During the six months ended November 30, 2006, Phoenix Digital entered into licensing agreements with third parties, pursuant to which it received aggregate proceeds of $32,699,000. License proceeds of $8,850,000 relating to an additional license agreement signed in November 2006 are to be received in January 2007. Phoenix Digital has recorded this amount as a license receivable. During December 2006, Phoenix Digital entered into licensing agreements with aggregate proceeds of $7,320,000.

The condensed balance sheet and statement of income of Phoenix Digital at November 30, 2006 and for the six months then ended are as follows:

Condensed Balance Sheet
ASSETS:
Cash		$	7,731,427
License fees receivable			8,850,000
Prepaid expenses			15,000
Total assets		$	16,596,427
Investment in Affiliated Company/License Agreement, continued
LIABILITIES AND MEMBERS’ EQUITY:
Accounts payable		$	1,172,314
Members’ equity			15,424,113
Total liabilities and members’ equity		$	16,596,427