Patriot Scientific der Highflyer 2006
Onkyo Becomes Latest Microprocessor Patent Licensee. Patriot Appoints Donald Schrock to Board of Directors
Patriot Scientific is an intellectual property company established to develop and market innovative and proprietary semiconductor technologies into the fast-growing hand-held wireless and smart card markets. Products based on these technologies can be used to connect to the Internet or other telecommunication networks. The company owns a portfolio of patents that encompass fundamental microprocessor technologies and includes additional patents pending. The company's strategy is to exploit its microprocessor technologies through product sales, licensing and strategic alliances. The company also intends to litigate against those infringing on its patents.
Founded in 1987 with DOD applicable technologies, Patriot Scientific developed a 32-bit unique microprocessor architecture in 1994 that evolved into the IGNITE™ family of microprocessors, the industry's smallest and most powerful 32-bit RISC microprocessor devices. The IGNITE technology is based on a unique dual stack architecture that delivers a low-cost, general purpose, Java environment in a single processor that is half the size, consumes half the power and delivers twice the performance of other 32-bit RISC microprocessors
Monday, April 28, 2008
CARLSBAD, Calif. –- Patriot Scientific (OTC Bulletin Board: PTSC) today announced that Onkyo Corporation has purchased a Moore Microprocessor Patent™ (MMP) Portfolio license from The TPL Group, Patriot’s exclusive licensing partner. Onkyo manufactures and sells a range of audio, video and home theater products.
“We welcome Onkyo to the growing list of International licensees for the MMP™ Portfolio,” said Rick Goerner, Patriot’s President and CEO. “Onkyo’s strong presence in the consumer electronics market represents another validation of the success of the licensing program.”
The wide scope of licensed applications using the MMP™ Portfolio design techniques continues to encourage global manufacturers of end user products to become MMP™ Portfolio licensees. More than 40 companies from the US, Europe, Japan, Korea and Taiwan have licensed the MMP™ Portfolio technologies, including many industry leaders such as Fujitsu, Hewlett Packard, Kenwood, Mattel, Nokia, Philips, Sony and Toshiba.
The MMP™ Portfolio patents utilize techniques that enable higher performance and lower cost designs and are fundamental to consumer and commercial digital systems. Today, there are dozens of microprocessor-based key features and benefits that are included in systems such as: DVD players, cell phones and portable music players to communications infrastructure, medical equipment, and automobiles.
About Onkyo Corporation
Founded in 1946, Onkyo is a global leader in high-quality Home AV products, including AV receiver-, speaker- and PC-related products. In recent years, building on its core strength in analog technology and its acquisition of leading Japan-based PC manufacturer SOTEC in 2007, Onkyo has been developing personal computers integrated with high-quality audio capabilities. Onkyo also has an active OEM business that includes the production of speakers for the automotive, TV display and entertainment industries. To learn more, visit http://www.onkyo.com. About Patriot Scientific
Patriot Scientific is a leading intellectual-property licensing company that develops, markets, and enables innovative technologies that satisfy the demands of fast-growing markets for wireless devices, smart cards, home appliances, network gateways, set-top boxes, entertainment technology, automotive telematics, biomedical devices, industrial controllers and more. Headquartered in Carlsbad, Calif., information about the company can be found at http://www.patriotscientific.com.
Monday, April 28, 2008
CARLSBAD, Calif. –- Patriot Scientific (OTC Bulletin Board: PTSC) today announced that Onkyo Corporation has purchased a Moore Microprocessor Patent™ (MMP) Portfolio license from The TPL Group, Patriot’s exclusive licensing partner. Onkyo manufactures and sells a range of audio, video and home theater products.
“We welcome Onkyo to the growing list of International licensees for the MMP™ Portfolio,” said Rick Goerner, Patriot’s President and CEO. “Onkyo’s strong presence in the consumer electronics market represents another validation of the success of the licensing program.”
The wide scope of licensed applications using the MMP™ Portfolio design techniques continues to encourage global manufacturers of end user products to become MMP™ Portfolio licensees. More than 40 companies from the US, Europe, Japan, Korea and Taiwan have licensed the MMP™ Portfolio technologies, including many industry leaders such as Fujitsu, Hewlett Packard, Kenwood, Mattel, Nokia, Philips, Sony and Toshiba.
The MMP™ Portfolio patents utilize techniques that enable higher performance and lower cost designs and are fundamental to consumer and commercial digital systems. Today, there are dozens of microprocessor-based key features and benefits that are included in systems such as: DVD players, cell phones and portable music players to communications infrastructure, medical equipment, and automobiles.
About Onkyo Corporation
Founded in 1946, Onkyo is a global leader in high-quality Home AV products, including AV receiver-, speaker- and PC-related products. In recent years, building on its core strength in analog technology and its acquisition of leading Japan-based PC manufacturer SOTEC in 2007, Onkyo has been developing personal computers integrated with high-quality audio capabilities. Onkyo also has an active OEM business that includes the production of speakers for the automotive, TV display and entertainment industries. To learn more, visit http://www.onkyo.com. About Patriot Scientific
Patriot Scientific is a leading intellectual-property licensing company that develops, markets, and enables innovative technologies that satisfy the demands of fast-growing markets for wireless devices, smart cards, home appliances, network gateways, set-top boxes, entertainment technology, automotive telematics, biomedical devices, industrial controllers and more. Headquartered in Carlsbad, Calif., information about the company can be found at http://www.patriotscientific.com.
Ronran´s Kommentar:
Very good post by ronran...
Posted by: fatwollit on May 05, 2008 11:36PM
which I've taken the liberty of copying and pasting here. Original can be read at Yahoo Group Message No 271:
. . . . . . .
While I was working in shareholder proposals this past weekend, I
also took what little free time I have left to draw up a post
addressing this subject, which is one of the others to which BaNosser
referred me. This installment is based largely on Teremoto's post of
May 1 here in this forum, although I as well as others have alluded
to it many times in different ways back on the Agora board. I once
posted there that Jim Turley did not have control over PTSC in its
current configuration, but as things stood at that moment, the full
explanation would likely have provoked havoc at a time when there was
great hope that the J3 settlement was going to be the watershed event
that all of us had expected. Since that event has now come and gone
to our dismay, however, and the stock price has fallen to current
levels, there seems little reason to now withhold the discussion any
longer.
Please keep in mind my usual disclaimer that I am not a corporate or
patent lawyer. The following are my opinions premised upon some very
basic concepts that I learned long ago in law school and that I have
dealt with only superficially since then, and would most definitely
require an attorney with expertise in these specific fields in order
to be validated. For now, all of this should be deemed as "stuff"
that is out there on the extreme, and that should thus not be relied
upon until such time, if ever, that the necessary validation has
occurred. I have chosen to discuss it now as food for thought, since
many of you appear to be engaging in fairly deep consideration of the
subject anyway.
The Master Agreement, speaking generally, allows TPL full, sole, and
complete authority over not only licensing and litigation, but also
as to all flow of information pertaining to such. On the surface,
the Agreement states a "mirror image" concept concerning PR matters,
in which TPL and PTSC are given the right of review over each other's
news releases — in practice, however, this actually provides a
kind of "veto power" that gives full and absolute control to TPL, and
thus to Dan Leckrone.
Please remember back to the days when PTSC was in litigation with TPL
over the co-ownership issue. I was shocked to learn, even after
confirming with several patent attorneys, that, in the absence of a
written agreement to the contrary, one co-owner of a patent can
engage in licensing activities as he wishes, and has no obligation
whatsoever to share the monetary proceeds with his other co-owners.
Yes, it's true — if you and I are co-owners of a patent and I
don't like the way you want to market the patented item, I can go out
and make my own licensing deals and I don't have to give you any of
the money. The underlying theory, as unfair as it seems on the
surface, is that the public should not be denied access to new
discoveries merely because the co-owners cannot unanimously decide
how best to utilize it or how much to charge for it. This is one of
those areas in which "fairness" cannot be done to all, and in which
the law has thus decided that the interest of the pubic outweighs
that of individual co-owners of a patent who did not have the
foresight to enter into a contract for their protection in advance.
Perhaps you are now starting to get the picture. If PTSC does not
obtain TPL's approval to release a particular PR, the failure to do
so is, at least arguably, a violation of the Master Agreement.
Violating the Master Agreement arguably results in its termination.
If the Master Agreement is terminated, the parties revert to being co-
owners with no other contract in place for either's protection. TPL
is then free to go out and engage in licensing activities to the full
and complete exclusion of PTSC, and with no obligation to share the
funds. And guess who has all of the lawyers, engineers, and other
support personnel to do just that? Hint: It ain't PTSC, and PTSC
would have a hard time playing "catch-up" to the system that TPL has
already developed — as a practical matter, catching up would be
virtually impossible.
The above is why Jim Turley — and, for that matter, David Pohl,
and now, Rick Goerner — have not been and/or are not, as a
practical matter, the CEOs of PTSC in the context of the Company's
current business model, which is making money from licensing fees
and/or litigation. In a "de facto" sense, Dan Leckrone is our CEO
and Chairman of the Board — he has virtually complete control not
only as to licensing and litigation, but also as to all information
released concerning such. And since we live in the "age of
information", where "knowledge is power", then we must acknowledge
that Mr. Leckrone currently has virtually all the power. Sure, we
can spend our money (after it comes in from licensing efforts) pretty
much as we please, and we can engage in efforts to diversify the
Company's revenue streams — however, such diversification has not
yet occurred, and until it does, the fact of the matter is that we
are solely dependent upon Mr. Leckrone and his minions. None of this
is any way a slam on Mr. Goerner, who I think is headed in the right
direction and doing a fine job so far — it is simply the way
things are right now.
As I see it, all of this dovetails not only with Teremoto's post
referred to at the outset of this note, but also with Brian's posts
of earlier today in which he discusses the ramifications of a merger
between TPL and PTSC. Is Mr. Leckrone's position of power and
control over PTSC in conflict with the valuation he would like to be
placed on TPL, especially in consideration of a possible merger
between the two companies (assuming, of course, such a thing is being
considered)? I don't have a concrete answer to that question at this
point, but the facts that we do know certainly raise some interesting
implications — speaking just theoretically, gaining power over,
yet then acting prejudcially toward, those whom one controls can
sometimes carry significant consequences.
With apologies for leaving you hanging, further discussion of these
concepts is far too premature at this point. Instead, my advice is
that we submit our shareholder proposals, using them as an expression
of formal dissatisfaction with our current status and in the hope
that we will have seen a change in direction by the time of the
shareholder meeting in October. Should no such change be evident by
that time and the share price has not recovered to reasonable levels,
then further consideration should perhaps be given to other avenues.
Best wishes to all.
ob die wohl angenommen werden??
From RonRan on Yahoo (Draft shareholders proposals)
Posted by: wolfpackvolt on May 05, 2008 09:29PM
Draft shareholders proposals
Below are two shareholder proposals that I have drafted. I would
characterize them as still being in rough form, though nearly
complete. Your suggestions are invited, but due to my schedule, I
will probably rely on Brian, if he would be so kind, to do any
finalization in the event that this concept is what we decide to
submit.
As most of you know, I am neither a corporate nor a securities
attorney, but from what little I have read, it seems that changes in
the constitution of the Board, at least insofar as existing members
are concerned, are not allowed to be addressed in shareholder
proposals. I invite correction on that, but it just seems logical to
me.
In any event, it is with this in mind that I drafted the proposals
below. If the three "seasoned" PTSC Board members are going to be
with us awhile longer, then I see no reason why they should be
further rewarded beyond their base salaries after we have suffered an
80 - 85% decrease in market cap during their tenure. Stated another
way, I think it is time that they "feel the same pain" as the rest of
us --- and their existing stock options aren't any consolation to
me, especially since these Board members didn't pay for them out of
their own pockets. Certainly, the newer members should not be put in
the same category since they haven't had as much time to perform, but
IMO, there is no further excuse for the others.
I want to be absolutely clear that I have no personal animosity for
these Board members. I have met and talked with all of them at one
time or another (shareholder meetings, Markman hearing, etc.), and I
think they are all very nice, and very talented in their fields. On
the other hand, with our market cap having declined to this
ridiculous and embarrassing extent, the "gravy train" must IMO come
to a grinding halt. Board meetings at fancy restaurants, riding in
limos to shareholder meetings, compenstation for "committee work"
and "extra work" (that has gotten us less than nowhere) are all, as I
see it, a slap in the face to the retail shareholder community. We
have asked nicely in our shareholders letters for some if not all of
these things, and have been ignored --- and we may continue to be
ignored even now, but at least we are speaking louder and with more
formality.
Thank you for your consideration of the above, and of these
proposals --- and don't be too hard on me, as this is the first
time I have ever done this kind of thing. It may well be that there
are better proposals out there, and if so, I will be interested to
see them as well.
Best wishes to all.
====================================...
1. Compensation and reimbursement of members of the Board of
Directors.
a) No Board member shall be compensated by the Company, whether
directly or indirectly, in excess of $3000.00 per month.
b) There shall be no additional compensation of any kind paid,
whether directly or indirectly, by the Company to any Board member(s)
for membership in, or leadership of, any of the Company's committees,
nor for any consulting work, other projects, or any other kinds of
tasks whatsoever, even if performed for or on behalf of the Company.
c) No expenses shall be paid or reimbursed, whether directly or
indirectly, to any Board member other than the following: $25.00 per
day per Board member for food and/or drink; rental car of compact or
medium size (or cab fare at standard rates), no limousines or other
types of transportation or couriers for any reason; plane fare
at "coach" level only; hotel at Holiday Inn Express level or
equivalent. All categories of said expenses shall be paid or
reimbursed only when the Board member is expressly involved solely
and directly in business activities on behalf of the Company, and
the Company shall keep separate monthly records of all said expenses
which shall be available for review by any shareholder who makes a
written request, after which the Company shall have five (5) business
days in which to supply the requested information.
d) No Board and/or committee meetings shall be held at any place
other than a conference room at PTSC, although members who live
outside the Carlsbad, California area may attend by phone.
e) All of the foregoing are subject to the additional limitation
that, pertaining to any work or other endeavors performed with the
goal of benefitting PTSC either directly or indirectly, no member(s)
of the Board shall accept compensation or expense reimbursement of
any kind, either directly or indirectly, from any person or entity
other than PTSC, and that PTSC may not accept any such funds from any
person or entity which PTSC then pays or reimburses to any Board
member(s).
2. Revaluation of stock options for certain Board members
a) The strike price of any existing options held by any Board member
who was holding his or her seat on the Board during the year 2005,
regardless of whether he or she has served, or will serve,
continuously or intermittently since that time, shall be immediately
increased to $1.75 (valued in comparison to the current outstanding
diluted share count of 395,666,621, as declared in the Company's 10Q
filing of April 9, 2008).
b) No further options shall be granted to any such Board member(s) as
described in item a) above until such time as the Company's stock
price reaches and maintains said price of $1.75 (valued in comparison
to the current outstanding diluted share count of 395,666,621, as
declared in the Company's 10Q filing of April 9, 2008) for at least
30 business days.
c) Should any options, warrants, or similar kinds of rights have been
granted to any members of the Board as described in a) and/or b)
above between the date this proposal was made known to the Company
and the time it becomes officially effective, then any such options,
warrants, or similar rights shall be immediately declared null and
void, and any Board member(s) having received same shall immediately
surrender them back to the Company without compensation or
reimbursement of any kind. In the event that any Board member
refuses to make such a surrender, the Company shall take any and all
steps necessary to render said options, warrants, or similar rights
legally null and void and/or to seek a judgment at law in
reimbursement of the full value of same from said Board members(s).
====================================...
From biajj2 on Yahoo
Posted by: wolfpackvolt on May 05, 2008 09:12PM
More TPL merger speculation ... corrected repost
My prior post below states why I believe a merger with TPL is an
active interest of PTSC's. Ease thinks TPL is valued lower as an
entity, some may feel TPL is valued higher, and some may feel that it
would be a merger of equals.
This seemingly narrow discussion is imo, at the very core of what
presently is and has been happening to PTSC's stock performance for
some time.
It's about the Market Capitalization of PTSC, its been about chopping
down the value of our company. Yes, there are legal concerns and
other influences too, but I see those issues as factors who's timing
only compliments and assists in making a merger more a possibility
and reality. Some thoughts ....
The legal uncertainties before us, and the limited transparency from
PTSC is creating some fear, and fear always equals stock sales. The
lack of any large 100+Million Dollar judgements getting front page
headlines discouraged many who invested hoping for them. The failed
expectations from PTSC not having put the $100,000,000 they did
collect into productive use disappointed many into selling. Swartz &
Lincoln unloading some 140 Million Warrants (max sub 7 cent cost)
into the float has overwhelmed what would be a more natural state of
share supply/demand. The economy is not good, we have some
investors getting out because they need money; and selling occurs
just from natural attrition too. Today, being priced all the way
back to when we licensed HP (the 3rd license ?) has EVERY buy and
hold investor in the past 2 years deeply underwater; dividends
included. Sure, this has been an incredible opportunity for big
buyers to accumulate large positions in PTSC stock over a long period
of time, and I don't doubt some of them have very friendly relations
with eachother. But still, I don't think this is just about market
uncertainty, or buying the stock cheap on the open market in order to
build an investment position, but rather, I believe it's about
intentionally making PTSC the company, itself cheaper.
All this, and yet the MMP to date has incredibly collected over 250
Million dollars for PTL and PTSC in under 3 years. It has proven to
be a very pervasive, very valuable, very profitable and cashflow rich
asset.
Why would TPL want to merge ? Back in 2005 when we joined the two
halfs under PDS, I struggled with the the consideration of a full
merger. I've since come full circle back around to thinking that TPL
simply has many of the same incentives as any private company in
benefiting from being public. I'll also add, that perhaps MMP
revenues aren't coming in as fast (easily) or as large as they
initially thought, and if that is true, then it would even magnify my
thinking as to their motivation. Being public helps spread the
risks of business from the Principals, it also allows them to extract
the illiquid equity they've created in the succesful building of that
business. We all know TPL touts secrecy as a tool for more effective
infringment prosecution, but they also know that licensing and
expense revenues eventually get publicized though PTSC Q reports.
So, in the end, what really are they keeping private that isn't just
delayed to some future more acceptable point in time; NDA's not
withstanding. We know they are aware of the semi-vacuume that PTSC
functions in with it's shareholders, and if that has been an example
for them, it may very well have calmed some of their concerns about
public entity disclosures, and in regards to PTSC in particular.
Look at TPL, their executives, managers, engineers, locations,
facilities, organizational network; you can't help but be impressed
with what they have assembled and how they have grown in 3 years.
The problem for them IMO is that if the MMP is their primary income
producer (which I think it is), they are growing faster than their
cash flow allows. I know they are promoting "SeaForth", and
licensing propriety as well other inventors IP, but I just don't
think that those are nearly as financially productive right now as
the MMP is. On the other hand, look at PTSC; we have been lumbering
along and after almost 3 years, still relying on TPL for practically
every bit of our revenues. I'm sure TPL was shocked when they saw
that our BOD didn't know what to do with our MMP revenue cash hoard,
and watched them pay out the $40 Million in dividends to
Shareholders. TPL would have rightfully invested that right back
into their business. TPL has big vision executives, and must have
huge huge overhead. I imagine capital restraints are the only
limitation on their growth right now.
What is the value of PTSC ? The Stock Market says we have a total
Market Cap of only $120 Mil. We have some $20 Mil in the bank, $15
Mil in ARSs, and 110 million shares of Treasury stock worth approx
another $30 Mil (and if issued, equating to 20% shareholder
dilution). Think we look much more attractive/affordable as a
Merger candidate now at 30 cents/share than we were two years ago @
$1-2 ? Think TPL is tempted to control the other half of the MMP
revenues ? Afterall, PTSC itself is only valued $20 Million more
than what we have already actually recieved from the MMP; and
infringment prosecution and licensing has only really just begun !
Do you think we are properly valued if those Treasury shares are
pegged at some weighted average to where we have traded for the past
few months ? Do you think TPL thinks they are now worth more than
PTSC is ? Does TPL think we are heavily discounted enough (or will
be soon) to really motivate them to make a deal work ? Pricewise,
for TPL, wouldn't it strategically be better for a merger to be
priced while licensing appears slow, PTSC's stock is "undervalued"
and before the PTO renders it's decision ? Afterall, if the PTO
reexams go our way much of the uncertainty will be removed and the
MMP's licensing value and injunction teeth will be much enhanced. If
I were TPL (and knowing every nuance of the posture of the
reexaminer), I'd do a PTSC/TPL entity pricing structure agreement (or
maybe even a full merger deal) before the PTO rules.
What is the value of TPL ? It's a private company, so we have to
use other methods of valuation. We don't know what their total
income is (our BOD does if they have been looking at the TPL books
during a DD analysis), but we do know via PTSC's income what the MMP
brings into them. TPLs other IP offerings and organization would
need to be valued as well; but who knows if the whole company would
be involved or they would carve out an Enterprise group or maybe
reorganize themselves to effect the Merger.
If you believe TPL has the greater value, the assets of PTSC (above)
would be what, along with the MMP and our public status, we could
bring to the table. That said, absent outside debt, there is one
other way we could self fund a merger to make up any difference in
value if there was any, and if it was not a merger of equals.
5,000,000 "Blank Check" Preferred Shares all able to be issued at the
discretion of the BOD without Shareholder approval. Additionally,
the BOD can attach ANY terms to those preferreds they want.
Dividends, voting rights, convertability to Common (what %age
dilution ? what exercise price and time ?), etc; all in addition to
the typical security protections that Preferred Shares enjoy over
Common shares.
* This discussion does not even take into consideration any Non TPL
independent acquisition efforts by RG, and his obvious cash or
Treasury stock needs. It is also my opinion that the Share Buyback
plan, even if in effect now, has only a very modest affect on
impacting our shareprice.
** Opinions disclaimer
Auszug vorweg:
"1. By his comment, does Mr. Goerner mean that “all transactions announced prior to the end of January” includes the 12 licenses from and inclusive of TEAC through Psion, and specifically inclusive of the 4 license agreements made that ended the litigation with Matsushita, JVC, Toshiba and NEC, as announced in late December? YES
2. Have all PDS license agreements or other PTSC transactions made prior to the end of January, 2008, been announced? YES
3. By using the language “fully reflects the financial results”, should investors take this to mean that all the revenues attributable to these transactions has been fully recognized and reflected in the 10q, and that no other revenue from these transactions remains to be recognized in the future? YES"
Das kann doch nur bedeuten, daß Geld erst in der Zukunft fliessen wird (weil m. E. die Lizenzen wohl nicht verschenckt worden sind = business solution = Geschäft = da sollte eigentlich Geld fliessen!
Hier die gesamte Meldung:
"Official" company response/non-response to 10q questions
Posted by: lambertslunatics on May 05, 2008 12:56PM
FWIW,
Here is an e-mail string between me and Hawk/PTSC trying to clarify some issues that I saw as conflicting at worst, and unclear at best, between the 10q & the letter from RG. These are listed in reverse chronology with the most recent listed first, so to follow, you're better off to read from the bottom up. As I indicated to them, unless they clarified further, I would "infer" (as they typically dictate we should do), from Ken's response that the answers listed in red are the company's official responses to my questions. Since it's been about 3 business days with no further clarification, I'm taking their responses as I indicated I would in my e-mail to them.
From: Investor Relations [mailto:ir@ptsc.com]
Sent: Wednesday, April 30, 2008 12:41PM
Subject: RE: Questions Regarding 10q
Forwarding your email to the company.
Regards,
Ken AuYeung, Hawk Associates Inc.
--------------------------------------------------
Sent: Wed 4/30/2008 1:03 PM
To: Investor Relations
Cc: Rick Goerner
Subject: RE: Questions Regarding 10q
Ken,
From your response about what I should and shouldn’t infer, you imply the following as the company’s official responses to my questions:
1. By his comment, does Mr. Goerner mean that “all transactions announced prior to the end of January” includes the 12 licenses from and inclusive of TEAC through Psion, and specifically inclusive of the 4 license agreements made that ended the litigation with Matsushita, JVC, Toshiba and NEC, as announced in late December? YES
2. Have all PDS license agreements or other PTSC transactions made prior to the end of January, 2008, been announced? YES
3. By using the language “fully reflects the financial results”, should investors take this to mean that all the revenues attributable to these transactions has been fully recognized and reflected in the 10q, and that no other revenue from these transactions remains to be recognized in the future? YES
4. If the above answer is no, what then did Mr. Goerner mean by “fully reflects the financial results”, and considering the company’s publicly proclaimed pursuit of only a one-time license payment structure, how can Mr. Goerner justify what would be in this context a very misleading statement? An explanation would only be required if the above answer is no.
5. If the financial results of the licenses announced in February are not reflected in the 10q, then is this due to revenue recognition issues, or is it possible that there are no financial considerations to these transactions to reflect? YES
6. Since history prior to this quarter has shown that fees associated with licenses signed prior to the issuance of a 10q have always been reflected in the 10q, either in the actual financial spreadsheets or in the subsequent events section, has something fundamentally changed in the MMP licensing process that is precluding PTSC/TPL/PDS/Alliacense from being able to deliver the MMP license(s) in a timely fashion, and thus being able to recognize the revenue from those transactions? If so, what has changed? NO
If my inferences do not correctly interpret your response, please correct your responses accordingly, otherwise, I’ll accept your response as inferred as the correct and final company issued position on these issues. Thank you.
--------------------------------------------------
From: Investor Relations [mailto:ir@ptsc.com]
Sent: Wednesday, April 30, 2008 5:44 AM
Subject: RE: Questions Regarding 10q
The "end of January 2008" comment in the recent shareholders letter was to address specific shareholder questions about whether the licenses announced in the December-January period were included in the results for the 2/29 quarter.
It should not be inferred that the February quarter's results are inclusive of only the licensees announced in December and January, nor should it be inferred that the licenses announced in the first two months of any given quarter will always be included in that quarter's results. As you can see from the Company's revenue recognition policy excerpted below, there is not always a correlation between the period when a license is announced and when it is recognized, although that generally has been the case.
"1. Revenue Recognition
Accounting for revenue recognition is complex and affected by interpretations of guidance provided by several sources, including the Financial Accounting Standards Board (“FASB”) and the Securities and Exchange Commission (“SEC”). This guidance is subject to change. We follow the guidance established by the SEC in Staff Accounting Bulletin No. 104, as well as generally accepted criteria for revenue recognition, which require that, before revenue is recorded, there is persuasive evidence of an arrangement, the fee is fixed or determinable, collection is reasonably assured, and delivery to our customer has occurred. Applying these criteria to certain of our revenue arrangements requires us to carefully analyze the terms and conditions of our license agreements. Revenue from our technology license agreements is generally recognized at the time we enter into a contract and provide our customer with the licensed technology. We believe that this is the point at which we have performed all of our obligations under the agreement; however, this remains a highly interpretive area of accounting and future license agreements may result in a different method of revenue recognition. Fees for maintenance or support of our licenses are recorded on a straight-line basis over the underlying period of performance.
Our consolidated variable interest entity recognizes revenue upon shipment of its product and recognizes revenue on its short-term installation contracts as time and materials costs are incurred."
Excerpt from
http://www.sec.gov/Archives/edgar/da...
Regards,
Ken AuYeung, Hawk Associates Inc.
--------------------------------------------------
Sent: Tue 4/29/2008 5:53 PM
To: Investor Relations
Cc: Rick Goerner
Subject: RE: Questions Regarding 10q
Dear Investor Relations:
Please provide answers to the questions listed below. This is my third request for clarification on these issues, yet I have received no response, not even an acknowledgement of your receipt of my query. If there is another channel through which I should address my questions, please let me know. In any case, I would appreciate thoughtful, direct and unambiguous responses to my questions. Thank you.
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Sent: Friday, April 25, 2008 3:47 PM
To: 'Investor Relations'
Subject: RE: Questions Regarding 10q
I’m resending the following e-mail that I sent on Tuesday in the event it has been forgotten, or never received. I’d appreciate a prompt response to the questions listed. Thank you.
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Sent: Tuesday, April 22, 2008 3:30 PM
To: 'Investor Relations'
Subject: Questions Regarding 10q
In an effort to reconcile the 10q filing and the Letter to Shareholders that followed, I have some questions about some apparent contradictions to which I ask that you provide some clarification. I’ll do my best to be complete and specific in my questions, focusing on available disclosed information, and to ask questions that you can answer without concern for confidentiality agreements or other disclosure concerns. As a long term shareholder, I ask that you be as complete, specific and direct in your responses.
The recent 10q filing was for the quarter ending Feb 29, 2008. However, Mr. Goerner’s letter indicates that the 10q “fully reflects the financial results of all transactions announced prior to the end of January 2008”. These appear to be contradictory conditions, though perhaps not, depending on the revenue recognition issues involved with the February licenses. However, in trying to decipher whether that’s the case, the 10q obscures that potential explanation since under the PDS Balance sheet section of the 10q, there is no figure shown in the “License Fees Receivable” section for the nine months ending Feb 29, 2008, while for the same quarter last year, fees for licenses signed before the quarter ended but for which fees were not received until after the quarter ended were listed under “License Fees Receivable” line item. Still, I understand that there may be revenue recognition conventions that would preclude the February signings from appearing in even the receivables column if the fees had yet to be received or were not measurable prior to the filing of the 10q, or if some other revenue recognition convention were not yet met. With this understanding, I have the following questions:
1. By his comment, does Mr. Goerner mean that “all transactions announced prior to the end of January” includes the 12 licenses from and inclusive of TEAC through Psion, and specifically inclusive of the 4 license agreements made that ended the litigation with Matsushita, JVC, Toshiba and NEC, as announced in late December?
2. Have all PDS license agreements or other PTSC transactions made prior to the end of January, 2008, been announced?
3. By using the language “fully reflects the financial results”, should investors take this to mean that all the revenues attributable to these transactions has been fully recognized and reflected in the 10q, and that no other revenue from these transactions remains to be recognized in the future?
4. If the above answer is no, what then did Mr. Goerner mean by “fully reflects the financial results”, and considering the company’s publicly proclaimed pursuit of only a one-time license payment structure, how can Mr. Goerner justify what would be in this context a very misleading statement?
5. If the financial results of the licenses announced in February are not reflected in the 10q, then is this due to revenue recognition issues, or is it possible that there are no financial considerations to these transactions to reflect?
6. Since history prior to this quarter has shown that fees associated with licenses signed prior to the issuance of a 10q have always been reflected in the 10q, either in the actual financial spreadsheets or in the subsequent events section, has something fundamentally changed in the MMP licensing process that is precluding PTSC/TPL/PDS/Alliacense from being able to deliver the MMP license(s) in a timely fashion, and thus being able to recognize the revenue from those transactions? If so, what has changed?
I understand that these questions may seem pedantic. However, considering the company’s prior public proclamations of increasing license fees, its public commentary of added pressure on licensees to license in order to avoid supply chain disruptions, its stated elimination of first mover discounts, the large legal expenses the company incurred directly prior to the settlement announcement timeframe, and the 10q’s results which appear to reflect license fees for 12 licenses that are less than what Fujitsu alone paid, either the information provided by the company is unclear, or something material has changed.
Thank you in advance for your anticipated prompt and unambiguous responses.
Gute Nachrichten!
Patriot Scientific Corp. (OTCBB:PTSC) today issued the following letter to all shareholders. To all shareholders and supporters of Patriot Scientific, the purpose of this letter is to update you on activities at the company. It is my intention to provide regular communication through these letters to provide insight to you on topical issues and to provide a uniform status report on activities at the company. In this letter I’d like to focus on three areas: activities to expand Patriot’s business, the status of our Auction Rate Product Obligation investments (ARPs), and actions to address other areas of shareholder feedback and concern. First, I’d like to introduce and welcome, Mr. Don Schrock to Patriot’s board of directors. Don is a veteran of the semiconductor business and most recently, led Qualcomm’s CDMA group to over $1 billion in revenues. While at Qualcomm, Don was involved in several of Qualcomm’s M&A activities and will, henceforth, chair Patriot’s M&A committee. Through his past position on the board of the Fabless Semiconductor Association (FSA), Don has an extensive network of valuable industry connections. He will be an important asset and resource to assist Paul, Cliff, and myself with our M&A efforts. Update on positioning Patriot for future growth As I outlined in my previous letter, as the blueprint for Patriot’s pursuit of M&A activities to expand our business we plan to: Evaluate selective expansion of our IP portfolio by acquiring new IP that builds on our existing portfolio. We have identified several interesting patent portfolios to expand our licensing efforts. These IP portfolios involve microcontroller, power management, embedded memory and mobile networking IP. We are engaged in exploratory meetings and we will next analyze the attractiveness of licensing prospects based on market assessments, technical support needs, and economic return to Patriot. I will update you periodically on our progress. Pursue minority investments, undertaken as a strategic investor, in certain early-revenue or technology ventures that currently do not support a full acquisition decision, however they represent a technology or capability of interest to us. Patriot would gain market and technology insights from its participation in a potential "pre-M&A” investment scenario. We will increase our holdings in Talis Data Systems (a position currently held by Patriot through SSDI). Talis (www.talisdata.com) is a manufacturer of multi-domain networking hardware. Patriot will first make a cash investment of $700,000 in Talis, and then in July will directly acquire the shares of Talis held by SSDI to increase Patriot’s direct holdings to 30%. Patriot will be entitled to two seats on Talis’ board of directors, currently held by John Burns of SSDI and by me. Talis’ Datagent multi-domain hardware unit has received National Security Agency (NSA) validation and the company will ship samples to customers this summer. Talis expects initial revenues later this year. Multi-domain interconnectivity among various government agencies is Priority #1 for the Homeland Security Agency. We are continuing to evaluate opportunities for full M&A. We will utilize the company’s capital resources (stock and cash) when considering the acquisition of any operating business. Patriot’s public equity market access can be attractive to certain private and foreign entities. We are not ruling out the consideration of an acquisition of another public entity either. Patriot’s strong cash position, public company posture and significant market capitalization value give us a very solid negotiating position, especially considering current market conditions and other companies’ limited access to cash. We have identified company M&A opportunities in software, networking and wireless technologies. We’ve also held meetings with several investment bankers to better understand their services and to brainstorm other opportunities for M&A. These relationships can assist in facilitating discussions with potential M&A candidates, both private and public. To re-iterate a point from my last letter, the acquisition process is both complicated and time consuming. I will keep you advised of progress in subsequent updates. TPL is Patriot’s business partner, and the exclusive licensor for the MMP™ Portfolio. Since my last shareholder letter, they’ve announced two new licensees; Research In Motion (RIM), the provider of BlackBerry® handheld devices, and Onkyo, a Japanese manufacturer of high-end audio gear. These two new licensees bring the total number of MMP™ Portfolio licenses to more than 45. As you know, the details of individual licenses cannot be disclosed. While all licensees to date have chosen lump sum front-end buy-outs, TPL continues to offer an on-going royalty payment option in new customer agreements and future license agreements could include on-going royalties. Shareholders’ feedback and concerns I have continued to collect feedback from shareholders, received input from our investor relations and public relations groups, and have continued to have conversations with shareholders to better understand the issues and concerns facing the company through their eyes. Notwithstanding the ever-present desire to have more detail on individual customer agreements on the MMP™ portfolio, which we are not permitted to disclose, current issues fall into three primary areas: 1. What are Patriot’s plans for future revenue growth? (I have addressed those above) 2. PTSC’s investment policy and the status of certain Auction Rate Products (ARPs). 3. What is the status of future dividends, a potential reverse split and listing on Nasdaq/NYSE/AMEX? PTSC’s investment policy and the status of certain Auction Rate Product Obligations (ARPs). In November 2007, the board and our CFO outlined and approved an investment policy to allow certain of the company’s funds to be discretionally managed by Deutsche Bank (DB), a large and reputable banking institution, in order to provide professional management of monies not immediately required for the day-to-day operations at the company. The policy appropriately outlined levels of diversification and risk the company was willing to accept. One of the mechanisms used by DB to achieve the objectives of safety and liquidity had been to invest in various FFELP (Federal Family Education Loan Program) Auction Rate Obligations that are sponsored by different state agencies. Since their inception 20 years ago, these investments operated uninterrupted in a liquid market that provided for monthly interest rate resets. The particular FFELP Auction Rate Obligations invested in by the company through our DB advisor, met only the highest AAA credit rating standard. Contributing to their high credit rating is the fact that the products are over collateralized by the amount of underlying student loan obligations, and they are further insured by the U.S. Department of Education. In February of this year the market mechanism that provided for the orderly exchange of these instruments and the resetting of interest was disrupted. Although the credit risk for these instruments remains diversified, the instruments all shared the same market liquidity mechanism which has now been revealed to be vulnerable. The bond auction market had been a market where credit risk could be allocated amongst various independently collateralized instruments; however, the recently revealed risk associated with the continued existence of the market itself is unprecedented. An imperfect analogy, but adequate for illustrative purposes, would be a concern that investing too heavily in the stocks of a given exchange could represent a concentration of risk in the event that the exchange failed to function. This would be a catastrophic event, which by some is how the failure of the auction market is characterized. The total bond auction market had recently been estimated at $360 billion, with the student loan portion representing just under $100 billion. Companies holding these investments that have been in the news as of late include Monster Worldwide - $357M, Intuit - $328M and Palm - $75M. Until the recent spate of auction failures, these were common investments for corporate cash managers to use as mechanisms for safety and liquidity. There have been some recent positive developments regarding the student loan auction rate instruments. Because the investments are now yielding higher default rates of interest, we are seeing some action taken by the issuing state agencies (which are non-profit institutions and not prepared to operate at these higher debt yield levels) to redeem them at face value. In fact, in late April, the state of Arkansas redeemed its bonds and Patriot received $2.5 million, reducing our total ARP exposure by nearly 20% of the remaining portfolio. These redeemed funds now reside in standard money market investments and the company’s investment policy has been changed to only allow investments in money market instruments and no longer allow advisor discretion when placing funds for our benefit. Finally the company believes that it may, if needed, borrow against these securities and we’re investigating these programs further in the event we need to access cash in this manner before redemption can be accomplished. What is the status of future dividends, a potential reverse split and listing on Nasdaq/NYSE/AMEX? There have been numerous shareholder inquiries regarding the company’s plan to continue paying out dividends, announce a reverse stock split or seek listing under a more broadly traded exchange. While no specific timeline has been outlined as we move toward an operating company with products, customers, and markets, the company expects not to make further dividend distributions, choosing to instead, use the cash and capital assets (stock) of the company to pursue its M&A efforts. It is unusual for emerging technology companies to pay dividends as they generally retain earnings to grow their businesses by funding future product R&D and expanding marketing and sales efforts. It is our plan to move the company in that direction. The board has also agreed that we should evaluate listing on a more broadly traded exchange, such as NASDAQ or NYSE/AMEX once we have developed a strategy, and acquired sufficient revenue-producing assets, to attract broader, institutional investors in PTSC stock. Our current stock price would not allow the company to consider re-listing on another exchange. The normal means to adjust the stock price to meet listing requirements would be a reverse split of the stock. The board is not anxious to move toward a reverse split until it believes that: 1. The company has a reliable, long term opportunity for growth of (less volatile) revenues, profits and shareholder value and, 2. A reverse split will not risk a reduction of the market capitalization of the company. Again, no definitive timeline has been outlined for considering these actions, but I believe that the shareholders understand the company’s objectives, and perspectives, with respect to these possible actions. Additionally, the company has resumed its share buyback program and has recently been actively buying shares in the open market as we view the current price to be at an attractive level to redeem shares. Since the resumption of the program in April the company has purchased over 2 million shares. I trust this letter has provided you with insight into our plans for Patriot Scientific and that I have answered some of your questions. I will address Patent Reform legislation in future communications as significant developments unfold. Please don’t hesitate to forward me any additional questions or comments that may not have been addressed in this letter. Our company will continue to grow and prosper and your support is a valuable contributor to our success in creating a company that has an exciting future and can attract new shareholders as well. I remain excited about the opportunity to build on Patriot’s past successes, and we will be doing everything we can going forward to ensure that you share in this excitement. Sincerely, Rick Goerner President and CEO Patriot Scientific Corporation Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Statements in this news release looking forward in time involve risks and uncertainties, including the risks associated with the effect of changing economic conditions, trends in the products markets, variations in the company's cash flow, market acceptance risks, patent litigation, technical development risks, seasonality and other risk factors detailed in the company's Securities and Exchange Commission filings. Moore Microprocessor Patent (MMP) and Alliacense are trademarks of Technology Properties Limited (TPL). PTSC is a trademark of Patriot Scientific Corporation. All other trademarks belong to their respective owners.
© Die Welt
erschienen am 12.05.2008 um 18:00 Uhr
http://newsticker.welt.de/...?channel=fin&module=smarthouse&id=723600
Quelle: http://www.agoracom.com/ir/patriot/messages/830599#message
I'll say there is no more money coming from the J3 ...
Posted by: ease2002 on May 14, 2008 01:40PM
I will also forgoe my representative chip theory and just say, as others have said, TPL/PTSC didn't want to risk a trial without absolute 100% validitiy from the USPTO.
There is prior art out there and it would be up to a jury to decide if somethig is obvious. Do you want Cook arguing for us? Maybe so and maybe not. I've been told by others that Cook is very good at writing briefs, etc. I am not sure how well he would do in a Texas trial with all of the details that he would need to present to a jury clearly and convincingly. Who knows?
Did TPL want to risk some problem with a trial case to expedite
MMP licensing when they can take the safer route (IMO) and wait another year to have absolute validity if/when the USPTO reissues the 336 and 148?
So with the above in mind, I will say that PTSC blinked. It doesn't mean we lost, it means TPL recognized that THEY and WE had EVERYTHING to lose and the J3 only had money to lose.
No conspiracy, just a conservative path to protecting the most valuable asset of both companies.
Die zweite Theorie besagt, daß noch etwas kommt und die "Business Solution" darin bestehen könnte, die zahlreichen verschiedenen Chips, die infrage kommen, zu analysieren und darauf beruhend Lizenzgebühren zu erheben. Zahlungen wären dann erst nach dieser Vorarbeit zu erwarten.
(Meine Gedanken: Longies werden sich an das Gerangel in Texas erinnern mit einzelne Chips versus chip-families, an die Vorgänge, daß die J3 bei Fristende 30.000 Seiten Papier kurz vor Fristablauf, überwiegend in japanisch, bei Gericht bzw. TPL abgeliefert haben.)
Quelle: (letzter Abschnitt aus) http://www.agoracom.com/ir/patriot/messages/831016#message
Another Theory
Posted by: virtvision on May 14, 2008 08:00PM
....................
My interpretation of the resolution can be synthesized down to my belief that “Words have meaning” and nuance. There is a fine line in reading a document and interpreting what is being said accurately and inferring something that simply isn’t there and is wishful thinking. Compounded by the fact, it belies common sense to believe TPL simply walked away from the negotiating table with nothing. People don’t be naïve! With a positive Markman, and many heavy hitters previously signed, TPL was negotiating from a position of strength not weakness. Now, to those who believe the previous licensees were simply negotiating nuisance fees, in some ways, I cannot disagree. However, when some licensees agree to ~$30M+, folks that ain’t chump change!! To date Goerner has been at times circumspect about possible future payments and at times adamant there is no future payments. How do you reconcile these two statements? Sometimes effective communications can be communicated by what is said and what is left unsaid. Words have meaning. Whether future payments are tied to successful USPTO re-exam outcome is possible. Personally, IMHO, TPL is conducting an inventory of all the chips, their value, and forecasting of future use. This takes time, at least2-3 months given the complexity. I believe an agreement has been reached whereby we will not see revenues booked until the end of May at the earliest. That’s my theory!
Virt
Note Regarding Settlement from CEO Jim Turley
This settlement occurred during Patriot's current financial quarter, which ends February 28, 2008, and for which financial reports will be due for filing with the SEC by the second week of April, 2008. Information applicable to this settlement will be included in those reports to the extent required of the company, yet consistent with the confidentiality restrictions imposed by the settlement pursuant to guidance from Patriot's professional legal and accounting advisors.
Shareholder letter: (Ausschnitt) Q3 results
I will not, in the limited context of this letter, recount all the information contained in our April 9, 2008 earnings release, which fully reflects the financial results of all transactions announced prior to the end of January 2008.
Und in meinen Worten die Aussage "im Q3 sind alle Zahlungen aus dem J3 Texas settlement enthalten" - bedeutet aber Zahlungen offensichtlich nur bis zum 31.01.2008!!
Es fehlt der Monat Februar - sicher absichtlich. Ob der SEC ein "kastrierter" Q3-Bericht wohl ausreicht??
Vielen Dank für die Ausführungen.
Wie Sie sicherlich wissen, bin auch ich investiert.
Allerdings sind die ganzen Spekulationen und Möglichkeiten genauso spekulativ, wie die Frage nach der Wahrhaftigkeit "Jesu".
Selbst in Agora wird zuviel spekuliert.
Warten, Warten und Top oder Flop.
Die ganzen Spekulationen bis dahin sind zwischenzeitlich etwas nervtötend geworden.
Sogar für mich :-))))
Gruss
DS
Ich warte noch ein bisschen und dann kaufe ich noch mal nach. Die Entscheidung des USPTO dürfte dann wieder etwas Schwung in die Aktie bringen.
Grüße an alle!
Abenteurer
http://groups.yahoo.com/group/patriot_scientific/join
Gruppenname http://groups.yahoo.com/group/patriot_scientific/
Dort hat sich die Meinung verfestigt, daß PTSC kein Risiko eingehen wollte, vor Gericht zu verlieren und lieber auf die Verbesserung des 584 hinzuarbeiten. Sollte dies gelingen, kommt wieder Leben in die Bude. Das heißt aber, mit schnellem Geld wird es nichts, man muß warten können. Habe zu 0,20 nachgekauft, war aber vieeleicht noch nicht der Tiefpunkt.
Gruß an Abenteurer und Killercop.
New Pacer: http://photos.imageevent.com/banos/ptsc/...f%20Discvy%20and%20CMC.pdf
Kommentar Ronran (yahoo)
"The underlying basis is simply that neither side wants to start working
on the case in earnest until they know the venue in which they will be
operating. Additionally, if the case stays in CA, then, at least in
its present form (declaratory judgment), there will be no issue of
damages, which simplifies the case to a considerable degree.
Conversely, if the case moves to Texas, damages are included.
This kind of joint motion is very routine. There is no reason to hang
up your coat and "hunker down" until you know where you will be staying
for awhile."
Keine Aussicht auf Änderung, bevor die USPTO nicht entschieden hat (Reexamination).
Quelle: http://www.agoracom.com/ir/patriot/messages/840288-der Originaltext ist lang und mühsam zu lesen. Zitat Auschnitt,vorletzter Absatz: "I hope the above has helped you in forming a better
understanding of the litigation process and our current status. As
it has turned out, our old friend, Larscot, was the most perceptive
of all of us when he posted, quite some time ago back on Agora, that
there would be no change in status until the PTO rules. Kudos to
you, Larry, and I hope you and yours are well."
ich habe das allerdings jetzt so verstanden, dass nach der Gültigkeitsprüfung der Patente und einer "entsprechenden" Bestätigung, sehr wohl die "betroffenen"/beklagten Firmen bzw. die Patentrechtsverletzter zu Zahlungen aufgefordert werden.
Dazu gehören auch die J3.
Damit wäre allerdings die Aussage : Settlement nichts gebracht; J3 vom Haken nicht richtig.
Vielmehr müsste es heißen :
Nach Bestätigung der Patente wird der Fall entsprechend "neu" verhandelt und dann sind auch die fraglichen Punkte geklärt.
Dann kann endlich mal richtiges Geld fließen.
Werden diese nicht bestätigt, kann mann vermutlich mit den Shares den Keller tapezieren.
Abhängig ist alles von den Patentbestätigungen
(....with a re-validation by the PTO, we would
then have TWO legally authoritative pieces of paper (one for
infringement, the other for validity ? both sides of the coin)
1. Patentverletzung
2. Gültigkeit
Die Erklärungen, hinsichtlich einer "Gerichtsentscheidung" vergleicht er mit einer "Alles oder Nichts" Situation.
Solange nicht die "Gültigkeit und Verletzung" der Patente bestätigt wurde bringt eine Gerichtsentscheidung nicht den Erfolg.
Jetzt, durch die jetzige Situation, kann noch ein großer Erfolg erungen werden, nämlich dann, wenn die PTO die Patente bestätigt!
Dann kann entsprechend reagiert werden.
Einziges wirkliches Problem für mich ist jetzt gar nicht Ob diese bestätigt werden.
Dann ist ehh alles aus und das Geld weg.
Vielmehr die große Frage : Wann ..... Wenn ich diese Frage beantwortet bekäme, könnte ich mir eine zeitliche Strategie hinlegen.
Ich meine, die US-Behörde hat sich auch nicht an irgendwelche Termine zu halten.
Lt. den US-Boards soll es wohl noch dieses Jahr zur Entscheidung kommen.
Für mich ist das Posting von Ronran nachvollziehbar und ich tue mir erstmal die Ruhe an.
Wenns keine positive entscheidung wird...ist das Geld ehh weg.
Sollte aber alles Pro PTSC laufen, werde ich lange und ruhig schlafen können.
Wenn ich nen genauen Termin wüsste, könnte ich vorher nochmal nachkaufen.
Morgen Leute, gestern kam ein Update Report von Dutton haben Ihr Rating von Speculative Buy in
STRONG SPECULATIVE BUY geändert........
http://www.duttonassociates.com/research/ptsc/...sc_report_052708.pdf
Captain Jack
The most exciting items taking place at bizSanDiego.com
Q and A with Patriot Scientific CEO Rick Goerner posted on Wednesday, 04 June 2008
As President and CEO of Patriot Scientific, Rick Goerner knows about positioning a company for future growth. Here he shares his vision for expanding one of San Diego’s leading up-and-coming M&A companies.
Interview by Jessica Sarra
bizSD: Patriot has transitioned from a product-based technology company to focusing solely on licensing technologies to now looking at other growth areas for the company. How has this evolution changed Patriot Scientific as a company?
Goerner: Patriot’s business model has continually evolved over the past six years based on opportunities in the market. Started initially as a company focused on design and manufacture of advanced microprocessor chips, Patriot developed a strong patent portfolio of microprocessor IP.
Image
Patriot Scientific CEO, Rick Goerner
One can think about Patriot’s move forward to building a products based operating company again as analogous to the Dubai model: How can we leverage today’s oil revenues for a stronger future? Moving into the next phase of Patriot’s corporate development, we plan to build on the cash flows generated through our MMP™ portfolio licensing business. Patriot intends to “invest” those cash flows to build an operating company with sustainable growth of revenues and profits through merger and acquisition activities. Target market areas for M&A include networking, wireless and software. These efforts once again provide the opportunity for Patriot to re-profile its resource team toward more business development, marketing and technology capabilities.
bizSD: You’ve talked about investments to grow your company. What types of investments is Patriot looking to pursue as part of your second revenue strategy? Are you looking at M&As?
Goerner: Patriot’s future blueprint contemplates building the next phase of our corporate development in three ways:
Selective expansion of our IP portfolio by acquiring new IP:
We have identified several patent portfolios to expand our MMP™ portfolio licensing efforts through TPL, our exclusive licensing partner. These IP portfolios involve microcontroller, power management, embedded memory and mobile networking IP.
Pursue minority investments, undertaken as a strategic investor, in certain early-revenue or technology ventures:
Patriot now owns 30 percent of Talis Data Systems, a local San Diego firm. Patriot also owns 46 percentof SSDI, a Carlsbad manufacturer of secure cabling enclosures for the government and defense sectors.
Evaluate opportunities for full M&A, utilizing the Company’s capital resources (stock and cash):
Patriot’s strong cash position, public company posture and significant market capitalization value give us a very solid negotiating position, especially considering current credit market conditions.
bizSD: You have brought in changes in management, including getting Donald Schrock on board. What are the implications of these changes for Patriot in the San Diego and global markets?
Goerner: The San Diego area is ripe with technology opportunities for us to explore from an M&A perspective. Mission one is to build the organizational infrastructure to support that effort. Internally, we have added Paul Bibeau, Vice President of Business Development. Paul has extensive marketing and operations experience in the semiconductor area. We added Don Schrock, ex-President of Qualcomm’s CDMA Division to the board. Don brings more than 40 years of semiconductor business experience to Patriot’s board and, as you know, led Qualcomm’s growth of its chip business from $50 million to over $1 billion in revenue. Don oversaw the integration of several acquisitions into Qualcomm during his tenure. Don was on the board of the Fabless Semiconductor Association, an industry consortium of the semiconductors suppliers, including Broadcom. Don brings industry contacts that are invaluable.
Patriot will expand, locally, as necessary to support the changing face of its business as progress is achieved on the M&A front and we look to expand on the technology perspective of our board through the next year.
bizSD: What can we expect to see on the innovative technologies horizon over the next year?
Goerner: I believe that we will continue to see the convergence of computing, communication and multimedia in all aspects of our lives on a multitude of platforms both mobile and home/consumer. Ease of use and quality of services will become product differentiators. The early 2009 deployment of digital TV will launch the TV industry into the digital age. Internet commerce will continue to make inroads into our everyday lives from pizza delivery to advertising, ordering and shipping of consumer goods.
Posted by Jessica Sarra | 16 Comments
Comment Posted by George Becker on June 05, 2008
Forget about share holder diviednds. Use the incoming cash flow to grow the business. Set up a R&D department to improve the existing patents and extend the life of all patents. Any patent rights sold should include royalties now and in the future. PTSC has the electronic world by tail and appears the company is not fully leveraging the patents potential cash flow.
Comment Posted by Cliff Dodge on June 05, 2008
Go to work (Rick) and give us the truth, nothing but the truth.
Please no reverse split!!!!!!!!!!!!!!
Thank's Cliff
Comment Posted by peter perris on June 04, 2008
BizSD, thanks for the interview with Rick G., though honestly, it would have read the same if the outgoing CEO had given it anytime during his brief tenure....
Question to BIZSD: Did PTSC pay for your services?
One thing that would have been nice to have mentioned in this piece is that Rick has recently purchased shares in the company.
Of course, those securities were purchased at much higher levels than todays share price.
But, as we know, that is to be expected with PTSC....
Welcome to the club, Rick.
Comment Posted by jack durkan on June 04, 2008
Thanks San Diego Biz for conducting this interview. This statement is directed specifically at Mr. Rick Goerner. "The San Diego area is ripe with technology companies for us to explore" you stated, Mr. Goerner. In my opinion, you and PTSC have had long enough to explore the San Diego area and you need to get on with a meaningful acquisition. As a major shareholder in PTSC, I am extremely tired of hearing this same message for 3 years now. When are you going to jump into the mix? PTSC has not been action oriented whatsoever. Mr. Goerner, I am gravely concerned you are getting into the same situation as previous CEO's with nothing to back up your "plans" for M&A or anything else. What in fact have you done with the tens of million's collected previously from the MMP? The previous CEO, Jim Turley reported tens of millions were garnered previous to the Texas decision with the Japanese companies that resulted in a winning accomodation by all parties involved from previous press releases from PTSC? You can't acquire an acquisition with ten's of millions of dollars? Again, I repeat: the lack of an ACTION oriented company is destroying the image of a company that could be a great holding company that was espoused years ago by David Pohl. PTSC shows no aggressive, assertive focused approach. Both of the previous CEO's espoused the same things you have stated over a 3 year period. As the interim CEO, will we as shareholders be seeing the exact same thing from the next CEO that replaces you if you are interim? The goals you have established are great but over the past 3 years, none of these goals have been realized. I realize you have been in the job for 4 months. This is a wake up call, Mr. Goerner. Please walk the walk. Your "talk" is fantastic but .... it is only talk. The Share price will rise with an effecive acquisition that you can oversee. This connotes ACTION. The current board has enough horsepower to determine a marketable product/company that is required in the technology community. I am very tired of reading we plan to do this and we plan to do that. "DO" never happens. The urgency of Now has never been clearer and for PTSC, it is an imperative.
Comment Posted by 2 Buck Chuck on June 04, 2008
This guy R. Groener is one smart man, Hiring Donald Schrock is a genius play. We now have a couple of smart men running the show and have been in the battle before, the chance is theirs and they'll get the job done. Patriot's board is crap but with a little help they will pull through. Think about it, you only need one good leader and we now have two, give the board a push in the right direction and they'll have to perform of be gone! Look what Bill bellachek did for the N.E. Patriots, a great leader he is, he led them to be a dynasty, that could happen here. In my opinion were on our way, the ducks are in a row, let it happen and we'll all be well rewarded!!!!!
Comment Posted by Mary Fung Koehler on June 04, 2008
I've been a shareholder starting with 20,000 shares in1999 at 45 cents/sh when Ptsc had essentially no income and a patent dispute. The stock hit over $7 in early 2000.I sold some of the 50,000+ share in the $6 range an unfortunately kept buying back in as the price dropped.
what kind of CPa do you have who allows ptsc to pay so much in income taxes which should have
been rewarding your long time shareholders or at least purchased some company already listed on nasdaq or the other exchanges? It is insane to keep us on the OTC bb and worst of all on the pink sheets. I am a lawyer and see no reason why you can't let us know when or if ptsc will receive any fund for the settlement of the JVC, panasonic , etc. lawsuit. I don't understand why the stok is so long when the company has been repurchasing shares.. Do they only go to reward the board?
Comment Posted by pedro on June 04, 2008
Revolving door for CEO’s at this company PTSC. A long history of making claims without fulfillment. As a shareholder, it has been hard to see Wall Street turn away from this company but I no longer can blame anyone for this company has not earned any trust. They offer excuses and “just you wait” promises of a brighter future but as many other responses have noted, the share price reflects, truly reflects, what the world thinks of PTSC management and BOD. Because they have failed in their many attempts to make something of this company, and they have squandered the millions they received, they are now discussing a reverse split. Perhaps they honestly feel by increasing the share price, they have done their job. And no doubt, a reverse split will, at least temporarily, raise the share price. Yet we all know, it will not help the retail shareholder. Many longs remember the hype that sent PTSC from a buck to seven dollars. That bubble burst relatively quickly. The next wave of overzealous enthusiasm came with patent signings. However, as I have stated, PTSC squandered this money. Despite the history of PTSC, this is a great stock for new time investors who want to double their money. From twenty six cents to fifty cents should be easy enough. For those who bought in to the story being given by anyone of the many CEO’s, Wallin, Pohl, Turley and purchased shares over a buck, these folks got duped by either incompetency or corruption or both. One might think that having patents on virtually all modern day chips, would insure a very attractive market capitalization. One would think that 400 million shares was not too many shares when you own half of the MMP. Probably should interview Johnson, Leckrone, or Swartz when discussing PTSC and PTSC’s future
Comment Posted by Eric on June 04, 2008
Rick:
How about getting the shareholders and investors excited by announcing a TARGET REVENUE / EARNINGS per Quarter?
Does PTSC have goals or targets to reach?
Does PTSC compare one quarter vs another ? Is PTSC hitting their quarterly goals... if not why? If yes, does the bar need to be raised.
I assume there is some kind of planning/budgeting... why cant this be shared with the investment community?
How about removing the INTERIM CEO and become full time CEO..... then maybe we know that your not just keeping the sit warm for someone else... collecting your severance and on your ways... (eg. turley)
Comment Posted by fedup on June 04, 2008
RG should go into politics with that ability to say so much without saying anything at all. Why has there been no licensing since losing the 584 appeal or hardly a mention of licensing? Why has stock fallen from .94 to .26 since the big settlement with JVC, Matushita and Panasonic that they were so pleased with? How long are they going to continue to allow a private company like TPL to negotiate confidential settlements for them? How low does the share price have to drop before they reconsider their philosophy of keeping shareholders completely in the dark?!
Comment Posted by Thurston Howell Factor on June 04, 2008
Thank you bizSanDiego for the exposure of the public information already provided. Mr. Goerner has assume the CEO position only since March 1, 2008 and set the course stated. The current condition of the business and share price is a direct result of poorly handled disclosure of recent past events of MMP transaction and in particular litigation, ongoing litigation and Patent re-exam. This poor performance lay directly with previous CEO management and members of the BOD who continue to reside. Does Mr. Goerner really have a shot at making a go here or is he the next CEO puppet? With no transparency of MMP performance in matters of great importance, we all await here on Gilligan's Island awaiting his rescue. He has run into a buzzsaw...so let's cut some wood.
Comment Posted by Mike on June 04, 2008
The only time there is transparency In the company is when the finacier wants to sell some shares and then calls his boy carlton johnson that sits on the board of ptsc to issue some press releases (in my opinion) .ptsc managment cant be trusted as long as the finacier has his own lawyer running the show in my opinion..thier is a NDA in the settlements that only a select few know what it is Mr. carlton johnson you have a patent that is like haveing a patent on water and the stock price is at .26 cents Mr carlton johnson you couldnt run a paper route in my opinion I would have been fired a long time ago if i worked as ptsc management does I probably would have quit from embarrasment if i was on the ptsc managment team .all in my opinion .
Comment Posted by jack durkan on June 04, 2008
"Mission One" is critical for SP rise immediately. "The Natives" (investors) are restless and for good reason due to the fact that essentially nothing but the MMP, now under review at USPTO is actually the work of another company, TPL and has provided the only sustained revenue in recent years. The company is in real trouble if M&A doesn't occur sooner rather than later. Dependence on the MMP has proven catastrophic in the recent past with a reduction in share price from .94 to .26. There appears to be excellent people on the BOD but until they get the ball rolling it might as well be the 3 Stooges running the show as all the shareholders have heard for 3 years is that 'itsa' coming. It needs to arrive ASAP. This is a tragic scene for long term investors.
Comment Posted by Temmer on June 04, 2008
Promises and more promises - but never any results. Please ask the questions Bob and Eric proffered and also ask about the possibility of a crippling reverse split, which Goerner hinted at in a recent letter to the stockholders. Ask some serious, probing questions. Don't let him get away with fluff and fantasy propaganda. I'll be watching.
Comment Posted by 12ralph12 on June 04, 2008
The last comment sums it up very well, they have thousands of stockholders that are just blowing in the wind, with no public release of information in sight.
We trusted GWB and you see where that got us.
Ralph Burquist
Comment Posted by Eric on June 04, 2008
How about ask the CEO why the stock is trading at .26 a share? I thought CEOs are suppose to increase shareholder value??
-- How many full time employees work at PTSC.. besides the BOD.. ( dont count SSDI or Talis not 100% owned by PTSC)
- No direction.. no shareholder transparency....
TPL controls this company...
Where is the increased momentum of MMP signings?
Nice softball toss questions...I hope PTSC didnt pay for this interview...
Comment Posted by Bob Bassett on June 04, 2008
PTSC has gone from a $0.10 a share company to a $2.00 a share company back to a $0.26 a share company over two years. Free fall during last year. No transparency by the company to shareholders, no plan, no products, no direction, three CEO in six months. Spent more money litigating infringement case than settled for. Poorly run company. Gave almost all revenue to venture capital group from Georgia. There is a story behind the story. Why don't you ask Goerner the hard questions? Many would like to know the answers.
Mein Finger juckt zwar schon seit einiger Zeit, hab meine Kauforder heute aber noch einmal gestrichen. Ich meine heute überlegen noch einige - morgen schmeißen die dann vielleicht auch noch....
Grüße Abenteurer
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