What exactly are "supporting efforts", "special litigation support" and "other" expenses that PDS has committed to pay? Don't forget that pursuant to Moore's complaint, upon info and belief, TPL was receiving kickbacks from attorneys (or something to that effect). Is it possible that Leckrone is receiving money directly from attorneys for his "supporting efforts" as well?
7. Investments in Affiliated Companies pgs. 16-18
Phoenix Digital Solutions, LLC
PDS has committed to pay a quarterly amount ranging between $500,000 and $1,000,000 (based upon a percentage of the working capital fund balance of PDS) for supporting efforts to secure licensing agreements by TPL on behalf of PDS. During the nine months ended February 28, 2011 PDS expensed $2,000,000
PDS reimburses TPL for payment of all legal and third-party expert fees and other related third-party costs and other expenses. During the nine months ended February 28, 2011 PDS expensed $4,780,936
On January 19, 2011, in accordance with our settlement agreement with TPL, PDS agreed to pay TPL an additional $750,000 pursuant to this agreement representing reimbursement of special litigation support costs incurred by TPL.
On January 19, 2011, pursuant to our settlement agreement with TPL, $1,048,903 consisting of principal and interest through January 2011 was offset against the March 1, 2010 and June 1, 2010 $500,000 quarterly expense amounts payable to TPL in accordance with the LLC Agreement for supporting efforts to secure licensing agreements and a portion of the fiscal 2010 special litigation support payments owed to TPL by PDS. PDS has paid TPL in cash for the September 1, 2010 and subsequent quarters’ expense amounts pursuant to the LLC Agreement for supporting efforts to secure licensing agreements.
During June 2010, PDS advanced Alliacense $410,000 to fund payroll and rent obligations. On January 19, 2011, pursuant to our settlement agreement with TPL, the $410,000 was offset against the fiscal 2010 special litigation support payments owed to TPL by PDS.
On January 19, 2011, pursuant to our settlement agreement with TPL, PDS agreed to pay TPL $67,000 per month from September 1, 2010 to April 30, 2011 relating to TPL’s special work and effort regarding internal costs related to litigation support and patent re-examinations.
During the three months ended February 28, 2011 TPL entered into licensing agreements with third parties, pursuant to which PDS received aggregate proceeds of $7,441,000
During the nine months ended February 28, 2011 TPL entered into licensing agreements with third parties, pursuant to which PDS received aggregate proceeds of $8,850,000
At February 28, 2011, PDS had accounts payable balances of approximately $1,666,000 and $4,600 to TPL and PTSC, respectively
Variable Interest Entity Disclosures
At April 7, 2011, PDS’ cash and cash equivalents balance was $1,392,328. Management has concluded that PDS’ equity investment at risk is insufficient to finance its activities as the volume of license revenue has not supported litigation costs independent of additional working capital funding
