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<SEC-DOCUMENT>0001119083-07-000009.txt : 20070808
<SEC-HEADER>0001119083-07-000009.hdr.sgml : 20070808
<ACCEPTANCE-DATETIME>20070808104658
ACCESSION NUMBER:		0001119083-07-000009
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20070630
FILED AS OF DATE:		20070808
DATE AS OF CHANGE:		20070808

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:		071034008

	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>mindcti2007_08.htm
<DESCRIPTION>SECOND QUARTER 2007 RESULTS
<TEXT>
<!DOCTYPE html PUBLIC "-//W3C//DTD HTML 3.2//EN">
<html>
<head>
	<title> MIND CTI LTD (Form: 6-K, 08/08/2007)</title>
</head>
<body text="#000000" bgcolor="#ffffff" alink="#0000ff"                 VLINK="#800080">
<br>
<p>

<font size="5">
	<strong><center>FORM 6-K</center></strong>
</font>
<p></p>
<p>
<font size="5">
	<strong><center>SECURITIES AND EXCHANGE COMMISSION</center></strong>
</font>
<p></p>
<font size="4">
	<center><strong>Washington, D.C.
20549</strong>  </center>
</font>
<p></p>
<p>
<strong><center>Report of Foreign Private Issuer</center></strong>
<p>

<center><strong>Pursuant to Rule 13a-16 or 15d-16
of</strong>      </center>
<center><strong>the Securities Exchange Act of
1934</strong>     </center>
<p>

<strong><center>
  For the month of August, 2007
</center>
</strong>
<p>
<strong><center>
Commission File Number: 000-31215
</center>
</strong>
<p>
<center>
	<font size="5"><strong>MIND C.T.I. LTD.</strong></font>
</center>
<p></p>
<center>
(Translation of Registrant's Name into English)
</center>
<p>

<center><strong>
	Industrial Park, Building 7, P.O.Box 144, Yoqneam 20692, Israel</strong>
</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 if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): N/A
</center>
<p>
<center>
	Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): N/A
</center>
<p>

<center>
Indicate by check mark whether by furnishing the information contained in this Form, the registrant 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 "Yes" is marked, indicate below the file number assigned to the registrant
	in connection with Rule 12g3-2(b): 82-N/A.
</center>
<p>
<p>
<strong><center>INCORPORATION BY REFERENCE</center></strong>
<p>
<center>
The financial statements included in the press release attached as Exhibit 1 to this Report on Form 6-K are hereby incorporated by reference into: (i) the Registrant's Registration Statement on Form S-8, Registration No. 333-117054; (ii) the Registrant's Registration Statement on Form S-8, Registration No. 333-100804; and (iii) the Registrant's Registration Statement on Form S-8, Registration No. 333-54632.
</center>
<p>
<p>
<strong><center>CONTENTS</center></strong>
<p>
<center>This report on Form 6-K of the registrant consists of the following document, which is attached hereto and incorporated by reference herein:
<br>1. Press Release:&nbsp;Cash Flow from
Operating	         Activities of $1.34 Million. Dated August 7, 2007.&nbsp;
</center>
<p>
<p>
<strong><center>SIGNATURES</center></strong>
<p>
<center>
Pursuant to the requirements of the Securities Exchange Act 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
</center>
<p>Date: August 08, 2007
<p>
<table width="100%" cellpadding="0" cellspacing="0">
	<tr>
	<td valign="bottom" width="50%"></td>
	<td>MIND C.T.I. LTD. <br><br></td></tr><tr><td></td><td>
	By: /s/ Monica Eisinger<br>
	Name: Monica Eisinger<br>
	===================<br>
     	Title: Chairperson of the Board of
	Directors, President and Chief Executive Officer
	</td>
	</tr>
</table>
<p align="center"><strong>EXHIBIT INDEX</strong></p>
<table cellpadding="2">
	<tr><td width="150">Exhibit Number</td><td>Description of Exhibit</td></tr>
	<tr><td align="right" valign="top">1.</td><td>Press Release: Cash Flow from Operating
         Activities of $1.34 Million. Dated August 7, 2007.</td>
	</tr>
</table>
<p>

<hr width="75%" color="#999999" noshade size=2>
<!-- -------------------------------------------------------------------------- -->
<p>
<center>
Exhibit 1<br>
</center>
<center><h1>MIND CTI Reports Second Quarter 2007 Results</h1></center>
<center><h2>Cash Flow from Operating Activities of $1.34 Million</h2></center>
<p>
	<b>Yoqneam, Israel, August 7, 2007</b> - MIND CTI Ltd. (NasdaqGM:MNDO), a leading provider of convergent end-to-end billing and customer care product based solutions for tier 2 and tier 3 carriers worldwide, today announced results for the second quarter 2007.
</p>
<p><b>Financial Highlights of Q2 2007</b>
	<ul type="square">
		<li>Revenues of $4.05 million, compared with $5.07
  million in the second quarter of 2006.

		<li>Operating income was $211 thousand, or 5% of revenue,
  excluding amortization of intangible assets of $102 thousand and equity-based
  compensation expense of $67 thousand.

		<li>GAAP operating income was $42 thousand, or 1% of
  revenue.

		<li>Net income was $677 thousand or $0.03 per share,
  excluding amortization of intangible assets of $102 thousand and equity-based
  compensation expense of $67 thousand.

		<li>GAAP net income was $508 thousand, or $0.02 per share
  compared with GAAP net loss of $492 thousand or $0.02 per share in the second
  quarter of 2006.
  <li>Cash flow from operating activities in Q2 2007 was
  $1.34 million. </li>
	</ul>
<p></p>
<p><b>Six Months Highlights</b>
<ul type="square">
  <li>Revenues of $8.86 million, compared with $10.33
  million in the first six months of 2006.
  <li>Net income was $2.01 million or $0.09 per share,
  excluding amortization of intangible assets of $218 thousand and equity-based
  compensation expense of $131 thousand.
  <li>GAAP net income was $1.66 million, or $0.08 per share
  compared with GAAP net income of $162 thousand or $0.01 per share in the first
  six months of 2006.
  <li>Cash flow from operating activities in first six
  months of 2007 was $2.20 million.
  <li>Cash position of approximately $35.5 million on June
  30, 2007. </li></ul>
<p></p>
<p>Monica Eisinger, Chairperson and CEO, commented:
"Although in the first half of 2007 we experienced a decline in our revenues, we
succeeded in managing our expenses accordingly and we generated over $2 million
in cash flow from our operations. While the results reflect the effect of
delayed decisions and long sales cycles, we operate in a very active market that
shows continuous demand for our products and services. The strong install base
and the long-term relationships with our customers continue to represent the
majority of our revenue and are the basis for future revenue stream. We are
pleased to announce a new win this quarter, a Pan-European IP services carrier
to whom we will provide a complete customer care and billing solution. We expect
to see new wins in the following quarters and we expect to increase our
profitability as well."</p>
<p><b>Revenue Distribution for Q2
2007</b><br>Sales in the Americas represented 43% and sales
in Europe represented 38% of total revenue. Revenue from our customer care and
billing software totaled $3.13 million, while revenue from our enterprise call
management software was $915 thousand. The revenue breakdown from our business
lines of products was $1.13 million, or 28% from licenses, $1.74 million, or 43%
from maintenance and $1.18 million, or 29% from services. </p>
<p><b>Conference Call Information
</b><br>MIND will host a conference call on August 8, 2007
at 8:30 a.m., Eastern Time, to discuss the Company's second quarter 2007 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
(MVNOs). Sentori, Inc. brings over ten years of wireless experience and eight
years of a wireless operational solution to carriers. A global company, MIND
operates from offices in Europe, Israel and the United States, serving customers
in more than 40 countries around the world. For financial information, reports
and presentations, please visit the Investor Relations site: http://www.mindcti.com/ir </p>
<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>
<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<br></p>
<center>(tables to follow)</center><!-- _________________________________________________________________________________________________-->
<p>
<hr width="100%">
<a name="table"></a><A href="#top" ><font size="1"><b>Back to top</b></font>
<p></p></A>
<center>
<h2>MIND C.T.I LTD. </h2></center>
<center>
<h3>CONDENSED CONSOLIDATED BALANCE SHEETS </h3></center>
<table cellspacing="0" cellpadding="0" width="100%" border="0">

  <tr>
    <td></td>
    <td align="middle" colspan="2"><font size="2"
      ><b>June 30 </b></font></td>
    <td align="middle"><font size="2"><b
      >December 31,</b></font>
  <tr>
    <td></td>
    <td align="middle" colspan="2"><font size="2"
      ><b>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
     ></div></b></font></td>
    <td align="middle"><font size="2"><b
      ></b></font>
  <tr>
    <td></td>
    <td align="middle"><font size="2"><b
      >2007 </b></font></td>
    <td align="middle"><font size="2"><b
      >2006 </b></font></td>
    <td align="middle"><font size="2"><b
      >2006</b></font>
  <tr>
    <td></td>
    <td align="middle"><font size="2"><b
      >
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
     ></div></b></font></td>
    <td align="middle"><font size="2"><b
      >
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
     ></div></b></font></td>
    <td align="right"><font size="2"><b
      >
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
     ></div></b></font>
  <tr>
    <td></td>
    <td align="middle" colspan="2"><font size="2"
      ><b>(Unaudited)</b></font> </td>
    <td align="middle"><font size="2"><b
      >(Audited)</b> </font>
  <tr>
    <td></td>
    <td align="middle" colspan="2"><font size="2"
      ><b>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
     ></div></b></font></td>
    <td align="right"><font size="2"><b
      >
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
     ></div></b></font>
  <tr>
    <td></td>
    <td align="middle" colspan="3"><font size="2"
      ><b>U.S. $ in
      thousands</b></font> </td>
    <td align=right>
  <tr>
    <td></td>
    <td align=middle colSpan=3><font size=2
      ><b>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
     ></div></b></font></td>
    <td align=right>
  <tr>
    <td align=middle><font size=2><b
      >A s s e t s </B></FONT></TD>
    <td></TD>
    <td>&nbsp; </TD>
    <td>
  <tr bgColor=#cceeff>
    <td><font size=2><b
      >CURRENT ASSETS: </B></FONT></TD>
    <td align=right></TD>
    <td align=right>&nbsp; </TD>
    <td align=right>
  <tr>
    <td style="PADDING-LEFT: 20px"><font size=2
      >Cash and cash equivalents </FONT></TD>
    <td align=right><font size=2>$
      25,484 </FONT></TD>
    <td align=right><font size=2>$
      25,694 </FONT></TD>
    <td align=right><font size=2>$
      27,571 </FONT></TD></TR>
  <tr bgColor=#cceeff>
    <td style="PADDING-LEFT: 20px"><font size=2
      >Accounts receivable: </FONT></TD>
    <td align=right></FONT></TD>
    <td align=right>&nbsp; </TD>
    <td align=right>
  <tr>
    <td style="PADDING-LEFT: 40px"><font size=2
      >Trade </FONT></TD>
    <td align=right><font size=2
      >4,672 </FONT></TD>
    <td align=right><font size=2
      >4,882 </FONT></TD>
    <td align=right><font size=2
      >5,385 </FONT></TD></TR>
  <tr bgColor=#cceeff>
    <td style="PADDING-LEFT: 40px"><font size=2
      >Other </FONT></TD>
    <td align=right><font size=2>368
      </FONT></TD>
    <td align=right><font size=2>948
      </FONT></TD>
    <td align=right><font size=2>231
      </FONT></TD></TR>
  <tr>
    <td style="PADDING-LEFT: 20px"><font size=2
      >Deferred income taxes </FONT></TD>
    <td align=right><font size=2>148
      </FONT></TD>
    <td align=right><font size=2>8
      </FONT></TD>
    <td align=right><font size=2>154
      </FONT></TD></TR>
  <tr bgColor=#cceeff>
    <td style="PADDING-LEFT: 20px"><font size=2
      >Inventories </FONT></TD>
    <td align=right><font size=2>35
      </FONT></TD>
    <td align=right><font size=2>30
      </FONT></TD>
    <td align=right><font size=2>35
      </FONT></TD></TR>
  <tr>
    <td></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD></TR>
  <tr bgColor=#cceeff>
    <td style="PADDING-LEFT: 60px"><font size=2
      >T o t a l current assets </FONT></TD>
    <td align=right><font size=2
      >30,707 </FONT></TD>
    <td align=right><font size=2
      >31,562 </FONT></TD>
    <td align=right><font size=2
      >33,376 </FONT></TD></TR>
  <tr>
    <td><font size=2><b
      >INVESTMENTS AND OTHER NON CURRENT ASSETS:
    </B></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 bgColor=#cceeff>
    <td style="PADDING-LEFT: 20px"><font size=2
      >Marketable debentures </FONT></TD>
    <td align=right><font size=2
      >10,000 </FONT></TD>
    <td align=right><font size=2
      ></FONT></TD>
    <td align=right><font size=2
      >10,000 </FONT></TD></TR>
  <tr>
    <td style="PADDING-LEFT: 20px"><font size=2
      >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
      ></FONT></TD></TR>
  <tr bgColor=#cceeff>
    <td style="PADDING-LEFT: 20px"><font size=2
      >Other </FONT></TD>
    <td align=right><font size=2>908
      </FONT></TD>
    <td align=right><font size=2>746
      </FONT></TD>
    <td align=right><font size=2
      >1,003 </FONT></TD></TR>
  <tr>
    <td><font size=2><b
      >PROPERTY AND EQUIPMENT</B>, net of accumulated
      depreciation </FONT></TD>
    <td align=right><font size=2
      >1,393 </FONT></TD>
    <td align=right><font size=2
      >1,910 </FONT></TD>
    <td align=right><font size=2
      >1,558 </FONT></TD></TR>
  <tr bgColor=#cceeff>
    <td><font size=2><b
      >INTANGIBLE ASSETS</B>, net of accumulated
      amortization </FONT></TD>
    <td align=right><font size=2>670
      </FONT></TD>
    <td align=right><font size=2
      >1,160 </FONT></TD>
    <td align=right><font size=2>888
      </FONT></TD></TR>
  <tr>
    <td><font size=2><b
      >GOODWILL </B></FONT></TD>
    <td align=right><font size=2
      >6,966 </FONT></TD>
    <td align=right><font size=2
      >6,966 </FONT></TD>
    <td align=right><font size=2
      >6,966 </FONT>
  <tr bgColor=#cceeff>
    <td></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV>
  <tr>
    <td style="PADDING-LEFT: 60px"><font size=2
      >T o t a l assets </FONT></TD>
    <td align=right><font size=2>$
      50,644 </FONT></TD>
    <td align=right><font size=2>$
      52,344 </FONT></TD>
    <td align=right><font size=2>$
      53,791 </FONT></TD></TR>
  <tr bgColor=#cceeff>
    <td></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV>
  <tr>
    <td></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV>
  <tr bgColor=#cceeff>
    <td align=middle><font size=2><b
      >Liabilities and shareholders' equity </B></FONT></TD>
    <td></TD>
    <td align=right>&nbsp; </TD>
    <td align=right>
  <tr>
    <td><font size=2><b
      >CURRENT LIABILITIES: </B></FONT></TD>
    <td align=right></FONT></TD>
    <td align=right>&nbsp; </TD>
    <td align=right></TD></TR>
  <tr bgColor=#cceeff>
    <td style="PADDING-LEFT: 20px"><font size=2
      >Accounts payable and accruals: </FONT></TD>
    <td align=right></TD>
    <td align=right>&nbsp; </TD>
    <td align=right></FONT></TD></TR>
  <tr>
    <td style="PADDING-LEFT: 40px"><font size=2
      >Trade </FONT></TD>
    <td align=right><font size=2>$
      440 </FONT></TD>
    <td align=right><font size=2>$
      699 </FONT></TD>
    <td align=right><font size=2>$
      464 </FONT></TD></TR>
  <tr bgColor=#cceeff>
    <td style="PADDING-LEFT: 40px"><font size=2
      >Other </FONT></TD>
    <td align=right><font size=2
      >1,611 </FONT></TD>
    <td align=right><font size=2
      >1,584 </FONT></TD>
    <td align=right><font size=2
      >2,509 </FONT></TD></TR>
  <tr>
    <td style="PADDING-LEFT: 20px"><font size=2
      >Deferred revenues </FONT></TD>
    <td align=right><font size=2
      >1,339 </FONT></TD>
    <td align=right><font size=2
      >1,412 </FONT></TD>
    <td align=right><font size=2
      >1,236 </FONT></TD></TR>
  <tr bgColor=#cceeff>
    <td style="PADDING-LEFT: 20px"><font size=2
      >Advances from customers </FONT></TD>
    <td align=right><font size=2>366
      </FONT></TD>
    <td align=right><font size=2>342
      </FONT></TD>
    <td align=right><font size=2>241
      </FONT></TD></TR>
  <tr>
    <td></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD></TR>
  <tr>
    <td style="PADDING-LEFT: 60px"><font size=2
      >T o t a l current liabilities </FONT></TD>
    <td align=right><font size=2
      >3,756 </FONT></TD>
    <td align=right><font size=2
      >4,037 </FONT></TD>
    <td align=right><font size=2
      >4,450 </FONT></TD></TR>
  <tr bgColor=#cceeff>
    <td><font size=2><b
      >EMPLOYEE RIGHTS UPON RETIREMENT </B></FONT></TD>
    <td align=right><font size=2
      >1,466 </FONT></TD>
    <td align=right><font size=2
      >1,397 </FONT></TD>
    <td align=right><font size=2
      >1,482 </FONT></TD></TR>
  <tr>
    <td></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD></TR>
  <tr bgColor=#cceeff>
    <td style="PADDING-LEFT: 60px"><font size=2
      >T o t a l liabilities </FONT></TD>
    <td align=right><font size=2
      >5,222 </FONT></TD>
    <td align=right><font size=2
      >5,434 </FONT></TD>
    <td align=right><font size=2
      >5,932 </FONT></TD></TR>
  <tr>
    <td></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD></TR>
  <tr bgColor=#cceeff>
    <td><font size=2><b
      >SHAREHOLDERS' EQUITY: </B></FONT></TD>
    <td align=right></TD>
    <td align=right></TD>
    <td align=right></TD></TR>
  <tr>
    <td style="PADDING-LEFT: 20px"><font size=2
      >Share capital </FONT></TD>
    <td align=right><font size=2>54
      </FONT></TD>
    <td align=right><font size=2>53
      </FONT></TD>
    <td align=right><font size=2>54
      </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
      >59,638 </FONT></TD>
    <td align=right><font size=2
      >59,510 </FONT></TD>
    <td align=right><font size=2
      >59,547 </FONT></TD></TR>
  <tr>
    <td style="PADDING-LEFT: 20px"><font size=2
      >Capital surplus </FONT></TD>
    <td align=right><font size=2>456
      </FONT></TD>
    <td align=right><font size=2>161
      </FONT></TD>
    <td align=right><font size=2>325
      </FONT></TD></TR>
  <tr bgColor=#cceeff>
    <td style="PADDING-LEFT: 20px"><font size=2
      >Accumulated deficit </FONT></TD>
    <td align=right><font size=2
      >(14,726) </FONT></TD>
    <td align=right><font size=2
      >(12,814) </FONT></TD>
    <td align=right><font size=2
      >(12,067) </FONT></TD></TR>
  <tr>
    <td></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD></TR>
  <tr>
    <td style="PADDING-LEFT: 60px"><font size=2
      >T o t a l shareholders' equity </FONT></TD>
    <td align=right><font size=2
      >45,422 </FONT></TD>
    <td align=right><font size=2
      >46,910 </FONT></TD>
    <td align=right><font size=2
      >47,859 </FONT></TD></TR>
  <tr bgColor=#cceeff>
    <td></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD></TR>
  <tr>
    <td style="PADDING-LEFT: 20px"><font size=2
      >T o t a l liabilities and shareholders' equity
    </FONT></TD>
    <td align=right><font size=2>$
      50,644 </FONT></TD>
    <td align=right><font size=2>$
      52,344 </FONT></TD>
    <td align=right><font size=2>$
      53,791 </FONT></TD></TR>
  <tr bgColor=#cceeff>
    <td></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD></TR>
  <tr>
    <td></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD></TR></table>
<p>
<center>
<p><font size=2>I</FONT></P></CENTER><!-- _________________________________________________________________________________________________-->
<hr width="100%">

<p></P><a name=table2></A><A href="#top" ><font size=1><b>Back to top</B></FONT>
<p></P></A>
<center>
<h2>MIND C.T.I LTD.</H2>
<h3>CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS</H3></CENTER>
<table cellSpacing=0 cellPadding=0 width="100%" align=center border=0>

  <tr>
    <td></TD>
    <td vAlign=bottom align=middle colSpan=2>
      <p><font size=2><b
      >Six months<br>ended June 30</B>
      </FONT></P></TD>
    <td vAlign=bottom align=middle colSpan=2>
      <p><font size=2><b
      >Three months<br>ended June
      30</B> </FONT></P></TD>
    <td vAlign=bottom align=middle>
      <p><font size=2><b
      >Year ended<br>December 31,</B>
      </FONT></P></TD></TR>
  <tr>
    <td></TD>
    <td align=middle colSpan=2>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=middle colSpan=2>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD></TR>
  <tr>
    <td></TD>
    <td vAlign=bottom align=middle width=80>
      <p><font size=2><b
      >2007</B> </FONT></P></TD>
    <td vAlign=bottom align=middle width=80>
      <p><font size=2><b
      >2006</B> </FONT></P></TD>
    <td vAlign=bottom align=middle width=80>
      <p><font size=2><b
      >2007</B> </FONT></P></TD>
    <td vAlign=bottom align=middle width=80>
      <p><font size=2><b
      >2006</B> </FONT></P></TD>
    <td vAlign=bottom align=middle width=80>
      <p><font size=2><b
      >2006</B> </FONT></P></TD></TR>
  <tr>
    <td></TD>
    <td align=middle>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=middle>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=middle>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=middle>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=middle>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD></TR>
  <tr>
    <td></TD>
    <td vAlign=bottom align=middle colSpan=2>
      <p><font size=2><b
      >(Unaudited)</B> </FONT></P></TD>
    <td vAlign=bottom align=middle colSpan=2>
      <p><font size=2><b
      >(Unaudited)</B> </FONT></P></TD>
    <td vAlign=bottom align=middle>
      <p><font size=2><b
      >(Audited)</B> </FONT></P></TD></TR>
  <tr>
    <td></TD>
    <td align=middle colSpan=2>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=middle colSpan=2>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=middle>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD></TR>
  <tr>
    <td></TD>
    <td vAlign=bottom align=middle colSpan=5>
      <p><font size=2><b
      >U.S. $ in thousands (except per share
      data)</B></FONT></P></TD></TR>
  <tr>
    <td></TD>
    <td align=middle colSpan=5>
      <div
      style="WIDTH: 95%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD></TR>
  <tr>
    <td align=middle colSpan=6>
      <div style="WIDTH: 95%; LINE-HEIGHT: 1px"></DIV></TD></TR>
  <tr bgColor=#cceeff>
    <td vAlign=bottom>
      <p><font size=2><b
      >REVENUES</B> </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>$ 8,856
      </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>$ 10,326
      </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>$ 4,049
      </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>$ 5,074
      </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>$ 20,060
      </FONT></P></TD></TR>
  <tr>
    <td vAlign=bottom>
      <p><font size=2><b
      >COST OF REVENUES</B> </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>2,620
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>3,090
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>1,275
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>1,492
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>5,675
    </FONT></P></TD></TR>
  <tr bgColor=#cceeff>
    <td></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD></TR>
  <tr>
    <td vAlign=bottom>
      <p><font size=2><b
      >GROSS PROFIT</B> </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>6,236
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>7,236
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>2,774
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>3,582
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>14,385
      </FONT></P></TD></TR>
  <tr bgColor=#cceeff>
    <td vAlign=bottom>
      <p><font size=2><b
      >RESEARCH AND DEVELOPMENT EXPENSES</B> </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>2,782
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>3,326
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>1,366
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>1,588
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>6,118
    </FONT></P></TD></TR>
  <tr>
    <td vAlign=bottom>
      <p><font size=2><b
      >SELLING AND MARKETING EXPENSES</B> </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>1,922
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>1,867
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>987
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>885
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>3,628
    </FONT></P></TD></TR>
  <tr bgColor=#cceeff>
    <td vAlign=bottom>
      <p><font size=2><b
      >GENERAL AND ADMINISTRATIVE EXPENSES
</FONT></P></B></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>822
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>758
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>379
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>399
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>2,135
    </FONT></P></TD></TR>
  <tr>
    <td></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD></TR>
  <tr bgColor=#cceeff>
    <td vAlign=bottom>
      <p><font size=2><b
      >OPERATING INCOME</B> </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>710
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>1,285
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>42
</FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>710
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>2,504
    </FONT></P></TD></TR>
  <tr>
    <td vAlign=bottom>
      <p><font size=2><b
      >FINANCIAL INCOME (EXPENSES)</B> - net </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>988
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>* (1,053)
      </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>484
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>* (1,178)
      </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>* (222)
      </FONT></P></TD></TR>
  <tr bgColor=#cceeff>
    <td></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD></TR>
  <tr>
    <td vAlign=bottom>
      <p><font size=2><b
      >INCOME (LOSS) BEFORE TAXES ON INCOME</B>
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>1,698
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>232
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>526
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>(468)
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>2,282
    </FONT></P></TD></TR>
  <tr bgColor=#cceeff>
    <td vAlign=bottom>
      <p><font size=2><b
      >TAXES ON INCOME</B> </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>39
</FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>70
</FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>18
</FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>24
</FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>1,373
    </FONT></P></TD></TR>
  <tr>
    <td></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD></TR>
  <tr bgColor=#cceeff>
    <td vAlign=bottom>
      <p><font size=2><b
      >NET INCOME (LOSS)</B> </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>$ 1,659
      </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>$ 162
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>$ 508
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>$ (492)
      </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>$ 909
    </FONT></P></TD></TR>
  <tr>
    <td></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD></TR>
  <tr bgColor=#cceeff>
    <td></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD></TR>
  <tr>
    <td vAlign=bottom>
      <p><font size=2><b
      >EARNING (LOSS) PER SHARE:</B> </FONT></P></TD>
    <td colSpan=6></TD></TR>
  <tr bgColor=#cceeff>
    <td vAlign=bottom>
      <p style="MARGIN-LEFT: 20px"><font size=2
      >Basic and diluted </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>$ 0.08
      </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>$ 0.01
      </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>$ 0.02
      </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>$ (0.02)
      </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>$ 0.04
      </FONT></P></TD></TR>
  <tr>
    <td></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD></TR>
  <tr bgColor=#cceeff>
    <td></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD></TR>
  <tr>
    <td vAlign=bottom>
      <p><font size=2><b
      >WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES USED IN
      COMPUTATION OF EARNINGS PER ORDINARY SHARE - IN THOUSANDS:</B>
    </FONT></P></TD>
    <td colSpan=5></TD></TR>
  <tr bgColor=#cceeff>
    <td vAlign=bottom>
      <p style="MARGIN-LEFT: 20px"><font size=2
      >Basic </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>21,578
      </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>21,500
      </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>21,590
      </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>21,528
      </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>21,515
      </FONT></P></TD></TR>
  <tr>
    <td></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD></TR>
  <tr bgColor=#cceeff>
    <td></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD></TR>
  <tr>
    <td vAlign=bottom>
      <p style="MARGIN-LEFT: 20px"><font size=2
      >Diluted </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>21,591
      </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>21,565
      </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>21,606
      </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>21,577
      </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>21,546
      </FONT></P></TD></TR>
  <tr bgColor=#cceeff>
    <td></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD></TR>
  <tr>
    <td></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD></TR></TABLE><br>
<table>

  <tr>
    <td vAlign=top><b>*</B></TD>
    <td>
      <p><font size=2><b
      >Financial expenses for the 6 and 3 month periods
      ended June 30, 2006 and for the year ended December 31, 2006 include a
      loss from a premature withdrawal of long-term bank deposits in the amount
      of $1,330,000. </B></FONT></P></TD></TR></TABLE>
<p>
<center>
<p><font size=2>II</FONT></P></CENTER><!-- _________________________________________________________________________________________________-->
<hr width="100%">

<p></P><a name=table3></A><A href="#top" ><font size=1><b>Back to top</B></FONT>
<p></P></A>
<center>
<h2>MIND C.T.I LTD.</H2>
<h3>CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS</H3></CENTER>
<table cellSpacing=0 cellPadding=0 width="100%" align=center border=0>

  <tr>
    <td></TD>
    <td vAlign=bottom align=middle colSpan=2>
      <p><font size=2><b
      >Six months<br>ended June
      30</B></FONT></P></TD>
    <td vAlign=bottom align=middle colSpan=2>
      <p><font size=2><b
      >Three months<br>ended June
      30</B></FONT></P></TD>
    <td vAlign=bottom align=middle>
      <p><font size=2><b
      >Year ended<br>December
      31,</B></FONT></P></TD></TR>
  <tr>
    <td></TD>
    <td align=middle colSpan=2>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=middle colSpan=2>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=middle>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD></TR>
  <tr>
    <td></TD>
    <td vAlign=bottom align=middle width=80>
      <p><font size=2><b
      >2007</B> </FONT></P></TD>
    <td vAlign=bottom align=middle width=80>
      <p><font size=2><b
      >2006</B> </FONT></P></TD>
    <td vAlign=bottom align=middle width=80>
      <p><font size=2><b
      >2007</B> </FONT></P></TD>
    <td vAlign=bottom align=middle width=80>
      <p><font size=2><b
      >2006</B> </FONT></P></TD>
    <td vAlign=bottom align=middle width=80>
      <p><font size=2><b
      >2006</B> </FONT></P></TD></TR>
  <tr>
    <td></TD>
    <td align=middle>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=middle>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=middle>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=middle>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=middle>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD></TR>
  <tr>
    <td>
    <td vAlign=bottom align=middle colSpan=2>
      <p><font size=2><b
      >(Unaudited)</B> </FONT></P></TD>
    <td vAlign=bottom align=middle colSpan=2>
      <p><font size=2><b
      >(Unaudited)</B> </FONT></P></TD>
    <td vAlign=bottom align=middle>
      <p><font size=2><b
      >(Audited)</B> </FONT></P></TD></TR>
  <tr>
    <td></TD>
    <td align=middle colSpan=2>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=middle colSpan=2>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=middle>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD></TR>
  <tr>
    <td>
    <td vAlign=bottom align=middle colSpan=5>
      <p><font size=2><b
      >U.S. $ in thousands </B></FONT></P></TD></TR>
  <tr>
    <td></TD>
    <td align=middle colSpan=5>
      <div
      style="WIDTH: 95%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD></TR>
  <tr>
    <td align=middle colSpan=4>
      <div style="WIDTH: 95%; LINE-HEIGHT: 1px"></DIV></TD></TR>
  <tr>
    <td vAlign=bottom>
      <p><font size=2><b
      >CASH FLOWS FROM OPERATING ACTIVITIES:</B>
    </FONT></P></TD>
    <td colSpan=5></TD></TR>
  <tr>
    <td vAlign=bottom>
      <p style="MARGIN-LEFT: 20px"><font size=2
      >Net income (loss) </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>$ 1,659
      </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>$ 162
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>$ 508
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>$ (492)
      </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>$ 909
    </FONT></P></TD></TR>
  <tr bgColor=#cceeff>
    <td vAlign=bottom>
      <p style="MARGIN-LEFT: 20px"><font size=2
      >Adjustments to reconcile net income (loss) to net
      cash provided by (used in) operating activities:</FONT></P></TD>
    <td colSpan=5></TD></TR>
  <tr>
    <td vAlign=bottom>
      <p style="MARGIN-LEFT: 40px"><font size=2
      >Depreciation and amortization </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>464
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>815
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>219
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>329
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>1,391
    </FONT></P></TD></TR>
  <tr bgColor=#cceeff>
    <td vAlign=bottom>
      <p style="MARGIN-LEFT: 40px"><font size=2
      >Deferred income taxes, net </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>68
</FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2></FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>66
</FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2></FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>(293)
    </FONT></P></TD></TR>
  <tr>
    <td vAlign=bottom>
      <p style="MARGIN-LEFT: 40px"><font size=2
      >Accrued severance pay </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>(16)
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>94
</FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>(32)
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>(8)
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>176
    </FONT></P></TD></TR>
  <tr bgColor=#cceeff>
    <td vAlign=bottom>
      <p style="MARGIN-LEFT: 40px"><font size=2
      >Capital loss (gain) on sale of property and equipment
      - net </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>8 </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>(8)
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>2 </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>(4)
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>(3)
    </FONT></P></TD></TR>
  <tr>
    <td vAlign=bottom>
      <p style="MARGIN-LEFT: 40px"><font size=2
      >Employees share based compensation expenses
      </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>131
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>161
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>67
</FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>84
</FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>325
    </FONT></P></TD></TR>
  <tr bgColor=#cceeff>
    <td vAlign=bottom>
      <p style="MARGIN-LEFT: 40px"><font size=2
      >Changes in operating asset and liability
      items:</FONT></P></TD>
    <td colSpan=5></TD></TR>
  <tr>
    <td vAlign=bottom>
      <p style="MARGIN-LEFT: 60px"><font size=2
      >Decrease (increase) in accounts
    receivable:</FONT></P></TD></TR>
  <tr bgColor=#cceeff>
    <td vAlign=bottom>
      <p style="MARGIN-LEFT: 80px"><font size=2
      >Trade </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>713
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>(1,493)
      </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>1,147
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>309
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>(1,996)
      </FONT></P></TD></TR>
  <tr>
    <td vAlign=bottom>
      <p style="MARGIN-LEFT: 80px"><font size=2
      >Interest accrued on marketable debentures
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>2 </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2></FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>137
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2></FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>(37)
    </FONT></P></TD></TR>
  <tr bgColor=#cceeff>
    <td vAlign=bottom>
      <p style="MARGIN-LEFT: 80px"><font size=2
      >Other </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>(139)
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>(217)
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>26
</FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>27
</FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>537
    </FONT></P></TD></TR>
  <tr>
    <td vAlign=bottom>
      <p style="MARGIN-LEFT: 60px"><font size=2
      >Increase in inventories </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2></FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2></FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2></FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2></FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>(5)
    </FONT></P></TD></TR>
  <tr bgColor=#cceeff>
    <td vAlign=bottom>
      <p style="MARGIN-LEFT: 60px"><font size=2
      >Increase (decrease) in accounts payable and
      accruals:</FONT></P></TD>
    <td colSpan=5></TD></TR>
  <tr>
    <td vAlign=bottom>
      <p style="MARGIN-LEFT: 80px"><font size=2
      >Trade </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>(24)
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>13
</FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>(63)
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>(90)
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>(222)
    </FONT></P></TD></TR>
  <tr bgColor=#cceeff>
    <td vAlign=bottom>
      <p style="MARGIN-LEFT: 80px"><font size=2
      >Other </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>(898)
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>(157)
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>(293)
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>(161)
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>768
    </FONT></P></TD></TR>
  <tr>
    <td vAlign=bottom>
      <p style="MARGIN-LEFT: 60px"><font size=2
      >Increase (decrease) in deferred revenues
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>103
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>(232)
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>(567)
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>(487)
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>(408)
    </FONT></P></TD></TR>
  <tr bgColor=#cceeff>
    <td vAlign=bottom>
      <p style="MARGIN-LEFT: 60px"><font size=2
      >Increase (decrease) in advances from customers, net
      </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>125
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>(448)
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>125
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>(233)
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>(549)
    </FONT></P></TD></TR>
  <tr>
    <td></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD></TR>
  <tr bgColor=#cceeff>
    <td vAlign=bottom>
      <p style="MARGIN-LEFT: 20px"><font size=2
      >Net cash provided by (used in) operating activities
      </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>2,196
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>(1,310)
      </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>1,342
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>(726)
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>593
    </FONT></P></TD></TR>
  <tr>
    <td></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD></TR>
  <tr>
    <td vAlign=bottom>
      <p><font size=2><b
      >CASH FLOWS FROM INVESTING ACTIVITIES:</B>
    </FONT></P></TD>
    <td colSpan=5></TD></TR>
  <tr>
    <td vAlign=bottom>
      <p style="MARGIN-LEFT: 20px"><font size=2
      >Purchase of property and equipment </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>(167)
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>(296)
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>(33)
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>(122)
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>(379)
    </FONT></P></TD></TR>
  <tr bgColor=#cceeff>
    <td vAlign=bottom>
      <p style="MARGIN-LEFT: 20px"><font size=2
      >Amounts withdrawal (funded) in respect of accrued
      severance pay </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>33
</FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>(12)
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>25
</FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>(15)
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>(119)
    </FONT></P></TD></TR>
  <tr>
    <td vAlign=bottom>
      <p style="MARGIN-LEFT: 20px"><font size=2
      >Acquisition of marketable debentures held-to-maturity
      </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2></FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2></FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2></FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2></FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2
      >(10,000)</FONT></P></TD></TR>
  <tr bgColor=#cceeff>
    <td vAlign=bottom>
      <p style="MARGIN-LEFT: 20px"><font size=2
      >Withdrawal of long-term bank deposits </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2></FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>20,000
      </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2></FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>20,000
      </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>30,000
      </FONT></P></TD></TR>
  <tr>
    <td vAlign=bottom>
      <p style="MARGIN-LEFT: 20px"><font size=2
      >Proceeds from sale of property and equipment
      </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>78
</FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>36
</FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>68
</FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>7 </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>162
    </FONT></P></TD></TR>
  <tr bgColor=#cceeff>
    <td></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD></TR>
  <tr>
    <td vAlign=bottom>
      <p style="MARGIN-LEFT: 20px"><font size=2
      >Net cash provided by (used in) investing activities
      </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>(56)
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>19,728
      </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>60
</FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>19,870
      </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>19,664
      </FONT></P></TD></TR>
  <tr bgColor=#cceeff>
    <td></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD></TR>
  <tr>
    <td vAlign=bottom>
      <p><font size=2><b
      >CASH FLOWS FROM FINANCING
    ACTIVITIES:</B></FONT></P></TD></TR>
  <tr bgColor=#cceeff>
    <td vAlign=bottom>
      <p style="MARGIN-LEFT: 20px"><font size=2
      >Employee stock options exercised and paid
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>91
</FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>111
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>10
</FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>51
</FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>149
    </FONT></P></TD></TR>
  <tr>
    <td vAlign=bottom>
      <p style="MARGIN-LEFT: 20px"><font size=2
      >Dividend paid </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>(4,318)
      </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>(3,009)
      </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>(736)
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>(406)
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>(3,009)
      </FONT></P></TD></TR>
  <tr bgColor=#cceeff>
    <td></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD></TR>
  <tr>
    <td vAlign=bottom>
      <p style="MARGIN-LEFT: 20px"><font size=2
      >Net cash used in financing activities </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>(4,227)
      </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>(2,898)
      </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>(726)
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>(355)
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>(2,860)
      </FONT></P></TD></TR>
  <tr bgColor=#cceeff>
    <td></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD></TR>
  <tr>
    <td vAlign=bottom>
      <p><font size=2><b
      >INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS</B>
      </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>(2,087)
      </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>15,520
      </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>676
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>18,789
      </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>17,397
      </FONT></P></TD></TR>
  <tr bgColor=#cceeff>
    <td align=middle colSpan=6>
      <div style="WIDTH: 95%; LINE-HEIGHT: 1px"></DIV></TD></TR>
  <tr>
    <td vAlign=bottom>
      <p><font size=2><b
      >BALANCE OF CASH AND CASH EQUIVALENTS AT BEGINNING OF
      PERIOD</B> </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>27,571
      </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>10,174
      </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>24,808
      </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>6,905
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>10,174
      </FONT></P></TD></TR>
  <tr bgColor=#cceeff>
    <td></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD></TR>
  <tr>
    <td vAlign=bottom>
      <p><font size=2><b
      >BALANCE OF CASH AND CASH EQUIVALENTS AT END OF
      PERIOD</B> </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>$ 25,484
      </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>$ 25,694
      </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>$ 25,484
      </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>$ 25,694
      </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>$ 27,571
      </FONT></P></TD></TR>
  <tr bgColor=#cceeff>
    <td></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD></TR>
  <tr>
    <td></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD></TR>
  <tr bgColor=#cceeff>
    <td vAlign=bottom>
      <p><font size=2><b
      >SUPPLEMENTAL DISCLOSURE OF CASH FLOW AND NON CASH
      ACTIVITIES</B> </FONT></P></TD>
    <td colSpan=5></TD></TR>
  <tr>
    <td vAlign=bottom>
      <p style="MARGIN-LEFT: 20px"><font size=2
      >Cash paid during the year for income tax
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>$ 853
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>$ 22
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>$ 6
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>$ 12
    </FONT></P></TD>
    <td vAlign=bottom align=right>
      <p><font size=2>$ 39
    </FONT></P></TD></TR>
  <tr bgColor=#cceeff>
    <td></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD></TR>
  <tr>
    <td></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD>
    <td align=right>
      <div
      style="WIDTH: 90%; COLOR: black; LINE-HEIGHT: 1px; BORDER-BOTTOM: black 1px solid"
      ></DIV></TD></TR></TABLE>
<p>
<center>
<p><font size=2>III</FONT></P></CENTER><!-- _________________________________________________________________________________________________-->
<hr width="100%">

<p></P><A href="#top" ><font size=1><b>Back to top</B></FONT>
<p></P></A>
<center>
<p><font size=2>- end of file
- -</FONT></P></CENTER>
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