The long term prospects for PPS look better than the short term, as it has been for years. Key factors which seem to be affecting PPS are not all that favorable in the short run.

Points and Counter-points:

A surprise early settlement seems unlikely. However that's exactly the outlook that the defense should be trying to convey, even if they know they will settle soon.

The possibility of many (and/or large) license sales seems unlikely until settlement; unless it becomes obvious that TPL will win.

If sales slow, EPS falls, running the P/E ratio up A high P/E resulting from a low EPS is not our goal.

A ruling favorable to TPL on the issue of Lawyer/Client privilege may not have a substantial impact on PPS. An unfavorable ruling could do harm to PPS.

An announced aquisition will unlikely have near term EPS favorable impacts, and therefore might not have a significant near term impact on PPS. If the aquisition gave PTSC access to a big exchange the PPS could react very favorably.

Large companies often budget for spending on an annual basis. It will be favorable if many are convinced that they may have to pay for a license in 2008. Thus they would put money in the 2008 budget for such an expediture. This could shorten the sales cycle time in 2008 as large budgets line items will have been extensively reviewed in 2007 and approved on merit. Many companies will be putting together 2008 budgets now. I hope TPL and Alliance are beating the drums loadly now - with a friendly but serious smile.