Taken From the recent 10Q (italics and underlines are mine)

Management has concluded that PDS’ equity investment at risk is insufficient to finance its activities

We have not provided financial support to PDS other than required capital contributions and we are not contractually obligated to provide financial support to PDS other than to fund the working capital account at the discretion of PDS’ management committee. In the event we, and not TPL, provide working capital funding to PDS we would consolidate PDS’ financials with our own as our ownership in PDS would be greater than 50%.



We had an unsecured note for $1million for which TPL was liable .

PDS reimbursed PTSC for the $950K plus interest, however, TPL has not reimbursed PDS.

PDS also loaned Alliacense $410K for rent and payroll. This loan has not been reimbursed.

In April 2010 we filed suit against TPL for failure to pay the $1million. Then, after we learned that $7million in license fees were reported between Nov 30, 2010 and mid January 2011, TPL makes good on its $1million loan and the suit is dropped.

Might the purpose of these loans, in reality, have been to enable TPL to make its required capital contributions. If so, could PTSC have elected instead to contribute the monies to the working capital fund thereby increasing PTSC's ownership of PDS (rather than making the loans)? Could Leckrone know of some skeletons in the closet that would prevent PTSC from taking action that would have resulted in an increased ownership position?

I am not an accountant. I would appreciate the thoughts of those who are well versed in accounting.