SUBSEQUENT EVENTS

Acorn Investment in DSIT

Effective July 1, 2013, the Company entered into a new Stock Purchase Agreement with DSIT pursuant to which the Company converted a prior loan into additional ordinary (common) shares of DSIT. The Company converted $2,800 in advances and loans into DSIT's Participating Preferred Stock (the “DSIT Preferred Stock”). At the closing, Acorn purchased an additional $800 of DSIT Preferred Stock and committed to purchasing an additional $1,400 of DSIT Preferred Stock as follows:


•	$300 upon the earlier of October 1, 2013 or the completion of a certain milestone in a Transfer of Engineering Data Agreement (“TED”) between DSIT and USSI which is currently being negotiated.


•	$500 on October 1, 2013.


•	$300 upon the earlier of January 1, 2014 or the completion of a certain milestone in the TED agreement.


•	$300 upon the earlier of April 1, 2014 or the completion of a certain milestone in the TED agreement.

The DSIT Preferred Stock provides that upon any future liquidation of DSIT, to the extent funds are available for distribution to DSIT's stockholders after the satisfaction of any DSIT liabilities at that time, DSIT would first repay the Company for the purchase price of our DSIT Preferred Stock. Thereafter, the Company would receive a further payment for such shares ratably with all other DSIT ordinary stock holders as though the Company's shares of DSIT Preferred Stock were the same number of DSIT ordinary shares.

The Company currently owns approximately 88.3% of DSIT on an as converted basis. If all the above investments are made, the Company would own approximately 89.1% of DSIT on an as converted basis. If all the options to purchase all shares of DSIT ordinary stock available under the DSIT Option Plan are granted and exercised and all above investments are made, the Company would own approximately 78.8% of DSIT on a fully diluted as converted basis.