1. The determinationof such allowances calls for us to make estimates of product return rates and expected prices to repair or to substitute matlab productsunder warranty. We will establish warranty reserves in response to our greatest estimates of guaranty fees for each product line combinedwith liability estimates in response to matlab past 12 months’ sales actions. If specific go back charges and/or repair and replacementcosts vary considerably from our estimates, changes to determine additional cost of gross sales may well be required in destiny intervals. In addition, due to the fact that our customers rely upon comfortable authentication and identification of cardholder to prevent unauthorized accessto programs, PC’s, networks, or facilities, engineering malfunction of or design illness in its merchandise or even engineering perceived defectcould result in legal or warranty claims against us for damages resulting from protection breaches. If such claims are adverselydecided against us, matlab capabilities legal responsibility may be significant and have engineering material hostile outcome on our business and operatingresults.