Purchased 5M Common Shares; All Warrants held by Lincoln RetiredCARLSBAD, Calif. -- October 11, 2007 --
Patriot Scientific reported operating results for the first fiscal quarter ended August 31, 2007. At August 31 Patriot had $22.3 million in current assets inclusive of $20.4 million in cash and liquid investments. Current liabilities of $8.6 million include $7.7 million in income taxes payable that are expected to be remitted over the remainder of the fiscal year. The company has no long-term debt. During the quarter the company repurchased approximately 5 million shares of outstanding common stock and retired warrants representing another 2 million shares for a total of $3.6 million. During September and October the company repurchased the remaining 5 million warrants, thus retiring all remaining warrants held by Lincoln.
The quarterly results included $1.2 million as the company's share of the net loss 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.
During the three months ended August 31, 2007 the company had incurred a net loss of $1.96 million or $0.01 per diluted share. During this period Phoenix Digital entered into technology licensing agreements with aggregate proceeds of $1.5 million. 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 portfolio licensing strategy through our joint venture with TPL has provided the company with over $75 million in earnings to date, said Patriot Scientific CEO Jim Turley. The unpredictable nature of the licensing business has not dampened our enthusiasm about the potential for continued strong returns.
Since the inception of the program in January 2006 through August 2007, twenty-one licenses have been signed with major electronics companies. Three additional licenses were signed in the month of September and are not reflected in the results of the first fiscal quarter.
Turley reconfirmed 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.
We have been evaluating investment alternatives that will provide Patriot with attractive returns apart from the licensing business, Turley said. Although many interesting opportunities have been uncovered to date, we are being highly selective in choosing candidates that we believe provide a good fit within Patriot coupled with prospects for significant growth. The recent addition of Nick Tredennick to our board of directors and the appointment of Cliff Flowers as CFO have provided additional resources in the furtherance of this effort, Turley added.
Patriot Scientific will hold its annual meeting of shareholders Tuesday, October 23, 2007 at the La Costa Resort and Spa in Carlsbad, California. Proxy statements were distributed to all shareholders no later than October 5, 2007. Further information is available on the company's web site at http://www.ptsc.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.ptsc.com
. About the MMP Portfolio
The Moore Microprocessor Patent (MMP) Portfolio contains intellectual property that is jointly owned by the privately held TPL Group and publicly held Patriot Scientific Corporation (OTCBB: PTSC). The portfolio includes seven U.S. patents as well as their European and Japanese counterparts. It is becoming widely recognized that these patents protect fundamental technology used in designing microprocessors, microcontrollers, digital signal processors (DSPs), embedded processors and system-on-chip (SoC) devices. The MMP portfolio is exclusively managed by Alliacense, a TPL Group Enterprise.