On April 6, 2006, we filed a declaratory relief lawsuit against Russell Fish and The Fish Family Trust in the United States District Court for the Southern District of California. As a consequence of licensing agreements entered into by or on behalf of Patriot , by Patriot's previous management , Mr. Fish presented demands for payment by us under his July 2004 agreement related to the Inventorship Litigation. We contended that Mr. Fish had been paid all sums that may have been owed to him. Our action sought declaratory relief that no further sums were owed to Mr. Fish. Also, on April 6, 2006, Fish and, later, Robert Anderson, allegedly as trustee of The Fish Family Trust, filed a lawsuit against the Company in the District Court of Dallas County, Texas. The case was subsequently removed to the United States District Court for the Northern District of Texas. The lawsuit was based on an alleged breach of the contract entered into on July 27, 2004 and sought enforcement of the contract or damages. The California action was transferred to the Northern District of Texas. Mediation commenced on September 11, 2006. In December 2006, the Fish lawsuit was settled in principle through mediation. Settlement terms have not been finalized as of this filing date nor is there an executed settlement agreement in place. In light of the mediation and after consulting with counsel, we feel we are close to a settlement agreement even though there is no guarantee that that will take place nor is it enforceable until an agreement has been signed. As a result, d uring the six months ended November 30, 2006, the Company recorded $6,300,000 of settlement and license expense relating to the mediation agreement with Fish. The amount consists of $3,000,000 to be paid in cash and 5,500,000 million shares of stock at an average price of $0.60 per share. In addition to those terms, the mediation terms further provide the Company will pay Fish the equivalent of 4% of 50% of the next $100 million of gross license fees as they are collected by Phoenix Digital and as distributions are made to Patriot , after excluding the first $20 million collected by P hoenix Digital after December 1, 2 0 06. Patriot's commitment to make payments to Fish related to such future license revenues will not exceed $2 million.