<SEC-DOCUMENT>0001193125-24-268898.txt : 20250218
<SEC-HEADER>0001193125-24-268898.hdr.sgml : 20250218
<ACCEPTANCE-DATETIME>20241202160928
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001193125-24-268898
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		2
FILED AS OF DATE:		20241202

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			GLADSTONE COMMERCIAL CORP
		CENTRAL INDEX KEY:			0001234006
		STANDARD INDUSTRIAL CLASSIFICATION:	LESSORS OF REAL PROPERTY, NEC [6519]
		ORGANIZATION NAME:           	05 Real Estate & Construction
		IRS NUMBER:				020681276
		STATE OF INCORPORATION:			MD
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		1521 WESTBRANCH DRIVE
		STREET 2:		SUITE 100
		CITY:			MCLEAN
		STATE:			VA
		ZIP:			22102
		BUSINESS PHONE:		703-287-5853

	MAIL ADDRESS:	
		STREET 1:		1521 WESTBRANCH DRIVE
		STREET 2:		SUITE 100
		CITY:			MCLEAN
		STATE:			VA
		ZIP:			22102
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
<TEXT>
<HTML><HEAD>
<TITLE>CORRESP</TITLE>
</HEAD>
 <BODY BGCOLOR="WHITE" STYLE="line-height:Normal">


<Center><DIV STYLE="width:8.5in" align="left">
 <P STYLE="margin-top:0pt;margin-bottom:0pt" ALIGN="center">


<IMG SRC="g903091g1202214806473.jpg" ALT="LOGO" STYLE="width:6.57569in;height:0.509028in;">
 </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">November&nbsp;27, 2024 </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>VIA EMAIL</U> </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Ms.&nbsp;Kellie Kim </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">U.S. Securities and Exchange Commission </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Division of Corporation
Finance </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Office of Real Estate&nbsp;&amp; Construction </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">100 F
Street N.E. </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Washington, D.C. 20549 </P> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B>RE:</B></TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left"><B>Gladstone Commercial Corporation </B></P></TD></TR></TABLE>
<P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman"><B>Form <FONT STYLE="white-space:nowrap">10-K</FONT> for the fiscal year ended December&nbsp;31, 2023 </B></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman"><B>File <FONT STYLE="white-space:nowrap">No.&nbsp;001-33097</FONT> </B></P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Dear Ms. Kim: </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">On behalf of Gladstone Commercial
Corporation (the &#147;<B><I>Company</I></B>&#148;) we are providing this letter in response to a comment (the &#147;<B><I>Comment</I></B>&#148;) received from the staff (the &#147;<B><I>Staff</I></B>&#148;) of the U.S. Securities and Exchange
Commission&#146;s (the &#147;<B><I>SEC</I></B>&#148;) Division of Corporation Finance, Office of Real Estate&nbsp;&amp; Construction by letter on November&nbsp;13, 2024 with respect to the Company&#146;s Annual Report on Form <FONT
STYLE="white-space:nowrap">10-K</FONT> for the fiscal year ended December&nbsp;31, 2023, File <FONT STYLE="white-space:nowrap">No.&nbsp;001-33097.</FONT> </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">For ease of reference, the heading and numbering of the response set forth below corresponds to the heading and numbering in the Staff&#146;s
comment letter, and the Company has also set forth below, in italics, the text of the Comment prior to the Company&#146;s response, to which the Company has responded in two parts for ease of the Staff&#146;s review. Unless the context indicates
otherwise, references in this letter to &#147;we&#148; &#147;us&#148; and &#147;our&#148; refer to the Company. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Form
<FONT STYLE="white-space:nowrap">10-K</FONT> for the fiscal year ended December&nbsp;31, 2023 </U></P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Note 1. Organization, Basis of Presentation and
Significant Accounting Policies </U> </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Revision of Previously Issued Financial Statements, page 63 </U></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Comment 1, Part 1 of 2 </U></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman"><I>We note the
company evaluated the errors related to the calculation of depreciation of tenant funded improvement assets and determined that the related impact was not material to the consolidated financial statements. We also note that the depreciation and
amortization adjustments represent approximately 11% and 14% of net income, as revised, for the fiscal years ended December&nbsp;31, 2021 and 2022, respectively. Please provide us with your detailed materiality analysis supporting your conclusion
that the impact of the errors is not material, particularly to the Consolidated Statements of Operations. Refer to SAB 99, Materiality, codified in ASC <FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap">250-10-S99.</FONT></FONT>
[&#133;] </I></P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="right">Page | 1 </P>

</DIV></Center>


<p style="margin-top:1em; margin-bottom:0em; page-break-before:always"> </p>
<HR SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">


<Center><DIV STYLE="width:8.5in" align="left">

 <P STYLE="margin-top:0pt;margin-bottom:0pt" ALIGN="center">


<IMG SRC="g903091g1202214806473.jpg" ALT="LOGO" STYLE="width:6.57569in;height:0.509028in;">
 </P> <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P>
 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><U>Response to Comment 1, Part 1 of 2</U>: </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Background: </B></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Company is a Real Estate
Investment Trust (&#147;<B><I>REIT</I></B>&#148;) incorporated in the State of Maryland (Nasdaq: GOOD) and is engaged in the business of investing primarily in single-tenant net leased industrial and office properties in the United States. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Company&#146;s tenants on occasion make investments in the properties they lease for their own business purposes. In some cases, such
investments take the form of physical improvements to the property. Those improvements that meet certain criteria are considered tenant-funded improvements, or tenant-funded lessor assets, thus assets owned by the Company. Prior to discovering the
error at issue, the Company incorrectly depreciated each tenant-funded improvement asset over the tenant&#146;s remaining lease term. However, the Company should have been depreciating each tenant-funded improvement asset over its useful life in
accordance with the Company&#146;s established fixed asset useful life policy instead of over the remaining term of the lease. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">Due to the
mismatch between the applicable lease term and the related asset&#146;s useful life, the Company recognized more depreciation (in the aggregate) than it should have for these assets resulting in understated net income for the year ended
December&nbsp;31, 2021, December&nbsp;31, 2022, the second, third and fourth quarters of 2021, each quarter of 2022, and the first quarter of 2023. Management analyzed the control deficiency and associated errors which were documented in the
Company&#146;s assessments which were finalized on August&nbsp;7, 2023, prior to the filing of the Company&#146;s Form <FONT STYLE="white-space:nowrap">10-Q</FONT> on August&nbsp;8, 2023. Management discussed its analysis with the Company&#146;s
Audit Committee of the Board of Directors, on August&nbsp;4, 2023. The Company concluded that the error was not material to the impacted prior period financial statements, and the control deficiency did not rise to the level of a material weakness.
</P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Materiality Analysis: </B></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The
Company&#146;s management considered the quantitative and qualitative factors outlined below to assess the materiality of the error to the impacted financial statements. This materiality assessment was conducted in connection with the preparation of
the Company&#146;s financial statements for the second quarter of 2023. </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">SAB 99 recognizes that qualitative considerations may suggest
that quantitative misstatements in excess of traditional materiality benchmarks are not material. Accordingly, quantitative and qualitative factors should be viewed in combination in assessing materiality. As indicated by the SEC in SAB 99,
&#147;quantifying, in percentage terms, the magnitude of a misstatement is only the beginning of an analysis of materiality; it cannot appropriately be used as a substitute for a full analysis of all relevant considerations.&#148; As such,
management further analyzed the impact of the matter. </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="right">Page | 2 </P>

</DIV></Center>


<p style="margin-top:1em; margin-bottom:0em; page-break-before:always"> </p>
<HR SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">


<Center><DIV STYLE="width:8.5in" align="left">

 <P STYLE="margin-top:0pt;margin-bottom:0pt" ALIGN="center">


<IMG SRC="g903091g1202214806473.jpg" ALT="LOGO" STYLE="width:6.57569in;height:0.509028in;">
 </P> <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P>
 <P STYLE="margin-top:0pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">As further indicated by the SEC in SAB 99, management performed &#147;a full analysis of all
relevant considerations&#146; in assessing whether the changes would have been viewed by a reasonable investor as having significantly altered the &#145;total mix&#146; of information made available.&#148; The Company specifically considered the
following quantitative and qualitative factors: </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Quantitative Analysis: </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Company&#146;s management evaluation on the impact of the change uses the errors and omissions framework provided by the SEC Staff in SAB
99, with such analysis considering both quantitative and qualitative factors. Specific to the Company&#146;s quantitative assessment, management first evaluated the prior year misstatement against a quantitative threshold commonly used by companies
and their auditors in their evaluation of whether items might be considered material to users of the financial statements. Specifically, the Company&#146;s management compared the error revision to 10% of annual profit and 15% of the quarterly YTD
profit and 5% of total assets. From a Statement of Operations and Comprehensive Income Financial Condition perspective, the omission of this adjustment was quantitatively significant. The Company as a REIT in the normal course of its operations of
leasing properties and paying property level expenses including interest expense on debt has near break-even net income from recurring operations excluding the impact of recurring gains/losses on sales and nonrecurring impairment charges which cause
the total net income to be volatile period over period. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"><I>Accumulated Depreciation Analysis: </I></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Company&#146;s management analyzed the effect of the error on accumulated depreciation which demonstrated the percentage of the error on
the <FONT STYLE="white-space:nowrap">as-reported</FONT> financial statement line item, as well as the percentage of the error on the <FONT STYLE="white-space:nowrap">as-reported</FONT> assets was insignificant and well below a 5% threshold. The
impact of the error expressed as a percentage on the <FONT STYLE="white-space:nowrap">as-reported</FONT> accumulated depreciation expense was significant in certain periods. However, when evaluated in the context of total assets, the error was 0.16%
or less of total assets in all periods. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"><I>Depreciation Expense Analysis: </I></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Company&#146;s management analyzed the effect of the error on depreciation expense and determined the amount of the variance was
insignificant as in all periods the variance was less than 10%. The depreciation variance compared to net income is quantitatively significant in a number of periods. The fact that net income is not the focus of REIT investors and the change in net
income does not have an effect on FFO or EBITDA (each defined below) was a mitigating factor. </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="right">Page | 3 </P>

</DIV></Center>


<p style="margin-top:1em; margin-bottom:0em; page-break-before:always"> </p>
<HR SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">


<Center><DIV STYLE="width:8.5in" align="left">

 <P STYLE="margin-top:0pt;margin-bottom:0pt" ALIGN="center">


<IMG SRC="g903091g1202214806473.jpg" ALT="LOGO" STYLE="width:6.57569in;height:0.509028in;">
 </P> <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P>
 <P STYLE="margin-top:0pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"><I>Earnings Analysis: </I></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Company&#146;s management analyzed the effect of the depreciation expense error on earnings per share (&#147;<B><I>EPS</I></B>&#148;) and
determined the amount was quantitatively significant in 2020, 2022, and <FONT STYLE="white-space:nowrap"><FONT STYLE="white-space:nowrap">year-to-date</FONT></FONT> 2023. Variance of net income due to the depreciation correction was also
quantitatively significant in a number of periods. The main reason is the relatively small net income (whether positive or negative) resulting from large <FONT STYLE="white-space:nowrap">non-cash</FONT> depreciation charges (whether corrected or
uncorrected). This also resulted in a net income that changed by material amounts from quarter to quarter whereas FFO, the focus of REIT investors, changed in line with actual cash changes to revenues and operating expenses. </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"><I>FFO, EBITDA and Statement of Cash flows Analysis: </I></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Company&#146;s management analyzed the effect of the depreciation error on Funds from Operations (&#147;<B><I>FFO</I></B>&#148;) (defined
as GAAP net (loss) income (attributable) available to common stockholders, excluding the incentive fee, depreciation and amortization, any realized and unrealized gains, losses or other noncash items recorded in net (loss) income (attributable)
available to common stockholders for the period) and Earnings Before Interest, Taxes, Depreciation and Amortization (&#147;<B><I>EBITDA</I></B>&#148;) and found no effect on these calculations. Management analyzed the Statement of Operating
Cashflows and noted the error has no net impact on the statement. In the case of FFO and EBITDA, depreciation was added back to net income thus canceling out effects of a change in depreciation. This was the same with the Statement of Operating
Cashflows. A change in depreciation expense had no effect on these three metrics as depreciation was added back to both EBITDA and FFO and any change in depreciation changed net income and depreciation in equal and offsetting amounts in the
Statement of Operating Cash Flow. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"><I>Statement of Equity Analysis: </I></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Company&#146;s management analyzed the effect of the correct accumulated depreciation variance on the Statement of Equity and found that
there was a very small, <FONT STYLE="white-space:nowrap">non-material</FONT> change due to the increase in retained earnings caused by a decrease in depreciation when applying the corrected depreciation variance. This accumulative impact was less
than 1% as a percentage of stockholders&#146; equity for all the impacted quarters. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman"><I>Compensation to Management Analysis: </I></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The Company is externally managed by Gladstone Management Company (the &#147;<B><I>Adviser</I></B>&#148;). There are four fees charged by the
Adviser and one by Gladstone Administration (the Company&#146;s administrator), which is a pass-through charge which only covers the cost of the services provided by Gladstone Administration. This Administration fee does not change with the
financial performance of the Company, therefore there was no effect on the Company&#146;s Administration Fee as a result of the error in depreciation. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The three fees charged to the Company by the Adviser are the Base Management Fee (&#147;<B><I>BMF</I></B>&#148;), the Capital Gains Fee
(&#147;<B><I>CGF</I></B>&#148;) and the Incentive Fee (&#147;<B><I>ICF</I></B>&#148;). The BMF is based on the Gross Real Estate Assets of the Company multiplied by 0.425% annually. A change in depreciation has no effect on the Company&#146;s Gross
Real Estate Assets, therefore there was no effect of the depreciation misstatement on the BMF. </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="right">Page | 4 </P>

</DIV></Center>


<p style="margin-top:1em; margin-bottom:0em; page-break-before:always"> </p>
<HR SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">


<Center><DIV STYLE="width:8.5in" align="left">

 <P STYLE="margin-top:0pt;margin-bottom:0pt" ALIGN="center">


<IMG SRC="g903091g1202214806473.jpg" ALT="LOGO" STYLE="width:6.57569in;height:0.509028in;">
 </P> <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P>
 <P STYLE="margin-top:0pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The CGF is calculated based on aggregated gains and losses on the sale of real estate based
on the net sale prices less the original purchase price and subsequent <FONT STYLE="white-space:nowrap">non-reimbursed</FONT> capital costs. A change in depreciation would have no effect on the CGF. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The ICF is based on quarterly Core FFO (defined as FFO and <FONT STYLE="white-space:nowrap">one-time</FONT> events pursuant to changes in
GAAP), before giving effect to any incentive fee, or <FONT STYLE="white-space:nowrap">pre-incentive</FONT> fee Core FFO, exceeds 2.0% quarterly, or 8.0% annualized, of adjusted total stockholders&#146; equity (after giving effect to the base
management fee but before giving effect to the incentive fee). The Company refer to this as the hurdle rate. The Adviser will receive 15.0% of the amount of our <FONT STYLE="white-space:nowrap">pre-incentive</FONT> fee Core FFO that exceeds the
hurdle rate. However, in no event shall the incentive fee for a particular quarter exceed by 15.0% (the cap) the average quarterly incentive fee paid for the previous four quarters (excluding quarters for which no incentive fee was paid). </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">An increase in depreciation would be canceled by the adding back of depreciation to net income to get to Core FFO. But an increase in
depreciation would result in a decrease in stockholders&#146; equity. This increase would increase the ICF. Therefore, during the periods impacted by the error there was an overstatement of ICF, but at an immaterial amount. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The ICF calculation using corrected depreciation yields an increase of $2,548 in 2021 and a decrease of $1,524 in 2022 for a net $1,024
underpayment of ICF to the Company over the two years combined compared to a total ICF paid of $10,129,000, or a 0.01% difference. For the fiscal year 2023 the ICF was contractually eliminated, so there was no effect of any depreciation changes on
the ICF in 2023. </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Qualitative Analysis </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">As further indicated by the SEC in SAB 99, the Company performed &#147;a full analysis of all relevant considerations&#148; in assessing
whether the changes &#147;would have been viewed by a reasonable investor as having significantly altered the &#145;total mix&#146; of information made available&#148;. The Company specifically considered the following: </P>
<P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="5%">&nbsp;</TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left" STYLE=" margin-top:0pt ; margin-bottom:0pt; font-family:Times New Roman; font-size:10pt">Although the Company noted that the change was quantitatively significant to the Statement of Operations and
Comprehensive Income, there was an immaterial impact on the Consolidated Balance Sheets, Consolidated Statements of Stockholders Equity and no impact on the Consolidated Statement of Cash Flows. </P></TD></TR></TABLE>
<P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="5%">&nbsp;</TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left" STYLE=" margin-top:0pt ; margin-bottom:0pt; font-family:Times New Roman; font-size:10pt">The misstatements did not affect the Company&#146;s compliance with regulatory requirements.
</P></TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="5%">&nbsp;</TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left" STYLE=" margin-top:0pt ; margin-bottom:0pt; font-family:Times New Roman; font-size:10pt">The misstatements did not change a loss into income or vice versa in the impacted prior periods.
</P></TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="5%">&nbsp;</TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left" STYLE=" margin-top:0pt ; margin-bottom:0pt; font-family:Times New Roman; font-size:10pt">The misstatements do not involve any concealment of an unlawful transaction or fraud. </P></TD></TR></TABLE>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="right">Page | 5 </P>

</DIV></Center>


<p style="margin-top:1em; margin-bottom:0em; page-break-before:always"> </p>
<HR SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">


<Center><DIV STYLE="width:8.5in" align="left">

 <P STYLE="margin-top:0pt;margin-bottom:0pt" ALIGN="center">


<IMG SRC="g903091g1202214806473.jpg" ALT="LOGO" STYLE="width:6.57569in;height:0.509028in;">
 </P> <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P>

<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="5%">&nbsp;</TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left" STYLE=" margin-top:0pt ; margin-bottom:0pt; font-family:Times New Roman; font-size:10pt">The impact to the primary users of the Financial Statements are focused on measurements that do not include
depreciation such as FFO, Cash from Operations, Dividends per Share or EBITDA. </P></TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="5%">&nbsp;</TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left" STYLE=" margin-top:0pt ; margin-bottom:0pt; font-family:Times New Roman; font-size:10pt">The Company, as a REIT, has near break-even net income from recurring operations, excluding the impact of
recurring gains/losses on sales and nonrecurring impairment charges, which cause the total net income to be volatile period over period and causes this error as a percent of net income to fluctuate in the relevant periods. While this error comprised
approximately 11% and 14% of the total net income in certain impacted periods, it was less than 1.5% of total assets and less than 5% of the depreciation expenses financial statement line item. </P></TD></TR></TABLE>
<P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="5%">&nbsp;</TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left" STYLE=" margin-top:0pt ; margin-bottom:0pt; font-family:Times New Roman; font-size:10pt">The Company&#146;s credit quality, liquidity, business plan or core elements of the business/operations were not
impacted by the changes in <FONT STYLE="white-space:nowrap">non-cash</FONT> impact to depreciation expense. Credit analysts look at the quality of real estate, gross assets and growth in FFO and cash flow, none of which are affected by a change in
depreciation. The Company&#146;s bank covenants are calculated using metrics that specifically exclude depreciation and none of the Company&#146;s plans or business operations would be affected by a change in a
<FONT STYLE="white-space:nowrap">non-cash</FONT> charge, such as depreciation. </P></TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="5%">&nbsp;</TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left" STYLE=" margin-top:0pt ; margin-bottom:0pt; font-family:Times New Roman; font-size:10pt">The impact on management&#146;s compensation is insignificant in 2021 and 2022 and
<FONT STYLE="white-space:nowrap">non-existent</FONT> in 2023. </P></TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="5%">&nbsp;</TD>
<TD WIDTH="3%" VALIGN="top" ALIGN="left">&#149;</TD>
<TD WIDTH="1%" VALIGN="top">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top"> <P ALIGN="left" STYLE=" margin-top:0pt ; margin-bottom:0pt; font-family:Times New Roman; font-size:10pt">Users of REIT financials are concerned with performance measures such as FFO, EBITDA, Gross Real Estate Assets
and Dividends Per Share. Measurements such as GAAP net income and EPS are not the primary focus of users of REIT financials as discussed in the NARIET FFO Discussion Paper released by the NAREIT Best Financial Practices Council. This Discussion
Paper summarizes the use of FFO is more meaningful than GAAP earnings because &#147;the current historical cost depreciation model fails to recognize adequately the complex interplay among shifting market values of buildings, appreciation of
underlying land and real, economic depreciation of real property.&#148; In particular, GAAP historical cost depreciation of real estate assets generally does not reflect a realistic residual value (or salvage value) at the end of a property&#146;s
depreciable life. In addition, some observers believe that current GAAP depreciation methods do not produce a pattern of charges over time that matches the long-term revenue potential of income producing real estate. Notwithstanding these facts,
management considered the quantitative and qualitative factors outlined below to assess the materiality of the error to the impacted financial statements. </P></TD></TR></TABLE>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="right">Page | 6 </P>

</DIV></Center>


<p style="margin-top:1em; margin-bottom:0em; page-break-before:always"> </p>
<HR SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">


<Center><DIV STYLE="width:8.5in" align="left">

 <P STYLE="margin-top:0pt;margin-bottom:0pt" ALIGN="center">


<IMG SRC="g903091g1202214806473.jpg" ALT="LOGO" STYLE="width:6.57569in;height:0.509028in;">
 </P> <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P>
 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Materiality Determination and Management&#146;s Method for Correction of Financial Reporting: </B></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">After considering the &#147;total mix&#148; of both quantitative and qualitative information available to users of the financial statements, in
consultation with the Company&#146;s Audit Committee of the Board of Directors, the Company concluded that the error was not material to the impacted prior period financial statements and that the appropriate method of correction was a revision to
the financial statements for the years ended December&nbsp;31, 2021, 2022, the second, third and fourth quarters of 2021, each quarter in 2022, and the first quarter of 2023.&#8195; </P>
<P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Form <FONT STYLE="white-space:nowrap">10-K</FONT> for the fiscal year ended December&nbsp;31, 2023 </U></P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Note 1. Organization, Basis of Presentation and Significant Accounting Policies </U> </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Revision of Previously Issued Financial Statements, page 63 </U></P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Comment 1, Part 2 of 2 </U></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:4%; font-size:10pt; font-family:Times New Roman"><I>[&#133;] Also,
separately address in detail how the errors impacted your conclusions regarding the effectiveness of your disclosure controls and procedures and your internal control over financial reporting. We note from your disclosure in your Form <FONT
STYLE="white-space:nowrap">10-Q</FONT> for the quarterly period ended June&nbsp;30, 2023 that there were no changes in your internal control over financial reporting when the errors was first identified and reported. In your response, please explain
to us the specific nature and design of the control or controls that you believe failed regarding these errors, describe in further detail your evaluation of the severity of the control deficiencies and how you considered whether it was reasonably
possible that such control deficiencies would fail to prevent or detect a material misstatement. </I></P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B><U>Response to Comment 1, Part 2 of 2</U>:
</B></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><B>Internal Controls: </B></P> <P STYLE="margin-top:6pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">When
deficiencies in the design or operation of a control are found, the issuer needs to assess the severity of the deficiency. The Company&#146;s management concluded that the root cause of the errors was due to the fact that the Company did not design
and maintain effective controls related to the accounting for the determination of the useful life for tenant funded lessor assets. The Company concluded that there was not a reasonable possibility the deficiency would fail to prevent or detect a
material misstatement based on its quantitative and qualitative analysis. Specifically, management determined the magnitude of the potential misstatement approximated the actual misstatement given the historical activity was either equal to or
higher than the expected activity in the foreseeable future and the periods with errors identified included larger, <FONT STYLE="white-space:nowrap">non-recurring</FONT> activity. Based on the determination that the potential misstatement
approximates the actual misstatements and the actual misstatements were determined not to be material as described above, and there were no other indicators (e.g., identification of fraud on the part of senior management, ineffective oversight by
the company&#146;s audit committee, other deficiencies that could aggregate with this deficiency) that would suggest a prudent official would determine the deficiency constituted a material weakness, the Company determined the severity of the
deficiency was less than a material weakness. After discovering the deficiency, the Company changed the design of the control at issue to verify the useful lives of tenant-funded improvement assets are determined in concurrence with the
Company&#146;s established useful life policy. This design change was determined to not have materially affected or is reasonably likely to materially affect the Company&#146;s internal control over financial reporting as it only applied to a small
subset of assets </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="right">Page | 7 </P>

</DIV></Center>


<p style="margin-top:1em; margin-bottom:0em; page-break-before:always"> </p>
<HR SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">


<Center><DIV STYLE="width:8.5in" align="left">

 <P STYLE="margin-top:0pt;margin-bottom:0pt" ALIGN="center">


<IMG SRC="g903091g1202214806473.jpg" ALT="LOGO" STYLE="width:6.57569in;height:0.509028in;">
 </P> <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P>
 <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">
(tenant-funded improvement assets). Therefore, the Company disclosed in its Quarterly Report on Form <FONT STYLE="white-space:nowrap">10-Q</FONT> for the period ended June&nbsp;30, 2023, when the
Company first disclosed the revision to its financial statements, that &#147;There were no changes in the Company&#146;s internal control over financial reporting that occurred during the quarter ended June&nbsp;30, 2023 that have materially
affected, or are reasonably likely to materially affect, the Company&#146;s internal control over financial reporting.&#148; </P> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">*** </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">Please direct any additional questions or comments concerning this response letter to the undersigned at (703)
<FONT STYLE="white-space:nowrap">287-5889</FONT> or Michael LiCalsi at (703) <FONT STYLE="white-space:nowrap">287-5898.</FONT> </P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P><DIV ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt">


<TR>

<TD WIDTH="100%"></TD></TR>


<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">Very truly yours,</P></TD></TR>
<TR STYLE="font-size:1pt">
<TD HEIGHT="16"></TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">/s/ Gary Gerson</P></TD></TR>
<TR STYLE="font-size:1pt">
<TD HEIGHT="16"></TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">Gary Gerson</P></TD></TR>
<TR STYLE="page-break-inside:avoid ; font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">Chief Financial Officer</P></TD></TR>
</TABLE></DIV> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR style = "page-break-inside:avoid">
<TD WIDTH="4%" VALIGN="top" ALIGN="left">cc:</TD>
<TD ALIGN="left" VALIGN="top"> <P STYLE=" margin-top:0pt ; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman; " ALIGN="left">David Gladstone, Gladstone Commercial Corporation </P></TD></TR></TABLE>
<P STYLE="margin-top:0pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">Michael LiCalsi, Gladstone Commercial Corporation </P>
 <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="right">Page | 8 </P>

</DIV></Center>

</BODY></HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>GRAPHIC
<SEQUENCE>2
<FILENAME>g903091g1202214806473.jpg
<DESCRIPTION>GRAPHIC
<TEXT>
begin 644 g903091g1202214806473.jpg
M_]C_X  02D9)1@ ! 0$ 8 !@  #_VP!#  @&!@<&!0@'!P<)"0@*#!0-# L+
M#!D2$P\4'1H?'AT:'!P@)"XG("(L(QP<*#<I+# Q-#0T'R<Y/3@R/"XS-#+_
MVP!# 0D)"0P+#!@-#1@R(1PA,C(R,C(R,C(R,C(R,C(R,C(R,C(R,C(R,C(R
M,C(R,C(R,C(R,C(R,C(R,C(R,C(R,C+_P  1"  P FX# 2(  A$! Q$!_\0
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M:=0 45P'Q*^)<7@!+!1:K=3W3',9;&U!U-=II>H0:MI5KJ%LP:&XC$BD>A%
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M?V<$9>X8S[&3'H,'- '5T5Y;\/OC):^-]>?2I=/^PS&,O$3+NWD=1T':O4J
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M6;Y0?UKR/]G31H;R\UC7KD"6ZB*Q1N_)!;)8_7@5[%XYT23Q'X*U72HO]=/
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MG((H S;[P_::AKVFZQ,7^T:>'$0!X.\8.:\&_:2_Y&+1O^O0_P#H9KZ.+*I
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MK&J:9;ES/IK1I.2/ERZ[@ >_%:E !1110 4444 (RAU*L 0>H(K%U'PCH&J
M_:]+MV8_Q*NT_I6W151E*+NF*45)6:/.KSX1Z9YAETK4+RPDZC:V1_0U1'PJ
MU2^EQJ_B2::$<*J[B2/QXKU.BMEBZRZF#PM)]#C=,^&'AG3MK-:-<R#^*=L_
MH*ZFUL+2Q0):VT,"CC$: 59HK*=2<_B=S6%.$/A5@HHHJ"PHHHH *Y_Q5X,T
M7QC8?9=6M?,V_P"KE0X>,^QKH** /+=-^%WB'PXI@\/^-KJ"S_A@G@#A?IS3
M;GX,+K^HQWWBOQ'>ZK+&,*JQK$ /3BO5** ,R]TIY- ;2["Z:S_<B&.8+O*+
MC'0]>*\RTSX$_P!BWSWNF^+;ZVN7!#21P+DYZ]Z]@HH \ON/A-J.H-"NJ>-M
M2O((Y5D\EXE"L5.1G!J_XG^&MWXGU:WO9O$]U!':.'M;=(%*Q$=^O/XUZ#10
M!2TRUNK33HX+R]:\N%&&G9 A?\!7FGB7X*#Q9JS:CJOB:XDFQM7%LHVKV'6O
M6** .5TOPKJ>F^%I]%/B.>=V3RX;J2!=T*XQC&>?QKB]*^!?]AWK7VF>++^U
MNW!#2I N2#U[UZ]10!YK+\)#JCJNO^*]7U.W!R8"1&K?7'6NYT70M-\/:>EC
MI5I';6Z?PH.I]2>YK1HH X/QC\-5\3:[!KEGK5WIFIP1B-)(AD8'M5"Z^'?B
M?6;7[#K7CBXEL",21P6X1I!Z$UZ710!D>'/#.E^%-)CTW2;?RH%Y))RSMW)/
M<U3\7^&[SQ/I_P!@@UJ;3;>162X6*)7\U3V.>G_UZZ.B@#R_PK\'W\&ZE]KT
MCQ/=QK(5\^(VZD2JIS@\\=_SKU#M110!Y_XO^$FB>*-1&JPRS:9J@.[[3;?Q
M,.A(]?>JI\!^-9;46<WQ N/LV-I9+51(1]:]*HH X[P=\-="\&/)<VJR7.H2
M@^9>7!W.<]<>F:7QOX*NO&EJ;%M>FLM.D11+;1P*WF$-D$DG/IQ[5V%% &+X
M9T:^T/3OL=[K$NI[,"*22((44 #''7IUI/%7A;3?%^AS:7J<6Z-QF.0#YHF[
M,OO6W10!R/P\\$#P%H=QI:7QO$EN6G5RFTC*J,8S_LUSOC'X.IXUUYM5U#Q!
M<(0NR&)+<8B0$D+G//)/->H44 >:_P#"L]?"+&OQ!U41@8QY*]/SKIO!7A*/
MP;H\U@E[+>M-<O<R3RKAF9@,Y_*NDHH *X#QE\(_#WB^Y-\PDL=0/6XMQ][W
M8=S[UW]% 'E-E\,_&.G1"VM?B%=K;#@!H S ?CG^===X6\%Q^'+B:]GU2]U/
M4)DV//=/P%SG"KT%=110!POC/X5Z%XRN%O93)9:DO2ZM^IQTR.]9\?@/QK%:
MBR7X@3_9@-H8VJF3'UKTJB@#A_"/POT3PK>OJ1>;4-5<DM>71RV3U(':M#QE
MX3NO%MD;!=;FL+*1"D\44*OYH/N3Q7444 <[X4\-WGAO3_L%QK,NI6Z*$A$L
M(0QJ.W'6J/A?X?:;X6\0ZQJ]JVZ34'W*NW'E+U('U/-=A10!YMXP^%,GC:^\
MW4_$MT+9'+06RVZXBS[YR:U?#W@C4_#FARZ5;>*+F2'R_+M2]LO^C\YR.>?Q
MKM** .!\-_#J^\-ZU/J,7BFZG^U2^;=Q/;J!,?KGC\*O>)_A[IOBCQ)I&LW1
MVR:>^60+D2CJ ?H:["B@#F_%OAJ\\36'V&WUJ;3;=U*S+%$K^:I[<]*Y3PI\
M('\&ZA]JTGQ/=QHY'GQ&W4B50>AYXKT^B@#SWQY\+QX]O89;S6YK>W@&(K=(
M00I[G.>]4[7X5:SI]E%9V7CW4X;>)=J1B!<*/0<UZ=10!PWA[X?7/AZWU8P^
M(KN;4-1VDWLL0+1D>@SS7-#X&!==_MP>*KT:IYOG?:/LZYW^N,XKUZB@#F-:
M\'0^)/"!T'6;I[N0J/\ 3#&%?>.C = :PO!'PM;P-?\ FV/B*[EM7YFM7B 2
M0]CUX->B44 <IXQ^'F@^-H -3@*W*#$=S%PZ^WN*X[3_ (2^)-"'DZ+X[N[>
MU'W8WAW;1[9)KURB@#B- ^'\VGZK%JNL^(=0UB]AR8Q*=D:$C&=HX)K"\2_!
MEO%VH_;=9\47<[H"L2_9U C7.<#GWKU2B@#CK/PAK5GX:DT=?%ET6.U8KDVR
M[XD QM'//UJ#P3\/[GP2SQ0>()[NQD9I'MI(%&7./FW9SVKN** .;\9>&+GQ
M9I9TV/5Y+"VE4K<*D(?S0<8')XQBN1\)_!U_!NJ"]TKQ/=H'*B>(VZ[95!SM
M//Z^]>I44 ><^.OA2OCW58[N^UR>"&%=L-ND (3.,\YYR14$'PMUNSM(K2U\
M?:I%;Q($1! N%4< #FO3:* .3\%>"E\'KJ#-J=QJ-Q?S"::>=<,2!CUKK***
# /_9

end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
