KRATOS DEFENSE & SECURITY SOLUTIONS, INC.
Bridge Pointe Corporate Centre
4810 Eastgate Mall
San Diego, California 92121
April 22, 2009
Via Facsimile and EDGAR Transmission
United States Securities and Exchange Commission
Division of Corporation Finance
Mail Stop 3720
100 F Street, N.E.
Washington, D.C. 20549
Facsimile: 703-813-6986
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Attention: |
Ms. Jessica Plowgian, Attorney-Adviser |
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Ms. Celeste Murphy, Legal Branch Chief |
Re: Kratos Defense & Security Solutions, Inc.
Preliminary Proxy Statement on Schedule 14A
Filed April 15, 2009
File No. 0-27231
Ladies and Gentlemen:
Kratos Defense & Security Solutions, Inc. (the “Company”) hereby encloses its response to comments received from the staff of the Securities and Exchange Commission (the “Staff”) by letter dated April 17, 2009 (the “Staff Letter”) with respect to the Company’s preliminary proxy statement filed with the Securities and Exchange Commission (the “Commission”) on April 15, 2009. In delivering such response, the Company acknowledges that:
· the Company is responsible for the adequacy and accuracy of the disclosure in the filing;
· Staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filing; and
· the Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the of the United States.
Please contact the undersigned at (858) 812-7300, or Taylor Stevens at Morrison & Foerster LLP at (858) 720-5138, with any questions you may have.
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Very truly yours, |
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KRATOS DEFENSE & SECURITY SOLUTIONS, INC. |
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By: |
/s/ ERIC M. DEMARCO |
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Eric M. DeMarco, |
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President and Chief Executive Officer |
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12531 HIGH BLUFF DRIVE |
MORRISON & FOERSTER LLP |
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SUITE 100 |
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SAN DIEGO, CALIFORNIA |
NEW YORK, SAN FRANCISCO, |
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92130-2040 |
LOS ANGELES, PALO ALTO, |
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SAN DIEGO, WASHINGTON, D.C. |
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TELEPHONE: 858.720.5100 |
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FACSIMILE: 858.720.5125 |
NORTHERN VIRGINIA, DENVER, |
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SACRAMENTO, WALNUT CREEK |
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WWW.MOFO.COM |
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TOKYO, LONDON, BEIJING, |
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SHANGHAI, HONG KONG, |
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SINGAPORE, BRUSSELS |
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April 22, 2009 |
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Writer’s Direct Contact |
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858.720.5138 |
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TStevens@mofo.com |
Via Facsimile and EDGAR Transmission
United States Securities and Exchange Commission
Division of Corporation Finance
Mail Stop 3720
100 F Street, N.E.
Washington, D.C. 20549
Facsimile: 703-813-6986
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Attention: |
Ms. Jessica Plowgian, Attorney-Adviser |
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Ms. Celeste Murphy, Legal Branch Chief |
Re: Kratos Defense & Security Solutions, Inc.
Preliminary Proxy Statement on Schedule 14A
Filed April 15, 2009
File No. 0-27231
Dear Ms. Plowgian and Ms. Murphy:
Reference is made to the Preliminary Proxy Statement on Schedule 14A filed by our client, Kratos Defense & Security Solutions, Inc. (the “Company”), on April 15, 2009 (the “Preliminary Proxy Statement”). This letter is being provided in response to comments received from the staff of the Securities and Exchange Commission (the “Staff”) by letter dated April 17, 2009 (the “Staff Letter”) with respect to the Preliminary Proxy Statement. The comments given by the Staff have been incorporated into this response letter for your convenience.
Staff Comments and Company Responses:
General
1. We note in your preliminary proxy statement that you do not intend to issue fractional shares in connection with your proposed reverse stock split. We also note the recent disclosure in your annual report on Form 10-K filed on March 10, 2009 that you had 509 record holders of your common stock as of March 6, 2009. Based on your disclosures, it is possible that your proposed transaction may implicate the rules
relating to going private transactions. Please advise us of your analysis as to the applicability of Rule 13e-3 under the Securities Exchange Act of 1934 to your proposed reverse stock split and explain the basis for your statement on page 18 regarding your expectations that the number of stockholders of record after the split will be approximately 500. Please revise your preliminary proxy statement to either disclose your analysis as to why Rule 13e-3 is not implicated or, alternatively, to provide all additional disclosures required under Rule 13e-3.
The Company acknowledges the Staff’s comment and respectfully notes that the proposed reverse stock split (the “Reverse Split”) does not implicate Rule 13e-3 under the Securities Exchange Act of 1934 (the “Exchange Act”).
The Reverse Split does not have a reasonable likelihood, or a purpose of producing, either directly or indirectly, any of the effects described in Rule 13e-3(a)(3)(ii) of the Exchange Act. In particular, the Reverse Split will not result in the Company’s common stock (the “Common Stock”) to become eligible for termination of registration under Rule 12g-4 of the Exchange Act because (i) the number of record holders of the Company following the Reverse Split shall not be reduced to less than 300 persons and (ii) the total assets of the Company have exceeded $10 million on the last day of each of the Company’s most recent three fiscal years.
The Reverse Split will also not (i) result in the Common Stock to become eligible for termination of registration under Rule 12h-6 of the Exchange Act or (ii) cause the reporting obligations with respect to the Common Stock to become eligible for termination under Rule 12h-6 of the Exchange Act because the Company is not a foreign private issuer.
Further, the Reverse Split will not cause the reporting obligations with respect to the Common Stock to become eligible for suspension under Rule 12h-3 of the Exchange Act because (i) as previously stated in the second paragraph above, the number of record holders of the Company following the Reverse Split shall not be reduced to less than 300 persons and the total assets of the Company have exceeded $10 million on the last day of each of the Company’s most recent three fiscal years and (ii) the Common Stock has not been deregistered pursuant to Section 12(d) of the Exchange Act. In addition, Section 15(d) is inapplicable as the Common Stock is registered and will continue to be registered following the Reverse Split pursuant to Section 12 of the Exchange Act.
In addition to the foregoing, the Reverse Split also qualifies as an exception to the provisions of Rule 13e-3 of the Exchange Act pursuant to Rule 13e-3(g)(2). In particular, (i) the Common Stock will have substantially the same rights before and after the split, including with respect to voting, dividends, redemption and liquidation rights; (ii) the Common Stock is registered pursuant to Section 12 of the Exchange Act; and (iii) the Common Stock will continue to be listed on the Nasdaq Global Select Market following the Reverse Split.
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The Company’s statement on page 18 of the Preliminary Proxy Statement regarding its expectation that the number of stockholders of record after the Reverse Split will be approximately 500 is based on the fact that, according to the stock records of the Company’s transfer agent, (i) there were 511 stockholders as of April 5, 2009, the record date, and (ii) of those 511 stockholders, 8 stockholders held fewer than 20 shares of Common Stock and 3 stockholders held exactly 20 shares. As such, the Company believes that the number of stockholders of record following the Reverse Split will be approximately 500.
In response to the Staff’s comment for disclosure regarding whether Rule 13e-3 of the Exchange Act is implicated, the Company proposes to include the revised disclosure shown on Appendix A hereto on page 18 of its Definitive Proxy Statement, to be filed on or prior to Monday, April 27, 2009.
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The Company respectfully requests the Staff’s assistance in completing the review of the Preliminary Proxy Statement as soon as possible. Please advise us if we can provide any further information or assistance to facilitate your review. Please direct any further comments or questions regarding this response letter to me at (858) 720-5138.
Yours very truly,
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/s/ TAYLOR STEVENS |
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Taylor Stevens |
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tstevens@mofo.com |
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(858) 720-5138 |
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cc: |
Eric DeMarco, Kratos Defense & Security Solutions Inc. |
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Scott Stanton, Esq., Morrison & Foerster |
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Neeta S. Toprani, Esq., Morrison & Foerster |
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APPENDIX A
PROPOSED DISCLOSURE FOR DEFINITIVE PROXY STATEMENT
