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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
January 9, 1997 (December 26, 1996)
PATRIOT SCIENTIFIC CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 0-22182 84-1070278
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(State or other jurisdiction of (Commission (I.R.S. Empl. Ident. No.)
incorporation or organization) File Number)
12875 Brookprinter Place, Suite 300, Poway, California 92064
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(Address of principal executive offices) (Zip Code)
(619) 679-4428
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(Registrant's telephone number, including area code)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
(a) Exchange of Stock for Stock
Pursuant to an Exchange Offer and Letter of Transmittal dated December 4, 1996
(the "Offer"), Patriot Scientific Corporation, a Delaware corporation, (the
"Company") received 96.89% of the outstanding shares, or 1,156,426 shares, of
Metacomp Inc., a California corporation ("Metacomp") from 38 shareholders of
Metacomp. As consideration for the shares tendered pursuant to the Offer, the
Company issued 1,272,068 unregistered shares of its common stock. The exchange
rate of 1.1 shares of the Company's stock for each share of Metacomp stock
tendered was determined by negotiations. Based on the closing price of the
Company's stock as reported on the OTC Electronic Bulletin Board system on
December 26, 1996 of $1.375, the value of this acquisition is $1,749,094.
(b) Description of Technology and Assets Acquired
Background
Metacomp, founded in 1978, is a privately held, high technology company located
in San Diego, California. Metacomp designs, manufactures, and sells a wide
range of high performance data and telecommunications solutions for wide area
networking and digital telecommunications requirements. In 1990, Metacomp filed
a Chapter 11 bankruptcy petition. In 1991, the Bankruptcy Court confirmed
Metacomp's plan of reorganization. As of July 31, 1996, all unsecured
creditors' debt had been discharged and one secured creditor had entered into a
forbearance agreement with Metacomp for the remaining balance. The secured
creditor was paid in full, $252,796, by the Company on January 6, 1997.
Business Strategy
The business combination is being treated as a pooling-of-interests and the
Company will continue to use the assets acquired in a like manner as had been
previously employed by Metacomp. The Company has been a development stage
company engaged in the development of semiconductor microprocessor technology,
Integrated Services Digital Network ("ISDN") interface technology and radar
and antenna technology. Metacomp's product line will be incorporated into the
Company's ISDN product line.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of businesses acquired.
To be filed by amendment to this Form 8-K within 60 days of the
date of this current report.
(b) Pro forma financial information.
To be filed by amendment to this Form 8-K within 60 days of the
date of this current report.
(c) Exhibits
2.3 Form of Exchange Offer dated December 4, 1996 between the
Company and certain shareholders of Metacomp, Inc.
2.4 Letter of Transmittal To Accompany Shares of Common Stock of
Metacomp, Inc. Tendered Pursuant to the Exchange Offer Dated
December 4, 1996.
99.5 Press Release of the Company dated November 4, 1996.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PATRIOT SCIENTIFIC CORPORATION
Dated: January 9, 1997 By: /s/ ROBERT PUTNAM
-------------------------------
Robert Putnam
Secretary/Treasurer
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Item Page
- ------- ---- ----
<S> <C> <C>
2.3 Form of Exchange Offer dated December 4,
1996 between the Company and certain
shareholders of Metacomp, Inc. (individual
Offers differ as to the shareholder)........... Filed herewith.
2.4 Letter of Transmittal To Accompany Shares
of Common Stock of Metacomp, Inc. Tendered
Pursuant to the Exchange Offer Dated
December 4, 1996............................... Filed herewith.
99.5 Press Release of the Company dated November
4, 1996........................................ Filed herewith.
</TABLE>
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EXHIBIT 2.3
(Patriot Scientific Corporation Letterhead)
December 4, 1996
<<Name1>>
<<Name2>>
<<Street>>
<<City>>, <<State>> <<ZIP>>
<<Salutation>>:
Patriot Scientific Corporation, a Delaware corporation (the "Company") hereby
offers to acquire all of the shares of the Common Stock (the "Shares") of
Metacomp, Inc., a California corporation, owned by you in exchange for 1.1
shares of the Common Stock of the Company for each share of Metacomp, Inc. (the
"Exchange Value") upon the terms and subject to the conditions set forth in this
Exchange Offer and in the Letter of Transmittal (the "Letter of Transmittal",
which, together with this Exchange Offer, constitute the "Offer"). The Offer
constitutes a part of a tender for most but not all of the issued and
outstanding shares of Metacomp. If your Shares are properly tendered, they will
be acquired at the Exchange Value, upon the terms and subject to the conditions
of the Offer.
You will not be obligated to pay brokerage commissions, solicitation fees, or,
subject to Instruction 6 of the Letter of Transmittal, stock transfer taxes
because of the Company's acquisition of your Shares pursuant to the Offer.
The Company's shares are not listed on any exchange or on NASDAQ and are
principally traded over-the-counter. On November 25, 1996, the closing sales
price of Company stock traded over-the-counter was $1.40 per share. The Company
urges you to obtain the current market quotations for its shares prior to
tendering your Shares to the Company.
1. Procedures for Tendering Shares.
For your Shares to be properly tendered pursuant to the Offer, the
certificate for your Shares, together with a properly completed and duly
executed Letter of Transmittal (or a facsimile thereof) including required
signature guarantees, and any other documents required by the Letter of
Transmittal, must be received prior to 5:00 p.m., Pacific Standard Time, on
Tuesday, December 17, 1996 (the "Expiration Date") by the Company.
The acceptance of your Shares by the Company for exchange will constitute a
binding agreement between you and the Company upon the terms and subject to
the conditions of the Offer. However, neither the Offer nor the Company's
receipt of your certificate and a Letter of Transmittal will require the
Company to accept the tender of your Shares. The Company will in all events
retain the right to accept or reject such tender and may do so for any
reason, including, without limitation, the receipt of tenders for less than
90% of the issued and outstanding shares of Metacomp.
<PAGE> 2
Your signature on the Letter of Transmittal must be guaranteed by an
"Eligible Institution." See Instruction 1 of the Letter of Transmittal. If
the certificate representing your Shares is registered in the name of a
person other than the signer of the Letter of Transmittal, or if the shares
to be issued in exchange for your Shares of Metacomp are to be issued to a
person other than the registered holder of such Shares, the certificate
must be endorsed or accompanied by an appropriate stock power, in either
case signed exactly as the name of the registered holder appears on the
certificate, with a signature on the certificate or stock power guaranteed
by an Eligible Institution.
The issuance of shares of the Company in return for your Metacomp Shares
will only occur after the tender of those shares has been accepted by the
Company and the Company has received certificates for those shares, a
properly completed and duly executed Letter of Transmittal and any other
documents required by the Letter of Transmittal. The method of delivery of
all documents, including stock certificates, the Letter of Transmittal, and
any other required documents, is at your election and risk. If delivery is
by mail, registered mail with return receipt requested, properly insured,
is recommended.
All questions as to the form, eligibility, validity (including time of
receipt) and acceptance of the tender of your Shares will be determined by
the Company, in its sole discretion, which determination shall be final and
binding on the parties. The Company reserves the right to reject any tender
it determines not to be in proper form and to waive any defect or
irregularity of the tender of your Shares. Neither the Company nor any
other person is or will be obligated to give notice of any defect or
irregularity in tender, nor will the Company or any such person incur any
liability for failure to give such notice.
2. Withdrawal Rights.
Except as otherwise provided in this Section 2, a tender of Shares made
pursuant to this Offer is irrevocable. A tender of your Shares pursuant to
this Offer may be made at any time prior to the Expiration Date and may
also be withdrawn after 5:00 p.m., Pacific Standard Time on Tuesday,
December 31, 1996, unless previously accepted by the Company.
For a withdrawal to be effective, the Company must receive a timely written
or facsimile transmission Notice of Withdrawal as is set forth in this
letter. All questions as to the form and validity (including time of
receipt) of a Notice of Withdrawal will be determined by the Company, in
its sole discretion, which determination shall be final and binding on all
parties.
3. Exchange of Shares and Issuance of Patriot Shares.
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Upon the terms and subject to the conditions of the Offer, the Company will
accept for exchange Shares properly tendered prior to the Expiration Date
as promptly as practicable following the Expiration Date. For purposes of
the Offer, the Company will be deemed to have accepted for exchange Shares
which are tendered prior to the Expiration Date if and when it gives
written notice to you of its acceptance of such Shares for exchange
pursuant to the Offer.
As soon as possible following its acceptance of the tender of your Shares
for exchange, the Company will issue to you certificates evidencing a
number of shares of its Common Stock equal to the Exchange Value. No
fractional shares will be issued. The Company will round any fractional
share to the nearest whole share.
The Company will pay stock transfer taxes, if any, payable on account of
the transfer to it of your Shares; provided, however, that if the shares to
be issued in exchange for your Shares are to be issued to any person other
than the registered holder of your Shares, or if the tendered certificates
are registered in the name of any person other than the person signing the
Letter of Transmittal, the amount of any stock transfer taxes payable on
account of such tender will be your responsibility or that of such other
person.
4. Certain Conditions of the Offer.
Notwithstanding any other provision of this Exchange Offer, the Company
will not be required to accept for exchange any Shares tendered, and may
terminate or amend the Offer or may postpone the acceptance of the Shares,
if at any time following the date of this Exchange Offer and at or before
the time of acceptance for exchange of the Shares, any of the following
events shall have occurred (or shall have been determined by the Company to
have occurred) which, in the Company's sole judgment in any such case, and
regardless of the circumstances giving rise thereto, makes it inadvisable
to proceed with the Offer or with the acceptance of the Shares for
exchange, including, without limitation, the following:
(a) The Company shall have received tenders of Shares constituting an
aggregate of less than 90% of the issued and outstanding shares of
Metacomp;
(b) Metacomp shall have received notice from any unsecured creditor of
Metacomp that it objects to the closing of Metacomp's bankruptcy
proceeding before the United States District Court for the Southern
District of California.
(c) There shall be any claim, action or proceeding threatened, pending or
instituted which challenges the making of this Offer or the
acquisition of Shares pursuant to this Offer, or otherwise relates in
any manner to the Offer.
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(d) The failure to satisfy any of the conditions to the closing of the
exchange set forth in that certain letter of intent, dated October
30, 1996, by and among the Company, Metacomp, and certain of the
shareholders of Metacomp.
(e) Any change shall occur or be threatened in the business, condition
(financial or otherwise) income, operations or prospects of Metacomp.
(f) The Company shall have received audited financial statements of
Metacomp for each of the years ended July 31, 1995 and July 31, 1996.
The foregoing conditions are non-exclusive, are for the benefit of the
Company, and may be asserted by the Company regardless of the circumstances
giving rise to them (including any action or failure to act on the part of
the Company) or may be waived by the Company in whole or in part. The
Company's failure at any time to exercise any of the foregoing rights shall
not be deemed a waiver of any such right, and each such right shall be
deemed an ongoing right which may be asserted at any time and from time to
time.
Any determination by the Company concerning any of the events described in
this Section 4 and any related judgment by the Company regarding the
inadvisability of proceeding with the exchange and the acquisition of
tendered Shares shall be final and binding on all parties.
5. Price Range of Shares.
The Company's Common Stock is traded in the over-the-counter market and is
quoted on the NASD OTC Bulletin Board system maintained by the National
Association of Securities Dealers, Inc. Prices reported represent prices
between dealers, do not include markups or commissions and do not
necessarily represent actual transactions. The market for the Company's
Shares has been sporadic and at times very limited.
The following table sets forth the high and low bid quotations for the
Common Stock for the fiscal years ended May 31, 1996 and 1995 and the
period ended November 25, 1996.
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<TABLE>
<CAPTION>
BID QUOTATIONS
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HIGH LOW
<S> <C> <C>
Period Ended November 25, 1996
First Quarter $3.38 $1.75
Second Quarter Thru November 25 $2.25 $1.16
Fiscal Year Ended May 31, 1996
First Quarter $0.35 $0.12
Second Quarter $0.76 $0.22
Third Quarter $3.53 $0.47
Fourth Quarter $3.97 $2.00
Fiscal Year Ended May 31, 1995
First Quarter $0.72 $0.12
Second Quarter $0.44 $0.12
Third Quarter $0.44 $0.09
Fourth Quarter $0.31 $0.09
</TABLE>
The Company has approximately 137 shareholders of record as of August 9,
1996. At August 9, 1996 there were 29,811,975 shares of Common Stock issued
and outstanding. The Company has never paid a cash dividend on its Common
Stock and does not expect to pay one in the foreseeable future.
6. Representations of Shareholders.
By execution of the Letter of Transmittal, you acknowledge that the
following representations are true:
(a) You have received a copy of the Company's report on Form 10-K for the
year ended May 31, 1996 and a copy of its report on Form 10-Q for the
quarter ended August 31, 1996.
(b) You understand that (i) the Patriot Common Stock to be issued to you
will not have been registered under any federal or state securities
laws and may not be resold unless so registered or in a transaction
exempt from registration and (ii) the certificates evidencing the
Patriot shares to be issued will bear a legend reflecting this
limitation on transferability.
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(c) You, together with your advisors, have such knowledge and experience
in financial or business matters that you are capable of evaluating
the merits and risks of this Exchange Offer, the Patriot Common
Stock, and the transactions related thereto.
(d) You understand and have fully considered for purposes for this
investment the risks of this investment and that (i) this investment
is suitable only for an investor who is able to bear the economic
consequences of losing his or her entire investment, (ii) the Patriot
Common Stock is a speculative investment which involves a high degree
of risk of loss, and (iii) you are able to bear the economic risk of
this investment.
(e) You and your representatives and advisors have been given the
opportunity to ask questions of, and have received satisfactory
answers from, the Company concerning the terms of the Exchange Offer
and the business prospects of the Company.
(f) You and your representatives and advisors have been given the
opportunity to ask questions of, and have received satisfactory
answer from, representatives of Metacomp concerning the financial
condition and business prospects of Metacomp.
7. Covenants of the Company. Within six months following the issuance of
Patriot shares in exchange for your Shares of Metacomp, the Company will
use its best efforts to prepare, file, and diligently pursue to
effectiveness a registration statement on Form S-3 (or, if Form S-3 is not
available, Form SB-2) with the Securities and Exchange Commission for the
registration of the shares of Patriot Common Stock to be issued to you
pursuant to the Offer. The cost of such registration will be borne by the
Company; however, the Company will not be responsible for any separate
expenses incurred by you in connection with this offering or for any
commissions or discounts paid to any underwriter or broker. As a condition
to the filing of such registration statement, the Company may require that
former shareholders of Metacomp who receive 10,000 or more shares of
Patriot Common Stock and on whose behalf the registration statement is
filed enter into lock-up agreements specifying that, for a period of two
years following
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the closing of the Exchange Offer, each such shareholder would be eligible
to sell not more than five percent (5%) of his shares of Patriot Common
Stock during any calendar month.
Very truly yours,
Patriot Scientific Corporation
By: /s/ MICHAEL A. CARENZO
-----------------------------
Michael A. Carenzo, President
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EXHIBIT 2.4
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THE OFFER WILL EXPIRE ON TUESDAY, DECEMBER 17, 1996 AT 5:00 P.M., PACIFIC
STANDARD TIME, UNLESS EXTENDED BY THE COMPANY. TENDERING SHAREHOLDERS MAY
WITHDRAW TENDERED SHARES AFTER TUESDAY, DECEMBER 31, 1996, UNLESS THE TENDER IS
ACCEPTED BY THE COMPANY BY THAT DATE.
================================================================================
LETTER OF TRANSMITTAL
TO ACCOMPANY SHARES OF COMMON STOCK
OF
METACOMP, INC.
TENDERED PURSUANT TO THE EXCHANGE OFFER
DATED DECEMBER 4, 1996
By Mail, Hand or Overnight Delivery:
Patriot Scientific Corporation
12875 Bookprinter Place, Suite 300
Poway, California 92064
Delivery of this Letter of Transmittal to an address other than as set
forth above will not constitute a valid delivery. The instructions accompanying
this Letter of Transmittal should be read carefully before this Letter is
completed. Shares of Common Stock must be properly tendered prior to 5:00 P.M.,
Pacific Standard Time, on Tuesday, December 17, 1996 (the "Expiration Date").
This Letter of Transmittal is to be completed by holders of shares of
the Common Stock of Metacomp, Inc., a California corporation ("Metacomp"), who
wish to respond favorably to an Exchange Offer (the "Exchange Offer")
distributed to certain of such shareholders by Patriot Scientific Corporation, a
Delaware corporation (the "Company"), and certificates for such shares are to be
forwarded herewith.
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NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to Patriot Scientific Corporation, a
Delaware corporation (the "Company"), the certificates described below
representing shares of the Common Stock (the "Shares") of Metacomp, Inc., a
California corporation ("Metacomp"), in return for the shares of the Common
Stock of the Company ("Patriot Common Stock"), upon the terms and conditions set
forth in the Exchange Offer dated December 4, 1996, receipt of which is hereby
acknowledged, and in this Letter of Transmittal (which together constitute the
"Offer").
The undersigned hereby sells, assigns and transfers to or upon the
order of the Company all Shares tendered hereby that are exchanged pursuant to
the Offer and hereby irrevocably constitutes and appoints the Company as
attorney-in-fact of the undersigned, with full power of substitution (such power
of attorney being deemed to be an irrevocable power coupled with an interest),
to (a) deliver certificates for such Shares or transfer ownership of such Shares
on the books maintained by Metacomp, together in either case with all
accompanying evidences of transfer and authenticity, and (b) receive all
benefits and otherwise exercise all rights of beneficial ownership of such
Shares, all in accordance with the terms of the Offer. The undersigned hereby
warrants that the undersigned has full authority to exchange, assign and
transfer the Shares tendered hereby and that the Company will acquire good title
thereto, free and clear of all liens, charges, encumbrances, conditional sale
agreements or other obligations relating to the sale or transfer thereof, and
not subject to any adverse claim, when and to the extent the same are acquired
by it. Upon request, the undersigned will execute and deliver any additional
documents necessary to complete the exchange, assignment and transfer.
The undersigned understands that tenders of Shares pursuant to any of
the procedures described in the Exchange Offer or in the Instructions hereto
will constitute an agreement between the undersigned and the Company upon the
terms and subject to the conditions of the Offer.
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<TABLE>
<CAPTION>
=================================================================================================================
DESCRIPTION OF SHARES TENDERED
(SEE INSTRUCTIONS 3 AND 4)
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Name(s) and Address(es) of Registered Holder(s) Certificate(s) Enclosed
(Please fill in exactly as Name(s) appear(s) on certificate(s) (Attach signed supplemental list if necessary)
- -------------------------------------------------------------- ----------------------------------------------
<S> <C> <C>
Total No.
of Shares Represented
Certificate No.(s) by Certificate(s)
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------------------------ -----------------------
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</TABLE>
The undersigned recognizes that under certain circumstances set forth
in the Exchange Offer, the Company may not be required to acquire the Shares
tendered hereby. The undersigned understands that the certificate(s) for the
Shares will be returned to the undersigned at the address indicated above if
such Shares are not acquired by the Company.
The certificate(s) for the shares of the Company's Common Stock issued
in exchange for the tendered Shares, if the tendered Shares are acquired by the
Company, will be issued to the undersigned and mailed to the address indicated
above unless otherwise indicated under the Special Delivery Instructions or
Special Exchange Instructions set forth below.
All authority hereby conferred shall survive the death or incapacity of
the undersigned and all obligations of the undersigned hereunder shall be
binding upon the heirs, personal representatives, successors and assigns of the
undersigned. Except as stated in the Offer, this tender is irrevocable.
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================================================================================
SIGN HERE
(SEE INSTRUCTIONS 1, 5, 6 AND 9)
................................................................................
................................................................................
(Signature(s) of Owner(s)
Dated......................................................................,1996
Name(s).........................................................................
.........................................................................
(Please Print)
Area Code and Telephone Number: (Day)..........................................
(Night)........................................
Tax ID or Social Security No.(s)................................................
................................................................................
GUARANTEE OF SIGNATURE(S)
Authorized Signature............................................................
Name............................................................................
(Please Print)
Name of Firm....................................................................
Address.........................................................................
(Including Zip Code)
Dated......................, 1996
================================================================================
The undersigned shareholder(s) of Metacomp represent(s) to the Company
that such shareholder(s) own(s) the Shares being tendered,
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================================================================================
SPECIAL EXCHANGE INSTRUCTIONS
(SEE INSTRUCTIONS 5 AND 7)
To be completed ONLY if certificates are to be issued in the name of and
sent to someone other than the undersigned.
Issue Certificates to:
Name(s).........................................................................
(Please Print)
Address.........................................................................
................................................................................
(Include Zip Code)
................................................................................
(Tax Identification or Social Security No.)
SIGNATURE
(IF SPECIAL EXCHANGE INSTRUCTIONS ARE GIVEN)
................................................................................
................................................................................
Signature(s) of Substitute Payee(s)
Dated....................................................................., 1996
================================================================================
Signature(s) of Owner(s) (if the box above has been completed):
____________________________
____________________________
================================================================================
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTION 7)
To be completed ONLY if certificates for shares, issued in the name of
the undersigned, are to be sent to someone other than the undersigned or to the
undersigned at an address other than that shown above.
Deliver Certificates to:
Name(s).........................................................................
(Please Print)
Address.........................................................................
................................................................................
(Include Zip Code)
Signature(s) of Owner(s)........................................................
................................................................................
================================================================================
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INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. All signatures in the box entitled "Sign
Here" on this Letter of Transmittal must be guaranteed by an Eligible
Institution. For purposes of these Instructions, a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office, branch or
agency in the United States is an "Eligible Institution."
2. Delivery of Letter of Transmittal and Certificates. Certificates for
the tendered Shares, as well as a properly completed and duly executed Letter of
Transmittal and any other documents required by this Letter of Transmittal, must
be received by the Company at the address set forth herein prior to the
Expiration Date of the Offer as defined in Section 1 of the Exchange Offer.
THE METHOD OF DELIVERY OF CERTIFICATES REPRESENTING SHARES AND OTHER
DOCUMENTS IS AT THE ELECTION AND RISK OF THE TENDERING SHAREHOLDER. IF DELIVERY
IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED.
No alternative, conditional or contingent tenders will be accepted, and
no fractional Shares will be acquired.
3. Inadequate Space. If the space provided is inadequate, the
certificate numbers and number of Shares should be listed on a separate signed
schedule attached hereto.
4. Partial Tenders. The Company will not accept tenders of less than
all of the shares of Common Stock evidenced by any certificate. All Shares
represented by certificates listed are deemed to have been tendered.
5. Signatures on Letter of Transmittal, Stock Powers and Endorsements.
(a) If this Letter of Transmittal is signed by the registered holder
of the Shares represented by the certificates tendered hereby, the signature(s)
must correspond with the name(s) as written on the face of the certificate
without any change whatsoever.
(b) If any of the Shares tendered hereby are held of record by two
or more joint holders, all such holders must sign this Letter of Transmittal.
(c) If any tendered Shares are registered in different names on
several certificates, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal as there are different registrations of
certificates. Photocopies of this form of Letter of Transmittal will be accepted
if original signatures are affixed.
(d) If this Letter of Transmittal or any certificates or stock
powers are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a fiduciary or
representative capacity, such persons should so indicate when signing and must
submit proper evidence satisfactory to the Company of their authority so to act.
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(e) If this Letter of Transmittal is signed by a person other than
the registered holder(s) of the certificates listed, the certificates must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name of the registered holder(s) appears on the certificates.
Signatures on such certificates or stock powers must be guaranteed by an
Eligible Institution. See also Instruction 1.
6. Stock Transfer Taxes. The Company will pay all stock transfer taxes,
if any, payable on the transfer to it of Shares exchanged pursuant to the Offer,
unless shares of the Company are to be registered in the name of any person
other than the registered holder, or if tendered certificates are registered in
the name of any person other than the person(s) signing this Letter of
Transmittal, in which event the amount of any stock transfer taxes shall be
payable by the registered holder or such other person.
7. Special Payment and Delivery Instructions. If certificates
representing shares of the Company are to be issued in the name of a person
other than the signer of this Letter of Transmittal or if such certificates are
to be delivered to someone other than the signer of this Letter of Transmittal,
the appropriate boxes on this Letter of Transmittal should be completed.
8. Irregularities. All questions as to the validity, form, eligibility
(including time of receipt) and acceptance of any tender of Shares will be
determined by the Company, which determination shall be final and binding. The
Company reserves the absolute right to reject any or all tenders determined by
it to be not in appropriate form or which would, in the opinion of the Company's
counsel, be unlawful to accept. The Company also reserves the absolute right to
waive any of the conditions of the Offer or any defect in any tender with
respect to any particular Shares or any particular shareholder, and the
Company's interpretations of the terms and conditions of the Offer (including
these Instructions) shall be final and binding. Unless waived, any defects or
irregularities in connection with tenders must be cured within such time as the
Company shall determine. The Company shall not be obligated to give notice of
defects or irregularities in tenders, nor shall it incur any liability for
failure to give any such notice. Tenders will not be deemed to have been made
until all defects and irregularities have been cured or waived.
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EXHIBIT 99.5
FOR IMMEDIATE RELEASE
PATRIOT SCIENTIFIC TO ACQUIRE METACOMP, INC.
STRATEGIC ACQUISITION TO ACCELERATE OPERATING TRANSITION AND
ENHANCE ENGINEERING SUPPORT FOR PATRIOT'S SHBOOM MICROPROCESSOR
San Diego, Calif., November 4, 1996 -- Patriot Scientific Corporation (OTC:
PTSC) announced today that it has signed a letter of intent to acquire at least
90% of the equity of Metacomp, Inc., located in San Diego, CA.
Metacomp, Inc. produces advanced high-performance digital telecommunication
products and solutions. The company, founded in 1978, designs and manufactures
data and telecommunications products and sub-systems that make up the integral
components of the communication equipment being used to enhance current and
future communication infrastructure. These include products used for high speed
digital access of the Internet, remote access servers and equipment for video
conferencing and digital telephony. Metacomp's products are also widely used in
building hubs and bandwidth-on-demand applications for satellite communications.
Metacomp had revenues of over $2 million for the fiscal year ended July 31, 1996
and is on track for significant growth for 1997. The company recently emerged
from reorganization and has been profitable for the last two fiscal years.
Metacomp's products include innovative solutions based on PCI, IBM PC/AT bus,
IBM PS/2 Microp Channel, VME bus and PCMCIA platforms which complement Patriot's
ISDN products. Metacomp has a strong engineering and product support
infrastructure for its sophisticated customers which include Motorola, Hewlett
Packard, GE Capital Spacenet and AT&T.
"The acquisition of Metacomp brings strength and market focus to our
communications products. It is a perfect blend of product lines, personnel and
strategies to expand communication product sales, minimize costs and support
customers," said Michael A. Carenzo, President and CEO of Patriot. "It allows
Patriot personnel to focus on our ShBoom, radar and antenna technologies.
Metacomp's engineering staff will enhance our ability to provide our customers
with product design and technical support. Metacomp's strategy has been to build
products for both the client and server sides of the burgeoning client/server
architecture and with the addition of our consumer ISDN CyberShark line we will
have a complete offering to our communications market." Carenzo added, "I am
particularly excited with the
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addition of Dawson and Maitra to our senior management team. Their management,
engineering , and operating talent will be greatly utilized in making Patriot
successful in its rapidly growing markets." Norm Dawson, President and CEO of
Metacomp will join Patriot's Board of Directors and manage Metacomp as a
subsidiary consolidating Patriot's communications products. Jayanta Maitra,
Metacomp's Vice President of Engineering, will also join Patriot as Vice
President of Engineering.
Metacomp's CEO Norm Dawson mentioned, "With Metacomp's engineering talent and
expertise, which include complex ASIC design, I foresee many applications
integrated around the ShBoom processor that will deliver leading-edge
communication solutions for the ongoing communication revolution. We are looking
forward to working with Mike Carenzo and being part of positioning the Company
for its phenomenal growth."
Dawson added "We are particularly attracted to the future of the patented ShBoom
microprocessor technology. ShBoom's architecture is ideally suited for digital
communications and can be employed to improve performance and reduce costs in
existing and future communication products. The rapidly growing market for
32-bit embedded processors provides an excellent opportunity for our experienced
design engineers to assist customers to achieve improved cost-performance in
volume applications. We also see opportunities to work with Patriot's
development team to develop new products based on the unique ShBoom architecture
as well as expanding our ISDN consumer offering with Patriot's CyberShark line."
Terms of the transaction, pending conditional approval, include a stock exchange
transaction valued at approximately $2.5 million for at least 90% of Metacomp's
stock when the acquisition closes, which is currently planned for December 1996.
Safe Harbor statement under the Private Securities Litigation Reform Act of
1995: Statements in this news release looking forward in time involve risks and
uncertainties, including the risks associated with planned acquisitions, the
effect of changing economic conditions, trends in the microprocessor and
communication products markets, variations in the Company's cash flow, customer
product demand, market acceptance risks, risks associated with sourcing products
offshore, technical development risks, seasonality and other
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risk factors detailed in the Company's Securities and Exchange Commission
filings.
For more information on the company and its technologies, visit www.ptsc.com.
# # #
CONTACT: Patriot Scientific Corporation, San Diego
Paul K. Berlin, 619/679-4428
NOTE TO EDITORS: Product and company names are trademarks of the respective
companies.
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