<SEC-DOCUMENT>0000814676-12-000038.txt : 20130222
<SEC-HEADER>0000814676-12-000038.hdr.sgml : 20130222
<ACCEPTANCE-DATETIME>20121214155122
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0000814676-12-000038
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		1
FILED AS OF DATE:		20121214

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CPS TECHNOLOGIES CORP/DE/
		CENTRAL INDEX KEY:			0000814676
		STANDARD INDUSTRIAL CLASSIFICATION:	POTTERY & RELATED PRODUCTS [3260]
		IRS NUMBER:				042832509
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		111 SOUTH WORCESTER STREET
		CITY:			NORTON
		STATE:			MA
		ZIP:			02766
		BUSINESS PHONE:		508-222-0614

	MAIL ADDRESS:	
		STREET 1:		111 SOUTH WORCESTER STREET
		CITY:			NORTON
		STATE:			MA
		ZIP:			02766

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	CERAMICS PROCESS SYSTEMS CORP/DE/
		DATE OF NAME CHANGE:	19920703
</SEC-HEADER>
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<P>&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;December
14, 2012</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">Mr. Terrance O&rsquo;Brien</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">Branch Chief</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">U.S. Securities and Exchange Commission</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">Division of Corporate Finance</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">100 F Street, N.E.</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">Washington, D.C.&nbsp; 20549</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0"><B>Re: CPS Technologies Corporation </B></P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0"><B>Forms 10-K </B></P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0"><B>Filed March 30, 2012 </B></P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0"><B>File No. 0-16088 </B></P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">Dear Mr. O&rsquo;Brien</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">This is in response to your letter to me dated November 21, 2012
in which you offered comments on our recent filings.&nbsp; Your comments and our responses are included below:</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">Form 10-K filed March 30, 2012</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">-----------------------------------------</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-indent: -0.25in"><FONT STYLE="font-size: 11.5pt">1.</FONT><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><FONT STYLE="font-size: 11.5pt">In future filings, please ensure that you provide disclosures for all material fourth quarter
events and transactions either in the footnote disclosure or within MD&amp;A. In this regard, we note the net losses recorded in
the fourth quarter of both fiscal 2011 and 2010, and gross margin was also significantly below the margins recognized for the other
three quarters of each year. Please refer to Item 302(a)(3) of Regulation S-K and ASC 270-10-50-2 for guidance. </FONT></P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We acknowledge the Staff's comment and will modify future filings beginning</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
with our Form 10-K for the year ended December 29, 2012.&nbsp; In these we will</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
disclose changes in our fourth quarters which vary from trends and material</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
fluctuations from those reported in the previous three quarters.</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">Management&rsquo;s Discussion and Analysis</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">Application of Critical Accounting Policies</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">------------------------------------------------------</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

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<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">Revenue Recognition</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-indent: -0.25in"><FONT STYLE="font-size: 11.5pt">2.</FONT><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><FONT STYLE="font-size: 11.5pt">You state &ldquo;Shipping terms are customarily EXW (Ex-works), shipping point&rdquo;. Please
explain what you mean by EXW, e.g., whether it is similar to FOB, and how your shipping terms comply with ASC 605-45-45-19 through
45-21. </FONT></P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The International Chamber of Commerce defines &quot;Incoterm&quot; which are rules</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
in international commercial trade.&nbsp; One of these rules is &quot;ex-works&quot; which</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
means that the seller makes his goods available at his location and the</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
buyer is responsible for all transportation costs and bearing the risk of</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
bringing the goods to their final destination.&nbsp; In this regard, &quot;Ex-works,</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
shipping point&quot;, is consistent with terms embodied in FOB shipping point.</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
These are the Company's customary terms.&nbsp; In transactions where the</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Company pays third party shipping cost, these cost are added to the</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
selling price and recorded as revenues of the Company and the costs are</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
not deducted from revenues.&nbsp;&nbsp; This complies with ASC 605-45-45-19 through&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
45-21 as the Company meets the indicators of gross revenue reporting as</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
listed in ASC-45-45-3 through 45-14.</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">3. You state that the cooperative agreement entered into with
the US Army Research Laboratory in 2008 is a four-year agreement which is 95% funded by the US Department of Defense and 5% funded
by CPS. Please tell us and revise future filings as applicable to disclose the date that this agreement is scheduled to end, and
whether the Company expects to invoice the full $6.6 million that has been approved. We note the subsequent Forms 10-Q mention
only a continued reduction in revenues earned therefrom.</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="color: #262626; font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Amendment/Modification #P00008 extended the term of performance of the original</P>

<P STYLE="color: #262626; font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Agreement, Cooperative Agreement W911NF-08-2-0017, &nbsp;from July 14, 2012 to July 14,&nbsp;</P>

<P STYLE="color: #262626; font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2013.&nbsp; As of September 29, 2012, the Company had invoiced $6.1 million since inception of&nbsp;&nbsp;&nbsp;</P>

<P STYLE="color: #262626; font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
the Agreement and expects to invoice the full amount approved i.e. $6.6 million, before</P>

<P STYLE="color: #262626; font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
July 14, 2013.&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">Income Taxes</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">4. Given your recent adverse operating results, please tell us
and expand your disclosure herein in future filings to provide the positive and negative factors you considered in assessing whether
a tax valuation allowance is warranted. Refer to ASC 740-10-30-17 and 30-18. Explain why most of the deferred tax asset is classified
as long-term instead of as current, and disclose the amount of taxable income you need to generate in order to realize your deferred
tax assets and the time period you have in which to recover them.</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company considers many factors in assessing whether or not a valuation</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
allowance for its Deferred Tax asset is warranted.&nbsp; On the positive side, the Company&nbsp;&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
considered such factors as its:&nbsp; history of taxable earnings (seven consecutive years from&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
2003-10), global customer base consisting of large companies with significant resources,&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
current products and their expected life, technological advantages, potential for price</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
increases, trend of improved manufacturing efficiencies and the magnitude of the Deferred</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Tax Asset compared with the Company&rsquo;s expectation of future earnings over the remaining</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
life of the asset.&nbsp; On the negative side, the Company considered such factors as: the current</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
global recession, the Company&rsquo;s ability to absorb a period of operating losses and negative</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
cash flow and the potential for technological breakthroughs and substitution of the</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Company&rsquo;s products by lower cost solutions.</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&rsquo;s decision to classify its Deferred Tax Asset as non-current occurred in the</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
second quarter as sales slowed, adverse economic conditions persisted and it became clear&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;that earning a profit for the year and realizing some deferred tax benefits over the short-&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
term would be unlikely.</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
At December 31, 2011 the Company&rsquo;s Deferred Tax Asset included net operating loss</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
carryforwards and other temporary differences which will&nbsp; require taxable income of</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
approximately $3.8 million to fully utilize, assuming an effective corporate tax rate of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
39%. The Company will have to earn an additional $2.4 million of taxable income to</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
fully utilize the Deferred Tax Asset generated during the first nine months of 2012.&nbsp; The</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Company has concluded that it is more likely than not that its Deferred Tax Asset will be</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;fully
realized.&nbsp; Current projections of future taxable income, including the reversal of</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
temporary differences,&nbsp; reflect the Company&rsquo;s belief that it has attractive growth</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
opportunities and a favorable cost structure.&nbsp; These projections support the conclusion that</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
the Company will generate taxable income sufficient to utilize the losses before they expire.&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
An important consideration in this analysis is that fact that none of the NOL carryforwards</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
expire before 2020 and the current year&rsquo;s loss will not expire until 2032.&nbsp;&nbsp; The Company</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
will reconsider the need for a valuation reserve for its Deferred Tax Asset at year-end.</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">Results of Operations</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0 0 0 0.5in; text-indent: -0.25in"><FONT STYLE="font-size: 11.5pt">5.</FONT><FONT STYLE="font: 7pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><FONT STYLE="font-size: 11.5pt">In future filings, please quantify the extent to which increases/decreases in volume, prices,
the introduction of new products, and inflation impacts of raw materials contributed to the changes in net sales and gross profit
margin. We especially note the gross losses incurred in the first and third quarters of fiscal 2012. In addition, please quantify
the impact of other factors you identify that contributed to fluctuations in line items included in income from continuing operations.
Please refer to Items 303(A)(3)(i) and 303(A)(3)(iii) of Regulation S-X and Sections 501.12.b.3. and 501.12.b.4. of the Financial
Reporting Codification for guidance. </FONT></P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We acknowledge the Staff's comment and will modify future filings beginning</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
with our Form 10-K for the year ended December 29, 2012 to disclose major</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
factors causing changes in Sales and Gross Margin.&nbsp; In addition, we will add</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
more detail to our description of factors causing fluctuations in line items</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
included in Income from Continuing Operations.</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">Liquidity and Capital Resources</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6.&nbsp; We note inventories
increased 106% during 2011, and had a material negative impact on&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; your operating cash
flows for the year. Please revise future filings to quantify inventory turnover or days sales in inventory for the periods presented
and to explain material variances. We also note the obsolescence charges recorded in each of the two quarters ending September
29, 2012. Please revise to disclose the nature and circumstances of this obsolescence and whether you expect to incur further such
charges, given your disclosure in the Inventory Critical Accounting Policy that there is &ldquo;minimal obsolescence risk as the
products typically have a life which extends over a number of years and do not deteriorate over time.&rdquo;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We acknowledge the Staff's comments and will modify future filings beginning</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
with our Form 10-K for the year ended December 29, 2012 to quantify inventory</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
turnover and explain significant variances.</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Beginning with our Form 10-K for the year ended December 29, 2012, we will</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
add commentary to explain the nature and circumstances of our obsolescence</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;charges.</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
You correctly cite that in our accounting policies we state that there is</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&quot;minimal obsolescence risk as the products typically have a life which</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
extends over a number of years and do not deteriorate over time.&quot;&nbsp; This is</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
true but, earlier in the policy, we indicate that &quot;....the company may</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
deliberately produce product for which the customer's expected shipment</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
dates are in the future to more efficiently schedule production resources.&quot;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In our 10-K filing for the period ended December 29, 2012, we will revise</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
this section in an effort to make the risk of obsolescence clearer to the</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
reader.&nbsp; This is our proposal:</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;The
Company manufactures to specifications and the products typically</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;have
a life which extends over several years and does not deteriorate</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;over
time.&nbsp; Therefore, the risk of obsolescence due to the passage</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of
time, per se, is minimal.&nbsp; However, in order to more efficiently</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;schedule
production or to meet agreements with customers to have</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;inventory
in the pipeline, the Company occasionally manufactures</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;products
in advance of purchase orders.&nbsp; In these instances, the Company</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;bears
the risk that it will be left with product manufactured to specification&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;for
which there are no customer purchase orders. The Company scrutinizes</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;its
inventory and, in the absence of pending customer orders or strong</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
evidence of future sales, establishes an obsolescence reserve when there</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;has
been no activity on a particular part for a twelve&nbsp; month period.&rdquo;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

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<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

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<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">Form 10-Q for the period ended September 29, 2012</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">Management&rsquo;s Discussion and Analysis</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">7. In Note (10) you disclose that in November 2012, you agreed
to a modification of your Line of Credit and Lease Line which, among other things, waived a covenant violation at the end of the
third quarter and modified future covenants. Please tell us and revise future filings to disclose which covenant(s) were violated
at September 29, 2012. In future filings, beginning with your December 29, 2012 Form 10-K, please revise to disclose the required
minimum/maximum ratios or amounts for each of your financial covenants and the actual ratios or amounts achieved for each financial
covenant as of the most recent balance sheet date. This disclosure will allow an investor to easily understand your current status
in meeting your financial covenants. Refer to Sections 501.13.b.2 and</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">501.13.c. of the Financial Reporting Codification for guidance.</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We acknowledge the Staff&rsquo;s comments and will modify future filings, beginning with our</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Form 10-K for the year ended December 29, 2012, to identify which covenant was</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
violated at September 29, 2012 (&ldquo;Earnings Coverage&rdquo;);&nbsp; in addition, we will disclose the</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
covenant requirements and the actual ratios achieved as of the most recent balance sheet</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
date.&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 11.5pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 12pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>



<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0">Date:&nbsp;&nbsp;&nbsp; December 14, 2012</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0">/s/ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Ralph M. Norwood</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0">Ralph M. Norwood</P>

<P STYLE="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0">Chief Financial Officer</P>


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