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United States securities and exchange commission logo
August 26, 2022
Huifeng Chang
Director and Chief Financial Officer
Canadian Solar Inc.
545 Speedvale Avenue West
Guelph, Ontario, Canada N1K 1E6
Re: Canadian Solar Inc.
Form 20-F for the
Year Ended December 31, 2021
Filed April 28,
2022
File No. 001-33107
Dear Dr. Chang:
We have limited our review of your filing to the financial
statements and related
disclosures 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 Year Ended December 31, 2021
Part I, page 4
1. At the onset of Part I,
please revise to disclose prominently the following:
whether your
auditor is subject to the determinations announced by the PCAOB on
December 16, 2021;
whether and how the
Holding Foreign Companies Accountable Act, the Accelerating
Holding Foreign
Companies Accountable Act, and related regulations will affect your
company, including
the time frame change in PCAOB inspections for two
consecutive years
instead of three years;
whether you have
been or expect to be identified by the Commission under the
HFCAA; and
a cross-reference
to your more detailed disclosure in your risk factors, including the
heading of the risk
factor.
Huifeng Chang
FirstName LastNameHuifeng Chang
Canadian Solar Inc.
Comapany
August 26, NameCanadian
2022 Solar Inc.
August
Page 2 26, 2022 Page 2
FirstName LastName
2. At the onset of Part I, provide prominent disclosure about the legal
and operational risks
associated with being based in or having the majority of the company
s operations in
China. Your disclosure should make clear whether these risks could
result in a material
change in your operations 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 the use
of variable interest entities and data security or anti-monopoly
concerns, have or may
impact the company s ability to conduct its business, accept foreign
investments, or list on
a U.S. or other foreign exchange. Please disclose whether your auditor
is subject to the
determinations announced by the PCAOB on December 16, 2021 and whether
and how
the Holding Foreign Companies Accountable Act and related regulations
will affect your
company.
3. At the onset of Part I, clearly disclose how you will refer to the
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 an interest.
Item 3. Key Information, page 4
4. 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 investigate
completely your auditor, and that as a result an exchange may
determine to delist your
securities. Disclose whether your auditor is subject to the
determinations announced by
the PCAOB on December 16, 2021.
5. At the onset of Item 3, 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. 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. 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.
Huifeng Chang
FirstName LastNameHuifeng Chang
Canadian Solar Inc.
Comapany
August 26, NameCanadian
2022 Solar Inc.
August
Page 3 26, 2022 Page 3
FirstName LastName
6. Disclose each permission or approval that you or your subsidiaries are
required to obtain
from Chinese authorities to operate your business and to offer the
securities being
registered to foreign investors. State whether you or your
subsidiaries are covered by
permissions requirements from the China Securities Regulatory
Commission (CSRC),
Cyberspace Administration of China (CAC) or any other governmental
agency, and state
affirmatively whether you have received all requisite permissions or
approvals and
whether any permissions or approvals have been denied. Please also
describe the
consequences to you and your investors if you or your subsidiaries:
(i) do not receive or
maintain such permissions or approvals, (ii) inadvertently conclude
that such permissions
or approvals are not required, or (iii) applicable laws, regulations,
or interpretations
change and you are required to obtain such permissions or approvals in
the future.
7. At the onset of Item 3, provide a clear description of how cash is
transferred through your
organization. Quantify any cash flows and transfers of other assets by
type that have
occurred and direction of transfer. Quantify any dividends or
distributions that a
subsidiary has made 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. Your disclosure should make clear if no transfers,
dividends, or
distributions have been made to date. Describe any restrictions on
foreign exchange and
your ability to transfer cash between entities, across borders, and to
U.S. investors.
Describe any restrictions and limitations on your ability to
distribute earnings from the
company, including your subsidiaries to the parent company and U.S.
investors.
Item 3.D. Risk Factors, page 4
8. Revise your risk factors to acknowledge that if these regulations
change or are interpreted
differently in the future, the securities you have registered may
decline in value or become
worthless if the determinations, changes, or interpretations result in
your inability to assert
contractual control over the assets of your PRC subsidiaries.
9. We note your disclosure about the Holding Foreign Companies
Accountable Act on page
30. Please expand your risk factors to disclose whether you have been
or expect to be
identified by the Commission under the HFCAA and what impact this may
have on your
ability to continue to offer your securities.
10. Given the Chinese government s significant oversight and discretion
over the conduct of
your business, please revise to highlight separately 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 the securities you are
registering. 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.
Huifeng Chang
Canadian Solar Inc.
August 26, 2022
Page 4
11. We note your risk factor disclosures on page 39 regarding the
difficulty of bringing
actions and enforcing judgements against your officers and directors
due to the fact that
the majority are located in countries other than the U.S. Please also
include a separate
Enforceability section in your annual report that discusses the
difficulty of bringing
actions and enforcing judgements against your officers and directors
located in China.
Item 5. Operating and Financial Review and Prospects
Results of Operations, page 69
12. We note that higher supply chain costs have impacted your results of
operations. Please
enhance your disclosure to clarify whether supply chain disruptions
materially affect your
outlook or business goals. Specify whether these challenges have
materially impacted
your results of operations or capital resources and quantify, to the
extent possible, how
your sales, profits, and/or liquidity have been impacted.
In closing, 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 Jeffrey Gordon at 202-551-3866 or Kevin Stertzel at
202-551-
3723 with any questions.
FirstName LastNameHuifeng Chang Sincerely,
Comapany NameCanadian Solar Inc.
Division of
Corporation Finance
August 26, 2022 Page 4 Office of
Manufacturing
FirstName LastName