Spire Corporation
One Patriots Park
Bedford, MA 01730-2397
October 14, 2009
BY EDGAR
Securities and Exchange Commission
100 F Street, N.E., Mail Stop 3030
Washington, D.C. 20549
Attn: Daniel H. Morris
Special Counsel
Re: Spire Corporation
Form 10-K for Year Ended December 31, 2008 Filed March 31, 2009 File
No. 0-12742
Form 10-Q for Quarter Ended June 30, 2009 Filed August 14, 2009 File
No. 0-12742
Dear Mr. Morris:
This letter is submitted on behalf of Spire Corporation (the "Company" or
"Spire") in response to the comments of the staff of the Division of Corporation
Finance (the "Staff") of the Securities and Exchange Commission (the
"Commission" or "SEC") with respect to the Company's Form 10-K for the fiscal
year ended December 31, 2008, filed on March 31, 2009 (the "Form 10-K"), and the
Company's Form 10-Q for the quarter ended June 30, 2009, filed on August 14,
2009 (the "Form 10-Q"), as set forth in a letter dated September 30, 2009 to
Roger G. Little (the "Comment Letter").
For reference purposes, the text of the relevant portions of the Comment Letter
have been reproduced herein with responses below each numbered comment. For your
convenience, we have bolded the reproduced Staff comments from the Comment
Letter and we have bolded the headings of our responses thereto.
Page 2
Securities and Exchange Commission
October 14, 2009
Form 10-K for the Year Ended December 31, 2008
- ----------------------------------------------
Spire Solar, page 2
- -------------------
Comment No. 1
- -------------
PLEASE FILE AS AN EXHIBIT YOUR DECEMBER 2008 CONTRACT WITH THE FEDERAL PRISON
INDUSTRIES MENTIONED IN THE LAST PARAGRAPH IN THIS SECTION. IN FUTURE FILING,
PLEASE DISCUSS THE MATERIAL TERMS OF THE CONTRACT, SUCH AS THE DURATION.
RESPONSE TO COMMENT NO. 1
While the contract with the Federal Prison Industries (the "UNICOR Contract") is
an important contract for Spire, the disclosure of which is useful for investors
in the context of understanding the Company's overall solar business, the
Company does not believe that it is the type of "material contract" required to
be filed as an exhibit pursuant to Item 601(b)(10) of Regulation S-K. Under Item
601(b)(10) a contract that is otherwise material is not required to be filed as
an exhibit if the contract is made in the ordinary course of business (subject
to certain exceptions, as discussed below). Pursuant to the rule, "[i] If the
contract is such as ordinarily accompanies the kind of business conducted by the
registrant and its subsidiaries, it will be deemed to have been made in the
ordinary course of business and need not be filed unless it falls within one or
more of the following categories . . .." Before addressing the exceptions, the
Company believes that the UNICOR Contract is an "ordinary course" contract
because it is the type of contract that ordinarily accompanies the kind of
business conducted by the Company. As noted on page 2 of the Form 10-K (under
"Products and Services"), the Company's "core business is in the solar market,
where we provide individual pieces of manufacturing equipment, turnkey cell and
module lines, INTEGRATED CELL SUPPLY [emphasis added], solar factory management
services, and solar systems though our joint venture." The Company is
continually looking for opportunities to enter into similar supply-based
agreements, whether it be solar cells or photovoltaic wafers, and has entered
into such arrangements. This part of their business is complementary to other
parts of the Company's solar business, as evidenced by the relationship with
UNICOR -- whereby (i) pursuant to a separate contract, Spire initially supplied
the turnkey module line to UNICOR and (ii) pursuant to a subsequent contract
that resulted from a separate solicitation put out by UNICOR, Spire now supplies
the solar cells for the Spire-installed turnkey module line to manufacture solar
modules.
With respect to the exceptions that would require the filing of an otherwise
"ordinary course" contract, the Company does not believe that any of the
exceptions outlined in Item 601(b)(10)(ii) are applicable with respect to the
UNICOR Contract. In particular, the Company does not believe that the UNICOR
Contract is a "contract upon which the registrant's business is substantially
dependent, as in the case of continuing contracts to sell the major part of the
registrant's products or services . . .." The principal focus of the Company's
solar business is the
Page 3
Securities and Exchange Commission
October 14, 2009
development, manufacturing and marketing of capital equipment for the
photovoltaic solar industry, including individual pieces of manufacturing
equipment and full turnkey lines for cell and module production and testing.
While, as stated above, the UNICOR Contract is an important contract for the
Company and complementary to the other parts of the Company's solar business,
the Company does not believe that it is "substantially dependent" on the
contract.
In future filings, to the extent the Company discusses the UNICOR contract, the
Company will include the material terms of the contract, such as the duration.
Item 1A. Risk Factors, page 6
- -----------------------------
Comment No. 2
- -------------
WE NOTE THAT YOU INCLUDE SEVERAL BULLETS IN YOUR RISK FACTORS, SUCH AS THE
ELEVEN BULLETS IN YOUR SECOND RISK FACTOR AND THE SEVEN BULLETS IN YOUR THIRD
RISK FACTOR. IN FUTURE FILINGS, PLEASE CLARIFY HOW EACH OF THE ISSUES MENTIONED
IN THE BULLET POINTS ARE SPECIFIC TO YOU. ADD SEPARATE RISK FACTORS AS
APPROPRIATE.
RESPONSE TO COMMENT NO. 2
In future filings containing risk factors, the Company will clarify how each of
the bullet points are specific to the Company, and will add separate risk
factors as appropriate.
Our ability to expand revenue and sustain profitability, page 7
- ---------------------------------------------------------------
Comment No. 3
- -------------
IN FUTURE FILINGS, PLEASE EXPAND THE BUSINESS SECTION TO DISCUSS THE
"SUBSTANTIAL INVESTMENT" MENTIONED IN THE SEVENTH BULLET OF THIS RISK FACTOR.
ALSO, DISCLOSE THE STATUS OF YOUR PLANS TO REDIRECT THE USE OF THE EQUIPMENT.
RESPONSE TO COMMENT NO. 3
In future filings, the Company will expand the Business section to discuss the
Company's substantial investment in equipment at Spire Semiconductor made in
anticipation of future revenues under its prior agreement with Principia
Lightworks, as well as the status of the Company's plans to redirect the use of
the equipment to manufacture solar concentrator cells in light of the
termination of the Principia contract.
Page 4
Securities and Exchange Commission
October 14, 2009
Item 7. Management's Discussion and Analysis of Financial Condition, page 15
- ----------------------------------------------------------------------------
Overview, page 16
- -----------------
Comment No. 4
- -------------
WHEN DRAFTING FUTURE "OVERVIEW" SECTIONS FOR YOUR MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, PLEASE CAREFULLY
REVIEW THE GUIDANCE IN RELEASE 34-48960 (DECEMBER 19, 2003). AS NOTED IN THAT
RELEASE, AN OVERVIEW SHOULD INCLUDE THE MOST IMPORTANT MATTERS ON WHICH A
COMPANY'S EXECUTIVES FOCUS IN EVALUATING FINANCIAL CONDITION AND OPERATING
PERFORMANCE AND PROVIDE A CONTEXT FOR THE DISCUSSION AND ANALYSIS OF THE
FINANCIAL STATEMENTS. A GOOD OVERVIEW SHOULD:
- BE A BALANCED, EXECUTIVE-LEVEL DISCUSSION THAT IDENTIFIES THE MOST
IMPORTANT THEMES OR OTHER SIGNIFICANT MATTERS WITH WHICH MANAGEMENT IS
CONCERNED PRIMARILY IN EVALUATING THE COMPANY'S FINANCIAL CONDITION
AND OPERATING RESULTS;
- INCLUDE ECONOMIC OR INDUSTRY-WIDE FACTORS RELEVANT TO THE COMPANY;
- PROVIDE INSIGHT INTO THE MATERIAL OPPORTUNITIES, CHALLENGES AND RISKS
ON WHICH THE COMPANY'S EXECUTIVES ARE MOST FOCUSED AND THE ACTIONS THE
COMPANY'S EXECUTIVES ARE TAKING TO ADDRESS THOSE OPPORTUNITIES,
CHALLENGES AND RISKS; AND
- ADDRESS OTHER ISSUES MENTIONED IN THE RELEASE.
WE NOTE, FOR EXAMPLE, THE THEMES AND MATTERS DISCUSSED IN YOUR MARCH 31, 2009
AND MAY 15, 2009 EARNINGS CONFERENCE CALLS.
RESPONSE TO COMMENT NO. 4
When drafting future "Overview" sections for Management's Discussion and
Analysis of Financial Condition and Results of Operations, the Company will
endeavor to draft such sections so that they comply with the guidance outlined
in Release 34-48960 (December 19, 2003).
Page 5
Securities and Exchange Commission
October 14, 2009
Loan Agreements, page 21
- ------------------------
Comment No. 5
- -------------
IN FUTURE FILINGS, PLEASE EXPAND THIS SECTION TO QUANTIFY THE RATIOS AND
COVENANTS OF YOUR CREDIT FACILITY THAT YOU MUST COMPLY WITH AND COMPARE THE
RATIOS AND COVENANTS TO YOUR FINANCIAL POSITION.
RESPONSE TO COMMENT NO. 5
In future filings, the Company will expand the discussion regarding the
Company's loan agreements to quantify the ratios and covenants of its credit
facility that it must comply with and compare the ratios and covenants to its
financial position. In this regard, the Company notes that in its Form 10-Q for
the quarter ended June 30, 2009 (page 21), the Company quantified its minimum
tangible net worth covenant and compared it to the Company's actual tangible net
worth as of June 30, 2009. The Company will continue to include this disclosure,
as well as add similar disclosure regarding its minimum liquidity covenant.
Exhibit 31.1 and 31.2
- ---------------------
Comment No. 6
- -------------
WE NOTE THAT THE CERTIFICATIONS FILED PURSUANT TO EXCHANGE ACT RULE 13A-14(A)
ARE NOT IN THE EXACT FORM PRESCRIBED BY ITEM 601(B)(31) OF REGULATION S-K.
SPECIFICALLY, WE NOTE THAT YOU INCLUDE THE TITLE OF THE CERTIFYING OFFICER IN
THE INTRODUCTION OF YOUR CERTIFICATION. PLEASE REVISE THE CERTIFICATIONS TO
CONFORM TO THE EXACT WORDING REQUIRED BY ITEM 601(B)(31) OF REGULATION S-K.
RESPONSE TO COMMENT NO. 6
In the Company's Form 10-Q for the quarter ended June 30, 2009, the Company
revised its certification format so that they now conform to the exact wording
required by Item 601(b)(31) or Regulation S-K, including by deleting the title
of the certifying officer in the introduction of the certification. The Company
respectfully requests that its continued use of this revised, conforming
certification in future filings resolve this comment.
Page 6
Securities and Exchange Commission
October 14, 2009
Signatures
- ----------
Comment No. 7
- -------------
YOUR CONTROLLER OR PRINCIPAL ACCOUNTING OFFICER SHOULD SIGN THE FORM 10-K BELOW
THE SECOND PARAGRAPH REQUIRED ON THE SIGNATURES PAGE. PLEASE REVISE.
RESPONSE TO COMMENT NO. 7
At the time of the filing of the Form 10-K (and currently), Christian Dufresne,
the Company's Chief Financial Officer and Treasurer, was both the Company's
principal financial officer and the principal accounting officer. In future
filings, the Company will specify the required capacities in which each officer
is signing.
Form 10-Q for the fiscal quarter ended June 30, 2009
- ----------------------------------------------------
Net Sales and Revenues, page 15
- -------------------------------
Comment No. 8
- -------------
IN FUTURE FILINGS, PLEASE EXPAND THE DISCUSSION OF CHANGES IN REVENUE TO
DISCLOSE, IF APPLICABLE, THE CHANGE IN THE MATERIAL AMOUNT OF REVENUES FROM YOUR
CUSTOMERS. WE NOTE THE DISCLOSURE ON PAGE 8 THAT TWO CUSTOMERS ACCOUNTED FOR
APPROXIMATELY 69% OF YOUR GROSS SALES FOR THE THREE MONTHS ENDED JUNE 30, 2009.
RESPONSE TO COMMENT NO. 8
In future filings, the Company will expand the discussion of changes in revenue
to disclose, if applicable, the change in the material amount of revenues from
its customers.
Page 7
Securities and Exchange Commission
October 14, 2009
Loan Agreements, page 19
- ------------------------
Comment No. 9
- -------------
PLEASE TELL US WHERE YOU FILED AS AN EXHIBIT THE BANK WAIVER MENTIONED IN THE
LAST PARAGRAPH OF THIS SECTION.
RESPONSE TO COMMENT NO. 9
The waiver was not filed as an exhibit to the Form 10-Q. The Company
respectfully requests that it be able to file the waiver with its next quarterly
report on Form 10-Q. The Company also confirms that it will file any future
waivers with the applicable periodic report.
* * * * *
In connection with the Company's responses contained in this letter, the Company
acknowledges that:
- the Company is responsible for the adequacy and accuracy of the
disclosure in the filings;
- 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.
If you should have any questions about this letter, please do not hesitate to
call the undersigned at (781) 275-6000.
Sincerely,
Spire Corporation
/s/ Christian Dufresne
Christian Dufresne
Chief Financial Officer & Treasurer