I had an opportunity to review the original and first amended complaints filed by PTSC. The following hand written notes are based on the first amended complaint (Oct 20, 2011) I tried to capture the substance of what I was reading, however, I may have missed capturing each and every word. Please forgive any errors and/or omissions

Allegations:

1. Incompetence of TPL’s management to run its business affairs causing it to squander and continue to squander over $45 million and its ensuing misconduct towards its JV Partner, Patriot, improperly designed to force Patriot to finance TPL’s on going losses.

2. TPL breached its fiduciary duties to Patriot by improperly commingling its expenses that it charged to their joint venture and by engaging in licensing activities designed to profit through over valuation of its own separate technology at the expense of the interests of the joint venture and Patriot.

3. TPL was paid its 15% totaling approximately $40 million and then some, out of the MMP licensing revenues derived to date

4. After the 15% TPL shared equally with Patriot 50% of distribution. Patriot believes that TPL has not paid Moore his share of their side of the net revenue and that Moore’s share of their side is 55%

5. TPL commenced on a spending binge. TPL grew its operations to support non MMP portfolios and technologies. TPL’s non MMP activities have not been profitable. Patriot is informed and believes TPL lost over $43 million on non MMP products, activities and technologies

6. By 2009 TPL’s cash woes worsened but it failed to scale back non MMP activities.

7. As such, it has and does continue to this date to experience a substantial “burn” which has rendered it insolvent. Patriot is informed and believes that TPL owes third parties in excess of $30 million.

8. In August 2009 TPL contended that in house work related to resisting patent re-exams were “extra” and outside the scope of its 15% off the top MMP licensing revenue. Its position was wrong and never agreed to by Patriot. Nonetheless, Patriot then agreed without any consideration to temporarily infuse additional cash into the JV beyond that called for under the parties’ agreements

9. This was done expressly based on assurance that TPL would drastically scale back its expenses and “burn” and would remain viable and based on projected MMP licensing revenue

10. Patriot (at TPL’s request) agreed to reduce the parties’ commitments under the terms of the PDS Operating Agreement to otherwise continuously maintain $8 million in capital. Also at TPL’s request, Patriot did not require PDS to make capital calls on its members.

11. Rather than accepting and expressing gratitude for relief from those obligations, TPL continued to seek funds from Patriot to support non MMP activities and its extraordinary overhead. Patriot has now refused to continue to support TPL financially any more than is legally required.

12. TPL’s response has been to threaten to shut down the licensing program. Further to try to coerce Patriot to loan it more money, TPL has focused on a new strategy of improperly diverting licensing revenue to itself through its licensing division Alliacense, contrary to its authority under the ComAg

13. MMP licenses were undervalued and Patriot has been damaged

14. TPL violated its duties to Patriot by exploiting for personal benefit the conflict in simultaneously licensing MMP and non MMP licenses with third party MMP infringers by charging the JV expenses of outside counsel devoted to pursuit of its own portfolios and other TPL intellectual property.

What I found to be most interesting was at the end of the complaint where it reads “Patriot Prays as follows”. In the original complaint PTSC prays for (damages, injunctions, accounting of expenses, etc) which is what the company has mentioned in their 10Q. However, the 1st amended complaint added one more request (Below) which has never, to my knowledge, been stated by the company.

For a declaration of Patriot’s right to declare the ComAg terminated. (bolded and underlined by me)

I reviewed SEC filings by Patriot including 8K and quarterly reports to see if PTSC mentions that they are seeking a declaration of Patriot’s right to declare the ComAg terminated and I could find nothing.

8-K (Filed: 13-10-2010)

“Despite our litigation with TPL, we have been engaged in ongoing discussions in an attempt to achieve a resolution to our differences,” stated Cliff Flowers, Patriot’s interim CEO. “Our objective has been to secure an agreement that paves the way for the continuation of licensing revenues, while ensuring that Patriot and its shareholders are fairly compensated for their ownership interests in the Moore Microprocessor Patent PortfolioTM. We have been pursuing the dual path of negotiating and litigating, aggressively preserving our full range of options in furtherance of our objectives, and will provide further information as definitive events take place.”

10-Q (Filed: 14-01-2011)

TPL Litigation

Our action against TPL in San Diego Superior Court for breach of a promissory note of $1 million and our actions against TPL and Alliacense LLC in Santa Clara Superior Court alleging claims for breach of contract, breach of fiduciary duty, aiding and abetting breach of fiduciary duty, and interference with contract, constructive fraud, for preliminary and permanent injunctions and for an accounting as described in Item 3 – “Legal Proceedings” in our Annual Report, are still ongoing, but there have been no material developments in such litigation since our Annual Report.

10-Q (Filed: 11-04-2011)

TPL Litigation

Our action against TPL and Alliacense LLC in Santa Clara Superior Court alleging claims for breach of contract, breach of fiduciary duty, aiding and abetting breach of fiduciary duty, and interference with contract, constructive fraud, for preliminary and permanent injunctions and for an accounting as described in Item 3 – “Legal Proceedings” in our Annual Report, is still ongoing, but there have been no material developments in such litigation since our Annual Report.

Our action against TPL in San Diego Superior Court for breach of a promissory note of $1 million was settled on January 19, 2011.