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5. Stockholders' Equity
9 Months Ended
Feb. 29, 2012
Stockholders' Equity Note Disclosure [Text Block]
5.   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.  As part of the program we purchased 1,578,616 and 1,028,289 shares of our common stock at an aggregate cost of $101,777 and $113,401 during the nine months ended February 29, 2012 and February 28, 2011, respectively.

Equity Transactions

The following table summarizes equity transactions during the nine months ended February 29, 2012:

   
Common Stock
                   
   
Shares
   
Amounts
   
Additional Paid-in Capital
   
Accumulated Deficit
   
Treasury Stock
 
                               
Balance June 1, 2011
    407,526,799     $ 4,381     $ 77,314,301     $ (51,077,059 )   $ (14,223,037 )
Share-based compensation
    -       -       14,968       -       -  
Repurchase of common stock for treasury
    (1,578,616 )     -       -       -       (101,777 )
Net loss
    -       -       -       (3,314,575 )     -  
Balance February 29, 2012
    405,948,183     $ 4,381     $ 77,329,269     $ (54,391,634 )   $ (14,324,814 )

Stock Options and Warrant Activity

As of February 29, 2012, we had 125,000 options outstanding pursuant to our 2001 Stock Option Plan exercisable at $0.47 per share expiring in 2012; and 2,325,000 options outstanding pursuant to our 2006 Stock Option Plan exercisable at a range of $0.09 to $0.45 per share expiring through 2015.  Some of the options outstanding under the 2006 Stock Option Plan are on a vesting schedule and are not presently exercisable.

During the nine months ended February 29, 2012, we recorded $14,968 of share-based compensation expense related to vesting of stock options granted to PDSG employees.  During the nine months ended February 28, 2011, we recorded $71,862 of share-based compensation expense related to vesting of stock options, including $15,483 related to PDSG.

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 for the nine months ended February 28, 2011 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.

   
Three Months
Ended
February 29, 2012
(Unaudited)
 
Nine Months
Ended
February 29, 2012 (Unaudited)
 
Three Months
Ended
February 28, 2011
(Unaudited)
 
Nine Months
Ended
February 28, 2011
(Unaudited)
                 
Expected term
 
*
 
*
 
*
 
5
 years
Expected volatility
 
*
 
*
 
*
 
106
%
Risk-free interest rate
 
*
 
*
 
*
 
2.17
%

* No stock options were granted during these periods.

A summary of option activity as of February 29, 2012 and changes during the nine months then ended, is presented below:

   
Shares
   
Weighted Average
Exercise Price
   
Weighted Average Remaining Contractual Term (Years)
   
Aggregate Intrinsic Value
 
Options outstanding at June 1, 2011
    3,010,000     $ 0.33              
Options granted
    -     $ -              
Options exercised
    -     $ -              
Options forfeited
    (560,000 )   $ 0.64              
Options outstanding at February 29, 2012
    2,450,000     $ 0.26       1.77     $ 53,500  
Options vested and expected to vest at February 29, 2012
    2,399,118     $ 0.26       1.77     $ 53,500  
Options exercisable at February 29, 2012
    2,348,235     $ 0.26       1.77     $ 46,800  

The weighted average grant date fair value of options granted during the nine months ended February 28, 2011 was $0.08.  T here were no options exercised during the nine months ended February 29, 2012 or February 28, 2011.

The aggregate intrinsic value represents the differences in market price at the close of the quarter ($0.16 per share on February 29, 2012) and the exercise price of outstanding, in-the-money options (those options with exercise prices below $0.16) on February 29, 2012.

As of February 29, 2012, there was $8,555 of total unrecognized compensation cost, net of forfeitures, related to employee stock option compensation arrangements.  That cost is expected to be recognized on a straight-line basis over the next 13 months.

The following table summarizes employee and director share-based compensation expense for Patriot and employee share-based compensation for PDSG for the three and nine months ended February 29, 2012 and February 28, 2011, which was recorded as follows:

   
Three Months
Ended
February 29, 2012
   
Nine Months
Ended
February29, 2012
   
Three Months
Ended
February28, 2011
   
Nine Months
Ended
February 28, 2011
 
Research and development - PDSG
  $ 483     $ 1,450     $ 483     $ 1,552  
Selling, general and administrative expense - PDSG
    4,472       13,518       4,521       13,931  
Selling, general and administrative expense - Patriot
    -       -       872       56,379  
Total
  $ 4,955     $ 14,968     $ 5,876     $ 71,862