Actions Included Continued Share Buy Backs, Mediation Settlement in Principle CARLSBAD, Calif. -- Jan. 18, 2007
-- Patriot Scientific Corporation (OTC Bulletin Board: PTSC - News) this week reported net income of $4,108,275 after provision for taxes, or $0.01 per diluted share, for the first 6 months ended November 30, 2006, even though the company recorded a net loss of $1,881,998 for the three-month fiscal quarter ended on that date after setting aside funds to provide for settlement in principle of a dispute. A copy of the company's Form 10-Q, filed January 16, 2007 with the U.S. Securities and Exchange Commission, is available on the company's redesigned website, www.ptsc.com
, where visitors can now sign up for e-mail alerts.
The quarterly results included $6,674,793 received as the company's share of the net income of Phoenix Digital Solutions, the joint venture entity that is owned half by Patriot Scientific and half by The TPL Group. Phoenix Digital receives its income from licenses purchased by manufacturers who use technologies contained in the MMP Patent Portfolio that is jointly owned by Patriot Scientific and TPL.
The report disclosed that during the six months ended November 30, 2006, Phoenix Digital received aggregate proceeds of $32,699,000 from technology licensing agreements entered into with third parties. License proceeds of $8,850,000 relating to an additional license agreement signed in November 2006 are to be received in January 2007. Phoenix Digital entered into licensing agreements with aggregate proceeds of $7,320,000 during December 2006. The dollar amount for each licensing deal varies, depending upon factors that include among other things the relevance of the patents to each licensee's revenue and the extent to which the patented technology is incorporated into specific products.
"Our revenues reflect continued momentum in pursuing our patent portfolio licensing strategy through our joint venture with TPL," stated Patriot Scientific chairman and CEO David Pohl. "We had a net increase in cash of $7,733,791 during the first six months ended November 30, 2006 as we continued to strengthen our balance sheet and our financial structure. We have subsequently used some of the cash for share buy backs."
Pursuant to its program to buy back stock, the Company repurchased 4,874,827 shares for the first six months ended November 30, 2006 at an aggregate cost of $4,024,395, and in December 2006 and January 2007 purchased 3,132,500 shares at an aggregate cost of $1,960,305. Patriot Scientific had 381,214,818 common shares outstanding on January 12, 2007. Shareholders' equity at the end of the quarter was $12,782,707, down from $16,629,014 at the end of the previous quarter and up from $10,827,551 on May 31, 2006.
At the end of the quarter Patriot Scientific had $15,714,374 in current assets that included short-term investments and over $11,718,031 in cash and cash equivalents. Current liabilities of $10,968,204 included a $4,154,600 provision for income taxes as well as $6,354,063 earmarked as an expense related to a settlement in principle reached during mediation of litigation between Patriot and a co-inventor of its patented technology. The company has no long-term debt.
"We are delighted that the strength of our patent portfolio continues to be validated by the 12 licenses that have been signed thus far with major electronics companies, 10 of them during calendar year 2006," said Pohl. "Our outlook remains positive for continued revenue based on further progress in licensing more of over 400 companies worldwide that have been notified they are candidates."
Pohl also noted that Patriot Scientific is continuing to actively evaluate sources and opportunities to create additional recurring revenue through possible joint ventures or acquisitions, all with the goal of increasing shareholder value.
Patriot Scientific and The TPL Group are co-owners of the MMP Portfolio, which Alliacense(TM), a TPL Group enterprise, exclusively manages. The MMP Portfolio patents, filed in the 1980s, protect design techniques that have become essential to a myriad of consumer and commercial digital systems ranging from computers, DVD players, cell phones and portable music players, to communications infrastructure, medical equipment and automobiles. About Patriot Scientific
Patriot Scientific is a leading intellectual property licensing company that develops, markets and enables innovative technologies to address the demands in fast-growing markets such as wireless devices, smart cards, home appliances and gateways, set-top boxes, entertainment technology, automotive telematics, biomedical devices and industrial controllers. Headquartered in Carlsbad, Calif., information about the company can be found at http://www.ptsc.com
Copies of Patriot Scientific press releases, current price quotes, stock charts and other valuable information for investors may be found at http://www.hawkassociates.com
. An investment profile on Patriot Scientific may be found at http://www.hawkassociates.com/ptscprofile.aspx
. About the Patent Portfolio
The patent portfolio, marketed as the Moore Microprocessor Patent™ Portfolio, contains intellectual property that is jointly owned by the publicly held Patriot Scientific Corporation and the privately held TPL Group. The portfolio encompasses seven U.S. patents as well as their European and Japanese counterparts. Both TPL and Patriot assert that their jointly owned patents protect techniques used in designing microprocessors, microcontrollers, Digital Signal Processors (DSPs), embedded processors and System-on-Chip (SoC) implementations. The MMP Portfolio is exclusively managed by Alliacense, a TPL Group Enterprise. About Alliacense
Alliacense is a TPL Group Enterprise executing best-in-class design and implementation of intellectual property licensing programs. As a cadre of IP licensing strategists, technology experts and experienced business development/management executives, Alliacense focuses on expanding the awareness and value of TPL's intellectual property portfolios. For more information, visit http://www.alliacense.com