Let’s review part of Storm Kings notes from the ASHM in Jan 28. Make note of Gloria’s response (in green) to Question #4 which was the 2nd question and answer segment

IV. Q & A because Mac and Larry H have a plane to catch, so it is broken up into 2 Q & A session.

1) Stan Caplan (This guy talked a lot at the SHM, but IMO was a great advocate for shareholders (and expressed their angst) and really put the BOD to the fire.

Stan (to Mac): Is ‘336 recertified. Mac: Yes in respect to 3 merged reexams.

2) Tom Burns? (CEO of Holocom): Tom: Presentation better than last few, a lot more concise. Question is, for every $100 collected in royalties, what $ goes to litigation costs and what comes to Patriot? Mac didn’t really answer this question in specific numbers. Mac said that licensing program is still young. Tom: Do you see litigation costs going down? Mac: No. More litigation is going to be required.

There was a lot of back and forth here that I am not summarizing because there was no bottom line, but bottom line is what Cliff said at the end of this questioner. Cliff: Before PDS margin were 80%, Lately, they are running at 60%.

3) Robert Bass? Robert: Funding of 950K to TPL? Dan L and other responded, somewhat disjointededly: Effort to get PTSC BOD more focused on process. TPL is viable – will be around.

It got confirmed that the 950K is above and beyond the 50% split of funding to PDS. However, TPL is burdened with > portion of expenses….

4) John Doe #1 (All I got was he is a local (?) patent attorney): Q: 15K claim charts sent out, licensed 60 odd companies, what plans to make 15000 claim chart speed up (i.e. acceleration in licenses)?

Mac L: It’s a numbers game. Strategy is to extract maximum value out of portfolio. Mac muses out loud, What’s the crossover pt (tipping point) to go to trial? (Mac didn’t really answer it, just implying that it’s a dynamic process and lots of factors go into it). Dan L, our resident folk tail/analogy expert pipes in about we being the “Johnny Appleseed “ and planting seeds. “We are building a brand awareness.”

5) Stan (to Leckrones): Do you have a predictable range for revenues that you can share with BOD (not necessarily shareholders)? Dan L: Yes.

3:35 PM - Cliff chimes in that Larry and Mac have plane to catch……

6) Last question by Mr. ______: Question of Ownership and Chick Moore. Dan L: All I can remember Dan L saying is, .”it will be extinguished” and something like “its without merit”.

Cliff said:

-M & A on hold

Alternatives to do: Rebuild cash, start up dividends, renew purchase of shares – all things they are evaluating (Bottom line I interpreted, is they (and we obviously) have been burned and are proceeding very cautiously). The plan is to develop alternatives in conjunction with a permanent CEO. Obtaining a CEO maybe be 90-120 days out. I didn’t sense that this was imminent.

4:26 PM – VI. 2nd Q & A (Cliff Presiding)

1)Joe Schmoe (Chubby older guy up front with wife there). He handed copy of 10K to Cliff. Basically, he compared profits in 2007 to 2009 and looked at employees being 31 (and 5 BOD) now vs. much less later. Said total income was 28 x less in 2009 (I’d say this guy is not an Agoracom reader). Q: Is it necessary to have that many directors?.

Cliff answered kindly: NOW – PDSG 13 employees, burn rate per quarter is 700-800K. PTSC, 5 employee, burn rate 500-600K per quarter (Don’t quote me on the employee numbers.

2)Mr. ______- wanted to know how CEO search is gong. Also, suggested setting up PTSC as shell company that pays out royalties. He sees dismal track record – Is BOD willing to consider? Gloria: BOD is discussing this possibility very seriously. We did divvies before w/pretaxtax carryover benefits (or something like that). Our tax rate now is 44%. Company is focused on increasing shareholder value (Honestly, Gloria seemed the most troubled up there by the situation and mentioned that she has family and friends who she urged to buy stock too) .

3)Stan (and now he lets then have it): Q#1: How many people did not fly in for this meeting. People raised hands. There were 16-18 people in the audience who did NOT FLY.

Stan Q #2: He commented on the losses in detail:

A)Talis, paid 1.5 mil, write-off to $0

B)Avot, paid 1.3 mil, nearly 0, except for 500K note, Cliff thinks they will get that back

C)Iameter 536K, Cliff stated that Iameter was sold on Monday for 250L

D)Vigilys – 175K paid, Cliff says not written down, its part of CDX

E)CDX/Vigilys – paid 10 mil for, have funded an additional 6 mil, but its worth far less (cant remember what number was stated)

F)Stan: TOTAL 17-18 mil dollars lost in last 12-15 months, after discussion back and forth with Cliff, this is the number both sides agreed to.

After the statement, Stan focused on Don Schrock and comes up with a long winded story about investment advisor asking for money but you never getting your investment back, etc. I didn’t follow it too well, as I took a mental break.

Bottom Line from Cliff as Don didn’t have good answers: Refocusing on MMP in the near future. ( I think that was fine, Stan just voices the frustrations that many of us shareholders are feeling in regards to PTSC failed attempt to create a recurring revenue stream outside the MMP.

4)Joe Schmoe (To Ms. Felcyn): In 13 meeting in the last year and as chair of Audit Committee, have officers of company kept you updated adequately? I believe Gloria said yes, and later says that there are procedure in place for auditing TPL, so other TPL products are not co-mingled. Gloria went to TPL offices – and noted that TPL are carrying a big burden of the expenses. And noted that TPL puts a lot of effort into charging PTSC appropriately.

5)Tom Burns (Holocom CEO) Tom talked about his company and how well it is doing (went over revs and profits and that they have a small acquisition in mind (encryption and storage device?)

6)Stan: Jokes he has got to go up there and say something nice. Got a chuckle from all. He says if PPS was $3 we would all be hugging each other and happy. Shareholders have kids. family, college tuition to fund. (To paraphrase - This is real money Patriot!) He mentioned the blowing of 17 mil in one year again. Stan thinks BOD cares. Request that is be more shareholder oriented – give to shareholders something they deserve.

7)Jeff ___: Q: Does the BOD feel that they will be a success. Gloria: she had 900K shares, family of hers have bought share – she absolutely believes this company is going to succeed. Gloria says we have learned our lesson and states that she regrets and that she wished BOD would have acted perhaps one quarter earlier.

Other BOD comments: Carlton Johnson: “We are coming out of a severe attack (on our patents)”. Also, TPL (or maybe all other licensing firms?) have had the most, historically, 2-3 reexams. The MMP has had 17-18. I think Carlton is trying to make clear the enormity and” unprecedentedness” of the attack.