Mosaic ImmunoEngineering (CPMV) 10-K 29 Aug 18 2018 FY Annual report Financial data

Document and Entity Information

Document and Entity Information - USD ($)	12 Months Ended
	May 31, 2018	Aug. 24, 2018	Nov. 30, 2017
Document And Entity Information
Entity Registrant Name	PATRIOT SCIENTIFIC CORP
Entity Central Index Key	836,564
Document Type	10-K
Document Period End Date	May 31, 2018
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 Public Float			$ 2,319,079
Entity Common Stock, Shares Outstanding		401,392,948
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2,018

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($)	May 31, 2018	May 31, 2017
Current assets:
Cash and cash equivalents	$ 2,297,890	$ 979,641
Restricted cash and cash equivalents	21,559	21,443
Marketable securities	0	2,203,396
Prepaid income tax	2,285	2,285
Prepaid expenses and other current assets	5,287	110,421
Total current assets	2,327,021	3,317,186
Property and equipment, net	1,303	1,877
Deferred income taxes	52,156	0
Investment in affiliated company	199,373	441,988
Total assets	2,579,853	3,761,051
Current liabilities:
Accounts payable	44,744	13,786
Accrued expenses and other	40,095	42,801
Total current liabilities	84,839	56,587
Total liabilities	84,839	56,587
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 May 31, 2018 and 2017	4,382	4,382
Additional paid-in capital	77,444,062	77,444,062
Accumulated deficit	(60,327,562)	(59,118,112)
Common stock held in treasury, at cost - 36,849,670 shares at May 31, 2018 and 2017	(14,625,868)	(14,625,868)
Total stockholders' equity	2,495,014	3,704,464
Total liabilities and stockholders' equity	$ 2,579,853	$ 3,761,051

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares	May 31, 2018	May 31, 2017
Statement of Financial Position [Abstract]
Preferred stock, par value (in Dollars per share)	$ 0.00001	$ 0.00001
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)	$ 0.00001	$ 0.00001
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

Consolidated Statements of Oper

Consolidated Statements of Operations - USD ($)	12 Months Ended
	May 31, 2018	May 31, 2017
Operating expenses:
Selling, general and administrative	$ 1,047,127	$ 1,216,347
Total operating expenses	1,047,127	1,216,347
Other income (expense):
Interest income	26,669	18,148
Other income	3,867	0
Equity in earnings (loss) of affiliated company	(242,615)	1,155,231
Total other income (expense), net	(212,079)	1,173,379
Loss before provision (benefit) for income taxes	(1,259,206)	(42,968)
Provision (benefit) for income taxes	(49,756)	2,400
Net loss	$ (1,209,450)	$ (45,368)
Basic loss per common share	$ 0	$ 0
Diluted loss per common share	$ 0	$ 0
Weighted average number of common shares outstanding - basic	398,548,318	398,548,318
Weighted average number of common shares outstanding - diluted	398,548,318	398,548,318

Consolidated Statements of Stoc

Consolidated Statements of Stockholders' Equity - USD ($)	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Treasury Stock	Total
Beginning balance, shares at May. 31, 2016	401,392,948
Beginning balance, value at May. 31, 2016	$ 4,382	$ 77,444,062	$ (59,072,744)	$ (14,625,868)	$ 3,749,832
Net loss			(45,368)		(45,368)
Ending balance, shares at May. 31, 2017	401,392,948
Ending balance, value at May. 31, 2017	$ 4,382	77,444,062	(59,118,112)	(14,625,868)	3,704,464
Net loss			(1,209,450)		(1,209,450)
Ending balance, shares at May. 31, 2018	401,392,948
Ending balance, value at May. 31, 2018	$ 4,382	$ 77,444,062	$ (60,327,562)	$ (14,625,868)	$ 2,495,014

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
	May 31, 2018	May 31, 2017
Operating activities:
Net loss	$ (1,209,450)	$ (45,368)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	763	826
Accrued interest income	3,280	2,399
Equity in (earnings) loss of affiliated company	242,615	(1,155,231)
Loss on disposal of property and equipment	1,276	0
Deferred income taxes	(52,156)	0
Changes in operating assets and liabilities:
Prepaid income tax	0	100
Prepaid expenses and other current assets	105,134	(96,633)
Accounts payable, accrued expenses and other	28,252	(16,925)
Net cash used in operating activities	(880,286)	(1,310,832)
Investing activities:
Proceeds from sales of marketable securities	4,900,000	3,200,000
Purchases of marketable securities	(2,700,000)	(2,950,000)
Purchase of property and equipment	(1,465)	(2,703)
Distributions from affiliated company	0	883,600
Net cash provided by investing activities	2,198,535	1,130,897
Net increase (decrease) in cash and cash equivalents	1,318,249	(179,935)
Cash and cash equivalents, beginning of year	979,641	1,159,576
Cash and cash equivalents, end of year	2,297,890	979,641
Supplemental Disclosure of Cash Flow Information:
Cash paid for income taxes	$ 2,400	$ 2,300

1. Organization and Business

1. Organization and Business	12 Months Ended
	May 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization and Business	1. Organization and Business Patriot Scientific Corporation (the “Company”, “PTSC”, “we”, “us”, or “our”), was organized under Delaware law on March 24, 1992 and is the successor by merger to Patriot Financial Corporation, a Colorado corporation, incorporated on June 10, 1987. In June 2005, we entered into a joint venture agreement with Technology Properties Limited, Inc. (“TPL”) to form Phoenix Digital Solutions, LLC (“PDS”). In September 2008, we acquired Patriot Data Solutions Group, Inc. formerly known as Crossflo Systems, Inc. (“PDSG”) which engaged in data-sharing services and products primarily in the public safety/government sector. In January 2010, we sold the assets of Verras Medical, Inc. and in August 2010 we sold the Vigilys business line both formerly associated with PDSG. During April 2012, we sold substantially all of the assets of PDSG. In March 2018, we dissolved Plasma Scientific Corporation. Through our joint venture PDS we pursue the commercialization of our patented microprocessor technologies through broad and open licensing and by litigating against those who may be infringing on our patents. As our patents have expired, we are exploring, developing or acquiring new lines of business. Liquidity and Management’s Plans Cash shortfalls currently experienced by 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 may be required. PDS had been incurring significant third-party costs for legal fees, 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 from the date of this report. 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, TPL filed a petition under Chapter 11 of the United States Bankruptcy Code. On March 5, 2018, TPL’s Motion for Entry of Final Decree Closing Chapter 11 was granted. 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 consolidated financial statements.

2. Summary of Significant Accou

2. Summary of Significant Accounting Policies	12 Months Ended
	May 31, 2018
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	2. Summary of Significant Accounting Policies Basis of Consolidation The consolidated balance sheets at May 31, 2018 and 2017 and consolidated statements of operations for the fiscal years ended May 31, 2018 and 2017 include our accounts and those of our wholly owned subsidiary PDSG which includes Crossflo Systems, Inc. (“Crossflo”). All significant intercompany accounts and transactions have been eliminated. During March 2018, we dissolved our inactive subsidiary Plasma Scientific Corporation. Financial Instruments and Concentrations of Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash, cash equivalents, and investments in marketable securities. We invest our cash and cash equivalents primarily in money market mutual funds and certificates of deposit. Cash and cash equivalents are maintained with high quality financial institutions, the composition and maturities of which are regularly monitored by management. At times, deposits held with financial institutions may exceed the amount of insurance provided by the Federal Deposit Insurance Corporation and the Securities Investor Protection Corporation. We perform ongoing evaluations of these financial institutions to limit our concentration of risk exposure. Fair Value of Financial Instruments Our financial instruments consist principally of cash and cash equivalents, investments in marketable securities, accounts payable and accrued expenses and other. The carrying value of these financial instruments approximates fair value because of the immediate or short-term maturity of the instruments. The fair value of our cash equivalents is determined based on quoted prices in active markets for identical assets or Level 1 inputs. The fair value of our investments in marketable securities is determined based on quoted prices in non-active markets for identical assets or Level 2 inputs. We believe that the carrying values of all other financial instruments approximate their current fair values due to their nature and respective durations. 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 May 31, 2018 and 2017 consist of a savings account held as collateral for our corporate credit card account. At May 31, 2017 our short-term marketable securities in the amount of $2,203,396 consisted of certificates of deposit with various financial institutions, with maturity dates between three months and twelve months from the purchase date. 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 consolidated statements of operations. Property, Equipment and Depreciation Property and equipment are stated at cost and are depreciated using the straight-line method over the estimated useful lives of the assets, ranging from three to five years. Major betterments and renewals are capitalized, while routine repairs and maintenance are charged to expense when incurred. Investment in Affiliated Companies We have a 50% interest in PDS. 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 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 the decline in value is deemed to be other than temporary, we would recognize an impairment loss. We own 100% of the preferred stock of Holocom (see Note 5). Prior to impairment, this investment was accounted for at cost since we do not have the ability to exercise significant influence over the operating and financial policies of Holocom. Treasury Stock We account for treasury stock under the cost method and include treasury stock as a component of stockholders’ equity. 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. With the exception for refundable alternative minimum tax (AMT) credits, 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, and with the exception for the aforementioned refundable tax credits, we have recorded a full valuation allowance against our deferred tax assets. On December 22, 2017, the United States Government passed new tax legislation that, among other provisions, will lower the corporate tax rate from 35% to 21%. In addition to applying the new lower corporate tax rate in 2018 and thereafter to any taxable income we may have, the legislation affects the way we can use and carryforward net operating losses previously accumulated and results in a revaluation of deferred tax assets and liabilities recorded on our consolidated balance sheet. Given that our current deferred tax assets, with the exception of those representing certain refundable tax credits, are offset by a full valuation allowance, these changes will have no net impact on our consolidated balance sheet. However, if we become profitable, we will receive a reduced benefit from such deferred tax assets. 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. 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 fiscal years ended May 31, 2018 and 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 years ended May 31, 2018 and 2017, 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 became a part of PDSG, we issued 2,844,630 escrow shares that are contingent upon certain representations and warranties made by Crossflo at the time of the merger agreement (see Note 9). We exclude these escrow shares from the basic income (loss) per share calculations and would have included the escrowed shares in the diluted income per share calculations if we reported net income. Use of Estimates The preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities in the consolidated financial statements and accompanying footnotes. Actual results could differ from those estimates. On an ongoing basis we evaluate our estimates, including, but not limited to: fair values of investments in marketable securities, the use, recoverability, and /or realizability of certain assets, including investments in affiliated companies, and deferred tax assets, and valuation of share-based compensation. 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 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 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 consolidated statements of cash flows. On December 22, 2017, the United States Government passed new tax legislation that, among other provisions, will lower the corporate tax rate from 35% to 21%. In addition to applying the new lower corporate tax rate in 2018 and thereafter to any taxable income we may have, the legislation affects the way we can use and carryforward net operating losses previously accumulated and results in a revaluation of deferred tax assets and liabilities recorded on our consolidated balance sheet. Given that our current deferred tax assets, with the exception of those representing certain refundable tax credits, are offset by a full valuation allowance, these changes will have no net impact on our consolidated balance sheet. However, if we become profitable, we will receive a reduced benefit from such deferred tax assets.

3. Cash, Cash Equivalents, Rest

3. Cash, Cash Equivalents, Restricted Cash and Marketable Securities	12 Months Ended
	May 31, 2018
Cash and Cash Equivalents [Abstract]
Cash, Cash Equivalents, Restricted Cash and Marketable Securities	3. Cash, Cash Equivalents, Restricted Cash and Marketable Securities 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 May 31, 2018 Using Fair Value at May 31, 2018 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Cash and cash equivalents: Cash $ 31,622 $ 31,622 $ – $ – Money market funds 1,265,505 1,265,505 – – Certificates of deposit 1,000,763 – 1,000,763 – Restricted cash and cash equivalents 21,559 21,559 – – Total $ 2,319,449 $ 1,318,686 $ 1,000,763 $ – Fair Value Measurements at May 31, 2017 Using Fair Value at May 31, 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 $ 93,321 $ 93,321 $ – $ – Money market funds 435,899 435,899 – – Certificates of deposit 450,421 – 450,421 – Restricted cash and cash equivalents 21,443 21,443 – – Marketable securities: Short-term: Certificates of deposit 2,203,396 – 2,203,396 – Total $ 3,204,480 $ 550,663 $ 2,653,817 $ – 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, 2018: May 31, 2018 Cost Gross Unrealized Gains/(Losses) Fair Value Maturity Due in three months or less $ 1,000,763 $ – $ 1,000,763 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, 2017: May 31, 2017 Cost Gross Unrealized Gains/(Losses) Fair Value Maturity Due in three months or less $ 450,421 $ – $ 450,421 Due in one year or less $ 2,203,396 $ – $ 2,203,396

4. Property and Equipment

4. Property and Equipment	12 Months Ended
	May 31, 2018
Property, Plant and Equipment [Abstract]
Property and Equipment	4. Property and Equipment Property and equipment consisted of the following at May 31, 2018 and 2017: 2018 2017 Computer equipment and software $ 9,082 $ 10,319 Furniture and fixtures 3,147 3,147 12,229 13,466 Less: accumulated depreciation (10,926 ) (11,589 ) Net property and equipment $ 1,303 $ 1,877 Depreciation expense related to property and equipment was $763 and $826 for the years ended May 31, 2018 and 2017, respectively.

5. Investment in Affiliated Com

5. Investment in Affiliated Companies	12 Months Ended
	May 31, 2018
Investments in and Advances to Affiliates, Schedule of Investments [Abstract]
Investment in Affiliated Companies	5. Investment in Affiliated Companies Phoenix Digital Solutions, LLC 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 fiscal years ended May 31, 2018 and 2017. 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 required Alliacense to provide PDS’s second licensing company, Dominion Harbor Group (“DHG”), with certain materials and to cooperate with reasonable discovery requests relating to infringement litigation 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, and the agreement retaining DHG as PDS’s second licensing company, will both 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 each of August 11, 2016 and October 3, 2016. During January 2013, TPL and Moore settled their litigation. Terms of the settlement included 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 came 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 $20,833 per month beginning February 2014 through January 2017. During the fiscal year ended May 31, 2017, PDS expensed $166,674 pursuant to this contractual obligation. This expense is recorded in the accompanying PDS statement of operations for the fiscal year ended May 31, 2017 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 loss during the fiscal year ended May 31, 2018 of $242,615 as a decrease in our investment. We have recorded our share of PDS’s net income during the fiscal year ended May 31, 2017 of $1,155,231 as an increase in our investment. Cash distributions of $883,600 received from PDS during the year ended May 31, 2017 have been recorded as a reduction in our investment. We have recorded our share of PDS’s net income and loss as “Equity in earnings (loss) of affiliated company” in the accompanying consolidated statements of operations for the years ended May 31, 2018 and 2017. During the fiscal year ended May 31, 2017, PDS entered into licensing agreements with third parties, pursuant to which PDS recognized revenues of $3,000,000. On March 20, 2013, TPL filed a petition under Chapter 11 of the United States Bankruptcy Code. On March 5, 2018, TPL’s Motion for Entry of Final Decree Closing Chapter 11 was granted. 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 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 May 31, 2018 and 2017 and statements of operations for the years ended May 31, 2018 and 2017 are as follows: Balance Sheets Assets: 2018 2017 Cash $ 351,746 $ 864,180 Prepaid expenses 48,825 26,378 Total assets $ 400,571 $ 890,558 Liabilities and Members’ Equity: 2018 2017 Payables $ 1,826 $ 6,582 Members’ equity 398,745 883,976 Total liabilities and members’ equity $ 400,571 $ 890,558 Statements of Operations 2018 2017 Revenues $ – $ 3,000,000 Expenses 484,431 688,527 Income (loss) before provision for income taxes and foreign taxes (484,431 ) 2,311,473 Provision for income taxes and foreign taxes 800 1,010 Net income (loss) $ (485,231 ) $ 2,310,463 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. Holocom, Inc We currently own 2,100,000 shares of preferred stock, equivalent to an approximate 46% ownership interest on an after converted basis, in Holocom, Inc. (“Holocom”), a California corporation that manufactures products that protect information transmitted over secure networks. The shares are convertible at our option into shares of Holocom’s common stock on a one-to-one basis. The preferred stock entitles us to receive non-cumulative dividends at the per annum rate of $0.04 per share, when and if declared by the Board of Directors of Holocom, as well as a liquidation preference of $0.40 per share, plus an amount equal to all declared but unpaid dividends. In 2010, we determined that the inability of Holocom to meet its business plan, raise capital, and the general economic environment were indicators of impairment on our investment and we wrote-off our cost basis investment in Holocom. At May 31, 2018 and 2017, our investment in Holocom was valued at $0.

6. Accrued Expenses and Other

6. Accrued Expenses and Other	12 Months Ended
	May 31, 2018
Payables and Accruals [Abstract]
Accrued Expenses and Other	6. Accrued Expenses and Other At May 31, 2018 and 2017, accrued expenses and other consisted of the following: 2018 2017 Compensation and benefits $ 40,095 $ 42,801

7. Stockholders' Equity

7. Stockholders' Equity	12 Months Ended
	May 31, 2018
Equity [Abstract]
Stockholders' Equity	7. Stockholders’ Equity Share Repurchases During July 2006, we commenced our Board of Director approved stock buyback program in which we repurchase our outstanding common stock from time to time on the open market. The repurchase plan has no maximum number of shares and is solely at the discretion of the Board of Directors. The repurchase plan has no set expiration date. There were no share repurchases during the years ended May 31, 2018 and 2017. 2006 Stock Option Plan The 2006 Stock Option Plan, as amended, which expired in March 2016, provided for the granting of options to acquire up to 10,000,000 shares, with a limit of 8,000,000 Incentive Stock Option (“ISO”) shares of our common stock to either full or part time employees, directors and our consultants at a price not less than the fair market value on the date of grant. In the case of a significant stockholder, the option price of the share is not less than 110 percent of the fair market value of the shares on the date of grant. Any option granted under the 2006 Stock Option Plan must be exercised within ten years of the date they are granted (five years in the case of a significant stockholder). As of May 31, 2018, options to purchase 2,600,000 shares of common stock are outstanding under the 2006 Stock Option Plan. 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 for the year ended May 31, 2018 is presented below: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Options outstanding at June 1, 2017 2,600,000 $ 0.06 Options granted – – Options exercised – – Options forfeited/expired – – Options outstanding at May 31, 2018 2,600,000 $ 0.06 1.19 $ – Options vested and expected to vest at May 31, 2018 2,600,000 $ 0.06 1.19 $ – Options exercisable at May 31, 2018 2,600,000 $ 0.06 1.19 $ – The aggregate intrinsic value in the table above represents the differences in market price at the close of the fiscal year ($0.005 per share on May 31, 2018) and the exercise price of outstanding, in-the-money options (those options with exercise prices below $0.005 per share) on May 31, 2018.

8. Income Taxes

8. Income Taxes	12 Months Ended
	May 31, 2018
Income Tax Disclosure [Abstract]
Income Taxes	8. Income Taxes The provision (benefit) for income taxes is as follows for the years ended May 31: 2018 2017 Current: Federal $ – $ – State 2,400 2,400 Total current 2,400 2,400 Deferred: Federal $ (52,156 ) $ – State – – Total deferred (52,156 ) Total provision (benefit) $ (49,756 ) 2,400 The reconciliation of the effective income tax rate to the Federal statutory rate is as follows for the years ended May 31: 2018 2017 Statutory federal income tax rate 28.6 % 35.0 % State income tax rate, net of Federal effect (0.1 )% (3.7 )% Change in tax rate (293.3 )% (1.0 )% Stock option expense – (3.2 )% Tax credits 4.1 % – Other – (0.6 )% Change in valuation allowance 264.6 % (32.1 )% Effective income tax rate (3.9 )% (5.6 )% Deferred tax assets and liabilities reflect the net tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and amounts used for income tax purposes. Significant components of our deferred tax assets from continuing operations are as follows as of May 31: 2018 2017 Current deferred tax assets: State taxes $ 504 $ 815 Accrued expenses 9,938 13,065 Less: valuation allowance (10,442 ) (13,880 ) Total net current deferred tax asset – – Long-term deferred tax assets (liabilities): Investment in affiliated company 852,370 1,196,518 Basis difference in property and equipment 155 542 Stock based compensation expense 30,306 222,774 Impairment of note receivable 231,180 331,896 Capital loss carryover 104 225,603 Net operating loss carryforwards 7,118,899 9,997,132 Credit carryover 109,786 109,786 Valuation allowance (8,290,644 ) (12,084,251 ) Total net long-term deferred tax asset 52,156 – Net deferred tax asset $ 52,156 $ – On December 22, 2017, the United States Government passed new tax legislation that, among other provisions, will lower the corporate tax rate from 35% to 21%. In addition to applying the new lower corporate tax rate in 2018 and thereafter to any taxable income we may have, the legislation affects the way we can use and carryforward net operating losses previously accumulated and results in a revaluation of deferred tax assets and liabilities recorded on our consolidated balance sheet. Given that our current deferred tax assets, with the exception of those representing certain refundable tax credits, are offset by a full valuation allowance, these changes will have no net impact on our consolidated balance sheet. The estimated effect of the legislation was a reduction in the deferred tax assets and the corresponding valuation allowance of $3,693,088. Additionally, the Alternative Minimum Tax (AMT) credit carryforwards will now be a refundable credit; therefore the valuation allowance on the federal AMT credits in the amount of $52,156 has been released. While we are able to make reasonable estimates of the impact of the reduction in corporate rate, the final impact of the Tax Act may differ from these estimates due to, among other things, changes in our interpretations and assumptions, additional guidance that may be issued by the Internal Revenue Service, and actions we may take. We are continuing to gather additional information to determine the final impact. We have federal and state net operating loss carryforwards available to offset future taxable income of approximately $25,318,746 and $18,238,385, respectively, at May 31, 2018. These carryforwards begin to expire in the years ending May 31, 2025 and 2028, respectively. We follow authoritative guidance which defines criteria that an individual tax position must meet for any part of the benefit of that position to be recognized in a company’s financial statements and also provides guidance on measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. Interest and penalties, if any, related to unrecognized tax benefits are recorded in income tax expense. Interest and penalties relating to underpayment of income taxes are recorded in general and administrative expense. As of May 31, 2018, we are subject to U.S. Federal income tax examinations for the tax years May 31, 2007 through May 31, 2019, and we are subject to state and local income tax examinations for the tax years May 31, 2007 through May 31, 2019 due to the carryover of net operating losses related to PDSG from previous years. We have no liability relating to unrecognized tax benefits under the authoritative guidance for the fiscal years ended May 31, 2018 and 2017. Our continuing practice is to recognize accrued interest and penalties related to unrecognized tax benefits as a component of tax expense. We do not expect our unrecognized tax benefits to change significantly over the next twelve months.

9. Commitments and Contingencie

9. Commitments and Contingencies	12 Months Ended
	May 31, 2018
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	9. Commitments and Contingencies 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 modifying the claim 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. On May 23, 2017, a case management conference was held in front of District Court Judge Chhabria, who ordered that Plaintiffs amend their infringement contentions on or before June 16, 2017. Judge Chhabria further ordered that Defendants submit any motion for summary judgment based on the amended infringement contentions and the modified claim construction by August 1, 2017. On June 5, 2017, the law firm of Banys, P.C., who had served as local counsel for PDS, withdrew as counsel. PDS continued to be represented by the law firm of Nelson Bumgardner, P.C. On June 16, 2017, Plaintiffs timely amended their infringement contentions. On July 13, 2017, all remaining counsel for each of Patriot, TPL, and PDS moved to withdraw as counsel and further moved to extend all currently pending case deadlines by 60 days for Plaintiffs to seek new counsel. On September 13, 2017, the law firm of Bunsow De Mory LLP was entered before the U.S. District Court for the Northern District of California as successor counsel in representation of Patriot, PDS, and TPL. The Defendants moved for summary judgment of non-infringement on September 29, 2017, and the Court held a hearing on Defendants’ motion on November 30, 2017. The Court granted Defendants’ motion and entered judgment of non-infringement on December 13, 2017. Defendant Samsung submitted a bill of costs seeking $30,170 in taxable costs in the underlying district court proceedings; Plaintiffs filed an objection to significant portions of that request. On March 1, 2018, the Clerk of the District Court taxed costs in the amount $829. Plaintiffs filed notices of appeal in these district court matters on January 5, 2018. The appeals were docketed and consolidated under lead case No. 18-1439, captioned as Technology Properties Limited v. Huawei Technologies Co., Ltd in the United States Court of Appeals for the Federal Circuit. Briefing was complete on July 31, 2018. The court has not yet scheduled an oral argument. We expect that it may take up to eight to twelve months before a decision is received. 401(k) Plan On March 29, 2018, we terminated our Section 401(k) plan pursuant to a plan to reduce corporate expenses. Our retirement plan complied with Section 401(k) of the Internal Revenue Code and all employees were eligible to participate in the plan. We matched 100% of elective deferrals subject to a maximum of 4% of the participant’s eligible earnings. Our participants vested 33% per year over a three year period in their matching contributions. Our matching contributions during the fiscal years ended May 31, 2018 and 2017 were $14,153 and $20,883, respectively. Employment Contracts In connection with Mr. Flowers’ appointment as the Chief Financial Officer, and commencing on September 17, 2007, we entered into an employment agreement with Mr. Flowers for an initial 120-day term if not terminated pursuant to the agreement, with an extension period of one year and on a continuing basis thereafter. On December 30, 2016, we entered into an amended and restated employment agreement with Mr. Flowers. Pursuant to the amended December 30, 2016 agreement, if Mr. Flowers is terminated without cause or resigns with good reason any time after two years of continuous employment, he is entitled to receive an amount equal to 1.25 times his annual base salary. Mr. Flowers is also entitled to certain payments upon a change of control of the Company if the surviving corporation does not retain him. All such payments are conditional upon the execution of a general release. 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 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. Operating Lease Our current facility operating lease is on a month to month basis. Rental expense is presented in the following table: Year Ended Year Ended May 31, 2018 May 31, 2017 Rental expense $ 17,985 $ 18,720

10. Subsequent Events

10. Subsequent Events	12 Months Ended
	May 31, 2018
Subsequent Events [Abstract]
Subsequent Events	10. Subsequent Events We have evaluated subsequent events after the balance sheet date and through the filing date of this Annual Report, and based on our evaluation, management has determined that no subsequent events have occurred that would require recognition in the accompanying consolidated financial statements or disclosure in the notes thereto other than as disclosed in the accompanying notes.

2. Summary of Significant Acc17

2. Summary of Significant Accounting Policies (Policies)	12 Months Ended
	May 31, 2018
Accounting Policies [Abstract]
Basis of Consolidation	Basis of Consolidation The consolidated balance sheets at May 31, 2018 and 2017 and consolidated statements of operations for the fiscal years ended May 31, 2018 and 2017 include our accounts and those of our wholly owned subsidiary PDSG which includes Crossflo Systems, Inc. (“Crossflo”). All significant intercompany accounts and transactions have been eliminated. During March 2018, we dissolved our inactive subsidiary Plasma Scientific Corporation.
Financial Instruments and Concentrations of Credit Risk	Financial Instruments and Concentrations of Credit Risk Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash, cash equivalents, and investments in marketable securities. We invest our cash and cash equivalents primarily in money market mutual funds and certificates of deposit. Cash and cash equivalents are maintained with high quality financial institutions, the composition and maturities of which are regularly monitored by management. At times, deposits held with financial institutions may exceed the amount of insurance provided by the Federal Deposit Insurance Corporation and the Securities Investor Protection Corporation. We perform ongoing evaluations of these financial institutions to limit our concentration of risk exposure.
Fair Value of Financial Instruments	Fair Value of Financial Instruments Our financial instruments consist principally of cash and cash equivalents, investments in marketable securities, accounts payable and accrued expenses and other. The carrying value of these financial instruments approximates fair value because of the immediate or short-term maturity of the instruments. The fair value of our cash equivalents is determined based on quoted prices in active markets for identical assets or Level 1 inputs. The fair value of our investments in marketable securities is determined based on quoted prices in non-active markets for identical assets or Level 2 inputs. We believe that the carrying values of all other financial instruments approximate their current fair values due to their nature and respective durations.
Cash Equivalents, Restricted Cash, and Marketable Securities	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 May 31, 2018 and 2017 consist of a savings account held as collateral for our corporate credit card account. At May 31, 2017 our short-term marketable securities in the amount of $2,203,396 consisted of certificates of deposit with various financial institutions, with maturity dates between three months and twelve months from the purchase date.
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 consolidated statements of operations.
Property, Equipment and Depreciation	Property, Equipment and Depreciation Property and equipment are stated at cost and are depreciated using the straight-line method over the estimated useful lives of the assets, ranging from three to five years. Major betterments and renewals are capitalized, while routine repairs and maintenance are charged to expense when incurred.
Investment in Affiliated Companies	Investment in Affiliated Companies We have a 50% interest in PDS. 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 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 the decline in value is deemed to be other than temporary, we would recognize an impairment loss. We own 100% of the preferred stock of Holocom (see Note 5). Prior to impairment, this investment was accounted for at cost since we do not have the ability to exercise significant influence over the operating and financial policies of Holocom.
Treasury Stock	Treasury Stock We account for treasury stock under the cost method and include treasury stock as a component of stockholders’ equity.
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. With the exception for refundable alternative minimum tax (AMT) credits, 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, and with the exception for the aforementioned refundable tax credits, we have recorded a full valuation allowance against our deferred tax assets. On December 22, 2017, the United States Government passed new tax legislation that, among other provisions, will lower the corporate tax rate from 35% to 21%. In addition to applying the new lower corporate tax rate in 2018 and thereafter to any taxable income we may have, the legislation affects the way we can use and carryforward net operating losses previously accumulated and results in a revaluation of deferred tax assets and liabilities recorded on our consolidated balance sheet. Given that our current deferred tax assets, with the exception of those representing certain refundable tax credits, are offset by a full valuation allowance, these changes will have no net impact on our consolidated balance sheet. However, if we become profitable, we will receive a reduced benefit from such deferred tax assets.
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.
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 fiscal years ended May 31, 2018 and 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 years ended May 31, 2018 and 2017, 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 became a part of PDSG, we issued 2,844,630 escrow shares that are contingent upon certain representations and warranties made by Crossflo at the time of the merger agreement (see Note 9). We exclude these escrow shares from the basic income (loss) per share calculations and would have included the escrowed shares in the diluted income per share calculations if we reported net income.
Use of Estimates	Use of Estimates The preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities in the consolidated financial statements and accompanying footnotes. Actual results could differ from those estimates. On an ongoing basis we evaluate our estimates, including, but not limited to: fair values of investments in marketable securities, the use, recoverability, and /or realizability of certain assets, including investments in affiliated companies, and deferred tax assets, and valuation of share-based compensation.
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 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 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 consolidated statements of cash flows. On December 22, 2017, the United States Government passed new tax legislation that, among other provisions, will lower the corporate tax rate from 35% to 21%. In addition to applying the new lower corporate tax rate in 2018 and thereafter to any taxable income we may have, the legislation affects the way we can use and carryforward net operating losses previously accumulated and results in a revaluation of deferred tax assets and liabilities recorded on our consolidated balance sheet. Given that our current deferred tax assets, with the exception of those representing certain refundable tax credits, are offset by a full valuation allowance, these changes will have no net impact on our consolidated balance sheet. However, if we become profitable, we will receive a reduced benefit from such deferred tax assets.

3. Cash, Cash Equivalents, Re18

3. Cash, Cash Equivalents, Restricted Cash and Marketable Securities (Tables)	12 Months Ended
	May 31, 2018
Cash and Cash Equivalents [Abstract]
Schedule of fair value of cash, cash equivalents and investments in marketable securities	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 May 31, 2018 Using Fair Value at May 31, 2018 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Cash and cash equivalents: Cash $ 31,622 $ 31,622 $ – $ – Money market funds 1,265,505 1,265,505 – – Certificates of deposit 1,000,763 – 1,000,763 – Restricted cash and cash equivalents 21,559 21,559 – – Total $ 2,319,449 $ 1,318,686 $ 1,000,763 $ – Fair Value Measurements at May 31, 2017 Using Fair Value at May 31, 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 $ 93,321 $ 93,321 $ – $ – Money market funds 435,899 435,899 – – Certificates of deposit 450,421 – 450,421 – Restricted cash and cash equivalents 21,443 21,443 – – Marketable securities: Short-term: Certificates of deposit 2,203,396 – 2,203,396 – Total $ 3,204,480 $ 550,663 $ 2,653,817 $ –
Schedule of maturities, gross unrealized gains or losses and fair value of certificates of deposit	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, 2018: May 31, 2018 Cost Gross Unrealized Gains/(Losses) Fair Value Maturity Due in three months or less $ 1,000,763 $ – $ 1,000,763 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, 2017: May 31, 2017 Cost Gross Unrealized Gains/(Losses) Fair Value Maturity Due in three months or less $ 450,421 $ – $ 450,421 Due in one year or less $ 2,203,396 $ – $ 2,203,396

4. Property and Equipment (Tabl

4. Property and Equipment (Tables)	12 Months Ended
	May 31, 2018
Property, Plant and Equipment [Abstract]
Schedule of property and equipment	2018 2017 Computer equipment and software $ 9,082 $ 10,319 Furniture and fixtures 3,147 3,147 12,229 13,466 Less: accumulated depreciation (10,926 ) (11,589 ) Net property and equipment $ 1,303 $ 1,877

5. Investment in Affiliated C20

5. Investment in Affiliated Company (Tables)	12 Months Ended
	May 31, 2018
Investments in and Advances to Affiliates, Schedule of Investments [Abstract]
Balance Sheets of Affiliates	Balance Sheets Assets: 2018 2017 Cash $ 351,746 $ 864,180 Prepaid expenses 48,825 26,378 Total assets $ 400,571 $ 890,558 Liabilities and Members’ Equity: 2018 2017 Payables $ 1,826 $ 6,582 Members’ equity 398,745 883,976 Total liabilities and members’ equity $ 400,571 $ 890,558 Statements of Operations 2018 2017 Revenues $ – $ 3,000,000 Expenses 484,431 688,527 Income (loss) before provision for income taxes and foreign taxes (484,431 ) 2,311,473 Provision for income taxes and foreign taxes 800 1,010 Net income (loss) $ (485,231 ) $ 2,310,463

6. Accrued Expenses and Other (

6. Accrued Expenses and Other (Tables)	12 Months Ended
	May 31, 2018
Payables and Accruals [Abstract]
Schedule of accrued expenses and other	2018 2017 Compensation and benefits $ 40,095 $ 42,801

7. Stockholders' Equity (Tables

7. Stockholders' Equity (Tables)	12 Months Ended
	May 31, 2018
Equity [Abstract]
Schedule of Stock Options Activity	Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Options outstanding at June 1, 2017 2,600,000 $ 0.06 Options granted – – Options exercised – – Options forfeited/expired – – Options outstanding at May 31, 2018 2,600,000 $ 0.06 1.19 $ – Options vested and expected to vest at May 31, 2018 2,600,000 $ 0.06 1.19 $ – Options exercisable at May 31, 2018 2,600,000 $ 0.06 1.19 $ –

8. Income Taxes (Tables)

8. Income Taxes (Tables)	12 Months Ended
	May 31, 2018
Income Tax Disclosure [Abstract]
Schedule of provisions for income taxes	2018 2017 Current: Federal $ – $ – State 2,400 2,400 Total current 2,400 2,400 Deferred: Federal $ (52,156 ) $ – State – – Total deferred (52,156 ) Total provision (benefit) $ (49,756 ) 2,400
Schedule of effective income tax rate	2018 2017 Statutory federal income tax rate 28.6 % 35.0 % State income tax rate, net of Federal effect (0.1 )% (3.7 )% Change in tax rate (293.3 )% (1.0 )% Stock option expense – (3.2 )% Tax credits 4.1 % – Other – (0.6 )% Change in valuation allowance 264.6 % (32.1 )% Effective income tax rate (3.9 )% (5.6 )%
Schedule of deferred tax assets and liabilities	2018 2017 Current deferred tax assets: State taxes $ 504 $ 815 Accrued expenses 9,938 13,065 Less: valuation allowance (10,442 ) (13,880 ) Total net current deferred tax asset – – Long-term deferred tax assets (liabilities): Investment in affiliated company 852,370 1,196,518 Basis difference in property and equipment 155 542 Stock based compensation expense 30,306 222,774 Impairment of note receivable 231,180 331,896 Capital loss carryover 104 225,603 Net operating loss carryforwards 7,118,899 9,997,132 Credit carryover 109,786 109,786 Valuation allowance (8,290,644 ) (12,084,251 ) Total net long-term deferred tax asset 52,156 – Net deferred tax asset $ 52,156 $ –

9. Commitments and Contingenc24

9. Commitments and Contingencies (Tables)	12 Months Ended
	May 31, 2018
Commitments and Contingencies Disclosure [Abstract]
Schedule of operating leases	Year Ended Year Ended May 31, 2018 May 31, 2017 Rental expense $ 17,985 $ 18,720

2. Summary of Significant Acc25

2. Summary of Significant Accounting Policies (Details Narrative) - USD ($)	12 Months Ended
	May 31, 2018	May 31, 2017
Short-term marketable securities	$ 0	$ 2,203,396
Estimated life of Property, Equipment	3-5 years
Crossflo [Member]
Shares held in escrow	2,844,630
Options [Member]
Common shares not included in calculation of net earnings (loss) per share	2,600,000	2,600,000
PDS [Member]
Percentage of investment in affiliated company	50.00%

3. Cash, Cash Equivalents, Re26

3. Cash, Cash Equivalents, Restricted Cash and Marketable Securities (Details - Fair Value) - USD ($)	May 31, 2018	May 31, 2017
Cash and cash equivalents:
Cash	$ 31,622	$ 93,321
Money market funds	1,265,505	435,899
Certificates of deposit	1,000,763	450,421
Restricted cash and cash equivalents	21,559	21,443
Short-term:
Certificates of deposit	0	2,203,396
Long-term:
Total	2,319,449	3,204,480
Fair Value Inputs Level 1
Cash and cash equivalents:
Cash	31,622	93,321
Money market funds	1,265,505	435,899
Certificates of deposit		0
Restricted cash and cash equivalents	21,559	21,443
Short-term:
Certificates of deposit		0
Long-term:
Total	1,318,686	550,663
Fair Value Inputs Level 2
Cash and cash equivalents:
Cash	0	0
Money market funds		0
Certificates of deposit	1,000,763	450,421
Restricted cash and cash equivalents	0	0
Short-term:
Certificates of deposit		2,203,396
Long-term:
Total	1,000,763	2,653,817
Fair Value Inputs Level 3
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
Long-term:
Total	$ 0	$ 0

3. Cash, Cash Equivalents, Re27

3. Cash, Cash Equivalents, Restricted Cash and Marketable Securities (Details - Maturities) - USD ($)	May 31, 2018	May 31, 2017
Due in three months or less
Cost	$ 1,000,763	$ 450,421
Gross Unrealized Gains/(Losses)	0	0
Fair Value	$ 1,000,763	450,421
Due in one year or less
Cost		2,203,396
Gross Unrealized Gains/(Losses)		0
Fair Value		$ 2,203,396

4. Property and Equipment (Deta

4. Property and Equipment (Details) - USD ($)	May 31, 2018	May 31, 2017
Property and Equipment, Gross	$ 12,229	$ 13,466
Less: accumulated depreciation	(10,926)	(11,589)
Net property and equipment	1,303	1,877
Computer equipment and software
Property and Equipment, Gross	9,082	10,319
Furniture and Fixtures
Property and Equipment, Gross	$ 3,147	$ 3,147

4. Property and Equipment (De29

4. Property and Equipment (Details Narrative) - USD ($)	12 Months Ended
	May 31, 2018	May 31, 2017
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 763	$ 826

5. Investment in Affiliated C30

5. Investment in Affiliated Company (Details - balance sheet) - USD ($)	May 31, 2018	May 31, 2017
Total assets	$ 400,571	$ 890,558
Total liabilities and members' equity	400,571	890,558
Cash [Member]
Total assets	351,746	864,180
Prepaid Expenses [Member]
Total assets	48,825	26,378
Payables [Member]
Total liabilities and members' equity	1,826	6,582
Members equity [Member]
Total liabilities and members' equity	$ 398,745	$ 883,976

5. Investment in Affiliated C31

5. Investment in Affiliated Company (Details - Income) - USD ($)	12 Months Ended
	May 31, 2018	May 31, 2017
Equity Method Investments and Joint Ventures [Abstract]
Revenues	$ 0	$ 3,000,000
Expenses	484,431	688,527
Income (loss) before provision for income taxes and foreign taxes	(484,431)	2,311,473
Provision for income taxes and foreign taxes	800	1,010
Net income (loss)	$ (485,231)	$ 2,310,463

5. Investment in Affiliated C32

5. Investment in Affiliated Company (Details Narrative) - USD ($)	2 Months Ended	4 Months Ended	12 Months Ended
	Aug. 11, 2016	Oct. 03, 2016	May 31, 2018	May 31, 2017
Investment in affiliated company			$ 199,373	$ 441,988
Cash distributions received from PDS			$ 0	883,600
PDS [Member]
Equity interest percentage			50.00%
Capital contribution to entity			$ 0	0
Increase (decrease) in investment			$ (242,615)	1,155,231
Proceeds from licensing agreement				3,000,000
PDS [Member] | Moore
Litigation settlement expense				$ 166,674
Terms of settlement				paid Moore $16,667 per month from August 2013 through January 2014 and $20,833 per month beginning February 2014 through January 2017.
PDS [Member] | Alliacense [Member]
Litigation settlement expense	$ 84,000	$ 84,000
PDS [Member] | Cash Distributions [Member]
Increase (decrease) in investment				$ (883,600)
Holocom [Member]
Equity interest percentage			46.00%
Investment in affiliated company			$ 0	$ 0
Holocom [Member] | Preferred Stock [Member]
Equity shares owned			2,100,000

6. Accrued Expenses and Other33

6. Accrued Expenses and Other (Details) - USD ($)	May 31, 2018	May 31, 2017
Payables and Accruals [Abstract]
Compensation and benefits	$ 40,095	$ 42,801

7. Stockholders' Equity (Detail

7. Stockholders' Equity (Details - Option activity) - Options [Member]	12 Months Ended
	May 31, 2018USD ($)$ / sharesshares
Number of Options
Number of Options Outstanding, Beginning | shares	2,600,000
Number of Options Granted | shares	0
Number of Options Exercised | shares	0
Number of Options Forfeited/Expired | shares	0
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
Weighted Average Exercise Price Outstanding, Beginning | $ / shares	$ 0.06
Weighted Average Exercise Price Granted | $ / shares
Weighted Average Exercise Price Exercised | $ / shares
Weighted Average Exercise Price Forfeited/Expired | $ / shares
Weighted Average Exercise Price Outstanding, Ending | $ / shares	0.06
Weighted Average Exercise Price, Options vested and expected to vest, Ending | $ / shares	0.06
Weighted Average Exercise Price Exercisable | $ / shares	$ 0.06
Weighted Average Remaining Contractual Life
Weighted Average Remaining Contractual Life (in years) Outstanding	1 year 2 months 8 days
Weighted Average Remaining Contractual Life (in years) Options vested and expected to vest	1 year 2 months 8 days
Weighted Average Remaining Contractual Life (in years) Exercisable	1 year 2 months 8 days
Aggregate Intrinsic Value
Aggregate Intrinsic Value Outstanding, Ending | $	$ 0
Aggregate Intrinsic Value Options vested and expected to vest | $	0
Aggregate Intrinsic Value Exercisable | $	$ 0

8. Income Taxes (Details - Prov

8. Income Taxes (Details - Provision) - USD ($)	12 Months Ended
	May 31, 2018	May 31, 2017
Current:
Federal	$ 0	$ 0
State	2,400	2,400
Total current	2,400	2,400
Deferred:
Federal	(52,156)	0
State	0	0
Total deferred	(52,156)	0
Total provision (benefit)	$ (49,756)	$ 2,400

8. Income Taxes (Details - Reco

8. Income Taxes (Details - Reconcilation)	12 Months Ended
	May 31, 2018	May 31, 2017
Income Tax Disclosure [Abstract]
Statutory federal income tax rate	28.60%	35.00%
State income tax rate, net of Federal effect	(0.10%)	(3.70%)
Change in tax rate	(293.30%)	(1.00%)
Stock option expense	0.00%	(3.20%)
Tax credits	4.10%	0.00%
Other	0.00%	(0.60%)
Change in valuation allowance	264.60%	(32.10%)
Effective income tax rate	(3.90%)	(5.60%)

8. Income Taxes (Details - Defe

8. Income Taxes (Details - Deferred tax assets) - USD ($)	May 31, 2018	May 31, 2017
Current deferred tax assets:
State taxes	$ 504	$ 815
Accrued expenses	9,938	13,065
Less: valuation allowance	(10,442)	(13,880)
Total net current deferred tax asset	0	0
Long-term deferred tax assets (liabilities):
Investment in affiliated company	852,370	1,196,518
Basis difference in property and equipment	155	542
Stock based compensation expense	30,306	222,774
Impairment of note receivable	231,180	331,896
Capital loss carryover	104	225,603
Net operating loss carryforwards	7,118,899	9,997,132
Credit carryover	109,786	109,786
Valuation allowance	(8,290,644)	(12,084,251)
Total net long-term deferred tax asset	52,156	0
Net deferred tax asset	$ 52,156	$ 0

8. Income Taxes (Details Narrat

8. Income Taxes (Details Narrative) - USD ($)	12 Months Ended
	May 31, 2018	May 31, 2017
Deferred tax assets valuation allowance	$ 3,693,088
Deferred income taxes	52,156	$ 0
Federal [Member]
Operating loss carryforwards	$ 25,318,746
Operating loss carryforwards, expiration date	May 31, 2025
State [Member]
Operating loss carryforwards	$ 18,238,385
Operating loss carryforwards, expiration date	May 31, 2028

9. Commitments and Contingenc39

9. Commitments and Contingencies (Details) - USD ($)	12 Months Ended
	May 31, 2018	May 31, 2017
Commitments and Contingencies Disclosure [Abstract]
Rental expense	$ 17,985	$ 18,720

9. Commitments and Contingenc40

9. Commitments and Contingencies (Details Narrative) - USD ($)	12 Months Ended
	May 31, 2018	May 31, 2017
Commitments and Contingencies Disclosure [Abstract]
401k matching company contributions	$ 14,153	$ 20,883