It's not just us doing business with Alliacense, i.e., it's not just PTSC that they have to worry about. How would those other entities feel about it? MMP=50 licenses, others, far fewer. You think they'd sit there and pay 33% of all expenses when it's obvious that PTSC is probably coming out way ahead in the use of resources? Think again.

Implied intent. Well, if they've been doing this (intermingling costs) since day one, the intent would be pretty darned clear. The issue of INTENT when it comes to fraud is the that you typically cannot prevail in court against a defendent if the error only happenned once, or only a few times (e.g., a typo or a misplaced decimal point). If the error is a standard business practice, you're nailed.

There's also a thing called Standard Accounting Procedures they must comply with. Such procedures preclude intermingling of costs that are reasonably severable. These costs could be easily severable. And Standard Accounting Procedures dictate the promulgation of written SOPs and training to assure compliance.

You obviously have zero experience in such matters. I do. When I worked at Hughes and Raytheon, we did R&D "services" work for the Gov't and commercial customers. We also did internally-funded IR&D. There was constant concern, and redundant extensive training of staff scientists and engineers, to make darned sure they never, ever, intermingled such costs (the biggest concern being performance of IR&D and a mischarge to externally-funded R&D). One foul up could mean big trouble. Frequent foul-ups could close the doors - for years if not forever. And people could go to jail (and this is why I would never want to be a CFO, because you can easily become the victim of foul-ups by others - because YOU are ultimately responsible).

Next time you take your car to be serviced, tell 'em it's fine with you if they intermingle the total cost of working on your car with the cost of the major overhaul of the Ferrari in the next stall. Yes, some non-severable overhead costs will be intermingled (utilities, pure administrative costs and the like); for this they apply a standard OH rate. Severable costs for parts and time by the tech are charged separately.

I'll replace "simple minds" with "the ignorant" (i.e, not knowledgable). Feel better?

SGE