UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                  FORM 10-QSB

(Mark One)

  [X]  Quarterly report under Section 13 or 15(d) of the Securities Exchange
       Act of 1934
                  For the fiscal quarter ended July 31, 2007

  [ ]  Transition report pursuant to Section 13 or 15(d) of the Securities
       Exchange Act of 1934
                  For the transition period from              to
                                                 ------------    -----------

  Commission file number     0-20303
                         ----------------


                             QUESTAR ASSESSMENT, INC.
----------------------------------------------------------------------------
                 (Name of Small Business issuer in its charter)


                Delaware                                 13-2846796
-----------------------------------------      -----------------------------
     (State or Other Jurisdiction of                  (I.R.S. Employer
      Incorporation or Organization)                 Identification No.)

   4 Hardscrabble Heights, P.O. Box 382,
          Brewster, New York                                10509
-----------------------------------------      -----------------------------
 (Address of Principal Executive Offices)                 (Zip Code)

                                  (845) 277-8100
----------------------------------------------------------------------------
                  (Issuer's Telephone Number, including Area Code)

        Securities registered under Section 12(b) of the Exchange Act: None.
                                                                       ----
        Securities registered under Section 12(g) of the Exchange Act:


                                 Title of Class
                                 --------------

                         Common Stock, $.0001 par value
                         ------------------------------

      Check whether the issuer is not required to file reports pursuant
to Section 13 or 15(d) of the Exchange Act. [  ]

      Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past 12 months
(or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past
90 days.
Yes___X___	No ________

      Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act).  Yes ______  No ___X___


                   (APPLICABLE ONLY TO CORPORATE REGISTRANTS)

     State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date:  As of September 5,
2007, 3,084,443 shares of Common Stock, par value $.0001 per share.


     Transitional Small Business Disclosure Format (check one):
Yes _______  No ___X___


<PAGE>

                                 PART I

ITEM 1. FINANCIAL STATEMENTS

	The Company's financial statements for the nine and
three-month periods ended July 31, 2007 are attached to this
Report, commencing at F-1.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
        OPERATIONS

        EXCEPT FOR HISTORICAL INFORMATION, THE MATERIAL
CONTAINED IN THIS MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATIONS IS FORWARD-LOOKING.  FOR PURPOSES OF THE SAFE HARBOR
PROTECTION FOR FORWARD-LOOKING STATEMENTS PROVIDED BY THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995, READERS ARE URGED TO
REVIEW THE LIST OF CERTAIN IMPORTANT FACTORS SET FORTH IN
"CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR"
PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995" CONTAINED IN THE COMPANY'S ANNUAL REPORT ON FORM 10-KSB FOR
THE FISCAL YEAR ENDED OCTOBER 31, 2006 ("FISCAL 2006") WHICH MAY
CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE DESCRIBED.

COMPANY BACKGROUND

      	The Company, effective March 16, 2007, changed its
corporate name from Touchstone Applied Science Associates, Inc,
to Questar Assessment, Inc.  This action was approved on January
24, 2007 by our Board of Directors, and as of February 5, 2007 by
the holders of a majority of our issued and outstanding voting
securities who executed a written consent in lieu of a special
meeting in accordance with the relevant sections of the Delaware
General Corporation Law.

        Questar Assessment, Inc. (the "Company") competes
exclusively in the assessment marketplace.  With the advent of No
Child Left Behind legislation ("NCLB"), the Company's Board of
Directors and management made the strategic decision to focus the
organization on the fast-growing assessment segment of the K-12
education market. The Company competes in both the custom and
proprietary product lines of the assessment marketplace.  Over
the past decade, this market has been moving towards custom
testing as a result of NCLB legislation requiring that student
success be measured against specific standards established by
each individual state.  The Company has recognized this trend and
has aligned its long term and short term strategic initiatives
and resources to take advantage of these changes in the market.
During the fiscal year ended October 31, 2006 ("Fiscal 2006"),
the Company decided to minimize its efforts in growing its
proprietary products business, and to devote significant
resources to expanding its custom testing products. The Company
implemented this strategy by acquiring Questar Educational
Systems, Inc. ("QES") in May 2006.  QES provides test delivery,
scoring, and score analysis capabilities for state testing
programs.

        As a result of the Company's acquisition of QES and change
in strategic initiatives, and because of the industry shift from
proprietary to custom work, the Company believes that the
descriptions of its revenues as either custom or proprietary are
no longer representative of the Company's business. Consequently,
the Company is combining categories in the reporting of its
assessment revenues. In order to report clearly the growth of our
business for prior versus current periods, we will be reporting
revenues with Questar Educational Systems revenues ("QES
Revenues") and without QES Revenues since that acquisition had a
significant impact on the overall revenues of the Company during
the current reporting period.

        Revenues were $15,097,954 for the nine-month period ended
July 31, 2006 ("prior period") and $38,873,491 for the nine-month
period ended July 31, 2007 ("current period").  For the fiscal
quarters ended July 31, 2006 ("prior quarter") and July 31, 2007
("current quarter"), revenues were $8,542,237 and $13,082,315
respectively.  Revenues without QES revenues for the current
period and current quarter were $11,534,478 and $4,482,188,
respectively.

        The Company's corporate headquarters are located at 4
Hardscrabble Heights, P.O. Box 382, Brewster, New York 10509.
The Company's telephone number is (845) 277-8100 and its
facsimile number is (845) 277-3548.  The Company maintains a
website at www.questarai.com.  Information contained on the
Company's website is not, and should not be deemed to be,
incorporated into this Report.  As used in this Report, the terms
"Company" and "Questar Assessment" refer to Questar Assessment,
Inc., and its subsidiaries, unless the context otherwise
indicates.

SUMMARY OF RECENT ACQUISITION

        In May 2006, the Company acquired all of the outstanding
shares of QES. QES provides test delivery, scoring and score
analysis capabilities to state testing programs and also provides
test material development. Total consideration paid by the
Company was $20,000,000 consisting of $15,000,000 in cash, the
issuance of 222,222 shares of Series A-2 Preferred Stock of the
Company valued at $1,000,000, and a $4,000,000 promissory note.
Goodwill totaling $11,229,541 was recorded as a result of the
acquisition. The Company also has valued and recorded $4,860,000
in other intangible assets identified during the acquisition,
including $4,500,000 in customer contracts. The Company has also
agreed to pay additional consideration in 2010 if QES achieves
certain revenue goals during the three years ending October 31,
2007, 2008, and 2009. The maximum contingent earn out payment is
$12,500,000, of which up to $10,000,000 shall be paid half in
cash and half in Series A-2 Preferred Stock and $2,500,000 shall
be paid, if earned, at the election of the Company, in cash or
additional shares of Series A-2 Preferred Stock, or any
combination thereof, valued at fair market value at the time of
issuance. The Company financed the acquisition through senior
debt and a private equity investment.  The Company entered into a
loan agreement (the "Loan Agreement") with TD Banknorth, N.A.
("Banknorth"), pursuant to which the Company borrowed a term loan
in an aggregate principal amount of $9,600,000, obtained a
revolving line of credit in the amount of $4,000,000 (See Note 3
of the accompanying condensed consolidated financial statements)
and a standby letter of credit in the original stated amount of
$194,750 against availability under the revolving line of credit.
The Loan Agreement contains ongoing financial covenants which are
measured on an annual basis beginning in October 2007.  The term
loan was interest-only for the first six months of the loan
(through November 2006), and thereafter is payable in fifty-four
equal monthly installments of principal and interest on a five-
year amortization schedule.  The Company has entered into an
interest rate swap agreement with Banknorth pursuant to which
Banknorth is paying the Company 250 basis points over the one
month USD LIBOR BBA rate and the Company is paying Banknorth a
fixed rate of 7.95% on a value of $9,600,000 declining
concurrently with the term loan.  The interest rate swap
agreement expires after thirty months on December 1, 2008. The
term loan balloons on May 30, 2011.  Advances under the revolving
line of credit are based on a borrowing base of eligible accounts
receivable and inventory of the Company and Questar.  The
revolving line of credit is available until April 30, 2008.  Both
the term loan and the revolving loan are secured by the assets of
the Company and by the assets of QES.  The proceeds from the
loans were used to pay a portion of the purchase price for the
shares of QES and closing costs for the transaction, and for
working capital.

        The Company also entered into a securities purchase
agreement (the "Series A Convertible Preferred Stock Purchase
Agreement") with Camden Partners Strategic Fund III, L.P. and
Camden Partners Strategic Fund III-A, L.P. (collectively, the
"Investors"), pursuant to which the Company issued and sold to
the Investors 1,666,667 shares of its Series A-1 Convertible
Preferred Stock ("Series A-1 Preferred Stock") valued at
$7,500,000, based on a price of $4.50 per share.  The proceeds
from the sale of stock were used to pay a portion of the purchase
price for the shares of Questar and closing costs for the
transaction, with the balance being retained by the Company for
working capital.  Two members of the Company's Board of
Directors, Donald W. Hughes and David L. Warnock are also
principals of each of the Investors.

RESULTS OF OPERATIONS

        For reporting purposes, effective June 2006, the Company
combined the separately reported revenue categories of custom and
proprietary, which were previously separate, since such
distinction is no longer representative of the Company's
business.  Additionally, due the acquisition of QES, the Company
will be discussing revenues with QES and without QES. QES
revenues have been included in the Company's consolidated
operations since its acquisition in May 2006.  The following
table sets forth such revenues and the percentage change for the
nine and three-month periods ended July 31, 2007 and 2006:

<TABLE>
<CAPTION>
                        Results of Operations for the Nine and Three-Month Periods
                                 Ended July 31, 2007 and July 31, 2006


                           Nine Months Ended July 31,        Three Months Ended July 31,
                           --------------------------        ---------------------------

                             (Dollars in Thousands)            (Dollars in Thousands)
                             ----------------------            ----------------------

                           2007      2006    % Change        2007      2006    % Change
                           ----      ----    --------        ----      ----    --------


<S>                   <C>        <C>         <C>         <C>       <C>        <C>


Revenues without QES     $11,534     $9,959.7    15.8%       $4,482   $3,404.0    31.7%

QES Revenues             $27,339     $5,138.2   432.1%       $8,600   $5,138.2    67.4%
                         -------     --------                ------   --------

Total Revenues           $38,873    $15,097.9   157.5%      $13,082   $8,542.2    53.1%

</TABLE>

      The following are statements of income components as a percentage of
total revenues for each period:

<TABLE>
<CAPTION>
                                 Nine Months Ended July 31,          Three Months Ended July 31,
                                 --------------------------          ---------------------------
                                    2007            2006             2007          2006
                                    ----            ----             ----          ----
<S>                              <C>             <C>              <C>           <C>
Total Revenues                      100%            100%             100%          100%
  Gross profit                       50%             44%              46%           50%
Operating expenses:
  Selling expenses                    5%              9%               5%            6%
  Depreciation and Amortization       8%              2%               7%            1%
  General & administrative           27%             31%              25%           31%
Income from operations               11%              2%               9%           12%
Other income (expense)               (2)%            (1)%             (2)%          (2)%
Income before income taxes            9%              1%               7%           10%

Income tax provision                  4%              1%               2%            4%
Net income                            5%              0%               5%            5%


</TABLE>

        REVENUES.  The Company's revenues for the nine-month period
        --------
ended July 31, 2007 ("current period") were $38,873,491
representing a 157.5% increase, or $23,775,537, from $15,097,954,
for the nine-month period ended July 31, 2006 ("prior period").
The Company's revenues for the fiscal quarter ended July 31,
2007 ("current quarter") were $13,082,315 representing a 53.1%
increase, or $4,540,078 from $8,542,237, for the fiscal quarter
ended July 31, 2006 ("prior quarter"). The overall increase was
attributable to the inclusion of QES which was acquired May 2006.
Only two months of QES revenue activity was recorded for the
prior period. Revenues, exclusive of QES revenues, grew 15.8%
year over year from $9,959,509 to $11,534,478 in the current
period. The growth in revenues without QES was driven primarily
by the Company adding new custom project related work in the
current period. QES revenues for the current period are
$27,339,013. Revenue, exclusive of QES revenues, increased by
$1,078,395, or 31.7% from $3,403,792, in the prior quarter to
$4,482,187 in the current quarter.  The growth in revenues
without QES was driven primarily by the Company adding new custom
project related work in the current quarter.

        COST OF GOODS SOLD.  Cost of goods sold increased by 130.2%
        ------------------
or $11,068,345 from $8,498,438 in the prior period to $19,566,783
in the current period.  As a percentage of revenue, cost of goods
represented 50% of revenues in the current period and 56% of
revenues in the prior period. Cost of goods sold increased by
66.5% or $2,835,012 from $4,265,846 in the prior quarter to
$7,100,858 in the current quarter.  As a percentage of revenue,
cost of goods represented 54% of revenues in current quarter and
50% of revenues in the prior quarter.  The dollar increase in
cost of goods sold is primarily attributable to the inclusion of
QES.  Cost of goods sold as a percentage of revenue will
fluctuate from period to period as project mix changes.  The
increase in cost of goods sold as a percentage of revenue from
the prior quarter is primarily attributable to the gross margins
realized from the QES revenues in the current quarter. Several
QES custom projects for the current quarter contained certain
work-related tasks that had a higher cost of goods sold as a
percentage of revenue than was previously anticipated.  This
increase in QES cost of goods sold was due to the fact the third
quarter historically represents the period when most of the
Company's annual projects conclude and thus many work-related
tasks that are still unfinished are identified, addressed and
completed.

        GROSS PROFIT.  The Company's gross profit increased by
        ------------
$12,707,192, or 192.5%, from $6,599,516 in the prior period to
$19,306,708 in the current period.  The Company's gross profit
increased by $1,705,066, or 39.9%, from $4,276,391 in the prior
quarter to $5,981,457 in the current quarter. The dollar increase
in gross profit was primarily attributable to the inclusion of
QES in the current period and quarter.  Several custom projects
during the current quarter contained higher cost of goods sold as
a percentage of revenue than was previously expected by the
Company. This increase in QES cost of goods sold was due to the
fact the third quarter historically represents the period when
most annual projects conclude and thus many work-related tasks
still open are identified, addressed and completed. The Company
prepares detailed expense budgets by project, however during the
course of a project's life, work related scope changes may affect
the overall total costs associated with such project.

        SELLING EXPENSES.  The Company's selling expenses increased
        ----------------
by $455,289, or 32.3%, from $1,408,849 in the prior period to
$1,864,138 in the current period. Selling expense was 4.8% of
revenue in the current period versus 9% of revenue in the prior
period. The Company's selling expenses increased by $150,744, or
29.2%, from $515,897 in the prior quarter to $666,641 in the
current quarter. The dollar increase in selling expense was
primarily attributable to the inclusion of QES in the current
period and current quarter. Selling expense was 5.1% of revenue
in the current quarter versus 6% of revenue in the prior quarter.
The decrease in selling expenses as a percentage of revenue was
primarily attributable to the inclusion of QES revenues in the
current quarter which has minimal selling expenses associated
with adding such revenue.

        DEPRECIATION AND AMORTIZATION.    The Company's
        -----------------------------
depreciation and amortization expense increased by $2,712,343, or
1273.5%, from $212,985 in the prior period to $2,925,328 in the
current period. The Company's depreciation and amortization
expense increased by $876,812, or 950.3%, from $92,270 in the
prior quarter to $969,082 in the current quarter. The increase in
depreciation and amortization is primarily due to two factors.
First, in the third quarter of Fiscal 2006, the Company acquired
all the tangible assets of QES; thus included in the Company's
current quarter depreciation expense is the expense associated
with the QES assets. Additionally, the Company recognized and
recorded the amortization associated with certain intangible
assets acquired in the QES acquisition (See Note 2 of the
accompanying Condensed Consolidated Financial Statements). The
fair value assigned to the non-compete covenants and customer
contracts purchased, increased the Company's current period
amortization expense by $1,962,897 over the expense in the prior
period. Below is a schedule detailing the future quarterly
amortization expense associated with these intangible assets:

<TABLE>
<CAPTION>
                           Future Amortization Expense of QES Intangible Assets (through Fiscal 2009)

                           Non - Compete Covenants         Customer Contracts          Total
                           -----------------------         ------------------          -----
<S>              <C>            <C>                           <C>                  <C>
Fiscal 2007         Q4             $26,305                       $627,994             $654,299

Fiscal 2008         Q1             $26,305                       $213,750             $240,055

                    Q2             $26,305                       $213,750             $240,055

                    Q3             $26,305                       $213,750             $240,055

                    Q4             $26,305                       $213,750             $240,055

Fiscal 2009         Q1             $26,305                       $121,750             $148,055

                    Q2             $26,305                       $121,750             $148,055

                    Q3             $26,305                       $121,750             $148,055

                    Q4             $26,305                       $121,750             $148,055

</TABLE>

        GENERAL AND ADMINISTRATIVE.  The Company's general and
        --------------------------
administrative ("G&A") expenses for the current period increased
$5,692,588, or 120.9%, from $4,706,781 in the prior period to
$10,399,369 in the current period.  The Company's G&A expenses
for the current quarter increased $555,171, or 20.9%, from
$2,653,541 in the prior quarter to $3,208,712 in the current
quarter. G&A expense is 24.5% in the current quarter versus 31%
in the prior quarter.  The infrastructure component of G&A costs
increased significantly as a result of the acquisition of QES
completed in Fiscal 2006 as the Company acquired various
facilities and staffing resources.  The Company expects in the
near term total dollars expended on G&A to remain relatively flat
when compared to the current period and current quarter.

        NET INCOME FROM OPERATIONS.  Income from operations
        --------------------------
increased by $3,846,972, or 1420.1%, from income of $270,901 in
the prior period to income of $4,117,873 in the current period.
Income from operations increased by $122,339, or 12.1%, from
income of $1,014,683 in the prior quarter to income of $1,137,022
in the current quarter. The overall increase in income from
operations increased primarily from the inclusion of QES in the
current period and current quarter. Net Income from operations
for the nine months ended July 31, 2007 included $1,962,897 of
amortization expense from intangible assets acquired from QES
during Fiscal 2006.  This QES expense did not exist in the nine
months ended July 31, 2006.

        EBITDA FROM OPERATIONS.  EBITDA is defined as earnings
        ----------------------
before interest expense, income tax expense, depreciation and
amortization.  EBITDA is not a measure of financial performance
under accounting principles generally accepted in the U.S., or
GAAP, and should not be considered an alternative to net income,
or any other measure of performance under GAAP, or to cash flows
from operating, investing or financing activities as an indicator
of cash flows or as a measure of liquidity.  EBITDA has its
limitations as an analytical tool, and you should not consider it
is isolation or as a substitute for analysis of our results as
reported under GAAP.  Some of the limitations of EBITDA are:

        *  EBITDA does not reflect our cash used for capital
           expenditures;

        *  Although depreciation and amortization are non-cash
           charges, the assets being depreciated or amortized
           often will have to be replaced and EBITDA does not
           reflect the cash requirements for replacements;

        *  EBITDA does not reflect changes in, or cash
           requirements for, our working capital requirements; and

        *  EBITDA does not reflect the cash necessary to make
           payments of interest or principal on our indebtedness.

        Because of these limitations, EBITDA should not be
considered as a measure of discretionary cash available to us to
service our debt or to invest in the growth of our business.  We
compensate for these limitations by relying on both our GAAP and
EBITDA results as measures of profit and cash flow.  Our
management believes that EBITDA is useful in evaluating our
operating performance in relation to other companies in our
industry because the calculation of EBITDA generally eliminates
the effects of financings and income taxes which items may vary
for different companies for reasons unrelated to overall
operating performance.

        In order to facilitate an understanding of the components of
EBITDA on the results of operations the following table is
provided as a reconciliation of reported income from operations
to EBITDA from operations. Management believes that this table
enables for a better understanding of the current and prior
amount of depreciation and amortization negatively affecting
income from operations. Further, management expects that the
current amount of depreciation and amortization will
significantly decrease during the next fiscal year (Fiscal 2008)
as the Company's amortization expense associated with the
acquired intangible assets from QES begins to expire.

<TABLE>
<CAPTION>
                                                        EBITDA From Operations

                                      Nine Months Ended July 31,        Three Months Ended July 31,
                                      --------------------------        ---------------------------

                                        2007              2006            2007                2006
                                        ----              ----            ----                ----
<S>                                <C>              <C>             <C>                <C>
Income from Operations
  before Interest and Taxes          $4,117,873         $270,901       $1,137,022         $1,014,683
Depreciation and Amortization *       3,156,109          778,186        1,044,523            400,029
                                     ----------       ----------       ----------         ----------
EBITDA from Operations               $7,273,982       $1,049,087       $2,181,545         $1,414,712

<FN>
        *Included in Depreciation and Amortization above is
amortization expense recorded in Cost of Goods Sold in the
accompanying financial statements. These amounts were $230,781
and $386,984 for the nine-month periods ended July 31, 2007 and
2006, respectively, and $75,441 and $129,646 for the fiscal
quarters ended July 31, 2007 and 2006, respectively.
</FN>
</TABLE>

        OTHER INCOME (EXPENSE).  Net other income (expense)
        ----------------------
decreased from $(149,281) in the prior period to $(614,687) in
the current period. For the current quarter, the Company had
other income (expense) of $(197,866) versus $(169,739) in the
prior quarter.   As the result of the acquisition of QES in
Fiscal 2006, the Company incurred an additional $754,421 of
interest expense for the current period resulting from the debt
used to finance the acquisition.

        NET INCOME AND NET INCOME PER SHARE.  The Company had net
        -----------------------------------
income of $8,752 for the nine months ended July 31, 2006 versus
net income of $2,032,003 for the nine months ended July 31, 2007.
For the current quarter, the Company had net income of $616,564
versus net income of $461,084 in the prior quarter. Included in
the current period net income is $1,962,897 of amortization
expense attributable to the non-compete covenants and customer
contracts the Company acquired during Fiscal 2006. The Company
had net income per basic and fully diluted share of $.00 in the
prior period versus a net income per basic share of $.41 and
diluted share of $.39 in the current period. In the current
quarter the Company had net income per basic share of $.12 and
fully diluted share of $.12 versus net income per basic share of
$.10 and fully diluted share of $.09 in the prior quarter. The
intangible amortization expense for the current period had a
negative $(.24) after tax per share effect to basic earnings per
share and a negative $(.22) effect to fully diluted earnings per
share. The intangible amortization expense for the current
quarter had a negative $(.08) after tax per share effect to basic
earnings per share and a negative $(.07) to fully diluted
earnings per share. The fully diluted weighted average shares
outstanding were 5,007,338 in the prior period versus 5,268,223
in current period.

LIQUIDITY AND WORKING CAPITAL

        WORKING CAPITAL.  Working capital increased by $3,680,097
        ---------------
during the current period from $2,002,054 at October 31, 2006 to
$5,682,151 at July 31, 2007.  The ratio of current assets to
current liabilities was approximately 1.75 to 1.0 on July 31, 2007
as compared to 1.23 to 1.0 on October 31, 2006. The increase in
working capital dollars in the current period was primarily the
result of an increase in the Company's accounts receivable and cash
which was partially offset by an increase in accrued expenses and
income tax payable.  The Company operates in a seasonal industry
whereby cash generated and received will be weighted more
significantly towards the third and fourth quarters of the
Company's fiscal year.  The first and second quarters are typically
the periods in which the Company extends its available working
capital to fund customer project-related requirements.

        CASH FLOW PROVIDED BY (USED IN) OPERATING ACTIVITIES.  During
        ----------------------------------------------------
the current period, the Company had cash provided by operating
activities of $4,130,811, as compared to $403,284 used in operating
activities in the prior period.  The increase in cash provided by
operating activities resulted primarily from net income of
$2,032,003 in the current period.

        CASH FLOW USED IN INVESTING ACTIVITIES.  During the current
        --------------------------------------
period, the Company had net cash used in investing activities of
$1,319,437 as compared to $15,572,845 in the prior period.  The
decrease in cash used in investing activities was primarily from
the fact that in the prior period the Company invested $14,555,869
in the acquisition of QES in May 2006.

        CASH FLOW PROVIDED (USED IN) FINANCING ACTIVITIES.  The
        -------------------------------------------------
Company had net cash used in financing activities of $1,993,188 for
the current period as compared to $16,577,757 provided by financing
activities for the prior period. The net cash used in financing
activities in the prior period resulted primarily from the
financing obtained in connection with the QES acquisition in May
2006. The Company had no balance outstanding on its revolving
credit facility on July 31, 2007. During the current period,
options to purchase 238,770 shares of the Company's Common Stock
were exercised resulting in proceeds totaling $222,690.

        The Company's current operating line of credit is due to
expire in April 2008, if not renewed.  The Company in August 2007
requested, and received, an increase in its operating line of
credit.  The line of credit will seasonally increase from $4
million to $6 million annually during the February through July
period.  This increase coincides with the Company's peak working
capital demands as it pertains to custom project related expenses.
The Company believes that the funds available under the current,
and any future, operating line of credit agreement along with
anticipated cash flows from operations will be sufficient to fund
cash requirements for the foreseeable future.

        Future repayments of our contractual obligations as of
July 31, 2007 are expected to be as follows:

<TABLE>
<CAPTION>

                                                            Payments Due
                                                            ------------

                                                              13 - 36       37 - 60      More Than 60
                                                              -------       -------      ------------
Obligations                  Total          0 - 12 months      months        months         months
-----------                  -----          -------------      ------        ------         ------

<S>                    <C>               <C>              <C>           <C>              <C>
Long-term debt
(excluding interest)      $12,825,062        $1,813,855      $3,914,509    $7,096,698           $--

Operating Leases            5,215,100         1,132,860       2,275,720     1,409,510       397,010

Other long-term
obligations(1)              2,709,233         2,188,983         520,250            --            --
                          -----------        ----------      ----------    ----------      --------

TOTAL OBLIGATIONS         $20,749,395        $5,135,698      $6,710,479    $8,506,208      $397,010
                          ===========        ==========      ==========    ==========      ========

(1)  Relate to employment contracts in effect at the end of the
current fiscal year. If an employment contract is terminated by the
company without cause a portion of the long term obligation recorded
above would be payable to the terminated employee.

</TABLE>

ITEM 3. CONTROLS AND PROCEDURES

(a)	Disclosure Controls and Procedures

        An evaluation of the Company's disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15 (e) ) was
carried out under the supervision and with the participation of
the Company's Chief Executive Officer ("CEO") and Chief Financial
Officer ("CFO") as of the end of the Company's fiscal quarter
ended July 31, 2007.  The Company's Chief Executive Officer and
Chief Financial Officer concluded that the Company's disclosure
controls and procedures as currently in effect are effective in
ensuring that the information required to be disclosed by the
Company is the reports it files or submits under the Exchange Act
is (i) accumulated and communicated to the Company's management
(including the Chief Executive Officer and Chief Financial
Officer) to allow timely decisions regarding required
disclosures, and (ii) recorded, processed, summarized and
reported within the time periods specified in the Commission's
rules and forms.

(b)	Internal Control Over Financial Reporting

        An evaluation of any changes in the Company's internal
control over financial reporting (as defined in Exchange Act
Rules 13a-15(f) and 15d-15(f)), that occurred during the
Company's fiscal quarter ended July 31, 2007, was carried out
under the supervision and with the participation of the Company's
Chief Executive Officer and Chief Financial Officer.  The
Company's Chief Executive Officer and Chief Financial Officer
concluded that no change identified in connection with such
evaluation has materially affected, or is reasonably likely to
materially affect, the Company's internal control over financial
reporting.

PRIOR YEAR RESTATEMENTS:
-----------------------

 	During Fiscal 2006, the Company identified a previously
unrecorded liability for employees' earned but unused vacation.
The Company's policy has been to allow employees who have earned
vacation hours as a result of their employment to carry forward a
limited amount of the unused vacation at the Company's fiscal
year end into the subsequent period. If an employee were to
terminate employment with the Company, the value (based upon such
employee's daily pay rate) of any earned but unused vacation
would be paid by the Company in the form of a cash payment to the
former employee. This carry forward provision within the
Company's employee benefits policy creates an accrued liability
that, in accordance with accounting principles generally accepted
in the United States, should be valued and recorded as a
liability during each fiscal reporting period.  As a result, the
Company recorded a liability valued at $259,866 for the fiscal
year ended October 31, 2005. The effect of recording this
liability resulted in a reduction of net income before tax of
$70,725 for Fiscal 2005.  On January 16, 2007, the Company
concluded that the Company should restate its consolidated
financial statements for Fiscal 2005.  The Audit Committee of the
Board also concluded that the financial impact of such change in
unused vacation liability on the Company's unaudited consolidated
financial statements for individual fiscal quarters ended during
Fiscal 2005 was immaterial, and therefore no restatement of the
interim financial statements for such periods was deemed
necessary.   The restatement for Fiscal 2005 did not affect the
Company's revenues from operations for such fiscal year. This
restatement reflects the inclusion of a previously unrecorded
liability for employees' earned but unused vacation. The restated
consolidated financial statements for Fiscal 2005 were filed with
the SEC on January 26, 2007. The unaudited condensed and
consolidated financial statements for Fiscal 2006, included in
this Report, include a recorded liability for employees' earned
but unused vacation.

        In Note 1 of the accompanying unaudited condensed and
consolidated financial statements for the period ended July 31,
2007, the Company has disclosed the financial effect of unused
vacation for the nine-month period and quarter ended July 31,
2006.  The previously issued consolidated statements of income
and cash flow for the quarter ended July 31, 2006 have been
restated to include the effect of unused employee vacation. As a
result of this inclusion, income before income taxes for the
nine-month period and quarter ended July 31, 2006 has decreased
in the amount of $106,479 and $37,347, respectively. The income
before income taxes for the nine-month period ended July 31, 2006
decreased from $228,099 to $121,620.  The income before income
taxes for the quarter ended July 31, 2006 decreased from $882,291
to $844,944.

        As of the end of Fiscal 2005, the Company's management,
including the CEO, concluded that, because the Company had not
separated the CEO and CFO functions, the Company's Disclosure
Controls were not effective at the end of such fiscal year to
ensure that information required to be disclosed by the Company
in reports that it files or submits under the Exchange Act is
recorded, processed, summarized and reported within the time
periods specified in SEC rules and forms. In June 2006, the
Company hired its current CFO thus achieving the separation of
the CEO function and the CFO function.

CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS
OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

        Certain statements contained in this Report contain
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995.  These are statements
that do not relate strictly to historical or current facts.  Such
forward-looking statements involve known and unknown risks and
uncertainties.  The Company's actual actions or results may
differ materially from those discussed in the forward-looking
statements.  These risk factors include, without limitation:

        *  Rapid changes in (i) the technology used to administer
           standardized tests generally or score standardized
           tests or (ii) in the policy considerations which
           determine which test will be administered;

        *  Non-renewal of any of the Company's material state
           contracts;

        *  Deficits in state and school budgets;

        *  The loss of any significant customer;

        *  The ability of the Company to compete successfully with
           the other providers of standardized tests and related
           assessment services;

        *  The ability of the Company to accommodate any changes
           in government regulation which may impact the
           marketability of its tests;

        *  The ability of the Company to secure additional
           financing as and when necessary;

        *  The ability of the Company to retain the services of
           its key management and to attract new members of the
           management team;

        *  The ability of the Company to effect and retain
           appropriate patent, copyright and trademark protection
           of its products; and

        *  Any decrease in the market for educational consulting
           services.

        The Company undertakes no obligation to release publicly any
revisions to the forward-looking statements or to reflect events
or circumstances after the date of this Report.


                                 PART II

                            OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

        None.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

        None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

        None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

        None.

ITEM 5. OTHER INFORMATION

        None.

ITEM 6. EXHIBITS

        The following Exhibits are filed as part of this Report:

 3.1    Certificate of Incorporation, dated August 22,
        1991 filed with the Secretary of State of the
        State of Delaware (incorporated herein by
        reference to the exhibit contained in the
        Company's Quarterly Report on Form 10-QSB for
        the fiscal quarter ended January 31, 1999)

 3.2    Certificate of Merger dated August 26, 1992,
        filed with the Secretary of State of the State
        of Delaware (incorporated herein by reference
        to the exhibit contained in the Company's
        Registration Statement on Form SB-2 under the
        Securities Act of 1933, as amended, filed with
        the Securities and Exchange Commission on July
        7, 1993)

 3.3    Certificate of Amendment of Certificate of
        Incorporation dated March 4, 1999, filed with
        the Secretary of State of the State of Delaware
        (incorporated herein by reference to the
        exhibit contained in the Company's Quarterly
        Report on Form 10-QSB for the fiscal quarter
        ended January 31, 1999)

 3.4    Amended and Restated By-Laws (incorporated by
        reference to the exhibit contained in the
        Company's Registration Statement on Form S-3
        (File No. 333-27659) under the Securities Act
        of 1933, as amended, filed with the Securities
        and Exchange Commission on May 22, 1997)

 3.5    Amended Certificate of Designations of Series A
        Convertible Preferred Stock filed with the
        Secretary of State of Delaware on May 25, 2006
        (incorporated by reference to the exhibit
        contained in the Company's Current Report on
        Form 8-K, filed June 6, 2006, as amended (the
        "June 2006 8-K")

 4.1    Specimen Certificate evidencing shares of
        Common Stock (incorporated herein by reference
        to the exhibit contained in the Company's
        Registration Statement on Form S-3 (File No.
        333-75377) under the Securities Act of 1933, as
        amended, filed with the Securities and Exchange
        Commission on March 31, 1999)

 4.2    Investor Rights Agreement, dated as of
        September 4, 1998, by and among the Company,
        Cahill Warnock Strategic Partners Fund, L.P.,
        Strategic Associates, L.P., and the Individual
        Shareholders Named Therein (incorporated by
        reference to the exhibit contained in the
        Company's Current Report on Form 8-K, which was
        filed with the Securities and Exchange
        Commission on November 23, 1998 (the "November
        1998 8-K"))

 4.3    Registration Rights Agreement, dated as of
        September 4, 1998, by and among the Company,
        Cahill, Warnock Strategic Partners Fund, L.P.,
        and Strategic Associates, L.P. (incorporated by
        reference to the exhibit contained in the
        November 1998 8-K)

 4.4    Voting Agreement, dated as of May 31, 2006, by
        and among Camden Partners Strategic Fund III,
        L.P., Camden Partners Strategic Fund III-A,
        L.P. and Touchstone Applied Science Associates,
        Inc. (incorporated by reference to the exhibit
        contained in the June 2006 8-K)

 4.5    Investor Rights Agreement, dated as of May 31,
        2006, by and among Camden Partners Strategic
        Fund III, L.P., Camden Partners Strategic Fund
        III-A, L.P. and Touchstone Applied Science
        Associates, Inc. (incorporated by reference to
        the exhibit contained in the June 2006   8-K)

 4.6    Questar Investor Rights Agreement, dated as of
        May 31, 2006, by and among John Adams, David
        Ihle, Theodore Naegeli, Terry Appleman, Mark
        Budde, MaJeana Hallstrom, Greg Lindstrom and
        Susan Trent, and Touchstone Applied Science
        Associates, Inc. (incorporated by reference to
        the exhibit contained in the June 2006 8-K)

 4.7    Warrant Certificate issued to Signal Hill
        Capital Group, LLC dated May 31, 2006
        (incorporated by reference to the exhibit
        contained in the June 2006 8-K)

31      Certifications by Chief Executive Officer and
        Chief Financial Officer (filed herewith)

32      Certifications by Chief Executive Officer and
        Chief Financial Officer pursuant to 18 U.S.C.
        Section 1350, as adopted pursuant to Section
        906 of the Sarbanes-Oxley Act of 2002 (filed
        herewith)



<PAGE>
                            QUESTAR ASSESSMENT, INC.
                                AND SUBSIDIARIES




              INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS






                                                                   PAGE
                                                                   ----


  CONDENSED CONSOLIDATED BALANCE SHEETS                           F - 2&3

  CONDENSED CONSOLIDATED STATEMENTS OF INCOME                     F - 4

  CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS                 F - 6&7

  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS            F - 8



                                       F-1


<PAGE>





                            QUESTAR ASSESSMENT, INC.
                                AND SUBSIDIARIES



                     CONDENSED CONSOLIDATED BALANCE SHEETS




                                                 July 31,          October 31,
                                                   2007               2006
                                                   ----               ----
                                                (Unaudited)

ASSETS
------

Current assets:
 Cash and cash equivalents                     $ 1,607,474         $ 789,288
 Restricted cash                                    45,596            20,307
 Accounts receivable, net of allowance
 for doubtful accounts of $33,000               10,176,384         8,611,587
 Inventories - net of reserve (Note 1)             348,864           545,362
 Prepaid expenses and other current assets         683,244           496,509
 Deferred income taxes                             414,776           364,031
                                               -----------        ----------

     Total current assets                       13,276,338        10,827,084


Property and equipment - net of
 accumulated depreciation of $1,922,000
 and $1,013,000, respectively                    3,761,398         3,734,227


Other assets:
 Test passage bank and test development,
  net of accumulated amortization of
  $4,722,000 and $4,509,000, respectively        2,523,230         2,335,670
 Non-compete agreements, net of
  accumulated amortization of $123,000
  and $44,000, respectively                        236,745           315,659
 Customer contracts, net of accumulated
  amortization of $2,261,000
  and $377,000, respectively                     2,238,695         4,122,678
 Goodwill                                       13,199,084        13,647,586
 Deferred income taxes                             941,372         1,325,379
 Other assets                                      293,963           349,832
                                               -----------       -----------

     Total assets                              $36,470,825       $36,658,115
                                               ===========       ===========











See notes to condensed consolidated financial statements.


                                       F-2
<PAGE>


                            QUESTAR ASSESSMENT, INC.
                                AND SUBSIDIARIES

                CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)







                                                 July 31,          October 31,
                                                   2007               2006
                                                   ----               ----
                                                (Unaudited)

LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------

Current liabilities:
 Revolving credit agreement                    $        --        $1,774,819
 Current maturities of long-term debt            1,813,913         1,459,502
 Accounts payable                                1,952,324         2,794,301
 Income tax payable                              1,230,514           204,319
 Accrued expenses                                2,471,998         1,996,161
 Billings in excess of costs                            --           470,490
 Deferred gain on sale of building -
  current portion                                  125,438           125,438
                                               -----------        ----------

     Total current liabilities                   7,594,187         8,825,030


Long-term debt:
 Long-term debt, less current maturities        11,011,207        12,405,735
 Interest rate swap agreement                       41,772            77,155
 Deferred gain on sale of building, net
  of current portion                               616,739           710,817
                                               -----------        ----------

     Total liabilities                          19,263,905        22,018,737
                                               -----------        ----------

Commitments and contingencies

Stockholders' equity:
 Preferred stock, $.0001 par value,
  5,000,000 shares authorized; 1,888,888
  shares issued and outstanding                        189               189
 Common stock, $.0001 par value,
  20,000,000 shares authorized;
  3,084,443 and 2,946,047 shares issued
  and outstanding, respectively                        308               295
 Additional paid-in capital                     15,604,562        15,069,034
 Retained earnings (deficit)                     1,601,861          (430,140)
                                               -----------       -----------

     Total stockholders' equity                 17,206,920        14,639,378
                                               -----------       -----------

Total liabilities and stockholders' equity     $36,470,825       $36,658,115
                                               ===========       ===========



See notes to condensed consolidated financial statements.

                                       F-3

<PAGE>

                            QUESTAR ASSESSMENT, INC.
                                AND SUBSIDIARIES

                  CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                  (Unaudited)

<TABLE>
<CAPTION>

                                  Nine Months Ended    Nine Months Ended     Three Months Ended      Three Months Ended
                                  -----------------    -----------------     ------------------      ------------------
                                    July 31, 2007        July 31, 2006          July 31, 2007           July 31, 2006
                                    -------------        -------------          -------------          --------------
                                                      (Restated - Note 1)                           (Restated - Note 1)


<S>                              <C>                  <C>                    <C>                     <C>
Net revenue earned                  $38,873,491          $15,097,954            $13,082,315             $8,542,237

Cost of goods sold                   19,566,783            8,498,438              7,100,858              4,265,846
                                    -----------          -----------            -----------             ----------

Gross profit                         19,306,708            6,599,516              5,981,457              4,276,391
                                    -----------          -----------            -----------             ----------

Operating expenses:
 Selling                              1,864,138            1,408,849                666,641                515,897
 Depreciation and amortization        2,925,328              212,985                969,082                 92,270
 General and administrative          10,399,369            4,706,781              3,208,712              2,653,541
                                    -----------          -----------            -----------             ----------

Total operating expenses             15,188,835            6,328,615              4,844,435              3,261,708
                                    -----------          -----------            -----------             ----------

Income from operations                4,117,873              270,901              1,137,022              1,014,683

Other income (expense):
 Gain on sale of assets/leaseback
  of building                           126,715               94,079                 31,360                 31,359
 Interest income                         13,019                5,139                  9,385                    361
 Interest expense                      (754,421)            (248,499)              (238,611)              (201,459)
                                    -----------          -----------            -----------             ----------

Income before income taxes            3,503,186              121,620                939,156                844,944

Income tax provision                  1,471,183              112,868                322,592                383,860
                                    -----------          -----------            -----------             ----------

Net income                          $ 2,032,003          $     8,752            $   616,564             $  461,084
                                    ===========          ===========            ===========             ==========

</TABLE>

See notes to condensed consolidated financial statements.



                                       F-4

<PAGE>
                            QUESTAR ASSESSMENT, INC.
                                AND SUBSIDIARIES

            CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Continued)
                                  (Unaudited)


<TABLE>
<CAPTION>

                                  Nine Months Ended    Nine Months Ended     Three Months Ended      Three Months Ended
                                  -----------------    -----------------     ------------------      ------------------
                                    July 31, 2007        July 31, 2006          July 31, 2007           July 31, 2006
                                    -------------        -------------          -------------          --------------
                                                      (Restated - Note 1)                           (Restated - Note 1)


<S>                              <C>                  <C>                    <C>                     <C>
Weighted average number of
common and convertible
preferred shares
outstanding:
 Basic                               4,919,103            4,801,318              4,961,541               4,803,627
 Diluted                             5,268,223            5,007,338              5,310,662               5,009,645

Net income per common share:
 Basic                              $      .41           $      .00             $      .12              $      .10
 Diluted                            $      .39           $      .00             $      .12              $      .09

</TABLE>


See notes to condensed consolidated financial statements.



                                       F-5

<PAGE>
                            QUESTAR ASSESSMENT, INC.
                                AND SUBSIDIARIES

              CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE NINE MONTHS ENDED JULY 31, 2007 and 2006
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                             2007                 2006
                                                             ----                 ----
                                                                          (Restated - Note 1)

<S>                                                  <C>                  <C>
OPERATING ACTIVITIES
Net income                                              $  2,032,003          $   8,752
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
 Depreciation and amortization                             3,156,109            778,186
 Deferred income taxes                                       333,262           (103,474)
 Gain on sale of equipment                                   (32,637)                --
 Gain on sale/leaseback of building                          (94,078)           (94,079)
 Stock based compensation expense                            162,293            151,777
 Change in interest swap agreement
 liability                                                   (35,383)                --
Changes in operating assets and liabilities:
 Restricted cash                                             (25,289)           (23,436)
 Accounts receivable                                      (1,564,797)        (2,065,166)
 Inventories                                                 196,498              1,381
 Prepaid expenses and other current assets                  (186,735)          (113,619)
 Billings in excess of cost                                 (470,490)           (61,830)
 Accounts payable and accrued expenses                       660,055          1,118,224
                                                          ----------         ----------

CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES            4,130,811           (403,284)
                                                          ----------         ----------

INVESTING ACTIVITIES
 Purchase of property and equipment                         (989,550)          (460,095)
 Test passage bank and test development                     (404,887)          (479,241)
 Cash and fees paid to acquire stock of QES                       --        (14,555,869)
 Proceeds from sale of equipment                              75,000                 --
 Other Assets                                                     --            (49,610)
 Software development costs                                       --            (28,030)
                                                          ----------         ----------

CASH USED IN INVESTING ACTIVITIES                         (1,319,437)       (15,572,845)
                                                          ----------         ----------

</TABLE>

See notes to condensed consolidated financial statements.



                                       F-6

<PAGE>
                            QUESTAR ASSESSMENT, INC.
                                AND SUBSIDIARIES

           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
                FOR THE NINE MONTHS ENDED JULY 31, 2007 and 2006
                                   (Unaudited)

<TABLE>
<CAPTION>

                                                             2007                 2006
                                                             ----                 ----
                                                                          (Restated - Note 1)

<S>                                                  <C>                  <C>
FINANCING ACTIVITIES
 Principal payments on long-term debt                     (1,040,117)        (1,286,040)
 Proceeds from long-term debt                                     --          9,600,000
 Net borrowing (payments) on revolving
  credit agreement                                        (1,774,819)           925,000
 Costs associated with obtaining
  long-term debt                                                  --           (282,767)
 Proceeds from issuance of stock to
  acquire stock of QES                                            --          7,500,000
 Proceeds from the exercise of stock options                 222,690              4,700
 Cashless exercise of stock options                          150,556                 --
 Non-cash warrants issued                                         --            116,864
 Increase in tangible assets acquired from QES               448,502                 --
                                                          ----------         ----------

CASH FLOWS PROVIDED BY (USED IN)
FINANCING ACTIVITIES                                      (1,993,188)        16,577,757
                                                          ----------         ----------

NET INCREASE IN CASH AND CASH EQUIVALENTS                    818,186            601,628

CASH AND CASH EQUIVALENTS
AT BEGINNING OF PERIOD                                       789,288          1,289,630
                                                          ----------         ----------

CASH AND CASH EQUIVALENTS
AT END OF PERIOD                                          $1,607,474        $ 1,891,258
                                                          ==========        ===========

SUPPLEMENTAL CASH FLOW INFORMATION:
 Cash paid during the period for:

 Interest                                                 $  866,029        $   135,854
                                                          ==========        ===========
 Income taxes                                             $  168,497        $   170,002
                                                          ==========        ===========



</TABLE>







See notes to condensed consolidated financial statements.



                                       F-7
<PAGE>


                            QUESTAR ASSESSMENT, INC.
                                AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
---------------------------------------------------------

Organization
------------

Effective March 16, 2007, Touchstone Applied Science Associates,
Inc. changed its corporate name to Questar Assessment, Inc. (the
"Company"). This action was approved on January 24, 2007 by the
Company's Board of Directors, and as of February 5, 2007 by the
holders of a majority of the Company's issued and outstanding
voting securities who had executed a written consent in lieu of a
special meeting in accordance with the relevant sections of the
Delaware General Corporation Law.

Questar Assessment, Inc. (the "Company") competes exclusively in
the assessment marketplace.  With the advent of No Child Left
Behind legislation ("NCLB"), the Company's Board of Directors and
management made the strategic decision to focus the organization on
the fast-growing assessment segment of the K-12 education market.
The Company competes in both the custom and proprietary product
lines of the assessment marketplace.  Over the past decade, this
market has been moving towards custom testing as a result of NCLB
legislation requiring that student success be measured against
specific standards established by each individual state.  The
Company has recognized this trend and has aligned its long term and
short term strategic initiatives and resources to take advantage of
these changes in the market.  During the fiscal year ended October
31, 2006 ("Fiscal 2006"), the Company decided to minimize its
efforts in growing its proprietary products, and to devote
significant resources to expanding its custom testing products. The
Company implemented this strategy by acquiring Questar Educational
Systems, Inc. ("QES") in May 2006.  QES provides test delivery,
scoring, and score analysis capabilities for state testing
programs.

Basis of Presentation and Principles of Consolidation
-----------------------------------------------------

The accompanying condensed unaudited consolidated financial
information has been prepared by the Company in accordance with
accounting principles generally accepted in the United States of
America for the preparation of interim financial information and
the instructions to Form 10-QSB and Article 10 of Regulation S-X of
the Securities and Exchange Commission (SEC). Accordingly, it does
not include all of the information and notes required by accounting
principles generally accepted in the United States for complete
financial statement presentation. In the opinion of management, all
adjustments (consisting of normal recurring adjustments) considered
necessary for a fair representation have been included. Financial
results for the nine-month period and fiscal quarter ended July 31,
2007 are not necessarily indicative of the results that may be
expected for the year ending October 31, 2007.

The condensed balance sheet at October 31, 2006 has been derived
from the audited consolidated financial statements as of that date
but does not include all of the information and footnotes required
by accounting principles generally accepted in the United States
for complete financial statements presentation.

This financial information should be read in conjunction with the
consolidated financial statements and notes included in the
Company's Annual Report on Form 10-KSB for the year ended October
31, 2006.

The consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiaries. All significant inter-
company accounts and transactions have been eliminated in
consolidation.



                                       F-8
<PAGE>


                            QUESTAR ASSESSMENT, INC.
                                AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)


NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)
---------------------------------------------------------

Management is required to make certain estimates and assumptions
which affect the amounts of assets, liabilities, revenue and
expenses reported.  Actual results could differ materially from
these estimates and assumptions.

Restatement
-----------

The unaudited consolidated financial statements included in this
Report for the Company's nine-month and three-month periods ended
July 31, 2006 have been restated and replace the Company's
previously issued unaudited condensed consolidated financial
statements for such periods.

Subsequent to the issuance of the Company's audited consolidated
financial statements in its Form 10-KSB for the fiscal year ended
October 31, 2005 but before the conclusion of the fiscal year ended
October 31, 2006, the Company concluded that it had previously
omitted an accrued liability recognizing the effect of its
employee's earned but unused vacation and that such omission was
not consistent with U.S. generally accepted accounting principles.
The Company concluded that it was necessary to restate such
financial statements. The restatement did not affect previously
reported revenues for the restated or future periods.

A summary of the significant effects of the restatement for the
fiscal years ended is as follows:

<TABLE>
<CAPTION>
                                                As Previously                  As Previously
                                                Reported        Restated       Reported        Restated
                                                2005            2005           2004            2004
                                                ----            ----           ----            ----
<S>                                          <C>            <C>             <C>             <C>
As of October 31,
-----------------

Accrued employee vacation                       $ 0            $259,866        $0              $189,141
Retained earnings                               850,625         694,705         375,661         262,176

For the fiscal year ended October 31,
-------------------------------------

Income before income taxes                      799,032         728,307       1,415,051       1,381,449
Income taxes                                    324,068         295,778         592,448         579,008
Income from continuing operations               474,964         432,529         822,603         802,441
Net Income                                      474,964         432,529         822,603         802,441
Net Income per common share
	Basic 					.17		.15		.31		.31
        Diluted                                 .16             .14             .29             .28


</TABLE>













                                       F-9
<PAGE>


                            QUESTAR ASSESSMENT, INC.
                                AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)


NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)
---------------------------------------------------------

<TABLE>
<CAPTION>

                                                As Previously                  As Previously
                                                Reported        Restated       Reported        Restated
                                                Nine Months     Nine Months    Three Months    Three Months
                                                -----------     -----------    ------------    ------------
<S>                                          <C>             <C>            <C>             <C>
For nine-month period & quarter
  ended July 31, 2006
-------------------------------

Accrued employee vacation                        $ 0             $366,345       $0              $366,345
Retained earnings                                925,109          705,302        925,109         705,302

Income before income taxes                       228,099          121,620        882,291         844,944
Income tax provision                             155,460          112,868        398,799         383,860
Net Income                                        72,639            8,752        483,492         461,084
Net income per common share
        Basic                                    .02             .00            .10             .10
        Diluted                                  .01             .00            .10             .09

</TABLE>

Reclassifications:
------------------

Certain income statement amounts for the nine-month and three-month
periods ended July 31, 2006 have been reclassified to be consistent
with the classifications adopted for the nine-month and three-month
periods ended July 31, 2007.

Revenue, Accounts Receivable and Allowance of Doubtful Accounts
---------------------------------------------------------------

The Company's revenues from the performance of assessment,
consulting and psychometric services under long term contracts are
recognized on the percentage of completion basis pursuant to the
provisions of Statement of Position No. 81-1, "Accounting for
Performance of Construction-type and Certain Production-type
Contracts" and Accounting Research Bulletin ("ARB") No. 45, "Long-
term Construction-type Contracts".  For each contract, the Company
compares the costs incurred in the course of performing such
contracts during a reporting period contract and recognizes a
proportionate amount of revenue for such period.  As of July 31,
2007, the Company reported costs in excess of billings of
$1,347,584, which are included in accounts receivable.  As of
October 31, 2006, the Company reported billings in excess of costs
of $470,490.

Accounts receivable are carried at original invoice amount less an
estimate made for doubtful receivables based on a review of all
outstanding amounts on a quarterly basis. Management determines the
allowance for doubtful accounts by regularly evaluating individual
customer receivables and considering a customer's financial
condition and credit history, and current economic conditions.
Accounts receivable are written off when deemed uncollectible.
Recoveries of accounts receivable previously written off are
recorded when received.





                                       F-10
<PAGE>


                            QUESTAR ASSESSMENT, INC.
                                AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)


NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)
---------------------------------------------------------

Accounts receivable consist of the following:


                                      July 31,            October 31,

                                        2007                 2006
                                        ----                 ----


Billed                               $8,828,800           $8,611,587
Unbilled (costs in
excess of billings)                   1,347,584                   --
                                    -----------           ----------

                                    $10,176,384           $8,611,587
                                    ===========           ==========

Inventories
-----------

Based on the nature of the Company's operations, inventories
consist solely of finished goods. These are stated at the lower of
cost (first in, first out method) or market. At July 31, 2007 and
October 31, 2006, inventories are net of reserves of $141,000 and
$161,000, respectively.

Other Intangible Assets
-----------------------

In accordance with SFAS 141, the Company has recognized separately
from goodwill the acquisition-date fair values of certain
identifiable finite life intangible assets acquired from QES on May
31, 2006.  The following are the net book values as of July 31,
2007 and October 31, 2006 of the Company's intangible assets:

                                                                     Estimated
                                   July 31,         October 31,      Intangible
                                     2007              2006          Asset lives
                                     ----              ----          -----------

Non-compete agreements             $ 237,000         $316,000        41 months

Customer contracts                 2,239,000        4,123,000        1 - 4 years
                                  ----------       ----------

Total                             $2,476,000       $4,439,000
                                  ==========       ==========


A summary of the future amortization expense associated with the
intangible assets acquired from QES is as follows:

             Fiscal          Non Compete        Customer
             Year            Covenants          Contracts          Total
             ------          -----------        ---------          -----

             2007            $ 26,000           $628,000           $654,000
             2008            $105,000           $855,000           $960,000
             2009            $106,000           $487,000           $592,000
             2010            $ -                $269,000           $269,000





                                       F-11
<PAGE>


                            QUESTAR ASSESSMENT, INC.
                                AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)


NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)
---------------------------------------------------------

Goodwill
--------

Goodwill is not amortized but is subject to impairment tests at
least annually.  The Company also reviews the carrying amount of
goodwill for impairment if an event occurs or circumstances
change that would indicate the carrying amount may be impaired.
The Company performed the annual test at October 31, 2006 and
determined there to be no impairment of the goodwill.  The net
carrying value of goodwill at July 31, 2007 was $13,199,084 and
at October 31, 2006 was $13,647,586.  The net carrying value of
goodwill was reduced by $448,502 as a result of a purchase price
adjustment resulting from a refund of previously paid costs
associated with a contract acquired from QES.


Income Taxes
------------

Income taxes are reported based upon Statement of Financial
Accounting Standards ("SFAS") No. 109, "Accounting for Income
Taxes". The Company files a consolidated Federal income tax return
with its subsidiaries. Deferred taxes are provided on an asset and
liability method whereby deferred tax assets are recognized for
deductible temporary differences and operating loss and tax credit
carry forwards, and deferred tax liabilities are recognized for
taxable temporary differences. Temporary differences are the
differences between the reported amounts of assets and liabilities
and their tax basis. Deferred tax assets are reduced by a valuation
allowance when, in the opinion of management, it is more than
likely than not that some portion or all of the deferred tax assets
will not be realized. Deferred tax assets and liabilities are
adjusted for the effects of changes in the tax laws and rates on
the date of enactment.




















                                       F-12
<PAGE>


                            QUESTAR ASSESSMENT, INC.
                                AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)


NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)
---------------------------------------------------------

Accrued Expenses
----------------

Accrued expenses consist of the following:


                                       July 31,           October 31,
                                         2007                2006
                                         ----                ----

Compensation                          $1,793,639          $1,080,174
Benefit Plans                            315,905             352,647
Interest                                  79,457             155,681
Other                                    282,997             407,659
                                      ----------          ----------

                                      $2,471,998          $1,996,161
                                      ==========          ==========


Stock Based Compensation
------------------------

The Company has a 2000 Stock Option Plan (the "Plan"). The Company's
Plan is accounted for in accordance with the recognition and
measurement provisions of Statement of Financial Accounting
Standards ("FAS") No. 123 (revised 2004), Share-Based Payment ("FAS
No. 123(R)"). FAS No. 123(R) requires compensation costs related to
share-based payment transactions, including employee stock options,
to be recognized in the financial statements. In addition, the
Company adheres to the guidance set forth within Securities and
Exchange Commission ("SEC") Staff Accounting Bulletin ("SAB") No.
107, which provides the Staff's views regarding the interaction
between SFAS No. 123(R) and certain SEC rules and regulations and
provides interpretations with respect to the valuation of share-
based payments for public companies.






                                       F-13
<PAGE>


                            QUESTAR ASSESSMENT, INC.
                                AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)


NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)
---------------------------------------------------------


The Company's results for the nine and three-month periods ended
July 31, 2007 include stock option compensation expense totaling
$162,293 and $54,776, respectively. The Company's results for the
nine and three-month periods ended July 31, 2006 included stock
option compensation totaling $151,777 and $65,192, respectively.
The Company recognized related tax benefits associated with share-
based compensation arrangements totaling approximately $67,000 and
$22,000 during the nine and three-month periods ended July 31,
2007, respectively. The Company recognized related tax benefits
associated with share-based compensation arrangements approximately
$60,000 and $26,000 for the nine and three-month periods ended July
31, 2006, respectively.

Stock option compensation expense is the estimated fair value of
options granted amortized on a straight-line basis over the
requisite service period for the entire award.  The Company has not
adjusted the expense by the amount the estimated fair value of
options forfeited as indicated in FAS No. 123(R) since the
forfeiture rate based upon historical data was determined to be
immaterial.

The fair value of options at the date of grant was estimated using
the Black-Scholes option pricing model. The Company took into
consideration guidance under FAS No. 123(R) and SEC Staff Accounting
Bulletin No. 107 (SAB 107) when reviewing and updating assumptions.
The expected volatility is based upon historical volatility of the
Company's stock and other contributing factors. The expected term is
based upon observation of actual time elapsed between date of grant
and exercise of options for all employees.  Previously, such
assumptions were determined based on historical data.

The assumptions made in calculating the fair values of options
are as follows:


                                   July 31, 2007         October 31, 2006
                                   -------------         ----------------

Expected term (in years)                10                       10
Expected volatility                    156%                     121%
Expected dividend yield                  0%                       0%
Risk-free interest rate              4.65-4.70%                4.23%















                                       F-14
<PAGE>


                            QUESTAR ASSESSMENT, INC.
                                AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)
---------------------------------------------------------

The Company granted options to purchase shares of its Stock during
the nine months ended July 31, 2007 at a weighted average exercise
price of $6.05 per share. The Company granted options to purchase
shares of the Company's Common Stock during the nine months ended
July 31, 2006 at a weighted average exercise price of $4.30 per
share.

The following table represents stock options granted, exercised, and
forfeited for all Common Stock option plans during the nine months
ended July 31, 2007:

<TABLE>
<CAPTION>

                                                Weighted        Weighted
                                                Average         Average
                                                Exercise        Remaining
                                Number of       Price per       Contractual
                                Shares          Share           Term                  Intrinsic Value
                                ------          -----           ----                  ---------------
<S>                          <C>             <C>             <C>                   <C>
Stock Options
Outstanding at
October 31, 2006		815,478		$2.94

Granted			 	45,500		$6.05

Forfeited			(9,375)		$1.72

Exercised                       (238,770)       $2.99                                  $758,159
                                ---------       -----                                  --------

Outstanding at
July 31, 2007                   612,833         $3.15           7 years                $1,534,520

Exercisable at
July 31, 2007                   465,667         $2.63           5 years, 5 months      $1,353,021

</TABLE>

Cash received from the exercise of certain stock options during the
nine months ended July 31, 2007 was $222,690. Certain options to
purchase shares of the Company's common stock were exercised in a
"Cashless" transaction resulting in $281,810 being considered as
compensation expense during the nine months ended July 31, 2007.

As of July 31, 2007, there was $476,344 of total unrecognized
compensation cost, net of estimated forfeitures, related to all
unvested stock options and shares, which is expected to be
recognized over a weighted average period of approximately 3 years.

Net income per common share
---------------------------

Basic income per common share is computed by dividing net income by
the weighted-average number of common and common equivalent shares
outstanding during the period.  Diluted income per common share is
computed by dividing net income by the weighted-average number of
common and common equivalent shares outstanding during the period,
including potentially diluted shares such as options and warrants
to purchase shares of common stock at various amounts per share.
The dilutive effect of the additional shares for the nine and three
month periods ended July 31, 2007 was to increase weighted-average
shares outstanding by 349,120.  The dilutive effect of the additional
shares for the nine and three-month periods ended July 31, 2006 was
to increase weighted-average shares outstanding by 206,020.




                                       F-15
<PAGE>


                            QUESTAR ASSESSMENT, INC.
                                AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)


NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)
---------------------------------------------------------

Recently issued accounting pronouncements
-----------------------------------------

In July 2006, the FASB issued Interpretation No. 48 (FIN 48),
"Accounting for Uncertainty in Income Taxes - an Interpretation of
FASB Statement 109", which clarified the accounting for uncertainty
in tax positions.  FIN 48 provides that the tax effects from an
uncertain tax position can be recognized in the consolidated
financial statements, only if the position is more likely than not
to be sustained on audit, base don the technical merits of the
position.  The provisions of FIN 48 are effective as of the
beginning of fiscal 2008, with the cumulative effect of the change
in accounting principal recorded as an adjustment to opening
retained earnings.  The Company is currently evaluation the impact
of adopting FIN 48 on the consolidated financial statements.


NOTE 2 - ACQUISITION
--------------------


On May 31, 2006, the Company acquired all of the outstanding
shares of Questar Educational Services ("QES"). Total
consideration paid by the Company was $20,000,000 consisting of
$15,000,000 in cash, the issuance of 222,222 shares of Series A-2
Preferred Stock of the Company valued at $1,000,000 and a
$4,000,000 promissory note.  The Company has also agreed to pay
additional consideration in 2010 if Questar achieves certain
revenue goals during the three fiscal years ending October 31,
2007, 2008 and 2009.  The maximum contingent earn out payment is
$12,500,000, of which up to $10,000,000 shall be paid half in
cash and half in Series A-2 Preferred Stock and $2,500,000 shall
be paid, if earned, at the election of the Company, in cash or
additional shares of Series A-2 Preferred Stock, or any
combination thereof, valued at fair market value at the time of
issuance.

The Company financed the acquisition of QES through senior debt
and a private equity investment.  The Company entered into a loan
agreement (the "Loan Agreement") with TD Banknorth, N.A.
("Banknorth"), pursuant to which the Company borrowed a term loan
in an aggregate principal amount of $9,600,000, obtained a
revolving line of credit in the amount of $4,000,000 (See Note 3)
and a standby letter of credit in the original stated amount of
$194,750 against availability under the Company's revolving line
of credit.  The Loan Agreement contains ongoing financial
covenants which are measured on an annual basis beginning in
Fiscal 2007.  The term loan is interest-only for the first six
months of the loan, and then is payable in fifty-four equal
monthly installments of principal and interest on a five year
amortization schedule.  The Company has entered into an interest
rate swap agreement with Banknorth pursuant to which Banknorth is
paying the Company 250 basis points over the one month USD LIBOR
BBA rate and the Company is paying Banknorth a fixed rate of
7.95% on a value of $9,600,000 declining concurrently with the
term loan. The interest rate swap agreement expires after thirty
months on December 1, 2008. The term loan balloons on May 30,
2011.  Advances under the revolving line of credit are based on a
borrowing base of eligible accounts receivable and eligible
inventory of the Company and Questar.  The revolving line of
credit is available until April 30, 2008.  Both the term loan and
the revolving loan are secured by the assets of the Company and
by the assets of QES.  The proceeds from the loans were used to
pay a portion of the purchase price for the shares of QES and
closing costs for the transaction, and for working capital.





                                       F-16
<PAGE>


                            QUESTAR ASSESSMENT, INC.
                                AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

NOTE 2 - ACQUISITION (continued)
--------------------

The Company also entered into a securities purchase agreement
(the "Series A Convertible Preferred Stock Purchase Agreement")
with Camden Partners Strategic Fund III, L.P. and Camden Partners
Strategic Fund III-A, L.P. (collectively, the "Investors"),
pursuant to which the Company issued and sold to the Investors
1,666,667 shares of its Series A-1 Convertible Preferred Stock
("Series A-1 Preferred Stock") (valued at $7,500,000, based on a
price of $4.50 per share).  The proceeds from the sale of stock
were used to pay a portion of the purchase price for the shares
of QES and closing costs for the transaction, with the balance
being retained by the Company for working capital.  Two members
of the Company's Board of Directors, Donald W. Hughes and David
L. Warnock are also principals of each of the Investors.
Management allocated the purchase price of QES to the assets
acquired with the assistance of third party independent
appraisals of all intangible assets and equipment acquired. The
Company allocated $2,990,000 to equipment which is a step up of
$1,400,000 from its pre-acquisition book value.  The Company
assigned a value of $360,000 to the non-compete covenant
agreements that were signed by the selling shareholders of QES.
The covenants will expire as of October 31, 2009. The Company is
amortizing the value assigned to this intangible asset on a
straight line basis over its expected life (41 months).
Additionally, the Company has estimated that the customer
contracts acquired from QES are valued at $4,500,000.  This
amount is being amortized on an accelerated basis in relation to
annual value of discounted cash flow the Company expects to
receive over the life of the contract. With the exception of the
non-compete covenants and customer contracts there were no other
identifiable intangible assets; therefore, the balance of the
purchase price of $11,229,541 was allocated to goodwill.  The
amount of goodwill was reduced by $448,502 subsequent to the
acquisition upon the realization of an additional tangible asset
value.

The operations of QES have been included in the consolidated
financial statements since the date of acquisition, May 31, 2006.

The Company has entered into employment agreements for an initial
twenty-four month term with certain members of the management of
Questar.  Such employment agreements with the QES management team
include non-competition covenants and proprietary rights
agreements.

The following table summarizes the estimated fair value of the
QES assets acquired and liabilities assumed at the date of
acquisition:


Current assets - including cash of
($1,443,772)                                          $ 1,544,363
Accounts receivable                                     3,432,911
Property and equipment                                  2,989,530
Non compete covenants                                     359,500
Customer contracts                                      4,500,000
Goodwill                                               11,229,541
                                                      -----------
     Total assets acquired                             24,055,845
Current liabilities assumed                            (3,028,771)
                                                      -----------
Net assets acquired                                   $21,027,074
                                                      ===========




                                       F-17
<PAGE>


                            QUESTAR ASSESSMENT, INC.
                                AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)


NOTE 2 - ACQUISITION (continued)
--------------------

The following unaudited pro forma income statement data presents
the consolidated results of operations of the Company for the
nine months ended July 31, 2006, as if the acquisition of QES
occurred at the beginning of that period presented:

                                   PRO FORMA

                               Nine Months Ended
                                 July 31, 2006
                                 -------------

Net revenue                        $36,500,000
Net income                          $2,400,000
Net income per common share             $.49



The above pro forma information does not purport to be indicative
of what would have occurred had the acquisition been made as of
such date or the results which may occur in the future.


NOTE 3 - REVOLVING CREDIT AGREEMENTS
------------------------------------

In August 2007 the Company requested and received an increase in
its revolving credit agreement. The revolving credit agreement
will increase from $4 million to $6 million each year during the
Company's seasonal peak period which occurs during the March
through July timeframe. The revolving credit agreement matures on
April 30, 2008, if not renewed. Advances are due on demand, are
secured by substantially all assets of the Company and its
subsidiaries, and are subject to a defined borrowing base that
shall not exceed the sum of 80% of eligible accounts receivables
and 50% of eligible inventory. Additionally, the Company has
secured under the revolving credit agreement three separate
'Irrevocable Letters of Credit' totaling $2,631,810 that reduce
the total line available to $1,368,190 during the period of
August through February; and to $3,368,190 during the period of
March through July. Interest on the advances is at 2.5% above
LIBOR and is due monthly. Advances of $1,774,819 were outstanding
at October 31, 2006. No advances were outstanding at July 31,
2007. The revolving credit agreement contains ongoing financial
covenants which are measured on an annual basis beginning in
October 2007.

                                       F-18


<PAGE>



                              SIGNATURES

      In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


                                      QUESTAR ASSESSMENT, INC.


September 14, 2007                    By:/s/ ANDREW L. SIMON
                                         -----------------------------
                                         Andrew L. Simon
                                         President and Chief Executive Officer




September 14, 2007                    By:/s/ JAMES J. WILLIAMS
                                         -----------------------------
                                         JAMES J. WILLIAMS
                                         Chief Financial Officer