SEC Company Response from TECHPRECISION CORP (TPCS) (CIK 0001328792) (TPCS) — Feb 26, 2010
TECHPRECISION CORP (TPCS) (CIK 0001328792)
Date: Feb. 26, 2010 · CIK: 0001328792 · Accession: 0001213900-10-000732
AI Filing Summary & Sentiment
Reasoning
Referenced dates: January 25, 2010
Letter
VIA EDGAR Division of Corporate Finance Securities and Exchange Commission Form 10-K for the Fiscal Year Ended March 31, 2009 Filed June 25, 2009 Form 10-Q for the Fiscal Quarter Ended September 30, 2009 File No. 51378
Dear Mr. O’Brien:
This letter is submitted on behalf of TechPrecision Corporation (the “Company”) in response to the comments that you provided on behalf of the staff of the Division of Corporate Finance (the “Staff”) of the Securities and Exchange Commission (the “Commission”) with respect to the Company’s annual report on Form 10-K for the fiscal year ended March 31, 2009 (filed June 25, 2009) (the “Form 10-K”) and quarterly report on Form 10-Q for the fiscal quarter ended September 30, 2009 (filed November 12, 2009) (the “Form 10-Q”), as set forth in your letter to the Company dated January 25, 2010. For reference purposes, the text of the comments contained in your letter dated January 25, 2010 has been reproduced herein (in bold), with the Company’s response below such comment.
Form 10-K for the Fiscal Year Ended March 31, 2009
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, page
General
1.
We note GT Solar, your largest customer, cancelled the majority of its open purchase orders, reducing the total purchase commitment by approximately $16.8 million in April 2009. In future filings please provide a quantified analysis of the impact on current periods and the expected impact on future operations from the cancellation of the purchase orders and other known material trends and uncertainties affecting future sales to this customer. Your analysis should also address the potential impact on your ability to fund operations, service debt obligations, comply with covenants, use fund sunder lines of credit, etc. Refer to Section 501.04 and 501.12 of the Financial Reporting Codification for guidance.
-1-
Company Response:
In future filings, we will provide a quantified analysis of the impact on current periods and the expected impact on future operations from material customer cancellations of purchase orders and other known material trends and uncertainties affecting future sales to our significant customers. Our MD&A will include a discussion of the known trends and uncertainties that have had a favorable or unfavorable material effect on revenue, operating income or net income and the relationship between revenue and the costs of the revenue. Also, we will disclose, if known, the range of likely effects on future results if certain events are reasonably likely to occur and would have a material effect.
Contractual Obligations, page 15
2.
To increase the transparency of cash flow, in future filings please revise your table on contractual obligations to include scheduled interest payments. To the extent that the interest rates are variable and unknown, you may use your judgment to determine whether to include estimates of future variable rate interest payments in the table or in a footnote to the table. Regardless of whether you decide to include variable rate estimated interest payments in the table or in a footnote, you should provide appropriate disclosure with respect to your assumptions.
Company Response:
In future filings, we will revise our disclosure of contractual obligations to include scheduled interest payments and the underlying assumptions used to determine estimates of future variable rate interest payments.
Note 12 – Capital Stock, page F-21
3.
In future filings, please disclose the number of common shares underlying shares of preferred stock outstanding at the end of the period, based on the current conversion rate (i.e. the number of common shares the preferred stock is convertible into). Also, please disclose the number of warrants outstanding as of the end of the period. Please provide us with a detailed schedule supporting your diluted EPS calculation for the year ending March 31, 2009, and the six months ending September 30, 2009.
Company Response:
In our future filings we will disclose the number of common shares underlying shares of preferred stock outstanding at the end of the period, based on the current conversion rate, and the number of warrants outstanding at the end of the period. Further, in Footnote # 10, “Capital Stock”, included in our recent Form 10-Q for the fiscal quarter ended December 31, 2009, filed with the commission on February 16, 2010, we included the following disclosure:
Based on the current conversion ratio, there were 12,629,489 common shares underlying the Series A Convertible Preferred Stock as of December 31, 2009. At December 31, 2009, the Company had 112,500 warrants issued and outstanding.
-2-
The following tables provide a detailed calculation for the diluted earnings per share (EPS) calculation for the year ending March 31, 2009, and the six months ending September 30, 2009:
TECHPRECISION CORPORATION
COMPUTATION OF EARNINGS PER SHARE
For the YEAR END 3/31/2009
NET INCOME
$ 5,928,991
A
EPS BASIC
$ 0.43
D=(A/B)
EPS FULLY DILUTED
$ 0.23
E=(A/C)
AVG. STOCK PRICE
$ 1.73
F
COMPUTATION OF
Period
Common.
Weighted
WEIGHTED AVG.
outstanding
Weight
Shares
Shares
NUMBER OF SHARES
3/31/2008
365.00
100.0%
12,572,995
12,572,995
Conversion of warrants
4/24/2008
341.00
93.4%
60,000
56,055
Conversion of warrants
4/25/2008
340.00
93.2%
50,000
46,575
Conversion of warrants
4/28/2008
337.00
92.3%
280,000
258,521
Conversion of preferred
6/10/2008
294.00
80.5%
125,000
100,685
Conversion of preferred
6/13/2008
291.00
79.7%
200,000
159,452
Conversion of preferred
6/23/2008
281.00
77.0%
125,000
96,233
Conversion of preferred
6/30/2008
274.00
75.1%
25,000
18,767
Conversion of preferred
6/30/2008
274.00
75.1%
248,000
186,170
Conversion of preferred
7/23/2008
251.00
68.8%
183,000
125,844
Conversion of preferred
10/1/2008
181.00
49.6%
38,518
19,101
WGT AVG SHS BASIC
13,907,513
13,640,397
B
DILUTIVE SHARES
12,103,760
WGT AVG SHS DILUTED
25,744,157
C
A
B
(A+B) =C
D
(D x C) = E
F
I
(E/F) = G
((C-G)*I) =H
COMPUTATION OF
4/1/2008
Granted
Available
Exercise
Treasury
Mos. Avg
Days O/S
Equivalent
Treasury
Dilutive
DILUTIVE SHARES
(Exercised)
Balance
Price
Proceeds
Market Price
Weight
shares
shares
Options 2006,
371,659
371,659
0.285
105,923
1.7304
100%
61,212
310,447
Options 3/23/2009
150,000
150,000
0.490
73,500
1.7304
2%
42,475
2,151
Options 10/1/2008
22,500
22,500
1.310
29,475
1.7304
50%
17,033
2,733
Warrants 9/1/2007
112,500
112,500
1.400
157,500
1.7304
100%
91,018
21,482
Warrants 2/24/2006
4,100,000
(390,000)
3,710,000
0.436
1,617,746
1.7304
100%
934,878
2,775,122
Warrants 2/24/2006
5,610,000
5,610,000
0.654
3,669,361
1.7304
100%
2,120,485
3,489,515
Preferred Stk 2/24/2006
7,018,064
(722,556)
6,295,508
0.218
1,372,578
1.7304
100%
793,198
5,502,309
12,103,760
In connection with our review of the Company’s EPS calculation, several nominal line item calculation errors were revealed in the supporting excel spreadsheets used to calculate the dilutive shares for purposes of the financial statements prepared for the year ended March 31, 2009 and for the six months ended September 30, 2009.
-3-
For the year ended March 31, 2009, there were 390,000 warrants and 722,556 preferred shares whose period outstanding was miscalculated. The correction added 180,891 dilutive shares, increasing the calculated fully diluted weighted average number of shares outstanding to 12,284,651:
3/31/2009
A
B
C
D
(D x C) = E
F
I
(E/F) = G
((C-G)*I) =H
COMPUTATION OF
Conversion
Available
Exercise
Treasury
Mos. Avg
Days O/S
Equivalent
Treasury
Dilutive
DILUTIVE SHARES
Date
Exercised
Balance
Price
Proceeds
Market Price
Weight
shares
shares
Weighted Average shares as reported:
12,103,760
Conversion of warrants
4/24/2009
60,000
60,000
0.43605
26,163
1.730435
24/365
15,119
2,951
Conversion of warrants
4/25/2009
50,000
50,000
0.43605
21,803
1.730435
25/265
12,599
2,562
Conversion of warrants
4/28/2009
280,000
280,000
0.43605
122,094
1.730435
28/365
70,557
16,067
Conversion of preferred
6/10/2008
95,625
95,625
0.21800
20,846
1.730435
71/365
12,047
16,258
Conversion of preferred
6/13/2008
153,000
153,000
0.21800
33,354
1.730435
74/365
19,275
27,111
Conversion of preferred
6/23/2008
95,625
95,625
0.21800
20,846
1.730435
84/365
12,047
19,234
Conversion of preferred
6/30/2008
19,125
19,125
0.21800
4,169
1.730435
91/365
2,409
4,167
Conversion of preferred
6/30/2008
189,720
189,720
0.21800
Show Raw Text
CORRESP
1
filename1.htm
seccorr022610_techpre.htm
Electronic Filing Services Corp.-->
February
26, 2010
VIA
EDGAR
Terrance
O’Brien
Accounting
Branch Chief
Division
of Corporate Finance
Securities
and Exchange Commission
100 F.
Street, N.E.
Mail Stop
4631
Washington,
D.C. 20549-4631
RE:
TechPrecision
Corporation
Form
10-K for the Fiscal Year Ended March 31, 2009
Filed
June 25, 2009
Form
10-Q for the Fiscal Quarter Ended September 30, 2009
File
No. 51378
Dear Mr.
O’Brien:
This
letter is submitted on behalf of TechPrecision Corporation (the “Company”) in response to the
comments that you provided on behalf of the staff of the Division of Corporate
Finance (the “Staff”) of
the Securities and Exchange Commission (the “Commission”) with respect to
the Company’s annual report on Form 10-K for the fiscal year ended March 31,
2009 (filed June 25, 2009) (the “Form 10-K”) and quarterly
report on Form 10-Q for the fiscal quarter ended September 30, 2009 (filed
November 12, 2009) (the “Form
10-Q”), as set forth in your letter to the Company dated January 25,
2010. For reference purposes, the text of the comments contained in your letter
dated January 25, 2010 has been reproduced herein (in bold), with the Company’s
response below such comment.
Form 10-K for the Fiscal
Year Ended March 31, 2009
Item 7. Management’s
Discussion and Analysis of Financial Condition and Results of Operations, page
7
General
1.
We
note GT Solar, your largest customer, cancelled the majority of its open
purchase orders, reducing the total purchase commitment by approximately
$16.8 million in April 2009. In future filings please provide a
quantified analysis of the impact on current periods and the expected
impact on future operations from the cancellation of the purchase orders
and other known material trends and uncertainties affecting future sales
to this customer. Your analysis should also address the
potential impact on your ability to fund operations, service debt
obligations, comply with covenants, use fund sunder lines of credit,
etc. Refer to Section 501.04 and 501.12 of the Financial
Reporting Codification for
guidance.
-1-
Company
Response:
In future
filings, we will provide a quantified analysis of the impact on current periods
and the expected impact on future operations from material customer
cancellations of purchase orders and other known material trends and
uncertainties affecting future sales to our significant customers. Our MD&A
will include a discussion of the known trends and uncertainties that have had a
favorable or unfavorable material effect on revenue, operating income or net
income and the relationship between revenue and the costs of the revenue. Also,
we will disclose, if known, the range of likely effects on future results if
certain events are reasonably likely to occur and would have a material
effect.
Contractual Obligations,
page 15
2.
To
increase the transparency of cash flow, in future filings please revise
your table on contractual obligations to include scheduled interest
payments. To the extent that the interest rates are variable
and unknown, you may use your judgment to determine whether to include
estimates of future variable rate interest payments in the table or in a
footnote to the table. Regardless of whether you decide to
include variable rate estimated interest payments in the table or in a
footnote, you should provide appropriate disclosure with respect to your
assumptions.
Company
Response:
In future
filings, we will revise our disclosure of contractual obligations to include
scheduled interest payments and the underlying assumptions used to determine
estimates of future variable rate interest payments.
Note 12 – Capital Stock,
page F-21
3.
In
future filings, please disclose the number of common shares underlying
shares of preferred stock outstanding at the end of the period, based on
the current conversion rate (i.e. the number of common shares the
preferred stock is convertible into). Also, please disclose the
number of warrants outstanding as of the end of the
period. Please provide us with a detailed schedule supporting
your diluted EPS calculation for the year ending March 31, 2009, and the
six months ending September 30,
2009.
Company
Response:
In our
future filings we will disclose the number of common shares underlying shares of
preferred stock outstanding at the end of the period, based on the current
conversion rate, and the number of warrants outstanding at the end of the
period. Further, in Footnote # 10, “Capital Stock”, included in our
recent Form 10-Q for the fiscal quarter ended December 31, 2009, filed with the
commission on February 16, 2010, we included the following
disclosure:
Based
on the current conversion ratio, there were 12,629,489 common shares underlying
the Series A Convertible Preferred Stock as of December 31, 2009. At December
31, 2009, the Company had 112,500 warrants issued and outstanding.
-2-
The
following tables provide a detailed calculation for the diluted earnings per
share (EPS) calculation for the year ending March 31, 2009, and the six months
ending September 30, 2009:
TECHPRECISION
CORPORATION
COMPUTATION
OF EARNINGS PER SHARE
For the
YEAR END 3/31/2009
NET
INCOME
$ 5,928,991
A
EPS
BASIC
$ 0.43
D=(A/B)
EPS
FULLY DILUTED
$ 0.23
E=(A/C)
AVG.
STOCK PRICE
$ 1.73
F
COMPUTATION
OF
Period
Common.
Weighted
WEIGHTED
AVG.
outstanding
Weight
Shares
Shares
NUMBER
OF SHARES
3/31/2008
365.00
100.0%
12,572,995
12,572,995
Conversion
of warrants
4/24/2008
341.00
93.4%
60,000
56,055
Conversion
of warrants
4/25/2008
340.00
93.2%
50,000
46,575
Conversion
of warrants
4/28/2008
337.00
92.3%
280,000
258,521
Conversion
of preferred
6/10/2008
294.00
80.5%
125,000
100,685
Conversion
of preferred
6/13/2008
291.00
79.7%
200,000
159,452
Conversion
of preferred
6/23/2008
281.00
77.0%
125,000
96,233
Conversion
of preferred
6/30/2008
274.00
75.1%
25,000
18,767
Conversion
of preferred
6/30/2008
274.00
75.1%
248,000
186,170
Conversion
of preferred
7/23/2008
251.00
68.8%
183,000
125,844
Conversion
of preferred
10/1/2008
181.00
49.6%
38,518
19,101
WGT
AVG SHS BASIC
13,907,513
13,640,397
B
DILUTIVE
SHARES
12,103,760
WGT
AVG SHS DILUTED
25,744,157
C
A
B
(A+B)
=C
D
(D
x C) = E
F
I
(E/F)
= G
((C-G)*I)
=H
COMPUTATION
OF
4/1/2008
Granted
Available
Exercise
Treasury
12
Mos. Avg
Days O/S
Equivalent
Treasury
Dilutive
DILUTIVE
SHARES
(Exercised)
Balance
Price
Proceeds
Market
Price
Weight
shares
shares
Options 2006,
2007
371,659
371,659
0.285
105,923
1.7304
100%
61,212
310,447
Options 3/23/2009
150,000
150,000
0.490
73,500
1.7304
2%
42,475
2,151
Options 10/1/2008
22,500
22,500
1.310
29,475
1.7304
50%
17,033
2,733
Warrants 9/1/2007
112,500
112,500
1.400
157,500
1.7304
100%
91,018
21,482
Warrants 2/24/2006
4,100,000
(390,000)
3,710,000
0.436
1,617,746
1.7304
100%
934,878
2,775,122
Warrants 2/24/2006
5,610,000
5,610,000
0.654
3,669,361
1.7304
100%
2,120,485
3,489,515
Preferred
Stk 2/24/2006
7,018,064
(722,556)
6,295,508
0.218
1,372,578
1.7304
100%
793,198
5,502,309
12,103,760
In
connection with our review of the Company’s EPS calculation, several nominal
line item calculation errors were revealed in the supporting excel spreadsheets
used to calculate the dilutive shares for purposes of the financial statements
prepared for the year ended March 31, 2009 and for the six months ended
September 30, 2009.
-3-
For the
year ended March 31, 2009, there were 390,000 warrants and 722,556 preferred
shares whose period outstanding was miscalculated. The correction
added 180,891 dilutive shares, increasing the calculated fully diluted weighted
average number of shares outstanding to 12,284,651:
3/31/2009
A
B
C
D
(D
x C) = E
F
I
(E/F)
= G
((C-G)*I)
=H
COMPUTATION
OF
Conversion
Available
Exercise
Treasury
12
Mos. Avg
Days O/S
Equivalent
Treasury
Dilutive
DILUTIVE
SHARES
Date
Exercised
Balance
Price
Proceeds
Market
Price
Weight
shares
shares
Weighted
Average shares as reported:
12,103,760
Conversion
of warrants
4/24/2009
60,000
60,000
0.43605
26,163
1.730435
24/365
15,119
2,951
Conversion
of warrants
4/25/2009
50,000
50,000
0.43605
21,803
1.730435
25/265
12,599
2,562
Conversion
of warrants
4/28/2009
280,000
280,000
0.43605
122,094
1.730435
28/365
70,557
16,067
Conversion
of preferred
6/10/2008
95,625
95,625
0.21800
20,846
1.730435
71/365
12,047
16,258
Conversion
of preferred
6/13/2008
153,000
153,000
0.21800
33,354
1.730435
74/365
19,275
27,111
Conversion
of preferred
6/23/2008
95,625
95,625
0.21800
20,846
1.730435
84/365
12,047
19,234
Conversion
of preferred
6/30/2008
19,125
19,125
0.21800
4,169
1.730435
91/365
2,409
4,167
Conversion
of preferred
6/30/2008
189,720
189,720
0.21800