“New Focus”)</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">New Focus was incorporated on November 21, 2012 in China, and is a wholly owned subsidiary of Leiya. The paid in capital was RMB 5,000,000 as of December 31, 2023.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The principal activity of New Focus is mainly the sale of Leiya’s products, which involves exports to multiple countries.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Reorganization</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b> </b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In or about April and August 2020, the Company completed corporate reorganization to roll several controlled entities (now referred to as the subsidiaries) into one legal corporation (the Company). Shengling Xiang transferred 10% equity of Leiya to Hecang Limited, a Hong Kong entity’s subsidiary, on January 14, 2020. On April 21, 2020, Wenjie acquired 90% equity of Leiya from Shengling Xiang, and 10% from Hecang Limited. As a result, Leiya’s equity interest is 100% held by Wenjie as of April 21, 2020. On August 12, 2020, Chuanlong Lin transferred 100% equity of New Focus to Leiya. Therefore, Leiya holds 100% of equity interest of New Focus as of August 12, 2020. Shengling Xiang, Hecang Limited, and Chuanlong Lin were holding shares on behalf of Lingyi Kong, and therefore, the Company is under the control of Lingyi Kong both before and after the transactions.</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During the years presented in these consolidated financial statements, the control of the entities has never changed (always under the ultimate control of Lingyi Kong).   Accordingly, the combination has been treated as a corporate restructuring (reorganization) of entities under common control and thus the current capital structure has been retroactively presented in prior periods as if such structure existed at that time and in accordance with ASC 805-50-45-5, the entities under common control are presented on a combined basis for all periods to which such entities were under common control. The consolidation of the Company and its subsidiaries has been accounted for at historical cost and prepared on the basis as if the aforementioned transactions had become effective as of the beginning of the first period presented in the accompanying consolidated financial statements.</p>
CY2019Q2 us-gaap Common Stock Shares Outstanding
CommonStockSharesOutstanding
11000000 shares
CY2023Q4 us-gaap Additional Paid In Capital Common Stock
AdditionalPaidInCapitalCommonStock
5000000 cny
CY2020Q1 us-gaap Health Care Organization Allowance For Doubtful Accounts Percentage Of Accounts Receivable
HealthCareOrganizationAllowanceForDoubtfulAccountsPercentageOfAccountsReceivable
0.10 pure
CY2023 us-gaap Use Of Estimates
UseOfEstimates
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>Use of Estimates</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The preparation of the consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and the accompanying notes. Such estimates include, but are not limited to, allowances for doubtful accounts, inventory valuation, useful lives of property, plant and equipment, intangible assets, and income taxes related to realization of deferred tax assets and uncertain tax position. Actual results could differ from those estimates.</p>
CY2023Q4 us-gaap Foreign Currency Exchange Rate Translation1
ForeignCurrencyExchangeRateTranslation1
7.0999 pure
CY2022Q4 us-gaap Foreign Currency Exchange Rate Translation1
ForeignCurrencyExchangeRateTranslation1
6.8972 pure
CY2021Q4 us-gaap Foreign Currency Exchange Rate Translation1
ForeignCurrencyExchangeRateTranslation1
6.3726 pure
CY2023 raya Foreign Exchange Period Average
ForeignExchangePeriodAverage
7.0809 pure
CY2022 raya Foreign Exchange Period Average
ForeignExchangePeriodAverage
6.729 pure
CY2021 raya Foreign Exchange Period Average
ForeignExchangePeriodAverage
6.4508 pure
CY2023Q4 us-gaap Restricted Cash Current
RestrictedCashCurrent
1062 usd
CY2022Q4 us-gaap Restricted Cash Current
RestrictedCashCurrent
34728 usd
CY2023Q4 us-gaap Property Plant And Equipment Salvage Value Percentage
PropertyPlantAndEquipmentSalvageValuePercentage
0.05 pure
CY2023 raya Prc Tax Authorities
PRCTaxAuthorities
P5Y
CY2023Q4 us-gaap Accounts Receivable Net Current
AccountsReceivableNetCurrent
6253189 usd
CY2022Q4 us-gaap Accounts Receivable Net Current
AccountsReceivableNetCurrent
9961343 usd
CY2023 raya Vat Description
VATDescription
The Company is subject to a VAT rate of 17% before May 1, 2018, 16% on and after May 1, 2018, and a new VAT rate of 13% effective on April 1, 2019. The VAT may be offset by VAT paid by the Company on raw materials and other materials included in the cost of producing or acquiring its finished products.
CY2023 us-gaap Other Income
OtherIncome
1061274 usd
CY2022 us-gaap Other Income
OtherIncome
194001 usd
CY2021 us-gaap Other Income
OtherIncome
169827 usd
CY2023 us-gaap Advertising Expense
AdvertisingExpense
78305 usd
CY2022 us-gaap Advertising Expense
AdvertisingExpense
8513 usd
CY2021 us-gaap Advertising Expense
AdvertisingExpense
5873 usd
CY2023 us-gaap Concentration Risk Credit Risk
ConcentrationRiskCreditRisk
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Certain Risks and Concentration</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Exchange Rate Risks</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company operates in PRC, which may give rise to significant foreign currency risks mainly from fluctuations and the degree of volatility of foreign exchange rates between the USD and the RMB.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Currency Convertibility Risks</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Substantially all of the Company’s operating activities are transacted in RMB, which is not freely convertible into foreign currencies. All foreign exchange transactions take place either through the People’s Bank of China or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the People’s Bank of China. Approval of foreign currency payments by the People’s Bank of China or other regulatory institutions requires submitting a payment application form together with other information such as suppliers’ invoices, shipping documents and signed contracts.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Concentration of Credit Risks</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Financial instruments that potentially subject the Company to concentration of credit risks consist primarily of cash and cash equivalents, restricted cash, notes receivable. The Company places its cash and cash equivalents, restricted cash, and note receivable in good credit quality financial institutions in Hong Kong and PRC. Concentration of credit risks with respect to accounts receivables is linked to the concentration of revenue. To manage credit risk, the Company performs ongoing credit evaluations of customers’ financial condition.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Interest Rate Risks</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company is subject to interest rate risk. The Company has bank interest bearing loans charged at variable interest rates. And although some bank interest bearing loans are charged at fixed interest rates within the reporting period, the Company is still subject to the risk of adverse changes in the interest rates charged by the banks when these loans are refinanced.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><i>Risks and Uncertainties</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The operations of the Company are located in the PRC. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by political, economic, and legal environments in the PRC, as well as by the general state of the PRC economy. The Company’s results may be adversely affected by changes in the political, regulatory and social conditions in the PRC. Although the Company has not experienced losses from these situations and believes that it is in compliance with existing laws and regulations including its organization and structure disclosed in Note1, this may not be indicative of future results.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><i>Liquidity Risks</i></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our primary sources of liquidity consist of existing cash balances, cash flows from our operating activities and availability under our revolving credit facility. Our ability to generate sufficient cash flows from our operating activities is primarily dependent on our sales of converters and power generating products to our customers at margins sufficient to cover fixed and variable expenses.</p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As of December 31, 2023 and 2022, we had cash and cash equivalents of $5,878,434 and $7,067,247, respectively. We believe that our current cash, cash to be generated from our operations and access to loans from our related parties will be sufficient to meet our working capital needs for at least the next twelve months. Although we do not have any amounts committed to be provided by our related parties, due to their relatively small amounts, we do not believe our working capital needs will be negatively impacted without such funds provided by related parties.   We are also not dependent upon this offering to meet our liquidity needs for the next twelve months. However, we plan to expand our business to implement our growth strategies in our existing market and strengthen our position in the marketplace. To do so, we will need more capital through equity financing to increase our production and meet market demands.</p>
CY2023Q4 us-gaap Cash And Cash Equivalents At Carrying Value
CashAndCashEquivalentsAtCarryingValue
5878434 usd
CY2022Q4 us-gaap Cash And Cash Equivalents At Carrying Value
CashAndCashEquivalentsAtCarryingValue
7067247 usd
CY2023 us-gaap Prior Period Reclassification Adjustment Description
PriorPeriodReclassificationAdjustmentDescription
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><b>Reclassification of Prior Period Presentation</b></p><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Certain prior period amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations.</p>
CY2023Q4 us-gaap Accounts Receivable Gross Current
AccountsReceivableGrossCurrent
6292469 usd
CY2022Q4 us-gaap Accounts Receivable Gross Current
AccountsReceivableGrossCurrent
9963821 usd
CY2023Q4 us-gaap Allowance For Doubtful Accounts Premiums And Other Receivables
AllowanceForDoubtfulAccountsPremiumsAndOtherReceivables
39280 usd
CY2022Q4 us-gaap Allowance For Doubtful Accounts Premiums And Other Receivables
AllowanceForDoubtfulAccountsPremiumsAndOtherReceivables
2478 usd
CY2022Q4 us-gaap Allowance For Doubtful Accounts Receivable Current
AllowanceForDoubtfulAccountsReceivableCurrent
2478 usd
CY2021Q4 us-gaap Allowance For Doubtful Accounts Receivable Current
AllowanceForDoubtfulAccountsReceivableCurrent
2682 usd
CY2023 us-gaap Allowance For Doubtful Accounts Receivable Write Offs
AllowanceForDoubtfulAccountsReceivableWriteOffs
36972 usd
CY2023 raya Exchange Difference
ExchangeDifference
170 usd
CY2022 raya Exchange Difference
ExchangeDifference
204 usd
CY2023Q4 us-gaap Allowance For Doubtful Accounts Receivable Current
AllowanceForDoubtfulAccountsReceivableCurrent
39280 usd
CY2022Q4 us-gaap Allowance For Doubtful Accounts Receivable Current
AllowanceForDoubtfulAccountsReceivableCurrent
2478 usd
CY2023Q4 us-gaap Inventory Raw Materials
InventoryRawMaterials
5687671 usd
CY2022Q4 us-gaap Inventory Raw Materials
InventoryRawMaterials
4298235 usd
CY2023Q4 us-gaap Inventory Work In Process
InventoryWorkInProcess
916997 usd
CY2022Q4 us-gaap Inventory Work In Process
InventoryWorkInProcess
642235 usd
CY2023Q4 us-gaap Inventory Finished Goods
InventoryFinishedGoods
546208 usd
CY2022Q4 us-gaap Inventory Finished Goods
InventoryFinishedGoods
1300383 usd
CY2023Q4 us-gaap Inventory Valuation Reserves
InventoryValuationReserves
94417 usd
CY2022Q4 us-gaap Inventory Valuation Reserves
InventoryValuationReserves
13397 usd
CY2023Q4 us-gaap Inventory Net
InventoryNet
7056459 usd
CY2022Q4 us-gaap Inventory Net
InventoryNet
6227456 usd
CY2023 us-gaap Inventory Write Down
InventoryWriteDown
81621 usd
CY2022 us-gaap Inventory Write Down
InventoryWriteDown
-31668 usd
CY2023Q4 us-gaap Supplies
Supplies
1747551 usd
CY2022Q4 us-gaap Supplies
Supplies
515137 usd
CY2023Q4 us-gaap Other Prepaid Expense Current
OtherPrepaidExpenseCurrent
1000000 usd
CY2022Q4 us-gaap Other Prepaid Expense Current
OtherPrepaidExpenseCurrent
4201354 usd
CY2023Q4 us-gaap Advances On Inventory Purchases
AdvancesOnInventoryPurchases
2747551 usd
CY2022Q4 us-gaap Advances On Inventory Purchases
AdvancesOnInventoryPurchases
4716491 usd
CY2022 us-gaap Payments To Suppliers And Employees
PaymentsToSuppliersAndEmployees
4200000 usd
CY2023Q4 us-gaap Property Plant And Equipment Gross
PropertyPlantAndEquipmentGross
3265464 usd
CY2022Q4 us-gaap Property Plant And Equipment Gross
PropertyPlantAndEquipmentGross
2646102 usd
CY2023Q4 us-gaap Accumulated Depreciation Depletion And Amortization Property Plant And Equipment
AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment
1340489 usd
CY2022Q4 us-gaap Accumulated Depreciation Depletion And Amortization Property Plant And Equipment
AccumulatedDepreciationDepletionAndAmortizationPropertyPlantAndEquipment
983947 usd
CY2023Q4 us-gaap Property Plant And Equipment Net
PropertyPlantAndEquipmentNet
1924975 usd
CY2022Q4 us-gaap Property Plant And Equipment Net
PropertyPlantAndEquipmentNet
1662155 usd
CY2023 us-gaap Property Plant And Equipment Additions
PropertyPlantAndEquipmentAdditions
696772 usd
CY2022 us-gaap Property Plant And Equipment Additions
PropertyPlantAndEquipmentAdditions
926117 usd
CY2023 us-gaap Depreciation
Depreciation
385666 usd
CY2022 us-gaap Depreciation
Depreciation
268346 usd
CY2021 us-gaap Depreciation
Depreciation
215121 usd
CY2023 us-gaap Cost Of Goods And Services Sold Depreciation
CostOfGoodsAndServicesSoldDepreciation
243284 usd
CY2022 us-gaap Cost Of Goods And Services Sold Depreciation
CostOfGoodsAndServicesSoldDepreciation
184542 usd
CY2021 us-gaap Cost Of Goods And Services Sold Depreciation
CostOfGoodsAndServicesSoldDepreciation
121455 usd
CY2023Q4 us-gaap Finite Lived Intangible Assets Gross
FiniteLivedIntangibleAssetsGross
12761 usd
CY2022Q4 us-gaap Finite Lived Intangible Assets Gross
FiniteLivedIntangibleAssetsGross
13136 usd
CY2023Q4 us-gaap Finite Lived Intangible Assets Accumulated Amortization
FiniteLivedIntangibleAssetsAccumulatedAmortization
-4199 usd
CY2022Q4 us-gaap Finite Lived Intangible Assets Accumulated Amortization
FiniteLivedIntangibleAssetsAccumulatedAmortization
-2851 usd
CY2023 us-gaap Finitelived Intangible Assets Acquired1
FinitelivedIntangibleAssetsAcquired1
25620 usd
CY2023 us-gaap Amortization Of Intangible Assets
AmortizationOfIntangibleAssets
2329 usd
CY2022 us-gaap Amortization Of Intangible Assets
AmortizationOfIntangibleAssets
1471 usd
CY2023Q4 us-gaap Intangible Assets Net Excluding Goodwill
IntangibleAssetsNetExcludingGoodwill
31853 usd
CY2022Q4 us-gaap Intangible Assets Net Excluding Goodwill
IntangibleAssetsNetExcludingGoodwill
8814 usd
CY2023Q4 us-gaap Operating Lease Right Of Use Asset
OperatingLeaseRightOfUseAsset
7338505 usd
CY2022Q4 us-gaap Operating Lease Right Of Use Asset
OperatingLeaseRightOfUseAsset
7665013 usd
CY2023Q4 us-gaap Other Assets Noncurrent
OtherAssetsNoncurrent
27400000 cny
CY2023Q4 us-gaap Other Assets Noncurrent
OtherAssetsNoncurrent
3859209 usd
CY2023 raya Percentage Of Deposit Interest Rate
PercentageOfDepositInterestRate
0.032 pure
CY2023Q4 us-gaap Short Term Borrowings
ShortTermBorrowings
70424 usd
CY2022Q4 us-gaap Short Term Borrowings
ShortTermBorrowings
6227165 usd
CY2023Q4 us-gaap Debt Instrument Carrying Amount
DebtInstrumentCarryingAmount
14888312 cny
CY2023Q4 us-gaap Debt Instrument Carrying Amount
DebtInstrumentCarryingAmount
2096974 usd
CY2023Q4 us-gaap Long Term Debt Current
LongTermDebtCurrent
1600200 cny
CY2023Q4 us-gaap Long Term Debt Current
LongTermDebtCurrent
225383 usd
CY2023Q4 us-gaap Long Term Debt Noncurrent
LongTermDebtNoncurrent
13288112 cny
CY2023Q4 us-gaap Long Term Debt Noncurrent
LongTermDebtNoncurrent
1871591 usd
CY2022Q4 us-gaap Debt Instrument Carrying Amount
DebtInstrumentCarryingAmount
31500300 cny
CY2022Q4 us-gaap Debt Instrument Carrying Amount
DebtInstrumentCarryingAmount
4567114 usd
CY2022Q4 us-gaap Long Term Debt Current
LongTermDebtCurrent
30000000 cny
CY2022Q4 us-gaap Long Term Debt Current
LongTermDebtCurrent
4349591 usd
CY2022Q4 us-gaap Long Term Debt Noncurrent
LongTermDebtNoncurrent
1500300 cny
CY2022Q4 us-gaap Long Term Debt Noncurrent
LongTermDebtNoncurrent
217523 usd
CY2023 us-gaap Interest Expense Long Term Debt
InterestExpenseLongTermDebt
245897 usd
CY2022 us-gaap Interest Expense Long Term Debt
InterestExpenseLongTermDebt
212451 usd
CY2021 us-gaap Interest Expense Long Term Debt
InterestExpenseLongTermDebt
153611 usd
CY2023 us-gaap Revenues
Revenues
20322498 usd
CY2022 us-gaap Revenues
Revenues
26909025 usd
CY2021 us-gaap Revenues
Revenues
18628886 usd
CY2023 raya Selling And Marketing Expenses
SellingAndMarketingExpenses
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><b>NOTE 14 – SELLING AND MARKETING EXPENSES</b></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Selling and marketing expenses as of December 31, 2023, 2022 and 2021 consisted of the following:</p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> </p> <table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif"> <tr style="vertical-align: bottom"> <td style="text-align: justify"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2023</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2022</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td><td style="font-weight: bold; padding-bottom: 1.5pt"> </td> <td colspan="2" style="font-weight: bold; text-align: center; border-bottom: Black 1.5pt solid">2021</td><td style="padding-bottom: 1.5pt; font-weight: bold"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 64%; text-align: justify">Employee compensation and benefits</td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">202,992</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">141,600</td><td style="width: 1%; text-align: left"> </td><td style="width: 1%"> </td> <td style="width: 1%; text-align: left">$</td><td style="width: 9%; text-align: right">99,797</td><td style="width: 1%; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify">Travel and promotion</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">125,213</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">36,768</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">45,083</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Shipping and handling</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">191,671</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">181,556</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">78,281</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify">Insurance</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">12,233</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right"><div style="-sec-ix-hidden: hidden-fact-38">-</div></td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">2,813</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Consulting fee</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">24,725</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">6,917</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">6,203</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify">Inspection and certification fees</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">141,729</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">196,732</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">77,352</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify">Entertainment</td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">182,221</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">140,292</td><td style="text-align: left"> </td><td> </td> <td style="text-align: left"> </td><td style="text-align: right">166,295</td><td style="text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: White"> <td style="text-align: justify; padding-bottom: 1.5pt">Office and miscellaneous</td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">81,695</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">16,255</td><td style="padding-bottom: 1.5pt; text-align: left"> </td><td style="padding-bottom: 1.5pt"> </td> <td style="border-bottom: Black 1.5pt solid; text-align: left"> </td><td style="border-bottom: Black 1.5pt solid; text-align: right">30,481</td><td style="padding-bottom: 1.5pt; text-align: left"> </td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: justify; padding-bottom: 4pt">Total</td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">962,479</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">720,120</td><td style="padding-bottom: 4pt; text-align: left"> </td><td style="padding-bottom: 4pt"> </td> <td style="border-bottom: Black 4pt double; text-align: left">$</td><td style="border-bottom: Black 4pt double; text-align: right">506,305</td><td style="padding-bottom: 4pt; text-align: left"> </td></tr> </table>
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