UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 20-F

/ /  REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF
     THE SECURITIES EXCHANGE ACT OF 1934

                                       OR

/X/  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002

                                       OR

/ /  TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934

             FOR THE TRANSITION PERIOD FROM __________ TO __________

                         COMMISSION FILE NUMBER 0-30820

                             TIOGA TECHNOLOGIES LTD.
                             -----------------------
            (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER AND
                 TRANSLATION OF REGISTRANT'S NAME INTO ENGLISH)

                                     ISRAEL
                                     ------
                 (JURISDICTION OF INCORPORATION OR ORGANIZATION)

                 126 YIGAL ALLON STREET, TEL AVIV 67443, ISRAEL
                 -----------------------------------------------
                    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

SECURITIES REGISTERED OR TO BE REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
     TITLE OF EACH CLASS       NAME OF EACH EXCHANGE ON WHICH REGISTERED
            NONE               _________________________________________

 SECURITIES REGISTERED OR TO BE REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
                  ORDINARY SHARES, PAR VALUE NIS 0.10 PER SHARE
                  ---------------------------------------------
                                (TITLE OF CLASS)

 SECURITIES FOR WHICH THERE IS A REPORTING OBLIGATION PURSUANT TO SECTION 15(d)
                                   OF THE ACT:
                                      NONE
                                      ----
                                (TITLE OF CLASS)

Indicate the number of outstanding shares of each of the issuer's classes of
capital or common stock as of the close of the period covered by the annual
report:
            25,025,436 ORDINARY SHARES, PAR VALUE NIS 0.10 PER SHARE
            --------------------------------------------------------

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.                     /X/ Yes  / / No
Indicate by check mark which financial statement item the registrant has elected
to follow.                                            / / Item 17  /X/ Item 18

<Page>

<Table>
<S>                                                                                   <C>
PART 1.................................................................................1

ITEM 1.       Identity of Directors, Senior Management and Advisors....................1

ITEM 2.       Offer Statistics and Expected Timetable..................................1

ITEM 3.       Key Information..........................................................1

       A.     Selected Financial Data..................................................1

       B.     Capitalization and Indebtedness..........................................4

       C.     Reasons for the Offer and Use of Proceeds................................4

       D.     Risk Factors.............................................................5

ITEM 4.       Information On the Company..............................................10

       A.     History and Development of the Company..................................10

       B.     Business Overview.......................................................11

       C.     Organizational Structure................................................18

       D.     Property, Plants and Equipment..........................................18

ITEM 5.       Operating and Financial Review and Prospects............................19

       A.     Operating Results.......................................................19

       B.     Liquidity and Capital Resources.........................................26

       C.     Research and Development, Patents and Licenses..........................29

       D.     Trend Information.......................................................30

ITEM 6.       Directors, Senior Management and Employees..............................30

       A.     Directors and Senior Management.........................................30

       B.     Compensation............................................................31

       C.     Board Practices.........................................................31

       D.     Employees...............................................................37

       E.     Share Ownership.........................................................38

ITEM 7.       Major Shareholders and Related Party Transactions.......................39

       A.     Major Shareholders......................................................39

       B.     Related Party Transactions..............................................39

       C.     Interests of Experts and Counsel........................................42

ITEM 8.       Financial Information...................................................42

       A.     Consolidated Statements and Other Financial Information.................42

       B.     Significant Changes.....................................................42

ITEM 9.       The Offer and Listing...................................................43

       A.     Offer and Listing Details...............................................43
</Table>

                                        2
<Page>

<Table>
<S>                                                                                   <C>
       B.     Plan of Distribution....................................................45

       C.     Markets.................................................................45

       D.     Selling Shareholders....................................................45

       E.     Dilution................................................................45

       F.     Expenses of the Issue...................................................45

ITEM 10.      Additional Information..................................................45

       A.     Share Capital...........................................................45

       B.     Memorandum and Articles of Association..................................45

       C.     Material Contracts......................................................50

       D.     Exchange Controls.......................................................52

       E.     Taxation................................................................53

       F.     Dividends and Paying Agents.............................................61

       G.     Statement by Experts....................................................61

       H.     Documents On Display....................................................61

       I.     Subsidiary Information..................................................62

ITEM 11.      Quantitative and Qualitative Disclosures About Market Risk..............62

ITEM 12.      Description of Securities Other Than Equity Securities..................62

PART 2................................................................................62

ITEM 13.      Defaults, Dividend Averages and Delinquencies...........................62

ITEM 14.      Material Modifications to the Rights of Security Holders and Use of
              Proceeds................................................................62

ITEM 15.      Controls and Procedures.................................................63

ITEM 16A.     Audit Committee Financial Expert........................................63

ITEM 16B.     Code of Ethics..........................................................63

ITEM 16C.     Principal Accountant Fees and Services .................................63

PART 3................................................................................63

ITEM 17.      Financial Statements....................................................63

ITEM 18.      Financial Statements....................................................63

ITEM 19.      Exhibits................................................................63
</Table>

                                        3
<Page>

                                     PART 1

          Unless the context otherwise requires, "Tioga," "us," "we" and "our"
refer to Tioga Technologies Ltd., an Israeli company, and its subsidiaries.

          STATEMENTS IN THIS ANNUAL REPORT CONCERNING OUR BUSINESS OUTLOOK OR
FUTURE ECONOMIC PERFORMANCE; ANTICIPATED REVENUES, EXPENSES OR OTHER FINANCIAL
ITEMS; AND STATEMENTS CONCERNING ASSUMPTIONS MADE OR EXPECTATIONS AS TO ANY
FUTURE EVENTS, CONDITIONS, PERFORMANCE OR OTHER MATTERS, ARE "FORWARD-LOOKING
STATEMENTS" AS THAT TERM IS DEFINED UNDER THE UNITED STATES FEDERAL SECURITIES
LAWS. IN SOME CASES, YOU CAN IDENTIFY FORWARD-LOOKING STATEMENTS BY OUR USE OF
WORDS SUCH AS "EXPECT," "ANTICIPATE," "BELIEVE," "INTEND," "PLAN," "SEEK" AND
"ESTIMATE" AND SIMILAR EXPRESSIONS. FORWARD-LOOKING STATEMENTS ARE SUBJECT TO
RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH COULD CAUSE ACTUAL RESULTS TO
DIFFER MATERIALLY FROM THOSE STATED IN SUCH STATEMENTS. FACTORS THAT COULD CAUSE
OR CONTRIBUTE TO SUCH DIFFERENCES INCLUDE, BUT ARE NOT LIMITED TO, THOSE SET
FORTH UNDER "RISK FACTORS" AND ELSEWHERE IN THIS ANNUAL REPORT AS WELL AS OUR
REPORTS ON FORM 6-K FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.

ITEM 1.     IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS

          Not applicable

ITEM 2.     OFFER STATISTICS AND EXPECTED TIMETABLE

          Not applicable.

ITEM 3.     KEY INFORMATION

A. SELECTED FINANCIAL DATA

          We were formed in December 1999 to receive substantially all of the
assets and liabilities of the semiconductor chip business of our former parent,
Orckit Communications Ltd., in accordance with the terms of a plan of
separation. Under this plan, Tioga received substantially all of Orckit's
semiconductor chip business, including the business of Silicon Value (S.V.)
Ltd., a company which Orckit acquired prior to consummation of the plan and
whose business we sold in April 2001. The spin-off was consummated on June 30,
2000.

          We have derived the following selected financial data from the
financial statements of Tioga, which have been prepared in accordance with
generally accepted accounting principles in the United States. The financial
data of Tioga contained in this annual report are presented as if Tioga had been
a separate entity since January 1, 1998 and the results of operations of the
ASIC business of Silicon Value, which we sold in April 2001, are reflected only
in the line item called "loss from discontinued operations". You should read the
selected consolidated financial data together with Item 5 "Operating and
Financial Review and Prospects" and our consolidated financial statements
included elsewhere in this annual report. These data are not necessarily
indicative of operating results or financial position that would have been
achieved had the plan been consummated on January 1, 1998 and should not be
construed as representative of Tioga's future operating results or financial
position. Our mode of operation and operating results were significantly
affected by the agreements we entered into in February 2002 with
STMicroelectronics, which are described below under Item 10.C "Additional
Information--Material Agreements."

                                        1
<Page>

          In April 2003, we sold substantially all of our assets and liabilities
to STMicroelectronics (other than financial indebtedness) pursuant to an asset
purchase agreement, which is described below under Item 10.C "Additional
Information--Material Agreements." Since then, our plan of operation has been to
explore the best course of action for Tioga, including to attempt to merge or
effect a business combination with a domestic or foreign, private or public
operating entity in a new area of operations. Other than activities relating to
attempting to locate such a candidate, and activities relating to the investment
of our funds in short and long term investments, we do not currently conduct any
operations. Accordingly, the data presented below are not indicative of our
future operating results or financial position.

                                        2
<Page>

<Table>
<Caption>
                                                                                YEARS ENDED DECEMBER 31,
                                                     ----------------------------------------------------------------------------
                                                         1998            1999            2000            2001             2002
                                                     ------------    ------------    ------------    ------------    ------------
                                                                          (IN THOUSANDS, EXCEPT PER SHARE DATA
<S>                                                  <C>             <C>             <C>             <C>             <C>
STATEMENT OF OPERATIONS DATA:
Revenues ..........................................  $     5,153     $     5,261     $    14,517     $     1,440     $     7,912
Product costs .....................................        3,714           4,561          13,107               8              20
                                                     ------------    ------------    ------------    ------------    ------------
Research and development expenses and
development services costs ........................        2,979           3,606           8,974           9,537           6,375
Less - royalty-bearing grants .....................           --              --              --           1,571           1,468
Research and development expenses, net and
development services costs, net ...................        2,979           3,606           8,974           7,966           4,907
Selling, marketing, general and administrative
expenses ..........................................          429             588           3,470           4,067           2,227
Spin-off expenses .................................           --              --           1,199              --              --
Impairment of property and equipment ..............           --              --              --              --             157
Amortization of deferred stock compensation(1)                 0              50              92           2,252             635
Operating loss ....................................       (1,969)         (3,544)        (12,325)        (12,853)            (34)
Other expenses ....................................                                                          (16)            (10)
Other income ......................................           --              --              --              --           9,698
Financial income (expense), net ...................           61              80             969          (1,238)           (874)
                                                     ------------    ------------    ------------    ------------    ------------
Net income (loss) from continuing operations.......       (1,908)         (3,464)        (11,356)        (14,107)          8,780
                                                     ------------    ------------    ------------    ------------    ------------
Income (loss) from discontinued operations(2)                 --              --        (120,839)         (4,043)             19
                                                     ------------    ------------    ------------    ------------    ------------
Net income (loss) .................................  $    (1,908)    $    (3,464)    $  (132,195)    $   (18,150)    $     8,799
                                                     ------------    ------------    ------------    ------------    ------------

                                                     ------------    ------------    ------------    ------------    ------------
Basic net earnings (loss) per share from
continuing ........................................  $     (0.09)    $     (0.16)    $     (0.51)    $     (0.60)    $      0.35
                                                     ============    ============    ============    ============    ============
Basic net earnings (loss) per share from
discontinued operations............................           --              --           (5.38)          (0.17)             *)
                                                     ============    ============    ============    ============    ============

                                                     ------------    ------------    ------------    ------------    ------------
Basic net earnings (loss) per share ...............  $     (0.09)    $     (0.16)    $     (5.89)    $     (0.77)    $      0.35
                                                     ============    ============    ============    ============    ============
Diluted net earnings (loss) per share from
continuing operations .............................  $     (0.09)    $     (0.16)    $     (0.51)    $     (0.60)    $     0. 31
                                                     ============    ============    ============    ============    ============
Diluted net earnings (loss) per share from
discontinued operations ...........................           --              --          (5.38)           (0.17)             *)
Diluted net earnings (loss) per share .............  $     (0.09)    $     (0.16)    $     (5.89)    $     (0.77)           0.31
Number of shares used in computing basic net
earnings (loss) per share .........................   22,007,000      22,007,000      22,455,860      23,604,309      24,771,743
Number of shares used in computing diluted net
earnings (loss) per share .........................   22,007,000      22,007,000      22,455,860      23,604,309      24,888,462
</Table>

                                        3
<Page>

--------------
(1) Amortization of deferred stock compensation related to the following
   operating expenses: research and development expenses, net and development
   services costs, net of $0, $50, $92, $1,338 and $387 for the years ended
   December 31, 1998, 1999, 2000, 2001 and 2002, respectively; and selling,
   marketing, general and administrative expenses of $0, $0, $0, $914 and $248
   for the years ended December 31, 1998, 1999, 2000, 2001 and 2002,
   respectively.

(2) This item includes, for the year 2000, impairment of goodwill and other
   intangible assets in the amount of $58,068, a charge to expense of in-process
   research and development in the amount of $24,695, goodwill amortization in
   the amount of $21,598 and amortization of other intangible assets in the
   amount of $4.1 million. For the year 2001, this item includes goodwill
   amortization in the amount of $2,259 and impairment of property and equipment
   in the amount of $823.

*) Represents an amount lower than $0.01.

<Table>
<Caption>
                                                                           DECEMBER 31,
                                                    ------------------------------------------------------------
                                                      1998         1999         2000        2001          2002
                                                    --------     --------     --------    ---------    ---------
                                                                       (IN THOUSANDS)
<S>                                                  <C>          <C>         <C>         <C>          <C>
BALANCE SHEET DATA:
Cash and cash equivalents and short term
investments....................................      $1,460       $1,762      $18,793     $  7,712     $  5,559
Working capital................................       1,379        1,764       (2,653)      (4,368)       3,951
Total assets...................................       2,722        3,618       59,697       13,450        9,498
Parent company investment......................       1,450        1,840           --           --           --

Shareholders equity (deficiency) ..............          --           --        3,629      (10,994)      (1,548)
</Table>

B. CAPITALIZATION AND INDEBTEDNESS

          Not applicable.

C. REASONS FOR THE OFFER AND USE OF PROCEEDS

          Not applicable.

                                        4
<Page>

D. RISK FACTORS

          WE BELIEVE THAT THE OCCURRENCE OF ANY ONE OR SOME COMBINATION OF THE
FOLLOWING FACTORS COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS,
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

WE HAVE SOLD OUR BUSINESS AND CURRENTLY CONDUCT NO BUSINESS ACTIVITIES.

          In April 2003, we sold substantially all of our assets and liabilities
(other than financial indebtedness) to STMicroelectronics. Since then, our plan
of operation has been to evaluate the best course of action for Tioga, including
to attempt to merge or effect a business combination with a domestic or foreign,
private or public operating entity in a new area of operations. Other than
activities relating to attempting to locate such a candidate and activities
relating to the investment of our funds in short and long term investments, we
do not currently conduct any operations.

WE MAY NOT BE SUCCESSFUL IN IDENTIFYING AND EVALUATING SUITABLE BUSINESS
OPPORTUNITIES OR IN CONSUMMATING A BUSINESS COMBINATION.

          We do not have an agreement or understanding with respect to engaging
in a business combination with a specific entity. We expect to incur expenses in
the course of this evaluation, whether or not such evaluation results in a
business combination. There can be no assurance that we will be successful in
identifying and evaluating suitable business opportunities or in consummating a
business combination. No particular industry or specific business within an
industry has been selected for a target company. Accordingly, we may enter into
a business combination with a business entity having no significant operating
history, losses, limited or no potential for immediate earnings, limited assets,
negative net worth or other negative characteristics. In the event that we
complete a business combination, the success of our operations will be dependent
upon the management of the target company and numerous other factors beyond our
control. There is no assurance that we will be able to negotiate a business
combination on terms favorable to us, or at all.

WE MAY BE SUBJECT TO REGULATION UNDER THE INVESTMENT COMPANY ACT IF WE WERE TO
ENGAGE IN CERTAIN ACTIVITIES OR BUSINESS COMBINATIONS.

          In the event that we engage in a business combination or engage in
other activities, which result in us holding passive investment interests in a
number of entities, we could be subject to regulation under the Investment
Company Act of 1940. In such event, we would be required to register as an
investment company and could be expected to incur significant registration and
compliance costs. A violation of that law could subject us to material adverse
consequences.

WE ARE EXPOSED TO POTENTIAL LIABILITIES.

     We have agreed to indemnify STMicroelectronics to a certain extent for
breaches of our asset purchase agreement and to deposit $1.8 million in an
escrow account in connection therewith. A claim against us could result in
substantial cost, which would have a negative impact on our financial condition.

                                        5
<Page>

POSSIBLE DILUTION OF VALUE OF SHARES UPON BUSINESS COMBINATION.

          A business combination normally will involve the issuance of a
significant number of additional shares. Depending upon the value of the assets
acquired in such business combination, the per share value of our ordinary
shares may increase or decrease, perhaps significantly.

WE MAY NOT BE ABLE TO COLLECT A MATERIAL AMOUNT OF OUR DEBTS.

          An amount of $1.8 million owed to us by STMicroelectronics as part of
the consideration for their purchase of our business was deposited in an escrow
account. Although the escrow period is expected to expire on June 30, 2003, we
cannot assure that we will receive all or a portion of this amount.

BECAUSE OUR INDUSTRY IS CHARACTERIZED BY FREQUENT LITIGATION OVER INTELLECTUAL
PROPERTY RIGHTS, WE MAY BE REQUIRED TO INCUR SUBSTANTIAL EXPENSES AND DIVERT
MANAGEMENT RESOURCES.

          The industry in which we competed up to the consummation of the sale
of our business in April 2003 is characterized by numerous allegations of patent
infringement among competitors. Infringement claims could be asserted against us
in the future. As part of the terms of the sale transaction, STMicroelectronics
assumed all liabilities of Tioga. However, if we are deemed to have
intentionally infringed any patents of a third party, we may be subject to
material damages.

WE MAY FACE TAX LIABILITIES RELATING TO OUR ASSET SALES.

          We have generated a significant amount of income from the sale of the
ASIC business of Silicon Value and our various agreements with
STMicroelectronics. Based on our assessment and that of our tax advisors, we
believe that we have fully satisfied all tax due in relation with these
transactions. The tax authorities may not agree with our view. Any such
disagreement and subsequent tax dispute could result in tax liabilities in
amounts which we currently can not estimate.

WE MIGHT LOSE MONEY FROM OUR INVESTMENTS.

          We plan to invest the majority of our cash on hand in a variety of
financial instruments, including different types of corporate and government
bonds and other financial structures. Some of these bonds or other structures
may be rated below investment grade or not rated. If the obligor of any of the
bonds or structures we hold default or undergo a reorganization in bankruptcy,
we may lose all or a portion of our investment in such obligor. This will harm
our financial condition. For information on the types of our investments as of
December 31, 2002, see Item 11 - "Quantitative and Qualitative Disclosures About
Market Risk--Interest Rate Risk Management."

                                        6
<Page>

RISKS RELATING TO OUR INCORPORATION IN ISRAEL

OUR INCORPORATION IN ISRAEL MAY LIMIT OUR ABILITY TO FIND A TARGET FOR A MERGER
OR OTHER BUSINESS COMBINATION.

          We are incorporated under the laws of Israel. A state of hostility,
varying in degree and intensity, has led to security and economic problems for
Israel. Since October 2000, there has been a high level of violence between
Israel and the Palestinians, which has led to a crisis in the entire peace
process and affected Israel's relationship with its Arab citizens and several
Arab countries. Furthermore, several countries restrict business with Israel and
Israeli companies, and additional companies may restrict doing business with
Israel and Israeli companies as a result of the recent increase in hostilities.
These political, economic and military conditions might deter potential targets
from effecting a business combination with an Israeli company.

IT MAY BE DIFFICULT TO ENFORCE A U.S. JUDGMENT AGAINST US, OUR OFFICERS AND
DIRECTORS OR TO ASSERT U.S. SECURITIES LAW CLAIMS IN ISRAEL.

          Service of process upon our directors and officers named herein may be
difficult to effect within the United States because some of these people reside
outside the United States. Any judgment obtained in the United States against us
or these individuals or entities may not be enforceable within the United
States.

          There is doubt as to the enforceability of civil liabilities under the
Securities Act and the Securities Exchange Act in original actions instituted in
Israel. However, subject to specified time limitations, Israeli courts may
enforce a U.S. final executory judgment in a civil matter, provided that:

          -    adequate service of process has been effected and the defendant
               has had a reasonable opportunity to be heard;

          -    the judgment and its enforcement are not contrary to the law,
               public policy, security or sovereignty of the State of Israel;

          -    the judgment was obtained after due process before a court of
               competent jurisdiction according to the rules of private
               international law prevailing in Israel;

          -    the judgment was not obtained by fraudulent means and does not
               conflict with any other valid judgment in the same matter between
               the same parties;

          -    an action between the same parties in the same matter is not
               pending in any Israeli court at the time the lawsuit is
               instituted in the U.S. court; and

          -    the U.S. court is not prohibited from enforcing the judgments of
               Israeli courts.

                                        7
<Page>

          If a foreign judgment is enforced by an Israeli court, it generally
will be payable in new Israeli shekels, which can then be converted into
non-Israeli currency and transferred out of Israel. The usual practice in an
action to recover an amount in non-Israeli currency is for the Israeli court to
render judgment for the equivalent amount in new Israeli shekels at the rate of
exchange on the date of payment, but the judgment debtor also may make payment
in non-Israeli currency. Pending collection, the amount of the judgment of an
Israeli court stated in new Israeli shekels ordinarily will be linked to the
Israel Consumer Price Index plus interest at the annual rate (set by Israeli
law) prevailing at that time. Judgment creditors bear the risk of unfavorable
exchange rates.

PROVISIONS OF ISRAELI LAW MAY DELAY, PREVENT OR MAKE MORE DIFFICULT A MERGER OR
OTHER BUSINESS COMBINATION.

          Provisions of Israeli corporate law may have the effect of delaying,
preventing or making more difficult a merger with, or acquisition of, us. The
Israeli Companies Law generally provides that a merger be approved by the board
of directors and a majority of the shares present and voting on the proposed
merger at a meeting called upon at least 21 days' notice. For purposes of the
shareholder vote, unless a court rules otherwise, the merger will not be deemed
approved if a majority of the shares not held by the other party to the merger
(or by any person who holds 25% or more of the shares or the right to appoint
25% or more of the directors of the other party or its general manager) have
voted against the merger. Upon the request of any creditor of a party to the
proposed merger, a court may delay or prevent the merger if it concludes that
there is a reasonable concern that, as a result of the merger, the surviving
company will be unable to satisfy the obligations of the surviving company.
Finally, a merger may not be completed unless at least 70 days have passed since
the filing of the merger proposal with the Israeli Registrar of Companies.

          The Companies Law also provides that an acquisition of shares in a
public company must be made by means of a tender offer if as a result of the
acquisition the purchaser would become a 25% or greater shareholder of the
company. This rule does not apply if there is already another 25% or greater
shareholder of the company. Similarly, an acquisition of shares must be made by
means of a tender offer if as a result of the acquisition the purchaser would
become a 45% or greater shareholder of the company, unless there is already a
majority shareholder of the company. In any event, if as a result of an
acquisition of shares the acquirer will hold more than 90% of a company's
shares, the acquisition must be made by means of a tender offer for all of the
shares.

          Finally, Israel tax law treats some acquisitions, such as
stock-for-stock exchanges between an Israeli company and a foreign company, less
favorable than U.S. tax laws. For example, Israeli tax law may, under certain
circumstances, subject a shareholder who exchanges his ordinary shares for
shares in another corporation, to taxation prior to the sale of the shares
received in such stock-for-stock swap.

RISKS RELATING TO THE MARKET FOR OUR ORDINARY SHARES

HOLDERS OF OUR ORDINARY SHARES WHO ARE U.S. RESIDENTS FACE INCOME TAX RISKS.

          Because of the sale of our operating assets to STMicroelectronics in
April 2003, we may be treated as a PFIC for 2003, unless we effect a business
combination that causes us not to satisfy the tests described below for 2003.
Our treatment as a PFIC could result in a reduction in the after-tax return to
the U.S. holders of our ordinary shares and could cause a reduction in the value
of our shares. For U.S. federal income tax purposes, we are treated as a PFIC
for any tax year in which either:

                                        8
<Page>

          -    75% or more of our gross income is passive in nature, or

          -    on average for such tax year, 50% or more of our assets (by
value) produce, or are held for the production of, passive income.

          We believe we did not satisfy either of the above tests for PFIC
status for 2002. A separate determination must be made each year as to whether
we are a PFIC. As a result, our PFIC status may change. We cannot assure you
that we will be able to effect a business combination that causes us not to
satisfy the tests described above for 2003.

          Highly complex rules apply to U.S. holders of our ordinary shares if
we are treated as a PFIC for U.S. federal income tax purposes for any year
during the U.S. holder's holding period. Accordingly, U.S. holders are urged to
consult their tax advisors regarding the application of these tax rules.

          U.S. residents should carefully read Item 10.E "Taxation - United
States Federal Income Tax Consequences" for a more complete discussion of the
U.S. federal income tax risks related to owning and disposing of our ordinary
shares and the consequences of PFIC status.

THE DELISTING OF OUR ORDINARY SHARES MAY REDUCE THEIR LIQUIDITY.

          On December 19, 2001, our ordinary shares were delisted from the
Nasdaq National Market and subsequently from the Tel Aviv Stock Exchange. Our
ordinary shares currently are quoted on the OTC Bulletin Board, an electronic
quotation medium regulated by the National Association of Securities Dealers.
The market for shares quoted on the OTC Bulletin Board is typically less liquid
than that for shares quoted on the Nasdaq National Market. This could make it
more difficult for our shareholders to sell their shares at desired prices and
amounts.

OUR SHARES ARE SUBJECT TO THE SECURITIES AND EXCHANGE COMMISSION'S "PENNY STOCK"
RULES AND MAY BE DIFFICULT TO SELL.

          The rules of the Securities and Exchange Commission require brokers to
provide information to purchasers of securities traded at less than $5.00 per
share and not traded on a national securities exchange or quoted on the Nasdaq
Stock Market. Once our shares were delisted from Nasdaq, they became "penny
stock" that is not exempt from these rules. Therefore, these disclosure
requirements may have the effect of reducing trading activity in our shares and
making it more difficult for investors to sell. The rules require a
broker-dealer to deliver a standardized risk disclosure document prepared by the
Securities and Exchange Commission that provides information about penny stocks
and the nature and level of risks in the penny stock market. The broker must
also give bid and offer quotations and broker and salesperson compensation
information to the customer orally or in writing before or with the
confirmation. The rules also require a broker to make a special written
determination that the penny stock is a suitable investment for the purchaser
and receive the purchaser's written agreement to the transaction before a
transaction in a penny stock.

                                        9
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TWO SHAREHOLDERS MAY BE ABLE TO CONTROL US.

          Izhak Tamir and Eric Paneth, directors of Tioga, each own
approximately 12.6% of our outstanding ordinary shares and are our largest
shareholders. Currently, Messrs. Paneth and Tamir are not party to a
shareholders agreement. However, if Messrs. Paneth and Tamir act together, there
is a high likelihood that they effectively would have the power to control the
outcome of all matters submitted for the vote of our shareholders, including the
election of directors and the approval of significant change in control
transactions. Their combined equity interest in us may have the effect of making
certain transactions more difficult and may result in delaying, deferring or
preventing a change in control of Tioga unless approved by one or both of them.

ITEM 4.   INFORMATION ON THE COMPANY

A. HISTORY AND DEVELOPMENT OF THE COMPANY

OUR HISTORY

     Tioga Technologies Ltd. was incorporated on December 14, 1999 under the
laws of the State of Israel. Our principal executive offices are located at 126
Yigal Allon Street, Tel Aviv, Israel and our telephone number is (972-3)
696-2121.

OUR DEVELOPMENT

          Tioga was formed to receive substantially all of the assets and
liabilities of the chip business of Orckit in accordance with the terms of
Orckit's plan of separation. On June 30, 2000, Orckit contributed and
transferred to us substantially all of the assets and liabilities constituting
its chip business, including the shares of Silicon Value, in exchange for our
ordinary shares and distributed as a stock dividend to its shareholders, on a
share-for-share basis, all of those Tioga ordinary shares.

          In April 2001, we sold the ASIC business of Silicon Value to a wholly
owned subsidiary of Zen Research Plc, in consideration for $21.7 million. ASICs,
or application specific integrated circuits, are chips that are custom-tailored
for customer-specific applications.

          In February 2002, we entered into three strategic agreements with
STMicroelectronics NV. Pursuant to a technology transfer agreement, we granted
STMicroelectronics certain co-ownership rights in our existing intellectual
property in the DSL field and ownership rights over our products, including
products under development. Pursuant to a development, marketing and services
agreement, we provided research and development and marketing services to
STMicroelectronics through April 2003. Pursuant to a one-year option agreement,
STMicroelectronics had the right to acquire our business. For a more detailed
description of these agreements, please see Item 10.C "Additional
Information--Material Agreements." Following the execution of these agreements,
our activities consisted primarily of research and development and marketing
services provided to STMicroelectronics and we ceased to conduct business as an
independent DSL chip developer.

                                       10
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          In January 2003, STMicroelectronics exercised its option to acquire
our business. This acquisition was consummated in April 2003. For a more
detailed description of our asset purchase agreement with STMicroelectronics,
please see Item 10.C "Additional Information--Material Agreements." Since the
consummation of this transaction, our plan of operation has been to explore the
best course of action for Tioga, including to attempt to merge or effect a
business combination with a domestic or foreign, private or public operating
entity in a new area of operations. In addition to the cash and cash equivalents
that we hold, we believe that there are perceived benefits to being a "reporting
company" with a class of publicly-traded securities which may be attractive to
private entities. Other than activities relating to attempting to locate such a
candidate, and activities relating to the investment of our funds in short and
long term investments, we do not currently conduct any operations.

          We may enter into a definitive agreement with a wide variety of
businesses without limitation as to their industry or revenues. It is not
possible at this time to predict when, if ever, we will enter into a business
combination with any such private company or what will be the industry,
operating history, revenues, future prospects or other characteristics of any
such company.

PRINCIPAL CAPITAL EXPENDITURES

          Our principal capital expenditures to date have been the purchase of
equipment and other fixed assets used in our business. These purchases totaled
$5.3million in 2000, $0.5 million in 2001 and $0.1 in 2002. Our capital
expenditures in 2000 were spent primarily for the procurement of chip-design
software for the ASIC business of Silicon Value, which was sold during 2000.

B. BUSINESS OVERVIEW

GENERAL

          EXCEPT AS OTHERWISE INDICATED BY THE CONTEXT, THE FOLLOWING
DESCRIPTION OF TIOGA ASSUMES THAT TIOGA HAS OWNED AND OPERATED SUBSTANTIALLY ALL
OF ORCKIT'S CHIP BUSINESS TO THE SAME EXTENT THAT ORCKIT HAS SINCE THE FORMATION
OF ORCKIT AND THAT TIOGA HAS NEVER OWNED THE ASIC BUSINESS OF SILICON VALUE. THE
FOLLOWING DESCRIPTION IS PRESENTED TO HELP YOU UNDERSTAND OUR ACTIVITIES UNTIL
THE SALE OF OUR BUSINESS TO STMICROELECTRONICS IN APRIL 2003. FOLLOWING SUCH
SALE, WE CEASED THE OPERATIONS OF OUR BUSINESS AS CONDUCTED PRIOR THERETO.

          Our traditional business was the design, development and marketing of
DSL chips used by manufacturers of telecommunications equipment. Our DSL chips
enabled the digital transmission of voice, video and data over standard
telephone lines at speeds that are up to 30 times faster than transmission rates
provided by conventional analog modems.

          As a result of the agreements we entered into in February 2002 with
STMicroelectronics, our activities from February 2002 through April 2003
consisted primarily of research and development and marketing services provided
to STMicroelectronics in our traditional field of business, and we did not
conduct business as an independent DSL chip developer.

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INDUSTRY BACKGROUND

THE DEMAND FOR HIGH-SPEED DATA ACCESS

          The volume of information transmitted over communications networks has
grown dramatically in recent years.

          A number of factors have contributed to this growth, including the:

          -      growing use by businesses of wide area networks that
                 interconnect geographically dispersed locations, intranets,
                 extranets and video and voice conferencing systems for
                 communicating with customers, suppliers and employees;

          -      need of telecommuters to access remote local area networks that
                 connect computers and peripheral equipment in a localized area,
                 such as an office; and

          -      emergence of the Internet as a major global communication
                 medium enabling many millions of individuals and businesses,
                 including small offices/home offices, to share information,
                 communicate and conduct business electronically.

          To accommodate increasingly high volumes of data, telecommunications
service providers, or telcos, have invested significant resources to upgrade
their network backbone of central office switching centers and the
infrastructure connecting these switching centers. These switching centers
contain the technology, which selects the paths or circuits to be used for the
transmission of information between users. While the capacity of the network
backbone to carry higher traffic levels has been increased through the use of
high-speed digital and fiber-optic equipment, the copper telephone wires that
connect telephone users to central office switching centers limit high-speed
voice, video and data transmission. These telephone wires were originally
designed for the low-speed analog method of storing, processing and transmitting
voice traffic whereby information is conveyed by continuous electrical signal
rather than high-speed digital data transmission. As a result, access to the
Internet and private communications networks over these telephone wires has
typically been limited to data transmission rates of up to 56 Kilobits per
second, or Kbps, using standard dial-up analog modems or 128 Kbps using
integrated services digital network, or ISDN, modems. At these rates, several
minutes may be required to access a media rich website, and several hours may be
required to transfer or download large files.

                                       12
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NEW COMPETITIVE ENVIRONMENT

          The deregulation of the telecommunications industry throughout the
world has enabled new entrants, such as competitive local exchange carriers
(CLECs) and Internet service providers to offer data and voice services over the
local loop. However, since 2001 these new entrants have suffered from extreme
capital constraints and scaled back their activities. In addition, providers of
other access technologies, such as cable and wireless companies, are challenging
traditional telecommunications' service providers. These entrants compete with
the incumbent local exchange carriers for the opportunity to provide
telecommunications services over the last mile. Cable and wireless companies now
offer transmission of data and voice at speeds of more than one Megabit per
second, or Mbps, without the need to use the existing copper telephone wires
infrastructure. Facing increasing customer dissatisfaction with existing
solutions and the encroachment of formidable competitors, the incumbent local
exchange carriers are offering DSL technology to address the local loop
bottleneck.

DSL TECHNOLOGIES

          DSL technology utilizes sophisticated digital signal processing
techniques to achieve high-speed data transmission over existing copper
telephone wires. Digital signal processing is a technology that transforms
analog into digital signals.

          DSL technologies vary by data delivery rate, direction of data
delivery, stage of development and utilization of splitters, which are devices
installed at the customer's premises which couple the DSL and telephone services
on a single telephone line. DSL technologies include:

          -      T1. In North America, the standard building block for digital
                 service is a T1 line that transmits data at 1.544 megabits per
                 second, commonly known as Mbps.

          -      ADSL. Asymmetric digital subscriber line, or ADSL, technology
                 is a technology that enables different data rate in each
                 direction of the transmission. Users of digital transmission
                 often require more capacity, or bandwidth, downstream to them
                 than upstream from them. For example, downloading a World Wide
                 Web page, a downstream transmission, requires far more
                 bandwidth than gaining access to a Web site, an upstream
                 transmission. Asymmetric transmission permits delivery of data
                 at a higher rate than does symmetric transmission. ADSL
                 technology allows the transmission of data at speeds of up to 8
                 Mbps downstream to the customer and up to 768 Kbps upstream
                 from the customer. ADSL technology transmits data at these
                 rates while simultaneously providing analog telephone service
                 over a standard copper telephone wire. ADSL-based products
                 enable telephone companies to efficiently provide high-speed
                 Internet access, telecommuting, video broadcasting and
                 conferencing, pay-per-view, interactive multimedia, medical
                 imaging and teleshopping over copper telephone wires.

                                       13
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          -      G.SHDSL. Symmetric high bit-rate digital subscriber line, or
                 SHDSL, constitutes the North American standard building block
                 for digital service at the rate of 1.544 Mbps, commonly knows
                 as T1, to carrier service areas. It further enhances the North
                 American standard by supporting a wide range of bit rates as
                 opposed to just the fixed T1 rate of 1.544 Mbps. G.SHDSL
                 transports symmetrical data across a single copper pair at data
                 rates from 192 Kbps to 2.304 Mbps. G.SHDSL represents the next
                 generation in HDSL technology and is expected to be used for
                 equipment for the business market in North America.

          -      VDSL. Very high bit-rate digital subscriber line, or VDSL,
                 technology is currently being developed to carry high data
                 rates over short distances. VDSL provides a full service access
                 network that can include very high-speed access to the Internet
                 and other interactive services for work at home, as well as for
                 business, medical and educational applications. VDSL will
                 increase the downstream data transmission rate to 13 to 52 Mbps
                 and the upstream rate to 6 Mbps depending on the distance
                 covered. VDSL is also being designed to transmit data
                 symmetrically at rates of up to 13 Mbps downstream and
                 upstream. VDSL is limited in its transmission distance so it
                 will use optical communications equipment in part.

          DSL technology has the following advantages over other high-speed
access technologies:

          -      DEDICATED BANDWIDTH. DSL is a point-to-point, bi-directional
                 transmission technology with dedicated connections. As a
                 result, DSL does not suffer from degradation as other
                 subscribers are added to the system and provides a higher level
                 of security. Some alternative high-speed data transmission
                 solutions, such as cable, are shared systems that may suffer
                 service degradation and increased risk of security breaches as
                 additional users are added.

          -      COST-EFFECTIVE. Because DSL uses existing telephone lines, it
                 can be significantly less expensive to deploy than other
                 high-speed data transmission technologies which may require new
                 infrastructure.

          -      BROAD COVERAGE. Since almost all businesses and homes have
                 installed copper telephone lines, DSL technologies can be made
                 immediately available to a large percentage of potential users.

          While DSL technology is advantageous in many respects, it has the
following limitations and disadvantages when compared to other high speed access
technologies:

          -      LIMITED RANGE. DSL technology has a limited transmission range
                 from the telephone companies' central office. The data
                 transmission rates of DSL modems depend, in large part, on the
                 length of the local loop. Many local loops are very long and
                 can support only a relatively low-rate of data transmission.
                 While DSL performance varies depending on the noise
                 environment, service and distance of transmission, it tends to
                 degrade as distance increases.

                                       14
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          -      SENSITIVE TO INTERFERENCE. DSL technology is sensitive to
                 interference from existing telephone company communications
                 equipment in the local loop. When present, this interference
                 materially affects the data transmission rates of DSL modems.

DSL PRODUCTS

          Until the sale of our business to STMicroelectronices in April 2003,
we designed our chips with the following features to meet the demands of DSL
equipment manufacturers:

          -      HIGH-PERFORMANCE. We designed our chips to provide high-speed
                 processing of communications data packets. Our solutions were
                 designed to perform billions of operations per second.
                 Performance is key to achieving market acceptance. We aimed to
                 develop proprietary algorithms that would allow us to design
                 relatively small chips that would consume less power than other
                 comparable designs. This leads to a higher rate/ reach
                 performance.

          -      DESIGN AND SOFTWARE FLEXIBILITY. Our solutions were software
                 programmable to meet the specific needs of each customer. This
                 enabled the implementation of multiple DSL configurations, a
                 broad range of transmission rates and performance enhancement
                 and feature upgrades in compliance with various industry
                 standards. This flexibility enables telecommunication service
                 providers to optimize performance and keep pace with changing
                 industry requirements.

          -      LOW POWER. Our solutions were designed to be low power
                 solutions. Our proprietary algorithms allowed us to design
                 chips that consume relatively less power than other comparable
                 solutions. Low power chips enable DSL system manufacturers to
                 design high-density products that result in lower cost systems.
                 We designed our chips to reduce power use without sacrificing
                 their flexibility and performance.

          -      INTEROPERABILITY/STANDARD COMPLIANCE. Our designs complied with
                 industry standards and we actively participated in the
                 formation of DSL standards. This enabled us to monitor industry
                 trends and refine our product development efforts to bring
                 standards-compliant solutions to market. Our highly flexible
                 architecture and algorithm expertise enabled us to adapt our
                 chips to evolving standards. It was our goal to provide our
                 customers with solutions that were interoperable with other DSL
                 chip vendors, providing significant added value.

          -      SYSTEM APPROACH. Our design methodology was system oriented and
                 customer focused.

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TRANSFERRED DSL TECHNOLOGY AND PRODUCTS

          Prior to our separation from Orckit, we licensed our chip designs to
third party semi-conductor manufacturers. Following the separation, we designed
our chips for sale to manufacturers of DSL equipment for incorporation into
products sold to telecommunications service providers and their customers.
Orckit assigned to us the intellectual property relating to our ADSL and VDSL
chips and granted us co-ownership rights in our ATM DSLAM chip known as
Condor(TM).

          Our goal was to provide performance advantages and design attributes
that will make us a preferred supplier of DSL chips for all DSL applications. We
designed chips that incorporate several different DSL technologies.

          Pursuant to our technology transfer agreement with STMicroelectronics,
in February 2002 we granted STMicroelectronics co-ownership rights to all of our
intellectual property in the fields of DSL, network traffic management applied
to DSL semiconductor products and DSL chipsets existing on the date of the
agreement. In addition, we transferred to STMicroelectronics ownership over
existing PeakADSL and Condor integrated circuits and our PeakVDSL, PeakSHDSL and
Perflow integrated circuits still under development, as well as ownership rights
in respect of certain design wins existing on the date of the agreement.

          Pursuant to our development, marketing and services agreement with
STMicroelectronics dated February 2002, DSL design wins and DSL products
developed during the term of the agreement were to be solely owned by
STMicroelectronics, while all intellectual property developed during the term of
the agreement was jointly owned by STMicroelectronics and us. For further
information, please see Section 10.C - "Material Contracts" below.

PEAKADSL AND KEYWAVE ASYMMETRIC DIGITAL SUBSCRIBER LINE (ADSL) CHIPS

          In June 1997, we entered into a six-year agreement with Fujitsu
Microelectronics for the cooperative development and marketing of an advanced
ADSL chip for ADSL-based modems called KeyWave(TM). Under this agreement, we
developed the digital portion of the chip, and Fujitsu Microelectronics
developed the analog and mixed-signal portions of the chip. Each party retained
ownership of the technology that was developed by it pursuant to the agreement.
This agreement resulted in the completion of the KeyWave(TM) chip.

          The KeyWave(TM) is an ADSL and G.Lite chip, combining analog and
digital signal processor functions in a single device. Incorporating the two
functionalities on one chip resulted in a lower-cost solution. The KeyWave(TM)
was integrated to Orckit's ADSL DSLAM products. Commercial sales of this chip to
Orckit began in the first quarter of 2000. All the technology developed by
Orckit which has been incorporated into KeyWave(TM) was transferred to us.

          PeakADSL is designed for the central office which implements eight
ADSL modems. Higher density products contain an increased number of DSL
interfaces in each rack of communications equipment.

                                       16
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          Our KeyWave(TM) and PeakADSL chips were able to be deployed over the
local loop at a distance of up to 10,000 ft. at a downstream bit-rate of up to 8
Mbps or at a distance of 12,000 ft. at a downstream bit-rate of up to 6 Mbps and
provided cost advantages over installing fiber to the home. An ADSL signal
typically degrades, or provides lower transmission rates and quality, the
further a user is located from the central office of the telephone service
provider. Our ADSL chip was rate adaptive to provide the highest possible
transmission rate for a given channel. This allowed equipment to be installed
over longer distances as a system incorporating our ADSL chip will automatically
adapt the transmission rate to the highest rate possible over a given distance.
Our ADSL chip also contained an ISDN filter. This filter enables simultaneous
ADSL and ISDN transmission over the same line. This feature was particularly
attractive to European telephone companies because many European countries have
a widely-installed base of ISDN equipment. The ISDN filter enabled telcos to
install ADSL on their ISDN lines, thus sharing the line in a cost-effective way
with the existing ISDN system.

PEAKSHDSL SYMMETRIC HIGH SPEED DIGITAL SUBSCRIBER LINE (SHDSL) CHIP

          Our SHDSL chip, was a higher density and lower power solution which
enabled DSLAM, DLC (Digital Loop Carrier) and MTU (Multiple Tenant Unit) vendors
to deliver to service provider's equipment that meets the demand for large-scale
and fast-growth symmetric DSL deployment. Our PeakSHDSL CO chip-set was designed
to meet all SHDSL standards, and SHDSL can transmit data at rates up to 2.3Mbps.
In turn, the service providers can address the high demand for higher bandwidth
from millions of SOHO and SMB users worldwide. Symmetric High-bit rate Digital
Subscriber Line solutions provide symmetrical communication at multiple
bit-rates. These solutions enable applications such as business high-speed
Internet access, VPN, branch offices interconnection and combined high-speed
data and multiple voice channels as well as transport T1/E1 replacement and pair
gain applications.

PEAKVDSL VERY HIGH-SPEED DIGITAL SUBSCRIBER LINE (VDSL) CHIP

          Each VDSL chip in the central office side was designed to support
eight modems on a chip and supports eight channels of asymmetric data and four
channels of symmetric data. Our VDSL chip was designed to transmit data
downstream typically at 13 to 52 Mbps at distances ranging from approximately
900 ft. to 4,200 ft. and upstream at 1.6 to 6.4 Mbps, and to transmit data at up
to 13 Mbps symmetrically, for a distance of up to 3,400 ft. depending on noise
level and wire type.

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FAB-LESS MANUFACTURING

          We operated on a fab-less basis, which means that we designed our
chips but outsourced the manufacturing of them. Since we did not own or operate
a chip fabrication facility, we depended on subcontractors to deliver to us
sufficient quantities of fully-assembled and tested chips on a timely basis.

          Outsourcing the manufacturing of our chips enabled us to concentrate
our resources on the design, development and marketing of our products, where we
believe we had greater competitive advantages, and to eliminate the high cost of
owning and operating a chip fabrication facility.

CUSTOMERS

          Almost all of our DSL chip sales were made to Orckit. Our product
supply agreement with Orckit expired on May 1, 2002. As a result of the
agreements with STMicroelectronics, our activities in 2002 consisted primarily
of research and development services provided to STMicroelectronics. Pursuant to
our development, marketing and services agreement, STMicroelectronics has the
sole ownership rights to any DSL design wins and DSL products developed by us
during the term of the agreement. During the period from February 2002 through
April 2003, marketing efforts of our products were carried out by
STMicroelectronics.

INTELLECTUAL PROPERTY RIGHTS

          Our patents principally covered various aspects of features relating
to telecommunications technologies and telecommunications products, including
certain aspects specifically pertaining to DSL and cable communications systems
and devices.

          Pursuant to our technology transfer agreement with STMicroelectronics,
in February 2002 we granted STMicroelectronics co-ownership rights to all of our
intellectual property in the fields of SHDSL, VDSL, ADSL, G.lite, HDSL2 and
network traffic management applied to DSL semiconductor products and DSL
chipsets existing on the date of the agreement. In addition, we transferred to
STMicroelectronics ownership over all of our existing PeakADSL and Condor
integrated circuits and our PeakVDSL, PeakSHDSL and Perflow integrated circuits
still under development. In April 2003, pursuant to our asset purchase agreement
with STMicroelectronics, STMicroelectronics acquired sole ownership of all our
intellectual property rights.

C. ORGANIZATIONAL STRUCTURE

          We do not have significant subsidiaries.

D. PROPERTY, PLANTS AND EQUIPMENT

          We do not have any material fixed assets.

                                       18
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ITEM 5.   OPERATING AND FINANCIAL REVIEW AND PROSPECTS

A. OPERATING RESULTS

          Our operating and financial review and prospects should be read in
conjunction with our financial statements, accompanying notes thereto and other
financial information appearing elsewhere in this annual report.

          OVERVIEW

          We were formed as a private Israeli company in December 1999. Prior to
our separation from Orckit, our business was operated as a division of Orckit.
Our traditional business was the design, development and marketing of DSL chips
used by manufacturers of telecommunications equipment. Since our inception, the
vast majority our chip sales were to Orckit. Upon our separation from Orckit, we
received from Orckit all of the outstanding capital stock of Silicon Value.
Silicon Value designed, developed and marketed ASIC solutions to systems
manufacturers in the communication and other markets.

          In April 2001, we sold the ASIC business of Silicon Value to a wholly
owned subsidiary of Zen Research plc., for consideration of $21.7 million. As a
result, the results of operations of the ASIC business of Silicon Value are
reported separately as a discontinued operation in our statement of operations.

          In February 2002, we entered into three strategic agreements with
STMicroelectronics. Pursuant to a technology transfer agreement, we granted
STMicroelectronics certain co-ownership rights in our existing intellectual
property in the DSL field and ownership rights over our products, including
certain products still under development and our rights under certain design
wins. Pursuant to a development, marketing and services agreement, we provided
research and development and marketing services to STMicroelectronics through
April 2003. Pursuant to a one year option agreement, we granted to
STMicroelectronics the right to acquire our business. STMicroelectronics
exercised its option and acquired our business in April 2003 pursuant to an
asset purchase agreement. For a more detailed description of these agreements,
please see Item 10.C "Additional Information--Material Agreements."

          As a result of these agreements, from February 2002 through April 2003
our activities consisted primarily of research and development and marketing
services provided to STMicroelectronics. During this period, substantially all
of our revenue derived from STMicroelectronics.

          Following the sale of our business to STMicroelectronics in April
2003, our plan of operation has been to explore the best course of action for
Tioga, including to attempt to merge or effect a business combination with a
domestic or foreign, private or public operating entity in a new area of
operations. Other than activities relating to attempting to locate such a
candidate, and activities relating to the investment of our funds in short and
long term investments, we do not currently conduct any operations. Accordingly,
the financial information presented herein is not indicative of our future
operating results or financial position.

                                       19
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          Our results of operations primarily include (i) the revenues from
STMicroelectronics pursuant to our development, marketing and services
agreement, (ii) the revenues and royalties from chip sales to Orckit based on
our product supply agreement with Orckit, (ii) for 2000, the costs directly
attributable to that portion of Orckit's chip business transferred to us. In
2000, certain costs and expenses have been allocated based on our estimates of
the cost of services provided to the chip business transferred to us by Orckit.
These costs include research and development expenses and selling, general and
administrative expenses. These allocations and charges are based on either a
direct cost pass-through or a percentage of total costs for the services
provided based on factors such as headcount or the specific level of activity
directly related to such costs. We believe that these allocations were based on
assumptions that were reasonable under the circumstances. However, these
allocations and estimates are not necessarily indicative of the costs and
expenses that would have resulted if the transferred chip business had been
operated as a separate entity.

          We incurred net loss of $132.2 million in 2000. The loss for 2000
included aggregate charges of $109.9 million relating to the acquisition of
Silicon Value and the spin-off of Tioga from Orckit. This number includes
impairment of goodwill and other intangible assets in the amount of $58.1
million, goodwill amortization in the amount of $21.6 million, amortization of
other intangible assets in the amount of $4.1 million, a charge to expense of
in-process research and development in the amount of $24.7 million and spin off
expenses in the amount of $1.4 million. The impairment of goodwill and other
intangible assets, the goodwill amortization, the amortization of other
intangible assets and the charge to expense of the in process research and
development are reflected in our statement of operations are reflected as "loss
from discontinued operations".

          We incurred net losses of $18.2 million in 2001. The loss for 2001
included $4.0 million relating to the discontinued operations of the ASIC
business of Silicon Value that we sold in April 2001. The 2001 loss from
discontinued operations includes goodwill amortization in the amount of $2.3
million and impairment of property and equipment in the amount of $0.8 million.

          We generated net income of $8.8 million in 2002. Our net income in
2002 includes $9.7 million of "other income," which consists of payments under
the technology transfer agreement signed with STMicroelectronics in February
2002, net of transaction costs.

APPLICATION OF CRITICAL ACCOUNTING POLICIES AND ESTIMATES

          We prepare our consolidated financial statements in conformity with
accounting principles generally accepted in the United States. These accounting
principles require management to make certain estimates, judgments and
assumptions based upon the information available at the time they are made,
historical experience and various other factors believed to be reasonable under
the circumstances. These estimates, judgments and assumptions can affect the
reported amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the periods
presented. Management evaluates its estimates and judgments on an on-going
basis. Some of those judgments can be subjective and complex, and consequently
actual results may differ from those estimates.

                                       20
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          The Company is also subject to risks and uncertainties that may cause
actual results to differ from estimates and assumptions, such as changes in the
economic environment, competition, foreign exchange, taxation and governmental
programs. Certain of these risks, uncertainties and assumptions are discussed in
Item 3.D - "Risk Factors." To facilitate the understanding of our business
activities, described below are certain accounting policies that are relatively
more important to the portrayal of our financial condition and results of
operations and that require management's subjective judgments. We base our
judgments on past experience and various other assumptions that are believed to
be reasonable under the circumstances. Please refer to Note 1 to our
consolidated Nfinancial statements included in this Annual Report for a summary
of all of our significant accounting policies

REVENUE RECOGNITION

          Prior to entering into the agreements with STMicroelectronics in
February 2002, we derived our revenues from continuing operations mostly from
royalties and sales of products to Orckit. In 2001, following the amendment of
our product supply agreement, we recognized our royalty revenues as net revenues
without cost of goods sold. Revenues under our agreements with Orckit are
recognized at the time of shipment as reported to us by Orckit.

          Revenues from sales of products were recognized when persuasive
evidence of an agreement exists, delivery occurred, the fee was fixed and
determinable and collectibility was probable.

          Revenues from research and development services are recognized at the
time they are rendered.

DISCONTINUED OPERATIONS

          The results of operations of the ASIC business of Silicon Value, which
we sold in 2001, are reported separately as discontinued operations.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

          In April 2002, the FASB issued Statement of Financial Accounting
Standard No. 145, "Rescission of FASB Statements No. 4, 44, and 64, Amendment of
FASB Statement No. 13, and Technical Corrections" ("SFAS No. 145"), which
rescinds SFAS No. 4, "Reporting Gains and Losses from Extinguishment of Debt"
and an amendment of that Statement, and SFAS No. 64, "Extinguishments of Debt
Made to Satisfy Sinking-Fund Requirements." SFAS No. 145 also rescinds SFAS No.
44, "Accounting for Intangible Assets for Motor Carriers." SFAS No. 145 amends
SFAS No. 13, "Accounting for Leases," to eliminate an inconsistency between the
required accounting for sale-leaseback transactions and the required accounting
for certain lease modifications that have economic effects that are similar to
sale-leaseback transactions. SFAS No. 145 also amends other existing
authoritative pronouncements to make various technical corrections, clarify
meanings, or describe their applicability under changed conditions. SFAS No. 145
is effective for fiscal years beginning after May 15, 2002. We do not expect the
adoption of SFAS No. 145 will have a material impact on our results of
operations or financial position.

                                       21
<Page>

          In June 2002, the FASB issues Statement of Financial Accounting
Standard No. 146, "Accounting for Costs Associated with Exit or Disposal
Activities" ("SFAS No. 146"), which addresses significant issue regarding the
recognition, measurement, and reporting of costs associated with exit and
disposal activities, including restructuring activities. SFAS No. 146 requires
that costs associated with exit or disposal activities be recognized when they
are incurred rather than at the date of a commitment to an exit or disposal
plan. SFAS No. 146 is effective for all exit or disposal activities initiated
after December 31, 2002. We do not expect the adoption of SFAS No. 146 to have a
material impact on our results of operations or financial position.

          In November 2002, the FASB issued FASB Interpretation No. 45,
"Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others, an interpretation of FASB
Statements No. 5, 57, and 107 and Rescission of FASB Interpretation No. 34"
("FIN No. 45"). FIN No. 45 elaborates on the disclosures to be made by a
guarantor in its interim and annual financial statements about its obligations
under certain guarantees that it has issued. It also clarifies that a guarantor
is required to recognize, at the inception of a guarantee, a liability for the
fair value of the obligation undertaken in issuing the guarantee. FIN No. 45
does not prescribe a specific approach for subsequently measuring the
guarantor's recognized liability over the term of the related guarantee. It also
incorporates, without change, the guidance in FASB Interpretation No. 34,
"Disclosure of Indirect Guarantees of Indebtedness of Others," which is being
superseded. The disclosure provisions of FIN No. 45 are effective for financial
statements of interim or annual periods that end after December 15, 2002, and
the provisions for initial recognition and measurement are effective on a
prospective basis for guarantees that are issued or modified after December 31,
2002, irrespective of a guarantor's year-end. We do not expect the adoption of
FIN No. 45 to have a material impact on our results of operations or financial
position.

                                       22
<Page>

RESULTS OF OPERATIONS

          The table below sets forth, for the periods indicated, financial data
which we believe to be significant in analyzing our results of operations.

<Table>
<Caption>
                                                                Years Ended December 31,
                                                       2000           2001             2002
                                                                 (IN THOUSANDS)
<S>                                                <C>             <C>               <C>
STATEMENT OF OPERATIONS DATA:
Revenues.........................................  $   14,517      $    1,440        $  7,912
Product costs....................................      13,107               8              20

Research and development expenses and
development services costs.......................       8,974           9,537           6,375
Less royalty-bearing grants .....................           -           1,571           1,468
                                                   -----------     -----------       ---------
Research and development expenses, net
and development services costs, net .............       8,974           7,966           4,907
Selling, marketing, general and
administrative expenses..........................       3,470           4,067           2,227
Spin-off expenses................................       1,199               -               -
Impairment of property and equipment.............           -               -             157
Amortization of deferred stock
compensation.....................................          92           2,252             635
Operating loss...................................     (12,325)        (12,853)            (34)
Other expenses ..................................           -             (16)            (10)
Other income ....................................           -               -           9,698
Financial income (expense), net..................         969          (1,238)           (874)
                                                   -----------     -----------       ---------
Net income (loss) from continuing
operations.......................................     (11,356)        (14,107)          8,780
                                                   ===========     ===========       =========
Income (loss) from discontinued
operations ......................................    (120,839)         (4,043)             19
                                                   ===========     ===========       =========
Net income (loss)................................  $  (132,19)     $  (18,150)       $  8,799
                                                   ===========     ===========       =========
</Table>

                                       23
<Page>

          The table below sets forth, for the periods indicated, financial data,
expressed as a percentage of total revenues, which we believe to be significant
in analyzing our results of operations.

<Table>
<Caption>
                                                            YEARS ENDED DECEMBER 31,
                                                     ------------------------------------
                                                        2000         2001         2002
                                                     ----------   -----------   ---------
<S>                                                    <C>          <C>           <C>
 Revenues: (1)                                          100.0%        100.0%        100%

 Product costs                                           90.3%          0.6%        0.3%
 Research and development expenses, net and
 development services costs, net                         61.8%        553.2%       62.0%
 Selling, marketing, general and
 administrative expenses                                 23.9%        282.4%       28.1%
 Spin off expenses                                        8.3%            -           -
 Impairment of property and equipment                       -             -         1.9%
 Amortization of deferred stock
 compensation                                             0.6%        156.4%        8.0%
 Operating loss                                         (84.9)%      (892.6)%      (0.4)%
 Other expenses                                             -          (1.1)%      (0.1)%
 Other income                                               -             -       122.6%
 Financial income (expense), net                          6.7%        (86.0)%     (11.0)%
 Net income (loss) from continuing
 operations                                             (78.2)%      (979.7)%     111.0%
                                                     ----------   -----------   ---------
 Net income (loss) from discontinued
 operations                                            (832.4)%      (280.8)%       0.2%
                                                     ==========   ===========   =========
 Net income (loss)                                     (910.6)%     (1260.4)%     111.2%
                                                     ==========   ===========   =========
</Table>

   ----------
   (1) In 2001, most of our revenues were royalties, which do not have any
       cost of revenues.

          REVENUES. Chips sales in 2000 included also revenues from the sale of
HDSL chips and ADSL KeyWave(TM) chips. In 2001 and 2002, all of our royalties
and chip sale revenues were generated from ADSL KeyWave(TM) chips. Effective
January 1, 2001, our product supply agreement with Orckit was amended, as a
result of which we began generating revenues in the form of royalties.
Specifically, Orckit paid us a royalty equal to 10% of the actual price paid by
Orckit to the chip supplier. This agreement expired on May 1, 2002. The
significant decrease in our revenues from 2000 to 2001 was mainly a result of
the transition from a sale basis to a royalty basis.

          Total revenues increased from $1.4 million in 2001 to $7.9 million in
2002 as a result of $7.7 million revenues under our development, marketing and
services agreement with STMicroelectronics, which was entered into in February
2002.

                                       24
<Page>

          These services were provided to STMicroelectronics until April 28,
2003 for total consideration of $10.3 million.

          RESEARCH AND DEVELOPMENT EXPENSES, NET AND DEVELOPMENT COSTS, NET.
Research and development expenses consist primarily of salaries and other
personnel-related expenses, consultant expenses, equipment and software
depreciation, supplies, overhead expenses and other expenses related to the
design and development of our products. Our research and development costs are
expensed as incurred. Research and development expenses decreased from $9.0
million in 2000 to $7.9 million in 2001 and to $4.9 million in 2002. The
decrease from 2000 to 2001 was primarily as a result of grants from the Office
of the Chief Scientist in the amount of $1.6 million, while the decrease from
2001 to 2002 was primarily a result of a reduction in our development plans and
a reduction in personnel and contractors.

          SELLING, MARKETING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling,
marketing, general and administrative expenses consist primarily of salaries and
other personnel-related expenses for sales and marketing personnel, executive,
accounting and administrative personnel, professional fees, warranty accrual and
other general corporate expenses. These expenses increased from $3.5 million in
2000 to $4.1 million in 2001 and decreased to $2.2 million in 2002. The
significant decrease in 2002 was primarily a result of the termination of our
sales and marketing personnel.

          INCOME (LOSS) FROM DISCONTINUED OPERATIONS. As a result of our sale of
the ASIC business of Silicon Value, the results of operations of the ASIC
business are reported separately as a discontinued operation in our statement of
operations for the year ended December 31, 2000, 2001 and 2002. Loss from
discontinued operations in 2000 consists principally of impairment of goodwill
and other intangible assets in the amount of $58.1 million, goodwill
amortization in the amount of $21.6 million, amortization of other intangible
assets in the amount of $4.1 million and a charge to expense of the in-process
research and development in the amount of $24.7 million. The impairment of the
goodwill and other intangible assets in 2001 was due to the decrease in the
value of our investment in Silicon Value as a result of the downturn in the
telecommunications industry. Loss from discontinued operations in 2001 includes
goodwill amortization in the amount of $2.3 million and impairment of property
and equipment in the amount of $0.8 million.

          OTHER INCOME. Other income consists of income generated from
STMicroelectronics. In 2002, we had $9.7 million of other income, which consists
of payments under the technology transfer agreement signed with
STMicroelectronics in February 2002, net of transaction costs.

          FINANCIAL INCOME (EXPENSES), NET. Financial income consists primarily
of interest on short-term and bank deposits. Financial expense consists of
interest on the loan received from Orckit during the second half of 2000, which
was partially repaid in 2002, and bank credit, which was fully repaid as of
December 31, 2001. Financial income was $1.0 million in 2000. In 2001 our net
borrowings increase significantly and, consequently, our financial expenses
increased to $1.2 million. In 2002 our financial expense decreased to $0.9
million due to our repayment of $13.0 million under our credit facility with
Orckit.

          NET LOSS. As a result of the foregoing, we had a net loss of $132.2
million in 2000 and $18.2 million in 2001. The net loss for 2000 includes a net
loss of $120.8 million from discontinued operations, and the net loss for 2001
includes a net loss of $4.0 million from discontinued operations.

                                       25
<Page>

          In 2002 we generated net income of $8.8 million, primarily as a result
of payments in the amount of $9.7 million received from STMicroelectronics under
our technology transfer agreement, net of transaction expenses.

IMPACT OF INFLATION, DEVALUATION AND FLUCTUATION OF CURRENCIES ON RESULTS OF
OPERATIONS LIABILITIES AND ASSETS

          The annual inflation rate in Israel was 0.0% in 2000, 1.4% in 2001 and
6.5% in 2002, and the U.S. dollar versus the new Israeli shekel devaluation rate
in Israel was (2.7)% in 2000, 9.3% in 2001 and 7.3% in 2002.

          A devaluation of the new Israeli shekel in relation to the U.S. dollar
would have the effect of decreasing the dollar value of our assets in new
Israeli shekels to the extent the underlying value is new Israeli shekel-based.
Such a devaluation also would have the effect of reducing the U.S. dollar amount
of any of our liabilities which are payable in new Israeli shekels (unless such
payables are linked to the U.S. dollar).

          Most of our revenues were denominated in dollars and our expenses in
new Israeli shekels. Our expenses in new Israeli shekels were principally
payroll. Our results of operations were adversely affected by increases in the
rate of inflation in Israel when such increases are not offset by a
corresponding devaluation of the new Israeli shekel against the U.S. dollar. In
2002, the rate of inflation in Israel was 6.5%, which was lower than the 7.3%
rate of devaluation of the new Israeli shekel against the U.S. dollar. We do not
presently engage in any hedging or other transactions intended to manage risks
relating to foreign currency exchange rate fluctuations.

B. LIQUIDITY AND CAPITAL RESOURCES

          We have incurred significant losses since formation and thus have had
to find financing sources that were not from our own operations.

          In June 2000, in connection with our separation from Orckit, we
borrowed $20.0 million under a credit facility from Orckit. We also received a
$10.0 million short-term credit line from a bank, which we fully repaid during
2001. In April 2001, we sold the ASIC business of Silicon Value for total
consideration of $21.7 million ($18.0 in the form of cash), of which $16.2
million was paid in 2002 and the remaining $1.8 million was paid in 2003.

          In 2002, substantially all of our revenues arose from our agreements
with STMicroelectronics

          In addition, in February 2003, the District Court of Tel Aviv approved
our application for the repurchase of our ordinary shares at an aggregate price
of up to $2.0 million. As of May 31, 2003, we repurchased 3,386,468 ordinary
shares at an aggregate price of $798,000.

                                       26
<Page>

          In June 2000, we entered into a credit facility with Orckit that
provides for borrowings up to $20.0 million. As of December 31, 2001, $20.0
million principal amount was outstanding. In 2002, we paid to Orckit an
aggregate of $13.0 million of outstanding principal. We repaid the balance of
$7.0 million in 2003, as well as net accrued interest of $0.8 million. For
additional information about this credit facility, please see "--Related Party
Transactions" below.

          We had working capital of $(2.65) million as of December 31, 2000,
$(4.37) million as of December 31, 2001, $3.95 million as of December 31, 2002.

          During 2000 and 2001, we had net losses and as a result used more cash
than we generated from operations. We used cash in our operating activities of
$16.0 million in 2000 and $17.2 million in 2001. During 2002, we had net profit
of $8.8 million and we generated $9.0 million of cash from operations.

          We generated net cash from investing activities of $4.7 million in
2000 and $15.0 million in 2001, which consisted principally of proceeds from
disposition of the ASIC business of Silicon Value, and $1.8 million in 2002.

          We received cash flow from financing activities of $30.0 million in
2000, of which $20.0 million was from a loan from Orckit and $9.9 million was
from a credit facility from a bank. We had a negative cash flow from financing
activities of $8.9 million in 2001, principally due to the repayment of
short-term bank credit. In 2002, we had a negative cash flow from financing
activities of $13.0 million due to the repayment of $13.0 million of the loan
from Orckit.

GOVERNMENT GRANTS

          Under the Law for the Encouragement of Industrial Research and
Development, 1984, or the R&D Law, research and development programs which meet
specified criteria and are approved by a governmental committee of the Office of
the Chief Scientist of the Ministry of Industry and Trade of the Government of
Israel are eligible for grants of up to 50% of the project's expenditure, as
determined by the research committee, in exchange for the payment of royalties
from the sale of products developed in accordance with the program.

          In 2001 and 2002 we recognized grants from the Office of the Chief
Scientist in the amount of approximately $1.6 million and $1.5 million,
respectively.

          With respect to any product of ours whose development was partially
funded by the Office of the Chief Scientist, we were required to pay royalties
to the Chief Scientist of 4% of the all revenues generated by such products,
including sales, license and maintenance revenues, until 100 - 150% of the
dollar-linked grant is repaid, with interest.

                                       27
<Page>

          The terms of the Israeli government participation also typically
require that the manufacture of products developed with government grants be
performed in Israel. In the event that any of the manufacturing rights are
transferred out of Israel, if approved by the Office of the Chief Scientist, we
would be required to pay royalties at a higher royalty rate and an increased
aggregate repayment amount (up to 300%), depending on the portion of
manufacturing to be performed outside of Israel. The lack of approval by the
Office of the Chief Scientist with respect to the transfer of manufacturing
rights out of Israel could have a material adverse effect on strategic alliances
that we enter into in the future that provide for the transfer of such
manufacturing rights.

          Our agreements with STMicroelectronics were approved by the Office of
the Chief Scientist. This approval was conditioned upon the undertaking of
STMicroelectronics to comply with the provisions of the R&D Law and to pay to
the Office of the Chief Scientist royalties on the sale of the purchased
products that are based on our funded intellectual property.

          In November 2002, the Israeli parliament approved an amendment to the
R&D Law. The amendment became effective on April 1, 2003.

          As opposed to the R&D Law prior to the amendment, which requires an
undertaking in the application that all manufacturing will be performed in
Israel, the amendment to the R&D Law allows for the approval of grants in cases
in which the applicant declares that part of the manufacturing will not be
performed in Israel. This declaration is required to include details regarding
the locations in which the manufacture of the product will be performed in
Israel and out of Israel, the manufacture activities to be performed in such
locations (including the reasons for performing such manufacture activities out
of Israel) and the proportionate manufacturing expenditures in Israel and out of
Israel. This declaration will be a significant factor in the determination of
the Office of Chief Scientist whether to approve a plan and the amount and other
terms of benefits to be granted.

          In accordance with the amendment to the R&D Law, a plan will be
approved if the applicant is an Israeli corporation and as a result of the plan
the applicant will develop in Israel, by Israeli residents, a new product or a
significant improvement to an existing product, unless the Office of Chief
Scientist is convinced that it is essential for the execution of the plan that
part of it will be performed out of Israel or by non-Israeli residents.

          The amendment to the R&D Law further allows the Office of Chief
Scientist to provide grants for portions of 20%, 30%, 40% or 50% of certain
approved expenditures of a research and development. The Research and
Development Law prior to the amendment only allowed for grants covering 50% of
such expenditures. This amendment and the budget of the Office of the Chief
Scientist may affect the rate of additional grants that may be requested by us
in the future.

          The amendment to the R&D Law adds reporting requirements with respect
to certain changes in the ownership of a grant recipient. The amendment requires
the grant recipient and its controlling shareholders and interested parties to
notify the Office of the Chief Scientist of any change in control of the
recipient or a change in the holdings of the means of control of the recipient
that results in a non-Israeli becoming an interested party directly in the
recipient and requires the new interested party to undertake to the Office of
the Chief Scientist to comply with the R&D Law. For this purpose, "control" is
defined as the ability to direct the activities of a company other than any
ability arising solely from serving as an officer or director of the company. A
person is presumed to have control if such person holds 50% or more of the means
of control of a company. "Means of control" refers to voting rights and the
right to appoint directors or the chief executive officer. An "interested party"
of a company includes a holder of 50% or more of its outstanding share capital
or voting rights, its chief executive officer and directors, someone who has the
right to appoint its chief executive officer or at least one director, and a
company with respect to which any of the foregoing interested parties owns 25%
or more of the outstanding share capital or voting rights or has the right to
appoint 25% or more of the directors.

                                       28
<Page>

C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES

          Our policy was to devote a significant portion of our personnel and
financial resources to developing new products and product applications. As a
result of the agreements with STMicroelectronics, from February 2002 through
April 2003 our activities consisted primarily of research and development
services provided to STMicroelectronics. Following the sale of our business to
STMicroelectronics in April 2003, we conduct no research and development
activities.

          Our gross research and development expenditures were $9.0 million in
2000 and $9.5 million in 2001 and $6.4 million in 2002. In 2001, we recognized
grants from the Office of the Chief Scientist of approximately $1.6 million and
thus the net research and development expenses were $7.9 million. In 2002, our
research and development expenditures were funded by payments from
STMicroelectronics pursuant to our development, marketing and services agreement
and from grants in the aggregate amount of $1.5 million from the Office of the
Chief Scientist.

D. TREND INFORMATION

          In April 2003, we sold substantially all of our assets and liabilities
(other than financial indebtedness) to STMicroelectronics pursuant to an asset
purchase agreement, which is described below under Item 10.C "Additional
Information--Material Agreements." Since then, our plan of operation has been to
explore the best course of action for Tioga, including to attempt to merge or
effect a business combination with a domestic or foreign, private or public
operating entity in a new area of operations. Accordingly, the financial
information provided herein is not indicative of our future operating results or
financial position.

                                       29
<Page>

ITEM 6.     DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A. DIRECTORS AND SENIOR MANAGEMENT

The following table lists our current directors and senior managers as of June
20, 2003:

NAME                           AGE   POSITION
Izhak Tamir                    50    Chairman of the Board
Douglas Goodyear               48    Director
Moti Kintzlinger               44    Director
Harel Kodesh                   44    External Director
Eric Paneth                    53    Director

          The business experience of each of our directors and executive
officers is as follows:

          IZHAK TAMIR has served as Chairman of our Board of Directors since
February 2000. He also served as our Chief Executive Officer from February 2000
to June 2000. He has served as President and a Director of Orckit since its
founding in 1990. From 1987 until 1989, Mr. Tamir was employed by Comstream
Inc., in San Diego, California. From 1985 until 1987, he was vice president of
A.T. Communication Channels Ltd., a subsidiary of Bezeq. From 1978 to 1985, he
was a senior engineer in the Israeli Ministry of Defense. Mr. Tamir holds an
engineering degree from the Israel Institute of Technology, commonly known as
the Technion, and an M.B.A. from Tel Aviv University.

          DOUGLAS GOODYEAR has served as one of our Directors since July 2001.
Since April 2003, he has served as the Chief Executive Officer of Tak'Asic, a
semiconductor provider of image/compression processors. Mr. Goodyear served as
our President and Chief Executive Officer from January 2001 to January 2003.
From June 2000 to January 2001, he served as our Vice President, Worldwide
Sales. From 1998 to 2000, Mr. Goodyear served as senior vice president,
worldwide sales at Radisys Corporation, a supplier of Telecom and Networking
solutions. He was vice president of worldwide sales for Actel Corp., a supplier
of programmable integrated circuits from 1995 to 1998, and vice president of
North American sales for the Microelectronics Group of Sharp Electronics from
1990 to 1995. Prior to this time, Mr. Goodyear held various sales and sales
management positions with Hitachi, Advanced Micro Devices, and Signetics Corp.
Mr. Goodyear holds B.S. degrees in both Computer Science & Management at the
University of Nebraska.

          MOTI KINTZLINGER has served as one of our Directors since June 2000
and as a vice president and general manager of our Israeli operations from May
2000 to January 2001. From February 2001 to October 2002, Mr. Kintzlinger
managed a start-up company called Cinata Inc., which develops IP storage
networking solutions for enterprises and service providers. He currently serves
as a director of Cinata and in another private company. He served as chief
executive officer of Silicon Value from its founding in 1995 through May 2000.
Mr. Kintzlinger holds a B.Sc. in Electrical Engineering from the Technion.

                                       30
<Page>

     HAREL KODESH has served as one of our Directors since June 2000. Mr. Kodesh
serves as Chairman of the Board of Mobilitech, a start-up company that develops
Java platforms for carriers. Until 2003, he served as President and Chief
Executive Officer of Wingcast Corporation, a new joint venture between Ford
Motor Corporation and Qualcomm Inc. that offers telematics services to people on
the move. From 1992 to 2000, he served in a variety of technical and managerial
roles at Microsoft Corporation, most recently as Vice President of the
productivity appliance division and, prior to that time, as Vice President of
the information appliances division. Prior to 1992, Mr. Kodesh worked at
Motorola, Inc. where he was in charge of the development of advanced wireless
data technology. Mr. Kodesh holds a B.S. degree in Computer Engineering and an
M.S. degree in Electrical Engineering, both from the Technion.

          ERIC PANETH has served as one of our Director since February 2000 and
served as our President from February 2000 to June 2000. Mr. Paneth has also
served as Chairman of the Board of Directors and Chief Executive Officer of
Orckit since its founding in 1990. From 1975 until 1983, Mr. Paneth was a senior
engineer in the Israeli Ministry of Defense, and from 1985 to 1990, was a
technical department head in the Israeli Ministry of Defense. From 1983 until
1985, he was employed by Linkabit Inc., in San Diego, California. Mr. Paneth
holds an advanced engineering degree from the Technion.

          There are no family relationships between any director or senior
manager. There are no arrangements or understandings between any director or
senior manager and any other person pursuant to which the director or senior
manager was selected.

B. COMPENSATION

          The aggregate direct remuneration, including fringe benefits commonly
provided by companies in Israel, paid or accrued by us to all persons as a group
(13 persons) who served in the capacity of director or executive officer in the
year ended December 31, 2002, was approximately $1.1 million. This figure
includes approximately $0.2 million set aside or accrued to provide pension,
retirement or similar benefits. The foregoing information includes the
compensation of officers and directors who have resigned from Tioga.

          In the year ended December 31, 2002, we did not grant to our officers
and directors any options to purchase ordinary shares.

C. BOARD PRACTICES

     ISRAELI COMPANIES LAW

          We are subject to the provisions of the new Israeli Companies Law,
5759-1999, and the regulations adopted thereunder.

     BOARD OF DIRECTORS

          According to the Companies Law and our articles of association, the
oversight of the management of our business is vested in our board of directors.
The board of directors may exercise all powers and may take all actions that are
not specifically granted to our shareholders. As part of its powers, our board
of directors may cause us to borrow or secure payment of any sum or sums of
money for our purposes, at times and upon terms and conditions as it thinks fit,
including the grant of security interests in all or any part of our property.
Our board of directors may consist of not less than three nor more than 15
directors and as of the date HEREOF, consists of six directors, including our
external directors.

                                       31
<Page>

          Since April 2003, upon the sale of our business to STMicroelectronics
and the transfer or resignation of all our employees, including senior
management, we are being managed directly by our board of directors. Subject to
shareholder approval, our board of directors has appointed Izhak Tamir as our
Chief Executive Officer, who has agreed to serve in that role for no
compensation until the end of 2003.

          Our directors are elected at annual meetings of our shareholders by a
vote of the holders of a majority of the ordinary shares voting thereon.
Generally, our directors hold office until the next annual meeting of
shareholders following the annual meeting at which they were elected. Directors
may be removed earlier from office by resolution passed at a general meeting of
our shareholders. Pursuant to the Israeli Companies Law, external directors are
elected by shareholders for a three-year term and may be re-elected by
shareholders for an additional three-year term.

          Unless otherwise unanimously decided by our directors, a quorum at a
meeting of the board of directors is constituted by the presence of a majority
of the directors then in office who are lawfully entitled to participate in the
meeting, but not less than two directors. A resolution proposed at a meeting of
the board of directors is deemed adopted if approved by a majority of the
directors present and voting on the matter.

          There are no arrangements or understandings between us and any of our
directors for benefits upon termination of service.

     EXTERNAL DIRECTORS

     QUALIFICATIONS OF EXTERNAL DIRECTORS

          Under the Companies Law, companies incorporated under the laws of
Israel whose shares are listed for trading on a stock exchange or have been
offered to the public in or outside of Israel are required to appoint two
external directors. The Companies Law provides that a person may not be
appointed as an external director if the person or the person's relative,
partner, employer or any entity under the person's control has, as of the date
of the person's appointment to serve as an external director, or had, during the
two years preceding that date any affiliation with:

          -    the company;

          -    any entity controlling the company; or

          -    any entity controlled by the company or by its controlling
               entity.

                                       32
<Page>

          The term affiliation includes:

          -    an employment relationship;

          -    a business or professional relationship maintained on a regular
               basis;

          -    control; and

          -    service as an office holder.

          The Companies Law defines the term "office holder" of a company to
include a director, the chief executive officer, the chief financial officer and
any officer that reports directly to the chief executive officer.

          No person can serve as an external director if the person's position
or other business creates, or may create conflict of interests with the person's
responsibilities as an external director or may otherwise interfere with the
person's ability to serve as an external director. Until the lapse of two years
from termination of office, a company may not engage an external director to
serve as an office holder and cannot employ or receive services from that
person, either directly or indirectly, including through a corporation
controlled by that person.

     ELECTION OF EXTERNAL DIRECTORS

          External directors are to be elected by a majority vote at a
shareholders' meeting, provided that either:

          -    at least one third of the shares of non-controlling shareholders
               voted at the meeting vote in favor of the election; or

          -    the total number of shares voted against the election of the
               external director does not exceed one percent of the aggregate
               voting rights in the company.

          The initial term of an external director is three years and may be
extended for an additional three years. External directors may be removed from
office only by the same percentage of shareholders as is required for their
election, or by a court, and then only if the external directors cease to meet
the statutory qualifications for their appointment or if they violate their duty
of loyalty to the company. Each committee of a company's board of directors is
required to include at least one external director, except for the audit
committee which is required to include all the external directors. In the
shareholders meeting held in September 2000, Menachem Abraham and Harel Kodesh
were elected as External Directors. Mr. Abraham resigned in June 2003, and we
intend to elect a replacement at our next shareholders meeting.

     COMMITTEES

          Subject to the provisions of the Companies Law, our board of directors
may delegate its powers to committees consisting of board members. Our board has
formed a compensation committee and an audit committee.

     COMPENSATION COMMITTEE

          Our board of directors has formed a compensation committee, which has
the authority to take actions on behalf of the board of directors relating to
all matters of compensation (other than granting stock options or issuing any
other securities) and to make recommendations to the board of directors relating
to the grant of stock options. Until Mr. Abraham's resignation in June 2003, the
compensation committee consisted of Izhak Tamir and Menachem Abraham.

                                       33
<Page>

     AUDIT COMMITTEE

          Under the Companies Law, our board of directors is required to appoint
an audit committee, comprised of at least three directors including all of the
external directors, but excluding:

          -    the chairman of the board of directors; and

          -    a controlling shareholder or a relative of a controlling
               shareholder and any director employed by the company or who
               provides services to the company on a regular basis.

          The role of the audit committee is to examine flaws in the business
management of the company, in consultation with the internal auditor and the
company's independent accountants, suggest appropriate course of action and to
approve specified related party transactions. Our audit committee consists of
our external directors and one additional director, Moti Kintzlinger.

     APPROVAL OF INTERESTED PARTY TRANSACTIONS

          The approval of the audit committee is required to effect specified
actions and transactions with office holders, controlling shareholders and
entities in which they have a personal interest. An audit committee may not
approve an action or a transaction with related parties or with its office
holders unless at the time of approval the two external directors are serving as
members of the audit committee and at least one of whom was present at the
meeting in which an approval was granted.

     INTERNAL AUDITOR

          Our board of directors has appointed an internal auditor. Under the
Companies Law, the role of the internal auditor is to examine, among other
things, whether the company's actions comply with the law and orderly business
procedure. Under the Companies Law, the internal auditor may not be an
interested party, an office holder or a relative of any of the foregoing, nor
may the internal auditor be the company's independent accountant or its
representative. The Companies Law defines the term "interested party" to include
a person who holds 5% or more of the company's outstanding share capital or
voting rights, a person who has the right to appoint one or more directors or
the general manager, or any person who serves as a director or as the general
manager.

                                       34
<Page>

     APPROVAL OF SPECIFIED RELATED PARTY TRANSACTIONS UNDER ISRAELI LAW

          FIDUCIARY DUTIES OF OFFICE HOLDERS

          The Companies Law imposes a duty of care and a duty of loyalty on all
office holders of a company. The duty of care requires an office holder to act
with the level of care with which a reasonable office holder in the same
position would have acted under the same circumstances. The duty of care
includes a duty to use reasonable means to obtain:

          -    information on the advisability of a given action brought for his
               approval or performed by him by virtue of his position; and

          -    all other important information pertaining to these actions.

          The duty of loyalty of an office holder includes a duty to:

          -    refrain from any conflict of interest between the performance of
               his duties in the company and the performance of his other duties
               or his personal affairs;

          -    refrain from any activity that is competitive with the company;

          -    refrain from exploiting any business opportunity of the company
               to receive a personal gain for himself or others; and

          -    disclose to the company any information or documents relating to
               a company's affairs which the office holder has received due to
               his position as an office holder.

          DISCLOSURE OF PERSONAL INTEREST OF AN OFFICE HOLDER

          The Israeli Companies Law requires that an office holder of a company
disclose to the company any personal interest that he may have and all related
material information known to him, in connection with any existing or proposed
transaction by the company. The disclosure is required to be made promptly and
in any event no later than the board of directors meeting in which the
transaction is first discussed. If the transaction is an extraordinary
transaction, the office holder must also disclose any personal interest held by:

          -    the office holder's spouse, siblings, parents, grandparents,
               descendants, spouse's descendants and the spouses of any of these
               people; or

          -    any corporation in which the office holder is a 5% or greater
               shareholder, director or general manager or in which he has the
               right to appoint at least one director or the general manager.

          Under the Companies law, an extraordinary transaction is a
          transaction:

          -    other than in the ordinary course of business;

          -    otherwise than on market terms; or

                                       35
<Page>

          -    that is likely to have a material impact of the company's
               profitability, assets or liabilities.

          Once an office holder complies with the above disclosure requirement,
the board of directors may approve a transaction between the company and an
office holder, or a third party in which an office holder has a personal
interest. A transaction that is adverse to the company's interest may not be
approved.

          If the transaction is an extraordinary transaction, approval of both
the audit committee and the board of directors is required. Under specific
circumstances, shareholder approval may also be required. A director who has a
personal interest in a matter which is considered at a meeting of the board of
directors or the audit committee may not be present at this meeting or vote on
this matter, unless a majority of the members of the board of directors or the
audit committee, as the case may be, has a personal interest in the matter. If a
majority of members of the board of directors have a personal interest therein,
shareholder approval is also required.

          DISCLOSURE OF PERSONAL INTERESTS OF A CONTROLLING SHAREHOLDER

          Under the Israeli Companies Law, the disclosure requirements that
apply to an office holder also apply to a controlling shareholder of a public
company. A controlling shareholder is a shareholder who has the ability to
direct the activities of a company, including a shareholder that owns 25% or
more of the voting rights if no other shareholder owns more than 50% of the
voting rights, but excluding a shareholder whose power derives solely from his
or her position on the board of directors or any other position with the
company. Extraordinary transactions with a controlling shareholder or in which a
controlling shareholder has a personal interest, and the engagement of a
controlling shareholder as an office holder or employee, require the approval of
the audit committee, the board of directors and the shareholders of the company
in that order. The shareholder approval must be by a majority of the shares
voted on the matter, provided that either:

          -    at least one-third of the shares of shareholders who have no
               personal interest in the transaction and who vote on the matter
               vote in favor thereof; or

          -    the shareholders who have no personal interest in the transaction
               who vote against the transaction do not represent more than one
               percent of the voting rights in the company.

          Shareholders generally have the right to examine any document in the
company's possession pertaining to any matter that requires shareholder
approval.

D. EMPLOYEES

          As a result of the sale of our business to STMicroelectronics in April
2003 and the transfer or resignation of our employees, as of May 31, 2003, we
had no employees. As of December 31, 2002, we had 67 employees, 66 based in
Israel and one in the United States, of whom 57 employees were engaged in
research and development, none in sales and marketing and 10 in management,
administration and operations. As of December 31, 2001, we had 71 employees, 66
based in Israel and 5 in the United States, of whom 56 employees were engaged in
research and development, 2 in sales and marketing and 13 in management,
administration and operations. As of December 31, 2000, we had 176 employees
based in Israel and the United States, of whom 149 employees were engaged in
research and development, 6 in sales and marketing and 21 in management,
administration and operations. The significant reduction in the number of our
employees during 2001 was mainly a result of the sale of the ASIC business of
Silicon Value in April 2001 and additional reduction of 31 employees during the
fourth quarter of 2001 for cost-saving purposes.

                                       36
<Page>

          None of our employees were represented by a labor union and we have
not experienced a work stoppage. Provisions of the collective bargaining
agreements between the Histadrut (General Federation of Labor in Israel) and the
Coordination Bureau of Economic Organizations (including the Industrialists
Associations) are applicable to our employees by order of the Israeli Ministry
of Labor and Welfare. These provisions principally concern cost of living
increases, recreation pay and other conditions of employment.

          Israeli Labor laws and regulations are applicable to all employees in
Israel. The laws principally concern matters such as paid annual vacation, paid
sick days, the length of the workday, payment for overtime, insurance for
work-related accidents, severance pay and other conditions of employment.
Israeli law generally requires severance pay, which may be funded, in whole or
in part, by Managers' Insurance described below, in certain circumstances,
including the retirement or death of an employee or termination of employment
without cause, as defined in the law. The payments thereto amount to
approximately 8.3% of wages. Furthermore, Israeli employers and employees are
required to pay predetermined sums to the National Insurance Institute, which is
similar to the United States Social Security Administration. Since January 1,
1995, these sums also include payments for national health insurance. A general
practice that we followed, although not legally required, is the contribution of
funds on behalf of most of our employees to a fund known as Managers' Insurance.
This fund provided employees with a lump sum payment upon retirement or with
payments on account of severance pay, if legally entitled, upon termination of
employment. Each employee who agreed to participate in the Managers' Insurance
plan contributed an amount equal to 5% of his or her base salary and we
contributed approximately 15% of the salary (which 15% includes the 8.3% for
severance pay).

                                       37
<Page>

E. SHARE OWNERSHIP

          As of May 31, 2003, Messrs. Eric Paneth and Izhak Tamir, each,
directly or through a wholly owned company, owns 2,965,105 ordinary shares and
options to purchase 220,000 of our ordinary shares at NIS 0.10 per share, which
is the par value of the ordinary shares. The options are fully vested and will
expire on the earlier of ten years following the date of grant and six months
following termination of the holder's directorship. Accordingly, each of Messrs.
Paneth and Tamir beneficially owns approximately 12.6% of our ordinary shares.
As of May 31, 2003, Mr. Kintzlinger owns 149,667 ordinary shares and options to
purchase 220,000 ordinary shares at NIS 0.10 per share, or beneficial ownership
of 1.5% of our ordinary shares. The options are fully vested and will expire six
month following our 2003 annual shareholders meeting. As of May 31, 2003, Mr.
Goodyear owns options to purchase 600,000 ordinary shares at NIS 0.10 per share,
or beneficial ownership of 2.3% of our ordinary shares. The options are fully
vested and will expire six month following our 2003 annual shareholders meeting.
Except for Messrs. Paneth, Tamir, Goodyear and Kintzlinger, none of our
executive officers or directors beneficially owns 1% or more of our outstanding
ordinary shares.

TIOGA SHARE INCENTIVE PLAN

          Our board of directors has adopted the Tioga Share Incentive Plan
pursuant to which options may be granted to directors, officers, key employees,
consultants and contractors of Tioga. This share option plan is administered by
our compensation committee, which is empowered, among other things, to recommend
to our board of directors the optionees, dates of grant and the exercise price
of options. Unless otherwise decided by our board of directors or the
compensation committee, options granted under the share option plan are be
non-assignable except by the laws of descent. Under the share option plan, the
grantee is responsible for all personal tax consequences of the grant and the
exercise thereof.

          As part of the plan pursuant to which Tioga was separated from Orckit,
holders of options to purchase Orckit shares were granted an equal number of
options to purchase our shares and were entitled to retain their Orckit options,
as well. The vesting schedule of our options is identical to the corresponding
Orckit options, including those Orckit options that were fully vested on the
date of consummation of the plan. The exercise price of the existing Orckit
options were allocated between that option and the Tioga option based on the
valuation of Orckit and Tioga's shares on the date of the consummation of the
plan.

          As of April 28, 2003, we had outstanding options to purchase a total
of 6,886,692 ordinary shares. The outstanding options have vesting periods of up
to four-years and have expiration dates ranging from 2003 to 2010. The options
issued to Orckit's option holders have exercise prices ranging from nominal
price to $15.00 per share. In 2001, our board of directors decreased the
exercise price of most of our outstanding options at the time of the resolution
granted to directors, officers and employees of Tioga to NIS 0.10 per share,
which is the par value of our ordinary shares.

          As a result of the sale of our business to STMicroelectronics in April
2003, the vesting schedule of the options held by our directors and certain
officer was accelerated and the expiration date of all outstanding options,
other than those held by continuing directors, was set for November 2003.

                                       38
<Page>

ITEM 7.   MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

     A. MAJOR SHAREHOLDERS

          The following table sets forth certain information regarding the
beneficial ownership of our ordinary shares as of April 28, 2003 by each person
who is known to own beneficially more than 5% of the outstanding ordinary
shares. The voting rights of all major shareholders are the same as for all
other shareholders.

<Table>
<Caption>
IDENTITY OF PERSON OR GROUP                 AMOUNT OWNED    PERCENT OF CLASS(1)
<S>                                           <C>                  <C>
Eric Paneth(2)                                3,185,105            12.6%
Izhak Tamir(2)                                3,185,105            12.6%
</Table>

----------
(1)  Based on 25,069,740 ordinary shares outstanding on April 28, 2003.
(2)  Includes 220,000 ordinary shares issuable upon the exercise of options that
     are exercisable currently or within the next 60 days.

          Clal Electronics Industries Ltd. and affiliates filed a Schedule 13D
on February 14, 2003 reporting that they beneficially own 4.7% of our
outstanding ordinary shares. On June 30, 2000, they beneficially owned 12.9%, on
April 30, 2001 they beneficially owned 14.4% and on May 31, 2002 they
beneficially owned 10.1% of our outstanding ordinary shares.

          As of May 5, 2003, there were 71 holders of record of our ordinary
shares in the United States who collectively held approximately 75.4% of our
outstanding ordinary shares. The number of record holders in the United States
is not representative of the number of beneficial holders nor is it
representative of where such beneficial holders are resident since many of these
ordinary shares were held of record by brokers or other nominees.

B. RELATED PARTY TRANSACTIONS

RELATIONSHIP BETWEEN TIOGA AND ORCKIT

          Tioga and Orckit, except as otherwise contemplated in the agreements
referred to below, operate independently of one another as separate public
companies.

          We believe that all of the agreements described below have been
entered into on terms similar to terms that would be obtained from independent
third parties.

          The following is a summary of the material terms of the agreements
entered into by Tioga and Orckit which define their ongoing relationship and is
qualified in its entirely by reference to the text of the agreements which are
filed or incorporated by reference as exhibits to this report. See Item 19 -
"Exhibits".

                                       39
<Page>

          SEPARATION AGREEMENT

          In June 2000, we entered into a separation agreement with Orckit
pursuant to which Orckit contributed and transferred to us substantially all of
the assets and liabilities constituting its chip business, including its shares
of Silicon Value, in exchange for our ordinary shares, which enabled Orckit to
distribute our ordinary shares as a stock dividend to its shareholders, on a
share-for-share basis. We have also issued to the holders of options to purchase
ordinary shares of Orckit, options to purchase an equivalent number of our
ordinary shares.

          Under the separation agreement, we have assumed all employment-related
obligations, accrued benefits and severance pay of Orckit's employees who have
become our full-time employees.

          INTELLECTUAL PROPERTY AGREEMENT

          In 2000, we entered into an agreement with Orckit for the (i)
assignment to us of substantially all of Orckit's DSL chip intellectual
property, including patents and patent applications, and (ii) joint ownership of
the Condor chip and certain other technologies without accounting to one
another, and (iii) irrevocable license from Orckit to us of other
non-semiconductor patents and patent applications of Orckit. In connection with
this assignment, we granted Orckit an irrevocable license to use the assigned
intellectual property. This agreement also contains cross indemnity provisions
whereby Orckit indemnifies us with respect to any patent or related claims with
respect to the technology retained by them and we indemnify Orckit with respect
to any work-around costs incurred as a result of any patent or related claims
with respect to the technology transferred to us by Orckit. Orckit agreed, for a
period of two years from our separation in June 2000, not to sell on a
stand-alone basis chip products which compete with our current line of business
as it relates to the technology assigned to us. In connection with our
transaction with STMicroelectronics, Orckit agreed to extend this period to
January 15, 2004.

          PRODUCT SUPPLY AGREEMENT

          In 2000, we entered into a two-year product supply agreement with
Orckit for the sale of certain chips to Orckit, including the KeyWave(TM), HDSL
and Condor(TM) chips. Subject to performance criteria and price, Orckit was
entitled to pay most-preferred customer prices. Initially, Orckit's price was
cost plus 10%. Effective January 1, 2001, this agreement was amended, as a
result of which, we began generating revenues from royalties. Specifically,
Orckit paid us a royalty equal to 10% of the actual price paid to the chip
supplier. This agreement expired on May 1, 2002.

                                       40
<Page>

          CREDIT FACILITY

          In 2000, we borrowed $20.0 million under a variable rate revolving
credit facility with OrckitThe credit facility was to mature on March 1, 2005
and initially accrued interest at the rate of 12-month LIBOR plus 2.0% per
annum. Effective January 1, 2001, the interest was changed to 6% per annum. This
revolving credit facility was secured by a first priority interest in all our
present and future assets.

          Pursuant to the terms of the credit facility, Orckit may have been
entitled to accelerate the repayment of the loan as a result of our transaction
with STMicroelectronics in February 2002. In connection with that transaction,
we entered into an agreement with Orckit pursuant to which we paid in 2002 to
Orckit an aggregate of $13.0 million of outstanding principal. We repaid the
remaining principal and accrued interest in the aggregate amount of $7.8 million
in 2003.

          OUR OBLIGATION TO ISSUE SHARES UPON CONVERSION OF ORCKIT'S NOTES

          On March 13, 2000, Orckit raised approximately $125 million in a
private placement of 5.75% convertible subordinated notes due April 2005.
Holders of the notes are entitled to convert the notes into the ordinary shares
Orckit and Tioga, at a conversion rate of 2.34962 ordinary shares of Orckit
(after giving effect to a one-for-five reverse share split) and 11.7481 ordinary
shares of Tioga per $1,000 principal amount of notes. If all the notes are
converted, we would be required to issue approximately 1.5 million ordinary
shares. As of May 31, 2003, Orckit has converted notes that it repurchased from
holders and has received from us an aggregate of 364,191 ordinary shares upon
said conversions. The notes may be called by Orckit at any time after April 1,
2003. Under certain conditions, the notes may be redeemed at any time prior to
April 1, 2003 if the price of our shares plus the price of Orckit's shares
exceeds 150% of the conversion price for at least 20 days within a 30-day period
and Orckit makes an additional make whole payment on the redeemed notes.

          The respective conversion rates are subject to adjustment if, among
other things:

          -    subject to limitations, we distribute rights or warrants pro rata
               to the holders of our ordinary shares, so long as any of these
               rights or warrants have not expired or been redeemed by us;

          -    there is a dividend or other distribution payable in ordinary
               shares on our ordinary shares;

          -    we issue to all holders of our ordinary shares rights, options or
               warrants entitling them to subscribe for or purchase ordinary
               shares at less than the current market price, subject to
               limitations;

          -    we subdivide, reclassify or combine our ordinary shares;

          -    we distribute to all holders of our ordinary shares evidences of
               our indebtedness, shares of capital stock, cash or assets,
               including securities, but excluding certain dividends, rights,
               options, warrants and distributions upon a merger or
               consolidation;

                                       41
<Page>

          -    with exceptions, we make a distribution consisting exclusively of
               cash (excluding cash distributed upon a merger or consolidation)
               to all holders of our ordinary shares; and

          -    there is a successful completion of a tender offer made by us for
               our ordinary shares, subject to limitations.

C. INTERESTS OF EXPERTS AND COUNSEL

          Not applicable.

ITEM 8.   FINANCIAL INFORMATION

A. CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION

          See financial statements under Item 18.

B. LEGAL PROCEEDINGS

          We have no material legal proceedings.

          Following our sale in 2001 of the ASIC business of Silicon Value to a
subsidiary of Zen Research plc., Zen made certain claims against us and has
refused to pay approximately $600,000, in respect of certain post-closing
financial adjustments set forth in the asset purchase agreement, and to permit
the release of $1.8 million then held in escrow under that agreement. These
claims were brought to arbitration pursuant to the provisions of the agreement.
While the arbitration was in process, we reached an agreement with Zen to settle
its claim and our counterclaim, pursuant to which we waived the payment of
$600,000 with respect to the post-closing adjustment and Zen released to us the
$1.8 million held in escrow.


C. SIGNIFICANT CHANGES

          In April 2003, we sold substantially all of our assets and liabilities
(other than financial indebtedness) to STMicroelectronics pursuant to an asset
purchase agreement, which is described below under Item 10.C "Additional
Information--Material Agreements." Since then, our plan of operation has been to
explore the best course of action for Tioga, including to attempt to merge or
effect a business combination with a domestic or foreign, private or public
operating entity in a new area of operations. Other than activities relating to
attempting to locate such a candidate, and activities relating to the investment
of our funds in short and long term investments, we do not currently conduct any
operations.

                                       42
<Page>

          In addition, in February 2003, the District Court of Tel Aviv approved
our application for the repurchase of our ordinary shares at an aggregate price
of up to $2.0 million. As of May 31, 2003, we repurchased 3,386,468 ordinary
shares at an aggregate price of $798,000.

ITEM 9.   THE OFFER AND LISTING

A. OFFER AND LISTING DETAILS

          Our ordinary shares are currently quoted on the OTC Bulletin Board, an
electronic quotation medium regulated by the National Association of Securities
Dealers, under the symbol TIGA. The OTC Bulletin Board typically has lower
liquidity than the Nasdaq National Market.

          Since June 26, 2000, the following table sets forth, for the periods
indicated, the high and low sales prices of our ordinary shares as reported on
the Nasdaq National Market & OTC Counter Bulletin Board.

                                       43
<Page>

<Table>
<Caption>
Calendar Year                                                 Price Per Share
-------------                                                 ---------------
                                                     High                       Low
                                                    -------                   ------
<S>                                                 <C>                       <C>
2000 (commencing June 26, 2000)                     $ 20.25                   $ 1.50
2001                                                   3.53                     0.23
2002                                                   0.43                     0.12

<Caption>
Calendar Period                                               Price Per Share
---------------                                               ---------------
                                                      High                      Low
                                                     ------                    -----
<S>                                                    <C>                      <C>
2003

         First Quarter                                 0.22                     0.12

2002

         First Quarter                                 0.43                     0.14

         Second Quarter                                0.20                     0.14

         Third Quarter                                 0.24                     0.12

         Fourth Quarter                                0.17                     0.12

2001

         First Quarter                                 3.53                     0.56

         Second Quarter                                1.84                     0.62

         Third Quarter                                 0.81                     0.28

         Fourth Quarter                                0.66                     0.23

<Caption>
Calendar Month                                                Price Per Share
---------------                                               ---------------
                                                      High                      Low
                                                     ------                    -----
<S>                                                    <C>                      <C>
2003

         May                                           0.28                     0.22

         April                                         0.26                     0.15

         March                                         0.19                     0.17

         February                                      0.19                     0.17

         January                                       0.22                     0.12

2002

         December                                      0.16                     0.14
</Table>

                                       44
<Page>

B.        PLAN OF DISTRIBUTION

          Not applicable

C.        MARKETS

          Our ordinary shares are quoted on the OTC Bulletin Board under the
symbol TIGA.

D.        SELLING SHAREHOLDERS

          Not applicable

E.        DILUTION

          Not applicable

F.        EXPENSES OF THE ISSUE

          Not applicable

ITEM 10.  ADDITIONAL INFORMATION

A. SHARE CAPITAL

          Not applicable.

B. MEMORANDUM AND ARTICLES OF ASSOCIATION

OBJECTS AND PURPOSES

          We were first registered under Israeli law on December 14, 1999 as a
private company, and on June 30, 2000 became a public company. Our registration
number with the Israeli registrar of companies is 51-286883-7. Our object is to
engage, directly or indirectly, in any lawful undertaking or business
whatsoever, including, without limitation, as stipulated in section 2 of our
Memorandum of Association, which was filed with the Israeli registrar of
companies.

TRANSFER OF SHARES AND NOTICES

          Fully paid ordinary shares may be freely transferred pursuant to our
articles of association unless the transfer is restricted or prohibited by
another instrument. Unless otherwise prescribed by law, shareholders of record
will be provided at least 21 calendar days' prior notice of any general
shareholders meeting.

          The ownership or voting of our ordinary shares by non-residents of
Israel, except with respect to citizens of countries which are in a state of war
with Israel, is not restricted in any way by our Memorandum of Association or
Articles of Association or by the laws of the State of Israel.

                                       45
<Page>

DIVIDEND AND LIQUIDATION RIGHTS

          Dividends on our ordinary shares may be paid only out of profits and
other surplus, as defined in the Companies Law, as of the end of the most recent
fiscal year or as accrued over a period of two years, whichever is higher. Our
board of directors is authorized to declare dividends, provided that there is no
reasonable concern that the dividend will prevent us from satisfying our
existing and foreseeable obligations as they become due. In the event of our
liquidation, after satisfaction of liabilities to creditors, our assets will be
distributed to the holders of ordinary shares in proportion to their respective
holdings. This liquidation right may be affected by the grant of preferential
dividends or distribution rights to the holders of a class of shares with
preferential rights that may be authorized in the future.

VOTING, SHAREHOLDERS' MEETINGS AND RESOLUTIONS

          Holders of ordinary shares have one vote for each ordinary share held
on all matters submitted to a vote of shareholders. These voting rights may be
affected by the grant of any special voting rights to the holders of a class of
shares with preferential rights that may be authorized in the future.

          We have two types of general shareholders meetings: the annual general
meetings and extraordinary general meetings. These meetings may be held either
in Israel or in any other place the board of directors determines. An annual
general meeting must be held in each calendar year, but not more than 15 months
after the last annual general meeting. Our board of directors may convene an
extraordinary meeting, from time to time, at its discretion and is required to
do so upon the request of any two directors, at least 25% of the directors, or
shareholders holding at least 5% of our ordinary shares. The quorum required for
an ordinary meeting of shareholders consists of at least two shareholders
present in person or by proxy who hold or represent between them at least 25% of
the outstanding voting shares unless otherwise required by applicable rules. A
meeting adjourned for lack of a quorum generally is adjourned to the same day in
the following week at the same time and place or any time and place as the
chairman may designate with the consent of the holders of a majority of the
voting power represented at the meeting and voting on the matter adjourned. At
such reconvened meeting the required quorum consists of any two members present
in person or by proxy.

          Under the Companies Law and our articles of association, all
resolutions of the shareholders require a simple majority of the shares present,
in person or by proxy, and voting on the matter.

          These voting rights may be affected by the grant of any special voting
rights to the holders of a class of shares with preferential rights that may be
authorized in the future. The quorum required for an ordinary meeting of
shareholders consists of at least two shareholders present in person or by proxy
who hold or represent between them at least 25% of the outstanding voting shares
unless otherwise required by applicable rules. A meeting adjourned for lack of a
quorum generally is adjourned to the same day in the following week at the same
time and place or any time and place as the chairman may designate with the
consent of the holders of a majority of the voting power represented at the
meeting and voting on the matter adjourned. At such reconvened meeting the
required quorum consists of any two members present in person or by proxy.

                                       46
<Page>

DUTIES OF SHAREHOLDERS

          Under the Companies Law, each and every shareholder has a duty to act
in good faith in exercising his rights and fulfilling his obligations towards us
and other shareholders and to refrain from abusing his power in Tioga, such as
in voting in the general meeting of shareholders on the following matters:

          -    any amendment to the articles of association;

          -    an increase of our authorized share capital;

          -    a merger; or

          -    approval of certain actions and transactions which require
               shareholder approval.

          In addition, each and every shareholder has the general duty to
refrain from depriving other shareholders of their rights.

          Furthermore, any controlling shareholder, any shareholder who knows
that it possesses the power to determine the outcome of a shareholder vote and
any shareholder that, pursuant to the provisions of the articles of association,
has the power to appoint or to prevent the appointment of an office holder in
Tioga or any other power toward Tioga is under a duty to act in fairness towards
us. The Companies Law does not describe the substance of this duty of fairness.

MERGERS AND ACQUISITIONS UNDER ISRAELI LAW

          The Israeli Companies Law includes provisions that allow a merger
transaction and requires that each company that is a party to a merger have the
transaction approved by its board of directors and a vote of the majority of its
shares, at a shareholders' meeting called on at least 21 days' prior notice. For
purposes of the shareholder vote, unless a court rules otherwise, the merger
will not be deemed approved if a majority of the shares held by parties other
than the other party to the merger, or by any person who holds 25% or more of
the shares or the right to appoint 25% or more of the directors of the other
party, vote against the merger. Upon the request of a creditor of either party
of the proposed merger, the court may delay or prevent the merger if it
concludes that there exists a reasonable concern that as a result of the merger,
the surviving company will be unable to satisfy the obligations of any of the
parties to the merger. In addition, a merger may not be completed unless at
least 70 days have passed from the time that a proposal of the merger has been
filed with the Israeli Registrar of Companies.

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          The Companies Law also provides that an acquisition of shares of a
public company must be made by means of a tender offer if as a result of the
acquisition the purchaser would become a 25% or greater shareholder of the
company and there is no existing 25% or greater shareholder in the company. An
acquisition of shares of a public company must be made by means of a tender
offer if as a result of the acquisition the purchaser would become a 45% or
greater shareholder of the company. This rule does not apply if someone else is
already a majority shareholder in the company. If following any acquisition of
shares, the acquiror will hold 90% or more of the company's shares, the
acquisition may not be made other than through a tender offer to acquire all of
the shares of such class. If more than 95% of the outstanding shares are
tendered in the tender offer, all the shares that the acquirer offered to
purchase will be transferred to it. However, the remaining minority shareholders
may seek to alter the consideration by court order.

          Finally, Israeli tax law treats stock-for-stock acquisitions between
an Israeli company and a foreign company less favorably than does U.S. tax law.
For example, Israeli tax law may, under certain circumstances, subject a
shareholder who exchanges his ordinary shares for shares in another corporation
to taxation prior to the sale of the shares received in such stock-for-stock
swap.

MODIFICATION OF CLASS RIGHTS

          Our articles of association provide that the rights attached to any
class (unless otherwise provided by the terms of that class), such as voting,
rights to dividends and the like, may be varied by a shareholders resolution,
subject to the sanction of a resolution passed by the holders of a majority of
the shares of that class at a separate class meeting.

INDEMNIFICATION, EXCULPATION AND INSURANCE OF OFFICE HOLDERS

          EXCULPATION OF OFFICE HOLDERS

          Under the Companies Law, an Israeli company may not exempt an office
holder from liability for breach of his duty of loyalty, but may exempt in
advance an office holder from liability to the company, in whole or in part, for
a breach of his duty of care provided the articles of association of the company
allow it to do so. Our articles of association allow us to exempt our office
holders to the fullest extent permitted by law.

          INSURANCE OF OFFICE HOLDERS

          Our articles of association provide that, subject to the provisions of
the Companies Law, we may enter into an insurance contract which would provide
coverage for any monetary liability incurred by any of our office holders, with
respect to an act performed in the capacity of an office holder for:

          -    a breach of his duty of care to us or to another person;

          -    a breach of his duty of loyalty to us, provided that the office
               holder acted in good faith and had reasonable cause to assume
               that his act would not prejudice our interests; or

          -    a financial liability imposed upon him in favor of another
               person.

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          INDEMNIFICATION OF OFFICE HOLDERS

          Our articles of association provide that we may indemnify an office
holder against the following obligations and expenses imposed on the office
holder with respect to an act performed in the capacity of an office holder:

          -    a financial obligation imposed on him in favor of another person
               by a court judgment, including a compromise judgment or an
               arbitrator's award approved by the court; and

          -    reasonable litigation expenses, including attorneys' fees,
               expended by the office holder or charged to him by a court in
               connection with:

          -    proceedings we institute against him or that are instituted on
               our behalf or by another person;

          -    a criminal charge from which he is acquitted; or

          -    a criminal proceeding in which he is convicted of an offense that
               does not require proof of criminal intent.

          Our articles of association also include provisions:

          -    authorizing us to undertake to indemnify an office holder as
               described above, provided that the undertaking is limited to
               those types of events which our board of directors deems to be
               anticipated when the undertaking is given and to an amount
               determined by our board of directors to be reasonable under the
               circumstances; and

          -    authorizing us to retroactively indemnify an officer or director.

          LIMITATIONS ON EXCULPATION, INSURANCE AND INDEMNIFICATION

          The Israeli Companies Law provides that a company may not exculpate or
indemnify an office holder, or enter into an insurance contract which would
provide coverage for any monetary liability incurred as a result of any of the
following:

          -    a breach by the office holder of his duty of loyalty unless, with
               respect to insurance coverage, the office holder acted in good
               faith and had a reasonable basis to believe that the act would
               not prejudice the company;

          -    a breach by the office holder of his duty of care if the breach
               was done intentionally or recklessly;

          -    any act or omission done with the intent to derive an illegal
               personal benefit; or

          -    any fine levied against the office holder.

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          In addition, under the Companies Law, exculpation of, indemnification
of, and procurement of insurance coverage for, our office holders must be
approved by our audit committee and our board of directors and, if the
beneficiary is a director, by our shareholders.

          Our articles of associations also provide that, subject to the
provisions of applicable law, we may procure insurance for or indemnify any
person who is not an office holder, including without limitation, any of our
employees, agents, consultants or contractors.

C. MATERIAL CONTRACTS

          The agreements that we entered into with Orckit are summarized below
under Item 7.B "Major Shareholders and Related Party Transactions--Related Party
Transactions" and also are incorporated by reference as exhibits to this report.

AGREEMENTS WITH STMICROELECTRONICS

          On February 14, 2002, we entered into three strategic agreements with
STMicroelectronics NV, and its Israeli subsidiary, ST Microelectronics Ltd.
STMicroelectronics is a large, multi-national semiconductor company
headquartered in Geneva and listed on the New York Stock Exchange. Our
agreements with STMicroelectronics consist of the following: a technology
transfer agreement; a development, marketing and services agreement; and an
option agreement. In addition, on April 28, 2003, we entered into an asset
purchase agreement with STMicroelectronics. Each of these agreements is
summarized below. This summary is qualified in its entirety by reference to the
full agreements, which are filed or incorporated by reference as exhibits to
this annual report. See Item 19 - "Exhibits". In connection with the agreements
entered into on February 14, 2002, we entered into an agreement with Orckit
relating to our loan agreement with Orckit. That agreement is described above in
Item 7.B "Major Shareholders and Related Party Transactions--Related Party
Transactions."

          TECHNOLOGY TRANSFER AGREEMENT

          Pursuant to the technology transfer agreement, we granted
STMicroelectronics co-ownership rights to all of our intellectual property in
the fields of DSL, network traffic management applied to DSL semiconductor
products and DSL chipsets existing on the date of the agreement.

          The technology transfer agreement further provides for the transfer to
STMicroelectronics of ownership over our existing PeakADSL and Condor integrated
circuits, and PeakVDSL, PeakSHDSL and Perflow integrated circuits still under
development. In addition, we transferred to STMicroelectronics ownership of
rights under certain design wins.

          In consideration for the above, STMicroelectronics paid us on June 4,
2002 an amount of $9.0 million. In addition, STMicroelectronics paid us $1.0
million on February 22, 2002 in exchange for co-ownership rights with respect to
certain VDSL patents and certain services that we will provide to
STMicroelectronics with respect to a certain research and development project.

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          We made certain representations with respect to ourselves and the
transferred technology and products and undertook not to grant to any third
party any rights in the transferred technology during that one-year period.

          DEVELOPMENT, MARKETING AND SERVICES AGREEMENT

          Pursuant to the development, marketing and services agreement, we were
required to provide STMicroelectronics with research and development and
marketing services in the DSL field, as determined by STMicroelectronics from
time to time. The performance of the services commenced upon the closing of the
technology transfer agreement and was scheduled to expire on April 15, 2003. It
was subsequently extended until April 28, 2003.

          In consideration for the services and certain intellectual property
rights in the technology and products developed during the term of the
agreement, STMicroelectronics was required to pay us $2.0 million for each
three-month period in which the services were rendered, commencing on January
15, 2002.

          Subject to STMicroelectronics's compliance with the terms of the
development, marketing and services agreement, the DSL design wins and DSL
products developed by our workforce during the term of the agreement were to be
solely owned by STMicroelectronics. However, all intellectual property developed
by such workforce during the term of the development, marketing and services
agreement was to be jointly owned by STMicroelectronics and us.

          OPTION AGREEMENT

         Under the option agreement, we granted STMicroelectronics, subject to
all requirements and consents required under Israeli law and under applicable
regulations of the Securities and Exchange Commission, the right to acquire our
business via a merger between us and a wholly-owned Israeli subsidiary of
STMicroelectronics. This option was exercisable at any time until January 15,
2003. In addition, STMicroelectronics granted us the option to cause
STMicroelectronics to effect such merger, subject to certain conditions. Our
option was exercisable at any time between January 16, 2003 and January 31,
2003. In lieu of structuring the acquisition of our business by
STMicroelectronics as a merger, STMicroelectronics may elect to structure it as
a purchase of assets and assumption of certain liabilities, regardless of which
party exercises its option.

          The consideration for the acquisition of our business was $12.0
million, subject to certain adjustments. In the event of an asset sale, the
consideration would be adjusted by the aggregate amount of certain unfunded
employee-related liabilities, overdue current liabilities that have not been
paid under their original terms of payment and accounts receivable sold that
have not yet expired.

          STMicroelectronics exercised its option to purchase our business on
January 15, 2003 and, in accordance with the option agreement, elected to
structure the deal as a purchase of assets and assumption of certain
liabilities. Accordingly, we entered into an asset purchase agreement with
STMicroelectronics dated as of April 28, 2003, which is summarized below.

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          ASSET PURCHASE AGREEMENT

          Under the asset purchase agreement, STMicroelectronics acquired all of
our assets and assumed all of our liabilities other than the following
liabilities: (i) our financial indebtedness (including our debt to Orckit); (ii)
our liabilities towards our subsidiaries and our subsidiaries' liabilities to
us; (iii) tax liabilities (other than value added tax, if any, which is to be
borne by STMicroelectronics); (iv) liabilities towards the Office of Chief
Scientist with respect to our development, marketing and services agreement with
STMicroelectronics; and (v) any other liability which is actually known to us
and not disclosed to STMicroelectronics.

          The purchase price for the acquisition of our business was $12.0
million. That amount is subject to certain adjustments based on the aggregate
amount, as appears in our audited financial statements for the date of the asset
purchase agreement, of (i) certain unfunded employee-related liabilities, (ii)
overdue current liabilities that have not been paid under their original terms
of payment, (iii) accounts receivable sold that have not yet expired and (iv)
any increase of liabilities and decrease of assets, outside the ordinary course
of business, as compared to our unaudited balance sheet as of March 31, 2003. If
we and STMicroelectronics are unable to agree on the aggregate value of the
adjustments, if any, the adjustments will be determined by Ernst & Young LLP,
and its determination will be final and binding on the parties.

          Of the consideration, $1.8 million was placed in escrow for a period
of 30 days from the signing of the agreement or 20 days from the receipt by
STMicroelectronics of our audited financial statements for the date of the
closing of the asset purchase agreement, whichever is later. The escrow will
secure the payment of any damages, which may be due to STMicroelectronics as a
result of any misrepresentation or breach of warranty made by us in the asset
purchase agreement or any breach by us of any covenant, agreement or undertaking
made in the agreement and will be the sole and exclusive remedy (except in the
case of fraud and the remedy of specific performance) with respect to any and
all claims relating to the asset purchase agreement and its ancillary documents.

          STMicroelectronics hired most of our employees under terms of
employment substantially identical to the terms under which we had employed
these employees.

          We have undertaken additional covenants in the asset purchase
agreement, including the following: (i) the obligation to change our corporate
name to a name that does not include the word "Tioga"; (ii) the obligation not
to engage, for a period of three years, in any business that competes with our
business as conducted prior to the closing of the asset purchase agreement; and
(iii) the obligation not to solicit, for a period of two years, the services of
any employee of STMicroelectronics previously employed by us or to otherwise
interfere with the relationship between STMicroelectronics and any such
employees.

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D. EXCHANGE CONTROLS

          There are currently no Israeli currency control restrictions on
payments of dividends or other distributions with respect to our ordinary shares
or the proceeds from the sale of the shares, except for the obligation of
Israeli residents to file reports with the Bank of Israel regarding certain
transactions. However, legislation remains in effect pursuant to which currency
controls can be imposed by administrative action at any time.

E. TAXATION

          THE FOLLOWING IS A GENERAL SUMMARY ONLY AND SHOULD NOT BE CONSIDERED
AS INCOME TAX ADVICE OR RELIED UPON FOR TAX PLANNING PURPOSES. HOLDERS OF OUR
ORDINARY SHARES SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE UNITED STATES,
ISRAELI OR OTHER TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF
ORDINARY SHARES, INCLUDING, IN PARTICULAR, THE EFFECT OF ANY FOREIGN, STATE OR
LOCAL TAXES.

UNITED STATES FEDERAL INCOME TAX CONSEQUENCES

          The following is a summary of certain material U.S. federal income tax
consequences arising from the purchase, ownership and disposition of our
ordinary shares that are relevant to shareholders who are "U.S. persons," as
defined below. This summary is based upon current law, including the United
States Internal Revenue Code of 1986, as amended (the "Code"), Treasury
regulations promulgated thereunder, administrative pronouncements and judicial
decisions relating thereto, and the current U.S-Israeli treaty relating to taxes
on income and capital gains, all of which are subject to change or differing
interpretations, possibly on a retroactive basis. This summary is limited to
U.S. federal income tax law, and does not consider estate or gift tax
consequences, U.S. state or local tax consequences, or taxation under the laws
of any other jurisdiction. This summary is further limited to U.S. persons that
hold our shares as capital assets within the meaning of Section 1221 of the
Code, and does not address all aspects of U.S. federal income taxation that may
be relevant to U.S. holders in light of their particular circumstances (e.g.,
persons who acquired our shares as compensation) or to certain types of U.S.
holders subject to special treatment under the U.S. federal income tax laws,
such as dealers in securities or currencies, tax-exempt plans and organizations,
regulated investment companies, life insurance companies, banks, other financial
institutions, U.S. holders who own, directly, indirectly or constructively, 10%
or more of our voting shares or U.S. holders who hold our shares through a
partnership or other pass-through entity and persons holding our shares as part
of a "straddle," "hedge" or "conversion transaction." Accordingly, shareholders
are urged to consult with their own tax advisors to determine the tax
consequences applicable to their individual situations.

          For purposes of the following discussion, a "U.S. holder" is:

          -    a U.S. citizen or an individual resident in the United States for
               purposes of U.S. federal income tax;

          -    a partnership, corporation or other entity taxable as a
               corporation created or organized in the United States or under
               the law of the United States or any political subdivision
               thereof;

          -    an estate the income of which is includable in gross income for
               U.S. federal income tax purposes regardless of its source; or

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          -    a trust, if a court within the United States is able to exercise
               primary supervision over the administration of the trust and one
               or more U.S. persons have the authority to control all
               substantial decisions of the trust.

SALE OR EXCHANGE OF OUR SHARES

          A U.S. holder's sale or exchange of our shares generally will result
in the recognition of capital gain or loss by such U.S. holder in an amount
equal to the difference between the amount realized and the U.S. holder's tax
basis in our shares sold, although a portion of any gain may be recharacterized
as ordinary income under the PFIC rules, discussed below. Gain or loss realized
on the sale of our shares will be long-term capital gain or loss if the U.S.
holder's holding period for our shares is more than one year at the time of the
sale or exchange. If the U.S. holder's holding period on the date of the sale or
exchange was one year or less, such gain or loss will be a short-term capital
gain or loss. Any capital loss realized upon the sale, exchange or other
disposition of our shares generally is deductible only against capital gains and
not against ordinary income, except that in the case of non-corporate taxpayers,
a capital loss is deductible to the extent of capital gains plus ordinary income
up to $3,000. In general, any capital gain recognized by a U.S. holder upon the
sale or exchange of our shares will be treated as U.S. source income for U.S.
foreign tax credit purposes.

TREATMENT OF DIVIDEND DISTRIBUTIONS

          For U.S. federal income tax purposes, subject to the PFIC rules,
discussed below, the gross amount of any distribution, including the amount of
any Israeli taxes withheld therefrom, paid to a U.S. holder with respect to our
shares will be included in his, her or its ordinary income to the extent that
the dividends are paid out of our current or accumulated earnings and profits,
as determined based on U.S. federal tax principles. These dividends will not be
eligible for the dividends received deduction allowed to U.S. corporations under
Section 243 of the Code. Because we expect to be treated as a PFIC, as discussed
below, we do not expect that our dividends will eligible to be treated as
"qualified dividend income," which is subject to tax at reduced rates for
shareholders that are individuals, estates or trusts.

          Distributions in excess of our current and accumulated earnings and
profits will be treated first as a non-taxable return of the U.S. holder's tax
basis in our shares to the extent thereof and then as a gain from the sale of
our shares.

          Dividends paid in new Israeli shekels, including the amount of any
Israeli taxes withheld therefrom, will be includable in income in a U.S. dollar
amount based on the exchange rate at the time of their receipt. Any gain or loss
resulting from currency fluctuations during the period from the date a dividend
is paid to the date such payment is converted into U.S. dollars generally will
be treated as ordinary income or loss.

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          Dividends paid to a U.S. holder with respect to our shares will be
treated as foreign source dividend income for U.S. foreign tax credit limitation
purposes. At the election of a U.S. holder, any Israeli withholding tax imposed
on such dividends will be eligible for credit against such U.S. holder's U.S.
federal income tax liability, subject to the general conditions and limitations
imposed on foreign tax credits. However, a credit generally will not be
available to the extent the Israeli rate of tax on such dividends exceeds the
U.S. rate of tax thereon. A credit also will not be available to the extent the
U.S. holder has not held the shares with respect to which the dividend is paid
for at least 16 days of the 30 day period beginning on the date which is 15 days
before the ex-dividend date or to the extent such U.S. holder is under an
obligation to make related payments with respect to substantially similar or
related property. Any days during which a U.S. holder has substantially
diminished its risk of loss on our shares are not counted toward meeting the
16-day holding period required by the statute. A U.S. holder not electing to
claim a credit for foreign taxes generally will be entitled to a deduction for
any withholding taxes imposed on dividends.

          The calculation of allowable foreign tax credits and, in the case of a
U.S. holder that elects to deduct foreign taxes, the availability of deductions
for foreign taxes paid involve the application of rules that depend on a U.S.
holder's particular circumstances, and also may be complicated by the
application of the PFIC rules, discussed below. Accordingly, U.S. holders should
consult their own tax advisors regarding their eligibility for foreign tax
credits or deductions.

PASSIVE FOREIGN INVESTMENT COMPANY STATUS

          Generally, we will be treated as a passive foreign investment company,
or PFIC, for U.S. federal income tax purposes for any tax year if, in such tax
year, either (i) 75% or more of our gross income is passive in nature, or (ii)
on average for such tax year, 50% or more of our assets (by value) produce or
are held for the production of passive income. We believe we did not satisfy
either of the above tests for PFIC status in 2002. However, because of the sale
of our operating assets to STMicroelectronics in April 2003, we may be treated
as a PFIC for 2003, unless we effect a business combination that causes us not
to satisfy the above tests for 2003.

          If we are treated as a PFIC for U.S. federal income tax purposes then,
as to a U.S. holder who does not make a QEF Election (as described below):

          Excess distributions by us will be taxed in a special way. "Excess
distributions" are amounts received by a U.S. holder with respect to our stock
in any taxable year that exceed 125% of the average distributions received by
such U.S. holder from us in the shorter of either the three previous years or
such U.S. holder's holding period for ordinary shares before the present taxable
year. Excess distributions must be allocated ratably to each day that a U.S.
holder has held our stock. A U.S. holder must include in its gross income for
the current taxable year, as ordinary income, amounts allocated to the current
taxable year or to a prior tax year in which we were not a PFIC. A U.S. holder
must pay tax on amounts allocated to each prior taxable year in which we were a
PFIC at the highest rate in effect for that year on ordinary income plus an
interest charge at the rate applicable to tax deficiencies.

          The entire amount of gain that is realized by a U.S. holder upon the
sale or other disposition of our shares will be treated in the same manner as an
excess distribution and would be subject to tax as described above, at ordinary
income rates.

          The tax basis in shares of our stock that were acquired from a
decedent who was a U.S. holder will not receive a step-up to fair market value
as of the date of the decedent's death but will instead be equal to the
decedent's basis, if lower.

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          A U.S. holder who beneficially owns shares of a PFIC must file Form
8621 (Return by a Shareholder of a Passive Foreign Investment Company or
Qualified Electing Fund) with the U.S. Internal Revenue Service for each tax
year in which he, she or it holds stock in a PFIC.

          For any tax year in which we are determined to be a PFIC, a U.S.
holder may elect to treat our shares as an interest in a qualified electing fund
(a "QEF Election"), in which case the U.S. holder will be required to include in
income currently his, her or its proportionate share of our earnings and profits
in years in which we are a PFIC regardless of whether distributions of such
earnings and profits are actually distributed to such U.S. holder, but any gain
subsequently recognized upon the sale by such U.S. holder of our shares
generally will be taxed as capital gain and the denial of the basis step-up at
death described above will not apply. A QEF election, once made, will apply with
respect to the electing U.S. holder's holding of our shares in all subsequent
taxable years.

          The PFIC rules also provide a "mark-to-market" election for certain
PFIC stock as an alternative to a QEF Election. However, the mark-to-market
election generally applies only to stock that is traded on certain qualified
exchanges. Because of the delisting of our shares from the Nasdaq National
Market and the Tel Aviv Stock Exchange, U.S. holders generally will not be able
to make a mark-to-market election with respect to our stock.

          U.S. holders should consult their own tax advisors regarding the
eligibility, manner and advisability of making a QEF Election or a
mark-to-market election if we are treated as a PFIC.

INFORMATION REPORTING AND BACKUP WITHHOLDING

          Any dividends paid on our shares, and payments of the proceeds of a
sale of our shares, paid within the United States or through certain
U.S.-related financial intermediaries are subject to information reporting and
may be subject to backup withholding at the rate of 28% unless (i) the payor is
entitled to, and does in fact, presume the U.S. holder of our shares is a
corporation or other exempt recipient or (ii) the U.S. holder provides a
taxpayer identification number on a properly completed Form W-9 and certifies
that no loss of exemption from backup withholding has occurred. The amount of
any backup withholding will be allowed as a credit against a U.S. holder's U.S.
federal income tax liability and may entitle the U.S. holder to a refund,
provided that the U.S. holder files a timely federal income tax return and
furnishes the required information to the Internal Revenue Service.

ISRAELI TAX CONSIDERATIONS

          The following is a summary of the principal tax laws applicable to
companies in Israel, with special reference to their effect on us, and certain
Israeli Government programs benefiting us. This section also contains a
discussion of certain Israeli tax consequences to persons acquiring ordinary
shares. This summary does not discuss all the acts of Israeli tax law that may
be relevant to a particular investor in light of his or her personal investment
circumstances or to certain types of investors subject to special treatment
under Israeli law, such as traders in securities or persons that own, directly
or indirectly, 10% or more of our outstanding voting share capital. To the
extent that the discussion is based on new tax legislation which has not been
subject to judicial or administrative interpretation, there can be no assurance
that the views expressed in this discussion will be accepted by the tax
authorities. The discussion should not be construed as legal or professional tax
advice and is not exhaustive of all possible tax considerations.

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          Potential investors are urged to consult their own tax advisors as to
the Israeli or other tax consequences of the purchase, ownership and disposition
of ordinary shares, including, in particular, the effect of any foreign, state
or local taxes.

TAX REFORM

          On January 1, 2003, the Law for Amendment of the Income Tax Ordinance
(Amendment No. 132), 5762-2002, as amended, commonly known as the Tax Reform,
came into effect.

          The Tax Reform, aimed at broadening the categories of taxable income
and reducing the tax rates imposed on employment income, introduced the
following measures, among other things:

          -    Reduction of the tax rate levied on capital gains (other than
               gains from the sale of listed securities) derived after January
               1, 2003 to a general rate of 25% for both individuals and
               corporations. Regarding assets acquired prior to January 1, 2003,
               the reduced tax rate will apply to a proportionate part of the
               gain, in accordance with the holding periods of the asset, before
               or after January 1, 2003, on a linear basis;

          -    Imposition of Israeli tax on all income of Israeli residents,
               individuals and corporations, regardless of the territorial
               source of income, including income derived from passive sources
               such as interest, dividends and royalties;

          -    Introduction of controlled foreign corporation (CFC) rules into
               the Israeli tax structure. Generally, under such rules, an
               Israeli resident who holds, directly or indirectly, 10% or more
               of the rights in a foreign corporation whose shares are not
               publicly traded (or which has offered less than 30% of its shares
               or any rights to its shares to the public), in which more than
               50% of the rights are held directly or indirectly by Israeli
               residents, and a majority of whose income in a tax year is
               considered passive income, will be liable for tax on the portion
               of such income attributed to his holdings in such corporation, as
               if such income were distributed to him as a dividend;

          -    Imposition of capital gains tax on capital gains realized by
               individuals as of January 1, 2003 from the sale of shares of
               publicly traded companies. Such gain was previously exempt from
               capital gains tax in Israel. For information with respect to the
               applicability of Israeli capital gains taxes on the sale of
               ordinary shares, see "Capital Gains Tax on Sales of Our Ordinary
               Shares" below;

          -    Introduction of a new regime for the taxation of shares and
               options issued to employees, officers and directors; and

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          -    Introduction of tax at a rate of 25% on dividends paid by one
               Israeli company to another (which are generally not subject to
               tax), if the source of such dividends is income that was derived
               outside of Israel.

GENERAL CORPORATE TAX STRUCTURE

          Israeli companies are subject to tax at the rate of 36% of taxable
income and are subject to capital gains tax at a rate of 25% for capital gains
derived after January 1, 2003. However, the effective tax rate payable by a
company that derives income from an Approved Enterprise may be considerably
less, as further discussed below.

APPROVED ENTERPRISE STATUS

          Our facility in Israel received Approved Enterprise status from the
Israel Investment Center, which entitled us to certain tax benefits. To be
eligible for these programs and tax benefits, a company must make specified
investments in fixed assets, finance a percentage of investments with share
capital and receive revenues from specific sources. Under the Law for
Encouragement of Capital Investments, 1959, or the Investment Law, income
derived from an investment program designated as an Approved Enterprise would be
subject to corporate tax at a rate of 10%-25%, depending on the percentage of
the company's ordinary shares held by foreign shareholders, rather than 36%, for
the benefit period. This period is ordinarily seven years commencing with the
year in which the approved enterprise first generates taxable income, and is
limited to twelve years from commencement of production or fourteen years from
the date of the approval, whichever is earlier. Under an amendment to the
Investment Law which came into effect on January 1, 2003, it was clarified that
tax benefits under the Investment Law will also apply to income generated by a
company from the grant of a usage right with respect to know-how developed by
the Approved Enterprise, income generated from royalties, and income derived
from a service which is auxiliary to such usage right or royalties, provided
that such income is generated within the Approved Enterprise's ordinary course
of business. Our taxes outside of Israel, mainly in the United States, are
dependent on our operations in each jurisdiction as well as relevant laws and
tax treaties.

          Instead of the foregoing tax benefits, we elected to receive an
alternative package of benefits. Under the alternative package of benefits,
undistributed income derived from an approved enterprise would be exempt from
company tax for a period of two years from the first year in which taxable
income is derived under the program and would be eligible for a reduced tax rate
of 10%-25% depending on the percentage of the company's ordinary shares held by
foreign shareholders, for an additional five years.

          A company that has elected the alternative package of benefits and
that subsequently pays a dividend out of income derived from the approved
enterprise during the tax exemption period will be subject to tax in respect of
the amount distributed, including any taxes thereon, at the rate which would
have been applicable had it not elected the alternative package of benefits,
generally 10%-25%, depending on the percentage of the company's ordinary shares
held by foreign shareholders. The dividend recipient is taxed at the reduced
rate of 15% applicable to dividends from Approved Enterprises, if the dividend
is distributed during the tax exemption period or within twelve years
thereafter. The company must withhold this tax at source, regardless of whether
the dividend is converted into foreign currency. The above benefits are
conditioned upon our fulfillment of conditions stipulated by Law for the
Encouragement of Capital Investments, regulations promulgated thereunder and the
instruments of approval for the specific investments in approved enterprises. If
a company fails to comply with these conditions, its benefits may be canceled
and it may be required to refund the amount of the benefits, in whole or in
part.

                                       58
<Page>

TAXATION UNDER INFLATIONARY CONDITIONS

          The Income Tax (Inflationary Adjustments) Law, 1985, which is referred
to below as the Inflationary Adjustments Law, attempts to overcome some of the
problems presented to a traditional tax system by an economy experiencing rapid
inflation, which was the case in Israel at the time the law was enacted.
Generally, the Inflationary Adjustments Law provides significant tax deductions
and adjustments to depreciation methods and tax loss carry forwards to
compensate for loss of value resulting from an inflationary economy. Our taxable
income is subject to the provisions of this law.

          The Israeli Income Tax Ordinance and the Inflationary Adjustments Law
allow "Foreign-Invested Companies," which maintain their accounts in dollars in
compliance with regulations published by the Israeli Minister of Finance, to
base their tax returns on their operating results as reflected in the dollar
financials statements or to adjust their tax returns based on exchange rate
changes rather than changes in the Israeli CPI, in lieu of the principles set
forth by the Inflationary Adjustments Law. For these purposes, a
"Foreign-Invested Company" is a company, more than 25% of whose share capital,
in terms of rights to profits, voting and appointment of directors, and of whose
combined share and loan capital is held by persons who are not residents of
Israel. A company that elects to measure its results for tax purposes based on
the dollar exchange rate cannot change that election for a period of three years
following the election. We believe that we qualify as a Foreign Investment
Company within the meaning of the Inflationary Adjustments Law. We have not yet
elected to measure our results for tax purposes based on the dollar exchange
rate, but may do so in the future.

TAX BENEFITS OF RESEARCH AND DEVELOPMENT

          Israeli tax law permits, under certain conditions, a tax deduction in
the year incurred for expenditures, including capital expenditures, in
scientific research and development projects, if the expenditures are approved
by the relevant government ministry, determined by the field of research, and if
the research and development is for the promotion of the enterprise and is
carried out by, or on behalf of, a company seeking such deduction. Expenditures
not so approved are deductible over a three year period; however, expenditures
made out of proceeds made available to us through government grants are not
deductible.

                                       59
<Page>

CAPITAL GAINS TAX ON SALES OF OUR ORDINARY SHARES

          Israeli law generally imposes a capital gains tax on residents and
non-residents of Israel on the sale of capital assets in Israel, including
shares in Israeli companies, unless a specific exemption is available or unless
a tax treaty between Israel and the shareholder's country of residence provides
otherwise. The law distinguishes between real gain and inflationary surplus. The
inflationary surplus is a portion of the total capital gain which is equivalent
to the increase of the relevant asset's purchase price which is attributable to
the increase in the Israeli consumer price index, or in certain circumstances, a
foreign currency exchange rate, between the date of purchase and the date of
sale. The real gain is the excess of the total capital gain over the
inflationary surplus.

          Prior to the Tax Reform, sales of our ordinary shares by individuals
were, under certain circumstances, exempt from Israeli capital gains tax.

          Pursuant to the Tax Reform, generally, capital gains tax is imposed at
a rate of 15% on real gains derived on or after January 1, 2003 from the sale of
shares in companies (i) publicly traded on the Tel Aviv Stock Exchange ("TASE")
or (ii) (subject to a necessary determination by the Israeli Minister of
Finance) Israeli companies publicly traded on a recognized stock exchange or
regulated market outside of Israel (such as our company). This tax rate is
contingent upon the shareholder not claiming a deduction for financing expenses
and does not apply to: (i) dealers in securities; (ii) shareholders that report
in accordance with the Inflationary Adjustments Law; or (iii) shareholders who
acquired their shares prior to an initial public offering (that are subject to a
different tax arrangement). The tax basis of shares acquired prior to January 1,
2003 will be determined in accordance with the average closing share price in
the three trading days preceding January 1, 2003. However, a request may be made
to the tax authorities to consider the actual adjusted cost of the shares as the
tax basis if it is higher than such average price.

          Non-Israeli residents are exempt from Israeli capital gains tax on any
gains derived from the sale of shares publicly traded on the TASE and are exempt
from Israeli capital gains tax on any gains derived from the sale of shares of
Israeli companies publicly traded on a recognized stock exchange or regulated
market outside of Israel, provided that such capital gains are not derived from
a permanent establishment in Israel and that such shareholders did not acquire
their shares prior to the issuer's initial public offering. However, non-Israeli
corporations will not be entitled to such exemption if an Israeli resident (i)
has a controlling interest of 25% or more in such non-Israeli corporation or
(ii) is the beneficiary of or is entitled to 25% or more of the revenues or
profits of such non-Israeli corporation, whether directly or indirectly.

          In any event, the provisions of the Tax Reform shall not effect the
exemption from capital gains tax for gains accrued before January 1, 2003, as
described above.

          In some instances where our shareholders may be liable to Israeli tax
on the sale of their ordinary shares, the payment of the consideration may be
subject to the withholding of Israeli tax at the source.

          Pursuant to a treaty between the governments of the United States and
Israel, the sale of shares by a person who qualifies as a resident of the United
States within the meaning of the treaty and who is entitled to claim the
benefits afforded to a resident by the treaty will not be subject to Israeli
capital gains tax. This exemption does not apply if: (i) the person holds,
directly or indirectly, shares representing 10% or more of our voting power
during any part of the 12-month period preceding the applicable sale; or (ii)
the capital gains from such sale can be allocated to a permanent establishment
in Israel. However, the person would be permitted to claim a credit for the
capital gains tax paid in Israel against the U.S. income tax imposed with
respect to the applicable sale, subject to the limitations in U.S. laws
applicable to foreign tax credits.

                                       60
<Page>

 TAX ON DIVIDENDS

          Non-residents of Israel are subject to income tax on income accrued or
derived from sources in Israel. These sources of income include passive income
such as dividends, royalties and interest, as well as non-passive income from
services rendered in Israel. On distributions of dividends other than bonus
shares, or stock dividends, we would be required to withhold income tax at the
rate of 25%. If the income out of which the dividend is being paid is
attributable to an approved enterprise, the rate is 15%. A different rate may be
provided in a treaty between Israel and the shareholder's country of residence.
Under the U.S.-Israel tax treaty, if the income out of which the dividend is
being paid is not attributable to an approved enterprise, then income tax with
respect to shareholders that are U.S. corporations holding at least 10% of our
voting power in the twelve-month period preceding the distribution of such
dividend, is required to be withheld at the rate of 12.5%. For more information
on approved enterprises, see Item 5B - "Liquidity and Capital
Resources--Approved Enterprise Status."

F. DIVIDENDS AND PAYING AGENTS

          Not applicable.

G. STATEMENT BY EXPERTS

          Not applicable.

H. DOCUMENTS ON DISPLAY

          We are subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, applicable to foreign private issuers and
fulfill the obligations with respect to such requirements by filing reports with
the Securities and Exchange Commission. You may read and copy any document we
file with the Securities and Exchange Commission without charge at the
Securities and Exchange Commission's public reference room at 450 Fifth Street,
N.W., Washington, D.C. 20549. Copies of such material may be obtained by mail
from the Public Reference Branch of the Securities and Exchange Commission at
such address, at prescribed rates. Please call the Securities and Exchange
Commission at 1-800-SEC-0330 for further information on the public reference
room.

          As a foreign private issuer, we are exempt from the rules under the
Exchange Act prescribing the furnishing and content of proxy statements, and our
officers, directors and principal shareholders are exempt from the reporting and
"short-swing" profit recovery provisions contained in Section 16 of the Exchange
Act. In addition, we are not required under the Exchange Act to file periodic
reports and financial statements with the Securities and Exchange Commission as
frequently or as promptly as United States companies whose securities are
registered under the Exchange Act.

                                       61
<Page>

I. SUBSIDIARY INFORMATION

          Not applicable.

ITEM 11.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

GENERAL

          We are exposed to market risk, including movements in interest rates
and foreign currency exchange rates. Our primary market risk exposure occurs
because we generate most of our revenues in U.S. dollars but incur most of our
expenses and part of our other in new Israeli shekels.

          We do not presently engage in any hedging or other transactions
intended to manage risks relating to foreign currency exchange rate or interest
rate fluctuations. At December 31, 2002, we did not own any market risk
sensitive instruments. However, we may in the future undertake hedging or other
similar transactions or invest in market risk sensitive instruments if our
management determines that it is necessary to offset these risks.

          INTEREST RATE RISK MANAGEMENT

     As of December 31, 2002, we had $5.6 million of cash and cash equivalents.
Due to the relatively short-term maturities of the Company's cash and deposits,
an immediate 10% change in the current interest rates (for example, from 5.0% to
5.5%) is not expected to have a material effect on its near-term financial
condition or results of operations.


ITEM 12.  DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Not applicable.

                                     PART 2

ITEM 13.  DEFAULTS, DIVIDEND AVERAGES AND DELINQUENCIES

Not applicable.

ITEM 14.  MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
          PROCEEDS

Not applicable.

ITEM 15.  CONTROLS AND PROCEDURES

          Within 90 days prior to the date of this report, we carried out an
evaluation, under the supervision and with the participation of our principal
executive officer and principal financial officer, of the effectiveness of the
design and operation of our disclosure controls and procedures. Based on this
evaluation, our principal executive officer and principal financial officer have
concluded that our disclosure controls and procedures are effective to ensure
that information required to be included in our periodic reports to the
Securities and Exchange Commission is recorded, processed, summarized and
reported in a timely manner.

                                       62
<Page>

          In addition, there have been no significant changes in our internal
controls or in other factors that could significantly affect those controls
subsequent to the date of their last evaluation.

ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT

Not applicable.

ITEM 16B. CODE OF ETHICS

Not applicable.

ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Not applicable.

                                     PART 3

ITEM 17.  FINANCIAL STATEMENTS

We have responded to Item 18 in lieu of this item.

ITEM 18.  FINANCIAL STATEMENTS

          The Financial Statements required by this item are found at the end of
this Annual Report, beginning on page F-1.

ITEM 19.  EXHIBITS

The exhibit lists required by this Item is incorporated by reference to the
Exhibit Index, which appears before the first exhibit filed with this document.

                                       63
<Page>

                                    SIGNATURE

          The registrant hereby certifies that it meets all of the requirements
for filing on Form 20-F and that it has duly caused and authorized the
undersigned to sign this annual report on its behalf.

                                               TIOGA TECHNOLOGIES LTD.


                                               By: /s/ Izhak Tamir
                                                   Izhak Tamir
                                                   Chairman of the Board


Date:   June 26, 2003


                                  CERTIFICATION
                                  -------------

I, Izhak Tamir, certify that:

1. I have reviewed this annual report on Form 20-F of Tioga Technologies Ltd.;

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

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

4. I am responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and have:

     i.   designed such disclosure controls and procedures to ensure that
          material information relating to the registrant, including its
          consolidated subsidiaries, is made known to me by others within those
          entities, particularly during the period in which this annual report
          is being prepared;

     ii.  evaluated the effectiveness of the registrant's disclosure controls
          and procedures as of a date within 90 days prior to the filing date of
          this annual report (the "Evaluation Date"); and

     iii. presented in this annual report my conclusions about the effectiveness
          of the disclosure controls and procedures based on my evaluation as of
          the Evaluation Date;

                                       64
<Page>

5. I have disclosed, based on my most recent evaluation, to the registrant's
auditors and the audit committee of registrant's board of directors (or persons
performing the equivalent function):

     i.   all significant deficiencies in the design or operation of internal
          controls which could adversely affect the registrant's ability to
          record, process, summarize and report financial data and have
          identified for the registrant's auditors any material weaknesses in
          internal controls; and

     ii.  any fraud, whether or not material, that involves management or other
          employees who have a significant role in the registrant's internal
          controls; and

6. I have indicated in this annual report whether or not there were significant
changes in internal controls or in other factors that could significantly affect
internal controls subsequent to the date of my most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.


Date: June 26, 2003



                                                       /s/ Izhak Tamir
                                                         Izhak Tamir
                                               Principal Executive Officer and
                                                 Principal Financial Officer

                                       65
<Page>

                                  EXHIBIT INDEX
                                  -------------

Exhibit        Exhibit
-------        -------
No.
---
1.1       Memorandum of Association******

1.2       Amended and Restated Articles of Association******

4.1       Separation Agreement, dated as of June 20, 2000, between Tioga and
          Orckit *

4.2       Intellectual Property Agreement, dated as of January 1, 2000, between
          Tioga and Orckit *

4.7       Registration Rights Agreement, dated March 13, 2000, by and among
          Orckit Communications Ltd., Tioga and CIBC World Markets Corp.**

4.8       Tioga Share Incentive Plan, as amended***

4.9       Asset Purchase Agreement, dated as of April 23, 2001 by and among
          Silicon Value, Printsense and Tioga ****

4.12      Technology Transfer Agreement, dated as of February 14, 2002, by and
          among Tioga, ST Microelectronics Ltd. and STMicroelectronics NV*****

4.13      Option Agreement, dated as of February 14, 2002, by and between Tioga
          and STMicroelectronics NV*****

4.14      Development, Marketing and Services Agreement, dated as of February
          14, 2002, by and among Tioga, ST Microelectronics Ltd. and
          STMicroelectronics NV*****

4.16      Asset Purchase Agreement, dated April 28, 2003, by and among Tioga, ST
          Microelectronics Ltd. and STMicroelectronics NV******

8         List of Subsidiaries******

10        Consent of Independent Auditors******

99        Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of
          2002

----------
* Incorporated by reference to Tioga's Registration Statement on Form 20-F filed
June 22, 2000 (File No. 0-30820)

** Incorporated by reference to Tioga's Registration Statement on Form F-1 (File
No.333-12238)

***Incorporated by reference to Tioga's Registration Statement on Form S-8 (File
No. 333-12904).

****Incorporated by reference to Tioga's Annual Report on Form 20-F for the year
ended December 31, 2001 (File No. 0-30820).

*****Incorporated by reference to Tioga's Report on Form 6-K for the month of
February 2002 dated February 14, 2002 (File No. 0-30820).

***** Filed herewith
<Page>

                             TIOGA TECHNOLOGIES LTD.

                        CONSOLIDATED FINANCIAL STATEMENTS

                             AS OF DECEMBER 31, 2002

                                 IN U.S. DOLLARS

                                      INDEX

<Table>
<Caption>
                                                                         PAGE
                                                                     -----------
<S>                                                                  <C>
REPORT OF INDEPENDENT AUDITORS                                           F-2

CONSOLIDATED BALANCE SHEETS                                           F-3 - F-4

CONSOLIDATED STATEMENTS OF OPERATIONS                                    F-5

STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIENCY)            F-6 - F-7

CONSOLIDATED STATEMENTS OF CASH FLOWS                                 F-8 - F-9

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                           F-10 - F-35
</Table>

                                 - - - - - - - -

<Page>



                         REPORT OF INDEPENDENT AUDITORS

                             TO THE SHAREHOLDERS OF

                             TIOGA TECHNOLOGIES LTD.

     We have audited the accompanying consolidated balance sheets of Tioga
Technologies Ltd. ("the Company") and its subsidiaries as of December 31, 2001
and 2002, and the related consolidated statements of operations, changes in
shareholders' equity (deficiency) and cash flows for each of the three years in
the period ended December 31, 2002. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

     We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

     In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
the Company and its subsidiaries as of December 31, 2001 and 2002, and the
consolidated results of their operations and cash flows for each of the three
years in the period ended December 31, 2002, in conformity with accounting
principles generally accepted in the United States.


Tel-Aviv, Israel                                   /s/ KOST FORER & GABBAY
January 15, 2003                              A Member of Ernst & Young Global


                                      F- 2
<Page>

                                                         TIOGA TECHNOLOGIES LTD.

CONSOLIDATED BALANCE SHEETS
================================================================================
U.S. DOLLARS IN THOUSANDS

<Table>
<Caption>
                                                          DECEMBER 31,
                                                  --------------------------
                                                      2001           2002
                                                  -----------    -----------
<S>                                                <C>            <C>
    ASSETS

CURRENT ASSETS:
  Cash and cash equivalents                        $   7,712      $   5,559
  Related party - trade receivables (Note 10)             21              -
  Trade receivables                                       22          1,693
  Deposit in escrow (Note 12)                          1,800              -
  Other current assets (Note 3)                        1,939            908
  Inventories                                             59             37
                                                  -----------    -----------

TOTAL current assets                                  11,553          8,197
                                                  -----------    -----------

LONG-TERM INVESTMENTS:
  Long-term prepaid expenses (Note 12)                   219              -
  Long-term lease deposits                                27             28
                                                  -----------    -----------

TOTAL long-term investments                              246             28
                                                  -----------    -----------

SEVERANCE PAY FUND                                       791            894
                                                  -----------    -----------

PROPERTY AND EQUIPMENT, NET (Note 4)                     860            379
                                                  -----------    -----------

                                                   $  13,450      $   9,498
                                                  ===========    ===========
</Table>

The accompanying notes are an integral part of the consolidated financial
statements.

                                      F- 3
<Page>

                                                         TIOGA TECHNOLOGIES LTD.

CONSOLIDATED BALANCE SHEETS
================================================================================
U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE DATA

<Table>
<Caption>
                                                                                        DECEMBER 31,
                                                                               -----------------------------
                                                                                    2001            2002
                                                                               -------------   -------------
<S>                                                                              <C>             <C>
    LIABILITIES AND SHAREHOLDERS' DEFICIENCY

CURRENT LIABILITIES:
  Current maturities of long term loan from a related party (Note 6)             $  13,000       $   1,800
  Trade payables                                                                       882             106
  Related party - current account (Note 10)                                            214             674
  Employees and payroll accruals                                                       733             448
  Other current liabilities (Note 5)                                                 1,092           1,218
                                                                               -------------   -------------

TOTAL current liabilities                                                           15,921           4,246
                                                                               -------------   -------------

LONG-TERM LIABILITIES:
  Long-term loan from a related party (Note 6)                                       7,000           5,200
  Accrued severance pay                                                              1,523           1,600
                                                                               -------------   -------------

TOTAL long-term liabilities                                                          8,523           6,800
                                                                               -------------   -------------

COMMITMENTS AND CONTINGENT LIABILITIES (Note 7)

SHAREHOLDERS' DEFICIENCY (Note 8):
  Share capital:
    Ordinary shares of NIS 0.1 par value: Authorized: 50,000,000 shares as of
    December 31, 2001 and 2002; Issued and outstanding: 24,555,779 and
    25,025,436 shares as of December 31, 2001 and 2002, respectively                   590             600
  Additional paid-in capital                                                       146,029         145,607
  Deferred stock compensation                                                       (1,830)           (771)
  Accumulated deficit                                                             (155,783)       (146,984)
                                                                               -------------   -------------

TOTAL shareholders' deficiency                                                     (10,994)         (1,548)
                                                                               -------------   -------------

                                                                                 $  13,450       $   9,498
                                                                               =============   =============
</Table>

The accompanying notes are an integral part of the consolidated financial
statements.

<Table>
<S>                            <C>                  <C>                         <C>
      January 15, 2003         /S/ Andy Carmon          /S/ Eyal Vardi          /S/ Izhak Tamir
---------------------------  --------------------  -------------------------  ---------------------
  Date of approval of the        Andy Carmon              Eyal Vardi               Izhak Tamir
   financial statements        General Manager      Chief Financial Officer      Chairman of the
                                                                                Board of Directors
</Table>

                                      F- 4
<Page>

                                                         TIOGA TECHNOLOGIES LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS
================================================================================
U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE DATA

<Table>
<Caption>
                                                                                             YEAR ENDED DECEMBER 31,
                                                                                 -----------------------------------------------
                                                                                     2000              2001             2002
                                                                                 -------------    -------------    -------------
<S>                                                                               <C>               <C>              <C>
Revenues (Note 13):
 Development and marketing services (Note 1)                                      $        -        $       -        $   7,667
 Royalties from a related party (Note 10)                                                  -            1,418              200
 Product (Note 10)                                                                    14,517               22               45
                                                                                 -------------    -------------    -------------

                                                                                      14,517            1,440            7,912
                                                                                 -------------    -------------    -------------
Operating costs and expenses:
 Research and development expenses, net and development services costs,
  net (Notes 1 and 2j)                                                                 8,974            7,966            4,907
 Product Costs (Note 10)                                                              13,107                8               20
 Selling, marketing, general and administrative expenses                               3,470            4,067            2,227
 Spin-off expenses                                                                     1,199                -                -
 Impairment of property and equipment                                                      -                -              157
 Amortization of deferred stock compensation *)                                           92            2,252              635
                                                                                 -------------    -------------    -------------

Total operating costs and expenses                                                    26,842           14,293            7,946
                                                                                 -------------    -------------    -------------

Operating loss                                                                       (12,325)         (12,853)             (34)
Other expenses                                                                             -              (16)             (10)
Other income (Note 1b)                                                                     -                -            9,698
Financial income (expenses), net (Note 14)                                               969           (1,238)            (874)
                                                                                 -------------    -------------    -------------

Net income (loss) from continuing operations                                         (11,356)         (14,107)           8,780

Discontinued operations
Income (loss) from discontinued operations net of income tax provision of
 $ 170, $ 13 and $ (157) for the years ended December 31, 2000, 2001 and
 2002, respectively (Note 12)                                                       (120,839)          (4,043)              19
                                                                                 -------------    -------------    -------------

Net income (loss)                                                                 $ (132,195)       $ (18,150)       $   8,799
                                                                                 =============    =============    =============

Basic net earnings (loss) per share (Note 11):

Continuing operations                                                             $    (0.51)       $   (0.60)       $    0.35
Discontinued operations                                                                (5.38)           (0.17)            **)-
                                                                                 -------------    -------------    -------------

Basic net earnings (loss) per share (Note 11)                                     $    (5.89)       $   (0.77)       $    0.35
                                                                                 =============    =============    =============

Diluted net earnings (loss) per share:

Continuing operations                                                             $    (0.51)       $   (0.60)       $    0.31
Discontinued operations                                                                (5.38)           (0.17)            **)-
                                                                                 -------------    -------------    -------------

Diluted net earnings (loss) per share                                             $    (5.89)       $   (0.77)       $    0.31
                                                                                 =============    =============    =============
</Table>

*)   Amortization of deferred stock compensation related to the following
     operating expenses: Research and development expenses, net and development
     services costs of $ 92, $ 1,338 and $ 387 for the years ended December 31,
     2000, 2001 and 2002, respectively; Selling, marketing, general and
     administrative expenses of $ 0, $ 914 and $ 248 for the years ended
     December 31, 2000, 2001 and 2002, respectively.

**)  Represent an amount lower than $ 0.01.

The accompanying notes are an integral part of the consolidated financial
statements.

                                      F- 5
<Page>

                                                         TIOGA TECHNOLOGIES LTD.

STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIENCY)
================================================================================
U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE DATA

<Table>
<Caption>
                                                                                 SERIES A CONVERTIBLE
                                                                                       REDEEMABLE                         NOTES
                                             PARENT         ORDINARY SHARES         ORDINARY SHARES       ADDITIONAL   RECEIVABLE
                                            COMPANY     ----------------------  -----------------------    PAID-IN        FROM
                                            ACCOUNT       SHARES      AMOUNT      SHARES       AMOUNT      CAPITAL      OFFICERS
                                           ----------   ----------  ----------  ----------   ----------   ----------   ----------
<S>                                        <C>          <C>         <C>         <C>          <C>          <C>          <C>
Balance at January 1, 2000                 $    7,018            -  $        -           -   $        -   $      260   $        -
Exercise of stock options                           -       14,186          (*           -            -           24            -
Acquisition of Silicon Value(S.V.) Ltd.       132,713            -           -           -            -            -            -
Issuance of Series A convertible
  redeemable Ordinary shares                        -            -           -   1,510,000           38        5,247       (5,075)
Issuance of shares upon spin-off, net        (139,731)  22,452,744         540           -            -      139,060            -
Deferred compensation related to
  issuance of series A convertible
  redeemable Ordinary shares to
  officers                                          -            -           -           -            -          750            -
Amortization of deferred stock
  compensation related to Series A
  convertible redeemable Ordinary
  shares                                            -            -           -           -            -            -            -
Compensation related to warrants
  granted to service providers                      -            -           -           -            -        1,191            -
Comprehensive loss:
Unrealized losses from
  available-for-sale marketable
  securities                                        -            -           -           -            -            -            -
Net loss                                            -            -           -           -            -            -            -
                                           ----------   ----------  ----------  ----------   ----------   ----------   ----------
Total comprehensive loss

Balance at December 31, 2000                        -   22,466,930         540   1,510,000           38      146,532       (5,075)

Exercise of employee stock options                  -    1,565,241          37           -            -          984            -
Exercise of stock options to service
  providers                                         -       50,000           1           -            -            -            -
Conversions of Series A convertible
  redeemable Ordinary shares into
  Ordinary shares                                   -       60,000           2     (60,000)          (2)           -            -
Redemption of Series A convertible
  redeemable Ordinary shares                        -            -           -  (1,450,000)         (36)      (5,039)       5,075
Issuance of shares upon exercise of
  ESPP                                              -       49,417           1           -            -           47            -
Deferred stock compensation related to
  repriced options                                  -            -           -           -            -        3,374            -
Amortization of deferred compensation
  related to repriced options                       -            -           -           -            -            -            -
Amortization of deferred stock
  compensation related to Series A
  convertible redeemable ordinary
  shares                                            -            -           -           -            -            -            -
Compensation related to options granted to
  service providers                                 -            -           -           -            -          140            -
Conversion of Orckit's subordinated
  notes                                             -      364,191           9           -            -           (9)           -
Comprehensive loss:
Realized losses from
  available-for-sale marketable
  securities                                        -            -           -           -            -            -            -
Net loss                                            -            -           -           -            -            -            -
                                           ----------   ----------  ----------  ----------   ----------   ----------   ----------
Total comprehensive loss
Balance at December 31, 2001               $        -   24,555,779  $      590           -   $        -   $  146,029   $        -
                                           ==========   ==========  ==========  ==========   ==========   ==========   ==========

<Caption>
                                                           ACCUMULATED                                       TOTAL
                                            DEFERRED          OTHER                           TOTAL       SHAREHOLDERS'
                                             STOCK        COMPREHENSIVE    ACCUMULATED    COMPREHENSIVE      EQUITY
                                          COMPENSATION        LOSS           DEFICIT          LOSS        (DEFICIENCY)
                                          ------------    -------------    -----------    -------------   -------------
<S>                                        <C>             <C>             <C>             <C>             <C>
Balance at January 1, 2000                 $        -      $        -      $   (5,438)                     $    1,840
Exercise of stock options                           -               -               -                              24
Acquisition of Silicon Value(S.V.) Ltd.             -               -               -                         132,713
Issuance of Series A convertible
  redeemable Ordinary shares                        -               -               -                             210
Issuance of shares upon spin-off, net               -               -               -                            (131)
Deferred compensation related to
  issuance of series A convertible
  redeemable Ordinary shares to
  officers                                       (750)              -               -                               -
Amortization of deferred stock
  compensation related to Series A
  convertible redeemable Ordinary
  shares                                           92               -               -                              92
Compensation related to warrants
  granted to service providers                      -               -               -                           1,191
Comprehensive loss:
Unrealized losses from
  available-for-sale marketable
  securities                                        -            (115)              -      $     (115)           (115)
Net loss                                            -               -        (132,195)       (132,195)       (132,195)
                                          ------------    -------------    -----------    -------------   -------------
Total comprehensive loss                                                                   $ (132,310)
                                                                                          =============
Balance at December 31, 2000                     (658)           (115)       (137,633)                          3,629

Exercise of employee stock options                  -               -               -               -           1,021
Exercise of stock options to service
  providers                                         -               -               -               -               1
Conversions of Series A convertible
  redeemable Ordinary shares into
  Ordinary shares                                   -               -               -                               -
Redemption of Series A convertible
  redeemable Ordinary shares                        -               -               -                               -
Issuance of shares upon exercise of
  ESPP                                              -               -               -                              48
Deferred stock compensation related to
  repriced options                             (3,374)              -               -                               -
Amortization of deferred compensation
  related to repriced options                   1,544               -               -                           1,544
Amortization of deferred stock
  compensation related to Series A
  convertible redeemable ordinary
  shares                                          658               -               -                             658
Compensation related to options granted to
  service providers                                 -               -               -                             140
Conversion of Orckit's subordinated
  notes                                             -               -               -                               -
Comprehensive loss:
Realized losses from
  available-for-sale marketable
  securities                                        -             115               -      $      115             115
Net loss                                            -               -         (18,150)        (18,150)        (18,150)
                                          ------------    -------------    -----------    -------------   -------------
Total comprehensive loss                                                                   $  (18,035)
                                                                                          =============
Balance at December 31, 2001               $   (1,830)     $        -      $ (155,783)                     $  (10,994)
                                          ============    =============    ===========                    =============
</Table>

*) Represents an amount lower than $ 1.
The accompanying notes are an integral part of the consolidated financial
statements.

                                      F- 6
<Page>

                                                         TIOGA TECHNOLOGIES LTD.

STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIENCY)
================================================================================
U.S. DOLLARS IN THOUSANDS, EXCEPT SHARE DATA

<Table>
<Caption>
                                                                      SERIES A CONVERTIBLE
                                                                           REDEEMABLE                       NOTES
                                     PARENT       ORDINARY SHARES        ORDINARY SHARES    ADDITIONAL   RECEIVABLE    DEFERRED
                                    COMPANY   ----------------------  --------------------   PAID-IN        FROM        STOCK
                                    ACCOUNT     SHARES      AMOUNT     SHARES     AMOUNT     CAPITAL      OFFICERS   COMPENSATION
                                    --------  ----------  ----------  --------  ----------  ----------   ----------   ----------
<S>                                  <C>      <C>          <C>              <C>  <C>        <C>           <C>          <C>
Balance at January 1, 2002           $    -   24,555,779   $    590         -    $      -   $ 146,029     $      -     $ (1,830)
Exercise of stock options                 -      469,657         10         -           -           2            -            -
Deferred stock compensation               -            -          -         -           -        (424)           -          424
Amortization of deferred stock
  compensation related to repriced
  options                                 -            -          -         -           -           -            -          635
Net income                                -            -          -         -           -           -            -            -
                                    --------  ----------  ----------  --------  ----------  ----------   ----------   ----------

Balance at December 31, 2002         $    -   25,025,436   $    600         -    $      -   $ 145,607     $      -     $   (771)
                                    ========  ==========  ==========  ========  ==========  ==========   ==========   ==========

<Caption>
                                     ACCUMULATED                                     TOTAL
                                        OTHER                         TOTAL      SHAREHOLDERS'
                                    COMPREHENSIVE   ACCUMULATED   COMPREHENSIVE      EQUITY
                                        LOSS          DEFICIT         LOSS        (DEFICIENCY)
                                    -------------  -------------  -------------  -------------
<S>                                   <C>           <C>                            <C>
Balance at January 1, 2002            $      -      $ (155,783)                    $ (10,994)
Exercise of stock options                    -               -                            12
Deferred stock compensation                  -               -                             -
Amortization of deferred stock
  compensation related to repriced
  options                                    -               -                           635
Net income                                   -           8,799                         8,799
                                     ----------    -------------                 -------------

Balance at December 31, 2002          $      -      $ (146,984)                    $  (1,548)
                                     ==========    =============                 =============
</Table>

The accompanying notes are an integral part of the consolidated financial
statements.

                                      F- 7
<Page>

                                                         TIOGA TECHNOLOGIES LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS
================================================================================
U.S. DOLLARS IN THOUSANDS

<Table>
<Caption>
                                                                                             YEAR ENDED DECEMBER 31,
                                                                                 -----------------------------------------------
                                                                                     2000              2001             2002
                                                                                 -------------    -------------    -------------
<S>                                                                               <C>               <C>              <C>
 CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income (loss)                                                              $ (132,195)       $ (18,150)       $   8,799
   Adjustments required to reconcile net income (loss) to net cash provided by
       (used in) operating activities:
     Depreciation                                                                      2,010            1,443              348
     Amortization of goodwill and other intangibles assets                            25,666            2,759                -
     Losses from sale of property and equipment                                            -               44               10
     Realized losses (gains) on available for sale marketable securities              (1,510)             115                -
     Decrease (increase) in related party - trade receivables                         (8,073)           8,377               21
     Decrease (increase) in trade receivables                                           (470)           1,761           (1,671)
     Decrease (increase) in other current assets                                        (183)             618              950
     Decrease (increase) in inventories                                                 (183)            (321)              22
     Impairment of goodwill and other intangible assets                               58,068                -                -
     In-process research and development write off                                    24,695                -                -
     Impairment of property and equipment                                                  -              823              157
     Accrued severance pay, net                                                          355               32              (26)
     Amortization of deferred stock compensation                                          92            2,202              635
     Compensation related to options granted to service providers                      1,191              140                -
     Decrease in trade payables                                                         (276)             (93)            (776)
     Increase (decrease) in related party - current account                           11,561          (11,404)             460
     Increase (decrease) in other current liabilities and employees and payroll
       accruals                                                                        3,274           (5,471)            (159)
     Loss (gain) from disposal of Silicon Value (SV) Ltd. business                         -              (45)             300
     Other                                                                                 -              (16)               -
                                                                                 -------------    -------------    -------------

 Net cash provided by (used in) operating activities                                 (15,978)         (17,186)           9,070
                                                                                 -------------    -------------    -------------

 CASH FLOWS FROM INVESTING ACTIVITIES:
   Payment for the acquisition of Silicon Value (S.V) Ltd. (a)                         5,036                -                -
   Proceeds from short-term bank deposits                                              1,707                -                -
   Proceeds from realization of available for sale marketable securities               1,382               44                -
   Purchase of property and equipment                                                 (3,275)            (932)             (53)
   Proceeds from sale of property and equipment                                            -               39               19
   Decrease (increase) in long-term lease deposits                                      (175)              63               (1)
   Proceeds from disposal of SVL business                                                  -           15,821            1,800
                                                                                 -------------    -------------    -------------

 Net cash provided by investing activities                                             4,675           15,035            1,765
                                                                                 -------------    -------------    -------------

 CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from issuance of shares, net                                                 103            1,070               12
   Proceeds from short term bank credit                                                9,938                -                -
   Payment of short-term bank credit                                                       -          (10,000)               -
   Proceeds from long-term loan from a related party                                  20,000                -                -
   Payment of long term loan from a related party                                          -                -          (13,000)
                                                                                 -------------    -------------    -------------

 Net cash provided by (used in) financing activities                                  30,041           (8,930)         (12,988)
                                                                                 -------------    -------------    -------------

 Increase (decrease) in cash and cash equivalents                                     18,738          (11,081)          (2,153)
 Cash and cash equivalents at the beginning of the year                                   55           18,793            7,712
                                                                                 -------------    -------------    -------------

 Cash and cash equivalents at the end of the year                                 $   18,793        $   7,712        $   5,559
                                                                                 =============    =============    =============

 SUPPLEMENTAL DISCLOSURE OF CASH FLOWS ACTIVITIES:
   Cash paid during the year for interest                                         $      251        $     387        $       2
                                                                                 =============    =============    =============
   Cash paid (received) during the year for taxes                                 $       18        $     211        $    (157)
                                                                                 =============    =============    =============
 NON-CASH INVESTING ACTIVITIES:
   Purchase of property and equipment                                             $    2,032        $       -        $       -
                                                                                 =============    =============    =============
</Table>

The accompanying notes are an integral part of the consolidated financial
statements.

                                      F- 8
<Page>

                                                         TIOGA TECHNOLOGIES LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS
================================================================================
U.S. DOLLARS IN THOUSANDS

(a)  Payment for acquisition of Silicon Value (S.V.) Ltd., net of cash acquired:

     In April 2000, Orckit (see Note 1a) acquired all of the outstanding shares
     of Silicon Value (S.V.) Ltd. (see Note 1c). The fair value of the assets
     acquired and liabilities assumed, as of the date of acquisition, was as
     follows:

<Table>
<Caption>
                                                                                 YEAR ENDED
                                                                                DECEMBER 31,
                                                                                    2000
                                                                              ----------------
<S>                                                                             <C>
     Working capital deficiency, net (excluding cash and cash equivalents)      $      3,841
     Severance pay                                                                       310
     Property and equipment                                                           (3,399)
     Goodwill and other intangible assets                                           (103,734)
     In-process research and development                                             (24,695)
                                                                              ----------------

                                                                                    (127,677)
     Parent company account                                                          132,713
                                                                              ----------------

                                                                                $      5,036
                                                                              ================
</Table>

                                      F- 9
<Page>

                                                         TIOGA TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================
U.S. DOLLARS IN THOUSANDS

NOTE 1:-  GENERAL

          a.   Tioga Technologies Ltd. ("the Company" or "Tioga") was
               incorporated on December 14, 1999 under the laws of the State of
               Israel. Tioga has a wholly owned subsidiary, Silicon Value (S.V.)
               Ltd. ("SVL"). SVL has a wholly-owned U.S. subsidiary, Tioga
               Technologies Inc. (see also Note 1c).

               On January 30, 2000, the Board of Directors of Orckit
               Communications Ltd. ("Orckit" or the "Parent company") decided to
               execute a Plan of Separation (the "Plan") under Section 350 of
               the Israeli Companies Law, pursuant to which, Orckit will be
               formally divided into two separate companies: (i) Tioga which
               would own substantially all of Orckit's Semiconductor chip
               business, and (ii) Orckit itself, which would continue to own and
               operate its telecom equipment and other businesses (see also Note
               8c).

          b.   In February 2002, the Company entered into three strategic
               agreements with STMicroelectronics NV and its Israeli subsidiary
               STMicroelectronics Ltd. (collectively "ST"), a technology
               transfer agreement, a development, marketing and services
               agreement and an option agreement.

               Pursuant to the technology transfer agreement, the Company
               granted ST certain co-ownership rights in its then existing
               intellectual property in the DSL field and ownership rights over
               its products, including certain products that were still under
               development and its rights under certain design wins in
               consideration of $ 10,000. With respect to the technology
               transfer agreement, the Company recorded $ 9,698 net of
               transaction expenses as other income. Also, in accordance with
               this agreement, ST should bear any costs and obligations to the
               OCS arising from this agreement. As of December 31, 2002 pursuant
               to this agreement, ST owes the Company $ 400.

               Pursuant to the development, marketing and services agreement,
               the Company is required to provide research and development and
               marketing services to ST in the DSL field as shall be determined
               by ST from time to time as detailed in this agreement. The
               relationship between Tioga and ST is that of independent
               contractors. In consideration for the performance of these
               services during the term of the agreement, ST is required to pay
               the Company $ 2,000 for every quarter, in which the services are
               rendered, commencing on January 15, 2002. The quarterly fee may
               be decreased proportionally in the event that the Company's
               workforce decreases below an average of 55 employees. The Company
               recorded such fees as revenues (see also Note 2).

               These services will terminate on or before January 15, 2003 if ST
               were to exercise its option under the option agreement or on
               April 15, 2003 in case ST does not exercise its option as
               contemplated by the option agreement.

                                      F- 10
<Page>

                                                         TIOGA TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================
U.S. DOLLARS IN THOUSANDS

NOTE 1:-  GENERAL (CONT.)

               Pursuant to the option agreement, Tioga granted to ST the right
               to acquire Tioga's business via a merger or a sale of Tioga's
               assets. The option is exercisable at any time until January 15,
               2003. In addition, ST granted the Company the option to cause ST
               to effect such merger, if the Company meets certain milestones
               set forth in the option agreement. The Company's option is
               exercisable at any time between January 16, 2003 and January 31,
               2003. The management of the company is aware of the fact that the
               conditions required to cause ST to effect a merger were not met.
               ST may elect to structure the acquisition of Tioga's business as
               a merger or as a purchase of assets and assumption of certain
               liabilities, regardless of which party exercises its option (see
               also Note 15).

               In consideration for the acquisition of the business, ST is
               required to pay $ 12.0 million, subject to certain adjustments.
               In the event of a merger, the consideration will be paid to
               Tioga's shareholders and will be adjusted by the amount of
               Tioga's net financial indebtedness and for any amount required to
               settle Tioga's outstanding obligations related to the convertible
               notes of Orckit (see also Note 8). In the event of an asset sale,
               the consideration will be adjusted by the aggregate amount of
               certain unfunded employee-related liabilities, overdue current
               liabilities that have not been paid under their original terms of
               payment and accounts receivable sold that have not yet expired
               (see also Note 15).

               Due to the fact that the fair values of the option granted to ST
               and the option received from ST were approximately equivalent and
               these related values essentially off set one another, no
               allocation to their fair value was recorded.

               As a result of these agreements, the Company's activities
               currently consist primarily of research and development and
               marketing services provided to ST and it does not currently
               conduct business as an independent DSL chip developer and
               manufacturer. In the event that ST does not acquire its business
               under the option agreement, the Company may again become an
               independent chip developer.

               The Company's traditional business is the design, development and
               marketing of DSL chips used by manufacturers of
               telecommunications equipment. The Company's DSL chips enable the
               digital transmission of voice, video and data over standard
               telephone lines at speeds that are up to 30 times faster than
               transmission rates provided by conventional analog modems.

               In 2002, 97% of the Company's revenues were derived from the
               development and marketing services agreement between the Company
               and ST.

          c.   Acquisition and disposal of SVL:

               In April 2000, Orckit acquired all of the outstanding shares of
               SVL, an Israeli based company, at an aggregate purchase price of
               approximately $135,000 which was paid in Orckit's stocks
               (approximately 1.6 million Ordinary shares) and options to
               purchase Orckit shares granted to employees and consultants of
               SVL (options to purchase approximately 0.4 million Ordinary
               shares). SVL has a wholly owned subsidiary incorporated in the
               United States. SVL and its subsidiary were engaged in the
               development, production and sale of ASIC chips.

                                      F- 11
<Page>

                                                         TIOGA TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================
U.S. DOLLARS IN THOUSANDS

NOTE 1:-  GENERAL (CONT.)

               SVL was transferred to Tioga as part of the spin-off plan.

               The acquisition was accounted for by the purchase method of
               accounting. The excess cost over the fair value of net assets
               acquired was $ 128,429, out of which $ 24,695 was charged to
               expense and represents the estimated value of the Technology
               acquired from SVL for which technological feasibility has not yet
               been established and for which no alternative future use exists
               ("in process research and development write-off"), and the
               remaining amount is being amortized on a straight-line basis over
               a three-year period.

          d.   In April 2001, the Company sold the ASIC division of its wholly
               owned subsidiary SVL. The results of operations for the 3 years
               ended December 31, 2002, reflect the ASIC division as
               discontinued operations (see Note 12).

          e.   In September 2001, the Board of Directors of the Company decided
               to liquidate SVL, which became an inactive company.

NOTE 2:-  SIGNIFICANT ACCOUNTING POLICIES

               The consolidated financial statements have been prepared in
               accordance with generally accepted accounting principles in the
               United States ("US GAAP").

          a.   Use of estimates:

               The preparation of the financial statements in conformity with
               generally accepted accounting principles requires management to
               make estimates and assumptions that affect the amounts reported
               in the financial statements and accompanying notes. Actual
               results could differ from those estimates.

          b.   Financial statements in U.S. dollars:

               The revenues of the Company are generated in U.S. dollars
               ("dollar"). In addition, a substantial portion of the Company's
               cash flow transactions is incurred in dollars. Company's
               management believes that the dollar is the primary currency of
               the economic environment in which the Company and its
               subsidiaries operate. Thus, the functional and reporting currency
               of the Company and its subsidiaries is the dollar.

               Accordingly, monetary accounts maintained in currencies other
               than the dollar are remeasured into U.S. dollars in accordance
               with Statement of Financial Accounting Standard No. 52 "Foreign
               Currency Translation" ("SFAS No. 52"). All transactions gains and
               losses of the remeasurement of monetary balance sheet items are
               reflected in the statements of operations as financial income or
               expenses, as appropriate.

                                      F- 12
<Page>

                                                         TIOGA TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================
U.S. DOLLARS IN THOUSANDS

NOTE 2:-  SIGNIFICANT ACCOUNTING POLICIES (CONT.)

          c.   Principles of consolidation:

               The consolidated financial statements include the accounts of the
               Company and its wholly-owned subsidiaries. Intercompany
               transactions and balances have been eliminated upon
               consolidation.

          d.   Cash equivalents:

               Cash equivalents are short-term highly liquid investments that
               are readily convertible to cash with original maturities of three
               months or less.

          e.   Marketable securities:

               The Company accounts for its investments in equity securities in
               accordance with Statement of Financial Accounting Standard No.
               115, "Accounting for Certain Investments in Debt and Equity
               Securities" ("SFAS No. 115").

               Management determines the appropriate classification of
               investments in marketable equity securities at the time of
               purchase and reevaluates such determination at each balance sheet
               date. In the years ended December 31, 2000 and 2001 all
               securities covered by SFAS No. 115 were designated as
               available-for-sale. Accordingly, these securities were stated at
               fair value, with unrealized gains and losses reported in a
               separate component of shareholders' equity accumulated other
               comprehensive income or loss. Realized gains and losses on sales
               of investments, as determined on a specific identification basis,
               are included in the consolidated statement of operations.

          f.   Deposit in escrow:

               The deposit is recorded at cost.

          g.   Inventories:

               Inventories consist of only finished products that are stated at
               the lower of cost or market value. Inventory write-offs are
               provided to cover risks arising from slow-moving items or
               technological obsolescence. Cost is determined on the basis of
               direct manufacturing costs.

               As of December 31, 2000, 2001 and 2002, the subsidiary, SVL, had
               slow-moving inventory write-offs amounting to approximately $
               650, $ 0 and $ 0, respectively.

                                      F- 13
<Page>

                                                         TIOGA TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================
U.S. DOLLARS IN THOUSANDS

NOTE 2:-  SIGNIFICANT ACCOUNTING POLICIES (CONT.)

          h.   Property and equipment:

               Property and equipment are stated at cost, net of accumulated
               depreciation. Depreciation is calculated by the straight-line
               method over the estimated useful lives, at the following annual
               rates:

<Table>
<Caption>
                                                                         %
                                                            --------------------------
<S>                                                         <C>
               Leasehold improvements                       Over the term of the lease
               Computers, software and related equipment              20 - 33
               Office furniture and equipment                         7 - 15
</Table>

               The Company and its subsidiaries' long-lived assets are reviewed
               for impairment in accordance with Statement of Financial
               Accounting Standard No. 144, "Accounting for the Impairment or
               Disposal of Long- Lived Assets" ("SFAS No. 144"), whenever events
               or changes in circumstances indicate that the carrying amount of
               an asset may not be recoverable. Recoverability of assets to be
               held and used is measured by a comparison of the carrying amount
               of an asset to the future undiscounted cash flows expected to be
               generated by the assets. If such assets are considered to be
               impaired, the impairment to be recognized is measured by the
               amount by which the carrying amount of the assets exceeds the
               fair value of the assets. During fiscal year 2002, the Company
               changed its Israeli office location and abandoned some of its
               office furniture and equipment. In addition, in early 2002 the
               Company decided to close the majority of its US operation, as a
               result, certain furniture and equipment were abandoned.
               Accordingly, the Company and its subsidiary recorded an
               impairment charge in the amount of $ 157.

               During fiscal year 2001, the Company and its subsidiaries
               assessed the recoverability of the carrying amount of the
               property and equipment and provided for any possible impairment
               loss based upon the difference between the carrying amount and
               fair value of such assets in accordance with Statement of
               Financial Accounting Standard No. 121 "Accounting for the
               Impairment of Long-Lived Assets and for Long-Lived Assets to Be
               Disposed Of" ("SFAS No. 121") and recorded impairment in the
               amount of $ 823.

          i.   Other assets:

               Goodwill and other intangible assets were amortized using the
               straight-line method over the estimated useful life, which is
               three years.

               The carrying value of goodwill and other intangible assets was
               reviewed by management, based on the expected future undiscounted
               operating cash flows over the remaining amortization period. If
               this review indicated that goodwill and other intangible assets
               would not be recoverable, the carrying value of the goodwill or
               the other intangible assets was reduced to estimated fair value.
               As of December 31, 2000 and 2001, impairment losses have been
               identified to be in the amount of $ 55,068 and $ 0, respectively.

          j.   Research and development costs:

               Research and development activities net of grants received, are
               expensed as incurred.

                                      F- 14
<Page>

                                                         TIOGA TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================
U.S. DOLLARS IN THOUSANDS

NOTE 2:-  SIGNIFICANT ACCOUNTING POLICIES (CONT.)

          k.   Income taxes:

               The Company and subsidiaries accounts for income taxes in
               accordance with Statement of Financial Accounting Standard No.
               109, "Accounting for Income Taxes" ("SFAS No. 109"). This
               Statement prescribes the use of the liability method whereby
               deferred tax assets and liability account balances are determined
               based on differences between financial reporting and tax bases of
               assets and liabilities and are measured using the enacted tax
               rates and laws that will be in effect when the differences are
               expected to reverse. The Company and its subsidiaries provides a
               valuation allowance, if necessary, to reduce deferred tax assets
               to their estimated realizable value.

          l.   Revenue recognition:

               The Company generates its revenues mostly from development and
               marketing services, royalties and historically from sale of its
               products.

               1.   Revenues from research and development services are
                    recognized at the time they are rendered (see also Note 1b).

               2.   Revenues related to royalties received from Orckit are
                    accounted for in accordance with Emerging Issues Task Force
                    99-19 "Reporting Revenue Gross as a Principal Versus Net as
                    an Agent" ("EITF 99-19") and, recognized according to the
                    net as an Agent Method. Revenues under such agreement with
                    Orckit, are recognized at the time of shipment, as reported
                    to the Company by Orckit.

               3.   Revenues from sales of products are recognized when
                    persuasive evidence of an agreement exists, delivery has
                    occurred, the fee is fixed and determinable, collectibility
                    is probable and no further obligations exists, in accordance
                    with Staff Accounting Bulletin No. 101, "Revenue Recognition
                    in Financial Statements" ("SAB No. 101").

               4.   Revenues and costs related to work-in-progress under
                    long-term unit price contracts were accounted for in
                    accordance with Standard Of Position ("SOP") 81-1,
                    "Accounting for Performance of Construction - Type and
                    Certain Production - Type Contracts" and recognized
                    according to the percentage-of-completion method, using the
                    input method.

                    As to contracts involving technological uncertainties and
                    for which reasonably dependable cost estimates cannot be
                    made, revenue was recognized under the completed-contract
                    method. Anticipated losses on contracts were provided for in
                    full when they were identified by management. Generally, a
                    contract might be regarded as substantially completed if
                    remaining cost and potential risk were insignificant.

                    Estimated gross profit or loss from long-term contracts
                    might change due to changes in estimates resulting from
                    differences between actual performance and original
                    forecasts. Such changes in estimated gross profit were
                    recorded in results of operations when they were reasonably
                    determinable by management, on a cumulative catch-up basis.

                                      F- 15
<Page>

                                                         TIOGA TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================
U.S. DOLLARS IN THOUSANDS

NOTE 2:-  SIGNIFICANT ACCOUNTING POLICIES (CONT.)

               5.   Net effect of cancellation of SVL's ASIC NRE projects:

                    In the fourth quarter of 2000, the Company decided to focus
                    exclusively on its DSL business, and consequently it
                    canceled some of its operating ASIC NRE projects and decided
                    not to take on any new projects. Income (losses) resulting
                    from canceled projects, were excluded from revenues and
                    presented as part of the discontinued operations (see Note
                    12).

          m.   Warranty accrual:

               Warranty accrual was determined according to management's
               estimation. The warranty accrual was recognized at time of
               recognition of the related revenues, and is included as part of
               selling and marketing expenses. The warranty accrual was computed
               as a percentage of the revenues from sales of products. As of
               December 31, 2001 and 2002, the Company has no warranty accrual.

          n.   Royalty-bearing grants:

               Royalty-bearing grants from the Government of Israel for funding
               approved research and development projects are recognized at the
               time the Company is entitled to such grants, on the basis of the
               costs incurred and included as a deduction of research and
               development expenses. Research and development grants recognized
               amounted to $ 0, $ 1,571 and $ 1,468 in 2000, 2001 and 2002,
               respectively (see Note 7c).

          o.   Accounting for stock-based compensation:

               The Company and its subsidiaries has elected to follow Accounting
               Principles Board Opinion No. 25 "Accounting for Stock Issued to
               Employees" ("APB No. 25") in accounting for its employee stock
               option plans. Under APB No. 25, when the exercise price of the
               Company's share options is less than the market price of the
               underlying shares on the date of grant, compensation expense is
               recognized. The pro forma disclosures required by Statement of
               Financial Accounting Standard No. 123 "Accounting for Stock-Based
               Compensation" ("SFAS No. 123"), are provided in Note 8c.

               The Company and its subsidiaries apply SFAS No. 123 and Emerging
               Issues Task Force 96-18 "Accounting for Equity Instruments that
               are Issued to Other than Employees for Acquiring, or in
               Conjunction with Selling, Goods or Services" ("EITF 96-18") and
               its amendments with respect to options issued to non-employees.
               SFAS No. 123 requires use of an option valuation model to measure
               the fair value of the options at the grant date.

                                      F- 16
<Page>

                                                         TIOGA TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================
U.S. DOLLARS IN THOUSANDS

NOTE 2:-  SIGNIFICANT ACCOUNTING POLICIES (CONT.)

          p.   Severance pay:

               The Company's liability for severance pay is calculated pursuant
               to Israeli Severance Pay Law based on the most recent salary of
               the employees multiplied by the number of years of employment as
               of balance sheet date. Employees are entitled to one month's
               salary per each year of employment, or a portion thereof. The
               Company's liability is fully provided by monthly deposits with
               insurance policies and an accrual. The value of these policies is
               recorded as an asset in the Company's balance sheet.

               The deposited funds include profits accumulated up to the balance
               sheet date. The deposited funds may be withdrawn only upon the
               fulfillment of the obligation pursuant to Israeli Severance Pay
               Law or labor agreements. The value of the deposited funds is
               based on the cash surrendered value of these policies, and
               includes immaterial profits.

               Severance expenses for the years ended December 31, 2000, 2001
               and 2002 amounted to approximately $ 598, $ 757 and $ 476,
               respectively.

          q.   Fair value of financial instruments:

               The following methods and assumptions were used by the Company in
               estimating its fair value disclosures for financial instruments:

               The carrying amounts of cash and cash equivalents, trade
               receivables, related party, deposit in escrow, short-term lease
               deposit and trade payables approximate their fair value due to
               the short-term maturity of such instruments.

               The carrying amount of the Company's long-term loan from a
               related party approximates its fair value. The fair value was
               estimated using discounted cash flow analyses, based on the
               Company's current incremental borrowing rates for similar type of
               borrowing arrangements.

          r.   Basic and diluted net earnings (loss) per share:

               Basic net earnings (loss) per share is computed based on the
               weighted average number of Ordinary shares outstanding during
               each year. Diluted net earnings per share is computed based on
               the weighted average number of Ordinary shares outstanding during
               each year, plus dilutive potential Ordinary shares considered
               outstanding during the year, in accordance with Statement of
               Financial Accounting Standard No. 128, "Earnings per Share"
               ("SFAS No. 128").

               As of December 31, 2000 and 2001 all Series A convertible
               redeemable Ordinary shares, outstanding stock options, warrants
               and subordinated convertible notes have been excluded from the
               calculation of the diluted net loss per Ordinary share because
               all such securities are anti-dilutive. The total numbers of
               shares related to the Series A convertible redeemable Ordinary
               shares, outstanding options, warrants and subordinated
               convertible notes excluded from the calculations of diluted net
               loss per share were 10,744,107 and 9,732,168 for the years ended
               December 31, 2000 and 2001, respectively.

                                      F- 17
<Page>

                                                         TIOGA TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================
U.S. DOLLARS IN THOUSANDS

NOTE 2:-  SIGNIFICANT ACCOUNTING POLICIES (CONT.)

               The total number of shares related to outstanding options,
               warrants and subordinated convertible notes, excluded from the
               calculation of the diluted net earnings per share, was 5,729,217
               for the year ended December 31, 2002.

          s.   Concentrations of credit risks:

               Financial instruments that potentially subject the Company and
               its subsidiaries to concentrations of credit risk consist
               principally of cash and cash equivalents, deposit in escrow,
               trade receivables and short-term lease deposits.

               Cash and cash equivalents are invested in major banks in Israel
               and the United States mainly in U.S. dollars. Such deposits in
               the United States may be in excess of insured limits and are not
               insured in other jurisdictions. Management believes that the
               financial institutions that hold the Company's investments are
               financially sound and, accordingly, minimal credit risk exists
               with respect to these investments.

               Trade receivables derived from services rendered to ST located in
               Europe. The Company performs ongoing credit evaluations of its
               one main customer and to date has not experienced any material
               losses. An allowance for doubtful accounts is determined with
               respect to those amounts that the Company has determined to be
               doubtful of collection. As of December 31, 2002, no allowance has
               been provided by the Company.

               The Company has no off-balance-sheet concentration of credit risk
               such as foreign exchange contracts, option contracts or other
               foreign hedging arrangements.

          t.   Impact of recently issued accounting standards:

               In April 2002, the FASB issued Statement of Financial Accounting
               Standard No. 145, "Rescission of FASB Statements No. 4, 44, and
               64, Amendment of FASB Statement No. 13, and Technical
               Corrections" ("SFAS No. 145"), which rescinds SFAS No. 4,
               "Reporting Gains and Losses from Extinguishment of Debt" and an
               amendment of that Statement, and SFAS No. 64, "Extinguishments of
               Debt Made to Satisfy Sinking-Fund Requirements." SFAS No. 145
               also rescinds SFAS No. 44, "Accounting for Intangible Assets for
               Motor Carriers." SFAS No. 145 amends SFAS No. 13, "Accounting for
               Leases," to eliminate an inconsistency between the required
               accounting for sale-leaseback transactions and the required
               accounting for certain lease modifications that have economic
               effects that are similar to sale-leaseback transactions. SFAS No.
               145 also amends other existing authoritative pronouncements to
               make various technical corrections, clarify meanings, or describe
               their applicability under changed conditions. SFAS No. 145 is
               effective for fiscal years beginning after May 15, 2002. The
               Company does not expect the adoption of SFAS No. 145 will have a
               material impact on its results of operations or financial
               position.

                                      F- 18
<Page>

                                                         TIOGA TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================
U.S. DOLLARS IN THOUSANDS

NOTE 2:-  SIGNIFICANT ACCOUNTING POLICIES (CONT.)

               In June 2002, the FASB issues Statement of Financial Accounting
               Standard No. 146, "Accounting for Costs Associated with Exit or
               Disposal Activities" ("SFAS No. 146"), which addresses
               significant issue regarding the recognition, measurement, and
               reporting of costs associated with exit and disposal activities,
               including restructuring activities. SFAS No. 146 requires that
               costs associated with exit or disposal activities be recognized
               when they are incurred rather than at the date of a commitment to
               an exit or disposal plan. SFAS No. 146 is effective for all exit
               or disposal activities initiated after December 31, 2002. The
               Company does not expect the adoption of SFAS No. 146 to have a
               material impact on its results of operations or financial
               position.

               In November 2002, the FASB issued FASB Interpretation No. 45,
               "Guarantor's Accounting and Disclosure Requirements for
               Guarantees, Including Indirect Guarantees of Indebtedness of
               Others, an interpretation of FASB Statements No. 5, 57, and 107
               and Rescission of FASB Interpretation No. 34" ("FIN No. 45"). FIN
               No. 45 elaborates on the disclosures to be made by a guarantor in
               its interim and annual financial statements about its obligations
               under certain guarantees that it has issued. It also clarifies
               that a guarantor is required to recognize, at the inception of a
               guarantee, a liability for the fair value of the obligation
               undertaken in issuing the guarantee. FIN No. 45 does not
               prescribe a specific approach for subsequently measuring the
               guarantor's recognized liability over the term of the related
               guarantee. It also incorporates, without change, the guidance in
               FASB Interpretation No. 34, "Disclosure of Indirect Guarantees of
               Indebtedness of Others," which is being superseded. The
               disclosure provisions of FIN No. 45 are effective for financial
               statements of interim or annual periods that end after December
               15, 2002, and the provisions for initial recognition and
               measurement are effective on a prospective basis for guarantees
               that are issued or modified after December 31, 2002, irrespective
               of a guarantor's year-end. The Company does not expect the
               adoption of FIN No. 45 to have a material impact on its results
               of operations or financial position.

NOTE 3:-  OTHER CURRENT ASSETS

<Table>
<Caption>
                                                                                      DECEMBER 31,
                                                                                  ---------------------
                                                                                     2001       2002
                                                                                  ---------- ----------
<S>                                                                                <C>        <C>
          Services to be rendered by the purchaser of SVL Business (see Note 12)   $    874   $    219
          Accounts receivable from the purchase of SVL Business (see Note 12)           300          -
          Other accounts receivable from ST (Note 1b)                                     -        400
          Grant from the Office of the Chief Scientist                                  460          -
          Prepaid expenses                                                              167        177
          Government authorities                                                         70        104
          Short-term lease deposits                                                      30          -
          Loan to employees                                                              38          8
                                                                                  ---------- ----------

                                                                                   $  1,939   $    908
                                                                                  ========== ==========
</Table>

                                      F- 19
<Page>

                                                         TIOGA TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
U.S. DOLLARS IN THOUSANDS

NOTE 4:-  PROPERTY AND EQUIPMENT, NET

<Table>
<Caption>
                                                            DECEMBER 31,
                                                       ---------------------
                                                          2001       2002
                                                       ---------   ---------
<S>                                                     <C>        <C>
          Cost:
            Computers, software and related equipment   $  1,802   $  1,417
            Office furniture and equipment                   194         51
            Leasehold improvements                           155          5
                                                       ---------- ----------

                                                           2,151      1,473
                                                       ---------- ----------

          Accumulated depreciation                         1,291      1,094
                                                       ---------- ----------

          Depreciated cost                              $    860   $    379
                                                       ========== ==========
</Table>

          As for charges, see Note 7b. As for impairment, see Note 2f.

NOTE 5:-  OTHER CURRENT LIABILITIES

<Table>
<S>                                                     <C>        <C>
          Provision for vacation and recreation         $    372   $    260
          Royalties to the OCS                                 -        588
          Government authorities                             129          -
          Accrued expenses                                   591        370
                                                       ---------- ----------

                                                        $  1,092   $  1,218
                                                       ========== ==========
</Table>

NOTE 6:-  LONG-TERM LOAN FROM A RELATED PARTY

          As of December 31, 2000, the Company received a long-term loan from a
          related party (Orckit) in the amount of $ 20,000. The loan is
          denominated in U.S. dollars and originally was payable by March 1,
          2005. In connection with the ST agreements (see Note 1b), the Company
          entered into an agreement with Orckit relating to the loan repayments,
          according to which the Company paid during 2002, $ 13,000 out of the
          outstanding loan and will repay $ 1,800 out of the released deposit in
          escrow established in connection with the sale of the ASIC business of
          SVL (see Note 12a). Furthermore, upon the closing of the potential
          acquisition of the business by ST, the Company will repay Orckit the
          entire balance of the loan together with any accrued and unpaid
          interest.

          If the potential acquisition will not take place, the remaining
          outstanding loan to Orckit will be required to be repaid by March 1,
          2005.

          As of December 31, 2000, the loan bore interest of LIBOR + 2% per
          annum. Commencing January 1, 2001, the interest was changed to 6% per
          annum and in no event shall the interest rate be less than 5.75% per
          year (see Note 10).

          As for charges, see Note 7b.

                                      F- 20
<Page>

                                                         TIOGA TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================
U.S. DOLLARS IN THOUSANDS

NOTE 7:-  COMMITMENTS AND CONTINGENT LIABILITIES

          a.   Lease commitments:

               The Company rents its facilities and vehicles under various
               operating lease agreements, which expire on various dates, the
               latest of which is in 2005. Future rental commitments under
               non-cancelable are as follows:

<Table>
<Caption>
                                  YEAR ENDED
                                 DECEMBER 31,
                                --------------
<S>                               <C>
               2003               $      210
               2004                       93
               2005                       17
                                --------------

                                  $      320
                                ==============
</Table>

               Total rent expenses for the years ended December 31, 2000, 2001
               and 2002, were approximately $ 828, $ 1,047 and $ 371,
               respectively.

          b.   Charges:

               A floating charge in a limited amount of up to $ 30,000 has been
               registered on all assets as security for long-term loan from a
               related party.

          c.   Government grants:

               The Company participated in programs sponsored by the Israeli
               Government through the Office of the Chief Scientist ("OCS") for
               the support of research and development activities. Through
               December 31, 2002, the Company had obtained grants from the OCS
               aggregating $ 2,921 for certain of the Company's research and
               development projects. The Company is obligated to pay royalties
               to the OCS, amounting to 4% of the sales of the products and
               other related revenues generated from such projects, such as the
               transactions with ST, up to 100%-150% of the grants received,
               linked to the U.S. dollars and bearing annual interest at a rate
               based on the LIBOR.

               Through December 31, 2002, the Company has paid or accrued
               royalties to the OCS in the amount of $ 707. As of December 31,
               2002, the aggregate contingent liability to the OCS amounted to
               at least $2,921.

                                      F- 21
<Page>

                                                         TIOGA TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================
U.S. DOLLARS IN THOUSANDS

NOTE 7:-  COMMITMENTS AND CONTINGENT LIABILITIES (CONT.)

          d.   Pending litigation:

               The Company is involved in pending litigation, as described
               below:

               1.   A claim was filed against the Company, by way of summary
                    proceedings by one of its suppliers in the amount of $ 459.
                    The plaintiff seeks damages with respect to the company's
                    alleged breach of the license agreement between the parties.
                    The Company intends to vigorously defend against the claim.

                    At this point, management and the Company's legal counsel
                    are of the opinion that the outcome of this litigation
                    cannot be assessed at this early stage.

               2.   A claim was filed against the Company, by summary
                    proceedings, by one of its former lessors in the amount of $
                    52.

                    At this point, management and the Company's legal counsel
                    are of the opinion that the likely outcome of a direct
                    negotiation and settlement will amount to approximately $
                    37. A provision for such amount has been made.

               3.   A claim was filed against the Company, by one of its former
                    service providers in the amount of $ 41. The Company applies
                    for leave of defense against the claim.

                    At this point, management and the Company's legal counsel
                    are of the opinion that the outcome of this litigation
                    depends on an evidence recently found out by the Company,
                    and not yet have been valuated by court. Therefore, the
                    outcome of this litigation cannot be assessed.

          e.   As part of the agreements with ST, the parties agreed that in the
               event the Company grants a license or effects a sale of ownership
               of the technology developed by the Company pursuant to the
               development and marketing services agreement, it shall be
               obligated to pay ST a royalty equal to 50% of the license fee,
               sale amounts or other proceeds, agreed with the third party
               within 12 months commencing January 15, 2003. The total royalties
               to be paid in these cases will not exceed $ 4,000.

          f.   Spin-off:

               In connection with the spin-off plan, Tioga and Orckit, except as
               otherwise contemplated in the agreements referred to below,
               operate independently of one another as separate public
               companies.

               The following is a summary of the material terms of the
               Intercompany Agreements and other arrangements and transactions
               between Tioga and Orckit.

                                      F- 22
<Page>

                                                         TIOGA TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================
U.S. DOLLARS IN THOUSANDS

NOTE 7:-  COMMITMENTS AND CONTINGENT LIABILITIES (CONT.)

          1.   Separation agreement:

               In connection with the plan, Tioga entered into a separation
               agreement with Orckit pursuant to which Orckit contributed
               substantially all of the assets and liabilities of its
               semiconductor business to Tioga in exchange for that number of
               Tioga's Ordinary shares, which equals the number of Orckit's
               outstanding Ordinary shares on the date on which the plan was
               consummated, Orckit then distributed those shares to its
               shareholders, on a share-for-share basis, by means of a stock
               dividend. Tioga also issued to the holders of options to purchase
               Ordinary shares of Orckit, options to purchase an equivalent
               number of Tioga's Ordinary shares.

               Upon the closing of the transactions contemplated by the
               separation agreement, Tioga assumed all employment-related
               obligations, accrued benefits and severance pay of Orckit's
               employees whom Tioga employed.

          2.   Intellectual property agreement:

               Tioga entered into an agreement with Orckit for the (i)
               assignment to Tioga of substantially all of Orckit's
               semiconductor intellectual property, including patents and patent
               applications, and (ii) joint ownership of the condor chip and
               certain other technologies without accounting to each other, and
               (iii) irrevocable license to Tioga of other non-semiconductor
               patents and patent applications of Orckit. In connection with
               this assignment, Tioga has granted Orckit an irrevocable license
               to use the assigned intellectual property. This agreement also
               contains additional provisions, including customary
               representations and warranties, as well as certain undertakings
               of indemnification.

          3.   Other agreements:

               Each of Tioga and Orckit may, in the ordinary course of business,
               also enter into certain other leases, sub-leases, operating
               agreements and other agreements that serve to define various
               aspects of the relationship that will exist among the parties
               after the plan has been consummated. None of these agreements,
               either alone, or in the aggregate, is expected to materially
               affect the results of operations of either company.

          The Company believes that all of the agreements described above, are
          on a basis no less favorable than could be obtained from an
          independent third party. Although it is not practical to determine the
          amounts that the Company would have incurred had it operated as an
          unaffiliated entity, management believes that the amounts chargeable
          for the services provided by these agreements are reasonable. All
          future transactions between Tioga and Orckit will be on terms no less
          favorable than could be obtained from an independent third party.

                                      F- 23
<Page>

                                                         TIOGA TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================
U.S. DOLLARS IN THOUSANDS

NOTE 8:-  SHAREHOLDERS' DEFICIENCY

          a.   Ordinary shares:

               The Ordinary shares confer upon the holders the right to receive
               notice to participate and vote in general meetings of the Company
               and the right to receive dividends, if declared.

          b.   Series A convertible redeemable Ordinary shares:

               The Series A Convertible Redeemable Ordinary shares ("Series A")
               had the same rights as Ordinary shares. In addition, these shares
               could automatically convert to Ordinary shares on a 1:1 basis
               according to the following schedule:

               25% shall convert on the first anniversary of such issuance date
               and an additional 6.25% of the shares could convert at the end of
               each three-month period thereafter.

               The Company should have the right to redeem all or a portion of
               the Series A shares upon termination of such holder's employment.

               The issuance of 1,450,000 of Series A convertible redeemable
               shares were in exchange for full-recourse promissory notes in the
               aggregate principal amount of $ 5,075. The notes were fully
               recoursed, bore interest at the rate of 6.08% per annum, and were
               payable upon the sale of any Ordinary shares issued upon
               conversion of the shares. The Series A share price was equal to
               the fair market value of the share of the Company's Ordinary
               shares at date of issuance. The issuance of 60,000 of the Series
               A convertible redeemable shares was for cash in an amount less
               than their fair market value. Accordingly, the Company recorded
               deferred stock compensation in the amount of $750. The total
               compensation costs charged to the statements of operations in
               respect of the Series A shares in 2000 and 2001 were $ 92 and $
               658, respectively.

               During 2001, the Company redeemed 1,450,000 of the Series A
               shares in exchange for the promissory notes.

               The Company resolved to accelerate the conversion of 60,000 of
               the Series A shares to Ordinary shares, upon termination of
               holder's employment. The Company amortized the deferred stock
               compensation and charged it as expense at the acceleration date.
               The Company did not record compensation due to the acceleration,
               due to the fact that the fair value of the share price was lower
               than the Series A share price.

               As of December 31, 2002, there are no outstanding Series A
               Ordinary shares.

          c.   Stock Option Plans:

               1.   Under the Company's stock option plan (the "plan") options
                    may be granted to employees, officers, consultants and
                    directors of the Company or its subsidiaries.

               2.   As of December 31, 2002, an aggregate of 3,794,960 of the
                    Company's options are still available for future grant.

                                      F- 24
<Page>

                                                         TIOGA TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================
U.S. DOLLARS IN THOUSANDS

NOTE 8:-  SHAREHOLDERS' DEFICIENCY (CONT.)

               3.   The options granted generally become fully exercisable after
                    four years and expires no later than 10 years from the
                    approval date of the option plan under terms of grant. Any
                    options which are forfeited or cancelled before expiration
                    become available for future grants.

               A summary of the Company's employees share option activity, and
               related information is as follows:

<Table>
<Caption>
                                                                      YEAR ENDED DECEMBER 31,
                                              -----------------------------------------------------------------------
                                                       2000                    2001                     2002
                                              ----------------------  -----------------------  ----------------------
                                                           WEIGHTED                 WEIGHTED                WEIGHTED
                                                NUMBER     AVERAGE       NUMBER      AVERAGE     NUMBER     AVERAGE
                                                  OF       EXERCISE        OF       EXERCISE       OF       EXERCISE
                                                OPTIONS     PRICE        OPTIONS      PRICE      OPTIONS     PRICE
                                              ----------- ----------  ------------ ----------  ---------- -----------
<S>                                            <C>          <C>        <C>          <C>        <C>          <C>
               Outstanding at the beginning
                of the year                            -    $   -       3,056,963   $    3.8   5,358,513    $  0.36
               SVL's employees (see Note 8f)           -        -        (593,979)  $    3.0           -          -
               Granted                         3,320,613    $ 3.8       4,391,000   $    0.2      15,500    $  0.17
               Exercised                          (4,690)   $   2        (289,599)  $   0.03    (457,169)   $  0.02
               Forfeited                        (258,960)   $ 4.3      (1,205,872)  $   2.28    (696,625)   $  0.08
                                              -----------             ------------             ----------

               Outstanding at the end of
                the year                       3,056,963    $ 3.8       5,358,513   $   0.36   4,220,219    $  0.44
                                              =========== ==========  ============ ==========  ========== ===========

               Exercisable options at the
                end of the year                  427,800    $ 3.8       1,370,292   $   0.81   2,538,917    $  0.56
                                              =========== ==========  ============ ==========  ========== ===========
</Table>

               All options granted during the three years ended December 31,
               2002 were at an exercise price that is equal to the fair value of
               the stock at the grant date.

               The options outstanding as of December 31, 2002, have been
               classified by exercise price, as follows:

<Table>
<Caption>
                                           OPTIONS            WEIGHTED                         OPTIONS          WEIGHTED
                                         OUTSTANDING          AVERAGE         WEIGTHED       EXERCISABLE        AVERAGE
                                            OF AS            REMAINING        AVERAGE           AS OF        EXERCISE PRICE
                        EXERCISE        DECEMBER 31,        CONTRACTUAL       EXERCISE      DECEMBER 31,       OF OPTIONS
                         PRICE              2002                LIFE           PRICE            2002          EXERCISABLE
                    ---------------- -------------------  ---------------- -------------- ----------------- ----------------
                           $                                   YEARS
                    ----------------                      ----------------
<S>                                       <C>                   <C>          <C>              <C>             <C>
                         0-1.5            4,017,243             7.8          $   0.14         2,361,558       $     0.1
                         3-4.5               46,500             7.8          $    3.5            24,250       $     3.5
                         4.5-7               53,752             6.2          $   5.74            53,751       $    5.74
                          7-10              102,724             7.1          $   7.95            99,358       $    7.95
                                     -------------------                                  -----------------

                                          4,220,219             7.8          $   0.44         2,538,917       $    0.56
                                     ===================  ================ ============== ================= ================
</Table>

                                      F- 25
<Page>

                                                         TIOGA TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================
U.S. DOLLARS IN THOUSANDS

NOTE 8:-  SHAREHOLDERS' DEFICIENCY (CONT.)

               As part of the spin-off process, Orckit's option holders
               maintained their outstanding options to purchase shares of Orckit
               and also received additional options to purchase shares of Tioga.
               The exercise price of the original option allocated between an
               Orckit option and a Tioga option, was based on the market value
               of the companies shares at the time of the spin-off. All other
               terms of the new options, other than the exercise price, remained
               unchanged as those of the original options. As a result, as of
               December 31, 2001 and as of December 31, 2002, Tioga's employees
               hold options to purchase Ordinary shares of Orckit.

               EITF 90-9, "Changes to Fixed Employee Stock Options Plans as a
               Result of Equity Restructuring", discusses the accounting
               treatment for existing options of a company that is effecting a
               spin-off. In accordance with EITF 90-9, three criteria must be
               considered in order to determine if a new measurement date has
               occurred. Since the Company followed the criteria required by
               EITF 90-9, no additional compensation expenses were recorded.

               The following is the information related to the outstanding
               options as of December 31, 2002 held by Orckits' employees to
               purchase Tioga's shares:

<Table>
<Caption>
                                      OPTIONS           WEIGHTED                         OPTIONS         WEIGHTED
                                    OUTSTANDING         AVERAGE         WEIGHTED       EXERCISABLE        AVERAGE
                                       OF AS           REMAINING        AVERAGE           AS OF       EXERCISE PRICE
                   EXERCISE        DECEMBER 31,       CONTRACTUAL       EXERCISE      DECEMBER 31,      OF OPTIONS
                    PRICE              2002               LIFE           PRICE            2002          EXERCISABLE
               ----------------  -----------------  ---------------- --------------  ---------------  ---------------
                      $                                  YEARS
               ----------------                     ----------------
<S>                                  <C>                  <C>          <C>               <C>            <C>
                    0-1.5             169,843               6          $    0.54         151,161        $    0.49
                    1.5-3             751,726               7          $    1.80         590,209        $    1.80
                    3-4.5              42,889             7.5          $    3.50          28,113        $    3.50
                    4.5-7             583,276             5.1          $    5.32         565,117        $    5.32
                     7-10             571,875             6.2          $    8.13         533,264        $    8.12
                    10-15             122,935             6.9          $   13.83          79,905        $   13.76
                                 -----------------                                   ---------------

                                    2,245,544             6.3          $    4.94       1,947,769        $    4.96
                                 =================  ================ ==============  ===============  ===============
</Table>

               During 2000, 2001 and 2002, Orckit's employees exercised 9,496,
               1,273,853 and 12,015 options, respectively.

               Under SFAS No. 123, proforma information regarding net income
               (loss) and net income (loss) per share is required and has been
               determined as if the Company had accounted for its employee
               options (including options granted to SVL's employees prior to
               their termination and to Orckit's employees in relation to the
               spin-off) under the fair value method of that statement. The fair
               value for these options was estimated at the date of grant using
               a Black-Scholes Option Valuation Model, with the following
               weighted-average assumptions for each of the three years in the
               period ended December 31, 2002. Expected volatility of 82% ,170%
               and 83% respectively, risk-free interest rates of 5%, 4% and 4%,
               respectively, dividend yield of 0% for each year, and a
               weighted-average expected life of the option of 3 years for each
               year.

                                      F- 26
<Page>

                                                         TIOGA TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================
U.S. DOLLARS IN THOUSANDS

NOTE 8:-  SHAREHOLDERS' DEFICIENCY (CONT.)

               Pro forma information under SFAS No. 123:

<Table>
<Caption>
                                                                                 YEAR ENDED DECEMBER 31,
                                                                      ----------------------------------------------
                                                                          2000            2001             2002
                                                                      -------------   -------------    -------------
<S>                                                                     <C>             <C>              <C>
               Net income (loss) as reported                            $ (132,195)     $  (18,150)      $    8,799
                                                                      =============   =============    =============
               Pro forma net income (loss)                              $ (134,484)     $  (21,735)      $    6,901
                                                                      =============   =============    =============
               Pro forma basic net income (loss)  per share             $    (5.99)     $    (0.92)      $     0.28
                                                                      =============   =============    =============
               Pro forma diluted net income (loss) per share            $    (5.99)     $    (0.92)      $     0.25
                                                                      =============   =============    =============
</Table>

          d.   Employee Share Purchase Plan:

               In September 2000, the Company's Board of Directors adopted the
               Employee Share Purchase Plan (the "Purchase Plan" or "ESPP").
               Eligible employees can have up to 10% of their earnings withheld,
               up to certain maximums, to be used to purchase Ordinary shares.
               The price of Ordinary share purchased under the Purchase Plan
               will be equal to 85% of the lower of the fair market value of the
               Ordinary share on the commencement date of each offering period
               or on the semi-annual purchase date Pursuant to the plan. On
               November 6, 2001, the Company resolved to terminate its employee
               share purchase plan.

               During 2001, 49,417 Ordinary shares of the Company were issued
               upon exercise of the purchase plan.

          e.   Warrants and options issued to service providers and consultants:

               1.   The Company's outstanding options to service providers as of
                    December 31, 2002, are as follows:

<Table>
<Caption>
                                              OPTIONS FOR      EXERCISE PRICE        OPTIONS          EXERCISABLE
                         ISSUANCE DATE      ORDINARY SHARES       PER SHARE        EXERCISABLE          THROUGH
                    ---------------------- -----------------  ----------------- ------------------ -----------------
<S>                                             <C>             <C>                   <C>                <C>
                             2001               210,000         $    0.63-3.5         136,250            *)
                                           =================  ================= ================== =================
</Table>

                    *) 10 years from the date of grant.

                    a)   On June 17, 1998, the subsidiary granted a warrant to a
                         consultant to purchase Ordinary shares of the
                         subsidiary, which will vest immediately in the event of
                         a "corporate transaction". Upon the acquisition of the
                         subsidiary this warrant vested immediately and
                         converted to 14,741 ordinary shares of the Company.
                         Accordingly, the subsidiary recorded compensation
                         expense in the amount of $ 1,081.

                                      F- 27
<Page>

                                                         TIOGA TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================
U.S. DOLLARS IN THOUSANDS

NOTE 8:-  SHAREHOLDERS' DEFICIENCY (CONT.)

                    b)   On December 17, 1998, the subsidiary issued warrant to
                         a bank, to purchase its Ordinary shares. All warrants
                         were exercised upon consummation of the acquisition by
                         Orckit during 2000 and were converted into 29,249
                         shares of the Company.

                    c)   On February 16, 2000, the subsidiary issued warrant to
                         a bank, to purchase a number of the subsidiary's
                         Ordinary shares, having an aggregate exercise price in
                         the amount of $ 250. Upon consummation of the
                         acquisition by Orckit, all warrants were exercised and
                         converted 1,294 Ordinary shares of the Company in
                         accordance with the cashless exercise method as
                         described in the warrant agreement. As a result, the
                         subsidiary recorded compensation expenses in the amount
                         of $ 110.

                    d)   During 2001, 50,000 options were exercised.

               2.   The Company had accounted for its options to service
                    providers under the fair value method of SFAS No. 123 and
                    EITF 96-18. The fair value for these options was estimated
                    using a Black-Scholes option-pricing model with the
                    following weighted-average assumptions for 2000 and 2001:
                    risk-free interest rates of 5% for each year, dividend
                    yields of 0% for each year, volatility factors of the
                    expected market price of the Company's Ordinary shares of
                    0.82 and 1.7, respectively, and a weighted-average expected
                    life of the options of approximately 3 years for each year.

               3.   The Company recorded compensation expenses of $ 1,191 and $
                    140 (out of which $ 90 included in the discontinued
                    operations) during 2000 and 2001, respectively, related to
                    the service providers options.

          f.   Under the agreement between the Company and SVL's employees, the
               exercise price of their vested options was amended to NIS 0.10
               per share. The Company recorded on the new measurement date
               compensation expenses of $ 51, as part of the $ 1,544
               compensation expenses (see also Note 8g).

               Upon the disposal of SVL's ASIC business most of SVL's employees
               were transferred to the purchaser and changed their status from
               employees to non-employees.

               The Company accounts for the unvested options as a variable plan
               and use the fair value method of SFAS No. 123 and EIFT 96-18. The
               fair value for these options was estimated using a Black-Scholes
               option-pricing model with the following weighted-average
               assumptions for 2000 and 2001: risk-free interest rates of 5% for
               each year, dividend yields of 0% for each year, volatility
               factors of the expected market price of the Company's Ordinary
               shares of 0.82 and 1.7, respectively, and a weighted-average
               contractual life of the options of approximately 3 years for each
               year.

               As of December 31, 2001 and 2002, the Company recorded no
               compensation expenses related to the unvested options, as the
               fair value of such options was zero.

                                      F- 28
<Page>

                                                         TIOGA TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================
U.S. DOLLARS IN THOUSANDS

NOTE 8:-  SHAREHOLDERS' DEFICIENCY (CONT.)

               As of December 31, 2002, the outstanding options held by SVL's
               employees were 586,975, out of which 376,648 options were
               exercisable.

               During 2001 and 2002, 1,789 and 473 options were exercised,
               respectively.

          g.   In April 2001, the Board of Directors of the Company resolved to
               reprice stock options of certain of its employees and employees
               of Orckit. The exercise price of the repriced stock options is
               NIS 0.10 which is the par value of the Ordinary shares. The
               Company had a new measurement date and consequently recorded
               deferred stock compensation of $ 3,374, out of which $ 1,544 and
               $ 635 was amortized to the statement of operations during 2001
               and 2002, respectively.

          h.   In March 2000, Orckit issued $ 125 million aggregate principal
               amount of its 5.75% convertible subordinated notes due in April
               2005. Holders of the notes are entitled to convert each $ 1,000
               principal amount of the notes into 11.7481 Ordinary shares of
               Orckit (which is equivalent to a conversion price of $ 85.12 per
               share) plus 11.7481 Ordinary shares of Tioga. The conversion
               rates with respect to Orckit and Tioga are subject to adjustment
               in certain circumstances, such as changes in the applicable
               Company's capital structure or upon the issuance by the
               applicable company of stock dividends or certain cash
               distribution.

               During 2001, $ 31,000 of the subordinated convertible notes were
               converted by the holders. As a result the Company issued 364,191
               Ordinary shares of the Company and during 2002, no convertible
               subordinated notes were converted into shares.

NOTE 9:-  TAXES ON INCOME

          a.   Measurement of taxable income under the Income Tax (Inflationary
               Adjustments) Law, 1985:

               Results for tax purposes are measured in terms of earnings in NIS
               after certain adjustments for increases in the Israeli Consumer
               Price Index ("CPI"). As explained in Note 2b, the financial
               statements are measured in U.S. dollars. The difference between
               the annual change in the Israeli CPI and in the NIS/dollar
               exchange rate causes a further difference between taxable income
               and the income before taxes shown in the financial statements. In
               accordance with paragraph 9(f) of SFAS No. 109, the Company has
               not provided deferred income taxes on the difference between the
               functional currency and the tax bases of assets and liabilities.

          b.   Tax benefits under the Law for the Encouragement of Capital
               Investments, 1959 (the "law"):

               Orckit's property and equipment in Tel-Aviv, which were
               transferred to the Company as part of the spin-off from Orckit,
               have been granted an "Approved Enterprise" status under the above
               law and the Company and its subsidiary have elected the
               alternative benefits program waiver of grants in return for tax
               exemptions. Pursuant thereto, the income of the Company derived
               from the "Approved Enterprise" program is tax-exempt for two
               years and will enjoy a reduced tax rate of 25% for a five-year
               period.

                                      F- 29
<Page>

                                                         TIOGA TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================
U.S. DOLLARS IN THOUSANDS

NOTE 9:-  TAXES ON INCOME (CONT.)

               The Company's 1997 investment plan was granted an approval as
               "Approved Enterprise". As the Company currently has no taxable
               income, the benefits have not yet commenced for the program.

               The period of tax benefits, detailed above, is limited to the
               earlier of 12 years from the commencement of production, or 14
               years form approval date, whichever is earlier. Given the above
               mentioned conditions, the period of benefits for the facilities
               will terminate in the year 2010.

               The entitlement to the above benefits is conditional upon the
               Company's fulfilling the conditions stipulated by the above law,
               regulations published thereunder and the instruments of approval
               for the specific investments in "Approved Enterprises". In the
               event of failure to comply with these conditions, the benefits
               may be canceled and the Company may be required to refund the
               amount of the received benefits, in whole or in part, including
               interest.

               If the retained tax-exempt income is distributed in a manner
               other than in the complete liquidation of the Company, it would
               be taxed at the corporate tax rate applicable to such profits as
               if the Company had not chosen the alternative tax benefits
               (currently - 25%), and an income tax liability would be incurred.

          c.   Should the Company derive income from sources other than the
               "Approved Enterprise" during the periods of benefits, such income
               shall be taxable at the regular corporate tax rate of 36%.

          d.   Deferred income taxes:

               Deferred income taxes reflect the net tax effects of temporary
               differences between the carrying amounts of assets and
               liabilities for financial reporting purposes and the amounts used
               for income tax purposes. Significant components of the Company's
               deferred tax liabilities and assets are as follows:

<Table>
<Caption>
                                                                                  DECEMBER 31,
                                                                     --------------------------------------
                                                                           2001                 2002
                                                                     -----------------    -----------------
<S>                                                                    <C>                  <C>
                Operating loss and capital loss carryforward           $      7,560         $     45,152
                Reserves and allowances                                         397                  344
                                                                     -----------------    -----------------

                Net deferred tax asset before valuation allowance             7,957               45,496
                Valuation allowance                                          (7,957)             (45,496)
                                                                     -----------------    -----------------

                Net deferred tax asset                                 $          -         $          -
                                                                     =================    =================
</Table>

               Management currently believes that since the Company and its
               subsidiaries have a history of losses it is more likely than not
               that the deferred tax assets regarding the loss carryforwards and
               other temporary differences will not be realized in the
               foreseeable future.

                                      F- 30
<Page>

                                                         TIOGA TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================
U.S. DOLLARS IN THOUSANDS

NOTE 9:-  TAXES ON INCOME (CONT.)

          e.   Net operating losses carryforwards:

               The Israeli companies have accumulated operating losses for tax
               purposes as of December 31, 2002, in the amount of approximately
               $ 11,460, which may be carried forward and offset against taxable
               income in the future for an indefinite period.

               The company has accumulated capital losses of $112,630, which may
               be carried forward. There is no assurance that Israeli tax
               authorities will accept such position.

               As of December 31, 2002 the U.S. subsidiary had approximately $
               1,370 in federal net operating loss carryforwards for income tax
               purposes, which can be carried forward and offset against taxable
               income for 20 years and expire until 2023.

               Utilization of U.S. net operating losses may be subject to
               substantial annual limitation, due to the "change in ownership"
               provisions of the Internal Revenue Code of 1986 and similar state
               provisions. The annual limitation may result in the expiration of
               net operating losses before utilization.

          f.   The main reconciling item from the statutory tax rate of the
               Company to the effective tax rate is the non-recognition of tax
               benefits from accelerated net operating losses carryforward due
               to the uncertainty of the realization of such tax benefits.

          g.   Net income (loss) from continuing operations consists of the
               following:

<Table>
<Caption>
                                                   YEAR ENDED DECEMBER 31,
                                      --------------------------------------------------
                                           2000              2001              2002
                                      --------------    --------------    --------------
<S>                                     <C>               <C>               <C>
               Domestic (Israel)        $    (9,989)      $   (11,133)      $     9,427
               Foreign                       (1,367)           (2,974)             (647)
                                      --------------    --------------    --------------

                                        $   (11,356)      $   (14,107)      $     8,780
                                      ==============    ==============    ==============
</Table>

NOTE 10:- RELATED PARTY TRANSACTIONS

          The balances with and the results of operations from transactions with
          Orckit, a related party, were as follows:

<Table>
<Caption>
                                                                             DECEMBER 31,
                                                                   --------------------------------
                                                                        2001              2002
                                                                   --------------    --------------
                                                                         $                 $
                                                                   --------------    --------------
<S>                                                                  <C>                <C>
          Balances:
            Trade receivables                                             21                 -
            Current account                                             (214)             (674)
            Long-term loan (see Note 6)                               (7,000)           (5,200)
            Current maturities of long-term loan (see Note 6)        (13,000)           (1,800)
</Table>

                                      F- 31
<Page>

                                                         TIOGA TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================
U.S. DOLLARS IN THOUSANDS

NOTE 10:- RELATED PARTY TRANSACTIONS (CONT.)

<Table>
<Caption>
                                                                      YEAR ENDED DECEMBER 31,
                                                         --------------------------------------------------
                                                              2000              2001              2002
                                                         --------------    --------------    --------------
                                                               $                 $                 $
                                                         --------------    --------------    --------------
          <S>                                               <C>                <C>               <C>
          Transactions:
            Revenues from products and royalties (1)        14,517             1,418             200
            Cost of revenues from products (1)              13,107                 -               -
            Interest on long-term loan                         781             1,200             961
</Table>

          (1)  Tioga entered into a product supply agreement with Orckit as part
               of the spin-off, pursuant to which Tioga would sell certain
               semiconductors products to Orckit subject to performance criteria
               and price. Orckit would purchase from Tioga a substantial portion
               of its chipsets requirements at most-preferred customer prices.

               Effective January 1, 2001 this agreement was amended to royalty
               agreement under which, Orckit will pay Tioga a royalty equal to
               10% of the actual chips price paid by Orckit to the chips
               supplier. This agreement terminated on May 1, 2002.

NOTE 11:- BASIC AND DILUTED NET EARNINGS (LOSS) PER SHARE

          The following table sets forth the computation of basic and diluted
          net earnings (loss) per share.

<Table>
<Caption>
                                                                                 YEAR ENDED DECEMBER 31,
                                                                    -------------------------------------------------
                                                                         2000              2001              2002
                                                                    --------------    --------------    -------------
          <S>                                                        <C>               <C>               <C>
          Numerator:

          Net income (loss) from continuing operations               $   (11,356)      $   (14,107)      $     8,780
          Net income (loss) from discontinued operations             $  (120,839)      $    (4,043)      $        19
                                                                    --------------    --------------    -------------

          Numerator for basic and diluted net earnings (loss)
           per share - income available to shareholders of
           Ordinary shares                                           $  (132,195)      $   (18,150)      $     8,799
                                                                    ==============    ==============    =============

          Denominator:

          Denominator for basic net earnings (loss) per share -
           weighted average shares                                    22,455,860        23,604,309        24,771,743
                                                                    --------------    --------------    -------------
          Effect of dilutive securities:
            Employee stock options, Orckit's employee
             options, SVL's employee options and options to
             service providers                                           (*    -           (*    -         2,012,398
            Convertible subordinated notes                               (*    -           (*    -         1,104,321
                                                                    --------------    --------------    -------------

          Denominator for diluted net earnings (loss) per
           share                                                         (*    -           (*    -        27,888,462
                                                                    ==============    ==============    =============

          *)   Antidilutive.
</Table>

                                      F- 32
<Page>

                                                         TIOGA TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================
U.S. DOLLARS IN THOUSANDS

NOTE 12:- DISCONTINUED OPERATIONS

          a.   Discontinued operations:

               1.   In April 2001, the Company sold the ASIC division of its
                    wholly owned subsidiary ("SVL" - see also Note 1d) in
                    consideration of $ 21,650 million in cash, assumptions of
                    debts and future services that the purchaser has undertaken
                    to render to the Company over a period of two years. The
                    initial consideration was set on $ 22,250 of which $ 300 was
                    settled and netted in 2001 and additional $ 300 in 2002, see
                    (3) below.

               2.   As of December 31, 2001, the Company received $ 16,200 in
                    cash ($ 15,821 net of transaction costs), in addition to $
                    1,800, which was released from an escrow account on December
                    2002, and the purchaser also assumed $ 1,900 of debt
                    assumptions (initially $ 2,500 see (3) below). The Company
                    is also entitled to receive services from the purchaser over
                    a period of two years, in consideration of $ 1,750. As of
                    December 31, 2002, the Company had a balance of $ 219 in
                    prepaid expenses of other current assets.

                    This transaction was accounted for in accordance with EITF
                    95-18, "Accounting and Reporting for a Discontinued Business
                    Segment When the Measurement Date Occurs After the Balance
                    Sheet Date But Before the Issuance of the Financial
                    Statements", and APB-30, "Reporting the Results of
                    Operations-Reporting the Effects of Disposal of a Segment of
                    a Business, and Extraordinary, Unusual and Infrequently
                    Occurring Events and Transactions".

               3.   On November 25, 2002, the Company and the purchaser of SVL
                    signed a settlement agreement and release agreement pursuant
                    to which Tioga waived $ 600 out of the consideration of the
                    transaction and the parties released the escrow account.
                    Therefore, during 2002 the Company recorded an additional
                    capital loss of only $ 300 as part of the discontinued
                    operations.

                                      F- 33
<Page>

                                                         TIOGA TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================
U.S. DOLLARS IN THOUSANDS

NOTE 12:- DISCONTINUED OPERATIONS (CONT.)

          b.   As a result of the selling of the ASIC business as mentioned
               above, the results of operations of the ASIC business were
               reported separately as discontinued operations in the statement
               of operations for the years ended December 31, 2000, 2001 and
               2002 and are summarized as follows:

<Table>
<Caption>
                                                                            YEAR ENDED DECEMBER 31,
                                                                   ------------------------------------------
                                                                       2000           2001          2002*)
                                                                   ------------- -------------- -------------
               <S>                                                  <C>            <C>            <C>
               Revenues                                             $    (7,262)   $  (4,968)     $      -
               Cost of revenues                                           6,601        1,740             -
               Net income from cancellation of NRE projects                (197)        (494)            -
               Research and development expenses                         10,534        2,821          (170)
               Selling, general and administrative expenses               6,344        1,787             8
               In process research and development                       24,695            -             -
               Amortization of goodwill                                  21,598        2,259             -
               Impairment of goodwill and other intangible assets        58,068            -             -
               Impairment of property and equipment                           -          823             -
               Spin-off expenses                                            239            -             -
               Financial expenses, net                                       49           79             -
               Loss from selling property and equipment                       -           28             -
               Income taxes                                                 170           13          (157)
               Gain (loss) from the disposal of SVL business                  -          (45)          300
                                                                   ------------- -------------- -------------

               Net (income) loss                                    $   120,839    $   4,043      $    (19)
                                                                   ============= ============== =============
</Table>

               *)   In accordance with Paragraph 25 of APB No. 30, those amounts
                    were included in 2002 discontinued operations, as a result
                    of remaining contingent subsequent to the disposal of SVL
                    business.

NOTE 13:- SEGMENTS CUSTOMERS AND GEOGRAPHICAL INFORMATION

          The Company and its subsidiaries manage their business on a basis of
          one reportable segment (see Note 1 for a brief description of the
          Company's business) and follows the requirements of Statement of
          Financial Accounting Standard No. 131, "Disclosures About Segments of
          an Enterprise and Related Information" ("SFAS No. 131").

<Table>
<Caption>
                                              YEAR ENDED DECEMBER 31,
                                     ------------------------------------------
                                         2000          2001           2002
                                     ------------- -------------  -------------
          <S>                          <C>           <C>            <C>
          Europe                       $       -     $       -      $   7,679
          Israel                          14,517         1,425            233
          United States                        -            15              -
                                     ------------- -------------  -------------

                                       $  14,517     $   1,440      $   7,912
                                     ============= =============  =============
</Table>

          Most of the Company's long-lived assets are in Israel for all years
          presented.

          During 2001, the Company's major customer was Orckit and during 2002
          the Company's major customer was ST (see also Note 1).

                                      F- 34
<Page>

                                                         TIOGA TECHNOLOGIES LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
================================================================================
U.S. DOLLARS IN THOUSANDS

NOTE 14:- FINANCIAL INCOME (EXPENSES), NET

<Table>
<Caption>
                                                                                 YEAR ENDED DECEMBER 31,
                                                                    --------------------------------------------------
                                                                         2000              2001              2002
                                                                    --------------    --------------    --------------
<S>                                                                  <C>               <C>               <C>
          Financial expenses:
            Interest                                                 $      (723)      $    (1,587)      $      (964)
            Foreign currency translation adjustments                        (251)                -               (51)
            Losses from available-for-sale marketable
             securities                                                        -               (99)                -
            Other                                                              -               (46)              (12)
                                                                    --------------    --------------    --------------

                                                                            (974)           (1,732)           (1,027)
                                                                    --------------    --------------    --------------
          Financial income:
            Gains on available-for-sale marketable
             securities                                                    1,510                 -                 -
            Foreign currency translation adjustments                         125                10                 -
            Interest                                                         308               484               153
                                                                    --------------    --------------    --------------

                                                                           1,943               494               153
                                                                    --------------    --------------    --------------

                                                                     $       969       $    (1,238)      $      (874)
                                                                    ==============    ==============    ==============
</Table>

NOTE 15:- SUBSEQUENT EVENTS

          On the date of signing these financial statements, ST sent the Company
          a notice of exercise of its call options pursuant to the option
          agreement, which was signed between ST and the Company. Per this
          notice of exercise, ST elected the method for exercising the call
          option as an assets deal (see also Note 1b).

                                - - - - - - - - -

                                      F- 35


                                  EXHIBIT INDEX
                                  -------------

Exhibit        Exhibit
-------        -------
No.
---
1.1       Memorandum of Association******

1.2       Amended and Restated Articles of Association******

4.1       Separation Agreement, dated as of June 20, 2000, between Tioga and
          Orckit *

4.2       Intellectual Property Agreement, dated as of January 1, 2000, between
          Tioga and Orckit *

4.7       Registration Rights Agreement, dated March 13, 2000, by and among
          Orckit Communications Ltd., Tioga and CIBC World Markets Corp.**

4.8       Tioga Share Incentive Plan, as amended***

4.9       Asset Purchase Agreement, dated as of April 23, 2001 by and among
          Silicon Value, Printsense and Tioga ****

4.12      Technology Transfer Agreement, dated as of February 14, 2002, by and
          among Tioga, ST Microelectronics Ltd. and STMicroelectronics NV*****

4.13      Option Agreement, dated as of February 14, 2002, by and between Tioga
          and STMicroelectronics NV*****

4.14      Development, Marketing and Services Agreement, dated as of February
          14, 2002, by and among Tioga, ST Microelectronics Ltd. and
          STMicroelectronics NV*****

4.16      Asset Purchase Agreement, dated April 28, 2003, by and among Tioga, ST
          Microelectronics Ltd. and STMicroelectronics NV******

8         List of Subsidiaries******

10        Consent of Independent Auditors******

99        Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of
          2002

----------
* Incorporated by reference to Tioga's Registration Statement on Form 20-F filed
June 22, 2000 (File No. 0-30820)

** Incorporated by reference to Tioga's Registration Statement on Form F-1 (File
No.333-12238)

***Incorporated by reference to Tioga's Registration Statement on Form S-8 (File
No. 333-12904).

****Incorporated by reference to Tioga's Annual Report on Form 20-F for the year
ended December 31, 2001 (File No. 0-30820).

*****Incorporated by reference to Tioga's Report on Form 6-K for the month of
February 2002 dated February 14, 2002 (File No. 0-30820).

***** Filed herewith
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