Patriot Scientific Corp., a Carlsbad firm that generates revenue through licensing agreements it strikes with large electronics manufacturers, is diversifying by acquiring a defense contractor in foreclosure last month.

Patriot acquired Holocom Networks Inc., which installs secured communications networks for the military, after Holocom defaulted on a $600,000 loan Patriot made last year.

The foreclosure sale, in which Patriot posted the amount of the loan, took place Feb. 2, said David Pohl. Patriot chief executive.

Holocom, also based in Carlsbad, is now operated as a joint venture owned by Patriot and Scripps Ventures Inc., a local merchant banking firm.

"Holocom did about $3.5 million in revenue last year," said John Burns, chief executive officer of Scripps Secured Data Inc., the renamed company. Burns is the CEO of Scripps Ventures.

Following the transaction, Burns cut Holocom's staff to 20 from 50.

Pohl said Holocom approached his firm last year seeking financial help. "They were saddled with so much debt, it was like an anchor around their necks," said Pohl.

Burns estimated that 10-year-old Holocom owed $25 million.
http://goliath.ecnext.com/coms2/gi_0199-6455052/Patriot-scientific-acquires-Holocom-Networks.html