Summary of Recent Company Happenings and Future Events

This is an update to my 12/29/08 posting to incorporate latest information from the 1/9/09 10Q and the 1/13/09 Webcast. The information provided here is based on: RG Shareholder Letters, company press releases, investor relations feedback, 10Qs, and the most recent shareholder webcast. This list is by no means all encompassing, but hits upon most of the key PTSC happenings. If some text is in my opinion (IMO), I will reference it as such and put it in Brown font. Formatting of post: I apologize for I still have some formatting issues here to iron out since the right side gets truncated a bit.

-----------------------------November 2008---------------------

Done [Released 11/14/08] - Crossflo Historical and Pro Forma Financial Statements.

Done [Released 11/20/08] Monthly Shareholder Letter #10

Done [Insider Buys 11/20, 11/21, 11/26/2008]: Total of 1.025 million shares purchased by officers and board members.

Done [November 2008]: RG Attended Investor Meetings in San Francisco

-----------------------------December 2008---------------------

Done [Released 12/22/08] Monthly Shareholder Letter #11 released on December 22, 2008 at 5:39 PM ET, 32 days after the last one.

Done [Released 12/22/08] ASUSTeK signs MMP License, ends Litigation.

Done [December 2008]: HP-Crossflo/Iameter Webinar –Iameter’s software product and services were featured in a recent HP webinar outlining the HP-Crossflo “Health Information Solution”. It was attended by 200 “web connections” representing potential customers and partners for HP’s solution. Dr. Bill Mollenbrock of Crossflo was the guest speaker for the session.

Done [December 2008]: European Road Show-New Investor Meetings –From the 10/30/08 Shareholder Update presentation on the PTSC website, RG reportedly attended meetings in the UK and Switzerland with potential investors.

Done [ Released 12/09/08] Iameter Acquired– Crossflo Systems, Inc., a Patriot Scientific company announced the acquisition of Iameter. Cost for Patriot/Crossflo to acquire assets of Iameter was $533,000 (from the Q2 10Q), $488,000 of it in cash.

-------------------January 2009 (and beyond)----------------

Done [January 6, 2009]: *New* Cohen Research Report – 167 pages, but first 45 pages are the guts of it. Comment (IMO): The remaining are the financials. Bottom Line, even their most pessimistic basecase price target (short term or long-term) has them over $0.75. They have a number of different valuation methods they look at, but a whole bunch are in the $1-$2 range. Key assumptions to note on their valuations/price targets----This report assumes a flat 20 million per year to Patriot from MMP Licensing plus Cohen does not forecast any revenues from our stakes in Avot or Talis or from any future acquisitions. Conservative. Conservative. Conservative

Done [Friday, January 9, 2009]: Release of Q2 10-Q Results of Period of September 1, 2008 – November 30, 2008. Holocom Net Revs Holocom = 1.61 mil, Net Revs Crossflo = 258K, Net Revs Patriot = $6,250 (AMD Maint. Fee), and MMP License Revs via PDS = $109,739 Comment: There is a plethora of detailed info in the 10Q, well worth making the time to read.

Done [Tuesday, January 13, 2009]: Q209Conference Call Shareholder Q & A: It began at 4:30 PM. Introduction and Safe Harbor statements by IR Angela Hartley, update of ongoing activities by Rick Goerner, and Financial Review by Mr. Flowers lasted until 4:50 PM, then a Question and Answer Session followed. Webcast ended at 5:21 ET. The audio replay of the webcast is available on Patriot’s website under the ‘Investors’ section and a Press Release came out today, 1/14/09 providing a link to the transcript of the conference call.

Done, but evolving [Updated January 13, 2009]: Guidance on Crossflo/Iameter Revenues: From Webcast Transcript: We believe the potential for our target markets and channel partners will drive calendar year 2009 revenues for Crossflo to $3.0 million to $6.0 million, reflecting Crossflo’s current limited customer base and the broad range of unpredictability in these two emerging markets. Subsequent project wins with additional customers will allow us to provide you more visibility within the range as the year progresses. From Recent Shareholder Letter, RG also promised the following, “We expect to provide a plan for Crossflo’s revenues for the period March 1, 2009 through February 28, 2010 (aligned with Patriot fiscal quarters) in January. We are initiating a rolling six quarter forecast with Crossflo and, while we do not expect to provide quarterly revenue guidance on the Crossflo business at this early stage, we will update the status of progress to our plan from time to time. Comment (IMO): I believe they are being conservative, which they should be considering the economic conditions. But, considering he just gave us the Calendar Year 2009 3-6 million number, but also had previously discussed providing a rolling six quarter forecast, it is obvious that we will be getting plenty of revenue guidance updates on this as downstream visibility improves.

Done [01/13/09]: Update the Website to reflect/include the non-MMP source of revenue direction. The website was updated sometime during the day on 1/13/09 to more accurately reflect Patriot’s additional direction. Comment (IMO): I plan on looking it over pretty good for errors or omissions and forwarding any comments/suggestions to IR.

Ongoing [ARS Situation, Updated 1/3/09] As of Nov. 30th, 2008, 12.9 mil of ARS outstanding. In early December, PTSC received partial redemption of ARS obligations from both the state of Florida and Washington totaling (1.25 million). This brings it down to 11.6 mil ARS outstanding. RG stated that he was hopeful that this points to a concerted effort by the issuing agencies, and government, to provide for broader redemptions and liquidity in 2009.”

Also, Patriot borrowed 3 million dollars against the ARS.

On October 14, 2008, we borrowed $3,000,000 on our credit facility with Wedbush, the proceeds of which is included in cash and cash equivalents at November 30, 2008. The credit facility is limited to $6,450,000 per requirements of The Financial Industry Regulatory Authority (FINRA). The facility is collateralized by the full value of the outstanding auction rate securities, requires no origination fee and bears interest at the federal funds rate plus 3%.

On October 16, 2008, we initiated binding arbitration claims before FINRA against Deutsche Bank Securities, Inc., and affiliates ("DBSI") based on advisory services provided to us resulting in our purchases of auction rate securities ("ARS") and the failure of the ARS market in February 2008. We experienced a loss of liquidity and other damages as a result, and allege DBSI engaged in negligence and nondisclosure in providing us services. DBSI has not yet responded to the claim.

[In the Future]: NASDAQ Listing: With respect to future M&A activity, we continue to develop our relationship with Imperial Capital regarding possible acquisition targets of publicly-traded companies. We believe that the current economic environment presents some attractive acquisition prospects. The acquisition of a publicly-traded company also presents the opportunity to pursue Patriot’s listing on a broader stock exchange, such as NASDAQ. No active decision to affect a reverse split, but any proposal on that front would be put before shareholders. Comment (IMO): I don’t think we should ignore that the stock exchange problem can be solved through M & A of a public company already on NAS. With many corporations struggling to raise or maintain capital, Patriot’s current and expected future cash position MMP has got to be extremely attractive.

Currently [New Blackout Period in effect for Insider Buying] (per IR response to “Papasimon” query around 12/9/08 – see quote from A. Hartley of IR below) “Standard blackouts are from the last day of each quarter until three full trading days after public release of the quarterly earnings.” Comment (IMO): Today, 1/14/09, theoretically would be the last day of blackout period according to what Ms. Hartley wrote.

[Shortly?]: Dutton Full Research Report on PTSC – (IMO) As mentioned in Dutton Summary Section of their 10/14/08 PTSC update – they said it was to be issued “shortly”. They have issued Research Note Updates on 11/10,11/24, 12/10, 12/22, and 12/29 2008. Also, as an FYI, PTSC paid $35,000 for 4 Research reports commencing on 11/27/06 (noted in the fine print at the end of the first report). Later, I noticed in the fine print of the 07/22/08 Dutton report that PTSC paid $67,000 for 8 research reports commencing on 11/27/08. So, the answer is, by averaging, PTSC is paying about $33,500 per year for Dutton Coverage (and presumably the 2 year coverage ended, 11/27/08. Was it continued?). They will also likely issue an update summary now that we are past the Q2 and shareholder webcast.

[Within a few calendar quarters]: Significant USPTO action on one of patent re-exams. Comment: Resolved within “quarters” per someone’s (one of the Leckrone’s) statement at Annual Shareholder meeting on 10/30/08. More news on the ‘584 patent came out week of Dec 1-5, please see other shareholder postings for info on that.

[Some Date in the Future]: Resolution on Evaluation of a “Textual Analysis and Search Software Company”. From Nov. 20, 2008 Shareholder Letter – “We have analyzed several potential text search/analytical tools, but not yet found an acceptable opportunity.” Comment (IMO) Nothing new on this from early January 2009 Q2 or Webcast.

[Some Date in the Future]: Further updates on IP expansion. RG stated in the 8/20/08 SH Letter #7, “We have held preliminary discussions with the developers of advanced networking IP technology for Digital Subscriber Line (DSL) applications." RG provided no new update on this in Shareholder Letter #10. Comment (IMO): Admittedly, would have been a good question to have asked on the Webcast. Oops.

[New Litigation with Barco]: On December 1, 2008, we, TPL and Alliasense, Ltd. were named as defendants in a lawsuit filed in the Northern District of California by Barco, N.V. The Barco case seeks declaratory relief that its products do not infringe enforceable claims of the '584, '749 and '890 patents. We anticipate responding to the Complaint in early 2009.

[Updated on 01/13/09 webcast]: New 2nd Fusion Center contract won by Crossflo: RG acknowledged on Q & A section of Webcast that mention of that back on 09/23/08 was premature as Crossflo’s is part of a bigger contract. He had thought it would be signed and dotted in December, then again maybe right after holidays. At this juncture, all he is allowed to say is, “Early deployments in the State of New Jersey, the San Diego and Los Angeles Port Authority, the Montana Health Information Exchange, and more recently in a national fusion center in the Midwest, are all important operational validations that create additional opportunities for the CDX solution in any local, state, or federal government agency. Comment(IMO): Not in December, not right after holidays. Sounds like it is close, so how about we get the PR being between now and end of February?

[NuPower Status, Updated on 01/13/09 Webcast]: From the Webcast Transcript (paraphrased), The NuPower relationship that was entered into this past June has not been terminated (will be corrected in Cohen report if in error). PTSC entered into a validation phase agreement with NuPower Semi. There have been several customer discussions. It is forward-enabling rather than infringement type of IP process. The evaluation of the technology for utilization by customers on a go-forward basis, taken longer than Patriot assumed. PTSC has extended the validation phase agreement with NuPower. To Patriot, this has been a very low-level financial engagement. PTSC has a revenue share on licensing going forward and a small investment in the pursuit of the patents that the company had filed for, with Patriot actually being now named as a co-assignee, for the patent portfolio.

[AVoT Status, Updated on 01/13/09 Webcast]: AVoT focused on carrier qualification, Carriers: (Basic telephone operators that provide video service and phone service to individual subscribers.) In last two weeks, AVoT booked its first commercial engagement with an Asian carrier, which is a revenue-sharing arrangement. There are three additional Asian carrier trials underway. As a result of trips to Europe Calendar 4th quarter of 2008, AVoT have been asked to engage three European carriers in trials by the end of January.

[Upcoming Investment Conferences] RG to attend Financial Services Exchange Conference February 4-7, 2009 in San Antonio, Texas. Comment: He also attended the last one held October 16-17, 2008 in Fort Lauderdale.

[Next MMP License]: ASUSTeK signed a license on 12/22/08, a span of 63 days since the previous signing by Respironics on 10/20/08. We are now at 23 days and counting since ASUSTeK license.

[Share Buyback]: From the Q2 10Q, PTSC bought back: 1,245,875 shares in September 2008 (Avg Price = $0.21)

889,276 shares in October 2008 (Avg Price = $0.17)

816,665 shares in November 2008 (Avg Price = $0.14)

200,00 shares Dec 2008 (to Jan 2, 2009) (Avg Price= $0.133)

From Cliff F. during the Webcast: So we haven’t, as you can read from the Q, we haven’t made purchases in the most recent several weeks and I suspect that we will just at this very opportunistically every time we re-enter the market. Comment (IMO): There is a lot more he said about this, so I recommend reading the transcript carefully. My opinion is that PTSC share buyback is not suspended. If they see another opportune time considering all factors (which could be anytime), they will buyback shares.

All, by no means is this post meant to provide a complete list of all company happenings. I welcome any reminders about omitted material or corrections/clarifications to what is written.

Mainly, writing this helps motivate me to do my due diligence on the company and stay abreast of developments so I can “know what I own” as best as I can.

I’d like to express a big thanks to those investors that have provided their own DD or insight on this and other forums. As individuals, we mostly have little spare time in a 24 hour day to devote to keeping up on everything. But collectively, the efforts by many individuals here have provided a helpful and efficient mechanism for keeping tabs on our Patriot investment. I sincerely appreciate it.

StormKing