<SEC-DOCUMENT>0001144204-16-088448.txt : 20160415
<SEC-HEADER>0001144204-16-088448.hdr.sgml : 20160415
<ACCEPTANCE-DATETIME>20160316155042
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001144204-16-088448
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20160316

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			R F INDUSTRIES LTD
		CENTRAL INDEX KEY:			0000740664
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTRONIC CONNECTORS [3678]
		IRS NUMBER:				880168936
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			1031

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		7610 MIRAMAR RD
		STREET 2:		BLDG 6000
		CITY:			SAN DIEGO
		STATE:			CA
		ZIP:			92126-2313
		BUSINESS PHONE:		8585496340

	MAIL ADDRESS:	
		STREET 1:		7620 MIRAMAR RD #4100
		STREET 2:		7620 MIRAMAR RD #4100
		CITY:			SAN DIEGO
		STATE:			CA
		ZIP:			92126-4202

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	CELLTRONICS INC
		DATE OF NAME CHANGE:	19910204
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<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>RF Industries, Ltd.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">7610 Miramar Road, Building 6000</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">San Diego, CA 92126</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">March 16, 2016</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">VIA EDGAR</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Securities and Exchange Commission</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Division of Corporate Finance</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">100 F Street, N.E.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Washington, D.C. 20549</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<TD STYLE="width: 0in"></TD><TD STYLE="width: 1in; text-align: left">Attn:</TD><TD STYLE="text-align: justify">Martin James&mdash;Senior Assistant Chief Accountant</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in; text-align: left">Re:</TD><TD STYLE="text-align: justify">RF Industries, Ltd.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in">Form 10-K
for the Fiscal Year Ended October 31, 2015</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in">Filed January
28, 2016</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in"><U>File No.
000-13301</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Dear Mr. James:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">This letter will respond to the Staff&rsquo;s
letter of comments, dated March 15, 2016, to RF Industries, Ltd. regarding additional comments to this company&rsquo;s above-referenced
annual report. The numbers of the responses and the headings set forth below correspond to the numbered comments and headings in
the March 15, 2016 letter.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">Form 10-K for the fiscal year ended October 31, 2015</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Item 8. Financial Statements </U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Note 2. Business Acquisitions, page F-11 </U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">1.&#9;Further to your response to comment 3, please quantify
the impact on your financial statements of consolidating Comnet as of November 1, 2014 versus January 20, 2015.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Company Response </U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">If we had accounted for the purchase of
Comnet effective as of January 20, 2015 instead of November 1, 2014 in our Annual Report on Form 10-K for the fiscal year ended
October 31, 2015, our net sales would have been lower by $1,910,167 (or 6%), our net income would have been reduced by $71,109
(or 7%), and our earnings per share (basic and diluted) would have been lower by $0.008 (or 7%). The following chart summarizes
the impact on our October 31, 2015 fiscal year-end income statement of consolidating Comnet as of November 1, 2014 versus January
20, 2015:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 21%; border: Black 1pt solid; padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-align: center; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="width: 25%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-decoration: underline; text-indent: 0in; text-align: center"><U>As reported in Form 10-K</U></TD>
    <TD STYLE="width: 28%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-decoration: underline; text-indent: 0in; text-align: center"><U>As Adjusted (excludes Comnet from Nov. 1, 2014 to January 19, 2015)</U></TD>
    <TD STYLE="width: 26%; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-decoration: underline; text-indent: 0in; text-align: center"><U>Decrease ($ and %)</U></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-indent: 0in">Net Sales</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-align: center; text-indent: 0in">$32,804,392</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-align: center; text-indent: 0in">$30,894,225</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-align: center; text-indent: 0in">$1,910,167 &nbsp;&nbsp;&nbsp;(6%)</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-indent: 0in">Gross Profit</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-align: center; text-indent: 0in">$11,266,962</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-align: center; text-indent: 0in">$10,807,236</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-align: center; text-indent: 0in">$459,726&nbsp;&nbsp;&nbsp;&nbsp;(4%)</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-indent: 0in">Operating Expenses</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-align: center; text-indent: 0in">$10,048,784</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-align: center; text-indent: 0in">$9,683,926</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-align: center; text-indent: 0in">$364,858&nbsp;&nbsp;&nbsp;&nbsp;(4%)</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-indent: 0in">Operating Income</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-align: center; text-indent: 0in">$1,218,178</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-align: center; text-indent: 0in">$1,123,310</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-align: center; text-indent: 0in">$94,868&nbsp;&nbsp;&nbsp;&nbsp;(8%)</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-indent: 0in">Net Income</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-align: center; text-indent: 0in">$993,836</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-align: center; text-indent: 0in">$922,727</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-align: center; text-indent: 0in">$71,109 &nbsp;&nbsp;&nbsp;(7%)</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid; padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-indent: 0in">Earnings Per Share (Diluted)</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-align: center; text-indent: 0in">$0.11</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-align: center; text-indent: 0in">$0.10</TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-right: 5.4pt; padding-bottom: 12pt; padding-left: 5.4pt; text-align: center; text-indent: 0in">($0.008) &nbsp;&nbsp;&nbsp;(7%)</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">2.&#9;Further, your response appears to indicate that you obtained
control of Comnet on November 5, 2014 and therefore used that as the acquisition date under ASC 805-10-25-7. However, we note that
you valued the stock issued to acquire Comnet based upon the volume weighted average price of your common stock during the five
trading days before January 20, 2015. Please explain how your valuation date is consistent with your assertion that you acquired
Comnet on November 5, 2014. Refer to ASC 805-30-30-1 and 30-7 which requires you to value the shares issued using their acquisition
date fair value.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Company Response </U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The November 5, 2014 counteroffer (the &ldquo;Counteroffer&rdquo;)
stated that the purchase price would consist of $1,060,000 worth of our common stock, and that the number of shares to be issued
would be determined by dividing the weighted average price of our common stock during the five trading days before the &ldquo;Closing
Date.&rdquo; The Counteroffer stated that the &ldquo;Closing Date&rdquo; was November 1, 2014, or as soon thereafter as possible.
In other words, our intention was to issue to Mr. Portera $1,060,000 worth of shares based on the weighted average stock prices
for the five days preceding November 1 2014.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In January 2015 Mr. Portera contacted our
new Chief Executive Officer and complained that he had been fully cooperating with the sale of Comnet to RF Industries since November
2014, but that he had not been paid the cash portion of the purchase price and that the delays were costing him money because our
stock price was decreasing. As a goodwill gesture to Mr. Portera, our CEO agreed to give Mr. Portera his $1,060,000 worth of shares
based on the five-day average price before the day the cash portion of the purchase price is paid (i.e. January 20, 2015). For
accounting purposes, the purchase price did not change (we paid Mr. Portera $1,060,000 in stock as part of the purchase price,
as contemplated in the Counteroffer), only the actual number of shares that we issued changed slightly. By using January 20, 2015
as the pricing date for the shares rather than November 1, 2014, we issued 17,401 more shares to Mr. Portera than he would have
been entitled to receive had we insisted on using the November 1, 2014 date set forth in the Counteroffer (i.e., Mr. Portera actually
received 252,381 shares based on the January 20, 2015 valuation, rather than 234,980 shares that we were obligated to issue).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">We respectfully contend that, since the
value of the stock consideration was the same on November 1, 2014 as on January 20, 2015 (i.e. $1,060,000), the issuance of some
additional shares should not affect the financial accounting of the acquisition. Furthermore, had we valued the actual number of
shares issued (252,381) by the five-day weighted average price based on the November 1, 2014 date, the additional consideration
for the additional 17,401 shares would have been worth $78,478. Considering that RF Industries had total assets of over $29 million
as of October 31, 2014, we respectfully contend that this amount of additional consideration does not represent a material change
to the company&rsquo;s balance sheet.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">3.&#9;As part of your response, please explain to us the significant
terms of your agreement with Mr. Portera regarding the control of Comnet during the period between November 5, 2014 and January
20, 2015. Explain why you needed to enter into the January 20, 2015 agreement if you already had control of Comnet and what terms
of the purchase, if any, were not agreed to in the November 5, 2014 agreement. Tell us whether it was possible for you or Mr. Portera
to not sign the January 20, 2015 agreement and the consequences thereof. Tell us whether either party could terminate the November
5, 2014 agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>Company Response </U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">As described in our March 10, 2016 letter,
we believe that <I>de facto</I> control over Comnet shifted to RF Industries in early November 2014. The November 5, 2014 Counteroffer
set forth, in detail, the purchase price to be paid to Mr. Portera for the shares of Comnet, the terms of his two-year employment
agreement, and other business terms. The Counteroffer was intended to document the financial and business terms upon which we were
purchasing Comnet from Mr. Portera, but was not intended to be the final document that evidenced the transaction. Although not
stated in the Counteroffer, it was understood that the parties would further document the agreements set forth in the Counteroffer
in a formal instrument that contained customary provisions (such as representations and warranties, indemnification provisions,
etc.) and that Mr. Portera&rsquo;s employment arrangement would be documented in a formal employment agreement (an agreement that
confirmed the salary he was receiving since November 1, 2014, his title as President, and his obligation to report to Darren Clark,
the President of our Cables Unlimited, Inc. subsidiary). In addition, since the Counteroffer stated that $300,000 of the purchase
price was to be placed into an escrow account, that escrow account had to be set up and the escrow terms had to be documented.
In other words, while the parties agreed to the sale of Comnet in the Counteroffer, the closing of the sale was still dependent
upon the completion of the customary documentation and could be terminated if those documents were not prepared and signed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">While we agreed to purchase Comnet from
Mr. Portera based on the Counteroffer, and while Mr. Portera agreed to sell Comnet to us based on the Counteroffer, as explained
above, the parties understood that the sale would be documented in formal, customary documents. While the Counteroffer constituted
a binding agreement regarding the financial/economic terms, the remaining details of the purchase still had to be negotiated and
documented. Accordingly, Mr. Portera could have refused to sign the stock purchase agreement (or any of the related agreements)
if those agreements did not reflect the Counteroffer or contain customary terms and provisions. If Mr. Portera had refused to sign
the purchase agreement because that agreement did not reflect the Counteroffer or because that agreement contained unreasonable
provisions, he could have terminated the sale. However, if Mr. Portera had backed out of the Counteroffer for no valid reason,
we believe we would have been entitled to sue him for breach of contract.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">* * * * *</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">As requested by the Staff, we hereby acknowledge
that:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.5in">&nbsp;</P>

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<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>This company is responsible for the adequacy and accuracy of the disclosure in the filing;</TD></TR></TABLE>

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<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>Staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action
with respect to the filing; and</TD></TR></TABLE>

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<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>This company may not assert staff comments as a defense in any proceeding initiated by the Commission
or any person under the federal securities laws of the United States.</TD></TR></TABLE>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Please direct questions regarding this letter
or the Form 10-K to the undersigned at (858) 549-6340.</P>

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<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="width: 50%">&nbsp;</TD>
    <TD STYLE="width: 50%">Very truly yours,</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD>/s/ MARK TURFLER</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD>Mark Turfler</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD>Chief Financial Officer</TD></TR>
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