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 August 31, 2005

|_|   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 |_|

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes |_| No |X|

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                         293,168,632
-------------------------------                         -----------
           (Class)                             (Outstanding at August 31,2005)


    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 August 31, 2005 (unaudited)
           and May 31, 2005                                                    3
        Consolidated Statements of Operations for the three months
           ended August 31, 2005 and 2004 (unaudited)                          4
        Consolidated Statements of Cash Flows for the three months
           ended August 31, 2005 and 2004 (unaudited)                          5
        Notes to Unaudited Consolidated Financial Statements                6-13
     ITEM 2. Management's Discussion and Analysis or Plan of Operation     14-20
     ITEM 3. Controls and Procedures                                          21

PART II. OTHER INFORMATION                                                    22
     ITEM 1. Legal Proceedings                                             22-23
     ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds       *
     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                              24-27

     SIGNATURES                                                               28



* No information provided due to inapplicability of the item.


                                       2
<PAGE>

                                    PART I- FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                    PATRIOT SCIENTIFIC CORPORATION
                                     CONSOLIDATED BALANCE SHEETS

                                                                        August 31, 2005  May 31, 2005
-----------------------------------------------------------------------------------------------------
<S>                                                                     <C>              <C>
ASSETS
                                                                          (Unaudited)

Current Assets:
   Cash and cash equivalents (including $3,504,862 held by a
   consolidated entity at August 31, 2005)                               $  9,474,759    $    591,426
   Marketable securities and short term investments                           709,475         697,524
   Restricted short term investment                                           203,341         201,648
   Licenses receivable                                                      1,250,000       2,000,000
   Prepaid expenses and other current assets                                  231,213         121,758
-----------------------------------------------------------------------------------------------------
Total current assets                                                       11,868,788       3,612,356

PROPERTY AND EQUIPMENT, net of accumulated depreciation of
   $1,091,533 and $1,085,703                                                   25,087          21,376

OTHER ASSETS                                                                       --          23,891

PATENTS AND TRADEMARKS, net of accumulated amortization of $558,269
   and $549,563                                                                57,705          66,411
-----------------------------------------------------------------------------------------------------
                                                                         $ 11,951,580    $  3,724,034
=====================================================================================================

LIABILITIES, MINORITY INTEREST, AND STOCKHOLDERS' EQUITY

Current liabilities:
   Line of credit                                                        $     99,098    $    100,000
   Current portion of convertible debentures, net of debt discount
      of $210,924 and $301,320                                                512,244         421,847
   Accounts payable                                                           326,689         268,458
   Accrued liabilities                                                        472,717         505,153
   Current portion of capital lease obligation                                     --           2,306
   Accrued contested fee payable                                              346,000         346,000
-----------------------------------------------------------------------------------------------------
Total current liabilities                                                   1,756,748       1,643,764

CONVERTIBLE DEBENTURES, net of debt discount of $14,699 and $111,559           10,301          45,942
-----------------------------------------------------------------------------------------------------
Total liabilities                                                           1,767,049       1,689,706
-----------------------------------------------------------------------------------------------------

MINORITY INTEREST IN EQUITY OF CONSOLIDATED ENTITY                          1,759,431              --

COMMITMENTS AND CONTINGENCIES (Note 5)

STOCKHOLDERS' EQUITY
   Preferred stock, $.00001 par value; 5,000,000 shares authorized:
     none outstanding                                                              --              --
   Common stock, $.00001 par value: 500,000,000 shares authorized:
     293,168,632 and 280,492,013 issued and outstanding                         2,932           2,805
   Additional paid-in capital                                              56,517,682      54,569,091
   Accumulated deficit                                                    (48,095,514)    (52,537,568)
-----------------------------------------------------------------------------------------------------
   Total stockholders' equity                                               8,425,100       2,034,328
-----------------------------------------------------------------------------------------------------
                                                                         $ 11,951,580    $  3,724,034
=====================================================================================================
</TABLE>

See accompanying notes to unaudited consolidated financial statements.


                                                  3
<PAGE>

<TABLE>
<CAPTION>
                                  PATRIOT SCIENTIFIC CORPORATION
                               CONSOLIDATED STATEMENTS OF OPERATIONS
                                            (UNAUDITED)



                                                                         Three Months Ended
                                                                  --------------------------------
                                                                  August 31, 2005  August 31, 2004
--------------------------------------------------------------------------------------------------
<S>                                                                <C>             <C>
Revenues:

   Licenses and royalties                                           $  10,000,000    $          --
   Other                                                                   10,070            2,550
--------------------------------------------------------------------------------------------------
                                                                       10,010,070            2,550

Operating expenses:
   Research and development                                                88,707          128,304
   Selling, general and administrative                                  1,675,719          380,401
   Settlement and license expense                                       3,855,132               --
--------------------------------------------------------------------------------------------------
                                                                        5,619,558          508,705
--------------------------------------------------------------------------------------------------

Operating income (loss)                                                 4,390,512         (506,155)
--------------------------------------------------------------------------------------------------

Other income (expense):
   Unrealized loss on marketable securities                                    --          (14,663)
   Other income                                                            53,457           47,273
   Interest expense                                                      (202,484)        (632,906)
--------------------------------------------------------------------------------------------------
                                                                         (149,027)        (600,296)
--------------------------------------------------------------------------------------------------

Income (loss) before minority interest in loss of consolidated
entity and income taxes                                                 4,241,485       (1,106,451)

Minority interest in loss of consolidated entity                          240,569               --
--------------------------------------------------------------------------------------------------
Income (loss) before income taxes                                       4,482,054       (1,106,451)
Provision for income taxes                                                (40,000)              --
--------------------------------------------------------------------------------------------------
Net income (loss)                                                   $   4,442,054    $  (1,106,451)
==================================================================================================
Basic income (loss) per common share                                $        0.02    $       (0.01)
--------------------------------------------------------------------------------------------------
Diluted income (loss) per common share                              $        0.01    $       (0.01)
--------------------------------------------------------------------------------------------------
Weighted average number of common shares outstanding-basic            291,335,488      183,060,245
Weighted average number of common shares outstanding-diluted          367,216,524      183,060,245
==================================================================================================
</TABLE>

See accompanying notes to unaudited consolidated financial statements.


                                                4
<PAGE>

<TABLE>
<CAPTION>
                                       PATRIOT SCIENTIFIC CORPORATION
                                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                 (UNAUDITED)

                                                                                    Three Months Ended
                                                                             -------------------------------
                                                                             August 31, 2005 August 31, 2004
------------------------------------------------------------------------------------------------------------
<S>                                                                          <C>             <C>
CHANGE IN CASH AND CASH EQUIVALENTS
OPERATING ACTIVITIES:
     Net income (loss)                                                            $ 4,442,054    $(1,106,451)
     Adjustments to reconcile net income (loss) to net cash provided by
      (used in) operating activities:
         Amortization and depreciation                                                 14,536         23,648
         Non-cash interest expense related to convertible debentures, notes
           payable and warrants                                                       187,256        585,411
         Unrealized loss on marketable securities                                          --         14,663
         Common stock issued for services and other                                   206,250         14,800
         Non-cash expense related to warrant repricing and issuance                 1,397,491             --
         Accrued interest income added to investments                                 (13,644)            --
         Loss in consolidated entity allocated to minority interest                  (240,569)            --
     Changes in:
           Accounts receivable                                                             --          1,225
           Prepaid and other assets                                                   (85,564)         3,183
           Licenses receivable                                                        750,000             --
           Accounts payable and accrued expenses                                       31,835        (36,155)
------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) operating activities                                 6,689,645       (499,676)
------------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES:
     Purchase of property and equipment                                                (9,541)            --
------------------------------------------------------------------------------------------------------------
Net cash used in investing activities                                                  (9,541)            --
------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES:
     Net payment on line of credit                                                       (902)            --
     Minority interest investment in consolidated entity                            2,000,000             --
     Payments for capital lease obligations                                            (2,306)        (1,839)
     Proceeds from exercise of common stock warrants and options                      206,437        154,431
------------------------------------------------------------------------------------------------------------
Net cash provided by financing activities                                           2,203,229        152,592
------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                8,883,333       (347,084)
CASH AND CASH EQUIVALENTS, beginning of period                                        591,426        355,940
------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, END OF PERIOD (1)                                      $ 9,474,759    $     8,856
============================================================================================================

(1)   Included in cash at August 31, 2005 is $3,504,862  held by a  consolidated
      entity  which amount can only be used for the  operations  of that entity.
      SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

     Cash payments for interest                                                   $        --    $     1,781
     Convertible debentures and accrued interest exchanged for common stock       $   138,540    $   469,665
============================================================================================================
</TABLE>

See accompanying notes to unaudited consolidated financial statements.


                                       5
<PAGE>

PATRIOT SCIENTIFIC CORPORATION
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1.    BASIS OF PRESENTATION

The  unaudited   consolidated   financial   statements  of  Patriot   Scientific
Corporation  (the "Company",  "We" or "us") 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-KSB for
our fiscal year ended May 31, 2005.

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.  Additionally,  during the quarter
ended August 31, 2005 the Company entered into certain nonrecurring transactions
related to the TPL agreement, which is more fully described in Note 5. Operating
results for the three month  period  ended  August 31, 2005 are not  necessarily
indicative of the results that may be expected for the year ending May 31, 2006.

EARNINGS (LOSS) PER SHARE

We  follow  Statement  of  Financial  Accounting  Standards  ("SFAS")  No.  128,
"Earnings  per Share."  Under SFAS No.  128,  basic  income  (loss) per share is
calculated  as income  (loss)  available to common  stockholders  divided by the
weighted average number of common shares outstanding.  Diluted income (loss) per
share is calculated as net income (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 and the if-converted  method
for  convertible  debentures.  For the period ended  August 31, 2005,  potential
common shares of  approximately  75,880,000,  arising from our stock options and
warrants,  were  included in the  determination  of diluted  earnings per share.
Potential  common  shares  arising  from an  additional  1,525,000  options  and
warrants,  as  well  as  approximately  11,500,000  related  to our  convertible
debentures,  were not included in the calculation of diluted  earnings per share
for  the  quarter  ended  August  31,  2005  as  they  were   considered  to  be
anti-dilutive.  Potential  common  shares  related to all options,  warrants and
convertible debentures were considered to be anti-dilutive for the quarter ended
August 31, 2004 due to our reported loss in this period.

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. See "Recent Accounting Policies."

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.


                                       6
<PAGE>

PATRIOT SCIENTIFIC CORPORATION
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


Had the  Company  employed  the  accounting  provisions  for SFAS No.  123,  the
Company's  reported  net income  (loss) per share would have been changed by the
pro forma amounts indicated below:

                                                Three Months Ended
                                       -------------------------------------
                                           August 31,         August 31,
                                              2005               2004
                                       ------------------  -----------------
Net income (loss)-as reported          $       4,442,054   $     (1,106,451)
Compensation expense                            (182,250)            (2,883)
                                       ------------------  -----------------
Pro forma
Net income (loss)-pro forma            $       4,259,804   $     (1,109,334)
                                       ==================  =================
As reported per share:
    Basic                              $            0.01   $          (0.01)
                                       ------------------  -----------------
    Diluted                            $            0.01   $          (0.01)
                                       ------------------  -----------------
Pro forma per share:
    Basic                              $            0.01   $          (0.01)
                                       ------------------  -----------------
    Diluted                            $            0.01   $          (0.01)
                                       ------------------  -----------------

2.    RECENT ACCOUNTING PRONOUNCEMENTS

In December 2004, the Financial  Accounting Standards Board ("FASB") issued SFAS
123R, "Share Based Payment." This statement replaces SFAS No. 123 and supersedes
APB  Opinion 25. SFAS No. 123R  requires  that the cost of  share-based  payment
transactions (including those with employees and non-employees) be recognized as
compensation based on the estimated fair value of the equity instrument awarded.
SFAS No. 123R applies to all share-based payment transactions in which an entity
acquires  goods or  services  by issuing  (or  offering  to issue)  its  shares,
options,  or other equity  instruments  or by incurring  liabilities  in amounts
based on the price of the entity's shares or other equity  instruments,  or that
require (or may require)  settlement  by the  issuance of an entity's  shares or
other  equity  instruments.  This  statement  applies to all new awards  granted
during the fiscal year beginning  after December 15, 2005 and to previous awards
that are  modified or cancelled  after such date.  The Company has not yet fully
evaluated the effect of adopting SFAS No. 123R on its financial statements.

In December 2004, the FASB issued SFAS No. 153, Exchange of Nonmonetary  Assets,
an amendment of APB Opinion No. 29,  "Accounting for Nonmmonetary  Transaction."
SFAS No. 153 is based on the  principle  that  exchanges of  nonmonetary  assets
should be measured based on the fair market value of the assets exchanged.  SFAS
No. 153 eliminates the exception of nonmonetary  exchanges of similar productive
assets and replaces it with a general  exception  for  exchanges of  nonmonetary
assets  that  do not  have  commercial  substance.  SFAS  153 is  effective  for
nonmonetary asset exchanges in fiscal periods beginning after June 15, 2005. The
Company  does not  believe  that the  provisions  of SFAS  No.  153 will  have a
material impact on its financial statements.

In May  2005,  the FASB  issued  SFAS No.  154,  "Accounting  Changes  and Error
Corrections,"  which replaces APB Opinion No. 20, Accounting  Changes,  and FASB
Statement No. 3, Reporting  Accounting Changes in Interim Financial  Statements,
and changes the requirements for the accounting for and reporting of a change in
accounting principle.  SFAS No. 154 requires retrospective  application to prior
periods' financial statements of changes in accounting  principle,  unless it is
impracticable to determine either the period-specific  effects or the cumulative
effect of the  change.  SFAS No. 154 is  effective  for  accounting  changes and
correction  of errors made in fiscal years  beginning  after  December 15, 2005.
Early adoption is permitted for accounting changes and correction of errors made
in fiscal years beginning after the date SFAS No. 154 was issued. At the present
time,  the Company  does not believe  that  adoption of SFAS No. 154 will have a
material effect on its financial statements

3.    CONTINUED EXISTENCE AND MANAGEMENT'S PLAN

Through May 31, 2005, the Company had incurred  repeated net losses and has used
significant amounts of cash in its operations. Historically, the Company has had
to rely on obtaining  financing to fund its  operations;  such  financing  often
being at unfavorable  terms to the Company due to its poor financial  condition.
Management of the Company believes that 2005 represented a turning point for the
Company.  During  fiscal year ended May 31,  2005,  and during the three  months


                                       7
<PAGE>

PATRIOT SCIENTIFIC CORPORATION
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

ended  August 31,  2005,  the  Company was able to resolve  long-standing  legal
disputes   involving   ownership  and  other  issues  related  to  its  patented
technologies.  As a  result,  the  Company  has  been  able to  enter  into  two
significant  license agreements for its technology which resulted in the Company
obtaining  approximately  $13,000,000  in the  aggregate.  These  agreements are
discussed  more  fully  in  Notes  4  and  5  to  these  financial   statements.
Prospectively,  the  Company  anticipates  that it may need to spend  additional
funds in its  efforts  to  further  develop  its  technologies  and  expand  the
technologies'  markets.  The Company  believes that the funds  obtained  through
these  agreements  will be sufficient to meet the Company's  obligations as they
come due for the foreseeable future. If expanded development is commenced or new
generations of microprocessor  technology are accelerated  beyond current plans,
additional  expenditures  may be  required.  At  the  present  time,  management
believes that it has the funds  available to it to meet the  obligations  of the
Company  as they come due for the  foreseeable  future.  In the  event  that the
Company  cannot do so, it will be required to curtail or alter its future  plans
of operations.

4.    LICENSE AGREEMENTS

In February 2005,  the Company  entered into two separate  licensing  agreements
with one customer for the Company's  Ignite  microprocessor  technology  and the
patent  portfolio  technology.  The  aggregate  amount of the two  licenses  was
$3,050,000,  of which  $2,950,000  was for  licensing  fees and $100,000 was for
maintenance services. Maintenance under the agreement is expected to be provided
over a period not to exceed four  years.  The  payment  terms of the  agreements
require aggregate payments of $300,000 at the time of execution, three quarterly
payments of $750,000  each on April 1, August 15, and  November 15, 2005 and one
final payment of $500,000 on February 15, 2006. Total payments  received to date
under the  agreements  include  $1,050,000 in fiscal 2005 and $750,000 in fiscal
2006.  The  agreements  also provide for the future  payment of royalties to the
Company based on sales of product using the licensed  technology.  In connection
with  the  license  agreement,  the  Company  became  obligated  to  the  former
co-inventor  of  the  Ignite  technology  for  $207,600,  payable  in  quarterly
installments of $51,900,  of which $103,800 remains outstanding as of August 31,
2005.

Also, in  conjunction  with entering into these license  agreements,  as well as
other license agreements (Note 5), the legal advisor who had previously assisted
the Company in its  negotiations  has  asserted a claim  against the Company for
amounts to which the advisor believes it is entitled.  The Company is contesting
the  matter;  the  outcome of this  matter is  currently  unknown.  Based on its
current  assessment  of the matter,  the  Company  has  accrued a  liability  of
$346,000 as of August 31, 2005. The Company intends to vigorously  defend itself
in this matter; however, it is possible that, were the Company not to prevail in
the  suit,  the  ultimate   amount  payable  to  such  legal  advisor  could  be
significantly higher.

5.    CREATION OF CONSOLIDATED VENTURE/LICENSE AGREEMENT

In June 2005,  the Company  entered into an agreement  with the  co-inventor  of
certain  of the  Company's  technology  pursuant  to which the  Company  and the
co-inventor  resolved  all  legal  disputes  between  them.  As a result  of the
agreement,  the Company  formed a new limited  liability  company (the "JV LLC")
with the  co-inventor  into which both parties  contributed  their rights to the
technologies.  The Company believes, based upon consultation with its attorneys,
that it was not  required by  applicable  law or other  existing  agreements  to
obtain  approval for the  contribution  of the license rights to the JV LLC from
shareholders  or any parties other than its various  warrant  holders.  Both the
Company and the other member of the JV LLC agreed to establish a working capital
fund of  $4,000,000  for the JV LLC,  of which the  Company's  contribution  was
$2,000,000. The Company and the other member of the JV LLC are obligated to fund
future working  capital  requirements at the discretion of the JV LLC management
committee, in order to maintain working capital of not more than $8,000,000, and
neither  the  Company  nor  the  other  member  of the JV LLC  are  required  to
contribute  more than $2,000,000 in any fiscal year. The JV LLC has committed to
pay the other member of the JV LLC  $500,000 on a quarterly  basis for work done
by the member on behalf of the JV LLC.  The Company  received a 50%  interest in
the JV LLC. For accounting  purposes the newly formed entity is considered to be
a variable  interest  entity,  as defined in FIN 46R,  for which the  Company is
considered  to  be  the  primary  beneficiary.  Accordingly,  the  accounts  and
transactions of the JV LLC have been  consolidated with those of the Company and
the other member of the JV LLC's  interest in the JV LLC has been presented as a
minority interest in the consolidated  financial statements of the Company as of
and for the three month period ended August 31, 2005. As of August 31, 2005, the
JV LLC's sole asset was approximately  $3,500,000 in cash.  Although this amount
is reported  together  with the  Company's  cash  balances  in the  consolidated
balance  sheet as of August 31,  2005,  the Company does not have the ability to
control the JV LLC and this cash is not available for use by the Company. The JV
LLC reported a net loss for the quarter ended August 31, 2005, of  approximately
$480,000.


                                       8
<PAGE>

PATRIOT SCIENTIFIC CORPORATION
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Concurrently  with  forming  the JV LLC,  the  Company  entered  into a  license
agreement  with a third party pursuant to which it received  $10,000,000,  which
amount was recorded as license revenue during the quarter ended August 31, 2005.
In connection  with entering into the license  agreement and forming the JV LLC,
the Company incurred  various cash and non-cash  expenses.  Direct,  incremental
cash costs incurred with the transactions  included $170,000 paid to a committee
of the  Company's  board of  directors  for their  efforts in  consummating  the
transactions,  approximately $1,328,000 paid to certain of the Company's warrant
holders to obtain their  approval of the  agreement,  and  $960,000  paid to the
former  co-inventor  of the  technology.  As more fully  discussed  in Note 4, a
former legal advisor of the Company may assert a success fee against the Company
based upon  proceeds  received by the Company under this license  agreement.  No
amount  has been  accrued  for this  contingency  as the  Company  believes  the
probability  of any amount being paid to the advisor for this license  agreement
is remote.

The Company also granted new  warrants and agreed to reprice  other  outstanding
warrants  in order to obtain  the  necessary  approvals  from  certain  security
interest holders as well as to obtain the release of their security interests in
the  Company's   intellectual  property,  and  to  finalize  the  joint  venture
agreement.  The Company  granted a warrant to the other  member of the JV LLC to
acquire up to  3,500,000  shares of the  Company's  common  stock at a per share
price of $0.125.  The warrant has a term of seven  years.  At the date of grant,
the right to acquire  1,400,000  common shares vested.  The right to acquire the
remaining  2,100,000  shares  will  vest in  700,000  increments  only  upon the
Company's  common  stock  attaining a per share stock price of $0.50,  $0.75 and
$1.00. As additional consideration to the warrant holders for providing approval
for the transaction, the Company agreed to reset the per share exercise price of
approximately  35,000,000  warrants to $0.015 for which the warrant holders also
conveyed  other  warrants  to acquire  12,000,000  shares  back to the  Company.
Further, the Company issued additional warrants to acquire approximately 290,000
shares of the Company's common stock at a per share price of $0.03. The warrants
issued and repriced were valued using the Black Scholes method and the following
assumptions:  volatility  of 123%, no  dividends,  risk free  interest  rates of
approximately  4%, and contractual  terms ranging from five to seven years.  The
value of the warrants  issued and repriced in excess of the current value of the
warrants  reconveyed  and the  value of the  warrants  previously  expensed  was
approximately  $1,397,000,  which  amount,  together  with  the  cash  component
previously described, is reflected as an expense in the quarter ended August 31,
2005.

6.    CONVERTIBLE DEBENTURES

Overview. From fiscal 2002 through fiscal 2005, the Company raised approximately
$5,400,000  through  the  issuance  of  convertible  debentures,  having  stated
interest  rates  ranging from 8% to 12%, to a limited  group of  investors.  The
convertible  debentures  entitle the debenture  holder to convert the principal,
and any accrued interest thereon,  into shares of the Company's common stock for
up to two years from the date of issuance. The following represents a summary of
certain salient features of the convertible debentures.

Number of Shares of Common Stock Into Which the Debentures May Be Converted. The
debentures were initially  convertible into shares of the Company's common stock
at conversion  prices ranging from  approximately  $0.02 to $0.10 per share. The
debentures contain provisions which allow for the conversion rate to be reset on
a periodic  basis based on a  comparison  of the market  price of the  Company's
common stock to the conversion  price of the  debentures.  On those  measurement
dates where the market price is less than the conversion  rate, a new conversion
rate is set based on a weighted  average  of the  market  price for the ten days
prior to the reset measurement date. As of August 31, 2005, the reset conversion
rate on debentures outstanding range from $0.02 to $0.09.

Warrants.  Concurrent  with the  issuance  of the  convertible  debentures,  the
Company  issued to the  debenture  holders  warrants to  purchase  shares of the
Company's  common stock.  These warrants are exercisable for five years from the
date of issuance at either initial negotiated exercise prices or prices equal to
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 generally  subject
to being reset on each six month anniversary of the warrant's issuance, however,
if the warrant  holder elects to have the warrant  shares  registered,  then the
exercise price is fixed at the price in effect on the date of the election.

Options to Purchase Additional Debentures. Subject to the price of the Company's
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 may be converted would initially equal 115% of the volume
weighted  average price for the Company's 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.


                                       9
<PAGE>

PATRIOT SCIENTIFIC CORPORATION
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Shareholder  Approval.  The  Company  may  currently  issue more than 20% of its
outstanding  shares  under the  convertible  debentures.  If the Company were to
become listed on the NASDAQ Capital Market or NASDAQ  National  Market,  then it
must get shareholder  approval to issue more than 20% of its outstanding shares.
Currently, shareholder approval is not required.

Restrictive  Covenants.  For a period of 18 months  from the date of issuance of
the   debentures,   the  Company  is  prohibited   from  entering  into  certain
transactions.  These prohibited transactions 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.  Additionally,  so  long  as  the
debentures  remain  outstanding,  the Company  cannot  declare or pay  dividends
without the debenture holders' approval.

Right of First Refusal.  The debenture  holders have a right of first refusal to
purchase or participate in any equity  securities  offered by the Company 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.  Except for one  debenture  issued on March 23, 2004,  the
Company is responsible  for  registering  the resale of the shares of its common
stock which will be issued on the  conversion of the  debentures.  As of May 31,
2005, there have been six registration statements.

 Security Interest. The convertible debentures were secured by substantially all
assets of the Company  through June 2005,  at which time the  debenture  holders
agreed  to  release  their  security  interests  in the  Company's  intellectual
property. (See Note 5).


                                       10
<PAGE>

PATRIOT SCIENTIFIC CORPORATION
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The  following   tables  present  the  status  and  activity  of  the  Company's
convertible debentures as of and through August 31, 2005:

<TABLE>
<CAPTION>
                                      Principal                                      Shares
                                       Balance                                     Converted
                                         at            Conversion Prices            as of          Warrant
             Dates of    Aggregate     August    ---------------------------       August 31,       Shares
  Series     Issuance    Principal    31, 2005     Initial           Reset           2005          Issued
------------------------------------------------------------------------------------------------------------
<S>          <C>          <C>        <C>         <C>             <C>              <C>            <C>
     A       4/23/02-     1,000,000  $       --  $  0.08616-     $  0.04190-       24,099,548     12,859,175
             6/10/02                                 0.10289         0.04457

     B       8/23/02-       605,000          --     0.05126-        0.04381-       14,777,350     11,234,835
             1/24/03                                  0.0727         0.04722

     C       3/24/02-       510,000          --       0.041-          0.041-       10,470,554      9,377,943
             6/9/03                                    0.065           0.065

     D       8/1/03-        547,500          --      0.0172-         0.0172-       25,178,803     22,455,355
             10/21/03                                  0.048          0.0477

     E       12/1/03-     1,527,500          --      0.0267-         0.0267-       46,794,618     30,395,392
             5/11/04                                    0.10            0.10

     F       3/23/04        723,168     723,168         0.09            0.09               --      8,035,192

     G       9/28/04-       490,000      25,000    0.016710-        0.01670-       20,729,062     21,690,815
             1/17/05                                    0.04            0.04
------------------------------------------------------------------------------------------------------------
                        $ 5,403,168  $  748,168                                   142,049,935    116,048,707
============================================================================================================
</TABLE>


  Convertible debentures issued since April 2002                 $ 5,403,168
  Less debentures converted to common stock                       (4,655,000)
  --------------------------------------------------------------------------
                                                                     748,168
  Less debt discount                                                (225,623)
  --------------------------------------------------------------------------

  Convertible debentures at August 31, 2005                          522,545
  Less current portion                                              (512,244)
  --------------------------------------------------------------------------

  Long term portion                                              $    10,301
  ==========================================================================

  Maturity dates of outstanding convertible debentures
      March 23, 2006                                             $   723,168
      November 17, 2006                                               25,000
  --------------------------------------------------------------------------
                                                                 $   748,168
  ==========================================================================

As of August 31, 2005, the Company's  convertible  debentures  were  convertible
into approximately  10,550,000 shares of the Company's common stock.  During the
quarter ended August 31, 2005,  holders of debentures having a principal balance
of $132,500  converted their debentures,  together with accrued interest thereon
of approximately $6,000, into 8,295,789 shares of the Company's common stock.


                                                     11
<PAGE>

PATRIOT SCIENTIFIC CORPORATION
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

7.    STOCKHOLDERS' EQUITY

The following table summarizes equity transactions during the three months ended
August 31, 2005:

<TABLE>
<CAPTION>
                                                                                 Common
                                                                                 Shares             Amount
                                                                            -----------------  -----------------

<S>                                                                         <C>                <C>
Balance June 1, 2005                                                             280,492,013   $     54,571,896

Exercise of common stock options                                                     850,000             78,400
Exercise of common stock warrants                                                  2,905,830            128,037
Stock issued on conversion of
    debentures and accrued interest                                                8,295,789            138,540
Stock issued to co-inventor of technology                                            625,000             81,250
Issuance of common stock warrants in connection with new
    venture/license agreement                                                             --            556,675
Extension of term of warrants previously issued to consultant                                           125,000
Effect of repricing and conveyance in connection with new
    venture/license agreement                                                             --            840,816
                                                                            -----------------   ----------------
Balance August 31, 2005                                                          293,168,632   $     56,520,614
                                                                            =================  =================
</TABLE>

STOCK OPTIONS ACTIVITY

As of August 31, 2005, we had 2,030,000 options outstanding pursuant to our 1996
Stock Option Plan  exercisable  at a range of $0.04 to $1.18 per share  expiring
through 2010;  1,943,000 options  outstanding  pursuant to our 2001 Stock Option
Plan  exercisable at a range of $0.04 to $0.13 per share expiring  through 2010;
and  3,575,000  options  outstanding  pursuant  to our 2003  Stock  Option  Plan
exercisable at a range of $0.04 to $0.16 per share expiring  through 2010.  Some
of the options  outstanding under these plans are not presently  exercisable and
are subject to meeting vesting criteria.

During the quarter ended August 31, 2005, we issued options to acquire 1,350,000
shares of our common stock at a per share price of $0.16 to members of our Board
of Directors.

WARRANTS

As of August 31, 2005, we had warrants  outstanding  exercisable into 98,007,041
common shares at exercise prices ranging from $0.015 to $0.65 per share expiring
through 2011.  During the three months ended August 31, 2005, we issued warrants
to purchase 3,790,290 shares of common stock, had investors exercise warrants to
purchase  2,905,830  shares of our  common  stock;  and  cancelled  warrants  to
purchase  12,000,000  shares  of  our  common  stock.  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  conjunction  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 three months ended August 31, 2005, no
warrants were repriced in connection with these agreements. The Company repriced
other  warrants to purchase  approximately  35,000,000  common  shares to $0.015
(Note 5).

COMMON STOCK

On July 22, 2005,  625,000 shares of common stock were issued to the co-inventor
of certain technology.  The Company recorded an expense of $81,250 in connection
with the issuance of the shares.


                                       12
<PAGE>

PATRIOT SCIENTIFIC CORPORATION
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

8.    INCOME TAXES

During  the  quarter  ended  August 31,  2005,  the  Company  recorded a $40,000
provision for income taxes which related to California state alternative minimum
taxes. Deferred income taxes are provided for the difference in the treatment of
certain  income and expense  items for  financial  and tax  reporting  purposes.
Deferred tax assets consist  principally of income tax benefits arising from the
Company's net operating loss carry-forwards. During the quarter ended August 31,
2005,  the  Company  utilized  approximately  $6,000,000  of its  available  net
operating  loss  carry-forwards  to offset  its  taxable  income  arising in the
quarter.  At August 31 and May 31, 2005, a valuation  allowance of approximately
$12,300,000  and  $14,700,000,  which  amounts  are equal to the  Company's  net
deferred tax assets at those dates,  has been  recorded,  as management  has not
determined  that it is more likely than not that the benefit  from the  deferred
tax asset will be realized.  As of August 31, 2005,  the Company has federal and
state  net  operating  loss  carry-forwards  of  approximately  $28,000,000  and
$15,000,000,  respectively,  that expire  through  2025 and 2015,  respectively.
Annual usage of these net operating  loss  carry-forwards  may be limited in the
future due to changes in our shareholders.

9.    CONTINGENCIES

During the quarter  ended August 31,  2005,  the Company  terminated  two of its
officers,  each of whom had an employment contract with the Company.  One of the
officers  agreed to accept as severance  approximately  $150,000 and to have the
maturity  date of  options  held by him  extended  for one  year.  Approximately
$90,000  remains  outstanding  to him at August 31, 2005.  Further,  the Company
agreed to accelerate the vesting of all outstanding warrants held by the officer
and to extend their term to September  2006. The Company  recorded an expense of
approximately $125,000 related to this warrant modification in the quarter ended
August 31, 2005.

The Company has not reached an agreement  with the other  officer,  however,  it
accrued  approximately  $50,000  during the  quarter  ended  August 31, 2005 for
amounts which it believes may be due to this individual.  The former officer has
filed a complaint  against the Company  seeking  arbitration  and claiming he is
owed approximately  $1,500,000.  The Company believes the claim is without merit
and intends to vigorously defend itself in connection with this claim.


                                       13
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN 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,  "RISK FACTORS"
SEE ALSO OUR ANNUAL REPORT ON FORM 10-KSB FOR THE YEAR ENDED MAY 31, 2005.

OVERVIEW

In June 2005,  Patriot  Scientific  Corporation (the "Company")  entered into an
agreement with Intel Corporation for the licensing of its technology. Management
of the Company  believes the agreement  represents  continued  validation of the
Company's  position that its  intellectual  property is being infringed by major
manufacturers  of  microprocessor  technology.  The Company  also entered into a
series of agreements with Technology  Properties Limited Inc. ("TPL") and others
to facilitate the pursuit of infringers of the Company's  intellectual property,
many of which infringers are large scale. It is the intention of management that
the recently signed license  agreements will be used as a starting point to work
toward more favorable  terms in future  negotiations.  Management  believes that
utilizing the option of working through TPL, as compared to creating and using a
Company  licensing  team for those  activities,  is a prudent way to achieve the
desired  results as the Company seeks to obtain fair value from the users of its
intellectual property.

The  Company  continues  to  develop,  market  and  sell  microprocessors,   the
technology behind the  microprocessors  and complementary  products which enable
computers and other data processing  devices to communicate.  These products can
be used to connect to the Internet or other telecommunications networks.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Our  consolidated  financial  statements  have been prepared in accordance  with
accounting principles generally accepted in the United States of America,  which
require  us to make  estimates  and  judgments  that  significantly  affect  the
reported  amounts of assets,  liabilities,  revenues and  expenses,  and related
disclosure of contingent  assets and  liabilities.  Actual  results could differ
from  those  estimates,  and  such  differences  could  affect  the  results  of
operations  reported  in future  periods.  We  believe  the  following  critical
accounting policies affect our most significant  estimates and judgments used in
the preparation of our consolidated financial statements.

1.    Revenue Recognition

Accounting for revenue recognition is complex and affected by interpretations of
guidance  provided  by  several  sources,  including  the  Financial  Accounting
Standards  Board ("FASB") and the Securities  and Exchange  Commission  ("SEC").
This guidance is subject to change.  We follow the guidance  established  by the
SEC in Staff Accounting Bulletin No. 104, as well as generally accepted criteria
for revenue recognition,  which require that, before revenue is recorded,  there
is  persuasive  evidence of an  arrangement,  the fee is fixed or  determinable,
collection  is  reasonably  assured,  and delivery to our customer has occurred.
Applying  these criteria to certain of our revenue  arrangements  requires us to
carefully  analyze the terms and conditions of our license  agreements.  Revenue
from our technology  license  agreements is generally  recognized at the time we
enter into a contract and provide our customer with the licensed technology.  We
believe that this is the point at which we have performed all of our obligations
under  the  agreement;  however,  this  remains  a highly  interpretive  area of
accounting  and future license  agreements  may result in a different  method of
revenue  recognition.  Fees for  maintenance  or  support  of our  licenses  are
recorded on a straight-line basis over the underlying period of performance.

2.    Assessment of Contingent Liabilities

We are involved in various  legal  matters,  disputes,  and patent  infringement
claims  which  arise in the  ordinary  conduct  of our  business.  We accrue for
estimated  losses at the time when we can make a reliable  estimate of such loss
and  it  is  probable  that  it  has  been  incurred.   By  their  very  nature,
contingencies  are difficult to estimate.  We continually  evaluate  information
related  to all  contingencies  to  determine  that  the  basis on which we have
recorded our estimated exposure is appropriate.


3.    Stock Options and Warrants

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 ("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.


                                       14
<PAGE>

The Company  applies SFAS No. 123 in valuing  options granted to consultants and
others and  estimates  the fair value of such  options  using the  Black-Scholes
option-pricing  model.  The fair value is recorded  as expense as  services  are
provided or other  obligations are incurred.  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.  The  Black-Scholes
model  requires the use of various  inputs,  including  volatility of our stock,
duration of the warrant,  and interest  rates,  over which we use our  judgment.
Given  that  we have  recorded  significant  non-cash  expenses  related  to the
issuance of our warrants to  third-parties,  including  the quarter ended August
31, 2005,  our  estimation  of the value of warrants  issued  remains a critical
component of our financial statements.

4.    Debt Discount

We have  issued  warrants  as  part  of our  convertible  debentures  and  other
financings. We value the warrants using the Black-Scholes pricing model based on
expected fair value at issuance and the estimated fair value is recorded as debt
discount.  The debt discount is amortized to non-cash  interest over the life of
the debenture  assuming the debenture will be held to maturity which is normally
two years.  If the  debenture  is  converted  to common  stock  previous  to its
maturity  date,  any debt  discount  not  previously  amortized  is  expensed to
non-cash interest.

5.    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.

6.    Income Taxes

Deferred income taxes are provided for by recognizing  temporary  differences in
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.  We have historically  provided a valuation allowance equal to 100% of
our net deferred tax asset. In spite of the net income recorded by us during the
quarter ended August 31, 2005, we do not believe that we have ample  evidence of
overcoming the "more likely than not" criteria established by generally accepted
accounting  principles.  We will  continue  to monitor our  financial  operating
results, and other factors, to determine when, if ever, we meet this criteria.

7.    Accounting for Venture

During the quarter ended August 31, 2005, we entered into a newly formed venture
with a third  party.  Although  we do not  control  the  venture  from a  voting
interest  standpoint,  we consider the venture to be a variable interest entity,
as that term is defined under  generally  accepted  accounting  principles  (FIN
46(R)), and  under such  definition  and  interpretation  of FIN  46(R),  we are
required to consolidate the results of the venture with our own.

RESULTS OF OPERATIONS

In June 2005, we entered into an agreement with Intel Corporation  licensing our
intellectual property for a one-time payment of $10,000,000. The license revenue
was  recognized  in the quarter  ended August 31,  2005.  During the three month
period ended August 31, 2004 no such  agreement was signed.  In connection  with
entering into the agreement with Intel Corporation, we entered into an agreement
with the co-owner of our  patented  technologies,  through  which we settled all
legal disputes between us and agreed to jointly pursue others who have infringed
upon our joint  rights.  It is not possible to predict  when,  if ever,  we will
again be  successful  in obtaining  future  license  agreements.  Product  sales
amounting to approximately  $10,000 were also recorded in the three month period
ended August 31, 2005 in  connection  with  communications  products that are no
longer  marketed by the Company.  Inventory  associated  with the sales of these
communications  products is carried at zero value and cost of sales is therefore
zero.  Total sales of  communications  products for the three month period ended
August 31, 2004 amounted to approximately $2,500.

Research and development expenses decreased from approximately  $128,000 for the
three months ended August 31, 2004 to approximately $89,000 for the three months
ended August 31, 2005. A manager and an engineer employed during the 2004 period
were not  employed  during the 2005  period  resulting  in a decrease  in salary
expenses of approximately  $44,000.  Employee  benefits and expenses  associated
with support of employees  also  declined from the three months ended August 31,
2004 to the three months ended August 31, 2005 by  approximately  $6,000.  Those
decreases were partially offset by increases in expenses during the three months
ended  August 31, 2005 related to the  purchase of  components  and supplies for
Ignite  related  product  development  and support  amounting  to  approximately
$2,000.  Also, contract expenses amounting to approximately $8,000 were incurred
during three months ended August 31, 2005  connected  with a battery  technology
assessment  project that was not  incurred  during the three months ended August
31, 2004.


                                       15
<PAGE>

Selling,  general  and  administrative  expenses  increased  from  approximately
$380,000 for the three months ended August 31, 2004 to approximately  $1,676,000
for the three  months  ended  August  31,  2005.  Legal and  accounting  related
expenses  increased by approximately  $254,000 for the three months ended August
31, 2005  compared  with the three months ended August 31, 2004 related to legal
matters  connected with  intellectual  property and formation of a joint venture
entity, the license agreement with Intel  Corporation,  and legal issues related
to former  employees  and other  corporate  matters.  In addition,  salary costs
increased  approximately  $224,000  for the three  months  ended August 31, 2005
compared  with the  prior  year  period  as a result of  changes  in  management
personnel that included accrued  severance costs.  Other increases for the three
months ended August 31, 2005 as compared  with the three months ended August 31,
2004 included  consulting  expenses of approximately  $44,000,  public relations
expenses of approximately $50,000,  travel expenses of approximately $18,000 and
insurance expenses of approximately $10,000. Finally, our newly created venture,
which we have consolidated since its creation in June 2005, incurred $500,000 in
expenses paid to the other member of the limited liability  company,  as part of
the quarterly fee to be paid to the other member in accordance  with our venture
agreement.

Settlement  and license  expenses  amounting to  approximately  $3,855,000  were
recorded  during the three months ended August 31, 2005 in  connection  with the
agreements involving the formation of a joint venture and, separately, a license
agreement  with  Intel  Corporation.  The  expenses  consisted  of both cash and
non-cash  elements  related  to  incremental,  direct  costs of  completing  the
transactions.  In  connection  with the  transactions,  it was necessary for the
Company to obtain the  consent of certain  debenture  and warrant  holders.  The
necessary consents, together with certain warrants held by the debenture holders
and the release of their security interests in our intellectual  property,  were
obtained in exchange for cash, new warrants and repriced warrants.  The expenses
resulted   primarily  from  cash  payments  to  debt  holders  of  approximately
$1,300,000,   to  co-owners   of  various   intellectual   property   assets  of
approximately $960,000 and to a committee of the Company's board of directors of
approximately $170,000.  Non-cash expenses totaled approximately  $1,400,000 and
resulted primarily from the incremental value of the effect of repricing various
warrants  and  granting  other  warrants  in  excess of the  expense  previously
recognized for warrants granted to these security holders,  as well as the value
of the warrants reconveyed to the Company.

Other  income and  expense  items for the  Company  amounted to a net expense of
approximately  $600,000 for the three months ended August 31, 2004 and decreased
to a net expense of approximately $149,000 for the three months ended August 31,
2005. Other income for the three months ended August 31, 2004 primarily resulted
from a one-time settlement with a subtenant amounting to approximately  $47,000.
For the three months ended August 31, 2005 other income primarily  resulted from
interest  income  in the  amount of  approximately  $54,000.  Cash and  non-cash
interest  expense declined  significantly  from  approximately  $633,000 for the
three  months  ended  August 31, 2004 to  approximately  $202,000  for the three
months ended August 31, 2005 as the  amortization of debt discount has declined.
The value of debt discount features recorded upon the issuance of a debenture is
expensed  as  non-cash  interest  over the  term of the  debt.  However,  as the
debentures  are  converted  into common  stock,  any  remaining  balance of debt
discount is recognized as non-cash  interest in that period.  Non- cash interest
expense decreased from approximately  $585,000 for the three months ended August
31, 2004 to approximately $187,000 for the three months ended August 31, 2005.

During the quarter ended August 31, 2005,  the Company  recorded a provision for
income taxes of $40,000  related to California  state  alternative  minimum tax.
Also  during  the  quarter   ended  August  31,  2005,   the  Company   utilized
approximately  $6,000,000 of its available net operating loss  carry-forwards to
offset its taxable income arising in the quarter.

The Company  recorded a net loss for the three  months  ended August 31, 2004 of
approximately  $1,106,000  compared with net income of approximately  $4,442,000
for the three months ended August 31, 2005.

LIQUIDITY AND CAPITAL RESOURCES

The Company's cash,  marketable  securities and short-term  investment  balances
increased  from  approximately  $1,289,000  as of May 31, 2005 to  approximately
$10,184,000  as of August 31,  2005.  We also held short  term  certificates  of
deposit amounting to approximately $202,000 as of May 31, 2005 and approximately
$203,000  as  of  August  31,  2005.   Total  current   assets   increased  from
approximately  $3,612,000 as of May 31, 2005 to approximately  $11,869,000 as of
August  31,  2005.  Total  current  liabilities   increased  from  approximately
$1,644,000 as of May 31, 2005 to approximately $1,757,000 as of August 31, 2005.
The improvement in the current position of the Company  primarily  resulted from
the license  agreement with Intel Corporation that was recorded during the three
months ended August 31, 2005.  Included  within both our cash and current assets
totals is  approximately  $3,500,000  of cash  which is held by a newly  created
venture which we  consolidate  for  accounting  purposes.  As this cash has been
invested by both us and our venture partner into this entity, its use is limited
to the operations of the venture itself.

During  the  three  months  ended  August  31,  2005,  the  Company's  operating
activities generated approximately $6,690,000 of cash. The Company's net income,
adjusted  for  non-cash  expense  items,  primarily  resulted  from the  license
agreement with Intel Corporation.  The Company's operating  activities used cash
amounting  to  approximately  $500,000  during the three months ended August 31,
2004,  primarily due to the Company's net loss as adjusted for non-cash  expense
items. During the three months ended August 31, 2005, we invested  approximately
$9,500 in the purchase of fixed assets. No such investment  activities  occurred
during the three  months  ended  August 31,  2004.  Cash  provided by  financing
activities  increased  from  approximately  $153,000  for the three months ended
August 31, 2004 to  approximately  $2,203,000  for the three months ended August
31, 2005. The increase primarily resulted from the minority interest  investment
in a consolidated  entity in the 2005 fiscal period  amounting to  approximately
$2,000,000. No such transaction occurred during the 2004 fiscal period. Cash was
also provided by the exercise of Common Stock warrants and options  amounting to
approximately  $154,000  and $206,000 for the three months ended August 31, 2004
and 2005 respectively.


                                       16
<PAGE>

Included in financing  activities is $2,000,000 invested by our co-venturer into
a venture which we consolidate for financial reporting purposes. The venture was
created for the purposes of jointly pursuing infringers of our technologies.  In
connection  with the creation of the joint venture,  both our co-venturer and we
have committed to funding the operations of the venture, if necessary,  up to an
additional  $4,000,000,  with no more than $2,000,000  being required in any one
year.  The  venture  agreement  provides  that  our co-  venturer  is to be paid
$500,000 on a  quarterly  basis by the venture  for  services  performed  by the
co-venturer.

The  Company's  current  working  capital  position  as of August 31,  2005,  is
expected to provide the funds necessary to support the Company's  operations for
the next 12 months.  During the  quarter  ended  August 31,  2005,  we  incurred
significant  cash and non-cash  expenses  related to the Intel and joint venture
transactions  which  we  expect  to  be  of a  nonrecurring  nature.  Given  the
unpredictable  nature of our revenue  stream,  we have  attempted  to curb other
non-strategic expenses. The Company is currently assessing various strategies to
pursue in the future  which may  include,  among  other  things,  expanding  our
commitment  to  research  and  development  or  making   acquisitions  of  other
technologies.

During  recent  years we have relied upon  financing  activities  to provide the
funds necessary for the Company's  operations including the sale of common stock
and the issuance of debentures and notes payable for cash. In addition,  we have
issued stock and warrants and options for the purchase of the  Company's  common
stock in  return  for  services.  Although  we have  entered  into  two  license
agreements  in  fiscal  2005 and the  first  quarter  of  fiscal  2006 that have
resulted in our reporting significant revenue, there can be no assurance that we
will be able to achieve  profitable  operations in the future.  Should the funds
generated from these  agreements be insufficient to fund our operations,  we may
be forced to curtail our operations or seek additional  external funding.  There
can be no assurance that  additional  funding would be available to us or, if it
is available, that it would be on terms favorable to us.

RECENT ACCOUNTING PRONOUNCEMENTS

In  December  2004,  the FASB issued SFAS  123R,"Share  Based  Payment."  This
statement  replaces  SFAS No. 123 and  supersedes  APB Opinion 25. SFAS No. 123R
requires that the cost of share-based payment transactions (including those with
employees  and  non-employees)  be  recognized  as  compensation  based  on  the
estimated fair value of the equity instrument awarded.  SFAS No. 123R applies to
all  share-based  payment  transactions  in which an  entity  acquires  goods or
services by issuing (or offering to issue) its shares,  options, or other equity
instruments  or by incurring  liabilities  in amounts  based on the price of the
entity's  shares or other equity  instruments,  or that require (or may require)
settlement  by the issuance of an entity's  shares or other equity  instruments.
This  statement  applies  to all new  awards  granted  during  the  fiscal  year
beginning  after December 15, 2005 and to previous awards that are remodified or
cancelled after such date. The Company has not yet fully evaluated the effect of
adopting SFAS No. 123R on its financial statements.

In  December  2004,  the FASB  issued SFAS No.  153,  "Exchange  of  Nonmonetary
Assets,"  an  amendment  of APB  Opinion  No. 29,  "Accounting  for  Nonmonetary
Transaction."  SFAS  No.  153  is  based  on the  principle  that  exchanges  of
nonmonetary  assets  should be measured  based on the fair  market  value of the
assets exchanged. SFAS No. 153 eliminates the exception of nonmonetary exchanges
of  similar  productive  assets and  replaces  it with a general  exception  for
exchanges of nonmonetary assets that do not have commercial substance.  SFAS 153
is effective for nonmonetary  asset exchanges in fiscal periods  beginning after
June 15, 2005.  The Company does not believe that the provisions of SFAS No. 153
will have a material impact on its financial statements.

In May  2005,  the FASB  issued  SFAS No.  154,  "Accounting  Changes  and Error
Corrections,"  which replaces APB Opinion No. 20, "Accounting Changes," and FASB
Statement No. 3, "Reporting Accounting Changes in Interim Financial Statements,"
and changes the requirements for the accounting for and reporting of a change in
accounting principle.  SFAS No. 154 requires retrospective  application to prior
periods' financial statements of changes in accounting  principle,  unless it is
impracticable to determine either the period-specific  effects or the cumulative
effect of the  change.  SFAS No. 154 is  effective  for  accounting  changes and
correction  of errors made in fiscal years  beginning  after  December 15, 2005.
Early adoption is permitted for accounting changes and correction of errors made
in fiscal years beginning after the date SFAS No. 154 was issued. At the present
time,  the Company  does not believe  that  adoption of SFAS No. 154 will have a
material effect on its financial statements.

RISK FACTORS

You  should  consider  the  following  discussion  of  risks  as well  as  other
information  regarding our common stock. The risks and  uncertainties  described
below are not the only ones, as additional risks and uncertainties not presently
known to us or that we currently  deem  immaterial  also may impair our business
operations.  If any of the following risks actually occur, our business could be
harmed.


                                       17
<PAGE>

WE ARE  CURRENTLY  INVOLVED IN A LEGAL  DISPUTE  WHICH  COULD  IMPACT OUR FUTURE
RESULTS OF OPERATIONS AND WORKING CAPITAL

We are currently in a dispute with a former legal advisor, pursuant to which the
legal  advisor is asserting a claim  against the proceeds we received  under our
recently  signed license  agreements.  We believe that the advisor's claim lacks
merit. However, if we do not prevail in this dispute, the amount payable to such
legal advisor could affect our business and operations.  In addition,  if we are
required to litigate  this  matter,  or otherwise  settle the matter  outside of
court,  the cost of resolving this matter may impact our future reported results
of operations and consume a significant amount of cash.

RELATED TO OUR BUSINESS

OUR  MICROPROCESSOR  TECHNOLOGIES  HAVE RESULTED IN LIMITED REVENUES AND SEVERAL
RELATED PRODUCTS ARE STILL IN THE DEVELOPMENT STAGE

We are in the  development  stage on several  components  of our  microprocessor
technology  product line, and the products which have been  commercialized  have
resulted in limited revenues.  Our other product lines have not generated enough
revenue to support our Company.  Therefore,  we have limited  financial  results
upon which you may judge our potential.  We may not become  profitable.  We have
experienced in the past, and may experience in the future, many of the problems,
delays and expenses  encountered by any early stage business,  many of which are
beyond our control. These include:

      o     substantial  delays and expenses  related to testing and development
            of our new products,

      o     production and marketing problems encountered in connection with our
            new and existing products and technologies,

      o     competition from larger and more established companies, and

      o     lack of market acceptance of our new products and technologies.

WE HAVE A HISTORY  OF  LOSSES,  EXPECTS  FUTURE  LOSSES  AND MAY NOT  ACHIEVE OR
SUSTAIN ANNUAL PROFITABILITY

We have a history of reported  losses.  For the fiscal  years ended May 31, 2005
and 2004, we reported net losses of  approximately  $2,700,000  and  $4,100,000,
respectively.  These  losses have  resulted  primarily  from  significant  costs
associated  with the  development  of our products,  costs  associated  with the
marketing of those products,  and the interest  charges and expenses  related to
equity and debt financings. Although we have entered into two license agreements
in fiscal 2005 and the first  quarter of fiscal 2006 which have  resulted in our
reporting significant revenue, there can be no assurance that we will be able to
achieve  sustained  profitable  operations  in  the  future.  Should  the  funds
generated from these  agreements be insufficient to fund our operations,  we may
be forced to curtail our operations or seek additional  external funding.  There
can be no assurance that  additional  funding would be available to us or, if it
is available, that it would be on terms favorable to us.

OUR LIMITED SALES AND MARKETING EXPERIENCE HAS AFFECTED OUR REVENUE

Our operating  results  depend to a large extent on our ability to  successfully
market and sell our products.  We currently have limited marketing  capabilities
and  need to hire  additional  sales  and  marketing  personnel.  In part , as a
consequence of our limited resources,  we may not be able to recruit,  train, or
retain  qualified  personnel to sell and market our products and may not be able
to develop a successful sales and marketing strategy.  We also have very limited
marketing  experience.  There can be no  assurance  that any  marketing  efforts
undertaken by us will be successful or will result in any  significant  sales of
our  products.  A continued  lack of  significant  revenues from the sale of our
products would require us to cease doing business  and/or  liquidate or sell our
assets

WE MAY EXPERIENCE  DIFFICULTIES  IN THE  INTRODUCTION OF NEW PRODUCTS THAT COULD
RESULT IN US HAVING TO INCUR SIGNIFICANT UNEXPECTED EXPENSES OR DELAY THE LAUNCH
OF NEW PRODUCTS

Our  technologies  and  products  are in  various  stages  of  development.  Our
development  stage products may not be completed in time to allow  production or
marketing due to the inherent risks of new product and  technology  development,
limitations on financing,  competition,  obsolescence, loss of key personnel and
other  factors.  Although we may license some of our  technology  at its current
stage of development, there can be no assurance that we will be able to do so or
that any  revenues  generated  from  licensing  will be  sufficient  to  support
operations at their current level.  Unanticipated  technical obstacles can arise
at any time and result in lengthy and costly delays or in a  determination  that
further development is not feasible.  Discovery of microprocessor design errors,
frequent in the industry prior to and after production,  could result in lengthy
and costly redesign,  fabrication  (production) and testing in an industry where
new technology rapidly eclipses prior innovations.

The development of our  technologies has taken longer than anticipated and could
be  additionally  delayed.  Therefore,  there  can  be no  assurance  of  timely
completion and introduction of improved  products on a cost-effective  basis, or
that such products, if introduced,  will achieve market acceptance such that, in
combination with existing products,  they will sustain us or allow us to achieve
profitable operations.


                                       18
<PAGE>

RELATED TO OUR INDUSTRY

INTENSE  COMPETITION  IN THE MARKET FOR  MICROPROCESSORS  COULD  PREVENT US FROM
INCREASING  OR  SUSTAINING  REVENUE AND PREVENT US FROM  ACHIEVING OR SUSTAINING
ANNUAL PROFITABILITY

Our  products  could  be  rendered  noncompetitive  or  obsolete.  Technological
competition  from  larger  and  more  established  microprocessor  companies  is
significant  and  expected  to  increase.  Most of the  companies  with which we
compete  and expect to  compete  have far  greater  capital  resources  and more
significant research and development staffs, marketing and distribution programs
and facilities,  and many of them have  substantially  greater experience in the
production  and  marketing of  products.  Staff cut backs by us, which have been
occasioned by financial constraints,  have increased the differences in capacity
between us and certain of our  competitors.  Our ability to compete  effectively
may be adversely  affected by the ability of these competitors to devote greater
resources to the sale and marketing of their  products than we can. In addition,
one or more of our  competitors  may succeed or may already  have  succeeded  in
developing  technologies  and products that are more effective than any of those
we currently offer or are developing.

OUR  LIMITED  ABILITY TO PROTECT OUR  INTELLECTUAL  PROPERTY  MAY  INADVERTENTLY
ADVERSELY AFFECT OUR ABILITY TO COMPETE

A successful  challenge  to our  ownership of our  technology  could  materially
damage  our  business   prospects.   Our  technologies  may  infringe  upon  the
proprietary  rights of others.  Licenses  required  by us from others may not be
available on commercially  reasonable terms, if at all. We rely on a combination
of  patents,   trademarks,   copyrights,   trade  secret  laws,  confidentiality
procedures  and  licensing  arrangements  to protect our  intellectual  property
rights.  We currently  have eight U.S.,  one  European and one Japanese  patents
issued.  Any issued patent may be challenged  and  invalidated.  Patents may not
issue from any of our pending applications.  Any claims allowed from existing or
pending  patents  may  not  be  of  sufficient  scope  or  strength  to  provide
significant  protection  for our  products.  Patents  may not be  issued  in all
countries where our products can be sold so as to provide meaningful  protection
or any commercial  advantage to us. Our  competitors  may also be able to design
around our patents.

Vigorous  protection and pursuit of  intellectual  property  rights or positions
characterize the fiercely competitive semiconductor industry, which has resulted
in significant and often  protracted and expensive  litigation.  Therefore,  our
competitors  may assert  that our  technologies  or  products  infringe on their
patents or  proprietary  rights.  Problems  with  patents or other  rights could
increase the cost of our  products or delay or preclude new product  development
and commercialization by us. If infringement claims against us are deemed valid,
we may not be able to obtain appropriate licenses on acceptable terms or at all.
Litigation  could be costly and  time-consuming  but may be necessary to protect
our future  patent  and/or  technology  license  positions or to defend  against
infringement  claims.  See our discussion of Legal Proceedings below. We did not
develop the  technology  which is the basis for our products.  This  technology,
which was  originally  known as the ShBoom  technology,  was acquired  through a
series of agreements from one of two co- inventors.  We have been, and may again
be, subject to claims from such prior parties  related to the  technology.  Such
parties may also attempt to exploit the technology  independently  of our rights
to do so. The asset purchase  agreement and plan of  reorganization  between us,
nanoTronics  Corporation  and  Helmut  Falk  was the  agreement  under  which we
acquired the basic ShBoom  technology.  The agreement also contained a number of
warranties and indemnities  related to the ownership of the technology and other
matters. We believe nanoTronics  Corporation has been liquidated and, due to Mr.
Falk's  death in July 1995,  our ability to obtain  satisfaction  for any future
claims as a result of a breach of the agreement may be limited.

WE MAY FACE  INTERRUPTION  OF PRODUCTION AND SERVICES DUE TO INCREASED  SECURITY
MEASURES IN RESPONSE TO TERRORISM

Our  business  depends on the free flow of  products  and  services  through the
channels  of  commerce.  Recently,  in response to  terrorists'  activities  and
threats aimed at the United States,  transportation,  mail,  financial and other
services have been slowed or at certain times stopped altogether. Further delays
or stoppages in transportation,  mail,  financial or other services could have a
material  adverse  effect on our business,  results of operations  and financial
condition.  Furthermore,  we may experience an increase in operating costs, such
as costs  for  transportation,  insurance  and  security,  as a result  of these
activities and potential activities.  We may also experience delays in receiving
payments  from  payers  that have been  affected  by  terrorist  activities  and
potential activities. The U.S. economy in general is being adversely affected by
terrorist activities and potential  activities,  and any economic downturn could
adversely impact our results of operations,  impair our ability to raise capital
or otherwise adversely affect our ability to grow our business.

RELATED TO OUR DEBT AND EQUITY OFFERINGS AND SHARE PRICE

WE MAY NOT BE ABLE TO OBTAIN  ADDITIONAL  CAPITAL  TO FUND ITS  OPERATIONS  WHEN
NEEDED

A lack of additional  funding could force us to  substantially  curtail or cease
our operations,  which would have a material adverse effect on our business. Our
ability to raise  additional  funds under the debenture  agreement is subject to
certain conditions. These conditions include the effectiveness of a registration
statement  covering  the  resale of the  shares  sold on the  conversion  of the
debentures  or the  exercise  of  the  warrants  issued  concurrently  with  the
debentures.  There can be no assurance  that any future funds  required  will be
generated from operations or from other  potential  sources.  Further,  any such
required funds may only be available on unattractive terms and may significantly
dilute the value of our existing shares.


                                       19
<PAGE>

IF A LARGE  NUMBER OF OUR SHARES  ARE SOLD ALL AT ONCE OR IN BLOCKS,  THE MARKET
PRICE OF OUR SHARES WOULD MOST LIKELY DECLINE

Our  debenture  holders are not  restricted  in the price at which they can sell
common stock  acquired  through the  conversion of the debentures or exercise of
warrants  issued with the  debentures.  Shares sold at a price below the current
market  price at which the common stock is trading may cause the market price to
decline.  The shares of common  stock that are  issuable  on the  conversion  of
debentures or exercise of the warrants issued  concurrently  with the debentures
represent a significant portion of our outstanding  shares.  Should the price of
our stock drop, the number of common shares  issuable on the conversion of these
debentures  would be  subject  to reset  provisions  which  would  substantially
increase the number of common  shares to be issued.  To the extent the debenture
holders,  and shareholders of currently  outstanding  common stock,  convert and
sell  their  common  stock,  the  common  stock  price may  decrease  due to the
additional shares in the market. This could allow remaining debenture holders to
convert their convertible  debentures into even greater amounts of common stock,
the sales of which would further depress the stock price. Accordingly, we do not
know the exact  number of shares that will be issued on the  conversions  of the
debentures.

In addition,  at the option of the debenture  holder,  interest  accruing at the
annual rate of 8% can be  converted  into shares of our common stock at the same
time and at the same conversion price as the principal portion of the debenture.
Should the  debenture  holders  accumulate  interest,  a larger number of shares
would be issued on  conversion;  and if the price of the common stock  declines,
the reset  provisions  which allow greater  amounts of shares to be issued would
also be in effect for the interest portion of the debenture.

IF A LARGE  NUMBER OF OUR SHARES  ARE SOLD ALL AT ONCE OR IN BLOCKS,  THE MARKET
PRICE OF OUR SHARES WOULD MOST LIKELY DECLINE

Our common  stock is currently  listed for trading in the NASD  Over-The-Counter
Bulletin Board Market and is subject to the "penny stock rules" adopted pursuant
to  Section  15(g) of the  Securities  Exchange  Act of 1934,  as  amended  (the
"Exchange  Act").  In general,  the penny stock  rules  apply to  non-NASDAQ  or
non-national  stock  exchange  companies  whose common stock trades at less than
$5.00  per  share or which  have  tangible  net  worth of less  than  $5,000,000
($2,000,000  if the company has been  operating  for three or more years).  Such
rules  require,  among other  things,  that brokers who trade  "penny  stock" to
persons other than "established customers" complete certain documentation,  make
suitability   inquiries  of  investors  and  provide   investors   with  certain
information  concerning  trading in the  security,  including a risk  disclosure
document,  quote  information,  broker's  commission  information and rights and
remedies  available to investors in penny stocks.  Many brokers have decided not
to trade "penny stock" because of the requirements of the penny stock rules, and
as a result,  the number of  broker-dealers  willing to act as market  makers in
such  securities  is limited.  The "penny stock rules,"  therefore,  may have an
adverse  impact on the market for our common stock and may affect our ability to
attract competitive funding.

OUR SHARE PRICE COULD BE LOWERED AS A RESULT OF SHORT SALES

The downward  pressure on the price of our common stock as the debenture holders
convert and sell material amounts of common stock could encourage short sales by
the debenture  holders or others.  When an investor sells stock that he does not
own, it is known as a short sale. The seller, anticipating that the price of the
stock  will go down,  will buy the  stock at a later  date.  If the price of the
stock goes down, the seller will profit to the extent of the difference  between
the amount the seller  originally  sold it for less the amount the seller  later
had to pay to buy it.  Short sales enable the seller to profit in a down market.
Short sales could place significant downward pressure on the price of our common
stock.

ON A SIGNIFICANT DROP IN THE PRICE OF OUR STOCK, WE COULD BE SUBJECT TO A CHANGE
IN CONTROL

There is a possibility that a significant  number of shares, the exact number of
which we do not know,  of our common stock could be issued on the  conversion of
the  debentures.  This  possibly  could  result  in a change in  control  of our
Company.  Such a change in control could have a material  adverse  effect on our
operations  and business  plans.  We are unable to  determine  the impact such a
change in control could have on our Company.


                                       20
<PAGE>

ITEM 3. CONTROLS AND PROCEDURES

As required by Rule 13a-15(e) under the Exchange Act, as of August 31, 2005, the
end of the period to which this quarterly report relates, we have carried out an
evaluation of the  effectiveness  of the design and operation of our  disclosure
controls and  procedures.  This evaluation was carried out under the supervision
and with the  participation  of our management,  including our President and our
Chief Financial Officer. Based upon that evaluation, our executive and financial
officers concluded that the disclosure controls and procedures are effective.

Disclosure  controls and procedures are controls and other  procedures  that are
designed to ensure that information required to be disclosed in our report filed
or  submitted  under the Exchange Act is  recorded,  processed,  summarized  and
reported,  within the time  periods  specified  in the  Securities  and Exchange
Commission's  rules and  forms.  Disclosure  controls  and  procedures  include,
without limitation,  controls and procedures designed to ensure that information
required  to be  disclosed  in our  reports  filed  under  the  Exchange  Act is
accumulated and  communicated  to management,  including the President and Chief
Executive Officer as appropriate,  to allow timely decisions  regarding required
disclosure.

During the quarter ended August 31, 2005,  in connection  with the change in our
chief  executive and finance  officers,  we made certain changes in our internal
controls over financial  reporting.  We engaged an external advisor,  to be used
both on a scheduled  and on an as-needed  basis,  to assist us in assessing  and
resolving financial accounting and disclosure matters, to prepare various period
end financial analyses and schedules used in our financial closing process,  and
to assist in writing  disclosures  contained  in our  financial  statements  and
filings.  These  items,  which  were  previously  prepared  directly  by us, are
prepared under the supervision and review of our chief financial officer.  There
were no other  changes to our internal  control  over  financial  reporting  (as
defined in Rules  13a-15(f) and 15d-15(f) under the Exchange Act) during the our
most recently  completed  fiscal  quarter that has  materially  affected,  or is
reasonably  likely to materially  affect,  our internal  control over  financial
reporting.


                                       21
<PAGE>

                           PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

In  December  2003,  Patriot  Scientific  Corporation,  a  Delaware  corporation
(hereinafter referred to as the "Company",  "We" or "us") 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 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>

The Company was requesting that the courts enjoin the defendants from making use
of our patent and requested  damages for past  infringements.  In February 2005,
with the consent of the  defendants,  the above five actions  were  consolidated
into the Fujitsu action in the Northern District of California under case number
C035787.

In February 2004,  Intel  Corporation  filed a lawsuit  against us in the United
States District Court- Northern District of California,  case number C040439, in
which they requested a declaratory judgment that their microprocessors,  used by
the defendants in our consolidated  suit, do not infringe our patent. We filed a
counterclaim  against  Intel  contending  that they also are  infringing  on our
patent,  and Intel asserted an affirmative  defense that our 5,809,336 patent is
invalid.

In February  2004,  the Company  filed a lawsuit in the United  States  District
Court-  Northern  District of  California,  case number  C040618,  against  TPL,
Charles H. Moore, an individual  ("Moore" and together with the Company and TPL,
the "Parties"), and Daniel E. Leckrone, an individual.  Counterclaims were filed
seeking  a  declaration  from the  Court  that the  inventors  as  stated in the
original patent filings were the inventors of the respective patents.

On June 7, 2005,  the  Company  entered  into a Master  Agreement  (the  "Master
Agreement") by and among the Company,  TPL and Moore. Moore and TPL were parties
to  certain  lawsuits  filed by the  Company  alleging  infringement  of certain
microprocessor science and design patents ("Patents") and a lawsuit filed by the
Company  alleging  claims  for  declaratory   judgment  for   determination  and
correction of inventorship  of the Patents.  The  transactions  described in the
Master  Agreement  and  related  agreements  form a part  of the  settlement  or
dismissal of the Inventorship Litigation.

Pursuant to the Master Agreement the Parties have agreed,  in pertinent part, as
follows:

(a)   The Company entered into a patent license  agreement (the "Intel License")
with Intel Corporation  ("Intel") pursuant to which the Company licensed certain
rights in the Patents to Intel.

(b)   The Company and TPL will cause  certain of their  respective  interests in
the Patents to be licensed to a limited liability company that will be owned 50%
by the Company and 50% by TPL (the "JV LLC").

(c)   The JV LLC will  engage TPL to  commercialize  the  Patents  pursuant to a
Commercialization  Agreement  among  the  JV  LLC,  TPL  and  the  Company  (the
"Commercialization Agreement").

(d)   The Parties will settle all or cause to be dismissed all litigation  among
them  pursuant  to a  stipulated  final  judgment,  including  the  Inventorship
Litigation.

On June 7, 2005, in connection  with the Master  Agreement,  the Company entered
into  the  Commercialization  Agreement  by and  among  the JV LLC,  TPL and the
Company. Pursuant to the Commercialization  Agreement, the JV LLC has granted to
TPL the exclusive right to grant licenses and sub-licenses of the Patents and to
pursue claims against violators of the Patents.


                                       22
<PAGE>

The Parties  executed and filed a stipulated  final judgment in the Inventorship
Litigation,  which  provided  for a dismissal  of the  Company's  third  amended
complaint and final judgment in favor of TPL and Moore on their counterclaims.

The  infringement  cases  referenced  above have been stayed by Judge  Armstrong
until late October 2005, in order to give the parties  sufficient time to settle
the  litigation.  Intel,  as noted  above,  has been granted a license and is no
longer a party to the proceedings.

Additional Litigation:

      Beatie and Osborne, LLP v. Patriot Scientific Corporation, et al.,
      United States District Court, Case No. 05-CV-6425 (S.D.N.Y)

This is an action by a New York law firm,  Beatie  and  Osborn  ("BandO"),  that
formerly represented the Company in patent infringement  litigation commenced by
the Company  against  certain  various  microprocessor  chip  manufacturers,  in
litigation still pending,  with the exception of Intel, in the Northern District
of California. In addition, BandO represented the Company in separate litigation
also in the Northern  District of  California  against Moore and TPL, as defined
above.  BandO undertook such  representation of the Company on a contingency fee
basis and had  previously  reached an agreement with the Company with respect to
transmission of anticipated litigation costs in connection with those underlying
litigation  matters.  BandO is believed to presently  hold in its trust  account
approximately $210,000 of the Company's funds advanced for litigation costs, and
BandO  claims  it  is  entitled  to  be  reimbursed  approximately  $240,000  in
litigation costs. The Company disputes BandO's claim to those litigation costs.

On March 8, 2005,  BandO was disqualified by United States District Judge Jeremy
Fogel in the patent ownership  litigation described above against Moore and TPL.
BandO  subsequently  withdrew from  representation  of the Company in the patent
infringement litigation.

BandO initiated  litigation in the Supreme Court of New York on or about June 8,
2005,  claiming breach of contract,  quantum meruit and unjust  enrichment,  and
alleging claims against the Company and former Company  representatives  Jeffery
Wallin and Lowell  Giffhorn,  for fraud and  interference  with the  contractual
relationship.  BandO claims a contingency fee under the terms of its contingency
fee agreement,  with respect to licensing  agreements entered and possibly to be
entered  into by the  Company.  The  Company  denies  past,  present  or  future
liability to BandO, and intends to vigorously defend this action.

The Company  caused a removal of the action to the United States  District Court
for the  Southern  District  of New  York,  and has  filed a motion  to have the
litigation  transferred  to  California.  A decision is expected by the District
Court in late October  2005.  Discovery  has yet to be commenced in the New York
litigation.  However, the Company has claimed that the disqualification of BandO
in the ownership  litigation  and its  withdrawal  from the patent  infringement
litigation has caused a forfeiture of any rights of BandO to a contingency  fee.
Further, the Company is evaluating  commencing a legal malpractice claim against
BandO that the Company believes will exceed the claims asserted by BandO. As for
the  agreement  regarding  costs and fees,  the Company hopes to show that BandO
breached  the terms of the  agreement  and is not entitled to any costs from the
escrow. This assumes, for the sake of argument,  that BandO would have any right
to the funds in escrow as a result of Judge Fogel's Order disqualifying BandO on
various  grounds,  including  violation of the California  Rules of Professional
Responsibility.

Litigation  is  inherently  uncertain  and while the Company  believes  that the
claims  brought  by  BandO  do  not  have  merit,  especially  in  light  of the
disqualification  previously  described,  there  can be no  assurances  that the
resolution  of the matter will not  negatively  impact the  Company's  financial
position or its results of operations in the future.

On September 23, 2005, Lowell Giffhorn, a former executive officer and a current
director of the Company  submitted a demand for  arbitration  with the  American
Arbitration  Association related to the termination of Mr. Giffhorn's employment
with the Company.  Mr.  Giffhorn  asserts that the termination of his employment
with the Company was unlawful,  retaliatory,  wrongful,  violated public policy,
violated the  covenant of good faith and fair  dealing and  violated  securities
laws.  Mr.  Giffhorn is seeking  damages of $1,500,000  in  connection  with his
claims.  The Company  intends to  vigorously  defend itself with regard to these
claims. Despite the inherent  uncertainties of litigation,  the Company does not
believe that the foregoing will have a material  adverse impact on its financial
condition, results of operations, or cash flows.


                                       23
<PAGE>

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Those exhibits marked with an asterisk (*) refer to exhibits filed herewith. The
other  exhibits  are  incorporated  herein by  reference,  as  indicated  in the
following list.

EXHIBIT
NO.                                DESCRIPTION
-------  -----------------------------------------------------------------------
(2.0)    PLAN OF PURCHASE,  SALE,  REORGANIZATION,  ARRANGEMENT,  LIQUIDATION OR
         SUCCESSION

(2.2)    Assets  Purchase  Agreement and Plan of  Reorganization  dated June 22,
         1994,  among the  Company,  nanoTronics  Corporation  and Helmut  Falk,
         incorporated  by  reference  to Exhibit  10.4 to Form 8-K dated July 6,
         1994

(3.0)    ARTICLES AND BYLAWS

(3.1)    Original  Articles  of  incorporation  of  the  Company's  predecessor,
         Patriot Financial Corporation, incorporated by reference to Exhibit 3.1
         to registration statement on Form S-18, file no. 33-23143-FW

(3.2)    Articles of Amendment of Patriot Financial  Corporation,  as filed with
         the  Colorado  Secretary  of State on July 21,  1988,  incorporated  by
         reference to Exhibit 3.2 to  registration  statement on Form S-18, File
         No. 33-23143-FW

(3.3)    Certificate of Incorporation of the Company, as filed with the Delaware
         Secretary  of State on March 24,  1992,  incorporated  by  reference to
         Exhibit 3.3 to Form 8-K dated May 12, 1992

(3.3.1)  Certificate  of Amendment to the  Certificate of  Incorporation  of the
         Company,  as filed with the  Delaware  Secretary  of State on April 18,
         1995, incorporated by reference to Exhibit 3.3.1 to Form 10-KSB for the
         fiscal year ended May 31, 1995

(3.3.2)  Certificate  of Amendment to the  Certificate of  Incorporation  of the
         Company, as filed with the Delaware Secretary of State on June 24,1997,
         incorporated  by  reference  to  Exhibit  3.3.2 to Form  10-KSB for the
         fiscal year ended May 31, 1997, filed July 18, 1997

(3.3.3)  Certificate  of Amendment to the  Certificate of  Incorporation  of the
         Company,  as filed with the  Delaware  Secretary  of State on April 28,
         2000,  incorporated  by  reference  to  Exhibit  3.3.3 to  Registration
         Statement on Form S-3 filed May 5, 2000

(3.3.4)  Certificate  of Amendment to the  Certificate of  Incorporation  of the
         Company,  as filed with the Delaware Secretary of State on May 6, 2002,
         incorporated by reference to Exhibit 3.3.4 to Registration Statement on
         Form S-3 filed June 27, 2002

(3.3.5)  Certificate  of Amendment to the  Certificate of  Incorporation  of the
         Company,  as filed with the Delaware  Secretary of State on October 16,
         2003,  incorporated  by  reference  to  Exhibit  3.3.5 to  Registration
         Statement on Form SB-2 filed May 21, 2004

(3.4)    Articles and  Certificate  of Merger of Patriot  Financial  Corporation
         into the Company dated May 1, 1992,  with  Agreement and Plan of Merger
         attached thereto as Exhibit A, incorporated by reference to Exhibit 3.4
         to Form 8-K dated May 12, 1992


                                       24
<PAGE>

EXHIBIT
NO.                                DESCRIPTION
-------  -----------------------------------------------------------------------
(3.5)    Certificate of Merger issued by the Delaware  Secretary of State on May
         8, 1992, incorporated by reference to Exhibit 3.5 to Form 8-K dated May
         12, 1992

(3.6)    Certificate of Merger issued by the Colorado  Secretary of State on May
         12,  1992,  incorporated  by reference to Exhibit 3.6 to Form 8-K dated
         May 12, 1992

(3.7)    Bylaws of the Company, incorporated by reference to Exhibit 3.7 to Form
         8-K dated May 12, 1992

(4.0)    INSTRUMENTS   DEFINING  THE  RIGHTS  OF  SECURITY   HOLDER,   INCLUDING
         INDENTURES

(4.1)    Specimen common stock certificate, incorporated by reference to Exhibit
         4.1 Form 8-K dated May 12, 1992

(4.2)    Form of Stock Purchase Warrant (Labway  Corporation) dated February 29,
         1996,  exercisable to purchase 253,166 common shares at $1.58 per share
         until August 31,  1996,  granted to  investors  in  connection  with an
         offering of securities made in reliance upon Regulation S, incorporated
         by  reference  to Exhibit 4.2 to Form 10-QSB for fiscal  quarter  ended
         February 29, 1996, filed March 15, 1996

(4.3)    Form of 6% Convertible  Subordinated  Promissory Note due September 30,
         1998 aggregating  $1,500,000 to six investors incorporated by reference
         to Exhibit 4.3 to Form 10-QSB for fiscal quarter ended August 31, 1996,
         filed October 15, 1996

(4.4)    Form of 5% Convertible Term Debenture (CC Investments, LDC) due June 2,
         1999 aggregating  $2,000,000 to two investors incorporated by reference
         to Exhibit 4.4 to Form 8-K dated June 16, 1997

(4.5)    Form of Stock Purchase Warrant (CC Investments, LDC) dated June 2, 1997
         exercisable  to  purchase  an  aggregate  of 400,000  common  shares at
         $1.69125  per share  until June 2, 2002,  granted to two  investors  in
         connection with the offering of securities in Exhibit 4.4  incorporated
         by reference to Exhibit 4.5 to Form 8-K filed June 17, 1997

(4.6)    Registration  Rights  Agreement  dated  June 2,  1997 by and  among the
         Company and CC Investments,  LDC and the Matthew Fund, N.V.  related to
         the  registration  of the common stock  related to Exhibits 4.4 and 4.5
         incorporated  by  reference  to Exhibit  4.6 to Form 8-K filed June 17,
         1997

(4.7)    Form of Warrant to Purchase  Common Stock (Swartz  Family  Partnership,
         L.P.)  dated June 2, 1997  exercisable  to  purchase  an  aggregate  of
         211,733 common shares at $1.69125 per share until June 2, 2002, granted
         to a group of investors in  connection  with the offering of securities
         in Exhibit 4.4  incorporated  by  reference  to Exhibit 4.7 to Form 8-K
         filed June 17, 1997

(4.8)    Registration  Rights  Agreement  dated  June 2,  1997 by and  among the
         Company and Swartz Investments,  LLC related to the registration of the
         common  stock  related to Exhibit  4.7  incorporated  by  reference  to
         Exhibit 4.8 to Form 8-K filed June 17, 1997

(4.9)    Form of 5% Convertible Term Debenture (CC Investments, LDC) due June 2,
         1999 aggregating  $1,000,000 to two investors incorporated by reference
         to Exhibit 4.9 to Form  10-KSB for the fiscal year ended May 31,  1998,
         filed August 19, 1998

(4.10)   Form of Stock Purchase Warrant (CC Investments, LDC) dated November 24,
         1997  exercisable  to purchase an aggregate of 200,000 common shares at
         $1.50 per  share  until  June 2,  2002,  granted  to two  investors  in
         connection  with the  offering of  securities  described in Exhibit 4.9
         incorporated  by  reference to Exhibit 4.10 to Form 10-KSB for the year
         ended May 31, 1998, filed August 19, 1998

(4.11)   Form of Warrant to Purchase  Common Stock (Swartz  Family  Partnership,
         L.P.) dated  November 24, 1997  exercisable to purchase an aggregate of
         105,867 common shares at $1.50 per share until June 2, 2002, granted to
         a group of investors  in  connection  with the  offering of  securities
         described in Exhibit 4.9  incorporated  by reference to Exhibit 4.11 to
         Form 10-KSB for the year ended May 31, 1998, filed August 19, 1998

(4.12)   Form of Warrant  to  Purchase  Common  Stock  (Investor  Communications
         Group,  Inc.) dated June 16, 1997  exercisable to purchase an aggregate
         of  130,000  common  shares at prices  ranging  from $2.50 to $7.50 per
         share until June 15, 1999  incorporated by reference to Exhibit 4.12 to
         Form 10-KSB for the year ended May 31, 1998, filed August 19, 1998


                                       25
<PAGE>

EXHIBIT
NO.                                DESCRIPTION
-------  -----------------------------------------------------------------------
(4.13)   Warrant   to   Purchase    Common   Stock    issued   to    Spellcaster
         Telecommunications,  Inc. dated April 28, 1998  exercisable to purchase
         an  aggregate of 100,000  common  shares at $1.25 per share until April
         28, 2000  incorporated  by reference to Exhibit 4.13 to Form 10-KSB for
         the year ended May 31, 1998, filed August 19, 1998

(4.14)   Investment agreement dated February 24, 1999 by and between the Company
         and  Swartz  Private  Equity,  LLC for a  maximum  aggregate  amount of
         $5,000,000  incorporated  by reference to Exhibit 4.14 to Form 10-QSB/A
         for the fiscal quarter ended November 30, 1998, filed March 5, 1999

(4.15)   Registration  Rights  Agreement  dated February 24, 1999 by and between
         the Company and Swartz Private Equity,  LLC related to the registration
         of the common stock related to Exhibit 4.14  incorporated  by reference
         to Exhibit 4.15 to Form 10-QSB/A for the fiscal  quarter ended November
         30, 1998, filed March 5, 1999

(4.16)   Form of Warrant to Purchase Common Stock (Swartz  Private Equity,  LLC)
         dated  February  24,  1999  exercisable  to purchase  common  shares in
         connection with the offering of securities in Exhibit 4.14 incorporated
         by reference to Exhibit  4.16 to Form  10-QSB/A for the fiscal  quarter
         ended November 30, 1998, filed March 5, 1999

(4.17)   Amended and Restated  Investment  Agreement  dated July 12, 1999 by and
         between  the  Company  and  Swartz  Private  Equity,  LLC for a maximum
         aggregate  amount of  $5,000,000  incorporated  by reference to Exhibit
         4.17 to Pre-Effective Amendment No. 2 to Registration Statement on Form
         SB-2 filed July 15, 1999

(4.18)   Investment  Agreement  dated May 2, 2000 by and between the Company and
         Swartz  Private  Equity,   LLC  for  a  maximum   aggregate  amount  of
         $30,000,000  incorporated  by reference to Exhibit 4.18 to Registration
         Statement on Form S-3 filed May 5, 2000

(4.18.1) Waiver and Agreement  dated  September 24, 2001 amending the Investment
         Agreement  (1) dated May 2, 2000 by and  between the Company and Swartz
         Private  Equity,  LLC for a maximum  aggregate  amount  of  $30,000,000
         incorporated by reference to Exhibit 4.18.1 to  Registration  Statement
         on Form S-1 filed October 11, 2001

(4.19)   2001  Stock  Option  Plan  of  the  Company  dated  February  21,  2001
         incorporated by reference to Exhibit 4.19 to Registration  Statement on
         Form S-8 filed March 26, 2001

(4.20)   Investment  agreement  dated  September  17,  2001 by and  between  the
         Company and Swartz Private Equity,  LLC for a maximum  aggregate amount
         of   $25,000,000   incorporated   by   reference  to  Exhibit  4.20  to
         Registration Statement on Form S-1 filed October 11, 2001

(4.21)   Registration  Rights  Agreement dated September 17, 2001 by and between
         the Company and Swartz Private Equity,  LLC related to the registration
         of the common stock related to Exhibit 4.20  incorporated  by reference
         to Exhibit 4.21 to Registration Statement on Form S-1 filed October 11,
         2001

(4.22)   Warrant to Purchase Common Stock dated  September 17, 2001  exercisable
         to purchase common shares in connection with the Offering of securities
         in  Exhibit  4.20   incorporated   by  reference  to  Exhibit  4.22  to
         Registration Statement on Form S-1 filed October 11, 2001

(4.23)   Financial  Consulting  Services  Agreement  between  the Company and M.
         Blaine Riley,  Randall  Letcavage and Rosemary  Nguyen  incorporated by
         reference to Exhibit 4.23 to  Registration  Statement on Form S-8 filed
         January 22, 2002

(4.24)   Form of 8% Convertible  Debenture (Lincoln Ventures,  LLC) due June 10,
         2004 aggregating  $1,000,000 to six investors incorporated by reference
         to Exhibit  4.24 to  Registration  Statement on Form S-3 filed June 27,
         2002

(4.25)   Form of Stock Purchase Warrant (Lincoln  Ventures,  LLC) dated June 10,
         2002  exercisable to purchase an aggregate of 12,859,175  common shares
         at initial  exercise prices ranging from $0.08616 to $0.10289 per share
         until June 10, 2007,  granted to six investors in  connection  with the
         offering  of  securities  described  in Exhibit  4.24  incorporated  by
         reference to Exhibit 4.25 to  Registration  Statement on Form S-3 filed
         June 27, 2002


                                       26
<PAGE>

EXHIBIT
NO.                                DESCRIPTION
-------  -----------------------------------------------------------------------
(4.26)   Form of Registration  Rights Agreement  (Lincoln  Ventures,  LLC) dated
         June 10, 2002 by and among the Company and six investors related to the
         registration  of the common stock related to Exhibit 4.24  incorporated
         by  reference  to Exhibit  4.26 to  Registration  Statement on Form S-3
         filed June 27, 2002

(4.27)   2003 Stock Option Plan of the Company  dated July 2, 2003  incorporated
         by  reference  to Exhibit  4.27 to  Registration  Statement on Form S-8
         filed September 4, 2003

(4.28)   Form of 8% Convertible Debenture, Stock Purchase Warrant,  Registration
         Rights  Agreement and  Securities  Purchase  Agreement  for  financings
         entered  into  between   September   28,  2004  and  January  17,  2005
         incorporated by reference to Exhibit 4.28 to Registration  Statement on
         Form SB-2 filed February 2, 2005.

(10.0)   MATERIAL CONTRACTS

(10.40)  Master  Agreement,  dated as of June 7, 2005, by and among the Company,
         Technology  Properties  Limited  Inc.,  a  California  corporation  and
         Charles H. Moore,  an individual,  incorporated by reference to Exhibit
         10.40 to Form 8-K filed June 15, 2005.

(10.41)  Commercialization  Agreement  dated as of June 7, 2005 by and among the
         JV LLC, Technology  Properties Limited Inc., a California  corporation,
         and the Company, incorporated by reference to Exhibit 10.41 to Form 8-K
         filed June 15, 2005.

(10.42)  Limited  Liability  Company  Operating  Agreement of JV LLC, a Delaware
         limited liability  company,  dated as of June 7, 2005,  incorporated by
         reference to Exhibit 10.42 to Form 8-K filed June 15, 2005.

(10.43)  Agreement  for  Part-Time  Employment  dated August 3, 2005 between the
         Company and Thomas J.  Sweeney,  incorporated  by  reference to Exhibit
         99.3 to Form 8-K filed August 9, 2005.

(31.0)   RULE 13A-14(A)/15D-14(A) CERTIFICATIONS

(31.1)*  Certification  of Chief  Executive  Officer  pursuant to Rule 13a-14(a)
         under the Securities Exchange Act of 1934

(31.2)*  Certification  of Chief  Financial  Officer  pursuant to Rule 13a-14(a)
         under the Securities Exchange Act of 1934

(32.0)   SECTION 1350 CERTIFICATIONS

(32.1)*  Certification of Chief Executive Officer pursuant to 18 U.S.C. ss.1350,
         as adopted pursuant to ss.906 of the Sarbanes-Oxley Act of 2002

(32.2)*  Certification of Chief Financial Officer pursuant to 18 U.S.C. ss.1350,
         as adopted pursuant to ss.906 of the Sarbanes-Oxley Act of 2002


                                       27
<PAGE>

                                   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: October 24, 2005                         By: /s/ THOMAS J. SWEENEY
                                                 -------------------------------
                                                 Thomas J. Sweeney,
                                                 Chief Financial Officer


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


                                       28