6-K













EXHIBIT 10.1  



TOP IMAGE SYSTEMS LTD.
AND ITS SUBSIDIARIES 



INTERIM CONSOLIDATED
FINANCIAL STATEMENTS 



AS OF JUNE 30, 2006 



U.S. DOLLARS IN
THOUSANDS 



UNAUDITED 





INDEX 












		Page

		
		
		
		
	Consolidated Balance Sheets	2 - 3 
	 
	Consolidated Statements of Operations 	4 
	 
	Statements of Changes in Shareholders' Equity 	5 
	 
	Consolidated Statements of Cash Flows 	6 - 7 
	 
	Notes to Consolidated Financial Statements 	8 - 12 




















	TOP IMAGE SYSTEMS LTD.

AND ITS SUBSIDIARIES 
	  
	CONSOLIDATED BALANCE SHEETS 
	

	U.S. dollars in thousands 










		December 31,

2005
	June 30,

2006

			Unaudited

	 		
			
			
	    ASSETS	 	 	 		 	 		 
	 	 	 
	CURRENT ASSETS:	 	 
	  Cash and cash equivalents	 	 	$	  8,200	 	$	  7,219	 
	  Marketable securities	 	 	 	1,805	 	 	2,307	 
	  Trade receivables (net of allowance for doubtful accounts of $ 412 and

    $ 391 at December 31, 2005 and June 30, 2006, respectively)	 	 	 	6,802	 	 	7,770	 
	  Other accounts receivable and prepaid expenses	 	 	 	622	 	 	1,111	 
		
		
	
	 	 	 
	Total current assets	 	 	 	17,429	 	 	18,407	 
		
		
	
	 	 	 
	LONG-TERM ASSETS:	 	 
	  Severance pay fund	 	 	 	654	 	 	604	 
	  Long-term deposits	 	 	 	135	 	 	68	 
	  Property and equipment, net	 	 	 	577	 	 	557	 
	  Other intangible assets, net	 	 	 	1,100	 	 	950	 
	  Goodwill	 	 	 	465	 	 	465	 
		
		
	
	 	 	 
	Total long-term assets	 	 	 	2,931	 	 	2,644	 
		
		
	
	 	 	 
	Total assets	 	 	$	 20,360	 	$	 21,051	 
		
		
	







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




- 2 -









	TOP IMAGE SYSTEMS LTD.

AND ITS SUBSIDIARIES 
	  
	CONSOLIDATED BALANCE SHEETS 
	

	U.S. dollars in thousands (except share and per share data) 












		December 31,

2005
	June 30,

2006

			Unaudited

	 		
			
			
	    LIABILITIES AND SHAREHOLDERS' EQUITY	 	 	 		 	 		 
	 	 	 
	CURRENT LIABILITIES:	 	 
	  Short-term bank loans	 	 	$	   2,179	 	$	   1,988	 
	  Trade payables	 	 	 	900	 	 	446	 
	  Accrued expenses and other accounts payable	 	 	 	2,213	 	 	2,888	 
		
		
	
	 	 	 
	Total current liabilities	 	 	 	5,292	 	 	5,322	 
		
		
	
	 	 	 
	ACCRUED SEVERANCE PAY	 	 	 	850	 	 	919	 
		
		
	
	 	 	 
	SHAREHOLDERS' EQUITY:	 	 
	  Share capital -	 	 
	    Ordinary shares of NIS 0.04 par value -	 	 
	      Authorized: 125,000,000 shares at December 31, 2005 and June 30, 2006;	 	 
	      Issued and outstanding: 8,777,366 and 8,826,366 shares at December 31,	 	 
	      2005 and June 30, 2006, respectively	 	 	 	97	 	 	97	 
	  Additional paid-in capital	 	 	 	29,561	 	 	29,686	 
	  Accumulated deficit	 	 	 	(15,440	)	 	(14,973	)
		
		
	
	 	 	 
	Total shareholders' equity	 	 	 	14,218	 	 	14,810	 
		
		
	
	 	 	 
	Total liabilities and shareholders' equity	 	 	$	  20,360	 	$	  21,051	 
		
		
	






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



- 3 -











	TOP IMAGE SYSTEMS LTD.

AND ITS SUBSIDIARIES 
	  
	CONSOLIDATED STATEMENTS OF OPERATIONS 
	

	U.S. dollars in thousands (except share and per share data) 











		Year ended

December 31,

2005
	Six months ended

June 30,

		2005
	2006

			Unaudited

	 			
				
	Revenues:	 	 	 		 	 		 	 		 
	  Products	 	 	$	      9,888	 	$	      4,471	 	$	      5,875	 
	  Services	 	 	 	6,932	 	 	3,529	 	 	3,599	 
		
		
		
	
	 	 	 
	Total revenues	 	 	 	16,820	 	 	8,000	 	 	9,474	 
		
		
		
	
	 	 	 
	Cost of revenues:	 	 
	  Products	 	 	 	3,363	 	 	1,057	 	 	1,151	 
	  Services	 	 	 	3,400	 	 	2,230	 	 	2,444	 
		
		
		
	
	 	 	 
	Total cost of revenues	 	 	 	6,763	 	 	3,287	 	 	3,595	 
		
		
		
	
	 	 	 
	Gross profit	 	 	 	10,057	 	 	4,713	 	 	5,879	 
		
		
		
	
	 	 	 
	Operating costs and expenses:	 	 
	  Research and development	 	 	 	1,312	 	 	644	 	 	884	 
	  Selling and marketing	 	 	 	5,396	 	 	2,755	 	 	3,171	 
	  General and administrative	 	 	 	3,470	 	 	1,701	 	 	1,576	 
	  Liquidated damages related to September 2004 investment	 	 	 	164	 	 	164	 	 	-	 
		
		
		
	
	 	 	 
	Total operating costs and expenses	 	 	 	10,342	 	 	5,264	 	 	5,631	 
		
		
		
	
	 	 	 
	Operating income (loss)	 	 	 	(285	)	 	(551	)	 	248	 
	Financial income (expenses), net	 	 	 	(146	)	 	(141	)	 	227	 
		
		
		
	
	 	 	 
	Income (loss) before taxes on income	 	 	 	(431	)	 	(692	)	 	475	 
	Taxes on income	 	 	 	30	 	 	-	 	 	8	 
		
		
		
	
	 	 	 
	Net income (loss)	 	 	$	       (461	)	$	       (692	)	$	        467	 
		
		
		
	
	 	 	 
	Basic and diluted net earnings (loss) per share	 	 	$	      (0.05	)	$	      (0.08	)	$	       0.05	 
		
		
		
	
	 	 	 
	Weighted average number of shares used in the computation of basic	 	 
	  net earnings (loss) per share	 	 	 	8,764,222	 	 	8,755,169	 	 	8,806,714	 
		
		
		
	
	Weighted average number of shares used in the computation of diluted

  net earnings (loss) per share	 	 	 	8,764,222	 	 	8,755,169	 	 	8,993,278	 
		
		
		
	







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




- 4 -












	TOP IMAGE SYSTEMS LTD.

AND ITS SUBSIDIARIES 
	  
	STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY 
	

	U.S. dollars in thousands 












		Share

capital
	Additional

paid-in

capital
	Accumulated

other

comprehensive

loss
	Accumulated

deficit
	Comprehensive

income (loss)
	Total

	 						
							
							
							
	Balance at January 1, 2005	 	 	$	   97	 	$	  29,579	 	$	  (2	)	$	 (14,979	)	 	 	 	$	  14,695	 
	 	 	 
	Net unrealized gains on	 	 
	  available-for-sale securities	 	 	 	-	 	 	-	 	 	2	 	 	-	 	$	     2	 	 	2	 
	Net loss	 	 	 	-	 	 	-	 	 	-	 	 	(461	)	 	(461	)	 	(461	)
										
			
	Comprehensive loss	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	  (459	)	 	 	 
										
			
	Issuance expenses	 	 	 	-	 	 	(77	)	 	-	 	 	-	 	 	 	 	 	(77	)
	Exercise of stock options	 	 	 	*) -	 	 	15	 	 	-	 	 	-	 	 	 	 	 	15	 
	Employee stock-based

  compensation related to

  acceleration of vesting	 	 	 	-	 	 	44	 	 	-	 	 	-	 	 	 	 	 	44	 
		
		
		
		
				
	
	 	 	 
	Balance at December 31, 2005	 	 	 	97	 	 	29,561	 	 	-	 	 	(15,440	)	 	 	 	 	14,218	 
	 	 	 
	Net income	 	 	 	-	 	 	-	 	 	-	 	 	467	 	$	   467	 	 	467	 
										
			
	Comprehensive income	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	   467	 	 	 	 
										
			
	 	 	 
	Exercise of stock options	 	 	 	(* -	 	 	85	 	 	-	 	 	-	 	 	 	 	 	85	 
	Employee stock-based	 	 
	  compensation	 	 	 	-	 	 	40	 	 	-	 	 	-	 	 	 	 	 	40	 
		
		
		
		
				
	
	 	 	 
	Balance at June 30, 2006

  (unaudited)	 	 	$	   97	 	$	  29,686	 	$	  -	 	$	 (14,973	)	 	 	 	$	  14,810	 
		
		
		
		
				
	








     *)    
          Represents an amount lower than $ 1. 



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



- 5 -











	TOP IMAGE SYSTEMS LTD.

AND ITS SUBSIDIARIES 
	  
	CONSOLIDATED STATEMENTS OF CASH FLOWS 
	

	U.S. dollars in thousands 










		Year ended

December 31,

2005
	Six months ended

June 30,

		2005
	2006

			Unaudited

	 			
				
	Cash flows from operating activities: 	 	 	 		 	 		 	 		 
	 	 	 
	  Net income (loss)	 	 	$	    (461	)	$	    (692	)	$	     467	 
	  Adjustments to reconcile net income (loss) to net cash used in	 	 
	    operating activities:	 	 
	    Stock-compensation due to acceleration of vesting	 	 	 	44	 	 	-	 	 	-	 
	    Stock based compensation	 	 	 	-	 	 	-	 	 	40	 
	    Interest on short-term bank loans	 	 	 	3	 	 	-	 	 	-	 
	    Depreciation and amortization	 	 	 	524	 	 	264	 	 	261	 
	    Accrued severance pay, net	 	 	 	10	 	 	(10	)	 	119	 
	    Gain from marketable securities, net	 	 	 	(3	)	 	(3	)	 	(2	)
	    Increase in trade receivables, net	 	 	 	(1,261	)	 	(952	)	 	(968	)
	    Increase in other accounts receivable and prepaid expenses	 	 	 	(56	)	 	(143	)	 	(489	)
	    Increase (decrease) in trade payables	 	 	 	495	 	 	241	 	 	(454	)
	    Increase in accrued expenses and other accounts payable	 	 	 	284	 	 	225	 	 	870	 
		
		
		
	
	 	 	 
	Net cash used in operating activities	 	 	 	(421	)	 	(1,070	)	 	(156	)
		
		
		
	
	 	 	 
	Cash flows from investing activities: 	 	 
	 	 	 
	  Payment of accrued expenses on account of acquisition	 	 	 	(73	)	 	(73	)	 	(114	)
	  Purchase of property and equipment	 	 	 	(164	)	 	(91	)	 	(91	)
	  Proceeds from sale of marketable securities	 	 	 	279	 	 	279	 	 	-	 
	  Purchase of marketable securities	 	 	 	(1,800	)	 	(1,500	)	 	(500	)
	  Decrease in long-term deposits	 	 	 	12	 	 	3	 	 	67	 
		
		
		
	
	 	 	 
	Net cash used in investing activities	 	 	 	(1,746	)	 	(1,382	)	 	(638	)
		
		
		
	
	 	 	 
	Cash flows from financing activities: 	 	 
	 	 	 
	  Proceeds from exercise of stock options	 	 	 	15	 	 	6	 	 	85	 
	  Increase (decrease) in short-term bank loans, net	 	 	 	469	 	 	689	 	 	(191	)
	  Payment of accrued issuance expenses	 	 	 	(253	)	 	(253	)	 	(81	)
		
		
		
	
	 	 	 
	Net cash provided by (used in) financing activities	 	 	 	231	 	 	442	 	 	(187	)
		
		
		
	
	 	 	 
	Decrease in cash and cash equivalents	 	 	 	(1,936	)	 	(2,010	)	 	(981	)
	Cash and cash equivalents at the beginning of the period	 	 	 	10,136	 	 	10,136	 	 	8,200	 
		
		
		
	
	 	 	 
	Cash and cash equivalents at the end of the period	 	 	$	   8,200	 	$	   8,126	 	$	   7,219	 
		
		
		
	







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



- 6 -








	TOP IMAGE SYSTEMS LTD.

AND ITS SUBSIDIARIES 
	  
	CONSOLIDATED STATEMENTS OF CASH FLOWS 
	

	U.S. dollars in thousands 













		Year ended

December 31,

2005
	Six months ended

June 30,

		2005
	2006

			Unaudited

	 			
				
	Supplemental disclosure of cash flows activity: 	 	 	 		 	 		 	 		 
	 	 	 
	  Cash paid during the period for:	 	 
	 	 	 
	    Interest	 	 	$	 97	 	$	 42	 	$	 45	 
		
		
		
	
	 	 	 
	Non-cash activity: 	 	 
	 	 	 
	  Accrued issuance expenses	 	 	$	 77	 	$	 77	 	$	  -	 
		
		
		
	






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




- 7 -












	TOP IMAGE SYSTEMS LTD.

AND ITS SUBSIDIARIES 
	  
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
	

	U.S. dollars in thousands, except share and per share data 











	NOTE 1:  	– 	GENERAL  






	 	a. 	Business
and organization: 






	 	
Top
Image Systems Ltd. (“TIS” or “the Company”) is engaged in the
development and marketing of a variety of information recognition systems and
technologies and automated document capture solutions for the most efficient flow of
information within and between organizations. The Company’s software minimizes the
need for manual data entry by automatically capturing, reading, understanding,
identifying, processing, classifying and routing the information contained in documents,
increasing data capture accuracy and the rate of information processing. The Company’s
shares are traded on the National Association of Securities Dealers’ Quotation
System (“NASDAQ”) in the United States. 






	 	
For
information regarding the principal customers of the Company, see Note 4b.  






	 	b. 	The
Company’s marketing and sales activities are conducted through its
          wholly-owned subsidiaries in the U.S., U.K, Germany and Japan. 






	NOTE 2:  	– 	SIGNIFICANT
ACCOUNTING POLICIES  






	 	
Except
as describe in Note 5 The significant accounting policies applied in the annual financial
statements of the Company as of December 31, 2005, are applied consistently in these
financial statements. 






	 	
Impact
of recently issued accounting standards:  






	 	
In
June 2006, the Financial Accounting Standards Board issued Interpretation No. 48,
Accounting for Uncertainty in Income Taxes (FIN 48). FIN 48 prescribes a more likely than
not threshold for financial statement recognition and measurement of a tax position taken
or expected to be taken in a tax return. This Interpretation also requires de-recognition
of income tax assets and liabilities, and provides guidance on classification of current
and deferred income tax assets and liabilities, interest and penalties associated with
tax positions, accounting for income taxes in interim periods, and income tax
disclosures. This Interpretation is effective as of January 1, 2007. We are currently
evaluating the impact of FIN 48 on our financial statements. 






	NOTE 3:  	– 	UNAUDITED
INTERIM CONSOLIDATED FINANCIAL STATEMENTS  






	 	
The
accompanying unaudited interim consolidated financial statements have been prepared in
accordance with accounting principles generally accepted in the United States for interim
financial information. Accordingly, they do not include all the information and footnotes
required by accounting principles generally accepted in the United States for complete
financial statements. In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been included.
Operating results for the six-month period ended June 30, 2006 are not necessarily
indicative of the results that may be expected for the year ended December 31, 2006. 






- 8 -








	TOP IMAGE SYSTEMS LTD.

AND ITS SUBSIDIARIES 
	  
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
	

	U.S. dollars in thousands, except share and per share data 






	NOTE 4:  	– 	GEOGRAPHICAL
INFORMATION  






	 	a. 	Business
segment, geographical areas and foreign operations: 






	 	
The
Company manages its business on the basis of one reportable segment (see Note 1 for a
brief description of the Company’s business). The Company’s business is divided
into the following geographic areas: Europe, the Americas, Far East, Israel and other
regions. 






	 	
Total
revenues are attributed to geographic areas based on the location of the customer.  






	 	b. 	Geographic
information: 







	 		Year ended

December 31,

2005
	Six month ended

June 30,

	 		2005
	2006

	 			Unaudited

	 	 			
	 				
	 	Product sales:	 	 	 		 	 		 	 		 
	 	  Israel	 	 	$	     60	 	$	     60	 	$	      2	 
	 	  Far East (excluding Japan)	 	 	 	2,020	 	 	366	 	 	834	 
	 	  Europe	 	 	 	5,604	 	 	2,663	 	 	3,376	 
	 	  North America	 	 	 	734	 	 	402	 	 	508	 
	 	  South America	 	 	 	210	 	 	280	 	 	45	 
	 	  Africa	 	 	 	512	 	 	190	 	 	240	 
	 	  Japan	 	 	 	748	 	 	510	 	 	870	 
	 		
		
		
	
	 	   	 	 
	 	 	 	 	 	9,888	 	 	4,471	 	 	5,875	 
	 		
		
		
	
	 	Service revenues:	 	 
	 	  Israel	 	 	 	78	 	 	58	 	 	5	 
	 	  Far East (excluding Japan)	 	 	 	375	 	 	193	 	 	307	 
	 	  Europe	 	 	 	3,396	 	 	1,756	 	 	1,958	 
	 	  North America	 	 	 	868	 	 	399	 	 	467	 
	 	  South America	 	 	 	15	 	 	15	 	 	7	 
	 	  Africa	 	 	 	53	 	 	20	 	 	44	 
	 	  Japan	 	 	 	2,147	 	 	1,088	 	 	811	 
	 		
		
		
	
	 	   	 	 
	 	 	 	 	 	6,932	 	 	3,529	 	 	3,599	 
	 		
		
		
	
	 	   	 	 
	 	Total revenues	 	 	$	 16,820	 	$	  8,000	 	$	  9,474	 
	 		
		
		
	
	 	   	 	 
	 	Sales to single customers exceeding 10% of	 	 
	 	   revenues:	 	 
	 	   	 	 
	 	Customer A	 	 	 	10	%	 	*) -	 	 	*) -	 
	 		
		
		
	
	 	   	 	 
	 	Customer B	 	 	 	*) -	 	 	*) -	 	 	10	%
	 		
		
		
	







	 	*) 	Less
than 10%  






	 	
The
Company’s substantial long-lived assets are located in Israel.  






- 9 -








	TOP IMAGE SYSTEMS LTD.

AND ITS SUBSIDIARIES 
	  
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
	

	U.S. dollars in thousands, except share and per share data 






	NOTE 5:  	– 	STOCK-BASED
COMPENSATION  






	 	
Effective
January 1, 2006, the Company adopted the provisions of Statement of Financial Accounting
Standard (SFAS) No. 123(R), “Share-Based Payment” (“SFAS 123(R)”),
which requires the Company to measure all employee stock-based compensation awards using
a fair value method and record the related expense in the financial statements. The
Company used the Black-Scholes option pricing model. The Company elected to use the
modified prospective method of adoption which requires that compensation expense be
recorded in the financial statements over the expected requisite service period for any
new options granted after the adoption of SFAS 123(R) as well as for existing awards for
which the requisite service has not been rendered as of the date of adoption and requires
that prior periods not be restated. 






	 	
A
summary of the activity in options granted to purchase the Company’s Ordinary shares
under the Company’s stock option plans is as follows: 








	 		Six months ended

June 30, 2006 (unaudited)

	 		Number of

options
	Weighted

average

exercise

price
	Weighted

average

remaining

contractual

term

(in years)
	Aggregate

intrinsic

value

	 	 				
	 					
	 					
	 	Outstanding at the beginning of	 	 	 		 	 		 	 		 	 		 
	 	   the period	 	 	 	822,000	 	$	 2.65	 	 	 	 	 	 	 
	 	   Granted	 	 	 	46,400	 	$	 2.83	 	 	 	 	 	 	 
	 	   Exercised	 	 	 	49,000	 	$	 1.75	 	 	 	 	 	 	 
	 	   Forfeited	 	 	 	-	 	 	-	 	 	 	 	 	 	 
	 		
						
	
	 	   	 	 
	 	Outstanding at the end of the	 	 
	 	   period	 	 	 	819,400	 	$	 2.71	 	 	7.83	 	$	  42,688	 
	 		
		
		
		
	
	 	   	 	 
	 	Number of options exercisable as

   of June 30, 2006	 	 	 	712,591	 	$	 2.74	 	 	7.17	 	$	  42,688	 
	 		
		
		
		
	
	 	   	 	 
	 	Vested and expected to vest	 	 	 	786,552	 	$	  2.7	 	 	5.29	 	$	  29,028	 
	 		
		
		
		
	






	 	
The
weighted-average fair value per share of the options granted during the six months ended
June 30, 2006 and 2005 was $ 2.83 and $ 2.92, respectively. The exercise prices of
such options were equal to the market price of the Company’s Ordinary shares on the
date of the respective option grants. 






	 	
The
Company recognizes compensation expenses for the value of its awards, which have graded
vesting based on the straight line method over the requisite service period of each of
the awards, net of estimated forfeitures. Estimated forfeitures are based on actual
historical pre-vesting forfeitures. 






	 	
The
total stock-based compensation charge included in the consolidated statement of
operations for the six months ended June 30, 2006 was in the total amount of $ 40 and was
recorded in general and administrative expenses. 






- 10 -








	TOP IMAGE SYSTEMS LTD.

AND ITS SUBSIDIARIES 
	  
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
	

	U.S. dollars in thousands, except share and per share data 






	NOTE 5:  	– 	STOCK-BASED
COMPENSATION (Cont.)  






	 	
Under
SFAS 123(R), the charge has been determined as if the Company had accounted for its
employee stock options under the fair value method of SFAS 123(R). The fair value for
these options was estimated on the date of grant using a Black-Scholes option pricing
model with the following weighted-average assumptions: 







	 		Six months

ended

June 30,

2006

	 		(unaudited)

	 		 
	 		
	 		
	 	Dividend yield	-
	 	Expected volatility	84%
	 	Risk-free interest rate	5%
	 	Expected forfeiture	32.3%
	 	Expected life	2.5 years






	 	
As
of June 30, 2006, there was a balance of $ 53 of unrecognized compensation expense
related to non-vested awards. The impact on both basic and diluted net loss per share for
the six months ended June 30, 2006 was $ 0.005. 






	 	
The
Company issues stock options to its employees and a director which provide the right to
purchase shares pursuant to approved stock option plans. Prior to the adoption of SFAS
123(R), the Company elected to follow Accounting Principles Board Opinion No. 25, “Accounting
for Stock Options Issued to Employees” (“APB No. 25”) and related
interpretations (collectively “APB No. 25”), in accounting for its stock option
plans. Under APB No. 25, when the exercise price of an employee stock option is less than
the market price of the underlying shares on the date of grant, compensation expense is
recognized. All options granted under these plans had an exercise price equal to the fair
market value of the underlying Ordinary shares on the date of grant. 






- 11 -








	TOP IMAGE SYSTEMS LTD.

AND ITS SUBSIDIARIES 
	  
	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
	

	U.S. dollars in thousands, except share and per share data 






	NOTE 5:  	– 	STOCK-BASED
COMPENSATION (Cont.)  






	 	
The
following table illustrates the pro forma effect on net loss and net loss per share for
the six-month period ended June 30, 2005, had the Company applied the fair value
recognition provisions of SFAS No. 123 as expenses: 







	 		Six months

ended

June 30, 2005

	 		(unaudited)

	 	 	
	 		
	 		
	 	Net loss as reported	 	 	$	 (692	)
	 	Deduct: total stock-based employee compensation expense determined under fair value based	 	 
	 	   method for all awards	 	 	 	(96	)
	 		
	
	 	   	 	 
	 	Pro forma net loss	 	 	$	 (788	)
	 		
	
	 	   	 	 
	 	Net loss per share:	 	 
	 	   Basic and diluted as reported	 	 	$	 (0.0	8)
	 		
	
	 	   	 	 
	 	   Basic and diluted pro forma	 	 	$	 (0.0	9)
	 		
	







	 	
The
fair value for these options was estimated on the date of grant using a Black-Scholes
option pricing model with the following weighted-average assumptions: risk-free interest
rate of 3.25%; dividend yield of 0%; volatility factor of 36% and a weighted average
expected life of the options of 4 years. 






- 12 -










SELECTED FINANCIAL DATA 



        The
following selected consolidated financial data as of, and for the years ended, December
31, 2001, 2002, 2003, 2004 and 2005 have been derived from, and should be read in
conjunction with, the Company’s audited consolidated financial statements, related
notes and other financial information included in the Company’s annual reports on
Form 20-F previously filed with the Securities and Exchange Commission. The selected
consolidated financial data as of, and for the six months ended, June 30, 2006 have been
derived from, and should be read in conjunction with, the Company’s unaudited
consolidated financial statements, related notes and other financial information included
elsewhere in this report. The selected consolidated financial data should also be read in
conjunction with and are qualified by reference to “Operating and Financial Review
and Prospects” included in the applicable annual reports and elsewhere in this
report.



1
















		Year Ended December 31
	Six-month

period

ended

June 30,

		2001
	2002
	2003
	2004
	2005
	2006

		In US$ except for weighted average number of shares data
	 						
							
	Statement of Operations Data
under U.S. GAAP: 	 	 	 		 	 		 	 		 	 		 	 		 	 		 
	   Revenues	 	 	$	     11,959	 	$	      7,799	 	$	      8,319	 	$	     11,178	 	$	     16,820	 	$	      9,474	 
	     Cost of revenues	 	 	 	3,072	 	 	3,005	 	 	2,340	 	 	3,472	 	 	6,763	 	 	3,595	 
	     Gross profit	 	 	 	8,887	 	 	4,794	 	 	5,979	 	 	7,706	 	 	10,057	 	 	5,879	 
	     Research and development, net	 	 	 	2,199	 	 	1,340	 	 	863	 	 	929	 	 	1,312	 	 	884	 
	     Selling, administrative and general	 	 	 	9,801	 	 	7,465	 	 	5,819	 	 	7,123	 	 	9,030	 	 	4,747	 
	     Financial expense (income), net	 	 	 	(287	)	 	(187	)	 	(109	)	 	(178	)	 	146	 	 	227	 
	     Other (income) expense	 	 	 	(34	)	 	4	 	 	-	 	 	-	 	 	-	 	 	-	 
	     Taxes on Income	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	30	 	 	8	 
	   Net income (loss)	 	 	 	(2,792	)	 	(3,828	)	 	(594	)	 	(168	)	 	(461	)	 	467	 
		
		
		
		
		
		
	
	 	 	 
	Net basic and dilutive income (loss)

   per share	 	 	$	     (0.458	)	$	     (0.627	)	$	      (0.11	)	$	     (0.024	)	$	     (0.053	)	$	       0.05	 
		
		
		
		
		
		
	
	 	 	 
	Weighted average number of shares	 	 
	   outstanding for basic	 	 
	   net earnings (loss) per share	 	 	 	6,098,890	 	 	6,098,890	 	 	6,102,496	 	 	6,905,559	 	 	8,764,222	 	 	8,806,714	 
		
		
		
		
		
		
	
	 	 	 
	Weighted average number of shares

   outstanding for dilutive

   net earnings (loss) per share	 	 	 	6,098,890	 	 	6,098,890	 	 	6,102,496	 	 	6,905,559	 	 	8,764,222	 	 	8,993,278	 
		
		
		
		
		
		
	









		As of December 31
	As of June 30,

		2001
	2002
	2003
	2004
	2005
	2006

		In US$
	 						
							
	Summary of Balance Sheet Data: 	 	 	 		 	 		 	 		 	 		 	 		 	 		 
	   Cash and cash equivalents	 	 	$	  9,419	 	$	  7,400	 	$	  5,854	 	$	 10,136	 	$	  8,200	 	$	  7,219	 
	   Working capital	 	 	 	11,292	 	 	7,739	 	 	7,353	 	 	12,232	 	 	12,137	 	 	13,085	 
	   Total Assets	 	 	 	16,161	 	 	12,488	 	 	12,130	 	 	19,742	 	 	20,360	 	 	21,051	 
	   Long Term debt	 	 	 	-	 	 	-	 	 	-	 	 	-	 	 	-	 	 	-	 
	   Total liabilities	 	 	 	4,140	 	 	4,286	 	 	4,490	 	 	5,047	 	 	6,142	 	 	6,241	 
	   Shareholders' equity	 	 	 	12,020	 	 	8,202	 	 	7,639	 	 	14,695	 	 	14,218	 	 	14,810	 






2














OPERATING AND
FINANCIAL REVIEW AND PROSPECTS 



	A.  	Operating
Results  






        The
following discussion of our consolidated financial condition and consolidated results of
operations should be read together with our consolidated financial statements and notes to
our consolidated financial statements contained in this report and in our annual reports
previously filed with the Securities and Exchange Commission on Form 20-F, as well as the
discussion of our financial condition and results of operations under the heading
“Operating and Financial Review and Prospects” contained in such annual reports.
This discussion contains certain forward-looking statements that involve risks,
uncertainties and assumptions. As a result of many factors, including those set forth
under “Risk factors” in our annual report on Form 20-F for the year ended
December 31, 2005, our actual results may differ materially from those anticipated in
these forward-looking statements. 



        The
following table sets forth certain items from our results of operations as a percentage of
total revenues for the periods indicated: 








		Year Ended December 31,
	Six months ended June 30,

		2001
	2002
	2003
	2004
	2005
	2006

		In thousands except for weighted average number of shares data
	 						
							
	Statement of Operations
Data: 	 	 	 		 	 		 	 		 	 		 	 		 	 		 
	 	 	 
	   Revenues	 	 	 	100	%	 	100	%	 	100	%	 	100	%	 	100	%	 	100	%
	     Cost of revenues	 	 	 	26	%	 	39	%	 	28	%	 	31	%	 	40	%	 	38	%
	   Gross profit	 	 	 	74	%	 	61	%	 	72	%	 	69	%	 	60	%	 	62	%
	     Research and

      development, net	 	 	 	18	%	 	17	%	 	10	%	 	8	%	 	8	%	 	9	%
	     Selling, administrative	 	 
	      and general	 	 	 	82	%	 	96	%	 	70	%	 	64	%	 	54	%	 	50	%
	   Financial expense

    (income), net	 	 	 	(2	)%	 	(2	)%	 	(1	)%	 	(2	)%	 	1	%	 	(2	)%
	   Other (income) expense	 	 	 	0	%	 	0	%	 	0	%	 	0	%	 	0	%	 	0	%
	   Tax on income	 	 	 	0	%	 	0	%	 	0	%	 	0	%	 	0	%	 	0	%
	   Net profit (loss)	 	 	 	(23	)%	 	(49	)%	 	(7	)%	 	(2	)%	 	(3	)%	 	5	%







        We
derive revenue from the sale of products and solutions and also from service and
maintenance agreements. 



        Our
sales to end-users, resellers, value-added resellers, distributors and system integrators
are made on credit terms and we do not hold collateral to secure payment. The terms of the
agreements with these customers do not provide them with the right to return the purchased
products or solutions. Payment with respect to such sales is generally due within a
specified period following receipt of an invoice. The period varies, but is up to 150 days
for end-users and up to 90 days for resellers, distributors and system integrators. We are
not party to any extended payment arrangements. 



        A
default in payment by one or more of our resellers, value-added resellers, distributors
and system integrators could adversely affect our business, results of operations, and
financial condition. We cannot assure you that uncollectible receivables will not exceed
our reserves. Any significant increase in uncollected accounts receivable beyond reserves
could have a material adverse effect on our business, results of operation, and financial
condition. 



        As
a result of our strategy of pursuing strategic alliances with value-added resellers,
distributors and system integrators, a substantial portion of our revenues is derived from
such alliances. During the years ended December 31, 2003, 2004, 2005, and the period of
six months ended June 30, 2006 revenues deriving from value-added resellers, distributors
and system integrators accounted for approximately 51%, 28%, 46% and 51%, respectively, of
our revenues. The decline during 2004 was mainly because of our direct sales to a major
customer in Europe. 



1










        Historically,
we have recognized a majority of our revenues from product sales. During the years ended
December 31, 2003, 2004, 2005, and the period of six months ended June 30, 2006, product
revenues accounted for approximately 75%, 62%, 59% and 62%, respectively, of revenues,
while service revenues accounted for approximately 25%, 38, 41% and 38% respectively, of
revenues. During 2004, we stopped marketing our AFPSProTM product, except for
Japan. In 2005, sales of eFLOWTM accounted for 95% of our product sales and for
approximately 60% of our revenue. 



        Seasonality  



        Our
sales cycle for eFLOWTM has ranged from 9 to 12 months. These sales cycles vary
by customer and could extend for longer periods depending on the time required by the
customer to evaluate the utility of the applicable product to its operations. Our
operating results could vary between periods as a result of this fluctuation in the length
of our sales cycles, the purchasing patterns of potential customers, the timing of
introduction of new products and product enhancements introduced by us and our
competitors, technological factors, variations in sales by distribution channels,
competitive pricing and generally non-recurring product sales. Consequently, our product
revenues may vary significantly by quarter. 



        Geographical
Considerations  



        The
following table summarizes total revenues by geographic market for each of the last three
completed fiscal years and the period of six months ended June 30, 2006: 



Total Revenues

by Region



(U.S. dollars in

thousands)












		Year Ended December 31,
	Six months ended

June 30,

		2003
	2004
	2005
	2006

		$	%	$	%	$	%	$	%
	 								
									
	Europe	 	 	 	5,729	 	 	69	%	 	7,966	 	 	71	%	 	9,000	 	 	54	%	 	5,334	 	 	56	%
	 	 	 
	North America	 	 	 	392	 	 	5	%	 	1,254	 	 	11	%	 	1,602	 	 	10	%	 	975	 	 	10	%
	Far East

(excluding Japan)	 	 	 	1,455	 	 	17	%	 	924	 	 	8	%	 	2,395	 	 	14	%	 	1,141	 	 	12	%
	Africa	 	 	 	144	 	 	2	%	 	180	 	 	2	%	 	565	 	 	3	%	 	284	 	 	3	%
	Japan	 	 	 	51	 	 	1	%	 	670	 	 	6	%	 	2,895	 	 	17	%	 	1,681	 	 	18	%
	Israel	 	 	 	31	 	 	0	%	 	184	 	 	2	%	 	138	 	 	1	%	 	7	 	 	0	%
	 	 	 
	South America	 	 	 	516	 	 	6	%	 	-	 	 	0	%	 	225	 	 	1	%	 	52	 	 	1	%
	 	 	 
	Middle East	 	 
	(excluding	 	 
	Israel)	 	 	 	1	 	 	0	%	 	-	 	 	0	%	 	-	 	 	0	%	 	0	 	 	0	%
		
		
		
		
		
		
		
		
	
	Total	 	 	 	8,319	 	 	100	%	 	11,178	 	 	100	%	 	16,820	 	 	100	%	 	9,474	 	 	100	%
		
		
		
		
		
		
		
		
	






        As
a result of the fluctuation in product sales in various geographic regions, we are subject
to the risks associated with international sales, including economic and political
instability, shipping delays, customs duties, export quotas and other trade restrictions,
any of which could have a significant impact on our ability to deliver products on a
competitive and timely basis and exacerbate the risks inherent in our business. While we
have not encountered significant difficulties in connection with the sales of our products
in international markets, the future imposition of, or significant increases in, the level
of custom duties, export quotas or other trade restrictions could have an adverse effect
on us. 



2










        Critical
Accounting Policies and Estimates  



        Our
consolidated financial statements have been prepared in accordance with generally accepted
accounting principles in the United States, or U.S. GAAP. We believe that several
accounting policies applied in the preparation of our consolidated financial statements
may be considered critical because they are most important to the portrayal of our
financial condition and results, and they require management’s most difficult,
subjective or complex judgments, often as a result of the need to make estimates about the
effect of matters that are inherently uncertain. We periodically evaluate our estimates,
including those relating to the allowance for doubtful accounts, contingencies and
litigation. We base our estimates on historical experience and on various other
assumptions that we believe to be reasonable under present circumstances. Actual results
may differ from these estimates under different assumptions or conditions. We believe the
following critical accounting policies require our more significant judgments and
estimates used in the preparation of our consolidated financial statements. 



        Revenue
Recognition



        We
derive revenue from primarily two sources: sales of software licenses and provision of
services. Service revenues include contracts for software maintenance and technical
support, consulting and training. 



        We
apply the provisions of Statement of Position (“SOP”) 97-2, “Software
Revenue Recognition” (as amended by SOP 98-4 and SOP 98-9) and related
interpretations to all revenue transactions. 



        We
allocate revenue from software arrangements involving multiple elements to each element
based on the relative fair values of the elements. The determination of fair value of each
element in multiple element arrangements is based on the price charged when a similar
element is sold separately and creates vendor specific objective evidence
(“VSOE”). Revenues are recognized under the “residual method” when
VSOE of fair value exists for all undelivered elements and VSOE of fair value does not
exist for all of the delivered elements, and when all SOP No. 97-2 criteria for revenue
recognition are met. 



        A
typical solution includes software licenses, maintenance, and technical support. Some
customer arrangements include training and consulting. Maintenance includes unspecified
updates on an if-and-when-available basis, and support includes telephone support, and bug
fixes or patches. Training consists of courses taught by our instructors at our facility
or at the customer’s site. Consulting consists primarily of product installation and
limited tailoring of the product to the customer’s needs. 



        We
have analyzed all of the elements included in our multiple-element arrangements and
determined that we have vendor-specific objective evidence of fair value to allocate
revenue to the different services. Accordingly, assuming all other revenue recognition
criteria are met, revenues from licenses are recognized upon delivery of the software
license in accordance with SOP 97-2, as amended. Revenues from maintenance and support
services are recognized ratably over the term of the agreement. Revenue for consulting and
training is recognized as the services are performed. 



        Our
criteria for revenue recognition are as follows: 



    1.        Persuasive
Evidence of an Arrangement Exists. It is our customary           practice to have a
written contract, which is signed by both the customer and           us, or to have a
purchase order from our customers, prior to recognizing revenue           from an
arrangement.  



    2.        Delivery
Has Occurred. Our software is physically or electronically           delivered to the
customer. If undelivered products or services exist that are           essential to the
functionality of the delivered product in an arrangement,           delivery is not
considered to have occurred.  



    3.        The
Vendor’s Fee is Fixed or Determinable. The fee our customers are           to
pay for the products or services is negotiated prior to the inception of the
          arrangement. Therefore, the fees are considered to be fixed or determinable at
          the inception of the arrangement.  



3










    4.        Collection
is Probable. Probability of collection for our customer’s           debts is
assessed by management on a customer-by-customer basis. This assessment           is
based, among other factors, on actual payment by the customer in previous
          transactions, general reputation of the customer in the market, and the history
          of relations between us and the customer.  



        License
revenues from reseller arrangements are recognized upon delivery unless payment is
dependent on third-party collection by the reseller. During the years ended December 31,
2003, 2004 , 2005 and the six month ended June 30, 2006, we had no arrangements in which
payment terms were dependent on third-party collection by the reseller. 



        When
services are considered essential, revenue under the arrangement is recognized using
contract accounting according to SOP 81-1. When consulting services are not considered
essential, the revenue allocable to the consulting services is recognized as the services
are performed or when acceptance is received, if required by the agreement. 



        If
services are considered essential to the functionality of the software licenses that
require significant customization, integration and installation, revenues are recognized
on the percentage of completion basis provided that the revenues are fixed or can be
reasonably estimated, collection is probable, costs related to performing the work are
determinable or can be reasonably determined, there is no substantial uncertainty
regarding the ability of the Company to complete the contract and to meet the contractual
terms and the percentage of completion can be reasonably estimated. The percentage of
completion is determined based on the ratio of actual cost to total estimated cost. Any
changes in those estimates could affect our results of operations. As for contracts in
which a loss is anticipated, a provision is recorded for the full amount of the expected
loss. 



        If
all the criteria for recognition of revenue from performance contracts are not met, then
revenue is recognized up to the amount of costs incurred whose collection is probable
(“zero profit margin” presentation). 



        Trade
Receivables and allowance for doubtful accounts. 



        Trade
receivables are recorded at cost, less the related allowance for doubtful trade
receivables. Management considers current information and events regarding the
customer’s ability to repay its obligations and determines accounts receivable to be
impaired when it is probable that we will be unable to collect those amounts. 



        The
balance sheet allowance for doubtful debts for all the periods through June 30, 2006 is
determined as a specific amount for those accounts the collection of which is uncertain.
We regularly review the allowance by considering factors such as historical experience,
credit quality, age of the accounts receivable balances, and current economic conditions
that may affect a customer’s ability to pay. If a major customer’s
creditworthiness deteriorates, or if actual defaults are higher than our historical
experience, or if other circumstances arise, our estimates of the recoverability of
amounts due to us could be overstated, and additional allowances could be required, which
could have an adverse impact on our results of operations. 



        Goodwill
and other intangible assets



        Under
Statement of Financial Accounting Standard No. 142, “Goodwill and Other Intangible
Assets,” goodwill is not amortized. SFAS No. 142 requires goodwill to be tested for
impairment on adoption and at least annually thereafter or between annual tests in certain
circumstances, and written down when impaired, rather than being amortized as previous
accounting standards required. Goodwill attributable to each of the reporting units is
tested for impairment by comparing the fair value of each reporting unit with its carrying
value. Fair value is determined using discounted cash flows, market multiples and market
capitalization. Significant estimates used in the methodologies include estimates of
future cash flows, future short-term and long-term growth rates, weighted average cost of
capital and estimates of market multiples for each of the reportable units. 



        Research
and Development Costs



        Research
and development costs, net of participations and grants received, are charged to our
statement of operations as incurred. 



4










        Loss
Contingencies



        We
are subject to the possibility of various loss contingencies arising in the ordinary
course of business. We consider the likelihood of loss or impairment of an asset or the
incurrence of a liability, as well as our ability to reasonably estimate the amount of
loss in determining loss contingencies. An estimated loss contingency is accrued when it
is probable that an asset has been impaired or a liability has been incurred and the
amount of loss can be reasonably estimated. We regularly evaluate current information
available to us to determine whether such accruals should be adjusted and whether new
accruals are required. 



        “Share-Based
Payment”



        Effective
January 1, 2006, the Company adopted the provisions of Statement of Financial Accounting
Standard (SFAS) No. 123(R), “Share-Based Payment” (“SFAS 123(R)”),
which requires the Company to measure all employee stock-based compensation awards using a
fair value method and record the related expense in the financial statements. We used the
Black-Scholes option pricing model. We elected to use the modified prospective method of
adoption which requires that compensation expense be recorded in the financial statements
over the expected requisite service period for any new options granted after the adoption
of SFAS 123(R) as well as for existing awards for which the requisite service has not been
rendered as of the date of adoption and requires that prior periods not be restated. The
impact on our results of operations was immaterial. 



Results of Operations
(all numbers herein are U.S. dollars in thousands)  



        The
following discussion and analysis should be read in conjunction with the section herein
entitled “Selected Financial Data” and the consolidated financial statements,
related notes and other financial information included herein. 



        Six
Months ended June 30th 2006 Compared to Six Months ended June 30th
2005 



             Revenues.
          Total revenues for the six months ended June 30, 2006 amounted to $9,474
          compared to $8,000 for the corresponding period in 2005, an increase of 22%.
          Product sales increased by $1,404 or 31%, from $4,471 in the six months ended
          June 30, 2005 to $5,875 in the six months ended June 30, 2006, mainly because of
          a large sale to a customer in the UK. Service revenues increased by $70, or
          approximately 2%, from $3,529 in the six months ended June 30, 2005 to $3,599 in
          the six months ended June 30, 2006. In the first half of 2006, we engaged in
          several sales in which our solution was sold to systems integrators, and
          therefore, service revenues did not increase in the same scale as our product
          sales. 



        Cost
of Revenues. Cost of revenues increased by $308, or 9%, from $3,287 in the six months
ended June 30, 2005 to $3,595 in the six months ended June 30, 2006. The increase is a
result of recruiting of more workforce mainly towards the end of the second quarter of
2006. 



        Research
and Development. Research and development expenses in the six months ended June 30,
2006 amounted to $884 compared to $644 for the six months ended June 30, 2005. In 2006, we
focused our research and developments efforts on increasing the learning capabilities of
our product, insertion of automatic QA tools and developing our future version. 



        Selling,
General and Administrative Expenses. Selling, general and administrative expenses in
the six months ended June 30, 2006 amounted to $4,747 compared to $4,620 for the six
months ended June 30, 2005, an increase of $127 or 3%. In first half of 2005, we held our
annual customers conference for which we incurred expenses in the amount of $211, whereas
in 2006 the conference will take place in November. This decrease was offset by an
increase in the size of our sales team in 2006, mainly in the UK. Also, we initiated in
2006 recording expenses with respect to our options grants in accordance with the
guidelines set forth in issued SFAS No. 123(R), “Share-Base Payment” (“SFAS
123(R)”) issued by the Financial Accounting Standards Board (“FASB”). Its
impact on our results of operations is disclosed in Note 5 to the financial statements. 



        Liquidated
Damages Related to September 2004 Private Placement. In the six months ended June 30,
2005, we incurred liquidated damages in the amount of $164 as part of our registration
commitment to investors in the September 2004 private placement. No such amounts were
incurred in the corresponding period of 2006. 



        Financing
Income, net. Financing income for the six months ended June 30, 2006 amounted to $227,
compared to financing expense of $141 for the six months ended June 30, 2005. The move to
financing income was primarily due to an increase of exchange gain in 2006, which is a
product of the strengthening of the Euro and British Pound against the U.S. Dollar. 



5










        Net
Income (Loss). As a result of the foregoing, our net income for the six months ended
June 30, 2006 was $467, compared to a net loss of $692 in the six months ended June 30,
2005. 



        Liquidity
and Capital Resources 



        As
of June 30, 2006, our cash, cash equivalents, bank deposits and marketable securities were
$9,526, compared to $10,005 as of December 31, 2005. 



        Net
cash used in operating activities for the six months ended June 30, 2006 was $156 as
compared to $421 for the year ended December 31, 2005. This decrease was attributable
primarily to the increase in our sales and the improvement in our collection efforts. Our
trade receivables increased by $968. This increase reflects our higher sales in the second
quarter of 2006 compared to the fourth quarter of 2005. Trade and other payables and
accrued expenses increased by $221 due to an increase in our operations and provisions
with regard to software components which were sold in the second quarter. 



        For
the six months ended June 30, 2006, the aggregate amount of our capital expenditures was
$114. These expenditures were principally for the purchases of computer hardware and
software and facilities improvements. 



        We
currently have a short-term line of credit with First International Bank of Israel. The
total amount available under this line of credit is the lesser of $2,300 and 75% of
certain eligible trade receivables. As of December 31, 2005, we had approximately $2,179
outstanding after extension of additional credit from the bank. The revolving line of
credit in NIS bears interest at a rate of prime + 1% (as of December 31, 2005, the prime
rate was 7%). The line of credit in US dollars bears interest at a rate of Libor + 2% (as
of December 31, 2005, the Libor rate was 4.375%). Any indebtedness under this credit line
is payable on demand and secured by a floating charge on our assets. Our ability to issue
securities is restricted. In the event that we default under the line of credit, the bank
could declare our indebtedness immediately due and payable and, if we are unable to make
the required payments, foreclose on our assets. Moreover, to the extent that our assets
continue to secure such indebtedness, such assets will not be available to secure
additional indebtedness unless approved by the Bank. 



        Our
line of credit decreased by $191 in the six months ended June 30, 2006 to $1,988. 



        Trends



        We
expect that semi-structured technology will become a central part of the document
management market. We are addressing this trend by strengthening and further developing
our semi-structured technology. 



        We
anticipate that growth will continue in the data capture market. We expect that new
recognition and classification technologies combined with more vertical market integration
will expend the main markets. However, we believe that there will be a move toward
integrated software solutions, such as Freedom, our eFLOW plug-in for
semi-structured content, instead of individual data capture products and semi-structured
technology. We also anticipate that the need for applications will increase substantially.
We expect outsourcing with respect to documents solutions to increase due to its cost
efficiency and improved quality and for the data capture industry to continue to move
toward consolidation. We are addressing these trends by solidifying our relationships with
our existing partners and seeking to become the preferred data capture solution provider
for many large integrated system providers. 



6