Patriot Scientific

I have received quite a few calls and emails since yesterday, but I am in a busy mode right now and do not have time to make individual responses.  Therefore, if you do not get a response for the next few days, please accept my apologies.  In the interim, here are a few thoughts.

I am not surprised at significantly increased legal fees/costs, if that is indeed what these figures represent in full.  Although not being a patent lawyer in a large firm, I cannot comment on whether the total number contained in this 10Q is "overboard" or not.  As I have told many of you who have contacted me over the last few months, I fully expected that legal fees and costs would  increase by several orders of magnitude as we approached the trial date, because that is the time when the most intensive work is done.  Indeed, if the case had not settled, I am sure these numbers would have been mind-boggling (or "even more so", depending on how one feels about the current number)   ---   indeed, that is probably one reason why it settled. 

The good news, of course, is that this is likely a one-time increase which will not be repeated unless there are other suits filed and other trial dates set.  Having said this, I would not be surprised if there are still some fees and costs to be incurred in concluding the settlement and/or that may not show up until the next filing.  And, or course, we all hope there will be ongoing legal fees and costs related to new settlements/licenses.

The other topic that people seem to be questioning is the amount of the Phillips deal, which has been estimated at around $17 million.  I don't know if that is correct or not, but assuming it is, I too was initially surprised before thinking further.  In my own cases, in which I usually represent large corporations as the defendant, I rarely pay more than the plaintiff's original settlement offer, even if the case goes on for years.  In other words, if the plaintiff makes a first offer of $100,000 (just pulled out of thin air), my client usually ends up paying less than that by the end of the case unless the evidence, as it develops, gets more unfavorable to my position.  On the other hand, it is perplexing to some extent that Phillips was not a higher number in view of what the Leckrones have consistently represented as being increasing settlement amounts, but I really don't know what to make of that at the moment.

Having said all of the above, I do not want to appear completely unconcerned or cavalier with these remarks.  It likewise perplexing to me that the stock price has behaved as it has, coming after the largest event in the Company's history   ---   as such, the months between now and April will IMO become the biggest "we shall see" time frame to date. 

In view of the above, I continue to advise that no one should be taking undue risk with his or her position in PTSC   ---   buy and/or hold only what you can afford to lose without disturbing your sleeping habits or otherwise doing harm to your personal financial situation.  Never fall in love with this company, its stock, or its management (or that of any other company), and do not hold  onto your shares merely because some of your favorite message board posters are still sticking around.  Many here tout that they "know" what they own, and I am not slamming them   ---   but in actuality, that is more a statement of their strong belief rather than of fact.

As I end this post, it seems that the price has stabilized somewhat, and that volume is not accelerating to any great degree.  I'm no TA master (or even a beginner, for that matter), but it seems to me that if those who are too nervous have sold and moved on (or will do so shortly), this downswing may pass without much further ado.  I am hopeful that is what will occur, but of course, no one knows the future.  Certainly, if the Company will now come out with some kind of statement/guidance, that would surely be welcome.

Best wishes to all.