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Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
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<SEC-DOCUMENT>0001119083-06-000003.txt : 20060510
<SEC-HEADER>0001119083-06-000003.hdr.sgml : 20060510
<ACCEPTANCE-DATETIME>20060510112959
ACCESSION NUMBER:		0001119083-06-000003
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20060510
FILED AS OF DATE:		20060510
DATE AS OF CHANGE:		20060510

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			MIND CTI LTD
		CENTRAL INDEX KEY:			0001119083
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-COMPUTER PROGRAMMING SERVICES [7371]
		IRS NUMBER:				000000000
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		6-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-31215
		FILM NUMBER:		06824158

	BUSINESS ADDRESS:	
		STREET 1:		INDUSTRIAL PARK BUILDING 7
		CITY:			YOQNEAM ILIT ISRAEL
		STATE:			L3
		ZIP:			20692
		BUSINESS PHONE:		97249936666

	MAIL ADDRESS:	
		STREET 1:		PO BOX 144
		CITY:			YOQNEAM ILIT ISRAEL
		ZIP:			20692
</SEC-HEADER>
<DOCUMENT>
<TYPE>6-K
<SEQUENCE>1
<FILENAME>mindcti6k.htm
<TEXT>
<!DOCTYPE html PUBLIC "-//W3C//DTD HTML 3.2//EN">
<HTML>
<HEAD>
	<TITLE> MIND CTI LTD (Form: 6-K, Received: 07/25/2002 09:11:35) </TITLE>
</HEAD>
<BODY TEXT="#000000" BGCOLOR="#FFFFFF" ALINK="#0000FF" HLINK="#FF0000" VLINK="#800080">
<BR>

<FONT SIZE=5>
	<STRONG><CENTER>SECURITIES AND EXCHANGE COMMISSION</CENTER></STRONG>
</FONT>

<FONT SIZE=4>
	<CENTER>Washington, D.C. 20549</CENTER>
</FONT>
<P>

<FONT SIZE=5>
	<STRONG><CENTER>FORM 6-K</CENTER></STRONG>
</FONT>
<P>

<STRONG><CENTER>Report of Foreign Private Issuer</CENTER></STRONG>
<P>

<CENTER>Pursuant to Rule 13a-16 or 15d-16 of</CENTER>
<CENTER>the Securities Exchange Act of 1934</CENTER>
<P>

<STRONG><CENTER>
  For the Quarter Ended March 31, 2006
</CENTER>
</STRONG>
<P>

<CENTER>
	<FONT SIZE=5><STRONG>MIND C.T.I. LTD.</strong></FONT>
</CENTER>

<CENTER>
(Translation of Registrant's Name into English)
</CENTER>
<P>

<CENTER>
	Industrial Park, Building 7, P.O. Box 144, Yoqneam, Israel 20692
</CENTER>
<CENTER>
	(Address of Principal Executive Offices)
</CENTER>
<P>

<CENTER>
	Indicate by check mark whether the registrant files or will file annual
</CENTER>
<CENTER>
	reports under cover Form 20-F or Form 40-F:
</CENTER>
<P>

<CENTER>Form 20-F [X] Form 40-F [ ]</CENTER>
<P>

<CENTER>
	Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:
	<BR>
	Yes [ ] No [X]
</CENTER>
<P>

<center>
	If &quot;Yes&quot; is marked, indicate below the file number assigned to the registrant
	in connection with Rule 12g3-2(b): 82-___.
</center>
<P>

<HR width=75% color=#999999 noshade size=2>
<!-- -------------------------------------------------------------------------- -->
<P>
<center>
  <h2>MIND CTI Reports 70% Growth in Revenue to a Record $5.25 Million for the  First Quarter of 2006</h2>
</center>

<strong>Key Highlights</strong>
<UL>
  <LI>First quarter 2006 revenues were $5.25 million, a 70% increase over the   first quarter of 2005 and a 4% increase over the fourth quarter of 2005.
  <LI>Net income, excluding amortization of intangible assets and equity-based   compensation expense, of $1.06 M.
  <LI>GAAP net income for Q1 2006 was $654 thousand or $0.03 per diluted share.
  <LI>The company distributed $0.14 per share in annual dividends. Cash position   remains strong with $37 million on the balance sheet on March 31, 2006. </LI>
</UL>
MIND CTI Ltd. (NasdaqNM:MNDO), a leading provider of convergent end-to-end billing and customer care   solutions for VoIP, Mobile, Wireline and Quad-play carriers worldwide, today   announced results for the first quarter 2006.<BR>
<BR>
Monica Eisinger,   Chairperson and CEO, commented: "We continue to execute on our strategy of being   a leading provider of solutions for the Tier&nbsp;2 and Tier 3&nbsp;n-play (multiple   services) carriers that require&nbsp;a complete end-to-end BSS solution. Our strength   is the fast deployment of a complete turn-key product based solution   that&nbsp;includes&nbsp;billing, customer care, mediation, provisioning, rating for   multiple services and prepaid&nbsp;IP&nbsp;functionality. Our strength is our&nbsp;proven   platform that is 8 years operational and our 10 years of wireless and IP   experience to deploy customer requirements. Finally, our flexibility to meet   customer requirements in a short time frame differentiates us from our   competition. Lately we increased significantly our investment in marketing, with   a clear focus on these markets. I believe that we are well positioned to seize   the opportunities that we see, mainly in the Americas".<BR>
<BR>
As of March 31,   2006, we had 306 employees in our four offices.
<p><strong>Revenue Distribution for Q1 2006<BR>
</strong>The geographic revenue breakdown, as   a percentage of total revenues, was as follows: sales in the Americas   represented 50%, Europe represented 32%, Africa, APAC and Israel represented   18%. <BR>
<BR>
Revenue from our customer care and billing software totaled $4.37   million, while revenue from our enterprise call management software was $886   thousand. The revenue breakdown from our business lines of products was $2.47   million, or 47%, from licenses, $1.54 million, or 29%, from maintenance and   $1.24 million, or 24%, from services</p>
<p><b>Conference Call Information</b><br>
  MIND will host a conference call on May 10, at 8:30 a.m., Eastern Standard Time,   to discuss the Company's first quarter 2006 results and other financial and   business information. The call will be carried live on the Internet via www.fulldisclosure.com and the MIND   website, www.mindcti.com. For those unable   to listen to the live web cast, a replay will be available.
</p>

<p><b>About MIND</b><br>
MIND CTI Ltd. is a leading provider of convergent prepaid and postpaid   end-to-end billing and customer care solutions for VoIP, Mobile, Wireline and   Quad-play carriers worldwide. Since 1997 MIND has been a pioneer in enabling the   VoIP technology for emerging and incumbent service providers. In August 2005   MIND acquired Sentori, Inc., a US based provider of customer care and billing   solutions to wireless carriers and mobile virtual network operators (MVNO's).   Sentori, Inc. brings over ten years of wireless experience staff and seven years   of a wireless operational solution to carriers. MIND operates from offices in   Europe, Israel and the United States.
</p>
<p>For financial information, reports and presentations, please visit the Investor Relations site: http://www.mindcti.com/ir</p>

<font size="2">Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the Private Securities Litigation Reform Act of 1995: All statements other than historical facts included in the foregoing press release regarding the Company's business strategy are "forward looking statements." These statements are based on management's beliefs and assumptions and on information currently available to management. Forward-looking statements are not guarantees of future performance, and actual results may materially differ. The forward looking statements involve risks, uncertainties, and assumptions, including the risks discussed in the Company's filings with the United States Securities Exchange Commission.  The Company does not undertake to update any forward-looking information.</font>

<p>
	<b>For more information please contact:</b><br>
	Andrea Dray<br>
	MIND CTI Ltd.<br>
	Tel: +972-4-993-6666<br>
	investor@mindcti.com
</p>
<center>(tables to follow)</center>
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<p>
<hr width="100%">

<a name="table"></a>
<a href="#top"><font size="1"><b>Back to top</b></font></a>

<center><h2>		CONDENSED CONSOLIDATED BALANCE SHEETS	</h2></center>
<table cellpadding="0" cellspacing="0" border="0" width="100%">
<tr><td>&nbsp;</td>
<td align="center" colspan="2"><font size="2"><b> March 31		</b></font></td>
<td align="center" colspan="2"><font size="2"><b> December 31</b></font></td>
</tr>
<tr><td>&nbsp;</td><td align="center" colspan="2">	<HR WIDTH="90%" SIZE="1" NOSHADE>					</td></tr>
<tr><td><font size="2"><b></b></font></td><td align="center"><font size="2"><b>2006</b></font></td><td align="center"><font size="2"><b>2005</b></font></td><td align="center"><font size="2"><b>2005</b></font></td></tr>
<tr><td>&nbsp;</td><td align="right" ><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr><td>&nbsp;</td><td align="center" colspan="2"><font size="2"><b>(Unaudited)</b></font></td><td align="center"><font size="2"><b>(Audited)</b></td></tr>
<tr><td><font size="2"><b>	</td><td align="center" colspan="3">	<HR WIDTH="90%" SIZE="1" NOSHADE>					</td></tr>
<tr><td>&nbsp;</td><td align="center" colspan="3"><font size="2"><b>U.S. $ in thousands 				</b></td></tr>
<tr><td>&nbsp;</td><td align="center" colspan="3">	<HR WIDTH="90%" SIZE="1" NOSHADE>					</td></tr>
<tr><td><font size="2"><b>A  s  s  e  t  s</b></font></td><td>&nbsp;</td><td>&nbsp;</td><td>&nbsp;</td></tr>
<tr BGCOLOR="#CCEEFF"><td><font size="2"><b>CURRENT ASSETS:</b></font></td><td>&nbsp;</td><td>&nbsp;</td><td>&nbsp;</td></tr>
<tr><td style="padding-left:20px"><font size="2">Cash and cash equivalents</font></td><td align="right"><font size="2">$6,905</font></td><td align="right"><font size="2">$5,828</font></td><td align="right"><font size="2">$ 10,174</font></td></tr>
<tr BGCOLOR="#CCEEFF">	<td style="padding-left:20px"><font size="2">Accounts receivable:</font></td><td align="right">&nbsp;</td>
<td>&nbsp;</td><td>&nbsp;</td></tr>
<tr><td style="padding-left:40px"><font size="2">Trade</font></td><td align="right"><font size="2">5,191</font></td><td align="right"><font size="2"> 1,780</font></td><td align="right"><font size="2">3,389</font></td></tr>
<tr BGCOLOR="#CCEEFF">	<td style="padding-left:40px"><font size="2">Interest accrued on long-term bank deposits</font></td><td>&nbsp;</td><td align="right"><font size="2"> 833</font></td><td align="right">&nbsp;</td>
</tr>
<tr><td style="padding-left:40px"><font size="2">Other</font></td><td align="right"><font size="2">1,034</font></td><td align="right"><font size="2"> 455</font></td><td align="right"><font size="2">739</font></td></tr>
<tr BGCOLOR="#CCEEFF">	<td style="padding-left:20px"><font size="2">Inventories</font></td><td align="right"><font size="2">30</font></td><td align="right"><font size="2"> 19</font></td><td align="right"><font size="2">30</font></td></tr>
<tr><td>&nbsp;</td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr BGCOLOR="#CCEEFF"><td><font size="2">T o t a l  current assets</font></td><td align="right"><font size="2">13,160</font></td><td align="right"><font size="2"> 8,915</font></td><td align="right"><font size="2">14,332</font></td></tr>
<tr><td><font size="2"><b>LONG-TERM BANK DEPOSITS</b></font></td><td align="right"><font size="2">30,000</font></td><td align="right"><font size="2"> 40,000</font></td><td align="right"><font size="2">30,000</font></td></tr>
<tr BGCOLOR="#CCEEFF"><td><font size="2"><b>OTHER LONG-TERM ASSETS</b></font></td><td align="right"><font size="2">477</font></td><td align="right">&nbsp;</td>
<td align="right"><font size="2">480</font></td></tr>
<tr><td><font size="2">PROPERTY AND EQUIPMENT, net of accumulated depreciation and amortization</font></td><td align="right"><font size="2">1,950</font></td><td align="right"><font size="2"> 1,810</font></td><td align="right"><font size="2">1,957</font></td></tr>
<tr BGCOLOR="#CCEEFF"><td><font size="2">INTANGIBLE ASSETS, net of accumulated amortization</font></td><td align="right"><font size="2">1,330</font></td><td align="right"><font size="2"> 644</font></td><td align="right"><font size="2">1,660</font></td></tr>
<tr><td><font size="2"><b>GOODWILL</font></td><td align="right"><font size="2">6,966</font></td><td align="right">&nbsp;</td>
<td align="right"><font size="2">6,966</font></td></tr>
<tr BGCOLOR="#CCEEFF"><td>&nbsp;</td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr><td><font size="2"><b>T o t a l  assets</b></font></td><td align="right"><font size="2">$53,883</font></td><td align="right"><font size="2">$51,369</font></td><td align="right"><font size="2">$ 55,395</font></td></tr>
<tr BGCOLOR="#CCEEFF"><td>&nbsp;</td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr><td>&nbsp;</td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr BGCOLOR="#CCEEFF"><td><font size="2"><b>Liabilities and shareholders' equity</b></font></td><td align="right">&nbsp;</td>
<td>&nbsp;</td><td>&nbsp;</td></tr>
<tr><td><font size="2"><b>CURRENT LIABILITIES:</b></font></td><td align="right">&nbsp;</td>
<td>&nbsp;</td><td>&nbsp;</td></tr>
<tr BGCOLOR="#CCEEFF">	<td style="padding-left:20px"><font size="2">Accounts payable and accruals:</font></td><td align="right">&nbsp;</td>
<td>&nbsp;</td><td>&nbsp;</td></tr>
<tr><td style="padding-left:20px"><font size="2">Trade</font></td><td align="right"><font size="2">$789</font></td><td align="right"><font size="2">$363</font></td><td align="right"><font size="2">$ 686</font></td></tr>
<tr BGCOLOR="#CCEEFF">	<td style="padding-left:40px"><font size="2">Other</font></td><td align="right"><font size="2">2,151</font></td><td align="right"><font size="2"> 1,893</font></td><td align="right"><font size="2">1,741</font></td></tr>
<tr><td style="padding-left:40px"><font size="2">Deferred revenues</font></td><td align="right"><font size="2">1,899</font></td><td align="right"><font size="2"> 1,578</font></td><td align="right"><font size="2">1,644</font></td></tr>
<tr BGCOLOR="#CCEEFF">	<td style="padding-left:20px"><font size="2">Advanced from customers, net</font></td><td align="right"><font size="2">575</font></td><td align="right">&nbsp;</td>
<td align="right"><font size="2">790</font></td></tr>
<tr><td>&nbsp;</td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr><td style="padding-left:20px"><font size="2">T o t a l  current liabilities</font></td><td align="right"><font size="2">5,414</font></td><td align="right"><font size="2"> 3,834</font></td><td align="right"><font size="2">4,861</font></td></tr>
<tr BGCOLOR="#CCEEFF"><td><font size="2"><b>EMPLOYEE RIGHTS UPON RETIREMENT</b></font></td><td align="right"><font size="2">1,151</font></td><td align="right"><font size="2"> 1,139</font></td><td align="right"><font size="2">1,049</font></td></tr>
<tr><td>&nbsp;</td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr><td><font size="2">T o t a l  liabilities</font></td><td align="right"><font size="2">6,565</font></td><td align="right"><font size="2"> 4,973</font></td><td align="right"><font size="2">5,910</font></td></tr>
<tr><td>&nbsp;</td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr BGCOLOR="#CCEEFF"><td><font size="2"><b>SHAREHOLDERS' EQUITY:</b></font></td><td>&nbsp;</td><td>&nbsp;</td><td>&nbsp;</td></tr>
<tr><td><font size="2">Share capital</font></td><td align="right"><font size="2">53</font></td><td align="right"><font size="2"> 53</font></td><td align="right"><font size="2">53</font></td></tr>
<tr BGCOLOR="#CCEEFF">	<td style="padding-left:20px"><font size="2">     Additional paid-in capital</font></td><td align="right"><font size="2">59,510</font></td><td align="right"><font size="2"> 59,341</font></td><td align="right"><font size="2">59,399</font></td></tr>
<tr><td style="padding-left:20px"><font size="2">     Compensation in respect of options granted to employees</font></td><td align="right"><font size="2">77</font></td><td align="right">&nbsp;</td>
<td align="right"><font size="2">	</td></tr>
<tr BGCOLOR="#CCEEFF"><td><font size="2">Accumulated deficit</font></td>
<td align="right"><font size="2">(12,322)</font></td>
<td align="right"><font size="2">(12,998)</font></td>
<td align="right"><font size="2">(9,967)</font></td>
</tr>
<tr><td>&nbsp;</td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr BGCOLOR="#CCEEFF"><td>&nbsp;</td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr><td><font size="2">T o t a l  shareholders' equity</font></td><td align="right"><font size="2">47,318</font></td><td align="right"><font size="2"> 46,396</font></td><td align="right"><font size="2">49,485</font></td></tr>
<tr BGCOLOR="#CCEEFF"><td>&nbsp;</td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr><td><font size="2">To t a l  liabilities and shareholders' equity</font></td><td align="right"><font size="2">$53,883</font></td><td align="right"><font size="2">$51,369</font></td><td align="right"><font size="2">$ 55,395</font></td></tr>
<tr BGCOLOR="#CCEEFF"><td>&nbsp;</td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
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</table>


<p><center><font size="2">I</font></center>
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<center><h2>		CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS	</h2></center>
<table cellpadding="0" cellspacing="0" border="0" width="100%">
<tr><td>&nbsp;</td><td align="center" colspan="2"><font size="2"><b>Three months ended March 31		</b></font></td><td align="center" colspan="2"><font size="2"><b>Year ended December 31</b></font></td></tr>
<tr><td>&nbsp;</td><td align="center" colspan="3">	<HR WIDTH="90%" SIZE="1" NOSHADE>					</td></tr>
<tr><td><font size="2"><b></b></font></td><td align="center"><font size="2"><b>2006</b></font></td><td align="center"><font size="2"><b>2005</b></font></td><td align="center"><font size="2"><b>2005</b></font></td></tr>
<tr><td>&nbsp;</td><td align="right" ><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr><td>&nbsp;</td><td align="center" colspan="2"><font size="2"><b>(Unaudited)</b></font></td><td align="center"><font size="2"><b>(Audited)</b></font></td></tr>
<tr><td><font size="2"><b>	</td><td align="center" colspan="3">	<HR WIDTH="90%" SIZE="1" NOSHADE>					</td></tr>
<tr><td>&nbsp;</td><td align="center" colspan="3"><font size="2"><b>U.S. $ in thousands (except per share data)					</td></tr>
<tr><td>&nbsp;</td><td align="center" colspan="3">	<HR WIDTH="90%" SIZE="1" NOSHADE>					</td></tr>
<tr><td><font size="2"><b>REVENUES</font></td><td align="right"><font size="2">$5,252</font></td><td align="right"><font size="2">$3,082</font></td><td align="right"><font size="2">$ 15,601</font></td></tr>
<tr BGCOLOR="#CCEEFF"><td><font size="2"><b>COST OF REVENUES</font></td><td align="right"><font size="2">1,598</font></td><td align="right"><font size="2"> 804</font></td><td align="right"><font size="2">4,015</font></td></tr>
<tr><td>&nbsp;</td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr BGCOLOR="#CCEEFF"><td><font size="2"><b>GROSS PROFIT</font></td><td align="right"><font size="2">3,654</font></td><td align="right"><font size="2"> 2,278</font></td><td align="right"><font size="2">11,586</font></td></tr>
<tr><td><font size="2">RESEARCH AND DEVELOPMENT EXPENSES</font></td><td align="right"><font size="2">1,738</font></td><td align="right"><font size="2"> 998</font></td><td align="right"><font size="2">5,086</font></td></tr>
<tr BGCOLOR="#CCEEFF"><td><font size="2"><b>SELLING, GENERAL AND ADMINISTRATIVE EXPENSES:</b></font></td><td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td></tr>
<tr><td style="padding-left:20px"><font size="2">Selling</font></td><td align="right"><font size="2">982</font></td><td align="right"><font size="2"> 593</font></td><td align="right"><font size="2">2,148</font></td></tr>
<tr BGCOLOR="#CCEEFF">	<td style="padding-left:20px"><font size="2">General and administrative</font></td><td align="right"><font size="2">359</font></td><td align="right"><font size="2"> 342</font></td><td align="right"><font size="2">1,507</font></td></tr>
<tr><td>&nbsp;</td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr BGCOLOR="#CCEEFF"><td><font size="2"><b>OPERATING INCOME</font></td><td align="right"><font size="2">575</font></td><td align="right"><font size="2"> 345</font></td><td align="right"><font size="2">2,845</font></td></tr>
<tr><td><font size="2"><b>FINANCIAL INCOME - net</font></td><td align="right"><font size="2">125</font></td><td align="right"><font size="2"> 701</font></td><td align="right"><font size="2">1,260</font></td></tr>
<tr BGCOLOR="#CCEEFF"><td>&nbsp;</td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr><td><font size="2"><b>INCOME BEFORE TAXES ON INCOME</font></td><td align="right"><font size="2">700</font></td><td align="right"><font size="2"> 1,046</font></td><td align="right"><font size="2">4,105</font></td></tr>
<tr BGCOLOR="#CCEEFF"><td><font size="2"><b>TAXES ON INCOME</font></td><td align="right"><font size="2">46</font></td><td align="right"><font size="2"> 15</font></td><td align="right"><font size="2">43</font></td></tr>
<tr><td>&nbsp;</td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr BGCOLOR="#CCEEFF"><td><font size="2"><b>NET INCOME</font></td><td align="right"><font size="2">$654</font></td><td align="right"><font size="2">$1,031</font></td><td align="right"><font size="2">$ 4,062</font></td></tr>
<tr><td>&nbsp;</td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr BGCOLOR="#CCEEFF"><td>&nbsp;</td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr><td><font size="2"><b>EARNING PER SHARE:</td></tr>
<tr BGCOLOR="#CCEEFF">	<td style="padding-left:20px"><font size="2">Basic and diluted</font></td><td align="right"><font size="2">$0.03</font></td><td align="right"><font size="2">$0.05</font></td><td align="right"><font size="2">$0.19</font></td></tr>
<tr><td>&nbsp;</td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr BGCOLOR="#CCEEFF"><td>&nbsp;</td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr><td><font size="2"><b>WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES USED IN COMPUTATION OF EARNINGS PER SHARE - IN THOUSANDS:</td></tr>
<tr BGCOLOR="#CCEEFF">	<td style="padding-left:20px"><font size="2">Basic</font></td><td align="right"><font size="2">21,439</font></td><td align="right"><font size="2"> 21,364</font></td><td align="right"><font size="2">21,431</font></td></tr>
<tr><td>&nbsp;</td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr BGCOLOR="#CCEEFF"><td>&nbsp;</td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr><td style="padding-left:20px"><font size="2">Diluted</font></td><td align="right"><font size="2">21,511</font></td><td align="right"><font size="2"> 21,679</font></td><td align="right"><font size="2">21,619</font></td></tr>
<tr BGCOLOR="#CCEEFF"><td>&nbsp;</td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
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</table>


<p><center><font size="2">II</font></center>
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<center><h2>		CONSOLIDATED STATEMENTS OF CASH FLOWS		</h2></center>
<table cellpadding="0" cellspacing="0" border="0" width="100%">
<tr><td>&nbsp;</td>
<td align="center" colspan="2"><font size="2"><b>Three months ended March 31 		</b></font></td><td align="center"><font size="2"><b>Year ended December 31</b></font></td></tr>
<tr><td>&nbsp;</td><td colspan="2">	<HR WIDTH="90%" SIZE="1" NOSHADE></td>
</tr>
<tr><td>&nbsp;</td>
<td align="center"><font size="2"><b>2006</b></font></td><td align="center"><font size="2"><b>2005</b></font></td><td align="center"><font size="2"><b>2005</b></font></td></tr>
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<tr><td>&nbsp;</td>
<td align="center" colspan="3"><font size="2"><b>(In thousands of U.S. dollars)				</b></font></td></tr>
<tr><td>&nbsp;</td><td colspan="3">	<HR WIDTH="90%" SIZE="1" NOSHADE>					</td></tr>
<tr><td><font size="2"><b>CASH FLOWS FROM OPERATING ACTIVITIES:</b></font></td><td>&nbsp;</td><td>&nbsp;</td><td>&nbsp;</td></tr>
<tr><td style="padding-left:20px"><font size="2">Net Income</font></td><td align="right"><font size="2">$654</font></td><td align="right"><font size="2">$1,031</font></td><td align="right"><font size="2">$ 4,062</font></td></tr>
<tr><td style="padding-left:20px"><font size="2">Adjustments to reconcile net income to net cash provided by operating activities:</font></td><td align="right"><font size="2"></font></td><td align="right"><font size="2">  </font></td><td align="right"><font size="2">	</td></tr>
<tr BGCOLOR="#CCEEFF">	<td style="padding-left:40px"><font size="2">Depreciation and amortization</font></td><td align="right"><font size="2">486</font></td><td align="right"><font size="2"> 180</font></td><td align="right"><font size="2">987</font></td></tr>
<tr><td style="padding-left:40px"><font size="2">Accrued severance pay</font></td><td align="right"><font size="2">102</font></td>
<td align="right"><font size="2">(61)</font></td>
<td align="right"><font size="2">(151)</font></td></tr>
<tr BGCOLOR="#CCEEFF">	<td style="padding-left:40px"><font size="2">Capital gain on sale of property and equipment - net</font></td><td align="right"><font size="2">(4)</font></td><td align="right"><font size="2">(23)</font></td><td align="right"><font size="2">(38)</font></td></tr>
<tr><td style="padding-left:40px"><font size="2">           Compensation in respect of options granted to employees</font></td><td align="right"><font size="2">77</font></td><td align="right"><font size="2"></font></td><td align="right"><font size="2">	</td></tr>
<tr BGCOLOR="#CCEEFF">	<td style="padding-left:40px"><font size="2">Changes in operating asset and liability items:</font></td><td align="right"><font size="2"></font></td><td align="right"><font size="2">  </font></td><td align="right"><font size="2">	</td></tr>
<tr><td style="padding-left:60px"><font size="2">Decrease (increase) in accounts receivable:</font></td><td align="right"><font size="2"></font></td><td align="right"><font size="2">  </font></td><td align="right"><font size="2">	</td></tr>
<tr BGCOLOR="#CCEEFF">	<td style="padding-left:80px"><font size="2">Trade</font></td><td align="right"><font size="2">(1,802)</font></td><td align="right"><font size="2"> 1,638</font></td><td align="right"><font size="2">196</font></td></tr>
<tr><td style="padding-left:80px"><font size="2">Interest accrued on long-term bank deposits</font></td><td align="right"><font size="2"></font></td><td align="right"><font size="2">(591)</font></td><td align="right"><font size="2">242</font></td></tr>
<tr BGCOLOR="#CCEEFF">	<td style="padding-left:80px"><font size="2">Other</font></td><td align="right"><font size="2">(244)</font></td><td align="right"><font size="2"> 318</font></td><td align="right"><font size="2">48</font></td></tr>
<tr><td style="padding-left:60px"><font size="2">      Increase in Inventories</font></td><td align="right"><font size="2"></font></td><td align="right"><font size="2">(1)</font></td><td align="right"><font size="2">(12)</font></td></tr>
<tr BGCOLOR="#CCEEFF">	<td style="padding-left:60px"><font size="2">Increase (decrease) in accounts payable and accruals:</font></td><td align="right"><font size="2"></font></td><td align="right"><font size="2"></font></td><td align="right"><font size="2">	</td></tr>
<tr><td style="padding-left:80px"><font size="2">Trade</font></td><td align="right"><font size="2">103</font></td><td align="right"><font size="2">(103)</font></td><td align="right"><font size="2">(697)</font></td></tr>
<tr BGCOLOR="#CCEEFF">	<td style="padding-left:80px"><font size="2">Other</font></td><td align="right"><font size="2">4</font></td><td align="right"><font size="2">(335)</font></td><td align="right"><font size="2">(1,510)</font></td></tr>
<tr><td style="padding-left:40px"><font size="2">Increase (decrease) in deferred revenues</font></td><td align="right"><font size="2">255</font></td><td align="right"><font size="2"></font></td><td align="right"><font size="2">(799)</font></td></tr>
<tr BGCOLOR="#CCEEFF">	<td style="padding-left:40px"><font size="2">Decrease in advanced from customers, net</font></td><td align="right"><font size="2">(215)</font></td><td align="right"><font size="2"></font></td><td align="right"><font size="2">(1,467)</font></td></tr>
<tr><td>&nbsp;</td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr BGCOLOR="#CCEEFF">	<td style="padding-left:20px"><font size="2">Net cash provided by (used in) operating activities</font></td><td align="right"><font size="2">(584)</font></td><td align="right"><font size="2"> 2,053</font></td><td align="right"><font size="2">861</font></td></tr>
<tr><td>&nbsp;</td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr BGCOLOR="#CCEEFF"><td><font size="2"><b>CASH FLOWS FROM INVESTING ACTIVITIES:</font></td><td align="right"><font size="2"></font></td><td align="right"><font size="2">  </font></td><td align="right"><font size="2"></font></td></tr>
<tr><td style="padding-left:20px"><font size="2">Purchase of property and equipment</font></td><td align="right"><font size="2">(174)</font></td><td align="right"><font size="2">(216)</font></td><td align="right"><font size="2">(589)</font></td></tr>
<tr BGCOLOR="#CCEEFF">	<td style="padding-left:20px"><font size="2">Acquisition of subsidiary (a)</font></td><td align="right"><font size="2"></font></td><td align="right"><font size="2"></font></td><td align="right"><font size="2"> (4,233)</font></td></tr>
<tr><td style="padding-left:20px"><font size="2">Amounts funded in respect of accrued severance pay</font></td><td align="right"><font size="2">3</font></td><td align="right"><font size="2"> 94</font></td><td align="right"><font size="2">94</font></td></tr>
<tr BGCOLOR="#CCEEFF">	<td style="padding-left:20px"><font size="2">Investment in long-term bank deposits</font></td><td align="right"><font size="2"></font></td><td align="right"><font size="2">(10,000)</font></td><td align="right"><font size="2">(10,000)</font></td></tr>
<tr><td style="padding-left:20px"><font size="2">Withdrawal of long-term bank deposits</font></td><td align="right"><font size="2"></font></td><td align="right"><font size="2">  </font></td><td align="right"><font size="2">10,000</font></td></tr>
<tr BGCOLOR="#CCEEFF">	<td style="padding-left:20px"><font size="2">Proceeds from sale of property and equipment</font></td><td align="right"><font size="2">29</font></td><td align="right"><font size="2"> 89</font></td><td align="right"><font size="2">175</font></td></tr>
<tr><td>&nbsp;</td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr BGCOLOR="#CCEEFF"><td><font size="2">Net cash used in investing activities</font></td><td align="right"><font size="2">(142)</font></td><td align="right"><font size="2">(10,033)</font></td><td align="right"><font size="2">(4,553)</font></td></tr>
<tr><td>&nbsp;</td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right">	<HR WIDTH="90%" SIZE="1" NOSHADE></td>
</tr>
<tr BGCOLOR="#CCEEFF"><td><font size="2"><b>CASH FLOWS FROM FINANCING ACTIVITIES:</font></td><td align="right"><font size="2"></font></td><td align="right"><font size="2">  </font></td><td align="right"><font size="2">	</td></tr>
<tr><td style="padding-left:20px"><font size="2">Employee stock options exercised and paid</font></td><td align="right"><font size="2">60</font></td><td align="right"><font size="2"> 264</font></td><td align="right"><font size="2">322</font></td></tr>
<tr BGCOLOR="#CCEEFF">	<td style="padding-left:20px"><font size="2">Dividend paid</font></td><td align="right"><font size="2">(2,603)</font></td><td align="right"><font size="2">(5,143)</font></td><td align="right"><font size="2">(5,143)</font></td></tr>
<tr><td>&nbsp;</td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr BGCOLOR="#CCEEFF">	<td style="padding-left:20px"><font size="2">Net cash used in financing activities</font></td><td align="right"><font size="2">(2,543)</font></td><td align="right"><font size="2">(4,879)</font></td><td align="right"><font size="2">(4,821)</font></td></tr>
<tr><td>&nbsp;</td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr BGCOLOR="#CCEEFF"><td><font size="2"><b>DECREASE IN CASH AND CASH EQUIVALENTS</font></td><td align="right"><font size="2">(3,269)</font></td><td align="right"><font size="2">(12,859)</font></td><td align="right"><font size="2">(8,513)</font></td></tr>
<tr><td><font size="2"><b>BALANCE OF CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD</font></td><td align="right"><font size="2">10,174</font></td><td align="right"><font size="2"> 18,687</font></td><td align="right"><font size="2">18,687</font></td></tr>
<tr BGCOLOR="#CCEEFF"><td>&nbsp;</td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr><td><font size="2"><b>BALANCE OF CASH AND CASH EQUIVALENTS AT END OF PERIOD</font></td><td align="right"><font size="2">$6,905</font></td><td align="right"><font size="2">$5,828</font></td><td align="right"><font size="2">$ 10,174</font></td></tr>
<tr BGCOLOR="#CCEEFF"><td>&nbsp;</td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td><td align="right"><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
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</table>


<table cellpadding="0" cellspacing="0" border="0" width="100%">
<tr><td>&nbsp;</td><td align="center"><font size="2"><b>Year ended December 31, 2005</b></font></td></tr>
<tr><td>&nbsp;</td><td><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr BGCOLOR="#CCEEFF"><td><font size="2"><b>(a) Acquisiiton of subsidiary:</b></font></td><td>&nbsp;</td></tr>
<tr><td style="padding-left:20px"><font size="2">Assets and liabilities of the subsidiary upon acquisition:</font></td><td>&nbsp;</td></tr>
<tr BGCOLOR="#CCEEFF">	<td style="padding-left:20px"><font size="2">Working capital (excluding cash and cash equivalents)</font></td><td align="right"><font size="2">($4,881)</font></td></tr>
<tr><td style="padding-left:20px"><font size="2">Property and equipment</font></td><td align="right"><font size="2">277</font></td></tr>
<tr BGCOLOR="#CCEEFF">	<td style="padding-left:20px"><font size="2">Intangible assets</font></td><td align="right"><font size="2">1,871</font></td></tr>
<tr><td style="padding-left:20px"><font size="2">Goodwill</font></td><td align="right"><font size="2">6,966</font></td></tr>
<tr BGCOLOR="#CCEEFF"><td>&nbsp;</td><td><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr><td style="padding-left:20px"><font size="2">Cash paid - net</font></td><td align="right"><font size="2">$ 4,233</font></td></tr>
<tr BGCOLOR="#CCEEFF"><td>&nbsp;</td><td><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr><td>&nbsp;</td><td><HR WIDTH="90%" SIZE="1" NOSHADE></td></tr>
<tr BGCOLOR="#CCEEFF">	<td colspan="2"><b>(b) Supplementary information on financing activities not involving cash flow:</b><br>
At March 31, 2006, other payables and other receivables include approximately $406,000 in respect of dividned payable and approximately $51,000 in respect of Employee stock options exercised, respectively. These balances would be given recognition in these statements upon payment.</td>
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<p><center><font size="2">III</font></center>
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