<SEC-DOCUMENT>0001640334-23-002326.txt : 20240313
<SEC-HEADER>0001640334-23-002326.hdr.sgml : 20240313
<ACCEPTANCE-DATETIME>20231219185328
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001640334-23-002326
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20231219

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			SolarMax Technology, Inc.
		CENTRAL INDEX KEY:			0001519472
		STANDARD INDUSTRIAL CLASSIFICATION:	CONSTRUCTION SPECIAL TRADE CONTRACTORS [1700]
		ORGANIZATION NAME:           	05 Real Estate & Construction
		IRS NUMBER:				262028786
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		3080 12TH STREET
		CITY:			RIVERSIDE
		STATE:			CA
		ZIP:			92507
		BUSINESS PHONE:		(951) 300-0788

	MAIL ADDRESS:	
		STREET 1:		3080 12TH STREET
		CITY:			RIVERSIDE
		STATE:			CA
		ZIP:			92507
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
<TEXT>
<html><head><title>solarmax_corresp.htm</title><!--Document created using EDGARMaster--></head><body style="TEXT-ALIGN: justify; FONT: 10pt times new roman; MARGIN-LEFT: 7%; MARGIN-RIGHT: 7%"><p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp; </p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;">SolarMax Technology, Inc.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;">1080 12th Street</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;">Riverside, California 92507</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:center;">December 19, 2023</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Division of Corporation Finance</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Office of Real Estate &amp; Construction</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">U.S. Securities and Exchange Commission</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">100 F Street, NE</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Washington, D.C., 20549</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Attn: Ronald (Ron) Alper</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 33.75pt; text-align:justify;">Pam Howell</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 33.75pt; text-align:justify;">Ameen Hamady</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 33.75pt; text-align:justify;">Jennifer Monick</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="margin:0px"> <table style="border-spacing:0;font-size:10pt;width:100%" cellpadding="0"> <tr style="height:15px"> <td style="width:4%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:4%;vertical-align:top;"> <p style="margin:0px"><strong>Re: </strong></p></td> <td style="vertical-align:top;"> <p style="margin:0px"><strong>SolarMax Technology, Inc.</strong></p></td></tr> <tr style="height:15px"> <td> <p style="margin:0px">&nbsp;</p></td> <td></td> <td style="vertical-align:top;"> <p style="margin:0px"><strong>Amendment No. 10 to Registration Statement on Form S-1</strong></p></td></tr> <tr style="height:15px"> <td> <p style="margin:0px">&nbsp;</p></td> <td></td> <td style="vertical-align:top;"> <p style="margin:0px"><strong>Filed December 4, 2023</strong></p></td></tr> <tr style="height:15px"> <td> <p style="margin:0px">&nbsp;</p></td> <td></td> <td style="vertical-align:top;"> <p style="margin:0px"><strong>File No. 333-266206</strong></p></td></tr></table></p> <p style="margin:0px"></p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Ladies and Gentlemen:</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; TEXT-INDENT: 33.75pt; text-align:justify;">This letter is in response to the letter dated December 18, 2023, from the staff (the &#8220;Staff&#8221;) of the Securities and Exchange Commission (the &#8220;Commission&#8221;) addressed to SolarMax Technology, Inc. (the &#8220;Company&#8221;). For ease of reference, we have recited the Staff&#8217;s comment in this response.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"><u>Notes to Consolidated Financial Statements for the Nine Months Ended September 30, 2023 and 2022 (Unaudited)</u></p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;"><u>2. Basis of Presentation and Summary of Significant Accounting Policies Warranties, page F-17</u></p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="margin:0px"> <table style="border-spacing:0;font-size:10pt;width:100%" cellpadding="0"> <tr style="height:15px"> <td style="width:4%;vertical-align:top;"> <p style="margin:0px">1.</p></td> <td style="vertical-align:top;"> <p style="MARGIN: 0px; text-align:justify;">We note your disclosure that in 2016, as a result of the bankruptcy of a Chinese panel supplier from whom the Company purchased solar modules, the Company reclassified the liability related to unpaid retentions to warranty liability in the amount of $651,000 and that given that the Company has not received any claims against the liability since that time, the Company reversed the liability against cost of revenue during the third quarter of 2023. Please tell us how the Company considered the guidance in ASC 405-20-40-1b in determining that it should derecognize the liability. Specifically, your response should indicate any analysis the Company conducted to determine that it was legally released under such liability.</p></td></tr></table></p> <p style="margin:0px"></p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">Response: There was no release of a legal obligation as described under ASC 405-20-40-1 but, rather, a change in estimate of the warranty reserve under ASC 460.&nbsp; </p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">In 2014, the Company negotiated a retention of $651,000 from purchases of solar modules from a Chinese panel supplier to support potential end-user claims which the Company may be required to satisfy in lieu of a manufacturer&#8217;s warranty.&nbsp; At the time, the Chinese panel supplier was experiencing financial problems, making it uncertain that the supplier would be able to honor its warranty on the panels purchased. There was no agreement that the Company would pay any portion of the amount retained that was not used to satisfy warranty costs and the retained amount was classified as a warranty liability.&nbsp; The Chinese panel supplier subsequently went bankrupt more than nine years ago, and no claim was made against the Company in the bankruptcy proceeding.&nbsp; </p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">The Company has not received any material claims against the amount retained and treated as warranty liability since the time the solar modules were installed in 2013.&nbsp; Accordingly, the Company reassessed its warranty reserve under ASC 460 and reduced its warranty reserve by $651,000 against cost of revenue in the third quarter of 2023.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">The paragraph in the Notes to Consolidated Financial Statements for the Nine Months Ended September 30, 2023 and 2022 (Unaudited), 2. Basis of Presentation and Summary of Significant Accounting Policies Warranties, page F-17 is not materially incorrect but we will revise the disclosure in the annual financial statements for the year ended December 31, 2023 to provide clarification.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">If you have any questions, please do not hesitate to call our counsel, Asher S. Levitsky PC of Ellenoff Grossman &amp; Schole LLP at (917) 930-0991.</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="margin:0px"> <table style="border-spacing:0;font-size:10pt;width:100%" cellpadding="0"> <tr style="height:15px"> <td style="width:50%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:3%;"> <p style="margin:0px">&nbsp;</p></td> <td style="width:35%;vertical-align:top;"> <p style="margin:0px">Very truly yours</p></td> <td style="width:12%;"> <p style="margin:0px">&nbsp;</p></td></tr> <tr style="height:15px"> <td> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td></tr> <tr style="height:15px"> <td> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td style="BORDER-BOTTOM: 1px solid;vertical-align:top;"> <p style="margin:0px">/s/ David Hsu</p></td> <td> <p style="margin:0px">&nbsp;</p></td></tr> <tr style="height:15px"> <td> <p style="margin:0px">&nbsp;</p></td> <td> <p style="margin:0px">&nbsp;</p></td> <td style="vertical-align:top;"> <p style="margin:0px">David Hsu, Chief Executive Officer</p></td> <td> <p style="margin:0px">&nbsp;</p></td></tr></table></p> <p style="margin:0px"></p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px 0px 0px 1.5pt; text-align:justify;">cc: Asher S. Levitsky PC</p> <p style="FONT-SIZE: 10pt; FONT-FAMILY: times new roman; MARGIN: 0px; text-align:justify;">&nbsp;</p><body>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
