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Exhibit 1B
November 7, 2000
Board of Directors
SafeNet, Inc.
Note 5 of Notes to Consolidated Financial Statements of SafeNet, Inc., included
in its Form 10-Q for the three months and nine months ended September 30, 2000,
describes a change in the method of accounting for income taxes. This change,
which only impacts fiscal year 2000, relates to the sequencing of the
utilization of net operating loss carryforwards and stock compensation
deductions.
There is no specific authoritative criteria for determining a preferable method
of sequencing the utilization of net operating loss carryforwards and stock
compensation deductions; however, we conclude that the change in the method of
accounting for income taxes is to an acceptable alternative method which, based
on your business judgment to make this change for the stated reason, is
preferable in your circumstances. We have not yet conducted an audit in
accordance with generally accepted auditing standards of any financial
statements of the Company and, therefore, we do not express any opinion on any
financial statements of SafeNet, Inc.
Very truly yours,
/s/ Ernst & Young LLP
