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CORRESP
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filename1.htm

    corresp_1332572.htm

    February
9, 2009

    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
      1O-Q for the quarterly period ended September 30, 2008

                Filed
      on November 07, 2008

                File
      No. 000-51910

      Dear Mr.
Krikorian:

      On behalf of Access Integrated Technologies, Inc. d/b/a
Cinedigm Digital Cinema Corp. (the “Company”), set forth below are the Company’s
responses to your letter of comment dated December 23, 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
Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2008
filed on November 7, 2008 (the “Form 10-Q”).

            Mr.
Stephen Krikorian

            Febrary 9, 2009

            Page Two

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

      Cover Page,
page 1

                1.

                Please
      clarify why you have checked the “accelerated filer” box on the cover page
      of your most recent Form 10-Q.

                RESPONSE:

      As of the
March 31, 2008 fiscal year end, the Company was an accelerated
filer.  As permitted, the Company made a determination at the end of
its second fiscal quarter ending September 30, 2008, that it qualified to exit
accelerated filer status after its fiscal year end on March 31, 2009 unless it
should again qualify as an accelerated filer in the future. However, Rule
12(b)(2) promulgated by the Commission under the Securities Exchange Act of
1934, as amended, requires that the Company continue to check the “accelerated
filer” box for the ongoing fiscal year and will file as a non-accelerated filer
and will no longer check the “accelerated filer” box after its fiscal year end
on March 31, 2009.

      Notes to
the Consolidated Financial Statements

      Note 2.
Summary of Significant Accounting Policies

      Goodwill
and Intangible Assets. page 10

                2.

                We
      note your response to prior comment No.2.  Please further
      clarify why you do not believe the significant drop in your stock price
      and market capitalization represents a triggering
      event.  Discuss the reasons why you believe your stock price and
      market capitalization have declined. Describe your policy for evaluating
      the duration and severity of the decline in your stock
      price.  Explain how the same factors impacting your stock price
      affect your discounted cash flow analysis.  Tell us why these
      factors are not symptoms of adverse changes in your business
      climate.

      RESPONSE:

      In light
of the continued decline in our market capitalization from September 30, 2008 to
December 31, 2008, caused by the depressed economic conditions, negative
investor sentiment, investor concern regarding the amount of indebtedness the
Company has incurred to fund the purchase of our digital cinema equipment, and
possible further dilution of existing equity holders , we believe this
represents a triggering event for an

            Mr.
Stephen Krikorian

            Febrary 9, 2009

            Page Three

      assessment
of goodwill impairment.  We have assessed the fair value of each
reporting unit as of December 31, 2008 and compared the fair value of the
reporting units to their respective carrying values.

      The
factors that have contributed to the decline in our stock price have been
considered in our discounted  cash flow projections.

      While the
Company has not changed its fundamental business strategy, we realize the
current lack of capital and financing sources and the overall depressed market
conditions, have delayed execution of some of our strategic plans, such as the
large scale deployment of additional digital cinema equipment, These market
conditions have also diminished the market multiples of our comparable peer
companies, discussed in more detail in response #3.  As a result of
our goodwill impairment tests as of December 31, 2008, we have recorded goodwill
impairment charges of $6.5 million, or approximately 45% of the total goodwill
that existed on the Company’s consolidated balance sheet as of March 31,
2008.

      The
Company’s management and board of directors will continue to evaluate the
drivers of future stock price declines and how and what those declines represent
to our business strategy and discounted cash flow projections.

                3.

                Please
      clarify the portion of your response to prior comment No. 2 that states in
      preparing your discounted cash flow analysis, you calculated the fair
      value of each reporting unit utilizing an income approach (discounted cash
      flows) and a market approach with 60% and 40% weight applied to each
      method, respectively.  Explain how you identify peer groups for
      each reporting unit.  Describe how you identify reporting units
      and explain why only four reporting units represent 30% of your
      revenues.  Identify the other reporting
      units.  Further, it is unclear why you include market
      capitalization of peer groups in your analysis while you do not consider
      your market capitalization within your analysis of determining the fair
      value of your reporting units.  Explain why you believe the
      market capitalization can not be directly correlated or reconciled to the
      “aggregate” fair value of your reporting
units.

      RESPONSE:

      The
Company derives the fair value of each reporting unit by weighting an income
approach (discounted cash flow) and a market approach.  The discounted
cash flow approach uses annual forecasts that extend five years into the future,
with a terminal value applied, while the market approach considers the revenue
and EBITDA multiples of peer comparable companies, and applies those median
multiples to the reporting units.

            Mr.
Stephen Krikorian

            Febrary 9, 2009

            Page Four

      The
median multiples are adjusted for relative factors including size, profitability
and growth.  The income approach is weighted 60% to 70% and
the market approach is weighted 40% to 30% to derive the fair value of the
reporting unit.  The weightings are evaluated each time a
goodwill impairment assessment is performed and give consideration to the
relative reliability of each approach at that time.

      The
discounted cash flows consider assumptions related to our strategic plans,
market conditions and market valuations.  The market approach
considers individual peer companies who display reasonably similar operating and
economic characteristics of the reporting unit and uses multiples of revenue and
earnings before income taxes, depreciation and amortization
expense.

      The
Company determines its reporting units based on the criteria in FAS 142,
“Accounting for Goodwill and Other Intangible Assets” (“FAS
142”).  Three out of the four reporting units aggregate 100% of our
content and entertainment reportable segment and the fourth reporting unit is a
component of our Media Services reportable segment. These reporting units
contain goodwill and other identifiable intangible assets as a result of
previous business acquisitions. We applied the reporting unit criteria in FAS
142 to the components of the operating segments to determine if reporting units
should be identified one level below the operating segments. We concluded that
our goodwill reporting units identified meet the following criteria in FAS 142:
1) constitutes a business as defined under EITF 98-3, “Determining Whether a
Nonmonetary Transaction Involves Receipt of Productive Assets or of a Business
Abstract”; 2) has discrete financial information available,  and 3)
operating results are reviewed by segment managers.  The aggregated
revenues of these four goodwill reporting units represent approximately 30% of
our consolidated revenues for the period ended December 31,
2008.   The Company’s remaining operations are derived from
“virtual print fees” earned from the Hollywood studios through the Company’s
Christie/AIX unit (60%) and the delivery of movies and other content into
theaters and other venues is through the Company’s Digital Media Services Unit
(7%).

        In our
previous comment, we believed that since our goodwill reporting
units comprised less than one-third of our consolidated revenues, we did
not initially consider the market capitalization of the Company in our goodwill
impairment tests; therefore, we stated that our overall market capitalization
could not be correlated or reconciled to the reporting units.  As a
method of allocating fair value to our reporting units not subject to FAS 142,
we, calculated the Company’s business enterprise value as the  market
capitalization as of December 31, 2008 plus our interest bearing debt
outstanding. Because the Company’s capital structure includes significant debt
financing, we believe the business enterprise

            Mr.
Stephen Krikorian

            Febrary 9, 2009

            Page Five

value more accurately captures the Company’s total value
then market capitalization alone for purposes of allocating fair value. As
discussed in response #2, we have taken an impairment charge under FAS 142 based
on our discounted cash flows and market multiples.   We compared
the implied fair value of our remaining reporting units not subject to FAS 142
to market multiples of peer companies, selected in the  same way as we
did market multiples for our goodwill reporting units, and determined that the
overall business enterprise value of the Company is reasonable

      Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of
Operations, page 28

                4.

                Tell
      us your consideration of providing disclosures in your critical accounting
      policies to fully describe the estimates and assumptions included in your
      assessment and evaluation of goodwill impairment.  In this
      respect, you should consider providing disclosures that serve as
      supplement to your accounting policy for goodwill impairment
      testing.  We have identified several areas that we believe would
      enhance your disclosures, including how you determine the weighting
      applied when using multiple fair value approaches (i.e. the income
      approach and the market approach), any estimates of control premiums that
      are factor into your analysis, the annual goodwill impairment assessment
      date and any discount rates applied when you perform a discounted cash
      flows analysis, as well as how the reporting units are identified, how
      goodwill is allocated to the reporting units and how the estimated fair
      value of each reporting units is determined.  We refer you to
      Item 303(a)(3)(ii) of Regulation S-K and Financial Reporting Release No.
      60 and Section V of SEC Release No. 33-8350.  Please provide us
      with any proposed disclosures you plan on making with respect to your
      critical accounting policy for goodwill impairment
  testing.

      RESPONSE:

      The
Company has made the following disclosure in its Form 10-Q for the period ended
December 31, 2008:

      The
carrying value of goodwill and other intangible assets with indefinite lives are
reviewed for possible impairment in accordance with SFAS No. 142 “Goodwill and
Other Intangible Assets” (“SFAS No. 142”).   SFAS No. 142
addresses the recognition and measurement of goodwill and other intangible
assets subsequent to their acquisition.  The Company tests its
goodwill for impairment annually and in interim periods if certain events occur
indicating that the carrying value of goodwill may be impaired. The Company
reviews possible impairment of finite lived intangible assets in accordance with
SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”.
The

            Mr.
Stephen Krikorian

            Febrary 9, 2009

            Page Six

      Company
records goodwill and intangible assets resulting from past business
combinations.

      The
Company’s process of evaluating goodwill for impairment involves the
determination of fair value of its four goodwill reporting units: AccessIT SW,
The Pavilion Theatre, USM and The Bigger Picture.  Identification of
reporting units is based on the criteria contained in SFAS No.
142.  The Company normally conducts its annual goodwill impairment
analysis during the fourth quarter of each fiscal year, measured as of March 31,
unless triggering events occur which require goodwill to be tested as of an
interim date.  As discussed further below, the Company concluded that
one or more triggering events had occurred during the three months ended
December 31, 2008 and conducted impairment tests as of December 31,
2008.

      Inherent
in the fair value determination for each reporting unit are certain judgments
and estimates relating to future cash flows, including management’s
interpretation of current economic indicators and market conditions, and
assumptions about the Company’s strategic plans with regard to its operations.
To the extent additional information arises, market conditions change or the
Company’s strategies change, it is possible that the conclusion regarding
whether the remaining goodwill is impaired could change and result in future
goodwill impairment charges that will have in a material effect on the Company’s
consolidated financial position or results of operations.

      The
discounted cash flow methodology establishes fair value by estimating the
present value of the projected future cash flows to be generated from the
reporting unit. The discount rate applied to the projected future cash flows to
arrive at the present value is intended to reflect all risks of ownership and
the associated risks of realizing the stream of projected future cash
flows.  The discounted cash flow methodology uses our projections of
financial performance for a five-year period.  The most significant
assumptions used in the discounted cash flow methodology are the discount rate,
the terminal value and expected future revenues and gross margins, which vary
among reporting units. The discount rates utilized as of the December 31, 2008
testing date range from 16.0% - 27.5% based on the estimated market
participant weighted average cost of capital (“WACC”) for each unit.
The market participant based WACC for each unit gives consideration to factors
including, but not limited to, capital structure, historic and projected
financial performance, and size.

      The
market multiple methodology establishes fair value by comparing the reporting
unit to other companies that are similar, from an operational or industry
standpoint and considers the risk characteristics in order to determine the risk
profile relative to the

            Mr.
Stephen Krikorian

            Febrary 9,
2009

            Page Seven

        comparable
companies as a group.  The most significant assumptions are the market
multiplies and the control premium. The Company has elected not
to apply a control premium to the fair value conclusions for the purposes of
impairment testing.

      The
Company then assigns a weighting to the discounted cash flows and market
multiple methodologies to derive the fair value of the reporting
unit.  The income approach is weighted 60% to 70% and the
market approach 40% to 30% to derive the fair value of the reporting
unit.  The weigh