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1. Form 8-K for PATRIOT SCIENTIFIC CORP
2. Company Provides Update on Significant Activities
3. Patriot Scientific Corporation Provides Litigation Update
zu 1.
13-Aug-2010
Regulation FD Disclosure, Financial Statements and Exhibits
Item 7.01 Regulation FD Disclosure.
On August 13, 2010, Patriot Scientific Corporation (the "Company") issued a press updating investors on significant business matters of the Company. On the same date, the Company also issued a press release updating investors on the status of its discussions and its outstanding legal actions against The Technology Properties Limited Group, LLC and Alliacense, LLC. The descriptions herein of the press releases are only summaries and are qualified in their entirety by the full text of such documents, which are filed as Exhibits 99.1 and 99.2 hereto and are incorporated by reference herein.
The information in this Current Report on Form 8-K furnished pursuant to Item 7.01 is not deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended ("Exchange Act"), or otherwise subject to the liabilities of that section, and such information is not incorporated by reference into any registration statements or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof, regardless of the general incorporation language contained in such filing, except as shall be expressly set forth by specific reference to this filing. All exhibits to this Current Report on Form 8-K relating to Item 7.01 are deemed furnished, and not filed, unless specified under Item 9.01 that a specific exhibit or exhibits, or portion thereof, are intended to be filed rather than furnished.
By filing this Current Report on Form 8-K and furnishing this information, the Company makes no admission as to the materiality of any information in this report. The information contained in this report is intended to be considered in the context of the Company's filings with the Securities and Exchange Commission (the "SEC") and other public announcements that the Company makes, by press release or otherwise, from time to time. The Company undertakes no duty or obligation to publicly update or revise the information contained in this report, although it may do so from time to time as its management believes is appropriate. Any such updating may be made through the filing of other reports or documents with the SEC, through press releases or through other public disclosure.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
99.1 Press release dated August 13, 2010, regarding business updates
99.2 Press release dated August 13, 2010, regarding litigation updates
Zu 2.
CARLSBAD, Calif., Aug. 13 /PRNewswire-FirstCall/ -- Patriot Scientific Corporation (OTC Bulletin Board:PTSC.ob - News) today issued an update on significant business matters.
To All Shareholders, Prospective Investors, and Stakeholders in Patriot Scientific Corporation,
As many of you may know, on Monday, August 16th, we will file our annual report on Form 10-K. There have been several significant developments over the past months which may be helpful for me to highlight and summarize.
First and foremost, I know everyone is interested in the status of our relationship with the TPL Group and matters affecting the MMP™ Portfolio. These issues have been amongst the most pressing in the Company's history and have occupied a significant portion of mine and our Board's time. Despite our attempts at resolving our differences through negotiations, at this point we are pressing forward with our litigation efforts against TPL and their licensing division Alliacense, as we believe this is the best way we can preserve our interests in the important MMP Portfolio asset.
As you may also know, we have been historically challenged in what we can publicly disclose on topics involving MMP and our relationship with TPL. This has largely been attributable to contractual restrictions contained within the agreements that govern the MMP joint-venture. Further, and at the request of TPL, we have also had restrictions placed on our ability to make public announcements by the Santa Clara Superior court. Needless to say we are inordinately frustrated by the contractual disclosure restrictions, and we know you are as well. So while we work towards the objective of having greater transparency on these issues that are of paramount importance to our shareholders, for now I must refer you to the disclosures we will make in our 10-K and the separate litigation update press release filed by us today, even though I know this will leave many of you with a desire to know more. Before leaving the MMP topic there are two other points I wanted to address. The first is to remind everyone about the USPTO's issuance of a Notice of Intent to Issue Reexamination Certificate (NIRC) for the US'336 patent. This represents a significant victory for us as it again validates the MMP Portfolio as essential technology for virtually all microprocessor-based products used today. For additional information on this important event please see our July 27th press release which can be found on our web-site at patriotscientific.com/...p;task=view&id=261&Itemid=29.
Secondly, we have had some questions about the Independent Manager role as it relates to the Management Committee of PDS (the joint venture entity through which MMP Portfolio results flow). The previous Independent Manager's contract ended on May 31, 2010, and as such this role has not been filled. At this time, Carlton Johnson, Patriot Board member and our representative on the PDS Management Committee, has been granted oversight of PDS' banking activities.
Switching topics, we have had several inquiries regarding our wholly owned data sharing subsidiary, Patriot Data Solutions Group (PDSG) and the efforts to redirect this business. Since the early part of this calendar year we, with the assistance of Attain LLC, have been engaging and working with go-to-market partners in an effort to increase the exposure and access to the potential buyers of the CDX solution set. At the onset of this exercise we were uncertain if this exercise would yield positive results, or if other decisions regarding the business would need to be implemented. At this time we remain cautiously optimistic about the prospects for PDSG and I'll share with you some of the more significant factors that influence our thinking. First and foremost, after meeting with several channel partners that service our market it is apparent we have a solution that resonates with this audience. This is in large part due to improvements and additions to CDX that were completed in March of this year, making it a truly enterprise level offering with broader appeal. Our recent press release announcing our reseller relationship with SRA is one of the tangible results in validation of CDX and the generation of partner interest. We are similarly engaged with other partners and in several instances are pursuing joint sales opportunities. While we are encouraged with the progress made over these past several months, we must temper our enthusiasm by realizing that PDSG is truly a very early stage business with respect to revenue growth. In light of this we have taken measures to rationalize our current level of investment, which include the aforementioned emphasizing of a channel development strategy over direct sales, as well as prioritizing CDX as the solution we will continue to develop and sell. As a result of these decisions we have divested of the Iameter and Vigilys product lines, in February and August of this year, respectively. This allows us to focus on what we believe to be PDSG's most valuable asset, CDX, with a leaner organization and reduced cost structure. We are committed to controlling PDSG's costs so that we do not find ourselves unnecessarily ahead of the rate at which revenues are growing.
Before closing there are two items we've received inquires about that I wanted to respond to. First and most importantly, let me say that there are no plans to acquire, merge, or otherwise take an interest in any new businesses, period. Effective with the beginning of my tenure as interim CEO all M&A activities have ceased. To the contrary, we have taken measures to divest ourselves of activities that were continuing to place a drain on our cash resources, and that did not present a clear timeframe and path to positive results. This includes Talis, Avot, and the aforementioned Iameter and Vigilys actions.
A second item that we've received some inquiries on is our disclosure of Wells Fargo's Cayman Island checking account sweep function, with an implication that it represents something that is less than above-board. I can only state that these concerns are unfounded. Nevertheless, because we had been maintaining minimal balances in our checking account causing the sweep functionality to in effect be non-operative, we have recently discontinued the sweep service. On a similar but broader note, I will say as a public company we are subjected to quarterly reviews and annual audits of our financial statements and internal controls by our independent public accountants. I occasionally hear from people on certain topics which leads me to believe they may not fully appreciate what these audits represent. I can only say that these audits are rigorous examinations and we work hard to ensure that the work we do is above reproach.
Finally and in closing, as you can see we have some significant issues to deal with before I can predict smooth sailing. Members of our Board have put in an inordinate amount of time over the past several months to assist me in clearing the obstacles that have impeded our progress. I wish to extend my appreciation to them and to all of Patriot's supporters who understand that the best that can be done for the business is being done. I and the Board will continue to pursue what we believe are realistic and practical measures for directing the business. Our challenges will not be overcome overnight, but I do believe they will be overcome and Patriot will come out of this a stronger and more valuable entity.
Sincerely,
Cliff Flowers
Interim CEO
About Patriot Scientific
Zu 3.
CARLSBAD, Calif., Aug. 13 /PRNewswire-FirstCall/ -- Patriot Scientific Corporation (OTC Bulletin Board:PTSC.ob - News) today reported that it has withdrawn from discussions aimed at settling its outstanding actions against The Technology Properties Limited Group, LLC (TPL) and Alliacense, LLC, the Company's joint venture partner in the management of the MMP™ Portfolio of microprocessor patents, and its licensing division, respectively.
On April 12, 2010 the Company filed suit in the Superior Court of the State of California, County of San Diego against TPL alleging breach of a $1 million promissory note obligation for which repayment was due Patriot on February 28, 2010. On April 22, 2010 it filed an action in the Superior Court of the State of California, County of Santa Clara, against TPL and Alliacense which was placed under seal provisionally by the court at the defendants' request. On August 12, 2010, the Court considered defendants' request to seal the file indefinitely and to compel private arbitration of the dispute and denied both Motions. On August 13, 2010 the Court provisionally allowed some file redactions pursuant to a Motion filed by TPL and will decide the appropriateness of those redactions on September 30, 2010.
The Complaint makes several allegations against TPL and Alliacense, including breach of contract, breach of fiduciary duty, aiding and abetting breach of fiduciary duty, contract interference, constructive fraud, and unjust enrichment, while also seeking declaratory relief over specific contractual disagreements. The Complaint further seeks an accounting of revenues and expenses charged to the PDS joint venture, while also engaging in licensing activities designed to profit TPL at the expense of the interests of PDS and Patriot.
"We had originally felt that discussions aimed at addressing a variety of issues, including the matter related to our April 22, 2010 action and the restructuring of the 2005 agreements that govern the management of the MMP™ Portfolio, represented the best approach to resolving the issues between the parties and for providing continuity to the licensing effort," said Carlton Johnson, Patriot Scientific Corporation's Executive Committee Chairman. "Our position is and remains one in which Patriot would have and maintain an equal or greater voice with all decisions relating to the MMP licensing. Up until now we had deferred making any announcement that a successful renegotiation of the relationship would occur. However, this process has taken far longer than we anticipated and where we were once hopeful that we were close to settling a number of differences, we now intend to vigorously resume the litigation process. We will provide details on the litigation as circumstances permit, however we ask our shareholders to appreciate that we remain under some contractual restrictions in regard to public disclosures pertaining to the MMP™ Portfolio, and we also wish to avoid any public sharing of information that could impair our litigation strategy. We regret having to take these measures, but we believe they are in the best long-term interests of Patriot, its shareholders, and our ownership in the MMP™ Portfolio."
About Patriot Scientific Corporation
Headquartered in Carlsbad, California, Patriot Scientific Corporation (PTSC) provides data sharing and secure data solutions for a connected world. These activities are funded with revenues generated, in a large part, from the Moore Microprocessor Patent™ Portfolio licensing partnership with The TPL Group. For more information on Patriot Scientific Corporation, visit: www.ptsc.com.
2. Company Provides Update on Significant Activities
3. Patriot Scientific Corporation Provides Litigation Update
zu 1.
13-Aug-2010
Regulation FD Disclosure, Financial Statements and Exhibits
Item 7.01 Regulation FD Disclosure.
On August 13, 2010, Patriot Scientific Corporation (the "Company") issued a press updating investors on significant business matters of the Company. On the same date, the Company also issued a press release updating investors on the status of its discussions and its outstanding legal actions against The Technology Properties Limited Group, LLC and Alliacense, LLC. The descriptions herein of the press releases are only summaries and are qualified in their entirety by the full text of such documents, which are filed as Exhibits 99.1 and 99.2 hereto and are incorporated by reference herein.
The information in this Current Report on Form 8-K furnished pursuant to Item 7.01 is not deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended ("Exchange Act"), or otherwise subject to the liabilities of that section, and such information is not incorporated by reference into any registration statements or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof, regardless of the general incorporation language contained in such filing, except as shall be expressly set forth by specific reference to this filing. All exhibits to this Current Report on Form 8-K relating to Item 7.01 are deemed furnished, and not filed, unless specified under Item 9.01 that a specific exhibit or exhibits, or portion thereof, are intended to be filed rather than furnished.
By filing this Current Report on Form 8-K and furnishing this information, the Company makes no admission as to the materiality of any information in this report. The information contained in this report is intended to be considered in the context of the Company's filings with the Securities and Exchange Commission (the "SEC") and other public announcements that the Company makes, by press release or otherwise, from time to time. The Company undertakes no duty or obligation to publicly update or revise the information contained in this report, although it may do so from time to time as its management believes is appropriate. Any such updating may be made through the filing of other reports or documents with the SEC, through press releases or through other public disclosure.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
99.1 Press release dated August 13, 2010, regarding business updates
99.2 Press release dated August 13, 2010, regarding litigation updates
Zu 2.
CARLSBAD, Calif., Aug. 13 /PRNewswire-FirstCall/ -- Patriot Scientific Corporation (OTC Bulletin Board:PTSC.ob - News) today issued an update on significant business matters.
To All Shareholders, Prospective Investors, and Stakeholders in Patriot Scientific Corporation,
As many of you may know, on Monday, August 16th, we will file our annual report on Form 10-K. There have been several significant developments over the past months which may be helpful for me to highlight and summarize.
First and foremost, I know everyone is interested in the status of our relationship with the TPL Group and matters affecting the MMP™ Portfolio. These issues have been amongst the most pressing in the Company's history and have occupied a significant portion of mine and our Board's time. Despite our attempts at resolving our differences through negotiations, at this point we are pressing forward with our litigation efforts against TPL and their licensing division Alliacense, as we believe this is the best way we can preserve our interests in the important MMP Portfolio asset.
As you may also know, we have been historically challenged in what we can publicly disclose on topics involving MMP and our relationship with TPL. This has largely been attributable to contractual restrictions contained within the agreements that govern the MMP joint-venture. Further, and at the request of TPL, we have also had restrictions placed on our ability to make public announcements by the Santa Clara Superior court. Needless to say we are inordinately frustrated by the contractual disclosure restrictions, and we know you are as well. So while we work towards the objective of having greater transparency on these issues that are of paramount importance to our shareholders, for now I must refer you to the disclosures we will make in our 10-K and the separate litigation update press release filed by us today, even though I know this will leave many of you with a desire to know more. Before leaving the MMP topic there are two other points I wanted to address. The first is to remind everyone about the USPTO's issuance of a Notice of Intent to Issue Reexamination Certificate (NIRC) for the US'336 patent. This represents a significant victory for us as it again validates the MMP Portfolio as essential technology for virtually all microprocessor-based products used today. For additional information on this important event please see our July 27th press release which can be found on our web-site at patriotscientific.com/...p;task=view&id=261&Itemid=29.
Secondly, we have had some questions about the Independent Manager role as it relates to the Management Committee of PDS (the joint venture entity through which MMP Portfolio results flow). The previous Independent Manager's contract ended on May 31, 2010, and as such this role has not been filled. At this time, Carlton Johnson, Patriot Board member and our representative on the PDS Management Committee, has been granted oversight of PDS' banking activities.
Switching topics, we have had several inquiries regarding our wholly owned data sharing subsidiary, Patriot Data Solutions Group (PDSG) and the efforts to redirect this business. Since the early part of this calendar year we, with the assistance of Attain LLC, have been engaging and working with go-to-market partners in an effort to increase the exposure and access to the potential buyers of the CDX solution set. At the onset of this exercise we were uncertain if this exercise would yield positive results, or if other decisions regarding the business would need to be implemented. At this time we remain cautiously optimistic about the prospects for PDSG and I'll share with you some of the more significant factors that influence our thinking. First and foremost, after meeting with several channel partners that service our market it is apparent we have a solution that resonates with this audience. This is in large part due to improvements and additions to CDX that were completed in March of this year, making it a truly enterprise level offering with broader appeal. Our recent press release announcing our reseller relationship with SRA is one of the tangible results in validation of CDX and the generation of partner interest. We are similarly engaged with other partners and in several instances are pursuing joint sales opportunities. While we are encouraged with the progress made over these past several months, we must temper our enthusiasm by realizing that PDSG is truly a very early stage business with respect to revenue growth. In light of this we have taken measures to rationalize our current level of investment, which include the aforementioned emphasizing of a channel development strategy over direct sales, as well as prioritizing CDX as the solution we will continue to develop and sell. As a result of these decisions we have divested of the Iameter and Vigilys product lines, in February and August of this year, respectively. This allows us to focus on what we believe to be PDSG's most valuable asset, CDX, with a leaner organization and reduced cost structure. We are committed to controlling PDSG's costs so that we do not find ourselves unnecessarily ahead of the rate at which revenues are growing.
Before closing there are two items we've received inquires about that I wanted to respond to. First and most importantly, let me say that there are no plans to acquire, merge, or otherwise take an interest in any new businesses, period. Effective with the beginning of my tenure as interim CEO all M&A activities have ceased. To the contrary, we have taken measures to divest ourselves of activities that were continuing to place a drain on our cash resources, and that did not present a clear timeframe and path to positive results. This includes Talis, Avot, and the aforementioned Iameter and Vigilys actions.
A second item that we've received some inquiries on is our disclosure of Wells Fargo's Cayman Island checking account sweep function, with an implication that it represents something that is less than above-board. I can only state that these concerns are unfounded. Nevertheless, because we had been maintaining minimal balances in our checking account causing the sweep functionality to in effect be non-operative, we have recently discontinued the sweep service. On a similar but broader note, I will say as a public company we are subjected to quarterly reviews and annual audits of our financial statements and internal controls by our independent public accountants. I occasionally hear from people on certain topics which leads me to believe they may not fully appreciate what these audits represent. I can only say that these audits are rigorous examinations and we work hard to ensure that the work we do is above reproach.
Finally and in closing, as you can see we have some significant issues to deal with before I can predict smooth sailing. Members of our Board have put in an inordinate amount of time over the past several months to assist me in clearing the obstacles that have impeded our progress. I wish to extend my appreciation to them and to all of Patriot's supporters who understand that the best that can be done for the business is being done. I and the Board will continue to pursue what we believe are realistic and practical measures for directing the business. Our challenges will not be overcome overnight, but I do believe they will be overcome and Patriot will come out of this a stronger and more valuable entity.
Sincerely,
Cliff Flowers
Interim CEO
About Patriot Scientific
Zu 3.
CARLSBAD, Calif., Aug. 13 /PRNewswire-FirstCall/ -- Patriot Scientific Corporation (OTC Bulletin Board:PTSC.ob - News) today reported that it has withdrawn from discussions aimed at settling its outstanding actions against The Technology Properties Limited Group, LLC (TPL) and Alliacense, LLC, the Company's joint venture partner in the management of the MMP™ Portfolio of microprocessor patents, and its licensing division, respectively.
On April 12, 2010 the Company filed suit in the Superior Court of the State of California, County of San Diego against TPL alleging breach of a $1 million promissory note obligation for which repayment was due Patriot on February 28, 2010. On April 22, 2010 it filed an action in the Superior Court of the State of California, County of Santa Clara, against TPL and Alliacense which was placed under seal provisionally by the court at the defendants' request. On August 12, 2010, the Court considered defendants' request to seal the file indefinitely and to compel private arbitration of the dispute and denied both Motions. On August 13, 2010 the Court provisionally allowed some file redactions pursuant to a Motion filed by TPL and will decide the appropriateness of those redactions on September 30, 2010.
The Complaint makes several allegations against TPL and Alliacense, including breach of contract, breach of fiduciary duty, aiding and abetting breach of fiduciary duty, contract interference, constructive fraud, and unjust enrichment, while also seeking declaratory relief over specific contractual disagreements. The Complaint further seeks an accounting of revenues and expenses charged to the PDS joint venture, while also engaging in licensing activities designed to profit TPL at the expense of the interests of PDS and Patriot.
"We had originally felt that discussions aimed at addressing a variety of issues, including the matter related to our April 22, 2010 action and the restructuring of the 2005 agreements that govern the management of the MMP™ Portfolio, represented the best approach to resolving the issues between the parties and for providing continuity to the licensing effort," said Carlton Johnson, Patriot Scientific Corporation's Executive Committee Chairman. "Our position is and remains one in which Patriot would have and maintain an equal or greater voice with all decisions relating to the MMP licensing. Up until now we had deferred making any announcement that a successful renegotiation of the relationship would occur. However, this process has taken far longer than we anticipated and where we were once hopeful that we were close to settling a number of differences, we now intend to vigorously resume the litigation process. We will provide details on the litigation as circumstances permit, however we ask our shareholders to appreciate that we remain under some contractual restrictions in regard to public disclosures pertaining to the MMP™ Portfolio, and we also wish to avoid any public sharing of information that could impair our litigation strategy. We regret having to take these measures, but we believe they are in the best long-term interests of Patriot, its shareholders, and our ownership in the MMP™ Portfolio."
About Patriot Scientific Corporation
Headquartered in Carlsbad, California, Patriot Scientific Corporation (PTSC) provides data sharing and secure data solutions for a connected world. These activities are funded with revenues generated, in a large part, from the Moore Microprocessor Patent™ Portfolio licensing partnership with The TPL Group. For more information on Patriot Scientific Corporation, visit: www.ptsc.com.
