From the Risk Factors and 10Q -

Why Lack of Transparency

…..Finally, there are several important factors that should be known which contribute to the success of the licensing business and we have been careful to enumerate these in the Risk Factors section of our annual report on Form 10-K for the year ended May 31, 2011, and the quarterly report on Form 10Q for the period ending May 31, 2011.These are not boiler plate comments and we encourage you to read them carefully.

10Q

Our Joint Venture Is At Risk For Going Concern And An Inability To Meet Certain Obligations.

PDS, our joint venture with TPL, which received a going concern opinion in our May 31, 2011 financial statements, has experienced significant declines in revenues while at the same time incurring significant legal costs associated with pending litigation with companies which we allege have infringed on our patent portfolio. Currently, there are no commitments by us or TPL to provide additional working capital to PDS. We expect PDS will fund its operations through licensing revenue.

37

In December 2011, TPL engaged new counsel on behalf of PDS, and committed PDS to paying an initial retainer payable in monthly installments. The $200,000 that we contributed to PDS referred to above, was used to pay the first installment of such retainer. The remaining balance of the retainer is anticipated to be funded by PDS from licensing revenues, which have declined over recent years to a point where PDS’ ability to make the foregoing retainer payments is in substantial doubt unless licensing revenues substantially increases in the near term.

In the event that PDS does not have the funds to pay one or more installments of the retainer, we and TPL must decide whether to contribute additional capital to PDS to fund such installments. The newly retained counsel will continue the Northern California cases to trial after the claims construction hearing.

(emphasis by me)

Questions for the BoD: Why does it state that TPL engaged new counsel on behalf of PDS and committed to paying a retainer. There is no mention that both TPL and PTSC engaged new counsel on behalf of PDS. If we are joint owners why/how could TPL do this without PTSC's consent. Also, PTSC contributed $200K to PDS. Did TPL also contribute an equal amount? If not, is this a capital contribution for PTSC thereby giving PTSC greater than a 50% ownership in PDS?