SEC Comment Letter for Applied Digital Corp. (APLD) (CIK 0001144879) (APLD) — Feb 11, 2005
Applied Digital Corp. (APLD) (CIK 0001144879)
Date: Feb. 11, 2005 · CIK: 0001144879 · Accession: 0000000000-05-006874
AI Filing Summary & Sentiment
Reasoning
Letter
February 9, 2003 Zip+4 Code: 20549-0305 Via Fax & U.S. Mail David D. Cryer Chief Financial Officer, Treasurer, Secretary 28 Cottrell Street Mystic, Connecticut 06355
RE: Flight Safety Technologies, Inc. Form 10-KSB for the year ended May 31, 2004 File No. 0-15159
Dear Mr. Cryer:
Based upon an examination restricted solely to considerations of the Financial Statements and Management`s Discussion and Analysis, the staff has the following comments on the above-referenced document. We think you should revise all future filings 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 necessary in your response. In some of our comments, we may ask you to provide us with supplemental information so we may better understand your disclosure. After reviewing this information, we may or may not raise additional comments.
Please understand that the purpose of our review process is to assist you in your compliance with the applicable disclosure requirements 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 on any other aspect of our review. Feel free to call us at the telephone numbers listed at the end of this letter.
Please respond to confirm that such comments will be complied with, or, if certain of the comments are deemed inappropriate by the Company, advise the staff of the reason thereof.
Pursuant to Rule 101(a)(3) of Regulation S-T, your response should be submitted in electronic form, under the label "corresp" with a copy to the staff. Please respond within fifteen (15) business days.
Form 10-KSB for the fiscal year ended May 31, 2004
Item 6- Management Discussion and Analysis or Plan of Operation Critical Accounting Policies and Estimates, page 26
1. Your critical accounting policies disclosures should be expanded to address each accounting policy that requires management`s most difficult, subjective or complex judgments. For example, you should provide disclosure addressing any uncertainties or significant judgments surrounding the revenue recognition process and your percentage of completion calculation. Additionally, please ensure that you do not duplicate the accounting policy disclosures in the notes to the financial statements. For further guidance refer to FRR 72.
Liquidity and Capital Resources, page 30
2. The difference between provisional and actual rates, for overhead as well as general administrative expenses, was recorded as $133,000 of unbilled receivables. However, actual rates incurred have not been approved by the government. Therefore, tell us how collectability was reasonably assured and persuasive evidence of an arrangement existed on May 31, 2004. For further guidance refer to SAB 104.
Item 7- Financial Statements Auditors Report, page F-2
3. Your audit report does not contain the name of the audit firm that performed your year end audit. As such, please provide us an audit report with the name of the audit firm.
Note 2 - Contracts Receivable and Other Receivables, page F-12
4. We note that you have reflected a receivable for amounts not billed. Furthermore, the amounts not billed in you most recent quarterly period (November 30, 2004) have materially increased since the fiscal year end. Please expand your notes to specifically include a description of the prerequisites for billing these amounts not billed. In addition, for billed and unbilled receivables, please disclose (i) amounts representing claims or other similar items subject to uncertainty concerning their determination or ultimate realization including the nature and status of these principal items; and (ii) any billed or unbilled receivables expected to be collected after one year or a statement that all receivable amounts will be collected within one year.
Note 7- Stockholders Equity, page F-15
5. Please revise to include disclosures relating to outstanding options and warrants, as required by paragraphs 47 and 48 of SFAS No. 123.
6. Please expand the first paragraph on page F-16 to provide pro forma net income (loss) and related pro forma per share data for all periods (i.e. both fiscal years) and not solely for the most recent fiscal year. Refer to the guidance in paragraph 45 of SFAS No. 123.
May 2004 Quarterly Newsletter
7. Your newsletter discloses that you entered into an agreement with Sanders Design International (SDI) to help in the development of the commercial aviation missile countermeasures project. Please tell us the term of the agreement and why this information was not in your filing.
August 2004 Quarterly Newsletter
8. In June 2004, you repurchased 250,000 shares at an average price of $1.72. Tell us the business purpose of this transaction and provide disclosure of all significant transactions in the subsequent event note.
Other
We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filings reviewed by the staff to be certain that they have provided all information investors require. Since the company and its management are in possession of all facts relating to a company`s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made.
In connection with responding to our comments, please provide, in writing, a statement from the company acknowledging that
* the company is responsible for the adequacy and accuracy of the disclosure in the filings; * staff comments or changes to disclosure in response to staff comments in the filings reviewed by the staff 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 United States.
In addition, please be advised that the Division of Enforcement has access to all information you provide to the staff of the Division of Corporation Finance in our review of your filing or in response to our comments on your filing.
You may contact Juan Migone at (202) 942-1771 if you have questions regarding comments on the financial statements and related matters. Please contact the undersigned at (202) 942-1952 with any other questions.
Sincerely,
Joseph Foti
Senior Assistant Chief
Accountant
Show Raw Text
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<TEXT>
February 9, 2003
Zip+4 Code: 20549-0305
Via Fax & U.S. Mail
David D. Cryer
Chief Financial Officer, Treasurer, Secretary
28 Cottrell Street
Mystic, Connecticut 06355
RE: Flight Safety Technologies, Inc.
Form 10-KSB for the year ended May 31, 2004
File No. 0-15159
Dear Mr. Cryer:
Based upon an examination restricted solely to
considerations
of the Financial Statements and Management`s Discussion and
Analysis,
the staff has the following comments on the above-referenced
document. We think you should revise all future filings 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 necessary in your response.
In some of our comments, we may ask you to provide us with
supplemental information so we may better understand your
disclosure.
After reviewing this information, we may or may not raise
additional
comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements 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 on any other
aspect
of our review. Feel free to call us at the telephone numbers
listed
at the end of this letter.
Please respond to confirm that such comments will be
complied
with, or, if certain of the comments are deemed inappropriate by
the
Company, advise the staff of the reason thereof.
Pursuant to Rule 101(a)(3) of Regulation S-T, your response
should be submitted in electronic form, under the label "corresp"
with a copy to the staff. Please respond within fifteen (15)
business days.
Form 10-KSB for the fiscal year ended May 31, 2004
Item 6- Management Discussion and Analysis or Plan of Operation
Critical Accounting Policies and Estimates, page 26
1. Your critical accounting policies disclosures should be
expanded
to address each accounting policy that requires management`s most
difficult, subjective or complex judgments. For example, you
should
provide disclosure addressing any uncertainties or significant
judgments surrounding the revenue recognition process and your
percentage of completion calculation. Additionally, please ensure
that you do not duplicate the accounting policy disclosures in the
notes to the financial statements. For further guidance refer to
FRR
72.
Liquidity and Capital Resources, page 30
2. The difference between provisional and actual rates, for
overhead
as well as general administrative expenses, was recorded as
$133,000
of unbilled receivables. However, actual rates incurred have not
been approved by the government. Therefore, tell us how
collectability was reasonably assured and persuasive evidence of
an
arrangement existed on May 31, 2004. For further guidance refer
to
SAB 104.
Item 7- Financial Statements
Auditors Report, page F-2
3. Your audit report does not contain the name of the audit firm
that
performed your year end audit. As such, please provide us an
audit
report with the name of the audit firm.
Note 2 - Contracts Receivable and Other Receivables, page F-12
4. We note that you have reflected a receivable for amounts not
billed. Furthermore, the amounts not billed in you most recent
quarterly period (November 30, 2004) have materially increased
since
the fiscal year end. Please expand your notes to specifically
include a description of the prerequisites for billing these
amounts
not billed. In addition, for billed and unbilled receivables,
please disclose (i) amounts representing claims or other similar
items subject to uncertainty concerning their determination or
ultimate realization including the nature and status of these
principal items; and (ii) any billed or unbilled receivables
expected
to be collected after one year or a statement that all receivable
amounts will be collected within one year.
Note 7- Stockholders Equity, page F-15
5. Please revise to include disclosures relating to outstanding
options and warrants, as required by paragraphs 47 and 48 of SFAS
No.
123.
6. Please expand the first paragraph on page F-16 to provide pro
forma net income (loss) and related pro forma per share data for
all
periods (i.e. both fiscal years) and not solely for the most
recent
fiscal year. Refer to the guidance in paragraph 45 of SFAS No.
123.
May 2004 Quarterly Newsletter
7. Your newsletter discloses that you entered into an agreement
with
Sanders Design International (SDI) to help in the development of
the
commercial aviation missile countermeasures project. Please tell
us
the term of the agreement and why this information was not in your
filing.
August 2004 Quarterly Newsletter
8. In June 2004, you repurchased 250,000 shares at an average
price
of $1.72. Tell us the business purpose of this transaction and
provide disclosure of all significant transactions in the
subsequent
event note.
Other
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require.
Since the company and its management are in possession of all
facts
relating to a company`s disclosure, they are responsible for the
accuracy and adequacy of the disclosures they have made.
In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that
* the company is responsible for the adequacy and accuracy of the
disclosure in the filings;
* staff comments or changes to disclosure in response to staff
comments in the filings reviewed by the staff 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 United States.
In addition, please be advised that the Division of Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.
You may contact Juan Migone at (202) 942-1771 if you have
questions regarding comments on the financial statements and
related
matters. Please contact the undersigned at (202) 942-1952 with
any
other questions.
Sincerely,
Joseph Foti
Senior Assistant Chief
Accountant
Via facsimile: David D. Cryer, CFO, Treasurer, and Secretary
(860) 437-4587
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David D. Cryer
Flight Safety Technologies, Inc.
February 9, 2005
Page 4
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