SEC Comment Letter for DATA I (DAIO) — Feb 15, 2008
DATA I/O CORP (DAIO) (CIK 0000351998)
Date: Feb. 15, 2008 · CIK: 0000351998 · Accession: 0000000000-08-008551
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 000-10394
Referenced dates: September 11, 2007, September 11, 2007
Letter
UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 DIVISION OF CORPORATION FINANCE Mail Stop 6010 December 18, 2007 VIA U.S. MAIL and FACSIMILE Mr. Joel S. Hatlen Chief Financial Officer 6464 185 th Ave NE, Suite 101 Redmond, Washington, 98052
RE: Data I/O Corporation Form 10-K for the fiscal year ended December 31, 2006 Filed April, 2, 2007 Form 10-Q for the quarterly period ended September 30, 2007 File No. 000-10394
Dear Mr. Hatlen: We have reviewed your response dated November 8, 2007 and related filings and have the following comments. Where in dicated, we think you should revise your document in response to these comments. If you disagree, we will consider your explanation as to why our comment is inappl icable or a revision is unnecessary. Please be as detailed as necessary in your explanat ion. 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 re view 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.
Mr. Joel S. Hatlen Data I/O Corporation December 18, 2007 Page 2
Form 10-K for the year ended December 31, 2006
Consolidated Statement of Cash Flows, page 29
1. We note your response to prior comment 2 in our letter dated September 11, 2007. In future filings, please provide additional disclosure of your acc ounting for sales of equipment that had previously been used internally, similar to your response.
Note 15. Share-Based Compensation, page 40
2. We reference your response to prior co mment 7 in our letter dated September 11, 2007. We see that beginning in the four th quarter of 2005 you excluded periods of historical data in calculating volatility due to decreasing revenue related to the dot com and telecom industry collapse fro m 2000 to 2002. SAB 107 and SFAS 123(R) explain that certain instances where it ma y be appropriate to adjust historical volatility are those such as a discrete one-time event that it is specific to the reporting company, under management’s control and not expected to recur during the expected term of the options being granted. Secti on D.1, question 2 of SAB 107 indicates that such exclusions would be rare. It does not appear that events affecting the broader market should be excluded from your analysis of historical volatility. Please further explain why you believe that your calculation of historical volatili ty is in compliance with SAB 107 and SFAS 123(R).
Form 10-Q for the quarterly period ended September 30, 2007
Item 4. Controls and Procedures
(a) Evaluation of disclosure controls and procedures.
3. We note your statement that disclosure cont rols are controls an d procedures designed to reasonably assure that information requi red to be disclosed in our reports filed under the Exchange Act is recorded, proce ssed, summarized, and reported within the time periods specified in the SEC’s rules a nd forms and that disclosure controls are also designed to reasonably assure that such information is accumulated and communicated to our management, including the CEO and CFO, as appropriate to allow timely decisions regarding disclosure. Please revise future filings to state that your principal executive officer and principa l financial officer concluded that your disclosure controls and procedures are effective at the reasonable assurance level . Please refer to Section II.F.4 of Manageme nt’s Reports on Internal Control Over Financial Reporting and Certif ication of Disclosure in Exchange Act Periodic Reports, SEC Release No. 33-8238, available on our website at <http://www.sec.gov/rules/final/33-8238.htm>.
Mr. Joel S. Hatlen Data I/O Corporation December 18, 2007 Page 3 As appropriate, please respond to these co mments within 10 business days or tell us when you will provide us with a response. Please furnish a cover letter with your response that keys your responses to our comments and provides any requested information. Detailed cover le tters greatly facilitate our re view. Please understand that we may have additional comments after re viewing your responses to our comments. You may contact Jong Hwang at (202) 551- 3327 or Kristin Lochhead at (202) 551-3664 if you have questions. In this regar d, please do not hesitate to contact me at (202) 551-3676 with any other questions. Sincerely,
Brian Cascio Accounting Branch Chief
Show Raw Text
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
DIVISION OF
CORPORATION FINANCE
Mail Stop 6010
December 18, 2007
VIA U.S. MAIL and FACSIMILE
Mr. Joel S. Hatlen Chief Financial Officer
6464 185
th Ave NE, Suite 101
Redmond, Washington, 98052
RE: Data I/O Corporation
Form 10-K for the fiscal year ended December 31, 2006
Filed April, 2, 2007 Form 10-Q for the quarterly period ended September 30, 2007
File No. 000-10394
Dear Mr. Hatlen:
We have reviewed your response dated November 8, 2007 and related filings and
have the following comments. Where in dicated, we think you should revise your
document in response to these comments. If you disagree, we will consider your explanation as to why our comment is inappl icable or a revision is unnecessary. Please
be as detailed as necessary in your explanat ion. 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 re view 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.
Mr. Joel S. Hatlen
Data I/O Corporation
December 18, 2007
Page 2
Form 10-K for the year ended December 31, 2006
Consolidated Statement of Cash Flows, page 29
1. We note your response to prior comment 2 in our letter dated September 11, 2007. In future filings, please provide additional disclosure of your acc ounting for sales of
equipment that had previously been used internally, similar to your response.
Note 15. Share-Based Compensation, page 40
2. We reference your response to prior co mment 7 in our letter dated September 11,
2007. We see that beginning in the four th quarter of 2005 you excluded periods of
historical data in calculating volatility due to decreasing revenue related to the dot
com and telecom industry collapse fro m 2000 to 2002. SAB 107 and SFAS 123(R)
explain that certain instances where it ma y be appropriate to adjust historical
volatility are those such as a discrete one-time event that it is specific to the reporting
company, under management’s control and not expected to recur during the expected
term of the options being granted. Secti on D.1, question 2 of SAB 107 indicates that
such exclusions would be rare. It does not appear that events affecting the broader
market should be excluded from your analysis of historical volatility. Please further
explain why you believe that your calculation of historical volatili ty is in compliance
with SAB 107 and SFAS 123(R).
Form 10-Q for the quarterly period ended September 30, 2007
Item 4. Controls and Procedures
(a) Evaluation of disclosure controls and procedures.
3. We note your statement that disclosure cont rols are controls an d procedures designed
to reasonably assure that information requi red to be disclosed in our reports filed
under the Exchange Act is recorded, proce ssed, summarized, and reported within the
time periods specified in the SEC’s rules a nd forms and that disclosure controls are
also designed to reasonably assure that such information is accumulated and communicated to our management, including the CEO and CFO, as appropriate to
allow timely decisions regarding disclosure. Please revise future filings to state that your principal executive officer and principa l financial officer concluded that your
disclosure controls and procedures are effective at the reasonable assurance level .
Please refer to Section II.F.4 of Manageme nt’s Reports on Internal Control Over
Financial Reporting and Certif ication of Disclosure in Exchange Act Periodic
Reports, SEC Release No. 33-8238, available on our website at
<http://www.sec.gov/rules/final/33-8238.htm>.
Mr. Joel S. Hatlen
Data I/O Corporation December 18, 2007
Page 3
As appropriate, please respond to these co mments within 10 business days or tell
us when you will provide us with a response. Please furnish a cover letter with your
response that keys your responses to our comments and provides any requested
information. Detailed cover le tters greatly facilitate our re view. Please understand that
we may have additional comments after re viewing your responses to our comments.
You may contact Jong Hwang at (202) 551- 3327 or Kristin Lochhead at (202)
551-3664 if you have questions. In this regar d, please do not hesitate to contact me at
(202) 551-3676 with any other questions.
Sincerely,
Brian Cascio Accounting Branch Chief