<SEC-DOCUMENT>0001437749-14-019243.txt : 20150507
<SEC-HEADER>0001437749-14-019243.hdr.sgml : 20150507
<ACCEPTANCE-DATETIME>20141031164912
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001437749-14-019243
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20141031

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			DAILY JOURNAL CORP
		CENTRAL INDEX KEY:			0000783412
		STANDARD INDUSTRIAL CLASSIFICATION:	NEWSPAPERS:  PUBLISHING OR PUBLISHING & PRINTING [2711]
		IRS NUMBER:				954133299
		STATE OF INCORPORATION:			SC
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		915 EAST FIRST STREET
		CITY:			LOS ANGELES
		STATE:			CA
		ZIP:			90012
		BUSINESS PHONE:		2132295300

	MAIL ADDRESS:	
		STREET 1:		915 EAST FIRST STREET
		CITY:			LOS ANGELES
		STATE:			CA
		ZIP:			90012

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	DAILY JOURNAL CO
		DATE OF NAME CHANGE:	19870427
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
<TEXT>
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<P id=PARA1 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B></B></FONT>&nbsp;</P>
<P style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>DAILY JOURNAL CORPORATION</B></FONT></P>
<P id=PARA2 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">915 EAST FIRST STREET</FONT></P>
<P id=PARA3 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">LOS ANGELES, CALIFORNIA 90012</FONT></P>
<P id=PARA4 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">TELEPHONE (213) 229-5300</FONT></P>
<P id=PARA5 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">FACSIMILE (213) 229-5481</FONT></P>
<P id=PARA6 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">______________</FONT></P>
<P id=PARA7 style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT></P>
<P id=PARA8 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">October 31, 2014</FONT></P>
<P id=PARA9 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT></P>
<P id=PARA10 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Lyn Shenk</FONT></P>
<P id=PARA11 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Branch Chief</FONT></P>
<P id=PARA12 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Division of Corporation Finance</FONT></P>
<P id=PARA13 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">U.S. Securities and Exchange Commission</FONT></P>
<P id=PARA14 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">100 F Street, N.E.</FONT></P>
<P id=PARA15 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Washington, D.C. 20549</FONT></P>
<P id=PARA16 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT></P>
<TABLE id=TBL17  style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 100%; TEXT-INDENT: 0px" cellSpacing=0 cellPadding=0 border=0>

<TR>
<TD style="WIDTH: 27pt">
<P id=PARA192 style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT></P></TD>
<TD style="WIDTH: 36pt; VERTICAL-ALIGN: top">
<P id=PARA190><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Re:</FONT></P></TD>
<TD style="VERTICAL-ALIGN: top">
<P id=PARA191><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Daily Journal Corporation (the &#8220;Company&#8221;)</P></FONT></TD></TR>
<TR>
<TD style="WIDTH: 27pt">&nbsp;</TD>
<TD style="WIDTH: 36pt; VERTICAL-ALIGN: top">&nbsp;</TD>
<TD style="VERTICAL-ALIGN: top">Form 10-K for the Fiscal Year Ended September 30, 2013</TD></TR>
<TR>
<TD style="WIDTH: 27pt">&nbsp;</TD>
<TD style="WIDTH: 36pt; VERTICAL-ALIGN: top">&nbsp;</TD>
<TD style="VERTICAL-ALIGN: top">Filed June 24, 2014</TD></TR>
<TR>
<TD style="WIDTH: 27pt">&nbsp;</TD>
<TD style="WIDTH: 36pt; VERTICAL-ALIGN: top">&nbsp;</TD>
<TD style="VERTICAL-ALIGN: top">File No. 000-14665</TD></TR></TABLE>
<P id=PARA18 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 72pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"></FONT>&nbsp;</P>
<P id=PARA22 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Dear Mr. Shenk:</FONT></P>
<P id=PARA23 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT></P>
<P id=PARA24 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">We are in receipt of your letter dated September 25, 2014 with respect to the above-referenced Form 10-K (the &#8220;Form 10-K&#8221;). By way of background, the Company was unable to file the Form 10-K on a timely basis because the Company&#8217;s auditor, Ernst &amp; Young LLP, required additional time to complete its audits of the Company&#8217;s fiscal 2013 financial statements and the Company&#8217;s internal control over financial reporting (&#8220;ICFR&#8221;). Therefore, in order to provide investors with important and timely information about the Company&#8217;s financial performance, the Company filed a Form 8-K with preliminary unaudited results in December 2013. </FONT></P>
<P id=PARA25 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT></P>
<P id=PARA26 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Then, because Ernst &amp; Young did not complete its audits until the third quarter of fiscal 2014, there was no definitive starting place for periods subsequent to fiscal 2013, and it was not possible for the Company to file Form 10-Qs for the first two quarters of fiscal 2014 on a timely basis. So, the Company filed Form 8-Ks on the due dates for the periodic reports in order to provide the marketplace with preliminary results. When the final reviewed financial statements were then included in the Form 10-Qs, they reflected all additional information and subsequent events through the date of each filing, as required under GAAP. </FONT></P>
<P id=PARA27 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT></P>
<P id=PARA28 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">For ease of reference, we have set forth your comments and the Daily Journal&#8217;s responses to those comments below. </FONT></P>
<P id=PARA29.1 style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&nbsp;</FONT></P>
<DIV id=PGBK29  style="WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=PGFTR29  style="WIDTH: 100%; TEXT-ALIGN: center">&nbsp;</DIV>
<DIV id=PGNUM29  style="FONT-SIZE: 10pt; WIDTH: 100%; TEXT-ALIGN: center">1</DIV>
<HR style="HEIGHT: 2px; WIDTH: 100%; PAGE-BREAK-AFTER: always; COLOR: #000000" noShade>

<DIV id=PGHDR29  style="WIDTH: 100%; TEXT-ALIGN: left">&nbsp;</DIV></DIV>
<P id=PARA29.2 style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&nbsp;</FONT></P>
<P id=PARA30 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><U>Item 8. Financial Statements and Supplementary Data</U></FONT></P>
<P id=PARA31 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT></P>
<P id=PARA32 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><U>Notes to Consolidated Financial Statements</U></FONT></P>
<P id=PARA33 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT></P>
<P id=PARA34 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><U>Intangible Assets, page 28</U></FONT></P>
<P id=PARA35 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT></P>
<P id=PARA36 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>1. </B><B>Based on</B><B> </B><B>y</B><B>o</B><B>u</B><B>r dis</B><B>c</B><B>losur</B><B>e</B><B>, it</B><B> </B><B>a</B><B>pp</B><B>ea</B><B>rs th</B><B>a</B><B>t </B><B>i</B><B>nta</B><B>n</B><B>g</B><B>ib</B><B>l</B><B>e</B><B> a</B><B>ssets </B><B>c</B><B>onsist of pu</B><B>r</B><B>c</B><B>h</B><B>a</B><B>s</B><B>e</B><B>d softw</B><B>a</B><B>r</B><B>e </B><B>a</B><B>nd </B><B>c</B><B>usto</B><B>m</B><B>e</B><B>r </B><B>r</B><B>e</B><B>lationships. </B><B>P</B><B>le</B><B>a</B><B>se</B><B> re</B><B>vise to dis</B><B>c</B><B>l</B><B>ose the</B><B> </B><B>gross </B><B>c</B><B>a</B><B>r</B><B>r</B><B>y</B><B>i</B><B>n</B><B>g</B><B> </B><B>a</B><B>m</B><B>ount and </B><B>acc</B><B>umu</B><B>l</B><B>a</B><B>ted</B><B> </B><B>a</B><B>morti</B><B>z</B><B>a</B><B>t</B><B>i</B><B>on </B><B>b</B><B>y</B><B> </B><B>major</B><B> </B><B>in</B><B>t</B><B>a</B><B>n</B><B>g</B><B>ib</B><B>l</B><B>e</B><B> </B><B>a</B><B>sset </B><B>c</B><B>lass </B><B>f</B><B>or</B><B> </B><B>eac</B><B>h </B><B>b</B><B>a</B><B>lan</B><B>c</B><B>e</B><B> </B><B>she</B><B>e</B><B>t date p</B><B>re</B><B>s</B><B>e</B><B>nted. R</B><B>e</B><B>f</B><B>e</B><B>r to </B><B>A</B><B>S</B><B>C</B><B> </B><B>35</B><B>0</B><B>-</B><B>30</B><B>-</B><B>50</B><B>-</B><B>2.</B></FONT></P>
<P id=PARA37 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>&nbsp;</B></FONT></P>
<P id=PARA38 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">In future filings, the Company will disclose the gross carrying amount and accumulated amortization by major intangible asset class for each balance sheet date presented. The following chart shows the additional detail as of September 30, 2013:</FONT></P>
<P id=PARA39 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT></P>
<TABLE id=TBL57  style="FONT-SIZE: 10pt; BORDER-TOP: #000000 1px solid; FONT-FAMILY: Times New Roman, Times, serif; BORDER-RIGHT: #000000 1px solid; WIDTH: 100%; BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0px" cellSpacing=0 cellPadding=0 border=0>

<TR id=TBL57.finRow.1>
<TD style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; BORDER-RIGHT: #000000 1px solid; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid"><B>&nbsp;</B></TD>
<TD id=TBL57.finRow.1.lead.D4 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid"><B>&nbsp;</B></TD>
<TD id=TBL57.finRow.1.amt.D4 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; MARGIN-LEFT: 0pt" colSpan=10>
<P id=PARA40 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>Intangibles ($000)</B></FONT></P></TD>
<TD id=TBL57.finRow.1.trail.D4 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid"><B>&nbsp;</B></TD></TR>
<TR id=TBL57.finRow.2>
<TD style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; BORDER-RIGHT: #000000 1px solid; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
<TD id=TBL57.finRow.2.lead.D2 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
<TD id=TBL57.finRow.2.amt.D2 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; MARGIN-LEFT: 0pt" colSpan=2>
<P id=PARA41 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Customer </FONT></P>
<P style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Relationships</FONT></P></TD>
<TD id=TBL57.finRow.2.trail.D2 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; BORDER-RIGHT: #000000 1px solid; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
<TD id=TBL57.finRow.2.lead.D3 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
<TD id=TBL57.finRow.2.amt.D3 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; MARGIN-LEFT: 0pt" colSpan=2>
<P id=PARA42 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Developed </FONT></P>
<P style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Technology</FONT></P></TD>
<TD id=TBL57.finRow.2.trail.D3 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; BORDER-RIGHT: #000000 1px solid; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
<TD id=TBL57.finRow.2.lead.D4 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
<TD id=TBL57.finRow.2.amt.D4 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; MARGIN-LEFT: 0pt" colSpan=2>
<P id=PARA43 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"></FONT></P>
<P id=PARA44 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Total</FONT></P></TD>
<TD id=TBL57.finRow.2.trail.D4 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD></TR>
<TR id=TBL57.finRow.3 style="BACKGROUND-COLOR: #ffffff">
<TD style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; BORDER-RIGHT: #000000 1px solid; WIDTH: 55%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">
<P id=PARA45 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Gross Intangibles</FONT></P></TD>
<TD id=TBL57.finRow.3.lead.2 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #ffffff">&nbsp;</TD>
<TD id=TBL57.finRow.3.symb.2 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #ffffff">&nbsp;</TD>
<TD id=TBL57.finRow.3.amt.2 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 12%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 7.2pt; BACKGROUND-COLOR: #ffffff">23,524</TD>
<TD id=TBL57.finRow.3.trail.2 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; BORDER-RIGHT: #000000 1px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" noWrap>&nbsp;</TD>
<TD id=TBL57.finRow.3.lead.3 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #ffffff">&nbsp;</TD>
<TD id=TBL57.finRow.3.symb.3 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #ffffff">&nbsp;</TD>
<TD id=TBL57.finRow.3.amt.3 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 12%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 7.2pt; BACKGROUND-COLOR: #ffffff">2,678</TD>
<TD id=TBL57.finRow.3.trail.3 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; BORDER-RIGHT: #000000 1px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" noWrap>&nbsp;</TD>
<TD id=TBL57.finRow.3.lead.4 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #ffffff">&nbsp;</TD>
<TD id=TBL57.finRow.3.symb.4 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #ffffff">&nbsp;</TD>
<TD id=TBL57.finRow.3.amt.4 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 12%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 7.2pt; BACKGROUND-COLOR: #ffffff">26,202</TD>
<TD id=TBL57.finRow.3.trail.4 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" noWrap>&nbsp;</TD></TR>
<TR id=TBL57.finRow.4 style="BACKGROUND-COLOR: #ffffff">
<TD style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; BORDER-RIGHT: #000000 1px solid; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">
<P id=PARA49 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Accumulated Amortization</FONT></P></TD>
<TD id=TBL57.finRow.4.lead.2 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #ffffff">&nbsp;</TD>
<TD id=TBL57.finRow.4.symb.2 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #ffffff">&nbsp;</TD>
<TD id=TBL57.finRow.4.amt.2 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 12%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 7.2pt; BACKGROUND-COLOR: #ffffff">(1,640</TD>
<TD id=TBL57.finRow.4.trail.2 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; BORDER-RIGHT: #000000 1px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" noWrap>)</TD>
<TD id=TBL57.finRow.4.lead.3 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #ffffff">&nbsp;</TD>
<TD id=TBL57.finRow.4.symb.3 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #ffffff">&nbsp;</TD>
<TD id=TBL57.finRow.4.amt.3 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 12%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 7.2pt; BACKGROUND-COLOR: #ffffff">(225</TD>
<TD id=TBL57.finRow.4.trail.3 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; BORDER-RIGHT: #000000 1px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" noWrap>)</TD>
<TD id=TBL57.finRow.4.lead.4 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #ffffff">&nbsp;</TD>
<TD id=TBL57.finRow.4.symb.4 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #ffffff">&nbsp;</TD>
<TD id=TBL57.finRow.4.amt.4 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 12%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 7.2pt; BACKGROUND-COLOR: #ffffff">(1,865</TD>
<TD id=TBL57.finRow.4.trail.4 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" noWrap>)</TD></TR>
<TR id=TBL57.finRow.5 style="BACKGROUND-COLOR: #ffffff">
<TD style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; BORDER-RIGHT: #000000 1px solid; VERTICAL-ALIGN: top; TEXT-ALIGN: left; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">
<P id=PARA53 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>Total </B></FONT></P></TD>
<TD id=TBL57.finRow.5.lead.2 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff"><B>&nbsp;</B></TD>
<TD id=TBL57.finRow.5.symb.2 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff"><B>&nbsp;</B></TD>
<TD id=TBL57.finRow.5.amt.2 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 12%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 7.2pt; BACKGROUND-COLOR: #ffffff"><B>21,884</B></TD>
<TD id=TBL57.finRow.5.trail.2 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; BORDER-RIGHT: #000000 1px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 0px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" noWrap><B>&nbsp;</B></TD>
<TD id=TBL57.finRow.5.lead.3 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff"><B>&nbsp;</B></TD>
<TD id=TBL57.finRow.5.symb.3 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff"><B>&nbsp;</B></TD>
<TD id=TBL57.finRow.5.amt.3 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 12%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 7.2pt; BACKGROUND-COLOR: #ffffff"><B>2,453</B></TD>
<TD id=TBL57.finRow.5.trail.3 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; BORDER-RIGHT: #000000 1px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 0px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" noWrap><B>&nbsp;</B></TD>
<TD id=TBL57.finRow.5.lead.4 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff"><B>&nbsp;</B></TD>
<TD id=TBL57.finRow.5.symb.4 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff"><B>&nbsp;</B></TD>
<TD id=TBL57.finRow.5.amt.4 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 12%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 7.2pt; BACKGROUND-COLOR: #ffffff"><B>24,337</B></TD>
<TD id=TBL57.finRow.5.trail.4 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 0px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" noWrap><B>&nbsp;</B></TD></TR></TABLE>
<P id=PARA58 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>&nbsp;</B></FONT></P>
<P id=PARA59 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><U>Item 9A. Controls and Procedures, page 34</U></FONT></P>
<P id=PARA60 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT></P>
<P id=PARA61 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><U>Evaluation of Disclosure Controls and Procedures, page 34</U></FONT></P>
<P id=PARA62 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>&nbsp;</B></FONT></P>
<P id=PARA63 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>2. We note</B><B> </B><B>y</B><B>our</B><B> </B><B>c</B><B>on</B><B>c</B><B>lus</B><B>i</B><B>on</B><B> </B><B>that dis</B><B>c</B><B>losure</B><B> c</B><B>ontrols </B><B>a</B><B>nd p</B><B>r</B><B>o</B><B>ce</B><B>du</B><B>r</B><B>e</B><B>s (</B><B>D</B><B>C</B><B>P</B><B>) </B><B>w</B><B>a</B><B>s e</B><B>f</B><B>fe</B><B>c</B><B>t</B><B>i</B><B>ve</B><B> a</B><B>s of</B><B> </B><B>S</B><B>e</B><B>ptemb</B><B>e</B><B>r 30,</B><B> </B><B>2013 </B><B>a</B><B>nd we</B><B> </B><B>note simi</B><B>l</B><B>a</B><B>r </B><B>c</B><B>on</B><B>c</B><B>l</B><B>usions in</B><B> </B><B>y</B><B>o</B><B>u</B><B>r </B><B>D</B><B>e</B><B>ce</B><B>m</B><B>b</B><B>e</B><B>r</B><B> </B><B>31, 2013, Ma</B><B>rc</B><B>h 31, 2014, </B><B>a</B><B>nd </B><B>J</B><B>une</B><B> </B><B>30, 2014 </B><B>F</B><B>o</B><B>r</B><B>ms 1</B><B>0-</B><B>Q.</B><B> </B><B>You state</B><B> </B><B>the unti</B><B>m</B><B>e</B><B>l</B><B>y</B><B> </B><B>filing</B><B> </B><B>of</B><B> </B><B>y</B><B>our </B><B>F</B><B>o</B><B>r</B><B>m 10</B><B>-</B><B>K</B><B> </B><B>for</B><B> </B><B>the </B><B>f</B><B>is</B><B>c</B><B>a</B><B>l</B><B> </B><B>y</B><B>ea</B><B>r </B><B>e</B><B>n</B><B>d</B><B>e</B><B>d </B><B>S</B><B>e</B><B>ptemb</B><B>e</B><B>r 3</B><B>0</B><B>, 2013 </B><B>a</B><B>nd</B><B> </B><B>y</B><B>o</B><B>u</B><B>r </B><B>F</B><B>o</B><B>rms 1</B><B>0</B><B>-</B><B>Q </B><B>f</B><B>or</B><B> f</B><B>i</B><B>s</B><B>ca</B><B>l 2014 w</B><B>e</B><B>re</B><B> </B><B>not d</B><B>u</B><B>e</B><B> </B><B>to a l</B><B>a</B><B>c</B><B>k of </B><B>e</B><B>f</B><B>f</B><B>e</B><B>c</B><B>t</B><B>i</B><B>v</B><B>e</B><B>n</B><B>e</B><B>ss of</B><B> </B><B>y</B><B>o</B><B>ur</B><B> </B><B>DC</B><B>P</B><B>, but </B><B>i</B><B>nste</B><B>a</B><B>d d</B><B>u</B><B>e</B><B> </B><B>to </B><B>t</B><B>he </B><B>a</B><B>ddi</B><B>t</B><B>ional t</B><B>i</B><B>me </B><B>re</B><B>quir</B><B>e</B><B>d </B><B>t</B><B>o </B><B>c</B><B>omp</B><B>l</B><B>e</B><B>te the</B><B> a</B><B>ssessm</B><B>e</B><B>nt and </B><B>a</B><B>udit</B><B> </B><B>of</B><B> </B><B>y</B><B>o</B><B>u</B><B>r int</B><B>e</B><B>r</B><B>n</B><B>a</B><B>l cont</B><B>r</B><B>ol ov</B><B>e</B><B>r </B><B>f</B><B>ina</B><B>n</B><B>c</B><B>ial r</B><B>e</B><B>p</B><B>o</B><B>rtin</B><B>g.</B></FONT></P>
<P id=PARA64 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>&nbsp;</B></FONT></P>
<P id=PARA65 style="TEXT-ALIGN: left; MARGIN: 0pt 2.45pt 0pt 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>E</B><B>x</B><B>c</B><B>h</B><B>a</B><B>n</B><B>g</B><B>e</B><B> </B><B>A</B><B>c</B><B>t </B><B>R</B><B>ule 13a</B><B>-</B><B>15(</B><B>e</B><B>) st</B><B>a</B><B>tes th</B><B>a</B><B>t </B><B>t</B><B>he</B><B> </B><B>t</B><B>e</B><B>rm</B><B> </B><B>&#8220;</B><B>disclosure</B><B> c</B><B>ontrols and</B><B> </B><B>p</B><B>r</B><B>o</B><B>ce</B><B>du</B><B>r</B><B>e</B><B>s&#8221; me</B><B>a</B><B>ns c</B><B>o</B><B>ntrols and oth</B><B>e</B><B>r</B><B> </B><B>pro</B><B>c</B><B>e</B><B>du</B><B>r</B><B>e</B><B>s of </B><B>a</B><B>n</B><B> </B><B>is</B><B>s</B><B>u</B><B>e</B><B>r </B><B>t</B><B>h</B><B>a</B><B>t a</B><B>r</B><B>e</B><B> </B><B>d</B><B>e</B><B>si</B><B>g</B><B>n</B><B>e</B><B>d to ensu</B><B>r</B><B>e</B><B> </B><B>that info</B><B>r</B><B>mation r</B><B>e</B><B>quir</B><B>e</B><B>d to </B><B>b</B><B>e</B><B> </B><B>disclosed </B><B>b</B><B>y</B><B> </B><B>the issuer</B><B> </B><B>in </B><B>t</B><B>he</B><B> re</B><B>ports that it</B><B> </B><B>f</B><B>i</B><B>l</B><B>e</B><B>s or submits und</B><B>e</B><B>r the</B><B> </B><B>A</B><B>c</B><B>t </B><B>i</B><B>s </B><B>r</B><B>ec</B><B>o</B><B>r</B><B>d</B><B>e</B><B>d</B><B>, pro</B><B>c</B><B>e</B><B>ssed, summ</B><B>a</B><B>ri</B><B>z</B><B>e</B><B>d </B><B>a</B><B>nd r</B><B>e</B><B>por</B><B>t</B><B>e</B><B>d, with</B><B>i</B><B>n the ti</B><B>m</B><B>e</B><B> </B><B>p</B><B>e</B><B>riods spe</B><B>c</B><B>ified</B><B> </B><B>in </B><B>t</B><B>he</B><B> </B><B>Com</B><B>m</B><B>is</B><B>s</B><B>ion</B><B>&#39;</B><B>s rul</B><B>e</B><B>s</B><B> </B><B>a</B><B>n</B><B>d fo</B><B>r</B><B>ms. </B><B>W</B><B>e</B><B> a</B><B>lso note the</B><B> a</B><B>moun</B><B>t</B><B>s </B><B>r</B><B>e</B><B>port</B><B>e</B><B>d for income</B><B> (</B><B>los</B><B>s</B><B>) </B><B>f</B><B>rom op</B><B>e</B><B>rat</B><B>i</B><B>ons, provision f</B><B>o</B><B>r </B><B>(</B><B>b</B><B>e</B><B>n</B><B>e</B><B>fit f</B><B>r</B><B>om) income</B><B> </B><B>ta</B><B>x</B><B>e</B><B>s, </B><B>a</B><B>nd n</B><B>e</B><B>t </B><B>i</B><B>n</B><B>c</B><B>ome (loss) in</B><B> </B><B>y</B><B>our</B><B> </B><B>filed</B><B> F</B><B>o</B><B>rm 1</B><B>0</B><B>-</B><B>K </B><B>a</B><B>nd</B><B> </B><B>F</B><B>o</B><B>r</B><B>ms 1</B><B>0</B><B>-Q </B><B>f</B><B>o</B><B>r th</B><B>e</B><B>se</B><B> </B><B>p</B><B>e</B><B>riods di</B><B>f</B><B>f</B><B>e</B><B>r</B><B>e</B><B>d f</B><B>r</B><B>om </B><B>t</B><B>he un</B><B>a</B><B>udi</B><B>t</B><B>e</B><B>d r</B><B>e</B><B>sul</B><B>t</B><B>s includ</B><B>e</B><B>d in</B><B> </B><B>y</B><B>our</B><B> </B><B>F</B><B>o</B><B>rms 8</B><B>-</B><B>K</B><B> </B><B>fil</B><B>e</B><B>d on D</B><B>ece</B><B>m</B><B>b</B><B>e</B><B>r 31,</B><B> </B><B>2013,</B><B> </B><B>Fe</B><B>b</B><B>r</B><B>u</B><B>a</B><B>r</B><B>y</B><B> </B><B>11, 2014, </B><B>a</B><B>nd M</B><B>a</B><B>y</B><B> </B><B>23, 2014,</B><B> </B><B>a</B><B>nd the di</B><B>f</B><B>fer</B><B>e</B><B>n</B><B>c</B><B>e</B><B>s w</B><B>e</B><B>re si</B><B>g</B><B>nifi</B><B>ca</B><B>nt f</B><B>o</B><B>r the</B><B> </B><B>qu</B><B>a</B><B>rt</B><B>e</B><B>r</B><B>l</B><B>y</B><B> </B><B>r</B><B>e</B><B>ports.</B></FONT></P>
<P id=PARA67 style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT></P>
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<DIV id=PGFTR193  style="WIDTH: 100%; TEXT-ALIGN: center">&nbsp;</DIV>
<DIV id=PGNUM193  style="FONT-SIZE: 10pt; WIDTH: 100%; TEXT-ALIGN: center">2</DIV>
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<DIV id=PGHDR193  style="WIDTH: 100%; TEXT-ALIGN: left">&nbsp;</DIV></DIV>
<P id=PARA193.2 style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&nbsp;</FONT><FONT style="FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman, Times, serif"><B></B></FONT></P>
<P id=PARA68 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>Giv</B><B>e</B><B>n th</B><B>i</B><B>s de</B><B>f</B><B>in</B><B>i</B><B>t</B><B>i</B><B>on,</B><B> </B><B>y</B><B>o</B><B>ur</B><B> </B><B>no</B><B>n</B><B>-</B><B>t</B><B>i</B><B>me</B><B>l</B><B>y</B><B> </B><B>f</B><B>i</B><B>l</B><B>i</B><B>n</B><B>g</B><B>s due</B><B> </B><B>to a </B><B>re</B><B>quir</B><B>e</B><B>m</B><B>e</B><B>nt of the </B><B>A</B><B>c</B><B>t, and the dif</B><B>fe</B><B>r</B><B>e</B><B>n</B><B>ce</B><B>s not</B><B>e</B><B>d in</B><B> </B><B>y</B><B>our</B><B> </B><B>f</B><B>in</B><B>a</B><B>n</B><B>c</B><B>ial </B><B>r</B><B>e</B><B>sul</B><B>t</B><B>s pl</B><B>ea</B><B>se</B><B> </B><B>t</B><B>e</B><B>ll</B><B> </B><B>us in more</B><B> </B><B>d</B><B>e</B><B>tail w</B><B>h</B><B>y</B><B> </B><B>y</B><B>o</B><B>u b</B><B>e</B><B>l</B><B>i</B><B>e</B><B>v</B><B>e </B><B>y</B><B>o</B><B>ur</B><B> </B><B>DCP</B><B> </B><B>w</B><B>a</B><B>s e</B><B>f</B><B>f</B><B>ec</B><B>t</B><B>i</B><B>ve</B><B> </B><B>und</B><B>e</B><B>r the</B><B> </B><B>d</B><B>e</B><B>finit</B><B>i</B><B>on in E</B><B>x</B><B>c</B><B>h</B><B>a</B><B>n</B><B>g</B><B>e</B><B> </B><B>A</B><B>c</B><B>t </B><B>R</B><B>ule 13</B><B>a</B><B>-</B><B>1</B><B>5</B><B>(</B><B>e</B><B>).</B></FONT></P>
<P id=PARA69 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>&nbsp;</B></FONT></P>
<P id=PARA70 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">The Form 10-K was completed and ready to file in December 2013, but for the completion of Ernst &amp; Young&#8217;s audits of the Company&#8217;s financial statements and ICFR. All internal sign-offs, as well as sign-off from the Company&#8217;s outside legal counsel, had been received, and the Company was under the impression that Ernst &amp; Young intended to deliver its audit reports by the extended reporting deadline under Exchange Act&nbsp;Rule 12b-25. When that deadline was missed, Ernst &amp; Young simply indicated that more time was required and that it would finish its work &#8220;in due course.&#8221;</FONT></P>
<P id=PARA71 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT></P>
<P id=PARA72 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Furthermore, the Company does not believe that the differences in amounts reported in the Form 8-Ks versus the Form 10-K and Form 10-Qs are significant from an investor&#8217;s standpoint. In fact, they represent only two things: (1) a reclassification of ($1,762,000) from goodwill and accrued liabilities to prepaid expenses and other assets relative to the allocation of the purchase price for New Dawn Technologies, Inc. (&#8220;New Dawn&#8221;) at the acquisition date in order to record work-in-progress, and (2) additional available information due to the passage of time.</FONT></P>
<P id=PARA73 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT></P>
<P id=PARA74 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">As part of its ICFR, the Company evaluated these differences at the time of the Form 10-K and Form 10-Q filings in accordance with SEC Staff Accounting Bulletin No. 99, and it determined that the differences were not quantitatively or qualitatively material. The Company also concluded that the differences did not evidence a deficiency in its disclosure controls and procedures. Below is additional detail on each of the items that contributed to the differences:</FONT></P>
<P id=PARA75 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT></P>
<P id=PARA76 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><I>Work-in-progress</I>. There was an immaterial difference of $69,000 in the net income of the Company between the $3,779,000 reported in the Form 10-K and the $3,848,000 reported in the Form 8-K. This difference is the consequence of the reclassification entry described above and is the after-tax result of adjusting the work-in-progress costs for New Dawn&#8217;s software installation projects as of September 30, 2013. This reclassification then affected the financial results for the first and second quarters of fiscal 2014 because $173,000 and $130,000, respectively, were required to be recorded as expenses for New Dawn projects that went &#8220;live&#8221; during those two quarters. </FONT></P>
<P id=PARA77 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT></P>
<P id=PARA78 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><I></I><I>Completion of third-party valuation</I>. The Company completed its preliminary valuation of the assets it acquired from ISD Corporation shortly after the closing of the purchase in September 2013. In accordance with ASC 805-<I>Business Combinations</I>, the Company then retained a third-party valuation specialist in December 2013, and the specialist completed its analysis in July 2014. Accordingly, the Company had the benefit of the specialist&#8217;s work at the time it filed the Form 10-Qs but not at the time it filed the Form 8-Ks. This resulted in a reclassification of $1,700,000 from intangibles to goodwill, and thus a downward $114,000 pre-tax adjustment to intangible amortization in the first quarter, and a downward $85,000 adjustment in the second quarter, in each case compared to the preliminary amounts disclosed in the Form 8-Ks.</FONT></P>
<P id=PARA79 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT></P>
<DIV id=PGBK194  style="WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=PGFTR194  style="WIDTH: 100%; TEXT-ALIGN: center">&nbsp;</DIV>
<DIV id=PGNUM194  style="FONT-SIZE: 10pt; WIDTH: 100%; TEXT-ALIGN: center">3</DIV>
<HR style="HEIGHT: 2px; WIDTH: 100%; PAGE-BREAK-AFTER: always; COLOR: #000000" noShade>

<DIV id=PGHDR194  style="WIDTH: 100%; TEXT-ALIGN: left">&nbsp;</DIV></DIV>
<P id=PARA194.2 style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&nbsp;</FONT></P>
<P id=PARA80 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><I></I><I>Better </I><I>full-year </I><I>2014 forecast</I>. The tax provisions reported in the Company&#8217;s Form 10-Qs increased by $165,000 in the first quarter and $110,000 in the second quarter compared to the numbers reported in the Form 8-Ks because the Company was able to more closely forecast its pretax income (loss) at the time it filed the Form 10-Qs given that almost 11 months of fiscal 2014 had passed. Accordingly,&nbsp;due to the passage of time,&nbsp;the tax provisions in the filed Form 10-Qs primarily reflect the better information that existed in August 2014 about the likelihood of better results for the full fiscal year than earlier estimated.</FONT></P>
<P id=PARA81 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT></P>
<P id=PARA82 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Below is a summary of these differences between the preliminary amounts reported in the Form 8-Ks and the amounts reported in the Form 10-K and Form 10-Qs:</FONT></P>
<P id=PARA83 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT>&nbsp;</P>
<TABLE id=TBL100  style="FONT-SIZE: 10pt; BORDER-TOP: #000000 1px solid; FONT-FAMILY: Times New Roman, Times, serif; BORDER-RIGHT: #000000 1px solid; WIDTH: 100%; BORDER-BOTTOM: #000000 1px solid; BORDER-LEFT: #000000 1px solid; TEXT-INDENT: 0px" cellSpacing=0 cellPadding=0 border=0>

<TR>
<TD style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 51%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
<TD id=TBL100.finRow.1.lead.D2 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; BORDER-RIGHT: #000000 1px solid; WIDTH: 1%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
<TD id=TBL100.finRow.1.amt.D2 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 33%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; MARGIN-LEFT: 0pt" colSpan=12><B>($000)</B></TD>
<TD id=TBL100.finRow.1.trail.D4 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid; PADDING-BOTTOM: 0px">&nbsp;</TD>
<TD id=TBL100.finRow.1.trail.D4 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid; PADDING-BOTTOM: 0px">&nbsp;</TD>
<TD id=TBL100.finRow.1.trail.D4 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid; PADDING-BOTTOM: 0px">&nbsp;</TD></TR>
<TR>
<TD style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 51%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid"><B>&nbsp;</B></TD>
<TD id=TBL100.finRow.1.lead.D2 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; BORDER-RIGHT: #000000 1px solid; WIDTH: 1%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid"><B>&nbsp;</B></TD>
<TD id=TBL100.finRow.1.amt.D2 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; MARGIN-LEFT: 0pt" colSpan=4>
<P id=PARA85 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>FY 2013</B></FONT></P></TD>
<TD id=TBL100.finRow.1.lead.D3 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; BORDER-RIGHT: #000000 1px solid; WIDTH: 1%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid"><B>&nbsp;</B></TD>
<TD id=TBL100.finRow.1.amt.D3 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; MARGIN-LEFT: 0pt" colSpan=4>
<P id=PARA86 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>Q1 FY 2014</B></FONT></P></TD>
<TD id=TBL100.finRow.1.lead.D4 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; BORDER-RIGHT: #000000 1px solid; WIDTH: 1%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid"><B>&nbsp;</B></TD>
<TD id=TBL100.finRow.1.amt.D4 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: center; MARGIN-LEFT: 0pt" colSpan=4>
<P id=PARA87 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>Q2 FY 2014</B></FONT></P></TD>
<TD id=TBL100.finRow.1.trail.D4 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD></TR>
<TR style="BACKGROUND-COLOR: #ffffff">
<TD style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 51%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">
<P id=PARA88 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Pretax income (loss)</FONT></P></TD>
<TD id=TBL100.finRow.2.lead.2 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; BORDER-RIGHT: #000000 1px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #ffffff">&nbsp;</TD>
<TD id=TBL100.finRow.2.symb.2 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #ffffff">&nbsp;</TD>
<TD id=TBL100.finRow.2.amt.2 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 12%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 7.2pt; BACKGROUND-COLOR: #ffffff">(119</TD>
<TD id=TBL100.finRow.2.trail.2 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" noWrap>)</TD>
<TD id=TBL100.finRow.2.trail.2 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" noWrap>&nbsp;</TD>
<TD id=TBL100.finRow.2.lead.3 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; BORDER-RIGHT: #000000 1px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #ffffff">&nbsp;</TD>
<TD id=TBL100.finRow.2.symb.3 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #ffffff">&nbsp;</TD>
<TD id=TBL100.finRow.2.amt.3 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 12%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 7.2pt; BACKGROUND-COLOR: #ffffff">(59</TD>
<TD id=TBL100.finRow.2.trail.3 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" noWrap>)</TD>
<TD id=TBL100.finRow.2.trail.3 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" noWrap>(a)</TD>
<TD id=TBL100.finRow.2.lead.4 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; BORDER-RIGHT: #000000 1px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #ffffff">&nbsp;</TD>
<TD id=TBL100.finRow.2.symb.4 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #ffffff">&nbsp;</TD>
<TD id=TBL100.finRow.2.amt.4 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 12%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 7.2pt; BACKGROUND-COLOR: #ffffff">(104</TD>
<TD id=TBL100.finRow.2.trail.4 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" noWrap>)</TD>
<TD id=TBL100.finRow.2.trail.4 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" noWrap>(c)</TD>
<TD id=TBL100.finRow.2.trail.4 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" noWrap>&nbsp;</TD></TR>
<TR style="BACKGROUND-COLOR: #ffffff">
<TD style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 51%; VERTICAL-ALIGN: top; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: left; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">
<P id=PARA92 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Tax (provision) benefit</FONT></P></TD>
<TD id=TBL100.finRow.3.lead.2 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; BORDER-RIGHT: #000000 1px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #ffffff">&nbsp;</TD>
<TD id=TBL100.finRow.3.symb.2 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #ffffff">&nbsp;</TD>
<TD id=TBL100.finRow.3.amt.2 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 12%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 7.2pt; BACKGROUND-COLOR: #ffffff">50</TD>
<TD id=TBL100.finRow.3.trail.2 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" noWrap>&nbsp;</TD>
<TD id=TBL100.finRow.3.trail.2 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" noWrap>&nbsp;</TD>
<TD id=TBL100.finRow.3.lead.3 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; BORDER-RIGHT: #000000 1px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #ffffff">&nbsp;</TD>
<TD id=TBL100.finRow.3.symb.3 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #ffffff">&nbsp;</TD>
<TD id=TBL100.finRow.3.amt.3 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 12%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 7.2pt; BACKGROUND-COLOR: #ffffff">(165</TD>
<TD id=TBL100.finRow.3.trail.3 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" noWrap>)</TD>
<TD id=TBL100.finRow.3.trail.3 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" noWrap>(b)</TD>
<TD id=TBL100.finRow.3.lead.4 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; BORDER-RIGHT: #000000 1px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #ffffff">&nbsp;</TD>
<TD id=TBL100.finRow.3.symb.4 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; BACKGROUND-COLOR: #ffffff">&nbsp;</TD>
<TD id=TBL100.finRow.3.amt.4 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 12%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; TEXT-ALIGN: right; MARGIN-LEFT: 7.2pt; BACKGROUND-COLOR: #ffffff">(110</TD>
<TD id=TBL100.finRow.3.trail.4 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" noWrap>)</TD>
<TD id=TBL100.finRow.3.trail.4 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" noWrap>(d)</TD>
<TD id=TBL100.finRow.3.trail.4 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 1px solid; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" noWrap>&nbsp;</TD></TR>
<TR style="BACKGROUND-COLOR: #ffffff">
<TD style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 51%; VERTICAL-ALIGN: top; TEXT-ALIGN: left; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff">
<P id=PARA96 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Net income (loss)</FONT></P></TD>
<TD id=TBL100.finRow.4.lead.2 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; BORDER-RIGHT: #000000 1px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</TD>
<TD id=TBL100.finRow.4.symb.2 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</TD>
<TD id=TBL100.finRow.4.amt.2 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 12%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 7.2pt; BACKGROUND-COLOR: #ffffff">(69</TD>
<TD id=TBL100.finRow.4.trail.2 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 0px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" noWrap>)</TD>
<TD id=TBL100.finRow.4.trail.2 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 0px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" noWrap>&nbsp;</TD>
<TD id=TBL100.finRow.4.lead.3 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; BORDER-RIGHT: #000000 1px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</TD>
<TD id=TBL100.finRow.4.symb.3 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</TD>
<TD id=TBL100.finRow.4.amt.3 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 12%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 7.2pt; BACKGROUND-COLOR: #ffffff">(224</TD>
<TD id=TBL100.finRow.4.trail.3 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 0px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" noWrap>)</TD>
<TD id=TBL100.finRow.4.trail.3 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 0px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" noWrap>&nbsp;</TD>
<TD id=TBL100.finRow.4.lead.4 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; BORDER-RIGHT: #000000 1px solid; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</TD>
<TD id=TBL100.finRow.4.symb.4 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BACKGROUND-COLOR: #ffffff">&nbsp;</TD>
<TD id=TBL100.finRow.4.amt.4 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 12%; VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; MARGIN-LEFT: 7.2pt; BACKGROUND-COLOR: #ffffff">(214</TD>
<TD id=TBL100.finRow.4.trail.4 style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif; WIDTH: 1%; VERTICAL-ALIGN: bottom; BORDER-BOTTOM: medium none; PADDING-BOTTOM: 0px; MARGIN-LEFT: 0pt; BACKGROUND-COLOR: #ffffff" noWrap>)</TD>
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<P id=PARA101 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT></P>
<P id=PARA102 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">(a) Reflects the $173,000 in expenses from work-in-progress less the $114,000 reduction from the ISD intangible adjustment.</FONT></P>
<P id=PARA103 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">(b) Reflects the net result from applying the effective tax rate anticipated for fiscal 2014 to the net operating loss from continuing operations for the first quarter of fiscal 2014.</FONT></P>
<P id=PARA104 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">(c) Reflects the $303,000 in accumulated expenses from work-in-progress less the accumulated reduction of $199,000 from the ISD intangible adjustment.</FONT></P>
<P id=PARA105 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">(d) Reflects the net result from applying the effective tax rate anticipated for fiscal 2014 to the net operating loss from continuing operations for the first two quarters of fiscal 2014.</FONT></P>
<P id=PARA106 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT></P>
<P id=PARA107 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Because all of the differences in the reported amounts can be traced to the work-in-progress reclassification and to better information due to the passage of time (including the availability of the valuation report for the ISD assets from the third-party specialist), the Company does not believe that any of the differences were the result of any weaknesses in the Company&#8217;s disclosure controls and procedures. Furthermore, the Company indicated in the Form 8-Ks that the reported amounts were preliminary and subject to change, and the Company believes that the changes were not unusual nor material to an investor&#8217;s understanding of the Company&#8217;s financial performance.</FONT></P>
<P id=PARA108 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>&nbsp;</B></FONT></P>
<P id=PARA109 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><U>Management&#8217;s Report on Internal Controls over Financial Reporting, page 34</U></FONT></P>
<P id=PARA110 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT></P>
<P id=PARA111 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>3. We note th</B><B>a</B><B>t</B><B> </B><B>y</B><B>ou </B><B>e</B><B>x</B><B>c</B><B>lud</B><B>e</B><B>d</B><B> </B><B>I</B><B>S</B><B>D </B><B>T</B><B>ec</B><B>hnol</B><B>o</B><B>g</B><B>i</B><B>e</B><B>s,</B><B> </B><B>I</B><B>n</B><B>c</B><B>.</B><B> </B><B>f</B><B>rom</B><B> </B><B>y</B><B>o</B><B>u</B><B>r </B><B>e</B><B>v</B><B>a</B><B>luation of</B><B> </B><B>in</B><B>t</B><B>e</B><B>rn</B><B>a</B><B>l </B><B>c</B><B>ontrols over</B><B> f</B><B>ina</B><B>n</B><B>c</B><B>ial reportin</B><B>g</B><B>. </B><B>P</B><B>le</B><B>a</B><B>se</B><B> </B><B>t</B><B>e</B><B>ll</B><B> </B><B>us wh</B><B>e</B><B>ther</B><B> </B><B>N</B><B>e</B><B>w </B><B>D</B><B>a</B><B>wn </B><B>Tec</B><B>h</B><B>n</B><B>olo</B><B>g</B><B>ies,</B><B> </B><B>I</B><B>n</B><B>c</B><B>., </B><B>ac</B><B>quir</B><B>e</B><B>d in </B><B>D</B><B>ece</B><B>m</B><B>b</B><B>e</B><B>r 2</B><B>0</B><B>12, w</B><B>a</B><B>s included</B><B> </B><B>in</B><B> </B><B>y</B><B>our</B><B> </B><B>e</B><B>v</B><B>a</B><B>luation of int</B><B>e</B><B>r</B><B>n</B><B>a</B><B>l c</B><B>o</B><B>ntrols over fin</B><B>a</B><B>n</B><B>c</B><B>ial </B><B>r</B><B>e</B><B>portin</B><B>g.</B></FONT></P>
<P id=PARA112 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>&nbsp;</B></FONT></P>
<P id=PARA113 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">New Dawn was included in the Company&#8217;s evaluation of internal control over financial reporting.</FONT></P>
<P id=PARA114 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT></P>
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<DIV id=PGNUM196  style="FONT-SIZE: 10pt; WIDTH: 100%; TEXT-ALIGN: center">4</DIV>
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<P id=PARA115 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>4. </B><B>We note</B><B> </B><B>y</B><B>our</B><B> </B><B>c</B><B>on</B><B>c</B><B>lu</B><B>s</B><B>ion</B><B> </B><B>that in</B><B>t</B><B>e</B><B>rn</B><B>a</B><B>l cont</B><B>r</B><B>ol over</B><B> </B><B>f</B><B>inan</B><B>c</B><B>ial </B><B>r</B><B>e</B><B>porting </B><B>(</B><B>I</B><B>C</B><B>F</B><B>R) </B><B>wa</B><B>s </B><B>e</B><B>f</B><B>f</B><B>e</B><B>c</B><B>t</B><B>i</B><B>ve</B><B> a</B><B>s of Sep</B><B>t</B><B>e</B><B>mber</B><B> </B><B>30, 2013. </B><B>W</B><B>e</B><B> f</B><B>u</B><B>r</B><B>ther</B><B> </B><B>no</B><B>t</B><B>e</B><B> </B><B>y</B><B>o</B><B>u</B><B>r dis</B><B>c</B><B>losure</B><B> </B><B>that</B><B> </B><B>y</B><B>o</B><B>u disa</B><B>g</B><B>r</B><B>e</B><B>e with</B><B> </B><B>y</B><B>our</B><B> </B><B>a</B><B>udi</B><B>t</B><B>o</B><B>r</B><B>&#8217;s </B><B>c</B><B>on</B><B>c</B><B>l</B><B>usion that</B><B> </B><B>y</B><B>our</B><B> </B><B>I</B><B>C</B><B>F</B><B>R w</B><B>a</B><B>s ine</B><B>f</B><B>f</B><B>e</B><B>c</B><B>t</B><B>i</B><B>v</B><B>e</B><B>. The</B><B> a</B><B>udit</B><B> r</B><B>e</B><B>port disclosed m</B><B>a</B><B>te</B><B>r</B><B>ial w</B><B>e</B><B>a</B><B>k</B><B>n</B><B>e</B><B>s</B><B>s</B><B>e</B><B>s in </B><B>t</B><B>he</B><B> a</B><B>r</B><B>e</B><B>a</B><B> </B><B>of n</B><B>o</B><B>n</B><B>-</B><B>r</B><B>out</B><B>i</B><B>ne</B><B> </B><B>tr</B><B>a</B><B>nsa</B><B>c</B><B>t</B><B>i</B><B>ons </B><B>a</B><B>nd </B><B>p</B><B>ro</B><B>c</B><B>e</B><B>sses,</B><B> </B><B>a</B><B>nd s</B><B>e</B><B>g</B><B>r</B><B>e</B><B>g</B><B>a</B><B>t</B><B>i</B><B>on of</B><B> </B><B>dut</B><B>i</B><B>e</B><B>s</B><B> </B><B>a</B><B>nd</B><B> </B><B>f</B><B>inan</B><B>c</B><B>ial </B><B>r</B><B>e</B><B>porting</B><B> </B><B>i</B><B>n</B><B>fo</B><B>r</B><B>mation. </B><B>I</B><B>t also s</B><B>t</B><B>a</B><B>tes</B><B> </B><B>ce</B><B>r</B><B>t</B><B>a</B><B>in of the </B><B>c</B><B>ontrol de</B><B>f</B><B>ici</B><B>e</B><B>n</B><B>c</B><B>ies th</B><B>a</B><B>t </B><B>l</B><B>e</B><B>d to a m</B><B>a</B><B>te</B><B>r</B><B>ial </B><B>w</B><B>ea</B><B>k</B><B>n</B><B>e</B><B>s</B><B>s w</B><B>e</B><B>re a</B><B> re</B><B>sult</B><B> </B><B>of</B><B> </B><B>a</B><B>udit</B><B> </B><B>a</B><B>djus</B><B>t</B><B>ments r</B><B>e</B><B>c</B><B>o</B><B>r</B><B>d</B><B>e</B><B>d in </B><B>t</B><B>he fou</B><B>r</B><B>th q</B><B>u</B><B>a</B><B>rt</B><B>e</B><B>r</B><B> </B><B>a</B><B>s w</B><B>e</B><B>ll</B><B> </B><B>a</B><B>s ad</B><B>d</B><B>i</B><B>t</B><B>ional</B><B> </B><B>disclosur</B><B>e</B><B>s in </B><B>t</B><B>he</B><B> c</B><B>onsolidat</B><B>e</B><B>d fin</B><B>a</B><B>n</B><B>c</B><B>ial st</B><B>a</B><B>tem</B><B>e</B><B>nts. </B><B>P</B><B>l</B><B>e</B><B>a</B><B>se</B><B> a</B><B>dd</B><B>r</B><B>e</B><B>ss </B><B>t</B><B>he</B><B> f</B><B>ol</B><B>l</B><B>owi</B><B>n</B><B>g:</B></FONT></P>
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<P id=PARA119 style="MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 9.65pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>&#9679;</B></FONT><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B></FONT></P></TD>
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<P id=PARA120 style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B></B></FONT><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>&nbsp;&nbsp;&nbsp;&nbsp; Tell us how</B><B> </B><B>y</B><B>ou</B><B> </B><B>c</B><B>onsid</B><B>e</B><B>r</B><B>e</B><B>d these</B><B> a</B><B>djus</B><B>t</B><B>ments in</B><B> </B><B>y</B><B>our </B><B>de</B><B>te</B><B>r</B><B>m</B><B>i</B><B>n</B><B>a</B><B>t</B><B>i</B><B>on of</B><B> </B><B>w</B><B>h</B><B>e</B><B>ther the</B><B>r</B><B>e</B><B> </B><B>w</B><B>e</B><B>re </B><B>c</B><B>ontrol de</B><B>f</B><B>ic</B><B>i</B><B>e</B><B>n</B><B>c</B><B>ies in</B><B> </B><B>y</B><B>our</B><B> </B><B>I</B><B>C</B><B>F</B><B>R. Re</B><B>f</B><B>e</B><B>r to</B><B> </B><B>bul</B><B>l</B><B>e</B><B>t po</B><B>i</B><B>nt </B><B>t</B><B>h</B><B>re</B><B>e</B><B> </B><B>on</B><B> </B><B>p</B><B>a</B><B>ge 37 of</B><B> </B><B>S</B><B>EC </B><B>R</B><B>e</B><B>le</B><B>a</B><B>se</B><B> </B><B>No. </B><B>3</B><B>3</B><B>-</B><B>8810 </B><B>&#8220;</B><B>Com</B><B>m</B><B>is</B><B>s</B><B>ion G</B><B>u</B><B>idan</B><B>c</B><B>e</B><B> </B><B>R</B><B>e</B><B>g</B><B>a</B><B>rdi</B><B>n</B><B>g </B><B>Mana</B><B>g</B><B>e</B><B>ment</B><B>&#8217;</B><B>s </B><B>R</B><B>e</B><B>p</B><B>o</B><B>rt on</B><B> </B><B>I</B><B>nt</B><B>e</B><B>rn</B><B>a</B><B>l </B><B>C</B><B>ontrol Ov</B><B>e</B><B>r</B><B> </B><B>F</B><B>i</B><B>n</B><B>a</B><B>n</B><B>c</B><B>ial Repo</B><B>r</B><B>t</B><B>i</B><B>n</B><B>g</B><B> </B><B>Und</B><B>e</B><B>r </B><B>S</B><B>ec</B><B>t</B><B>i</B><B>on 13</B><B>(a</B><B>) or</B><B> </B><B>1</B><B>5</B><B>(d)</B><B> </B><B>of</B><B> </B><B>the Se</B><B>c</B><B>u</B><B>r</B><B>i</B><B>t</B><B>ies E</B><B>x</B><B>c</B><B>h</B><B>a</B><B>nge</B><B> </B><B>A</B><B>c</B><B>t of 1934.&#8221;</B></FONT></P></TD></TR></TABLE>
<P id=PARA121 style="TEXT-ALIGN: left; MARGIN: 0pt 9.65pt 0pt 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>&nbsp;</B></FONT></P>
<P id=PARA122 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B></B>The Company believes that the &#8220;certain&#8221; audit adjustments and disclosures referred to in Ernst &amp; Young&#8217;s report were (1) the work-in-progress reclassification described above, (2) the purchase price allocation for the New Dawn acquisition, and (3) the recording of an &#8220;other than temporary impairment&#8221; charge for one of the marketable securities held by the Company. The Company believes that these adjustments were not material to an investor&#8217;s understanding of the Company&#8217;s financial performance, and the Company does not believe that any of these adjustments were the result of any ICFR deficiencies. </FONT></P>
<P id=PARA123 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT></P>
<P id=PARA124 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">As noted above, the work-in-progress reclassification led to an immaterial reduction in net income for fiscal 2013 from $3,848,000 to $3,779,000 &#8211; a difference of only $69,000. With respect to the New Dawn purchase price allocation, a third-party specialist engaged to support the allocation valued New Dawn&#8217;s intangible assets at $9,500,000 compared to management&#8217;s original valuation of $9,522,000 &#8211; an immaterial difference of only $22,000. And the recording of an &#8220;other than temporary impairment&#8221; charge for a marketable security is a highly subjective decision about which reasonable minds can differ. As part of its ICFR, the Company closely monitors its portfolio and evaluates each security for impairment quarterly (or more frequently, if circumstances warrant). In this case, the Company had, in fact, identified the possible need to write off an unrealized loss on a security in the Summer of 2013 (just as it had in the prior fiscal year with a different security) but concluded, initially with Ernst &amp; Young&#8217;s concurrence, that it was not necessary. A later change in that subjective assessment does not represent a failure of the Company&#8217;s controls.</FONT></P>
<P id=PARA125 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT></P>
<P id=PARA126 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Accordingly, none of these adjustments implicate the third bullet point on page 37 of SEC Release No. 33-8810. That bullet point refers to the identification of a material misstatement of the financial statements in the current period in circumstances that indicate the misstatement would not have been detected by the Company&#8217;s ICFR. No material misstatements were identified in this case. And even if the amount of the &#8220;other than temporary impairment&#8221; charge is considered significant, the Company&#8217;s ICFR was effective in identifying the issue.</FONT></P>
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<P id=PARA130 style="MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 9.65pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>&#9679;</B></FONT><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B></FONT></P></TD>
<TD style="VERTICAL-ALIGN: top">
<P id=PARA131 style="MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 9.65pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B></B></FONT><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>&nbsp;&nbsp;&nbsp;&nbsp; Tell us wh</B><B>e</B><B>ther</B><B> </B><B>y</B><B>ou iden</B><B>t</B><B>ified</B><B> </B><B>control de</B><B>f</B><B>ic</B><B>i</B><B>e</B><B>n</B><B>c</B><B>ies</B><B> </B><B>in a</B><B>n</B><B>y</B><B> </B><B>of t</B><B>h</B><B>e</B><B> </B><B>same</B><B> </B><B>a</B><B>re</B><B>a</B><B>s d</B><B>e</B><B>s</B><B>c</B><B>rib</B><B>e</B><B>d in </B><B>t</B><B>he</B><B> </B><B>a</B><B>udit</B><B> </B><B>re</B><B>p</B><B>o</B><B>r</B><B>t (</B><B>e</B><B>.</B><B>g</B><B>. s</B><B>e</B><B>g</B><B>re</B><B>g</B><B>a</B><B>t</B><B>i</B><B>on of</B><B> </B><B>d</B><B>ut</B><B>i</B><B>e</B><B>s or mul</B><B>t</B><B>ip</B><B>l</B><B>e</B><B> e</B><B>lem</B><B>e</B><B>nt softw</B><B>a</B><B>re r</B><B>e</B><B>v</B><B>e</B><B>n</B><B>u</B><B>e</B><B> r</B><B>e</B><B>c</B><B>o</B><B>g</B><B>n</B><B>i</B><B>t</B><B>i</B><B>on). </B><B>I</B><B>f so,</B><B> </B><B>e</B><B>x</B><B>plain in det</B><B>a</B><B>il</B><B> </B><B>y</B><B>our </B><B>e</B><B>v</B><B>a</B><B>luation of t</B><B>h</B><B>e s</B><B>e</B><B>v</B><B>e</B><B>ri</B><B>t</B><B>y</B><B> </B><B>of th</B><B>e</B><B>se</B><B> </B><B>c</B><B>ontrol</B><B> </B><B>d</B><B>e</B><B>fi</B><B>c</B><B>ien</B><B>c</B><B>i</B><B>e</B><B>s.</B></FONT></P></TD></TR></TABLE>
<P id=PARA132 style="TEXT-ALIGN: left; MARGIN: 0pt 9.65pt 0pt 54pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>&nbsp;</B></FONT></P>
<P id=PARA133 style="TEXT-ALIGN: left; MARGIN: 0pt 9.65pt 0pt 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B></B>The Company did identify a control deficiency with respect to segregation of duties, although the Company does not believe it to be a material weakness or even a significant deficiency. As a small company, the Company has traditionally had a six-person accounting department, and the controller and the assistant to the controller post journal entries and have administrative access to the Sage accounting system and Ceridian payroll system. Recognizing that this is not a best practice, the Company has long used mitigating controls whereby the CEO/CFO reviews all non-routine and all period-ended routine journal entries. Also, the various department supervisors participate in the financial review and new hire processes.</FONT></P>
<P id=PARA134 style="TEXT-ALIGN: left; MARGIN: 0pt 9.65pt 0pt 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT></P>
<DIV id=PGBK197  style="WIDTH: 100%; MARGIN-LEFT: 0pt; MARGIN-RIGHT: 0pt">
<DIV id=PGFTR197  style="WIDTH: 100%; TEXT-ALIGN: center">&nbsp;</DIV>
<DIV id=PGNUM197  style="FONT-SIZE: 10pt; WIDTH: 100%; TEXT-ALIGN: center">5</DIV>
<HR style="HEIGHT: 2px; WIDTH: 100%; PAGE-BREAK-AFTER: always; COLOR: #000000" noShade>

<DIV id=PGHDR197  style="WIDTH: 100%; TEXT-ALIGN: left">&nbsp;</DIV></DIV>
<P id=PARA197.2 style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&nbsp;</FONT></P>
<P id=PARA135 style="TEXT-ALIGN: left; MARGIN: 0pt 9.65pt 0pt 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">The Company believes that the review by the CEO/CFO and the department supervisors, coupled with the fact that the Company&#8217;s supporting financial systems are run by the supervisors and not by the accounting or IT departments, are sufficient mitigating controls that would expose any material errors and any improper journal entries. The Company believes that these controls have worked well for many years, and that its documentation of these controls is robust. Accordingly, the Company does not believe that this deficiency in the Company&#8217;s segregation of duties is a material weakness or significant deficiency in ICFR.</FONT></P>
<P id=PARA136 style="TEXT-ALIGN: left; MARGIN: 0pt 9.65pt 0pt 54pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>&nbsp;</B></FONT></P>
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<P id=PARA139 style="MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 9.65pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>&#9679;</B></FONT><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B><B></B></FONT></P></TD>
<TD style="VERTICAL-ALIGN: top">
<P id=PARA140 style="MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 9.65pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B></B></FONT><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>&nbsp;&nbsp;&nbsp;&nbsp; To the</B><B> e</B><B>x</B><B>t</B><B>e</B><B>nt</B><B> </B><B>y</B><B>ou identifi</B><B>e</B><B>d more</B><B> </B><B>than one</B><B> </B><B>d</B><B>e</B><B>fi</B><B>c</B><B>i</B><B>e</B><B>n</B><B>c</B><B>y</B><B>; d</B><B>i</B><B>s</B><B>c</B><B>uss how</B><B> </B><B>a</B><B>g</B><B>g</B><B>reg</B><B>a</B><B>t</B><B>i</B><B>on of d</B><B>e</B><B>fi</B><B>c</B><B>ien</B><B>c</B><B>i</B><B>e</B><B>s w</B><B>a</B><B>s co</B><B>n</B><B>si</B><B>d</B><B>e</B><B>r</B><B>e</B><B>d in</B><B> </B><B>y</B><B>o</B><B>u</B><B>r </B><B>e</B><B>v</B><B>a</B><B>luation of </B><B>t</B><B>he</B><B> e</B><B>f</B><B>f</B><B>ec</B><B>t</B><B>i</B><B>v</B><B>e</B><B>n</B><B>e</B><B>ss of other i</B><B>m</B><B>p</B><B>ac</B><B>ted </B><B>c</B><B>omponents of</B><B> </B><B>the Comm</B><B>i</B><B>t</B><B>t</B><B>e</B><B>e</B><B> </B><B>of Spons</B><B>o</B><B>ring</B><B> </B><B>O</B><B>r</B><B>g</B><B>a</B><B>ni</B><B>z</B><B>a</B><B>t</B><B>i</B><B>ons of the T</B><B>rea</B><B>d</B><B>w</B><B>a</B><B>y</B><B> </B><B>Com</B><B>m</B><B>is</B><B>s</B><B>ion (CO</B><B>S</B><B>O)</B><B> </B><B>I</B><B>n</B><B>t</B><B>e</B><B>rn</B><B>a</B><B>l</B><B> </B><B>Control</B><B> </B><B>I</B><B>nt</B><B>e</B><B>g</B><B>ra</B><B>ted</B><B> </B><B>F</B><B>r</B><B>a</B><B>me</B><B>w</B><B>o</B><B>r</B><B>k l</B><B>i</B><B>k</B><B>e</B><B> </B><B>the risk </B><B>a</B><B>ssessment </B><B>c</B><B>ompon</B><B>e</B><B>nt.</B></FONT></P></TD></TR></TABLE>
<P id=PARA141 style="TEXT-ALIGN: left; MARGIN: 0pt 0pt 0pt 90pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>&nbsp;</B></FONT></P>
<P id=PARA142 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">The Company identified segregation of duties within the accounting department as the only deficiency within the Company&#8217;s ICFR.</FONT></P>
<P id=PARA143 style="TEXT-ALIGN: left; MARGIN: 0pt 0pt 0pt 90pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>&nbsp;</B></FONT></P>
<P id=PARA144 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>5. You </B><B>state</B><B> </B><B>on p</B><B>a</B><B>g</B><B>e</B><B> </B><B>35 that</B><B> </B><B>y</B><B>ou will</B><B> </B><B>c</B><B>onsid</B><B>e</B><B>r</B><B> </B><B>wh</B><B>e</B><B>t</B><B>h</B><B>e</B><B>r </B><B>a</B><B>ddi</B><B>t</B><B>ional do</B><B>c</B><B>ument</B><B>a</B><B>t</B><B>i</B><B>on of</B><B> </B><B>y</B><B>o</B><B>u</B><B>r fin</B><B>a</B><B>n</B><B>c</B><B>ial </B><B>r</B><B>e</B><B>porting </B><B>a</B><B>nd i</B><B>n</B><B>te</B><B>r</B><B>n</B><B>a</B><B>l cont</B><B>r</B><B>ol </B><B>s</B><B>y</B><B>stem sh</B><B>o</B><B>uld be </B><B>c</B><B>re</B><B>a</B><B>ted to </B><B>a</B><B>ss</B><B>i</B><B>st </B><B>w</B><B>i</B><B>t</B><B>h the </B><B>re</B><B>view </B><B>a</B><B>nd </B><B>a</B><B>udit</B><B> </B><B>of</B><B> </B><B>y</B><B>our inte</B><B>r</B><B>n</B><B>a</B><B>l cont</B><B>r</B><B>ols </B><B>i</B><B>n the </B><B>f</B><B>uture</B><B> a</B><B>n</B><B>d wh</B><B>e</B><B>ther</B><B> a</B><B>ddi</B><B>t</B><B>ional s</B><B>e</B><B>g</B><B>r</B><B>e</B><B>g</B><B>a</B><B>t</B><B>i</B><B>on of dut</B><B>i</B><B>e</B><B>s would m</B><B>ea</B><B>ningfully</B><B> </B><B>e</B><B>n</B><B>h</B><B>a</B><B>n</B><B>c</B><B>e</B><B> </B><B>that </B><B>s</B><B>y</B><B>s</B><B>t</B><B>e</B><B>m. How</B><B>e</B><B>v</B><B>e</B><B>r, </B><B>w</B><B>e</B><B> </B><B>note</B><B> </B><B>f</B><B>r</B><B>om</B><B> </B><B>y</B><B>o</B><B>ur subsequ</B><B>e</B><B>nt qua</B><B>r</B><B>t</B><B>e</B><B>r</B><B>l</B><B>y</B><B> </B><B>r</B><B>e</B><B>p</B><B>o</B><B>r</B><B>ts on </B><B>F</B><B>o</B><B>r</B><B>ms 1</B><B>0</B><B>-</B><B>Q th</B><B>a</B><B>t</B><B> </B><B>y</B><B>o</B><B>u </B><B>r</B><B>e</B><B>port</B><B>e</B><B>d th</B><B>e</B><B>re</B><B> </B><B>w</B><B>e</B><B>re no mat</B><B>e</B><B>ri</B><B>a</B><B>l </B><B>c</B><B>h</B><B>a</B><B>n</B><B>g</B><B>e</B><B>s in</B><B> </B><B>y</B><B>our inter</B><B>n</B><B>a</B><B>l</B><B> </B><B>c</B><B>ontrol ov</B><B>e</B><B>r </B><B>f</B><B>ina</B><B>n</B><B>c</B><B>ial </B><B>r</B><B>e</B><B>p</B><B>o</B><B>r</B><B>t</B><B>i</B><B>n</B><B>g</B><B>. Th</B><B>e</B><B>r</B><B>e</B><B>f</B><B>o</B><B>r</B><B>e</B><B>, pl</B><B>e</B><B>a</B><B>se</B><B> </B><B>tell us wh</B><B>e</B><B>ther</B><B> </B><B>y</B><B>ou </B><B>h</B><B>a</B><B>ve</B><B> </B><B>g</B><B>iven</B><B> </B><B>c</B><B>onsid</B><B>e</B><B>r</B><B>a</B><B>t</B><B>i</B><B>on to addit</B><B>i</B><B>on</B><B>a</B><B>l docum</B><B>e</B><B>ntation and </B><B>c</B><B>o</B><B>ntrols as stat</B><B>e</B><B>d in</B><B> </B><B>y</B><B>our </B><B>r</B><B>e</B><B>port in</B><B> </B><B>y</B><B>our S</B><B>e</B><B>ptemb</B><B>e</B><B>r 30,</B><B> </B><B>2013 </B><B>F</B><B>o</B><B>rm 1</B><B>0</B><B>-</B><B>K </B><B>a</B><B>nd, if so, w</B><B>h</B><B>a</B><B>t r</B><B>e</B><B>su</B><B>l</B><B>ted </B><B>f</B><B>rom this fu</B><B>r</B><B>ther</B><B> c</B><B>onsi</B><B>d</B><B>e</B><B>r</B><B>a</B><B>t</B><B>i</B><B>on.</B></FONT></P>
<P id=PARA145 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>&nbsp;</B></FONT></P>
<P id=PARA146 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B></B>There were no material changes in the Company&#8217;s ICFR during the Company&#8217;s first three fiscal quarters. Since then, the Company has been critically assessing and refining its ICFR, and it has made certain changes (none of which it views as material), as described below:</FONT></P>
<P id=PARA147 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT></P>
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<TD style="WIDTH: 21pt">&nbsp;</TD>
<TD style="WIDTH: 18pt; VERTICAL-ALIGN: top">
<P id=PARA150 style="MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&#9679;</FONT><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"></FONT></P></TD>
<TD style="VERTICAL-ALIGN: top; PADDING-LEFT: 0pt">
<P id=PARA151 style="MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"></FONT><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">moved responsibility for setting up user access rights of the Company&#8217;s Sage financial system from the accounting department to the IT department;</FONT></P></TD></TR></TABLE>
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<TD style="WIDTH: 18pt; VERTICAL-ALIGN: top">
<P id=PARA154 style="MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&#9679;</FONT><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"></FONT></P></TD>
<TD style="VERTICAL-ALIGN: top; PADDING-LEFT: 0pt">
<P id=PARA155 style="MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"></FONT><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">updated some of the Company&#8217;s process documentation, primarily for the technology business, and started building a software program to better track the implementation project control process;</FONT></P></TD></TR></TABLE>
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<P id=PARA158 style="MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&#9679;</FONT><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"></FONT></P></TD>
<TD style="VERTICAL-ALIGN: top; PADDING-LEFT: 0pt">
<P id=PARA159 style="MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"></FONT><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">adopted a control whereby the CEO/CFO or controller initial and document their review of all of the tax schedules received from the Company&#8217;s third-party tax expert;</FONT></P></TD></TR></TABLE>
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<P id=PARA162 style="MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&#9679;</FONT><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"></FONT></P></TD>
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<P id=PARA163 style="MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"></FONT><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">hired an additional accounting clerk to review accounts receivable and payable and reconcile bank accounts for the technology business; and</FONT></P></TD></TR></TABLE>
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<P id=PARA166 style="MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&#9679;</FONT><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"></FONT></P></TD>
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<P id=PARA167 style="MARGIN-BOTTOM: 0pt; TEXT-ALIGN: left; MARGIN-TOP: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"></FONT><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">instituted a process whereby the accounting and human resources departments cross-check each other with respect to new hires and/or salary changes.</FONT></P></TD></TR></TABLE>
<P id=PARA168 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT></P>
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<P id=PARA198.2 style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&nbsp;</FONT></P>
<P id=PARA169 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">In addition, the Company will continue to assess the desirability of any additional controls and/or ICFR documentation as the audit of the fiscal 2014 financial statements continues. </FONT></P>
<P id=PARA170 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>&nbsp;</B></FONT></P>
<P id=PARA171 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><U>Form 10-Q for Fiscal Quarters Ended December 31, 2013 and March 31, 2014</U></FONT></P>
<P id=PARA172 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT></P>
<P id=PARA173 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>6. We note th</B><B>a</B><B>t </B><B>t</B><B>he</B><B> a</B><B>moun</B><B>t</B><B>s r</B><B>e</B><B>port</B><B>e</B><B>d f</B><B>o</B><B>r in</B><B>c</B><B>ome </B><B>(</B><B>lo</B><B>s</B><B>s) </B><B>f</B><B>rom op</B><B>e</B><B>r</B><B>a</B><B>t</B><B>i</B><B>ons, provision f</B><B>o</B><B>r (b</B><B>e</B><B>n</B><B>e</B><B>fit </B><B>f</B><B>rom)</B><B> </B><B>income</B><B> </B><B>t</B><B>ax</B><B>e</B><B>s, and</B><B> </B><B>n</B><B>e</B><B>t </B><B>i</B><B>n</B><B>c</B><B>ome </B><B>(</B><B>los</B><B>s</B><B>) in</B><B> </B><B>y</B><B>our</B><B> </B><B>F</B><B>o</B><B>r</B><B>ms 1</B><B>0</B><B>-</B><B>Q </B><B>f</B><B>or</B><B> </B><B>the </B><B>f</B><B>irst and s</B><B>ec</B><B>ond qu</B><B>a</B><B>r</B><B>t</B><B>e</B><B>rs of</B><B> f</B><B>i</B><B>s</B><B>ca</B><B>l</B><B> </B><B>2014 dif</B><B>fe</B><B>r</B><B>e</B><B>d s</B><B>i</B><B>g</B><B>nifi</B><B>c</B><B>a</B><B>nt</B><B>l</B><B>y</B><B> </B><B>f</B><B>rom the </B><B>re</B><B>sul</B><B>t</B><B>s includ</B><B>e</B><B>d in</B><B> </B><B>y</B><B>our </B><B>F</B><B>o</B><B>r</B><B>ms </B><B>8</B><B>-</B><B>K </B><B>f</B><B>i</B><B>l</B><B>e</B><B>d on</B><B> </B><B>Fe</B><B>b</B><B>r</B><B>u</B><B>a</B><B>r</B><B>y</B><B> </B><B>11, 2014 </B><B>a</B><B>nd M</B><B>a</B><B>y</B><B> </B><B>2</B><B>3, 2014. </B><B>W</B><B>e</B><B> a</B><B>lso note one</B><B> </B><B>of the</B><B> </B><B>no</B><B>n</B><B>- routine</B><B> c</B><B>lass of</B><B> </B><B>tr</B><B>a</B><B>n</B><B>s</B><B>ac</B><B>t</B><B>i</B><B>ons </B><B>a</B><B>nd p</B><B>r</B><B>o</B><B>ce</B><B>s</B><B>s</B><B>e</B><B>s r</B><B>e</B><B>f</B><B>e</B><B>re</B><B>n</B><B>ce</B><B>d </B><B>a</B><B>s a </B><B>m</B><B>a</B><B>te</B><B>r</B><B>ial </B><B>w</B><B>ea</B><B>k</B><B>n</B><B>e</B><B>ss </B><B>i</B><B>n the </B><B>S</B><B>e</B><B>ptemb</B><B>e</B><B>r 30,</B><B> </B><B>2013 </B><B>F</B><B>o</B><B>r</B><B>m 1</B><B>0</B><B>-</B><B>K </B><B>a</B><B>udit</B><B> </B><B>re</B><B>port on</B><B> </B><B>IC</B><B>F</B><B>R w</B><B>a</B><B>s the </B><B>e</B><B>v</B><B>a</B><B>luation of the</B><B> </B><B>qu</B><B>a</B><B>rt</B><B>e</B><B>r</B><B>l</B><B>y </B><B>a</B><B>nd </B><B>a</B><B>nnu</B><B>a</B><B>l c</B><B>u</B><B>r</B><B>re</B><B>nt</B><B> </B><B>a</B><B>nd </B><B>d</B><B>e</B><B>f</B><B>e</B><B>r</B><B>r</B><B>e</B><B>d tax</B><B> </B><B>pro</B><B>v</B><B>is</B><B>i</B><B>on </B><B>a</B><B>nd r</B><B>e</B><B>lat</B><B>e</B><B>d </B><B>a</B><B>cc</B><B>ounts. </B><B>P</B><B>le</B><B>a</B><B>se</B><B> </B><B>tell us how these</B><B> </B><B>dif</B><B>f</B><B>e</B><B>r</B><B>e</B><B>n</B><B>c</B><B>e</B><B>s a</B><B>r</B><B>o</B><B>s</B><B>e</B><B>, including</B><B> </B><B>w</B><B>h</B><B>e</B><B>ther</B><B> </B><B>th</B><B>e</B><B>y</B><B> </B><B>relat</B><B>e</B><B>d to cont</B><B>r</B><B>ol de</B><B>f</B><B>ici</B><B>e</B><B>n</B><B>c</B><B>ies in f</B><B>i</B><B>s</B><B>ca</B><B>l 2013 </B><B>a</B><B>nd/or 2014. </B><B>I</B><B>f so,</B><B> </B><B>tell us how</B><B> </B><B>y</B><B>ou </B><B>e</B><B>v</B><B>a</B><B>luat</B><B>e</B><B>d</B><B> </B><B>the s</B><B>e</B><B>v</B><B>e</B><B>ri</B><B>t</B><B>y</B><B> </B><B>of th</B><B>e</B><B>s</B><B>e</B><B> c</B><B>o</B><B>n</B><B>trol d</B><B>e</B><B>fi</B><B>c</B><B>ien</B><B>c</B><B>i</B><B>e</B><B>s ind</B><B>i</B><B>vidual</B><B>l</B><B>y</B><B> </B><B>a</B><B>nd in </B><B>t</B><B>he</B><B> </B><B>a</B><B>g</B><B>g</B><B>reg</B><B>a</B><B>te </B><B>w</B><B>i</B><B>t</B><B>h</B><B> </B><B>other</B><B> c</B><B>ontrol de</B><B>f</B><B>i</B><B>c</B><B>ien</B><B>c</B><B>i</B><B>e</B><B>s identifi</B><B>e</B><B>d in fis</B><B>ca</B><B>l 2013.</B></FONT></P>
<P id=PARA174 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif"><B>&nbsp;</B></FONT></P>
<P id=PARA175 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">As noted above in our response to comment #2, the differences in the amounts reported for income (loss) from operations, provision for (benefit from) income taxes, and net income (loss) in the Company&#8217;s Form 10-Qs differed from the amounts reported in the Form 8-Ks due to the work-in-progress reclassification, the ISD intangible amortization expenses and the Company&#8217;s ability to better forecast its fiscal 2014 results due to the passage to time. The Company does not believe that the differences are the result of any ICFR deficiencies in fiscal 2013 or fiscal 2014. </FONT></P>
<P id=PARA176 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT></P>
<P id=PARA177 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">The Company believes that the reference in Ernst &amp; Young&#8217;s attestation report to a material weakness in the Company&#8217;s evaluation of its current and deferred tax provision and related accounts relates to a mathematical error in a draft of one of the tax schedules that was prepared by the Company&#8217;s third-party tax expert and circulated simultaneously to Ernst &amp; Young and the Company in an early stage of the review process when the tax entries had not yet been recorded in the Company&#8217;s books. The Company&#8217;s CEO/CFO and/or controller have always reviewed the tax entries and discussed various tax issues with its third-party tax expert and the auditor&#8217;s tax team. As noted above in our response to comment #5, the Company has now adopted a control whereby the CEO/CFO or controller initial and document their review of all of the tax schedules received from the Company&#8217;s third-party tax expert, but we believe our failure to have this control previously did not represent an ICFR deficiency. Also, it had nothing to do with the differences in the amounts reported in the Form 10-Qs compared to the amounts in the Form 8-Ks. There was no adjustment to the tax provision for fiscal 2013, and the adjustments in fiscal 2014 relate to the improvement in the Company&#8217;s business 11 months into the fiscal year compared to the earlier loss estimates.</FONT></P>
<P id=PARA178 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT></P>
<P id=PARA179 style="TEXT-ALIGN: center; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">* * *</FONT></P>
<P id=PARA180 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT></P>
<P id=PARA181 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">The Company acknowledges that it is responsible for the adequacy and accuracy of the disclosure in the filing; that 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 that 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.</FONT></P>
<P id=PARA182 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">&nbsp;</FONT><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"></FONT></P>
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<DIV id=PGNUM199  style="FONT-SIZE: 10pt; WIDTH: 100%; TEXT-ALIGN: center">7</DIV>
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<P id=PARA199.2 style="MARGIN-BOTTOM: 0px; MARGIN-TOP: 0px"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&nbsp;</FONT></P>
<P id=PARA183 style="TEXT-ALIGN: left; MARGIN: 0pt; LINE-HEIGHT: 1.25; TEXT-INDENT: 36pt"><FONT style="FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman, Times, serif">Please direct any comments or questions regarding the foregoing to the undersigned at (213) 229-5300.</FONT></P>
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<P id=PARA201 style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt">Sincerely,</P></TD></TR>
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<P id=PARA205 style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt">/s/ Gerald L. Salzman</P></TD></TR>
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<P id=PARA209 style="MARGIN-BOTTOM: 0pt; MARGIN-TOP: 0pt">Gerald L. Salzman</P></TD></TR></TABLE>
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