Re: Crossflo/Avot discussions and their software compatibility...via IR
posted on
Jan 27, 2009 03:15AM
emtnester: I submitted a similar request for information regarding this topic. I included a compilation summary of many poster's comments made in and around this discussion as a backdrop to the query. This is the email I sent, but unlike you I have not yet received a response.... Dear Investor Relations: Fellow investors and myself have been discussing the possible synergies between the various acquired and affiliate entities, specifically regarding the revenue-generating potential of the possible co-mingling of their technologies toward broadening the scope of their respective solutions. With regarding to our particular discussions, the most relevant was speculated to be between Crossflo's secure data exchange solution (i.e., CDX) and Avot's dynamic digital video streaming solution. This speculation centered on whether one's technology could provide "improvement" to the other's, whereby the resulting combined solution might provide benefits that would add to the functionality of the solution and thereby be more attractive to potential customers, thereby increasing potential market penetration. The context of our discussion is primarily formed by the recent guidance provided by Mr. Rick Goerner regarding Crossflo's currently projected revenues of $3M to $6M for the calendar year 2009. Given the current financial position of Patriot Scientific (Company) as defined in the most recent quarterly filing, we were concerned that this guidance was lower than expected. Put another way, when projecting into the future using the Crossflo projected revenue figures, when combined with the current shares outstanding, the EPS projections are seen as unsupportive of the growth required to achieve the range in share price that retail investors (and presumably the Company) are desiring. It is duly noted that, based on the Company's public statements to date, the M&A efforts are ongoing toward building a foundation in this revenue-generating market and are anticipated to expand in a complimentary way, and that this effort will require time, how much of which is uncertain. Equally uncertain is the assurance that the Company will be able to acquire or invest in other complimentary companies and technologies that would increase potential revenues, especially in light of the also uncertain outcome of the USPTO re-examinations of certain patents in the MMP. Finally, the Company's published goal of reducing the ratio of revenues from the licensing of the MMP to those revenues from the data sharing and security solutions implies the need for the latter's revenues to be substantially higher than the projections recently provided, even when combined with reasonable estimates for future revenues from the Company's other current revenue sources. The present national economic and financial turmoil completes the backdrop upon which these concerns are projected. In summary, the shareholders within the mentioned group discussing these issues are seeking information from the Company with regard to the potential of the cross-development of the technologies available to the Company for the purpose of increasing the benefit of the respective solutions provided by each technology. We understand that certain of these plans, if any, might be considered sensitive and that releasing such information might compromise efforts to position the Company ahead of its competitors. Never-the-less, some insight into whether the efforts described herein are being considered or are in progress would provide investors additional information with which to better evaluate equity positions held in Patriot Scientific going forward. If at all possible, answers to or comment on the following specific questions are requested. 1. Is a combination of Crossflo's and Avot's technology considered by the Company to be an area of interest? 2. If the two are being considered for combined solution development, what aspects of the two technologies are of specific interest in that effort, and what specific benefits would result to leverage-up the Company's position in its target markets? 3. Is there potential for any of the Company's technologies, either separately or in a potentially combined form, as they apply to solutions in the HLS and/or first-responder-related IEPD-Alerts and mobile services in conjunction with Fusion Centers, or other similar applications or markets? Thank you in advance for your consideration of the queries included here, and for your answers and comments. I look forward to your reply. Cordially,