2 Milliarden $: Patriot Scientific gegen intel
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halt das übliche Spiel
alles bischen undurchsichtig geworden und immer auf kosten der kleinen
Grüße
www.agoracom.com
weiss einer was hier stehen soll?
Optionen
| Boardmail an "Eichi" |
Wertpapier: Patriot Scientific |
In den USA gibt es immer spektakuläre Gerichtsentscheidungen. Wenn Profijuristen eine beachtliche Chance sehen, weshalb sollte dann letztendlich nicht gewonnen werden. Vermutlich gibt's bei den beiden bereits stattgefundenen Zwischenverhandlungen richterliches Verständnis.
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| Boardmail an "Eichi" |
Wertpapier: Patriot Scientific |
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Ich weiß ja nicht, was für so ein listing in Berlin so an eventuellen Kosten anfällt, ich könnte mir aber vorstellen, dass es sich hierbei eher um eine "Sparmaßnahme" handeln könnte. Wie ja allgemein bekannt hat Patriot nicht mehr gerade viel cash in der Kasse... und bis wirklich Geld, resultierend aus irgendwelchen Patenten in die Kassen fließt dürfte ja wohl noch eine Weile vergehen.
EEMBC Adds Six New Members to Bring Total to 58
EL DORADO HILLS, Calif.--(BUSINESS WIRE)--Aug. 18, 2004--EEMBC, the Embedded Microprocessor Benchmark Consortium, today announced that Applied Micro Circuits Corp. (AMCC), Juniper Networks, Marvell Semiconductor, Patriot Scientific, Qualcomm and Rockwell Collins have joined the ranks of its members.
With these new additions, the consortium counts 58 corporate members, including 42 board of directors members who have access to source code for all of the EEMBC benchmarks, and exercise full voting rights on all issues decided by the consortium.
Among the new members, AMCC, Marvell Semiconductor and Qualcomm are joining EEMBC as board of directors members. Juniper Networks joins as a member of the networking subcommittee. Patriot Scientific joins as a member of the consumer subcommittee, and Rockwell Collins joins as a member of the automotive/industrial subcommittee.
" As EEMBC grows, we're seeing that industry-standard processor benchmarks have applications beyond what anyone expected when this consortium was founded seven years ago," said Markus Levy, EEMBC president. " They serve the needs of companies that want a reliable means of testing their own processors, they allow systems designers to make apples-to-apples comparisons between competing processors, and they serve the business needs of companies who are asked -- increasingly -- to provide customers with objective performance data for their processors.
" All these uses of EEMBC benchmarks are helping to raise standards for the embedded industry, and we welcome the contribution of these new members to making that happen."
About EEMBC
EEMBC, the Embedded Microprocessor Benchmark Consortium, develops and certifies real-world benchmarks and benchmark scores to help designers select the right embedded processors for their systems. Every processor submitted for EEMBC(R) benchmarking is tested for parameters representing different workloads and capabilities in communications, networking, consumer, office automation, automotive/industrial, embedded Java and microcontroller-related applications. With members including leading semiconductor, intellectual property and compiler companies, EEMBC establishes benchmark standards and provides certified benchmarking results through the EEMBC Certification Labs (ECL).
EEMBC members include Altera, AMCC, AMD, Analog Devices, ARC, ARM, Atmel, CEVA, Cirrus Logic, esmertec, Faraday, Freescale Semiconductor, Fujitsu Microelectronics, General Dynamics, Green Hills Software, IAR Systems, IBM, Imagination Technologies, Improv Systems, Infineon Technologies, Intel, Intrinsity, Juniper Networks, LSI Logic, Marvell Semiconductor, Matsushita Electric Industrial, Mentor Graphics, Metaware, MetroWerks, MIPS Technologies, National Semiconductor, NEC Electronics, Nokia, Oki Electric Industry, palmOne, Patriot Scientific, Philips Semiconductors, PMC-Sierra, Qualcomm, Raza Microelectronics, Red Hat, Renesas Technology, Rockwell Collins, Samsung Electronics, Sony Computer Entertainment, ST Microelectronics, StarCore, Stretch, Sun Microsystems, SuperH, Symbian, Tao Group, Tensilica, Texas Instruments, Time Warner Cable, Toshiba, Transmeta, VIA Technologies and Wind River Systems.
EEMBC is a registered trademark of the Embedded Microprocessor Benchmark Consortium. All other trademarks appearing herein are the property of their respective owners.
Contacts
EEMBC
Markus Levy, 530-672-9113
Fax: 530-672-9439
markus@eembc.org
or
Wall Street Communications
Bob Decker, 415-409-0233
Fax: 650-618-1512
bob.decker@wallstcom.com
Poway -- You might say Woody Norris is waiting for his chip to come in.
Nine years ago, the Poway inventor founded Patriot Scientific to develop his idea for a ground-penetrating radar that could be used to identify subterranean features from an aircraft.
Theoretically, such a radar could be used to search for everything from deep-underground oil fields and mineral deposits to buried structures, utilities and even land mines just beneath the surface.
Now a proprietary microprocessor that Patriot acquired for its radar two years ago could take the little start-up company in a whole new direction.
Norris, 57, says the high-speed micro-processor--named " ShBoom" after a 1954 jukebox tune--is perfect for running Java, an innovative programming language for the Internet designed by Sun Microsystems.
" The chip fits with Java like this," Norris says, holding aloft his hands with fingers dovetailed.
On Wall Street, investors have likewise embraced the idea.
On May 17, the price of stock in Patriot Scientific hit a record $4.03 per share on the Nasdaq electronic exchange--almost 26 times its year-ago price of 15 cents per share. Last week, the stock hovered at about $3 trading on an average volume of roughly 230,000 shares a day.
...
In 1994, NanoTronics merged with Patriot in a deal intended to combine Norris' radar technology with Falk's high-speed processor.
" We liked the idea of pairing the chip with the radar," Norris recalls.
As part of the deal, Falk received 10 million shares of Patriot's stock and took over as Patriot's chairman and chief executive. Norris, who also founded Norris Communications and American Technology, says he was happy to withdraw from Patriot's day-to-day operations.
Then, Falk died unexpectedly of cancer last July 6.
Obsolescence feared
By this time, the National Semiconductor of Santa Clara had manufactured two generations of ShBoom prototypes for Patriot. But more testing would be required, and Norris wondered if the chip was already obsolete.
" When Helmut died the stock was at 18 cents a share," recalls Norris, who adds that it was months before anyone realized that the chip might be the right hardware to run Sun's Java programming language.
" I had some concerns about this microprocessor making it because it's been in development since 1989," Willis says. " I was wondering if the window of opportunity had already bypassed us."
The phenomenal rise of Patriot's stock occurred mostly in February, apparently spurred by a London-based trade journal that published several articles about Patriot's ShBoom processor. The stories noted that ShBoom seemed particularly well-suited for Sun's new programming language.
" I think what happened with this company is that the Internet found us," Norris says. (The development-stage company has its own site on the Internet, www.ptsc.com, and has promoted its own coverage in trade journals through news releases.)
Norris says production of the ShBoom processor has begun at National Semiconductor, and the chip is available in limited quantities. Yet, Patriot's fortunes are far from certain.
The technology underlying the ShBoom processor relies on a long-established integrated circuit design known as stack-based architecture, which was shelved by most chip makers decades ago.
Although Patriot's 32-bit chip can run different programs, it was tailored to run most efficiently with the Fourth programming language, a computer code similar to Java.
Unlike standard circuits
The chip's design is unlike standard integrated circuits, like Intel's 80X86 series of micoprocessors, that are intended for the broadest range of uses by a variety of computer system designers.
Several experts in microprocessor design questioned whether a specialized chip designed for a particular code can gain market acceptance.
...
So far, Patriot has obtained two patents for the ShBoom processor and Higgins says other applications are pending. Nevertheless, Patriot has never generated operating revenues and currently has only 13 employees.
One trade-industry review of ShBoom said " industry support for Patriot is non-existent" and the company will have to depend on " adventurous, resourceful customers" to develop products that incorporate its unusual chip.
In the meantime, Norris says he is eager to license Patriot's technology to others, and the company has been negotiating with a number of companies. He says the company also hopes to forge alliances with its customers and to use the ShBoom chip in its ground-penetrating radar and other products developed by Patriot.
...
Since its initial public offering in 1989, the company has financed its operations through additional stock offerings and now has about 26 million shares outstanding.
The company is free of debt. Yet with so much stock outstanding, Raaf says, " If they finally become profitable, it could take some time before investors finally see it reflected in the share price."
Meanwhile, Patriot insiders have seen astronomical gains in their share price. Documents filed with the Securities and Exchange Commission show that Norris owns 5 million shares of Patriot's common stock, issued at par value of one-thousandth of a penny per share.
As Norris puts it: " We've got no complaints at this end."
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Show all filings for PATRIOT SCIENTIFIC CORP | Request a Trial to NEW EDGAR Online Pro
Form 10KSB for PATRIOT SCIENTIFIC CORP
--------------------------------------------------
19-Aug-2004
Annual Report
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATON
OVERVIEW
Patriot Scientific Corporation ("the Company") develops, markets, and sells microprocessors, the technology behind the microprocessors, and complementary products which enable computers and other data processing devices to communicate. These products can be used to connect to the Internet or other telecommunication networks. The microprocessor technology product line accounted for approximately 18% of our revenue in fiscal 2004. The balance of our fiscal 2004 revenue was generated from a communications product line that, subsequent to a completed last buy program, is now generating minimal revenue. We also have a patent for special radar technology which, if fully developed, may allow a potential licensee to penetrate the ground or structures to find various objects. We also owned gas plasma antenna technology which we sold for $250,000 in August 1999. In fiscal 2004 we received a final royalty payment of $75,500 from the sale of the gas plasma technology. Our strategy is to exploit our microprocessor technologies through product sales, licensing, strategic alliances and to litigate against those who may be infringing on our patents.
Management's discussion and analysis of results of operations and financial condition are based upon the Company's financial statements. These statements have been prepared in accordance with accounting principles generally accepted in the United States of America. These principles require management to make certain estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, we evaluate our estimates based on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
We have identified nine accounting principles that we believe are key to an understanding of our financial statements. These important accounting policies require management's most difficult, subjective judgments.
1. Going Concern
These financial statements are presented on the basis that the Company is a going concern. Going concern contemplates the realization of assets and the satisfaction of liabilities in the normal course of business over a reasonable length of time. The Company has incurred significant operating losses and has had negative cash flows from operating activities for each of the years ended May 31, 2004 and 2003, had negative working capital and a stockholders' deficit for the year ended May 31, 2003 and used convertible debentures for raising substantially all of its working capital. These factors raise substantial doubt as to the Company's ability to continue as a going concern.
Management's plans to eliminate the going concern situation include, but are not limited to, the following:
1. Obtain additional equity or debt financing from investors including the exercise of outstanding warrants.
2. Obtain revenue producing contracts by successfully negotiating licensing, development and product opportunities within the microprocessor market place.
3. Aggressively pursue patent infringement opportunities by litigating with companies alleged to be infringing on our issued patents.
4. If funds are not satisfactorily available to continue operations at our current level, put in place cost reduction programs. Such reduction programs could include a scale back in the support of the microprocessor technology with total emphasis being placed on patent infringement activity. If, in the future, there is patent infringement success, additional funds would be available for the microprocessor technology.
2. Marketable Securities
As part of the sale of our gas plasma antenna technology we received restricted securities in a company that is traded on the OTC bulletin board. The securities can be traded under Rule 144 after July 2004. We reflect the value of those securities based on the closing price as of the end of our reporting period. Any unrealized gain or loss between reporting periods is reflected in our consolidated statement of operations as non-operating income or loss.
3. Property, Equipment and Depreciation
Property and equipment are stated at cost. Depreciation is computed over the estimated useful life of three to five years using the straight-line method. Long-lived assets and certain identifiable intangibles to be held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We continuously evaluate the recoverability of our long-lived assets based on estimated future cash flows and the estimated fair value of such long-lived assets, and provide for impairment if such undiscounted cash flows are insufficient to recover the carrying amount of the long-lived asset.
4. Patents and Trademarks
Patents and trademarks are carried at cost less accumulated amortization and are amortized over their estimated useful lives of four years. The carrying value of patents and trademarks is periodically reviewed and impairments, if any, are recognized when the expected future benefit to be derived from an individual intangible asset is less than its carrying value.
5. Revenue Recognition
We recognize revenue on the shipment to our customers of communication products, microprocessor integrated chips and evaluation boards. We also derive revenue from fees for the transfer of proven and reusable intellectual property components or the performance of engineering services. We enter into licensing agreements that will provide licensees the right to incorporate our intellectual property components in their products with terms and conditions that will vary by licensee. Generally, these payments will include a nonrefundable technology license fee, which will be payable upon the transfer of intellectual property, or a nonrefundable engineering service fee, which generally will be payable upon achievement of defined milestones. In addition, we anticipate these agreements will include royalty payments, which will be payable upon sale of a licensee's product, and maintenance and limited support fees. We will classify all revenue that involves the future sale of a licensee's products as royalty revenue. Royalty revenue will be generally recognized in the quarter in which a report is received from a licensee detailing the shipments of products incorporating our intellectual property components (i.e., in the quarter following the sale of licensed product by the licensee). We will classify all revenue that does not involve the future sale of a licensee's products, primarily license fees and engineering service fees and maintenance and support fees, as contract revenue. License fees will be recognized upon the execution of the license agreement and transfer of intellectual property, provided no further significant performance obligations exist and collectibility is deemed probable. Fees related to engineering services contracts, which will be performed on a best efforts basis and for which we will receive periodic milestone payments, will be recognized as revenue over the estimated development period, using a cost-based percentage of completion method. Annual maintenance and support fees, which will be renewable by the licensee, will be classified as contract revenue and will be amortized over the period of support, generally 12 months.
6. Research and Development Costs
Research and development costs are expensed as incurred.
7. Stock Options
The Company applies Accounting Principles Board ("APB") Opinion 25, "Accounting for Stock Issued to Employees," and related Interpretations in accounting for all stock option plans. Under APB Opinion 25, compensation cost has been recognized for stock options granted to employees when the option price is less than the market price of the underlying common stock on the date of grant.
SFAS No. 123, "Accounting for Stock-Based Compensation," and SFAS No. 148, "Accounting for Stock-Based Compensation-Transition and disclosure," require the Company to provide pro forma information regarding net income as if compensation cost for the Company's stock option plans had been determined in accordance with the fair value based method prescribed in SFAS No. 123. To provide the required pro forma information, the Company estimates the fair value of each stock option at the grant date by using the Black-Scholes option-pricing model. SFAS No. 148 also provides for alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. The Company has elected to continue to account for stock based compensation under APB No. 25.
The Company applies SFAS No. 123 in valuing options granted to consultants and estimates the fair value of such options using the Black-Scholes option-pricing model. The fair value is recorded as consulting expense as services are provided. Options granted to consultants for which vesting is contingent based on future performance are measured at their then current fair value at each period end, until vested.
8. Income Taxes
Deferred income taxes are provided for by recognizing temporary differences in certain income and expense items for financial and tax reporting purposes. Deferred tax assets consist primarily of income tax benefits from net operating loss carry-forwards. A valuation allowance has been recorded to fully offset the deferred tax asset as it is more likely than not that the assets will not be utilized. The valuation allowance increased approximately $441,000 for the year ended May 31, 2004, from $14,291,000 at May 31, 2003 to $14,732,000 at May 31, 2004.
9. Debt Discount
We issue warrants as part of our convertible debentures and other financings. We value the warrants using the Black-Scholes pricing model based on expected fair value at issuance and the estimated fair value is recorded as debt discount. The debt discount is amortized to non-cash interest over the life of the debenture assuming the debenture will be held to maturity which is normally 2 years. If the debenture is converted to common stock previous to its maturity date, any debt discount not previously amortized is expensed to non-cash interest.
SELECTED FINANCIAL INFORMATION
Year Ended
Increase
5/31/2004 5/31/2003 (Decrease) %
Statements of Operations
Revenue $ 76,417 $ 123,903 $ (47,486) -38.3%
Cost of revenue 10,472 18,660 (8,188) -43.9%
% of revenue 14% 15% -1% -9.0%
Gross profit 65,945 105,243 (39,298) -37.3%
% of revenue 86% 85% 1% 1.6%
Operating expenses
Research and development 549,756 723,287 (173,531) -24.0%
General and administrative 1,253,559 1,821,902 (568,343) -31.2%
Total operating expenses 1,803,315 2,545,189 (741,874) -29.1%
Gain on sale of technology 75,500 -- 75,500 NM
Loss on marketable securities (45,354) -- (45,354) NM
Interest expense (2,443,024) (1,448,544) 994,480 68.7%
Interest income 270 191 79 41.4%
Net loss (4,149,978) (3,888,299) 261,679 6.7%
Net loss per share basic and diluted (0.03) (0.04) (0.01) -25.0%
RESULTS OF OPERATIONS
Year ended May 31, 2004, compared to year ended May 31, 2003.
Revenues
Our revenue decrease of $47,486, or 38.3%, was due to a continuing lack of significant revenue producing contracts. Although our bid and proposal activity remains high, our microprocessor product line has failed to generate any significant contracts. We continue to receive minor follow-on orders for the communication products that have reached the end of their life cycle. We no longer market these products but do fill follow-on orders when economically feasible. During fiscal 2004, we had an engineering design contract for approximately $25,000 with a company owned by one of our executive officers. We anticipate that future revenue will be derived from successful microprocessor technology efforts in the form of licensing and royalties and the successful collection of patent infringement proceeds from litigation and settlement.
Cost of Revenue
Our cost of revenue decrease of $8,188, or 43.9%, was commensurate with the reduction in revenue. We fully reserved our inventory in fiscal 2002 and, therefore, minor amounts of existing inventory can be resold at a zero cost basis. However, in order to fulfill the minor follow-on orders for communication products, we normally must procure a portion of additional components and assemblies. We anticipate that future cost of revenue will be commensurate with the success of receiving microprocessor licenses and royalties and patent infringement proceeds.
Research and Development
Year Ended
Increase
5/31/2004 5/31/2003 (Decrease) %
Research and Development
Personnel (including consultants) $ 480,967 $ 610,416 $(129,449) -21.2%
Facilities 66,294 104,832 (38,538) -36.8%
Other research and development expenses 2,495 8,039 (5,544) -69.0%
--------- --------- ---------
The $173,531, or 24%, reduction in research and development was attributed to a reduction in personnel costs, primarily consulting costs, as the development of our softcore microprocessor technology has reached a leveling off point. In addition, there has been no significant increase in depreciable equipment related to research and development for the past three years resulting in a lower depreciation amount charged to facilities expense. When and if funds become available, we anticipate an increase in research and development to upgrade the tools which are used by our potential customers to implement the microprocessor technology and to expand our offerings on which our microprocessor can run to include additional operating systems.
General and Administrative
Year Ended
Increase
5/31/2004 5/31/2003 (Decrease) %
General and Administrative
Personnel (including consultants) $ 491,898 $ 891,851 $ (399,953) -44.8%
Professional fees 228,935 272,296 (43,361) -15.9%
Facilities 308,207 324,726 (16,519) -5.1%
Other general and administrative expenses 224,519 333,029 (108,510) -32.6%
----------- ----------- -----------
$ 1,253,559 $ 1,821,902 $ (568,343) -31.2%
$ 549,756 $ 723,287 $ (173,531) -24.0%
The $568,343, or 31.2%, reduction in general and administrative expenses was attributed to a reduction in personnel costs, including consulting ($87,000), prior employee legal settlement costs ($76,000), and non-cash compensation related to investor relations ($207,000). Professional fees decreased as a result of fewer registration statements being filed during fiscal 2004. Other general and administrative expenses decreased as a result of a one time write off of prepaid royalties in fiscal 2003 ($48,000), a one time write off of impaired patent costs in fiscal 2003 ($77,000), and reduced insurance costs ($35,000) partially offset by an increase in shareholder costs ($112,000) which includes annual meeting expenses and investor relations. We anticipate general and administrative expenses to remain stable at the fiscal 2004 levels until such time as contract revenue and patent litigation proceeds are recognized at which time additional personnel and other fees would be expected to increase.
Other income (expense)
Year Ended
5/31/2004 5/31/2003 Change %
Other income (expense)
Sale of technology $ 75,500 $ -- $ 75,500 NM
Loss on marketable securities (45,354) -- (45,354) NM
Interest income 270 191 79 41.4%
Interest expense, paid in cash or accrued (149,102) (143,587) (5,515) 3.8%
Non-cash interest expense (2,293,922) (1,304,957) (988,965) 75.8%
----------- ----------- -----------
$(2,412,608) $(1,448,353) $ (964,255) 66.6%
The increase in other expenses, net of other income, of $964,255, or 66.6%, was primarily attributable to the non-cash interest expense recognized on the amortization and cancellation of debt discounts related to our convertible debentures and the recognition of expense on the issuance of warrants related to our financings. We anticipate that the non-cash interest expense will increase over the fiscal 2004 amount due to a large debt discount remaining on our books as of May 31, 2004 ($2,075,146) which will be recognized as expense via amortization over 24 months if the underlying debentures are not converted or written off in their entirety on the conversion of the underlying debentures.
CAPITAL RESOURCES
Working Capital
Year Ended
Increase
5/31/2004 5/31/2003 (Decrease)
Current assets $ 701,879 $ 129,559 $ 572,320
Current liabilities 548,042 1,586,562 (1,038,520)
----------- ----------- -----------
Working capital (deficit) $ 153,837 $(1,457,003) $ 1,610,840
=========== =========== ===========
Long-term debt $ 230,007 $ 290,436 $ (60,429)
=========== =========== ===========
Stockholders' equity (deficit) $ 148,179 $(1,411,764) $ 1,559,943
=========== =========== ===========
Statements of Cash Flows Select Information
Year Ended
Increase
5/31/2004 5/31/2003 (Decrease)
Net cash provided (used) by:
Operating activities $(2,075,972) $(1,885,762) $ (190,210)
Investing activities $ (28,623) $ (2,194) $ (26,429)
Financing activities $ 2,427,872 $ 1,832,511 $ 595,361
Balance Sheet Select Information
Year Ended
Increase
5/31/2004 5/31/2003 (Decrease)
Cash and cash equivalents $ 355,940 $ 32,663 $ 323,277
=========== =========== ===========
Prepaid expenses $ 322,068 $ 93,030 $ 229,038
=========== =========== ===========
Accounts payable and accrued expesnes $ 294,702 $ 643,002 $ (348,300)
=========== =========== ===========
The increase in working capital of $1,610,840 and stockholders' equity of $1,559,943 was attributable to the continued financing of the company by issuing convertible debentures ($2,175,000), the issuance of common stock ($50,440), and the exercise of common stock warrants and options ($175,237). The proceeds from these financings were used, in addition to funding our operating needs, to increase our cash balances ($323,277), create a legal fund for anticipated protracted legal fees related to the patent enforcement litigation ($240,719), and reduce our outstanding accounts payable and accrued expenses ($348,300).
LIQUIDITY
We estimate our current cash requirements to sustain our operations for the next twelve months through May 2005 to be $1.8 million. Since we are no longer supporting the communications product line, we are assuming that there will be no communications product revenue. We have issued 8% convertible debentures as our primary source of funding since 2002. At the option of the debenture holders, they may purchase additional debentures up to $1 million at any time during the two years following their purchase as long as the price of our common stock is in excess of $0.20 per share. During the year ended May 31, 2004, we obtained $2,175,000 from the issuance of convertible debentures, $50,440 from the sale of equity to several private investors, $175,237 from the exercise of warrants and $12,320 from short term notes entered into with a related party.
If the optional amounts under the convertible debentures are not raised in sufficient amounts, then we may not have funds sufficient to meet our cash requirements. In such circumstances, we would need to secure additional debt and/or equity financings with individual or institutional investors. In addition, we would be required to make additional cost reductions if our cash requirements cannot be met from external sources. We expect that the $1.8 million requirement will be provided by:
o additional debt and/or equity financings;
o proceeds from the exercise of outstanding stock options and warrants; and
o proceeds from revenue contracts and patent enforcement activities.
In addition, we have formulated additional cost reduction plans which can be implemented if the required funds are not obtainable. As of May 31, 2004, we also have remaining $400,000 under an accounts receivable factoring agreement with our bank.
We anticipate our future revenue to be derived primarily from the sale of licenses, royalties and the proceeds from litigation of patent infringement cases. To receive this revenue, we may require additional equipment, fabrication, components and supplies during the next twelve months to support potential customer requirements and further develop our technologies and to fund the expenses of protracted patent enforcement litigation. Product introductions such as those currently underway for the Ignite microprocessor may require significant product launch, marketing personnel and other expenditures that cannot be currently estimated. Further, if expanded development is commenced or new generations of microprocessor technology are accelerated beyond current plans, additional expenditures we cannot currently estimate, may be required. It is possible therefore, that higher levels of expenditures may be required than we currently contemplate resulting from changes in development plans or as required to support new developments or commercialization activities or otherwise.
If we are unable to obtain the necessary funds, we could be forced to substantially curtail or cease operations, which would have a material adverse effect on our business. Further, there can be no assurance that required funds, if available, will be available on attractive terms or that they will not have a significantly dilutive effect on our existing shareholders. As such, there is substantial doubt about our ability to continue as a going concern. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from our possible inability to continue as a going concern.
NEW ACCOUNTING PRONOUNCEMENTS
In April 2003, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standard ("SFAS") No. 149, "Amendment of Statement 133 on Derivative Instruments and Hedging Activities." SFAS No. 149 amends and clarifies financial accounting and reporting for derivative instruments, including certain derivative instruments embedded in other contracts (collectively referred to as derivatives) and for hedging activities under SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities." SFAS No. 149 requires that contracts with comparable characteristics be accounted for similarly. SFAS No. 149 is effective for contracts entered into or modified after June 30, 2003, and for hedging relationships designated after June 30, 2003. The adoption of this statement did not impact our financial position or results of operations.
In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity." SFAS No. 150 establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. It requires that an issuer classify a financial instrument that is within its scope as a liability (or an asset in some circumstances). SFAS No. 150 is effective for financial instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim period beginning after June 15, 2003, except for mandatorily redeemable financial instruments of nonpublic entities. The adoption of this statement did not impact our financial position or results of operations.
RISK FACTORS
You should consider the following discussion of risks as well as other information regarding our common stock. The risks and uncertainties described below are not the only ones. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations. If any of the following risks actually occur, our business could be harmed.
RELATED TO OUR BUSINESS
PATRIOT'S MICROPROCESSOR TECHNOLOGIES HAVE RESULTED IN LIMITED REVENUES AND SEVERAL RELATED PRODUCTS ARE STILL IN THE DEVELOPMENT STAGE
We are in the development stage on several components of our microprocessor technology product line, and the products which have been commercialized have resulted in limited revenues. Our other product lines have not generated enough revenue to support our company. Therefore, we have limited financial results upon which you may judge our potential. We may not become . . .
http://finance.lycos.com/qc/news/...83&story=200408201422_PRN__FLF004