Another Theory

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Another Theory

posted on May 14, 2008 04:00PM

A few words.....

A lot has been written over the last few months attempting to decipher the J3 resolution, and resultant deterioration of the share price. As a long suffering PTSC investor , who has been repeatedly disappointed in management action and inaction, I have struggled to retain confidence in the BOD over the years. I have defended Gloria Felcyn in prior posts detailing the work involved in generating various SEC reports in a SOX environment. Some of the work involved is boilerplate, no doubt, but other work is very tedious and complicated consolidated corporate accounting and reporting. Resurrecting this moribund company from the ash heap to its present profitable condition takes work people!. Am not an apologist for Gloria by any means. Am just suggesting people do their homework before they criticize. I interpret her position as more executing policy rather than creating policy. CJ runs the show IMHO. My background has been as a Controller, Program Controller, and Financial Planning Manager in the Defense Aerospace industry for over 25 years. Sorry, to get off on a tangent on Gloria, I just abhor people being unmercilessly crucified by a mob, who have little experience in a particular field.

I DO hold the BOD accountable for the financial decisions reached with Schwartz and the infamous Lowell Giffhorn. I don’t believe the BOD fully understood the long term ramifications of the Schwartz agreement. If they did (BOD), they should have been summarily dismissed. However, PTSC at the time in 2001 was basically flat on its back, with an Ignite chip, which ran great but had little Software Tools to optimize its potential, and fewer marketing dollars available. Shrewd move by Schwartz, bad deal by PTSC. CJ, while looking after Schwartz’s interests on the BOD, based on history to date, IMHO, has done very little visibly to improve PTSC. I do recognize he is entitled to be on the BOD given the investment Schwartz made in PTSC. The “invisible wall” CJ espoused between PTSC and Schwartz, I never believed. IMHO he served as a conduit for information between PTSC and Schwartz to the detriment of PTSC shareholders. He knows where his allegiance lies.

Now, with regards to the so called business resolution with the J3. I have read all the arguments to date both positive and negative. I am going to break ranks with my good friends Ron & Brian and politely disagree. Ron’s experience in courtroom procedure and tactics is nonpareil. He has keen insight and presents opinions in easy to understand language.

Brian, has been a champion of the long term PTSC investor for many years. It’s a pity those that doubt his motives and questioned his background have likely never met the man or read his voluminous posts in years past. I have met and talked extensively with Brian at numerous SHM’s in person. He possesses a sharp intellect and a forceful manner in many of his posts. His financial breakdown of the raping of PTSC by Schwartz and his minions was spot on. He served tirelessly at no cost to shareholders. IMHO. The BOD effectively muzzled Brian when they asked him to become the “Shareholder Representative”. He undoubtedly signed a NDA. Once you are allowed to peek under the tent sotospeak, you are prohibited from speaking outside. Whether the BOD took anything Brian advocated and turned it into policy is debatable. However, Brian’s long term desire to eliminate the Warrants and eliminating the re-pricing of said warrants was well known by longs. Eventually, these were eliminated. While I cannot say concretely Brian caused the event to happen, I have no doubt he contributed to making the decision to eliminate the warrants sooner than later. I believe what the BOD led Brian to believe his role would be and how the BOD treated Brian were different than what Brian expected, but that’s just my opinion.

My interpretation of the resolution can be synthesized down to my belief that “Words have meaning” and nuance. There is a fine line in reading a document and interpreting what is being said accurately and inferring something that simply isn’t there and is wishful thinking. Compounded by the fact, it belies common sense to believe TPL simply walked away from the negotiating table with nothing. People don’t be naïve! With a positive Markman, and many heavy hitters previously signed, TPL was negotiating from a position of strength not weakness. Now, to those who believe the previous licensees were simply negotiating nuisance fees, in some ways, I cannot disagree. However, when some licensees agree to ~$30M+, folks that ain’t chump change!! To date Goerner has been at times circumspect about possible future payments and at times adamant there is no future payments. How do you reconcile these two statements? Sometimes effective communications can be communicated by what is said and what is left unsaid. Words have meaning. Whether future payments are tied to successful USPTO re-exam outcome is possible. Personally, IMHO, TPL is conducting an inventory of all the chips, their value, and forecasting of future use. This takes time, at least2-3 months given the complexity. I believe an agreement has been reached whereby we will not see revenues booked until the end of May at the earliest. That’s my theory!