Looking at this year to date regarding what TPL has reaped from MMP vs. what PTSC has reaped. Keep in mind that TPL & PTSC split the expenses for licensing efforts of the MMP, HOWEVER, they do so through PDS and their funding of PDS, not as an out of pocket expense quarterly. Therefore, when people indicate that TPL has a 125 person staff, that is drawing a payroll, you gotta keep in mind that the portion of that payroll expense that has to do with MMP related licensing activities (includes the reverse engineering, etc.) is NOT an EXPENSE that TPL covers, and in fact is an ADDED revenue sources that TPL makes money on in terms of the overhead and profit they charge on those employees' efforts.

To try and clarify what I'm saying, I'll use the FY2009 numbers. To date, PDS has licensed $19,340,000 this year to date. In doing so, PDS has incurred expenses of $5,893,877. So the NET PROCEEDS of licensing are $13,446,123. Add to that some interest that PDS earns on its cash on hand of $58,580, and TPL & PTSC split the $13,504,703 left over 50/50. So TPL and PTSC each get $6,752,351.

HOWEVER, in addition to TPL's check for the above mentioned amount, TPL also gets whatever portion of the original $5,893,877 that was not outside legal or other outside expenses. For arguments sake, lets say 60% of it was Alliancense expense, and 40% was for outside lawyers, form processing, court fees, etc. etc. etc. So in addition to its $6,752,351, TPL got paid this year to date $3,356,326 using the 60/40 epxense split (this percentage split is totally an assumption by me and not any published figure - the actual figures could be much higher or much lower, but it the logic is what is not variable).

So let's look at the $3,356,326, and see what that corrolates to in the real world. If you want to assume an average blended billing rate for TPL staff (including reverse engineering, lawyers, contract administrators, secretaries, etc - top to bottom staff) of $250 per hour, that provides funding for 13,425 hours for the nine months that these figures cover. There are 2,080 work hours in the typical work year for an individual. So for 3 quarters, there were 1560 hours per person billable, not including overtime of course, but I'll assume no overtime. That's money enough to cover 8.6 employees at an average billing rate of $250 per hour.

Now as most people in business realize, a billing rate not only includes the actual payroll expense (salary, benefits, other burden), but it also includes an assumed overhead amount (misc costs for office facilities, rent, etc.) and PROFIT. So in reality, at an assumed billiable rate of $250, in that there is likely at least 20% (or $50) in profit, plus another 20% ($50) to cover expenses like rent, office epenses etc, support staff, etc., leaving an AVERAGE hourly rate actually paid to billable employees of $150 per employee. That equates to an AVERAGE annual salary of $312,000 per person working for TPL. Now my guess is that TPL does NOT pay all of it's employees that much. I'll assume that some lawyers make $500K but for each of those, there's probably 5 people that average $80K. So with that assumption, I think in reality, the actual costs of 6 employees would be $$900K, or the cost of 3 average employees' billable rates, so in essence rather than 8.6 employees being covered, the money collected AFTER overhead and profit is enough to cover more like 17 employees. Factor in that the overhead covers some secretaries and other staff (mailroom etc.) and the likelihood is that at least 20 people are covered in this analysis.

This is not money TPL pays out of pocket from it's portion of the 50/50 PDS split, but this is money that PDS pays TPL from the gross licensing money that PDS takes in. This additonal revenue source for TPL has been going on since the inception of the Commercialization Agreement. I'd assume that their other licesing efforts/agreements are similarly structured. If so, I'd suggest that it is unlikley that TPL has serious money concerns. Rather, I'd tell you that using this explanation, even if overly simplified, shows you why Leckrone would be so agressive in his defense of the PTSC BOD, as it provides him a cash cow of funding for his operations.