NOTE J – INVESTMENT

During the period December 2018 through August 2022, the Company made an aggregate investment of $7,000,000 in ILiAD Biotechnologies, LLC (“ILiAD”), a privately held clinical stage biotechnology company dedicated to the prevention and treatment of human disease caused by Bordetella pertussis. ILiAD is focused on validating its proprietary intranasal vaccine, BPZE1, for the prevention of pertussis (whooping cough). At June 30, 2023, the Company owned approximately 6.8% of the outstanding units of ILiAD on a non-fully diluted basis and 6.1% of the outstanding units on a fully diluted basis (after giving effect to the exercise all outstanding options and warrants). In connection with its initial investment, the Company’s Chairman and Chief Executive Officer obtained a seat on ILiAD’s Board of Managers and receives the same compensation for service on the Board of Managers as other non-management Board members.

For the three months ended June 30, 2023 and 2022, the Company recorded an allocated net loss from its equity method investment in ILiAD of $391,000 and $355,000, respectively. For the six months ended June 30, 2023 and 2022, the Company recorded an allocated net loss from its equity investment in ILiAD of $1,065,000 and $788,000.

The difference between the Company’s share of equity in ILiAD’s net assets and the purchase price of the investment is due to an excess amount paid over the book value of the investment of $4,612,000, which is accounted for as equity method goodwill.

The following table provides certain summarized financial information for ILiAD (the equity method investee) for the periods presented and has been compiled from ILiAD’s financial statements, reported on one quarter lag. The table below includes an additional comprehensive loss of $621,000 for the six months ended March 31, 2023 as a result of the Company receiving audited financial information from ILiAD for its year ended December 31, 2022 (see Note B[1] hereof). For the three and six months ended June 30, 2023, with respect to such additional comprehensive loss of ILiAD, the Company recorded its allocated net loss of $42,000.