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<SEC-DOCUMENT>0001104659-09-025544.txt : 20090720
<SEC-HEADER>0001104659-09-025544.hdr.sgml : 20090719
<ACCEPTANCE-DATETIME>20090422195752
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001104659-09-025544
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20090422

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			INNOVATIVE SOLUTIONS & SUPPORT INC
		CENTRAL INDEX KEY:			0000836690
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-COMPUTER PROGRAMMING SERVICES [7371]
		IRS NUMBER:				232507402
		STATE OF INCORPORATION:			PA
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		420 LAPP RD
		CITY:			MALVERN
		STATE:			PA
		ZIP:			19355
		BUSINESS PHONE:		6108899898

	MAIL ADDRESS:	
		STREET 1:		420 LAPP ROAD
		CITY:			MALVERN
		STATE:			PA
		ZIP:			19355
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
<TEXT>

<html>

<head>





</head>

<body lang="EN-US">

<div>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">VIA
EDGAR</font></u></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 1.0in .0001pt 2.5in;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">April&nbsp;22, 2009</font></p>

<p style="margin:0in 1.0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">United
States Securities and Exchange Commission</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">100
F Street, NE</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Washington,
D.C. 20549-4561</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="8%" valign="top" style="padding:0in .7pt 0in .7pt;width:8.02%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Attn:</font></p>
  </td>
  <td width="91%" valign="top" style="padding:0in .7pt 0in .7pt;width:91.98%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Ms.&nbsp;Kathleen Collins</font></p>
  </td>
 </tr>
 <tr>
  <td width="8%" valign="top" style="padding:0in .7pt 0in .7pt;width:8.02%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="91%" valign="top" style="padding:0in .7pt 0in .7pt;width:91.98%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Ms.&nbsp;Melissa Feider</font></p>
  </td>
 </tr>
 <tr>
  <td width="8%" valign="top" style="padding:0in .7pt 0in .7pt;width:8.02%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="91%" valign="top" style="padding:0in .7pt 0in .7pt;width:91.98%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Mr.&nbsp;Kevin
  Dougherty</font></p>
  </td>
 </tr>
 <tr>
  <td width="8%" valign="top" style="padding:0in .7pt 0in .7pt;width:8.02%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="91%" valign="top" style="padding:0in .7pt 0in .7pt;width:91.98%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Mr.&nbsp;Mark
  P. Shuman</font></p>
  </td>
 </tr>
</table>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="16%" valign="top" style="padding:0in .7pt 0in .7pt;width:16.18%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="6%" valign="top" style="padding:0in .7pt 0in .7pt;width:6.8%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">RE:</font></b></p>
  </td>
  <td width="77%" valign="top" style="padding:0in .7pt 0in .7pt;width:77.02%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Innovative
  Solutions and Support,&nbsp;Inc.</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="22%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:22.98%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="77%" valign="top" style="padding:0in .7pt 0in .7pt;width:77.02%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Form&nbsp;10-K
  and Form&nbsp;10-K/A for Fiscal Year Ended</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="22%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:22.98%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="77%" valign="top" style="padding:0in .7pt 0in .7pt;width:77.02%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">September&nbsp;30,
  2008</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="22%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:22.98%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="77%" valign="top" style="padding:0in .7pt 0in .7pt;width:77.02%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Filed
  December&nbsp;11, 2008 and December&nbsp;19, 2008</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="22%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:22.98%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="77%" valign="top" style="padding:0in .7pt 0in .7pt;width:77.02%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Form&nbsp;10-Q
  for the Fiscal Quarter Ended December&nbsp;31, 2008</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="22%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:22.98%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="77%" valign="top" style="padding:0in .7pt 0in .7pt;width:77.02%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Filed
  on February&nbsp;6, 2009</font></b></p>
  </td>
 </tr>
 <tr>
  <td width="22%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:22.98%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
  </td>
  <td width="77%" valign="top" style="padding:0in .7pt 0in .7pt;width:77.02%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">File
  No.&nbsp;000-31157</font></b></p>
  </td>
 </tr>
</table>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Dear
Ms.&nbsp;Collins and Ms. Feider:</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">On
behalf of Innovative Solutions and Support,&nbsp;Inc. (the &#147;Company&#148;), we
respond to the written comments of the staff (the &#147;Staff&#148;) of the Securities
and Exchange Commission (the &#147;Commission&#148;) contained in your letter dated April&nbsp;10,
2009 to John C. Long (the &#147;Comment Letter&#148;), with respect to Form&nbsp;10-K and
Form&nbsp;10-K/A for Fiscal Year Ended September&nbsp;30, 2008, filed with the
Commission by the Company on December&nbsp;11, 2008 and December&nbsp;19, 2008,
respectively, and Form&nbsp;10-Q for the Fiscal Quarter Ended December&nbsp;31,
2008, filed with the Commission by the Company on February&nbsp;6, 2009 (File No.&nbsp;000-31157).</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
headings and numbered items of this letter correspond to the headings and
numbered items contained in the Comment Letter. For the convenience of the
Staff, each of the comments from the Comment Letter is restated in bold italics
prior to the Company&#146;s response.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">General</font></u></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">1.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; We
note from your response to prior comment 1 that the &#147;typographical errors&#148; did
not result in a mathematical mistake based on your consideration of the
definition of an error pursuant to SFAS 154.&#160;
However, the typographical error of using the wrong net loss figure
resulted in an error in the presentation of the cash flow statement and caused
the mathematical calculations of &#147;net cash provided by (used in) operating
activities&#148;, &#147;net decrease in cash and cash equivalents&#148;, and &#147;cash and cash
equivalents, end of year&#148; to be incorrect.&#160;
As a result, it appears that the typographical errors would meet the
definition of an error and, assuming these errors are considered</font></i></b></p>

<p style="margin:0in 0in .0001pt .5in;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">&nbsp;</font></i></b></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
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<div style="font-family:Times New Roman;">

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">material, the Company should have filed an Item
4.02 8-K and labeled the related cash flow information as restated[.]&#160; In this regard, please provide the Company&#146;s
SAB 99 analysis in determining whether these errors were considered to be
material.</font></i></b></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .75in;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Response</font></u></b><b><font size="2" style="font-size:10.0pt;font-weight:bold;">:</font></b></p>

<p style="margin:0in 0in .0001pt .75in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
Company notes the Staff&#146;s comment but respectfully disagrees with the Staff&#146;s
conclusion that &#147;it appears that the typographical errors would meet the
definition of an error&#148; as defined in Statement of Financial Accounting
Standards No.&nbsp;154 (&#147;SFAS No.&nbsp;154&#148;), which superseded Accounting
Principles Board Opinion No.&nbsp;20 (&#147;APB No.&nbsp;20&#148;).&#160; As explained in our March&nbsp;27, 2009
letter, the Company believes that the errors in presentation that occurred in
the consolidated statement of cash flows for the year ended September&nbsp;30,
2008 were the result of a mis-key of a cell reference on an Excel spreadsheet,
which caused the incorrect net income amount to be included on the consolidated
statement of cash flows in the Company&#146;s Form&nbsp;10-K that was filed on December&nbsp;11,
2008.&#160; The mathematical calculations of &#147;net
cash provided by (used in) operating activities,&#148; &#147;net decrease in cash and
cash equivalents,&#148; and &#147;cash and cash equivalents, end of year&#148; were also
presented incorrectly on the consolidated statement of cash flows in the Form&nbsp;10-K,
solely because the incorrect net income amount was improperly included.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">SFAS
No.&nbsp;154 defines an &#147;error in previously issued financial statements&#148; as &#147;an
error in the recognition, measurement, presentation, or disclosure in the
financial statements <i>resulting from</i>
mathematical mistakes, mistakes in the application of GAAP, or oversight or
misuse of facts that existed at the time the financial statements were
prepared.&#148; (<i>emphasis added)</i>.&#160; Since there was no mistake in the application
of GAAP or oversight or misuse of facts that existed at the time the financial
statements were prepared, to conclude that an error occurred as defined under
SFAS No.&nbsp;154 and therefore determine that a Form&nbsp;8-K was required to
be filed under Item 4.02(a), the errors in presentation in the financial
statements must have <i>resulted from</i> a
mathematical mistake.&#160;&#160; In his book <i>SOX 404 for Small, Publicly Held Companies:&#160; Internal Control Assessment and Reporting
Under Sarbanes-Oxley </i>Robert Sonnelitter when discussing SFAS 154
states that mathematical mistakes occur when &#147;a specified mathematical
operation is not correct&#148; or &#147;the specified mathematical operation is not
correctly performed.&#148;&#160; As a result of the
typographical error in the net loss line item described above, the other line
items also became misstated, but this was not due to a specified mathematical
operation not being correct or not being correctly performed.&#160; Instead, it was because once the incorrect
net loss number was inserted into the statement, the specified mathematical
procedures were correctly performed, resulting in an incorrect presentation for
the three additional line items.&#160; Because
mathematical calculations determined the line items in question that were
ultimately incorrect does not necessarily mean that the errors in those line
items <i>resulted from</i> a mathematical mistake.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Instead,
as noted in our March&nbsp;27 letter, all of the errors in presentation on the
statement of cash flows resulted from what we would consider to be one &#147;typographical
error&#148; in the input of the net loss line item.&#160;
According to the <i>Free On-line Dictionary of
Computing</i>, a typographical error is defined as an &#147;error while
inputting text via keyboard, made despite the fact that the user knows exactly
what to type in. This usually results from the operator&#146;s inexperience at
keyboarding, rushing, not paying attention, or carelessness.&#148;&#160; Therefore, because the error in the
presentation of the line items on the cash flow statement <i>resulted
from</i> a typographical error and not a mathematical mistake, the error
in presentation is not considered an error within the plain meaning of the term
under SFAS No.&nbsp;154, and therefore no Item 4.02 Form&nbsp;8-K is required,
no SAB 99 analysis is required to be performed and the cash flow statement need
not be labeled as restated.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

</div>
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<div style="font-family:Times New Roman;">

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Item 5.
Market for the Registrant&#146;s Common Equity, Related Stockholder Matters and
Issuer Repurchase of Equity Securities </font></u></b></p>

<p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>

<p style="margin:0in 0in .0001pt;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Comparison
of the Five Year Total Return, page&nbsp;20</font></u></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">2.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Your
response to prior comment 4 states that you do not use a published industry or
line-of-business index because you are not aware of any such index made of
companies that are comparable to you and that would be accessible to your
security holders or is widely recognized and used.&#160; However, we note that other companies in the
aerospace and aviation industry, under such SIC codes as 3721, 3728, 3812, and
3823, which appear to be comparable to you have identified and used such
indices for comparison in their performance graphs; including the SPADES
Defense index, the Dow Jones US Aerospace Index, or the S&amp;P Aerospace and
Defense Index.&#160; Please advise as to why
identification and use of such industry or line-of-business indices are not
feasible or appropriate; or alternatively why you are unable to construct an
index of peer issuer(s), which need not be limited to direct competitors.</font></i></b></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .75in;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Response:</font></u></b></p>

<p style="margin:0in 0in .0001pt .75in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
Company accepts the Staff&#146;s comment and will include the Dow Jones US Aerospace&nbsp;&amp;
Defense Index on the stock performance table in its Proxy Statement for the
2010 annual meeting of shareholders based on its determination that including
the Dow Jones US Aerospace &amp; Defense Index would comply with the
requirements of Item 201(e)(1)(ii)&nbsp;of Regulation S-K.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Note 3.
Summary of Significant Accounting Policies, Revenue Recognition, page&nbsp;39</font></u></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">3.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; You
state in your response to prior comment 6 that the Company has not recognized
any revenue under SOP 97-2 in the historical financial statements.&#160; However, from your response to prior comment
4 of your letter dated March&nbsp;2, 2007, it appears that revenue from some of
your arrangements was recognized pursuant to SOP 97-2.&#160; Please clarify this discrepancy and tell us
whether you subsequently concluded that the arrangements discussed in your March&nbsp;2,
2007 response letter should have been accounted for pursuant to SAB 104 from
inception.&#160; Also, tell us the percentage
of revenue recognized pursuant to SOP 97&#172;2 for each period presented and if
applying SAB 104 would have resulted in different revenue recognition.&#160; Additionally, tell us when and if there was a
specific event that caused the Company to change its determination that SAB 104
was the appropriate guidance for revenue recognition.</font></i></b></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .75in;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Response</font></u></b><b><font size="2" style="font-size:10.0pt;font-weight:bold;">:</font></b></p>

<p style="margin:0in 0in .0001pt .75in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
Company notes the Staff&#146;s comment and the Staff&#146;s reference to our letter dated
March&nbsp;2, 2007.&#160; In the March&nbsp;2,
2007 letter we stated:</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">&#160;&#147;Based on the considerations of the above
guidance, the Company&#146;s product sales (non-long term) should be accounted for
under the guidance of SOP 97-2. Per SOP 97-2 revenue is recognized when all of
the following criteria are met:</font></i></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.25in;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><i><font size="2" style="font-size:10.0pt;font-style:italic;">Persuasive evidence of an arrangement exists;</font></i></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.25in;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><i><font size="2" style="font-size:10.0pt;font-style:italic;">Delivery has occurred or services have been
rendered;</font></i></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.25in;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><i><font size="2" style="font-size:10.0pt;font-style:italic;">The seller&#146;s price to the buyer is fixed or
determinable; and</font></i></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.25in;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><i><font size="2" style="font-size:10.0pt;font-style:italic;">Collectibility is reasonably assured.</font></i></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">The
requirements of SOP 97-2 are consistent with the general requirements of SAB
104 noted above. As noted in SOP 97-2, software contracts may include post
contract support and other related services. Although the Company&#146;s product
sales fall within the scope of SOP 97-2, the current product sales transactions
do not include post contract support and other related services. As such, these
portions of SOP 97-2 are not applicable to the Company.&#148;</font></i></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">As
noted in our March&nbsp;2, 2007 letter, none of the product sales recognized at
the time of the response contained &#147;post contract support and other related
services,&#148; and revenue for those sales was therefore recognized at the time the
product was shipped.&#160; The Company also
noted in its March&nbsp;2007 response that the requirements of Statement of
Position 97-2, <i>Software Revenue Recognition</i>
(&#147;SOP 97-2&#148;) in the context of the product sales recognized at the time were
consistent with the requirements of Staff Accounting Bulletin No. 104, <i>Revenue Recognition</i> (&#147;SAB 104&#148;).&#160;&#160; In the Company&#146;s response letter dated March&nbsp;27,
2009, it was stated that &#147;The Company has not recognized any revenue under SOP
97-2 in its historical financial statements.&#148;&#160;
This statement is accurate because although the Company believed at the
time of its March&nbsp;2, 2007 response that its product sales should be
accounted for under SOP 97-2, the sales activity and the nature of the then
existing customer agreements under which the sales activity occurred resulted
in the Company recognizing product sales under SAB 104, which management has
concluded&#160; was correct.&#160; This statement is also accurate for revenue
recognized related to sales arrangements with multiple deliverables for which
the Company recognized revenue in accordance with EITF 00-21, <i>Revenue Arrangements with Multiple Deliverables</i>
(&#147;EITF 00-21&#148;).&#160; This revenue recognition
policy was previously stated in our March&nbsp;27, 2009 letter. The Company
does note, however, that the disclosure relating to the Company&#146;s revenue
recognition policy (Note 3 in the Company&#146;s financial statements as of September&nbsp;30,
2008) references SOP 97-2, even though no revenue was recognized under such
guidance.&#160; The Company will revise its
disclosure, as indicated in the March&nbsp;27, 2009 letter, in its second
quarter 10-Q filing to be submitted on or before May&nbsp;11, 2009 to remove
the references to SOP 97-2.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In
response to the Staff&#146;s inquiry regarding whether there was a &#147;specific event
that caused the Company to change its determination that SAB 104 was the
appropriate guidance for revenue recognition,&#148; the Company notes that it is not
aware of any specific event that caused the change in its determination.&#160; Current financial management has determined
that none of the Company&#146;s contracts, nor any of its product sales, contained
provisions or products that would have required recognition under SOP 97-2
versus SAB 104 and /or under the guidance included in EITF 00-21, as
appropriate.&#160; As noted in our March&nbsp;27,
2009 letter, the Company&#146;s products have included flat panel displays and air
data systems, and these products have remained relatively unchanged.&#160; The Company has recognized revenue
appropriately and consistently under SAB 104 and EITF 00-21, as applicable,
since its March&nbsp;2, 2007 response.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In
summary, current financial management has reviewed the sales arrangements and related
revenue recognized and has concluded, for the reasons discussed above and in
our March&nbsp;27, 2009 letter, that the historical revenue recognition
policies it has utilized have been consistent with SAB 104 and/or EITF 00-21,
and that software is not more than incidental to the product.&#160; Further, the Company concluded that it should
continue to recognize revenue under SAB 104 and /or EITF 00-21, as
applicable,&#160; that revenue previously
recognized had not been misstated and that no errors occurred.&#160;&#160; As noted in our March&nbsp;27, 2009 letter,
in light of the constant evolution of the Company&#146;s products as well as the
fact that they do include embedded software, the Company does plan to continue
to consider the applicability of SOP 97-2 (and any other potentially applicable
accounting guidance) to each new product and/or customer arrangement.</font></p>

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</div>
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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">4.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Additionally,
explain in detail, how you determined whether or not the subsequent evaluation
of the Company&#146;s products, which resulted in the change from SOP 97-2 to SAB
104, should be considered a correction of an error pursuant to SFAS 154.</font></i></b></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .75in;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Response</font></u></b><b><font size="2" style="font-size:10.0pt;font-weight:bold;">:</font></b></p>

<p style="margin:0in 0in .0001pt .75in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
Company notes the Staff&#146;s comment and respectfully refers the Staff to our
response to comment #3 above.&#160; The
Company, upon determining that the software utilized is not
more-than-incidental to the Company&#146;s flat panel products and therefore not
subject to revenue recognition under SOP 97-2, considered whether revenue
recognized up to that time was appropriate and concluded, for the reasons
discussed above, that it was.&#160; The
Company concluded that under SAB 104, any revenue recognized would be the same
as under SOP 97-2 for the activity that occurred.&#160; As a result, the Company concluded that
revenue recognized had not been misstated, and that no errors occurred.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">5.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Please
refer to prior comment 8.&#160; Tell us how
you considered disclosing that your customer contracts include provisions &#147;requiring
the payment of all revenue earned and costs incurred through the date of
contract termination&#148; to make it clear that there is no risk with respect to
refundable fees associated with contract termination rights.</font></i></b></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .75in;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Response</font></u></b><b><font size="2" style="font-size:10.0pt;font-weight:bold;">:</font></b></p>

<p style="margin:0in 0in .0001pt .75in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
Company notes the Staff&#146;s comment and respectfully submits that its customer
contracts do not provide the customer the right to any sort of refundable fee
associated with their contract termination rights.&#160; Previously, the Company had not considered
the prospect of refundable fees associated with contract rights to be a
sufficient risk such that additional disclosure was required.&#160; However, to provide further clarity, in
future filings the Company will provide additional disclosure to make it clear
there is no risk with respect to refundable fees associated with contract
rights because the customer has the obligation to pay for all revenue earned
and costs incurred through the date of termination.&#160; Had this enhanced disclosure been provided in
the Company&#146;s Form&nbsp;10-K for the fiscal year ended September&nbsp;30, 2008,
it would have read as follows:</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Sales
to government contractors and agencies accounted for approximately 23%, 36% and
51% of total sales during fiscal years 2008, 2007 and 2006, respectively.&#160; While under these contracts the government
agency or general contractor typically retains the right to terminate the contract
at any time at its convenience, to date these contracts generally have included
provisions requiring the payment to the Company of all revenue earned and costs
incurred by the Company through the date of contract termination, and do not
entitle the customer to receive a refund of any previously paid fees.</font></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">6.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Please
refer to prior comment 9 and tell us in further detail the factors management
considered to determine that the Eclipse inventory would not be used for other
products in Q1&#146;09.&#160; Additionally, we note
that the Company stopped recognizing revenue in <u>August</u>&nbsp;2008 &#147;after
you became aware of Eclipse&#146;s deteriorating financial condition.&#148;&#160; Please tell us what information the Company
considered to determine that</font></i></b></p>

<p style="margin:0in 0in .0001pt .5in;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">&nbsp;</font></i></b></p>

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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;"><b><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;font-weight:bold;">August&nbsp;2008 was the appropriate month to cease
revenue recognition for Eclipse and tell us exactly when this information
became known to you.&#160; In this regard,
considering you ceased recognizing revenue in August, it appears that
management may have known about Eclipse&#146;s problems prior to the meeting
referred to in your response. &#160;Also, tell
us the amount of accounts receivable due from Eclipse at June&nbsp;30, 2008 and
tell us whether any of these receivables were outstanding for more than the
Company&#146;s normal payment term (45 days).</font></i></b></p>

<p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .75in;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Response</font></u></b><b><font size="2" style="font-size:10.0pt;font-weight:bold;">:</font></b></p>

<p style="margin:0in 0in .0001pt .75in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Company notes the Staff&#146;s
comment regarding inventory reserves related to Eclipse. In order to establish
the inventory reserve related to the Eclipse inventory, the Company&#146;s
Purchasing and Accounting groups held several meetings during the last two
weeks of September, 2008 and the first week of October, 2008.&#160; At these meetings, the members of these
groups collectively analyzed the &#147;bills of material&#148; associated with the
Eclipse product and determined which components and subassemblies were unique
to the Eclipse product, <i>and whether such products
could be used, or could be modified for use without significant additional
cost, in other of the Company&#146;s products</i>.&#160; The group utilized a forecast reporting
function within the Company&#146;s IT system to generate an excess and obsolete
inventory report as of September&nbsp;30, 2008 that contained inventory on hand
detail by part number for all products sold by the Company (including Eclipse
product) with a 24 month demand forecast horizon.&#160; Based upon this analysis, the Company&#146;s
Accounting group then developed and calculated the excess and obsolete
inventory reserve as previously discussed in our response to comment # 9 in our
letter dated March&nbsp;27, 2009.</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Whether a product or part
originally intended for a flat panel display to be sold to Eclipse can ultimately
be used in a product for another customer is a matter of subjective judgment by
management which is subject to change as new information regarding customer
demands and other factors become available. As a result, the Company continued
to re-evaluate its conclusions on the proper level of inventory reserve each
quarter, and did so for the three months ended December&nbsp;31, 2008.&#160; For the first quarter of fiscal year 2009
(ending on December&nbsp;31, 2008), the Company determined that an additional
$336,000 of reserve was necessary for inventory determined to be obsolete based
upon additional review and analysis.&#160; Additionally,
approximately $221,000 of reserve was established as of September&nbsp;30, 2008
for the noncancellable purchase commitment of inventory in accordance with ARB
43, Chapter 4, Statement 10. When this inventory was received subsequent to September&nbsp;30,
2008, the Company reclassified the accrued liability from accrued expenses to a
contra-inventory account and, therefore, there was no impact to the income
statement.</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The Company notes the Staff&#146;s
comment regarding revenue recognition related to Eclipse. &#160;From the date of the execution of the Eclipse
contract through August&nbsp;2008, based upon invoice payment history,
discussions with Eclipse management and other suppliers regarding the credit
status of Eclipse, the Company believed that the collectability of outstanding
accounts receivable was reasonably assured. &#160;Additionally, as evidenced in the table set
forth at the end of this response, as of June&nbsp;30, 2008, less than 1% of
the $1.9 million of outstanding billings were greater than 30 days past
due.&nbsp; Until August, 2008, the Company believed that collectability of
revenue recognized under the arrangement was reasonably assured based on the
Company&#146;s past collection experience as well as its ongoing business
relationship with Eclipse.&#160; The Company
considered a variety of information in making the determination during August,
2008 to stop recognizing revenue from Eclipse due to the fact that Eclipse was
experiencing financial difficulties.&#160;
Several of the key factors that caused the Company to come to that
determination during August, 2008 are as follows:</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

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<p align="center" style="line-height:normal;margin:0in 0in .0001pt;text-align:center;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="line-height:normal;margin:0in 0in .0001pt .75in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" face="Times New Roman" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">More frequent reductions to the planned
production levels of Eclipse aircraft during July&nbsp;and August;</font></p>

<p style="line-height:normal;margin:0in 0in .0001pt .75in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" face="Times New Roman" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">Participation by Company management on a
supplier conference call on August&nbsp;8, 2008 during which the new Eclipse
Chairman/CEO, Roel Piper outlined a new financing arrangement with HSBC and in
the opinion of the Company&#146;s management neglected to be forthright in answering
supplier questions regarding production rates and past due balances;</font></p>

<p style="line-height:normal;margin:0in 0in .0001pt .75in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" face="Times New Roman" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">Lack of follow through by Eclipse on
payment commitments during July/August&nbsp;2008 (last payment via check/US
mail received on July&nbsp;18, 2008, wire transfer received on August&nbsp;31,
2008);</font></p>

<p style="line-height:normal;margin:0in 0in .0001pt .75in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" face="Times New Roman" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">Continued growth in past due balances;
and</font></p>

<p style="line-height:normal;margin:0in 0in .0001pt .75in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" face="Times New Roman" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">A letter received from the Eclipse CEO to
Eclipse suppliers dated August&nbsp;18, 2008.</font></p>

<p style="line-height:normal;margin:0in 0in .0001pt .75in;text-autospace:none;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In particular, after
receiving the letter from the Eclipse CEO on August&nbsp;18, 2008 and
consulting with the Company&#146;s board of directors, management of the Company
determined to stop recognizing revenue from Eclipse.&#160; After that date only an insignificant amount
of revenue (approximately $54,000) was recognized based on amounts that were
actually paid by Eclipse.&#160; Concurrently
with that determination, on August&nbsp;20, 2008 the Company issued a press
release and Form&nbsp;8-K to revise its financial targets for the fourth
quarter and fiscal year ended September&nbsp;30, 2008, and held a conference
call to discuss the matter further with investors on August&nbsp;21, 2008.</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">For purposes of clarity, all
of the information described above upon which the Company determined to stop
recognizing revenue from Eclipse was known to the Company prior to the meeting
referred to in our response to comment # 9 in our letter dated March&nbsp;27,
2009.&#160; This meeting was referenced in our
prior letter for the purpose of illustrating the steps the Company took before
recognizing an allowance as of September&nbsp;30, 2008 against both the
outstanding receivable balance as well as Eclipse-related inventory.&#160; The decision to stop recognizing revenue from
Eclipse was made in August&nbsp;2008 based on the factors described above.</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The balance of Eclipse
accounts receivable at June&nbsp;30, 2008 was as follows:</font></p>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<div align="center">

<table border="0" cellspacing="0" cellpadding="0" width="50%" style="border-collapse:collapse;width:50.0%;">
 <tr>
  <td width="65%" valign="top" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:65.5%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Total</font></p>
  </td>
  <td width="3%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:3.92%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:2.22%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="27%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:27.36%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1,946,468</font></p>
  </td>
  <td width="1%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:1.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="65%" valign="top" style="padding:0in 0in 0in 0in;width:65.5%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Current</font></p>
  </td>
  <td width="3%" valign="bottom" style="padding:0in 0in 0in 0in;width:3.92%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="29%" colspan="2" valign="bottom" style="padding:0in 0in 0in 0in;width:29.58%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1,889,860</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0in 0in 0in 0in;width:1.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="65%" valign="top" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:65.5%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&gt;30 days past due</font></p>
  </td>
  <td width="3%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:3.92%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="29%" colspan="2" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:29.58%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">28,304</font></p>
  </td>
  <td width="1%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:1.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="65%" valign="top" style="padding:0in 0in 0in 0in;width:65.5%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&gt;60 days past due</font></p>
  </td>
  <td width="3%" valign="bottom" style="padding:0in 0in 0in 0in;width:3.92%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="29%" colspan="2" valign="bottom" style="padding:0in 0in 0in 0in;width:29.58%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">0</font></p>
  </td>
  <td width="1%" valign="bottom" style="padding:0in 0in 0in 0in;width:1.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="65%" valign="top" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:65.5%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&gt;90 days past due</font></p>
  </td>
  <td width="3%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:3.92%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="29%" colspan="2" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:29.58%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">28,304</font></p>
  </td>
  <td width="1%" valign="bottom" bgcolor="#CCEEFF" style="background:#CCEEFF;padding:0in 0in 0in 0in;width:1.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
</table>

</div>

<p style="margin:0in 0in .0001pt;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">If
you have any questions or comments regarding the foregoing, please feel free to
contact the undersigned at 215.994.2621.&#160;
Thank you for your cooperation and attention to this matter.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt 3.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Sincerely,</font></p>

<p style="margin:0in 0in .0001pt 3.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt 3.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt 3.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Stephen
M. Leitzell,&nbsp;Esq.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="5%" valign="top" style="padding:0in .7pt 0in .7pt;width:5.12%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">cc:</font></p>
  </td>
  <td width="94%" valign="top" style="padding:0in .7pt 0in .7pt;width:94.88%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Geoffrey
  S. M. Hedrick</font></p>
  </td>
 </tr>
 <tr>
  <td width="5%" valign="top" style="padding:0in .7pt 0in .7pt;width:5.12%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="94%" valign="top" style="padding:0in .7pt 0in .7pt;width:94.88%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">John
  C. Long</font></p>
  </td>
 </tr>
 <tr>
  <td width="5%" valign="top" style="padding:0in .7pt 0in .7pt;width:5.12%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
  <td width="94%" valign="top" style="padding:0in .7pt 0in .7pt;width:94.88%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Henry
  N. Nassau,&nbsp;Esq.</font></p>
  </td>
 </tr>
</table>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>

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