Patriot Scientific

Patriot Scientific Reports Profitable Quarter; Q3 FY '08 Net Income $6.3 Million or $0.02 Basic and Diluted Earnings Per Share.

On your first point, unless I'm missing somethning or looking in the wrong place, it does NOT say that in the asignment agreement. That is something that appears in the court's statement of decision, but not in the original assignment agreement with TPL. It's a bit hard to read, but look at page 18 of the attached filing for more info. In fact, the language included in 2.1 (iii), while not interpreted this way by the court, seems to suggest to me that PTSC's portion of the proceeds would be specifically excluded.

http://www.scefiling.org/filingdocs/11049/37506/89312e_EXxA.pdf

As for Felcyn, she states that she first met Brown during meetings associated with the merger efforts. And she DOES testify that she had no knowledge of the Brown/TPL agreement. That's part of my problem with Brown. If he was in meetings with her and other TPL directors over the merger as the testimony suggests, I feel it was incumbent on him to communicate his interests since they were based on GROSS proceeds that would certainly affect PTSC's take.

As for testimony about how much he knew back then about the deal points, I haven't seen anything that would illuminate that, but there are so many filings and I've been focussed mainly on what they reveal about PTSC and the licensing, and not so much on the Brown/TPL issues.

Lastly, in the last post to you I mentioned that if Lecky had simply paid according to agreeement this woudl be an moot issue. And that if there was evidence that Brown accepted payments that reflected an accounting that kept the funds due him to just 3.5% of the Gross that TPL received, exclusive of PTSC's portion, that would clarify, IMO, what Brown REALLY expected and agreed to in his mind. While I take it with a grain of salt, because it's from Leckrone's testimony/declaration, I did find a filing that states that the payments that WERE made after the Intel payment were indeed calcluated based on that idea. Apparently there wer no objections from Brown at that point. What did happen apparently, is later LECKRONE objected saying he incorrectly calculated those payments because in addition to PTSC's portion, he should have excluded Moore's take, and others', significantly reducing the balance owed to Brown.

IMO, if that is true that Brown didn't object to that calculation logic of PTSC's portion being deducted before the 3.5% was calculated, then it would fit with the idea that he never expected to participate in the new owner's portion of the proceeds. Keep in mind, PTSC was in fact a 50% OWNER of the patents, not an investor with an assignment deal with TPL like Brown, or Neilson, or these others, or an understanding that his 3.5% would come off the top before the payments due Moore like Moore understood his agreement with TPL, according to Brown. So it would logically make sense that Brown would expect that Owner to get their full half without deductions for deals that TPL had cut with him unbeknownst to PTSC.

Intuitively, that's what I believe was the understanding Brown had, and it wasn't until he had to sue Leckrone to collect after Leckrone stopped paying, that he has massaged his understanding of the agreement to get whatever the court will allow.

Lastly, it's odd to me that Felcyn is the one from PTSC's side that has been called to testify. At that time, David Pohl and Carlton Johnson would have been more "powerful" and important players for PTSC in their dealings with TPL, yet I don't see any declarations or filings from them. I wonder why.

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lambertslunatics
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