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To: Sondo who wrote (2535)	8/2/1997 6:07:00 PM
From: Craig Richards	of 4571

In looking over the latest earnings release, I noticed that the line item "Investment in product development, net" had increased by about 450,000 for the quarter. Since Ardes2K has already been developed and is being sold, what are their new product development costs for? This item should have decreased by about 90,000 for the quarter due to depreciation, so they capatalized around 550K of development costs last quarter. Does anyone have any insight into what development efforts were capatalized for the quarter?

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