IMO, the PR was issued to indicate a change to the upper CAP of $8M. Otherwise, it seems to me, they would not need to mention it, as the agreement language would have handled replenishing the fund based on licensing activity.

It is true that neither TPL and PTSC are required to contribute more than $2M each per year into the fund. And it is true that before monies are paid to TPL for their 15% flat fee, and distributed 50/50 to the partners, that money is taken from available proceeds to fund the working capital fund. I assume such proceeds taken prior to distribution and applied to the working capital fund do NOT constitute satisfaction of TPL or PTSC's individual responsibilities to contribute up to $2M each per year.

So yes, IMO, if there are license revenues available, the fund would be replenished simply under the parameters of the agreement, and since the PR is talking about funds coming from the license revenues and not the partners, it would seem unnecessary to even mention so UNLESS there were a change to the upper cap of $8M.

Why this is important, IMO, is that according to the language in the agreements, TPL is essentially entitled to 1/8th of the working capital fund EACH quarter, whether there is any license revenue or not, with the caveat that if there is no money in the fund, they will get it when it becomes available. So, if they doubled (SUBSTANTIAL INCREASE) the upper cap to $16M, that would now entitle TPL to $2M per quarter in advance. Again, that money by agreement is nonaccountable and nonrecoupable by PDS, so it's a check to TPL regardless of what they do (again provided they are living up to the contract). So a CRAFTY licensing agent, might line up a bunch of licenses in one quarter, but intentionally NOT sign them until the next quarter in an effort to get that full $2M in the first quarter, withOUT it offsetting the 15% flat fee.

For example, say the fund had $16M in it at the beginning of this quarter we're in now. TPL is entitlted to 1/8th of that fund as an advance to cover their efforts. Say they expend $500K this quarter, but line up 10 licenses, but "can't" quite close them this quarter (intentionally). They still get the full $2M thist quarter. Then say they do conveniently close the deals NEXT quarter, and it amounts to $50M in fees AFTER expenses. TPL is first at the trough to get 15% of that money minus whatever was advanced to them at the begining of next quarter (presumably that would be no more than 1/8th of $14M by then. So TPL would get $7.5M minus the $1.75M that got in advance.

So in that scenario, TPL would have gotten $9.5M over 2 quarters for licensing.

Contrast that to a scenario where they sign $25M of that license revenue this quarter and $25M next (again amounts AFTER expenses). In that scenario, TPL would have been advanced $2M this quarter, and would receive 15% of $25M or $3.75M. However, the $2M advance would be taken off the $3.75M. Next quarter, through the license revenues, presumably the working capital fund would be replenished to the max cap again, so TPL would again get a full $2M advance, and at the end of the quarter, get another $3.75M minus the $2M advance, for their licensing efforts next quarter. That would equate to $7.5M total money going to TPL for the exact same licensing activity, just manipulated by TPL differently. So essentially, TPL would GAIN an EXTRA $2M from this kind of manipulation.

Granted, all of that is doable even NOW, albeit, though at lower working fund levels, the risk is reduced by $1M in this example.

Again, considering we're in court with TPL for constructive fraud and breach of contract allegations, it seems prudent to me for PTSC to be SKEPTICAL and conservative rather than agreeing to a larger pot of money that TPL can again manipulate the opportunities to maximize their take at the expense of PTSC.