PDS is a variable interest entity (VIE) and PTSC is not the primary beneficiary and cannot direct the licensing activity of TPL on behalf of PDS. The investment provides PTSC with the ability to exercise significant influence, but not control, over the investee. Significant influence is generally deemed to exist if PTSC has an ownership interest in the voting stock of the investee of between 20% and 50%.

In the event PTSC, and not TPL, provides working capital funding to PDS, PTSC would consolidate PDS’ financials with our own as our ownership in PDS would be greater than 50%.

Do you see any scenario where PTSC will ever direct the licensing activity of TPL? Remember it is Alliacense that does the licensing. PTSC could possibly end up with greater than 50% ownership in PDS and greater control over PDS. However, if Leckrone is still in control of licensing and has carte blanche on his expenses, does it really matter what % of PDS is owned by PTSC?

Do I think PTSC would be foolish enough to make another loan to TPL, well I guess that would depend upon how much influence (trying to be gentle with my words) Leckrone may have on the remaining BoD members.

Am I wrong in my thinking? Corrections welcome