<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

          ------------------------------------------------------------

                                   FORM 10-Q/A

                                   (Mark One)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

                For the quarterly period ended September 30, 2001
                                       OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

           For the transition period from ____________ to ____________

                        Commission File Number: 333-30827
   ---------------------------------------------------------------------------
                         ClickSoftware Technologies Ltd.
             (Exact name of Registrant as specified in its charter)

               ISRAEL                                      Not Applicable
   (State or other jurisdiction of                        (I.R.S. Employer
    incorporation or organization)                      Identification Number)

                               34 Habarzel Street
                                Tel Aviv, Israel
                    (Address of principal executive offices)

                                (972-3) 765-9400
              (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.

                                  Yes  X  No
                                      ---    ---

         As of September 30, 2001, there were 26,180,191 shares of the
Registrant's ordinary shares, par value 0.02 NIS, outstanding.

                                EXPLANATORY NOTE
THIS FORM 10-Q/A IS BEING FILED FOR THE PURPOSE OF AMENDING AND RESTATING ITEMS
1, 2 AND 3 OF PART I OF FORM 10-Q (EXCLUDING "FACTORS THAT MAY AFFECT FUTURE
RESULTS") SOLELY TO THE EXTENT NECESSARY TO REFLECT THE RESTATEMENT OF OUR
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE PERIODS ENDED
SEPTEMBER 30, 2001 AND 2000 AND DECEMBER 31, 2000, TO MAKE A REVISION TO
"MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS - LIQUIDITY AND CAPITAL RESOURCES" AND TO INCLUDE THE CERTIFICATIONS
REQUIRED BY THE SARBANES-OXLEY ACT OF 2002. WE HAVE MADE NO FURTHER CHANGES TO
THE PREVIOUSLY FILED 10-Q. ALL INFORMATION IN THIS FORM 10-Q/A IS AS OF
SEPTEMBER 30, 2001 AND DOES NOT REFLECT ANY SUBSEQUENT INFORMATION OR EVENTS
OTHER THAN THE RESTATEMENT.

                                       1
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<CAPTION>

                         ClickSoftware Technologies Ltd.

                                   FORM 10-Q/A

                    FOR THE QUARTER ENDED SEPTEMBER 30, 2001


PART I.  FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)
<S>                                                                                   <C>
     (a) Condensed Consolidated Balance Sheets as of September 30, 2001 and
         December 31, 2000..........................................................   3

     (b) Condensed Consolidated Statements of Operations for the three and nine
         months ended September 30, 2001 and September 30, 2000.....................   4

     (c) Condensed Consolidated Statements of Cash Flows for nine months ended
         September 30, 2001 and September 30, 2000..................................   5

     (d) Notes to Condensed Consolidated Financial Statements.......................   6

Item 2. Management's Discussion and Analysis of Financial Condition and
        Results of Operations.......................................................  11

Item 3. Quantitative and Qualitative Disclosures About Market Risks.................  26


PART II. OTHER INFORMATION

Item 1. Legal Proceedings...........................................................  28

Item 2. Changes in Securities and Use of Proceeds...................................  28

Item 4. Submission of Matters to a Vote of Security Holders.........................  28

Item 6. Exhibits and Reports on Form 8-K............................................  28

Signatures..........................................................................  29

Exhibit 99.1........................................................................  32

Exhibit 99.2........................................................................  33
</TABLE>

                                       2
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<TABLE>
<CAPTION>

PART I--FINANCIAL INFORMATION
ITEM 1. Financial Statements

                                            CLICKSOFTWARE TECHNOLOGIES LTD.
                                         CONDENSED CONSOLIDATED BALANCE SHEETS
                                           (IN THOUSANDS, EXCEPT SHARE DATA)

                                                                                  SEPTEMBER 30,        DECEMBER 31,
                                                                                       2001                2000
                                                                              ----------------------------------------
        ASSETS                                                                    (AS RESTATED -      (AS RESTATED -
                                                                                   SEE NOTE 2)         SEE NOTE 2)
                                                                                  (UNAUDITED)
                                                                              ----------------------------------------
<S>                                                                                   <C>                  <C>
        CURRENT ASSETS:
        Cash and cash equivalents                                                        $ 10,004             $ 4,438
        Short-term investments                                                              2,088              16,878
        Trade receivables                                                                   3,075               2,042
        Other receivables and prepaid expenses                                              1,691               1,466
                                                                              ----------------------------------------
                  Total current assets                                                     16,858              24,824

        Property and equipment, net                                                         3,152               3,295
        Severance pay deposits                                                                593                 526
                                                                              ----------------------------------------

                  Total assets                                                           $ 20,603            $ 28,645
                                                                              ========================================

        LIABILITIES AND SHAREHOLDERS' EQUITY

        CURRENT LIABILITIES
        Short-term debt                                                                $       61          $      146
        Accounts payable and accrued expenses                                               2,620               3,153
        Deferred revenues                                                                     227                 127
                                                                              ----------------------------------------
               Total current liabilities                                                    2,908               3,426
                                                                              ----------------------------------------

        LONG-TERM LIABILITIES
           Long-term debt                                                                      57                 103
           Accrued severance pay                                                            1,399               1,343
                                                                              ----------------------------------------
               Total long-term liabilities                                                  1,456               1,446
                                                                              ----------------------------------------
               Total liabilities                                                            4,364               4,872
                                                                              ----------------------------------------

        SHAREHOLDERS' EQUITY:

        Ordinary shares of NIS 0.02 par value:
           Authorized - 100,000,000 as of September 30, 2001 and
           December 31, 2000;
           Issued - 26,202,191 shares as of September 30, 2001 and 26,064,539
           shares as of December 31, 2000
           Outstanding -- 26,180,191 shares as of September 30, 2001 and
           26,064,539 shares as of December 31, 2000.

                                                                                              101                 100
        Additional paid-in capital                                                         69,104              69,169
        Deferred stock compensation                                                         (555)             (1,120)
        Treasury stock, at cost:22,000 shares                                                (25)                   -
        Accumulated deficit                                                              (52,386)            (44,376)
                                                                              ----------------------------------------
               Total shareholders' equity                                                  16,239              23,773
                                                                              ----------------------------------------
        Total liabilities and shareholders' equity                                     $   20,603          $   28,645
                                                                              ========================================

The accompanying notes are an integral part of these condensed consolidated financial statements
</TABLE>

                                                           3
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<CAPTION>

                                                  CLICKSOFTWARE TECHNOLOGIES LTD.
                                          CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                         (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
                                                            (UNAUDITED)


                                                            THREE MONTHS ENDED SEPTEMBER 30,      NINE MONTHS ENDED SEPTEMBER 30,
                                                               2001               2000               2001              2000
                                                        --------------------------------------------------------------------------
                                                           (As Restated       (As Restated       (As Restated      (As Restated
                                                               and                and                and               and
                                                           Reclassified -     Reclassified -     Reclassified -    Reclassified -
                                                            see Note 2)        see Note 2)        see Note 2)       see Note 2)
                                                        --------------------------------------------------------------------------
<S>                                                           <C>                    <C>               <C>                <C>
Revenues:
  Software license                                            $     2,079            $ 1,316           $ 7,026            $ 4,786
  Services                                                          1,697              1,536             5,184              4,138
                                                        --------------------------------------------------------------------------
     Total revenues                                                 3,776              2,852            12,210              8,924
                                                        --------------------------------------------------------------------------
Cost of revenues:
  Software license                                                    161                135               585                336
  Services                                                          1,287              1,391             4,374              4,024
                                                        --------------------------------------------------------------------------
     Total cost of revenues                                         1,448              1,526             4,959              4,360
                                                        --------------------------------------------------------------------------
     Gross profit                                                   2,328              1,326             7,251              4,564
                                                        --------------------------------------------------------------------------
Operating expenses:
  Research and development expenses, net                              801                941             2,460              3,346
  Selling and marketing expenses                                    2,966              3,319             9,790              9,459
  General and administrative expenses                               1,242                838             2,976              2,461
  Reorganization expenses                                               -                  -               294                  -
  Amortization of deferred Stock-based compensation (1)               134                277               321                987
                                                        --------------------------------------------------------------------------
     Total operating expenses                                       5,143              5,375            15,841             16,253
                                                        --------------------------------------------------------------------------
     Operating loss                                               (2,815)            (4,049)           (8,590)           (11,689)
Interest and other income, net                                        110                329               580                328
                                                        --------------------------------------------------------------------------
     Net loss                                                   $ (2,705)           $(3,720)         $ (8,010)          $(11,361)
                                                        --------------------------------------------------------------------------
Basic and diluted net loss per share                            $  (0.11)           $ (0.15)         $  (0.32)          $  (0.53)
Shares used in computing basic and diluted net loss
per share                                                      25,154,690         24,699,121        25,070,748         21,554,795


(1) Amortization of deferred stock-based compensation would be further classified as follows:


                                                                  THREE MONTHS ENDED             NINE MONTHS ENDED
                                                                      SEPTEMBER 30,                 SEPTEMBER 30,
                                                                 2001             2000          2001           2000
Cost of revenues                                                  $5              $25           $13             $89
                                                        ------------------------------------------------------------------
Research and development expenses                                 17               39            41             139
                                                        ------------------------------------------------------------------
Selling and marketing expenses                                    17               39            41             139
                                                        ------------------------------------------------------------------
General and administrative expenses                               95              174           226             620
                                                        ------------------------------------------------------------------
Total                                                          $ 134            $ 277         $ 321            $987
                                                        ------------------------------------------------------------------

     The accompanying notes are an integral part of these condensed consolidated financial statements
</TABLE>

                                                                 4
<PAGE>
<TABLE>
<CAPTION>

                                             CLICKSOFTWARE TECHNOLOGIES LTD.
                                     CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                     (IN THOUSANDS)
                                                       (UNAUDITED)
                                                                                          NINE MONTHS ENDED
                                                                                            SEPTEMBER 30
                                                                                      2001               2000
                                                                               ----------------------------------------
                                                                                  (As Restated -     (As Restated -
                                                                                    See Note 2)        See Note 2)
<S>                                                                                  <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                                                                                $ (8,010)           $ (11,361)

Adjustments to reconcile net loss to net cash used in operating activities
Expenses not affecting operating cash flows:
  Depreciation                                                                                560                  457
  Amortization of deferred compensation                                                       321                  987
  Unrealized gain from investments                                                            319                (426)
  Severance pay, net                                                                         (11)                  349
Changes in operating assets and liabilities:
  Trade receivables                                                                       (1,033)                1,126
  Other receivables and other prepaid expenses                                              (225)                (658)
  Accounts payable and accrued expenses                                                     (533)                   13
  Deferred revenues                                                                           100                (861)
  Change in investments, net                                                               14,471             (15,092)
                                                                               ----------------------------------------
Net cash provided by (used in) operating activities                                         5,959             (25,466)
                                                                               ----------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of equipment                                                                      (417)              (2,153)
                                                                               ----------------------------------------
Net cash  (used in) investing activities                                                    (417)              (2,153)
                                                                               ----------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of short-term debt                                                                 (76)                (169)
Repayment of long-term debt                                                                  (55)                 (99)
Net proceeds from issuance of Ordinary shares                                                   -               28,343
Net proceeds from warrants exercised                                                            -                  579
Purchase of treasury stock                                                                   (25)                    -
Employee options exercised                                                                    180                  459
                                                                               ----------------------------------------
Net cash provided by financing activities                                                      24               29,113
                                                                               ----------------------------------------
Increase in cash and cash equivalents                                                       5,566                1,494
Cash and cash equivalents at beginning of Period                                            4,438                7,838
                                                                               ----------------------------------------
Cash and cash equivalents at end of period                                               $ 10,004              $ 9,332
                                                                               ========================================

     The accompanying notes are an integral part of these condensed consolidated financial statements
</TABLE>

                                                           5
<PAGE>

                         CLICKSOFTWARE TECHNOLOGIES LTD.

            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
  (INFORMATION AS OF SEPTEMBER 30, 2001 AND FOR THE THREE AND NINE MONTHS ENDED
                   SEPTEMBER 30, 2001 AND SEPTEMBER 30, 2000)

1.   BASIS OF PRESENTATION

     The accompanying condensed unaudited interim consolidated financial
     statements have been prepared by ClickSoftware Technologies Ltd.
     ("ClickSoftware" or the "Company") in accordance with accounting principles
     generally accepted in the United States of America for interim financial
     information and the instructions to Form 10-Q and Article 10 of Regulation
     S-X. These financial statements reflect all adjustments, consisting of
     normal recurring adjustments and accruals, which are, in the opinion of
     management, necessary for a fair presentation of the financial position of
     the Company as of September 30, 2001 and the results of operations and cash
     flows for the interim periods indicated in conformity with generally
     accepted accounting principles applicable to interim periods. Accordingly,
     certain information and footnote disclosures normally included in annual
     financial statements prepared in accordance with generally accepted
     accounting principles have been condensed or omitted. These financial
     statements should be read in conjunction with the audited financial
     statements and notes thereto of ClickSoftware for the year ended December
     31, 2000 that are included in ClickSoftware's Form 10-K/A for 2001 filed
     with the Securities and Exchange Commission on January 24, 2003. The
     results of operations presented are not necessarily indicative of the
     results to be expected for future quarters or for the year ending December
     31, 2001.

2.   RESTATEMENT

     During the third quarter of 2002, the Company's audit committee, with the
     assistance of outside advisors, conducted a review of its financial
     statements for 2000 and 2001 and for the first six months of 2002. On
     October 21, 2002, the Company announced that it would restate its financial
     statements for 2000 and 2001 and for the first six months of 2002.

     Following the reaudit of the Company's financial statements, the Company is
     restating its financial statements for the announced periods and for the
     year ended December 31, 1999. The restatement results primarily from the
     recognition of revenue from sales to reseller customers and other
     customers, where revenue has been recognized prematurely or should not have
     been recognized at all. The Company has also determined to reclassify
     royalty expenses related to grants received from the Chief Scientist Office
     from Selling and Marketing expenses to Cost of Revenues expenses.

     This restatement is further discussed in note 3 of the notes to the
     consolidated financial statements of the Company that are included on the
     Company's Form 10-K/A for the year ended December 31, 2001, filed with the
     Securities and Exchange Commission on January 24, 2003.

     The Company applied in these financial statements the SEC staff guidance to
     classify royalty expenses related to grants received from Chief Scientist
     Office as part of cost of revenues. Accordingly, the Company reclassified
     the following amounts from Selling and Marketing expenses to Cost of
     Revenues expenses: $462,000 and $76,000 for the nine and three months ended
     September 30, 2001, respectively, and $322,000 and $124,000 for the nine
     and three months ended September 30, 2000, respectively.

     The impact of the adjustments on the financial statements of the Company is
     set forth below.

                                       6
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<TABLE>
<CAPTION>

                                             CLICKSOFTWARE TECHNOLOGIES LTD.
                                 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                                 AS OF SEPTEMBER 30, 2001
                                            (IN THOUSANDS, EXCEPT SHARE DATA)

BALANCE SHEET:
                                                               DECEMBER 31,           EFFECT OF            DECEMBER 31,
                                                                  2000               RESTATEMENT              2000
                                                          ---------------------------------------------------------------
                                                             (AS PREVIOUSLY                              (AS RESTATED)
ASSETS                                                         REPORTED)
<S>                                                             <C>                <C>                      <C>
CURRENT ASSETS:
Cash and cash equivalents                                              $4,438                                     $4,438
Short-term investments                                                 16,878                                     16,878
Trade receivables, net                                                  4,375              (2,333)                 2,042
Other receivables and prepaid expenses                                  1,466                                      1,466
                                                          ---------------------------------------------------------------
          Total current assets                                         27,157              (2,333)                24,824

Property and equipment, net                                             3,772                (477)                 3,295
Severance pay deposits                                                    526                                        526
                                                          ---------------------------------------------------------------
          Total assets                                                $31,455             $(2,810)               $28,645
                                                          ===============================================================

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
Short-term loans                                                         $146                                       $146
Accounts payable and accrued expenses                                   3,274                (121)                 3,153
Deferred revenues                                                         127                                        127
                                                          ---------------------------------------------------------------
       Total current liabilities                                        3,547                (121)                 3,426
                                                          ---------------------------------------------------------------

LONG-TERM LIABILITIES
Long-term loans                                                           103                                        103
Accrued severance pay                                                   1,343                                      1,343
                                                          ---------------------------------------------------------------
       Total long-term liabilities                                      1,446                                      1,446
                                                          ---------------------------------------------------------------
       Total liabilities                                                4,993                (121)                 4,872
                                                          ---------------------------------------------------------------

SHAREHOLDERS' EQUITY:
Ordinary shares of NIS 0.02 par value:                                   101                                         100
Additional paid-in capital                                            69,169                                      69,169
Deferred stock compensation                                          (1,120)                                     (1,120)
Accumulated deficit                                                 (41,687)               (2,689)              (44,376)
                                                          ---------------------------------------------------------------
       Total shareholders' equity                                     26,462               (2,689)                23,773
                                                          ---------------------------------------------------------------
Total liabilities and shareholders' equity                           $31,455              $(2,810)               $28,645
                                                          ===============================================================
</TABLE>

                                                            7
<PAGE>
<TABLE>
<CAPTION>
                                             CLICKSOFTWARE TECHNOLOGIES LTD.
                                 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                                 AS OF SEPTEMBER 30, 2001
                                            (IN THOUSANDS, EXCEPT SHARE DATA)
BALANCE SHEET:
                                                               DECEMBER 31,          EFFECT OF             DECEMBER 31,
                                                                  2000              RESTATEMENT               2000
                                                          ---------------------------------------------------------------
                                                             (AS PREVIOUSLY                               (AS RESTATED)
ASSETS                                                         REPORTED)
<S>                                                             <C>                <C>                      <C>
CURRENT ASSETS:
Cash and cash equivalents                                             $10,004                                    $10,004
Short-term investments                                                  2,088                                      2,088
Trade receivables, net                                                  4,664              (1,589)                 3,075
Other receivables and prepaid expenses                                  1,908                (217)                 1,691

                                                          ---------------------------------------------------------------
          Total current assets                                         18,664              (1,806)                16,858

Property and equipment, net                                             3,646                (494)                 3,152
Severance pay deposits                                                    593                                        593
                                                          ---------------------------------------------------------------
          Total assets                                                $22,903             $(2,300)              $ 20,603
                                                          ===============================================================

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
Short-term loans                                                          $61                                        $61
Accounts payable and accrued expenses                                   2,741                (121)                 2,620
Deferred revenues                                                         227                                        227
                                                          ---------------------------------------------------------------
       Total current liabilities                                        3,029                (121)                 2,908
                                                          ---------------------------------------------------------------

LONG-TERM LIABILITIES
Long-term loans                                                            57                                         57
Accrued severance pay                                                   1,399                                      1,399
                                                          ---------------------------------------------------------------
       Total long-term liabilities                                      1,456                                      1,456
                                                          ---------------------------------------------------------------
       Total liabilities                                                4,485                (121)                 4,364
                                                          ---------------------------------------------------------------

SHAREHOLDERS' EQUITY:
Ordinary shares of NIS 0.02 par value:                                   101                                         101
Additional paid-in capital                                            69,104                                      69,104
Deferred stock compensation                                            (555)                                        (555)
Treasury stock, at cost:22,000 shares                                   (25)                                         (25)
Accumulated deficit                                                 (50,207)               (2,179)               (52,386)
                                                          ---------------------------------------------------------------
       Total shareholders' equity                                     18,418               (2,179)                16,239
                                                          ---------------------------------------------------------------
Total liabilities and shareholders' equity                           $22,903              $(2,300)               $20,603
                                                          ===============================================================
</TABLE>

                                                            8
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<TABLE>
<CAPTION>
                                                  CLICKSOFTWARE TECHNOLOGIES LTD.
                                   NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                                FOR PERIOD ENDED SEPTEMBER 30, 2001
                                        (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
                                                            (UNAUDITED)

                                                                          THREE MONTHS ENDED SEPTEMBER 30,
STATEMENT OF OPERATIONS:
                                                           2001               2001               2001                2001
                                                    ----------------------------------------------------------------------------
                                                     (AS PREVIOUSLY       (EFFECT OF          (EFFECT OF      (AS RESTATED AND
                                                       REPORTED)          RESTATEMENT)     RECLASSFICATION))    RECLASSIFIED)
<S>                                                   <C>                  <C>             <C>                    <C>
Revenues:
  Software license fees                                        $1,042             1,037                                  $2,079
  Services                                                      1,697                                                     1,697
                                                    ----------------------------------------------------------------------------
     Total revenues                                             2,739             1,037                                   3,776
                                                    ----------------------------------------------------------------------------
Cost of revenues:
  Software license                                                 95                37                   29                161
  Services                                                      1,292              (52)                   47              1,287
                                                    ----------------------------------------------------------------------------
     Total cost of revenues                                     1,387              (15)                   76              1,448
                                                    ----------------------------------------------------------------------------
     Gross profit                                               1,352             1,052                 (76)              2,328
                                                    ----------------------------------------------------------------------------
Operating expenses:
  Research and development expenses, net                          801                                                       801
  Selling and marketing expenses                                3,099              (57)                 (76)              2,966
  General and administrative expenses                           1,575             (333)                                   1,242
  Amortization of deferred Stock-based compensation               134                                                       134
                                                    ----------------------------------------------------------------------------
     Total operating expenses                                   5,609             (390)                 (76)              5,143
                                                    ----------------------------------------------------------------------------
     Operating loss                                           (4,257)             1,442                    -            (2,815)
Interest and other income, net                                    110                                                       110
                                                    ----------------------------------------------------------------------------
     Net loss                                                $(4,147)             1,442                                $(2,705)
                                                    ----------------------------------------------------------------------------
Basic and diluted net loss per share                          $(0.16)                                                   $(0.11)
                                                    ----------------------------------------------------------------------------
Shares used in computing basic and diluted net
loss per share                                             25,154,690                                                25,154,690
                                                    ----------------------------------------------------------------------------

STATEMENT OF OPERATIONS:                                                   NINE MONTHS ENDED SEPTEMBER 30,

                                                           2001               2001               2001                2001
                                                    ----------------------------------------------------------------------------
                                                     (AS PREVIOUSLY       (EFFECT OF          (EFFECT OF      (AS RESTATED AND
                                                       REPORTED)          RESTATEMENT)     RECLASSFICATION))    RECLASSIFIED)
Revenues
  Software license fees                                         $7,028            $(2)                                   $7,026
  Services                                                       5,271            (87)                                    5,184
                                                    ----------------------------------------------------------------------------
     Total revenues                                             12,299            (89)                                   12,210
                                                    ----------------------------------------------------------------------------
Cost of revenues:
  Software license                                                 307                                   278                585
  Services                                                       4,242            (52)                   184              4,374
                                                    ----------------------------------------------------------------------------
     Total cost of revenues                                      4,549            (52)                   462              4,959
                                                    ----------------------------------------------------------------------------
     Gross profit                                                7,750            (37)                 (462)              7,251
                                                    ----------------------------------------------------------------------------
Operating expenses:
  Research and development expenses, net                         2,460                                                    2,460
  Selling and marketing expenses                                10,411           (159)                 (462)              9,790
  General and administrative expenses                            3,364           (388)                                    2,976
  Reorganization expenses                                          294                                                      294
  Amortization of deferred Stock-based compensation                321                                                      321
                                                    ----------------------------------------------------------------------------
     Total operating expenses                                   16,850           (547)                 (462)             15,841
                                                    ----------------------------------------------------------------------------
     Operating loss                                            (9,100)             510                     -            (8,590)
Interest and other income, net                                     580                                                      580
                                                    ----------------------------------------------------------------------------
     Net loss                                                 $(8,520)             510                                 $(8,010)
                                                    ----------------------------------------------------------------------------
Basic and diluted net loss per share                          $ (0.34)                                                 $ (0.32)
                                                    ----------------------------------------------------------------------------
Shares used in computing basic and diluted net
loss per share                                              25,070,748                                               25,070,748
                                                    ----------------------------------------------------------------------------
</TABLE>

                                                            9
<PAGE>
<TABLE>
<CAPTION>
                                                CLICKSOFTWARE TECHNOLOGIES LTD.
                                    NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                              FOR PERIOD ENDED SEPTEMBER 30, 2001
                                       (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
                                                          (UNAUDITED)

                                                                     THREE MONTHS ENDED SEPTEMBER 30,
STATEMENT OF OPERATIONS:

                                                   2001                  2001                 2001                 2001
                                          ------------------------------------------------------------------------------------
                                              (AS PREVIOUSLY          (EFFECT OF            (EFFECT OF       (AS RESTATED AND
                                                 REPORTED)            RESTATEMENT)       RECLASSFICATION))     RECLASSIFIED)
<S>                                               <C>                  <C>               <C>                   <C>
Revenues
  Software license fees                                   $3,320              (2,004)                                  $1,316
  Services                                                 1,469                   67                                   1,536
                                          ------------------------------------------------------------------------------------
     Total revenues                                        4,789              (1,937)                                   2,852
                                          ------------------------------------------------------------------------------------
Cost of revenues:
  Software license                                           117                 (68)                 86                  135
  Services                                                 1,353                                      38                1,391
                                          ------------------------------------------------------------------------------------
     Total cost of revenues                                1,470                 (68)                124                1,526
                                          ------------------------------------------------------------------------------------
     Gross profit                                          3,319              (1,869)              (124)                1,326
                                          ------------------------------------------------------------------------------------
Operating expenses:
  Research and development expenses, net                     941                                                          941
  Selling and marketing expenses                           3,443                                   (124)                3,319
  General and administrative expenses                        838                                                          838
  Amortization of deferred
Stock-based compensation                                     277                                                          277
                                          ------------------------------------------------------------------------------------
     Total operating expenses                              5,499                    -              (124)                5,375
                                          ------------------------------------------------------------------------------------
     Operating loss                                      (2,180)              (1,869)                  -              (4,049)
Interest and other income, net                               329                                                          329
                                          ------------------------------------------------------------------------------------
     Net loss                                           $(1,851)              (1,869)                                $(3,720)
                                          ------------------------------------------------------------------------------------
Basic and diluted net loss per share                     $(0.07)                                                      $(0.15)
                                          ------------------------------------------------------------------------------------
Shares used in computing basic and
diluted net loss per share                            24,699,121                                                   24,699,121
                                          ------------------------------------------------------------------------------------

STATEMENT OF OPERATIONS:                                         NINE MONTHS ENDED SEPTEMBER 30,

                                                   2001                  2001                 2001                 2001
                                          ------------------------------------------------------------------------------------
                                              (AS PREVIOUSLY          (EFFECT OF            (EFFECT OF       (AS RESTATED AND
                                                 REPORTED)            RESTATEMENT)       RECLASSFICATION))     RECLASSIFIED)
Revenues
  Software license fees                                   $8,406             $(3,620)                                  $4,786
  Services                                                 4,202                 (64)                                   4,138
                                          ------------------------------------------------------------------------------------
     Total revenues                                       12,608              (3,684)                                   8,924
                                          ------------------------------------------------------------------------------------
Cost of revenues:
  Software license                                           250                (129)                215                  336
  Services                                                 3,917                                     107                4,024
                                          ------------------------------------------------------------------------------------
     Total cost of revenues                                4,167                (129)                322                4,360
                                          ------------------------------------------------------------------------------------
     Gross profit                                          8,441              (3,555)              (322)                4,564
                                          ------------------------------------------------------------------------------------
Operating expenses:
  Research and development expenses, net                   3,346                                                        3,346
  Selling and marketing expenses                           9,781                                   (322)                9,459
  General and administrative expenses                      2,594                (133)                                   2,461
  Amortization of deferred
Stock-based compensation                                     987                                                          987
                                          ------------------------------------------------------------------------------------
     Total operating expenses                             16,708                (133)              (322)               16,253
                                          ------------------------------------------------------------------------------------
     Operating loss                                      (8,267)              (3,422)                  -             (11,689)
Interest and other income, net                               328                                                          328
                                          ------------------------------------------------------------------------------------
     Net loss                                           $(7,939)              (3,422)                               $(11,361)
                                          ------------------------------------------------------------------------------------
Basic and diluted net loss per share                     $(0.37)                                                      $(0.53)
                                          ------------------------------------------------------------------------------------
Shares used in computing basic and
diluted net loss per share                            21,554,795                                                   21,554,795
                                          ------------------------------------------------------------------------------------
</TABLE>
                                                              10
<PAGE>

3.   REVENUE RECOGNITION

     The Company recognizes revenues in accordance with the American Institute
     of Certified Public Accountants ("AICPA") Statement of Position 97-2,
     Software Revenue Recognition, as amended.

     In accordance with SOP 97-2, revenues from software license fees are
     recognized when persuasive evidence of an arrangement exists, the software
     product covered by written agreement or a purchase order signed by the
     customer has been delivered, the license fees are fixed and determinable
     and collection of the license fees is considered probable. Revenues from
     software product license agreements, which require significant
     customization and modification of the software product are deferred and
     recognized using the percentage-of-completion method of contract accounting
     in accordance with AICPA Statement of Position 81-1. When software
     arrangements involve multiple elements the Company allocates revenue to
     each element based on the relative fair values of the elements. The
     Company's determination of fair value of each element in multiple element
     arrangements is based on vendor-specific objective evidence (VSOE). The
     Company limits its assessment of VSOE for each element to the price charged
     when the same element is sold separately. If vendor specific objective
     evidence of fair value does not exist for all elements to support the
     allocation of the total fee among all delivered and undelivered elements of
     the arrangement, revenue is deferred until such evidence exist for the
     undelivered elements, or until all elements are delivered, whichever is
     earlier.

     If the fee due from the customer is not fixed or determinable, revenue is
     recognized as payments become due from the customer, assuming all other
     revenue recognition criteria have been met. Generally, we consider all
     arrangements with extended payment terms greater than nine months not to be
     fixed or determinable.

     We also enter into license arrangements with resellers whereby revenues are
     recognized upon sale through to the end user by the reseller.

     Service revenues include consulting services, post-contract customer
     support and training. Consulting revenues are generally recognized on a
     time and material basis. However, revenues from certain fixed-price
     contracts are recognized on the percentage of completion basis.
     Post-contract customer support agreements provide technical support and the
     right to unspecified updates on an if-and-when-available basis.
     Post-contract customer support revenues are recognized ratably over the
     term of the support period (generally one year) and training and other
     service revenues are recognized as the related services are provided.

4.   NET LOSS PER SHARE

     ClickSoftware computes net loss per share of ordinary shares in accordance
     with Statement of Financial Accounting Standards No. 128, "Earnings per
     Share" ("SFAS No. 128"). Under the provisions of SFAS No. 128 basic an
     diluted net loss per share ("Basic EPS") is computed by dividing net loss
     by the weighted average number of shares of common stock outstanding,
     excluding ordinary shares held by a trustee reserved for allocation against
     employee options granted but not yet exercised. Diluted net loss per
     ordinary share is the same as basic net loss per ordinary share for all
     periods presented, as the effects of the Company's potential ordinary
     shares were antidilutive

     A total of 3,684,869 and 2,666,446 incremental shares were excluded from
     the calculation of diluted net loss per ordinary share for the nine months
     ended September 30, 2001 and September 30, 2000,respectively.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

This report contains certain forward-looking statements (as such term is defined
in Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934) and information relating to us that are based on the
beliefs of our management as well as assumptions made by and information
currently available to our management, including statements related to products,
markets, and future results of operations and profitability, and may include
implied statements concerning market acceptance of our products, and our growing
leadership role in the marketplace. In addition, when used in this report, the
words "likely," "will," "suggests," "may," "would," "could," "anticipate,"
"believe," "estimate," "expect," "intend," "plan, "predict" and similar
expressions and their variants, as they relate to us or our management, may
identify forward-looking statements. Such statements reflect our judgment as of
the date of this annual report on Form 10-K with respect to future events, the
outcome of which is subject to certain risks, including the risk factors set
forth herein, which may have a significant impact on our business, operating
results or financial condition. Investors are cautioned that these
forward-looking statements are

                                       11
<PAGE>

inherently uncertain. Should one or more of these risks or uncertainties
materialize, or should underlying assumptions prove incorrect, actual results or
outcomes may vary materially from those described herein. We undertake no
obligation to update forward-looking statements, whether as a result of new
information, future events or otherwise.

OVERVIEW

Since late 1996, we have focused on providing service optimization software
products based on our W-6 Service Scheduler and TechMate technologies. We have
also invested significant resources in developing products based on these
technologies including, until 2001, increasing the number of our employees
involved in research and development, selling and marketing, and professional
services.

We believe that in today's economy successful businesses must constantly
increase the performance of existing service resources. Our products emphasize
the use of optimization tools for performance enhancement in the service
environment. In September 1999, we began marketing our product lines under new
names, CLICKSCHEDULE and CLICKFIX and in May 2000, we changed our company name
to ClickSoftware Technologies Ltd. Currently our product offering for service
optimization applications includes: CLICKSCHEDULE, CLICKFIX, CLICKANALYZE,
CLICKPLAN, CLICKMOBILE.

We derive revenues from software licensing and services. Our operating history
shows that a significant percentage of our quarterly revenues come from orders
placed toward the end of a quarter. Software license revenues are comprised of
perpetual software license fees primarily derived from contracts with our direct
sales clients and our indirect distribution channels. We recognize revenues in
accordance with the AICPA Statement of Position 97-2, "SOFTWARE REVENUE
RECOGNITION," or SOP 97-2, as amended (see note 3 of the notes to our interim
consolidated financial statements).

Service revenues are comprised of revenues from consulting, training, and
post-contract customer support. Consulting services are billed at an agreed-upon
rate plus incurred expenses. Clients licensing our products generally purchase
consulting agreements from us. Post-contract customer support arrangements
provide technical support and the right to unspecified upgrades on an if-and
when-available basis. Post-contract customer support revenues are charged as a
percentage of license fees depending upon the level of support coverage
requested by the customer. Our products are marketed worldwide through a
combination of a direct sales force, consultants and various business
relationships we have with implementation and technology companies and
resellers.

Cost of revenues consists of cost of software license revenues and cost of
services. Cost of software license revenues consists of expenses related to
media duplication and packaging of our products, costs of software purchased or
licensed for resale and royalties payments to the Chief Scientist. Cost of
services consists of expenses related to salaries and expenses of our
professional services organizations, costs related to third-party consultants,
and equipment costs and royalties payments to the Chief Scientist.

Operating expenses are categorized into research and development expenses, sales
and marketing expenses, general and administrative expenses, and stock-based
compensation.

Research and development expenses consist primarily of personnel costs to
support product development, net of grants received from the Chief Scientist. In
return for some of these grants, we are obligated to pay the Israeli Government
royalties as described below which are included in cost of services expenses.
Software research and development costs incurred prior to the establishment of
technology feasibility are included in research and development expenses as
incurred.

Selling and marketing expenses consist primarily of personnel and related costs
for marketing and sales functions, including related travel, direct advertising
costs, expenditures on trade shows, market research and promotional printing.

General and administrative expenses consist primarily of personnel and related
costs for corporate functions, including information services, finance,
accounting, human resources, facilities, provision for doubtful accounts, legal
and costs related to activity as public company.

Amortization of stock- based compensation represents the aggregate difference,
at the date of grant, between the respective exercise price of stock options and
the deemed fair market value of the underlying stock. Deferred Stock-based
compensation is amortized over the vesting period of the underlying options,
generally four years.

Interest and other income include interest income earned on our cash equivalents
and short-term investments, offset by interest expense, and also includes the
effects of foreign currency translations.

                                       12
<PAGE>

The functional currency of our operations is the U.S. dollar, which is the
primary currency in the economic environment in which we conduct our business. A
significant portion of our research and development expenses is incurred in New
Israeli Shekels ("NIS") and a portion of our revenues and expenses are incurred
in British Pounds and the European Community Euro. The results of our operations
are subject to fluctuations in these exchange rates which are influenced by
various global economic factors.

The effects of foreign currency exchange rates on our results of operations for
the three and months ended September 31, 2001 and the three and nine months of
2000 were immaterial.

Our tax rate will mainly reflect a mix of the U.S. statutory tax rate on our
U.S. income, the U.K statutory tax rate on our U.K income and the Israeli tax
rate discussed below. Israeli companies are generally subject to income tax at
the rate of 36% of taxable income. The majority of our income, however, is
derived from our company's capital investment program with "Approved Enterprise"
status under the Law for the Encouragement of Capital Investments, and is
eligible therefore for tax benefits. As a result of these benefits, we will have
a tax exemption on income derived during the first two years in which this
investment program produces taxable income, and a reduced tax rate of 15-25% for
the next 5 to 8 years. In the event of a distribution of a cash dividend out of
retained earnings that were exempt from tax due to its Approved Enterprise
status, we would be required to pay 25% corporate income tax on income from
which the dividend was distributed. All of these tax benefits are subject to
various conditions and restrictions. There can be no assurance that we will
obtain approval for additional Approved Enterprise Programs, or that the
provisions of the law will not change.

CRITICAL ACCOUNTING POLICIES

The discussion and analysis of our financial condition and results of operations
are based upon our consolidated financial statements, which have been prepared
in accordance with accounting principles generally accepted in the United
States. The preparation of these financial statements requires us to make
estimates and judgments that affect the reported amounts of assets, liabilities,
revenues and expenses, and related disclosure of contingent assets and
liabilities. These estimates are evaluated by us on an on-going basis. We base
our estimates on our historical experience and on various other assumptions that
we believe to be reasonable under the circumstances, the results of which form
the basis for making judgments about the carrying amount values of assets and
liabilities that are not readily apparent from other sources. Actual results may
differ from these estimates under different assumptions or conditions.

Our recognition of revenue requires judgments and estimates which may
significantly impact our consolidated financial statements.

Revenue results are difficult to predict, and any shortfall in revenues or delay
in recognizing revenues could cause our operating results to vary significantly
from quarter to quarter and could result in future operating losses. In
addition, the timing of our revenue recognition influences the timing of certain
expenses, such as commissions and royalties. We follow very specific and
detailed guidelines in measuring revenues, however, certain judgments affect the
application of our revenue policy.

Our revenues are principally derived from the licensing of our software and the
provision of related services. We recognize revenues in accordance with SOP
97-2. Revenues from software license fees are recognized when persuasive
evidence of an arrangement exists, either by written agreement or a purchase
order signed by the customer, the software product has been delivered, the
license fees are fixed and determinable, and collection of the license fees is
considered probable. License fees from software arrangements which involve
multiple elements, such as post-contract customer support, consulting and
training, are allocated to each element of the arrangement based on the relative
fair values of the elements. We determine the fair value of each element in
multiple-element arrangements based on vendor specific objective evidence, or
VSOE. We determine the VSOE for each element according to the price charged when
the element is sold separately. In judging the probability of collection of
software license fees we continuously monitor collection and payments from our
customers and maintain a provision for estimated credit losses based upon our
historical experience and any specific customer collection issues that we have
identified. In connection with customers with whom we have no previous
experience, we may utilize independent resources to evaluate the
creditworthiness of those customers. For some customers, typically those with
whom we have long-term relationships, we may grant extended payment terms. We
perform on-going credit evaluations of our customers. If the financial situation
of any of our customers were to deteriorate, resulting in an impairment of their
ability to pay the indebtedness they incur with us, additional allowances may be
required.

                                       13
<PAGE>

Our software products generally do not require significant customization or
modification. However, when such customization or modification is necessary, the
revenue generated by those activities is deferred and recognized using the
percentage of completion method.

Service revenues include post-contract customer support, consulting and
training. Post-contract customer support arrangements provide for technical
support and the right to unspecified updates on an if-and-when-available basis.
Revenues from those arrangements are recognized ratably over the term of the
arrangement, usually one year. Consulting services are recognized on a time and
material basis, or in a fixed price contract, on a percentage of completion
basis. Revenues from training are recognized as the services are provided.

In recognizing revenues based on the rate of completion method, we estimate time
to completion with revisions to estimates reflected in the period in which
changes become known. If we do not accurately estimate the resources required or
the scope of work to be performed, or do not manage our projects properly within
the planned periods of time or satisfy our obligations under the contracts, then
future services margins may be significantly and negatively affected or losses
on existing contracts may need to be recognized.

RECENT ACCOUNTING PRONOUNCEMENTS

None

RESULTS OF OPERATIONS

Our operating results for each of the three and nine months ended September 30,
2001 and 2000, expressed as a percentage of revenues are as follows:

<TABLE>
<CAPTION>
                                                       -------------------------------------------------------------------------
                                                                  THREE MONTHS                         NINE MONTHS
                                                               ENDED SEPTEMBER 30                  ENDED SEPTEMBER 30
                                                       -------------------------------------------------------------------------
                                                             2001             2000              2001               2000
                                                       -------------------------------------------------------------------------
                                                         (As Restated     (As Restated      (As Restated       (As Restated
                                                              and              and               and                and
                                                         Reclassified)    Reclassified)     Reclassified)      Reclassified)
                                                       -------------------------------------------------------------------------
<S>                                                               <C>              <C>                <C>               <C>
Revenues:
  Software license                                                    55%              46%                58%               54%
  Services                                                            45%              54%                42%               46%
                                                       -------------------------------------------------------------------------
     Total revenues                                                  100%             100%               100%              100%
Cost of revenues:
  Software license                                                     4%               5%                 5%                4%
  Services                                                            34%              49%                36%               45%
     Total cost of revenues                                           38%              54%                41%               49%
                                                       -------------------------------------------------------------------------
     Gross profit                                                     62%              46%                59%               51%
                                                       -------------------------------------------------------------------------
Operating expenses:
  Research and development expenses, net                              21%              33%                20%               37%
  Selling and marketing expenses                                      79%             116%                80%              106%
  General and administrative expenses                                 33%              29%                24%               28%
  Reorganization expenses                                               -                -                 2%                 -
  Amortization of deferred Stock-based compensation                    4%              10%                 3%               11%
                                                       -------------------------------------------------------------------------
     Total operating expenses                                        137%             188%               129%              182%
                                                       -------------------------------------------------------------------------
     Operating loss                                                 (75%)           (142%)              (70%)            (131%)
Interest and other income, net                                         3%              12%                 4%                4%
                                                       -------------------------------------------------------------------------
     Net loss                                                       (72%)           (130%)              (66%)            (127%)
                                                       =========================================================================
</TABLE>

                                       14
<PAGE>

RESULTS OF OPERATIONS FOR THREE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
(AS RESTATED AND RECLASSIFIED)

During the third quarter of 2002, our audit committee, with the assistance of
outside advisors, conducted a review of our financial statements for 2000 and
2001 and for the first six months of 2002. On October 21, 2002, we announced
that we would restate our financial statements for 2000 and 2001 and for the
first six months of 2002. In addition, we announced that our audit committee
decided to recommend to our shareholders that we terminate our relationship with
Luboshitz Kasierer, formerly a member firm of Arthur Andersen, as our auditors
and to appoint new auditors. At a shareholders' meeting held on December 31,
2002, our shareholders authorized the engagement of Brightman Almagor, a member
of Deloitte Touche Tohmatsu.

Following the reaudit of our financial statements, we are restating our
financial statements for the announced periods and for the year ended December
31, 1999. The restatement results primarily from the recognition of revenue from
sales to reseller customers and other customers, where revenue has been
recognized prematurely or should not have been recognized at all. We have also
determined to reclassify royalty expenses related to grants received from Chief
Scientist Office from Selling and Marketing expenses to Cost of Revenues
expenses.

The Company applied in these financial statements the SEC staff guidance to
classify royalty expenses related to grants received from Chief Scientist Office
as part of cost of revenues. Accordingly, the Company reclassified the following
amounts from Selling and Marketing expenses to Cost of Revenues expenses:
$462,000 and $76,000 for the nine and three months ended September 30, 2001,
respectively and $322,000 and $124,000 for the nine and three months ended
September 30, 2000, respectively.

REVENUES: Company revenues increased $0.9 million or 32% to $3.8 million for the
three months ended September 30, 2001 from $2.9 million for the three months
ended September 30, 2000. This increase was primarily the result of increase in
license revenues recognized in the third quarter of 2001.

SOFTWARE LICENSE: Software license revenues were $2.1 million or 55% of total
revenues for the three months ended September 30, 2001, and $1.3 million or 46%
of total revenues for the three months ended September 30, 2000. The increase in
software license revenues primarily the result of increase in license revenues
recognized in the third quarter of 2001.

SERVICES: Services revenues were $1.7 million or 45% of revenues for the three
months ended September 30, 2001, and $1.5 million or 54% of total revenue in the
three months ended September 30, 2000. The increase in services revenues was
primarily due to an increase in professional services fees in connection with
implementations performed for clients going into production during the third
quarter of 2001.

COST OF REVENUES: Cost of revenues were $1.4 million or 38% of revenues for the
three months ended September 30, 2001, and $1.5 million or 54% of revenues for
the three months ended September 30, 2000. The decrease in the cost of revenues
was primarily due to the decrease in the Cost of services costs.

COST OF SOFTWARE LICENSES: Cost of software license revenues were $161,000 or 4%
of total revenues for the three months ended September 30, 2001 and, $135,000 or
5% of revenues for the three months ended September 30, 2000. The increase in
the cost of software licenses is due to increase in royalties paid.

COST OF SERVICES: Cost of services revenues was $1.3 million or 34% of revenues
for the three months ended September 30, 2001, and $1.4 million or 49% of
revenues for the three months ended September 30, 2000. The decrease in the cost
of services on an absolute basis was primarily due to service improvements
reducing implementation time associated with our product.

GROSS PROFIT: Gross profit as a percentage of revenues was 62% for the three
months ended September 30, 2001 as compared to 46% for the three months ended
September 30, 2000. The increase in the gross profit is due to the increase in
license revenues.

OPERATING EXPENSES: Total operating expenses were $5.1 million or 136% of
revenues for the three months ended September 30, 2001, and $5.4 million or 188%
of revenues for the three months ended September 30, 2000. The decrease in
operating expenses was primarily due to cost controls implemented during the
year of 2001, partially offset by the increase in the provision for doubtful
accounts.

RESEARCH AND DEVELOPMENT EXPENSES, NET: Research and development expenses, net
of related grants, were $800,000 or 21% of revenues for the three months ended
September 30, 2001, and $941,000 or 33% of revenues for the three months ended
September 30, 2000. For the third

                                       15
<PAGE>

quarter of 2001 we recognized a research and development grant from Israel's
Chief Scientist in the amount of $300,000 compared to $500,000 recognized for
the three months ended September 30, 2000. The decrease is due to cost controls
implemented during the nine months ended September 30, 2001 and is also due to
the temporary transfer of R&D software engineers to professional services to
support the implementation process with several European customers.

SELLING AND MARKETING EXPENSES: Selling and marketing expenses were $3.0 million
or 79% of revenues for the three months ended September 30, 2001, and $3.3
million or 116% of revenues for the three months ended September 30, 2000. The
absolute decrease in selling and marketing expenses was due to cost controls
implemented during the year of 2001 as well as the decrease in revenues that
reduced related variable expenses.

GENERAL AND ADMINISTRATIVE EXPENSES: General and administrative expenses were
$1.2 million or 33% of revenues for the three months ended September 30, 2001,
and $838,000 or 29% of revenues for the three months ended September 30, 2000.
The absolute increase in general and administrative expenses was due primarily
to increase in the provision for doubtful accounts.

AMORTIZATION OF STOCK-BASED COMPENSATION: Stock-based compensation for the three
months ended September 30, 2001 amounted to $134,000 of previously recorded
deferred compensation. Share based compensation for the three months ended
September 30, 2000 amounted to $277,000. The decrease in stock-based
compensation is due to termination of options associated with the corporate
restructuring during the first quarter on 2001. Additionally, the amortization
of the stock-based compensation progressively decreases over the three-year
amortization period.


RESULTS OF OPERATIONS FOR NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
(As restated and reclassified)

REVENUES: Company revenues increased $3.3 million or 37% to $12.2 million for
the nine months ended September 30, 2001 from $8.9 million for the nine months
ended September 30, 2000. This increase was the result of increased demand to
our software offerings.

SOFTWARE LICENSE: Software license revenues were $7.0 million or 58% of total
revenues for the nine months ended September 30, 2001, and $4.8 million or 54%
of total revenues for the nine months ended September 30, 2000. The increase in
software license revenues was the primarily the result of increase in license
revenues recognized in the nine months ended September 30, 2001.

SERVICES: Services revenues were $5.2 million or 42% of revenues for the nine
months ended September 30, 2001, and $4.1 million or 46% of total revenue for
the nine months ended September 30, 2000. The increase in services revenues was
primarily due to the increased professional services fees in connection with
implementation for new clients going into production during the nine months
ended September 30, 2001.

COST OF REVENUES: Cost of revenues were $5.0 million or 41% of revenues for the
nine months ended September 30, 2001, and $4.4 million or 49% of revenues for
the nine months ended September 30, 2000. The increase in the cost of revenues
on an absolute basis was due to the increase in all cost items due to higher
revenues. .

COST OF SOFTWARE LICENSES: Cost of software license revenues were $585,000 or 5%
of total revenues for the nine months ended September 30, 2001 and, $336,000 or
4% of revenues for the nine months ended September 30, 2000. The increase in the
cost of software licenses is due is primarily due to increase in royalties paid.

COST OF SERVICES: Cost of services revenues was $4.4 million or 36% of revenues
for the nine months ended September 30, 2001, and $4.0 million or 45% of
revenues for the nine months ended September 30, 2000. The increase in cost of
services was primarily due to the increased amount of services performed for a
larger number of clients that went into production during the nine months ended
September 31 of 2001.

GROSS PROFIT: Gross profit as a percentage of revenues was 59% for the nine
months ended September 30, 2001 as compared to 51% for the nine months ended
September 30, 2000. The increase in the gross profit is due to the significant
increase in license revenues.

OPERATING EXPENSES: Total operating expenses were $15.8 million or 129% of
revenues for the nine months ended September 30, 2001, and $16.3 million or 182%
of revenues for the nine months ended September 30, 2000.

RESEARCH AND DEVELOPMENT EXPENSES, NET: Research and development expenses, net
of related grants, were $2.5 million or 20% of revenues for the nine months
ended September 30, 2001, and $3.3 million or 37% of revenues for the nine
months ended September 30, 2000. For the

                                       16
<PAGE>

nine months ended September 30, 2001, we recognized a research and development
grant from Israel's Chief Scientist in the amount of $1.0 million. For the nine
months ended September 30, 2000, we recognized $0.6 million of such grant.
Research and development costs declined as a result of cost controls implemented
during the nine months ended in September 30, 2001.

SELLING AND MARKETING EXPENSES: Selling and marketing expenses were $9.8 million
or 80% of revenues for the nine months ended September 30, 2001, and $9.5
million or 106% of revenues for the nine months ended September 30, 2000. The
absolute increase in selling and marketing expenses was due to increase in
revenues that increased related variable expenses.

GENERAL AND ADMINISTRATIVE EXPENSES: General and administrative expenses were
$3.0 million or 24% of revenues for the nine months ended September 30, 2001,
and $2.5 million or 28% of revenues for the nine months ended September 30,
2000. The absolute increase in general and administrative expenses was primarily
due to the increase in the provision for doubtful accounts.

REORGANIZATION EXPENSES: Reorganization expenses were $0.3 million or 2% of
revenues for the nine months ended September 30, 2001. There were no
reorganization expenses for the nine months ended September 30, 2000.

AMORTIZATION OF STOCK-BASED COMPENSATION: Stock-based compensation for the nine
months ended September 30, 2001 amounted to $300,000 of previously recorded
deferred compensation. Stock-based compensation for the nine months ended
September 30, 2000 amounted to $1.0 million. The decrease in stock-based
compensation is due to termination of options associated with the corporate
restructuring during the first quarter on 2001. Additionally, the amortization
of the stock-based compensation progressively decreases over the three-year
amortization period.

LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 2001 we had cash and cash equivalents of $10.0 million and
short-term investments of $2.1 million for a total of $12.1 million.

From inception through our IPO on September 22, 2000, we financed our operations
primarily through the private placement of equity securities, which through
December 31, 1999 totaled approximately $32.0 million, net of issuance costs.
Our initial public stock offering of ordinary shares realized $28.3 million, net
of underwriter discount and other issuance costs.

Net cash provided (used) in the company's operating activities primarily
consisted of net losses for the period and changes in short term investment
before non-cash expenses primarily consisting of depreciation, deferred
compensation and unrealized gain from investments, in addition to net changes in
trade receivables, prepaid expenses, deferred revenues and changes in accounts
payable. For the nine months ended September 30, 2001, net cash provided by
operations was $6.0 million, comprised of our net loss of $8.0 million, an
increase in trade receivables of $1.0 million, an increase in other receivables
of $225,000, a decrease in accounts payable of $533,000, an increase in deferred
revenue of $100,000, a decrease in short term investments of $14.5 million
partially offset by non-cash charges of $1.2 million. For the nine months ended
September 30, 2000, cash used in operations was $25.5 million, comprised of our
net loss of $11.4 million, a decrease in trade receivables of $1.1 million, an
increase in other receivables of $658,000, a decrease in deferred revenue of
$861,000, an increase in short term investments of $15.1 million partially
offset by non-cash charges of $1.4 million.

Net cash used in investing activities for the nine months ended September 30,
2001 was $0.4 million and was invested primarily in purchases of equipment and
systems, including computer equipment and fixtures and furniture. Net cash used
in investing activities for the nine months ended September 30, 2000 was $2.2
million and was invested primarily in leasehold improvements and purchases of
equipment and systems, including computer equipment and fixtures and furniture.

Net cash provided by financing activities during the nine months ended September
30, 2001 was $24,000 and $29.1 million for the nine months ended September 30,
2000. In June 2000, the Company completed an initial public offering of
4,000,000 ordinary shares at a price of $7.00 per share. In July 2000, the
Underwriters exercised their overallotment option and purchased 600,000
additional ordinary shares at a price of $7.00 per share. The proceeds to the
Company from the offering were approximately $28.3 million (net of underwriters
discount and issuance expenses).

As of September 30, 2001 we had outstanding trade receivables of approximately
$3.1 million. Our trade receivables typically have 30 to 60 day terms, although
we have also negotiated longer payment plans with some of our clients. As of
September 30, 2001 our DSO (Day Sales Outstanding) was 73 days.

                                       17
<PAGE>

Since inception, we have received aggregate payments from the Government of the
State of Israel in the amount of $4.8 million related to research and
development and $707,000 related to marketing activities. As of September 30,
2001, we have paid or accrued royalties related to these funds in the amount of
$1.9 million.

The Company also has an aggregate of $118,000 in term loans relating to
borrowings for working capital. We have a loan in US Dollars bearing an interest
rate of LIBOR plus 1% and a loan in New Israeli Shekels linked to the Israeli
CPI, currently bearing an interest rate of 9.7%. Additional loans are in British
Pounds bearing an average interest rate of 6.25%, and US dollar loan bearing
interest rate of 7.1%.

We have a $1.0 million unsecured line of credit with an Israeli bank. Our bank
in Israel has issued two standby letters of credit on our behalf. One is for
$125,000 for tenant improvements related to our facilities in Israel. The other
is for $695,000 and secures our performance pursuant to projects with the
Government of Israel. Additionally, Silicon Valley Bank has issued a letter of
credit on our behalf in the amount of $205,560 to assure performance under the
terms of our Campbell, CA lease.

Our capital requirements depend on numerous factors, including market acceptance
of our products, the resources we devote to developing, marketing, selling and
supporting our products, the timing and extent of establishing additional
international operations and other factors. We intend to continue investing
significant resources in our sales and marketing and research and development
operations in the future. We believe that our current cash balance will be
sufficient to fund our expenses until we reach profitability.

FACTORS THAT MAY AFFECT FUTURE RESULTS

You should carefully consider the following factors and other information in
this statement before you decide to invest in our ordinary shares. If any of the
negative events referred to below occur, our business, financial condition and
results of operations could suffer. In any such case, the trading price of our
ordinary shares could decline, and you may lose all or part of your investment.

RISKS RELATED TO OUR BUSINESS

THE ECONOMIC OUTLOOK MAY ADVERSELY AFFECT THE DEMAND FOR OUR CURRENT PRODUCTS
AND THE COMPANY'S RESULTS OF OPERATIONS. Current predictions for the general
economy indicate uncertain economic conditions. Weak economic conditions may
cause a reduction in information technology spending generally. Consequently,
there may be an adverse impact on the demand for our products, which would
adversely affect our results of operations. In addition, predictions regarding
economic conditions have a low degree of certainty, and further predicting the
effects of the changing economy is even more difficult. We may not accurately
gauge the effect of the general economy on our business. As a result, we may not
react to such changing conditions in a timely manner that may result in an
adverse impact on our results of operations. Any such adverse impacts to our
results of operations from a changing economy may cause the price of our
ordinary shares to decline.

We have not achieved profitability. We expect to continue to incur significant
sales and marketing and research and development expenses. Some of our expenses,
such as administrative and management payroll and rent and utilities, are fixed
in the short term and cannot be quickly reduced to respond to decreases in
revenues. As a result, we will need to generate significant revenues to achieve
and maintain profitability, which we may not be able to do.

OUR QUARTERLY OPERATING RESULTS ARE SUBJECT TO FLUCTUATIONS AND IF WE FAIL TO
MEET THE EXPECTATIONS OF SECURITIES ANALYSTS OR INVESTORS, OUR SHARE PRICE MAY
DECREASE. Our quarterly operating results are difficult to predict and are not a
good measure for comparison. Our operating history shows that a significant
percentage of our quarterly revenues come from orders placed toward the end of a
quarter. From time to time, we anticipate a sale of significant size to a single
customer. A delay in the completion of any sale past the end of a particular
quarter could negatively impact results for that quarter, and such negative
impact could be significant for the delay of a sale of significant size. Even
without the delay of a significant sale, our future quarterly operating results
may fluctuate significantly and may not meet the expectations of securities
analysts or investors. If this occurs, the price of our ordinary shares may
decrease. The factors that may cause fluctuations in our quarterly operating
results include the following:

     o    the volume and timing of customer orders;
     o    internal budget constraints and approval processes of our current and
          prospective clients;
     o    the length, unpredictability of our sales cycle;

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<PAGE>

     o    the mix of revenue generated by product licenses and professional
          services;
     o    the mix of revenue between domestic and foreign sources;
     o    announcements or introductions of new products or product enhancements
          by us or our competitors;
     o    changes in prices of and the adoption of different pricing strategies
          for our products and those of our competitors;
     o    timing and amount of sales and marketing expenses;
     o    changes in our business and partner relationships;
     o    technical difficulties or "bugs" affecting the operation of our
          software;
     o    foreign currency exchange rate fluctuations; and
     o    general economic conditions.

FAILURE OF THE MARKET TO ACCEPT OUR PRODUCTS WOULD ADVERSLY AFFECT OUR
PROFITABILITY. Historically, all of our operating revenue has come from sales
of, and services related to, our ClickSchedule product and our ClickFix product,
to clients seeking application software that enables efficient provisioning of
services in enterprise environments.

During the year ended December 31, 2000, we introduced three products that,
together with our existing products, constitute a suite of products that offers
a more comprehensive solution to our customers. The growth of our company
depends in part on the development of market acceptance of these products. We
have no guarantee that the sales of these products will develop as quickly as we
anticipate, or at all. Lack of long-term demand for our new products would have
a material adverse effect on our business and operating results.

OUR SALES AND IMPLEMENTATION CYCLES DEPEND ON FACTORS OUTSIDE OUR CONTROL, WHICH
MAY CAUSE QUARTERLY LICENSE AND SERVICE FEES REVENUES TO VARY SIGNIFICANTLY FROM
PERIOD TO PERIOD. To date, our customers have taken typically from three months
to nine months to evaluate our offering before making their purchase decisions.
In addition, depending on the nature and specific needs of a client, the
implementation of our products typically takes two to six months. Sales of
licenses and implementation schedules are subject to a number of risks over
which we have little or no control, including clients' budgetary constraints,
clients' internal acceptance reviews, the success and continued internal support
of clients' own development efforts, the efforts of businesses with which we
have relationships, the nature, size and specific needs of a client and the
possibility of cancellation of projects by clients. The uncertain outcome of our
sales efforts and the length of our sales cycles could result in substantial
fluctuations in license revenues. Historically, a significant part of our sales
in any given quarter occur in the last two weeks of the quarter; if sales
forecasted from a specific client for a particular quarter are not realized in
that quarter, we are unlikely to be able to generate revenues from alternate
sources in time to compensate for the shortfall. As a result, and due to the
relatively large size of some orders, a lost or delayed sale could have a
material adverse effect on our quarterly revenue and operating results.
Moreover, to the extent that significant sales occur earlier than expected,
revenue and operating results for subsequent quarters could be adversely
affected.

FAILURE TO EXPAND OUR SALES AND MARKETING ORGANIZATIONS COULD LIMIT OUR ABILITY
TO SELL ADDITIONAL PRODUCTS AND SERVICES, WHICH WOULD IMPAIR OUR ABILITY TO GROW
OUR BUSINESS AND INCREASE REVENUES. We are expanding our direct and indirect
sales operations to increase market awareness of our products and generate
increased revenues. We cannot be certain that we will be successful in these
efforts. In addition to normal turnover of personnel, we are attempting to
expand our direct sales force in North America. As of September 30, 2001, we
employed 51 individuals in our sales and marketing organizations. Because 17 of
these sales and marketing personnel joined us within the last twelve months, we
will be required to devote significant resources to the training of these new
sales personnel. In addition, we might not be able to hire or retain the kind
and number of sales and marketing personnel we are targeting because competition
for qualified sales and marketing personnel in our market is intense.

WE DEPEND ON KEY PERSONNEL, AND THE LOSS OF ANY KEY PERSONNEL COULD AFFECT OUR
ABILITY TO COMPETE AND OUR ABILITY TO ATTRACT ADDITIONAL KEY PERSONNEL MAY BE
IMPAIRED. We believe our future success will depend on the continued service of
our executive officers and other key sales and marketing, product development
and professional services personnel. Dr. Moshe BenBassat, our Chief Executive
Officer, has individually participated in and has been responsible for
overseeing much of the research and development of our core technologies. At the
beginning of 2001, Mr. Shimon Rojany, our CFO, announced his plan to retire, but
has recently decided to indefinitely withdraw his retirement plans. Mr. Rojany
is committed to continue his employment with the Company. The services of Dr.
BenBassat and other members of our senior management team and key personnel
would be very difficult to replace and the loss

                                       19
<PAGE>

of any of these employees could harm our business significantly. We have
employment agreements with, among others, Dr. BenBassat, Mr. Rojany, and Mr.
Corey Leibow, our Chief Operating Officer. Although these agreements request
sixty days notification prior to departure, relationships with these officers
and key employees are at will. The loss of any of our key personnel could harm
our ability to execute our business strategy and compete.

IF WE FAIL TO EXPAND OUR PROFESSIONAL SERVICES ORGANIZATION, WE MAY NOT BE ABLE
TO SERVICE ADDITIONAL CLIENTS AND INSTALL ADDITIONAL LICENSES. We cannot be
certain that we can attract or retain a sufficient number of highly qualified
professional services personnel to meet our business needs. Clients that license
our software typically engage our professional services organization to assist
with the installation and operation of our software applications. Our
professional services organization also provides assistance to our clients
related to the maintenance, management and expansion of their software systems.
Growth in licenses of our software will depend in part on our ability to provide
our clients with these services. In addition, we will be required to expand our
professional services organization to enable us to continue to support our
existing installed base of customers. As a result, we plan to increase the
number of our service personnel in order to meet these needs. Competition for
qualified services personnel with the relevant knowledge and experience is
intense, and we may not be able to attract and retain necessary personnel. If we
were not able to grow our professional services organization, our ability to
expand our service business would be limited. In addition, we could experience
delays in recognizing revenue if our professional services group fails to
complete implementations in a timely manner.

IF WE FAIL TO EXPAND OUR RELATIONSHIPS WITH THIRD PARTIES THAT CAN PROVIDE
IMPLEMENTATION AND PROFESSIONAL SERVICES TO OUR CLIENTS, WE MAY BE UNABLE TO
INCREASE OUR REVENUES AND OUR BUSINESS COULD BE HARMED. In order for us to focus
more effectively on our core business of developing and licensing software
solutions, we need to continue to establish relationships with third parties
that can provide implementation and professional services to our clients.
Third-party implementation and consulting firms can also be influential in the
choice of resource optimization applications by new clients. If we are unable to
establish and maintain effective, long-term relationships with implementation
and professional services providers, or if these providers do not meet the needs
or expectations of our clients, we may be unable to grow our revenues and our
business could suffer. As a result of the limited resources and capacities of
many third-party implementation providers, we may be unable to attain sufficient
focus and resources from the third-party providers to meet all of our clients'
needs, even if we establish relationships with these third parties. If
sufficient resources are unavailable, we will be required to provide these
services internally, which could limit our ability to meet other demands. Even
if we are successful in developing relationships with third-party implementation
and professional services providers, we will be subject to significant risk, as
we cannot control the level and quality of service provided by third-party
implementation and professional services partners.

OUR MARKET IS HIGHLY COMPETITIVE AND ANY REDUCTION IN DEMAND FOR, OR PRICES OF,
OUR PRODUCTS COULD NEGATIVELY IMPACT OUR REVENUES, REDUCE OUR GROSS MARGINS AND
CAUSE OUR SHARE PRICE TO DECLINE. The market for our products is competitive and
rapidly changing. We expect competition to increase in the future as current
competitors expand their product offerings and new companies enter the market.

Because the market for service and delivery optimization software is evolving,
it is difficult to determine what portion of the market each competitor
currently controls. However, competition could result in price reductions, fewer
customer orders, reduced gross margin and loss of market share, any of which
could cause our business to suffer. We may not be able to compete successfully,
and competitive pressures may harm our business.

Some of our current and potential competitors have greater name recognition,
longer operating histories, larger customer bases and significantly greater
financial, technical, marketing, public relations, sales, distribution and other
resources than us. In addition, some of our potential competitors are among the
largest and most well capitalized software companies in the world.

FAILURE TO FULLY DEVELOP OR MAINTAIN KEY BUSINESS RELATIONSHIPS COULD LIMIT OUR
ABILITY TO SELL ADDITIONAL LICENSES THAT COULD DECREASE OUR REVENUES AND
INCREASE OUR SALES AND MARKETING COSTS. We believe that our success in
penetrating our target markets depends in part on our ability to develop and
maintain business relationships with software vendors, resellers, systems
integrators, distribution partners and customers. If we fail to continue
developing these relationships, our growth could be limited. We have entered
into agreements with third parties relating to the integration of our products
with their product offerings, distribution, reselling and consulting. We are
currently deriving revenues from these agreements but we may not be able to
derive significant revenues in the future from these agreements. In addition,
our growth may be limited if prospective clients do not accept the solutions
offered by our strategic partners.

                                       20
<PAGE>

OUR MARKET MAY EXPERIENCE RAPID TECHNOLOGICAL CHANGES THAT COULD CAUSE OUR
PRODUCTS TO FAIL OR REQUIRE US TO REDESIGN OUR PRODUCTS, WHICH WOULD RESULT IN
INCREASED RESEARCH AND DEVELOPMENT EXPENSES. Our market is characterized by
rapid technological change; dynamic client needs and frequent introductions of
new products and product enhancements. If we fail to anticipate or respond
adequately to technology developments and client requirements, or if our product
development or introduction is delayed, we may have lower revenues. Client
product requirements can change rapidly as a result of computer hardware and
software innovations or changes in and the emergence, evolution and adoption of
new industry standards. For example, we offer Windows NT versions of our
products due to the market acceptance of Windows NT over the last several years.
While we interface smoothly with UNIX systems, we currently do not provide UNIX
versions of our software. The actual or anticipated introduction of new products
has resulted and will continue to result in some reformulation of our product
offerings. Technology and industry standards can make existing products obsolete
or unmarketable or result in delays in the purchase of such products. As a
result, the life cycles of our products are difficult to estimate. We must
respond to developments rapidly and continue to make substantial product
development investments. As is customary in the software industry, we have
previously experienced delays in introducing new products and features, and we
may experience such delays in the future that could impair our revenue and
operating results.

OUR PRODUCTS COULD BE SUSCEPTIBLE TO ERRORS OR DEFECTS THAT COULD RESULT IN LOST
REVENUES, LIABILITY OR DELAYED OR LIMITED MARKET ACCEPTANCE. Complex software
products such as ours often contain errors or defects, particularly when first
introduced or when new versions or enhancements are released. In the past, some
of our products have contained errors and defects that have delayed
implementation or required us to expend additional resources to correct the
problems. Despite internal testing and testing by current and potential clients,
and despite the history of use by our installed base of customers, our current
and future products may contain as yet undetected serious defects or errors. Any
such defects or errors could result in lost revenues, liability or a delay in
market acceptance of these products, any of which would have a material adverse
effect on our business, operating results and financial condition.

The performance of our products also depends in part upon the accuracy and
continued availability of third-party data. We rely on third parties that
provide information such as street and address locations and mapping functions
that we incorporate into our products. If these parties do not provide accurate
information, or if we are unable to maintain our relationships with them, our
reputation and competitive position in our industry could suffer and we could be
unable to develop or enhance our products as required.

OUR INTELLECTUAL PROPERTY COULD BE USED BY THIRD PARTIES WITHOUT OUR CONSENT
BECAUSE PROTECTION OF OUR INTELLECTUAL PROPERTY IS LIMITED. Our success and
ability to compete are substantially dependent upon our internally developed
technology, which we protect through a combination of copyright, trade secret
and trademark law. However, we may not be able to adequately protect our
intellectual property rights, which may significantly harm our business.
Specifically, we may not be able to protect our trademarks for our company name
and our product names, and unauthorized parties may attempt to copy or otherwise
obtain and use our products or technology. Policing unauthorized use of our
products and technology is difficult, particularly in countries outside the
U.S., and we cannot be certain that the steps we have taken will prevent
infringement or misappropriation of our intellectual property rights.

Our end-user licenses are designed to prohibit unauthorized use, copying or
disclosure of our software and technology in the United States, Israel and other
foreign countries. However, these provisions may be unenforceable under the laws
of some jurisdictions and foreign countries. Unauthorized third parties may be
able to copy some portions of our products or reverse engineer or obtain and use
information and technology that we regard as proprietary. Third parties could
also independently develop competing technology or design around our technology.
If we are unable to successfully detect infringement and/or to enforce our
rights to our technology, we may lose competitive position in the market. We
cannot assure you that our means of protecting our intellectual property rights
in the United States, Israel or elsewhere will be adequate or that competing
companies will not independently develop similar technology. In addition, some
of our licensed users may allow additional unauthorized users to use our
software, and if we do not detect such use, we could lose potential license
fees.

OUR TECHNOLOGY AND OTHER INTELLECTUAL PROPERTY MAY BE SUBJECT TO INFRINGEMENT
CLAIMS. Substantial litigation regarding technology rights and other
intellectual property rights exists in the software industry both in terms of
infringement and ownership issues. A successful claim of patent, copyright or
trademark infringement or conflicting ownership rights against us could cause us
to make changes in our business or significantly harm our business. We believe
that our products do not infringe the intellectual property rights of

                                       21
<PAGE>

third parties. However, we cannot assure you that we will prevail in all future
intellectual property disputes.

We expect that software products may be increasingly subject to third-party
infringement or ownership claims as the number of competitors in our industry
segment grows and the functionality of products in different industry segments
overlaps. Third parties may make a claim of infringement or conflicting
ownership rights against us with respect to our products and technology. Any
claims, with or without merit, could:

     o    be time-consuming to defend;
     o    result in costly litigation;
     o    divert management's attention and resources; or
     o    cause product shipment delays.

Further, if an infringement or ownership claim is successfully brought against
us, we may have to pay damages or royalties, enter into a licensing agreement,
and/or stop selling the product or using the technology at issue. Any such
royalty or licensing agreements may not be available on commercially reasonable
terms, if at all.

From time to time, we may encounter disputes over rights and obligations
concerning intellectual property. We also indemnify some of our customers
against claims that our products infringe the intellectual property rights of
others. We have only conducted a partial search for existing patents and other
intellectual property registrations, and we cannot assure you that our products
do not infringe any issued patents. In addition, because patent applications in
the United States and Israel are not publicly disclosed until the patent is
issued, applications may have been filed which would relate to our products.

ANY FUTURE ACQUISITIONS OF COMPANIES OR TECHNOLOGIES MAY RESULT IN DISTRACTION
OF OUR MANAGEMENT AND DISRUPTIONS TO OUR BUSINESS. Although not currently under
consideration, we may acquire or make investments in complementary businesses,
technologies, services or products if appropriate opportunities arise. From time
to time we may engage in discussions and negotiations with companies regarding
our acquiring or investing in such companies' businesses, products, services or
technologies. We cannot make assurances that we will be able to identify future
suitable acquisition or investment candidates, or if we do identify suitable
candidates, that we will be able to make such acquisitions or investments on
commercially acceptable terms or at all. Our management has limited experience
in acquiring companies or technologies. If we acquire or invest in another
company, we could have difficulty assimilating that company's personnel,
operations, technology or products and service offerings. In addition, the key
personnel of the acquired company may decide not to work for us. These
difficulties could disrupt our ongoing business, distract our management and
employees, increase our expenses and adversely affect our results of operations.
Furthermore, we may incur indebtedness to pay for any future acquisitions. As of
the date of this statement, we have neither begun discussions nor entered an
agreement to make any such material investment or acquisition transaction.

FUTURE ACQUISITIONS MAY RESULT IN DILUTION TO OUR CURRENT SHAREHOLDERS. In the
future we may acquire complementary business through the issuance of additional
ordinary shares. Additional issuances of ordinary shares could decrease the
value of our ordinary shares and reduce the net tangible book value per share.
Consequently, an acquisition in which we issue additional shares could actually
decrease the value of your investment in ClickSoftware. As of the date of this
statement, we have neither begun discussions nor entered an agreement to make
any material acquisition that would result in the issuance of additional shares.

OUR BUSINESS MAY BECOME INCREASINGLY SUSCEPTIBLE TO NUMEROUS RISKS ASSOCIATED
WITH INTERNATIONAL OPERATIONS. Significant portions of our operations occur
outside the United States. Our facilities are located in North America, Israel,
the European continent, and the United Kingdom, and our executive officers and
other key employees are dispersed throughout the world. This geographic
dispersion requires significant management resources that may place us at a
disadvantage compared to our locally based competitors. In addition, our
international operations are generally subject to a number of risks, including:

     o    foreign currency exchange rate fluctuations;
     o    longer sales cycles;
     o    multiple, conflicting and changing governmental laws and regulations;
     o    expenses associated with customizing products for foreign countries;
     o    protectionist laws and business practices that favor local
          competition;
     o    difficulties in collecting accounts receivable; and
     o    political and economic instability.

We expect international revenues to continue to account for a significant
percentage of total revenues and we believe that we must continue to expand our
international sales and

                                       22
<PAGE>

professional services activities in order to be successful. Our international
sales growth will be limited if we are unable to expand our international sales
management and professional services organizations, hire additional personnel,
customize our products for local markets and establish relationships with
additional international distributors, consultants and other third parties. If
we fail to manage our geographically dispersed organization, we may fail to meet
or exceed our business plan and our revenues may decline.

WE ARE INCORPORATED IN ISRAEL AND HAVE IMPORTANT FACILITIES AND RESOURCES
LOCATED IN ISRAEL, WHICH COULD BE NEGATIVELY AFFECTED DUE TO MILITARY OR
POLITICAL TENSIONS. We are incorporated under the laws of the State of Israel
and our research and development facilities as well as significant executive
offices are located in Israel. Although substantial portions of our sales
currently are to customers outside of Israel, political, economic and military
conditions in Israel could nevertheless directly affect our operations. Since
the establishment of the State of Israel in 1948, a number of armed conflicts
have taken place between Israel and its Arab neighbors and a state of hostility,
varying in degree and intensity, has led to security and economic problems for
Israel. Since September 2000, a continuous armed conflict with the Palestinian
authority has been taking place.

Despite our history of avoiding adverse effects, in the future we could be
adversely affected by any major hostilities involving Israel, the interruption
or curtailment of trade between Israel and its trading partners, a significant
increase in inflation, or a significant downturn in the economic or financial
condition of Israel. Despite the progress towards peace between Israel and its
Arab neighbors, the future of these peace efforts is uncertain. Several Arab
countries still restrict business with Israeli companies, which may limit our
ability to make sales in those countries. We could be adversely affected by
restrictive laws or policies directed towards Israel or Israeli businesses.

CERTAIN OF OUR OFFICERS AND EMPLOYEES ARE REQUIRED TO SERVE IN THE ISRAEL
DEFENSE FORCES AND THIS COULD FORCE THEM TO BE ABSENT FROM OUR BUSINESS FOR
EXTENDED PERIODS. David Schapiro, our Executive Vice President of Worldwide
Markets and Product Group, and Hannan Carmeli, our Senior Vice President of
Worldwide Professional Services and Operations, as well as other male employees
located in Israel are currently obligated to perform up to 39 days of annual
reserve duty in the Israel Defense Forces and are subject to being called for
active military duty at any time. The loss or extended absence of any of our
officers and key personnel due to these requirements could harm our business.

WE ARE SUBJECT TO A RECENTLY ADOPTED NEW COMPANIES LAW, WHICH HAS NOT YET BEEN
INTERPRETED. Because we are incorporated under the laws of the State of Israel,
the Companies Law of Israel, which became effective on February 1, 2000, will
govern your rights as a shareholder. Certain obligations and fiduciary duties of
directors, officers and shareholders under the new Companies Law are new and
have not been interpreted or reviewed by the Israeli courts. In addition, not
all of the regulations have been promulgated to date. As a result, our
shareholders may have more difficulty and uncertainty in protecting their
interests in the case of actions by our directors, officers or controlling
shareholders or third parties than would shareholders of a corporation
incorporated in a state or other jurisdiction in the United States.

WE ARE AN INTERNATIONAL COMPANY AND OUR INTERNATIONAL OPERATIONS ARE EXPANDING.
OUR RISK EXPOSURE TO FOREIGN CURRENCY FLUCTUATIONS IS INCREASING, AND WE MAY NOT
BE ABLE TO FULLY MITIGATE THE RISK. Our revenue from the UK has grown both in
absolute dollar basis as well as a percentage of total revenues. We are
expanding operations in other areas of Europe, and income and expenses
recognized in the European Community Euro will increase. We incur a portion of
our expenses, principally salaries and related personnel expenses in Israel, in
NIS. In 2000, 27% of our costs were incurred in NIS. We are also experiencing a
growth in revenue and expenses in Israel, and we anticipate recognizing revenue
from other international sources. Presently our risk to foreign currency
fluctuations is minimal, but if our foreign accounts receivable balances
increase, the risk will increase. We cannot assure that we will be able to
adequately protect ourselves against such risk.

THE GOVERNMENT PROGRAMS IN WHICH WE CURRENTLY PARTICIPATE AND TAX BENEFITS WHICH
WE CURRENTLY RECEIVE REQUIRE US TO SATISFY PRESCRIBED CONDITIONS AND MAY BE
DELAYED, TERMINATED OR REDUCED IN THE FUTURE. THIS WOULD INCREASE OUR COSTS AND
TAXES. We receive grants from the Government of the State of Israel through the
Office of the Chief Scientist of the Ministry of Industry and Trade, or the
Chief Scientist, for the financing of a significant portion of our research and
development expenditures in Israel, and we may apply for additional grants in
the future. We cannot assure that we will continue to receive grants at the same
rate or at all. The Chief Scientist budget has been subject to reductions that
may affect the availability of funds for Chief Scientist grants in the future.
The percentage of our research and development expenditures financed using
grants from the Chief Scientist may decline in the future, and the terms of such
grants may become less favorable. In connection with research and development
grants received from the Chief Scientist, we must make royalty

                                       23
<PAGE>

payments to the Chief Scientist on the revenues derived from the sale of
products, technologies and services developed with the grants from the Chief
Scientist. From time to time, the Government of Israel changes the rate of
royalties we must pay, which does not allow us to accurately predict what this
rate will be. In addition, our ability to manufacture products or transfer
technology outside Israel without the approval of the Chief Scientist is
restricted under law. Any manufacture of products or transfer of technology
outside Israel will also require the company to pay increased royalties to the
Chief Scientist up to 300%. We currently conduct all of our manufacturing
activities in Israel and intend to continue doing so in the foreseeable future
and therefore do not believe there will be any increase in the amount of
royalties we pay to the Chief Scientist. Currently the office of the Chief
Scientist does not consider the licensing of our software in the ordinary course
of business a transfer of technology and we do not intend to transfer any
technology outside of Israel. Consequently, we do not anticipate having to pay
increased royalties to the Chief Scientist for the foreseeable future. In
connection with our grant applications, we have made representations and
covenants to the Chief Scientist regarding our research and development
activities in Israel. The funding from the Chief Scientist is subject to the
accuracy of these representations and covenants. If we fail to comply with any
of these conditions, we could be required to refund payments previously received
together with interest and penalties and would likely be denied receipt of these
grants thereafter.

WE ANTICIPATE RECEIVING TAX BENEFITS FROM THE GOVERNMENT OF THE STATE OF ISRAEL,
HOWEVER THESE BENEFITS MAY BE DELAYED, REDUCED OR TERMINATED IN THE FUTURE.
Pursuant to the Law for the Encouragement of Capital Investments, the Government
of the State of Israel through the Investment Center has granted "Approved
Enterprise" status to three of our existing capital investment programs.
Consequently, we are eligible for certain tax benefits for the first several
years in which we generate taxable income. We have not, however, begun to
generate taxable income for purposes of this law and we do not expect to utilize
these tax benefits for the near future. Once we begin to generate taxable
income, our financial condition could suffer if our tax benefits were
significantly reduced. The benefits available to an approved enterprise are
dependent upon the fulfillment of certain conditions and criteria. If we fail to
comply with these conditions and criteria, the tax benefits that we receive
could be partially or fully canceled and we could be forced to refund the amount
of the benefits we received, adjusted for inflation and interest. From time to
time, the Government of Israel has discussed reducing or limiting the benefits.
We cannot assess whether these benefits will be continued in the future at their
current levels or at all.

IT MAY BE DIFFICULT TO ENFORCE A U.S. JUDGMENT AGAINST US, OUR OFFICERS AND
DIRECTORS AND THE ISRAELI ACCOUNTANTS NAMED AS EXPERTS IN THIS STATEMENT OR TO
ASSERT U.S. SECURITIES LAWS CLAIMS IN ISRAEL OR SERVE PROCESS ON SUBSTANTIALLY
ALL OF OUR OFFICERS AND DIRECTORS AND THESE ACCOUNTANTS. We are incorporated in
Israel and maintain significant operations in Israel. Some of our executive
officers and directors and the Israeli accountants named as experts in this
statement reside outside of the United States and a significant portion of our
assets and the assets of these persons are located outside the United States.
Therefore, it may be difficult for an investor, or any other person or entity,
to enforce a U.S. court judgment against us or any of those persons or to effect
service of process upon these persons in the United States, based upon the civil
liability provisions of the U.S. federal securities laws in an Israeli court.
Additionally, it may be difficult for an investor, or any other person or
entity, to enforce civil liabilities under U.S. federal securities laws in
original actions instituted in Israel. We have appointed ClickSoftware Inc., our
U.S. subsidiary, as our agent to receive service of process in any action
against us arising out of our original June 22, 2000 initial public offering. We
have not given our consent for our agent to accept service of process in
connection with any other claim. Furthermore, if a foreign judgment is enforced
by an Israeli court, it will be payable in NIS.

OUR OFFICERS, DIRECTORS AND AFFILIATED ENTITIES OWN A LARGE PERCENTAGE OF OUR
COMPANY AND COULD SIGNIFICANTLY INFLUENCE THE OUTCOME OF ACTIONS. As of
September 30, 2001, our executive officers, directors and entities affiliated
with them beneficially owned approximately 33.8% of our outstanding ordinary
shares. These shareholders, if acting together, would be able to significantly
influence all matters requiring approval by our shareholders, including the
election of directors. This concentration of ownership may also have the effect
of delaying or preventing a change of control of our company, which could have a
material adverse effect on our stock price. These actions may be taken even if
our other investors oppose them.

WE ARE SUBJECT TO ANTI-TAKEOVER PROVISIONS THAT COULD DELAY OR PREVENT AN
ACQUISITION OF US, EVEN IF AN ACQUISITION WOULD BE BENEFICIAL TO OUR
SHAREHOLDERS. Provisions of Israeli corporate and tax law and of our articles of
association may have the effect of delaying, preventing or making more difficult
merger or other acquisition of us, even if doing so would be beneficial to our
shareholders. In addition, any merger or acquisition of us will require the
prior consent of the Chief Scientist.

                                       24
<PAGE>

Israeli law regulates mergers, votes required to approve a merger, acquisition
of shares through tender offers and transactions involving significant
shareholders. In addition, our articles of association provide for a staggered
board of directors and for restrictions on business combinations with interested
shareholders. Any of these provisions may make it more difficult to acquire our
company. Accordingly, an acquisition of us could be delayed or prevented even if
it would be beneficial to our shareholders.

OTHER ORDINARY SHARES MAY BE SOLD IN THE FUTURE. THIS COULD DEPRESS THE MARKET
PRICE FOR OUR ORDINARY SHARES. As of September 30, 2001, we had 26,180,191 (net
of 22,000 shares held in treasury), ordinary shares outstanding, including
shares held by a trustee for issuance under outstanding options. In addition, as
of September 30, 2001, we had 2,862,248 ordinary shares issuable upon exercise
of outstanding options, and 2,321,274 additional ordinary shares reserved for
issuance pursuant to our stock option plans and employee share purchase plan. If
our existing shareholders or we sell a large number of our ordinary shares, the
price of our ordinary shares could fall dramatically. Restrictions under the
securities laws limit the number of ordinary shares available for sale by our
shareholders in the public market. We have filed a Registration Statement on
Form S-8 to register for resale the ordinary shares reserved for issuance under
our stock option plans.

OUR NEED FOR ADDITIONAL FINANCING IS UNCERTAIN, AS IS OUR ABILITY TO RAISE
FURTHER FINANCING IF REQUIRED. We believe that our current cash balances will be
sufficient to fund our expenses until we reach profitability. However, we cannot
assure you that we will attain sufficient revenues to achieve or maintain
profitability, particularly given current economic conditions and potential
reductions in information technology spending by our current and prospective
customers. We may need to raise additional capital to finance our operations or
for strategic purposes, and we may do so by selling additional equity or debt
securities or by increasing the size of our credit facility. If additional funds
are raised through the issuance of equity or debt securities, these securities
could have rights; preferences and privileges senior to those of holders of
ordinary shares, and the terms of these securities could impose restrictions on
our operations. The sale of additional equity or convertible debt securities
could result in additional dilution to our shareholders. In addition, we cannot
be certain that additional financing will be available in amounts or on terms
acceptable to us, if at all. If we are unable to obtain this additional
financing, we may be required to reduce the scope of our planned product
development and marketing efforts, which could harm our business, financial
condition or operating results. If the economy continues to weaken or, for any
other reason, we are unable to meet our business goals, we may have to raise
additional funds to respond to business contingencies and may include the need
to:

     o    fund additional marketing expenditures;
     o    develop new or enhance existing products and services;
     o    enhance our operating infrastructure;
     o    hire additional personnel;
     o    respond to competitive pressures;
     o    acquire complementary businesses or necessary technologies; or
     o    fund more rapid expansion.

We cannot assure you that additional financing will be available on terms
favorable to us, or at all. If adequate funds are not available or are not
available on acceptable terms, our ability to fund our operations, take
advantage of unanticipated opportunities, develop or enhance our products and
services or otherwise respond to competitive pressures would be significantly
limited. Additionally, prior to the issuance of additional equity or convertible
debt securities to entities outside of Israel, we will need to obtain approval
from the Chief Scientist of the State of Israel and there can be no assurance
that we will be able to obtain this consent in the future.

IF WE ARE CHARACTERIZED AS A PASSIVE FOREIGN INVESTMENT COMPANY, OUR UNITED
STATES SHAREHOLDERS WILL BE SUBJECT TO ADVERSE TAX CONSEQUENCES. If, for any
taxable year, our passive income, or our assets that produce passive income,
exceeds specified levels, we may be characterized as a passive foreign
investment company for United States federal income tax purposes. We do not
currently anticipate that this will happen, but, if it does, our shareholders
will be subject to adverse United States tax consequences. Prospective investors
should consult with their own tax advisors with respect to the tax consequences
applicable to them of investing in our ordinary shares.

BUSINESS INTERRUPTIONS COULD ADVERSELY AFFECT OUR BUSINESS. Our operations are
vulnerable to interruption by fire, earthquake, power loss, telecommunications
failure and other events beyond our control. In particular, we have operations
in the San Francisco Bay Area, an area that is known to be susceptible to the
risk of earthquakes. We do not have a detailed disaster recovery plan. Our
facilities in the State of California have been subject to electrical blackouts
as a consequence of recent shortages of available electrical power. In

                                       25
<PAGE>

the event these blackouts resume or increase in severity, they could disrupt the
operations of our affected facilities. In addition, we do not carry sufficient
business interruption insurance to compensate us for losses that may occur and
any losses or damages incurred by us could have a material adverse effect on our
business.

OUR STOCK PRICE COULD BE VOLATILE AND COULD DECLINE SUBSTANTIALLY. The stock
market has experienced significant price and volume fluctuations, and the market
prices of technology companies have been highly volatile. The price at which our
ordinary shares trades is likely to be volatile and may fluctuate substantially
due to factors such as:

     o    announcements of technological innovations;
     o    announcements relating to strategic relationships;
     o    conditions affecting the software and Internet industries;
     o    trends related to the fluctuations of stock prices of companies such
          as ours;
     o    our historical and anticipated quarterly and annual operating results;
     o    variations between our actual results and the expectations of
          investors or published reports or analyses of ClickSoftware;
     o    announcements by us or others affecting our business, systems or
          expansion plans; and
     o    general conditions and trends in technology industries.

In the past, securities class action litigation has often been instituted
against companies following periods of volatility in the market price of their
securities. This type of litigation could result in substantial costs and a
diversion of management's attention and resources.


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

FOREIGN CURRENCY EXCHANGE RATE RISK. We develop products in Israel and sell them
primarily in North America and Europe. As a result, our financial results could
be affected by factors such as changes in foreign currency exchange rates or
weak economic conditions in foreign markets. As most of our sales are currently
made in U.S. dollars, a strengthening of the dollar could make our products less
competitive in foreign markets. Our interest income is sensitive to changes in
the general level of U.S. interest rates, particularly since the majority of our
investments are in short-term instruments. We regularly assess these risks and
have established policies and business practices to protect against the adverse
effects of these and other potential exposures. As a result, we do not
anticipate material losses as a result of foreign exchange rate fluctuations.
Due to the short-term nature of our term investments, we have concluded that
there is no material market risk exposure. Therefore, no quantitative tabular
disclosures are required. Additionally, although we do not presently participate
in hedging contracts related to foreign currency exchange rates, we may do so in
the future to protect against rate fluctuations affecting our foreign currency
accounts receivable balances. We do not participate in any speculative
investments.

INTEREST RATE RISK. As of September 30, 2001, we had cash and cash equivalents
of $12.1 million that consist of cash and highly liquid short-term investments.
Our investments will decline in value by an immaterial amount if market interest
rates increase, and, therefore, our exposure to interest rate changes has been
immaterial. Declines of interest rates over time will, however, reduce our
interest income from our short-term investments.

As of September 30, 2001, we had total short-term debt of $61,000 and long-term
debt net of current maturities of $57,000 that bear interest at rates that are
linked to LIBOR or the Israeli consumer price index or GBP. We also have a
revolving, accounts receivable-based, secured credit facility of up to $2.5
million for working capital purposes. Amounts outstanding bear interest at the
U.S. prime rate plus 1%. As of September 30, 2001, there were no amounts
outstanding under this facility.

ClickSoftware maintains a short-term investment portfolio primarily consisting
of corporate debt securities with maturities of twelve months or less. These
securities are subject to interest rate risk and will rise and fall in value if
market interest rates change. The extent of this risk is not quantifiable or
predictable due to the variability of future interest rates. ClickSoftware does
not expect any material loss with respect to its investment portfolio.

                                       26
<PAGE>

The following table provides information about ClickSoftware's investment
portfolio, cash, and long-term debts as of September 30, 2001 and presents
principal cash flows and related weighted averages interest rates by expected
maturity dates.

<TABLE>
<CAPTION>
                                       YEAR OF MATURITY
                                     2001   2002     2003    AFTER 2003    TOTAL CARRYING VALUE
                                    (Dollars in thousands)

            A) CASH AND CASH EQUIVALENTS AND INVESTMENT PORTFOLIO:
<S>                                <C>    <C>     <C>     <C>                <C>
Cash and equivalents                7,873      -       -         -               7,873
  Average interest rate              3.0%      -       -         -                3.0%
Commercial Papers                     998      -       -         -                 998
  Average interest rate              3.1%      -       -         -                3.1%
Euro Dollar Bonds                   1,116      -       -         -               1,116
  Average interest rate              4.0%      -       -         -                4.0%
Taxable Auction Securities          1,600      -       -         -               1,600
  Average interest rate              3.7%      -       -         -                3.7%
Asset backed Securities                -     506       -         -                 506
  Average interest rate                -    3.7%       -         -                3.7%
            A) LONG-TERM DEBTS:
Bank Loan                              15     30       -         -                  45
  Average interest rate              L+1%   L+1%       -         -                L+1%
N.I.S indexed loans                     2      5       2         -                   9
  Average interest rate              9.7%   9.7%    9.7%         -                9.7%
Leases US$                              3      7       8         -                  18
  Average interest rate              7.1%   7.1%    7.1%         -                7.1%
Leases GBP                              4     18      17         7                  46
  Average interest rate              6.3%   6.3%    6.3%      6.3%                6.3%
</TABLE>

                                       27
<PAGE>

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     None

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

     None

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
     On September 6, 2001, the Annual Meeting of Shareholders of the Company
     was held at 4:00 pm, local time, at the Company's offices at 655 Campbell
     Technology Parkway, Suite 250, Campbell, California. An election of an
     external director was held with the following individual being elected to
     the Board of Directors of the Company:

                               Votes For           Votes Against or Withheld
     Janet Schinderman         23,586,660                   59,255

     Continuing Class II directors are Roni Einav and Nathan Gantcher.
     Continuing Class III directors are Dr. Moshe BenBassat, Eddy Shalev and
     James W. Thanos. Dr. Israel Borovich is a continuing external director.

     Other matters voted upon at the meeting and the number of affirmative and
     negative votes cast with respect to each such matter were as follows:

     1.   To ratify the appointment of Arthur Andersen LLP as independent
          accountants of the Company for the 2001 fiscal year. The number of
          affirmative votes for this proposal was 23,590,830, the number of
          negative votes was 52,050 and the number of abstained votes was 3,035.

     2.   To approve an amendment to the Company's 2000 Share Option Plan in
          order to provide initial grants of 30,000 shares to new, non-employee
          directors, other than those directors classified as external
          directors, and annual grants of 7,500 shares to all non-employee
          directors. The number of affirmative votes for this proposal was
          23,545,906, the number of negative votes was 93,374 and the number of
          abstained votes was 6,635.

     3.   To ratify and approve the grant of options, as described in the August
          6, 2001 Proxy Statement, to each of Israel Borovich, Roni Einav,
          Nathan Gantcher, James Thanos and Janet Schinderman. Grants of options
          to purchase 30,000 shares at an exercise price of $1.69 per share to
          each of Dr. Borovich and Messrs. Einav, Gantcher and Thanos were
          approved, and a grant to Ms. Schinderman that resulted in an option to
          purchase 24,036 shares at an exercise price of $1.26 per share was
          also approved. The number of affirmative votes for this proposal was
          23,534,440, the number of negative votes was 103,453 and the number of
          abstained votes was 8,022.

     4.   To ratify and approve the grant of a loan from the Company to Dr.
          BenBassat, as described in the August 6, 2001 Proxy Statement. The
          number of affirmative votes for this proposal was 21,688,605, the
          number of negative votes was 1,952,882 and the number of abstained
          votes was 4,428.

     5.   To approve of the receipt and consideration by the annual meeting of
          the directors' report and the Audited Consolidated Financial
          Statements for the Company. The number of affirmative votes for this
          proposal was 23,570,830, the number of negative votes was 71,750 and
          the number of abstained votes was 3,335.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits:

     Exhibit Number           Description

     99.1     Certification of the Chief Executive Officer pursuant to 18 U.S.C.
              Section 1350, as adopted pursuant to Section 906 of the
              Sarbanes-Oxley Act of 2002.

                                       28
<PAGE>

     99.2     Certification of the Chief Financial Officer pursuant to 18 U.S.C.
              Section 1350, as adopted pursuant to Section 906 of the
              Sarbanes-Oxley Act of 2002.

(b)  Reports on Form 8-K:

     No reports on Form 8-K were filed with the Securities and Exchange
     Commission during the three months ended September 30, 2001.




                                       29
<PAGE>


                                   SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                             CLICKSOFTWARE TECHNOLOGIES LTD.
                                             (Registrant)

                                             By:  /s/ SHMUEL ARVATZ
                                                  -----------------
                                             Name:  Shmuel Arvatz
                                             Title: Executive Vice President
                                                    and Chief Financial Officer

Date:  February 27, 2003


                                       30
<PAGE>

                                 CERTIFICATIONS


     I, Moshe BenBassat, certify that:

1.   I have reviewed this quarterly report on Form 10-Q/A of ClickSoftware
     Technologies Ltd.;

2.   Based on my knowledge, this quarterly report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this quarterly report; and

3.   Based on my knowledge, the financial statements, and other financial
     information included in this quarterly report, fairly present in all
     material respects the financial condition, results of operations and cash
     flows of the registrant as of, and for, the periods presented in this
     quarterly report.


February 27, 2003
                                           By: /s/ Moshe BenBassat
                                               ----------------------
                                           Moshe BenBassat
                                           Chairman and Chief Executive Officer


                                       31
<PAGE>


     I, Shmuel Arvatz, certify that:

1.   I have reviewed this quarterly report on Form 10-Q/A of ClickSoftware
     Technologies Ltd.;

2.   Based on my knowledge, this quarterly report does not contain any untrue
     statement of a material fact or omit to state a material fact necessary to
     make the statements made, in light of the circumstances under which such
     statements were made, not misleading with respect to the period covered by
     this quarterly report; and

3.   Based on my knowledge, the financial statements, and other financial
     information included in this quarterly report, fairly present in all
     material respects the financial condition, results of operations and cash
     flows of the registrant as of, and for, the periods presented in this
     quarterly report.


February 27, 2003
                                           By: /s/ Shmuel Arvatz
                                               -----------------
                                           Shmuel Arvatz
                                           Executive Vice President and
                                           Chief Financial Officer


                                       32