First let me say that I think the acqusition plan is a very good one, but here are some things that savey new investors will consider.

Acquisitions:

If acquired with the intent of operating the business (not selling the pieces), acquisitions typically have a negative impact on the bottom line, sometimes for years. Think costs: consolidation costs, systems integration, systems & process improvements, Marketing and Sales improvements. On the revenue side we often underestimate the length of product-sales-cycle-times. Sales cycle times are roughly proportional to product price. We also tend to underestimate the compitition's products that are already in the market and those in the design pipeline. Partnering with a large established firm was a good, necessary idea. But keep in mind the statistics of acquisitions.

“According to available statistics, acquirers have less than a 50-50 chance of being successful in merger/acquisition ventures. With significant financial exposure at stake with the initial investment and ongoing operations, the stakes are high.”

“Research has shown that reductions in productivity of 50% are not uncommon during the integration phase of a merger or acquisition.”

Perhaps it’s better for PTSC if they don’t do much integration of their acquisitions – let them continue to operate as independently as possible. But there is still the up front cash drain related to operational improvements, market entry, and positioning of products.

There have been many studies of acquisitions. Here’s one article on the subject.

www.clarerossorganization.com/index....

License Sales:

I still say that in the shorter time frame we can only hope that license sales pick-up. But here's my not so favorable theory about the low rate of license sales.

Thoery:

1) Each MMP sale represents extensive DD by a company’s patent lawyers, resulting in confirmation of validity. But this validity only applies to those portions of the patents that the lawyers deem likely to survive USPTO review - and that the company’s products infringe. Putting millions of dollars on the table for a license is a strong statement supporting validity, but only for some portions of the MMP.

2) Many other companies have chosen not to buy a license. We’d be wise to assume that equally qualified lawyers have done equally extensive DD and concluded that they are not infringing on any portion of the MMP that is likely to survive USPTO review.

Both could be right, and this rate of sales could be an indicator of the post-USPTO-decision sales rates. This theory might be wrong, but it would explain why we have big companies putting out millions for an MMP license, but only a few.

I hope my theory of why we are getting infrequent license sales is wrong. Or if I'm not wrong, I hope that the extensive DD by company patent lawyers (those not buying licenses) has resulted in wrong conclusions.