During fiscal 2009, we finalized an agreement with NuPower Semiconductor whereby we became co-assignees of a total of seven U.S. patents (five of which had issued and two of which had notices of allowance) related to power management for microprocessor based systems. The agreement is effective until November 30, 2010. The assignment was final in fiscal 2010 with the United States Patent and Trademark Office (“USPTO”) following the final issuance of the remaining two patents. These patents are currently set to expire between 2026 and 2029

In the HTC and Barco cases the parties have stipulated to non-infringement of the ‘584 patent and that patent will not be litigated in those cases

A settlement of the Sirius action has been finalized and that action was dismissed on July 30, 2010

On April 26, 2010, the Court granted our application for a Temporary Restraining Order ("TRO") precluding TPL from executing any license of the MMP patents without providing us five business days' notice of the proposed MMP license and any other proposed license with the licensor, in order to allow us time to seek redress if we are dissatisfied by the proposed licenses... However TPL stipulated on August 3, 2010 that the TRO already in place would become a Preliminary Injunction

During fiscal 2010, we recorded a gain on our sale of the Iameter portfolio of assets of approximately $182,000

Our line of credit facility with a balance of approximately $3,122,000 at May 31, 2010 does not have a specified maturity date and terms of the agreement state the credit facility is available to us “as long as needed” subject to the collateral value of our ARS. During June 2010, we paid $500,000 on the credit facility

At May 31, 2010, work-in-process consisting of recognized revenue on PDSG’s current contracts was $264,637 and invoices to customers were $128,000

At May 31, 2010, the balance in licenses receivable consists of a license agreement for which partial payment was made in fiscal 2010 and the remaining payment of $2,000,000 was received by the Company during July 2010

On July 15, 2010 the Company paid $1,003,095 to PTSC in accordance with terms of PTSC’s $950,000 secured note receivable with TPL due July 12, 2010 which named the Company as jointly and severally liable for payment

Accordingly, we are in the process of examining alternatives that could allow for the partnering or divestiture of PDSG. If successful, these measures may provide for a further reduction in expenses and cash use, or additionally in the event of divestiture, cash proceeds.

http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=7418327

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Be well