Final Results

Embargoed Release: 07:00hrs Thursday 27th March 2008

                                  SOPHEON PLC                                  

                   ("Sopheon", the "Group" or the "Company")                   

         PRELIMINARY AUDITED RESULTS FOR THE YEAR TO 31 DECEMBER 2007          

Sopheon plc, the international provider of software and services that improve
the financial return from innovation and product development investments,
announces its results for the year ended 31 December 2007 together with an
outlook for the current year. Sopheon shares are traded on AIM in London and on
Euronext Amsterdam.

Highlights:

  * Revenue for the year was £6.3m (2006: £6.0m) and the EBITDA result for the
    year was a profit of £113,000 (2006: £33,000). Our US business grew
    strongly, offset by a reduction in Europe. The declining value of the US
    dollar weighed on reported revenues. Two of the major orders deferred from
    the end of 2007 have now been signed, with the others remaining under
    negotiation. Full year revenue visibility for 2008 already stands above £
    4m.
   
  * In June we acquired Alignent Software Inc ("Alignent"). The acquisition and
    ongoing working capital needs were financed through a combination of debt
    and equity funding. The Alignent Vision Strategist software extends
    Sopheon's solution upstream to encompass strategic product planning, and
    also brings immediate market credibility in the aerospace, defense and
    high-tech markets with customers including Boeing, BAE Systems, Honeywell,
    Lockheed Martin, and Motorola.
   
  * We closed 47 new license orders and extensions during the year, and broke
    through our internal goal of 100 customers for our core software platforms.
    Including new customers secured through the acquisition of Alignent, by
    year end we had 135 licensees. Our recurring revenue base coming into 2008
    was £2.6m compared to £1.7m at the start of 2007.
   
  * We have introduced the most significant new release of Accolade in six
    years, offering functionality that positions the product for the heavy
    manufacturing markets. The combination of Accolade and Vision Strategist is
    the first in the industry to integrate and synchronize product planning and
    product development execution. AMR Research recently identified Sopheon as
    the most mature product portfolio management offering in the market today.
   
Barry Mence, Chairman, commented: "We had expected a strongerfinish to 2007,
but continue to anticipate substantial growth in our businessand are pleased to
maintain positive EBITDA. The acquisition of Alignent has bedded down well and
has improved our strategic position. We have a great platform to build from,
and continue to drive forward with determination and confidence."

For further information contact:

Barry Mence, Chairman   Sopheon plc                  + 44 (0) 1483 685 735     
                                                                               
Arif Karimjee, CFO                                                             
                                                                               
Vikki Krause            Hansard Communications       + 44 (0) 207 245 1100     
                                                                               
                                                     + 44 (0) 7515 922 906     
                                                                               
Claire Verhagen         Citigate First Financial     + 31 (0) 205 754 010      
                                                                               
David Newton            Seymour Pierce               + 44 (0) 207 107 8000     

About Sopheon

Sopheon (LSE: SPE) is an international provider of software and services that
help organizations improve the business impact of product innovation. Sopheon's
solutions automate and govern the innovation process, enabling companies to
increase revenue and profits from new products. Sopheon is listed on the AIM
Market of the London Stock Exchange and on the Euronext in the Netherlands. For
more information, please visit www.sopheon.com.

Accolade®is a registered trademark of Sopheon plc.

Stage-Gate® is a registered trademark of the Product Development Institute.

                             CHAIRMAN'S STATEMENT                              

Introduction

2007 was a year of steady progress in our core operations. However, as the year
came to a close, a number of expected, significant transactions were deferred
into 2008. As a result, our revenue performance for the year shows modest
growth. Despite our disappointment over this outcome, we continue to anticipate
substantial expansion in our business. Of the six major transactions that we
expected to close in 2007 but were deferred, two have now been signed, three
remain in negotiations and one has concluded a small initial order. Full-year
2008 revenue visibility incorporating booked revenue, contracted services
business and the run rate of recurring contracts, already stands above £4m. We
were able to maintain positive EBITDA for the year, even though we raised the
level of investment in R&D and built out our customer services operations. We
also completed an acquisition - funded largely by debt - which we believe is
already having a major strategic impact on our business. License sales and
extensions continued to grow in quantity, with 47 transactions compared to 36
the year before, and ended the year with a licensee base of 135 companies. Our
recurring revenue base coming into 2008 was £2.6m, 50% higher than at the start
of 2007.

The acquisition of Alignent will help drive expansion of Sopheon's business in
two areas. First, Alignent's Vision Strategist ("VS") software has extended
Sopheon's solution upstream from our existing position to include strategic
product planning. Second, Alignent's roster of industry-leading customers has
brought Sopheon instant credibility in a range of new markets, including
aerospace, defense and high-tech. Integration of the acquisition has gone very
smoothly, with people, facilities, and resources successfully consolidated in
the third quarter, and we closed six new sales of VS by year end and also
converted the vast majority of recurring contracts that came due for renewal in
the period.

In parallel with commercial activities, we have continued to invest heavily in
product development. During 2007 our development team released two new versions
of VS to the market, including features which integrate the software to our
core Accolade software. In addition, we have just introduced the most
significant new release of Accolade since it was first introduced more than six
years ago. This new version of Accolade offers new functionality that positions
the product beyond our historical process manufacturing markets, and into the
large aerospace, defence and automobile sectors which we are now entering. The
combination of Accolade and VS is the first in the industry to integrate
product planning and product development execution.

We previously reported having established affiliate or reseller relationships
with organizations in Germany, Australia, New Zealand, Portugal, France and,
most recently, the United Kingdom. We continue to invest in the development of
these partners with the expectation that their contribution to Sopheon's sales
and financial performance will increase. The volume of sales generated by our
reseller channel did not meet our expectations; however, the number and quality
of opportunities in the channel's sales funnel improved substantially.

In 2007, we were encouraged by the increase in commercial activity generated
through our consulting partners. This facet of our partner ecosystem continues
to grow in strength and contribution. Consulting partners that have been
engaged in commercial discussions include Hewlett Packard, Arthur D Little,
Deloitte, Kalypso and PRTM, as well as Robert Cooper and Stage-Gate
Incorporated.

Trading Performance

Sopheon's consolidated turnover grew to £6.3m (2006: £6.0m). As in the prior
year, the declining value of the US dollar has continued to weigh on reported
performance. In dollar terms, revenues were $12.7m compared to $11.2m in 2006.
The Alignent business acquired in June 2007 contributed $1.2m to this increase.
Augmented by orders for the Alignent product, total license transactions
including extension orders rose from a total of 36 in 2006 to 47 in 2007. From
a geographical standpoint, revenues for our US business increased by
approximately 50%, however this was offset by a reduction in Europe. In 2006
our European business closed an unusually high value order which contributed $2
million in revenues during that year.

The geographical pattern of our revenues shifts from year to year, with the US
delivering greater revenues in 2005 and 2007, and Europe greater revenues in
2004 and 2006. This does not in our view reflect a particular trend of growth
in one region or another, but simply illustrates the substantial impact that
the timing of a small number of orders can have, an impact which is magnified
for the results of a particular region.

Although the level of revenue growth in 2007 was clearly disappointing,
annualized average growth of the business since the launch of Accolade seven
years ago is approximately 40% in US dollar terms. Although we look forward to
consistently strong underlying growth in our business, we believe that our
performance in any particular period will remain relatively unpredictable for
some time to come. This is a function of continued variation both in sales
cycle times and transaction values.

Business mix

Overall, in 2007 our business delivered a 34:29:37 ratio of license,
maintenance, service respectively compared to 37:25:38 in the prior year. We
believe that the proportion of license revenues will rise in 2008, assisted in
part by the effect of the transactions that were deferred from the end of 2007.

We expect our consulting revenues to continue to grow well and to provide a
source of stability and maturity to our business. Our 2007 implementations
consistently met or exceeded customer expectations, as rated by the client
executive who invested in Accolade. Alongside this achievement, we delivered £
1.2m (2006: £0.6m) of services to existing customers that required additional
configuration and consultancy work. Whilst we are very proud of the
achievements of our services organization, we believe that in time services
will moderate as a proportion of our total revenues by the effect of license
business coming through partners, for which associated services work is
unlikely to be performed by Sopheon.

Recurring income has grown to £2.6m coming into 2008, compared to £1.7m a year
before. The majority of this income is represented by maintenance services, but
also includes hosting services and license rentals. Approximately half of our
year-on-year growth can be attributed to license rental income from Alignent
customers that subscribe to our software on a rental basis, as opposed to
having purchased a perpetual license which is the traditional Sopheon model.

Overall gross margins have held fairly steady at 73% (2006: 72%).

Research & Development expenditure

During 2007, our R&D effort focused on two primary areas. First, we invested in
two new releases of the former Alignent's Vision Strategist product planning
software, including the incorporation of portfolio management capabilities
derived from our core Accolade product. This development is generating
considerable interest from the existing Vision Strategist client base. Second,
our product development organization completed the coding for the most
significant new version of Accolade release in Sopheon's history, This new
version of the offering will extend our value not only to the process
manufacturing markets we have historically targeted, but also to the large
aerospace, defence and automobile sectors which we are now entering. Market
roll-out of Accolade version 7.0 has begun in the first quarter of 2008,
starting with release of the new software to our existing customers.

We had planned a material expansion of our product development team during the
course of 2007 in connection with the anticipated completion of Accolade 7.0,
and this was further extended by the acquisition of Alignent. Accordingly,
during the year we increased this team from a staff of 16 to 29, underlining
Sopheon's commitment to product leadership. Ignoring the effect of the
capitalization and amortization of such costs, total R&D expenditure increased
by over £0.3m compared to the previous year. As a result of the above, £0.8m
(2006: £0.5m) of our 2007 R&D expenditure met the criteria of IAS38 for
capitalization.

Operating costs & Results

Overall staff costs have increased by approximately £0.6m, due largely to an
increase in headcount over the course of the year from 65 to 92, of which 10
can be attributed to the acquisition of Alignent in June. The financial effect
of this increased headcount was mitigated by three factors: (i) the increasing
weakness of the US Dollar reducing the reported cost of the additional staff
that were taken on in America; (ii) a reduced bonus was earned by the group's
employees in 2007; and (iii) a greater proportion of customer services work
performed by our own staff rather than by subcontractors. The services staff
expanded from 18 to 25 during the course of the year.

Distribution costs are higher than the previous year, reflecting both the
additional staff afforded by the acquisition of Alignent and approximately £
0.1m of amortization of intangible assets acquired with Alignent.
Administration costs increased by £0.2m, and much of this increase can be
attributed to increases in share-based compensation and depreciation of assets
acquired with Alignent, as well as £0.1m of provisions against investments and
loans to the group's reseller partners. Sopheon operates a conservative policy
with regard to the recoverability of such investments.

We achieved a consolidated EBITDA profit of £0.1m (2006: £0.03m). This total
reflects a deduction of share based payments of £0.1m (2006: £0.1m) but
excludes depreciation and amortization charges of £0.5m (2006: £0.3m) for the
year and net interest costs of £0.1m (2006: £0.0m). In common with other
businesses in our sector, Sopheon measures its annual performance using EBITDA
(Earnings before Interest, Tax, Depreciation and Amortization) which the board
believes provides a useful indicator of the operating performance of our
business by removing the effect on earnings of tax, capital spend and
financing. EBITDA is further defined in Note 7. Including the effect of
interest, depreciation and amortization, the retained loss for the year was £
0.4m (2006: £0.3m) and the loss per ordinary share was 0.3p (2006: 0.2p).

Acquisition

On 11 June 2007 Sopheon announced the acquisition of Alignent Software Inc
("Alignent"). Based in California, USA, Alignent is one of only a few suppliers
worldwide that specializes in the provision of strategic product and technology
roadmapping software for complex global companies.

The maximum consideration for the acquisition was $5.50m, comprising $4.75m
initially upon closing, and a further $0.75m in potential earn-out payments.
The earn-out objectives were linked to aggressive targets for sales performance
in the second half of 2007, which were not achieved. Accordingly, no earn-out
payment is due. The initial consideration was reduced by the book value of net
liabilities of Alignent assumed at the closing, which amounted to $1m.
Accordingly, the initial cash consideration was $3.75m. In addition, Sopheon
incurred transaction expenses for the acquisition of approximately $0.2m. The
cash consideration, transaction expenses and working capital for the combined
group were funded by (i) $3.5m of new medium-term debt as described below and
(ii) raising £2.1m (before expenses) by the placing of 12,000,000 new Sopheon
ordinary shares at 17.5p per share.

International Financial Reporting Standard 3 "Business Combinations" requires
that the fair value of assets and liabilities acquired, including intangible
assets, should be measured at the date of acquisition. International Accounting
Standard 38 "Intangible Assets" requires that intangible assets acquired as
part of a business combination should be separately recognised if the asset
meet certain criteria. Accordingly, technology and customer relationships
acquired as part of the Alignent acquisition were valued at $4m (£2m) upon
acquisition and are included in Sopheon's balance sheet at 31 December 2007.
These assets are being amortized over four and eight years respectively. In
addition, Sopheon has recognized $1m (£0.5m) of residual goodwill, which is
also included as an intangible asset at 31 December 2007.

Financing and balance sheet

Net assets at the end of the year stood at £3.3m (2006: £1.6m) and include £
3.7m (2006: £0.8m) of intangible assets. This includes £1.4m being the net book
value of capitalized research and development (2006: £0.8m) and an additional £
2.3m (2006: £nil) being the net book value of Alignent intangible assets and
goodwill as further detailed in Note 8.

As part of the funding raised for the Alignent acquisition, Sopheon secured
$3.5m of medium-term debt from BlueCrest Capital Finance LLC ("BlueCrest"). The
debt is being repaid in 48 equal monthly instalments, and is secured by a
debenture and guarantee from Sopheon plc. BlueCrest also offered the enlarged
group an additional $750,000 revolving credit facility secured on accounts
receivable, which has replaced the $1m facility previously in place with
Silicon Valley Bank.

Gross cash resources at 31 December 2007 amounted to £2.1m (2006: £1.0m). Short
term borrowings connected with the group's revolving facilities amounted to £
0.4m (2006: £0.4m). A surge of sales at the end of 2006, which did not recur at
the end of 2007, resulted in trade and other receivables reducing from £2.5m to
£2.3m year on year.

Corporate

In June 2006, Sopheon filed a certification with the US Securities and Exchange
Commission ("SEC") on Form 15, to immediately suspend its duty to file reports
under the Securities Act of 1934. This has saved us filing costs. However, the
acquisition of Alignent could have required Sopheon to resume SEC reporting,
unless it terminated its registration. Accordingly, pursuant to recently
adopted Rule 12h-6(i) of the Exchange Act, on 28 December 2007 we filed a
certification with the SEC on Form 15F, in order to effect such termination.
Sopheon's ordinary shares are not traded on any US Stock Exchange, and this
change will have no effect on the trading of Sopheon's shares on AIM or
Euronext.

During 2007 we agreed terms to extend Sopheon's equity line of credit facility
with GEM Global Yield Fund Limited ("GEM") for a further two year period
through to 23 December 2009. GEM agreed to implement this extension at no cost
to Sopheon. The facility has been used to raise working capital once, in March
2004, leaving approximately 90% of the original €10m facility available under
the extended agreement. Drawings under the GEM equity line of credit are
subject to conditions relating inter alia to trading volumes in Sopheon shares.

Markets & Products

Companies are challenged to bring new innovative products to market that will
offer them sustainable profitable growth. More than half of today's corporate
executives are dissatisfied with the business return their organizations
receive from R&D investments. Often those investments are undercut by poor
execution. Recent studies show that, on average, corporations fail to implement
35 percent of their strategic initiatives. An estimated 65 percent of companies
also struggle to keep product portfolios and development activity aligned with
corporate strategic plans. A root cause of these issues is the fact that in
most organizations, product planning and product development execution are
independent, complex processes. What's more, they are typically carried out by
multiple, geographically dispersed teams and functions, with little emphasis on
making sure that innovation projects fit the business' long-term strategies.

Sopheon's software synchronizes corporate strategic product plans with the
execution of new product development, commercialization and management. Our
solutions are the first in the industry to address and successfully resolve the
synchronization challenge.

Sopheon has two principal offerings. Its Accolade® solution is a modular
software system specifically designed to increase work efficiency and improve
decision-making in the development and management of new products. Accolade
provides a central repository for storing and managing data and information on
all types of product innovation projects across the organization. This
centralization, augmented by easy access to the stored data, enables executives
and product development teams to make quicker, more informed decisions.
Accolade also automates the management of the product life cycle, allowing the
user to track the business opportunities and risks associated with products
from their inception as ideas to their retirement from the marketplace.

Sopheon's other principal offering, Vision Strategisttm, automates and manages
the customer's strategic product planning process. Acquired in mid-2007 as part
of Sopheon's purchase of Alignent Software, the solution helps companies reduce
the uncertainty and risks associated with making portfolio decisions by
allowing them to visualize the likely impact of external market factors on
innovation plans. Roadmaps created by the VS system can be used to project and
analyze the future of everything from products, markets and technologies to the
competitive landscape. The software simplifies the complex task of product
roadmapping and improves long-term decisions on innovation projects.

The integration of Accolade and Vision Strategist creates the only
comprehensive strategic product planning and innovation process support
solution in the marketplace. The offering is the first to tie product, market
and technology roadmapping directly to the operational aspects of product
development.

People

Our ability to deliver value to our customers is a testament to Sopheon people
in all parts of our company, many of whom have been working tirelessly for
several years to build the business we have today. I thank them for their
continuing contribution to our growing success.

Sopheon's executive management team has also been in place for several years,
comprised of our CEO Andy Michuda, CFO Arif Karimjee Paul Heller our CTO, Huub
Rutten our head of research, and myself. The Sopheon plc board is made up of
three executive directors, augmented by three non-executive directors who bring
a wealth of knowledge and experience to our business.

In order to help accelerate our growth transition, we have taken steps to
fortify our senior-management team in the USA. During the second quarter we
added executive leaders for our North American sales and client services
organizations. Each brings considerable experience from Lawson Software and
Oracle respectively.

Outlook

Sopheon has built a strong stable of 135 licensed customers spread across the
key vertical markets that we have chosen to address. Our results for 2007
demonstrate how our customer base is leading to rising levels of repeat
business and recurring revenues, which are providing, at last, an element of
the predictability which has proved so elusive for us. Initial indications are
that our newly released Accolade 7.0, further enhanced by the opportunity to
integrate with Vision Strategist, is being received well by the market. We
believe this will further underpin growth and solidify our leadership position.
It is very gratifying to have our solution recognized by members of the analyst
community not just as a best of breed offering, but now as the most mature.

This growing reputation coupled with the increasing recognition of the
importance of our chosen market, is leading to more competition from major
enterprise software vendors as well as new entrants. Staying on top of this
fast changing competitive landscape is challenging for a company our size,
which is why we continue to invest in expanding our partnership and reseller
network. Our successful ongoing business at General Motors, delivered alongside
Hewlett Packard, is just one example of the partner model we are working to
develop.

We remain alert to potential shifts in buying patterns caused by the
increasingly turbulent financial environment, and are aware that this could
have an impact on our business. However, when appropriate, we do emphasize the
benefits that our solutions can bring to organizations facing both financial
and competitive pressures.

The backdrop set out above, together with the pipeline of business built up in
the later stages of 2007, lead us to expect a good start to the current year,
reinforced by the fact that revenue visibility already stands above £4m. This
will contribute to getting us back on track for more significant growth and an
improved performance for the full year of 2008. We look forward with optimism
to the challenges and potential rewards ahead.

Barry Mence                                                       27 March 2008
                                                                               
Chairman                                                                       

       CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2007       

                                                            2007           2006
                                                                               
                                                           £'000          £'000
                                                                               
Turnover - continuing activities                           6,332          6,045
                                                                               
Cost of sales                                            (1,703)        (1,690)
                                                                               
Gross profit                                               4,629          4,355
                                                                               
Distribution costs                                       (2,523)        (2,401)
                                                                               
Research and development expenses                        (1,027)        (1,028)
                                                                               
Other administrative expenses                            (1,462)        (1,232)
                                                                               
Total Administrative costs                                 2,489          2,260
                                                                               
Operating loss                                             (383)          (306)
                                                                               
Investment revenue                                            70             39
                                                                               
Finance costs                                              (130)           (36)
                                                                               
Loss on ordinary activities before taxation                (443)          (303)
                                                                               
Retained loss for the year                                 (443)          (303)
                                                                               
Loss per share - basic and diluted                        (0.3p)         (0.2p)
                                                                               
EBITDA                                                       113             33
                                                                               

            CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE            

                      FOR THE YEAR ENDED 31 DECEMBER 2007                      

                                                            2007           2006
                                                                               
                                                           £'000          £'000
                                                                               
Exchange difference on translation of foreign               (27)          (133)
operations                                                                     
                                                                               
Net expense recognised directly in equity                   (27)          (133)
                                                                               
Loss for the financial year                                (443)          (303)
                                                                               
Total recognised income and expense for the year           (470)          (436)
(all attributable to equity holders of the parent                              
company)                                                                       
                                                                               

                CONSOLIDATED BALANCE SHEET AT 31 DECEMBER 2007                 

                                                            2007           2006
                                                                               
                                                           £'000          £'000
                                                                               
Non-current assets                                                             
                                                                               
Property, plant and equipment                                182            110
                                                                               
Intangible assets                                          3,725            848
                                                                               
Non-current receivables                                       10             10
                                                                               
                                                           3,917            968
                                                                               
Current assets                                                                 
                                                                               
Trade and other receivables                                2,221          2,484
                                                                               
Cash and cash equivalents                                  2,053          1,034
                                                                               
                                                           4,274          3,518
                                                                               
Total assets                                               8,191          4,486
                                                                               
Current liabilities                                                            
                                                                               
Short term borrowings                                        755            414
                                                                               
Trade and other payables                                   2,934          2,452
                                                                               
                                                           3,689          2,866
                                                                               
Non-current liabilities                                                        
                                                                               
Bank loans                                                 1,192              -
                                                                               
Total liabilities                                          4,881          2,866
                                                                               
Net assets                                                 3,310          1,620
                                                                               
Equity and reserves                                                            
                                                                               
Share capital                                              7,279          6,679
                                                                               
Other reserves                                            73,499         72,827
                                                                               
Profit and loss account and translation reserve         (77,468)       (77,886)
                                                                               
Total equity (all attributable to equity holders of        3,310          1,620
the parent company)                                                            
                                                                               

     CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2007      

                                                            2007           2006
                                                                               
                                                           £'000          £'000
                                                                               
Loss for the year                                          (443)          (303)
                                                                               
Adjustments for non-cash and similar items                   661            397
                                                                               
Movements in working capital                                  24          (596)
                                                                               
Net cash outflow from operating activities                   242          (502)
                                                                               
Investing activities                                     (2,687)          (510)
                                                                               
Financing activities                                       3,452             95
                                                                               
Increase/(Decrease) in cash and cash equivalents           1,007          (917)

NOTES

1. Basis of preparation

The financial statements have been prepared in accordance with International
Financial Reporting Standards and Interpretations issued by the International
Accounting Standards Board as adopted by the European Union and those parts of
the Companies Act 1985 which apply to companies preparing their financial
statements under IFRS. Accounting policies have been applied consistently to
all the years presented, and on the going concern basis.

2. Going concern.

The financial statements have been prepared on a going concern basis. In
reaching their assessment, the directors have considered a period extending at
least 12 months from the date of approval of these financial statements and
have considered both the forecast performance for the next 12 months and the
cash and financing facilities available to the group.

In 2007, the group achieved revenues of £6.3m and generated a loss of £443,000.
The directors are positive about the direction, focus and momentum of the
business and believe that the group's existing resources and facilities
described below provide it with adequate funding to support its activities
through to the point at which they anticipate that operations will become cash
generative on a sustained basis. This is however dependent on the group
delivering an adequate level of sales. Furthermore, the time-to-close and the
order value of individual sales can vary considerably, factors which constrain
the ability to accurately predict revenue performance.

At 31 December 2007, the group reported net assets of £3.3 million and gross
cash resources of £2.0 million. The group has a £1.8 million loan note from
BlueCrest Capital Finance ("BlueCrest") which is repayable in equal instalments
of £45,000 through July 2011. The group also has access to a bank line of
credit with BlueCrest which is secured against the trade receivables of
Sopheon's North American business.

If sales fall short of expectations, the group may need to raise additional
finance. Sopheon continues to have access to the equity markets, as
demonstrated by the placing in June 2007 in London of 12 million shares to
raise £2 million after expenses. In addition, the group has access to an equity
line of credit facility from GEM Global Yield Fund Limited ("GEM") for an
aggregate of €10 million for a term, the expiry date of which was recently
extended until December 2009. GEM's obligation to subscribe for shares is
subject to certain conditions linked to the prevailing trading volumes and
prices of Sopheon shares on the Euronext stock exchange. To date Sopheon has
made one call on the equity line of credit facility, raising just under €1
million in March 2004, leaving a maximum €9 million potentially available.

The directors believe that taken as a whole, the factors described above enable
the group to continue as a going concern for the foreseeable future. The
financial information does not include the adjustments that would be required
if the company or group were unable to continue as a going concern.

3. Annual Report

The abridged financial information set out herein has been extracted from
financial statements approved by the directors on 26 March 2008, and which will
be delivered to the Registrar of Companies following the Company's annual
general meeting. The auditors have issued an unqualified audit report, but
consistent with prior years, have drawn attention to the uncertainty over going
concern. This financial information does not constitute statutory accounts as
defined in section 240 of the Companies Act 1985 and has been prepared on the
basis of the accounting policies set out in the financial statements for the
year ended 31 December 2007. The Annual Report and Financial Statements will be
posted to shareholders shortly and thereafter will be available from the
Company's registered office at 40 Occam Road, Surrey Research Park, Guildford,
Surrey GU2 7YG and from the Company's website www.sopheon.com.

4. Principal Accounting Policies

Basis of consolidation

The consolidated financial statements incorporate the financial statements of
the company and entities controlled by the company ("subsidiaries"). Control is
achieved where the company has the power to govern the financial and operating
policies of an entity and to obtain benefits from its activities. All
intra-group transactions, balances, income and expenses are eliminated on
consolidation.

Revenue recognition

Revenue is measured at the fair value of the consideration received or
receivable and represents amounts receivable for goods and services provided in
the normal course of business, net of discounts and sales related taxes. Sales
of software products are recognized on delivery, and when no significant vendor
obligations remain. Revenues relating to maintenance and post contract support
agreements are deferred and recognized over the period of the agreements.
Revenues from implementation and consultancy services are recognized as the
services are performed, or in the case of milestone based or long term
contracts, recognized on a percentage basis as the work is completed and any
relevant milestones are met, using latest estimates to determine the expected
duration and cost of the project.

Leases

Assets held under finance leases are recognised as assets of the group at their
fair value at the inception of the lease or, if lower, at the net present value
of the minimum lease payments. The corresponding liability to the lessor is
included in the balance sheet as a finance lease obligation. Lease payments are
apportioned between finance charges and reduction of the lease obligation so as
to achieve a constant rate of interest on the remaining balance of the
liability. Finance charges are charged to profit or loss. Rentals payable under
operating leases are charged to profit or loss on a straight-line basis over
the term of the relevant lease.

Retirement benefit costs

Payments to defined contribution retirement benefit plans are charged as an
expense as they fall due. The group does not operate any defined benefit
retirement benefit plans.

Treatment of foreign currencies for consolidation

For the purpose of presenting consolidated financial statements, the assets and
liabilities of the group's foreign operations (including comparatives) are
expressed in sterling using exchange rates prevailing on the balance sheet
date. Income and expense items (including comparatives) are translated at the
average exchange rates for the period. Exchange differences arising (including
exchange differences on intra-group loans) are classified as equity and
transferred to the group's translation reserve. Such translation differences
are recognized in profit or loss in the period in which the foreign operation
is disposed of.

Deferred taxation

Deferred tax is recognized on differences between the carrying amounts of
assets and liabilities in the financial statements and the corresponding tax
bases used in the computation of taxable profit, and is accounted for using the
balance sheet liability method. Deferred tax liabilities are generally
recognized for all taxable temporary differences, but deferred tax assets are
recognized only to the extent that it is probable that taxable profits will be
available against which deductible temporary differences can be utilised.
Deferred tax is calculated at tax rates that have been enacted or substantively
enacted at the balance sheet date, and that are expected to apply in the period
when the liability is settled or the asset realized. Deferred tax is charged or
credited to profit or loss, except when it relates to items charged or credited
directly to equity, in which case the deferred tax is also dealt with in
equity.

Property, plant and equipment

Computer equipment and fixtures and fittings are stated at cost less
accumulated depreciation and any accumulated impairment losses. Depreciation is
charged so as to write off the costs of assets over their estimated useful
lives, using the straight-line method. Assets held under finance leases are
depreciated over their expected useful lives on the same basis as owned assets,
or, when shorter, over the term of the relevant lease. The gain or loss arising
on the disposal or retirement of an item of property, plant and equipment is
determined as the difference between the sale proceeds and the carrying amount
of the asset and is recognised in profit or loss.

Intangible assets - research and developmentexpenditure

Development expenditure on internally developed software products is
capitalised if it can be demonstrated that:

  * it is technically feasible to develop the product
   
  * adequate resources are available to complete the development
   
  * there is an intention to complete and sell the product
   
  * the Group is able to sell the product
   
  * sales of the product will generate future economic benefits; and
   
  * expenditure on the product can be measured reliably
   
Capitalised development costs are amortized over the period over which the
group expects to benefit from selling the product developed. Development costs
not satisfying the above criteria and expenditure on the research phase of
internal projects are recognised in profit or loss as incurred.

Share based payments

The group issues equity-settled share-based payments to certain employees.
Equity-settled share-based payments are measured at fair value (excluding the
effect of non-market-based vesting conditions) at the date of grant. The fair
value determined at the date of grant is expensed on a straight-line basis over
the vesting period, based on the group's estimate of the shares that will
eventually vest and adjusted for the effect of non-market-based vesting
conditions. Fair value is measured by the binomial option-pricing model. The
expected life used in the model had been adjusted, based on management's best
estimate, for the effects of non-transferability, exercise restrictions and
behavioral considerations.

Business combinations

The acquisition of subsidiaries is accounted for using the purchase method. The
cost of the acquisition is measured at the aggregate of the fair values at the
date of exchange, of assets given, liabilities incurred or assumed, and equity
instruments issued by the group in exchange for control of the entity being
acquired, together with any costs directly attributable to the business
combination. The results of the acquired entities are included in the
consolidated income statement from the date on which effective control is
obtained. The identifiable assets, liabilities and contingent liabilities of
the entity being acquired that meet the conditions for recognition under IFRS 3
Business Combinations are recognized at their fair values of the date of
acquisition.

Identifiable intangible assets are capitalised at fair value as at the date of
acquisition. The useful lives of these intangible assets are assessed and
amortisation is charged on a straight-line basis, with the expense taken to the
income statement. Intangible assets are tested for impairment when a trigger
event occurs. Useful lives are also examined on an annual basis and
adjustments, where applicable are made on a prospective basis.

5. Turnover

All of the Group's revenue in respect of the years ended 31 December 2007 and
2006 derived from continuing operations and from the Group's single business
segment, the design, development and marketing of software products with
associated implementation and consultancy services.

6. Share based payments

In accordance with IFRS2Share basedPayments, an option pricing model has been
used to work out the fair value of share options granted since November 2002,
with this value being charged to the profit and loss account over the expected
vesting period and leading to a charge of £105,000 (2006: £62,000).

7. Earnings per share and EBITDA

The calculation of basic loss per ordinary share is based on a loss of £443,000
(2006: £303,000), and on 140,286,000 (2006: 133,441,000) ordinary shares, being
the weighted average number of ordinary shares in issue during the year. The
effect of all potential ordinary shares is antidilutive.

EBITDA is defined as earnings before interest, tax, depreciation and
amortization and can be arrived at by adding back depreciation and amortization
charges amounting to £496,000 (2006: £338,000) to the operating loss of £
383,000 (2006: £306,000).

8. Acquisition of Alignent

                                                                 £'000
                                                                      
Net Assets acquired                                                   
                                                                      
Property, plant and equipment                                       86
                                                                      
Intangible assets                                                2,012
                                                                      
Net working capital and deferred income                          (632)
                                                                      
                                                                 1,466
                                                                      
Goodwill                                                           493
                                                                      
Cost of acquisition                                              1,959
                                                                      
Comprising                                                            
                                                                      
Cash consideration                                               1,852
                                                                      
Costs of transaction                                               107
                                                                      
                                                                 1,959

Included in intangible assets is the fair value of technology and customer
relationships arising upon acquisition, estimated at £700,000 and £1,312,000
respectively.

9. Intangible Assets

In accordance with IAS 38Intangible Assets, certain development expenditure
must be capitalised and amortised based on detailed technical criteria, rather
than automatically charging such costs in the profit and loss account as they
arise. This has led to the capitalization of £785,000 (2006: £495,000), and
amortization of £233,000 (2006: £305,000) during the year. In addition as noted
above the acquisition of Alignent resulted in the recognition of a further £
2,505,000 of intangible assets and goodwill, and £169,000 of amortization
during the year.

10. Cautionary Statement

Sopheon has made forward-looking statements in this press release, including
statements about the market for and benefits of its products and services;
financial results; product development plans; the potential benefits of
business relationships with third parties and business strategies. These
statements about future events are subject to risks and uncertainties that
could cause Sopheon's actual results to differ materially from those that might
be inferred from the forward-looking statements. Sopheon can make no assurance
that any forward-looking statements will prove correct.