<PAGE>   1

                    U. S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                  FORM 10-QSB/A
                                 AMENDMENT NO. 1


(Mark One)

[X]      AMENDMENT NO. 1 TO QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
         THE SECURITIES EXCHANGE ACT OF 1934

         For quarterly period ended February 28, 1999
                                    -----------------

[ ]      TRANSITION  REPORT UNDER  SECTION 13 OR 15(d) OF THE 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)

                                 (619) 674-5000
                                 --------------
                           (Issuer's telephone number)

Indicate by check mark whether the registrant (1) filed all reports  required to
be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the preceding
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
             -----     -----

Indicate 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                            41,063,915
-------------------------------                            ----------
            (Class)                             (Outstanding at April 14, 1999)




<PAGE>   2



                         PATRIOT SCIENTIFIC CORPORATION
                                      INDEX


<TABLE>
<CAPTION>
                                                                                           Page
PART I. FINANCIAL INFORMATION
<S>          <C>                                                                            <C>
     Item 1. Financial Statements:

             Consolidated Balance Sheets as of February 28, 1999 (unaudited)
               and May 31, 1998                                                             3

             Consolidated Statements of Operations for the nine months and three
               months ended February 28, 1999 and 1998 (unaudited)                          4

             Consolidated Statements of Cash Flows for the nine months ended
               February 28, 1999 and 1998 (unaudited)                                       5

             Notes to Consolidated Financial Statements                                     6-11

     Item 2. Management's Discussion and Analysis of Financial Condition
               and Results of Operations                                                    12

PART II. OTHER INFORMATION                                                                  17

     Item 1. Legal Proceedings                                                              17
     Item 2. Changes in Securities                                                          18
     Item 3. Defaults upon Senior Securities                                                *
     Item 4. Submission of Matters to a Vote of Security Holders                            *
     Item 5. Other Information                                                              *
     Item 6. Exhibits and Reports on Form 8-K                                               *

SIGNATURES                                                                                  18
</TABLE>


     *  No information provided due to inapplicability of the item.



                                       2
<PAGE>   3


PART I -  FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS


                         PATRIOT SCIENTIFIC CORPORATION
                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS


<TABLE>
<CAPTION>
                                                                    February 28,         May 31,
                                                                        1999              1998
                                                                    (Unaudited)
<S>                                                                 <C>               <C>
Current Assets
      Cash and cash equivalents                                     $     16,800      $    602,456
      Accounts receivable                                                250,322           593,542
      Inventories (Note 3)                                               187,384           230,417
      Prepaid expenses and other                                         204,539           109,365
                                                                    ------------      ------------
        Total current assets                                             659,045         1,535,780

Property and equipment - net                                             531,579           453,211
Patents, trademarks, net                                                 150,966           196,942
Other                                                                      3,721             3,721
                                                                    ============      ============
      Total Assets                                                  $  1,345,311      $  2,189,654
                                                                    ============      ============

                         LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current Liabilities
      Short-term notes payable                                      $    247,500      $         --
      Accounts payable                                                 1,238,156           391,184
      Accrued liabilities                                                184,529           131,088
      Current portion- capital lease obligations                           1,916             2,179
                                                                    ------------      ------------
          Total current liabilities                                    1,672,101           524,451

Long-term Liabilities
      Capital lease obligations                                               --             1,355
      5% Convertible Term Debentures (Note 5)                                 --           507,000
                                                                    ------------      ------------
          Total Liabilities                                            1,672,101         1,032,806

Stockholders' Equity (Deficit)
      Preferred stock $.00001 par value; authorized
        5,000,000 shares;  none outstanding                                   --                --
      Common stock $.00001 par value; authorized
        60,000,000 shares;  41,063,915 and 37,880,776
        shares issued and outstanding (Note 4)                               411               379
      Additional paid-in capital (Note 4)                             22,572,934        20,741,092
      Accumulated deficit                                            (22,900,135)      (19,584,623)
                                                                    ------------      ------------
                                                                        (326,790)        1,156,848
                                                                    ============      ============
      Total Liabilities and Stockholders' Equity (Deficit)          $  1,345,311      $  2,189,654
                                                                    ============      ============
</TABLE>


                 See notes to consolidated financial statements.



                                       3
<PAGE>   4



                         PATRIOT SCIENTIFIC CORPORATION
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)


<TABLE>
<CAPTION>
                                          Three Months Ended                  Nine Months Ended
                                             February 28,                        February 28,
                                        1999              1998              1999              1998
<S>                                 <C>               <C>               <C>               <C>
Net sales                           $    271,525      $    253,691      $  1,108,022      $  1,140,711

Cost of sales                            113,425           109,430           683,323           546,130
                                    ------------      ------------      ------------      ------------

Gross profit                             158,100           144,261           424,699           594,581

Operating expenses:
      Research and development           478,571           475,214         1,634,060         1,299,975
      Selling, general and
        administrative                   407,483           389,043         1,770,158         2,620,908
                                    ------------      ------------      ------------      ------------
                                         886,054           864,257         3,404,218         3,920,883
                                                      ------------      ------------      ------------
Operating loss                          (727,954)         (719,996)       (2,979,519)       (3,326,302)
                                    ------------      ------------      ------------      ------------
Other income (expenses):
      Interest income                         45            16,197             3,764            51,313
      Interest expense                   (12,970)          (32,563)          (19,455)          (92,360)
      Non-cash interest expense
        (Notes 4 and 5)                  (20,500)       (1,000,000)         (320,302)       (1,624,678)
                                    ------------      ------------      ------------      ------------
                                         (33,425)       (1,016,366)         (335,993)       (1,665,725)
                                    ------------      ------------      ------------      ------------
Net loss                            $   (761,379)     $ (1,736,362)     $ (3,315,512)     $ (4,992,027)
                                    ============      ============      ============      ============

Basic and diluted loss
      per common share:             $      (0.02)     $      (0.06)     $      (0.09)     $      (0.17)
                                    ============      ============      ============      ============

Weighted average number of
  common shares outstanding
  during the period (Note 1)          39,134,034        31,432,995        37,485,732        29,974,221
                                    ============      ============      ============      ============
</TABLE>


                 See notes to consolidated financial statements.




                                       4
<PAGE>   5



                         PATRIOT SCIENTIFIC CORPORATION
                CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)


<TABLE>
<CAPTION>
                                                        Nine Months Ended February 28,
                                                            1999             1998
<S>                                                      <C>              <C>
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

OPERATING ACTIVITIES:
       Net loss                                          $(3,315,512)     $(4,992,027)
       Adjustments to reconcile net loss
         to cash used in operating activities:
           Amortization and depreciation                     194,728          225,031
           Amortization of debt issuance costs                48,000               --
           Common stock and warrants issued
               for services                                   94,971           10,500
           Non-cash compensation expense                     445,000        1,245,000
           Non-cash interest expense related to
               convertible debentures, common stock
               and warrants (Notes 4 and 5)                  365,472        1,624,678
           Changes in:
              Accounts receivable                            136,220         (133,687)
               Inventories                                    43,033            1,206
               Prepaid and other assets                      (49,198)        (212,406)
               Accounts payable and accrued expenses         900,413            8,295
                                                         -----------      -----------
Net cash used in operating activities                     (1,136,873)      (2,223,410)
                                                         -----------      -----------

INVESTING ACTIVITIES:
       Purchase of property and equipment                   (273,096)        (285,701)

FINANCING ACTIVITIES:
       Proceeds from the issuance of notes payable           247,500               --
       Proceeds from sale of accounts receivable             207,000               --
       Principal payments on notes payable and
         long-term debt                                       (1,618)          (2,203)
       Proceeds from issuance of common stock
         and exercise of common stock warrants
         and options                                         371,431          230,283
       Proceeds from issuance of convertible notes                --        3,000,000
                                                         -----------      -----------
           Net cash provided by financing activities         824,313        3,228,080
                                                         -----------      -----------

Net increase (decrease) in cash                             (585,656)         718,969
Cash and cash equivalents at
  beginning of period                                        602,456          477,675
                                                         -----------      -----------
Cash and cash equivalents at
  end of period                                          $    16,800      $ 1,196,644
                                                         ===========      ===========

Supplemental Disclosure of Cash Flow Information:
       Convertible debentures and accrued interest
         exchanged for common stock                      $   575,642      $ 1,498,566
                                                         ===========      ===========
       Cash payments for interest                        $    19,455      $    43,794
                                                         ===========      ===========
</TABLE>


                 See notes to consolidated financial statements.



                                       5
<PAGE>   6



                         PATRIOT SCIENTIFIC CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


1. BASIS OF PRESENTATION

The consolidated financial statements of Patriot Scientific Corporation ("the
Company") 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 generally accepted
accounting principles. These statements should be read in conjunction with the
Company's audited financial statements and notes thereto for the year ended May
31, 1998.

In the opinion of management, the interim 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 nine month periods are
not necessarily indicative of the results that may be expected for the year.

LOSS PER SHARE

During the year ended May 31, 1998, the Company implemented Standard 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, common stock warrants, and
debt convertible into common stock. Common stock options and warrants of 115,078
and 367,789 for the three months and 157,315 and 999,674 for the nine months and
debt convertible into none and 2,707,522 common shares of stock for the three
months and 330,726 and 2,351,774 common shares of stock for the nine months were
not included in diluted loss per share for the periods ended February 28, 1999
or 1998, respectively, as the effect was antidilutive due to the Company
recording losses in each of those periods.

In addition, 1,500,000 shares of common stock in escrow as of February 28, 1999
were not considered outstanding for diluted loss per share because these shares
are subject to an earnout agreement which has not yet been met.

Options and warrants to purchase 3,474,291 shares of common stock at exercise
prices from $0.45 to $2.30 per share were outstanding at February 28, 1999 but
were not included in the computation of diluted loss per share because the
exercise prices were greater than the average market price of the common shares.
Options and warrants to purchase 4,426,791 shares of common stock at exercise
prices from $0.80 to $7.50 per share were outstanding at February 28, 1998 but
were not included in the computation of diluted loss per share because the
exercise prices were greater than the average market price of the common shares.

SALE OF ACCOUNTS RECEIVABLE

The Company has adopted SFAS No. 125, "Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities" ("SFAS 125"). SFAS 125
provides consistent standards for distinguishing transfers of financial assets
that are sales from transfers that are secured borrowings. A factoring line
established by the Company with a bank qualifies for a sale of assets since (1)
the Company has transferred all of its right, 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) the Company has no
effective control over the selected accounts receivable invoices since it may
not redeem the invoices sold previous to maturity. Under SFAS 125, 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. The Company sold approximately $259,000 of its accounts receivable
to a bank under a factoring agreement for approximately $207,000.




                                       6
<PAGE>   7


                         PATRIOT SCIENTIFIC CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (Unaudited)


Pursuant to the provisions of SFAS 125, the Company reflected the transaction as
a sale of assets and  established an accounts  receivable  from the bank for the
retained  amount  less the  costs of the  transaction  and less any  anticipated
future loss in the value of the retained asset.

MANAGEMENT'S PLAN

        At February 28, 1999, working capital was a negative $1,013,056 and cash
and cash equivalents totaled $16,800. The Company has funded its operations
primarily through the issuance of securities and debt financings. The Company's
current cash requirements to sustain its operations for the next twelve months
are estimated to be $1,600,000. The Company's management expects that these
requirements will be provided:

     Internally  by:

o    the cash profits related to the $3,355,000 kiosk order, a portion of which
     is anticipated as an advance payment during its first fiscal quarter of
     2000 (June 1 to August 31, 1999), previous to any product shipments, and

     Externally by:

o    short-term debt instruments, including a receivable financing arrangement
     established with the Company's bank,

o    private placement debt and/or equity financings, and

o    the investment agreement.

Since February 28, 1999, the Company has issued short-term debt financings for
$553,000 and sold equity to two private investors totaling $75,000. In February
1999, the Company entered into an agreement for up to $5,000,000 under an
investment agreement as discussed in Note 6.

The investment agreement allows the Company, at its sole discretion, to put
common stock into the hands of Swartz Private Equity, LLC at a discount from
market, ranging from 10% to 20% depending on the market price of the common
stock. The puts are subject to common stock trading volume limitations and
registration of the securities. The Company anticipates the initial put under
the investment agreement will take place during the first quarter of fiscal year
2000, June 1 to August 31, 1999.

With the exception of the financings discussed above, there can be no assurance
that any funds required during the next twelve months or thereafter can be
generated from operations or that if such required funds are not internally
generated that funds will be available from external sources such as debt or
equity financings or other potential sources. The funds anticipated from the
kiosk order are subject to the Company's customer receiving funds from the
Mexican Department of Tourism and on several occasions product shipments have
been rescheduled pending the receipt of those funds. The lack of additional
capital could force the Company to substantially curtail or cease operations and
would, therefore, have a material adverse effect on the Company's 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 existing shareholders of the Company.

2. NEW ACCOUNTING PRONOUNCEMENTS

In June 1997, the Financial Accounting Standards Board ("FASB") issued SFAS No.
131, "Disclosures about Segments of an Enterprise and Related Information" which
supersedes SFAS No. 14 "Financial Reporting for Segments of a Business
Enterprise." SFAS No. 131 establishes standards on the way that public companies
report financial information about operating segments in their annual financial
statements and requires reporting of selected



                                       7
<PAGE>   8


                         PATRIOT SCIENTIFIC CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (Unaudited)


information about operating segments in interim financial statements issued to
the public. It also establishes standards for disclosure regarding products and
services, geographic areas and major customers. SFAS No. 131 defines operating
segments as components of a company about which separate financial information
is available that is evaluated regularly by the chief operating decision maker
in deciding how to allocate resources and in assessing performance. SFAS 131 is
effective for financial statements for periods beginning after December 15, 1997
and requires comparative information for earlier years to be restated. The
Company will implement SFAS No. 131 in its May 31, 1999 financial statements.
Results of operations and financial position will be unaffected by
implementation of the standard. Management believes the adoption of this
statement will have no material impact on the Company's financial statements.

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities" which requires companies to record
derivatives on the balance sheet as assets or liabilities, measured at fair
market value. Gains or losses resulting from changes in the values of those
derivatives would be accounted for depending on the use of the derivative and
whether it qualifies for hedge accounting. The key criterion for hedge
accounting is that the hedging relationship must be highly effective in
achieving offsetting changes in fair value or cash flows. SFAS No. 133 is
effective for fiscal periods beginning after June 15, 1999. Management believes
the adoption of this statement will have no material impact on the Company's
financial statements.

3. INVENTORIES

Inventories are stated at cost (determined primarily by the weighted average
cost method which approximates cost on a first-in, first-out basis) not in
excess of market value.

Inventories at February 28, 1999 and May 31, 1998, consist of the following:

<TABLE>
<CAPTION>
                                                 February 28,           May 31,
                                                     1999                1998
                                                 ------------         ---------
<S>                                               <C>                 <C>
Component parts                                   $ 389,938           $ 418,502
Work in process                                      73,988              60,136
Finished goods                                       88,458             116,779
                                                  ---------           ---------
                                                    552,384             595,417
Reserve for obsolescence                           (365,000)           (365,000)
                                                  ---------           ---------
                                                  $ 187,384           $ 230,417
                                                  =========           =========
</TABLE>

4. STOCKHOLDERS' EQUITY

The following table summarizes equity transactions during the nine months ended
February 28, 1999:

<TABLE>
<CAPTION>
                                                             Common
                                                             Shares         Amounts
                                                           ----------     -----------
<S>                                                        <C>            <C>
Balance June 1, 1998                                       37,880,776     $20,741,471
Issuance of stock and exercise of stock options               892,387         266,402
Stock issued for conversion of debentures and related
  accrued interest                                          1,735,752         575,642
Stock released from escrow for purchased technology                --         445,000
Exercise of warrants                                          555,000         200,000
Non-cash interest expense related to convertible notes
  and warrants recorded to additional paid-in capital              --         344,830
                                                           ----------     -----------
Balance February 28, 1999                                  41,063,915     $22,573,345
                                                           ==========     ===========
</TABLE>




                                       8
<PAGE>   9



                         PATRIOT SCIENTIFIC CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (Unaudited)

A total of 5,000,000 shares of the Company's outstanding common stock were
placed in escrow as a contingent cost of the Company's acquisition of its ShBoom
technology in 1994. As such, when the escrowed shares are earned, they are
charged to compensation costs. The terms of the escrow arrangement provide for
an earnout formula of 500,000 shares for each $500,000 of revenues earned by the
Company during the period from June 1, 1994 through May 31, 1999. Additionally,
this agreement also provides for the full earnout of these shares if during the
earnout period there is (i) any sale of the assets of the Company, (ii) a
business combination with another entity where the Company is not the surviving
entity, (iii) at least 75% of the Company's stock is tendered to another
organization, or (iv) a liquidation or dissolution of the Company. Any of the
contingent shares not earned by May 31, 1999 would be returned to the Company
and canceled.

        During the nine months ended February 28, 1999 and 1998, 1,000,000
shares and 1,000,000 shares, respectively, were earned as a result of the
arrangement and $445,000 and $1,245,000, respectively, were charged to
compensation costs. The 1,000,000 shares that were earned during the nine months
ended February 28, 1999 were released during the current period. At February 28,
1999, 3,500,000 shares remain in escrow of which 2,000,000 shares have been
earned and charged to compensation costs but remain in escrow pending the
outcome of a lawsuit between the Company, nanoTronics and the Fish Family Trust
as discussed in Note 7 to the Consolidated Financial Statements. Upon the
resolution of the lawsuit, the remaining shares held in escrow will either be
released to the Falk Family Trust, used either partially or in their entirety as
a means of settling the lawsuit, or be returned to the Company. At February 28,
1999, the 1,500,000 shares that have not met the earnout arrangement have been
excluded from the calculation of basic or diluted earnings per share.

During the current fiscal quarter, in exchange for services, 279,326 shares of
common stock were issued to the Company's attorneys. The fair value (as
determined by the quoted market price) of the common stock in excess of the
liability, $30,500, has been accounted for as additional general and
administrative expense.

At February 28, 1999, the Company had 165,000 options outstanding pursuant to
its 1992 ISO Stock Option Plan exercisable at prices ranging from $0.50 to $2.30
per share expiring beginning 2000 through 2001. The Company had 511,753 options
outstanding pursuant to its 1992 NSO Stock Option Plan exercisable at prices
ranging from $0.18 to $2.30 per share expiring beginning 1999 through 2002. The
Company also had 3,296,691 options outstanding pursuant to its 1996 Stock Option
Plan exercisable at $0.39 to $2.30 per share expiring beginning in 1999 through
2003. Some of the options outstanding under these plans are not presently
exercisable and are subject to meeting vesting criteria.

As of October 1, 1995, the Board of Directors adopted the 1995 Employee Stock
Compensation Plan providing for the issuance of up to 250,000 common shares to
Employees, as defined. Executive officers and directors were not eligible under
the Plan. Through September 30, 1998, the Company had issued 217,600 common
shares pursuant to the plan. The plan expired on September 30, 1998 with no
additional common shares being issued.

At February 28, 1999, the Company had warrants outstanding to purchase 641,171
common shares at exercise prices ranging from $0.35 to $1.69 per share expiring
beginning in 2000 through 2003. During the three months and nine months ended
February 28, 1999, the Company issued warrants to a group of investors who had
loaned the Company in the aggregate $147,500 under short-term notes payable. The
Company has included $20,500 and $29,000 for the three months and the nine
months ended February 28, 1999, respectively, related to the value of these
warrants in "non-cash interest expense".

5. 5% CONVERTIBLE TERM DEBENTURES

In June 1997, the Company issued to a limited number of investors for cash an
aggregate of $2,000,000 of unsecured 5% Convertible Term Debentures due June 2,
1999 ("Debentures") and Stock Purchase Warrants ("Warrants") with a right to
purchase an aggregate 611,733 shares of common stock, par value $.00001 per




                                       9
<PAGE>   10


                         PATRIOT SCIENTIFIC CORPORATION
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (Unaudited)


share, at an exercise price of $1.69125. In September 1998, the exercise price
for related warrants to purchase 370,000 shares of common stock was reduced from
$1.69125 to $0.36. In November 1997, the Company issued to the same investors
for cash an aggregate of $1,000,000 of Debentures due June 2, 1999 and Warrants
with a right to purchase an aggregate 305,867 shares of common stock, par value
$.00001 per share, at an exercise price of $1.50. In September 1998, the
exercise price for related warrants to purchase 185,000 shares of common stock
was reduced from $1.50 to $0.36. The additional warrants value, due to the
reduction in the exercise price, of $142,500 was reflected as additional
interest expense in the second fiscal quarter of 1999.

The principal and interest amount of each Debenture could, at the election of
the holder, be converted in whole or in part and from time to time into fully
paid and nonassessable shares of common stock, $.00001 par value, of the
Company, at a price which was the lower of (i) $1.1646 per share or (ii)
depending on the number of days the Debentures had been held after the funding
date, from 75% to 91% of the average of the closing bid prices for the common
stock for the ten consecutive trading days ending on the trading day immediately
preceding such conversion date.

As of February 28, 1999, the Debentures had been fully converted into 6,069,345
common shares of the Company. In addition, as of February 28, 1999, the
investors had exercised warrants to purchase 555,000 common shares of the
Company.

Convertible debt instruments which are convertible at a discount to market were
accounted for by treating such discount as additional interest expense. The
Company computed the amount of the discount based on the difference between the
conversion price and fair value of the underlying common stock on the dates the
Debentures were issued. The Company recorded $2,160,941 of additional paid-in
capital for the discount related to the embedded interest in the Debentures. Of
this amount, $142,830 has been expensed during the nine months ended February
28, 1999 under the caption "Non-cash interest expense."

6. INVESTMENT AGREEMENT

In February 1999, the Company entered into an investment agreement with Swartz
Private Equity, LLC. The investment agreement entitles the Company, at the
Company's option, to issue and sell its common stock for up to an aggregate of
$5 million from time to time during a three-year period through February 24,
2002, subject to certain conditions including (1) an effective registration
statement must be on file with the SEC registering the resale of the common
shares, and (2) a limitation on the number of common shares which can be sold to
Swartz within a 30 day time period based on the trading volume of the stock,
among others. Swartz may purchase the common stock from the Company at a
discount ranging from 10% to 20% depending on the price of the common stock. In
addition to the common stock purchased, Swartz will receive warrants to purchase
an additional 15% of the common stock equal to 110% of the market price on the
last day of the purchasing period, subject to further semi-annual adjustment if
the price of the common stock goes down.

7. CONTINGENCY

In October 1998, the Company was sued in the District Court for Travis County,
Texas by the Fish Family Trust, a co-inventor of the original ShBoom technology.
The suit also named as defendants nanoTronics and Gloria Felcyn on behalf of the
Falk Trust. The suit sought a judgment for damages, a rescission of the
Technology Transfer Agreement and a restoration of the technology to the
co-inventor. The Company had the suit removed to the United States District
Court for the Western District of Texas, Austin Division, and requested the
Federal District Court to dismiss the suit based on lack of minimum contacts
with Texas or, in the alternative, to transfer the case to the Southern District
of California. In January 1999, the Federal District Court dismissed the suit
for lack of subject matter and personal jurisdiction. The Fish Family Trust then
refiled the suit in



                                       10
<PAGE>   11


              PATRIOT SCIENTIFIC CORPORATION NOTES TO CONSOLIDATED
                        FINANCIAL STATEMENTS (CONTINUED)
                                   (Unaudited)


the Superior Court of San Diego County, California seeking remedies similar to
the Federal District Court dismissed action. In March 1999, the Company joined
with nanoTronics and Gloria Felcyn and filed its response and cross-complaint
against the Fish Family Trust. The Company and the other defendants intend to
vigorously contest the plaintiff's allegations. Management does not believe, at
this stage of the case, that it is possible to estimate the outcome of the
litigation.

8. RESTATEMENT OF 1998 FINANCIAL STATEMENTS

     During the years ended May 31, 1998 and 1997, shares of common stock were
earned under the terms of the escrow arrangement as discussed in Note 4 to the
Consolidated Financial Statements. Previously, compensation expense was
recognized upon the release of shares from escrow rather than when such shares
were earned. The market value of the shares at the release date was previously
recorded as compensation expense in the year ended May 31, 1998. The market
value of the shares at the date that such shares were earned should have been
recorded as compensation expense in the fiscal years ended May 31, 1998 and
1997. Accordingly, the Company restated its 1998 and 1997 Consolidated Financial
Statements. As a result of this restatement, the 1998 and 1997 net loss before
extraordinary item and net loss were each increased by $1,620,000 and $725,000,
respectively, and basic and diluted loss per share were each decreased by $0.04
and $0.03 per share, respectively.















                                       11
<PAGE>   12



ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS.

THE FOLLOWING DISCUSSION INCLUDES FORWARD-LOOKING STATEMENTS WITH RESPECT TO THE
COMPANY'S 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 THE COMPANY'S ANNUAL REPORT ON
FORM 10-KSB FOR THE YEAR ENDED MAY 31, 1998.

The Company's results of operations have and may continue to be subject to
significant quarterly variation. The results for a particular quarter may vary
due to a number of factors, including the overall state of the microprocessor
and communications segments of the economy, the development status and demand
for the Company's products, economic conditions in the Company's markets, the
timing of orders, the timing of expenditures in anticipation of future sales,
the mix of products sold by the Company, the introduction of new products and
product enhancements by the Company or its competitors and pricing and other
competitive conditions.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED FEBRUARY 28, 1999 AND 1998

Net sales. Total net sales for the third quarter of fiscal 1999 increased 7.0%
to $271,525 from $253,691 for the third quarter of fiscal 1998. This increase
was due primarily to a new licensing agreement for the Company's PSC1000
microprocessor for $80,000 coupled with a reduction in follow on shipments for
the Company's matured communication products several of which are approaching
the end of their life cycles. Development and sales of new communications
products have not achieved a level to replace the maturing products.

Cost of sales. Cost of sales as a percentage of net sales decreased to 41.8% for
the third quarter of fiscal 1999 compared to 43.1% for the corresponding quarter
of the previous fiscal year. This decrease is due to the licensing agreement for
the PSC1000, which does not have associated costs, favorably impacting the cost
of sales percentage.

Research and development expenses remained substantially the same at $478,571
for the third fiscal quarter of 1999 compared to $475,214 for the third fiscal
quarter of 1998.

Selling, general and administrative expenses increased by 4.7% from $389,043 for
the third quarter of fiscal 1998 to $407,483 for the third quarter of fiscal
1999. This increase was due primarily to an increase in legal costs.

Other income (expense) was significantly lower for the third quarter of fiscal
1999 compared to the corresponding period of the previous fiscal year primarily
as a result of higher non-cash interest expense recognized in 1998 as discussed
in Notes 4 and 5 to the consolidated financial statements.

RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED FEBRUARY 28, 1999 AND 1998

Net sales. Total net sales for the nine months ended February 28, 1999 decreased
2.9% to $1,108,022 from $1,140,711 for the corresponding period of fiscal 1998.
This decrease was due primarily to a reduction in follow on shipments for our
matured communication products several of which are approaching the end of their
life cycles. Development and sales of new communications products have not
achieved a level to replace the maturing products. Also, we had to reschedule
the product delivery on our kiosk application order of $3,355,000. Although no
assurance can be given, the kiosk order is scheduled to begin shipments in the
first fiscal quarter of 2000, June 1 to August 31, 1999, with the balance of
shipments to be completed by the end of fiscal year 2000.

Cost of sales. Cost of sales as a percentage of net sales increased to 61.7% for
the nine months ended February 28, 1999 compared to 47.9% for the corresponding
period of the previous fiscal year. This increase is due in part to lower




                                       12
<PAGE>   13


profit margins on the non-recurring engineering portion of our kiosk application
order compared to profit margins typically associated with our other product
lines. The remainder of the kiosk order is anticipated to put upward pressure on
the cost of sales as a percentage of net sales when shipments of the product
portion of the kiosk order commences.

Research and development expenses increased 25.7% for the nine months ended
February 28, 1999 to $1,634,060 from $1,299,975 for the corresponding period for
the previous fiscal year. This was due to an increase in licensed software
support and update fees for the Java OS and Personal Java application, increased
costs of porting a real time operating system to the PSC1000, and costs related
to the development of the kiosk.

Selling, general and administrative expenses decreased by 32.5% to $1,770,158
for the nine months ended February 28, 1999 compared to $2,620,908 for the
corresponding period of the previous fiscal year. This decrease was due
primarily to a reduction in compensation costs.

Other expense was $335,993 for the nine months ended February 28, 1999 compared
to $1,665,725 for the corresponding period for the previous fiscal year. This
decrease was due primarily to the non-cash interest related to Convertible Term
Debentures discussed in Note 5 to the Consolidated Financial Statements and the
interest on those Debentures being significantly lower in the current nine month
period.

LIQUIDITY AND CAPITAL RESOURCES

At February 28, 1999, working capital was a negative $1,013,056 and cash and
cash equivalents totaled $16,800. The Company has funded its operations
primarily through the issuance of securities and debt financings. Cash and cash
equivalents decreased $585,656 during the nine months ended February 28, 1999.
The net cash used in operating activities was $1,136,873, additions to property
and equipment were $273,096, and funds generated from debt and equity financings
were $824,313. During the nine months ended February 28, 1999, accounts
receivable decreased $136,220 as a result of a reduction in sales, increased
collection efforts and the sale of receivables to a bank under a factoring
agreement. Prepaid expenses increased $49,198 as a result of maintenance
contracts on software being amortized over the entire year. Accounts payable
increased $900,413 as a result of annual obligations for software maintenance
and a slow down in payments as a result of the cash and cash equivalent
reduction.

The Company's current cash requirements to sustain its operations for the next
twelve months are estimated to be $1,600,000. The Company expects that these
requirements will be provided:

     Internally by:
     o    the cash profits related to the $3,355,000 kiosk order, (a portion of
          which is anticipated as an advance payment during our first fiscal
          quarter of 2000 (June 1 to August 31, 1999), previous to any product
          shipments, and

     Externally by:
     o    short-term debt instruments, including a receivable financing
          arrangement established with its bank,

     o    previous to the effective date of the registration of the underlying
          stock to be resold under the investment agreement, private placement
          debt and/or equity financings, and

     o    subsequent to the effective date of the registration of the underlying
          stock to be resold under the investment agreement, draws against the
          equity line of credit.

Since February 28, 1999, the Company has issued short-term debt financings for
$553,000 and sold equity to two private investors totaling $75,000. These
amounts have enabled the Company to meet its current needs and will provide
funding for the next 30 to 60 days. If, during the next 60 days, the Company
does not receive the initial funding for the kiosk order or the initial draw
against the investment agreement, then additional similar debt or equity
financings will be necessary to continue to meet its cash requirements.

In February 1999, the Company entered into an agreement for up to $5,000,000
under an investment agreement. The investment agreement allows it, at its sole
discretion, to put common stock into the hands of Swartz Private Equity, LLC at
a discount from market, ranging from 10% to 20% depending on the market price of
the common stock. The puts are subject to common stock trading volume
limitations and registration of the securities. The Company anticipates the
initial put under the investment agreement will take place during the first
quarter of fiscal year 2000,



                                       13
<PAGE>   14

June 1-August 31, 1999. The funds anticipated from the kiosk order are subject
to the Company's customer receiving funds from the Mexican Department of Tourism
and on several occasions product shipments have been rescheduled pending the
receipt of those funds.

The Company anticipates that it may require additional equipment, fabrication,
components and supplies during the next twelve months to continue development of
its technologies. Product introductions such as those currently underway for
communication products and the PSC1000 may require significant inventory,
product launch, marketing personnel and other expenditures that the Company can
not currently estimate. Further, if expanded development is commenced or new
generations of microprocessors are accelerated beyond the Company's current
plans, additional expenditures, that the Company can not currently estimate, may
be required. It is possible therefore, that higher levels of expenditures may be
required than the Company currently contemplates resulting from changes in
development plans or as required to support new developments or
commercialization activities or otherwise.

Based on the current fiscal year's rate of cash operating expenditures and
current plans, the Company anticipates a need for additional cash to meet its
requirements for the next twelve months. There can be no assurance that any
funds required during the next twelve months or thereafter can be generated from
operations or that if such required funds are not internally generated that
funds will be available from external sources such as debt or equity financings
or other potential sources. The lack of additional capital could force the
Company to substantially curtail or cease operations and would, therefore, have
a material adverse effect on its 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 the
Company's existing shareholders.

NEW ACCOUNTING PRONOUNCEMENTS

In June 1997, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards ("SFAS") No. 131, "Disclosures about Segments
of an Enterprise and Related Information" which supersedes SFAS No. 14
"Financial Reporting for Segments of a Business Enterprise." SFAS No. 131
establishes standards governing the way that public companies report financial
information about operating segments in annual financial statements, and
requires reporting of selected information about operating segments in interim
financial statements issued to the public. It also establishes standards for
disclosure regarding products and services, geographic areas and major
customers. SFAS No. 131 defines operating segments as components of a company
about which separate financial information is available that is evaluated
regularly by the chief operating decision maker in deciding how to allocate
resources and in assessing performance. The Company has only one operating
segment. SFAS No. 131 is effective for financial statements for periods
beginning after December 15, 1997 and requires comparative information for
earlier years to be restated. The Company will implement SFAS No. 131 in its May
31, 1999 financial statements. Results of operations and financial position will
be unaffected by implementation of the standard.

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities" which requires companies to record
derivatives on the balance sheet as assets or liabilities, measured at fair
market value. Gains or losses resulting from changes in the values of those
derivatives would be accounted for depending on the use of the derivative and
whether it qualifies for hedge accounting. The key criterion for hedge
accounting is that the hedging relationship must be highly effective in
achieving offsetting changes in fair value or cash flows. SFAS No. 133 is
effective for fiscal periods beginning after June 15, 1999. The Company believes
the adoption of this statement will have no material impact on its financial
statements.

YEAR 2000 COMPLIANCE

Many existing computer programs use only two digits to identify a year in the
date field, with the result that data referring to the year 2000 and subsequent
years may be misinterpreted by these programs. If present in the computer
applications of a company or third parties (such as customers, financial
institutions, and suppliers) and not corrected, this problem may cause computer
applications to fail or to create erroneous results and could cause a disruption
in operations and have an adverse effect on a company's business and results of
operations.



                                       14
<PAGE>   15

The Company has adopted a formal plan to evaluate its readiness for the Year
2000 and to address any deficiencies. The plan encompasses:

        o  information technology (IT) systems,

        o  non-IT systems,

        o  our products, and

        o  systems of third parties, including distributors and key suppliers.

INFORMATION TECHNOLOGY. The Company's principal computer systems that it uses
for financial accounting, manufacturing, inventory control, purchasing, sales
administration, engineering, and other business functions are not Year 2000
compliant. The Company has identified a replacement system that we expect to
purchase, install, and have fully functional before June 30, 1999. The cost of
this new system will be approximately $30,000.

NON-IT SYSTEMS. By the end of June 1999, the Company expects to have completed
an evaluation of telephone systems, manufacturing equipment, facility heating
and cooling systems, and other non-IT systems for Year 2000 readiness and will
promptly take remedial action as necessary.

THE COMPANY'S PRODUCTS. The Company has completed a series of tests, utilizing
industry standards, of the electronics systems of our products, including those
product lines no longer being manufactured but remaining in use at customer
sites. The Company's review has determined that the products should continue to
operate according to specifications after December 31, 1999.

KEY VENDORS AND SUPPLIERS. The Company will initiate a survey of its key vendors
and suppliers to assess their plans for bringing any non-compliant systems into
Year 2000 compliance. This study is expected to be completed by the end of June
1999.

Other than the replacement computer system discussed above, substantially all of
the effort to evaluate our Year 2000 readiness has been made using internal
personnel, and therefore incremental expenses have been less than $50,000. The
Company has not incurred any material expenses in connection with its evaluation
of non-IT systems and do not expect material expense in the future, although the
evaluation of non-IT systems is not yet complete. The Company has not incurred
any material expenses to date in connection with the evaluation of our products
and the status of its vendors and suppliers with respect to Year 2000 issues.
The Company does not anticipate material expenses in the future, although the
evaluation of key vendors' and suppliers' Year 2000 readiness is not yet
complete.

The Company's Year 2000 readiness plan, as well as its consideration of
contingency plans, are ongoing and will continue to evolve as new information
becomes available. At the present time, the Company believes that it is
difficult to identify the cause of the most reasonably likely worst case Year
2000 scenario. The Company has not yet adopted any formal contingency plans and
will determine the need for such plans as part of our ongoing assessment of
vendors and suppliers, products, and internal business systems. Due to the
complexity and pervasiveness of the Year 200 issue, and in particular the
uncertainty regarding the Year 2000 compliance programs of third parties, no
assurances can be given that the Year 2000 problem will not have material
adverse effects on the Company's business or its results from operations.






                                       15
<PAGE>   16



FUTURE PERFORMANCE AND RISK FACTORS

THIS REPORT CONTAINS A NUMBER OF FORWARD-LOOKING STATEMENTS WHICH REFLECTS THE
COMPANY'S CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND FINANCIAL PERFORMANCE.
THE COMPANY'S 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. THE COMPANY UNDERTAKES
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, the
Company has segregated its operations into microprocessor, communication, and
radar/antenna segments. However, synergistic technical and other resources can
and will be deployed across all three segments.

Product revenues have been primarily from the communication segment. The
communication products are specifically designed to fill both the high speed
data as well as the video conferencing requirements of the Internet.

The microprocessor continues to be the Company's primary development focus. The
Company has completed development of a 0.35 micron version of the PSC1000 which
has resulted in increased processing speed and performance. In addition, the
Company is running the Sun Microsystems's Java OS on the PSC1000. The PSC1000
executes Java very efficiently, and is the price/performance leader in the Java
processor marketplace. This enhancement is expected to increase potential market
opportunities in areas such as TV set top boxes, smart phones, PDAs, network
computers, and other Internet related products.

The Company's primary focus for the radar and antenna technology segment
continues to be to pursue various government agencies and commercial entities to
fund additional development efforts and to establish business partnerships that
will enable the Company to commercialize this technology. The Company recently
completed the first phase of a development contract and has submitted a proposal
for additional funding to the Navy to continue development of the gas antenna.

The Company is focusing its sales efforts on original equipment manufacturers,
system integrators, and Internet service providers for both the microprocessor
and communication segments. In addition, the Company anticipates using the
microprocessor in existing and future products developed in all three product
segments.

The Company has 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 the Company's control. The
Company has a limited operating history, has incurred significant cumulated
losses, has only recently commenced marketing and sales of its products and has
not achieved a profitable level of operations. There can be no assurance of
future profitability. The Company may require additional funds in the future for
operations or to exploit its technologies. There can be no assurance that any
funds required during the next twelve months or thereafter can be generated from
operations or that such required funds will be available from the aforementioned
or other potential sources. The lack of additional capital could force the
Company to substantially curtail or cease operations and could therefore have a
material adverse effect on the Company's 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
existing shareholders of the Company. The Company's technologies are in various
stages of development. The Company's communication products have been developed
to the point of production of marketable product and the PSC1000 is in the first
stages of production. 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. The Company's
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 the Company or achieve profitable operations.




                                       16
<PAGE>   17

The Company relies primarily on patents to protect its intellectual property
rights. There can be no assurance that patents held by the Company will not be
challenged and invalidated, that patents will issue from any of the Company's
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 the
Company's products can be sold to provide meaningful protection or commercial
advantage to the Company. Competitors may also be able to design around the
Company's patents.

The Company acquired its ShBoom technology pursuant to a chain of agreements,
and there is uncertainty regarding royalty payments, if any, and indemnification
from prior parties. The Company does not believe it is obligated to pay any
royalties on aspects of the ShBoom technology specified in prior agreements
between nanoTronics Corporation and previous inventors. The Company believes,
should there be royalties due to previous inventors, that the obligation is that
of nanoTronics. The Company could become subject to unindemnified claims
relating to any failure by nanoTronics to pay such royalties, if due. Also the
Company could become liable for up to $1,250,000 to nanoTronics under certain
indemnification provisions. The Company has recently been named as a defendant
in a law suit filed by one of the previous inventors. The Company is unable at
this time to determine the eventual outcome of this suit. The Company's
Consolidated Financial Statements do not include any adjustments that might
result from the outcome of this uncertainty.

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

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

In October 1998, the Company was sued in the District Court for Travis County,
Texas by the Fish Family Trust, an assignee of a co-inventor of the original
ShBoom technology. The suit also named as defendants nanoTronics and Gloria
Felcyn as trustee of the Falk Family Trust. The suit sought a judgment for
damages, a rescission of the technology transfer agreement by which nanoTronics
obtained the technology and a restoration of the technology to the Fish Family
Trust. The Company had the suit removed to the United States District Court for
the Western District of Texas, Austin Division. The Company requested the
Federal District Court dismiss the suit based on a lack of minimum contacts with
Texas or, in the alternative, to transfer the case to the Southern District of
California. In January 1999, the Federal District Court dismissed the suit for
lack of subject matter and personal jurisdiction.

The Fish Family Trust then refiled the suit in the Superior Court of San Diego
County, California seeking remedies similar to the action dismissed by the
Federal District Court. The Company joined with nanoTronics and Gloria Felcyn,
Trustee, and retained joint legal counsel to defend this suit. The Company has
not had any meaningful settlement discussions. A trial has been scheduled for
December, 1999. The Company and the other defendants intend to vigorously
contest the plaintiff's allegations.



                                       17
<PAGE>   18


ITEM 2. CHANGE IN SECURITIES

        (a)    The Company offered and sold the following described securities,
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.

<TABLE>
<CAPTION>
                                                Number of Common    Aggregate Purchase    Purchase Price Per
   Name                      Date of  Sale           Shares               Price                 Share
   ----                      -------  ----           ------               -----                 -----
<S>                          <C>                     <C>                 <C>                 <C>
Robert Crawford              December 4, 1998        100,000             $ 25,000            .25  Cash
                             December 16, 1998       100,000               23,000            .23  Cash
                             April 26, 1999          200,000               35,000            .175 Cash
                             April 28, 1999          100,000               20,000            .20  Cash

James C. and
  Josephine M. Zolin         December 29, 1998       130,435               30,000            .23  Cash
                             January 29, 1999         50,000               17,500            .35  Cash

Wayne Opperman               January 29, 1999         50,000               17,500            .35  Cash

Clifford E. Koerner          February 1, 1999        100,000               35,000            .35  Cash

Richard D. Daniels           February 1, 1999         50,000               17,500            .35  Cash

Luce, Forward, Hamilton
  and Scripps, LLP           February 11, 1999       279,326               94,971            .34  Services

William G. Crawford          April 28, 1999          100,000               20,000            .20  Cash

Castle Creek Technology
   Partners, LLC             June 14, 1999           397,205              116,183            .292 Note
                                                                                                  Conversion
</TABLE>



                                   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: June 21, 1999                     By:   /s/ LOWELL W. GIFFHORN
                                             ---------------------------------
                                             Chief Financial Officer
                                             (Principal Financial and
                                             Accounting Officer and duly
                                             authorized to sign on behalf
                                             of the Registrant)





                                       18