In November 2007, PTSC invested a majority of cash in Auction Rate Product Obligations (ARPs),

through Deutsche Bank (DB), to provide professional management of monies not immediately required

for the Company’s working capital requirement. These ARPs have the highest AAA credit rating

standard and are further insured by the U.S. Department of Education. However, the recent turmoil in

the financial markets resulted in the disruption of the market mechanism that provides for the orderly

exchange of these instruments. This had led to strong concerns over Company’s ability to raise money

incase some interesting investment opportunities that might come its way.

However, there have been positive developments regarding these ARP instruments. In fact, in late April,

the State of Arkansas redeemed its bonds portfolio. This resulted in Patriot receiving $2.5 million, thus

reducing its total ARP exposure by nearly 20% of the remaining portfolio. Also, management believes it

could raise additional capital, if needed, by providing these securities as collateral. Hence, we believe

this to be a huge positive and remove the potential roadblocks associated with raising funds for