10/28/2002

Strength of TASA Product Evident In Massachusetts Federal Application; Update

TASA - Another Major Relationship.

A recently-conducted Internet search turned up indications that TASA may be close to announcing another major contract. On October 11th, the Company announced a "$2 million contract to develop custom language arts and math assessment tests for the state of Michigan during fiscal 2003- 2004." Now it appears that it may have another major relationship to announce in the near future.

On October 2nd, the Massachusetts Department of Education announced that "Massachusetts' schools will receive nearly $100 million from the federal government over the next six years to implement the Reading First program, aimed at ensuring that all students can read at or above grade level by the end of third grade." Although neither TASA nor any of its assessment products were mentioned in this release, a search of the State's Application for this program showed that the Company's Degrees of Reading Power (DRP) product is a key element in the assessment portion of this program.

Specifically, Degrees of Reading Power will be used in this program to "monitor progress in comprehension in grades 2 and 3." Based on our reading of this Application, it appears that, in order to "monitor progress," DRP will be administered at least twice a year to each student in the second and third grades, starting in the fall of 2003.

This news is important to understanding the Company's strengths because it shows that its key products are widely accepted as "state of the art." In fact, it is clear that while this relationship will have a much smaller impact on the Company's revenues than will the Michigan contract, the real importance of this relationship is summed up in the following paragraph from the Application:

"As preparation for this application, the Office of Reading undertook an analysis of the assessment tools currently in use statewide. In addition to reviewing instruments that had been successfully used for Reading Excellence grants, Reading staff also examined which new instruments, if any, would be incorporated into the MADOE's reading assessment battery."

The Company itself has not made any announcement about this relationship, as they have not yet been formally notified of it by the State.

During our discussion with management we also asked about the status of the Elley divestiture. Reportedly progress is being made in obtaining all of the regulatory approvals needed in order to complete this transaction, but it appears to be a time-consuming process involving both state and federal regulatory bodies.

Clearly, the Massachusetts Department of Education conducted a careful review of the currently available assessment products before selecting DRP. Their selection confirms our solid opinion of TASA, and we are maintaining our current BUY recommendation on this stock.

J.M.Dutton & Associates, LLC. John M. Dutton, President and Supervisory Analyst, 1129 Manning Drive, Suite 310, El Dorado Hills, CA 95762 Phone (916) 941-4985, Fax (978) 418-6422 Email: [email protected] Web site: www.JMDutton.com

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' Copyright, 2002, by J.M. Dutton & Associates, LLC.