Short-term Investments

At July 31, 2011 we had marketable securities consisting of U.S. government securities and certificates of deposit of approximately $2,999,000 that were classified as "available-for-sale securities" and reported at fair value.

At April 30, 2011 we had marketable securities consisting of U.S. government securities of approximately $1,349,000 that were classified as "held–to-maturity securities". During the three months ended July 31, 2011, for working capital purposes, we sold approximately $550,000 of the U.S. government securities prior to their maturity dates, for their approximate amortized cost with no significant gains or losses. Since it was management intention at July 31, 2011 to use these securities for working capital purposes as required, they were classified as "available-for-sale securities" as of that date.

Investment in Videocon

Our investment in Videocon is classified as an "available-for-sale security" and reported at fair value, with unrealized gains and losses excluded from operations and reported as a component of accumulated other comprehensive income (loss) in shareholders' equity. The original cost basis was determined using the specific identification method. The fair value of the Videocon GDRs is based on the price on the Luxembourg Stock Exchange, which price is based on the underlying price of Videocon's equity shares which are traded on stock exchanges in India with prices quoted in rupees.

ASC 320 "Investments – Debt and Equity Securities" and SEC guidance on other than temporary impairments of certain investments in equity securities requires an evaluation to determine if the decline in fair value of an investment is either temporary or other than temporary. Unless evidence exists to support a realizable value equal to or greater than the cost basis of the investment, a write-down accounted for as a realized loss should be recorded. At each reporting period we assess our investment in Videocon to determine if a decline that is other than temporary has occurred. In evaluating our investment in Videocon at October 31, 2009, we determined that based on both the duration and the continuing magnitude of the market price decline compared to the original cost basis of $16,200,000 and the uncertainty of its recovery, a write-down of the investment should be recorded as of October 31, 2009 and a new cost basis of $7,105,264 should be established. The fair value of our investment as of July 31, 2011 of approximately $6,362,000 represents a price decline of approximately $743,000 from the revised cost basis. In evaluating our investment in Videocon at July 31, 2011, we determined that based primarily on the fair value exceeding the revised cost basis in June 2011 and both the duration and the magnitude of the market price decline compared to the revised cost basis, a write down of the investment as of July 31, 2011 is not required.

The fair value of our investment in Videocon as of July 31, 2011 and October 31, 2010, and the unrealized loss for the nine month period ended July 31, 2011, are as follows:

Investment in Digital Info Security Co. Inc.

Our investment in DISC is classified as an "available-for-sale security" and reported at fair value, with unrealized gains and losses excluded from operations and reported as a component of accumulated other comprehensive income (loss) in shareholders' equity. The original cost basis was determined using the specific identification method. DISC's common stock is not registered under the Securities Act of 1934, but is traded in the over the counter market and quoted on the Pink Sheets. At each reporting period we assess our investment in DISC to determine if a decline that is other than temporary has occurred. In evaluating our investment in DISC at October 31, 2009 we determined that, due to the decline in market value and the uncertainty of its recoverability, an other than temporary impairment of the investment of approximately $124,000 should be recorded as of October 31, 2009 and a new cost basis of $198,030 should be established.

The fair value of our investment in DISC as of July 31, 2011 and October 31, 2010, and the cost basis of common stock sold and unrealized loss for the nine month period ended July 31, 2011, are as follows:

During the nine months ended July 31, 2011, we received proceeds of approximately $119,000 on the sale of 4,219,443 shares of the 7,199,443 shares of DISC common stock we held at October 31, 2010, and recorded a net gain on such sales of approximately $30,000. During the three months ended July 31, 2011, we did not sell any shares of DISC.

Investment in Volga-Svet, Ltd

In September 2009, we acquired a 19.9% ownership interest in Volga, a privately held Russian company, in exchange for 150,000 unregistered shares of our common stock. As we do not believe that we can exercise significant influence over Volga, our investment in Volga is recorded at cost of $127,500, based on the closing price of our common stock at the time of the acquisition. As of July 31, 2011, we have not identified any events or changes in circumstances that may have a significant adverse effect on the fair value of the investment.