Prophecy Annoucement.

Hi

I need some help with evaluating this company announcement:

I have been very quite since the downturn in the market and lost a lot of my funds, but have stuck in there and been quietly buying what I think are good companies, Recently I keep buying PRO right down to 16c and then this announcement comes out. not sure what to do, I can no longer buy and sell on my assumptions and would please ask for some opinion on the value of this supposed deal.

Thankyou.
Hostcp3

PROPHECY INTERNATIONAL HOLDINGS LIMITED 2002-07-25 ASX-SIGNAL-G

HOMEX - Adelaide

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THE AGREEMENT

Prophecy International and IBM have signed a worldwide agreement for
IBM to distribute its product, Velatte, through IBM's Passport
Advantage Solution Selling for ISVs program. The agreement was signed
with IBM in the USA with senior IBM executives.

Passport Advantage is IBM's worldwide program, involving in excess of
20,000 IBM channel partners world-wide, for volume licensing of
distributed software. IBM has introduced this innovative program to
enhance its sales through the promotion and sale of third party
software products that are tightly coupled with IBM's middleware
products. Beginning in Quarter 2, IBM and its channel partners will
promote, sell and implement Velatte product and services orders
utilizing IBM's internal order fulfillment systems with royalties
back to Prophecy from worldwide sales. Velatte is the first non-IBM
product to be announced through this program.

In Prophecy International's long history of alliances with major
software vendors, this is potentially the biggest alliance signed to
date and Prophecy expects that sales by IBM under this agreement will
make a substantial contribution to its revenues beginning in the
2002-03 financial period.

Prophecy International believes that the Promotion and sale of the
Velatte product by way of access to the IPASS program provides a
significant endorsement of the role of the Velatte product in today's
application development and middleware arena.

PRODUCT DESCRIPTION

Velatte is a product that allows organizations to produce Java-based
software applications without the traditional development phase and
reduces the need for Java coding. Velatte is receiving considerable
attention, following its announcement at the World Congress on IT
2002 in Adelaide during February and subsequently at the JavaONE
conference in San Francisco in April 2002.

Velatte has been ported to IBM's middleware products supporting
IBM's DB2 database and market leading application server solution
Websphere.

ABOUT PROPHECY INTERNATIONAL

For more details on Prophecy International visit www.prophecyopen.com
or www.velatte.com
call Paul Turner, Chief Financial Officer on 61 8 8364 4411
or Impress Media Australia on 61 8 8431 4000.