Mosaic ImmunoEngineering (CPMV) 10-Q 13 Apr 17 2017 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Feb. 28, 2017	Apr. 10, 2017
Document And Entity Information
Entity Registrant Name	PATRIOT SCIENTIFIC CORP
Entity Central Index Key	836,564
Document Type	10-Q
Document Period End Date	Feb. 28, 2017
Amendment Flag	false
Current Fiscal Year End Date	--05-31
Is Entity a Well-known Seasoned Issuer	No
Is Entity a Voluntary Filer	No
Is Entity's Reporting Status Current	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		401,392,948
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2,017

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Feb. 28, 2017	May 31, 2016
Current assets:
Cash and cash equivalents	$ 1,815,707	$ 1,159,576
Restricted cash and cash equivalents	21,416	21,336
Marketable securities	1,502,436	1,955,493
Prepaid income tax	2,285	2,385
Prepaid expenses and other current assets	49,748	13,788
Total current assets	3,391,592	3,152,578
Property and equipment, net	2,102	0
Marketable securities, net of current portion	250,583	500,409
Investment in affiliated company	446,503	170,357
Total assets	4,090,780	3,823,344
Current liabilities:
Accounts payable	7,717	33,215
Accrued expenses and other	51,198	40,297
Total current liabilities	58,915	73,512
Total liabilities	58,915	73,512
Commitments and contingencies
Stockholders' equity
Preferred stock, $0.00001 par value; 5,000,000 shares authorized: none outstanding	0	0
Common stock, $0.00001 par value: 600,000,000 shares authorized: 438,242,618 shares issued and 401,392,948 shares outstanding at February 28, 2017 and May 31, 2016	4,382	4,382
Additional paid-in capital	77,444,062	77,444,062
Accumulated deficit	(58,790,711)	(59,072,744)
Common stock held in treasury, at cost - 36,849,670 shares at November 30, 2016 and May 31, 2016	(14,625,868)	(14,625,868)
Total stockholders' equity	4,031,865	3,749,832
Total liabilities and stockholders' equity	$ 4,090,780	$ 3,823,344

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Feb. 28, 2017	May 31, 2016
Statement of Financial Position [Abstract]
Preferred stock, par value (in Dollars per share)	$ .00001	$ .00001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in Dollars per share)	$ .00001	$ .00001
Common stock, shares authorized	600,000,000	600,000,000
Common stock, shares issued	438,242,618	438,242,618
Common stock, shares outstanding	401,392,948	401,392,948
Common stock held in treasury, at cost	36,849,670	36,849,670

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Feb. 28, 2017	Feb. 29, 2016	Feb. 28, 2017	Feb. 29, 2016
Operating expenses:
Selling, general and administrative	$ 281,265	$ 405,242	$ 887,881	$ 1,145,606
Total operating expenses	281,265	405,242	887,881	1,145,606
Other income (expense):
Interest income	4,081	3,930	12,568	10,421
Equity in earnings (loss) of affiliated company	(32,139)	(130,553)	1,159,746	444,070
Total other income (expense), net	(28,058)	(126,623)	1,172,314	454,491
Income (loss) before income taxes	(309,323)	(531,865)	284,433	(691,115)
Provision for income taxes	0	0	2,400	2,400
Net income (loss)	$ (309,323)	$ (531,865)	$ 282,033	$ (693,515)
Basic income (loss) per common share	$ 0	$ 0	$ 0	$ 0
Diluted income (loss) per common share	$ 0	$ 0	$ 0	$ 0
Weighted average number of common shares outstanding-basic	398,548,318	398,548,318	398,548,318	398,548,318
Weighted average number of common shares outstanding-diluted	398,548,318	398,548,318	401,398,948	398,548,318

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Feb. 28, 2017	Feb. 29, 2016
Operating activities:
Net income (loss)	$ 282,033	$ (693,515)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation	601	1,237
Accrued interest income added to investments	2,803	(494)
Equity in earnings of affiliated company	(1,159,746)	(444,070)
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	(35,960)	(57,623)
Prepaid income tax	100	2,400
Accounts payable, accrued expenses, and other	(14,597)	(26,138)
Net cash used in operating activities	(924,766)	(1,218,203)
Investing activities:
Proceeds from sales of marketable securities	2,450,000	1,950,000
Purchases of marketable securities	(1,750,000)	(1,950,000)
Purchase of property and equipment	(2,703)	0
Distributions from affiliated company	883,600	58,000
Net cash provided by investing activities	1,580,897	58,000
Net increase (decrease) in cash and cash equivalents	656,131	(1,160,203)
Cash and cash equivalents, beginning of period	1,159,576	2,679,360
Cash and cash equivalents, end of period	1,815,707	1,519,157
Supplemental Disclosure of Cash Flow Information:
Cash paid for income taxes	$ 2,300	$ 0

1. Basis of Presentation and Su

1. Basis of Presentation and Summary of Significant Accounting Policies	9 Months Ended
	Feb. 28, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation and Summary of Significant Accounting Policies	The unaudited condensed consolidated financial statements of Patriot Scientific Corporation (the “Company”, “PTSC”, “Patriot”, “we”, “us” or “our”) presented herein have been prepared pursuant to the rules of the Securities and Exchange Commission (“SEC”) for quarterly reports on Form 10-Q and do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America. These unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and notes thereto included in our Report on Form 10-K for our fiscal year ended May 31, 2016. In the opinion of management, the interim condensed consolidated financial statements reflect all adjustments of a normal recurring nature necessary for a fair presentation of the results for the interim period presented. Operating results for the nine month period ended February 28, 2017 are not necessarily indicative of the results that may be expected for the year ending May 31, 2017. Basis of Consolidation The condensed consolidated balance sheets at February 28, 2017 and May 31, 2016 and condensed consolidated statements of operations for the three and nine months ended February 28, 2017 and February 29, 2016, and condensed consolidated statements of cash flows for the nine months ended February 28, 2017 and February 29, 2016 include our accounts and those of our inactive subsidiaries: Patriot Data Solutions Group, Inc. (“PDSG”) which includes Crossflo Systems, Inc. (“Crossflo”), and Plasma Scientific Corporation. All significant intercompany accounts and transactions have been eliminated. Liquidity and Management’s Plans Cash shortfalls currently experienced by Phoenix Digital Solutions, LLC (“PDS”) will have an adverse effect on our liquidity. To date, we have determined that it is in the best interests of the Moore Microprocessor Patent (“MMP”) licensing program that we provide our 50% share of capital to provide for PDS expenses including legal retainers, and litigation related payments in the event license revenues received by PDS are insufficient to meet these needs. We believe it is likely that contributions to PDS to fund working capital will continue to be required. PDS had been incurring significant third-party costs for expert testimony, depositions and other related litigation costs. We could be required to make capital contributions to PDS for any future litigation related costs in the event that PDS does not receive sufficient licensing revenues to pay these expenses. Our current liquid cash resources are expected to provide the funds necessary to support our operations through at least the next twelve months. The cash flows from our interest in PDS represent our only significant source of cash generation. In the event of a continued decrease or interruption in MMP portfolio licensing we will incur a significant reduction to our cash position. It is highly unlikely that we would be able to obtain any additional sources of financing to supplement our cash and cash equivalents and short-term investment position. On March 20, 2013, Technology Properties Limited, Inc. (“TPL”) filed a petition under Chapter 11 of the United States Bankruptcy Code. We have been appointed to the creditors’ committee and have been closely monitoring the progress in this matter as it relates to our interest in PDS. A Joint Plan of Reorganization (the “Joint Plan”) between TPL and the creditor’s committee was confirmed by the Bankruptcy Court on February 11, 2015 with the entered confirmation order becoming final on April 2, 2015. In the event we are required to provide funding to PDS that is not reciprocated by TPL, our ownership percentage in PDS will increase and we will have a controlling financial interest in PDS, in which case, we will consolidate PDS in our condensed consolidated financial statements. Investments in Marketable Securities We determine the appropriate classification of our investments at the time of purchase and reevaluate such designation at each balance sheet date. Our investments in marketable securities have been classified and accounted for as held-to-maturity based on management’s investment intentions relating to these securities. Held-to-maturity marketable securities are stated at amortized cost. Unrealized gains and losses, net of deferred taxes, are recorded as a component of other comprehensive income (loss). We follow the authoritative guidance to assess whether our investments with unrealized loss positions are other than temporarily impaired. Realized gains and losses and declines in fair value judged to be other than temporary are determined based on the specific identification method and are reported in other income (expense), net in the condensed consolidated statements of operations. Investment in Affiliated Company We have a 50% interest in PDS (see Note 3). We account for our investment using the equity method of accounting since the investment provides us the ability to exercise significant influence, but not control, over the investee. Significant influence is generally deemed to exist if we have an ownership interest in the voting stock of the investee of between 20% and 50%, although other factors, such as representation on the investee’s Board of Directors, are considered in determining whether the equity method of accounting is appropriate. Under the equity method of accounting, the investment, originally recorded at cost, is adjusted to recognize our share of net earnings or losses of the investee and is recognized in the condensed consolidated statements of operations in the caption “Equity in earnings (loss) of affiliated company” and also is adjusted by contributions to and distributions from PDS. PDS, as an unconsolidated equity investee, recognizes revenue from technology license agreements at the time a contract is entered into, the license method is determined (paid-in-advance or on-going royalty), performance obligations under the license agreement are satisfied, and the realization of revenue is assured, which is generally upon the receipt of the license proceeds. PDS may at times enter into license agreements whereby contingent revenues are recognized as one or more contractual milestones are met. We review our investment in PDS to determine whether events or changes in circumstances indicate that the carrying amount may not be recoverable. The primary factors we consider in our determination are the financial condition, operating performance and near term prospects of PDS. If a decline in value is deemed to be other than temporary, we would recognize an impairment loss. Earnings (Loss) Per Share Basic earnings per share includes no dilution and is computed by dividing earnings available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an entity. For the three months ended February 28, 2017, potential common shares of 2,600,000 related to our outstanding options were not included in the calculation of diluted loss per share as we recorded a loss. Had we reported net income for the three months ended February 28, 2017, no shares of common stock would have been included in the calculation of diluted income per share using the treasury stock method. For the nine months ended February 28, 2017, potential common shares of 2,600,000 related to our outstanding options were not included in the calculation of diluted income per share as their inclusion would be anti-dilutive. For the nine months ended February 28, 2017 we included the PDSG escrow shares of 2,844,630 in the calculation of diluted income per share. For the three and nine months ended February 29, 2016, potential common shares of 2,760,000 related to our outstanding options were not included in the calculation of diluted loss per share as we recorded a loss. Had we reported net income for the three and nine months ended February 29, 2016, no shares of common stock would have been included in the calculation of diluted income per share using the treasury stock method. In connection with our acquisition of Crossflo, which is part of PDSG, we issued escrow shares that are contingent upon certain representations and warranties made by Crossflo at the time of the merger agreement (see Note 6). We exclude these escrow shares from the basic loss per share calculations and would have included the escrowed shares in the diluted income per share calculations if we reported net income. Income Taxes We follow authoritative guidance in accounting for uncertainties in income taxes. This authoritative guidance prescribes a recognition threshold and measurement requirement for the financial statement recognition of a tax position that has been taken or is expected to be taken on a tax return and also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. Under this guidance we may only recognize tax positions that meet a “more likely than not” threshold. We follow authoritative guidance to evaluate whether a valuation allowance should be established against our deferred tax assets based on the consideration of all available evidence using a “more likely than not” standard. In making such judgments, significant weight is given to evidence that can be objectively verified. We assess our deferred tax assets annually under more likely than not scenarios in which they may be realized through future income. We have determined that it was more likely than not that all of our deferred tax assets will not be realized in the future due to our continuing pre-tax and taxable losses. As a result of this determination we have placed a full valuation allowance against our deferred tax assets. We follow authoritative guidance to adjust our effective tax rate each quarter to be consistent with the estimated annual effective tax rate. We are also required to record the tax impact of certain discrete items, unusual or infrequently occurring, including changes in judgment about valuation allowances and effects of changes in tax laws or rates, in the interim period in which they occur. In addition, jurisdictions with a projected loss for the year or a year-to-date loss where no tax benefit can be recognized are excluded from the estimated annual effective tax rate. The impact of such an exclusion could result in a higher or lower effective tax rate during a particular quarter, based upon the mix and timing of actual earnings or losses versus annual projections. Assessment of Contingent Liabilities We are involved in various legal matters, disputes, and patent infringement claims which arise in the ordinary course of our business. We accrue for any estimated losses at the time when we can make a reliable estimate of such loss and it is probable that it has been incurred. By their very nature, contingencies are difficult to estimate. We continually evaluate information related to all contingencies to determine that the basis on which we have recorded our estimated exposure is appropriate. Intellectual Property Rights PDS, our investment in affiliated company, relies on a combination of patents, trademarks, copyrights, trade secret laws, confidentiality procedures and licensing arrangements to protect our intellectual property rights. We have seven U.S., nine European, and three Japanese patents all of which expired between August 2009 and October 4, 2016. These patents, while expired, may have certain retrospective statutory benefits that will fully diminish six years after the patent expiration dates. The patent useful life for purposes of negotiating licenses is finite and these patents are subject to legal challenges, which in combination with the limited life, could adversely impact the stream of revenues. A successful challenge to the ownership of the technology or the proprietary nature of the intellectual property would materially damage business prospects. Any issued patent may be challenged and invalidated. Recent Accounting Pronouncements In August 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-15, "Presentation of Financial Statements – Going Concern." ASU 2014-15 provides guidance in generally accepted accounting principles about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. ASU 2014-15 is effective for annual reporting periods ending after December 15, 2016 and for annual periods and interim periods thereafter (fiscal year 2017 for the Company). Early adoption is permitted. We adopted this guidance during the three months ended February 28, 2017, which did not have a significant impact on the condensed consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows – Classification of Certain Cash Receipts and Cash Payments.” ASU 2016-15 provides guidance intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. The issue addressed in ASU 2016-15 that will affect the Company is classifying distributions received from equity method investments. The guidance provides an accounting policy election for classifying distributions received from equity method investments using either a cumulative earnings approach or a nature of distributions approach. ASU 2016-15 is effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years (fiscal 2019 for the Company). Early adoption is permitted. We have not yet determined the potential effects of the adoption of ASU 2016-15 on our condensed consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash”. ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-18 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years (fiscal 2019 for the Company), with early adoption permitted. The Company is currently evaluating the effect ASU 2016-18 will have on our condensed consolidated statements of cash flows.

2. Cash, Cash Equivalents, Rest

2. Cash, Cash Equivalents, Restricted Cash and Marketable Securities	9 Months Ended
	Feb. 28, 2017
Cash and Cash Equivalents [Abstract]
Cash, Cash Equivalents, Restricted Cash and Marketable Securities	We consider all highly liquid investments acquired with a maturity of three months or less from the purchase date to be cash equivalents. Restricted cash and cash equivalents at February 28, 2017 and May 31, 2016 consist of a savings account held as collateral for our corporate credit card account. At February 28, 2017 and May 31, 2016, our short-term marketable securities in the amount of $1,502,436 and $1,955,493, respectively, consist of certificates of deposit with various financial institutions, with maturity dates between three months and twelve months from the purchase date. At February 28, 2017 and May 31, 2016, our long-term marketable securities in the amount of $250,583 and $500,409, respectively, consist of certificates of deposit with various financial institutions, with maturity dates greater than twelve months from the purchase date. We follow authoritative guidance to account for our marketable securities as held-to-maturity. Under this authoritative guidance we are required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. We determine fair value based on quoted prices when available or through the use of alternative approaches, such as discounting the expected cash flows using market interest rates commensurate with the credit quality and duration of the investment or valuations by third party professionals. The three levels of inputs that we may use to measure fair value are: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2: Quoted prices in markets that are not active or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e. supported by little or no market activity). The following tables detail the fair value measurements within the fair value hierarchy of our cash, cash equivalents and investments in marketable securities: Fair Value Measurements at February 28, 2017 Using Fair Value at February 28, Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs 2017 (Level 1) (Level 2) (Level 3) Cash and cash equivalents: Cash $ 84,564 $ 84,564 $ – $ – Money market funds 580,119 580,119 – – Certificates of deposit 1,151,024 – 1,151,024 – Restricted cash and cash equivalents 21,416 21,416 – – Marketable securities: Short-term: Certificates of deposit 1,502,436 – 1,502,436 – Long-term: Certificates of deposit 250,583 – 250,583 – Total $ 3,590,142 $ 686,099 $ 2,904,043 $ – Fair Value Measurements at May 31, 2016 Using Fair Value at May 31, Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs 2016 (Level 1) (Level 2) (Level 3) Cash and cash equivalents: Cash $ 113,803 $ 113,803 $ – $ – Money market funds 795,600 795,600 – – Certificates of deposit 250,173 – 250,173 – Restricted cash and cash equivalents 21,336 21,336 – – Marketable securities: Short-term: Certificates of deposit 1,955,493 – 1,955,493 – Long-term: Certificates of deposit 500,409 – 500,409 – Total $ 3,636,814 $ 930,739 $ 2,706,075 $ – We purchase certificates of deposit with varying maturity dates. The following table summarizes the purchase date maturities, gross unrealized gains or losses and fair value of the certificates of deposit as of February 28, 2017: February 28, 2017 (Unaudited) Cost Gross Unrealized Gains/(Losses) Fair Maturity Due in three months or less $ 1,151,024 $ – $ 1,151,024 Due in one year or less $ 1,502,436 $ – $ 1,502,436 Due in one year or more $ 250,583 $ – $ 250,583 We purchase certificates of deposit with varying maturity dates. The following table summarizes the purchase date maturities, gross unrealized gains or losses and fair value of the certificates of deposit as of May 31, 2016: May 31, 2016 Cost Gross Unrealized Gains/(Losses) Fair Maturity Due in three months or less $ 250,173 $ – $ 250,173 Due in one year or less $ 1,955,493 $ – $ 1,955,493 Due in one year or more $ 500,409 $ – $ 500,409

3. Investment in Affiliated Com

3. Investment in Affiliated Company	9 Months Ended
	Feb. 28, 2017
Equity Method Investments and Joint Ventures [Abstract]
Investment in Affiliated Company	On June 7, 2005, we entered into a Master Agreement (the “Master Agreement”) with TPL, and Charles H. Moore (“Moore”), the co-inventor of the technology which is the subject of the MMP Portfolio of microprocessor patents, pursuant to which the parties resolved all legal disputes between them. Pursuant to the Master Agreement, we and TPL entered into the Limited Liability Company Operating Agreement of PDS (the “LLC Agreement”) into which we and Moore contributed our rights to certain of our technologies. We and TPL each own 50% of the membership interests of PDS, and each member has the right to appoint one member of the three member management committee. The two appointees are required to select a mutually acceptable third member of the management committee. There had not been a third management committee member since May 2010; however, as a result of our initiation of arbitration seeking the appointment of a third member, on December 16, 2014, an independent manager to the PDS management committee was selected by the arbitrator. Pursuant to the LLC Agreement, we and TPL initially agreed to establish a working capital fund for PDS of $4,000,000, of which our contribution was $2,000,000. The working capital fund was increased to a maximum of $8,000,000 as license revenues are achieved. We and TPL are obligated to fund future working capital requirements at the discretion of the management committee of PDS in order to maintain working capital of not more than $8,000,000. If the management committee determines that additional capital is required, neither we nor TPL are required to contribute more than $2,000,000 in any fiscal year. No such contributions were made during the three and nine months ended February 28, 2017 and February 29, 2016. Distributable cash and allocation of profits and losses have been allocated to the members in the priority defined in the LLC Agreement. On July 11, 2012, we entered into the Program Agreement with PDS, TPL, and Alliacense, and an Agreement (the “TPL Agreement”) with TPL. Pursuant to the Program Agreement, PDS engaged Alliacense to negotiate MMP portfolio licenses and to pursue claims against violators of the MMP portfolio on behalf of PDS, TPL, and the Company. The Program Agreement continued through the useful life of the MMP portfolio patents. Pursuant to the TPL Agreement, we and TPL agreed to certain allocations of obligations in connection with the engagement of Alliacense. On July 24, 2014, the Program Agreement was amended with PDS and Alliacense entering into the Amended Alliacense Services and Novation Agreement (the “Novation Agreement”). Pursuant to the Novation Agreement certain performance goals and incentives were established for Alliacense. The Novation Agreement also provided for the addition of a second licensing company, which was engaged on October 10, 2014, to complement the MMP licensing commercialization. However, Alliacense fulfilled only a portion of its obligations under the Novation Agreement associated with the deployment of the second licensing company and on May 11, 2015, Alliacense was terminated by PDS. On August 10, 2016, PDS entered into an agreement with Alliacense and MMP Licensing, LLC to settle matters relating to Alliacense’s non-performance under terms of the Novation Agreement. The August 10, 2016 agreement requires Alliacense to provide PDS’s second licensing company with certain materials and to cooperate with reasonable discovery requests relating to infringement litigation currently pending in the U.S. District Court for the Northern District of California. MMP Licensing, LLC will provide commercialization services to PDS for the MMP portfolio with respect to certain companies. PDS and Alliacense have agreed to cause the arbitration between the parties to be dismissed with prejudice. The August 10, 2016 agreement will expire on October 4, 2022. Terms of the settlement agreement required PDS to pay Alliacense $84,000 within 24 hours after delivery of materials to PDS’s second licensing agent and to pay Alliacense $84,000 out of subsequent recoveries. PDS paid Alliacense $84,000 on August 11, 2016 and October 3, 2016, respectively. On October 3, 2016, Alliacense received proceeds of $600,000 earned on a licensing agreement entered into by PDS during the period ended August 31, 2016. This expense is recorded in the accompanying PDS statement of operations presented below. During January 2013, TPL and Moore settled their litigation. Terms of the settlement include the payment by PDS to Moore of a consulting fee of $250,000 for four years or until the completion of all outstanding MMP litigation whichever comes first. Per terms of the agreement PDS paid Moore $150,000 on the settlement date and paid Moore $16,667 per month from August 2013 through January 2014 and paid Moore $20,833 per month from February 2014 through January 2017. During the three months ended February 28, 2017 and February 29, 2016, PDS expensed $41,676 and $62,499, respectively, pursuant to this commitment and during the nine months ended February 28, 2017 and February 29, 2016, PDS expensed $166,674 and $187,497, respectively, pursuant to this commitment. These expenses are recorded in the accompanying PDS statements of operations presented below. Based on our analysis of current authoritative accounting guidance with respect to our investment in PDS, we continue to account for our investment in PDS under the equity method of accounting, and accordingly have recorded our share of PDS’s net income during the nine months ended February 28, 2017 and February 29, 2016 of $1,159,746 and $444,070, respectively, as an increase in our investment and we have recorded our share of PDS’s net loss during the three months ended February 28, 2017 and February 29, 2016 of $32,139 and $130,553 as an decrease in our investment. We received distributions of $883,600 and $58,000, respectively, from PDS during the nine months ended February 28, 2017 and February 29, 2016 and we have recorded these distributions as a decrease in our investment. We have recorded our share of PDS’s net income and loss for the three and nine months ended February 28, 2017 and February 29, 2016 as “Equity in earnings (loss) of affiliated company” in the accompanying condensed consolidated statements of operations. During the three and nine months ended February 28, 2017, PDS entered into a licensing agreement with a third party, pursuant to which PDS received proceeds of $0 and $3,000,000, respectively. During the three and nine months ended February 29, 2016, PDS entered into licensing agreements with third parties, pursuant to which PDS received aggregate proceeds of $0 and $1,450,000, respectively. On March 20, 2013, TPL filed a petition under Chapter 11 of the United States Bankruptcy Code. A Joint Plan of Reorganization (the “Joint Plan”) between TPL and the creditor’s committee was confirmed by the Bankruptcy Court on February 11, 2015 with the entered confirmation order becoming final on April 2, 2015. We have been appointed to the creditors’ committee and have been closely monitoring the progress in this matter as it relates to our interest in PDS. In the event we are required to provide funding to PDS that is not reciprocated by TPL, our ownership percentage in PDS will increase and we will have a controlling financial interest in PDS, in which case, we will consolidate PDS in our condensed consolidated financial statements. If we determine that it is appropriate to consolidate PDS, we would measure the assets, liabilities and noncontrolling interests of PDS at their fair values at the date that we have the controlling financial interest. PDS’s balance sheets at February 28, 2017 and May 31, 2016 and statements of operations for the three and nine months ended February 28, 2017 and February 29, 2016 are as follows: Balance Sheets Assets: February 28, 2017 May 31, 2016 (Unaudited) (Audited) Cash $ 900,601 $ 741,971 Prepaid expenses 2,629 26,295 Total assets $ 903,230 $ 768,266 Liabilities and Members’ Equity: February 28, 2017 May 31, 2016 (Unaudited) (Audited) Payables $ 10,224 $ 427,553 Members’ equity 893,006 340,713 Total liabilities and members’ equity $ 903,230 $ 768,266 Statements of Operations Three Months Ended Nine Months Ended February 28, 2017 February 29, 2016 February 28, 2017 February 29, 2016 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Revenues $ – $ – $ 3,000,000 $ 1,450,000 Expenses 64,278 261,106 680,297 561,860 Income (loss) before provision for income taxes (64,278 ) (261,106 ) 2,319,703 888,140 Provision for income taxes – – 210 – Net income (loss) $ (64,278 ) $ (261,106 ) $ 2,319,493 $ 888,140 We review our investment in PDS to determine whether events or changes in circumstances indicate that the carrying amount may not be recoverable. The primary factors we consider in our determination are the financial condition, operating performance and near term prospects of PDS. If a decline in value is deemed to be other than temporary, we would recognize an impairment loss.

4. Income Taxes

4. Income Taxes	9 Months Ended
	Feb. 28, 2017
Income Tax Disclosure [Abstract]
Income Taxes	We have determined that it was more likely than not that all of our deferred tax assets will not be realized in the future due to our continuing pre-tax and taxable losses. As a result of this determination we have placed a full valuation allowance against our deferred tax assets. There have been no changes to our determination during the current fiscal year.

5. Stockholders' Equity

5. Stockholders' Equity	9 Months Ended
	Feb. 28, 2017
Equity [Abstract]
Stockholders' Equity	Share-based Compensation Summary of Assumptions and Activity The fair value of share-based awards to employees and directors is calculated using the Black-Scholes option pricing model, even though this model was developed to estimate the fair value of freely tradable, fully transferable options without vesting restrictions, which differ significantly from our stock options. The Black-Scholes model also requires subjective assumptions, including future stock price volatility and expected time to exercise, which greatly affect the calculated values. The expected term of options granted is derived from historical data on employee exercises and post-vesting employment termination behavior. The risk-free rate selected to value any particular grant is based on the U.S. Treasury rate that corresponds to the pricing term of the grant effective as of the date of the grant. The expected volatility is based on the historical volatilities of our common stock. These factors could change in the future, affecting the determination of share-based compensation expense in future periods. A summary of option activity as of February 28, 2017 and changes during the nine months then ended, is presented below: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Options outstanding at June 1, 2016 2,760,000 $ 0.05 Options granted – $ – Options exercised – $ – Options forfeited/expired (160,000 ) $ 0.04 Options outstanding at February 28, 2017 2,600,000 $ 0.06 2.63 $ – Options vested and expected to vest at February 28, 2017 2,600,000 $ 0.06 2.63 $ – Options exercisable at February 28, 2017 2,600,000 $ 0.06 2.63 $ – The aggregate intrinsic value represents the differences in market price at the close of the quarter ($0.0051 per share on February 28, 2017) and the exercise price of outstanding, in-the-money options (those options with exercise prices below $0.0051 per share) on February 28, 2017.

6. Commitments and Contingencie

6. Commitments and Contingencies	9 Months Ended
	Feb. 28, 2017
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Litigation Patent Litigation We, TPL, and PDS (collectively referred to as “Plaintiffs”) are Plaintiffs in ongoing proceedings in the U.S. District Court for the Northern District of California where the Plaintiffs allege infringement of the US 5,809,336 patent (the “‘336 patent”) by: Huawei Technologies Co. Ltd., LG Electronics, Nintendo Co. Ltd., Samsung Electronics Co. Ltd., and ZTE Corporation. This litigation is proceeding in front of District Court Judge Vince Chhabria. These ongoing proceedings relate to the proceedings filed by the Plaintiffs in February 2008 in the U.S. District Court for the Northern District of California alleging infringement of the US 5,440,749 patent (the “‘749 patent”), the US 5,530,890 patent (the “‘890 patent”) and the ‘336 patent against Amazon.com Inc., Barnes & Noble Inc., Garmin Ltd., Huawei Technologies Co. Ltd., Kyocera Corporation, LG Electronics, Nintendo Co. Ltd., Novatel Wireless Inc., Samsung Electronics Co. Ltd., Sierra Wireless Inc., and ZTE Corporation. We have settled with all defendants except those named in the first paragraph to this footnote. On September 18, 2015, a Markman hearing was held before U.S. Magistrate Judge Grewal and, on September 22, 2015, he issued a claim construction report and recommendation. On September 25, 2015, as a result of the claim construction report and recommendation, Plaintiffs and defendants, with the exception of Huawei Technologies Co. Ltd., (“Huawei”) agreed to stay all proceedings pending resolution of Plaintiffs’ objections to the claim construction report and recommendation. Plaintiffs further stipulated that, under the claim construction provided by the report and recommendation, defendants’ products do not infringe the ‘336 patent, and, in the event that the Court does not materially modify the claim construction, Plaintiffs and defendants ask that the Court enter a final judgment of non-infringement. After Plaintiffs and Huawei filed opposing letter briefs with the Court, U.S. Magistrate Judge Grewal stayed the action against Huawei pending resolution of Plaintiffs’ objections to the claim construction. On October 6, 2015, Plaintiffs filed objections to the claim construction with District Court Judge Chhabria. Judge Chhabria rejected those objections on November 9, 2015. Based on that order, the parties stipulated to a judgment of non-infringement as to the ‘336 patent and such judgment was entered on November 13, 2015. On December 7, 2015, Plaintiffs filed notices of appeal with the U.S. Federal Circuit appealing the district court’s claim construction. Plaintiffs filed their opening appellate brief on March 10, 2016. Defendants filed their response brief on May 23, 2016, with Plaintiffs filing their reply brief on June 23, 2016. On March 3, 2017, the U.S. Court of Appeals for the Federal Circuit rendered its decision vacating the claims construction that was issued in September 2016 by the U.S. District Court for the Northern District of California and has remanded the matter to the District Court for further proceedings. 401(k) Plan We have a retirement plan that complies with Section 401(k) of the Internal Revenue Code. All employees are eligible to participate in the plan. We match 100% of elective deferrals subject to a maximum of 4% of the participant’s eligible earnings. Our participants vest 33% per year over a three year period in their matching contributions. Our matching contributions during the three months ended February 28, 2017 and February 29, 2016 were $4,641 and $5,524, respectively. Our matching contributions during the nine months ended February 28, 2017 and February 29, 2016 were $15,469 and $15,459, respectively. Guarantees and Indemnities We have made certain guarantees and indemnities, under which we may be required to make payments to a guaranteed or indemnified party. We indemnify our directors, officers, employees and agents to the maximum extent permitted under the laws of the State of Delaware. The duration of the guarantees and indemnities varies, and in many cases is indefinite. These guarantees and indemnities do not provide for any limitation of the maximum potential future payments we could be obligated to make. Historically, we have not been obligated to make any payments for these obligations and no liabilities have been recorded for these guarantees and indemnities in the accompanying condensed consolidated balance sheets. Escrow Shares On August 31, 2009 we gave notice to the former shareholders of Crossflo and Union Bank of California (the “Escrow Agent”) under Section 2.5 of the Agreement and Plan of Merger between us and Crossflo (the “Agreement”), outlining damages incurred by us in conjunction with the acquisition of Crossflo, and seeking the return of 2,844,630 shares of our common stock held by the Escrow Agent. Subsequently, former shareholders of Crossflo representing a majority of the escrowed shares responded in protest to our claim, delaying the release of the escrowed shares until a formal resolution is reached. In the event we fail to prevail in our claim against the escrowed shares, we may be obligated to deposit into escrow approximately $256,000 of cash consideration due to the decline in our average stock price over the one year escrow period, calculated in accordance with the Section 2.5 of the Agreement. We have evaluated the potential for loss regarding our claim and believe that it is probable that the resolution of this issue will not result in a material obligation to the Company, although there is no assurance of this. Accordingly, we have not recorded a liability for this matter.

7. Subsequent Events

7. Subsequent Events	9 Months Ended
	Feb. 28, 2017
Subsequent Events [Abstract]
Subsequent Events	We have evaluated subsequent events after the balance sheet date and based on our evaluation, management has determined that no subsequent events have occurred that would require recognition in the accompanying condensed consolidated financial statements or disclosure in the notes thereto other than as disclosed in the accompanying notes.

1. Summary of Significant Accou

1. Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Feb. 28, 2017
Accounting Policies [Abstract]
Basis of Presentation	The unaudited condensed consolidated financial statements of Patriot Scientific Corporation (the “Company”, “PTSC”, “Patriot”, “we”, “us” or “our”) presented herein have been prepared pursuant to the rules of the Securities and Exchange Commission (“SEC”) for quarterly reports on Form 10-Q and do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America. These unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and notes thereto included in our Report on Form 10-K for our fiscal year ended May 31, 2016. In the opinion of management, the interim condensed consolidated financial statements reflect all adjustments of a normal recurring nature necessary for a fair presentation of the results for the interim period presented. Operating results for the nine month period ended February 28, 2017 are not necessarily indicative of the results that may be expected for the year ending May 31, 2017.
Basis of Consolidation	Basis of Consolidation The condensed consolidated balance sheets at February 28, 2017 and May 31, 2016 and condensed consolidated statements of operations for the three and nine months ended February 28, 2017 and February 29, 2016, and condensed consolidated statements of cash flows for the nine months ended February 28, 2017 and February 29, 2016 include our accounts and those of our inactive subsidiaries: Patriot Data Solutions Group, Inc. (“PDSG”) which includes Crossflo Systems, Inc. (“Crossflo”), and Plasma Scientific Corporation. All significant intercompany accounts and transactions have been eliminated.
Liquidity and Management's Plans	Liquidity and Management’s Plans Cash shortfalls currently experienced by Phoenix Digital Solutions, LLC (“PDS”) will have an adverse effect on our liquidity. To date, we have determined that it is in the best interests of the Moore Microprocessor Patent (“MMP”) licensing program that we provide our 50% share of capital to provide for PDS expenses including legal retainers, and litigation related payments in the event license revenues received by PDS are insufficient to meet these needs. We believe it is likely that contributions to PDS to fund working capital will continue to be required. PDS had been incurring significant third-party costs for expert testimony, depositions and other related litigation costs. We could be required to make capital contributions to PDS for any future litigation related costs in the event that PDS does not receive sufficient licensing revenues to pay these expenses. Our current liquid cash resources are expected to provide the funds necessary to support our operations through at least the next twelve months. The cash flows from our interest in PDS represent our only significant source of cash generation. In the event of a continued decrease or interruption in MMP portfolio licensing we will incur a significant reduction to our cash position. It is highly unlikely that we would be able to obtain any additional sources of financing to supplement our cash and cash equivalents and short-term investment position. On March 20, 2013, Technology Properties Limited, Inc. (“TPL”) filed a petition under Chapter 11 of the United States Bankruptcy Code. We have been appointed to the creditors’ committee and have been closely monitoring the progress in this matter as it relates to our interest in PDS. A Joint Plan of Reorganization (the “Joint Plan”) between TPL and the creditor’s committee was confirmed by the Bankruptcy Court on February 11, 2015 with the entered confirmation order becoming final on April 2, 2015. In the event we are required to provide funding to PDS that is not reciprocated by TPL, our ownership percentage in PDS will increase and we will have a controlling financial interest in PDS, in which case, we will consolidate PDS in our condensed consolidated financial statements.
Investments in Marketable Securities	Investments in Marketable Securities We determine the appropriate classification of our investments at the time of purchase and reevaluate such designation at each balance sheet date. Our investments in marketable securities have been classified and accounted for as held-to-maturity based on management’s investment intentions relating to these securities. Held-to-maturity marketable securities are stated at amortized cost. Unrealized gains and losses, net of deferred taxes, are recorded as a component of other comprehensive income (loss). We follow the authoritative guidance to assess whether our investments with unrealized loss positions are other than temporarily impaired. Realized gains and losses and declines in fair value judged to be other than temporary are determined based on the specific identification method and are reported in other income (expense), net in the condensed consolidated statements of operations.
Investment in Affiliated Company	Investment in Affiliated Company We have a 50% interest in PDS (see Note 3). We account for our investment using the equity method of accounting since the investment provides us the ability to exercise significant influence, but not control, over the investee. Significant influence is generally deemed to exist if we have an ownership interest in the voting stock of the investee of between 20% and 50%, although other factors, such as representation on the investee’s Board of Directors, are considered in determining whether the equity method of accounting is appropriate. Under the equity method of accounting, the investment, originally recorded at cost, is adjusted to recognize our share of net earnings or losses of the investee and is recognized in the condensed consolidated statements of operations in the caption “Equity in earnings (loss) of affiliated company” and also is adjusted by contributions to and distributions from PDS. PDS, as an unconsolidated equity investee, recognizes revenue from technology license agreements at the time a contract is entered into, the license method is determined (paid-in-advance or on-going royalty), performance obligations under the license agreement are satisfied, and the realization of revenue is assured, which is generally upon the receipt of the license proceeds. PDS may at times enter into license agreements whereby contingent revenues are recognized as one or more contractual milestones are met. We review our investment in PDS to determine whether events or changes in circumstances indicate that the carrying amount may not be recoverable. The primary factors we consider in our determination are the financial condition, operating performance and near term prospects of PDS. If a decline in value is deemed to be other than temporary, we would recognize an impairment loss.
Earnings (Loss) Per Share	Earnings (Loss) Per Share Basic earnings per share includes no dilution and is computed by dividing earnings available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an entity. For the three months ended February 28, 2017, potential common shares of 2,600,000 related to our outstanding options were not included in the calculation of diluted loss per share as we recorded a loss. Had we reported net income for the three months ended February 28, 2017, no shares of common stock would have been included in the calculation of diluted income per share using the treasury stock method. For the nine months ended February 28, 2017, potential common shares of 2,600,000 related to our outstanding options were not included in the calculation of diluted income per share as their inclusion would be anti-dilutive. For the nine months ended February 28, 2017 we included the PDSG escrow shares of 2,844,630 in the calculation of diluted income per share. For the three and nine months ended February 29, 2016, potential common shares of 2,760,000 related to our outstanding options were not included in the calculation of diluted loss per share as we recorded a loss. Had we reported net income for the three and nine months ended February 29, 2016, no shares of common stock would have been included in the calculation of diluted income per share using the treasury stock method. In connection with our acquisition of Crossflo, which is part of PDSG, we issued escrow shares that are contingent upon certain representations and warranties made by Crossflo at the time of the merger agreement (see Note 6). We exclude these escrow shares from the basic loss per share calculations and would have included the escrowed shares in the diluted income per share calculations if we reported net income.
Income Taxes	Income Taxes We follow authoritative guidance in accounting for uncertainties in income taxes. This authoritative guidance prescribes a recognition threshold and measurement requirement for the financial statement recognition of a tax position that has been taken or is expected to be taken on a tax return and also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. Under this guidance we may only recognize tax positions that meet a “more likely than not” threshold. We follow authoritative guidance to evaluate whether a valuation allowance should be established against our deferred tax assets based on the consideration of all available evidence using a “more likely than not” standard. In making such judgments, significant weight is given to evidence that can be objectively verified. We assess our deferred tax assets annually under more likely than not scenarios in which they may be realized through future income. We have determined that it was more likely than not that all of our deferred tax assets will not be realized in the future due to our continuing pre-tax and taxable losses. As a result of this determination we have placed a full valuation allowance against our deferred tax assets. We follow authoritative guidance to adjust our effective tax rate each quarter to be consistent with the estimated annual effective tax rate. We are also required to record the tax impact of certain discrete items, unusual or infrequently occurring, including changes in judgment about valuation allowances and effects of changes in tax laws or rates, in the interim period in which they occur. In addition, jurisdictions with a projected loss for the year or a year-to-date loss where no tax benefit can be recognized are excluded from the estimated annual effective tax rate. The impact of such an exclusion could result in a higher or lower effective tax rate during a particular quarter, based upon the mix and timing of actual earnings or losses versus annual projections.
Assessment of Contingent Liabilities	Assessment of Contingent Liabilities We are involved in various legal matters, disputes, and patent infringement claims which arise in the ordinary course of our business. We accrue for any estimated losses at the time when we can make a reliable estimate of such loss and it is probable that it has been incurred. By their very nature, contingencies are difficult to estimate. We continually evaluate information related to all contingencies to determine that the basis on which we have recorded our estimated exposure is appropriate.
Intellectual Property Rights	Intellectual Property Rights PDS, our investment in affiliated company, relies on a combination of patents, trademarks, copyrights, trade secret laws, confidentiality procedures and licensing arrangements to protect our intellectual property rights. We have seven U.S., nine European, and three Japanese patents all of which expired between August 2009 and October 4, 2016. These patents, while expired, may have certain retrospective statutory benefits that will fully diminish six years after the patent expiration dates. The patent useful life for purposes of negotiating licenses is finite and these patents are subject to legal challenges, which in combination with the limited life, could adversely impact the stream of revenues. A successful challenge to the ownership of the technology or the proprietary nature of the intellectual property would materially damage business prospects. Any issued patent may be challenged and invalidated.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In August 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-15, "Presentation of Financial Statements – Going Concern." ASU 2014-15 provides guidance in generally accepted accounting principles about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. ASU 2014-15 is effective for annual reporting periods ending after December 15, 2016 and for annual periods and interim periods thereafter (fiscal year 2017 for the Company). Early adoption is permitted. We adopted this guidance during the three months ended February 28, 2017, which did not have a significant impact on the condensed consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows – Classification of Certain Cash Receipts and Cash Payments.” ASU 2016-15 provides guidance intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. The issue addressed in ASU 2016-15 that will affect the Company is classifying distributions received from equity method investments. The guidance provides an accounting policy election for classifying distributions received from equity method investments using either a cumulative earnings approach or a nature of distributions approach. ASU 2016-15 is effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years (fiscal 2019 for the Company). Early adoption is permitted. We have not yet determined the potential effects of the adoption of ASU 2016-15 on our condensed consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash”. ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-18 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years (fiscal 2019 for the Company), with early adoption permitted. The Company is currently evaluating the effect ASU 2016-18 will have on our condensed consolidated statements of cash flows.

2. Cash, Cash Equivalents, Re14

2. Cash, Cash Equivalents, Restricted Cash and Marketable Securities (Tables)	9 Months Ended
	Feb. 28, 2017
Cash and Cash Equivalents [Abstract]
Schedule of fair value of cash, cash equivalents and investments in marketable securities	Fair Value Measurements at February 28, 2017 Using Fair Value at February 28, Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs 2017 (Level 1) (Level 2) (Level 3) Cash and cash equivalents: Cash $ 84,564 $ 84,564 $ – $ – Money market funds 580,119 580,119 – – Certificates of deposit 1,151,024 – 1,151,024 – Restricted cash and cash equivalents 21,416 21,416 – – Marketable securities: Short-term: Certificates of deposit 1,502,436 – 1,502,436 – Long-term: Certificates of deposit 250,583 – 250,583 – Total $ 3,590,142 $ 686,099 $ 2,904,043 $ – Fair Value Measurements at May 31, 2016 Using Fair Value at May 31, Quoted Prices in Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs 2016 (Level 1) (Level 2) (Level 3) Cash and cash equivalents: Cash $ 113,803 $ 113,803 $ – $ – Money market funds 795,600 795,600 – – Certificates of deposit 250,173 – 250,173 – Restricted cash and cash equivalents 21,336 21,336 – – Marketable securities: Short-term: Certificates of deposit 1,955,493 – 1,955,493 – Long-term: Certificates of deposit 500,409 – 500,409 – Total $ 3,636,814 $ 930,739 $ 2,706,075 $ –
Schedule of maturities, gross unrealized gains or losses and fair value of certificates of deposit	February 28, 2017 (Unaudited) Cost Gross Unrealized Gains/(Losses) Fair Maturity Due in three months or less $ 1,151,024 $ – $ 1,151,024 Due in one year or less $ 1,502,436 $ – $ 1,502,436 Due in one year or more $ 250,583 $ – $ 250,583 May 31, 2016 Cost Gross Unrealized Gains/(Losses) Fair Maturity Due in three months or less $ 250,173 $ – $ 250,173 Due in one year or less $ 1,955,493 $ – $ 1,955,493 Due in one year or more $ 500,409 $ – $ 500,409

3. Investment in Affiliated C15

3. Investment in Affiliated Company (Tables)	9 Months Ended
	Feb. 28, 2017
Equity Method Investments and Joint Ventures [Abstract]
Financial statements of affiliates	Balance Sheets Assets: February 28, 2017 May 31, 2016 (Unaudited) (Audited) Cash $ 900,601 $ 741,971 Prepaid expenses 2,629 26,295 Total assets $ 903,230 $ 768,266 Liabilities and Members’ Equity: February 28, 2017 May 31, 2016 (Unaudited) (Audited) Payables $ 10,224 $ 427,553 Members’ equity 893,006 340,713 Total liabilities and members’ equity $ 903,230 $ 768,266 Statements of Operations Three Months Ended Nine Months Ended February 28, 2017 February 29, 2016 February 28, 2017 February 29, 2016 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Revenues $ – $ – $ 3,000,000 $ 1,450,000 Expenses 64,278 261,106 680,297 561,860 Income (loss) before provision for income taxes (64,278 ) (261,106 ) 2,319,703 888,140 Provision for income taxes – – 210 – Net income (loss) $ (64,278 ) $ (261,106 ) $ 2,319,493 $ 888,140

5. Stockholders' Equity (Tables

5. Stockholders' Equity (Tables)	9 Months Ended
	Feb. 28, 2017
Equity [Abstract]
Schedule of Stock Option Activity	Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Options outstanding at June 1, 2016 2,760,000 $ 0.05 Options granted – $ – Options exercised – $ – Options forfeited/expired (160,000 ) $ 0.04 Options outstanding at February 28, 2017 2,600,000 $ 0.06 2.63 $ – Options vested and expected to vest at February 28, 2017 2,600,000 $ 0.06 2.63 $ – Options exercisable at February 28, 2017 2,600,000 $ 0.06 2.63 $ –

1. Basis of Presentation and 17

1. Basis of Presentation and Summary of Significant Accounting Policies (Details Narrative) - shares	3 Months Ended		9 Months Ended
	Feb. 28, 2017	Feb. 29, 2016	Feb. 28, 2017	Feb. 29, 2016
Options [Member]
Common shares not included in calculation of diluted net income and loss per share	2,600,000	2,760,000	2,600,000	2,760,000
Common shares included in calculation of diluted net income per share	0	0	2,844,630	0
PDS [Member]
Ownership interest	50.00%		50.00%

2. Cash, Cash Equivalents, Re18

2. Cash, Cash Equivalents, Restricted Cash and Marketable Securities (Details) - USD ($)	Feb. 28, 2017	May 31, 2016
Cash and cash equivalents:
Cash	$ 84,564	$ 113,803
Money market funds	580,119	795,600
Certificates of deposit	1,151,024	250,173
Restricted cash and cash equivalents	21,416	21,336
Short-term:
Certificates of deposit	1,502,436	1,955,493
Long-term:
Certificates of deposit	250,583	500,409
Total	3,590,142	3,636,814
Fair Value Inputs Level 1 [Member]
Cash and cash equivalents:
Cash	84,564	113,803
Money market funds	580,119	795,600
Certificates of deposit	0	0
Restricted cash and cash equivalents	21,416	21,336
Short-term:
Certificates of deposit	0	0
Long-term:
Certificates of deposit	0	0
Total	686,099	930,739
Fair Value Inputs Level 2 [Member]
Cash and cash equivalents:
Cash	0	0
Money market funds	0	0
Certificates of deposit	1,151,024	250,173
Restricted cash and cash equivalents	0	0
Short-term:
Certificates of deposit	1,502,436	1,955,493
Long-term:
Certificates of deposit	250,583	500,409
Total	2,904,043	2,706,075
Fair Value Inputs Level 3 [Member]
Cash and cash equivalents:
Cash	0	0
Money market funds	0	0
Certificates of deposit	0	0
Restricted cash and cash equivalents	0	0
Short-term:
Certificates of deposit	0	0
Long-term:
Certificates of deposit		0
Total	$ 0	$ 0

2. Cash, Cash Equivalents, Re19

2. Cash, Cash Equivalents, Restricted Cash and Marketable Securities (Details - Certificates of Deposit) - USD ($)	Feb. 28, 2017	May 31, 2016
Due in three months or less [Member]
Certificates of deposit
Cost	$ 1,151,024	$ 250,173
Gross Unrealized Gains/(Losses)	0	0
Fair Value	1,151,024	250,173
Due in one year or less [Member]
Certificates of deposit
Cost	1,502,436	1,955,493
Gross Unrealized Gains/(Losses)	0	0
Fair Value	1,502,436	1,955,493
Due in one year or more [Member]
Certificates of deposit
Cost	250,583	500,409
Gross Unrealized Gains/(Losses)	0	0
Fair Value	$ 250,583	$ 500,409

2. Cash, Cash Equivalents, Re20

2. Cash, Cash Equivalents, Restricted Cash and Marketable Securities (Details Narrative) - USD ($)	Feb. 28, 2017	May 31, 2016
Cash and Cash Equivalents [Abstract]
Current portion of marketable securities	$ 1,502,436	$ 1,955,493
Non-current portion of marketable securities	$ 250,583	$ 500,409

3. Investment in Affiliated C21

3. Investment in Affiliated Company (Details - balance sheet) - USD ($)	Feb. 28, 2017	May 31, 2016
Total assets	$ 903,230	$ 768,266
Total liabilities and members' equity	903,230	768,266
Cash [Member]
Total assets	900,601	741,971
Prepaid Expenses [Member]
Total assets	2,629	26,295
Payables [Member]
Total liabilities and members' equity	10,224	427,553
Members equity [Member]
Total liabilities and members' equity	$ 893,006	$ 340,713

3. Investment in Affiliated C22

3. Investment in Affiliated Company (Details - Statement of Operations) - USD ($)	3 Months Ended		9 Months Ended
	Feb. 28, 2017	Feb. 29, 2016	Feb. 28, 2017	Feb. 29, 2016
Equity Method Investments and Joint Ventures [Abstract]
Revenues	$ 0	$ 0	$ 3,000,000	$ 1,450,000
Expenses	64,278	261,106	680,297	561,860
Income (loss) before provision for income taxes	(64,278)	(261,106)	2,319,703	888,140
Provision for income taxes	0	0	210	0
Net income (loss)	$ (64,278)	$ (261,106)	$ 2,319,493	$ 888,140

3. Investment in Affiliated C23

3. Investment in Affiliated Company (Details Narrative PDS) - USD ($)	3 Months Ended		9 Months Ended
	Feb. 28, 2017	Feb. 29, 2016	Feb. 28, 2017	Feb. 29, 2016
Net income from PDS	$ (32,139)	$ (130,553)	$ 1,159,746	$ 444,070
Cash distributions received from PDS			883,600	58,000
PDS [Member]
Proceeds from licensing agreement	0	0	3,000,000	1,450,000
PDS [Member] | Moore [Member]
Litigation settlement expense	$ 41,676	$ 62,499	$ 166,674	$ 187,497

5. Stockholders' Equity (Detail

5. Stockholders' Equity (Details - Option activity) - Options [Member]	9 Months Ended
	Feb. 28, 2017USD ($)$ / sharesshares
Number of Options Outstanding, Beginning | shares	2,760,000
Number of Options Granted | shares	0
Number of Options Exercised | shares	0
Number of Options Forfeited | shares	(160,000)
Number of Options Outstanding, Ending | shares	2,600,000
Options vested and expected to vest, Ending | shares	2,600,000
Number of Options Exercisable, Ending | shares	2,600,000
Weighted Average Exercise Price Outstanding, Beginning | $ / shares	$ .05
Weighted Average Exercise Price Granted | $ / shares
Weighted Average Exercise Price Exercised | $ / shares
Weighted Average Exercise Price Forfeited | $ / shares	.04
Weighted Average Exercise Price Outstanding, Ending | $ / shares	.06
Weighted Average Exercise Price, Options vested and expected to vest, Ending | $ / shares	.06
Weighted Average Exercise Price Exercisable | $ / shares	$ .06
Weighted Average Remaining Contractual Life (in years) Outstanding	2 years 7 months 17 days
Weighted Average Remaining Contractual Life (in years) Options vested and expected to vest	2 years 7 months 17 days
Weighted Average Remaining Contractual Life (in years) Exercisable	2 years 7 months 17 days
Aggregate Intrinsic Value Outstanding | $	$ 0
Aggregate Intrinsic Value Options vested and expected to vest | $	0
Aggregate Intrinsic Value Exercisable | $	$ 0

6. Commitments and Contingenc25

6. Commitments and Contingencies (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Feb. 28, 2017	Feb. 29, 2016	Feb. 28, 2017	Feb. 29, 2016
Commitments and Contingencies Disclosure [Abstract]
Patriot's matching contributions to the 401K plan	$ 4,641	$ 5,524	$ 15,469	$ 15,459