Mail Stop 7010
September 20, 2005
Via U.S. mail
Mr. Roger A. Leopard
President and Chief Executive Officer, CalciTech Ltd.
10 route de l`aeroport
1215 Geneva Switzerland
RE: Form 20-F for the fiscal year ended February 28, 2005
File No. 0-20420
Dear Mr. Leopard:
We have reviewed this filing and have the following
comments. If you disagree with a comment, 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
explanation.
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.
FORM 20-F FOR THE YEAR ENDED FEBRUARY 28, 2005
General
1. Where a comment below requests additional disclosures or other
revisions to be made, please show us in your supplemental response
what the revisions will look like. Some of our comments refer to
US
GAAP literature. If your accounting under IFRS differs from your
accounting under US GAAP, please also show us the additional
disclosures that will be included in your US GAAP reconciliation
footnote. With the exception of comments below that specifically
refer to an amendment, these revisions may be included in your
future
filings.
Selected Financial Information, page 1
2. Please round your per share amounts to only the nearest cent in
the Selected Financial Information and throughout your filing, in
order not to imply a greater degree of precision than exists.
Item 5. Operating and Financial Review and Prospects, page 18
3. Please add an Overview section, as suggested by SEC Release No.
34-48960. In this overview, discuss the prospects for commencing
full scale production and the funding necessary to accomplish this
objective. Also, discuss your current financing arrangements and
the
consequences if you are unable to repay or refinance your
convertible
debentures prior to their maturity. In this regard, please
discuss
the specific repayment and conversion terms of the convertible
debentures in a manner similar to your discussion of the Epsom
convertible loan facility at the end of Item 3.D on page 4.
New accounting pronouncements under IFRS and US GAAP, page 20
4. We note that you are in the process of evaluating the effect of
adopting FAS 150 in your consolidated financial statements. Since
FAS 150 is effective for financial statements entered into or
modified after May 31, 2003, please amend your Form 20-F to update
as
the process of evaluating should be complete.
Operating Results, page 21
5. Please discuss in the business reasons for the changes between
periods in revenues, expenses and net loss. In doing so, please
disclose the amount of each significant change in line items
between
periods and the business reasons for it. In circumstances where
there is more than one business reason for the change, attempt to
quantify the incremental impact of each individual business reason
discussed on the overall change in the line item. The discussion
should include information that does not clearly appear in the
financial statements. Your discussion should not merely repeat
numerical data contained in the financial statements or recite
amounts that are readily computable from the financial statements.
See Item 5 in the instructions for Form 20-F and Financial
Reporting
Codification 501.04.
Liquidity and Capital Resources, page 22
6. With respect to your working capital deficiency, discuss the
reasons for increases or decreases in such deficiency. Also,
discuss
the effect (if any) of your working capital deficiency on your
ability to meet your obligations as they become due as required
under
Item 5.B.1.(a) in the instructions for Form 20-F.
7. In view of the uncertainties concerning your continued
existence
as a going concern, the filing should contain a reasonably
detailed
description of management`s specific viable plans intended to
mitigate the effect of such conditions and management`s assessment
of
the likelihood that such plans can be effectively implemented.
Those
elements of the plan that are particularly significant or critical
to
overcoming your present financial difficulties should be clearly
identified and discussed. Additionally, there should be a
reasonably
detailed discussion of your ability (or inability) to generate
sufficient cash to support its operations during the twelve-month
period following the date of the most recent balance sheet
presented.
You should describe the plan in both the management`s discussion
and
analysis of liquidity and the notes to the financial statements.
This discussion should be updated, as necessary, in future
filings.
See Financial Reporting Codification Section 607.02.
Tabular Disclosure of Contractual Obligations, page 25
8. Since the convertible debentures are accounted for differently
under IFRS and U.S. GAAP, please add disclosure below the table
discussing such differences and explaining how you determined the
$4.5 million amount shown in the table and why it is reflected as
an
obligation due in less than one year.
9. Please revise your table of contractual obligations to include
estimated interest payments on your debt. Because the table is
aimed
at increasing transparency of cash flow, we believe these payments
should be included in the table. Please also disclose any
assumptions you made to derive these amounts.
Item 15. Disclosure Controls and Procedures, page 39
10. We note your disclosure that your "principal executive officer
and principal financial officer have concluded that as of the end
of
that fiscal year, our disclosure controls and procedures are
effective to ensure that information required to be disclosed by
us
in reports that we file or submit under the Exchange Act is
recorded,
processed, summarized and reported within the time periods
specified
in the Securities and Exchange Commission rules and forms."
Revise
to clarify, if true, that your officers concluded that your
disclosure controls and procedures are also effective to ensure
that
information required to be disclosed in the reports that you file
or
submit under the Exchange Act is accumulated and communicated to
your
management, including your chief executive officer and chief
financial officer, to allow timely decisions regarding required
disclosure. See Exchange Act Rule 13a-15(e).
Financial Statements
Audit Report of MRI Moores Rowland LLP, page 2
11. In accordance with the PCAOB`s Auditing Standard No. 1, please
have your auditors refer to "the standards of the Public Company
Accounting Oversight Board (United States)" rather than "the
auditing
standards of the Public Company Accounting Oversight Board (United
States)" in the second paragraph of the audit report. Also, the
fourth paragraph only presents an opinion for the year ended
February
28, 2005. Please amend the Form 20-F to have your auditors
present
an opinion on each of the two years ended February 28, 2005. Note
that you are required to refile the entire Form 20-F with the
amended
audit report and obtain updated certifications as well as an
updated
signature page.
Audit Report of PricewaterhouseCoopers, page 4
12. Please have your auditors revise their report to express an
opinion only the financial statements covered in this Form 20-F.
In
this regard, references to the balance sheets of February 28, 2003
and February 28, 2002 should be eliminated as well as references
to
the statements of operations, shareholders` deficiency, and cash
flows for the years ended February 28, 2002 and February 28, 2001.
Please also eliminate references in this audit report to financial
statement notes that do not exist in this filing or update them,
as
appropriate. Please amend your Form 20-F in response to this
comment.
Note 15. Differences Between International Financial Reporting
Standards and US Generally Accepted Accounting Principles, page 29
13. Due to the significant differences in your accounting under
IFRS
and U.S. GAAP, we suggest that you present a balance sheet under
U.S.
GAAP. In the alternative, add prominent disclosure of the
differences in accounting for the convertible debentures with
respect
to the balance sheet presentation.
14. Using the reconciled to U.S. GAAP net income and other
necessary
data, furnish in Note 15 a statement of stockholders` equity under
U.S. GAAP for each of the three years ended February 28, 2005.
* * * *
Please respond to these comments within 10 business
days,
or tell us when you will provide us with a response. Please
provide
us with a supplemental response letter that keys your responses to
our comments and provides any requested supplemental information.
Detailed letters greatly facilitate our review. Please file your
supplemental response on EDGAR as a correspondence file. Please
understand that we may have additional comments after reviewing
your
responses to our comments.
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
for
an informed decision. 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 their filings;
* 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 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.
If you have any questions regarding these comments, please
direct them to Marie Trimeloni, Staff Accountant, at (202) 551-
3734
or, in her absence, to the undersigned at (202) 551-3769.
Sincerely,
Rufus Decker
Accounting Branch Chief
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Mr. Roger A. Leopard
September 20, 2005
Page 5 of 5
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-7010
DIVISION OF
CORPORATION FINANCE