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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 31, 2003
Commission File Number: 0-12742
SPIRE CORPORATION
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(Exact name of Registrant as specified in charter)
MASSACHUSETTS 04-2457335
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(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification Number)
ONE PATRIOTS PARK
BEDFORD, MASSACHUSETTS 01730-2396
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(Address of principal executive offices)
781-275-6000
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(Registrant's telephone number)
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ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT.
On December 31, 2003, Spire Corporation (the "Company") dismissed KPMG
LLP ("KPMG") as its principal independent accountant. However, KPMG will
complete the audit of the balance sheets of Bandwidth Semiconductor, LLC
(acquired by the Company on May 23, 2003) as of December 31, 2002 and 2001, and
the related statements of operations, stockholders' equity, and cash flows for
the years ended December 31, 2002 and 2001, all of which are to be included in a
Current Report on Form 8-K/A. The decision to change principal independent
accountants was approved by the Company's Audit Committee. The Company is
arranging for the engagement of a principal independent accountant to replace
KPMG. A Current Report on Form 8-K will be filed reporting the engagement of the
new principal independent accountant.
KPMG's report on the financial statements of the Company for each of the
years ended December 31, 2002 and 2001 did not contain an adverse opinion or a
disclaimer of opinion and were not modified as to uncertainty, audit scope or
accounting principles.
During the Company's two most recent fiscal years ended December 31,
2002 and the subsequent interim period through December 31, 2003, there were no
disagreements with KPMG on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure, which
disagreements, if not resolved to KPMG's satisfaction, would have caused KPMG to
make reference to the subject matter of the disagreement(s) in connection with
its reports on the Company's financial statements.
During the Company's two most recent fiscal years ended December 31,
2002 and the subsequent interim period through December 31, 2003, there were no
reportable events (as described in Item 304(a)(1)(iv)(B) of Regulation S-B),
except as follows:
(i) In connection with its audit of the Company's financial statements
for the period ended December 31, 2002, KPMG advised the Audit Committee
by a letter dated April 30, 2003 that it noted certain matters involving
internal control and its operation that it considered to be reportable
conditions under standards established by the American Institute of
Certified Public Accountants (the "AICPA"). Reportable conditions are
matters coming to an independent auditors' attention that, in their
judgment, relate to significant deficiencies in the design or operation
of internal control and could adversely affect the organization's
ability to record, process, summarize, and report financial data
consistent with the assertions of management in the financial
statements. KPMG advised the Audit Committee that it considered the
following to constitute a reportable condition: During 2002, the Company
did not follow its accounting policy on revenue recognition for its
business to install solar electric systems (its solar systems division).
KPMG advised the audit committee that this condition was considered in
determining the nature, timing and extent of the audit tests applied in
its audit of the Company's 2002 financial statements, and that the
condition did not affect KPMG's report dated March 20, 2003 with respect
to these financial statements.
(ii) In connection with its review of the Company's Form 10-QSB for the
quarter ended June 30, 2003, KPMG advised the Audit Committee and
management by a letter dated December 24, 2003 that it noted certain
matters involving internal control and its operation that it considered
to be material weaknesses that constituted reportable conditions under
standards established by the AICPA. Under those standards, a material
weakness is a reportable condition in which the design or operation of
one or more internal control components does not reduce to a relatively
low level the risk that errors or fraud in amounts that would be
material in relation to the financial statements being audited may occur
and not be detected within a timely period by employees in the normal
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course of performing their assigned functions. KPMG advised management
and the Audit Committee that it considered the following to constitute
material weaknesses in internal control and operations: the Company's
failure to adequately staff its finance group with the appropriate level
of experience to effectively control the increased level of transaction
activity, address the complex accounting matters and manage the
increased financial reporting complexities resulting from, among other
things, the acquisition of Bandwidth and the implementation of a new
financial reporting system.
The Company is currently assessing the findings of KPMG set forth in its
letter dated December 24, 2003. However, the Company has made and is continuing
to make changes in its controls and procedures, including its internal control
over financial reporting, aimed at enhancing their effectiveness and ensuring
that the Company's systems evolve with, and meet the needs of, the Company's
business. The Company is also continually striving to improve its management and
operational efficiency and the Company expects that its efforts in that regard
will from time to time directly or indirectly affect the Company's controls and
procedures, including its internal control over financial reporting. For
example, as a result of the recent resignation of the Company's Chief Financial
Officer, the Company intends to commence a search for a new chief financial
officer, and the Company expects to hire an experienced person with an
appropriate background to manage the diverse and complex financial issues which
may arise in its business. The Company is also continuing its efforts to upgrade
the information technology capabilities of certain of the Company's business
units, as well as integrate the financial accounting systems used by certain of
its business units.
The Company has authorized KPMG to respond fully to the inquiries of the
successor accountant concerning the subject matter of the reportable conditions
and material weaknesses cited by KPMG.
The Company has provided KPMG with a copy of the disclosures it is
making in this report and has requested KPMG to furnish the Company with a
letter addressed to the Securities and Exchange Commission stating whether it
agrees with the statements made by the Company in this report and, if not,
stating the respects in which it does not agree. A copy of that letter is filed
as Exhibit 16.1 to this report.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits.
Exhibit No. Description
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16.1 Letter from KPMG LLP to the Securities and Exchange
Commission dated January 7, 2004.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SPIRE CORPORATION
Dated: January 7, 2004 By: /s/ Roger G. Little
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Roger G. Little
President, Chief Executive Officer and
Chairman of the Board
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EXHIBIT INDEX
Exhibit No. Description
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16.1 Letter from KPMG LLP to the Securities and Exchange
Commission dated January 7, 2004.
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