3. Liquidation Basis of Accounting

Fiscal Year 2015

Net assets in liquidation were $10.08 million and $9.5 million as of July 31, 2015 and July 31, 2014, respectively.

As of July 31, 2015, assets consisted of cash and cash equivalents of $10.94 million, the Tyngsborough Land valued at $2.5 million and other assets of $0.05 million. Based on our current best estimate of the realizable value of the Company’s remaining assets relating to the IQstream Business, we have assigned a value of $0 to these assets for purposes of the Statement of Net Assets. In addition, due to the uncertainty surrounding our ability to liquidate our Tejas investment, we have determined that we cannot reasonably provide an estimate of the net realizable value of our Tejas investment at this time and, accordingly, have assigned no value to the Tejas investment for purposes of the Statement of Net Assets.

As of July 31, 2015, liabilities consisted of accrued expenses of $0.05 million, our reserve for estimated costs during the Dissolution period of $1.77 million and other liabilities of $1.59 million. For additional information concerning other liabilities, see Note 6. “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 March 7, 2016). The Company was required to make certain estimates and exercise judgment in determining the accrued costs of liquidation as of July 31, 2015 and July 31, 2014.

The table below summarizes the reserve for estimated costs during the Dissolution period as of July 31, 2015 and July 31, 2014 (in thousands) and assumes that the Dissolution period ends on March 7, 2016:


	July 31, 2015		July 31, 2014
Compensation	$	376	$	1,004
Professional fees		568		1,154
Other expenses associated with wind-down activities		646		1,010
Insurance		186		294

	$	1,776	$	3,462

Net assets in liquidation increased $0.58 million during fiscal year 2015.

During the year ended July 31, 2015, the Company adjusted its estimate of the realizable value of assets and its estimated settlement amounts of liabilities, resulting in a net increase to net assets of $0.58 million. The realizable value of assets increased by $0.09 million as a result of an increase in other assets primarily related to a miscellaneous receivable. The Company decreased its reserve for estimated costs during the Dissolution period by $0.21 million. The decrease was primarily related to lower professional fees of $0.15 million and other expenses of $0.08 million. The decrease was offset in part by an increase in compensation costs of $0.02 million. The Company also decreased accrued expenses and other liabilities by $0.28 million primarily related to taxes in certain state and foreign jurisdictions.

Fiscal Year 2014

Net assets in liquidation decreased $4.14 million during fiscal year 2014. On July 29, 2014, the Company paid a liquidating distribution to stockholders, resulting in a decrease to net assets of $6.93 million.

In addition to the impact of the liquidating distribution, during the twelve months ended July 31, 2014, the Company also adjusted its estimate of the realizable value of assets and its estimated settlement amounts of liabilities, resulting in a net increase to net assets of $2.79 million. The realizable value of assets increased by $2.99 million as a result of the sale of the IBM Patents for $2.0 million, the sale of the IQstream Patents for $0.3 million, the determination by a neutral accountant that certain disputed amounts were for the account of the Company under the Asset Sale Agreement for $1.11 million, and an increase in other assets of $0.03 million, partially offset by a decrease in the realizable value for the Tyngsborough Land of $0.45 million. The Company increased its reserve for estimated costs during the Dissolution period by $0.46 million. The increase was primarily related to additional professional fees of $0.35 million, compensation costs of $0.28 million and insurance costs of $0.13 million expected to be incurred as a result of certain wind-down activities taking longer to complete than originally anticipated, including continued compliance with our public company reporting obligations. The increase was offset in part by a reduction in estimated other expenses of $0.3 million associated with wind-down activities. The Company also decreased accrued expenses and other liabilities by $0.26 million primarily related to taxes in certain state and foreign jurisdictions.