Liquidation Basis of Accounting

6 Months Ended

Jan. 24, 2015

3. Liquidation Basis of Accounting

Net assets in liquidation were $9.57 million and $9.50 million as of January 24, 2015 and July 31, 2014, respectively.

As of January 24, 2015, assets consisted of cash and cash equivalents of $11.36 million, the Tyngsborough Land valued at $2.5 million and other assets of $0.04 million. Based on our current best estimate of the realizable value of the Company’s remaining assets relating to the IQstream Business and the Company’s investment in Tejas, we have assigned no value to these assets for purposes of the Statement of Net Assets.

As of January 24, 2015, liabilities consisted of accounts payable of $0.03 million, accrued expenses of $0.05 million, our reserve for estimated costs during the Dissolution period of $2.46 million and other liabilities of $1.79 million. For additional information concerning other liabilities, see Note 5. “Income Taxes.”

The Company accrued estimated costs expected to be incurred in carrying out the Plan of Dissolution. Under Delaware law, the Dissolution period will last for a minimum of three years from the filing of the Certificate of Dissolution, or until March 7, 2016. The Company was required to make certain estimates and exercise judgment in determining the accrued costs of liquidation as of January 24, 2015 and July 31, 2014.

The table below summarizes the reserve for estimated costs during the Dissolution period as of January 24, 2015 and July 31, 2014 (in thousands):


	January 24, 2015		July 31, 2014
Compensation	$	526	$	1,004
Professional fees		876		1,154
Other expenses associated with wind down activities		869		1,010
Insurance		186		294

	$	2,457	$	3,462

For the three months ended January 24, 2015, net assets in liquidation decreased $0.01 million primarily as a result of an increase in expected compensation costs. For the six months ended January 24, 2015, net assets in liquidation increased $0.07 million primarily as a result of an increase in other assets related to a miscellaneous receivable and changes in estimates of other expenses associated with wind down activities and compensation costs.

- Definition

Disclosure of accounting policy for reporting when there is a substantial doubt about an entity's ability to continue as a going concern for a reasonable period of time (generally a year from the balance sheet date). Disclose: (a) pertinent conditions and events giving rise to the assessment of substantial doubt about the entity's ability to continue as a going concern for a reasonable period of time, (b) the possible effects of such conditions and events, (c) management's evaluation of the significance of those conditions and events and any mitigating factors, (d) possible discontinuance of operations, (e) management's plans (including relevant prospective financial information), and (f) information about the recoverability or classification of recorded asset amounts or the amounts or classification of liabilities. If management's plans alleviate the substantial doubt about the entity's ability to continue as a going concern, disclosure of the principal conditions and events that initially raised the substantial doubt about the entity's ability to continue as a going concern would be expected to be considered. Disclose whether operations for the current or prior years generated sufficient cash to cover current obligations, whether waivers were obtained from creditors relating to the company's default under the provisions of debt agreements and possible effects of such conditions and events, such as: whether there is a possible need to obtain additional financing (debt or equity) or to liquidate certain holdings to offset future cash flow deficiencies. Disclose appropriate parent company information when parent is dependent upon remittances from subsidiaries to satisfy its obligations.

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