A Summary of recent company happenings and a review of what events are on the immediate horizon for PTSC

This is an update to my 12/10/08 post with new information added based on 12/22/08 (released at 5:39 PM ET) RG Shareholder Letter #11. The information provided is generally based on: CEO Rick Goerner provided info from Shareholder Letters, company press releases, and investor relations feedback. Green font means newly added details. If some information is in my opinion (IMO), I will reference it as such and put it in Brown font.

-------------------------November 2008------------------------

Done [Released 11/14/08] - Crossflo Historical and Pro Forma Financial Statements.

Done [Released 11/20/08] [Monthly Shareholder Letter #10] - Comment (IMO): SH letter out on November 20th, 28 days after the last one.

Done [Insider Buys 11/20,11/21, 11/26/2008]:

Share Purchases by:

Felcyn (280,000 sh.), Bibeau (150,000 sh.)

Tredennick (180,000 sh.), Goerner (300,000 sh.)

H Falk, Jr. (100,000 sh.), C. Johnson (150,000 sh.)

Link: http://www.insidercow.com/history/co...

Now [New Blackout Period] in effect for Insider Buying (per IR response to “Papasimon” query around 12/9/08 – see quote from A. Hartley of IR below) “Standard blackouts are from the last day of each quarter until three full trading days after public release of the quarterly earnings.”

Probably Done, but not confirmed [November 2008]: New Investor Meetings in San Francisco Comment: (IMO): Must have happened, but have found no confirmation on this.

-----------------------------December 2008---------------------

Done [Released Monday, 12/22/08] [Monthly Shareholder Letter #11] - SH Letter out on December 22, 2008 at 5:39 PM ET, 32 days after the last one.

Done [12/22/08]: Guidance on Crossflo/Iameter Revenues: We are continuing to update our assessment of the market opportunities for the Crossflo technology, including the recent addition of the Iameter product. While Crossflo is in early stage revenue development, its sales assumptions and estimates have a great deal of variability. This is particularly true in the public/government sector. We expect to provide a plan for Crossflo’s revenues for the period March 1, 2009 through February 28, 2010 (aligned with Patriot fiscal quarters) in January. We are initiating a rolling six quarter forecast with Crossflo and, while we do not expect to provide quarterly revenue guidance on the Crossflo business at this early stage, we will update the status of progress to our plan from time to time.

Done [ASUSTeK signs MMP License on 12/22/08, ends Litigation]: “This decision to purchase an MMP Portfolio license allows ASUSTeK to end potentially expensive litigation,” said Rick Goerner, Patriot Scientific President and CEO.” Comment (IMO): An outstanding development that ASUSTeK has abandoned the litigation as part of the T3 and signed on. From Wikipedia----Asustek: In 2007, one in three desktop PCs sold was using an ASUS motherboard; and the company's 2007 revenues reached US$6.9 billion. This was the first license since Respironics on 10/20/08, a span of 63 days.

Ongoing [ARS Situation Updated in last two SH Letter, 12/22/08 and 11/20/08 SH Letter]:

From the 12/22/08 SH Letter #11, RG stated, “I’m also pleased to report that in December we’ve seen movement in the ARS market and have received partial redemption of ARS obligations from both the state of Florida and Washington. We are hopeful that this points to a concerted effort by the issuing agencies, and government, to provide for broader redemptions and liquidity in 2009.”

From the 11/20/08 SH Letter #10, RG stated, ”As shown in our most recent quarterly report, which we filed on October 10th, the Auction Rate Securities (ARS) held by us, although illiquid, retain approximately 95% of their face value as determined by a third party valuation firm. The 5% write down to date represents a temporary valuation adjustment reflective of their illiquid status. The relatively high carrying value is attributable to the strength of the underlying principal as a result of US government agency guarantees. The ARS, which continue to earn and pay interest, serve as collateral for a line of credit secured by us earlier in the year whereby we are able to borrow against 50% of their value when necessary. Also, we recently filed a formal claim against the institution through whom we purchased the ARS, seeking redemption of the instruments at full value and payment for specified damages. We believe we have strong arguments and intend to aggressively pursue this matter.”

Done [December ??, 2008]: HP-Crossflo/Iameter Webinar – In 12/22/08 Shareholder Letter, RG stated: “Iameter’s software product and services were featured in a recent HP webinar outlining the HP-Crossflo “Health Information Solution”. It was attended by 200 “web connections” representing potential customers and partners for HP’s solution. Dr. Bill Mollenbrock of Crossflo was the guest speaker for the session.” Comment (IMO) Did more sleuthing – still cannot find the exact date of the Webinar. Note 200 “connections”, not necessarily hospitals. That’s still a lot either way.

Probably Done, but not confirmed [Early December]: European Road Show-New Investor Meetings – No specific new info about this in Nov. 20, 2008 Shareholder Letter #10. However, from the 10/30/08 Shareholder Update presentation on the PTSC website, he was scheduled to specifically visit the UK and Switzerland. Comment (IMO) Presumably this was done week of Dec 1-5, 2008 or Dec 8-12, 2008.

Done [PR Released Announced 12/09/08] Iameter Acquired– Crossflo Systems, Inc., a Patriot Scientific company announced the acquisition of Iameter in a 12/09/08 press release. However, as RG stated in 12/22/08 SH Letter, On December 1, Crossflo finalized the acquisition of the assets of Iameter which expands Crossflo’s healthcare product offering. Iameter provides a healthcare software platform for hospitals and physician groups to assess the quality of care delivery against state and federal healthcare standards to help them realize quality improvements and reduced cost. The type of solutions Iameter offers have recently become important to healthcare providers because quality of care will now affect the amounts healthcare providers are reimbursed for services provided to Medicare patients. This fundamental change in the nation’s largest healthcare reimbursement system makes Iameter’s technology a timely and compelling addition to Crossflo’s healthcare data sharing technology.

-----------------January 2008 and Beyond-------------------

· [Friday, January 9, 2009]: Release of Q2 10-Q Results It will be released After the Close (ATC).

· [Tuesday, January 13, 2009]: Conference Call Shareholder Q & A "As this is not a traditional earnings call, we plan to conduct the call at 1:30 pm (ET, CT, PT?) on Tuesday, January 13, 2009. The two business day offset should give all interested shareholders time to contemplate our results and formulate questions for the call. Details for the conference call logistics will be released in early January and also included in the Company’s Q2 release on January 9, 2009."

· [In the Future]: NASDAQ Listing: Per RG, “During my last trip to New York City I had the opportunity to meet with the NASDAQ representative for new listings and discussed the prospects for Patriot. Based on the current listing criteria NASDAQ has established, Patriot could pursue listing on NASDAQ’s Global Market if we met the share price criteria. All other capital and financial requirements can be met. Therefore, the decision to pursue a NASDAQ, or other exchange, listing, is not if, but when.” Comment (IMO): Every criterion is met except Stock Price. Excellent, only one “minorJ” obstacle left. See this link to find out NASDAQ listing requirements: http://www.nasdaq.com/about/nasdaq_l...

· [Sometime soon]: Comment (IMO): Update the Website to reflect/include the non-MMP source of revenue direction. Comment (IMO) I did go ahead and ask this question of Patriot IR on 12/3/08 and received a reply on 12/9/08. IR stated that new information to be added to the website reflecting Patriot’s additional direction is in the works. A specific timeframe was not provided, but my sense is that it is soon.

· [Shortly]: Dutton Full Research Report on PTSC – (IMO) As mentioned in Dutton Summary Section of their 10/14/08 PTSC update – they said it was to be issued “shortly”. They have issued Research Note Updates on 11/10/08 and 11/24/08. Also, as an FYI, PTSC paid $35000 for 4 Research reports commencing on 11/27/06 (noted in the fine print at the end of the first report). Later, I noticed in the fine print of the 07/22/08 Dutton report that PTSC paid $67,000 for 8 research reports commencing on 11/27/08. So, the answer is, by averaging, PTSC is paying about $33,500 per year for Dutton Coverage (and presumably the 2 year coverage ends tomorrow, 11/27/08. Was it continued?).

· [Sometime, maybe] (IMO): Big Cohen Research Report – Will they renew Cohen Research? I thought I had read a comment somewhere that RG planned to pay Cohen again but not for sure on that. Still, increased or sustained coverage is critical (but, maybe he has some *new* coverage in mind). We received the first full Cohen Research Report one back on 10/16/07 and the last Cohen Update on 7/18/08. No further update/clarification on this from RG in the 12/22/08 SH Letter. http://www.cohenresearch.com/

· [Within a few calendar quarters]: Significant USPTO action on one of patent re-exams. Comment: Resolved within “quarters” per someone’s ( one of the Leckrone’s) statement at Annual Shareholder meeting on 10/30/08. More news on the ‘584 patent came out week of Dec 1-5, please see other shareholder postings for info on that.

· [Some Date in the Future]: Resolution on Evaluation of a “Textual Analysis and Search Software Company”. From Nov. 20, 2008 Shareholder Letter – “We have analyzed several potential text search/analytical tools, but not yet found an acceptable opportunity.” Comment (IMO) Nothing new on this in 12/22/08 Shareholder Letter.

· [Some Date in the Future]: Further updates on IP expansion. RG stated in the 8/20/08 SH Letter #7, “We have held preliminary discussions with the developers of advanced networking IP technology for Digital Subscriber Line (DSL) applications." RG provided no new update on this in Shareholder Letter #10. Comment (IMO) Nothing new on this in 12/22/08 Shareholder Letter.

· [Overdue, where is it?]: New 2nd Fusion Center contract won by Crossflo: RG stated on 9/23/08: “…and has most recently won an additional state Fusion Center award which will be announced shortly. Comment (IMO): Crossflo should announce a 2nd Fusion Center contract shortly. Well, has this been announced, did I miss it? It has been nearly 13 weeks since- is that still defined as “shortly”? RG provided no new update on this in Shareholder Letter #10 or #11.

All, if I omitted a key topic or reported some factual item incorrectly, please let me know and I will add/edit for next time.

StormKing