ALMC Alimco Financial Corporation (CE)

 

 

United States Securities and Exchange Commission

Washington, D.C. 20549

 

Form 10-Q

(Mark One)

þ		Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2008,

or

o		Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from                      to                      .

Commission file number: 0-22594

Alliance Semiconductor Corporation

(Exact name of Registrant as Specified in Its Charter)

Delaware		77-0057842
(State or Other Jurisdiction of Incorporation		(I.R.S. Employer Identification Number)
or Organization)

4633 Old Ironsides Drive
Santa Clara, California 95054-1836
(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code is (408) 855-4900

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o		Accelerated filer o		Non-accelerated filer o		Smaller reporting company þ
				(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

As of July 31, 2008, there were 33,047,882 shares of Registrant’s Common Stock outstanding.

 

 

Alliance Semiconductor Corporation
Form 10-Q
for the Quarter Ended June 30, 2008

INDEX

		Page
Part I Financial Information
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets (unaudited) as of June 30, 2008 and March 31, 2008			3
Condensed Consolidated Statements of Operations (unaudited) for the three months ended June 30, 2008 and 2007			4
Condensed Consolidated Statements of Cash Flows (unaudited) for the three months ended June 30, 2008 and 2007			5
Notes to Condensed Consolidated Financial Statements (unaudited)			6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			9
Item 3. Quantitative and Qualitative Disclosure About Market Risk			10
Item 4. Controls and Procedures			11
Part II Other Information
Item 1. Legal Proceedings			11
Item 1A. Risk Factors			11
Item 6. Exhibits			12
Signature			13
EXHIBIT 31.1
EXHIBIT 31.2
EXHIBIT 32

Part I — Financial Information

Item 1. Financial Statements

Alliance Semiconductor Corporation

Condensed Consolidated Balance Sheets

(in thousands)
(unaudited)

		June 30, 2008				March 31, 2008
ASSETS
Current assets:
Cash and cash equivalents		$	11,935			$	11,764
Short-term investments			59,425				61,167
Receivable from sale of securities			—				401
Federal and State Tax Receivable			—				8,236
Other current assets			134				1,895
Deferred tax assets			—				3,739
Total current assets			71,494				87,202
Other assets			68				68
Total assets		$	71,562			$	87,270
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable			34			$	17
Accrued liabilities			78				134
Income tax payable			—				190
Total current liabilities			112				341
Deferred tax liabilities			—				3,739
Total liabilities		$	112			$	4,080
Stockholders’ equity:
Common stock (41,222 shares issued and 33,048 shares outstanding at June 30, 2008 and March 31, 2008)			412				412
Additional paid-in capital			194,547				194,546
Treasury stock (8,174 shares at cost June 30, 2008 and March 31, 2008)			(68,658	)			(68,658	)
Accumulated deficit			(54,851	)			(42,586	)
Accumulated other comprehensive loss			—				(524	)
Total stockholders’ equity			71,450				83,190
Total liabilities and stockholders’ equity		$	71,562			$	87,270

The accompanying notes are an integral part of these condensed consolidated financial statements.

Alliance Semiconductor Corporation

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)
(unaudited)

		Three months ended
		June 30,
		2008				2007
General and administrative expense		$	(565	)			(1,378	)
Loss from operations			(565	)			(1,378	)
Other Income/(Expense)
Loss on sale of marketable securities			(982	)		$	—
Interest and dividends			560				2,664
Total other income			(422	)			2,664
Income/(Loss) before income tax			(987	)			1,286
Benefit/(provision) for income tax			285				(698	)
Income/(Loss) from continuing operations			(702	)			588
Income from discontinued operations, net of tax			—				2,890
Net income/(loss)		$	(702	)		$	3,478
Net income/(loss) per share — Basic:
Continuing operations		$	(0.02	)		$	0.02
Discontinued operations		$	—			$	0.09
Net income/(loss)		$	(0.02	)		$	0.11
Net income/(loss) per share — Diluted:
Continuing operations		$	(0.02	)		$	0.02
Discontinued operations		$	—			$	0.09
Net income/(loss)		$	(0.02	)		$	0.11
Weighted average number of common shares:
Basic			33,048				32,611
Diluted			33,048				32,784

The accompanying notes are an integral part of these condensed consolidated financial statements.

ALLIANCE SEMICONDUCTOR CORPORATION

Condensed Consolidated Statements of Cash Flows

(in thousands)(unaudited)

		Three months ended
		June 30,
		2008				2007
Cash flows from operating activities:
Net Income/(Loss)		$	(702	)		$	3,478
Adjustments to reconcile net income/(loss) to net cash used in operating activities:
Depreciation and amortization			—				4
Stock based compensation			—				3
Equity in loss of investees			—				(14	)
(Gain)/Loss on investments			982				(140	)
Gain on sale of business units			—				(1,630	)
Other			—				3
Gain on sale of patents			—				(1,250	)
Provision for income tax			(285	)			698
Changes in assets and liabilities:
Accounts receivable			—				(13	)
Receivable from sale of securities			401				1,733
Assets held for sale			—				335
Other assets			1,764				(59	)
Federal and State Tax Receivable			8,236				—
Accounts payable			17				172
Accrued liabilities and other long-term obligations			(56	)			(13	)
Liabilities related to assets held for sale			—				(382	)
Income tax payable			(192	)			—
Net cash provided by (used in) operating activities			10,165				2,925
Cash flows from investing activities:
Proceeds from sale of business units			—				1,630
Proceeds from sale of short-term money market instruments			1,569				26,193
Proceeds from sale of Alliance Ventures and other investments			—				439
Proceeds from sale of patents			—				1,250
Net cash provided by investing activities			1,569				29,512
Cash flows from financing activities:
Net proceeds from exercise of stock options			—				263
Special dividends			(11,563	)			—
Net cash used in financing activities			(11,563	)			263
Net increase/(decrease) in cash and cash equivalents			171				32,700
Cash and cash equivalents at beginning of the period			11,764				58,236
Cash and cash equivalents at end of the period		$	11,935			$	90,936
Supplemental disclosure of cash flow information:
Cash paid (refunded) for taxes, net		$	(8,031	)			—
Cash paid for interest		$	—			$	—

The accompanying notes are an integral part of these condensed consolidated financial statements.

ALLIANCE SEMICONDUCTOR CORPORATION

Notes to Condensed Consolidated Financial Statements

(unaudited)

Note 1. Basis of Presentation

The accompanying unaudited consolidated financial statements of Alliance Semiconductor Corporation and its subsidiaries (the “Company”, “we”, “us”, “ours” or “Alliance”) have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures, normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America, have been condensed or omitted in accordance with such rules and regulations. In the opinion of management, the unaudited interim consolidated financial statements reflect all adjustments, consisting only of normal recurring items, which in the opinion of management are necessary to present fairly our consolidated financial position and our consolidated results of operations and cash flows.

The year-end condensed consolidated balance sheet data was derived from audited financial statements. These financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2008 filed with the Securities and Exchange Commission on June 30, 2008.

The results of operations for the three months ended June 30, 2008 are not necessarily indicative of the results that may be expected for the fiscal year ending March 31, 2009 or any future period, and we make no representations related thereto.

(a) Reclassifications

Comparative amounts from the quarter ended June 30, 2007 have been reclassified to conform to the current year presentation. For the year ended March 31, 2007 the Company had significant discontinued operations related to the disposal of the Semiconductor Manufacturing Operations and Alliance Ventures and Solar Venture Partners. The following table illustrates the significant reclassifications, net of tax:

		Fiscal Quarter Ended June 30, 2007:
		Fiscal				Current
		2008				Year
		Presentation				Presentation
Discontinued Operations:
Memory Products:
Loss on operations		$	—				—
Loss on sale			50				—
Total Memory			50				—
Non-Memory Products:
Loss on operations			(92	)			—
Gain on sale			1,616				—
Total Non-Memory			1,524				—
Venture Investments:
Gain on sale			66				—
Gain on sale of Patents			1,250				—
Total Discontinued Operations		$	2,890			$	2,890

(b) Recently Issued Accounting Standards

Our management reviewed recently issued accounting standards and determined that there were no material standards applicable to Alliance that had not been previously disclosed in our filings.

Note 2. Short-term Investments

Short-term investments are accounted for in accordance with Statement of Financial Accounting Standards No. 115, “Accounting for Certain Investments in Debt and Equity Securities” (“SFAS 115”). Management determines the appropriate categorization of investment securities at the time of purchase and re-evaluates such designation as of each balance sheet date.

Management has the ability and intent, if necessary, to liquidate non-restricted investments in order to meet our liquidity needs within the normal operating cycle. During the three months ending June 30, 2008 we sold our remaining equity securities. At March 31, 2008, equity securities with no restrictions on sale were designated as available-for-sale in accordance with SFAS 115 and reported at fair market value with the related unrealized gains and losses, net of taxes, included in stockholders’ equity. Realized gains and losses and declines in value of securities judged to be other than temporary, were included in other income, net. The fair value of the Company’s investments in equity securities was based on quoted market prices. Realized gains and losses are computed using the specific identification method. Short-term marketable securities are carried at cost.

Short-term investments include the following at June 30, 2008 and March 31, 2008 (in thousands):

		June 30, 2008								March 31, 2008
Investment		Shares				Market Value				Shares				Market Value
Tower Semiconductor Debentures (1)						$	—							$	38
Tower Semiconductor Ltd. Shares			—				—				1,639				1,704
Short-term Marketable securities (2)							59,425								59,425
Total						$	59,425							$	61,167

Note 3. Comprehensive Income

The following are the components of comprehensive income (in thousands):

		Three months ended
		June 30, 2008				June 30, 2007
Net income/(loss)		$	(702	)		$	3,478
Unrealized gain/(loss) on marketable securities			524				(1,034	)
Comprehensive income/(loss)		$	(178	)		$	2,444

Comprehensive income consists of the net income/(loss) plus the decrease/(increase) in unrealized gains and losses on available-for-sale investments, net of tax. As of June 30, 2008 we had sold all our equity securities, recognizing all of our unrealized gains and losses.

Note 4. Net Income/(Loss) Per Share

Basic income per share is computed by dividing net income available to common stockholders (numerator) by the weighted average number of common shares outstanding (denominator) during the period. Diluted income per share gives effect to all potentially dilutive common shares outstanding during the period including stock options, using the treasury stock method. In computing diluted income per share, the average stock price for the period is used in determining the number of shares assumed to be purchased from the proceeds obtained upon exercise of stock options. At June 30, 2008 and 2007 there were 8,809 and 29,979 options outstanding to purchase common stock that were excluded from diluted net income per share computations because their effect would have been anti-dilutive. The weighted average exercise prices of these options were $2.02 and $9.98 for 2008 and 2007, respectively.

At June 30, the numerators and denominators used in the Basic and Diluted EPS computations consisted of the following (in thousands, except per share amounts):

		Three months ended
		June 30, 2008								June 30, 2007
Net income/(loss) available to common stockholders		$	(702	)						$	3,478
Weighted average common shares outstanding
Basic			33,048								32,611
Diluted			33,048								32,784
Net income/(loss) per share: Basic		$	(0.02	)						$	0.11
Net income/(loss) per share: Diluted		$	(0.02	)						$	0.11

Note 5. Commitments and Contingencies

We apply the disclosure provisions of FASB Interpretation No.45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others,” to our agreements that contain guarantee or indemnification clauses. These disclosure provisions expand those required by SFAS 5, “Accounting for Contingencies,” by requiring that guarantors disclose certain types of guarantees, even if the likelihood of requiring the guarantor’s performance is remote. At June 30, 2008 we had no material commitments or contingencies.

Note 6. Income Tax

In the first three months of fiscal 2009 we did not recognize any federal or state tax benefits from our losses in Continuing Operations and Discontinued Operations as we were not certain that we would have income in the future to use such benefits. Our reported benefit resulted from clearing the remaining balance in the tax component of other comprehensive income.

In the first three months of fiscal 2009 our deferred tax assets and liabilities were realized through the sale of our holdings in Tower stock, clearing out their balances.

During the three months ending June 30, 2008, as previously reported, we received a tax refund of approximately $6.6 million plus $1.3 million interest in accordance with the settlement of our dispute with the Internal Revenue Service for our taxable years 1990-2002. In accordance with that settlement, we amended our State tax filings and received approximately $1.6 million in state tax refunds together with $400,000 of interest.

We retain substantial net operating losses, however, we cannot provide assurance that we will be able to utilize our net operating losses in the future and have fully reserved against them.

Note 7. Legal Matters

(a) SRAM Class Actions

In October and November 2006, we and other companies in the semiconductor industry were named as defendants in a number of purported antitrust class action lawsuits filed in federal district courts in California and other states, and in Canada. The Company was served in some but not all of these actions. The lawsuits purport to state claims on behalf of direct and indirect purchasers of SRAM products based on an alleged conspiracy between manufacturers of SRAM devices to fix or control the price of SRAM during the period January 1, 1998 through December 31, 2005. The Company denies all allegations of wrongful activity.

Based on an agreement to preserve evidence and toll the statute of limitations until January 10, 2009, the plaintiffs in the United States litigation voluntarily dismissed Alliance from the litigation without prejudice. Based on a similar agreement to toll the statute of limitations until January 10, 2009, the litigation pending in Ontario and British Columbia, Canada has been discontinued without prejudice. We anticipate that the litigation pending in Quebec, Canada will also be discontinued in accordance with the tolling agreement. At this time we do not believe these lawsuits will have a material adverse effect on the company.

Note 8. Subsequent Events

On June 12, 2008 the Board declared a special cash dividend of $0.25 per share which was paid July 1, 2008 to shareholders of record as of June 24, 2008.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Certain information contained in or incorporated by reference in the following Management’s Discussion and Analysis of Financial Condition and Results of Operations and elsewhere in this Report contains forward-looking statements that involve risks and uncertainties. These statements relate to liquidity and markets. These forward-looking statements are based on management’s estimates, projections and assumptions as of the date hereof and include the assumptions that underlie such statements. In some cases, forward-looking statements can be identified by terminology such as “may,” “will,” “should,” “expect,” “anticipate,” “intend,” “plan,” “believe,” “estimate,” “potential,” or “continue,” the negative of these terms or other comparable terminology. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including, but not limited to, our ability to have cash resources for continued operations, fluctuations in the value and liquidity of securities we own, and those described in the section entitled “Risk Factors”. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect our present expectations and analysis and are inherently susceptible to uncertainty and changes in circumstances. These forward-looking statements speak only as of the date of this Report. We assume no obligation to update these forward-looking statements to reflect actual results or changes in factors or assumptions affecting such forward-looking statements. The following information should be read in conjunction with the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of our Annual Report on Form 10-K for the fiscal year ended March 31, 2008 filed with the Securities and Exchange Commission on June 30, 2008.

OVERVIEW

During the three months ended June 30, 2008 we completed the sale of our remaining holdings of Tower Semiconductor Corporation (“Tower”) ordinary shares (“Tower shares”) and debentures. The loss reported in this Quarterly Report resulted primarily from this sale, which was at prices less than the carrying value of those shares at March 31, 2008. We are now primarily a holding company whose chief asset is an investment in asset-backed securities with primary holdings consisting of short-term investment-grade commercial paper. These securities are currently not liquid. Our focus continues to be on Treasury management and closing down our remaining foreign subsidiaries.

DIVIDENDS

During the quarter ended June 30, 2008, we distributed to shareholders an aggregate of $0.35 per share in special dividends. On April 8, 2008 we paid a special cash dividend of $0.25 per share to shareholders of record as of March 31, 2008, and we paid a special cash dividend of $0.10 per share on May 20, 2008 to shareholders of record as of May 12, 2008. In addition, on July 1, 2008 we paid a special cash dividend of $0.25 per share to shareholders of record as of June 24, 2008 (see Note 8 in Part 1 of this Quarterly Report on Form 10-Q). At this time our Board of Directors has no other definitive plans regarding the payment of an additional special cash dividend to stockholders.

INVESTMENTS

Tower Semiconductor Ltd.

During the three months ended June 30, 2008 we sold 1,638,848 Tower shares for $1.5 million and 36,385 Tower shares resulting from the conversion of Tower Debentures for $31,000, and recorded a loss of $1.0 million, and $9,000, respectively.

Other Income

In the first three months of fiscal 2009 and 2008, other income reflected interest income of $560,000 compared to $2.4 million in the comparable 2008 period primarily due to lower invested amounts, investment loss of $1.0 million in 2009 compared to zero in 2008 as

a result of the sales of Tower shares described above, foreign exchange gain of zero in 2009 versus $400,000 in 2008, and a $1.3 million gain from the non-recurring sale of certain patents in 2008.

LIQUIDITY AND CAPITAL RESOURCES

At June 30, 2008, we had approximately $11.9 million in cash, and cash equivalents, an increase of $200,000 from March 31, 2008 and $59.4 million in short-term investments, a decrease of $1.7 million from March 31, 2008. We had approximately $71.4 million in working capital at June 30, 2008, a decrease of approximately $15.5 million from $86.9 million at March 31, 2008, primarily resulting from payment of cash dividends totaling $11.6 million to our shareholders during the three months ended June 30, 2008. Our working capital at both June 30 and March 31, 2008 includes $59.4 million in auction-rate securities that are currently not liquid (see “Investment Risk” in Item 3).

In accordance with our investment policy, we seek to invest with issuers who have high-quality credit. The primary objective of our investment activities is to maximize return while preserving principal and maintaining a desired level of liquidity to meet working capital needs. We seek to preserve principal and minimize exposure to interest-rate fluctuations by limiting default risk, market risk and reinvestment risk. All investment securities we own are investment grade. We do not have any investments in securities that are collateralized by assets that include mortgages or subprime debt. Our investments in auction-rate securities are AA-rated as of June 30, 2008, and collateralized by commercial paper, 80% of which must be rated A-1+/Prime-1 or better, and no more than 20% rated A-1/Prime-1.

Until August 2007, the market for auction-rate securities was highly liquid. During that month, auctions for the securities we hold began to fail as the amount of securities submitted for sale in those auctions exceeded the aggregate amount of the bids. Ambac Assurance has the right to compel the liquidation of the portfolio of assets held by the sub-trusts and compel the sub-trusts to purchase Ambac Assurance preferred stock with a liquidation preference equal to the portfolio’s liquidated value (the “Put Right”). All of our auction-rate securities portfolio at June 30, 2008 has been subject to failed auctions. For each unsuccessful auction, the interest rate moves to a maximum rate defined for each security. To date, we have collected all interest timely on our auction-rate securities and expect to continue to do so in the future. The principal associated with failed auctions will not be accessible until successful auctions occur, a buyer is found outside of the auction process, or the issuers establish a different form of financing to replace these securities.

On August 13, 2008, JPMorgan reached a settlement with the New York State Attorney General regarding their sales of auction-rate securities which was announced on August 14, 2008. Until we get further information, we cannot currently determine what impact, if any, this settlement might have on our holdings of auction-rate securities.

Notwithstanding the recent illiquidity of the asset-backed securities we hold, we expect that, given our remaining cash reserves, our cash will be sufficient to meet our projected working capital and other cash requirements for the next 12 months.

OFF-BALANCE SHEET ARRANGEMENTS

There are no material off-balance sheet commitments at June 30, 2008.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

We do not hold any derivative financial instruments for trading purposes at June 30, 2008.

INVESTMENT RISK

At June 30, 2008, we held $59.4 million (par value) in investments in auction-rate securities and concluded no temporary impairment exists on these securities. Given current conditions in the auction-rate securities market as described above in the “Liquidity and Capital Resources” section in Item 2. of Part II of this Quarterly Report on Form 10-Q, we may incur temporary unrealized losses or other-than-temporary realized losses in the future if market conditions persist and we are unable to recover the cost of our investments in auction-rate securities. Ambac Assurance has a put right to compel conversion of our investment in auction-rate securities to Ambac preferred stock, but has never indicated publicly that they have any intention of doing so. A hypothetical 100-basis-point loss from the par value of these investments would result in a $600,000 impairment

ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of disclosure controls and procedures.

The Company conducted an evaluation, with the participation of its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, as of June 30, 2008. Based on this evaluation, our management, including the Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures were effective as of June 30, 2008. The Company’s disclosure controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported on a timely basis.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Part II — Other Information

ITEM 1. LEGAL PROCEEDINGS.

SRAM Class Actions

In October and November 2006, we and other companies in the semiconductor industry were named as defendants in a number of purported antitrust class action lawsuits filed in federal district courts in California and other states, and in Canada. The Company was served in some but not all of these actions. The lawsuits purport to state claims on behalf of direct and indirect purchasers of SRAM products based on an alleged conspiracy between manufacturers of SRAM devices to fix or control the price of SRAM during the period January 1, 1998 through December 31, 2005. The Company denies all allegations of wrongful activity.

Based on an agreement to preserve evidence and toll the statute of limitations until January 10, 2009, the plaintiffs in the United States litigation voluntarily dismissed Alliance from the litigation without prejudice. Based on a similar agreement to toll the statute of limitations until January 10, 2009, the litigation pending in Ontario and British Columbia, Canada has been discontinued without prejudice. We anticipate that the litigation pending in Quebec, Canada will also be discontinued in accordance with the tolling agreement. At this time we do not believe these lawsuits will have a material adverse effect on the company.

We may be party to various legal proceedings and claims, either asserted or unasserted, which arise in the ordinary course of business. While the outcome of these claims cannot be predicted with certainty, we do not believe that the outcome of any of these or any of the above mentioned legal matters would have a material adverse effect on our consolidated financial position, results of operations or cash flows.

ITEM 1A. RISK FACTORS

Our results of operations and financial condition are subject to a number of factors, risks and uncertainties in addition to the factors discussed elsewhere in this Quarterly Report on Form 10-Q, including those previously disclosed under Part I. Item 1A “Risk Factors” of our annual report on Form 10-K for the fiscal year ended March 31, 2008. The disclosures in our annual report on Form 10-K and our subsequent reports and filings are not necessarily a definitive list of all factors that may affect our future results of operations and financial condition. There have been no material changes to the risk factors as disclosed in our Annual Report on Form 10-K for the fiscal year ended March 31, 2008 except as set forth below.

We hold securities which are currently not liquid.

At June 30, 2008 we held asset-backed auction-rate securities issued by sub-trusts of two master trusts, Anchorage Finance Master Trust and Dutch Harbor Finance Master Trust (the “sub-trusts”) that are currently not liquid. See “Liquidity and Capital Resources” in Item 2. of Part I and “Investment Risk” under Item 3 of Part I. for more information.

ITEM 6.

EXHIBITS

Exhibit No.		Description
31.1		Certificate of Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-14(a) dated February 14, 2008.
31.2		Certificate of Interim Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-14(a) dated February 14, 2008.
32		Certificate of Chief Executive Officer and Interim Chief Financial Officer pursuant to section 18 U.S.C. Section 1350 dated February 14, 2008.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Exhibit Index

Exhibit No.		Description
31.1		Certificate of Chief Executive Officer pursuant to Securities Exchange Act Rule 13a-14(a) dated August 21, 2008.
31.2		Certificate of Interim Chief Financial Officer pursuant to Securities Exchange Act Rule 13a-14(a) dated August 21, 2008.
32		Certificate of Chief Executive Officer and Interim Chief Financial Officer pursuant to section 18 U.S.C. section 1350 dated August 21, 2008.

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