United States securities and exchange commission logo
September 22, 2021
Xiaofeng Peng
Chief Executive Officer
SPI Energy Co., Ltd.
#1128, 11/F, No. 52 Hung To Road
Kwun Tong, Kowloon
Hong Kong SAR, China
Re: SPI Energy Co.,
Ltd.
Form 20-F for the
Fiscal Year Ended December 31, 2020
Filed April 29,
2021
File No. 001-37678
Dear Mr. Peng:
We have reviewed your filing 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 these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 20-F for the Fiscal Year Ended December 31, 2020
Part 1 Item 3. Key Information, page 3
1. On page 3, as an
overview under Item 3. Key Information, revise to provide prominent
disclosure about the
legal and operational risks associated with being based in in China.
Your disclosure should
make clear whether these risks could result in a material change in
your operations and/or
the value of your ordinary shares or could significantly limit or
completely hinder your
ability to offer or continue to offer securities to investors and
cause the value of such
securities to significantly decline or be worthless. Your disclosure
should address how
recent statements and regulatory actions by China s government, such
as those related to
data security or anti-monopoly concerns, has or may impact the
company s ability to
conduct its business, accept foreign investments, or list on an U.S. or
other foreign exchange.
Xiaofeng Peng
SPI Energy Co., Ltd.
September 22, 2021
Page 2
2. On page 3, as an overview under Item 3. Key Information, revise to
clearly disclose how
you will refer to the holding company and subsidiaries when providing
the disclosure
throughout the document so that it is clear to investors which entity
the disclosure is
referencing and which subsidiaries or entities are conducting the
business operations.
Disclose clearly the entity (including the domicile) in which
investors are purchasing
their interest.
D. Risk Factors, page 5
3. On page 3 and as separate risk factor under Item 3 D., revise to
disclose the risks that your
corporate structure and being based in or having the majority of the
company s operations
in China poses to investors. In particular, describe the significant
regulatory, liquidity,
and enforcement risks with cross-references to the more detailed
discussion of these risks
in the filing. For example, specifically discuss risks arising from
the legal system in
China, including risks and uncertainties regarding the enforcement of
laws and that rules
and regulations in China can change quickly with little advance
notice; and the risk that
the Chinese government may intervene or influence your operations at
any time, or may
exert more control over offerings conducted overseas and/or foreign
investment in China-
based issuers, which could result in a material change in your
operations and/or the value
of your ordinary shares. Acknowledge any risks that any actions by the
Chinese
government to exert more oversight and control over offerings that are
conducted overseas
and/or foreign investment in China-based issuers could significantly
limit or completely
hinder your ability to offer or continue to offer securities to
investors and cause the value
of such securities to significantly decline or be worthless.
4. On page 3 and as separate risk factor under Item 3 D., revise to
disclose each permission
that you or your subsidiaries are required to obtain from Chinese
authorities to operate and
issue these securities to foreign investors. State whether you or your
subsidiaries are
covered by permissions requirements from the CSRC, CAC or any other
entity and state
affirmatively whether you have received all requisite permissions and
whether any
permissions have been denied.
5. On page 3 and as a separate risk factor under Item 3 D., revise to
provide a clear
description of how cash is transferred through your organization.
Disclose your intentions
to distribute earnings or settle any amounts owed. Quantify any cash
flows and transfers
of other assets by type that have occurred between the holding company
and its
subsidiaries and direction of transfer. Quantify any dividends or
distributions that a
subsidiary has made to the holding company and which entity made such
transfer, and
their tax consequences. Similarly quantify dividends or distributions
made to U.S.
investors, the source, and their tax consequences. Describe any
restrictions on foreign
FirstName LastNameXiaofeng Peng
exchange and your ability to transfer cash between entities, across
borders, and to U.S.
Comapany NameSPI
investors. Energy
Describe anyCo., Ltd.
restrictions and limitations on your ability
to distribute earnings
from22,
September your businesses,
2021 Page 2 including subsidiaries to the parent company and
U.S. investors.
FirstName LastName
Xiaofeng Peng
FirstName
SPI EnergyLastNameXiaofeng Peng
Co., Ltd.
Comapany 22,
September NameSPI
2021 Energy Co., Ltd.
September
Page 3 22, 2021 Page 3
FirstName LastName
6. We note that your principal executive offices and your auditor are
located in Hong Kong,
China. Revise to disclose that trading in your securities may be
prohibited under the
Holding Foreign Companies Accountable Act if the PCAOB determines that
it cannot
inspect or fully investigate your auditor, and that as a result an
exchange may determine to
delist your securities. If the PCAOB has been or is currently unable
to inspect your
auditor, revise your disclosure to so state.
7. On page 3 and as a separate risk factor under Item 3 D., revise to
acknowledge that if the
PRC government determines that your offshore corporate structure does
not comply with
PRC regulations, or if these regulations change or are interpreted
differently in the future,
your shares may decline in value or become worthless if you are unable
to assert your
contractual control rights over the assets of your PRC subsidiaries
that conduct all or
substantially all of your operations.
8. Given the Chinese government s significant oversight and discretion
over the conduct of
your business, revise to separately highlight the risk that the
Chinese government may
intervene or influence your operations at any time, which could result
in a material change
in your operations and/or the value of your ordinary shares. Also,
given recent statements
by the Chinese government indicating an intent to exert more oversight
and control over
offerings that are conducted overseas and/or foreign investment in
China-based issuers,
acknowledge the risk that any such action could significantly limit or
completely hinder
your ability to offer or continue to offer securities to investors and
cause the value of such
securities to significantly decline or be worthless.
9. In light of recent events indicating greater oversight by the
Cyberspace Administration of
China over data security, particularly for companies seeking to list
on a foreign exchange,
please revise your disclosure to explain how this oversight impacts
your business and your
offering and to what extent you believe that you are compliant with
the regulations or
policies that have been issued by the CAC to date.
Notes to the Consolidated Financial Statements
Note 1. Description of Business and Organization, page F-9
10. We note that you deconsolidated Sinsin Renewable Investment Limited (
Sinsin ) on
January 1, 2017 and recorded the carrying amount of $69,606 thousand
in investment in
affiliate due to petitions filed that directly affected the Group s
ability to effectively
control Sinsin and make any direct management decisions or have any
direct impact on
Sinsin s polices, operations or assets without the agreement of
Sinsin Group. However, we
also note that judgement was made and that interim management consists
of one member
elected by the Group. Please provide us with your detailed accounting
analysis of the
transaction including how you determined deconsolidation and
subsequent presentation of
the Group's investment in Sinsin at its carrying value was appropriate
citing relevant
GAAP. Please include a discussion of your voting power.
Xiaofeng Peng
SPI Energy Co., Ltd.
September 22, 2021
Page 4
11. Please tell us what method you have used for accounting for the
investment in affiliate of
Sinsin after the deconsolidation and why you believe it is
appropriate. In this regard,
please explain why the balance in investment in affiliates has not
changed since the initial
recognition.
Note 14. Short-term Borrowings and Long-term Borrowings, page F-31
12. We note significant proceeds and repayments from line of credit and
loans payable in your
statements of cash flows. Please disclose the material terms of your
lines of credit,
including amounts available, interest rates, maturity dates, any
collateral requirements,
and any other material terms. Please also discuss how any financial
covenants may restrict
your ability to incur additional debt to finance uses in the next 12
months, if applicable. In
addition, please file the agreements governing your line of credit.
Refer to Item
601(b)(10)of Regulation S-K.
Note 15. Convertible Bonds
(1) 2014 and 2015 Convertible Promissory Note and Amendments, page F-32
13. We note your disclosure that you defaulted the payment for the related
outstanding
convertible bonds of $35,000 thousand in June 2016 and that all of the
conversion options
of these convertible bonds expired. We also note from your disclosure
on page 101 that
you continue to negotiate settlement arrangements with the
bondholders. Please disclose
the maturity dates and expiration dates of these outstanding balances
and tell us the terms
of any updated settlement arrangements including if the holders have
attempted any
recourse for payment or conversion.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
You may contact Eiko Yaoita Pyles, Staff Accountant at 202-551-3587 or
Melissa
Gilmore, Senior Staff Accountant at 202-551-3777 with any questions.
FirstName LastNameXiaofeng Peng Sincerely,
Comapany NameSPI Energy Co., Ltd.
Division of
Corporation Finance
September 22, 2021 Page 4 Office of
Manufacturing
FirstName LastName