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TALKING ABOUT A MICROCAP?

|Includes: Patriot Scientific Corp. (PTSC)
By Anthony Davis
March 23, 2010


Talking about a penny stock? I took a look at PATRIOT SCIENTIFIC (OTC BB: PTSC.OB).  This microcap stock has a 20 year history!

Patriot Scientific has many patents that have been infringed upon.  Many of the patents are in the MMP portfolio.  There is the “336  patent”, “584 patent”, and “148 patent”. The 336 patent is for making microprocessor chips go faster. The 584 patent is for fetching multiple instructions at once. Then the 148 patent that is in today’s high-end microprocessor chips.

There is one patent that caught my eye that has been applied for! It is called “Remote Power Charging of Electronic Devices”. This little jewel if everything goes right could be very beneficial for PTSC’s future.


Patriot Scientific has been purchasing stock in several other companies. One is Talis Data Systems, LLC (“Talis”) of which PTSC holds 38.9%  and another is Avot Media Inc. (“Avot”) of which PTSC owns a substantial amount. There is also a secured revolving loan note with Avot that bears interest of 8% which was due December 2009.

There are several patent litigations going on and should bring some numbers to the balance sheet.


PTSC also has a stock repurchase program and PTSC does buy back stock from time to time.  PTSC bought back stock in the fourth quarter of fiscal year 2009.


They maintain cash in institutional money market accounts which pay interest. PTSC had a few bad investment deals that went sour that hurt the company. I think 2010 will be a better year for PTSC.


There is an auction rate securities litigation that commenced on January 11th 2010.  The outcome of this litigation may not be realized for some time.



PTSC has other income from the sell of software and services to end users.

PTSC has NOL’s that are worth $11,975,000 and $11,894,000. The NOL’s are good until May 31, 2023 and 2013. The State of California has suspened NOL deductions for 2009 for business income of $500,000 or more.


In October of 2009 a reorganization of Patriot Data Solutions Group, Inc. (“PDSG”) was announced. PDSG incurred impairment charges for intangibles and goodwill in the PDSG segment of the business.  


“Cash shortfalls currently experienced by PDS and TPL, and continued negative cash flows incurred by PDSG, will have an adverse effect on our liquidity.” That was according to the 10-k for Patriot Scientific corp.


Other revenue for PTSC is from software licensing, related professional services and post contract support (“PCS”) agreements.


As of July 31, 2009 there were 410,304,054 shares of PTSC.OB.

 






Disclosure: I am long PTSC.OB as of this writing.