In May 2013, as part of the acquisition of the Mirror Worlds Patent Portfolio (see Note J[2]), the Company acquired from Mirror Worlds, LLC 250,000 shares of common stock of Lifestreams Technologies Corporation (“Lifestreams”), a company engaged in the development of next generation applications and methodologies designed to organize and display digital data.  In July 2013, the Company made an additional investment of $50,000 in Lifestreams as part of a financing and received 123,456 shares of Series A preferred stock and, as part of an amended license agreement between the Company’s wholly-owned subsidiary and Lifestreams, the Company received a warrant to purchase 1,305,000 shares of common stock of Lifestreams.  The warrant was valued at $70,000 based on the Black-Scholes option model and recorded as non-cash royalty income during 2013.  In March 2014, the Company participated in a $2.0 million secured convertible notes (the “Notes”) financing of Lifestreams by agreeing to invest an aggregate of $380,000 in four equal tranches (the first tranche of $95,000 was paid at closing).  In May 2014, August 2014 and December 2014, the Company made additional investments of $95,000 each as part of the second, third and fourth tranche of the investment.

Since the Company owns less than 20% of the outstanding equity of Lifestreams and does not have significant influence or control, the Company’s investment in Lifestreams was recorded at cost.  The Notes all matured on March 31, 2015.  At September 30, 2015, Lifestreams remained in default of the Notes and had not completed any additional material financing. As a result, the Company has an impairment of $386,000 with respect to the investment which has a carrying value at September 30, 2015 of $190,000 compared with a carrying value at December 31, 2014 of $576,000.  The carrying value of $190,000 at September 30, 2015 reflects management’s estimate at September 30, 2015 of the fair value of the investment (see Note B).  The impairment of $386,000 is included in general and administrative expenses in the Company’s Condensed Consolidated Statements of Operations for the nine months ended September 30, 2015.