UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

(Mark One)

                |X| QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  For quarterly period ended November 30, 2003

                 |_| TRANSITION REPORT UNDER SECTION 13 OR 15(d)
                         OF THE SECURITIES EXCHANGE ACT

         For the transition period from _____________ to _______________

                         Commission File Number 0-22182

                         PATRIOT SCIENTIFIC CORPORATION
        (Exact name of small business issuer as specified in its charter)

          Delaware                                             84-1070278
(State or other jurisdiction of                        (I.R.S. Empl. Ident. No.)
incorporation or organization)

                 10989 Via Frontera, San Diego, California 92127
                    (Address of principal executive offices)

                                 (858) 674-5000
                           (Issuers telephone number)

Check whether the issuer (1) filed all reports to be filed by Section 13 or
15(d) of the Exchange Act during the past 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes |X| No |_|

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:

Common Stock, $.00001 par value                           148,248,232
            (Class)                            (Outstanding at January 20, 2004)

Transitional Small Business Disclosure Format (Check one): Yes |_|  No |X|

<PAGE>

                         PATRIOT SCIENTIFIC CORPORATION
                                      INDEX

                                                                            Page
PART I. FINANCIAL INFORMATION

    Item 1. Financial Statements:

         Consolidated Balance Sheets as of November 30, 2003 (unaudited)
            and May 31, 2003                                                   3

         Consolidated Statements of Operations for the three  and six months
           ended November 30, 2003 and 2002 (unaudited)                        4

         Consolidated Statements of Cash Flows for the six months ended
           November 30, 2003 and 2002 (unaudited)                              5

         Notes to Unaudited Consolidated Financial Statements               6-16

    Item 2. Management's Discussion and Analysis or Plan of Operation      17-23

    Item 3. Controls and Procedures                                           23

PART II. OTHER INFORMATION                                                    23

    Item 1. Legal Proceedings                                                 23
    Item 2. Changes in Securities                                             23
    Item 3. Defaults upon Senior Securities                                    *
    Item 4. Submission of Matters to a Vote of Security Holders               24
    Item 5. Other Information                                                  *
    Item 6. Exhibits and Reports on Form 8-K                                  25

SIGNATURES                                                                    25

*     No information provided due to inapplicability of the item.


                                       2
<PAGE>

PART I- FINANCIAL INFORMATION
Item 1.  Financial Statements

                         PATRIOT SCIENTIFIC CORPORATION
                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                             November 30,        May 31,
                                                                                 2003             2003
                                                                             ------------     ------------
                                                                             (Unaudited)
<S>                                                                          <C>              <C>
                        ASSETS (Notes 4 and 5)

Current assets:
       Cash and cash equivalents                                             $      6,390     $     32,663
       Marketable securities-restricted                                            44,766               --
       Accounts receivable, net of allowance
         of  none and $10,000 for uncollectible accounts                           35,422            3,866
       Prepaid expenses                                                           101,586           93,030
                                                                             ------------     ------------

Total current assets                                                              188,164          129,559

Property and equipment, net                                                       110,959          153,530

Other assets, net                                                                  41,221           53,220

Patents and trademarks, net of accumulated amortization of $548,103
   and $522,948                                                                   125,965          128,925
                                                                             ------------     ------------
                                                                             $    466,309     $    465,234
                                                                             ============     ============

               LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
       Secured note payable (Note 4)                                         $    635,276     $    635,276
       Current portion of convertible debentures, net of debt discount of
         $89,097 and $103,121 (Note 5)                                            190,903          121,879
       Secured notes payable to a related party                                   200,354          180,000
       Accounts payable                                                           425,911          397,180
       Accrued liabilities                                                        219,689          245,822
       Current portion of capital lease obligation                                  7,167            6,405
                                                                             ------------     ------------

Total current liabilities                                                       1,679,300        1,586,562

Convertible debentures, net of debt discount of $335,421
   and $709,890 (Note 5)                                                          122,079          280,110

Long term portion of capital lease obligation                                       6,541           10,326

Commitments and contingencies (Note 7)

Stockholders' deficit: (Notes 4,5,6 and 7)
       Preferred stock, $.00001 par value; 5,000,000 shares
         authorized none outstanding                                                   --               --
       Common stock, $.00001 par value; 400,000,000 shares
         authorized; issued and outstanding 140,420,093 and 106,547,807             1,405            1,066
       Additional paid-in capital                                              46,376,361       44,281,210
       Accumulated deficit                                                    (47,719,377)     (45,694,040)
                                                                             ------------     ------------
Total stockholders' deficit                                                    (1,341,611)      (1,411,764)
                                                                             ------------     ------------
                                                                             $    466,309     $    465,234
                                                                             ============     ============
</TABLE>


                                       3
<PAGE>

                         PATRIOT SCIENTIFIC CORPORATION
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                        Three Months Ended                    Six Months Ended
                                                  -------------------------------     -------------------------------
                                                   November 30,      November 30,     November 30,      November 30,
                                                      2003              2002              2003              2002
                                                  -------------     -------------     -------------     -------------
<S>                                               <C>               <C>               <C>               <C>
Net sales                                         $      51,960     $       5,160     $      63,200     $      45,049

Cost of sales                                             4,259             7,080            10,472            11,989
                                                  -------------     -------------     -------------     -------------

Gross profit (loss)                                      47,701            (1,920)           52,728            33,060

Operating expenses:
      Research and development                          112,391           164,218           261,513           373,505
      Selling, general and
        administrative                                  321,132           577,133           672,602         1,064,234
                                                  -------------     -------------     -------------     -------------
                                                        433,523           741,351           934,115         1,437,739
                                                  -------------     -------------     -------------     -------------
Operating loss                                         (385,822)         (743,271)         (881,387)       (1,404,679)
                                                  -------------     -------------     -------------     -------------
Other income (expenses):
      Gain on sale of technology                         75,500                --            75,500                --
      Unrealized loss on marketable securities          (23,234)               --           (23,234)               --
      Interest income                                        --                10                --               185
      Interest expense                                 (539,234)         (334,027)       (1,196,216)         (616,235)
                                                  -------------     -------------     -------------     -------------
                                                       (486,968)         (334,017)       (1,143,950)         (616,050)
                                                  -------------     -------------     -------------     -------------
Net loss                                          $    (872,790)    $  (1,077,288)    $  (2,025,337)    $  (2,020,729)
                                                  =============     =============     =============     =============

Basic and diluted loss
     per common share                             $       (0.01)    $       (0.01)    $       (0.02)    $       (0.02)
                                                  =============     =============     =============     =============

Weighted average number of
  common shares outstanding
  during the period (Note 1)                        129,716,912        84,054,186       121,738,543        82,752,899
                                                  =============     =============     =============     =============
</TABLE>

See accompanying summary of accounting policies and notes to unaudited
consolidated financial statements.


                                       4
<PAGE>

                         PATRIOT SCIENTIFIC CORPORATION
                CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

<TABLE>
<CAPTION>
                                                                            Six Months Ended
                                                                      -----------------------------
                                                                      November 30,     November 30,
                                                                          2003           2002
                                                                      -----------     -----------
<S>                                                                   <C>             <C>
Decrease in Cash and Cash Equivalents
Operating activities:
       Net loss                                                       $(2,025,337)    $(2,020,729)
       Adjustments to reconcile net loss
         to cash used in operating activities:
           Amortization and depreciation                                   67,726         105,306
          Non-cash interest expense related to convertible
              debentures, notes payable and warrants                    1,118,584         550,566
       Gain on sale of technology                                         (75,500)             --
       Unrealized loss on marketable securities                            23,234              --
       Common stock issued for services and litigation settlements             --         126,000
           Changes in:
               Accounts receivable                                        (52,836)        (11,315)
               Prepaid expenses and other assets                            3,443         114,021
               Accounts payable and accrued liabilities                    81,211          28,031
                                                                      -----------     -----------
Net cash used in operating activities                                    (859,475)     (1,108,120)
                                                                      -----------     -----------

Investing activities:
       Proceeds from sale of technology                                     7,500              --
       Purchase of property, equipment and patents                        (22,195)        (34,240)
                                                                      -----------     -----------
Net cash used for investing activities                                    (14,695)        (34,240)
                                                                      -----------     -----------

Financing activities:
       Proceeds from the issuance of short term notes payable              10,000         150,000
       Proceeds from the issuance of convertible debentures               722,500         847,000
       Proceeds from the issuance of common stock                          47,040          50,000
       Principal payments for capital lease obligations                    (3,023)         (2,415)
       Proceeds from sales of accounts receivable                          21,280          11,877
       Proceeds from exercise of common stock warrants                     50,100              --
                                                                      -----------     -----------
Net cash provided by financing activities                                 847,897       1,056,462
                                                                      -----------     -----------

Net decrease in cash and cash equivalents                                 (26,273)        (85,898)

Cash and cash equivalents, beginning of period                             32,663          88,108
                                                                      -----------     -----------

Cash and cash equivalents, end of period                              $     6,390     $     2,210
                                                                      ===========     ===========

Supplemental Disclosure of Cash Flow Information:
       Cash payments for interest                                     $     6,303     $     8,223
       Common stock issued on conversion of debentures,
         notes payable and accrued interest                           $ 1,268,259     $    75,394
       Debt discount                                                  $   622,500     $ 1,153,815
</TABLE>

See accompanying summary of accounting policies and notes to unaudited
consolidated financial statements.

                                       5
<PAGE>

                         PATRIOT SCIENTIFIC CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

1.    BASIS OF PRESENTATION

The consolidated financial statements of Patriot Scientific Corporation
("Patriot") presented herein have been prepared pursuant to the rules of the
Securities and Exchange Commission for quarterly reports on Form 10-QSB and do
not include all of the information and footnotes required by accounting
principles generally accepted in the United States of America. These statements
should be read in conjunction with our audited consolidated financial statements
and notes thereto included in Form 10-K for the year ended May 31, 2003.

In the opinion of management, the interim consolidated financial statements
reflect all adjustments of a normal recurring nature necessary for a fair
statement of the results for interim periods. Operating results for the three
and six month periods are not necessarily indicative of the results that may be
expected for the year.

Loss Per Share

We follow Statement of Financial Accounting Standards ("SFAS") No. 128,
"Earnings per Share." Under SFAS No. 128, basic loss per share is calculated as
loss available to common stockholders divided by the weighted average number of
common shares outstanding. Diluted loss per share is calculated as net loss
divided by the diluted weighted average number of common shares. The diluted
weighted average number of common shares is calculated using the treasury stock
method for common stock issuable pursuant to outstanding stock options and
common stock warrants. Common stock options and warrants of 90,525,744 and
48,744,320 for the three and six months ended November 30, 2003 and 2002,
respectively, were not included in diluted loss per share for the periods as the
effect was antidilutive due to our recording losses in each of those periods.
See Notes 5 and 7 for discussion of commitments to issue additional shares of
common stock and warrants.

Stock Options

The Company applies Accounting Principles Board ("APB") Opinion 25, "Accounting
for Stock Issued to Employees," and related Interpretations in accounting for
all stock option plans. Under APB Opinion 25, compensation cost has been
recognized for stock options granted to employees when the option price is less
than the market price of the underlying common stock on the date of grant.

SFAS No. 123, "Accounting for Stock-Based Compensation," and SFAS No. 148,
"Accounting for Stock-Based Compensation-Transition and disclosure," require the
Company to provide pro forma information regarding net income as if compensation
cost for the Company's stock option plans had been determined in accordance with
the fair value based method prescribed in SFAS No. 123. To provide the required
pro forma information, the Company estimates the fair value of each stock option
at the grant date by using the Black-Scholes option-pricing model. SFAS No. 148
also provides for alternative methods of transition for a voluntary change to
the fair value based method of accounting for stock-based employee compensation.
The Company has elected to continue to account for stock based compensation
under APB No. 25.

The Company applies SFAS No. 123 in valuing options granted to consultants and
estimates the fair value of such options using the Black-Scholes option-pricing
model. The fair value is recorded as consulting expense as services are
provided. Options granted to consultants for which vesting is contingent based
on future performance are measured at their then current fair value at each
period end, until vested.

Under the accounting provisions for SFAS No. 123, the Company's net loss per
share would have been increased by the pro forma amounts indicated below:


                                       7
<PAGE>

Patriot Scientific Corporation
Notes to Consolidated Financial Statements (Continued)

<TABLE>
<CAPTION>
                                    Three Months Ended               Six Months Ended
                               ----------------------------    -----------------------------
                               November 30,    November 30,    November 30,     November 30,
                                   2003            2002           2003            2002
-------------------------------------------------------------------------------------------
<S>                            <C>             <C>             <C>             <C>
Net loss as reported           $  (872,790)    $(1,077,288)    $(2,025,337)    $(2,020,729)
Compensation expense               (64,400)        (81,900)       (150,074)       (226,323)
                               -----------     -----------     -----------     -----------
Net loss pro forma             $  (937,190)    $(1,159,188)    $(2,175,411)    $(2,247,052)
                               ===========     ===========     ===========     ===========
As reported per share
     Basic and diluted loss    $     (0.01)    $     (0.01)    $     (0.02)    $     (0.02)
                               ===========     ===========     ===========     ===========
Pro forma per share
     Basic and diluted loss    $     (0.01)    $     (0.01)    $     (0.02)    $     (0.03)
                               ===========     ===========     ===========     ===========
</TABLE>

Sale of Accounts Receivable

We follow SFAS No. 140, "Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities," a replacement of SFAS No. 125. SFAS
No. 140 provides consistent standards for distinguishing transfers of financial
assets that are sales from transfers that are secured borrowings. A $400,000
factoring line we established with a bank enables us to sell selected accounts
receivable invoices to the bank with full recourse against us. These
transactions qualify for a sale of assets since (1) we have transferred all of
our rights, title and interest in the selected accounts receivable invoices to
the bank, (2) the bank may pledge, sell or transfer the selected accounts
receivable invoices, and (3) we have no effective control over the selected
accounts receivable invoices since we are not entitled to or obligated to
repurchase or redeem the invoices before their maturity and we do not have the
ability to unilaterally cause the bank to return the invoices. Under SFAS
No.140, after a transfer of financial assets, an entity recognizes the financial
and servicing assets it controls and the liabilities it has incurred,
derecognizes financial assets when control has been surrendered, and
derecognizes liabilities when extinguished. During the first six months of
fiscal 2004, we sold $26,600 of our accounts receivable to a bank under the
factoring agreement for $21,280. Pursuant to the provisions of SFAS No. 140, we
reflected the transactions as sales of assets and established a receivable from
the bank for the retained amount less the costs of the transactions and less any
anticipated future loss in the value of the retained asset. The retained amount
was equal to 20% of the total accounts receivable invoices sold to the bank less
1% of the total invoices as an administrative fee and 1.75% per month of the
total outstanding accounts receivable invoices as a finance fee. The estimated
future loss reserve for each receivable included in the estimated value of the
retained asset was based on the payment history of the accounts receivable
customer. At November 30, 2003, accounts receivable invoices totaling $22,600
were outstanding under the factoring line and $377,400 was available for future
factoring of accounts receivable invoices.

2.    RECENT ACCOUNTING PRONOUNCEMENTS

In April 2003, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standard ("SFAS") No. 149, "Amendment of
Statement 133 on Derivative Instruments and Hedging Activities." SFAS No. 149
amends and clarifies financial accounting and reporting for derivative
instruments, including certain derivative instruments embedded in other
contracts (collectively referred to as derivatives) and for hedging activities
under SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities." SFAS No. 149 requires that contracts with comparable
characteristics be accounted for similarly. SFAS No. 149 is effective for
contracts entered into or modified after June 30, 2003, and for hedging
relationships designated after June 30, 2003. The adoption of this statement did
not impact our financial position or results of operations.


                                       8
<PAGE>

Patriot Scientific Corporation
Notes to Consolidated Financial Statements (Continued)

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity." SFAS No. 150
establishes standards for how an issuer classifies and measures certain
financial instruments with characteristics of both liabilities and equity. It
requires that an issuer classify a financial instrument that is within its scope
as a liability (or an asset in some circumstances). SFAS No. 150 is effective
for financial instruments entered into or modified after May 31, 2003, and
otherwise is effective at the beginning of the first interim period beginning
after June 15, 2003, except for mandatorily redeemable financial instruments of
nonpublic entities. The adoption of this statement did not impact our financial
position or results of operations.

3.    CONTINUED EXISTENCE AND MANAGEMENT'S PLAN

Our consolidated financial statements are presented on the going concern basis,
which contemplates the realization of assets and the satisfaction of liabilities
in the normal course of business. Our ability to continue as a going concern is
contingent upon our obtaining sufficient financing to sustain our operations. We
incurred a net loss of $2,025,337, $3,888,299 and $5,487,051 and negative cash
flow from operations of $904,241, $1,885,762 and $3,632,534 in the six months
ended November 30, 2003 and the years ended May 31, 2003 and 2002, respectively.
At November 30, 2003, we had deficit working capital of $1,491,136 and cash and
cash equivalents of $6,390. We have historically funded our operations primarily
through the issuance of securities and debt financings. Cash and cash
equivalents decreased $26,273 during the six months ended November 30, 2003.

We estimate our current cash requirements to sustain our operations for the next
twelve months through November 2004 to be $2.1 million. Since we are no longer
supporting the communications product line, we are assuming that there will be
no communications product revenue. We have a note payable to Swartz Private
Equity, LLC ("Swartz") of $635,276 at November 30, 2003 which is due March 1,
2004. We also have convertible debentures with a group of investors as of
November 30, 2003 aggregating $662,500 and advances of $75,000 on a convertible
debenture that closed subsequent to November 30, 2003. At the option of the
debenture holders, they may purchase additional debentures up to $1 million at
any time during the next two years as long as the price of our common stock is
in excess of $0.20 per share. During the first six months ended November 30,
2003, we obtained $47,040 from the sale of equity to several private investors,
$50,100 from the exercise of a warrant and $10,000 from short term notes entered
into with a related party. Subsequent to November 30, 2003, we obtained an
additional $25,000 from the issuance of one convertible debenture and additional
advances of $200,000 towards the issuance of a future convertible debenture.

If the optional amounts under the convertible debentures are not raised in
sufficient amounts, then we may not have funds sufficient to meet our cash
requirements. In such circumstances, we may need to secure additional short-term
debt, private placement debt and/or equity financings with individual or
institutional investors. In addition, we may need to make additional cost
reductions if our cash requirements cannot be met from external sources. We
expect that the $2.1 million requirement will be provided by:

      o     additional debt and/or equity financings; and

      o     proceeds from the exercise of outstanding stock options and
            warrants.

In addition, we have formulated additional cost reduction plans which can be
implemented if the required funds are not obtainable. As of November 30, 2003,
we also have remaining $377,400 under a $400,000 accounts receivable factoring
agreement with our bank.

We anticipate our future revenue to be derived primarily from the sale of
licenses and royalties. To receive this revenue, we may require additional
equipment, fabrication, components and supplies during the next twelve months to
support potential customer requirements and further develop our technologies.
Product introductions such as those currently underway for the Ignite I may
require significant product launch, marketing personnel and other expenditures
that cannot be currently estimated. Further, if expanded development is
commenced or new


                                       9
<PAGE>

Patriot Scientific Corporation
Notes to Consolidated Financial Statements (Continued)

generations of microprocessor technology are accelerated beyond current plans,
additional expenditures we cannot currently estimate, may be required. It is
possible therefore, that higher levels of expenditures may be required than we
currently contemplate resulting from changes in development plans or as required
to support new developments or commercialization activities or otherwise.

If we are unable to obtain the necessary funds, we could be forced to
substantially curtail or cease operations which would have a material adverse
effect on our business. Further, there can be no assurance that required funds,
if available, will be available on attractive terms or that they will not have a
significantly dilutive effect on our existing shareholders. As such, there is
substantial doubt about our ability to continue as a going concern. The
consolidated financial statements do not include any adjustments to reflect the
possible future effects on the recoverability and classification of assets or
the amounts and classification of liabilities that may result from our possible
inability to continue as a going concern.

4.    SECURED NOTE PAYABLE

On March 12, 2002, we replaced and superceded a previously issued Secured
Promissory Note with Swartz with an Amended Secured Promissory Note and
Agreement with an effective date of October 9, 2001 and an Addendum to Amended
Secured Promissory Note dated March 12, 2002. The amended note, which originally
was to mature on April 9, 2003, has been extended to March 1, 2004 and amounts
outstanding under the note bear interest at the rate of 5% per annum. Per the
addendum to the amended note, principal and interest payments are deferred until
March 1, 2004.

As part of the consideration for entering into the above amended note, we agreed
to issue warrants to Swartz related to each advance against the note. In
connection with each advance, we issued to Swartz a warrant to purchase a number
of shares of common stock equal to the amount of the advance multiplied by 8.25
at an initial exercise price equal to the lesser of (a) the factor of the
average of the volume weighted average price per share, as defined by Bloomberg
L.P., for each trading day in the period beginning on the date of the previous
advance and ending on the trading day immediately preceding the date of the
current advance multiplied by .70 or (b) the volume weighted average price per
share minus $0.05. In addition, we were obligated under the addendum to the note
to issue to Swartz warrants equal to 20% of the common stock issued between
March 12, 2002 and April 1, 2003 and we are obligated under the antidilution
agreement to issue to Swartz warrants equal to 30% of the common stock issued
subsequent to April 1, 2003 to any parties other than Swartz. In addition, we
agreed to extend the expiration date to December 31, 2006 on certain warrants
that were to expire previous to December 31, 2006. In exchange for these
concessions, Swartz agreed to extend the due date to March 1, 2004 on a note for
$635,276 net of accrued interest and unreserved 20,007,350 shares that have been
reserved for the exercise of warrants for a period the sooner of 1) March 19,
2004, 2) 90 days after the date on which our common stock exceeds $0.375 for 10
consecutive trading days, or 3) or the approval by our shareholders of an
increase in the authorized shares to at least 400,000,000 common shares. Our
shareholders approved the increase in authorized common shares at our annual
shareholders meeting held on October 16, 2003 and, accordingly, the 20,007,350
shares were again reserved as of that date.

As of November 30, 2003 we issued warrants to purchase up to 19,994,698 shares
of our common stock in accordance with the amended note agreements and
antidilution agreement. The warrants issued were valued using the Black-Scholes
pricing model based on the expected fair value at issuance and the estimated
fair value was also recorded as debt discount.

The note is secured by our assets.

All debt discounts were amortized as additional interest expense over the term
of the note payable. As of November 30, 2003, $1,107,238 had been reflected as
debt discount which was amortized to interest expense during the previous fiscal
years.


                                       10
<PAGE>

Patriot Scientific Corporation
Notes to Consolidated Financial Statements (Continued)

<TABLE>
<S>                                                                          <C>
Advances against the note                                                    $ 1,790,000
Less amount applied against $30 million equity line of credit                   (227,800)
Less amount applied against $25 million equity line of credit                   (926,924)

                                                                                 635,276
Less debt discount
         Total                                                  1,107,238
         Amount amortized to expense                           (1,107,238)            --
                                                                             -----------
Note payable at November 30, 2003                                            $   635,276
</TABLE>

On November 9, 2001, an offset of $227,800 from the sale of 2,500,000 shares of
common stock was applied against the final put under a $30 million equity line
of credit.

On May 30, 2002, an offset of $926,924 from the sale of 14,100,000 shares of
common stock was applied against the first and only put under the $25 million
equity line of credit discussed below.

5.    CONVERTIBLE DEBENTURES

Overview. From April 23, 2002 through November 30, 2003, we sold an aggregate of
$2,587,500 of 8% convertible debentures and $75,000 of short term convertible
debentures at an interest rate of 12% to a group of eleven investors. In
addition, at November 30, 2003, we have received advances totaling $75,000
against a convertible debenture that closed subsequent to the quarter. The
convertible debentures entitle the debenture holder to convert the principal and
unpaid accrued interest into our common stock for two years from the date of
closing. In addition, the debenture holders received warrants exercisable into a
number of our common shares.

Number of Shares Debentures May Be Converted Into. The debentures can be
converted into a number of our common shares at conversion prices that initially
equaled $0.0172 to $0.10289 per share.

Resets of Conversion Price and Conversion Shares. A reset date occurs on each
three month anniversary of the closing date of each debenture and on the date
the registration statement becomes effective, October 29, 2002 for the first
$1,000,000 of principal, March 7, 2003 for the second $605,000 of principal,
June 26, 2003 for the third $510,000 of principal and November 18, 2003 for the
fourth $472,500 of principal. If the volume weighted average price for our
common stock for the ten days previous to the reset date is less than the
conversion price in effect at the time of the reset date, then the number of
common shares issuable to the selling shareholder on conversion will be
increased. If the conversion price is reset, the debenture can be converted into
a number of our common shares based on the following calculation: the amount of
the debenture plus any unpaid accrued interest divided by the reset conversion
price which shall equal the volume weighted average price for our common stock
for the ten days previous to the reset date. On October 29, 2002, the date the
registration statement for the first $1,000,000 of principal became effective,
the conversion prices were reset to $0.04457 from initial conversion prices
ranging from $0.08616 to $0.10289. On March 7, 2003, the date the registration
statement for the second $605,000 of principal became effective, the conversion
prices were reset to $0.04722 from initial conversion prices ranging from
$0.05126 to $0.0727. On June 26, 2003, the date the registration statement for
the third $510,000 of principal became effective, the conversion prices for
debentures with initial conversion prices of $0.065 were reset to $0.06346. On
November 18, 2003, the date the registration statement for the fourth $472,500
of principal became effective, the conversion prices for debentures with initial
conversion prices of $0.048 were reset to $0.0477.

Warrants. Concurrent with the issuance of the convertible debentures, we issued
to the debenture holders warrants to purchase up to 55,927,308 shares of our
common stock. These warrants are exercisable for five years from the date of
issuance at initial exercise prices equal to a negotiated price or 115% of the
volume weighted average price for our common stock for the ten days previous to
the debenture date. The warrant exercise price is subject to being reset on each
six month anniversary of its issuance.


                                       11
<PAGE>

Patriot Scientific Corporation
Notes to Consolidated Financial Statements (Continued)

Options to Purchase Additional Debentures. Subject to the price of our common
stock being equal to or greater than $0.20 per share and a two year limitation,
the debenture holders may purchase additional debentures equal to the value of
their initial debentures. The price at which the optional additional debentures
could be converted would initially equal 115% of the volume weighted average
price for our common stock for the ten days previous to the date on which the
optional additional debentures were closed. The optional additional debentures
would carry the same warrant amounts and reset privileges as the initial
debentures.

Shareholder Approval. We may currently issue more than 20% of our outstanding
shares under the convertible debentures. If we become listed on the NASDAQ Small
Cap Market or NASDAQ National Market, then we must get shareholder approval to
issue more than 20% of our outstanding shares. Since we are currently a bulletin
board company, we do not need shareholder approval.

Restrictive Covenants. For a period of 18 months from the date of the
debentures, we are prohibited from certain transactions. These include the
issuance of any debt or equity securities in a private transaction which are
convertible or exercisable into shares of common stock at a price based on the
trading price of the common stock at any time after the initial issuance of such
securities; the issuance of any debt or equity securities with a fixed
conversion or exercise price subject to adjustment; and any private equity line
type agreements without obtaining the debenture holders' prior written approval.

Right of First Refusal. The debenture holders have a right of first refusal to
purchase or participate in any equity securities offered by us in any private
transaction which closes on or prior to the date that is two years after the
issue date of each debenture.

Registration Rights. We are responsible for registering the resale of the shares
of our common stock which will be issued on the conversion of the debentures. On
October 29, 2002, a registration statement covering the first $1,000,000 of
debentures was declared effective by the Securities and Exchange Commission. On
March 7, 2003, a registration statement covering the second $605,000 of
debentures was declared effective by the Securities and Exchange Commission. On
June 26, 2003, a registration statement covering the third $510,000 of
debentures was declared effective by the Securities and Exchange Commission. On
November 18, 2003, a registration statement covering the fourth $547,500 of
debentures was declared effective by the Securities and Exchange Commission.

The convertible debentures are secured by our assets.


                                       12
<PAGE>

Patriot Scientific Corporation
Notes to Consolidated Financial Statements (Continued)

<TABLE>
<S>                                                                                   <C>
Convertbile debenture dated April 23, 2002                                            $   225,000
Convertbile debentures dated June 10, 2002                                                775,000
Convertbile debenture dated August 23, 2002                                               175,000
Convertbile debentures dated October 29, 2002                                             180,000
Convertbile debenture dated December 16, 2002                                             100,000
Convertbile debenture dated January 24, 2003                                              150,000
Convertbile debenture dated March 24, 2003                                                162,500
Convertbile debenture dated April 15, 2003                                                 10,000
Convertbile debenture dated May 20, 2003                                                  187,500
Convertbile debenture dated June 9, 2003                                                  150,000
Convertbile debentures dated August 1, 2003                                                75,000
Convertbile debenture dated August 5, 2003                                                120,000
Convertbile debenture dated September 22, 2003                                            202,500
Convertbile debenture dated September 30, 2003                                             75,000
Convertbile debenture dated October 21, 2003                                               75,000
Advances against a debenture issued subsequent to November 30, 2003                        75,000
Less amounts converted to common stock                                                 (2,000,000)
                                                                                      -----------
                                                                                          737,500
Less debt discount
                            Total discounts recorded                   $ 2,587,500
                            Amount amortized to expense                   (924,098)
                            Amount cancelled on conversion              (1,238,884)      (424,518)
                                                                       -----------    -----------
Convertible debentures at November 30, 2003                                               312,982
Less current portion                                                                      190,903
                                                                                      -----------
Long term portion                                                                     $   122,079
                                                                                      ===========
</TABLE>

6.    INVESTMENT AGREEMENT

$25 Million Equity Line of Credit Agreement

Overview. On September 17, 2001, we entered into an investment agreement with
Swartz. The investment agreement entitled us to issue and sell our common stock
to Swartz for up to an aggregate of $25 million from time to time during a
three-year period following the effective date of the registration statement.
This is also referred to as a put right. We filed a registration statement on
Form S-1 on October 11, 2001 that was declared effective on November 5, 2001 for
15,000,000 shares of our common stock which we issued to Swartz during the
fiscal year ended May 31, 2002. There remains approximately $24 million
available under this line conditioned on us filing one or more additional
registration statements. As of November 30, 2003, we have not filed a statement
requesting the registration of additional shares to put to Swartz under the $25
million equity line of credit.

Put Rights. In order to invoke a put right, we must have an effective
registration statement on file with the SEC registering the resale of the common
shares which may be issued as a consequence of the invocation of that put right.
Additionally, we must give at least ten but not more than twenty business days
advance notice to Swartz of the date on which we intend to exercise a particular
put right, and we must indicate the number of shares of common stock we intend
to sell to Swartz. At our option, we may also designate a maximum dollar amount
of common stock (not to exceed $3 million) which we will sell to Swartz during
the put and/or a minimum purchase price per common share at which Swartz may
purchase shares during the put. The number of common shares sold to Swartz may
not exceed 20% of the aggregate daily reported trading volume during each of two
consecutive ten business day periods beginning on the business day immediately
following the day we invoked the put right.


                                       13
<PAGE>

Patriot Scientific Corporation
Notes to Consolidated Financial Statements (Continued)

The price Swartz will pay for each share of common stock sold in a put is equal
to the lesser of (i) the market price for each of the two consecutive ten
business day periods beginning on the business day immediately following the day
we invoked the put right minus $0.10, or (ii) X percent of the market price for
each of the two ten day periods, where, X is equal to 90% if the market price is
below $2.00 and 93% if market price is equal to or greater than $2.00. Market
price is defined as the lowest closing bid price for the common stock during
each of the two consecutive ten business day periods. However, the purchase
price may not be less than the designated minimum per share price, if any, that
we indicated in our notice.

Limitations and Conditions Precedent to Our Put Rights. We may not initiate a
put if, as of the proposed date of such put:

o     we have issued shares of our common stock that have been paid for by
      Swartz and the amount of proceeds we have received is equal to the maximum
      offering amount;

o     the registration statement covering the resale of the shares becomes
      ineffective or unavailable for use;

o     our common stock is not actively trading on the OTC Bulletin Board, the
      Nasdaq Small Cap Market, the Nasdaq National Market, the American Stock
      Exchange, or the New York Stock Exchange, or is suspended or delisted with
      respect to the trading on such market or exchange.

If any of the following events occur during the pricing period for a put, the
volume accrual shall cease. For the put, the pricing period shall be adjusted to
end 10 business days after the date that we notify Swartz of the event, and any
minimum price per share we specified shall not apply to the put:

      o     we have announced or implemented a stock split or combination of our
            common stock between the advanced put notice date and the end of the
            pricing period;

      o     we have paid a common stock dividend or made any other distribution
            of our common stock between the advanced put notice date and the end
            of the pricing period;

      o     we have made a distribution to the holders of our common stock or of
            all or any portion of our assets or evidences of indebtedness
            between the put notice date and the end of the pricing period;

      o     we have consummated a major transaction (including a transaction,
            which constitutes a change of control) between the advance put
            notice date and the end of the pricing period, the registration
            statement covering the resale of the shares becomes ineffective or
            unavailable for use, or our stock becomes delisted for trading on
            our then primary exchange; or

      o     we discover the existence of facts that cause us to believe that the
            registration statement contains an untrue statement or omits to
            state a material fact.

Short Sales. Swartz and its affiliates are prohibited from engaging in short
sales of our common stock unless they have received a put notice and the amount
of shares involved in a short sale does not exceed the number of shares
specified in the put notice.

Shareholder Approval. We may currently issue more than 20% of our outstanding
shares under the investment agreement. If we become listed on the Nasdaq Small
Cap Market or Nasdaq National Market, then we must get shareholder approval to
issue more than 20% of our outstanding shares. Since we are currently a bulletin
board company, we do not need shareholder approval.


                                       14
<PAGE>

Patriot Scientific Corporation
Notes to Consolidated Financial Statements (Continued)

Termination of Investment Agreement. We may also terminate our right to initiate
further puts or terminate the investment agreement by providing Swartz with
notice of such intention to terminate; however, any such termination will not
affect any other rights or obligations we have concerning the investment
agreement or any related agreement.

Restrictive Covenants. During the term of the investment agreement and for a
period of two months thereafter, we are prohibited from certain transactions.
These include the issuance of any debt or equity securities in a private
transaction which are convertible or exercisable into shares of common stock at
a price based on the trading price of the common stock at any time after the
initial issuance of such securities or with a fixed conversion or exercise price
subject to adjustment without obtaining Swartz's prior written approval.

Right of First Refusal. Swartz has a right of first refusal to purchase any
variable priced securities offered by us in any private transaction which closes
on or prior to two months after the termination of the investment agreement and
a right of participation for any equity securities offered by us in any private
transaction which closes on or prior to two months after the termination of the
investment agreement.

Swartz's Right of Indemnification. We are obligated to indemnify Swartz
(including their stockholders, officers, directors, employees and agents) from
all liability and losses resulting from any misrepresentations or breaches we
made in connection with the investment agreement, our registration rights
agreement, other related agreements, or the registration statement.

Waiver and Agreement. On March 12, 2002, we entered into an amended waiver and
agreement with Swartz which replaced and superseded all previous waivers and
agreements. This amended waiver and agreement extended the time of the put
beyond twenty days and redefined the price of the put to be the lesser of the
factor of (a) the volume weighted average price per share, as defined by
Bloomberg L.P., for each day of the put multiplied by .70 or (b) the volume
weighted average price per share minus $0.05 multiplied by 20% of the acceptable
daily volume as defined in the waiver. At the discretion of Swartz, the 20%
daily volume limitation could be increased up to 30% of the daily volume. In
addition, the amended waiver and agreement increased the intended put share
amount for the first put to 14,100,000 shares, which is the total number of
shares we had registered so far under the $25 million equity line of credit. On
May 30, 2002 we closed the first put under the $25 million equity line of credit
by applying the proceeds of $926,924 to the secured note payable discussed in
Note 4.

Warrants. In connection with closing the $25 million equity line of credit, we
issued to Swartz a commitment warrant to purchase 900,000 shares of our common
stock. This warrant was valued on the issuance date using the Black-Scholes
pricing model and the value was recorded as a debt discount.

7.    STOCKHOLDERS' DEFICIT

The following table summarizes equity transactions during the six months ended
November 30, 2003:


                                       15
<PAGE>

Patriot Scientific Corporation
Notes to Consolidated Financial Statements (Continued)

                                                      Common
                                                      Shares           Dollars
                                                    -----------      -----------

Balance June 1, 2003                                106,547,807      $44,282,276

Sale of common stock                                  1,701,752           47,040
Exercise of common stock warrants                     1,334,757           50,100
Stock issued on conversion of
  debentures and accrued interest                    30,835,777        1,268,259
Non-cash interest and debt discount
  related to warrants and debentures                         --          730,091
                                                    -----------      -----------
Balance November 30, 2003                           140,420,093      $46,377,766
                                                    ===========      ===========

Stock Options

At November 30, 2003, we had 17,500 options outstanding pursuant to our 1992 ISO
Stock Option Plan exercisable at $1.325 per share expiring in 2005; 50,000
options outstanding pursuant to our 1992 NSO Stock Option Plan exercisable at
$1.325 per share expiring in 2005; 2,026,500 options outstanding pursuant to our
1996 Stock Option Plan exercisable at a range of $0.0425 to $1.325 per share
expiring beginning in 2004 through 2008; 2,960,000 options outstanding pursuant
to our 2001 Stock Option Plan exercisable at a range of $0.0425 to $0.69 per
share expiring beginning in 2004 through 2008; and 1,100,000 options outstanding
pursuant to our 2003 Stock Option Plan exercisable at a range of $0.0485 to
$0.05 per share expiring in 2008.

Some of the options outstanding under these plans are not presently exercisable
and are subject to meeting vesting criteria.

Warrants

At November 30, 2003, we had warrants outstanding exercisable into 84,371,744
common shares at exercise prices ranging from $0.0172 to $0.65 per share
expiring beginning in 2004 through 2008. During the six months ended November
30, 2003, we issued warrants to purchase 26,714,033 shares of common stock of
which 26,514,033 are subject to repricings at the six month anniversary of the
issuance of the warrant. For warrants issued in conjunction with the 8%
convertible debentures, at each anniversary date the warrants will be repriced
to the lesser of the initial exercise price or the volume weighted average price
for our common stock for the ten days previous to the reset date. For warrants
issued in junction with the equity lines of credit and snap shot warrants, at
each anniversary date the warrants will be repriced to the lesser of the initial
exercise price or 110% of the lowest closing bid price of our common stock for
the five trading days ending on such six month anniversary date. During the six
months ended November 30, 2003, warrants to purchase 41,572,462 shares of common
stock with initial or reset exercise prices ranging from $0.0451 to $0.07303
have been repriced to exercise prices ranging from $0.0435 to $0.0649.

During the six months ended November 30, 2003, we issued to Swartz snap shot
warrants exercisable for five years into 1,750,986 common shares at initial
exercise prices ranging from $0.0436 to $0.0572 per share. The snap shot
warrants were issued under an agreement with Swartz whereby we will issue to
Swartz warrants to purchase common shares equal to 30% of any common stock or
warrants we issue to parties other than Swartz or their affiliates after April
1, 2003.

During the six months ended November 30, 2003, a warrant to purchase 1,334,757
shares of common stock was exercised at a price which was lower than the reset
price at the time of exercise. The difference between the exercise price and the
reset price, $35, 618, was recorded during the first fiscal quarter as
additional interest expense.


                                       16
<PAGE>

Patriot Scientific Corporation
Notes to Consolidated Financial Statements (Continued)

Common Stock

During the six months ended November 30, 2003, we sold to a group of individual
private investors a total of 1,701,752 shares of common stock at prices ranging
from $0.025 to $0.034 for an accumulated total of $47,040. The investors have
agreed to hold these shares for a minimum of one year.

8.    RELATED PARTY TRANSACTION

During the six months ended November 30, 2003, we sold services totaling
approximately $30,000 to a company owned by one of our officers.


                                       17
<PAGE>

Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.

THE FOLLOWING DISCUSSION INCLUDES FORWARD-LOOKING STATEMENTS WITH RESPECT TO OUR
FUTURE FINANCIAL PERFORMANCE. ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE
CURRENTLY ANTICIPATED AND FROM HISTORICAL RESULTS DEPENDING UPON A VARIETY OF
FACTORS, INCLUDING THOSE DESCRIBED BELOW UNDER THE SUB-HEADING, "FUTURE
PERFORMANCE AND RISK FACTORS." SEE ALSO OUR ANNUAL REPORT ON FORM 10-K FOR THE
YEAR ENDED MAY 31, 2003.

Our results of operations have been and may continue to be subject to
significant variations. The results for a particular period may vary due to a
number of factors. These include:

      o     Our major product line has had limited revenues
      o     We have incurred significant losses and may continue to do so
      o     Our independent certified public accountants have added an
            explanatory paragraph to their opinion in which they expressed
            substantial doubt about our ability to continue as a going concern
      o     The price and the trading volume of our common stock have an effect
            on the amount of capital we can raise
      o     We will require additional financing
      o     Large block sales of our stock may decrease the price of our stock
      o     We may be impacted as a result of terrorism
      o     Our products may not be completed on time
      o     The market in which we operate is highly competitive
      o     Protection of our intellectual property is limited; there is a risk
            of claims for infringement
      o     Our products are dependent on the Internet and Java
      o     Our stock is subject to penny-stock rules

Critical Accounting Policies

We believe that the following represent our critical accounting policies:

Marketable Securities

As part of the sale of our gas plasma antenna technology we received restricted
securities in a company that is traded on the OTC bulletin board. The securities
can be traded under Rule 144 after July 2004. We reflect the value of those
securities based on the closing price as of the end of our reporting period. Any
unrealized gain or loss between reporting periods is reflected in our
consolidated statement of operations as non-operating income or loss.

Property, Equipment and Depreciation

Property and equipment are stated at cost. Depreciation is computed over the
estimated useful life of three to five years using the straight-line method.
Long-lived assets and certain identifiable intangibles to be held and used by
the Company are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. We continuously evaluate the recoverability of our long-lived
assets based on estimated future cash flows from and the estimated fair value of
such long-lived assets, and provide for impairment if such undiscounted cash
flows are insufficient to recover the carrying amount of the long-lived asset.

Patents and Trademarks

Patents and trademarks are carried at cost less accumulated amortization and are
amortized over their estimated useful lives of four years. The carrying value of
patents and trademarks is periodically reviewed and impairments, if any, are
recognized when the expected future benefit to be derived from an individual
intangible asset is less than its carrying value.


                                       18
<PAGE>

Revenue Recognition

We recognize revenue on the shipment to our customers of communication products,
microprocessor integrated chips and evaluation boards. We anticipate that in the
future we will also derive revenue from fees for the transfer of proven and
reusable intellectual property components or the performance of engineering
services. We anticipate to enter into licensing agreements that will provide
licensees the right to incorporate our intellectual property components in their
products with terms and conditions that we anticipate to vary by licensee.
Generally, we anticipate these payments will include a nonrefundable technology
license fee, which will be payable upon the transfer of intellectual property,
or a nonrefundable engineering service fee, which generally will be payable upon
achievement of defined milestones. In addition, we anticipate these agreements
will include royalty payments, which will be payable upon sale of a licensee's
product, and maintenance and limited support fees. We will classify all revenue
that involves the future sale of a licensee's products as royalty revenue.
Royalty revenue will be generally recognized in the quarter in which a report is
received from a licensee detailing the shipments of products incorporating our
intellectual property components (i.e., in the quarter following the sale of
licensed product by the licensee). We will classify all revenue that does not
involve the future sale of a licensee's products, primarily license fees and
engineering service fees and maintenance and support fees, as contract revenue.
License fees will be recognized upon the execution of the license agreement and
transfer of intellectual property, provided no further significant performance
obligations exist and collectibility is deemed probable. Fees related to
engineering services contracts, which will be performed on a best efforts basis
and for which we will receive periodic milestone payments, will be recognized as
revenue over the estimated development period, using a cost-based percentage of
completion method. Annual maintenance and support fees, which will be renewable
by the licensee, will be classified as contract revenue and will be amortized
over the period of support, generally 12 months.

Research and Development Costs
Research and development costs are expensed as incurred.

Stock Options

The Company applies Accounting Principles Board ("APB") Opinion 25, "Accounting
for Stock Issued to Employees," and related Interpretations in accounting for
all stock option plans. Under APB Opinion 25, compensation cost has been
recognized for stock options granted to employees when the option price is less
than the market price of the underlying common stock on the date of grant.

Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation," requires the Company to provide pro forma information regarding
net income as if compensation cost for the Company's stock option plans had been
determined in accordance with the fair value based method prescribed in SFAS No.
123. To provide the required pro forma information, the Company estimates the
fair value of each stock option at the grant date by using the Black-Scholes
option-pricing model.

Use of Estimates

The preparation of consolidated financial statements in conformity 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 and disclosure of contingent assets and
liabilities at the date of the consolidated financial statements and the
reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.

Results of Operations for the Three months Ended November 30, 2003 and November
30, 2002

Net sales. Total net sales for the fiscal quarter ended November 30, 2003
increased 907% to $51,960 from $5,160 for the corresponding period of the
previous fiscal year. This increase was due to 1) a follow on buy for an end of
life communication product on which production had ceased before the beginning
of the current fiscal year and 2) an engineering contract to develop an adaptive
protocol for communication products. We do not anticipate that follow on buys of
communication products will continue. We are currently expending our efforts on
marketing and sale of our microprocessor technology. Although the microprocessor
technology generated minimal revenue during the fiscal quarter ended November
30, 2003, we anticipate that future revenue will be derived from up front
license fees


                                       19
<PAGE>

and royalties as a result of the shift in focus to the commercialization of our
microprocessor and related echnologies. We cannot estimate when significant
revenue will be generated from the microprocessor technology.

Cost of sales. Cost of sales as a percentage of net sales decreased to 8.2% in
the second fiscal quarter ended November 30, 2003 compared to 137.2% for the
corresponding period of the previous fiscal year. This significant decrease was
due to 1) sales during the second quarter of fiscal year 2004 not having
associated costs due to our having written off the communication product
inventory during the previous fiscal year and 2) the engineering contract not
having associated costs.

Research and development expenses decreased 31.6% from $164,218 for the fiscal
quarter ended November 30, 2002 compared to $112,391 for the fiscal quarter
ended November 30, 2003. This decrease was due primarily to a reduction in
payroll expense in an amount of $30,552 and overhead expenses of $11,679.

Selling, general and administrative expenses decreased 44.4% to $321,132 for the
fiscal quarter ended November 30, 2003 compared to $577,133 for the fiscal
quarter of the previous fiscal year. This decrease was due to a reduction in
non-cash compensation of $91,500 related to investor relations, a reduction of
$90,910 in professional fees and settlement charges related to financings and
litigation, a reduction of $22,500 in consulting fees related to patents and
$47,356 reduction in impaired royalty expenses.

Other expenses for the fiscal quarter ended November 30, 2003, were $486,968
compared to other expenses of $334,017 for the corresponding period of the
previous fiscal year. This change resulted primarily from the recognition of
non-cash interest expense of $500,516 related to the amortization of the debt
discount associated with the issuance of warrants under a secured note payable
and convertible debentures coupled with interest expense of $38,718 related to
the note and debentures for the current fiscal period compared to $296,199 and
$37,828, respectively, for the same fiscal period of the previous fiscal year.
In addition, in the current fiscal quarter $52,266 was recorded as non-operating
income as a result of receiving the final payment on the sale of our gas plasma
antenna technology.

Results of Operations for the Six months Ended November 30, 2003 and November
30, 2002

Net sales. Total net sales for the six months ended November 30, 2003 increased
40.3% to $63,200 from $45,049 for the corresponding period of the previous
fiscal year. This increase was due to an engineering contract to develop an
adaptive protocol for communication products. We are currently expending our
efforts on marketing and sale of our microprocessor technology. Although the
microprocessor technology generated minimal revenue during the six months ended
November 30, 2003, we anticipate that future revenue will be derived from up
front license fees and royalties as a result of the shift in focus to the
commercialization of our microprocessor and related technologies. We cannot
estimate when significant revenue will be generated from the microprocessor
technology.

Cost of sales. Cost of sales as a percentage of net sales decreased to 16.6% in
the six months ended November 30, 2003 compared to 26.6% for the corresponding
period of the previous fiscal year. This significant decrease was due to 1)
sales during the six months of fiscal year 2004 not having associated costs due
to our having written off the communication product inventory during the
previous fiscal year and 2) the engineering contract not having associated
costs.

Research and development expenses decreased 30.0% from $373,505 for the six
months ended November 30, 2002 compared to $261,513 for the six months ended
November 30, 2003. This decrease was due primarily to a reduction in payroll
expense in an amount of $49,783, a reduction in consulting expenses related to
completing a soft core version of the microprocessor technology in the amount of
$33,836 and a reduction in overhead expenses of $23,357.

Selling, general and administrative expenses decreased 36.8% to $672,602 for the
six months ended November 30, 2003 compared to $1,064,234 for the corresponding
period of the previous fiscal year. This decrease was due to a reduction in
non-cash compensation of $150,000 related to investor relations, a reduction of
$122,674 in professional fees and settlement charges related to financings and
litigation, a reduction of $45,000 in consulting fees related to patents and
$47,356 reduction in impaired royalty expenses.


                                       20
<PAGE>

Other expenses for the six months ended November 30, 2003, were $1,143,950
compared to other expenses of $616,050 for the corresponding period of the
previous fiscal year. This change resulted primarily from the recognition of
non-cash interest expense of $1,118,584 related to the amortization of the debt
discount associated with the issuance of warrants under a secured note payable
and convertible debentures coupled with interest expense of $77,537 related to
the note and debentures for the current fiscal period compared to $550,566 and
$65,669, respectively, for the same fiscal period of the previous fiscal year.
In addition, in the current fiscal period $52,266 was recorded as non-operating
income as a result of receiving the final payment on the sale of our gas plasma
antenna technology.

Income Taxes

Deferred income taxes are provided for temporary differences in recognizing
certain income and expense items for financial and tax reporting purposes.
Deferred tax assets consist primarily of income tax benefits from net operating
loss carry-forwards. A valuation allowance has been recorded to fully offset the
deferred tax asset as it is more likely than not that the assets will not be
utilized. The valuation allowance increased approximately $244,000 in the first
six months of 2004, from $14,291,000 at May 31, 2003 to $14,535,000 at November
30, 2003.

Liquidity and Capital Resources

In connection with their report on our consolidated financial statements as of
and for the year ended May 31, 2003, Nation Smith Hermes Diamond, our
independent certified public accountants, expressed substantial doubt about our
ability to continue as a going concern because of recurring net losses and
negative cash flow from operations.

At November 30, 2003, we had deficit working capital of $1,491,136 and cash and
cash equivalents of $6,390. We have historically funded our operations primarily
through the issuance of securities and debt financings. Cash and cash
equivalents decreased $26,273 during the six months ended November 30, 2003 due
to net cash used in operations of $859,475 offset by funds generated primarily
from the issuance of convertible debentures of $722,500 and the sale of common
stock and exercise of common stock warrants of $97,140. The net cash used in
operations was $859,475 for the six months ended November 30, 2003 compared to
$1,108,120 for the corresponding period of the previous fiscal year. The
decrease in cash required in operations was due primarily to a $347,564
reduction in net loss as adjusted to reconcile to cash used in operating
activities between the two periods. Cash used for investing activities was
$14,695 for the six months ended November 30, 2003 compared to cash used for
investing activities of $34,240 for the corresponding period of the previous
fiscal year. The decrease was a result of receiving the final payment of $7,500
from the sale of our gas plasma antenna technology during the current fiscal
period. Cash provided by financing activities was $847,897 for the six months
ended November 30, 2003 compared to $1,056,462 for the corresponding period of
the previous fiscal year. This decrease was primarily the result of a reduced
issuance of convertible debentures of $124,500 during the current fiscal period
compared to the corresponding period of the previous fiscal year.

We estimate our current cash requirements to sustain our operations for the next
twelve months through November 2004 to be $2.1 million. Since we are no longer
supporting the communications product line, we are assuming that there will be
no communications product revenue. We have a note payable to Swartz Private
Equity, LLC ("Swartz") of $635,276 at November 30, 2003 which is due March 1,
2004. We also have convertible debentures with a group of investors as of
November 30, 2003 aggregating $662,500 and advances of $75,000 on a convertible
debenture that closed subsequent to November 30, 2003. At the option of the
debenture holders, they may purchase additional debentures up to $1 million at
any time during the next two years as long as the price of our common stock is
in excess of $0.20 per share. During the first six months ended November 30,
2003, we obtained $47,040 from the sale of equity to several private investors,
$50,100 from the exercise of a warrant and $10,000 from short term notes entered
into with a related party. Subsequent to November 30, 2003, we obtained an
additional $25,000 from the issuance of one convertible debenture and additional
advances of $200,000 towards the issuance of a future convertible debenture.

If the optional amounts under the convertible debentures are not raised in
sufficient amounts, then we may not have


                                       21
<PAGE>

funds sufficient to meet our cash requirements. In such circumstances, we may
need to secure additional short-term debt, private placement debt and/or equity
financings with individual or institutional investors. In addition, we may

need to make additional cost reductions if our cash requirements cannot be met
from external sources. We expect that the $2.1 million requirement will be
provided by:

      o     additional debt and/or equity financings; and

      o     proceeds from the exercise of outstanding stock options and
            warrants.

In addition, we have formulated additional cost reduction plans which can be
implemented if the required funds are not obtainable. As of November 30, 2003,
we also have remaining $377,400 under a $400,000 accounts receivable factoring
agreement with our bank.

We anticipate our future revenue to be derived primarily from the sale of
licenses and royalties. To receive this revenue, we may require additional
equipment, fabrication, components and supplies during the next twelve months to
support potential customer requirements and further develop our technologies.
Product introductions such as those currently underway for the Ignite I may
require significant product launch, marketing personnel and other expenditures
that cannot be currently estimated. Further, if expanded development is
commenced or new generations of microprocessor technology are accelerated beyond
current plans, additional expenditures we cannot currently estimate, may be
required. It is possible therefore, that higher levels of expenditures may be
required than we currently contemplate resulting from changes in development
plans or as required to support new developments or commercialization activities
or otherwise.

If we are unable to obtain the necessary funds, we could be forced to
substantially curtail or cease operations which would have a material adverse
effect on our business. Further, there can be no assurance that required funds,
if available, will be available on attractive terms or that they will not have a
significantly dilutive effect on our existing shareholders. As such, there is
substantial doubt about our ability to continue as a going concern. The
consolidated financial statements do not include any adjustments to reflect the
possible future effects on the recoverability and classification of assets or
the amounts and classification of liabilities that may result from our possible
inability to continue as a going concern.

New Accounting Pronouncements

In April 2003, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standard ("SFAS") No. 149, "Amendment of
Statement 133 on Derivative Instruments and Hedging Activities." SFAS No. 149
amends and clarifies financial accounting and reporting for derivative
instruments, including certain derivative instruments embedded in other
contracts (collectively referred to as derivatives) and for hedging activities
under SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities." SFAS No. 149 requires that contracts with comparable
characteristics be accounted for similarly. SFAS No. 149 is effective for
contracts entered into or modified after June 30, 2003, and for hedging
relationships designated after June 30, 2003. The adoption of this statement did
not impact our financial position or results of operations.

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity." SFAS No. 150
establishes standards for how an issuer classifies and measures certain
financial instruments with characteristics of both liabilities and equity. It
requires that an issuer classify a financial instrument that is within its scope
as a liability (or an asset in some circumstances). SFAS No. 150 is effective
for financial instruments entered into or modified after May 31, 2003, and
otherwise is effective at the beginning of the first interim period beginning
after June 15, 2003, except for mandatorily redeemable financial instruments of
nonpublic entities. The adoption of this statement did not impact our financial
position or results of operations.


                                       22
<PAGE>

Future Performance and Risk Factors

THIS REPORT CONTAINS A NUMBER OF FORWARD-LOOKING STATEMENTS WHICH REFLECT OUR
CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND FINANCIAL PERFORMANCE. OUR
FUTURE BUSINESS, OPERATING RESULTS AND FINANCIAL CONDITION ARE SUBJECT TO
VARIOUS

RISKS AND UNCERTAINTIES, INCLUDING THOSE SUMMARIZED BELOW. READERS ARE CAUTIONED
NOT TO PLACE UNDUE RELIANCE ON FORWARD-LOOKING STATEMENTS

CONTAINED HEREIN, WHICH SPEAK ONLY AS OF THE DATE HEREOF. WE UNDERTAKE NO
OBLIGATION TO PUBLICLY REVISE THESE FORWARD-LOOKING STATEMENTS, TO REFLECT
EVENTS OR CIRCUMSTANCES THAT MAY ARISE AFTER THE DATE OF THIS REPORT.

Since the business combination with Metacomp, effective December 1996, we have
segregated our operations into microprocessor, communication, and radar/antenna
product lines.

The status of these three major technologies is as follows:

o     Ignite I microprocessor technology. This technology is generating minor
      amounts of revenue from the sale of evaluation boards, microprocessors and
      initial license fees related to the intellectual property. We have ported
      the VxWorks operating system and the Sun Microsystems personalJava virtual
      machine to the microprocessor. Although we anticipate the sales of
      licenses and royalties from the microprocessor technology will be our main
      product line, it currently accounted for only 1% of our revenue for the
      six months ended November 30, 2003.

o     High-speed data communications. Revenue from this technology was generated
      primarily from mature communication products that completed their life
      cycles. We have decided to concentrate our efforts on the Ignite I
      microprocessor technology and have discontinued the sale of communication
      products subsequent to the last buys that were shipped during the previous
      fiscal year. Although minimal shipments of communications product
      accounted for 99% of the revenue shipped during the first six months ended
      November 30, 2003, future revenue will come from our microprocessor
      technologies.

o     Radar and antenna. We sold the gas plasma antenna technology in August
      1999. In October 2003, we received a royalty payment valued at $75,500
      comprised of $7,500 cash and $68,000 in marketable securities which were
      revalued to $44,766 at November 30, 2003. This represents the final
      payment related to the sale of the gas plasma antenna technology. The
      $52,266 was recorded as non-operating income during the three months ended
      November 30, 2003. Our radar technology has not generated any revenue and
      we have suspended further development of this technology in order to
      concentrate our resources on the Ignite I microprocessor technology.

During at least the last three years, we have focused the majority of our
efforts on the Ignite I microprocessor technology. This technology is targeted
for the embedded controller and Java language processor marketplaces.

We have experienced in the past and may experience in the future many of the
problems, delays and expenses encountered by any business in the early stages of
development, some of which are beyond our control. We have had limited operating
history, have incurred significant cumulated losses, have only recently
commenced marketing and sales of our products and have not achieved a profitable
level of operations. There can be no assurance of future profitability. We may
require additional funds in the future for operations or to exploit our
technologies. There can be no assurance that any funds required in the future
can be generated from operations or that such required funds will be available
from other potential sources. The lack of additional capital could force us to
substantially curtail or cease operations and would therefore have a material
adverse effect on our business. Further there can be no assurance that any such
required funds, if available, will be available on attractive terms or that they
will not have a significantly dilutive effect on our existing shareholders. Our
technologies are in various stages of development. There can be no assurance
that any of the technologies in development can be completed to commercial
exploitation due to the inherent risks of new technology development limitations
on financing, competition, obsolescence, loss of key technical personnel and
other factors. Our development projects are high risk in nature, where
unanticipated technical obstacles can arise at any time and result in lengthy
and costly delays or result in determination that further development is
unfeasible. There can be no assurance that the technologies, if completed, will
achieve market acceptance sufficient to sustain us or achieve profitable
operations.


                                       23
<PAGE>

We rely primarily on patents to protect our intellectual property rights. There
can be no assurance that patents held by us will not be challenged and
invalidated, that patents will issue from any of our pending applications or
that any

claims allowed from existing or pending patents will be sufficient in scope or
strength or be issued in all countries where our products can be sold to provide
meaningful protection or commercial advantage to us. Competitors may also be
able to design around our patents.

Our common shares are traded on the OTC Bulletin Board, are thinly traded and
are subject to special regulations imposed on "penny stocks." Our shares may
experience significant price and volume volatility, increasing the risk of
ownership to investors.

Item 3. Controls and Procedures

Our President and Chief Executive Officer and our Executive Vice President and
Chief Financial Officer conducted an evaluation of our disclosure controls and
procedures (as defined in Securities Exchange Act Rules 13a-14 and 15d-14) as of
January 1, 2004. Based on their evaluation, they concluded that our disclosure
controls and procedures are effective to ensure that information required to be
disclosed by us in reports that we file or submit under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified
in SEC rules and forms. There have been no significant changes in our internal
controls or in other factors that could significantly affect these controls
subsequent to the date of this evaluation.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

In December 2003 we filed several lawsuits in United States District Courts
against companies we contend are infringing on our patent number 5,809,336
entitled "High Performance Microprocessor Having Variable Speed Clock." The
defendants and suits are as follows:

<TABLE>
<CAPTION>
Defendant                       U.S. District Court                     Case Number
---------                       -------------------                     -----------
<S>                             <C>                                     <C>
Sony Corporation of America     Southern District Court of New York     03CV10142

Fujitsu                         Northern District of California         C035787

Toshiba America, Inc.           Southern District of New York           03CV10180

NEC USA, Inc.                   Eastern District of New York            CV036432

Matsushita                      District of New Jersey                  03CV06210
</TABLE>

We are requesting the courts to enjoin the defendants from making use of our
patent and are requesting damages for past infringements.

Item 2. Changes in Securities

(a) We offered and sold the following common stock, either for cash or in
consideration of services rendered as indicated below, without registration
under the Securities Act of 1933, as amended, and exemption for such sales from
registration under the Act is claimed in reliance upon the exemption provided by
Section 4(2) thereof on the basis that such offers and sales were transactions
not involving any public offering. Appropriate precautions against transfer have
been taken, including the placing of a restrictive legend on all certificates
evidencing such securities. All such sales were effected without the aid of
underwriters, and no sales commissions were paid.


                                       24
<PAGE>

<TABLE>
<CAPTION>
                                           Number of     Aggregate       Purchase Price Per
  Name                  Date of Sale        Shares      Purchase Price         Share
  ----                  ------------       ---------    --------------   ------------------
<S>                   <C>                   <C>            <C>              <C>
Red Oak, Inc.         September 16, 2003     64,516        $ 2,000          $0.031 Cash

Dean Gulick           September 23, 2003    181,333        $ 5,440          $0.030 Cash

Lydon Inc.            September 30, 2003     67,667        $ 2,000          $0.030 Cash

Red Oak, Inc.         October 31, 2003      100,000        $ 3,300          $0.033 Cash

Red Oak, Inc.         November 25, 2003     100,000        $ 3,300          $0.033 Cash
</TABLE>

Item 4. Submission of Matters to a Vote of Security Holders

At our fiscal 2003 Annual Meeting of Shareholders held on October 16, 2003, the
following members, constituting all the members, were elected to the Board of
Directors: Donald R. Bernier, Lowell W. Giffhorn, Carlton Johnson, David Pohl,
Helmut Falk Jr. and Gloria H. Felcyn.

The following proposals were approved at our Annual Meeting of Shareholders:

      1.    Proposal to approve an amendment to our Certificate of Incorporation
            to increase the number of authorized shares of common stock, $.00001
            par value, from 200,000,000 to 400,000,000

             Votes For                 Votes Against            Votes Abstaining
            105,726,186                  7,111,384                   213,335

      2.    Proposal to approve our 2003 Stock Option Plan

               Votes For               Votes Against            Votes Abstaining
              19,450,113                 6,810,701                   268,345

      3.    Appointment of Nation Smith Hermes Diamond LLP as our Independent
            Auditors

               Votes For                Votes Against           Votes Abstaining
             111,255,417                   668,217                  1,129,271

      4.    Election of Directors

                  Director                  Votes For         Votes Withheld

                  Donald Bernier            107,596,986           627,522

                  Lowell W. Giffhorn        107,824,366           400,142

                  Carlton Johnson           107,298,276           926,232

                  David Pohl                107,790,334           434,174

                  Helmut Falk Jr.           107,205,456         1,019,052

                  Gloria H. Felcyn          107,992,966           231,542


                                       25
<PAGE>

Item 6. Exhibits and Reports on Form 8-K

(a)   Exhibits -

      31.1  Section 302 Certification of Chief Executive Officer

      31.2  Section 302 Certification of Chief Financial Officer

      32.1  Section 906 Certification of Chief Executive Officer

      32.2  Section 906 Certification of Chief Financial Officer

(b)   Reports on Form 8-K - NONE

                                   SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                        PATRIOT SCIENTIFIC CORPORATION

Date: January 21, 2004                  By: /s/ LOWELL W. GIFFHORN
                                           -------------------------------------
                                           Executive Vice President and
                                           Chief Financial Officer

                                           (Principal Financial and
                                           Accounting Officer and duly
                                           authorized to sign on behalf
                                           of the Registrant)


                                       26