http://www.ptsc.com/news/PTSC_SHLetter_taxtreatment.pdf

September 4, 2007

Dear Shareholder of Patriot Scientific Corporation:

During the twelve months ended December 31, 2006, Patriot Scientific Corporation (the

“Company”) declared and paid dividends of $0.02 per share and $0.04 per share on March 22,

2006 and April 24, 2006, respectively. In accordance with Internal Revenue Service reporting

requirements, the Company arranged for 2006 Form 1099-DIV information returns to be

completed and sent to shareholders who received the dividend payments. The original 2006

Form 1099-DIV information returns sent out by the Company to its shareholders reported the

dividend payments as “ordinary dividends” and “qualified dividends” in boxes 1a and 1b of the

1099 Form.

Subsequently, we concluded that for tax purposes, the dividend payments were deemed to have

been paid from invested capital, not from earnings or profits. Therefore, we filed amended 2006

Forms 1099-DIV and resent corrected information returns to the Patriot shareholders. The

dividend payment amount on the amended 2006 Form 1099-DIV was reclassified in box 3 as

“Nondividend distributions.”

It has come to our attention that Patriot’s shareholders who hold their shares in street name may

not have received the corrected information returns. We have initiated once again the process of

causing the amended information returns to be distributed to those shareholders. This letter is

being provided to our shareholders to assist them in understanding the appropriate tax treatment

of the 2006 dividend payments.

We regret any inconvenience that may have arisen in this matter.

Thomas J. Sweeney

Chief Financial Officer

Patriot Scientific Corporation

Go PTSC Onwards and Upwards!

Cheers~