SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

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

                                    FORM 10-Q

                                   (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, 2000

                                       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:333-30274
   ---------------------------------------------------------------------------

                         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,  2000,  there  were  26,000,725  shares  of  the
Registrant's common stock, par value 0.02 NIS, outstanding.



<PAGE>

<TABLE>
<CAPTION>

                         ClickSoftware Technologies Ltd.

                                    FORM 10-Q

                    FOR THE QUARTER ENDED September 30, 2000


PART I. FINANCIAL INFORMATION


Item 1.   Financial Statements (Unaudited)

<S>                                                                                               <C>
     (a)  Condensed Consolidated Balance Sheets as of December 31, 1999 and September
          30, 2000..................................................................................3

     (b)  Condensed Consolidated Statements of Operations for the Three Months Ended
          and Nine Months Ended September 30, 1999 and September 30, 2000...........................4

     (c)  Condensed Consolidated Statements of Cash Flows for Nine Months Ended
          September 30, 1999 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.............................................................................7

     Factors That May Affect Future Results........................................................14




PART II. OTHER INFORMATION

Item 1. Legal Proceedings..........................................................................26

Item 2. Changes in Securities and Use of Proceeds..................................................27

Item 3. Quantitative and Qualitative Disclosures About Market Risk.................................27

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

Signatures.........................................................................................28


</TABLE>

<PAGE>
<TABLE>
PART I--FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS
<CAPTION>

                         ClickSoftware Technologies Ltd.

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (In thousands)
                                   (Unaudited)



                                                                      December 31,     September 30,
                                                                         1999              2000
                                                                        ---------        ---------

ASSETS
     Current Assets:
<S>                                                                     <C>             <C>
         Cash and cash equivalents                                      $   7,838       $ 9,332
         Short-term investments                                                 -        15,518
         Trade receivables                                                  3,966         6,390
         Other receivables and prepaid expenses                               465         1,123
                                                                        ---------     ---------
               Total current assets                                        12,269        32,363
     Property and equipment, net                                            1,498         3,194
     Severance pay deposits                                                   428           524
                                                                        ---------     ---------
TOTAL ASSETS                                                            $  14,195     $  36,081
                                                                        =========     =========


LIABILITIES AND SHAREHOLDERS' EQUITY
     Current Liabilities
         Short term debt                                                $     320    $      151
         Accounts payable and accrued expenses                              2,799         2,941
         Deferred revenue                                                   1,143           282
                                                                        ---------     ---------
               Total Current Liabilities                                    4,262         3,374

                                                                        ---------     ---------
     Long Term Liabilities
         Long-term debt                                                       213           114
         Accrued severance pay, net                                           899         1,344
                                                                        ---------     ---------
        Total Long Term Liabilities                                         1,112         1,458

                                                                        ---------     ---------
        Total Liabilities                                                   5,374         4,832
                                                                        ---------     ---------



     Shareholders' Equity
         Ordinary shares
          NIS 0.02 par value;  Authorized - 25,645,039 shares as of
          December 31, 1999 and 100,000,000 shares as of September 30,
          2000. Issued and outstanding - 20,708,714 shares as of December
          31, 1999 and 26,000,725 as of September 30, 2000                     73           100
         Convertible preferred shares
          Authorized - none as of December 31, 1999 and 5,000,000 shares
          as of September 30, 2000. Issued and outstanding - none as of
          December 31, 1999 and none as of September 30, 2000.                  -             -
         Additional paid-in capital                                        40,052        69,239
         Deferred compensation                                             (2,663)       (1,509)
         Accumulated deficit                                              (28,641)      (36,581)
                                                                        ---------     ---------
               Total Shareholders' Equity                                   8,821        31,249
                                                                        ---------     ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                              $  14,195    $   36,081
                                                                        =========     =========

</TABLE>


See notes to condensed consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
                         ClickSoftware Technologies Ltd.

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
               (In thousands, except share and per share amounts)
                                   (Unaudited)


                                                  THREE MONTHS                 NINE MONTHS
                                              ENDED SEPTEMBER 30            ENDED SEPTEMBER 30
                                           -----------------------      ------------------------
                                                 1999          2000          1999          2000
                                             --------      --------      --------      --------
Revenues:
<S>                                          <C>           <C>           <C>           <C>
 Software License                            $  1,352      $  3,320      $  3,143      $  8,406
 Service and maintenance                        1,407         1,469         3,986         4,202
                                             --------      --------      --------      --------
  Total Revenues                                 2,759        4,789         7,129        12,608
Cost of revenues:
 Software License                                   3           117            21           250
 Service and maintenance                        1,156         1,353         3,039         3,917
                                             --------      --------      --------      --------
  Total cost of revenue                         1,159         1,470         3,060         4,167
                                             --------      --------      --------      --------
 Gross Profit                                   1,600         3,319         4,069         8,441
                                             --------      --------      --------      --------
Operating expenses
 Research and development, net                    843           941         2,021         3,346
 Sales and marketing expenses                   1,993         3,443         5,698         9,782
 General and administrative expenses              404           838         1,262         2,595
 Share-based compensation                         622           277           662           987
                                             --------      --------      --------      --------
    Total operating expenses                    3,862         5,499         9,643        16,710
                                             --------      --------      --------      --------
Operating loss                                (2,262)       (2,180)       (5,574)       (8,269)
 Interest and other(expenses) income, net          85           329           (2)           328
                                             --------      --------      --------      --------
Net Loss                                    $ (2,177)      $(1,851)     $ (5,576)      $(7,941)
                                             ========      ========      ========      ========

Basic and Diluted Net Loss Per Share        $  (0.12)     $  (0.07)     $  (0.32)      $ (0.37)
                                             ========      ========      ========      ========

Shares Used In Calculating Basic and
  Diluted Net Loss Per Share                   17,617        24,699        17,617        21,555
                                             ========      ========      ========      ========


</TABLE>

See notes to condensed consolidated financial statements.

<PAGE>
<TABLE>
<CAPTION>
                         ClickSoftware Technologies Ltd.

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
                                   (Unaudited)



                                                                             NINE MONTHS ENDED
                                                                                SEPTEMBER 30,
                                                                         --------------------------
                                                                            1999         2000
                                                                         ---------     ---------

CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                     <C>            <C>
Net Loss                                                                $  (5,576)     $ (7,941)
Adjustments to reconcile net loss to net cash used in
  operating activities:
   Expenses not affecting operating cash flows:
    Depreciation                                                              334           457
    Amortization of deferred compensation                                     662           987
     Appreciation of investments                                                          (426)
    Severance pay, net                                                         72           349
  Changes in operating assets and liabilities:
    Trade receivables                                                     (1,215)       (2,424)
    Other receivables                                                         (5)         (658)
    Accounts payable and accrued expenses                                     745           142
    Deferred revenues                                                       1,321         (861)
                                                                        ---------     ---------
    NET CASH USED IN OPERATING ACTIVITIES                                 (3,662)      (10,375)
                                                                        ---------     ---------

CASH FLOWS FROM INVESTING ACTIVITIES
Increase in Investments, Net                                                           (15,092)
Purchase  of equipment                                                      (452)       (2,153)
                                                                        ---------     ---------
    NET CASH USED IN INVESTING ACTIVITIES                                   (452)      (17,245)
                                                                        ---------     ---------

CASH FLOWS FROM FINANCING ACTIVITIES
Short-term debt                                                             1,172         (169)
Repayments of long-term debt                                                 (95)          (99)
Net proceeds from issuance of shares                                                     28,344
Net proceeds from warrants exercised                                                        579
Employee options exercised                                                                  459
                                                                        ---------     ---------
    NET CASH PROVIDED BY FINANCING ACTIVITIES                               1,077        29,114
                                                                        ---------     ---------

NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS                            (3,037)        1,494
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                              3,770         7,838
                                                                        ---------     ---------
CASH AND EQUIVALENTS, END OF PERIOD                                       $   733      $  9,332
                                                                        =========     =========


</TABLE>

See notes to condensed consolidated financial statements.



<PAGE>


                         ClickSoftware Technologies Ltd.

            NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

         (INFORMATION AS OF September 30, 2000 FOR THE THREE MONTHS AND
          NINE MONTHS ENDED September 30, 1999 AND September 30, 2000)

1.   Condensed  Consolidated  Financial Statements.  The accompanying  condensed
     consolidated financial statements have been prepared by the Company without
     audit  and  reflect  all   adjustments,   consisting  of  normal  recurring
     adjustments  and  accruals,  which  are,  in  the  opinion  of  management,
     necessary for a fair statement of the financial  position of the Company as
     of September 30, 2000 and the results of operations  and cash flows for the
     interim  periods  indicated.  The  results of  operations  covered  are not
     necessarily indicative of the results to be expected for future quarters or
     for the year ending December 31, 2000. The statements have been prepared in
     accordance with the regulations of the Securities and Exchange  Commission;
     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,  1999  which are  included  in  ClickSoftware's  Registration
     Statement on Form S-1 (File No.  333-30274  filed with the  Securities  and
     Exchange Commission).

2.   Net Income (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  net loss per  share  ("Basic  EPS") is
     computed by dividing net loss by the weighted  average  number of shares of
     common stock outstanding.  The weighted average ordinary shares outstanding
     are on a pro-forma  basis for the three months ended September 30, 1999 and
     for  the  nine  months  ended  September  30,  1999.  The  following  is  a
     reconciliation  of the numerators and denominators  used in computing basic
     and diluted net loss per share (in thousands except per share amounts):


<TABLE>
<CAPTION>

                                                Three Months Ended                     Nine Months Ended
                                                    September 30,                         September 30,
                                        ------------------------------------------------------------------------
                                            1999                2000                1999                2000
                                        ------------------------------------------------------------------------

NET LOSS (NUMERATOR)
<S>                                     <C>                  <C>                 <C>                  <C>
 basic and diluted                      $(2,177)             $(1,851)            $ (5,576)            (7,941)
                                        ------------------------------------------------------------------------

SHARES
(DENOMINATOR)
                    Weighted         17,616,627          24,699,121         17,616,627          21,554,795
                    Average
                    Ordinary Shares
                    Outstanding



                                        ========================================================================

Net Loss per share basic and
  diluted                               $   (0.12)       $      (0.07)       $      (0.32)       $      (0.37)
                                        ========================================================================
</TABLE>

3.   Initial  Public  Offering.  On June 22, 2000,  ClickSoftware  completed the
     initial  public  offering of its ordinary  shares (the  "IPO").  A total of
     4,000,000 shares of  ClickSoftware  ordinary shares were sold to the public
     at a price of $7.00 per share.  Cash proceeds to ClickSoftware net of $1.96
     million in  underwriting  discounts  before  expenses,  were  approximately
     $26.04 million. Concurrent with the IPO, all of the shares of the Company's

<PAGE>

     Series A,  Series B,  Series C and  Series D  convertible  preferred  stock
     ("Preferred  Stock") were  converted  into shares of the  Company's  common
     stock on a share for share basis.  The number of authorized and outstanding
     ordinary  shares as of December  31,  1999  include  preferred  convertible
     shares as if converted on a pro forma basis.

4.   Exercise  of  Underwriters'  Overallotment  Option.  On  July  20  the  IPO
     Underwriters  exercised their  overallotment  Option and purchased  600,000
     additional  ordinary  shares  from  ClickSoftware  at a price of $7.00  per
     share.  Cash proceeds to ClickSoftware  net of $0.3 million in underwriting
     discounts before expenses, were approximately $3.9 million.

5.   Recent Accounting  Pronouncements.  In June 1998, the Financial  Accounting
     Standards Board issued SFAS No. 133, "Accounting for Derivative Instruments
     and Hedging Activities".  SFAS No. 133 establishes accounting and reporting
     standards  requiring  that every  derivative  instrument be recorded in the
     balance sheet at its fair value.  SFAS No. 133 requires that changes in the
     derivative's fair value be recognized currently in earnings unless specific
     hedge accounting criteria are met. Special accounting for qualifying hedges
     allows a  derivative's  gains and losses to offset  related  results on the
     hedged item in the income  statement.  SFAS No. 133 is effective for fiscal
     years beginning after June 15, 2000. The Company believes that the adoption
     of  SFAS  No.  133  will  not  have a  material  effect  on  its  financial
     statements.

     In March  2000,  the FASB issued  interpretation  No. 44,  "Accounting  for
     Certain  Transactions  Involving Stock Compensation -- an Interpretation of
     APB Opinion No. 25". The  interpretation  clarifies the  application of APB
     Opinion No. 25 in certain  situations,  as defined.  The  interpretation is
     effective  July 1, 2000, but covers  certain  events  occurring  during the
     period after  December  15, 1998,  but before the  effective  date.  To the
     extent that events covered by this  interpretation  occur during the period
     after  December 15, 1998,  but before the  effective  date,  the effects of
     applying this  interpretation  would be  recognized on a prospective  basis
     from the effective date. Accordingly, upon initial application of the final
     interpretation,   (a)  no  adjustments  would  be  made  to  the  financial
     statements  for periods  before the effective date and (b) no expense would
     be  recognized  for  any  additional  compensation  cost  measured  that is
     attributable  to periods  before the  effective  date.  We expect  that the
     adoption  of  this  interpretation   would  not  have  any  effect  on  the
     accompanying financial statements.

     In December  1999,  the  Securities  and Exchange  Commission  issued Staff
     Accounting  Bulletin  (SAB) No.  101,  "Revenue  Recognition  in  Financial
     Statements".  SAB 101  provides  guidance  on applying  generally  accepted
     accounting   principles   to  revenue   recognition   issues  in  financial
     statements.  We adopted SAB 101 as required in the second  quarter of 2000.
     There was no  material impact on our consolidated results of operations and
     financial position as a result of the adoption of SAB 101.



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

Except for  historical  information,  the  discussion  in this  report  contains
forward-looking  statements that involve risks and uncertainties.  These forward
looking statements include,  among others, those statements including the words,
"expects", "anticipates", "intends", "believes" and similar language. Our actual
results could differ materially from those discussed herein.  Factors that could
cause or  contribute  to such  differences  include,  but are not limited to the
risks discussed in the section titled "Risk Factors" in this prospectus.

OVERVIEW

We derive  revenues from software  licensing and service and  maintenance  fees.
Software  license revenues are comprised of perpetual or annual software license
fees  primarily  derived from  contracts  with our direct sales  clients and our
indirect  distribution  channels.  License  fees are based upon an  initial  fee
determined  by the number of service  resources  to be  scheduled,  followed  by
periodic maintenance fees. We recognize revenues in accordance with the American
Institute of Certified Public Accountants  Statement of Position 97-2, "Software
Revenue  Recognition,"  or SOP 97-2,  as amended by Statement of Position  98-4.


<PAGE>

Under SOP 97-2, we recognize  software  license revenues when a software license
agreement has been executed or a definitive purchase order has been received and
the product has been delivered to our clients,  no significant  obligations with
regard  to  implementation  remain,  the  fee is  fixed  and  determinable,  and
collectability is probable.

Service and maintenance  revenues are comprised of professional service revenues
from  implementation,  and  revenues  from  consulting,  training,  and customer
service support fees.  Clients licensing our products generally purchase support
service  agreements  from us.  Professional  service and  training  revenues are
billed at an agreed-upon  rate plus incurred  expenses,  and are recognized when
provided.  Consulting  revenues are recognized on a straight-line basis over the
life of the  agreement.  Customer  support is charged as a percentage of license
fees depending upon the level of support coverage requested by the customer, and
are  recognized  over the  duration of the support  provided.  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.

In conjunction  with the  repositioning  of our  ClickSchedule  product line, we
introduced  additional  software license pricing structures to our clients which
includes lower initial license fees followed by monthly payments,  and are based
on the  number  of  scheduling  transactions  conducted.  To date,  however,  no
significant revenue has been recognized on this basis.

Cost of  revenues  consists  of cost of software  license  revenues  and cost of
service and maintenance revenues.  Cost of software license revenues consists of
expenses  related to media  duplication  and packaging of our products.  Cost of
service and  maintenance  revenues  consists of  expenses  related to  salaries,
expenses  of  our  professional   services   organizations,   costs  related  to
third-party consultants, and equipment costs.

We believe that as our client base  reaches  maturity,  and as existing  clients
purchase  additional  licenses,  the percentage of revenues derived from license
fees will increase as a percentage of revenues  while the percentage of revenues
derived from service and maintenance fees will increase on an absolute basis but
decrease as a percentage of revenues as compared to historic periods.

Operating expenses are categorized into research and development expenses,  net,
sales and marketing  expenses,  general and administrative  expenses,  and share
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 sales and marketing expenses.
Software  research and development  costs incurred prior to the establishment of
technology  feasibility  are  included in research and  development  expenses as
incurred.

In previous  years we received  grants  from the Fund for the  Encouragement  of
Marketing  Activities  established  by the  Government of Israel.  In return for
these  grants,  we are  obligated  to pay the Israeli  Government  royalties  as
described below. We expect that sales and marketing expenses will increase on an
absolute  basis  over the next year as we hire  additional  sales and  marketing
personnel,  continue to promote our brand and our new corporate  name,  continue
our Internet initiative, and increase our international sales efforts.

Sales 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,  legal,  and  directors and officers
liability insurance.

Share 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. Share based compensation is amortized
over the  vesting  period  of the  underlying  options,  generally  four  years.

<PAGE>

Interest and other (expenses)  income,  net,  includes interest income earned on
our cash and cash equivalents, offset by interest expense, and also includes the
effects of foreign currency translations.

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  expense 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,  including  inflation rates and economic growth
within each nation.

The effects of foreign currency  exchange rates on our results of operations for
the nine months ended September 30, 1999 and 2000 were immaterial.

RESULTS OF OPERATIONS

Our operating  results for each of the nine months ended  September 30, 2000 and
1999 and for the three months ended  September 30, 2000 and 1999 as a percentage
of total revenues are as follows:

<TABLE>
<CAPTION>

                                                    THREE MONTHS                      NINE MONTHS
                                                   ENDED SEPTEMBER 30              ENDED SEPTEMBER 30
                                                ----------------------            ---------------------
                                                  1999          2000                1999          2000
                                                -------        -------            --------       ------
Revenues:
<S>                                               <C>            <C>                 <C>           <C>
 Software License                                 49 %           69 %                44 %          67 %
 Service and maintenance                          51 %           31 %                56 %          33 %
                                                -------        -------            --------       ------
  Total Revenues                                 100 %          100 %               100 %         100 %
Cost of revenues:
 Software License                                  -              2 %                 -             2 %
 Service and maintenance                          42 %           29 %                43 %          31 %
                                                -------        -------            --------       ------
  Total cost of revenue                           42 %           31 %                43 %          33 %
                                                -------        -------            --------       ------
 Gross Profit                                     58 %           69 %                57 %          67 %
                                                -------        -------            --------       ------
Operating expenses
 Research and development, net                    31 %           20 %                28 %          27 %
 Sales and marketing expenses                     72 %           72 %                80 %          78 %
 General and administrative expenses              15 %           17 %                18 %          21 %
 Share-based Compensation                         23 %            6 %                 9 %           8 %
                                                -------        -------            --------       ------
    Total operating expenses                     140 %          115 %               135 %         133 %
                                                -------        -------            --------       ------
Loss from operations                             (82)%          (46)%              (78) %         (66)%
 Interest and other(expenses)income, net           3 %            7 %                -              3 %
                                                -------        -------            --------       ------
Net Loss                                         (79)%          (39)%              (78) %        (63) %
                                                =======        =======            ========      =======
</TABLE>


RESULTS OF OPERATIONS - SUMMARY

Our revenues of $4.8 million for the third  quarter  ended  September  30, 2000,
increased  from $2.8  million or 74% over the third  quarter  of 1999.  Revenues
increased  11% from  second  quarter  2000  revenues  of $4.3  million,  and the
Company's net loss was reduced to $1.9 million.  This third quarter loss of $1.9
million is $0.07 per share,  compared  to the second  quarter  2000 loss of $2.7
million,  or $0.14 per share.  The comparative net loss for the third quarter of
1999 was $2.18  million,  or pro forma  $0.12 per share,  with 29% fewer  shares
outstanding.

As of December 31, 1999, we had outstanding  trade  receivables of approximately
$4.0 million which represented  approximately 38% of 1999 total revenues.  As of
September 30, 2000, we had outstanding trade  receivables of approximately  $6.4
million. Our trade receivables have terms that are negotiated  individually with
each client. As of September 30, 2000, our DSO (Days Sales  Outstanding) was 120
days.
<PAGE>

RESULTS OF OPERATIONS FOR THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999

REVENUES.  Revenues  increased  $2.0 million or 74% to $4.8 million in the three
months  ended  September  30, 2000 from $2.8  million in the three  months ended
September 30, 1999.

SOFTWARE  LICENSE.  Software  license revenues were $3.3 million or 69% of total
revenues in the three months ended September 30, 2000 and $1.4 million or 49% of
total revenues in the three months ended September 30, 1999. The increase is due
to sales to new customers.

SERVICE AND MAINTENANCE.  Service and maintenance  revenues were $1.5 million or
31% of revenues in the three months ended  September  30, 2000 and, $1.4 million
or 51% of revenues in the three months ended September 30, 1999. The decrease in
service and  maintenance  revenues  as a  percentage  of revenues  for the three
months ended  September 30, 2000 from the three months ended  September 30, 1999
was due  primarily  to  increased  sales  of  ClickSchedule  software  licenses,
decreased implementation times, and an increase in implementation by third party
integrators.

COST OF REVENUES.  Cost of revenues  were $1.5 million or 31% of revenues in the
three months ended  September  30, 2000 and,  $1.2 million or 42% of revenues in
the three months ended  September 30, 1999. The increase in the cost of revenues
on an  absolute  basis was due to an  increased  number of  licenses  sold which
resulted in an increased demand for our professional services.

COST OF SOFTWARE LICENSES. Cost of software license revenues were $117,000 or 2%
of total  revenues in the three months ended  September 30, 2000 and,  $3,000 or
less than 1% of revenues in the three months ended September 30, 1999.

COST OF SERVICE AND MAINTENANCE.  Cost of service and maintenance  revenues were
$1.4 million or 29% of revenues in the three months ended September 30, 2000 and
$1.2 million or 42% of revenues in the three months  ended  September  30, 1999.
This absolute  increase in the cost of service and maintenance  revenues was due
to increased  professional services required as a result of the increase in sale
of licenses, which resulted in an increase in the use of third party consultants
and an  increase  of other  costs.  The total  number of  professional  services
employees  employed by us was 39 on September  30, 2000 and 38 on September  30,
1999.

GROSS  PROFIT.  Gross  profit as a  percentage  of revenues was 69% in the three
months  ended  September  30, 2000 as compared to 58% in the three  months ended
September  30, 1999.  This  improvement  is mostly  attributed  to change in the
revenue mix in favor of higher margin license revenues.

OPERATING  EXPENSES.  Total  operating  expenses  were $5.5  million  or 115% of
revenues in the three months ended  September 30 ,2000 and, $3.9 million or 140%
of revenues in the three months ended September 30, 1999.

RESEARCH AND DEVELOPMENT EXPENSES,  NET. Research and development expenses,  net
of related  grants,  were $0.9  million or 20% of revenues  in the three  months
ended  September  30,  2000,  and $0.8  million or 31% of  revenues in the three
months ended September 30, 1999. In the third quarter,  we received  approval of
the year 2000 research and  development  grant from Israel's Chief  Scientist in
the amount of $820,000.  The grant will offset R&D  expenses  only for the final
two  quarters of 2000,  whereas in past years the grant was  recognized  ratably
over four quarters. Research and development expenses for the three months ended
September  30, 2000 reflect an increase in personnel  related  costs  related to
development of our products.

SALES AND MARKETING EXPENSES.  Sales and marketing expenses were $3.4 million or
72% of revenues in the three months ended September 30, 2000 and $2.0 million or
72% of revenues in the three  months  ended  September  30,  1999.  The absolute
increase  in sales  and  marketing  expenses  was due to  additional  sales  and
marketing efforts related to the expansion of our salesforce,  which resulted in
an increase in personnel related costs as well as additional marketing costs. We
expect that sales and marketing  expenses will increase on an absolute  basis in
future periods as we hire additional sales and marketing personnel,  continue to
promote our brand, and establish sales in additional geographic areas. The total
number of sales and marketing  employees  employed by us was 74 on September 30,
2000 and 39 on September 30, 1999.

<PAGE>

GENERAL AND ADMINISTRATIVE  EXPENSES.  General and administrative  expenses were
$0.8 million or 17% of revenues in the three months ended September 30, 2000 and
$0.4 million or 15% of revenues in the three months  ended  September  30, 1999.
This  increase  is largely due to the  increased  overhead  associated  with our
expanding  operations  and the increased  costs  associated  with being a public
company. We expect that the absolute dollar amount of general and administrative
expenses will increase as we expand our operations and incur  incremental  costs
of being a public company.  However,  we expect them to decrease as a percentage
of revenues.

SHARE BASED  COMPENSATION.  Share based  compensation for the three months ended
September  30, 2000  amounted to $0.3 million of  previously  recorded  deferred
compensation.  Share based compensation for the three months ended September 30,
1999 amounted to $0.6 million.


RESULTS OF OPERATIONS FOR NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999

REVENUES.  Revenues  increased  $5.5 million or 77% to $12.6 million in the nine
months  ended  September  30, 2000 from $7.1  million in the nine  months  ended
September 30, 1999.

SOFTWARE LICENSE. Software license revenues were $8.4 million or 67% of revenues
in nine months ended  September 30, 2000, and $3.1 million or 44% of revenues in
the nine months  ended  September  30, 1999.  The  increase in software  license
revenues was due to  increased  average  sales per client,  growth of our client
base, and recurring sales to our installed base of clients.

SERVICE AND MAINTENANCE.  Service and maintenance  revenues were $4.2 million or
33% of revenues in the nine months ended September 30, 2000 and, $4.0 million or
56% of revenues in the nine months  ended  September  30, 1999.  The  relatively
small  increase  in  service  and  maintenance  revenues  was  primarily  due to
ClickSchedule  Fast Track  initiative  which  offers a rapid  implementation  of
ClickSchedule, and an increase in implementation by third party integrators.

COST OF REVENUES.  Cost of revenues  were $4.2 million or 33% of revenues in the
nine months ended September 30, 2000 and, $3.1 million or 43% of revenues in the
nine months ended  September 30, 1999.  This increase in the cost of revenues on
an absolute basis was due to an increased number of clients.

COST OF SOFTWARE  LICENSES.  Cost of software  license revenues were $250,000 in
the nine months ended  September 30, 2000 and,  $21,000 in the nine months ended
September 30, 1999. Cost of software license revenues represented 2% of revenues
in nine  months  ended  September  30, 2000 and less than 1% of revenues in nine
months ended September 30, 1999.

COST OF SERVICE AND MAINTENANCE.  Cost of service and maintenance  revenues were
$3.9 million or 31% of revenues in the nine months ended September 30, 2000 and,
$3.0  million or 43% of revenues in the nine months  ended  September  30, 1999.
This absolute  increase in the cost of service and maintenance  revenues was due
primarily to an increase in the sale of licenses,  which resulted in an increase
in personnel  related  costs and an increase in third party related  costs.  The
total  number  of  professional  services  employees  employed  by us  was 39 on
September 30, 2000 and 38 on September 30, 1999.

GROSS  PROFIT.  Gross  profit as a  percentage  of revenues  was 67% in the nine
months  ended  September  30, 2000 as  compared to 57% in the nine months  ended
September 30, 1999.  This  improvement is mostly  attributed to the  significant
increase in higher margin license revenues. Our service and maintenance revenues
have a significantly lower gross margin than our software license revenues.

OPERATING  EXPENSES.  Total  operating  expenses  were $16.7  million or 133% of
revenues in the nine months ended September 30, 2000 and $9.6 million or 135% of
revenues in the nine months ended September 30, 1999.


<PAGE>

RESEARCH AND DEVELOPMENT EXPENSES,  NET. Research and development expenses,  net
of related grants, were $3.3 million or 27% of revenues in the nine months ended
September 30, 2000 and, $2.0 million or 28% of revenues in the nine months ended
September 30, 1999. In the third quarter,  we received approval of the year 2000
research and  development  grant from Israel's Chief  Scientist in the amount of
$820,000.  The grant will offset R&D expenses only for the final two quarters of
2000, whereas in past years the grant was recognized ratably over four quarters.
Research and  development  expenses for the nine months ended September 30, 2000
reflect an increase in personnel  related  costs related to  development  of our
product. We are continuing to invest  substantially in research and development,
and we expect  that  research  and  development  expenses  will  increase  on an
absolute basis in the future.

SALES AND MARKETING EXPENSES.  Sales and marketing expenses were $9.8 million or
78% of revenues in the nine months ended September 30, 2000 and, $5.7 million or
80% of revenues in the nine months ended  September  30, 1999.  The increase was
primarily  due to the  expansion  of our sales  force,  and an increase in print
advertising  and  appearances  in trade  shows.  Personnel  and  related  costs,
primarily from our direct sales force and marketing staff,  comprised 56% of our
sales and  marketing  expenses for the nine months ended  September 30, 1999 and
59% for the nine months ended September 30, 2000. Marketing programs,  including
advertising,  public relations, trade shows and promotional events comprised 44%
of our sales and marketing expenses for the nine months ended September 30, 1999
and 41% for the nine months ended  September  30, 2000. We expect that sales and
marketing  expenses will increase on an absolute  basis in future  periods as we
hire additional  sales and marketing  personnel,  continue to promote our brand,
and establish sales in additional geographic areas.

GENERAL AND ADMINISTRATIVE  EXPENSES.  General and administrative  expenses were
$2.6 million or 21% of revenues in the nine months ended September 30, 2000 and,
$1.3 million or 18% of revenues in the nine months ended September 30, 1999.

SHARE BASED  COMPENSATION.  Share based  compensation  for the nine months ended
September  30, 2000 amounted to $1.0  million,  net of a $0.1 million  reduction
from  expired  options,  and share  based  compensation  for nine  months  ended
September 30, 1999 amounted to $0.7 million.  We recorded  deferred  share based
compensation totaling $3.4 million for the year ended December 31, 1999.

INTEREST  AND OTHER  (EXPENSES)  INCOME,  NET.  Interest  income,  net, was $0.3
million of net expense in the nine months ended  September 30, 2000, and $-2,000
of net expense in the nine months ended September 30, 1999.

INCOME TAXES.  As of September 30, 2000, we had  approximately  $13.5 million of
Israeli net operating loss  carryforwards,  approximately  $15.1 million of U.S.
federal net  operating  loss  carryforwards  and  approximately  $1.8 million of
British net operating  loss  carryforwards  available to offset  future  taxable
income.  The  Israeli  and  British net  operating  loss  carryforwards  have no
expiration  date.  The U.S.  net  operating  loss  carryforwards  will expire in
various amounts in the years 2008 to 2013.

LIQUIDITY AND CAPITAL RESOURCES

Since  our  inception  and  prior to our  initial  public  offering,  we  funded
operations  primarily through the private placement of equity securities and, to
a lesser extent, borrowings from financial institutions.  We raised an aggregate
of  approximately  $32.0  million,  net of  issuance  costs,  from  the  sale of
preferred shares and ordinary shares.

On June 22, 2000, the Company  completed an initial public offering of 4,000,000
ordinary shares at a price of $7.00 per share.  The proceeds to the Company from
the  offering  were   approximately   $26.0  million  before  expenses  (net  of
underwriters discount).

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 $3.9 million before
expenses (net of underwriters discount).


<PAGE>

Cash used in  operations  includes  expenditures  associated  with  research and
development  activities  and  marketing  efforts  related  to  promotion  of our
products.  For the nine months ended September 30, 2000, cash used in operations
was $10.4  million,  consisting of our net loss of $7.9 million,  an increase in
trade  receivables  of $2.4 million,  an increase in other  receivables  of $0.7
million,  partially offset by non-cash charges of $1.4 million,  and an increase
in accrued expenses of $0.1 million and a decrease in deferred  revenues of $0.9
million.  For the nine months ended  September 30, 1999, cash used in operations
was $3.7 million,  consisting  of our net loss of $5.6  million,  an increase in
trade receivables of $1.2 million,  partially offset by non-cash charges of $1.1
million,  and an increase in accrued expenses of $0.7 million and an increase in
deferred revenues of $1.3 million.

As of September 30, 2000, we had outstanding  trade receivables of approximately
$6.4 million.  Our trade  receivables  typically  have terms that are negotiated
individually  with each client.  As of September  30, 2000,  our DSO (Days Sales
Outstanding) was 120 days.

As of  September  30, 2000 we have also  received  aggregate  payments  from the
Government  of the State of Israel in the  amount  of $3.7  million  related  to
research and development and $0.7 million related to marketing activities. As of
September 30, 2000, we have paid or accrued  royalties related to these funds in
the amount of $1.5 million.

The  Company  also has an  aggregate  of  $265,000  in term  loans  relating  to
borrowings for working  capital.  One loan is in dollars and bears interest at a
rate of LIBOR  plus 1% and the  other is  linked  to the  Israeli  CPI and bears
interest at a rate of 5.4%.

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 $405,000 and secures our performance  pursuant to projects with the
Government  of Israel.  Our bank in  California  has issued a standby  letter of
credit in the amount of  $205,560 to secure  performance  under the terms of our
office lease in Campbell.

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  balances  will be
sufficient to fund our  operations  for at least the next twelve  months.  After
that time,  we cannot assure you that cash  generated  from  operations  will be
sufficient  to  satisfy  our  liquidity  requirements,  and we may need to raise
additional  capital  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, and 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.

FACTORS THAT MAY AFFECT FUTURE RESULTS

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 the Company that is based on
the beliefs of the management of the Company as well as assumptions  made by and
information  currently  available  to the  management  of the Company  including
statements  related to the timing and  amount of our  capital  expenditures  and
financing  needs,  the  protection  of our  trademarks  and  other  intellectual
property,  the length of our sales cycle, the potential of our projected market,

<PAGE>

the effects of the marketplace and our  competition,  and the ability to hire or
retain  personnel.  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 the Company or the  management of the Company,  may
identify  forward-looking  statements.  Such statements reflect the judgement of
the Company as of the date of this quarterly report on Form 10-Q with respect to
future events,  the outcome of which is subject to certain risks,  including the
risk  factors  set  forth  below,  which  may have a  significant  impact on the
Company's  business,  operating  results or financial  condition.  Investors are
cautioned that these forward-looking statements are inherently uncertain. Should
assumptions prove incorrect, actual results or outcomes may vary materially from
those  described  herein.  ClickSoftware  undertakes  no  obligation  to  update
forward-looking statements.

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 occurs, 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

OUR FINANCIAL PERFORMANCE MAY SUFFER BECAUSE WE HAVE RECENTLY CHANGED OUR
STRATEGIC FOCUS. Historically,  all of our operating revenue has come from sales
of our ClickSchedule product,  formerly known as W-6 Service Scheduler,  and our
ClickFix  product,  formerly known as TechMate,  to clients seeking  application
software that enables efficient  provisioning of services in enterprise,  rather
than Internet,  environments. As a result, while we sold the W-6 technology that
is included in  ClickSchedule  and the TechMate  technology  that is included in
ClickFix prior to 1999, we have only recently sold the new versions for Internet
scheduling  and  troubleshooting.  Our  current  strategy  is to expand upon our
installed  base of clients using our software to become the leading  provider of
web-scheduling and delivery software solutions for service operations, including
Internet companies and companies transitioning to Internet applications.  To the
extent that our strategy is not successful, our business,  operating results and
financial condition will suffer.

OUR FINANCIAL  PERFORMANCE MAY SUFFER BECAUSE WE HAVE RECENTLY  INTRODUCED A NEW
PRICING  PROGRAM.  In December 1999, we introduced a new pricing program for our
products.  Traditionally,  we have generated  revenue through  one-time sales of
licenses to our clients at a price based upon the number of resources optimized.
Our new pricing  model enables our clients to pay monthly user fees for licenses
of our software or to pay on a per-transaction basis. This new pricing structure
may reduce the  initial  amount of software  license  revenues we realize at the
time of sale and could cause our  revenue  growth to decrease in the short term.
If we have not determined  appropriate  monthly or per transaction  fees for our
software  licenses,  our revenues from software licenses may decrease or may not
increase.  Our new  pricing  model may also  result in  delayed  recognition  of
revenues,  which may cause our  quarterly  operating  results  to be lower  than
expected in any  particular  quarter.  Although this pricing  structure has been
selected by only a few  customers  and has not had a  significant  impact on our
revenue, it remains as an option for our customers.

WE HAVE A HISTORY  OF LOSSES  AND  EXPECT TO INCUR  FUTURE  LOSSES.  We have not
achieved  profitability  and  expect to  continue  to incur net  losses  for the
foreseeable future.

We expect to continue to incur  significant sales and marketing and research and
development expenses and expect such expenses to increase significantly. Some of
our expenses,  such as expenses for  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

<PAGE>

quarter.  For example,  in the nine months  ended  September  30,  2000,  68% of
realized revenue was recognized in the last two weeks of the quarter.

A delay in the  completion of a sale past the end of a particular  quarter could
negatively  impact  results for that  quarter.  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:

-    the volume and timing of customer orders;

-    the length and unpredictability of our sales cycle;

-    the mix of revenue generated by product licenses and professional services;

-    the mix of revenue between domestic and foreign sources;

-    internal  budget  constraints  of  our  current  and  prospective  clients,
     particularly newly formed Internet companies;

-    announcements or  introductions of new products or product  enhancements by
     us or our competitors;

-    changes in prices of and the adoption of different  pricing  strategies for
     our products and those of our competitors;

-    changes in our business strategy;

-    timing and amount of sales and marketing expenses;

-    changes in our business and partner relationships;

-    technical difficulties or "bugs" affecting the operation of our software;

-    foreign currency exchange rate fluctuations; and

-    general economic conditions.

FAILURE OF THE MARKET TO ACCEPT OUR TECHNOLOGY WOULD ADVERSELY AFFECT DEMAND FOR
OUR PRODUCTS AND THE PRICE OF OUR ORDINARY  SHARES COULD  DECLINE.  Our products
are based on complex technologies, including sophisticated algorithms and models
which we have developed to address complex scheduling and troubleshooting issues
in the service  industry.  Although our products are currently being used in the
service  industry,  and we believe our  technologies  address these issues,  the
methods  we have  chosen  have  not yet  been  widely  accepted  by the  service
industry,  and other providers of similar software use different  technology and
models.  We cannot predict  whether our products will be widely  accepted by the
service industry. Failure of the market to accept our technology would adversely
affect demand for our products.  In addition, we participate in an industry with
an  inherently  high failure rate and we cannot assure you that our clients will
achieve success when using our products and services. Any publicized performance
problems  relating to our products or those of our  competitors  could also slow
client adoption of our products.  Moreover, to the extent that we are associated
with  unsuccessful  client projects,  even if due to factors beyond our control,
our reputation and competitive  position in our industry could be materially and
adversely affected.

IF THE MARKET FOR  SCHEDULING  FULFILLMENT  OF SERVICES  AND  PRODUCTS  OVER THE
INTERNET  DOES NOT DEVELOP AS EXPECTED  OR AT ALL,  OR IF OUR  PRODUCTS  ARE NOT
ACCEPTED  BY  BUSINESSES  SCHEDULING  SERVICES,  A  SUBSTANTIAL  PORTION  OF THE
ANTICIPATED  DEMAND  FOR OUR  SOLUTIONS  MAY NOT  DEVELOP  AND THE  PRICE OF OUR
ORDINARY SHARES COULD DECLINE ACCORDINGLY. Our business strategy is premised, in
part,  on our  belief  that  traditional  bricks-and-mortar  companies,  such as
utilities,  as well as  e-commerce  companies,  will offer their  customers  the
opportunity to schedule and obtain services online rather than on the telephone.
While some of our  clients  use the  web-based  features  of our  products in an
intranet environment,  as of the date of this statement,  none of our clients is
currently  offering  Internet  self-scheduling  options  to its  customers.  Our
business  strategy depends in part on consumers and businesses  moving away from
telephone-based  customer  service to  Internet-based  customer  service.  While

<PAGE>

adoption of the Internet as a new medium for commerce is occurring for purchases
of products,  the adoption of the Internet to schedule and obtain services is at
a much earlier  stage.  If online  service  scheduling  solutions are not widely
adopted by consumers and  businesses  engaging in e-commerce  transactions,  our
business will not realize its full potential. We began emphasizing our products'
Internet  capabilities  in  September  1999 and we have  devoted  and  expect to
continue to devote substantial resources to market this use of our products. Our
business  strategy  requires us to market our products to companies that utilize
the  Internet  to deliver  service.  Many of these  companies  may have  limited
capital resources and may not be willing to invest in our solutions.

IF USE OF THE INTERNET FOR COMMERCIAL TRANSACTIONS DOES NOT GROW AS ANTICIPATED,
OUR BUSINESS STRATEGY MAY NOT BE SUCCESSFUL.  Our success will depend in part on
the acceptance of the Internet in the commercial  marketplace and on the ability
of third parties to provide a reliable Internet  infrastructure network with the
speed,  data  capacity,  security and hardware  necessary for reliable  Internet
access and  services.  To the extent that the Internet  continues to  experience
increased numbers of users,  increased  frequency of use or increased  bandwidth
requirements of users,  the Internet  infrastructure  may not be able to support
the demands  placed on it and the  performance  and  reliability of the Internet
could  suffer,  which could cause the market for our products to fail to grow or
to grow more slowly than anticipated, causing our business to suffer.

IF WE FAIL TO MANAGE OUR GROWTH EFFECTIVELY,  OUR BUSINESS MAY NOT SUCCEED.  Our
ability to  successfully  offer  products  and  services  and to  implement  our
business  plan in the  evolving  market  for  service  scheduling  and  resource
optimization  software requires an effective planning and management process. We
continue  to  increase  the scope of our  operations  in the  United  States and
internationally  and expect to continue to increase our headcount  substantially
in the future. For example,  the number of individuals we employed grew from 142
as of  September  30,  1999 to 192 as of  September  30,  2000.  As part of this
growth,  we  have  had to  implement  new  operational  and  financial  systems,
procedures  and  controls;  expand,  train and manage  our  employee  base;  and
maintain close coordination among our technical,  accounting, finance, marketing
and sales staffs. These factors have placed, and our anticipated  expansion will
continue to place, a significant  strain on our existing  management systems and
resources.

We expect that we will need to continue to expand our existing management and to
improve  our  financial  and  managerial  controls  and  reporting  systems  and
procedures, and expand, train and manage our work force worldwide.  Furthermore,
we expect that we will be required to manage multiple relationships as we expand
our customer base and our business relationships.

TWO PRODUCTS  ACCOUNT FOR THE  MAJORITY OF OUR REVENUE.  IF THE DEMAND FOR THESE
PRODUCTS  FALLS,  OUR SALES COULD BE  SIGNIFICANTLY  REDUCED  AND OUR  FINANCIAL
PERFORMANCE  COULD BE  SERIOUSLY  DAMAGED.  Historically,  all of our  operating
revenue  has come from  sales of, and  services  related  to, our  ClickSchedule
product,  formerly  known as W-6 Service  Scheduler,  and our ClickFix  product,
formerly known as TechMate, to clients seeking application software that enables
efficient provisioning of services in enterprise environments.  As we pursue our
new business strategy and develop our products, we anticipate that revenues from
sales of our  ClickSchedule  and ClickFix  product lines,  together with related
professional  services  fees,  will continue to account for all of our operating
revenue  for  the  foreseeable  future.   Accordingly,   the  widespread  market
acceptance  of these  products is critical to our future  success.  Competition,
technological  change or other  factors  could  decrease  demand  for, or market
acceptance of, these products or make these products  obsolete.  Any decrease in
demand or market acceptance would have a material adverse effect on our business
and operating results.

OUR LONG AND  UNPREDICTABLE  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 a
long time,  typically  ranging  from three  months to one year,  to evaluate our
products before making their purchase decisions.  In addition,  depending on the
nature and specific needs of a client,  the  implementation  of our products can

<PAGE>

take up to  three  to  twelve  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.  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 must expand 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.  We
have recently  expanded our direct sales force in North America and plan to hire
additional sales personnel. As of September 30, 2000, we employed 74 individuals
in our  sales  and  marketing  organizations.  Because  35 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. We
believe   we  will  need  to  expand  our  sales  and   marketing   organization
significantly.  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
MORE  DIFFICULT.  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.  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 of any of these
employees could harm our business  significantly.  We have employment agreements
with Dr. BenBassat and our Chief Financial  Officer,  Shimon M. Rojany.  None of
our other  officers or key  employees is bound by an employment  agreement.  Our
relationships  with these officers and key employees are at will and the loss of
any of our key personnel could harm our ability to execute our business strategy
and compete.  In addition,  we believe that the  prospective  employees  that we
target may perceive that the share option component of our compensation packages
is not a valuable  component.  Consequently,  we may have difficulty  hiring our
desired numbers of key personnel.  Moreover,  even if we are able to attract key
personnel,  the  resources  required to attract and retain  such  personnel  may
adversely affect our operating results.

IF WE FAIL TO EXPAND OUR PROFESSIONAL SERVICES ORGANIZATION,  WE MAY NOT BE ABLE
TO SERVICE ADDITIONAL CLIENTS AND SELL ADDITIONAL LICENSES. We cannot be certain
that we can attract or retain a sufficient  number of highly qualified  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 other  assistance to our clients and works
with our  clients'  in-house  staff to train  them  regarding  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 we focus on our new  business  strategy.  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 are not able to grow our professional  services  organization,

<PAGE>

our ability to expand our business would be limited.  To meet our clients' needs
for  professional  services,  we may  need to  increase  our use of  third-party
consultants to supplement our own professional  services group which may be more
costly  and less  successful  than  professional  services  provided  by our own
organization.  In addition, we could experience delays in recognizing revenue if
our professional  services group fails to complete  implementations  in a timely
manner.

OUR ABILITY TO ATTRACT AND RETAIN QUALIFIED  DEVELOPERS IS CRUCIAL TO OUR FUTURE
GROWTH AND RESULTS OF  OPERATIONS.  As a company  focused on the  development of
software  products,  our research and development  personnel are one of our most
valued assets.  Our future success depends in large part on our ability to hire,
train and retain software  developers,  systems  architects,  project  managers,
telecommunications   business  process  experts,  systems  analysts,   trainers,
writers, consultants and sales and marketing professionals of various experience
levels. Personnel possessing the skills needed to contribute to our research and
development  efforts  are in  short  supply,  and this  shortage  is  likely  to
continue. As a result, competition for these people is intense, and the industry
turnover  rate for them is high.  Any  inability  to hire,  train  and  retain a
sufficient number of qualified  development  employees could hinder the research
and development activities and growth of our business.

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 be seriously  harmed.  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 expand our base of
clients. 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.

Our current and potential competitors include:

-    independent   systems   integrators,   such  as  Electronic   Data  Systems
     Corporation,   consulting   firms  and  in-house   information   technology
     departments of enterprise and Internet  businesses  which may develop their
     own solutions that compete with our products;

-    traditional   enterprise   resource  planning  and  customer   relationship
     management software application vendors, including Oracle Corporation;

-    software vendors in the utility, telecom, field services, home delivery and
     other vertical markets, including Mobile Data Solutions Inc.;

-    other  providers of scheduling  software and  components as well as various
     logistics solutions providers such as ServicePower, Inc.; and

-    providers of software that allow  manufacturing  organizations  to optimize
     their resources.


<PAGE>

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 DEVELOP OR  MAINTAIN  KEY  BUSINESS  RELATIONSHIPS  COULD  LIMIT OUR
ABILITY TO SELL  ADDITIONAL  LICENSES  WHICH 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 develop 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  have  not  derived
significant  revenues  from  these  agreements  and 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.

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.
We currently do not provide Unix versions of our software and we may not be able
to modify our products and services to address new  requirements  and standards.
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 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 which
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  which  have  delayed
implementation  or required  us to expend  additional  resources  to correct the
problems. Despite internal testing and testing by current and potential clients,
our current and future products may contain serious defects or errors.  Any such
defects or errors would likely 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 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.


<PAGE>

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. For example,
on February 28, 2000, a trademark  infringement  complaint  was filed against us
with respect to the use of our former  corporate name and former Internet domain
names. On May 2, 2000, a preliminary  injunction was entered,  enjoining us from
using these names. As a result,  we changed our corporate name to  ClickSoftware
Technologies  Ltd.  and ceased  our use of our former  domain  names.  Also,  as
described  below,  we are currently  involved in a dispute with Click  Commerce,
Inc.

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:

-    be time-consuming to defend;

-    result in costly litigation;

-    divert management's attention and resources;

-    cause product shipment delays; or

-    require us to enter into costly  royalty or licensing  agreements,  if they
     are even available, on commercially reasonable terms, or at all.

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.

ANY FUTURE  ACQUISITIONS OF COMPANIES OR TECHNOLOGIES  MAY RESULT IN DISTRACTION
OF OUR  MANAGEMENT  AND  DISRUPTIONS  TO OUR  BUSINESS.  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

<PAGE>

indebtedness  to pay  for  any  future  acquisitions.  As of the  date  of  this
statement,  we have no  agreement  to enter  into  any  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 no agreement to enter into any  material  acquisition  which
would result in the issuance of additional shares.

OUR BUSINESS MAY BECOME  INCREASINGLY  SUSCEPTIBLE TO NUMEROUS RISKS  ASSOCIATED
WITH  INTERNATIONAL  OPERATIONS.  A significant  portion of our operations occur
outside the United States.  Our facilities are located in North America,  Israel
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:

-    foreign currency exchange rate fluctuations;

-    longer sales cycles;

-    multiple, conflicting and changing governmental laws and regulations;

-    expenses associated with customizing products for foreign countries;

-    protectionist laws and business practices that favor local competition;

-    difficulties in collecting accounts receivable; and

-    political and economic instability.

We expect  international  revenues  to  continue  to account  for a  significant
percentage of total  revenues in the future and we believe that we must continue
to expand our international sales and 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  a  substantial  portion of our sales
currently are being made 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.  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.


<PAGE>

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  Senior  Vice  President  of  Product
Development,  and Hannan Carmeli,  our Senior Vice President of Product 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,
your rights as a  shareholder  will be governed by the  Companies  Law of Israel
which became  effective on February 1, 2000.  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.

THE RATE OF  INFLATION IN ISRAEL MAY  NEGATIVELY  IMPACT OUR COSTS IF IT EXCEEDS
THE RATE OF DEVALUATION OF THE NIS AGAINST THE DOLLAR.  Substantially all of our
revenues are denominated in dollars or are dollar-linked, but we incur a portion
of our expenses,  principally salaries and related personnel expenses in Israel,
in NIS. In 1999 34%, and in the nine months ended  September 30, 2000 30% of our
costs were  incurred  in NIS.  As a result,  we are exposed to the risk that the
rate of  inflation in Israel will exceed the rate of  devaluation  of the NIS in
relation  to the dollar or that the timing of this  devaluation  will lag behind
inflation in Israel.  In that event, the dollar cost of our operations in Israel
will increase and our  dollar-measured  results of operations  will be adversely
affected.  In 1998,  the  rate of  devaluation  of the NIS  against  the  dollar
exceeded the rate of inflation in Israel which benefited us. However,  we cannot
assure you that this  reversal  will  continue or that we will not be materially
adversely  affected in the future if the rate of inflation in Israel exceeds the
devaluation  of the NIS against the dollar or if the timing of this  devaluation
lags behind increases in inflation in Israel.

WE ARE AN  INTERNATIONAL  COMPANY AND OUR  INTERNATIONAL  OPERATIONS ARE GROWING
RAPIDLY. OUR RISK EXPOSURE TO FOREIGN CURRENCY  FLUCTUATIONS IS INCREASING,  AND
WE MAY NOT BE ABLE TO  FULLY  MITIGATE  THE  RISK.  For the  nine  months  ended
September  30,  2000,  our  expenses  incurred  in the UK were 20% of our  total
expenses.  For the year of 1999,  these  expenses  represented  15% of our total
expenses.  Our  revenue  from  the  UK has  similarly  grown.  We are  expanding
operations in other areas of Europe,  and income and expenses  recognized in the
European  Community  Euro will  increase.  We are also  experiencing a growth in
revenue and expenses in Israel, and we anticipate recognizing revenue from other
international  sources.  For the quarter ended September 30, 2000, our DSO (days
sales  outstanding) was 120 days reflecting the necessity to extend longer terms
for  larger  deals.  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 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.  In 1998,  1999,  and 2000,  we received or accrued  grants from the
Chief  Scientist  totaling   approximately   $0.9  million,   $1.0  million  and
approximately $1.0 million respectively.  In the nine months ended September 30,
2000,  we accrued  and will  receive  grants from the Chief  Scientist  totaling
approximately  $0.6  million.  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  which 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  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.   The  amount  of  the  grants  received  since  inception  is
approximately $3.7 million in respect of which we have already paid $1.1 million
out of a  total  of $3.8  million  due to the  Chief  Scientist  in the  form of

<PAGE>

royalties.  We expect to pay or accrue additional royalties for the year 2000 at
a  rate  equal  to 3% of  our  total  revenues.  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.  Additionally,  the
licensing of our software in the ordinary course of business is not considered a
transfer of technology by the Office of the Chief Scientist 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 any  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.

PROPOSED  TAX REFORM IN ISRAEL MAY REDUCE OUR TAX  BENEFITS.  On May 4, 2000,  a
committee  chaired by the  Director  General of the Israeli  Ministry of Finance
issued  a report  recommending  a  sweeping  reform  in the  Israeli  system  of
taxation.  The  proposed  reform  would  significantly  alter  the  taxation  of
individuals  and would  also  affect  corporate  taxation.  In  particular,  the
proposed  reform would reduce but not eliminate,  the tax benefits  available to
approved  enterprises  such as  ours.  The  Israeli  cabinet  has  approved  the
recommendation  in  principle,   but   implementation  of  the  reform  requires
legislation  by Israel's  Knesset.  We cannot be certain  whether  the  proposed
reform  will be  adopted,  when it will be adopted or what form any reform  will
ultimately take or what effect it will have on our company.

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  based upon the civil  liability  provisions of
the U.S. federal  securities laws in an Israeli court against us or any of those
persons or to effect service of process upon these persons in the United States.

<PAGE>

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, 2000, our executive  officers,  directors and entities  affiliated
with them beneficially  owned  approximately  50.4% 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
they are opposed by our other investors.

WE EXPECT TO  EXPERIENCE  VOLATILITY  IN OUR SHARE PRICE WHICH COULD  NEGATIVELY
AFFECT YOUR INVESTMENT.  You may not be able to sell your shares at or above the
purchase price due to a number of factors, including:

-    announcements of technological innovations;

-    announcements relating to strategic relationships;

-    conditions affecting the software and Internet industries; and

-    trends related to the fluctuations of stock prices of Israeli companies.

The  trading  price of our  ordinary  shares  may be  volatile.  The  market for
technology and  Internet-related  companies has experienced  extreme  volatility
that  often  has been  unrelated  to the  operating  performance  of  particular
companies.  These  fluctuations  may  adversely  affect the trading price of our
ordinary shares, regardless of our actual operating performance.

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.

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,  2000,  we had  26,000,625
ordinary  shares  outstanding,  including  shares held by a trustee for issuance
under  outstanding  options.  In  addition,  as of September  30,  2000,  we had
1,853,567  ordinary  shares  issuable upon exercise of  outstanding  options and
warrants,  and  3,061,787  additional  ordinary  shares  reserved  for  issuance
pursuant to our stock option plans and employee  share  purchase  plan. If we or
our existing  shareholders sell a large number of our ordinary shares, the price
of  our  ordinary  shares  could  fall  dramatically.   Restrictions  under  the
securities  laws and  certain  lock-up  agreements  limit the number of ordinary
shares available for sale by our  shareholders in the public market.  We and the
beneficial  holders, or trustees issuing shares to option holders, of 21,394,485

<PAGE>

ordinary shares and options  exercisable into an aggregate of 1,519,954 ordinary
shares have agreed not to sell  ordinary  shares or any  securities  convertible
into or exercisable for ordinary shares for 180 days after June 22, 2000 without
the prior  consent  of Lehman  Brothers.  After the  expiration  of this 180 day
period,  these shares will be available for sale in the public market of varying
times subject to compliance  with applicable  laws.  Lehman Brothers may, in its
sole  discretion,  release all or any portion of the securities  subject to such
lock-up  agreements  prior  to the end of the 180 day  period.  The  holders  of
options exercisable into an aggregate of 645,313 additional ordinary shares hold
options which will not be exercisable  within 180 days of June 22, 2000. 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 currently  anticipate that our available cash
resources will be sufficient to meet our anticipated working capital and capital
expenditure  requirements  for at  least  twelve  months.  We may  need to raise
additional  funds,  however,  to respond  to  business  contingencies  which may
include the need to:

-    fund more rapid expansion;

-    fund additional marketing expenditures;

-    develop new or enhance existing products and services;

-    enhance our operating infrastructure;

-    hire additional personnel;

-    respond to competitive pressures; or

-    acquire complementary businesses or necessary technologies.

If  additional  funds are raised  through the issuance of equity or  convertible
debt securities,  the percentage  ownership of our shareholders will be reduced,
and these newly issued  securities  may have rights,  preferences  or privileges
senior to those of existing  shareholders.  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 which 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.

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,  particularly  Internet-related  companies, have
been highly volatile. The price at which our common stock trades is likely to be
volatile and may fluctuate  substantially due to factors such as: our historical
and anticipated  quarterly and annual operating results;  variations between our
actual  results  and the  expectations  of  investors  or  published  reports or
analyses  of  ClickSoftware;  announcements  by us or  others  and  developments
affecting our business, systems or expansion plans; and conditions and trends in
e-commerce industries.

In the past,  securities  class  action  litigation  has often  been  instituted
against  companies  following periods of volatility in the market price of their

<PAGE>

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 RISK


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
in  these  areas.  Due to the  nature  of our  short-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, 2000,  we had cash and cash  equivalents  of $24.8  million
which consist of cash and highly liquid short-term  investments.  Our short-term
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,  2000,  we had total  short term debt of $0.2  million and
long-term debt net of current  maturities of $0.1 million which bear interest at
rates that are linked to LIBOR or the Israeli consumer price index. 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,  2000,  there  were no  amounts
outstanding under this facility.

PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

Click Commerce,  Inc., an unrelated third party,  contacted us alleging that our
trademarks  and our  new  company  name  infringe  on  their  trademarks.  After
discussions  with them,  we responded on June 22, 2000 by filing a complaint for
declaratory  relief in the United States  District Court,  Northern  District of
California,  seeking a determination  that the use of our name and trademarks do
not infringe on Click Commerce, Inc.'s claimed trademarks.  Click Commerce, Inc.
responded  to our  complaint  by denying our  allegations.  In  addition,  Click
Commerce,  Inc.'s response includes a  cross-complaint  alleging that our use of
the CLICKSOFTWARE  trademark and our use of other product names have resulted in
trademark infringement,  unfair competition,  and false designation of origin in
violation of federal law. The  cross-complaint  also alleges unfair  competition
and false advertising in violation of California's Business and Professions Code
and  trademark  infringement  in  violation  of  California  common  law.  Click
Commerce, Inc. is seeking damages from us in an unspecified amount.

Based on our  preliminary  investigation,  we believe  that we have  meritorious
defenses to Click Commerce,  Inc.'s claims for relief and damages, and we intend
to  vigorously  pursue our  interests in these  matters.  If this  litigation is
decided  adversely  to us, we might be required to change our name and the names
of our products,  pay damages,  and we could be subject to significant  costs of
litigation.


<PAGE>

We have  participated in settlement  negotiations  with Click Commerce,  Inc. We
presently  believe  that this matter will be amicably  settled  with no material
adverse financial effects beyond our legal fees.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
Item 2(d)

On July 20,  2000 the  Company  completed  the sale of an  aggregate  of 600,000
additional  ordinary shares of its common stock at a price of $7.00 per share by
way of exercise of the  underwriters'  overallotment  option.  The  offering was
effected  pursuant to a  Registration  Statement on Form S-1  (Registration  No.
333-30274),  which the United States Securities and Exchange Commission declared
effective on June 22, 2000.  Lehman  Brothers Inc., CIBC World Markets Corp., SG
Cowen  Securities  Corporation  and  Fidelity  Capital  Markets  were  the  lead
underwriters exercising.

Of the $4.2 million in aggregate proceeds raised by the Company in the exercise,
$0.3  million  was paid to  underwriters  in  connection  with the  underwriting
discount.  There were no direct or indirect payments to directors or officers of
the Company.

The  Company  expects  to use  the  proceeds  for  general  corporate  purposes,
including working capital.  A portion of the proceeds may also be used to pursue
possible acquisitions of complementary businesses, technologies or products. The
Company,  however, has no current plans,  agreements or commitments with respect
to any such  acquisition.  Pending  such  uses,  the  Company is  investing  the
proceeds in short-term,  interest-bearing,  money market investment accounts and
investment-grade securities.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ClickSoftware  maintains a short-term  investment portfolio primarily consisting
of corporate debt  securities  with  maturities of twelve months or less.  These
available-for-sale  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.

The  following  table  provides   information  about  ClickSoftware   investment
portfolio, cash, long term debts as of September 30, 2000 and presents principal
cash flows and related  weighted  averages  interest rates by expected  maturity
dates.

<TABLE>
<CAPTION>
                                          YEAR OF MATURITY
                                 2000       2001        2002     2003 AFTER  2003   TOTAL CARRYING VALUE
                                                (dollars in thousands)

<S>                            <C>        <C>            <C>     <C>        <C>           <C>
Cash and Equivalents           $9,332         -           -       -          -             $9,332
 Average interest rate           6.5%         -           -       -          -               6.5%
Commercial Papers                  -      $3,957          -       -          -             $3,957
 Average interest rate             -        6.8%          -       -          -               6.8%
Corp Bonds                         -      $1,730          -       -          -             $1,730
 Average interest rate             -        6.8%          -       -          -               6.8%
Euro dollar Bonds                  -      $4,340          -       -          -             $4,340
 Average interest rate             -        6.8%          -       -          -               6.8%
Asset-backed Securities            -      $5,290          -       -          -             $5,290
  Average interest rate            -        6.7%          -       -          -               6.7%
Other                              -        $201          -       -          -               $201
 Average interest rate             -        6.8%          -       -          -               6.8%

Bank Loans                        $15        $60         $30                                 $105
  Average interest rate          L+1%       L+1%        L+1%                          US LIBOR+1%
Other Loans                       $28        $38          $5      $1                          $72
  Average interest rate      5.4-9.7%   5.4-9.7%        9.7%    9.7%                  IS CPI+5.4%
US Capital lease obligations       $2         $7          $8      $8                          $25
  Average interest rate          7.1$       7.1%        7.1%    7.1%                         7.1%
GBP Capital lease obligations      $5        $26         $18      $8                          $57
  Average interest rate          5.5%       5.5%        5.5%    5.5%                         5.5%

Other Long-term Debt         NONE
</TABLE>

<PAGE>

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)   Exhibits

      27.1 Financial Data Schedule

(b)   No  reports on Form  8-K  were  filed  with  the  Securities and  Exchange
Commission during the three months ended September 30, 2000.








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/ SHIMON M. ROJANY
                                   ------------------------------------
                                   Shimon M. Rojany
                                   Senior Vice President and
                                     Chief Financial Officer


Date:  November 14, 2000