Thank you for asking, and I apologize in that I know that my attempt to explain the $5M and my opinion that if the $5M is correct then there was some good negotiating by PTSC, was all lacking in desired clarity. I'll give it another shot....but I acknowledge that my comment was based on a couple of assumptions.
First, this is based on the assumption that our shared opinion that ~$5M is the actual total value of the Apple license. It is also based on LL's nearly-year-old speculation that PTSC received ~$1M "up front" (though it came and was recognized "accounting wise" late, assumed to be due to the court putting a hold on the funds until some months after the license was executed), and I believe that speculation came after the Fall/2Q FY11 (Oct 2011 release) 10-Q (I may be off on these dates - sometimes it becomes a blur! LOL). This number appeared reasonable at the time, and I don't recall any significant arguing about it (i.e., it was accepted as probable, as I don't believe there was any other known licensing during the time frame). Then there was the settlement of the TPL/PTSC dispute, which included the following "visibility of dollar terms":
"Form 8-K for PATRIOT SCIENTIFIC CORP
7-Oct-2011
Other Events, Financial Statements and Exhibits
Item 8.01 Other Events.
On October 6, 2011, Patriot Scientific Corporation (the "Company") entered into a settlement agreement with Technology Properties Limited LLC ("TPL"), pursuant to which the Company and TPL settled all claims relating to their current litigation. A description of the litigation is contained in the Company's Form 10-K for the fiscal year ended May 31, 2011, under the caption "TPL Litigation" at Item 3. Legal Proceedings.
Pursuant to the terms of the settlement agreement, TPL has agreed to have PDS allocate to the Company $1,100,000 at the rate of five and ten percent of future distributions due to TPL as a member of PDS; TPL has agreed to increased review and procedures by PDS and the Company on all MSD licensing; the Company has agreed to have PDS pay TPL for certain litigation and reexamination support services at the rate of $172,000 for June 2011, and $86,000 per month thereafter until 60 days after the Markman hearing in the current patent infringement litigation; and the parties have agreed to established guidelines and procedures relating to proposed license arrangements to be entered into by TPL involving the MSD Patents and one or more other patents within TPL's portfolio that is not an MSD Patent, and a procedure for allocating revenue between the MSD Patents and the non-MSD Patents, if needed.
On October 7, 2011 the Company issued a press release announcing the settlement, a copy of which is attached hereto as Exhibit 99.1"
See "...TPL has agreed to have PDS allocate to the Company $1,100,000 at the rate of five and ten percent of future distributions due to TPL as a member of PDS". This is money out of TPL's pocket, and into PTSC's.
So:
~$1M up front, plus $1.1M out of future revenues = ~$2.1M
Now, assuming $5M total value of the Apple license:
$5M minus $750K (15% off the top to TPL/Alliacense) = $4.25M
$4.25M divided by 2 = $2.125M to each PTSC and TPL IF the entire amount were dedicated/allocated to the MMP.
Conclusion: ~$2.1M is mighty close to ~$2.125M, which would mean that the other TPL portfolio(s) got virtually nothing, and it would mean that in it's negotiations with TPL to resolve the dispute PTSC successfully argued away any/almost all of any allocation of Apple revenues to the other portfolio(s). It became nearly a 50/50 split of net to PDS.
No insider info, no rocket science, no creative accounting, just a couple of assumptions; one being that the total value of the Apple license was ~$5M, and one being that LL's accepted speculation about the "up front" payment to PTSC was ~$1M. The rest is the above filing and some simple math.
Though I won't attach the word "delusional", I do suggest this as a theory and NOT a statement of fact, because I have no way of knowing it is FACT. But the numbers work.
While I originally used the numbers to "back into" the ~$5M total figure, I did "shift gears" on you to draw the "negotiation success" conclusion/theory based on those same numbers.
I hope this helps.
SGE
