Quarterly report pursuant to Section 13 or 15(d)

Product Warranty

Product Warranty

3 Months Ended

Mar. 31, 2011

3.	Product Warranty:

Prior to the sale of the DRIE assets in the prior fiscal year, the Company provided warranties on all system sales based on the estimated cost of product warranties at the time revenue was recognized. The warranty obligation was affected by product failure rates, material usage rates, and the efficiency by which the product failure was corrected. Warranty activity for the three months ended June 30, 2011 and 2010 is as follows:

	Warranty Activity for the Three Months Ended June 30,
	2011		2010
Balance at the beginning of the period	$	-	$	374
Additional warranty accruals for warranties issued during the period
Warranty expense during the period		-		(99	)
Balance at the end of the period	$	-	$	275

Certain of the Company's sales contracts included provisions under which customers would be indemnified by the Company in the event of, among other things, a third-party claim against the customer for intellectual property rights infringement related to the Company's products. There are no limitations on the maximum potential future payments under these guarantees. The Company has accrued no amounts in relation to these provisions as no such claims have been made, and the Company believes it has valid, enforceable rights to the intellectual property embedded in its products.

As part of the consideration paid in the sale of the DRIE assets in the prior fiscal year, all existing customer contracts, including all installation and warranty obligations of existing customers, were assumed by the buyer of those assets.