Mail Stop 6010
June 28, 2005
Via U.S. Mail and Facsimile to (978) 777-6570
William J. Schmidt
Chief Financial Officer
Ibis Technology Corporation
32 Cherry Hill Drive
Danvers, MA 01923
Re: Ibis Technology Corporation
Form 10-K for the Fiscal Year Ended December 31, 2005
Filed March 31, 2005
Form 10-Q for the Fiscal Quarter Ended March 31, 2005
File No. 000-23150
Dear Mr. Schmidt:
We have reviewed your filing and have the following
comments.
We have limited our review to only your financial statements and
related disclosures and do no intend to expand our review to other
portions of your documents. In some of our comments, we may ask
you
to provide us with information so we may better understand your
disclosure. After reviewing this information, we may raise
additional comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or any other aspect
of
our review. Feel free to call us at the telephone numbers listed
at
the end of this letter.
Form 10-K for the Year Ended December 31, 2004
Management Discussion and Analysis of Financial Condition and
Results
of Operations, page 23
Liquidity and Capital Resources, page 30
1. We note that you engaged in "cost savings measures" which
included
the layoff of employees and the discontinuance of the wafer
manufacturing business. Please expand MD&A in future filings to
make
quantified disclosure about anticipated and actual cost savings
derived from your cost saving measures during the periods
presented.
Your disclosures should fully conform to the guidance set forth in
the Question under "Disclosures" to SAB Topic 5-P. Refer to the
next
to last paragraph to the referenced Question.
2. We see that in June of 2003 you entered into an agreement with
a
financing agent to obtain payment for products on an expedited
basis.
Please tell us more about this agreement and how it impacted your
results from operations and revenue recognition.
Note 5. Inventories, page 45
3. We note that you transferred equipment from property and
equipment
to inventory in 2004. Tell us more about your accounting for this
transfer and demonstrate that your accounting complies with GAAP.
Also, confirm that the inventory is stated at the lower of cost or
market in accordance with ARB 43.
(9) Accrued Liabilities, page 49
4. Please revise future filings to provide the disclosures
required
by paragraph 14 of FIN 45. Alternatively, tell us why you believe
such disclosures are not required.
(17) Discontinued Operation, page 53
5. We note that you recorded $11.1 million impairment charge
related
to wafer manufacturing inventory and fixed assets in 2003. For
assets
write-downs, you should provide all of the disclosures required by
SFAS 144, as applicable. Specifically, tell us and disclose in
future filings the following; (i) the original and adjusted cost
basis of the assets; (ii) the method utilized for determining
their
fair value; (iii) the expected nature and timing for the disposal
of
these assets; and (iv) the expected proceeds from their disposal.
6. Refer to your disposal of your wafer manufacturing business.
Explain the nature of any significant costs allocated to
discontinued
operations. Indicate the basis for the allocation and state
whether
any of these costs were expected to be recurring. Refer to SFAS
144
in your response.
Form 10-Q for the Fiscal-Quarter Ended March 31, 2005
Part I - Item 4, page 21
7. We note your disclosure that management has concluded that your
disclosure controls and procedures are "adequate and effective to
ensure that material information relating to the company was made
known to them by others within the company, particularly during
the
period in which this Quarterly Report on Form 10-Q was prepared."
Please address the following in your future filings:
* Revise to eliminate the term "adequate" as it is not defined
under
Rule 13a-15(e).
* Revise the language that appears after the word "effective" so
that
it is substantially similar in all material respects to the
language
that appears in the entire two-sentence definition of "disclosure
controls and procedures" set forth in Rule 13a-15(e).
As appropriate, please respond to these comments within 10
business days or tell us when you will provide us with a response.
Please furnish a cover letter that keys your responses to our
comments and provides any requested information. Detailed cover
letters greatly facilitate our review. Please understand that we
may
have additional comments after reviewing your responses to our
comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing includes all information required under the Securities
Exchange Act of 1934 that they have provided all information
investors require for an informed decision. Since the company and
its management are in possession of all facts relating to a
company`s
disclosure, they are responsible for the accuracy and adequacy of
the
disclosures they have made.
In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:
* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.
You may contact Kevin Kuhar, Staff Accountant, at (202) 551-
3662 or me at (202) 551-3554 if you have questions regarding these
comments on the financial statements and related matters. In this
regard, do not hesitate to contact Martin James, Senior Assistant
Chief Accountant, at (202) 551-3671.
Sincerely,
Angela Crane
Branch Chief
William J. Schmidt
Ibis Technology Corporation
June 28, 2005
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