SecProbe.io

CORRESP
1
filename1.htm

    corresp_1317988.htm

    November
21, 2008

    Via
EDGAR and U.S. Mail

    Mr.
Stephen Krikorian

    Assistant
Director

    United
States Securities and Exchange Commission

    100 F
Street, N.E.

    Washington,
D.C.  20549

                    Re:

                    Access
      Integrated Technologies, Inc.

                    Form
      10-K for the fiscal year ended March 31, 2008

                    Filed
      on June 16, 2008

                    Form
      10-Q for the quarterly period ended September 30, 2008

                    Filed
      on August 11, 2008

                    File
      No. 000-51910

    Dear Mr.
Krikorian:

    On behalf of Access Integrated
Technologies, Inc. (“AccessIT” or the “Company”), set forth below are the
Company’s responses to your letter of comment dated November 10, 2008 to Mr. A.
Dale Mayo, President and Chief Executive Officer of the Company.  The
numbered responses of the Company and related captions contained in this letter
correspond to the numbered paragraphs and related captions in the letter of
comment.  The responses provided below relate to the Company’s Annual
Report on Form 10-K for the fiscal year ended March 31, 2008 filed on June 16,
2008 and subsequently amended on June 26, 2008 and September 11, 2008 (the “Form
10-K”), and the Company’s Quarterly Report on Form 10-Q for the quarterly period
ended June 30, 2008 filed on August 11, 2008 (the “Form 10-Q”), as
applicable.

      Mr.
Stephen Krikorian

      November
21, 2008

      Page
Two

    Form 10-K for the fiscal
year ended March 31, 2008

    General

              1.

              We
      note that your counsel, on behalf of the company, provided the
      acknowledgments we requested in your response to our letter dated August
      6, 2008.  Please note that the representations should come
      directly from the company.  In your next response, please
      provide the representations directly from the
  company.

    RESPONSE:

    The
representations are being submitted in a separate letter from the Company, filed
contemporaneously herewith.

    Form 10-Q for the quarterly
period ended September 30, 2008

    Notes to the Consolidated
Financial Statements

    Note 2.  Summary
of Significant Accounting Policies

    Business Combinations and
Intangible Assets, page 9

              2.

              We
      note from your response on prior comment No. 10 that you “periodically
      review the carrying values of goodwill and intangible
      assets.”  Clarify whether you considered the significant drop in
      market capitalization to be a triggering event.  Indicate how
      often you are testing for impairment.  Explain whether you apply
      any weighting when determining fair value using your discounted cash flow
      analysis and market multiple approach.  Tell us how you
      considered the recent operating losses and cash flow deficits in preparing
      your discounted cash flow analysis by reporting unit.  In
      addition, please reconcile or explain the difference between your market
      capitalization and fair value you calculate based on the models
      utilized.

    RESPONSE:

    The
Company has allocated its goodwill to four reporting units  – AccessIT
Software, the Pavilion Theatre, Advertising and Creative Services (“ACS”), and
The Bigger Picture.  These four reporting units comprised 30% of the
Company’s consolidated revenues for the quarter ended September 30,
2008.  The AccessIT software reporting unit is contained within the
company’s Media Services segment, while the other three reporting

      Mr.
Stephen Krikorian

      November
21, 2008

      Page
Three

    units
together comprise the Content and Entertainment segment.  The Company
recognizes that a significant adverse change in the business climate, among
other examples used in Paragraph 28 of SFAS 142, requires goodwill to be tested,
if such event or circumstance would more likely than not reduce the fair value
of a reporting unit below its carrying amount.  The Company has
considered the recent decline in its market capitalization, but it does not
believe that this factor alone reduced the fair value of any one of the four
reporting units described above, below its carrying amount.  The
Company reviews the actual and forecasted results of each reporting unit monthly
and has noted no declines in operating performances of three of its reporting
units, with the exception of ACS, as of September 30, 2008.  The
Company conducted a goodwill impairment test of the ACS reporting unit and
concluded that no impairment charge was necessary because the fair value of the
reporting unit exceeded the carrying amount.

    The
Company tests all four reporting units for goodwill impairment annually, as of
each fiscal year-end and on an interim basis if certain events occur indicating
that an impairment may have occurred, using the “more likely than not” guidance
stated in SFAS 142.  The Company’s market capitalization is based on
company-wide factors and varied marketplace factors.  The market
capitalization currently experienced by the Company as a whole cannot be
directly correlated or reconciled to the fair value of the Company’s four
reporting units.  In preparing the discounted cash flow analysis, the
Company calculates the fair value of each reporting unit utilizing an income
approach (discounted cash flows), based on expected future operating results,
and a market approach, considering the market capitalization and multiples of a
peer group, with a 60% and 40% weight assigned to each method,
respectively.  The Company recognizes the existence of recent
operating losses in certain of reporting units; however, these losses include
certain non-cash charges such as depreciation and amortization.  The
movements in the Company’s market capitalization will continue to be part of our
impairment analysis review.

    Note 5.  Debt and
Credit Facilities, page 12

              3.

              We
      note your response to prior comment No. 11 indicating that the interest
      rate swap arrangement was entered into on April 2, 2008 with the swap
      agreement becoming effective on August 1, 2008.  Please clarify
      how you determined that it was appropriate to record the changes in fair
      value for the interest rate swap during the three months ended June 30,
      2008.  In this regard, it does not appear as though changes in
      fair value should be recorded until the interest rate swap agreement
      became effective on August 1, 2008.  In addition, please describe
      your consideration of providing disclosures as outlined in paragraphs 32
      and 39 of SFAS 157.

      Mr.
Stephen Krikorian

      November
21, 2008

      Page
Four

    RESPONSE:

    On April
2, 2008, the Company entered into an interest rate swap agreement (“Swap”),
effective immediately, with HSBC Bank as the counterparty.  At that
date, the Company recorded the Swap in accordance with SFAS No. 133, concluding
that the Swap is a derivative instrument effective on April 2,
2008.  If the Swap had been settled as of June 30, 2008, the Company
would have received or paid the fair value of the Swap as of that date from the
counterparty. Therefore, the changes in fair value were appropriately recorded
for the period ended June 30, 2008.

    The Swap
was entered into in order to fix the interest rate and guard against the
exposure to increases in the variable interest rate under the Company’s GE
Credit Facility.  The August 1, 2008 date represented the date we
began payments on the GE Credit Facility.  However, as described
above, the Company believes the Swap was effective and enforceable on
April 2, 2008, and was properly recorded in the June 30, 2008 financial
statements.  In its Form 10-Q filed for the period ended September 30,
2008 the Company has properly described the Swap as being effective on April 2,
2008.  The Company apologizes for the miscommunication included
in the previous response letter.

    The
Company considered the disclosure requirements as outlined in paragraphs 32 and
39 of SFAS 157 for the quarter ended September 30, 2008, and has concluded the
following disclosure requirements under paragraph 32, and as it relates to the
disclosures required in paragraphs 33-35 (as referenced in paragraph 39), were
applicable to the Company:

    Paragraph
32:

              a.

              The
      fair value measurements at the reporting
date.

              b.

              The
      level within the fair value hierarchy in which the fair value measurements
      in their entirety fall, segregating fair value measurements using quoted
      prices in active markets for identical assets or liabilities (Level 1),
      significant other observable inputs (Level 2), and significant
      unobservable inputs (Level 3).

              e.

              The
      valuation technique used to measure fair value, and a discussion of
      changes in valuation techniques, if any, during the
  period.

    Paragraph
34:

              a.

              The
      quantitative disclosures required by this Statement shall be presented
      using a tabular format.

      Mr.
Stephen Krikorian

      November
21, 2008

      Page
Five

    Below is
the disclosure that was included in Footnote 2 to the Form 10-Q for the quarter
ended September 30, 2008:

    ACCOUNTING
FOR DERIVATIVES

    In April
2008, the Company executed an interest rate swap agreement (the “Interest Rate
Swap”) (see Note 5) to limit the Company’s exposure to changes in interest
rates.  The Interest Rate Swap is a derivative financial instrument,
which the Company accounts for pursuant to Statement of Financial Accounting
Standards (“SFAS”) No. 133, "Accounting for Derivative Instruments and Hedging
Activities," as amended and interpreted ("SFAS No. 133").  SFAS No.
133 establishes accounting and reporting standards for derivative instruments
and requires that all derivatives be recorded at fair value on the balance
sheet.  Changes in fair value of derivative financial instruments are
either recognized in other comprehensive income (a component of stockholders'
equity) or net income depending on whether the derivative is being used to hedge
changes in cash flows or fair value.  The Company has determined that
changes in value of its Interest Rate Swap should be recorded as a component of
net income or loss (see Note 5).

    Fair
Value of Financial Instruments

    On April
1, 2008, the Company adopted SFAS No. 157, “Fair Value Measurements” (SFAS 157),
for financial assets and liabilities. The statement defines fair value,
establishes a framework for measuring fair value and expands disclosures about
fair value measurements.  The fair value measurement disclosures are
grouped into three levels based on valuation factors:

    ·  Level 1 –
quoted prices in active markets for identical investments

    ·  Level 2 –
other significant observable inputs (including quoted prices for similar
investments, market corroborated inputs, etc.)

    ·  Level 3 –
significant unobservable inputs (including the Company’s own assumptions in
determining the fair value of investments)

    Assets
and liabilities measured at fair value on a recurring basis use the market
approach, where prices and other relevant information is generated by market
transactions involving identical or comparable assets or
liabilities.

    The
following table summarizes the levels of fair value measurements of the
Company’s financial assets:

      Mr.
Stephen Krikorian

      November
21, 2008

      Page
Six

                                      Financial
      Assets at Fair Value

                                      as
      of September 30, 2008

                                      Level
      1

                                      Level
      2

                                      Level
      3

                                      Cash
      and cash equivalents

                                    $
                                    23,147

                                    $
                                    —

                                    $
                                    —

                                      Interest
      rate swap

                                    —

                                    1,565

                                    —

                                      Total

                                    $
                                    23,147

                                    $
                                    1,565

                                    $
                                    —

      * * * * *
* *

      We hope
this addresses all of the Commission’s comments and concerns.  Please
do not hesitate to contact us with any further questions.

                          Sincerely,

                          /s/ Carol W.
Sherman

                          Carol W.
Sherman

      cc: Gary
S. Loffredo

      November
21, 2008

      Via
EDGAR and U.S. Mail

      Mr.
Stephen Krikorian

      Assistant
Director

      United
States Securities and Exchange Commission

      100 F
Street, N.E.

      Washington,
D.C.  20549

                Re:

                Access
      Integrated Technologies, Inc.

                Form
      10-K for the fiscal year ended March 31, 2008

                Filed
      on June 16, 2008

                Form
      10-Q for the quarterly period ended September 30, 2008

                Filed
      on August 11, 2008

                File
      No. 000-51910

      Dear Mr.
Krikorian:

      In connection with a response being
submitted contemporaneously herewith on behalf of Access Integrated
Technologies, Inc. (“AccessIT” or the “Company”) by Kelley Drye & Warren LLP
setting forth the Company’s responses to your letter of comment dated November
10, 2008 to Mr. A. Dale Mayo, President and Chief Executive Officer of the
Company, please find below the representations you have requested pursuant to
comment number 1, which is reproduced below for your convenience.

      Form 10-K for the fiscal
year ended March 31, 2008

      General

                1.

                We
      note that your counsel, on behalf of the company, provided the
      acknowledgments we requested in your response to our letter dated August
      6, 2008.  Please note that the representations should come
      directly from the company.  In your next response, please
      provide the representations directly from the
  company.

      RESPONSE:

      We acknowledge that:

      ·

                The
      Company is responsible for the adequacy and accuracy of the disclosure in
      the filing;

      ·

                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

      ·

                The
      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.

      We hope this addresses all of the
Commission’s comments and concerns.  Please do not hesitate to contact
us with any further questions.

      Sincerely,

      /s/ Brian
D. Pflug

      Brian D.
Pflug

      Senior
Vice President – Accounting & Finance and Principal Financial
Officer