13. STOCK
PURCHASE AGREEMENT
During
fiscal year 2012, we signed a Stock Purchase Agreement to
acquire an 11% position with Demibooks, Inc. for an initial
investment of $250,000. We have accounted for this
investment using the cost method, as reflected on the balance
sheet under ‘investment in nonmarketable equity
securities’. Demibooks provides a publishing
platform, Composer, which is a code-free way for publishers
and self-published authors and illustrators to create
interactive books for the iPad on the device itself. We
utilize the Composer platform to create proprietary
interactive products. The Stock Purchase Agreement allowed
for an additional $250,000 investment, of which we have
invested an additional $180,300 during fiscal year 2013,
resulting in a total position of 15.6%. Our
investment in Demibooks is subject to a high degree of risk
because such securities are illiquid and the value of such
securities could decline causing us to write-down or
write-off the value of our investment, which would result in
a negative impact to our earnings.
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