UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
October 10, 2014
PATRIOT SCIENTIFIC
CORPORATION
(Exact name of registrant as specified in
its charter)
| Delaware |
|
000-22182 |
|
84-1070278 |
(State of other jurisdiction
of incorporation) |
|
(Commission File Number) |
|
(IRS Employer
Identification No.) |
| |
|
|
|
|
| 701 Palomar Airport Road, Suite 170, Carlsbad, California 92011 |
| (Address of Principal Executive Offices) |
| |
|
|
|
|
| Registrant’s telephone number, including area code: (760) 547-2700 |
| |
| Not Applicable |
| (Former name or former address, if changed since last report) |
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction
A.2 below):
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425).
o
Soliciting material pursuant to Rule 14A-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
| Item 1.01 |
Entry Into a Material Definitive
Agreement. |
On October 10, 2014,
the joint venture of Patriot Scientific Corporation (the “Company”), known as Phoenix Digital Solutions, LLC, a Delaware
limited liability company (“PDS”), entered into a letter agreement (the “Agreement”) with Dominion Harbor
Group, LLC (“Dominion”).
Pursuant to the
Agreement, Dominion will provide PDS strategic advisory services relating to, without limitation, the licensing, prosecution,
enforcement, and settlement with respect to the Moore Microprocessor Patent portfolio (the “MMP Portfolio”). The
Agreement terminates six years after the expiration of the last-to expire patent included in the MMP Portfolio, subject to
certain early termination provisions.
The foregoing description
of the Agreement does not purport to be complete and is qualified in its entirety by reference to the text of the Agreement, a
copy of which is attached hereto as Exhibit 10.10.
On October 13, 2014,
the Company issued a press release announcing the Agreement, which is attached hereto as Exhibit 99.1.
| Item 9.01 |
Financial Statements and Exhibits. |
| |
|
| (d) |
Exhibits. The following materials are filed as exhibits to this current report on Form 8-K: |
| |
|
Exhibit
Number |
|
| |
|
| 10.10 |
Letter agreement dated October 10, 2014 between Phoenix Digital Solutions, LLC and Dominion Harbor Group, LLC.* |
| 99.1 |
Press Release, dated October 13, 2014, entitled “Patriot Scientific Corporation Announces Retention of Dominion Harbor as Licensing Agent for MMP™ Portfolio.” |
*The Company has requested confidential
treatment of portions of the exhibit pursuant to Rule 24b-2 under the Securities Exchange Act of 1934. The confidential portions
of this exhibit have been omitted and are marked accordingly. The confidential portions have been filed separately with the Securities
and Exchange Commission.
SIGNATURE
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| |
PATRIOT SCIENTIFIC CORPORATION |
| |
|
|
| |
|
|
| Date: October 16, 2014 |
By: |
/s/ CLIFFORD L. FLOWERS |
| |
|
Clifford L. Flowers |
| |
|
Chief Financial Officer |
| |
|
|
Exhibit 10.10
Confidential information has been omitted
from portions of this document, indicated by [*], and filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to this omitted information.
October 10, 2014
Carlton Johnson, Jr.
Member
Phoenix Digital Solutions, LLC
701 Palomar Road, Suite 170
Carlsbad, CA. 92011
Re: Advisory Services
Dear Mr. Johnson,
This letter agreement
(“Agreement”) confirms the agreement of Phoenix Digital Solutions, LLC (the “Company”), a corporation organized
under the laws of the state of Delaware, to engage Dominion Harbor Group, LLC (“Dominion”), a corporation organized
under the laws of the state of Texas, to provide specified services to the Company on the following terms and conditions:
RESPONSIBILITIES
| a. | Dominion will provide strategic advisory services relating to, without limitation, the licensing,
prosecution, enforcement, and settlement with respect to the intellectual property of the Company, including without limitation,
the patents identified in Exhibit A (the “Services” and the “IP Rights” respectively). The parties specifically
contemplate licensing efforts with respect to the entities identified on Exhibit B. |
| b. | Dominion may introduce the Company to individuals and entities that may act as counsel, consultants,
vendors and experts relating to the Services and that may provide financing therefor. Dominion or its affiliates may have relationships
with these entities and individuals. Dominion is not impartial in recommending entities and individuals that Dominion believes
provide superior service. |
| c. | The Services will be provided by Dominion from such locations, and at such times, as Dominion shall
reasonably determine. Dominion agrees to provide the Services to the best of its reasonable abilities, but guarantees no particular
outcome. |
| d. | Dominion will provide additional services as may be reasonably requested by the Company and approved
by Dominion. |
Confidential information has been omitted
from portions of this document, indicated by [*], and filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to this omitted information.
| e. | Dominion will act as an independent contractor, and is not a fiduciary for the Company. |
| f. | Dominion will not negotiate licenses with the same prospective licensee on behalf of the Company
and another client at the same time without prior disclosure to the Company. In no event shall such negotiation be used to the
disadvantage of the Company. If asked by a prospective licensee to bundle licenses or negotiate the Company’s IP Rights with
another client’s, Dominion will promptly inform the Company of such request and, unless the Company’s consent is obtained,
respond that it has a responsibility to the Company not to do so. |
| g. | Dominion will not write any license agreements without the Company’s consent. |
| h. | Dominion will keep the Company apprised on a periodic basis of all negotiations occurring on Company
matters. |
| a. | Dominion will advise and make recommendations, but decision-making rests solely with the Company.
Dominion is not affiliated with the Company and does not directly or indirectly control the Company. |
| b. | Dominion is not a law or accounting firm, or a tax advisor, and the Company will not rely on Dominion
to provide any such advice or services, but will seek separate legal, accounting, tax and other similar advice and services at
its discretion. |
| c. | The Company identifies Carlton Johnson, Jr. (the “Company Designee”) as the point of
contact for Dominion. Dominion will report to and coordinate with the Company Designee and may rely on him/her as the official
spokesperson and authorized officer of the Company, with full authority to bind the Company. The Company Designee may be changed
by written notice. |
| d. | The Company will cooperate with Dominion so that the Services may be performed in an efficient
and prompt manner. |
| e. | The Company will promptly inform Dominion of any relevant information relating to the IP Rights. |
| f. | The Company will retain its exclusive right to license the IP Rights. |
| g. | The Company has secured (and will secure) the agreement of any holders of indebtedness of the Company
that they will not foreclose or exercise rights that would adversely impact the Company or the IP Rights. |
Confidential information has been omitted
from portions of this document, indicated by [*], and filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to this omitted information.
| 3. | Both Dominion and the Company |
| a. | Dominion and the Company will act in a reasonable manner so as to preserve the other’s goodwill
and reputation. |
| b. | Neither Dominion nor the Company will undertake actions intended to circumvent this Agreement. |
| c. | Both Dominion and the Company will take reasonable actions to preserve the confidential nature
of any information exchanged during the course of this Agreement. Notwithstanding the foregoing and anything to the contrary in
this Agreement, (i) the Company may disclose a mutually-agreed redacted form of this Agreement to the Securities and Exchange Commission;
(ii) either Dominion or the Company may issue a mutually-agreed press release concerning the relationship contemplated in this
Agreement. |
| d. | Both Dominion and the Company will maintain records (including financial records) sufficient to
determine their respective rights and obligations under this Agreement, and will make such records available promptly upon written
request. |
COSTS
AND EXPENSES
| a. | Dominion will pay [*] incurred by Dominion in connection with this Agreement. |
| a. | The Company will pay [*] to a maximum of [*] U.S. dollars ($[*]) in any given calendar quarter.
Dominion will invoice for any such costs on a monthly basis. |
COMPENSATION
| 6. | Dominion Fee. The Company agrees to pay Dominion [*] of the Gross Consideration for the
Services. |
“Gross Consideration”
means [*].
| 7. | If the Company takes or fails to take any action the result of which could adversely impact Dominion’s
current or future ability to collect payment that is due or may become due under the terms of this Agreement, the Company will
enter into an amendment to the Agreement with Dominion (in a form reasonably acceptable to Dominion) to eliminate the adverse impact
of such action or failure to take action. |
Confidential information has been omitted
from portions of this document, indicated by [*], and filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to this omitted information.
| 8. | Timing. The Company shall wire payments due under this Agreement within five (5) business
days Gross Consideration is received by the Company. If the Company receives non-cash consideration (e.g., stock), the Company
and Dominion will cooperate to divide the non-cash consideration according to the percentage set forth in Section 6 above. Dominion’s
wire information is: |
| Bank: |
[*] |
| Account Name: |
[*] |
| Account #: |
[*] |
| Routing #: |
[*] |
| Bank Address: |
[*] |
TERMINATION
| 9. | Generally; Survival. This Agreement will terminate six (6) years after the last-to-expire
of the patents included within the definition of IP Rights unless earlier terminated by mutual written consent of the parties or
as set forth in Sections 10 and 11. All payment obligations due prior to the expiration or termination of this Agreement shall
survive such expiration or termination for any reason whatsoever. |
| 10. | Termination by Dominion. |
| a. | Dominion may terminate this Agreement in the event of a breach by the Company that is not cured,
if capable of being cured, within three (3) days of notice to the Company of the breach. In the event of such a termination, the
Company will remain responsible for and shall pay the Dominion Fee under and in accordance with this Agreement. |
| b. | Dominion may terminate this Agreement at its discretion upon five (5) days written notice to the
Company. In the event of such a termination, the Company shall have no further payment obligation to Dominion under this Agreement. |
| 11. | Termination by the Company. |
| a. | The Company may terminate this Agreement in the event of a breach by Dominion that is not cured,
if capable of being cured, within three (3) days of notice to Dominion of the breach. In the event of such a termination, the Company
shall have no further payment obligation to Dominion under this Agreement. Without limitation, a violation of Sections 1(f) or
1(g) shall constitute a breach by Dominion. |
| b. | The Company may terminate this Agreement at its discretion upon five (5) days written notice to
Dominion. In the event of such a termination, the Company shall be obligated to pay and shall pay (i) all amounts owed under this
Agreement at the time of the written notice; and (ii) the Dominion Fee with respect to all Monetization Events occurring within
the six (6) months following such written notice. |
Confidential information has been omitted
from portions of this document, indicated by [*], and filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to this omitted information.
REPRESENTATIONS
AND WARRANTIES
| 12. | By the Company. The Company represents and warrants [*]. |
MISCELLANEOUS
| 13. | Common Interest. From time to time, the parties may share information with each other that
is covered by the attorney-client privilege, work product immunity, or other privileges and immunities. This Agreement memorializes
the parties’ understanding that any such communications are covered by a community of interest that exists between them with
respect to the Services. The parties intend that all applicable privileges and immunities have been, are, and will be preserved. |
| 14. | Conflicts of Interest. Dominion is now, and may in the future be, engaged by other entities
engaged in businesses similar to and competitive with the Company. The Company has assessed the risks of these conflicts and potential
conflicts and determined that the benefit of engaging an advisor with relevant experience outweighs the risks of these actual and
potential conflicts. Nevertheless, in the event a potential or actual conflict is identified, Dominion shall a) communicate the
nature of the conflict to the Company, and b) Dominion and the Company shall determine a mutually agreeable solution to address
the conflict. |
| 15. | Choice of Law. This Agreement shall be governed by and construed under the laws of the State
of Delaware. Any disputes relating to or arising from this Agreement by or among the parties shall be resolved exclusively by arbitration
to be conducted exclusively in Phoenix, Arizona, in accordance with the Commercial Rules of the American Arbitration Association.
Any court of competent jurisdiction shall be authorized to enforce the provisions of the previous sentence and enforce the remedies
imposed by such arbitration. The losing party in any action to adjudicate rights relating to this Agreement shall bear the costs
of such action. |
| a. | This Agreement shall be binding on and inure to the benefit of the Company and Dominion, and their
respective successors, assigns, heirs and representatives. This Agreement may only be modified or amended by a written agreement
signed by both parties. |
| b. | In the event that a party executes this Agreement by an electronic or scanned signature, such electronic
or scanned signature shall create a valid and binding obligation of the party executing the same with the same force and effect
as if such electronic or scanned signature were an original signed signature. |
Confidential information has been omitted
from portions of this document, indicated by [*], and filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to this omitted information.
If the foregoing correctly
sets forth our understanding, please sign below and return an executed copy of this Agreement to Dominion. We look forward to working
with you.
Regards,
DOMINION HARBOR GROUP, LLC
By: /s/Matthew DelGiorno 10/10/14
Duly Authorized Date
Accepted and Agreed to
PHOENIX DIGITAL SOLUTIONS, LLC
By: /s/Carlton Johnson, Jr. 10/10/14
Carlton Johnson, Jr., Member Date
Exhibit 99.1
Patriot Scientific Corporation Announces Retention of Dominion
Harbor as Licensing Agent for MMP™ Portfolio
CARLSBAD, Calif., Oct. 13, 2014
–(PRNewswire)–Patriot Scientific Corporation (OTCQB: PTSC) today announced that its joint venture Phoenix Digital
Solutions (PDS), has entered into an agreement with Dominion Harbor Group, LLC (DHG) to provide licensing and enforcement
services to the Moore Microprocessor Patent (MMP) Portfolio™.
“I am extremely pleased to announce that PDS has engaged
Patriot’s selection for an additional licensing company to represent the MMP Portfolio,” stated Cliff Flowers, Patriot’s
Interim CEO. “We are excited to have DHG’s world-class talent and depth of experience on our team, and believe their
skills provide an excellent opportunity for the revitalization of the licensing program.”
“In July Patriot announced that PDS had entered into an
agreement paving the way for the engagement of a second company to secure licenses to the MMP Portfolio,” stated Carlton
Johnson, Patriot Board member and its appointee to the PDS Management Committee. “Today’s announcement represents the
fulfillment of that important effort.”
“We are excited to help PDS build on the strong licensing
history of the MMP Portfolio,” said Dominion CEO David Pridham. “Given its established value, we call on future licensees
to promptly engage in productive licensing discussions.”
About Patriot Scientific Corporation
Headquartered in Carlsbad, California, Patriot Scientific Corporation
is the co-owner of the Moore Microprocessor Patent Portfolio™. For more information on PTSC, visit www.ptsc.com.
About the MMP Portfolio™
The MMP Portfolio includes US patents as well as their European
and Japanese counterparts, which cover techniques that enable higher performance and lower cost designs essential to consumer and
commercial digital systems ranging from PCs, cell phones and portable music players to communications infrastructure, medical equipment
and automobiles.
About Dominion Harbor Group, LLC
Dominion Harbor Group was founded in 2013 by seasoned legal,
technical, engineering and financial professionals dedicated to the premise that patents are a sacrosanct and critical component
of the United States and global commercial marketplaces. The firm’s highly specialized and talented team manages, helps protect
and preserve intellectual property portfolios, maximizes values of patent portfolios through licensing, helps enforce and defend
clients’ critical intellectual property rights, and advises owners and investors in realizing appropriate value for innovations
and risk taking in the patent market.
www.dominionharbor.com
Safe Harbor Statement: Statements herein which are not purely
historical, including statements regarding Patriot Scientific Corporation’s intentions, hopes, beliefs, expectations, representations,
projections, plans or predictions of the future are forward-looking statements within the meaning of the Private Securities Litigation
Reform Act of 1995. The forward-looking statements involve risks and uncertainties including, but not limited to, the risk that
current and additional licensing agents may not be successful in generating licensing revenues or in implementing the MMP licensing
program, the risk that the recently filed actions and litigation strategy may not be successful, and the risks and uncertainties
relating to the future of our MMP joint-venture. It is important to note that the company’s actual results could differ materially
from those in any such forward-looking statements. Factors that could cause actual results to differ materially include, but are
not limited to, risks and uncertainties associated with the effect of changing economic conditions, trends in the products markets,
variations in the company’s cash flow, market acceptance risks, patent litigation, technical development risks, and seasonality.
Our business could be affected by a number of other factors, including the risk factors listed from time to time in the company’s
SEC reports including, but not limited to, the annual report on Form 10-K for the year ended May 31, 2014. The company cautions
investors not to place undue reliance on the forward-looking statements contained herein. Patriot Scientific Corporation disclaims
any obligation, and does not undertake to update or revise any forward-looking statements made herein.
Contact:
Patriot Investor Relations ir@ptsc.com
760-547-2700 x-102
SOURCE Patriot Scientific Corporation
Website: http://www.ptsc.com