SEC Comment Letter for KOPIN CORP (KOPN) (CIK 0000771266) (KOPN) — Sep 4, 2009
KOPIN CORP (KOPN) (CIK 0000771266)
Date: Sept. 4, 2009 · CIK: 0000771266 · Accession: 0000000000-09-049273
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 000-19882
Referenced dates: July 30, 2009
Letter
UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549
DIVISION OF CORPORATION FINANCE
Mail Stop 3030 August 13, 2009
VIA U.S. MAIL AND FAX 508-822-1381
Richard A. Sneider Chief Financial Officer Kopin Corporation 200 John Hancock Rd. Taunton, Massachusetts 02780 Re: Kopin Corporation Form 10-K for the year ended December 27, 2008 Filed March 10, 2009 File No. 000-19882 Dear Mr. Sneider:
We have reviewed your letter dated July 30, 2009 and have the following comments. Where indicated, we think you should revise yo ur future documents in response to these comments. If you disagree, we will consider your explanation as to why our comment is inapplicable or a revision is unnecessary. Please be as detailed as necess ary in your explanation. In some of our comments, we may ask you to pr ovide us with information so we may better understand your disclosure. After reviewing th is 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 requir ements 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 fr ee to call us at the telephone numbers listed at th e end of this letter.
Richard A. Sneider Kopin Corporation August 13, 2009 Page 2 Form 10-K for the year ended December 27, 2008
Item 11. Executive Compensation, page 47
1. We note your response to prior comment 2. Pl ease provide us with a more detailed analysis of how disclosure of the specif ic quantitative or qualitative performance objectives upon which your Compensation Committee bases its incentive awards would result in competitive harm. Refer to Qu estion 118.04 of the Regulation S-K Compliance and Disclosure Interpretations available on our website at http://www.sec.gov/divisions/corpf in/guidance/regs-kinterp.htm .
3. Other Assets and Amounts Due To /Due From Affiliates, page 63
Non-Marketable Securities – Equ ity Method Investments, page 64
2. Refer to our prior comment 4. With respec t to your 2008 loan to KTC, we noted your response indicated that you considered the guidance in EITF 02-18 and concluded that since you received fair value for the loans (the loans were collateralized by equipment) and no increase in ownership occurred, you “were not funding previously unrecorded equity losses and therefore no a dditional equity method losses we re recorded”. We also noted disclosures on page 38 of your Form 10-K that “On October 8, 2008 you entered into an agreement wherein you loaned KTC $2.0 million for first and third liens on its building and certain equipment. For financ ial accounting reporting purposes $0.8 million of the $2.0 million was considered an equity investment and is included in Equity losses in unconsolidated affiliates.” Your response and the referenced disclosures do not clearly indicate how and why you concluded only $.8 million of the referenced loan to KTC represented, in substance, the f unding of prior losses of KTC. Please provide us with the following:
• an analysis of each of the four factors describe d under paragraph 10 of EITF 02-18 (and at paragraph 29 of FASB ASC 323-10-35) that you considered in reaching your conclusion as to the amounts of your 2008 $2 m illion loan to KTC that represented, in substance, the funding of prior KTC losses.
• In a related matter, tell us how the re quested conclusions are impacted by the following facts:
o the October 2008 loan to KTC was appare ntly related to the fact that (as disclosed on page 38 of your Form 10 -K) “KTC has been incurring operating losses and, as a result, it has been ex periencing cash flow problems” and o the $1.2 million of the loan not considered to be funding of prior losses of KTC was written-off during your fourth quarter of 2008;
Richard A. Sneider Kopin Corporation August 13, 2009 Page 3
• your cumulative share of KTC’s net losses not recognized (for all periods the equity method was suspended) as of December 31, 2007 and 2008 and
• a summary of the significant terms of the lo an. As applicable, please cross-reference the information provided in our reques ted analysis to the loan terms.
Index to Exhibits, page 80
3. We note your response to prior comment 7. Plea se reconcile your an alysis regarding the materiality of the Skyworks Solutions agr eement with your response to prior comment 2, in which you state that disclosure of certa in performance measures and targets would cause competitive harm due to the negative impact on your ab ility to negotiate prices with Skyworks. Form 8-K dated July 30, 2009
4. We note from information herein that you purchased 19,572,468 shares of KTC’s common stock for approximately $5,975,000 and ag reed to purchase 128,226 shares of KTC from Microelectronics Technology Inc. We also note you indicated that as a result of these two transactions and the Company’ s previous investments in KTC you will own approximately 87% of the outstanding common stock of KTC. Please explain to us how you accounted for this acquisition and tell us wh ether you are required to and plan to file KTC’s historical financial statements and a ny pro forma financial information reflecting the transaction under Item 9.01 of Form 8-K. Please provide us with the significance tests outlined in Rule 1-02(w) of Regul ation S-X for the referenced acquisition.
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.
Richard A. Sneider Kopin Corporation August 13, 2009 Page 4 You may contact Andri Boerman at (202) 551-3645 or me at (202) 551-3603 if you have questions regarding comments on th e financial statements and rela ted matters. Please contact Joe McCann at (202) 551-3360 or Mary Beth Breslin at (202) 551-3358 if you have questions on other comments. S i n c e r e l y , J a y W e b b Accounting Reviewer
Show Raw Text
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
DIVISION OF
CORPORATION FINANCE
Mail Stop 3030
August 13, 2009
VIA U.S. MAIL AND FAX 508-822-1381
Richard A. Sneider Chief Financial Officer
Kopin Corporation
200 John Hancock Rd. Taunton, Massachusetts 02780
Re: Kopin Corporation
Form 10-K for the year ended December 27, 2008
Filed March 10, 2009 File No. 000-19882
Dear Mr. Sneider:
We have reviewed your letter dated July 30, 2009 and have the following comments.
Where indicated, we think you should revise yo ur future documents in response to these
comments. If you disagree, we will consider your explanation as to why our comment is
inapplicable or a revision is unnecessary. Please be as detailed as necess ary in your explanation.
In some of our comments, we may ask you to pr ovide us with information so we may better
understand your disclosure. After reviewing th is 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 requir ements 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 fr ee to call us at the
telephone numbers listed at th e end of this letter.
Richard A. Sneider
Kopin Corporation August 13, 2009 Page 2
Form 10-K for the year ended December 27, 2008
Item 11. Executive Compensation, page 47
1. We note your response to prior comment 2. Pl ease provide us with a more detailed
analysis of how disclosure of the specif ic quantitative or qualitative performance
objectives upon which your Compensation Committee bases its incentive awards would result in competitive harm. Refer to Qu estion 118.04 of the Regulation S-K Compliance
and Disclosure Interpretations available on our website at
http://www.sec.gov/divisions/corpf in/guidance/regs-kinterp.htm
.
3. Other Assets and Amounts Due To /Due From Affiliates, page 63
Non-Marketable Securities – Equ ity Method Investments, page 64
2. Refer to our prior comment 4. With respec t to your 2008 loan to KTC, we noted your
response indicated that you considered the guidance in EITF 02-18 and concluded that
since you received fair value for the loans (the loans were collateralized by equipment)
and no increase in ownership occurred, you “were not funding previously unrecorded
equity losses and therefore no a dditional equity method losses we re recorded”. We also
noted disclosures on page 38 of your Form 10-K that “On October 8, 2008 you entered
into an agreement wherein you loaned KTC $2.0 million for first and third liens on its building and certain equipment. For financ ial accounting reporting purposes $0.8 million
of the $2.0 million was considered an equity investment and is included in Equity losses in unconsolidated affiliates.” Your response and the referenced disclosures do not clearly
indicate how and why you concluded only $.8 million of the referenced loan to KTC represented, in substance, the f unding of prior losses of KTC. Please provide us with the
following:
• an analysis of each
of the four factors describe d under paragraph 10 of EITF 02-18
(and at paragraph 29 of FASB ASC 323-10-35) that you considered in reaching your
conclusion as to the amounts of your 2008 $2 m illion loan to KTC that represented, in
substance, the funding of prior KTC losses.
• In a related matter, tell us how the re quested conclusions are impacted by the
following facts:
o the October 2008 loan to KTC was appare ntly related to the fact that (as
disclosed on page 38 of your Form 10 -K) “KTC has been incurring operating
losses and, as a result, it has been ex periencing cash flow problems” and
o the $1.2 million of the loan not considered to be funding of prior losses of KTC was written-off during your fourth quarter of 2008;
Richard A. Sneider
Kopin Corporation August 13, 2009 Page 3
• your cumulative share of KTC’s net losses not recognized (for all periods the equity
method was suspended) as of December 31, 2007 and 2008 and
• a summary of the significant terms of the lo an. As applicable, please cross-reference
the information provided in our reques ted analysis to the loan terms.
Index to Exhibits, page 80
3. We note your response to prior comment 7. Plea se reconcile your an alysis regarding the
materiality of the Skyworks Solutions agr eement with your response to prior comment 2,
in which you state that disclosure of certa in performance measures and targets would
cause competitive harm due to the negative impact on your ab ility to negotiate prices
with Skyworks.
Form 8-K dated July 30, 2009
4. We note from information herein that you purchased 19,572,468 shares of KTC’s
common stock for approximately $5,975,000 and ag reed to purchase 128,226 shares of
KTC from Microelectronics Technology Inc. We also note you indicated that as a result
of these two transactions and the Company’ s previous investments in KTC you will own
approximately 87% of the outstanding common stock of KTC. Please explain to us how
you accounted for this acquisition and tell us wh ether you are required to and plan to file
KTC’s historical financial statements and a ny pro forma financial information reflecting
the transaction under Item 9.01 of Form 8-K. Please provide us with the significance
tests outlined in Rule 1-02(w) of Regul ation S-X for the referenced acquisition.
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.
Richard A. Sneider
Kopin Corporation August 13, 2009 Page 4
You may contact Andri Boerman at (202) 551-3645 or me at (202) 551-3603 if you have
questions regarding comments on th e financial statements and rela ted matters. Please contact
Joe McCann at (202) 551-3360 or Mary Beth Breslin at (202) 551-3358 if you have questions on other comments. S i n c e r e l y , J a y W e b b Accounting Reviewer