(4) INVESTMENT IN NET INSURANCE BENEFITS

Investment in NIBs for the nine months ended December 31, 2015, and the fiscal year ended March 31, 2015, were as follows:

	December 31, 2015		March 31, 2015
Beginning Balance	$	22,544,635	$	12,243,411
Additional investments		3,368,380		7,846,746
Accretion of interest income		2,777,501		2,454,478
Distributions of investments		-		-
Impairment of investments		-		-
Total	$	28,690,516	$	22,544,635

As mentioned in Note 3, the Company transferred $3,368,380 from advance for investment in NIBs into investment in NIBs on September 30, 2015.

The investment in NIBs is a residual economic beneficial interest in a portfolio of life insurance contracts that have been financed by an independent third party via a loan from a senior lender and insured via a mortality risk insurance product or mortality re-insurance (“MRI”). Future expected cash flow is defined as the net insurance proceeds from death benefits after senior debt repayment, mortality risk repayment and service provider or other third-party payments. The Company is not responsible for maintaining premiums or other expenses related to maintaining the underlying life insurance contracts. Therefore, the investment in NIBs balance on the Company's balance sheet does not increase when premiums or other expenses are paid. The Company holds a 100% interest in the NIBs relating to the underlying life insurance policies as of March 31, 2015. The Company holds between 81% and 100% in the NIBs relating to the underlying life insurance policies as of December 31, 2015.

The Company accounts for its investment in NIBs at the initial investment value increased for interest income and decreased for cash receipts received by the Company. At the time of transfer or purchase of an investment in NIBs, we estimate the future expected cash flows and determine the effective interest rate based on these estimated cash flows and our initial investment. Based on this effective interest rate, the Company calculates accretable income, which is recorded as interest income on investment in NIBs in the statement of operations. Subsequent to the purchase and on a regular basis, these future estimated cash flows are evaluated for changes. If the determination is made that the future estimated cash flows should be significantly adjusted, a revised effective yield is calculated prospectively based on the current amortized cost of the investment, including accrued accretion. Any positive or adverse change in cash flows that does not result in the recognition of an “other-than-temporary impairment” (“OTTI”) results in a prospective increase or decrease in the effective interest rate used to recognize interest income. We have not recognized any significant adverse change in future estimated cash flows relating to our investment in NIBs from January 31, 2013 (inception) to the period ended December 31, 2015.

During July, 2015, a group of persons located in the United States (the “Purchasers”) acquired the entities that owned all of the portfolios of life insurance contracts underlying the Company's NIBs. The Purchasers have also agreed to amend the NIBs agreements to provide greater disclosure to the Company and limit permitted expenses to be paid prior to payments to the NIBs holders, pending certain regulatory and tax approvals. In connection with this purchase, the Purchasers and the respective owners of these portfolios entered into a Settlement Agreement releasing such owners and their managers from liability related to their ownership and management of the entities that owned the respective portfolios of life insurance contracts. The Purchasers further required releases from the Company and the payment of certain accrued expenses. Accordingly, effective as of July 17, 2015, the Purchasers acquired all of the ownership interests in the entities that owned all of the portfolios of life insurance contracts underlying the Company's NIBs from their prior owners and executed a Settlement Agreement with such owners and the Company in relation to these matters. The NIBs amendments are in process, and the Company believes the NIBs amendments will be in effect within the next three months. The Company and Purchasers agreed to indemnify the prior owners of such portfolios against future claims in connection with the issuance of the NIBs or their ownership or management of the entities sold, based on actions that occurred prior to this sale to the Purchasers. During the three months ended December 31, 2015, the Company accrued for an $826,665 obligation related to the ownership change, which is recorded in General and Administrative Expenses. Management of the Company is presently not aware of the existence of any additional payments owed. Neither the purchase of these entities nor the Settlement Agreement resulted in any material change in our NIBs ownership interest. The Company was supportive of the Purchasers acquiring the entities that owned the portfolios of life insurance contracts underlying the Company's NIBs and was willing to provide the indemnification because it believes this ownership change will result in a reduction of costs and expenses associated with ownership of the NIBs, which should increase their intrinsic value.