Aren't you forgetting the $1.05M that TPL owes PDS from the SECURED loan it defaulted on?

per the 10q:

"On July 15, 2010, we received payment from PDS of $1,003,095 consisting of principal and interest through July 15, 2010 on our $950,000 secured note with TPL for which PDS was jointly and severally liable. This amount has been recorded as a note receivable from TPL on PDS’ balance sheet on July 15, 2010. Due to TPL’s inability to pay the note, it has been fully reserved for at July 15, 2010 and the allowance has been recorded as “Reserve for loan loss and uncollectable receivable” on PDS’ statement of operations for the six months ended November 30, 2010."

I don't understand the accounting reporting rules well enough to know, and hopefully you do, but doesn't that money offset the $3.1 PDS owes TPL?