Patriot Scientific

PATRIOT SCIENTIFIC – EXTRACT FROM A YAHOO ‘BLOG’ NOV 16 2011

By http://messages.finance.yahoo.com/profile?bn=49226&mid=18614 “whatptscwontputinapr”

69 years old, Henderson, Nevada

http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_P/threadview?m=tm&bn=49226&tid=18584&mid=18584&tof=21&frt=2

EXTRACT IS VERBATIM EXCEPT FOR SPELLING CORRECTIONS

TPL is a private company and PTSC's sole partner in PDS, a JV entity created solely for the purpose of commercializing, expensing costs and distributing profits from Licensing of the MMP patent portfolio. PDS granted to TPL the exclusive right to manage the reverse engineering, negotiations, licensing and Prosecution of the MMP Portfolio; and TPL has engaged Alliacense, a separate company under the apparent direction/control of the Principals of TPL to provide much of those services.

I believe the Principals of TPL, and any related party with confidential or non public knowledge and access to MMP Licensing efforts or developments within Alliacense, as well as each person on the Board of PDS (past, present and future) should be labeled an INSIDER and specifically treated and reported to the SEC as such for purposes of ownership of PTSC stock.

Because of PTSC's Annual report disclosing TPL having "exercised" Warrants back in 2007, and the lack of any record of a (even delayed) Form 4 for TPL (filed by TPL, Leckrone or PTSC), I'm left to conclude that I don't believe TPL, Dan Leckrone (Chairman of TPL), Mac Leckrone (President of Alliacense) or Robert Neilson (Independent Manager of PDS) were/are considered "Insiders"; and I WOULD LIKE TO KNOW THE LOGIC AND LEGALITY IN THAT. Any outside entity/person that owns or is exercising Warrants into publicly traded stock, and is as critically and intimately involved in a public company's revenue making business decisions as TPL is in PDS's as its exclusive asset manager and equal JV Partner, and since PDS is the financial lifeline of PTSC, if TPL is NOT an "Insider", I can't imagine any relationship which would qualify as one better. Finally, if TPL is not an "Insider", it stands to reason that neither would Alliacense nor PDS's Independent Manager be considered one either.

However, I don't buy it. I think TPL is an Insider, and Alliacense too, and so would anyone also be who is on the PDS Board.

Where is TPL's Form 4 covering up to 3,500,000 Warrants?
"Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned"
"( e.g. , puts, calls, warrants, options, convertible securities)"

As a result of the exclusive licensing efforts of TPL's Alliacense, PDS has received approx $300,000,000 over the past 5-6 years, and approximately $120,000,000 of that then went to publicly traded PTSC; the news of which would eventually appear in some form of subsequent public disclosure with the dollar amounts only finally showing up months later in PTSC's Q & K reports. All three of those entities routinely knew the intimate details of MMP License Fees, successes, failures, Patent challenges and litigation far in advance of any publicly published reports.

PTSC is wholly dependent upon on TPL and Alliacense to license the MMP portfolio, which is almost entirely PTSC's sole income driver and apparently necessary for PTSC to remain viable and solvent. As a result of the recent lawsuit between TPL and PTSC, we know that TPL and Alliacense had more control and advance knowledge of information regarding MMP infringing parties, damage amounts, negotiations status, and Licensing fees than did the BOD Leadership at PTSC. Rightfully, traditionally, the Leadership at PTSC are deemed to be "Insiders" for PTSC stock Trading and Reporting due to the obvious and typical reasons of advance knowledge of financial impacting activities to our company.

Why is TPL treated any different than the BOD and Executive Insiders at PTSC? Is TPL an Insider to PTSC? What about ALLIACENSE? The PDS Independent Manager? Aren't they all Insiders for the same advance knowledge reasons PTSC's leadership are? Shouldn't they be? By virtue of this continuous and contractual relationship, TPL and their team are responsible for the licensing and prosecution efforts of the MMP portfolio; and as those efforts go, so goes the prospects of revenues/income for PDS, and then the one half share to PTSC; and thus the resulting impact on PTSC's Profit or Loss and impacted stock value. After all, it is PTSC who reminds us in their SEC filings "...we are wholly dependent on TPL to secure licensing revenues with respect to our microprocessor portfolio, which revenues have represented substantially all of our income since June 2005".

How can we be "wholly dependent on TPL to secure revenues which represent substantially all of our income", and them not have inside information ???? It's just not believable. I can't imagine a stronger case being made for an outsider being an "Insider". Virtually nothing happens regarding MMP licensing, PTO and prosecution activities that TPL doesn't determine or authorize.

1. Who is an "INSIDER”? In addition to company Officers, Directors and 10% owners, "Insiders" include those who have "temporary" or "constructive" access to "material" "nonpublic" information on a company. That includes anyone outside of the firm.



2. What is "MATERIAL" information? There is no statutory definition of what type of information is “material.” However, a common guideline is whether there is a substantial likelihood that a reasonable investor would consider the information to be important in deciding whether to purchase or sell a security.



3. What is "NONPUBLIC" information? In general, information is “nonpublic” until it is publicly disseminated, which can occur by the issuance of a press release, disclosure in a document filed with the SEC, or through a public webcast

Do you think that TPL, ALLIACENSE, and PDS Board Members have/had "access" to "material" "non public" information as defined above ?? "Insiders" who Acquire or Dispose of Beneficial, Direct or Indirect Debenture Securities, Warrants, Options, or Stock, are required to file a Section 16 FORM 4.

Surely in contemplating the structure of the operational mechanics of PDS, PTSC anticipated that certain individuals at TPL, Alliacense, and anyone on the Board of PDS, would necessarily be privy to Insider information to PTSC. If improper unreported ownership/trading occurred, the stock impacted is PTSC's, so, in my mind, we must have considered that some measures or guidelines be put in place for real-time notification (as an example: Providing the names of Insiders to our Transfer Agent, or requirement of a legend placed on all Insider instruments notifying that Section 16 (Form 4) compliance was required) for folks in sensitive positions at those three entities.


I believe TPL is an Insider; do you? WHERE IS TPL's FORM 4? From the May 31, 2011 10-K .....

"We issued warrants to TPL which were exercised by TPL in September 2007, to acquire shares of our common stock, $0.00001 par value (“Common Stock”). 1,400,000 warrants were exercisable upon issue; 700,000 warrants became exercisable when our Common Stock traded at $0.50 per share; an additional 700,000 warrants became exercisable when our Common Stock traded at $0.75 per share; and an additional 700,000 warrants became exercisable when our Common Stock traded at $1.00 per share, all such vesting having been achieved as of the date of this filing."

"EXERCISED" THEIR WARRANTS.... I read this as TPL having "exercised" their Warrants, thus converting them into actual stock "in September 2007". My search of all Form 4s for PTSC does NOT show TPL or Dan Leckrone (or any known associated entity) as ever being a Beneficial Owner of a Derivative Security (Warrants) or even a Stockholder. http://www.secform4.com/insider-trading/...


How many of TPL's 3,500,000 Warrants "were Exercised by TPL in September 2007”?

Does TPL still own those PTSC shares? If not, when did they sell them?

Has Dan Leckrone ever owned PTSC shares, has he ever traded them?

Has Mac Leckrone ever owned PTSC shares, has he ever traded them?

Has Robert Neilson ever owned PTSC shares, has he ever traded them?


Have those at TPL, Alliacense or PDS with "temporary or constructive access to material non public information" about MMP licensing efforts ever owned or traded PTSC stock?

Do you think PTSC has documentation on file dating to PDS's creation requiring that TPL et al file a Form 4 for any PTSC Derivative or Stock related activity? Do you think we at least notified our Transfer Agent? If not, WHY not?


Although it might not be their responsibility to do the actual Form 4 filing for the "Insider", I believe that it's within the fiduciary obligation of every public company to take reasonable precautions to insure that there are no known improper or unreported Insider ownership/trades occurring in its Issue; as any violation could undermine the confidence and trust of an even playing field in the ownership and trading of that equity.

Where is TPL's Form 4 showing they owned Derivative Securities, or that they "exercised" Warrants "in September 2007”?


Does PTSC agree that no Form 4 is needed?


Is PTSC's official position that TPL is NOT an "Insider”?


If PTSC believes TPL is an Insider, what action, if any, has PTSC taken about those TPL Warrants, or other possible PTSC Insider activity by TPL et al? Four years (Sept 2007) after PTSC was put on notice about TPL's Warrant exercise, in what appears to me to involve a Section 16 Reporting failure, has PTSC at least notified the SEC of the names of those persons at the three entities that are KNOWN to have access to or actual Insider information ?


If this "Warrants issued" or Warrants "Exercised" situation should have been reported in a Form 4, I wonder if/what other unreported Insider related activities may have occurred and not been reported ?