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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB/A
AMENDMENT NO. 1
|X| Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the quarterly period ended June 30, 2005; or
|_| Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the transition period from _______ to _______
Commission file number: 0-12742
SPIRE CORPORATION
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(Name of small business issuer as specified in its charter)
MASSACHUSETTS 04-2 57335
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) 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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(Issuer's telephone number)
Securities registered under Section 12(g) of the Act:
COMMON STOCK, $0.01 PAR VALUE; REGISTERED ON THE NASDAQ STOCK MARKET
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(Title of class)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file such
reports); and (2) has been subject to such filing requirements for the past 90
days.
Yes |X| No |_|
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).
Yes |_| No |X|
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date. There were 6,864,366
outstanding shares of the issuer's only class of common equity, Common Stock,
$0.01 par value, on August 8, 2005.
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EXPLANATORY NOTE
Spire Corporation (the "Company") is filing this Amendment No. 1 (this
"Amendment") on Form 10-QSB/A to amend the Company's Form 10-QSB for the
quarterly period ended June 30, 2005 (the "Original Report") in order to file
correct versions of the certifications required by Rule 13a-14(a) of the
Securities Exchange Act of 1934 (the "Section 302 Certifications"). The Section
302 Certifications filed with the Original Report were inadvertently missing the
paragraph in which the certifying officers state that they have "disclosed in
this report any change in the Company's internal control over financial
reporting that occurred during the Company's most recent fiscal quarter that has
materially affected, or is reasonably likely to materially affect, the Company's
internal control over financial reporting." In connection with filing correct
Section 302 Certifications, the Company is also including in this Amendment Item
3, "Controls and Procedures," of Part I, although no changes have been made to
the disclosure included in Item 3 of Part I of the Original Report.
Pursuant to Rule 12b-15 under the Securities Exchange Act of 1934, as
amended, the Company is including in this Amendment only (i) Item 3, "Controls
and Procedures," of Part I and (ii) Item 6, "Exhibits," of Part II (including
correct Section 302 Certifications). The remaining Items of the Original Report
are not amended hereby.
PART I
FINANCIAL INFORMATION
ITEM 3. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
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As required by Rule 13a-15 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), the Company carried out an evaluation under the
supervision and with the participation of the Company's management, including
the Chief Executive Officer and President and the Chief Financial Officer, of
the effectiveness of the Company's disclosure controls and procedures as of
March 31, 2005. In designing and evaluating the Company's disclosure controls
and procedures, the Company and its management recognize that there are inherent
limitations to the effectiveness of any system of disclosure controls and
procedures, including the possibility of human error and the circumvention or
overriding of the controls and procedures. Accordingly, even effective
disclosure controls and procedures can only provide reasonable assurance of
achieving their desired control objectives. Additionally, in evaluating and
implementing possible controls and procedures, the Company's management was
required to apply its reasonable judgment. Furthermore, in the course of this
evaluation, management considered certain internal control areas, including
those discussed below, in which we have made and are continuing to make changes
to improve and enhance controls. Based upon the required evaluation, the Chief
Executive Officer and the Chief Financial Officer concluded that as of June 30,
2005 the Company's disclosure controls and procedures were effective (at the
"reasonable assurance" level mentioned above) to ensure that information
required to be disclosed by the Company in the reports it files or submits under
the Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the Securities and Exchange Commission's rules and forms.
From time to time, the Company and its management have conducted and will
continue to conduct further reviews and, from time to time put in place
additional documentation, of the Company's disclosure controls and procedures,
as well as its internal control over financial reporting. The Company may from
time to time make changes aimed at enhancing their effectiveness, as well as
changes aimed at ensuring that the Company's systems evolve with, and meet the
needs of, the Company's business. These changes may include changes necessary or
desirable to address recommendations of the Company's management, its counsel
and/or its independent auditors, including any recommendations of its
independent auditors arising out of their audits and reviews of the Company's
financial statements. These changes may include changes to the Company's own
systems, as well as to the systems of businesses that the Company has acquired
or that the Company may acquire in the future and will, if made, be intended to
enhance the effectiveness of the Company's controls and procedures. 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 disclosure controls and
procedures, as well as the Company's internal control over financial reporting.
As disclosed in our quarterly report on Form 10-QSB/A Amendment Number 2
for the quarterly period ended June 30, 2003, as amended (the "Second Quarter
Form 10-QSB"), in connection with the initial filing of the Second Quarter Form
10-QSB, which was initially submitted prior to the completion of the required
SAS 100 Review by the Company's independent auditors, the Audit Committee
engaged outside counsel to conduct an investigation into the events
surrounding the preparation and filing of the Second Quarter Form 10-QSB. Based
on the results of that investigation, outside counsel concluded that weaknesses
existed in the Company's disclosure controls and procedures and proposed an
action plan designed to strengthen the Company's disclosure controls and
procedures. The Audit Committee, the Board of Directors and management have
begun to adopt and implement certain of those recommendations in order to
strengthen the Company's disclosure controls and procedures.
As disclosed in our annual report on Form 10-KSB for the year ended
December 31, 2003, the Company's independent auditor, Vitale, Caturano &
Company, Ltd. ("VCC") advised management and the Audit Committee by a letter
dated March 18, 2004 that, in connection with its audit of the Company's
consolidated financial statements for the year ended December 31, 2003, it noted
certain matters involving internal control and its operation that it considered
to be a material weakness under standards established by the American Institute
of Certified Public Accountants. 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. Further, 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 course of
performing their assigned functions. VCC advised management and the Audit
Committee that it considered the following to constitute material weaknesses in
internal control and operations: (i) 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, the
implementation of a new financial reporting system and the investigation
surrounding the filing and eventual restatement of the Company's Form 10-QSB, as
amended, for the quarter ended June 30, 2003 and (ii) the Company's current
monthly close process does not mitigate the risk that material errors could
occur in the books, records and financial statements, and does not ensure that
those errors would be detected in a timely manner by the Company's employees in
the normal course of performing their assigned functions. The matter noted in
clause (i) above was similar to the material weakness noted by our former
independent auditor (as disclosed in prior SEC filings). VCC noted that these
matters were considered by it during its audit and did not modify the opinion
expressed in its independent auditor's report dated March 18, 2004.
On March 24, 2005, VCC issued a letter advising management and the Audit
Committee, that, in connection with its audit of the Company's consolidated
financial statements for the year ended December 31, 2004, it continued to note
certain matters involving internal control and its operation previously outlined
in their March 18, 2004 letter that it considered to be a material weakness
under standards established by the American Institute of Certified Public
Accountants. VCC noted that the Company had implemented several of the specific
recommendations in their March 18, 2004 letter including, but not exclusive of:
o An improved reconciliation process;
o A disciplined and timely close process on a monthly basis; and
o Detailed reviews of monthly close packages by the appropriate levels
of management.
However, VCC also noted that improvements still need to be made in the
reconciliation and documentation and information flow processes. In addition,
VCC noted that while an internal assessment of the finance staff has been made
and certain roles and responsibilities have been defined, the appropriate level
of staffing within the finance department will not be alleviated until such time
as the full finance team is assembled.
The Company concurs with VCC's finding noted above and is continuing to
make changes in its internal controls and procedures. The Company is also
continually striving to improve its management and operational efficiency and
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. The Company has reorganized the accounting
staff and expects to hire additional professionals in the near term. In
addition, the Company has completed compliance training and will continue to
arrange for additional training for its finance staff.
Changes in Internal Control Over Financial Reporting
There was no change in the Company's internal control over financial
reporting that occurred during the first and second fiscal quarters of 2005 that
has materially affected, or is reasonably likely to materially affect, the
Company's internal control over financial reporting.
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PART II
OTHER INFORMATION
ITEM 6. EXHIBITS
*10(n) Development, Manufacturing, and Sales Consortium Agreement
between Nisshinbo Industries, Inc. and Spire Corporation, with
an effective date of 16 May 2005. +
**31.1 Certification of the Chairman of the Board, Chief Executive
Officer and President pursuant to ss.302 of the Sarbanes-Oxley
Act of 2002.
**31.2 Certification of the Chief Financial Officer pursuant to ss.302
of the Sarbanes-Oxley Act of 2002.
*32.1 Certification of the Chairman of the Board, Chief Executive
Officer and President pursuant to 18 U.S.C. ss.1350, as adopted
pursuant to ss.906 of the Sarbanes-Oxley Act of 2002.
*32.2 Certification of the Chief Financial Officer pursuant to 18
U.S.C. ss.1350, as adopted pursuant to ss.906 of the
Sarbanes-Oxley Act of 2002.
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* Previously filed.
** Filed herewith.
+ Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment.
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SIGNATURES
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, thereunto duly authorized.
Spire Corporation
Dated: August 24, 2005 By: /s/ Roger G. Little
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Roger G. Little
Chairman of the Board, Chief
Executive Officer and President
Dated: August 24, 2005 By: /s/ James F. Parslow
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James F. Parslow
Chief Financial Officer
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EXHIBIT INDEX
Exhibit Description
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*10(n) Development, Manufacturing, and Sales Consortium Agreement between
Nisshinbo Industries, Inc. and Spire Corporation, with an effective
date of 16 May 2005. +
**31.1 Certification of the Chairman of the Board, Chief Executive Officer
and President pursuant to ss.302 of the Sarbanes-Oxley Act of 2002
**31.2 Certification of the Chief Financial Officer pursuant to ss.302 of
the Sarbanes-Oxley Act of 2002
*32.1 Certification of the Chairman of the Board, Chief Executive Officer
and President pursuant to 18 U.S.C. ss.1350, as adopted pursuant to
ss.906 of the Sarbanes-Oxley Act of 2002
*32.2 Certification of the Chief Financial Officer pursuant to 18 U.S.C.
ss.1350, as adopted pursuant to ss.906 of the Sarbanes-Oxley Act of
2002
____________________
* Previously filed.
** Filed herewith.
+ Portions of this Exhibit have been omitted pursuant to a request for
confidential treatment.
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