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11 February 2008


Nasdaq extends Kopin deadline, but warns Lam again

The Nasdaq Stock Market has extended the deadline from 11 February to 17 March for Kopin Corp of Taunton, MA, USA to file all delayed periodic reports with the US Securities and Exchange Commission (SEC), necessary to regain compliance with Nasdaq Marketplace Rule 4310(c)(14). Nasdaq had already previously extended the deadline once from 17 December.

Kopin, which makes heterojunction bipolar transistors (HBTs) and liquid-crystal CyberDisplays, has previously received Nasdaq notifications for failing to file its Q3/2006 Form 10-Q, 2006 Form 10-K, and Q1, Q2 and Q3/2007 Form 10-Q financial reports. The delays are due to an investigation into the firm’s past stock option granting practices by a special investigative committee (appointed by Kopin’s board).

Last May, the committee issued preliminary findings and recommendations that the firm’s financial statements for 1995 through 2006 should not be relied upon and should be restated. Kopin says that it is working to complete any necessary restatements.

If Kopin regains compliance by 17 March, then it will be remanded back to Nasdaq’s Listing Qualifications Panel for further consideration of the firm’s failure to solicit proxies and hold its annual meeting, as required by Rules 4350(e) and 4350(g). However, if Kopin has not regained compliance by 17 March, then its securities will be suspended and a notification of de-listing will be filed with the SEC.

Etch and wafer-cleaning equipment maker Lam Research Corp of Fremont, CA, USA has received a further Nasdaq Staff Determination letter saying that it is not in compliance with the filing requirements for continued listing set forth in Nasdaq Marketplace Rule 4310(c)(14). The letter was issued due to the delayed filing of Lam’s report on Form 10-Q for the quarter ended 23 December.

This follows similar letters received on 27 August and 7 November due to Lam’s delayed filing of its Form 10-K report for the year ended 24 June and its Form 10-Q report for the quarter ended 23 September, respectively. After a hearing on 11 October, at which Lam’s management presented its plan to regain compliance, the Nasdaq Listing Qualification Panel granted the firm’s request for continued listing on the Nasdaq Global Select Market, provided that the firm files the delayed reports with the Securities and Exchange Commission by 13 February.

As Lam has previously disclosed, a committee composed of two independent board members is conducting a review of its past stock option practices and related accounting, as a result of the independent fiscal year-end 2007 audit.

Working with outside legal counsel, the committee has reached a preliminary conclusion that the actual measurement dates for financial accounting purposes of certain stock option grants differ from the recorded grant dates, but that there was no intentional misconduct by management.

On 18 December, the board’s audit committee concluded that the firm’s financial statements for 1997 through 2005 should no longer be relied upon. Lam expects to restate certain financial statements to record non-cash charges for compensation expenses relating to past stock option grants. Most of the measurement date changes result from grants prior to fiscal 2003.

Lam says that it will not be in a position to file the delayed reports until after the completion of the review and until it can determine the non-cash adjustments to compensation expense. Because it does not believe it can complete that by 13 February, on 6 February Lam requested that the Nasdaq Listing and Hearing Review Council call for a review of the Listing Qualification Panel’s decision and grant a stay of delisting beyond 13 February.

See related items:

Nasdaq extends Kopin deadline to 11 February

Kopin expects WiMAX to revive its HBT sales in 2008

Lam receives further Nasdaq notice of non-compliance

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