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Message: Response received from my 2nd email to Mr. Flowers

Response received from my 2nd email to Mr. Flowers

posted on Jan 28, 2010 11:02AM

and after I posted it to the Agora board...

Subject: RE: Attn: Mr. Clifford Flowers, Corporate Secretary, PTSC

Mr. XXXX,

Please find the following in response to your inquiry:

1. The system of internal controls is designed to provide integrity over financial reporting. It is not compromised by having the CEO and CFO role performed by the same individual. The system and duty segregation involves other individuals that participate with the financial reporting process to ensure that accurate and complete information is reported. From a business perspective, especially as one increases in complexity, multiple executive roles including separate individuals to occupy a traditional CEO and CFO role becomes more critical, and this is the primary reason why the roles are separated. As we have previously stated, the combination of positions is only temporary pending the identification of the optimal CEO candidate. Compromising the selection of an optimal CEO candidate over concerns that the internal control process was being compromised would be misguided.

2. I understand your comment and perspective on the role of a Board Chairperson. Obviously the Board believes it can execute its responsibilities under the current structure but I will share your concerns.

3. There are two issues here. One is the action against the former Crossflo officers which is not limited as to claim amount. The second is our objection filed with the escrow agent to the release of our escrow deposit to the sellers (former shareholders) of Crossflo. While the underlying reasons for both actions are similar, they are two separate actions.

Patriot Scientific Corporation

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