On April 4, 2014, we were notified of the resignation of TPL's representative to the PDS management committee, and the concurrent appointment by TPL of its new representative to PDS. While we are hopeful that this may relieve some of the decision deadlock at PDS, the impact of this action has yet to be determined.

Further frustrating management's plans for the continued operation of PDS, PDS has been notified by its current patent counsel that they are no longer able to work on a contingency basis. PDS and its current patent counsel are currently discussing alternative, hybrid hourly/contingency fee arrangements. While it is unclear whether PDS will come to an agreement with its current patent litigation counsel, it is reasonably likely that PDS' legal fees will materially increase in the future. Additionally, a significant delay in revising the terms of PDS' engagement of its current patent counsel or in engaging new counsel could result in material delays in the underlying litigation and delays in receiving any judgments resulting therefrom, if any.