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

                                    FORM 10-K


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

                   For the fiscal year ended December 31, 2001

                                       or

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

                       For the transition period from ___ to ___

                        Commission File Number 000-29871

                                   -----------

                                 RADVISION LTD.
             (Exact name of registrant as specified in its charter)

             Israel                                              N/A
(State or other jurisdiction of                           (I.R.S. Employer
 incorporation or organization)                          Identification No.)

                           24 Raoul Wallenberg Street
                             Tel Aviv 69719, Israel
                    (Address of principal executive offices)

                               011-972-3-645-5220
              (Registrant's telephone number, including area code)

                                   -----------

        SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: None

           SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

                       Ordinary Shares, NIS 0.1 par value
                                (Title of class)

                                    ---------


<PAGE>


         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes X No ___

         Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ] (Not applicable. See Preliminary Notes on page
1.)

         As of March 11, 2002, 18,071,559 Ordinary Shares of RADVISION Ltd. were
outstanding. The aggregate market value of the Ordinary Shares held by
non-affiliates was approximately $73.1 million.

                                   -----------


                    DOCUMENTS INCORPORATED BY REFERENCE: None



<PAGE>




                                TABLE OF CONTENTS


PART I........................................................................1


   Item 1.     Business.......................................................1
   Item 2.     Properties....................................................29
   Item 3.     Legal Proceedings.............................................30
   Item 4.     Submission of Matters to a Vote of Security Holders...........30

PART II......................................................................31


   Item 5.     Market for Registrant's Common Equity and Related
               Stockholder Matters...........................................31
   Item 6.     Selected Financial Data.......................................31
   Item 7.     Management's Discussion and Analysis of Financial
               Condition and Results of  Operations..........................32
   Item 7A.    Qualitative and Qualitative Disclosures About Market Risk.....44
   Item 8.     Financial Statement and Supplementary Data....................45
   Item 9.     Changes in and Disagreements with Accountants on
               Accounting and Financial Disclosure...........................45

PART III.....................................................................46


   Item 10.    Directors and Executive Officers of the Registrant............46
   Item 11.    Executive Compensation........................................54
   Item 12.    Security Ownership of Certain Beneficial Owners
               and Management................................................58

PART IV......................................................................64


   Item 13.    Exhibits, Financial Statement Schedules, and Reports
               on Form 8-K...................................................64



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<PAGE>



         Preliminary Notes: RADVISION Ltd. is incorporated in Israel and is a
"foreign private issuer" as defined in Rule 3b-4 under the Securities Exchange
Act of 1934 (the "1934 Act") and in Rule 405 under the Securities Act of 1933.
As a result, it is eligible to file this annual report pursuant to Section 13 of
the 1934 Act on Form 20-F (in lieu of Form 10-K) and to file its interim reports
on Form 6-K (in lieu of Forms 10-Q and 8-K). However, RADVISION Ltd. elected to
file its annual and interim reports on Forms 10-K, 10-Q and 8-K.

         Pursuant to Rule 3a12-3 under the 1934 Act regarding foreign private
issuers, the proxy solicitations of RADVISION Ltd. are not subject to the
disclosure and procedural requirements of Regulation 14A under the 1934 Act, and
transactions in its equity securities by its officers and directors are exempt
from Section 16 of the 1934 Act.

         This Annual Report on Form 10-K contains various "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and
within the Private Securities Litigation Reform Act of 1995, as amended. Such
forward-looking statements reflect our current view with respect to future
events and financial results. Forward-looking statements usually include the
verbs, "anticipates," "believes," "estimates," "expects," "intends," "plans,"
"projects," "understands" and other verbs suggesting uncertainty. We remind
readers that forward-looking statements are merely predictions and therefore
inherently subject to uncertainties and other factors and involve known and
unknown risks that could cause the actual results, performance, levels of
activity, or our achievements, or industry results, to be materially different
from any future results, performance, levels of activity, or our achievements
expressed or implied by such forward-looking statements. Readers are cautioned
not to place undue reliance on these forward-looking statements, which speak
only as of the date hereof. We undertake no obligation to publicly release any
revisions to these forward-looking statements to reflect events or circumstances
after the date hereof or to reflect the occurrence of unanticipated events.

         We have attempted to identify additional significant uncertainties and
other factors affecting forward-looking statements in the Risk Factors section
which appears in Item 1 - Business.




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<PAGE>



                                     PART I


Item 1. Business

General

         We are a leading designer, developer and supplier of products and
technology that enable real-time voice, video and data communications over
packet networks, including the Internet and other networks based on the Internet
protocol or IP. Our products and technology are used by our customers to develop
systems that enable enterprises and service providers to use next generation
packet networks for real-time IP communications. We have approximately 400
customers worldwide including Cisco, NTT, Philips, Panasonic, Samsung, Shanghai
Bell, Siemens, Sony and Tandberg.

         In the beginning of 2001, we created two separate business units
corresponding to our two product lines to enable our product development and
product marketing teams to respond quickly to evolving market needs with new
product introductions. The "Networking" business unit, or NBU, focuses on
networking products, and it is responsible for developing networking products
for IP-centric voice, video and data conferencing services. Enterprises and
service providers of all sizes use our family of innovative, scalable and market
proven IP-centric networking solutions for migrating from traditional telephony
to converged networks. The "Technology" business unit, or TBU, focuses on
creating developer toolkits for the underlying IP communication protocols and
testing tools needed for real-time voice and video over IP, or V2oIP(TM).
Industry giants and emerging technology companies use our family of IP
communication protocol toolkits to reduce their time to market for developing
interoperable, standards-compliant V2oIP products, applications and services.
Today you may find RADVISION protocols implemented in a wide range of
environments from chipsets to simple user devices like IP phones and video
systems through carrier class network devices like gateways, switches and soft
switches.

Business Overview

Growth in Communications

         In recent years communications networks have experienced dramatic
growth in traffic. After a decline in growth in 2000 and 2001, we expect this
growth to resume due to a number of factors, including:

          o    an increasing  need for  enterprises  to expand their networks to
               enable  them to send,  access and  receive  information  quickly,
               economically and globally;

          o    an increasing  use of the Internet and other packet  networks for
               communicating and engaging in commercial transactions;

          o    an increase in available bandwidth at declining prices; and



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          o    the  introduction  of new  voice,  video and data  communications
               services and applications.

Limitations of Traditional Networks

         Traditionally, circuit-switched networks have been the principal medium
for the transmission of communications. Circuit-switched technology dedicates a
circuit with a fixed amount of bandwidth for the duration of the connection,
regardless of a user's actual bandwidth usage. The recent growth in data
communications traffic, particularly the growth in the number of Internet users,
has placed significant strains on the capacity of traditional circuit-switched
networks. Circuit-switched networks were initially deployed to handle only voice
communications. These networks were not designed to handle data efficiently and
cannot scale cost-effectively to accommodate the growth in data traffic.
Moreover, circuit-switched networks were built based on proprietary, complex
technologies, which have historically limited the entrance of new competitors
and hindered the development and introduction of new services.

Advantages of Packet-based Networks

         While circuit-switched networks were principally designed to handle
analog voice traffic, packet-based networks were principally designed for
transmitting digital information. Packet-based networks, including IP networks,
transmit voice, video and data information in the form of small digital packages
called packets. Voice, video and data packets are sent over a single network
simultaneously and reassembled at the destination. Packet switching enables more
efficient utilization of available network bandwidth than circuit-switching,
allowing more calls to travel through a packet network at the same time.
Moreover, packet networks allow for the cost-efficient expansion of capacity as
communications traffic increases. In addition, packet networks are built using
open standards, like IP, which promote competition by allowing different vendors
to build products and applications that can interoperate with one another. By
using packet technologies based on open standards, new services can be deployed
rapidly and economically.

The Need for Industry Standards for Real-time IP Communications

         Originally, enterprises and communications service providers deployed
packet networks primarily for handling data traffic and not for real-time IP
communications. Technical barriers initially hampered the use of packet networks
for real-time communications. For example, packet networks were not designed to
guarantee the sequential delivery of packets and packets could be lost. In
addition, the time of delivery of packets was dependent upon the amount of
packet traffic being transmitted over the network. For real-time communications,
it is critical that the packets associated with a specific voice or video
communication be transmitted in the correct sequence and in a timely manner.
Early attempts at real-time IP communications solved these technical problems by
using proprietary solutions developed by individual vendors. However,
proprietary solutions from different vendors meant that different vendor
products could not inter-operate with one another.

         To enable the global deployment of real-time IP communications
networks, industry standards and protocols were developed to promote
interoperability of real-time communications over packet networks.
H.323 is currently the most widely deployed  protocol for real-time IP

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communications. H.323 was developed by a team of computing, telephony and
networking experts under the auspices of the International Telecommunications
Union, or ITU-T, a United Nations organization, with the goal of specifying a
universal real-time standard that would ensure interoperability of rich-media
communications on packet-based networks. H.323 provides the technical framework
for developing standards-compliant products and systems for real-time voice and
video communication over packet networks. All components of an H.323 compliant
network, including terminals, gateways, gatekeepers and conferencing bridges,
use the H.323 protocol to communicate.

         Our leadership position stems from the pioneering work we began in
1993. We were the first to develop and demonstrate commercially viable
technology for establishing real-time voice, video, and data on IP networks. We
are helping to develop the industry standards that are driving the emergence and
growth of the use of packet networks for real-time communications. RADVISION was
an original member of the ITU (International Telecommunications Union) team that
defined the H.323 standard and we continue to work closely with the ITU, the
IETF, IMTC, and other industry consortia to define a broad spectrum of IP
telephony protocols for voice and video communication including, Session
Initiation Protocol (SIP), Media Gateway Control Protocol (MGCP) and
MEGACO/H.248.

          Our protocol toolkits provide the underpinning technology required for
the rapid development of next generation products and applications for real-time
V2oIP. Industry giants and emerging technology companies use our family of IP
communication protocol toolkits to reduce their time to market for developing
interoperable, standards-compliant V2oIP products, applications and services.
Today you will find RADVISION protocols implemented in a wide range of
environments from chipsets to simple user devices like IP phones and video
systems through carrier class network devices like gateways, switches and
softswitches.

Growth in Real-time Voice and Video IP Communications

         Due to the inherent benefits of packet networks and the advent of new
technologies and standards that have enabled real-time communications over these
networks, the use of packet networks for real-time voice, video and data
communications is expected to grow dramatically. This anticipated growth in
real-time IP communications is expected to be driven primarily by enterprises
and communications service providers migrating to packet networks. As
enterprises move from centralized organizations to distributed networks of
employees, customers, suppliers and business partners, they require more
effective communications capabilities to support their operations and remain
competitive in a global and rapidly changing market. Packet networks are well
suited for enterprises because they provide enterprises with the following
advantages:

          o    cost-effective   increases   in  capacity   to  meet   increasing
               communications traffic demands;

          o    support   for  new   communications   applications,   like  video
               conferencing  and  data  collaboration,  for  improved  workforce
               productivity;

          o    interoperability  with different network  configurations of their
               customers, suppliers and partners; and

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<PAGE>


          o    costsavings   associated  with  simplified   network   management
               resulting  from  creating  a  single  network  that  handles  all
               communications, rather than having to maintain separate telephone
               and computer networks.

         Communications service providers have also begun to deploy packet
networks in an effort to compete more effectively in a deregulated market.
Global deregulation and rapid technological advances have resulted in the
emergence of many new communications service providers, increased competition
among traditional telecommunications carriers, lower prices, innovative new
product and service offerings and accelerated customer turnover. To remain
competitive, communications service providers must be able to develop and
introduce new services to differentiate themselves in the market and attract and
maintain customers. Packet networks are well suited to accomplish these
objectives because they enable the rapid deployment of new and differentiated
solutions. In addition, packet-based technology allows new competitors to enter
the market quickly without substantial investment in infrastructure.

Key Attributes of Real-time Voice and Video IP Communications Solutions

         To migrate their voice and video communications to packet networks,
enterprises and communications service providers require a real-time IP
communications solution that provides:

          o    reliable   real-time   voice,   video  and  data   communications
               functionality;

          o    interoperability with the existing  circuit-switched  networks as
               well as with other IP equipment and systems;

          o    applications,  features  and  functionality  comparable  to those
               available over  traditional  telephone  networks,  including call
               transfer, conferencing and caller identification;

          o    scalability  to permit  cost-effective  increases  in capacity to
               meet demand;

          o    standards compliance, so that products from different vendors can
               work together in one network; and

          o    flexibility to adapt to rapidly changing network  environments in
               response to the evolving needs of enterprises  and to accommodate
               a mobile business environment.

Our Solution

         We provide standards-based IP-centric networking products for real-time
voice, video and data communications over packet networks for enterprises and
service providers. We also provide enabling technology in the form of software
toolkits for key IP communications protocols that are needed to develop
standards-based IP-centric products and services for real time voice and video
communication. Our networking products and software toolkits offer the following
benefits:

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         Real-time Voice, Video and Data Communications Functionality. We are
one of the few companies that offer IP communications products which support
both voice-only, as well as combined voice, video and data communications. We
believe that this dual functionality is attractive to enterprises and service
providers that seek a flexible IP communications solution, which can provide
enhanced multimedia functionality in addition to IP telephony capabilities. We
believe our products enable developers of IP communications solutions to offer
features and functions generally unavailable in competitive solutions.

         Market Leading Technology for Standards Based Real-time IP
Communications. We were one of the original five members of the ITU-T committee
responsible for defining the H.323 standard, which has been adopted worldwide
for real-time packet-based communications. We believe our technology is
recognized as the market-leading implementation of the H.323 industry standard
for real-time voice, video and data communications over packet networks. We also
believe that our technology is recognized as one of the market-leading
implementations of the Session Initiation Protocol, or SIP, and other protocols
such as MGCP and MEGACO/ H.248. We have been actively involved in the
development of protocols for real-time communications since the inception of the
industry in 1994 and believe that we were the first-to-market with enabling
products and technology for voice, video and data communications over IP
networks. We continue to be actively involved in the specification of evolving
IP communications protocols and offer a complete suite of IP communications
software toolkits to developers of IP-centric products, applications and
services. We believe that our technology has become the technology of choice
among developers of standards-compliant IP communications systems. Because we
were first to market and have achieved broad market penetration, our customers
benefit from our ability to develop and provide them market-tested, proven
products and technology. Using our products and technology, our customers can
develop unique capabilities with increased functionality that will differentiate
their IP communications solutions in the market. We believe that the accumulated
knowledge that we have gained participating in the development of industry
standards provides us with a competitive advantage and positions us to be among
the first to market products and technology based on the latest technological
advances.

         Interoperability. We provide our customers with products and technology
that are interoperable across a broad range of IP communications systems. Our
products and technology have been integrated into IP communications systems
developed by hundreds of communications equipment providers. Because our
products and technology are broadly deployed across various segments of the IP
communications industry, we believe that the interoperability of our products
and technology with products from different vendors is virtually assured. We
believe that our long-standing involvement in the definition of standards and
accumulated experience with product development across our broad customer base
provides us with a competitive advantage in addressing interoperability needs.
We continue to participate actively in defining industry standards by working
closely with industry consortia on a broad spectrum of IP communications
protocols to ensure continued interoperability of our products and technology
across multiple protocols.

         Improved Time to Market.  Our customers rely on our accumulated
expertise with IP communications standards and core technology to significantly
reduce their development cycle and improve time to market.  Communications
equipment providers seeking to market

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<PAGE>


standards-compliant systems for real-time voice and video communications over
packet networks require standards-compliant building blocks to develop their
products. Implementing standards as deployable products and technology is a
complex task that requires significant technical knowledge and expertise as well
as substantial investments of time and resources. Our products and technology
enable our customers to shorten their own development time by integrating our
proven enabling products and technology into their solutions. Rather than
dedicate in-house resources to implementing industry standards, these developers
can use our products and technology and focus their core competencies on
building enhanced systems, products and applications.

         Broad Range of Product Environments. Our products and technology
provide our customers with flexibility to design individual products and
applications or complete systems. Our customers can build a complete network
solution for real-time IP communications using our full suite of products or
integrate RADVISION products with their own products or other vendor products
into their real-time IP communications solution. Similarly, our technology has
been designed to enable the development of a broad range of products and
applications, from those that can service single users, including hand held
devices and residential IP phones, to multi-user products, like highly complex,
powerful carrier class gateways. Taken together, our products and technology
provide all of the key network components necessary to build a real-time IP
communications solutions.

         Distributed Architecture. We designed our products based on a
distributed architecture. With a distributed architecture, the core functions
needed for real-time IP communications are dispersed throughout the network at
the site of each gateway, IP conferencing bridge and gatekeeper, rather than
aggregated at a single centralized location. This distributed approach offers
several advantages compared to a traditional centralized architecture. The
distributed architecture of our products enables better utilization of network
bandwidth, because communications need not be routed through a centralized
location but rather can be routed over the shortest path to minimize bandwidth
usage. Similarly, our distributed architecture is a scalable solution, allowing
a network manager to add network resources at distributed locations
incrementally as the network grows. Our distributed architecture also provides
redundancy and increased fault tolerance and reliability because, unlike a
centralized architecture, failure at one location will not compromise the entire
network.

Our Strategy

         Our goal is to be the leading provider of innovative products and
technology that enable real-time multimedia collaboration (voice, video and
data) communications over packet networks. The combination of offering
IP-centric networking products and software toolkits uniquely positions us in
the center of the IP communication revolution. Both of our product lines are
essential for building IP networks that support real time voice and video
communication. Key elements of our strategy include the following:

          o    Maintain and Extend our Technology Leadership. We believe that we
               have  established  ourselves as a technology  leader in providing
               core-enabling  technology for a broad range of IP  communications
               products and services.  We have accumulated  extensive  knowledge
               and expertise as designers and

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<PAGE>


               developers of commercial  products and  technology  for real-time
               packet-based  communications.  We place considerable  emphasis on
               research  and  development  to  expand  the  capabilities  of our
               existing  products,  to develop new  products  and to improve our
               existing technology and capabilities.  We believe that our future
               success   will  depend   upon  our   ability  to   maintain   our
               technological leadership, to enhance our existing products and to
               introduce  on a timely  basis new  commercially  viable  products
               addressing the needs of our  customers.  We intend to continue to
               devote a  significant  portion  of our  personnel  and  financial
               resources to research and development.

          o    Strengthen and expand our  relationships  with OEM customers.  We
               have established and continue to maintain  collaborative  working
               relationships  with  many OEMs in the IP  communications  market,
               including Cisco,  Samsung,  Siemens,  Sony and Tandberg.  We work
               closely with our OEM customers to integrate our products and core
               technology  into their  solutions.  Our core  technology  and our
               system design  expertise  enable us to assist these  customers in
               the  development  of complete  solutions  that  contain  enhanced
               features and functionality compared to competitive  alternatives.
               We have generally  established  long-term  relationships with our
               OEM  customers by starting  with a few products and  subsequently
               expanding these  relationships by increasing the number and range
               of  products  sold to these  customers.  We intend to expand  the
               depth  and  breadth  of  our  existing  OEM  relationships  while
               initiating similar new relationships with leading OEMs focused on
               the IP communications market.

          o    Continue to offer new and  enhanced  products  and  features.  We
               believe we have  consistently  been  either  first,  or among the
               first, to market products that support real-time voice, video and
               data  communications  over packet networks.  We were the first to
               market with IP gateways that provide  combined  voice,  video and
               data functionality, and first to market with software development
               kits for the  development of  H.323-compliant  IP  communications
               products and applications. We intend to utilize our technological
               expertise as a basis for market  leadership  by  continuing to be
               first-to-market  with new and enhanced products and features that
               address the increasingly sophisticated needs of our customers and
               the evolving markets they serve. In addition, we believe that our
               participation in the drafting of industry  standards gives us the
               ability  to  quickly  identify  emerging  trends to  develop  new
               products  and   technologies   that  are  at  the   forefront  of
               technological evolution in the IP communications industry.

               In 2001,  our TBU  expanded  its  product  offering  to include a
               complete  suite of key IP  communications  protocol  toolkits for
               voice and video over IP.  RADVISION  toolkits  now  include  SIP,
               MGCP,   MEGACO,   H.323  and  ProLab  Test  Manager  for  network
               simulation and testing. The introduction of SIP, MGCP, MEGACO and
               ProLab  moves us closer to  achieving  our goal of  becoming  the
               premier, one-stop-shop for all voice and video

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               technologies and reinforces  RADVISION's  leadership  position as
               the V2oIP technology experts.

               We will continue to introduce  new or enhanced  products in 2002.
               We plan to  introduce  upgrades  to our  software  toolkits  that
               include  added  functionality  defined  by  new  versions  of the
               standards   that  are  ratified  by  the  various   international
               standards bodies  responsible for the different IP communications
               protocols.  In  2001,  we  demonstrated  prototype  software  for
               H.323-SIP  and  H.323-MGCP   interworking.   For  our  networking
               products we plan to upgrade our viaIP product family.  We will be
               introducing new plug-in boards for viaIP platform.

          o    Expand the distribution  channels for our products.  We intend to
               continue to focus our sales and  marketing  efforts on  expanding
               our  distribution  channels,  including  broadening the number of
               channel   partners  that  distribute  our  products  as  well  as
               strengthening  our  existing   relationships.   Channel  partners
               provide us feedback  from their  customers,  the end-users of our
               products,  which gives us valuable insight into evolving industry
               trends and customer  requirements.  OEMs,  resellers  and systems
               integrators are all important  channel partners for our products.
               They provide us with  increased  market  presence  through  their
               distributor   relationships   and  existing   customer  base.  In
               addition,  endorsements  by key channel  partners  strengthen our
               brand name awareness.

          o    Continue our active involvement in shaping industry standards for
               IP communications.  We actively  participate in and contribute to
               the formulation of standards for IP communications.  We intend to
               continue our active  involvement in the organizations that define
               the standards for real-time  communications  over next generation
               packet   networks.   Our  knowledge   and  expertise   gained  in
               participating  in the  development  of these  industry  standards
               enable  us to be among  the  first to  market  our  Products  and
               Technology  products  based  on  new  standards  adopted.  We are
               continually   improving,   enhancing   and   expanding  our  core
               competency  in real time IP  communications  protocols  including
               H.323,  SIP,  MGCP and  MEGACO.  Because  of our  involvement  in
               defining  these IP  communications  standards,  we believe we are
               well-positioned to quickly develop enhanced functionality and new
               products based on multiple protocols.

Our Products and Technology

         RADVISION networking and technology products provide the core building
blocks needed for standards-based real-time voice, video and data communications
over packet networks. Our customers can deploy our products as a complete
network solution for IP communications, integrate our products into their own IP
communications systems or use our technology to build their own
standards-compliant IP communications products, systems and applications for
enterprises and service providers.

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         The networking products developed by our Networking Business Unit
consist of:

          o    RADVISION   Gateways,   which   interface   between   traditional
               circuit-switched networks and IP networks;

          o    RADVISION or Enhanced  Communication Server (ECS), or gatekeepers
               applications,  which control, manage and monitor real-time voice,
               video and data traffic over packet networks;

          o    RADVISION Multipoint Conferencing Units (MCU), or IP conferencing
               bridges,  which  enable  voice or  multimedia  conferencing  over
               packet networks among three or more participants;

          o    RADVISION   Video   Processing   Server  (VPS),   which  supports
               continuous presence,  rate matching and improved media processing
               for multipoint conferences.

          o    RADVISION  Reservation  and Scheduling  Server (RSS),  which is a
               central web interface for conference and resource management and

          o    RADVISION  Data  Collaboration  Server (DCS),  for real-time data
               sharing and collaboration.

         Our technology business unit offers a complete suite of key IP
communications protocol tool kits for building interoperable,
standards-compliant products, systems and applications for real-time voice and
video communication over packet networks. RADVISION tool kits now include SIP,
MGCP, MEGACO, H.323 and ProLab Test Manager.

NBU Networking Products

RADVISION Gateways and Conferencing Bridges

         To achieve the successful deployment of IP communications systems by
enterprises and service providers, users who are connected to packet networks
must be able to communicate with users who are connected to circuit-switched
telephone networks. RADVISION gateways provide an interface between traditional
circuit-switched telephone networks and the new packet-based networks. A gateway
converts voice, video and data signals received from a circuit-switched network
into packets, that it then transmits in real-time over a packet-based network.
When the direction of the communication is reversed, the gateway converts the
packets back into circuit-switched signals.

         Our IP-centric networking solutions include V2oIP multimedia gateways,
which support real-time voice, video and data communications. Our standalone
OnLAN gateways were designed for small to medium sized networks. Our plug-in
viaIP gateway boards for our new viaIP chassis-based platform were designed for
large scale networks.

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         Conferencing Bridges, sometimes called MCUs, are networking products
that connect multiple callers into a single conference that allows them to talk
to each other. Our conferencing bridges support voice, video and data, allowing
the callers to see each other and also share data.

RADVISION V2oIP Multimedia Gateways

         Our OnLAN RADVISION multimedia gateways can support up to 16 voice
calls or 8 multimedia calls simultaneously in a 1.75" by 19" (1U) system. Our
viaIP gateway boards, which we began selling during the first quarter of 2001,
can support up to 60 voice calls or 30 multimedia calls simultaneously. A single
3.5 " by 19" (2U) viaIP chassis can be configured for high capacity with 4
gateway boards, which can support 240 voice calls or 120 multimedia calls
simultaneously. We sell these gateways principally to systems integrators and
OEMs who offer IP communications solutions to enterprises for next generation
networks. These gateways provide the following benefits:

          o    Real-time voice,  video and data  communications.  Our multimedia
               gateways   support   real-time   voice  and  video  calls,   data
               collaboration as well as voice-only calls.

          o    Interoperability. Our multimedia gateways are H.323 compliant and
               are  designed  to be fully  interoperable  with  other IP network
               components.

          o    Advanced call functionality.  Our multimedia gateways can support
               advanced  PBX-like  functions  including  call  transfer and call
               forwarding.

RADVISION Enhanced Communication Server (ECS) or Gatekeepers

         Gatekeepers perform the essential network function of controlling and
managing real-time voice, video and data communications on a packet-based
network. Gatekeepers define and control how traffic is routed over a
packet-based network by identifying the IP destination address and routing the
traffic to that destination. Gatekeepers also enable the provisioning of
advanced PBX-like functions, including call forwarding, multi-point conferencing
and call transfer. Network managers use gatekeepers to configure, monitor and
manage the voice and video call activity on a packet network to ensure optimal
implementation of the network. Gatekeepers log and track call activity and
maintain details of network activity which permit the network manager to monitor
IP communications activity on the network, including number of calls, number of
users and bandwidth usage.

         We provide a free embedded gatekeeper in our OnLAN gateways that
provide basic gatekeeper functionality. For our viaIP multi-function
chassis-based system, we sell an Enhanced Communication Server, or ECS,
application that provides advanced gatekeeper functionality. The ECS application
is a Microsoft Windows NT-based application that was designed to run as an
embedded viaIP application on a Windows NT-based "application server" card. We
also sell versions of our Windows NT-based gatekeeper application as a
standalone application that can be installed on any computer that supports the
Microsoft Windows NT operating system. We sell this off-the-shelf application to
systems integrators as a complementary product to both our OnLAN and viaIP
product families. These customers

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<PAGE>


combine RADVISION gatekeeper application software with other IP network
components to build complete IP communications solutions.

         We also sell gatekeeper technology in the form of software development
kits that enable our OEM customers to build and customize their own gatekeeper
applications. Our gatekeeper software development kit offers the software
developer full control over a wide range of gatekeeper functions and the
flexibility to customize and further differentiate the gatekeeper to respond to
the needs of their particular market. By using RADVISION software development
kits, our customers can build upon our proven technology and bring their
gatekeeper products to market quickly.

RADVISION Multipoint Conferencing Units (MCU) or IP Conferencing Bridges

         While communications between two parties involves point-to-point
connections, conferencing between multiple parties involves multipoint
communications among three or more participants. In traditional circuit-switched
networks, conferencing bridges connect callers to each other through a central
bridge that conducts the conference call. As enterprises migrate to packet
networks, IP conferencing bridges are needed to conduct conference calls over
these next generation networks. We were one of the first and remain one of a few
companies to offer IP conferencing bridges for rich-media multipoint
communications.

         Traditionally, voice or video conferencing requires the conference to
be arranged in advance by a network administrator and remain attended by an
operator for the duration of the conference. RADVISION's MCUs allow voice or
video conferencing among multiple participants over IP networks without any
advance arrangements or the assistance of an operator. Participants simply dial
a number and the conferencing bridge automatically arranges the conference call.
Additional participants can join the conference while it is in progress or by
being added to the conference by any party already participating in the
conference. Traditional conferencing bridges were primarily built as large
complex carrier class bridges that were not appropriate for installation within
an enterprise, requiring enterprises to contract with external service providers
to conduct conference calls. The RADVISION standalone OnLAN MCU can support up
to 15 simultaneous voice and video calls or 24 voice-only calls. The
multi-service viaIP platform supports 3 different capacity MCU boards ranging
from 45 voice calls or 30 multimedia calls, to 150 voice calls or 100 multimedia
calls. A single 2U, 19" viaIP chassis can be configured for high capacity with 4
MCU boards, which can support 600 voice calls or 400 multimedia calls
simultaneously. Like our gateways, our conferencing bridges include an embedded
gatekeeper. Our distributed conferencing architecture provides a highly scalable
solution that enables multiple conferencing bridges to be linked together to
provide a solution for very large conferences, allowing for multiple conference
panels with many remote viewers.

RADVISION Video Processing Server (VPS)

         The viaIP VPS is a complimentary product to the viaIP MCU. The VPS
performs rate matching, enabling each endpoint in a videoconference to
participate according to individual video bandwidth capabilities without
affecting the connection of other participants. The VPS also allows endpoints
that are not capable of working in an asymmetrical mode to receive a symmetric
media stream, allowing ISDN calls (passing via the Gateway) to receive a
continuous

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<PAGE>


presence video mode. The VPS will be provided as a server application, installed
on a dedicated viaIP as NT board.

RADVISION  Reservation and Scheduling Server (RSS)

         The RSS is a highly sophisticated reservation and scheduling system for
centralized scheduling of conference rooms and resources. The new RSS provides
an intuitive web-based scheduling interface as well as providing users with the
option to schedule conferences directly from Microsoft Outlook.  RSS centrally
manages an organization's conferencing, collaboration and meeting resources,
including multiple time zone scheduling, attendee invitation, recurring events,
reporting capabilities and network resources.

RADVISION Data Collaboration Server (DCS)

         The DCS is an easy-to-use data collaboration and application sharing
solution that provides unmatched conference capabilities. The RADVISION DCS, is
a dynamic and scalable solution for data collaboration and greatly enhances
conference capabilities by enabling application sharing based on the T.120
standard. With the RADVISION DCS, any conference can become a real working
session by enabling the conference participants to collaborate and share
applications. The DCS is applicable for both audio and/or video communications
using RADVISION's state-of-the-art MCU. The DCS allows you to view diagrams,
graphic presentations and slide lectures simultaneously with other
videoconferencing participants. It is also possible to conduct text chats,
whiteboard exchanges or rapid file transfers during a multipoint videoconference
of three or more participants. The DCS places particular emphasis on
scalability, reliability and performance.

TBU Technology Products

         As a driving force behind evolving technologies for real-time IP
communications, RADVISION is in a unique position to deliver one of the most
complete sets of V2oIP enabling technology. We sell the core enabling technology
for real-time IP communications in the form of software development kits.
Communications equipment providers and developers seeking to market industry
standard compliant IP telephony and multimedia products, systems and
applications need core IP communication protocol software to develop their
IP-centric solutions. Rather than dedicate in-house resources to developing this
core technology, these providers seek to build upon our proven enabling
technologies. RADVISION toolkits enables our customers to focus on their core
competencies and dramatically reduces the time to market of industry standard
compliant IP communications products, systems and applications.

RADVISION SIP  Development Toolkit

         SIP is a relatively new signaling protocol for initiating, managing and
terminating voice and video sessions across packet networks. The SIP was
designed, from conception, for building high performance, compact SIP user
agents. This optimized design offers superior functionality to other "reduced
function" implementations that are derived by simply eliminating features from
other fuller implementations. This "nuclear SIP toolkit" is ideal for developing
products that require full user/agent functionality, but are limited in
resources, particularly memory, such as wireless IP phones and PDAs, web clients
and video terminals. The SIP Toolkit is designed to

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<PAGE>


provide high scalability and extensibility for both small and large-scale
projects. It is ideal for implementing all types of feature rich SIP entities
such as application servers, softswitches, IP-PBXs, gateways and conferencing
bridges.

RADVISION H.323  Development Toolkit

         H.323 is currently the most widely deployed standard for real-time IP
communications. All components of an H.323-compliant network, including
terminals, gateways, gatekeepers and conferencing bridges, use the H.323
protocol to communicate. Our RADVISION H.323 software development kits provide
developers with the core software building blocks needed to develop
H.323-compliant products, systems and applications. Our RADVISION H.323 software
development kit is an integrated set of software programs which execute the
H.323 protocol and perform the functions necessary to establish and maintain
real-time voice, video and data communications over packet-based networks. Our
RADVISION H.323 software development kits can be used to develop a broad
spectrum of products, including gateways, gatekeepers, conferencing bridges, IP
telephones and other H.323-compliant products.

RADVISION MGCP  Development Toolkit

         Media gateway control protocol, commonly referred to as MGCP, provides
functions that complement H.323 and has been developed for large packet networks
operated by telecommunications carriers and service providers that require
gateways that can support a practically unlimited number of calls. MGCP is the
protocol by which a centralized gateway controller communicates with and
controls the numerous gateways throughout a packet network and manages the
network traffic through those gateways. MGCP has been adopted by large
telecommunications companies and Internet service providers as well as by cable
television companies building IP communications solutions over their networks.
Our RADVISION MGCP software development kit is used to build MGCP compliant
media gateways controllers and media gateways

RADVISION MEGACO  Development Toolkit

        MEGACO/H.248 is the official industry standard media gateway control
protocol for large scale IP-centric communication networks. Like MGCP, it is an
internal protocol used between "intelligent" centralized gateway controllers and
numerous "dumb" media gateways that handle voice and video media streams. The
standard is the result of unique collaborative effort between the IETF and ITU
standards organizations. Derived from MGCP, MEGACO/H.248 offers several key
enhancements including support for multimedia and conferencing calls, improved
handling of protocol messages and a formal process for creating extensions to
support advanced functionality. RADVISION's MEGACO/H.248 Toolkit includes a
unique Media Device Manager to greatly simplify application development and
reduce development time by eliminated the need for developers to write code for
interpreting MEGACO/H.248 messages.

RADVISION ProLab H.323 Test Manager

        RADVISION's ProLab is designed for debugging and simulating numerous
testing scenarios. Based on RADVISION's award-winning H.323 Protocol Toolkit,
this powerful testing tool simulates a full VoIP network with a professional
quality assurance laboratory, enabling

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<PAGE>


developers or QA specialists to test H.323 version compliance, H.323 version
upgrade compliance, stress and load. The ProLab(TM) H.323 Test Manager is a
highly scalable tool designed to be aware of any changes to the H.323 standard.
It provides the:

          o    capability to run the same tests on the application each time the
               underlying protocol version is upgraded;

          o    flexibility  to mix and match  scenarios to develop a broad range
               of testing possibilities; and

          o    ability to define numerous scripts and scale up the test scenario
               by linking them as the test plan progresses.

Products and Technology Under Development

         We intend to capitalize upon our technological leadership in real-time
IP communications to develop new products and technology that meet the evolving
needs of the IP communications market. Our future product and technology
offerings are expected to include platforms and tools needed for creating
value-added IP-centric enhanced services.

Customers

         We sell our products to OEMs, systems integrators and value added
resellers, or VARs. Our OEM customers purchase our products to integrate with
products that they developed in-house to build complete IP communications
solutions. Our systems integrator customers either purchase our full suite of
products or integrate our individual products with products of other
manufacturers to build complete IP communications solutions. Our VAR customers
purchase our products to resell to end-users as separate units, or as part of a
family of related product offerings, either under our RADVISION label or under
their private label.

         We sell our technology in the form of software development kits to
developers of IP communications products, systems and applications for
developing their own IP communications solutions based on our core enabling
technology.

         The following is a representative list of our customers who purchased
more than $250,000 of our products or technology during the year 2001:

         Networking Products
         -------------------

         ADL                           Philips
         Atlantis                      PictureTel Corp.
         Belgacom                      Polycom, Inc.
         Cisco Systems                 SKC
         Control Tech                  Sony
         First Virtual                 Tandberg
         H.S Digital                   Wafer
         MVC Mobile Video              Wire One
         NTT - ME Corp                 Zhizhen











                                       14

<PAGE>


         Technology Products
         -------------------

         Alcatel                       Nortel
         Ascom                         NTT - ME Corp
         CCL-ITRI                      Panasonic
         Cintech                       Samsung
         Cisco Systems                 Siemens
         E-soft                        Spirent
         IMAG Industries               Teleware
         Intel
         LG



Sales and Marketing

         Sales organization. We market and sell our products through multiple
channels in North America, Europe, the Far East and Israel. Our networking
products are sold to end-users principally through indirect channels by OEMs,
system integrators and value added resellers. We market and sell our technology
products, primarily in the form of software development kits, directly to
developers of IP communications products and applications. In Taiwan, Korea and
Japan, we sell our software development kits indirectly through local sales
representatives.

         We currently have sales offices in the United States in New Jersey,
California, Maryland and Texas. We also have sales offices in Tel Aviv, Israel,
Hong Kong, China and in the United Kingdom. The geographic breakdown of our
total sales for the year ended December 31, 2001 was: 63.3% in North America,
21.7% in Europe and the Middle East and 15.0% in Asia Pacific.

         We have dedicated sales teams to support our large strategic accounts
as well as to identify potential strategic customers who would deploy our
products on large scales and generate significant revenues for us.

         Marketing organization. Our marketing organization develops strategies
and implements programs to support the sale of our products and technology and
to sustain and enhance our market position as an industry leader. Our current
marketing efforts include various sales and channel support programs designed to
drive sales, and marketing communication programs designed to increase industry
visibility, including press/analyst tours, trade shows and events, speaking
engagements and ongoing interaction with analysts and the media as well as
targeted marketing programs. Additional programs include technical seminars
where customers and other industry participants are educated in real-time IP
communications technology and the benefits of our products and technology. We
also view our web site as an important marketing tool for lead generation,
customer relations and to support our market position as the V2oIP experts
through quality content including providing information related to issues
relevant to the IP communications industry, as well as important product and
market trends.

         To reinforce and further strengthen our market position as a technology
leader in the field of real-time IP communications, we actively participate in
key industry consortia and standards bodies. We are also active in defining and
reviewing evolving IP communications standards that are being developed by
international standards bodies including:

          o    the ITU-T, which has published the H.323 and MEGACO standards;


                                       15

<PAGE>




          o    the Internet Engineering Task Force, or IETF, which has published
               the SIP and MEGACO standards;

          o    CableLabs, an organization of cable operators, which is currently
               working on defining the MGCP standard; and

          o    IMTC, a global organization to promote  interoperable  multimedia
               communications solutions based on international standards.

         We regularly participate in IMTC-sponsored InterOP events, a
vendor-neutral forum where IMTC members test the interoperability of their
products.

Customer Care and Support

         Our ability to provide our customers with responsive and qualified
customer care and support services globally is essential to attract and retain
customers, build brand loyalty and maintain our leadership position in the
market. We believe our customer care and support organizational structure
enables us to provide superior technical support and customer service on a cost-
and time-efficient basis.

         We provide global customer care and support for our products and
technology. Our customer care and technical support teams are located in Tel
Aviv, Israel, Mahwah, New Jersey, Sunnyvale, California, Hong Kong and China. We
assist our customers with the initial installation, set-up and training. In
addition, our technical support team trains and certifies our customers to
provide local support in each of the geographical areas in which our products
are sold. We also provide customers the option of obtaining, for a fee, 24 hours
a day, 7 days a week help-desk support.

         In addition, customers who purchase our software development kits
generally request that we provide them with ongoing engineering and technical
support services to integrate our technology into their products, although these
services are not essential for the use of our software development kits. Our
standard software development kit contract provides for one year of support
services, renewable annually at the customer's option. Customers who have
contracted for support services receive all relevant software updates and
enhancements as well as access to our customer care and technical support teams.

Intellectual Property

         We rely on copyright, trademark and trade secret laws, confidentiality
agreements and other contractual arrangements with our customers, third-party
distributors, employees and others to protect our intellectual property.

         Despite our efforts to protect our proprietary rights, unauthorized
parties may attempt to copy aspects of our products and technology or obtain and
use information that we regard as proprietary. Policing unauthorized use of our
products and technology is difficult. In addition, the laws of some foreign
countries in which we currently or may in the future sell products do not
protect our proprietary rights to as great an extent as do the laws of the
United States. Our means of protecting our proprietary rights may not be
adequate and our competitors may

                                       16

<PAGE>


independently develop similar technology, duplicate our products or design
around our intellectual property.

         We rely on technology that we license from third parties, including
software that is integrated with internally developed software and used in our
products to perform key functions. For example, we license T.120 data
collaboration software from Data Connection Limited and voice compression
technology from Siemens. If we are unable to continue to license any of this
software on commercially reasonable terms, we will face delays in releases of
our products or will be required to reduce the functionality of our products
until equivalent technology can be identified, licensed or developed, and
integrated into our current products.

Research and Development

         We place considerable emphasis on research and development to expand
the capabilities of our existing products and technology, to develop new
products and to improve our existing technologies and capabilities. We believe
that our future success will depend upon our ability to maintain our
technological leadership, to enhance our existing products and technology and to
introduce on a timely basis new commercially viable products and technology
addressing the needs of our customers. Our gross investment in research and
development for the three years ended December 31, 1999, 2000 and 2001 was $7.7
million, $14.3 million and $17.9 million, respectively. We intend to continue to
devote a significant portion of our personnel and financial resources to
research and development. As part of our product development process, we seek to
maintain close relationships with our customers to identify market needs and to
define appropriate product specifications.

         As of December 31, 2001, our research and development staff consisted
of approximately 120 employees. Our research and development activities are
conducted at our facilities in Tel Aviv, Israel and in our office in Mahwah, New
Jersey. To introduce new, high quality products, we deploy procedures for the
design, development and quality assurance of our new product developments. Our
team is divided according to our existing product lines. Each product line team
is headed by a team leader and includes software or hardware engineers and
quality control technicians.

Competition

         We compete in a new, rapidly evolving and highly competitive and
fragmented market. We expect competition to intensify in the future. We believe
that the main competitive factors in our market are time to market, product
quality, features, cost, technological performance, scalability, compliance with
industry standards and customer relationships.

         The principal competitors in the market for our products and software
development kits currently include:



             Products                               Software development kits
---------------------------------------    -------------------------------------
     o   Ezenia!, formerly known                 o   DynamicSoft Inc.
         as Video-Server



                                       17

<PAGE>




     o   CUseeMe Networks Inc.                   o   Trillium Digital Systems,
         (formerly known as White                    acquired by  Intel Corp.
         Pine Software Inc., merged
         with First Virtual
         Communications)                         o   Hughes Software Systems

     o   Polycom Networks, a
         division of Polycom                     o   In-house developers
         Inc., formerly known                        employed by manufacturers
         as Accord Networks                          of telecommunications
                                                     equipment and systems


         Additional competitors may enter any of our markets at any time.

         Both Vovida Networks (now part of Cisco Systems), Inc. and OpenH323
offer H.323 source code for free. In addition, Vovida offers MGCP and SIP source
code for free. If our customers choose to use the free source code offered by
these organizations instead of purchasing our technology, our revenues from the
sale of our software development kits will decline.

Manufacturing

         Our manufacturing operations consist of materials planning and
procurement, out-sourcing of sub-assemblies, final assembly, product assurance
testing, quality control and packaging and shipping. We assemble and test our
products at our facilities in Tel Aviv, Israel. We test our products both during
and after the assembly process using internally developed product assurance
testing procedures. We have a flexible assembly process that enables us to
configure our products at the final assembly stage for customers who require
that our products be modified to bear their private label. This flexibility is
designed to reduce our assembly cycle time and reduce our need to maintain a
large inventory of finished goods. We use an enterprise resource planning, or
ERP, system that we purchased from BAAN Systems that we modified to our specific
needs. This system allows us to use just in time procurement and manufacturing
procedures. We believe that the efficiency of our assembly process to date is
largely due to our product architecture and our commitment to assembly process
design. We manufacture our software development kits on CD-ROMs and package and
ship them accompanied by relevant documentation.

         As part of our commitment to quality, we have been certified as an ISO
9002 supplier. The ISO 9002 standard defines the procedures required for the
manufacture of products with predictable and stable performance and quality. We
are continuously trying to improve our quality based on the guidelines dictated
by the ISO 9002 standard.

Employees

         As of January 31, 2002, we had 243 employees worldwide, of whom 121
were employed in research and development, 84 in sales and marketing, 24 in
management and administration and 14 in operations. We have standard employment
agreements with all of our employees

                                       18

<PAGE>


located in Israel. Of our employees, 175 are based in Israel, 54 are based in
the United States, 12 are based in Hong Kong and China and 2 are based
in the United Kingdom.

         Our relationships with our employees in Israel are governed by Israeli
labor legislation and regulations, extension orders of the Israeli Ministry of
Labor and Welfare and personal employment agreements.

         Israeli labor laws and regulations are applicable to all of our
employees. The laws concern various matters, including severance pay rights at
termination, retirement or death, length of work day and work week, minimum
wage, overtime payments and insurance for work-related accidents. We currently
fund our ongoing legal severance pay obligations by paying monthly premiums for
our employees' insurance policies.

         In addition, Israeli law requires Israeli employees and employers to
pay specified sums to the National Insurance Institute, which is similar to the
United States Social Security Administration. Since January 1, 1995, such
amounts also include payments for national health insurance. The payments to the
National Insurance Institute are approximately 14.5% of wages, up to a specified
amount, of which the employee contributes approximately 66.0% and the employer
contributes approximately 34.0%. The majority of our permanent employees are
covered by life and pension insurance policies providing customary benefits to
employees, including retirement and severance benefits. We contribute 13.3% to
15.8%, depending on the employee, of base wages to such plans and the employee
contributes 5.0%.

         RADVISION and its employees are not parties to any collective
bargaining agreements. However, certain provisions of the collective bargaining
agreements between the Histadrut, the General Federation of Labor in Israel, and
the Coordination Bureau of Economic Organizations, including the Manufacturers'
Association of Israel, are applicable to our employees by "extension orders" of
the Israeli Ministry of Labor and Welfare. These provisions principally concern
periodic cost of living adjustments, procedures for dismissing employees, travel
allowances, recuperation pay and other conditions of employment.

         At the start of their employment, our employees in North America
generally sign offer letters specifying basic terms and conditions of employment
as well as non-disclosure agreements. At the start of their employment, our
employees in Israel generally sign written employment agreements that include
confidentiality and non-compete provisions.

RISK FACTORS

         Investing in our ordinary shares involves a high degree of risk and
uncertainty. You should carefully consider the risks and uncertainties described
below before investing in our ordinary shares. If any of the following risks
actually occurs, our business, prospects, financial condition and results of
operations could be harmed. In that case, the value of our ordinary shares could
decline, and you could lose all or part of your investment.

                                       19

<PAGE>




Risks Relating to Our Business

We have a history of losses and we cannot assure you that we will operate
profitably in the future.

         We incurred significant losses in every fiscal year from our inception
until 1999, and we incurred operating losses in 2000 and 2001. We may continue
to incur losses in the future. As of December 31, 2001, our accumulated deficit
was $10.6 million. We cannot assure you that we will operate profitably in the
future.

Our quarterly financial performance is likely to vary significantly in the
future. Our revenues and operating results in any quarter may not be indicative
of our future performance and it may be difficult for investors to evaluate our
prospects.

         Our quarterly revenues and operating results have varied significantly
in the past and are likely to continue to vary significantly in the future.
Fluctuations in our quarterly financial performance may result from the fact
that we may receive a small number of relatively large orders in any given
quarter. Because these orders generate disproportionately large revenues, our
revenues and the rate of growth of our revenues for that quarter may reach
levels that may not be sustained in subsequent quarters. In addition, some of
our products have lengthy sales cycles. For example, it typically takes from
three to twelve months after we first begin discussions with a prospective
customer before we receive an order from that customer. We also have a limited
order backlog, which makes revenues in any quarter substantially dependent upon
orders we deliver in that quarter. Because of these factors, our revenues and
operating results in any quarter may not meet market expectations or be
indicative of future performance and it may be difficult for investors to
evaluate our prospects.

Unless our revenues grow in excess of our increasing expenses, we will not be
profitable.

     We expect that our operating expenses will increase significantly in the
future, both to finance the planned expansion of our sales and marketing and
research and development activities and to fund the anticipated growth in our
revenues.  However, our revenues may not grow apace or even continue at their
current level.  If our revenues do not increase as anticipated or if expenses
increase at a greater pace than our revenues, we will not be profitable. Even if
we achieve profitability, we may not be able to sustain or increase
profitability on a quarterly or annual basis.

If the use of packet-based networks as a medium for real-time voice, video and
data communications does not continue to grow, the demand for our products and
technology will slow and our revenues will decline.

         Our future success depends on the growth in the use of packet-based
networks, including the Internet and other IP networks, as a medium for
real-time voice, video and data communications. If the use of packet-based
networks does not expand, the demand for our products and technology will slow
and our revenues will decline. Market acceptance of packet-based networks as a
viable alternative to circuit-switched networks for the transmission of
real-time voice and video communications is not proven and may be inhibited by
concerns about quality of service and potentially inadequate development of the
necessary infrastructure.

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<PAGE>




We must develop new products and technology and enhancements to existing
products and technology to remain competitive. If we fail to do so, we may lose
market share to our competitors and our revenues may decline.

         The market for our products and technology is characterized by rapid
technological change, new and improved product introductions, changes in
customer requirements and evolving industry standards. Our future success will
depend to a substantial extent on our ability to:

          o    timely identify new market trends; and

          o    develop,  introduce  and support new and  enhanced  products  and
               technology on a successful and timely basis.

         If we fail to develop and deploy new products and technology or product
and technology enhancements on a successful and timely basis, we may lose market
share to our competitors and our revenues may decline.

         We are currently developing new products and technology and
enhancements to our existing products and technology. We may not be successful
in developing or introducing these or any other new products or technology to
the market.

We have invested, and will continue to invest, in products and technology which
comply with those industry standards which we believe have been, or will be,
broadly adopted. If one or more alternative standards were to gain greater
acceptance than the standards which we believe have or will be broadly adopted,
sales of our products and technology might suffer.

         Currently, we offer networking products that comply with the H.323
industry standard for real-time voice, video and data communications over packet
networks. During 2000, we expanded our enabling technology product family to
include additional key IP protocols. Our current suite of IP communication
protocol toolkits include H.323, SIP, MGCP and MEGACO. We believe that IP
networks will be designed with components built around each of these protocols.
If these expectations ultimately prove to be incorrect, our investments may be
of little or no value.

We rely on a small number of marketing partners who distribute our products
either under our name or as private label products for a significant portion of
our business.

         We rely in great measure on OEMs, systems integrators and value added
resellers, or VARs, to sell our products. Our OEM customers purchase our
products to integrate with products that they developed in-house to build
complete IP communications solutions. Our systems integrator customers either
purchase our full suite of products or integrate our individual products of
other manufacturers to build complete IP communications solutions. Our VAR
customers purchase our products to resell to end-users as separate units, or as
part of a family of related product offerings, either under our RADVISION label
or under their private label. If we are unable to maintain these marketing
partners or obtain new marketing partners, our future revenues and profitability
will be affected and we may lose market share.

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<PAGE>




Competition in the markets for our products and technology is intense. We may
not be able to compete effectively in these markets and we may lose market share
to our competitors.

         The markets for our products and technology are highly competitive and
we expect competition to intensify in the future. We may not be able to compete
effectively in these markets and we may lose market share to our competitors.
The principal competitors in the market for our products currently include
Polycom Inc., which acquired Accord Networks Inc., First Virtual Communications,
which merged with CUseeMe Networks Inc. (formerly known as White Pine Software
Inc.), Ezenia (formerly known as Video-Server), and the in-house developers
employed by manufacturers of telecommunications equipment and systems. Our
principal competitors in the market for our technology which is primarily sold
in the form of software development kits, currently include DynamicSoft,
Trillium Digital Systems (acquired by Intel in Q42000) and Hughes Software
Systems. Additional competitors may enter each of our markets at any time.
Moreover, our customers may seek to develop internally the products that we
currently sell to them and compete with us.

Our software development kit revenues will decrease if our customers choose to
use source code which is available for free.

         Both Vovida Networks, Inc. (now part of Cisco Systems Inc.) and
OpenH323 offer H.323 source code for free. In addition, Vovida offers MGCP and
SIP source code for free. If our customers choose to use the free source code
offered by these organizations instead of purchasing our technology, our
revenues from the sale of our software development kits will decline. Other
companies, including Microsoft, may offer similar development kits as part of
their product offerings.

Most of our competitors have greater resources than we do. This may limit our
ability to compete effectively with them and discourage customers from
purchasing our products and technology.

         Most of our competitors have greater financial, personnel and other
resources than we do, which may limit our ability to compete effectively with
them. These competitors may be able to respond more quickly to new or emerging
technologies or changes in customer requirements. These competitors may also:

          o    benefit from greater economies of scale;

          o    offer more aggressive pricing; or

          o    devote greater resources to the promotion of their products.

         Any of these advantages may discourage customers from purchasing our
products and technology. If we are unable to compete successfully against our
existing or potential competitors, our revenues and margins will decline.

                                       22

<PAGE>




Our agreements with our customers generally do not have minimum purchase
requirements. If our customers decrease or cease purchasing our products and
technology, our revenues will decline.

         Our agreements with our customers generally do not have minimum
purchase requirements nor do they require our customers to purchase any products
from us. If any or all of our customers cease to purchase or reduce their
purchases of our products and technology at any time, our revenues will decline.
We cannot assure you that our customers will not choose to independently develop
for themselves, or purchase from others, products and technology similar to our
products and technology. Moreover, if our customers do not successfully market
and sell the systems and products into which they incorporate our products and
technology, the demand of these customers for our products and technology will
decline. Our customers' sales of systems and products containing our products
and technology may be adversely affected by circumstances over which we have no
control and over which our customers may have little, if any, control.

We are dependent upon a limited number of suppliers of key components. If these
suppliers delay or discontinue manufacture of these components, we may
experience delays in shipments, increased costs and cancellation of orders for
our products.

         We currently obtain key components used in the manufacture of our
products from a single supplier or from a limited number of suppliers. We do not
have long-term supply contracts with our suppliers. Any delays in delivery of or
shortages in these components could interrupt and delay manufacturing of our
products and result in the cancellation of orders for our products. In addition,
these suppliers could discontinue the manufacture or supply of these components
at any time. We may not be able to identify and integrate alternative sources of
supply in a timely fashion or at all. Any transition to alternate suppliers may
result in delays in shipment and increased expenses and may limit our ability to
deliver products to our customers. Furthermore, if we are unable to identify an
alternative source of supply, we would have to modify our products to use a
substitute component, which may cause delays in shipments, increased design and
manufacturing costs and increased prices for our products.

We intend to manufacture and maintain an inventory of customized products for
some customers who will have no obligation to purchase these products. If these
customers fail to purchase these products, our financial results may be harmed.

         To satisfy the timing requirements of some of our larger customers, we
intend to manufacture and maintain an inventory of some of our products that we
will customize to the specifications of these customers. The size of this
inventory will be based upon the purchasing history and forecasts of these
customers, which we currently estimate to be approximately two months of sales
to these customers. These customers will have no obligation to purchase the
inventoried products at any time. If the customers for whom the inventoried
products are manufactured do not purchase them, we may be required to modify the
products for sale to others and we may be unable to find other purchasers. In
either case, the value of the products may be materially diminished which may
have a negative impact on our financial results.

                                       23

<PAGE>




Undetected errors may increase our costs and impair the market acceptance of our
products and technology.

         Our products and technology have occasionally contained, and may in the
future contain, undetected errors when first introduced or when new versions are
released. Our customers integrate our products and technology into systems and
products that they develop themselves or acquire from other vendors. As a
result, when problems occur in equipment or a system into which our products or
technology have been incorporated, it may be difficult to identify the cause of
the problem. Regardless of the source of these errors, we must divert the
attention of our engineering personnel from our research and development efforts
to address the errors. We cannot assure you that we will not incur warranty or
repair costs, be subject to liability claims for damages related to product
errors or experience delays as a result of these errors in the future. Any
insurance policies that we may have, may not provide sufficient protection
should a claim be asserted. Moreover, the occurrence of errors, whether caused
by our products or technology or the products of another vendor, may result in
significant customer relations problems and injury to our reputation and may
impair the market acceptance of our products and technology.

We rely on third party technology licenses. If we are unable to continue to
license this technology on reasonable terms, we may face delays in releases of
our products and may be required to reduce the functionality of our products
derived from this technology.

         We rely on technology that we license from third parties, including
software that is integrated with internally developed software and used in our
products to perform key functions. For example, we license T.120 data
collaboration software from Data Connection Limited and voice compression
technology from Siemens. If we are unable to continue to license any of this
software on commercially reasonable terms, we will face delays in releases of
our products or will be required to reduce the functionality of our products
until equivalent technology can be identified, licensed or developed, and
integrated into our current products.

Third parties may infringe upon or misappropriate our intellectual property,
which could impair our ability to compete effectively and negatively affect our
profitability.

         Our success depends upon the protection of our technology, trade
secrets and trademarks. Our profitability could suffer if third parties infringe
upon our intellectual property rights or misappropriate our technology and other
assets. To protect our rights to our intellectual property, we rely on a
combination of trade secret protection, trademark law, confidentiality
agreements and other contractual arrangements. The protective steps we have
taken may be inadequate to deter infringement or misappropriation. We may be
unable to detect the unauthorized use of our intellectual property or take
appropriate steps to enforce our intellectual property rights. Policing
unauthorized use of our products and technology is difficult. In addition, the
laws of some foreign countries in which we currently or may in the future sell
our products do not protect our proprietary rights to as great an extent as do
the laws of the United States. Failure to adequately protect or to promptly
detect unauthorized use of our intellectual property could devalue our
proprietary content and impair our ability to compete effectively. Further,
defending our intellectual property rights could result in the expenditure of
significant financial and managerial resources, whether or not the defense is
successful.

                                       24

<PAGE>




Our products may infringe on the intellectual property rights of others, which
could increase our costs and negatively affect our profitability.

         Third parties may assert against us infringement claims or claims that
we have infringed a patent, copyright, trademark or other proprietary right
belonging to them. For example, in 1998, Lucent alleged that some products
manufactured by us infringed specified Lucent patents. See "Item 3. Legal
Proceedings." Any infringement claim, even if not meritorious, could result in
the expenditure of significant financial and managerial resources and could
negatively affect our profitability.

We are dependent on our senior management. Any loss of the services of our
senior management could negatively affect our business.

         Our future success depends to a large extent on the continued services
of our senior management and key personnel. We do not carry key-man life
insurance for any of our senior management. Any loss of the services of members
of our senior management or other key personnel could negatively affect our
business.

Our failure to retain and attract personnel could harm our business, operations
and product development efforts.

         Our products require sophisticated research and development, marketing
and sales, and technical customer support. Our success depends on our ability to
attract, train and retain qualified research and development, marketing and
sales and technical customer support personnel. We intend to increase
substantially the number of our employees who perform these functions.
Competition for personnel in all of these areas is intense and we may not be
able to hire sufficient personnel to achieve our goals or support the
anticipated growth in our business. The market for the highly-trained personnel
we require is very competitive, due to the limited number of people available
with the necessary technical skills and understanding of our products and
technology. If we fail to attract and retain qualified personnel, our business,
operations and product development efforts would suffer.

Our non-competition agreements with our employees may not be enforceable. If any
of these employees leaves us and joins a competitor, our competitor could
benefit from the expertise our former employee gained while working for us.

         We currently have non-competition agreements with our key employees in
Israel. These agreements prohibit those employees, if they cease to work for us,
from directly competing with us or working for our competitors. Under current
U.S. and Israeli law, we may not be able to enforce these non-competition
agreements. If we are unable to enforce any of these agreements, our competitors
that employ our former employees could benefit from the expertise our former
employees gained while working for us. In addition, we do not have
non-competition agreements with our employees outside of Israel.

                                       25

<PAGE>




Government regulation could delay or prevent product offerings, resulting in
decreased revenues.

         Our products are designed to operate with local telephone systems
throughout the world and therefore must comply with the regulations of the
Federal Communications Commission and other regulations affecting the
transmission of voice, video and data over telecommunications and other media.
Each time we introduce a new product, we are required to obtain regulatory
approval in the countries in which it is offered. In addition, we must
periodically obtain renewals of the regulatory approvals for the use of our
products in countries where we have already obtained approval. We cannot assure
you that regulatory approval for our current products will be renewed or that
regulatory approval for future products will be obtained. If we do not obtain
the necessary approvals and renewals, we may be required to delay the sales of
our products in those countries until approval for use is granted or renewed.
This could result in decreased revenues.

Risks Relating to Our Location in Israel

Conditions in Israel affect our operations and may limit our ability to produce
and sell our products, which could decrease our revenues.

         We are incorporated under the laws of Israel, and most of our offices
and our production facilities are located in, the State of Israel. We are
directly affected by the political, economic and military conditions affecting
Israel. Any major hostilities involving Israel or the interruption or
curtailment of trade between Israel and its present trading partners could have
a material adverse effect on our business, financial condition and results of
operations. Since the establishment of the State of Israel in 1948, a state of
hostility has existed, varying in degree and intensity, between Israel and the
Arab countries. While Israel has entered into peace agreements with both Egypt
and Jordan and several other countries have announced their intentions to
establish trade and other relations with Israel, Israel has not entered into any
peace arrangement with Syria or Lebanon. Moreover, while Israel had conducted
peace negotiations with the Palestinian Authority the increase in violence
primarily in the West Bank and Gaza Strip since October 2000 has caused a
significant deterioration in the relationship between Israel and the Palestinian
Authority and a cessation of peace talks. Efforts to resolve the problem have
failed to result in an agreeable solution. Continued hostilities between the
Palestinian community and Israel and any failure to settle the conflict may have
a material adverse effect on our business and us. Further deterioration of
hostilities into a full scale conflict might require more widespread military
reserve service by some of our employees, which may have a material adverse
effect on our business.

Because all of our revenues are generated in U.S. dollars or are linked to the
U.S. dollar while a portion of our expenses are incurred in new Israeli shekels,
our results of operations would be adversely affected if inflation in Israel
is not offset on a timely basis by a devaluation of the new Israeli shekel
against the U.S. dollar.

         All of our revenues are in dollars or are linked to the dollar, while a
portion of our expenses, principally salaries and the related personnel
expenses, are in new Israeli shekels, or NIS. As a result, we are exposed to the
risk that the rate of inflation in Israel will exceed the rate

                                       26

<PAGE>


of devaluation of the NIS in relation to the dollar or that the timing of this
devaluation lags behind inflation in Israel. This would have the effect of
increasing the dollar cost of our operations. In 1997 and 1998, the rate of
devaluation of the NIS against the dollar exceeded the rate of inflation, a
reversal from prior years. However, in 1999 and 2000 while the rate of inflation
was low, there was a devaluation of the dollar against the NIS. In the year 2001
the rate of devaluation of the NIS against the dollar exceeded the rate of
inflation. We cannot predict any future trends in the rate of inflation in
Israel or the rate of devaluation of the NIS against the dollar. If the dollar
cost of our operations in Israel increases, our dollar-measured results of
operations will be adversely affected.

The tax benefits that we currently receive from our approved enterprise programs
require us to satisfy specified conditions. If we fail to satisfy these
conditions, we may be required to pay additional taxes and would likely be
denied these benefits in the future.

         The Investment Center of the Israeli Ministry of Industry and Trade has
granted approved enterprise status to several investment programs at our
manufacturing facility. The portion of our income derived from these approved
enterprise programs commencing when we begin to generate net income from these
programs will be exempt from tax for a period of two years and will be subject
to a reduced tax rate for an additional five to eight years, depending on the
percentage of our share capital held by non-Israelis. The benefits available to
an approved enterprise program are dependent upon the fulfillment of conditions
stipulated in applicable law and in the certificate of approval. If we fail to
comply with these conditions, in whole or in part, we may be required to pay
additional taxes during the period in which we would have benefited from the tax
exemption or reduced tax rates and would likely be denied these benefits in the
future.

It may be difficult to enforce a U.S. judgment against us and most of our
officers and directors or to assert U.S. securities laws claims in Israel or
serve process on most of our officers and directors.

         We are incorporated in Israel. Many of our executive officers and
directors are nonresidents of the United States, and a substantial portion of
our assets and the assets of these persons are located outside the United
States. Therefore, it may be difficult for an investor, or any other person or
entity, to enforce a U.S. court judgment based upon the civil liability
provisions of the U.S. federal securities laws in an Israeli court against us or
any of those persons or to effect service of process upon these persons in the
United States. Additionally, it may be difficult for an investor, or any other
person or entity, to enforce civil liabilities under U.S. federal securities
laws in original actions instituted in Israel.

Risks Relating to Our Ordinary Shares

Holders of our ordinary shares who are United States residents face income tax
risks.

         There is a substantial risk that we will be classified as a passive
foreign investment company, or PFIC. Our treatment as a PFIC could result in a
reduction in the after-tax return to the holders of our ordinary shares and
would likely cause a reduction in the value of such shares. For U.S. Federal
income tax purposes, we will be classified as a PFIC for any taxable year in

                                       27

<PAGE>


which either (i) 75% or more of our gross income is passive income, or (ii) at
least 50% of the average value of all of our assets for the taxable year produce
or are held for the production of passive income. For this purpose, passive
income includes dividends, interest, royalties, rents, annuities and the excess
of gains over losses from the disposition of assets which produce passive
income. If we were determined to be a PFIC for U.S. federal income tax purposes,
highly complex rules would apply to U.S. Holders owning ordinary shares.
Accordingly, you are urged to consult your tax advisors regarding the
application of such rules.

         As a result of our substantial cash position and the decline in the
value of our stock, there is a substantial risk that we will be classified as a
PFIC under the asset test described in the preceding paragraph. However, based
on a independent third party opinion, we believe that we were not deemed to be
classified as a PFIC for the year 2001. We have, however, no assurance that the
U.S. Internal Revenue Services will accept this determination and there can be
no assurance that we will not be classified as a PFIC in the future.

         United States residents should carefully read "Item 10E. Additional
Information - 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.

Our share price has been volatile in the past and may decline in the future.

         Our ordinary shares have experienced significant market price and
volume fluctuations in the past and may experience significant market price and
volume fluctuations in the future in response to factors such as the following,
some of which are beyond our control:

          o    quarterly variations in our operating results;

          o    operating  results that vary from the  expectations of securities
               analysts and investors;

          o    changes in expectations as to our future  financial  performance,
               including   financial   estimates  by  securities   analysts  and
               investors;

          o    announcements of technological  innovations or new products by us
               or our competitors;

          o    announcements by us or our competitors of significant  contracts,
               acquisitions,  strategic partnerships,  joint ventures or capital
               commitments;

          o    changes in the status of our intellectual property rights;

          o    announcements   by  third  parties  of   significant   claims  or
               proceedings against us;

          o    additions or departures of key personnel;

          o    future sales of our ordinary shares; and

                                       28

<PAGE>




          o    stock market price and volume fluctuations.

         Domestic and international stock markets often experience extreme price
and volume fluctuations. Market fluctuations, as well as general political and
economic conditions, such as a recession or interest rate or currency rate
fluctuations or political events or hostilities in or surrounding Israel, could
adversely affect the market price of our ordinary shares.

         In the past, securities class action litigation has often been brought
against a company following periods of volatility in the market price of its
securities. We may in the future be the target of similar litigation. Securities
litigation could result in substantial costs and divert management's attention
and resources.

Anti-takeover provisions could negatively impact our shareholders.

         The new Israeli Companies Law 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% shareholder of the company. This
rule does not apply if there is already another 25% shareholder of the company.
Similarly, the Israeli Companies Law 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 45% shareholder of the company. There
is an exception to this provision, if someone else is already a majority
shareholder of the company. Regulations under the Companies Law provide that the
Companies Law's tender offer rules do not apply to a company whose shares are
publicly traded outside of Israel, if pursuant to the applicable foreign
securities laws and stock exchange rules there is a restriction on the
acquisition of any level of control of the company, or if the acquisition of any
level of control of the company requires the purchaser to make a tender offer to
the public shareholders.

         Finally, Israeli tax law treats certain acquisitions, particularly
stock-for-stock swaps between an Israeli company and a foreign company, less
favorably than United States tax law. Israeli tax law may, for instance, subject
a shareholder who exchanges his company shares for shares in a foreign
corporation to immediate taxation.

Item 2. Properties

         Our headquarters and principal administrative, finance, sales and
marketing and promotion operations are located in approximately 60,079 square
feet of leased office space in Tel Aviv, Israel at an approximate rental cost of
$ 1,178,000 in 2001. The lease for our principal offices expires in June 2005.
In the United States, we lease approximately 10,000 square feet from a related
party in Mahwah, New Jersey expiring in May 2002 and approximately 1,232 square
feet in Sunnyvale, California expiring in December 2002. We also lease
approximately 1,246 square feet in Hong Kong expiring in June 2002,
approximately 872 square feet in China expiring in April 2003 and approximately
500 square feet in the United Kingdom expiring in February 2003.

         The aggregate annual rent for our sales and service offices in the
United States, Hong Kong, China and the United Kingdom was approximately
$246,000 in 2001.

                                       29

<PAGE>




Item 3. Legal Proceedings

         In January 2001, we entered into an agreement with Zohar Zisapel
Properties Inc. and Yehuda Zisapel Properties Inc. (entities that are wholly
owned by Zohar Zisapel, our Chairman of the Board and a principal shareholder,
and Yehuda Zisapel, a principal shareholder and our former Chairman,
respectively) to lease approximately 24,000 feet square of office space in
Paramus, New Jersey for a period of 5 years, which space we subsequently
surrendered. The parties disagree as to the extent of damages caused by this
action, if any. We cannot predict the final outcome of this dispute.

         Other than the above, we are not involved in any legal proceedings that
are material to our business or financial condition.

          In 1998, Lucent sent correspondence to our affiliate, RAD Data
Communications Ltd., alleging that some products manufactured by RAD and some of
its affiliates, including us, infringe upon specified Lucent patents and
offering to license these patents to RAD and its affiliates. In subsequent
correspondence, RAD requested that Lucent specifically substantiate each
allegation of infringement before RAD or any of its affiliates considers
entering into any licensing arrangements. RAD has recently received further
correspondence from Lucent in which Lucent has reiterated its claims. RAD does
not believe Lucent has substantiated its claims and has communicated this belief
to Lucent. RAD advises us that the alleged infringement claims are unresolved.

         The elements of our products that Lucent has alleged infringe upon its
patents are contained within components which we obtain from a third party
manufacturer. We believe that the third party manufacturer has a license to use
these patents and that we may be entitled to the benefits of this license.

         In addition, based on Lucent's fee and royalty schedule for licensing
the relevant patents, we believe that any licensing fee and royalty payments
that we may be required to pay for the right to use Lucent's patents would not
have a material impact on our earnings. As a result, we do not believe that
Lucent's allegations will have a material adverse effect upon us, our business,
financial condition or liquidity.

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

         No matters were submitted to a vote of securities holders during the
fourth quarter of the fiscal year ended December 31, 2001.


                                       30

<PAGE>



                                     PART II

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters

         Our ordinary shares are traded on the Nasdaq National Market under the
symbol RVSN. The following table sets forth, for the periods indicated, the high
and low sale prices of our ordinary shares as reported by the Nasdaq National
Market since our initial public offering on March 14, 2000:

2000                                                High             Low
----                                               -------         -------
First Quarter (from March 14, 2000).............   $65             $40-1/2
Second Quarter .................................    52-3/4          16-1/8
Third Quarter ..................................    40-1/2          24-5/8
Fourth Quarter..................................    29-1/2          11-5/16

2001
----
First Quarter...................................   $16.25           $6.16
Second Quarter..................................     8.34            5.02
Third Quarter...................................     5.84            4.70
Fourth Quarter..................................     8.85            4.85

         As of March 11, 2002 we had approximately 3,455 beneficial shareholders
including 52 holders of record.

         We have never paid dividends on our ordinary shares since our inception
and we do not anticipate paying any dividends in the foreseeable future. If we
were able to distribute cash dividends out of income that had been exempt from
tax because of our investment program's Approved Enterprise status (for
description of such status please refer to the section entitled "Effective
Corporate Tax Rate" in "Item 7. Management's Division and Analysis of Financial
Conditions and Results of Operations") such income would become subject to
Israeli corporate tax.

         If we were to declare dividends in the future, we would declare those
dividends in NIS but pay those dividends to our non-Israeli shareholders in U.S.
dollars. Because exchange rates between NIS and the dollar fluctuate
continuously, a U.S. shareholder would be subject to currency fluctuation
between the date when the dividends were declared and the date the dividends
were paid.

Item 6. Selected Financial Data

         The following selected consolidated financial data for and as of the
five years ended December 31, 2001, are derived from our audited consolidated
financial statements which have been prepared in accordance with U.S. GAAP. Our
consolidated financial statements were examined by Luboshitz Kasierer, Arthur
Andersen, independent auditors whose report with respect to the three years
ended December 31, 2001 and as of December 31, 2001 and 2000 appears in this
Annual Report.

                                       31

<PAGE>




<TABLE>
<CAPTION>

                                                                    Year ended December 31,
                                                 1997          1998          1999            2000            2001
                                              ---------      --------     -------          -------        -------
                                                             (in thousands, except per share data)
<S>                                           <C>            <C>          <C>              <C>            <C>
Consolidated Statement of
Operations Data:
Revenues................................      $  4,899       $ 8,894      $17,550          $45,911        $46,227
Cost of revenues........................         1,211         1,412        2,853           11,446         10,362
                                              --------       -------      -------          -------        -------
Gross profit............................         3,689         7,482       14,697           34,465         35,865
                                              --------       -------      -------          -------        -------
Operating expenses:
Research and development................         2,763         4,379        7,667           14,263         17,933
Less participation by the Chief
   Scientist............................           890         1,140        1,097              353              -
                                              --------       -------      -------          -------        -------
Research and development, net...........         1,873         3,239        6,570           13,910         17,933
Marketing and selling, net..............         2,384         4,425        9,502           17,358         16,735
General and administrative..............           494           670        1,426            3,458          4,438
Restructuring costs.....................             -             -            -                -          3,023
Royalties to Chief Scientist............             -             -            -            3,666              -
                                              --------       -------      -------          -------        -------
Total operating expenses................         4,751         8,334       17,498           38,392         42,129
                                              --------       -------      -------          -------        -------
Operating loss..........................        (1,062)         (852)      (2,801)          (3,927)        (6,264)
Financial income, net...................             6            23          105            4,176          4,652
                                              --------       -------      -------          -------        -------
Net income (loss).......................      $ (1,056)      $  (829)     $(2,696)         $   249        $(1,612)
                                              ========       =======      =======          =======        =======
Net earnings (loss) per ordinary share..      $  (0.10)      $ (0.08)     $ (0.26)         $ 0.014        $ (0.09)
Weighted average number of ordinary
   shares...............................        10,234        10,492       10,538           17,174         18,943
Diluted earnings (loss) per
   ordinary share ......................      $  (0.10)      $ (0.08)     $ (0.26)         $ 0.013        $(0.09)
Weighted average number of ordinary
   shares...............................        10,234        10,492       10,538           19,873         18,943

</TABLE>

<TABLE>
<CAPTION>
                                                                         December 31,
                                              -----------------------------------------------------------------
                                               1997           1998         1999           2000            2001
                                              ------        -------      -------        --------        --------
                                                                      (in thousands)
<S>                                           <C>            <C>         <C>            <C>             <C>
Consolidated Balance Sheet Data:
Cash and cash equivalents...............      $  435         $3,305      $ 2,605        $ 41,617        $ 6,717
Working capital.........................         873          4,318          814          73,660         53,377
Total assets............................       3,704          9,371       13,261         116,351         99,767
Total bank debt, less current maturities         106            130           67              19              -
Shareholders' equity....................       1,363          5,450        3,481          94,345         83,549

</TABLE>


Item 7. Management's  Discussion and Analysis of Financial Condition and Results
        of Operations

Operating Results

         The following discussion of our operating results of operations should
be read together with our consolidated financial statements and the related
notes, which appear elsewhere in this annual report. The following discussion
contains forward-looking statements that reflect our current plans, estimates
and beliefs and involve risks and uncertainties. Our actual results may differ
materially from those discussed in the forward-looking statements. Factors that
could

                                       32

<PAGE>


cause or contribute to such differences include those discussed below and
elsewhere in this annual report.

         All of our revenues are generated in U.S. dollars or are linked to the
dollar and a majority of our expenses are incurred in dollars. Consequently, we
use the dollar as our functional currency. Transactions and balances in other
currencies are converted into dollars according to the principles in Financial
Accounting Standards Board Statement No. 52. Gains and losses arising from
conversion are recorded as interest income or expense, as applicable.

Overview

         We are a leading designer, developer and supplier of products and
technology that enable real-time voice, video and data communications over
packet networks, including the Internet and other IP networks.

         We were incorporated in January 1992, commenced operations in October
1992 and commenced sales of our products in the fourth quarter of 1994. Before
that time, our operations consisted primarily of research and development and
recruiting personnel. In 1995, we established a wholly owned subsidiary in the
United States, RADVISION Inc., which conducts our sales and marketing activities
in North America. We currently have sales offices in the United States, Hong
Kong, China, United Kingdom and Israel.

Revenues

         We generate revenues from sales of our networking products that are
primarily sold in the form of stand-alone products, and our technology products
that are primarily sold in the form of software development kits, as well as
related maintenance and support services. We generally recognize revenues from
the sale of our products upon shipment and when collection is probable. Revenues
generated from maintenance and support services are deferred and recognized
ratably over the period of the term of service. We price our networking products
on a per unit basis, and grant discounts based upon unit volumes. We price our
software development kits on the basis of a fixed-fee plus royalties from
products developed using the software development kits. We sell our products and
technology through direct sales and various indirect distribution channels in
North America, Europe, the Asian/Pacific region and Israel. For the year ended
December 31, 2001, approximately 63% of our revenues were generated in the
United States.

Significant Costs and Expenses

         Cost of Revenues Our cost of revenues consists of component and
material costs, direct labor costs, subcontractor fees, overhead related to
manufacturing and depreciation of manufacturing equipment. Our gross margin is
affected by the selling prices for our products as well as the proportion of our
revenues generated from the sale of our technology products as compared to our
networking products. Our revenues from the sale of our technology products have
higher gross margins than our revenues from the sale of our networking products
and we offer greater discounts to our high volume OEM customers. As the relative
proportion of our revenues from our networking products increases as a
percentage of our total revenues and we generate a higher percentage of our
revenues from sales to our high volume OEM customers, our gross margins will
decline.

                                       33

<PAGE>




         Research and development expenses, net. Our research and development
expenses consist primarily of compensation and related costs for research and
development personnel, expenses for testing facilities and depreciation of
equipment.

         Research and development costs, net are charged to operations as
incurred. Software development costs are considered for capitalization when
technological feasibility is established according to SFAS No. 86, "Accounting
for the Costs of Computer Software to be Sold, Leased or Otherwise Marketed."
Costs incurred after achievement of technological feasibility in the process of
software production have not been material. Therefore, we have not capitalized
any of our research and development expenses and do not anticipate that our
development process will differ materially in the future.

         Historically our research and development expenses were presented net
of payments received from the Office of the Chief Scientist of Israeli Ministry
of Industry and Trade, or the Chief Scientist. In 2000 we voluntarily repaid
$3,666,000 in future royalty payments to the Chief Scientist and discontinued
our relationship with the Chief Scientist in order to reduce certain
restrictions on our business and to avoid paying increased interest rates in the
future on royalty payments. We do not currently intend to apply for grants from
the Chief Scientist in the future. However, we expect to continue to make
substantial investments in research and development.

         Marketing and selling expenses, net. Our marketing and selling expenses
consist primarily of compensation and related costs for sales personnel,
marketing personnel, sales commissions, marketing programs, public relations,
promotional materials, travel expenses, trade show exhibit expenses and
royalties paid to the Government of Israel. Marketing and selling expenses until
December 31, 1999 are presented net of marketing grants received from the
Government of Israel. We do not intend to apply for any grants from the
Government of Israel in the future.

         General and administrative expenses. Our general and administrative
expenses consist primarily of salaries and related expenses for executive,
accounting and human resources personnel, professional fees, provisions for
doubtful accounts and other general corporate expenses.

         Operating expenses also include amortization of stock-based
compensation, which is allocated among research and development expenses,
marketing and selling expenses and general and administrative expenses based on
the division in which the recipient of the option grant is employed.
Amortization of stock-based compensation results from the granting of options to
employees with exercise prices per share determined to be below the fair market
value per share of our ordinary shares on the dates of grant. The stock-based
compensation is being amortized to operating expenses over the vesting period of
the individual options.

         Financial income, net. Our financial income consists primarily of
interest earned on bank deposits and other liquid investments, gains and losses
from the conversion of monetary balance sheet items denominated in non-dollar
currencies into dollars and interest expense incurred on outstanding debt.

                                       34

<PAGE>




         Taxes. Israeli companies are generally subject to income tax at the
corporate tax rate of 36%. However, several of our investment programs at our
manufacturing facility in Tel Aviv have been granted approved enterprise status
and, therefore, we are eligible for tax benefits. These benefits should result
in income recognized by us being tax exempt or taxed at a lower rate for a
specified period after we begin to report taxable income and exhaust any net
operating loss carry-forwards. However, these benefits may not be applied to
reduce the tax rate for any income derived by our U.S. subsidiary.

Results of Operations

         The following discussion of our results of operations for the years
ended December 31, 1999, 2000 and 2001, including the percentage data in the
following table, is based upon our statements of operations contained in our
financial statements for those periods, and the related notes, included in this
annual report:

                                                     1999      2000       2001
                                                    ------    ------     ------
Revenues..........................................  100.0%    100.0%     100.0%
Cost of revenues..................................   16.3      24.9       22.4
Gross profit......................................   83.7      75.1       77.6
Operating expenses:
   Research and development.......................   43.7      31.1       38.8
   Less participation by the Chief Scientist......    6.3       0.8         -
   Research and development, net..................   37.4      30.3       38.8
   Marketing and selling, net.....................   54.1      37.8       36.2
   General and administrative.....................    8.1       7.5        9.6
   One time charge/repayment of future royalties..    -         8.0        6.5
 Total operating expenses.........................   99.6      83.6       91.1
Operating loss....................................  (15.9)     (8.5)     (13.5)
Financial income, net.............................    0.6       9.1       10.1
Net income (loss).................................  (15.3)%     0.6%      (3.4)%
                                                    =====     =====      =====

Year Ended December 31, 2001 as Compared with Year Ended December 31, 2000

         Revenues. Revenues increased from $45.9 million for the year ended
December 31, 2000 to $46.2 million for the year ended December 31, 2001. This
increase was due to a $3.1 million increase in sales of our networking products
offset by a decrease of $2.8 million from technology products.

         Revenues from networking products increased from $26.6 million for the
year ended December 31, 2000 to $29.7million for the year ended December 31,
2001. The increase in revenue from networking products is attributable to an
increase in demand for these units as customers moved from integrated services
digital networks, or ISDN, to IP-based networks, as well as from OEM agreements
that generated additional product sales. Revenues from technology products
decreased from $19.3 million for the year ended December 31, 2000 to $16.5
million for the year ended December 31, 2001. This decrease in revenues from
technology products was primarily attributable to decreased market demand as
budgets for these products declined due to the worldwide economic downturn.

                                       35

<PAGE>




         Revenue from sales to customers in the United States increased from
$27.9 million, or 60.9% of revenue, for the year ended December 31, 2000, to
$28.3 million, or 61.3% of revenue, for the year ended December 31, 2001, an
increase of $0.4 million, or 1.4%. Revenue from sales to customers in Europe
increased from $7.3 million, or 16.0% of revenue, for the year ended December
31, 2000, to $8.1 million, or 17.5% of revenue, for the year ended December 31,
2001, an increase of $0.8 million, or 11.0%. This increase in sales to customers
in Europe was primarily attributable to increased market demand for our products
in this region.

         Revenue from sales to customers in the Asian/Pacific region increased
from $5.3 million, or 11.5% of revenue, for the year ended December 31, 2000, to
$6.9 million, or 15.0% of revenue, for the year ended December 31, 2001, an
increase of $1.6 million, or 30.2%. This increase in sales to customers in this
region was primarily attributable to increased sales efforts for our networking
products.

         Revenue from sales to customers in Israel decreased from $4.5 million,
or 9.7% of revenue, for the year ended December 31, 2000, to $1.9 million, or
4.2% of revenue, for the year ended December 31, 2001, a decrease of $2.6
million, or 57.8%. This decrease in sales to customers in Israel was primarily
attributable to the depressed economy in this region.

         Cost of Revenues. Cost of revenues decreased from $11.4 million for the
year ended December 31, 2000 to $10.3 million for the year ended December 31,
2001, a decrease of $1.1 million, or 9.6%. Gross profit as a percentage of
revenues increased from 75.1% for the year ended December 31, 2000 to 77.6% for
the year ended December 31, 2001, due to the increased proportion of new
networking products sales with higher profit margins.

         Research and Development, Net. Research and development expenses, net
increased from $13.9 million for the year ended December 31, 2000 to $17.9
million for the year ended December 31, 2001, an increase of $4.0 million, or
28.8%. This increase was primarily attributable to an increase in the number of
research and development personnel whom we employed. We have increased our
research and development personnel to support our existing and expected new
product lines and to accommodate, the expected future growth of our business.
Research and development expenses, net as a percentage of revenues increased
from 30.3% for the year ended December 31, 2000 to 38.8% for the year ended
December 31, 2001.

         Marketing and Selling, Net. Marketing and selling expenses, net
decreased from $17.4 million for the year ended December 31, 2000 to $16.7
million for the year ended December 31, 2001, a decrease of $623,000, or 35.9%.
This decrease was primarily attributable to a reduction of our marketing
activities in the second half of the year as we reduced our sales and marketing
expenses in response to current conditions. Marketing and selling expenses, net
as a percentage of revenues decreased from 37.8% for the year ended December 31,
2000 to 36.2% for the year ended December 31, 2001.

         General and Administrative. General and administrative expenses
increased from $3.5 million for the year ended December 31, 2000 to $4.4 million
for the year ended December 31, 2001, an increase of $980,000 or 28.0%. This
increase was primarily attributable to an increase of $581,000, or 29.3%, in
personnel expenses. General and administrative expenses as a

                                       36

<PAGE>


percentage of revenues increased from 7.5% for the year ended December 31, 2000
to 9.6% for the year ended December 31, 2001.

         One Time Charge / Royalty Payments to the Chief Scientist. In 2000 we
determined to repay all future royalty payments due to the Chief Scientist. This
decision made as part of our strategy to discontinue the relationship with the
Chief Scientist to reduce the growing restrictions imposed by the Chief
Scientist on our business. By doing so, we will also save the increased interest
rates that are imposed by the Chief Scientist on part of the royalties due. In
2001 we recorded a charge of $3.0 million, mainly for severance costs associated
with a 13.0% reduction in our workforce that was implemented as part of our
efforts to reduce operating expenses in light of the worsening economic climate.

         Operating Loss. Our operating loss increased from $3.9 million for the
year ended December 31, 2000 to $6.3 million for the year ended December 31,
2001.

         Financial Income, net. Financial income increased from $4.2 million for
the year ended December 31, 2000 to $4.7 million for the year ended December 31,
2001 principally as a result of the investment for a full year of the proceeds
of our March 2000 initial public offering and private placement.

         Net Income(Loss). We reported net income of $249,000, for the year
ended December 31, 2000 as compared to a net loss of $1.6 million for the year
ended December 31, 2001.

Year Ended December 31, 2000 as Compared with Year Ended December 31, 1999

         Revenues. Revenues increased from $17.5 million for the year ended
December 31, 1999 to $45.9 million for the year ended December 31, 2000, an
increase of $28.4 million, or 162.3%. This increase was due to an $18.1 million,
or 212.9%, increase in sales of our networking products, as well as a $10.3
million, or 114.4%, increase in sales of technology products.

         Revenues from networking products increased from $8.5 million for the
year ended December 31, 1999 to $26.6 million for the year ended December 31,
2000. The increase in revenue from networking products is attributable to a
global increase in demand for these units as customers moved from integrated
services digital networks, or ISDN to IP-based networks, as well as from new OEM
agreements that generated additional product sales.

         Revenues from technology products increased from $9.0 million for the
year ended December 31, 1999 to $19.3 million for the year ended December 31,
2000. This increase in revenues from technology products was primarily
attributable to increased market demand.

         Revenue from sales to customers in the United States increased from
$9.1 million, or 51.6% of revenue, for the year ended December 31, 1999, to
$27.9 million, or 60.9% of revenue, for the year ended December 31, 2000, an
increase of $18.8 million, or 206.6%. This increase in sales to customers in the
United States was primarily attributable to the more rapid adoption of our
technology in the United States as compared to the rest of the world.

         Revenue from sales to customers in Europe increased from $4.0 million,
or 23.1% of revenue, for the year ended December 31, 1999, to $7.3 million, or
16.0% of revenue, for the

                                       37

<PAGE>


year ended December 31, 2000, an increase of $3.3 million, or 82.5%. This
increase in sales to customers in Europe was primarily attributable to increased
market demand for our products in this region.

         Revenue from sales to customers in the Asian/Pacific region increased
from $2.7 million, or 15.4% of revenue, for the year ended December 31, 1999, to
$5.3 million, or 11.5% of revenue, for the year ended December 31, 2000, an
increase of $2.6 million, or 96.3%. This increase in sales to customers in this
region was primarily attributable to increased sales efforts.

         Revenue from sales to customers in Israel increased from $1.3 million,
or 7.2% of revenue, for the year ended December 31, 1999, to $4.5 million, or
9.7% of revenue, for the year ended December 31, 2000, an increase of $3.2
million, or 246.2%. This increase in sales to customers in Israel was primarily
attributable to increased sales efforts in this region.

         Cost of Revenues. Cost of revenues increased from $2.9 million for the
year ended December 31, 1999 to $11.4 million for the year ended December 31,
2000, an increase of $8.5 million, or 293.1%. Gross profit as a percentage of
revenues decreased from 83.7% for the year ended December 31, 1999 to 75.1% for
the year ended December 31, 2000, due to the increased proportion of networking
products sales.

         Research and Development, Net. Research and development expenses, net
increased from $6.6 million for the year ended December 31, 1999 to $13.9
million for the year ended December 31, 2000, an increase of $7.3 million, or
111.7%. This increase was primarily attributable to an increase in the number of
research and development personnel whom we employed, as well as a decrease in
grants received from the Chief Scientist. We have increased our research and
development personnel to support our existing and expected new product lines and
to accommodate the growth of our business. Research and development expenses,
net as a percentage of revenues decreased from 37.4% for the year ended December
31, 1999 to 30.3% for the year ended December 31, 2000.

         Marketing and Selling, Net. Marketing and selling expenses, net
increased from $9.5 million for the year ended December 31, 1999 to $17.4
million for the year ended December 31, 2000, an increase of $7.9 million, or
83.2%. This increase was primarily attributable to a $3.7 million, or 78.7%,
increase in personnel-related expenses resulting from our increasing the number
of our sales and marketing employees. We have increased our sales and marketing
expenses in response to current and expected growth in the market for our
products. Marketing and selling expenses, net as a percentage of revenues
decreased from 54.1% for the year ended December 31, 1999 to 37.8% for the year
ended December 31, 2000.

         General and Administrative. General and administrative expenses
increased from $1.4 million for the year ended December 31, 1999 to $3.5 million
for the year ended December 31, 2000, an increase of $2.1 million or 142.5%.
This increase was primarily attributable to an increase of $1.3 million, or
175%, in personnel expenses. General and administrative expenses as a percentage
of revenues was 8.1% for the year ended December 31, 1999 and 7.5% for the year
ended December 31, 2000.

                                       38

<PAGE>




         Royalty Payments to the Chief Scientist. In 2000 we determined to repay
all future royalty payments due to the Chief Scientist. This decision has been
made as part of our strategy to discontinue the relationship with the Chief
Scientist to reduce the growing restrictions imposed by the Chief Scientist on
our business. By doing so, we will also save the increased interest rates that
are imposed by the Chief Scientist on part of the royalties due.

         Operating Income. Our operating loss increased from $2.8 million for
the year ended December 31, 1999 to $3.9 million for the year ended December 31,
2000 as a result of our $3.7 million repayment of future royalties to the Chief
Scientist.

         Financial Income. Financial income increased from $105,000 for the year
ended December 31, 1999 to $4.2 million for the year ended December 31, 2000
principally as a result of the increased interest income we derived from the
investment of the proceeds of our March 2000 initial public offering and private
placement.

         Net Income(Loss). Net income increased from a net loss of $2.7 million,
or 15.4%, for the year ended December 31 1999 to net income of $249,000, or 0.6%
as a percentage of revenues, for the year ended December 31, 2000.

Consolidated Balance Sheet Data

         Trade Receivables. Trade receivables decreased from $7.0 million at
December 31, 2000 to $5.1 million at December 31, 2001, a decrease of $1.9
million, or $27.1%. This decrease was attributable to a decrease in sales in the
last quarter of 2001 compared to the sales in the same period of 2000.

         Allowance for Doubtful Accounts. Allowance for doubtful accounts
increased from $577,000 at December 31, 2000 to $1,126,000 at December 31, 2001,
an increase of $549,000, or $95.1%. Allowance for doubtful accounts as a portion
of trade receivables increased from $7.6% as of December 31, 2000 to $18.1% as
of December 31, 2001. This increase was primarily attributable to the worldwide
economic downturn.

         Other Receivables and Prepaid Expenses. Other receivables and prepaid
expenses increased from $1.1 million at December 31, 2000 to $1.3 million at
December 31, 2001, a increase of $208,000 or 18.9%. This increase was primarily
attributable to an increase in prepaid rental expenses.

         Inventories. Inventories decreased from $5.0 million at December 31,
2000 to $1.9 million at December 31, 2001, a decrease of $3.1 million, or 62.0%.
This decrease was primarily attributable to our effort to reduce inventory
levels in light of the uncertain economic conditions.

         Trade Payables. Trade payables decreased from $3.7 million at December
31, 2000 to $765,000 at December 31, 2001, a decrease of $2.9 million, or 78.4%.
This decrease was primarily attributable to earlier payments to our trade
payables at the end of 2001.

         Other Payables and Accrued Expenses. Other payables and accrued
expenses decreased from $16.8 million at December 31, 2000 to $13.6 million at
December 31, 2001, a decrease of $3.2 million, or 19.0%. This decrease was
primarily attributable to a decrease in accrued

                                       39

<PAGE>


deferred income, which will be recognized only after all criteria for revenue
recognition according to SOP 97-2 are met.

Quarterly Results of Operations

         The following tables present consolidated statements of operations data
for each of the eight fiscal quarters ended December 31, 2001, in dollars and as
a percentage of revenues. In management's opinion, this unaudited information
has been prepared on the same basis as our audited consolidated financial
statements and includes all adjustments, consisting only of normal recurring
adjustments, necessary for fair presentation of the unaudited information for
the quarters presented. The results of operations for any quarter are not
necessarily indicative of results that we might achieve for any subsequent
periods.


<TABLE>
<CAPTION>
                               Mar. 31,       June 30,    Sept. 30,      Dec. 31,   Mar. 31,   June 30,   Sept. 30,  Dec. 31,
                                2000            2000        2000          2000       2001        2001       2001      2001
                               --------       --------    --------      ---------  ---------   --------   --------- ---------
<S>                            <C>            <C>         <C>           <C>        <C>         <C>        <C>       <C>
 Revenues...................   $7,827         $10,201     $12,708       $15,176    $14,895     $10,430    $10,208   $10,694
 Cost of revenues...........   (1,944)         (2,579)     (3,102)       (3,822)    (3,725)     (2,240)    (2,099)   (2,298)
 Gross profit...............    5,833           7,622       9,606        11,354     11,170       8,190      8,109     8.396
 Operating expenses:
    Research and development    2,529           3,332       3,749         4,653      4,757       4,563      4,319     4,294
    Less participation by
     the Chief Scientist....     (236)           (365)        247             -          -           -          -         -
    Research and
     development, net.......    2,293           2,967       3,996         4,653      4,757       4,563      4,319     4,294
    Marketing and selling,
     net....................    3,611           4,523       4,470         4,754      4,840       4,365      3,690     3,840
    General and
     administrative.........      615             670         779         1,393      1,169       1,308      1,057       904
    One time charge/repayment
     of future royalties....        -               -           -         3,666          -       3,023          -         -
 Operating income (loss)....     (636)           (538)        361        (3,112)       404      (5,069)      (957)     (642)
 Financial income, net......      115           1,279       1,291         1,490      1,404       1,264      1,118       866
      Net income (loss).....   $ (521)        $   741     $ 1,652       $(1,622)   $ 1,808     $(3,805)   $   161   $   224

 As a percentage of
 revenues:
 Revenues...................      100 %           100 %       100 %         100 %      100 %       100 %      100 %     100 %
 Cost of revenues...........      (25)            (25)        (24)          (25)       (25)        (21)       (21)      (21)
 Gross profit...............       75              75          76            75         75          79         79        79
 Operating expenses:
    Research and development       32              33          30            31         32          42         42        40
    Less participation by
      the Chief Scientist...       (3)             (4)          2             0          -           -          -         -
    Research and
      development, net......       29              29          32            31         32          42         42        40
    Marketing and selling, net     46              44          35            31         32          42         36        36
    General and administrative      8               7           6             9          8          13         10         9
    One time charge/repayment
       of future royalties..        -               -           -            24          -          29          -         -
 Operating income (loss) ...       (8)             (5)          3           (20)         3         (49)        (9)       (6)
 Financial income, net......        1              13          10            10          9          12         11         8
      Net income (loss).....       (7)%             8 %        13 %         (10)%       12 %       (37)%        2 %       2 %

</TABLE>



         We expect our operating results to fluctuate significantly in the
future as a result of various factors, many of which are outside our control.
Consequently, we believe that period-to-

                                       40

<PAGE>


period comparisons of our operating results may not necessarily be meaningful
and, as a result, you should not rely on them as an indication of future
performance.

Liquidity and Capital Resources

         From our inception until our initial public offering in March 2000, we
financed our operations through cash generated by operations and a combination
of private placements of our share capital and borrowings under lines of credit.
Through December 31, 1999, we raised a total of approximately $12.2 million in
aggregate net proceeds in four private placements. In March 2000, we sold
4,370,000 of our ordinary shares in an initial public offering and 590,822
ordinary shares in a private placement to Samsung Venture Investment
Corporation, a member of the Samsung group, and Siemens Aktiengesellschraft. We
received net proceeds of $89.2 million from the public offering and private
placement. As of December 31, 2001, we had approximately $6.7 million in cash
and cash equivalents, $52.8 million in short term investments and our working
capital was approximately $53.4 million. Taking into account long-term liquid
investments, we had $85.8 million in cash and liquid investments as of December
31, 2001.

         Capital expenditures for the years ended December 31, 1999, 2000 and
2001 were approximately $2.4 million, $4.2 million and $2.0 respectively. These
expenditures were principally for research and development equipment, motor
vehicles, office furniture and equipment and leasehold improvements. We
currently do not have significant capital spending or purchase commitment, but
we expect to continue to engage in capital spending consistent with anticipated
growth in our operations, infrastructure and personnel.

         Net cash provided by operating activities was approximately $221,000
for the year ended December 31, 2001. This amount was primarily attributable to
a decrease of $1.9 million in trade receivables, a decrease of $3.1 million in
inventories and an increase in depreciation of $2.4 million. These increases in
cash provided by operating activities were offset in part by a decrease in trade
payables of $2.9 million and a decrease in other payables and accrued expenses
of $ 3.2 million.

         The decrease in inventory for the year ended December 31, 2001 was
primarily due to our efforts to reduce inventories in light of the difficult
economic condition prevailing worldwide. The decrease in accounts receivable for
the year ended December 31, 2001 was primarily attributable to a decrease in
sales in the last quarter of 2001 compared to the sales in the same period of
2000.

         Net cash used in investing activities was approximately $25.6 million
for the year ended December 31, 2001. For the year ended December 31, 2001,
$13.2 million of cash used in investing activities were invested in short term
deposits and $10.4 million were invested in long term investments. During the
year ended December 31, 2001, $2.0 million of cash used in investing activities
was for purchases of property and equipment.

         On February 28, 2001, we announced that our Board of Directors has
authorized the repurchase of up to 10% of our outstanding ordinary shares in the
open market from time to time at prevailing market prices. We purchased
1,585,446 ordinary shares through December 31, 2001 at a cost of $9.9 million,
an average of $6.25 per share. We anticipate that the repurchase

                                       41

<PAGE>


 program will be completed in the first quarter of 2002. We may use the
repurchased shares for issuance upon exercise of employee stock options or other
corporate purposes.

         Net cash use by financing activities was $9.6 million for the year
ended December 31, 2001. For the year ended December 31, 2001, cash used in
financing activities was attributable principally to repurchase of ordinary
shares for a total cash of $9.9 million.

         As of December 31, 2001, our principal commitments consisted of
obligations outstanding under operating leases. Our capital requirements are
dependent on many factors, including market acceptance of our products and the
allocation of resources to our research and development efforts, as well as our
marketing and sales activities. In the last three years, we have experienced
substantial increases in our expenditures as a result of the growth in our
operations and personnel. We intend to increase our expenditures in the
future consistent with our anticipated growth. We anticipate that our cash
resources will be used primarily to fund our operating activities, as well
as for capital expenditures.

         As of December 31, 2001, we had $19,000 outstanding under an equipment
term loan facility and an unused $2.5 million line of credit.

Effective Corporate Tax Rate

         Israeli companies are generally subject to income tax at the corporate
tax rate of 36%. However, several investment programs at our manufacturing
facility in Tel Aviv have been granted approved enterprise status and we are,
therefore, eligible for tax benefits under the Law for the Encouragement of
Capital Investments, 1959. We have derived, and expect to continue to derive, a
substantial portion of our income from the approved enterprise programs at our
manufacturing facility.

         Subject to compliance with applicable requirements, the portion of our
income derived from the approved enterprise programs will be eligible for the
following tax benefits commencing in the first year in which it generates
taxable income:

      Year after we
     begin generating
      taxable income            Tax benefit
     ---------------------      -------------------------------------------
     1-2..................      Tax-exempt
     3-7..................      Corporate tax of up to 25%
     8-10.................      Corporate tax of up to 25% if more than 25%
                                of our shares are held by (per Israeli Tax
                                Authorities' position - invested by)
                                non-Israeli investors

         The period of tax benefits for our approved enterprise programs has not
yet commenced, because we have yet to realize taxable income. These benefits
should result in income



                                       42

<PAGE>



recognized by us being tax exempt or taxed at a lower rate for a specified
period after we begin to report taxable income and exhaust any net operating
loss carry-forwards. However, these benefits may not be applied to reduce the
tax rate for any income derived by our U.S. subsidiary.

         As of December 31, 2001, our net operating loss carry-forwards for
Israeli tax purposes amounted to approximately $22.7 million. Under Israeli law,
these net-operating losses may be carried forward indefinitely and offset
against future taxable income. We expect that, during the period in which these
tax losses are utilized, our income will be substantially tax-exempt. Therefore,
there will be no tax benefit available from these losses and no deferred income
taxes have been included in our financial statements. Deferred taxes for other
temporary differences are immaterial.

         As of December 31, 2001, the net operating loss carry-forwards
of our U.S. subsidiary for U.S. tax purposes amounted to approximately $9.5
million.  These losses are available to offset any future U.S. taxable income
of our U.S. subsidiary and will expire in the years 2010 through 2015.

Impact of Inflation and Currency Fluctuations

         The dollar cost of our operations is influenced by the extent to which
any inflation in Israel is offset, is offset on a lagging basis, or is not
offset by the devaluation of the NIS in relation to the dollar. When the rate of
inflation in Israel exceeds the rate of devaluation of the NIS against the
dollar, companies experience increases in the dollar cost of their operations in
Israel. Unless offset by a devaluation of the NIS, inflation in Israel will have
a negative effect on our profitability as we receive payment in dollars or
dollar-linked NIS for all of our sales while we incur a portion of our expenses,
principally salaries and related personnel expenses, in NIS.

         The following table presents information about the rate of inflation in
Israel, the rate of devaluation of the NIS against the U.S. dollar, and the rate
of inflation of Israel adjusted for the devaluation:

                                                              Israeli inflation
   Year ended        Israeli inflation   Israeli devaluation     adjusted for
  December 31,             rate %              rate %           devaluation %
  ------------       -----------------   -------------------  -----------------

      1996                  10.6                3.7                   6.6
      1997                   7.0                8.8                  (1.7)
      1998                   8.6               17.6                  (7.7)
      1999                   1.3               (0.1)                  1.3
      2000                   0.0               (2.7)                  2.8
      2001                   1.4                9.3                  (7.8)

         We cannot assure you that we will not be materially and adversely
affected in the future if inflation in Israel exceeds the devaluation of the NIS
against the dollar or if the timing of the devaluation lags behind inflation in
Israel.

         A devaluation of the NIS in relation to the dollar has the effect of
reducing the dollar amount of any of our expenses or liabilities which are
payable in NIS, unless these expenses or payables are linked to the dollar. This
devaluation also has the effect of decreasing the dollar

                                       43

<PAGE>


value of any asset which consists of NIS or receivables payable in NIS, unless
the receivables are linked to the dollar. Conversely, any increase in the value
of the NIS in relation to the dollar has the effect of increasing the dollar
value of any unlinked NIS assets and the dollar amounts of any unlinked NIS
liabilities and expenses.

         Because exchange rates between the NIS and the dollar fluctuate
continuously, with a historically declining trend in the value of the NIS,
exchange rate fluctuations and especially larger periodic devaluations will have
an impact on our profitability and period-to-period comparisons of our results.
The effects of foreign currency re-measurements are reported in our consolidated
financial statements in current operations.

Recent Accounting Pronouncements

         In July 2001, the Financial Accounting Standards Board issued
Statements of Financial Accounting Standards ("SFAS") No. 141, Business
Combinations and SFAS No. 142, Goodwill and Other Intangible Assets. SFAS 141
requires all business combinations initiated after September 30, 2001 to be
accounted for using the purchase method. Under SFAS 142, goodwill and intangible
assets with indefinite lives are no longer amortized but are reviewed annually
(or more frequently if impairment indicators arise) for impairment. All other
intangible assets will continue to be amortized over their estimated useful
lives. The amortization provisions of SFAS 142 apply to goodwill and intangible
assets acquired after June 30, 2001. With respect to goodwill and intangible
assets acquired prior to July 1, 2001, the Company is required to adopt SFAS 142
effective January 1, 2002. We believe that the adoption of SFAS 141 and SFAS 142
will not have an effect on our financial statements.

         In August 2001, the Financial Accounting Standards Board issued SFAS
No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets".
Although SFAS 144 supersedes SFAS 121, it retains the requirements of SFAS 121
regarding recognition of impairment loss for long-lived assets to be held and
used (based on undiscounted cash flows) and resolves certain implementation
issues. Also, the accounting model used in SFAS 121 for long-lived assets to be
disposed of by sale (lower of carrying amount or fair value less cost to sell)
is broadened by SFAS 144 to include discontinued operations and supersedes APB
Opinion No. 30. Therefore, discontinued operations will no longer be measured on
a net realizable value basis and future operating losses will no longer be
recognized before they occur. SFAS 144 also broadens the presentation of
discontinued operations to include a component of an entity (rather than a
segment of a business). The provisions of SFAS 144 are effective for financial
statements issued for fiscal years beginning after December 15, 2001, and
interim periods within those years. We believe that the adoption of SFAS 144
will not have an effect on our financial statements.

Item 7A.  Qualitative and Qualitative Disclosures About Market Risk

         We develop products in Israel and sell them in North America, Asia and
Europe. As a result our financial results could be affected by factors such as
changes in foreign currency exchange rates or weak economic conditions in
foreign markets.

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<PAGE>




         As of December 31, 2001 we had cash and cash equivalents and short-term
investments of $59.5 million. We invest our cash surplus in time deposits, cash
deposits, U.S. federal agency securities and corporate bonds with an average
credit rating of A2. These investments are not purchased for trading or other
speculative purposes. Due to the nature of these investments, we believe that we
do not have a material exposure to market risk. We currently pay interest on our
equipment term loan facility based on the London interbank offered rate. As a
result, changes in the general level of interest rates directly affect the
amount of interest payable by us under this facility. However, because our
outstanding debt under this facility has never exceeded $218,000, we do not
expect our exposure to market risk from changes in interest rates to be
material.

Item 8. Financial Statement and Supplementary Data

         See Index to Financial Statements on page F-1 for a list of the
financial statements being filed therein.

Item  9.  Changes in and Disagreements with Accountants on Accounting and
          Financial Disclosure

         There have been no changes in or disagreements with our accountants.


                                       45

<PAGE>



                                    PART III

Item 10. Directors and Executive Officers of the Registrant

         Our directors and executive officers are as follows:

Name                 Age   Position
-------------------- ---   ----------------------------------------------------
Zohar Zisapel....... 53    Chairman of the Board of Directors
Gadi Tamari......... 57    Chief Executive Officer, President and Director
Eli Doron........... 50    Chief Technical Officer and Executive Vice President
David Seligman...... 44    Chief Financial Officer
Ami Amir............ 58    Director
Dan Goldstein....... 48    Director
Liora Katzenstein... 46    Director
Andreas Mattes...... 41    Director
Efraim Wachtel...... 57    Director

         Zohar Zisapel, Gadi Tamari, Ami Amir, Efraim Wachtel, and Andreas
Mattes will serve as directors until our 2002 annual general meeting of
shareholders. Liora Katzenstein and Dan Goldstein will serve as outside
directors pursuant to the provisions of the Israeli Companies Law for three-year
terms (i.e., January 2003 for Mr. Goldstein and December 2003 for Prof.
Katzenstein). Thereafter, their terms of service may be renewed for one
additional three-year term.

         Zohar Zisapel has served as a director of RADVISION since November
1992, and as our Chairman of the Board of Directors until August 1999.  He
again assumed the position of Chairman of the Board in April 2001.  Mr. Zisapel
is a founder and a director of RAD Data Communications Ltd., or RAD, a leading
worldwide data communications company headquartered in Israel, of which he has
served as president from January 1982 until 1999, and a director of other
public companies in the RAD-BYNET group, including RADCOM, SILICOM, RIT,
Ceragon and RADWARE.  During the last five years, Mr. Zisapel has been engaged
mainly in management of high technology companies.  Mr. Zisapel has B.Sc. from
the Technion, Israel Institute of Technology and M.Sc. degrees from Tel
Aviv University

         Gadi Tamari has served as our chief executive officer since April 2001.
From November 1999 to April 2001, Mr. Tamari was the vice president,
international operations of the OpenNet Softswitch organization, of Lucent
Technologies. During the years 1996-1999 he was chief operating officer of Excel
Switching Corporation responsible for international sales, operations, marketing
and customer support. Mr. Tamari has a B.Sc. degree in mechanical engineering
and an M.Sc. degree in industrial engineering from the Technion, Israel
Institute of Technology and attended Harvard University's Advanced Management
Program.

         Eli Doron, our co-founder, has served as our executive vice president
and chief technical officer since July 1998. From October 1992 to July 1998, Mr.
Doron was our vice president of research and development. From October 1983 to
October 1992, Mr. Doron held senior

                                       46

<PAGE>


engineering positions at Simtech Advanced Training and Simulation Systems.  Mr.
Doron has a B.Sc. degree in electronics and computer science from Ben Gurion
University.

         David Seligman has served as our chief financial officer since November
1999. From July 1996 until November 1999, Mr. Seligman was the chief financial
officer and secretary of LanOptics Ltd. From October 1993 until June 1996, Mr.
Seligman was a senior financial analyst for Fidelity Investments Systems
Company. Mr. Seligman has a B.A. in political science and geography and an
M.B.A. in accounting and finance from Tel Aviv University.

         Ami Amir, our co-founder, served as our president and chief executive
officer from November 1992 until April 2001 and has served as a director since
November 1992. From March 1987 to November 1992, Mr. Amir was the president of
RAD Data Communications Inc. Before March 1987, Mr. Amir held senior engineering
positions for Simtech Advanced Training and Simulation Systems, Tadiran
Electronic Industries and Elbit Systems Ltd. Mr. Amir has a B.Sc. degree in
electronics and computer science from the Technion Israel Institute of
Technology.

         Dan Goldstein has served as an outside director of RADVISION since
January 2000.  In 1985, Mr. Goldstein founded Formula Systems (1985) Ltd. and
has been its chief executive officer and chairman of the board of directors
since that time.  Mr. Goldstein is also the chairman of the board of directors
of other companies in the Formula Systems group, including Magic Software
Enterprises Ltd., Sintec Advanced Technologies Ltd., F.C.T. Formula Computer
Technologies Ltd. and Applicom Software Industries (1990) Ltd., and is a
director of Crystal Systems Solutions Ltd. Mr. Goldstein has a B.Sc. degree in
mathematics and computer science and an M.B.A. in business administration from
Tel Aviv University.

         Liora Katzenstein has served as an outside director of RADVISION since
December 2000. Prof. Liora Katzenstein specializes in Business Administration
and Entrepreneurship. During the last five years she founded, and serves as the
President and CEO of, ISEMI - Israel School of Entrepreneurial Management and
Innovation.  Prof. Katzenstein has also served as a Senior Lecturer in various
academic institutions in Israel and abroad including the Harvard Business
School, Nanyang University and the Technion, Israel Institute of Technology.
Prof. Katzenstein currently serves as a director of Clal Industries &
Investments Ltd., Discount Issuers Ltd., Amanat Ltd., Palafric Investments Ltd.
and Tachlit - Discount Bank, and holds various other academic and business
related positions, including as a member of the Israeli Governmental Committee
on Start-Up Companies. Over the last fifteen years Prof. Katzenstein served as
a faculty member and on the management of universities and management institutes
both in Israel and abroad and published numerous business articles in the
Israeli professional press.

         Andreas Mattes has served as a director of RADVISION since March, 2000.
Since April 1999, Mr. Mattes has been the president of enterprise networks of
Siemens ICN. From October 1998 until April 1999, Mr. Mattes was the president of
central sales of Siemens ICN. From June 1997 until October 1998, Mr. Mattes was
the president of international sales of Siemens PN. From January 1996 until June
1997, Mr. Mattes was the vice president of product management of Siemens PN.
From October 1985 until January 1996, Mr. Mattes held various sales, marketing
and business administration positions at Siemens.

                                       47

<PAGE>




         Efraim Wachtel has served as a director of RADVISION since March 1998.
Mr. Wachtel has been president and chief executive officer of Data
Communications Ltd., or RAD since November 1997. From October 1985 to November
1997, Mr. Wachtel was vice president of sales and marketing of RAD. Before
October 1985, Mr. Wachtel held various research and development positions in
several companies in Israel and in the U.S. Mr. Wachtel has a B.Sc. degree in
electrical engineering from the Technion, Israel Institute of Technology.

         Other key managers are as follows:

Name                      Age   Position
------------------------  ---   ------------------------------------------------

Boaz Raviv..............   42   General Manager of the Technology Group
Avinoam Barak...........   40   General Manager of the Networking Group
Ofer Shapiro............   33   Senior Vice President, Business Development
Yotam Raz...............   37   Executive Vice President, General Manager of the
                                Networking Group in North America

         Boaz Raviv has served as general manager of the technology group since
December 2000. From December 1999 to December 2000, Mr. Raviv was the vice
president of business development and marketing at Elron TeleSoft. From January
1996 to November 1999, he was telecom division manager at Elron Software. From
July 1989 to December 1995, Mr. Raviv held various key positions at CAP GEMINI,
France. Raviv served his apprenticeship at Robotic in CEMAGREF and he holds a
bachelor's degree from the Technion, Israel Institute of Technology in Haifa.

         Avinoam Barak has served as the general manager of our networking
business unit since June 2000.  Prior to joining RADVISION and since 1989, Mr.
Barak held various positions at MLM, a division of Israel Aircraft Industries.
In his last position, he was a business manager for a communications-system
unit. Mr. Barak holds a B.Sc. in Computer Engineering from the Technion Israel
Institute of Technology and an M.B.A. in Information Systems and Finance from
Bar Ilan University.

         Ofer Shapiro has served as our Senior Vice President of Business
Development since September 2000. While at RADVISION, Mr. Shapiro has held a
variety of key positions including Vice President of Strategic Accounts and
leading the development of RADVISION's first gatekeeper and multipoint
conferencing unit products. Prior to joining us, Mr. Shapiro managed
electro-optics related projects in the Israeli Defense Force for five years. He
holds a B.Sc. degree in math and physics from the Hebrew University in Jerusalem
and an M.Sc. in applied physics from Tel Aviv University.

         Yotam Raz has served as  our Executive Vice President since October of
2001. Prior to joining RADVISION Mr. Raz was vice president of new business at
Comverse and chief executive officer and chairman of Gaya Software Industries
before it was sold to Comverse in August 2000. Mr. Raz also co-founded Foresight
Ltd., a high-tech financial consulting firm. He holds an MBA and a bachelor's
degree from Tel-Aviv University.

                                       48

<PAGE>




Election of Directors

         Pursuant to our articles of association, all of our directors, other
than our outside directors, are elected at our annual general meeting of
shareholders by a vote of the holders of a majority of the voting power
represented and voting at such meeting. Outside directors are elected for a
three-year term. All the members of our Board of Directors, except the outside
directors, may be reelected upon completion of their term of office. In the
intervals between annual general meetings of the company, our Board of Directors
may elect new directors, whether to fill vacancies or in addition to those of
their body, but only if the total numbers of directors shall not at any time
exceed any maximum number, if any, fixed by or in accordance with our articles
of association. Five of our directors currently in office were elected by our
shareholders at our 2001 annual general meeting of shareholders.

Independent and Outside Directors

         The Israeli Companies Law requires Israeli companies with shares that
have been offered to the public in or outside of Israel to appoint at least two
outside directors. No person may be appointed as an outside director if the
person or the person's relative, partner, employer or any entity under the
person's control has or had, on or within the two years preceding the date of
the person's appointment to serve as outside director, any affiliation with the
company or any entity controlling, controlled by or under common control with
the company. The term affiliation includes:

          o    an employment relationship;

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

          o    control; and

          o    service as an officer holder.

         No person may serve as an outside director if the person's position or
other activities create, or may create, a conflict of interest with the person's
responsibilities as an outside director or may otherwise interfere with the
person's ability to serve as an outside director. If, at the time outside
directors are to be appointed, all current members of the Board of Directors are
of the same gender, then at least one outside director must be of the other
gender.

         Outside directors are elected by shareholders. The shareholders voting
in favor of their election must include at least one-third of the shares of the
non-controlling shareholders of the company who are present at the meeting. This
minority approval requirement need not be met if the total shareholdings of
those non-controlling shareholders who vote against their election represent 1%
or less of all of the voting rights in the company. Outside directors serve for
a three-year term, which may be renewed for only one additional three-year term.
Outside directors can be removed from office only by the same special percentage
of shareholders as can elect them, or by a court, and then only if the outside
directors cease to meet the statutory qualifications with respect to their
appointment or if they violate their duty of loyalty to the company.

                                       49

<PAGE>




         Any committee of the board of directors must include at least one
outside director and the audit committee must include all of the outside
directors. An outside director is entitled to compensation as provided in
regulations adopted under the Companies Law and is otherwise prohibited from
receiving any other compensation, directly or indirectly, in connection with
such service.

         In addition, the Nasdaq Stock Market requires us to have at least three
independent directors on our Board of Directors and to establish an audit
committee, at least a majority of whose members are independent of management.
Our current audit committee complies with the Nasdaq rules.

Audit Committee

         Our audit committee currently is composed of Dan Goldstein, Liora
Katzenstein and Efraim Wachtel. It is currently contemplated that the audit
committee will meet at least two times each year. The responsibilities of the
audit committee include: (i) examining the manner in which management ensures
and monitors the adequacy of the nature, extent and effectiveness of accounting
and internal control systems; (ii) reviewing prior to publication the statutory
accounts and other published financial statements and information; (iii)
monitoring relationships with our independent auditors, ensuring that there are
no restrictions on the scope of the statutory audit, making recommendations on
the auditors appointment and dismissal, and reviewing the activities, findings,
conclusions and recommendations of the independent auditors; (iv) reviewing
arrangements established by management for compliance with regulatory and
financial reporting requirements; (v) reviewing the scope and nature of the work
of the internal auditing unit.; and (vi) approval of related party transactions
under the Companies Law.

         The Audit Committee is authorized generally to investigate any matter
within the scope of its responsibilities and has the power to obtain from the
internal auditing unit, our independent auditors or any other officer or
employee any information that is relevant to such investigations.

Other Committees

         In addition to our audit committee, our board of directors has
established an option and compensation committee and an executive committee.

         Our option and compensation committee, whose members are Zohar Zisapel,
Efraim Wachtel and Gadi Tamari, administers our consultants option plan and sets
the annual compensation for Gadi Tamari, our chief executive officer. Our
executive committee, whose members are Zohar Zisapel, Dan Goldstein, Gadi Tamari
and Ami Amir, is responsible for managing our daily operations and acting on
behalf of our board of directors in exigent circumstances.

Internal Audit

         The Israeli Companies Law also requires the board of directors of a
public company to appoint an internal auditor nominated by the audit committee.
A person who does not satisfy the Companies Law's independence requirements may
not be appointed as an internal auditor. The role of the internal auditor is to
examine, among other things, the compliance of the company's

                                       50

<PAGE>


conduct with applicable law and orderly business practice. Our internal auditor
complies with the requirements of the Companies Law. Our Internal Auditor is
currently Mr. Gideon Duvshani, C.P.A. of Schwartz, Lerner, Duvshani & Co.

Approval of Related Party Transactions Under Israeli Law

         The Companies Law codifies the fiduciary duties that "office holders",
including directors and executive officers, owe to a company. An "office holder"
is defined in the Companies Law as a director, general manager, chief business
manager, deputy general manager, vice general manager, other manager directly
subordinate to the managing director or any other person assuming the
responsibilities of any of the foregoing positions without regard to such
person's title. An office holder's fiduciary duties consist of a duty of care
and a duty of loyalty. The duty of care requires an office holder to act at a
level of care that a reasonable office holder in the same position would employ
under the same circumstances. This includes the duty to utilize reasonable means
to obtain (i) information regarding the appropriateness of a given action
brought for his approval or performed by him by virtue of his position and (ii)
all other information of importance pertaining to the foregoing actions. The
duty of loyalty includes avoiding any conflict of interest between the office
holder's position in the company and his personal affairs, avoiding any
competition with the company, avoiding exploiting any business opportunity of
the company in order to receive personal gain for the office holder or others,
and disclosing to the company any information or documents relating to the
company's affairs which the office holder has received due to his position as an
office holder. Each person identified as a director or executive officer in the
first table in the section is an office holder. Under the Companies Law, all
arrangements as to compensation of office holders who are not directors require
approval of our Board of Directors, and the compensation of office holders who
are directors must be approved by our Audit Committee, Board of Directors and
shareholders.

         The Companies Law requires that an office holder promptly disclose any
personal interest that he or she may have and all related material information
known to him or her, in connection with any existing or proposed transaction by
us. In addition, if the transaction is an extraordinary transaction, that is, a
transaction other than in the ordinary course of business, other than on market
terms, or likely to have a material impact on the company's profitability,
assets or liabilities, 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 the foregoing, or by
any corporation in which the office holder or a relative is a 5% or greater
shareholder, director or general manager or in which he or she has the right to
appoint at least one director or the general manager. Some transactions, actions
and arrangements involving an office holder (or a third party in which an office
holder has an interest) must be approved by the board of directors or as
otherwise provided for in a company's articles of association, as not being
adverse to the company's interest. In some cases, such a transaction must be
approved by the audit committee and by the board of directors itself (with
further shareholder approval required in the case of extraordinary
transactions). An office holder 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 during the board of directors or audit committee discussions and
may not vote on this matter, unless the majority of the members of the board or
the audit committee have a personal interest, as the case may be.

                                       51

<PAGE>




         The Companies Law also provides that some transactions between a public
company and a controlling shareholder, or transactions in which a controlling
shareholder of the company has a personal interest but which are between a
public company and another entity, require the approval of the board of
directors and of the shareholders. Moreover, an extraordinary transaction with a
controlling shareholder or the terms of compensation of a controlling
shareholder must be approved by the audit committee, the board of directors and
shareholders. The shareholder approval for an extraordinary transaction must
include at least one-third of the shareholders who have no personal interest in
the transaction and are present at the meeting. The transaction can be approved
by shareholders without this one-third approval, if the total shareholdings of
those shareholders who have no personal interest and voted against the
transaction do not represent more than one percent of the voting rights in the
company. In addition, a private placement of securities that will increase the
relative holdings of a shareholder that holds 5% or more of the company's
outstanding share capital or that will cause any person to become, as a result
of the issuance, a holder of more than five percent of the company's outstanding
share capital, requires approval by the board of directors and the shareholders
of the company. The Companies Law 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% shareholder of the company. This
rule does not apply if there is already another 25% shareholder of the company.
Similarly, the Companies Law 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 45% shareholder of the company, unless
there is a 50% shareholder of the company. Regulations under the Companies Law
provide that the Companies Law's tender offer rules do not apply to a company
whose shares are publicly traded outside of Israel, if pursuant to the
applicable foreign securities laws and stock exchange rules there is a
restriction on the acquisition of any level of control of the company, or if the
acquisition of any level of control of the company requires the purchaser to
make a tender offer to the public shareholders.

Indemnification of Directors and Officers

         The Companies Law provides that an Israeli company cannot exculpate an
office holder from liability with respect to a breach of his duty of loyalty,
but may exculpate in advance an office holder from his liability to the company,
in whole or in part, with respect to a breach of his duty of care. Our Articles
of Association provide that, subject to any restrictions imposed by the
Companies Law, we may enter into a contract for the insurance of the liability
of any of our office holders with respect to:

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

          o    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 in respect of
an act performed by him in his capacity as an office holder. In addition, we may
indemnify an office holder against:

                                       52

<PAGE>




          o    a financial  liability  imposed on him in favor of another person
               by any judgment,  including a settlement or an arbitrator's award
               approved  by a  court  in  respect  of an  act  performed  in his
               capacity as an office holder; and

          o    reasonable   litigation  expenses,   including  attorneys'  fees,
               expended by such office  holder or charged to him by a court,  in
               proceedings we institute  against him or instituted on our behalf
               or by another  person,  or in a criminal charge from which he was
               acquitted,  all in respect of an act performed in his capacity as
               an office holder.

         These provisions are specifically limited in their scope by the Israeli
Companies Law, which provides that a company may not indemnify an office holder,
nor enter into an insurance contract that would provide coverage for any
monetary liability incurred as a result of any of the following:

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

          o    a breach by the office  holder of his duty of care if such breach
               was done  intentionally  or in disregard of the  circumstances of
               the breach or its consequences;

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

          o    any fine  levied  against  the  office  holder  as a result  of a
               criminal offense.

         Under the Companies Law, our shareholders may amend our Articles of
Association to include either of the following provisions:

          o    Prospectively  undertake  to  indemnify  an office  holder of the
               company,  provided  that the  undertaking  is limited to types of
               events which our board of directors  deems to be anticipated  and
               limited to an amount  determined  by the board of directors to be
               reasonable under the circumstances.

          o    Retroactively indemnify an office holder of the company.

         In addition, pursuant to the Companies Law, indemnification of, and
procurement of insurance coverage for, our office holders must be approved by
our Audit Committee and our Board of Directors and, in specified circumstances,
by our shareholders.

         We have agreed to indemnify our office holders to the fullest extent
permitted under the Companies Law. We have obtained directors and officers
liability insurance for the benefit of our office holders.

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<PAGE>




Item 11. Executive Compensation

         The following table sets forth information concerning the total
compensation paid to our executive officers whose total salary in fiscal 2001
totaled $100,000 or more:

                                    Salaries, fees,     Pension, retirement and
                                    commissions and     other similar benefits
Name and Principal Position             bonuses
-----------------------------       ---------------     -----------------------
All 9 officers and directors
  as a group                            461,646                   51,204


         The aggregate value of all other perquisites and other personal
benefits furnished to each of these executive officers was less than 10% of each
officer's salary for such year.

1996 Stock Option Plan

         In April 1996, we adopted our key employee share incentive plan.
Employees of RADVISION and its subsidiaries of or affiliates of RADVISION
belonging to the RAD-BYNET group are eligible to participate in the plan.
Options granted under this plan are for a term of sixty-two months from the date
of the grant of the option. The following table presents option grant
information for this plan as of January 31, 2002:



 Ordinary shares reserved                Options               Weighted average
     for option grants                   granted                exercise price
 ------------------------               ---------              ----------------
         3,163,523                      3,100,223                   $2.86


         The 3,163,523 ordinary shares indicated in the table as having been
reserved for option grants reflect the total number of ordinary shares reserved
for grants under this plan and our consultants option plan in the aggregate. We
intend to grant further options under this plan to our executive officers and
employees.

Plan Administration

         The share incentive committee of our board of directors administers the
plan subject to Board Ratification. Under the plan, the committee has the
authority to recommend to the Board:

          o    the persons to whom options are granted;

          o    the number of shares underlying each option award;

          o    the time or times at which the award shall be made;

          o    the exercise price,  vesting  schedule and conditions under which
               the options may be exercised; and

                                       54

<PAGE>



          o    any other matter necessary or desirable for the administration of
               the plan.

Option Trust

         Under the plan, all options, or shares issued upon exercise of options,
are held in trust and registered in the name of a trustee selected by the share
incentive committee. The trustee may not release the options or ordinary shares
to the beneficiaries of these options or shares before the second anniversary of
the registration of the options in the name of the trustee.

         During this period, voting rights attached to the ordinary shares
issued upon exercise of the options may be exercised by the trustee.

Termination and Amendment

         Our board of directors may terminate or amend the plan, provided that
any action by our board of directors which will alter or impair the rights of an
option holder requires the prior consent of that option holder.

Consultants Option Plan

         In March 1999, we adopted our consultants option plan. Our employees
and directors and consultants employed by us are eligible to participate in the
plan. Options granted under the plan are for a term of sixty-two months from the
date of grant of the option. The following table presents option grant
information for this plan as of January 31, 2002:

          Ordinary shares                                      Weighted average
     reserved for option grants      Options granted            exercise price
     --------------------------      ---------------           ----------------
             3,163,523                   63,300                      $1.18

         The ordinary shares indicated in the table as having been reserved for
option grants reflect the total number of ordinary shares reserved for grants
under this plan and our key employee share incentive plan in the aggregate.

Plan Administration

         The option committee of our board of directors administers the plan,
subject to Board ratification. Under the plan, the committee has the authority
to recommend to the Board:

          o    the persons to whom options are granted;

          o    the number of shares underlying each option award;

          o    the time or times at which the award shall be made;

          o    the exercise price,  vesting  schedule and conditions under which
               the options may be exercised; and

                                       55

<PAGE>




          o    any other matter necessary or desirable for the administration of
               the plan.

Option Trust

         Under the plan, all options, or shares issued upon exercise of options,
are held in trust and registered in the name of a trustee selected by the option
committee. The plan provides that the trustee will empower Yehuda and Zohar
Zisapel to exercise the voting rights attached to the ordinary shares issued
upon exercise of the options.

Termination and Amendment

         Our board of directors may terminate or amend the plan, provided that
any action by our board of directors which will alter or impair the rights of an
option holder requires the prior consent of that option holder.

2000 Stock Option Plan

         Our 2000 Employee Stock Option Plan, or the 2000 Plan, currently
authorizes the grant of options to purchase up to 3,009,052 ordinary shares.
Employees and consultants of our company and its subsidiaries are eligible to
participate in the 2000 Plan. The 2000 Plan also provides for the grant of
options equal in the amount of up to 4% of our share capital, on a fully diluted
basis, in each subsequent year following the year 2000 for issuance under the
2000 Stock Option Plan. An additional 894,945 ordinary shares were authorized
for grant in 2001 based on 4% of our share capital at December 31, 2000 and an
additional 887,630 ordinary shares were authorized for grant in 2002 based on 4%
of our share capital at December 31, 2001. Options, which are canceled or not
exercised within the option period will become available for future grants.
Awards under the 2000 Plan may be granted in the form of incentive stock options
as provided in Section 422 of the U.S. Internal Revenue Code of 1986, as
amended, non-qualified stock options, options granted pursuant to Section 102 of
the Israeli Tax Ordinance and options granted pursuant to Section 3.(9) of the
Israeli Tax Ordinance.

Plan Administration

         The option and compensation committee appointed by the Board of
Directors administers the 2000 Plan, subject to Board ratification. Subject to
the provisions of the 2000 Plan and applicable law, the option and compensation
committee has the authority to recommend to the Board:

          o    the persons to whom such awards are granted;

          o    the form,  terms  and  conditions  of the  written  stock  option
               agreement evidencing the option, including the type of option and
               the number of shares to which it pertains,  the option price, the
               option period and its vesting schedule, and exercisability of the
               option in special  cases (such as death,  retirement,  disability
               and change of control); and

          o    the form and  provisions of the notice of exercise and payment of
               the option.

                                       56

<PAGE>




         Subject to the provisions of the 2000 Plan and applicable law, the
         Board has the authority to:

          o    nominate a trustee for options  issued  under  Section 102 of the
               Israeli Tax Ordinance;

          o    adjust  any  or all  of  the  number  and  type  of  shares  that
               thereafter  may be made the  subject of  options,  the number and
               type of shares subject to outstanding  options,  and the grant or
               exercise  price  with  respect  to  any  option,  or,  if  deemed
               appropriate,  make  provision for a cash payment to the holder of
               any   outstanding   option  in  order  to  prevent   dilution  or
               enlargement of the benefits or potential  benefits intended to be
               made  available  under the 2000 Plan in the event of any dividend
               or other  distribution,  recapitalization,  stock split,  reverse
               stock split,  reorganization,  merger,  consolidation,  split-up,
               spin-off, combination, repurchase, or exchange of shares or other
               securities;

          o    interpret the provisions of the 2000 Plan; and

          o    prescribe,  amend, and rescind rules and regulations  relating to
               the 2000 Plan or any award thereunder as it may deem necessary or
               advisable.

         Neither the Board of Directors nor the option and compensation
committee may, without the consent of the optionee, alter or in any way impair
the rights of such optionee under any award previously granted. Neither the
termination of the 2000 Plan nor the change of control of our company, except to
the extent provided in the 2000 Plan, will affect any option previously granted.

         The option price per share may not be less than 100% of the fair market
value of such share on the date of the award; provided, however, that in the
case of an award of an incentive stock option made to a 10% owner, the option
price per share may not be less than 110% of the fair market value (as such term
is defined in the 2000 Plan) of such share on the date of the award.

         An option may not be exercisable after the expiration of ten (10) years
from the date of its award. No option may be exercised after the expiration of
its term. In the case of an award of incentive stock options made to a 10%
owner, such options may not be exercisable after the expiration of five (5)
years from its date of award.

         Options are not assignable or transferable by the optionee, other than
by will or the laws of descent and distribution, and may be exercised during the
lifetime of the optionee only by the optionee or his or her guardian or legal
representative; provided, however, that during the optionee's lifetime, the
optionee may, with the consent of the option and compensation committee transfer
without consideration all or any portion of his options to members of the
optionee's immediate family (as defined in the 2000 Plan), a trust established
for the exclusive benefit of members of the optionee's immediate family, or a
limited liability company in which all members are members of the optionee's
immediate family.

                                       57

<PAGE>




         The following table presents option grant information for this plan as
of January 31, 2002:

          Ordinary shares                                      Range of exercise
     reserved for option grants      Options granted                prices
     --------------------------      ---------------           -----------------
             3,009,052                  2,066,193               $4.70 - $28.00

Exercise of options during 2001

         During the year ended December 31, 2001, we issued 744,706 ordinary
shares, par value NIS 0.1 per share each, at an average exercise price of $1.31
per share to employees and consultants as a result of the exercise of stock
options.

Item 12. Security Ownership of Certain Beneficial Owners and Management

         The following table sets forth certain information, as of the date of
this annual report, regarding the beneficial ownership by all shareholders known
to us to own beneficially more than 5% of our ordinary shares. The voting rights
of our major shareholders do not differ from the voting rights of other holders
of our ordinary shares. However, concurrent with our initial public offering in
March 2000, certain of our shareholders entered into a voting agreement. As a
result, such shareholders may be able to exercise control with respect to the
election of directors.

                                         Number of ordinary        Percentage of
                                         shares beneficially        outstanding
                                              owned (1)              ordinary
Name                                                                shares (2)
----------------------------------------- ------------------       -------------
Yehuda Zisapel (3).......................     1,964,561              10.87%
Zohar Zisapel (4)........................     2,028,041              11.22%
Siemens Venture Capital GmbH (5).........     1,625,228               8.99%
Samsung entities (6).....................     1,000,000               5.53%
Morgan Stanley Dean Witter & Co. (7).....     1,695,826               9.38%
Morgan Stanley Dean Witter Investment
   Management Inc. (7)...................     1,695,826               9.38%
The Baupost Group, L.L.C. (8)............     1,360,475               7.53%

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

(1)      Beneficial ownership is determined in accordance with the rules of the
         Securities and Exchange Commission and generally includes voting or
         investment power with respect to securities. Ordinary shares relating
         to options currently exercisable or exercisable within 60 days of the
         date of this annual report are deemed outstanding for computing the
         percentage of the person holding such securities but are not deemed
         outstanding for computing the percentage of any other person. Except as
         indicated by footnote, and subject to community property laws where
         applicable, the persons named in the table above have

                                       58

<PAGE>


         sole voting and investment power with respect to all shares shown as
         beneficially owned by them.

(2)      The percentages shown are based on 18,071,559 ordinary shares issued
         and outstanding as of March 11, 2002.

(3)      Includes 477,213 ordinary shares owned of record by Rad Data
         Communications Ltd.

(4)      Includes 477,213 ordinary shares owned of record by Rad Data
         Communications Ltd., 310,856 ordinary shares owned of record by Michael
         and Klil Holdings (93) Ltd., and 306,456 ordinary shares owned of
         record by Lomsha Ltd.

(5)      The address of Siemens Venture Capital GmbH is Baierbrunner Str. 23,
         81379, Munich, Germany.

(6)      The address of Samsung Electro-Mechanics Co. Ltd. is 314 Maetan 3-Dong,
         Paldal-Gu, Suwon, Kyunggi-D, Korea 442-743.  The address of Samsung
         Venture Investment Corporation is Samsung Yeok Sam Bldg. 647-9, Yeok
         Sam-Dong, Kang Nam-Gu, Korea 135-080.

(7)      Based solely upon, and qualified in its entirety with reference to, a
         Schedule 13G filed with the Securities and Exchange Commission on
         February 8, 2002.

(8)      Based solely upon, and qualified in its entirety with reference to, a
         Schedule 13G filed with the Securities and Exchange Commission on
         February 14, 2002.


Directors and Executive Officers

         The following table and the footnotes thereto contain information
concerning the beneficial ownership of our ordinary shares by each director and
executive officer of our company and by all of our directors and executive
officers of the as a group including currently exercisable stock options.

                                   Number of ordinary  Percentage of outstanding
Name                               shares              ordinary shares (1)
------------------------------     ------------------  -------------------------
All directors and executive
officers as a group (9 persons)..  2,252,294               12.46%

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

(1)      Beneficial ownership is determined in accordance with the rules of the
         Securities and Exchange Commission and generally includes voting or
         investment power with respect to securities. Ordinary shares relating
         to options currently exercisable or exercisable within 60 days of the
         date of this annual report are deemed outstanding for computing the
         percentage of the person holding such securities but are not deemed
         outstanding for computing the percentage of any other person. Except as
         indicated by footnote, and subject to community property laws where
         applicable, the persons named in the table

                                       59

<PAGE>


         above have sole voting and investment power with respect to all shares
         shown as beneficially owned by them.

(2)      The  percentage of ordinary  shares for each person and the group
         shown in this table is based on the 18,071,559 ordinary shares
         outstanding on March 11, 2002.  Each  shareholding is less than
         1% except as indicated.

Certain Relationships and Related Transactions

The RAD-BYNET Group

         Zohar Zisapel our chairman and Yehuda Zisapel, our former director and
chairman, are principal shareholders of our company. Individually or together,
they are also directors and principal shareholders of several other companies
which, together with us and the other subsidiaries and affiliates, are known as
the RAD-BYNET group. These corporations include:

<TABLE>
<S>                                    <C>                            <C>
AB-NET Ltd.                            Axerra Networks Inc.           RADView Software Ltd.
BYNET Data Communications Ltd.         RADCOM Ltd.                    RADWARE Ltd.
BYNET Electronics Ltd.                 RAD Data Communications        RADWIN Ltd.
BYNET SEMECH Ltd.                      RADLAN Computer                RIT Technologies Ltd.
BYNET Systems Applications Ltd.          Communications Ltd.          RND Operation Services Ltd.
BYNET Personal Computers Ltd.                                         Sanrad Inc.
Ceragon Networks Ltd.                                                 SILICOM Ltd.
Modules INC.                                                          WISAIR Inc.
                                                                      RADREAL Ltd.
</TABLE>

         In addition to engaging in other businesses, members of the RAD-BYNET
group are actively engaged in designing, manufacturing, marketing and supporting
data communications products, none of which currently compete with our products.
Some of the products of members of the RAD-BYNET group are complementary to, and
may be used in connection with, our products.

         Members of the RAD-BYNET group provide us with human resource and
administrative services, and we reimburse each company for its costs in
providing these services. The aggregate amount of these reimbursements was
approximately $196,000,  $272,000 and $107,000 in 1999, 2000 and 2001,
respectively.

Agreement with  Axerra Ltd. (formally named IP RAD Ltd)

         In September 2000, we entered into an agreement to license our MGCP MG
software to Axerra Ltd., an affiliated company controlled by Yehuda and Zohar
Zisapel and a member of the RAD-BYNET group. The agreement, which was based on
our standard form, provides for an aggregate fee of $80,000. This fee includes
maintenance and support services for one year. In addition, the agreement
provides that Axerra has an option to extend the maintenance and support
services for additional annual periods.

                                       60

<PAGE>




Lease Arrangements

         We lease from RAD Data Communications, an affiliated company controlled
by Yehuda Zisapel and Zohar Zisapel and a member of the RAD-BYNET group,
approximately 11,000 square feet of office space for our facility in New Jersey,
for a monthly rent of approximately $8,800. The lease terminates in May 2002.
The monthly rent payments include a 15% intra-group discount.

Supply Arrangement

         We purchase from RAD Data Communications components which we integrate
into our multimedia RADVISION products. The aggregate purchase price of these
components was approximately $798,000 for the year ended December 31, 2000, and
$ 114,000 for the year ended December 31, 2001.

         We generally ascertain the market prices for goods and services that
can be obtained at arms' length from unaffiliated third parties before entering
into any transaction with a member of the RAD-BYNET group for those goods and
services. In addition, all of our transactions to date with members of the
RAD-BYNET group were approved unanimously by our shareholders. As a result, we
believe that the terms of the transactions in which we have engaged and are
currently engaged with other members of the RAD-BYNET group are beneficial to us
and no less favorable to us than terms which might be available to us from
unaffiliated third parties. Any future transactions and arrangements with
entities, including other members of the RAD-BYNET group, in which our office
holders have a personal interest will require approval by our audit committee,
our board of directors and, if applicable, our shareholders.

Registration Rights

         In a private placement of our ordinary shares in April 1995, several of
our shareholders were granted registration rights for their ordinary shares. We
granted registration rights to Yehuda Zisapel, Zohar Zisapel, RAD Data
Communications Ltd. and the employees' trust, as a group.

         This shareholder group as well as other groups who purchased our
ordinary shares in the private placement, have the right to make a single demand
for the registration of their ordinary shares outstanding at the time of our
public offering in March 2000 provided that:

          o    the shareholder  group owns at least 2% of our outstanding  share
               capital; and

          o    the demand covers shares  representing a market value of at least
               $3 million and does not include  shares which may be sold without
               restriction within three months from the date of the demand.

         The shareholders' rights will be exercisable at any time commencing on
March 13, 2001 and for a period of three years thereafter. In addition, each of
the investors in the April 1995 private placement has the right to have its
ordinary shares included in some of our registration

                                       61

<PAGE>


statements, provided that the shareholder owns at least 2% of our outstanding
share capital at the time it exercises this right.

         In the private placement of our ordinary shares in September 1996,
Intel Corporation was granted registration rights for their ordinary shares. The
agreement provides for registration rights on the same terms and conditions as
contained in the private placement agreements of April 1995.

         In the private placement of our preferred shares in May 1998, several
of our shareholders were granted registration rights for the ordinary shares
outstanding or to be issued upon conversion of their preferred shares, which
represent 2,957,165 ordinary shares in the aggregate.

         The agreement provides that the purchasers of the preferred shares in
May 1998, as a group, will have the right to make a demand on two occasions for
the registration of their ordinary shares outstanding at the time of this
offering, provided that:

          o    the demand covers shares  representing a market value of at least
               $3 million; and

          o    the demand  does not  include  shares  which may be sold  without
               restriction within three months from the date of the demand.

         The shareholders' rights will be exercisable at any time commencing on
the first anniversary of the consummation of our public offering in March 2000
and for a period of three years thereafter or, in specified cases, for a period
of five years. In addition, each of the investors in the May 1998 private
placement has the right to have its ordinary shares included in some of our
registration statements. The agreement also provides that if subsequent
investors in RADVISION are granted more favorable terms concerning demand or
other registration rights, each of the investors will be granted identical
rights, for so long as they own at least 5% of our outstanding shares at that
time.

Voting Agreement

         Upon the completion of the private placement which took place
contemporaneously with our March 2000 initial public offering, Siemens and some
of our existing shareholders, including our current chairman of the board, our
former chief executive officer, the Evergreen Group, Clal Venture Capital Fund
LP and Yehuda Zisapel, entered into a voting agreement. The voting agreement
provided that, in the election of our directors, the shareholders party to the
agreement will nominate and vote for a nominee of Siemens to serve as a director
and as many other nominees as the other shareholders party to the agreement
shall unanimously propose to serve as directors. However, the number of
directors that the other shareholders propose to serve as directors shall at a
minimum be equal to the number of directors which these shareholders have
appointed to the board prior to March 2000. If all directors, except for one
director, decide that the continuation of a director on our board may damage our
business prospects, then the director shall be removed from our board.

         The voting agreement expires in March 2003, except that it will be
automatically extended for two additional one-year periods, unless any of the
parties to the agreement notifies

                                       62

<PAGE>


each of the other parties 60 days before the expiration date of the then current
term that such party wishes to terminate the agreement. 4,872,337 ordinary
shares, representing approximately 26.91% of the outstanding shares, are
currently subject to the voting agreement.

                                       63

<PAGE>


                                     PART IV

Item 13. Exhibits, Financial Statement Schedules, and Reports on Form 8-K

(a)(1) See Index to Financial Statements on Page F-1 for a list of the financial
statements being filed herein.


(a)(2) Index to Financial Statement Schedules


Schedule II--Valuation and qualifying accounts (years ended December 31, 2000,
1999 and 1998).

(a)(3) See Exhibits below for all Exhibits being filed or incorporated by
reference herein.

    Exhibit    Description
    -------    -----------

     *3.1      Memorandum of Association of the Registrant

     *3.2      Articles of Association of the Registrant

     *4.1      Form of Ordinary Share Certificate

     *4.2      Agreement,  dated as of April 14, 1995, by and among  Registrant,
               RAD Data Communications Ltd. and Yehuda Zisapel and Zohar Zisapel

     *4.3      Agreement,  dated as of April 18, 1995, by and among  Registrant,
               Clal Venture Capital Fund LP and Yehuda Zisapel and Zohar Zisapel

     *4.4      Agreement,  dated as of April 18, 1995, by and among  Registrant,
               Lannet  Data  Communications  Ltd.  and Yehuda  Zisapel and Zohar
               Zisapel

     *4.5      Agreement,  dated as of April 19, 1995, by and among  Registrant,
               ECI Telecom Ltd. and Yehuda Zisapel and Zohar Zisapel

     *4.6      Agreement,  dated as of April 24, 1995, by and among  Registrant,
               Zohar  Gilon,  Avraham  Neuman,  Yair  Tauman and W.S.P.  Capital
               Investment Ltd., and Yehuda Zisapel and Zohar Zisapel

     *4.7      Agreement,  dated as of April 26, 1995, by and among  Registrant,
               Lerosh Investments Ltd., Gevahim  Investments House Limited Ltd.,
               Yoav Chelouche,  Permal  Emerging Growth V Ltd.,  Maritime--Julex
               Investment Ltd., Shraga Blazer and Eli Luz and Yehuda Zisapel and
               Zohar Zisapel

     *4.8      Agreement,  dated as of April 27, 1995, by and among  Registrant,
               Finovelec,  Factory Systemes,  Houston Venture Partners, Ltd. and
               Yehuda Zisapel and Zohar Zisapel

                                       64

<PAGE>




     *4.9      Agreement,  dated September 12, 1996, by and among Registrant and
               Intel Corporation, as amended

     *4.10     Agreement,  dated  May  12,  1998,  by  and  among   Registrant,
               Evergreen Canada Israel  Management Ltd., IJT Technologies  Ltd.,
               Periscope I Fund Israeli Partnership,  Dovrat Shrem Trust Company
               Ltd., Rubin Gruber, C.E.  Unterberg,  Towbin LLC, C.E. Unterberg,
               Towbin Private Equity Partners LP, C.E. Unterberg, Towbin Private
               Equity Partners CV, C.E.  Unterberg,  Private Profit Sharing Plan
               FBO Alex Bernstein and Steimatzsky Ltd.

     10.1      Form of 2000 Employee Stock Option Plan

    *10.2      Key Employee Share Incentive Plan, as amended

    *10.3      Consultant Option Plan, as amended

    *10.4      License  Agreement,  dated January 13, 1999,  between  Registrant
               and RADCOM Ltd.

    *10.5      Lease Agreement,  dated May 12, 1997,  between RADVISION Inc. and
               RAD Data Communications Inc., as amended

   **10.6      Lease Agreement,  dated January 19, 2001, between Zohar Zisapel
               Properties,  Inc., Yehuda Zisapel Properties,  Inc. and RADVISION
               Inc.

     11        Statements re computation of Per Share Earnings.

     21        Subsidiaries of RADVISION Ltd.

     23        Consent of Luboshitz Kasierer,  Arthur Andersen,  with respect to
               the Registration Statements on Form S-8.

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

*    Incorporated by reference to our registration statement on Form F-1,
registration number 333-30916, as amended, filed with the Securities and
Exchange Commission.

**   Incorporated by reference to our Annual Report on Form 20-F for the
fiscal year ended December 31, 2000, filed with the Securities and
Exchange Commission.


(b)      Reports on Form 8-K.

         No report on Form 8-K was filed during the fourth quarter of 2001.

                                       65

<PAGE>

<TABLE>
<CAPTION>

                         RADVISION Ltd. and Subsidiaries
                 Schedule II--Valuation and Qualifying Accounts

Column A                                Column B                   Column C                   Column D        Column E
--------                               -----------     -------------------------------      ------------    ------------
                                                                  Additions
                                        Balance at     Charged to                                            Balance at
                                        beginning      costs and          Charged to                             end
Description                             of period       expenses        other accounts       Deductions       of period
-----------                             ---------      ----------       --------------       -----------     -----------
<S>                                     <C>            <C>                                                   <C>
Year ended December 31, 2001:
Allowance for doubtful accounts........ $577,000       $549,000                                              $1,126,000
                                        ========                                                             ==========
Year ended December 31, 2000:
Allowance for doubtful accounts........  225,000        352,000                                                 577,000
                                        ========                                                             ==========
Year ended December 31, 1999:
Allowance for doubtful accounts........   73,000        152,000                                                 225,000
                                        ========                                                             ==========

</TABLE>


                                       66


<PAGE>


                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Dated: March 19, 2002

                                   RADVISION LTD.


                                   By:  /s/Gadi Tamari
                                        --------------
                                           Gadi Tamari
                                           President and Chief Executive Officer
                                           (Principal Executive Officer)


                                   By:  /s/David Seligman
                                        -----------------
                                           David Seligman
                                           Chief Financial Officer
                                          (Principal Accounting Officer)

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the date indicated.

                                                           Dated: March 19, 2002

       Name                          Title
       ----                          -----

/s/Zohar Zisapel
--------------------
   Zohar Zisapel                Chairman of the Board of Directors

/s/Gadi Tamari
--------------------
   Gadi Tamari                  Chief Executive Officer, President and Director

/s/Ami Amir
--------------------            Director
   Ami Amir

/s/Dan Goldstein
--------------------
   Dan Goldstein                Director

/s/Efraim Wachtel
--------------------            Director
   Efraim Wachtel

/s/Andreas Mattes
--------------------            Director
   Andreas Mattes

/s/Liora Katzenstein
--------------------
   Liora Katzenstein            Director


                                    67


<PAGE>





                                 RADVISION LTD.




                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS






                                                                           Page
                                                                           ----

Report of Independent Public Accountants                                    F-2

Consolidated Balance Sheets as of December 31, 2000 and 2001                F-3

Consolidated Statements of Operations for the years ended
  December 31,  1999, 2000 and 2001                                         F-4

Consolidated Statements of Shareholders' Equity for the years
  ended December 31, 1999, 2000 and 2001                                    F-5

Consolidated Statements of Cash Flows for the years ended
  December 31, 1999, 2000 and 2001                                          F-6

Notes to the Consolidated Financial Statements                              F-7




                                      F-1

<PAGE>
                                                              Andersen
                                                              Luboshitz Kasierer





                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



To the Board of Directors and the Shareholders of
RADVISION Ltd.:
---------------


We have audited the accompanying  consolidated  balance sheets of RADVISION Ltd.
(an Israeli  corporation) and its subsidiaries as of December 31, 2000 and 2001,
and the related consolidated statements of operations,  shareholders' equity and
cash flows for each of the three years in the period  ended  December  31, 2001.
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
RADVISION  Ltd. and its  subsidiaries  as of December 31, 2000 and 2001, and the
consolidated results of operations and cash flows for each of the three years in
the period ended  December 31, 2001, in conformity  with  accounting  principles
generally accepted in the United States.



                                                           /s/Luboshitz Kasierer
                                                              Luboshitz Kasierer
                                                              Arthur Andersen
Tel-Aviv, Israel
January 30, 2002


                                      F-2

<PAGE>

                                 RADVISION LTD.

                              CONSOLIDATED BALANCE SHEETS
                    In thousands of U.S. dollars, except share data

<TABLE>
<CAPTION>
                                                                                 December 31,
                                                                          -----------------------
                                                              Note            2000          2001
                                                              ----        ---------     ---------
<S>                                                           <C>         <C>           <C>
Current assets
  Cash and cash equivalents                                    (3)        $  41,617     $   6,717
  Short-term investments                                       (4)           39,550        52,785
  Trade receivables, net                                       (5)            7,025         5,078
  Other receivables and prepaid expenses                                      1,051         1,259
  Inventories                                                  (6)            4,956         1,884
                                                                              -----         -----
        Total current assets                                                 94,199        67,723
                                                                             ------        ------
Long-term investments                                          (4)           15,897        26,326
                                                                             ------        ------
Property and equipment, net                                    (7)            5,200         4,518
                                                                              -----         -----
Deposit with insurance companies                              (10)            1,055         1,200
                                                                              -----         -----
      Total assets                                                        $ 116,351     $  99,767
                                                                          =========     =========
Current liabilities
  Current maturities of long-term bank loans                              $      46     $      19
  Trade payables                                                              3,716           765
  Other payables and accrued expenses                          (8)           16,777        13,562
                                                                             ------        ------
      Total current liabilities                                              20,539        14,346
                                                                             ------        ------
Long-term liabilities
  Bank loans, net of current maturities                        (9)               19             -
  Accrued severance pay                                       (10)            1,448         1,872
                                                                              -----         -----
                                                                              1,467         1,872
                                                                              -----         -----
        Total liabilities                                                    22,006        16,218
                                                                             ------        ------
Commitments and contingencies                                 (11)

Shareholders' equity:                                         (12)
Ordinary shares of NIS 0.1 par value:
  Authorized - 24,984,470 shares as of December 31, 2001;
   Issued and outstanding - 19,144,984 and 19,889,690 shares
   as of December 31, 2000 and 2001                                             165           182
  Additional paid-in capital                                                103,849       104,209
  Deferred compensation                                                        (641)         (299)
  Accumulated deficit                                                        (9,028)      (10,640)
                                                                             ------       -------
                                                                             94,345        93,452
  Less cost of treasury stock - 1,585,446
    Ordinary shares of NIS 0.1 par value as of
    December 31, 2001 (2000 - none)                                               -         9,903
                                                                               ----         -----
      Total shareholders' equity                                             94,345        83,549
                                                                             ------        ------
      Total liabilities and shareholders' equity                         $  116,351     $  99,767
                                                                         ==========     =========
</TABLE>

       /s/Gadi Tamari                          /s/David Seligman
       --------------                          -----------------
         GADI TAMARI                            DAVID SELIGMAN
   Chief Executive Officer                  Chief Financial Officer


Date of approval of financial statements:
January 30, 2002

     The  accompanying  notes  form  an  integral  part  of  these  consolidated
financial statements.

                                      F-3
<PAGE>

                                 RADVISION LTD.

                      CONSOLIDATED STATEMENTS OF OPERATIONS
               In thousands of U.S. dollars, except per share data

<TABLE>
<CAPTION>
                                                            For the year ended December 31,
                                                      ---------------------------------------
                                             Note         1999         2000          2001
                                             ----     -----------   -----------   -----------
<S>                                          <C>      <C>           <C>           <C>
Revenues                                     (13B)    $    17,550   $    45,911   $    46,227

Cost of revenues                                            2,853        11,446        10,362
                                                            -----        ------        ------
      Gross profit                                         14,697        34,465        35,865
                                                           ------        ------        ------
 Operating expenses
  Research and development expenses                         7,667        14,263        17,933
  Less - participation by the Chief
    Scientist of the Government of Israel                   1,097           353             -
                                                            -----           ---          ----
  Research and development expenses, net                    6,570        13,910        17,933

  Marketing and selling expenses, net        (14)           9,502        17,358        16,735

  General and administrative expenses                       1,426         3,458         4,438

  Restructuring costs                        (15)               -             -         3,023

  Repayment of future royalties
    to the Chief Scientist                                      -         3,666             -
                                                             ----         -----          ----
        Total operating expenses                           17,498        38,392        42,129
                                                           ------        ------        ------

Operating loss                                             (2,801)       (3,927)       (6,264)

Financing income, net                                         105         4,176         4,652
                                                             ----         -----         -----
      Net income (loss)                               $    (2,696)  $       249   $    (1,612)
                                                      ===========   ===========   ===========

Basic earnings (loss) per ordinary share     (2M)     $    (0.26)   $     0.014   $     $(0.09)
                                                      ==========    ===========   ============


Weighted average number of ordinary
  shares outstanding                                   10,538,395    17,174,453    18,943,014
                                                       ==========    ==========    ==========

Diluted earnings (loss) per ordinary share    (2M)    $     (0.26)       $0.013   $     (0.09)
                                                      ===========        ======   ===========

Weighted average number of shares                      10,538,395    19,873,222    18,943,014
                                                       ==========    ==========    ==========
</TABLE>

     The  accompanying  notes  form  an  integral  part  of  these  consolidated
financial statements.

                                      F-4

<PAGE>

                                 RADVISION LTD.

                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                 In thousands of U.S. dollars, except share data

<TABLE>
<CAPTION>


                                    Ordinary shares     Preferred shares   Additional
                                  ------------------    ----------------    paid-in      Deferred    Accumulated  Treasury    Total
                                   Shares     Amount    Shares    Amount    capital    compensation    deficit     stock
                                  ----------  ------  ----------  ------   ----------  ------------  -----------  --------  --------
<S>                               <C>          <C>     <C>          <C>    <C>            <C>         <C>         <C>       <C>
Balance as of January 1, 1999     10,528,056   $ 17    2,957,165    $ 4    $ 12,088       $   (78)    $ (6,581)   $    -    $ 5,450
Ordinary shares issued               158,250    (*)            -      -         250             -            -         -        250
Deferred compensation                      -      -            -      -       1,467        (1,467)           -         -          -
Amortization of deferred
compensation                               -      -            -      -         (16)          493            -         -        477
Net loss                                   -      -            -      -           -             -       (2,696)        -     (2,696)
                                  ----------   ----   ----------    ---    --------       -------     --------    ------    --------
Balance as of January 1, 2000     10,686,306   $ 17    2,957,165    $ 4    $ 13,789       $(1,052)    $ (9,277)   $    -    $ 3,481
Ordinary shares issued             4,960,822    125            -      -      89,094(**)         -            -         -     89,219
Conversion of preferred shares     2,957,165      4   (2,957,165)    (4)          -             -            -         -          -
Cancellation of ordinary shares      (58,447)     -            -      -           -             -            -         -          -
Deferred compensation                      -      -            -      -         218          (218)           -         -          -
Options exercised                    599,138     19            -      -         780             -            -         -        799
Amortization of deferred
compensation                               -      -            -      -         (32)          629            -         -        597
Net income                                 -      -            -      -           -             -          249         -        249
                                  ----------   ----   ----------    ---    --------       -------     --------    ------    --------
Balance as of December 31, 2000   19,144,984   $165            -    $ -    $103,849       $  (641)    $ (9,028)  $     -    $94,345
Purchase of treasury stock        (1,585,446)     -            -      -           -             -            -    (9,903)    (9,903)
Options exercised                    744,706     17            -      -         924             -            -         -        941
Payment of issuance expenses               -      -            -      -        (550)            -            -         -       (550)
Amortization of deferred
compensation                               -      -            -      -         (14)          342            -         -        328
Net income                                 -      -            -      -           -             -       (1,612)        -     (1,612)
                                  ----------   ----   ----------    ---    --------       -------     --------    ------    --------
Balance as of December 31, 2001   18,304,244   $182            -    $ -    $104,209       $  (299)    $(10,640)  $(9,903)   $83,549
                                  ==========   ====   ==========    ===    ========       =======     ========   =======    ========

</TABLE>

(*)  Less than one thousand.

(**) Net of issuance expenses of approximately $8,400.

     The  accompanying  notes  form  an  integral  part  of  these  consolidated
financial statements.
                                      F-5

<PAGE>
                                 RADVISION LTD.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                          In thousands of U.S. dollars

<TABLE>
<CAPTION>
                                                                       For the year ended December 31,
                                                                      ---------------------------------
                                                                        1999         2000        2001
                                                                      --------    --------    ---------
<S>                                                                   <C>         <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income (loss)                                                   $(2,696)    $    249    $ (1,612)
  Adjustments to reconcile net income (loss) to net cash
   provided by operating activities:
     Income and expenses not affecting operating cash flows:
      Depreciation                                                        718        1,843       2,407
      Severance pay                                                       104          107         279
      Amortization of deferred compensation                               477          597         328
      Other                                                                20           34         174
     Changes in operating assets and liabilities:
      Decrease (increase) in trade receivables, net                      (647)      (3,810)      1,947
      Decrease (increase) in other receivables and prepaid expenses      (430)         465        (208)
      Decrease (increase) in inventories                               (1,561)      (2,522)      3,072
      Increase (decrease) in trade payables                             1,924        1,158      (2,951)
      Increase (decrease) in other payables and accrued expenses        3,529       10,443      (3,215)
                                                                        -----       ------      ------
     Net cash provided by operating activities                          1,438        8,564         221
                                                                        -----       ------      ------

CASH FLOWS FROM INVESTING ACTIVITIES
  Increase in short-term investments                                        -      (39,550)    (13,235)
  Increase in long-term investments                                         -      (15,897)    (10,429)
  Purchase of property and equipment                                   (2,388)      (4,175)     (2,045)
  Proceeds from sale of property and equipment                             74          118         146
                                                                        -----        -----       -----
     Net cash used in investing activities                             (2,314)     (59,504)    (25,563)
                                                                       ------      -------     -------

CASH FLOWS FROM FINANCING ACTIVITIES
  Issuance of share capital                                               250       90,018         941
  Purchase of treasury stock                                                -            -      (9,903)
  Decrease in short-term credit                                           (11)           -           -
  Payment of issuance expenses                                              -            -        (550)
  Repayment of long-term bank loans                                       (63)         (66)        (46)
                                                                          ---        -----       -----
     Net cash provided by (used in) financing activities                  176       89,952      (9,558)
                                                                          ---       ------      ------

INCREASE (DECREASE) IN CASH AND CASH
  EQUIVALENTS                                                            (700)      39,012     (34,900)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                          3,305        2,605      41,617
                                                                        -----        -----      ------
CASH AND CASH EQUIVALENTS AT END OF YEAR                              $ 2,605     $ 41,617    $  6,717
                                                                      =======     ========    ========
CASH PAID DURING THE YEAR IN RESPECT OF INTEREST                      $    16     $      8    $      4
                                                                      =======     ========    ========
NON-CASH ACTIVITY                                                     $   200     $      -    $      -
                                                                      =======     ========    ========
</TABLE>


     The  accompanying  notes  form  an  integral  part  of  these  consolidated
financial statements.
                                      F-6

<PAGE>

                                 RADVISION LTD.

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                          In thousands of U.S. dollars


Note 1 - General

          RADVISION  Ltd.  (the  "Company"),  an Israeli  corporation,  designs,
          develops and supplies  products and technology  that enable  real-time
          voice, video and data communications  over packet networks,  including
          the Internet and other networks based on the Internet protocol.

          The  consolidated  financial  statements  of  the  Company  have  been
          prepared in U.S.  dollars,  as the  currency  of the primary  economic
          environment  in which the  operations  of the Company are conducted is
          the U.S. dollar. All of the Company's sales are in U.S. dollars or are
          dollar-linked.  Most  purchases of materials and  components  and most
          marketing  costs  are  denominated  in U.S.  dollars.  Therefore,  the
          functional currency of the Company is the U.S. dollar.

          Transactions and balances  originally  denominated in U.S. dollars are
          presented  at their  original  amounts.  Transactions  and balances in
          other  currencies are remeasured into U.S.  dollars in accordance with
          the  principles  set  forth  in  Statement  No.  52 of  the  Financial
          Accounting  Standards Board of the United States ("FASB").  Items have
          been remeasured as follows:

          -    Monetary  items - at the  exchange  rate in effect on the balance
               sheet date.

          -    Non-monetary items - at historical exchange rates.

          -    Revenue and expense items - at the exchange rates in effect as of
               the date of  recognition of those items,  excluding  depreciation
               and other items deriving from non-monetary items.

          All exchange gains and losses from the remeasurement  mentioned above,
          which are immaterial for all periods  presented,  are reflected in the
          statement  of  operations.  The  representative  rate of  exchange  at
          December 31, 2001 was U.S.$ 1.00 = NIS 4.416; and at December 31, 2000
          and 1999 = NIS 4.041 and NIS 4.153, respectively.



                                      F-7

<PAGE>

                                 RADVISION LTD.

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                          In thousands of U.S. dollars


Note 2 - Significant Accounting Policies

          The financial  statements are prepared according to generally accepted
          accounting principles in the United States. The significant accounting
          policies  followed in the  preparation  of the  financial  statements,
          applied on a consistent basis, are as follows:

          A.   Principles of Consolidation

               The financial  statements include the accounts of the Company and
               its wholly-owned subsidiaries in the United States,  Netherlands,
               United-Kingdom and Hong Kong. Material  intercompany balances and
               transactions have been eliminated.

          B.   Cash and Cash Equivalents

               All highly liquid  investments with an original maturity of three
               months or less are considered cash equivalents.

          C.   Allowance for Doubtful Accounts

               Allowance  for doubtful  accounts is computed for specific  debts
               the  collectibility of which is doubtful based upon the Company's
               experience.

          D.   Investments

               The Company  accounts for  investments  in  debentures  under the
               provisions of Statement of Financial Accounting Standard ("SFAS")
               No. 115,  "Accounting for Certain  Investments in Debt and Equity
               Securities".  Under SFAS 115, investments in debentures for which
               the  Company  has the  positive  intent  and  ability  to hold to
               maturity,  are  reported at their  amortized  cost  basis,  which
               approximates their fair market value.

          E.   Inventories

               Inventories  are stated at the lower of cost or  market.  Cost is
               determined by the moving average method.

                                       F-8

<PAGE>

                                 RADVISION LTD.

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                          In thousands of U.S. dollars


Note 2 - Significant Accounting Policies (Cont.)

          F.   Property and Equipment

               Property  and  equipment  are  stated  at cost.  Depreciation  is
               computed using the straight-line method over the estimated useful
               lives of the assets, ranging from three to fifteen years.

          G.   Revenue Recognition

               Revenues from sales of products and  technology are recognized in
               accordance  with  Statement of Position (SOP) 97-2, as amended by
               SOP  98-4,  upon  delivery,  when  collection  is  probable,  the
               vendor's fee is fixed or determinable and persuasive  evidence of
               an  arrangement  exists.  Provided that all other elements of SOP
               97-2 are met, revenues are recognized upon delivery,  whether the
               customer is a  distributor  or the final end user.  Revenues  for
               maintenance  and support  services are  deferred  and  recognized
               ratably over the service period.

               In  accordance   with  SOP  97-2,   revenues  for   multi-element
               arrangements,  that  is,  sales  of  products  or  technology  in
               conjunction with  post-contract  customer support  services,  are
               segregated.  Revenues  allocated  to the  delivered  elements are
               recognized upon delivery, provided that the other elements of SOP
               97-2  are  satisfied.   Revenues  allocated  to  the  undelivered
               elements  (post-contract  customer support services) are deferred
               and recognized  ratably over the service  period.  The portion of
               the  fee  for   multi-element   arrangements   allocated  to  the
               undelivered elements (post-contract customer support services) is
               based on vendor-specific  objective evidence  determined,  in the
               case of  post-contract  customer support  services,  based on the
               annual  renewal  rate  for  such  services  actually  charged  to
               customers for years  subsequent to the first year following sale.
               The  remaining  portion of the fee is allocated to the  delivered
               elements based on the residual value method.

                                       F-9
<PAGE>


                                 RADVISION LTD.

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                          In thousands of U.S. dollars

Note 2 - Significant Accounting Policies (Cont.)

          H.   Research and Development Costs

               Research and  development  costs,  net of  participations  by the
               Government of Israel  through the Ministry of Industry and Trade,
               Office of the Chief  Scientist,  are  charged  to  operations  as
               incurred.

               Software development costs are considered for capitalization when
               technological  feasibility is established  according to Statement
               of Financial  Accounting  Standards  ("SFAS") No. 86, "Accounting
               for  the  Costs  of  Computer  Software  to be  Sold,  Leased  or
               Otherwise   Marketed."   Costs  incurred  after   achievement  of
               technological  feasibility in the process of software  production
               have  not  been   material.   Therefore,   the  Company  has  not
               capitalized any of its research and development expenses and does
               not  anticipate   that  its   development   process  will  differ
               materially in the future.

          I.   Advertising Costs

               Advertising costs are charged to expenses as incurred.

          J.   Income Taxes

               The Company  accounts for income taxes under the liability method
               of  accounting.  Under the liability  method,  deferred taxes are
               determined  based  on  the  differences   between  the  financial
               statement and tax basis of assets and  liabilities at enacted tax
               rates in effect in the year in which the differences are expected
               to reverse. Valuation allowances are established, when necessary,
               to reduce deferred tax assets to amounts expected to be realized.

          K.   Fair Value of Financial Instruments

               Unless   otherwise   noted,  the  carrying  amount  of  financial
               instruments approximates fair value.

          L.   Provision for Warranty Costs

               The Company  warranties  its products for a twelve month  period.
               Provision  for  warranty   costs  are  based  on  Company's  past
               experience.

                                      F-10
<PAGE>


                                 RADVISION LTD.

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                          In thousands of U.S. dollars

Note 2 - Significant Accounting Policies (Cont.)

          M.   Basic and Diluted Net Earnings (Loss) Per Share

               Basic  earnings  (loss) per share is  calculated  by dividing net
               income (loss) by the weighted  average number of ordinary  shares
               outstanding during the period.  Diluted earnings (loss) per share
               is  calculated  by dividing net income by the sum of the weighted
               average  number  of  Ordinary   shares   outstanding,   plus  all
               additional  Ordinary  shares that would have been  outstanding if
               potentially dilutive Ordinary shares had been issued.  Options to
               purchase  2,667,251,  529,887 and 3,885,872  Ordinary shares were
               not  included in the  computation  of years  1999,  2000 and 2001
               diluted  earnings  (loss) per share  because  such  options  were
               considered anti-dilutive.

          N.   Share-based Compensation

               The Company has adopted the disclosure provisions of Statement of
               Financial  Accounting Standards ("SFAS") No. 123, "Accounting for
               Stock-Based Compensation," and the accounting rules in Accounting
               Principles  Board ("APB")  Opinion No. 25,  "Accounting for Stock
               Issued to  Employees",  including the FASB Issued  Interpretation
               No. 44  "Accounting  for  Certain  Transactions  Involving  Stock
               Compensation on Interpretation of APB 25." Under APB 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 Company has provided the
               necessary pro forma  disclosures  as if the fair value method had
               been applied.

          O.   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 reported  amounts
               of assets and liabilities and disclosure of contingent assets and
               liabilities  at the  date  of the  financial  statements  and the
               reported  amounts of revenues and expenses  during the  reporting
               period. Actual results could differ from those estimates.


                                      F-11
<PAGE>

                                 RADVISION LTD.

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                          In thousands of U.S. dollars


Note 2 - Significant Accounting Policies (Cont.)

          P.   Derivative Financial Instruments

               Effective  January 1, 2001,  the  Company  adopted  Statement  of
               Financial  Accounting  Standards ("SFAS") No. 133 "Accounting for
               Derivative  Instruments and Hedging Activities".  The adoption of
               SFAS 133 had no material impact on reported earnings for the year
               ended December 31, 2001.

          Q.   Segment Reporting

               Effective   January  2001,  the  Company  adopted   Statement  of
               Financial  Accounting  Standard  ("SFAS")  No. 131,  "Disclosures
               about  Segments of an Enterprise and Related  Information."  SFAS
               131  establishes   standards  for  the  manner  in  which  public
               companies report  information about operating  segments in annual
               and interim financial statements.

          R.   Recently Issued Accounting Pronouncements

               In July 2001,  the Financial  Accounting  Standards  Board issued
               Statements of Financial  Accounting  Standards  ("SFAS") No. 141,
               "Business  Combinations"  and SFAS No. 142,  "Goodwill  and Other
               Intangible Assets".  SFAS 141 requires all business  combinations
               initiated  after June 30,  2001,  to be  accounted  for using the
               purchase method.  Under SFAS 142,  goodwill and intangible assets
               with  indefinite  lives are no longer  amortized but are reviewed
               annually (or more frequently if impairment  indicators arise) for
               impairment.  All other  intangible  assets  will  continue  to be
               amortized over their  estimated  useful lives.  The  amortization
               provisions  of SFAS 142 apply to goodwill and  intangible  assets
               acquired  after  June 30,  2001.  With  respect to  goodwill  and
               intangible  assets acquired prior to July 1, 2001, the Company is
               required to adopt SFAS 142 effective January 1, 2002. The Company
               believes  that adoption of SFAS 141 and SFAS 142 will not have an
               effect on its financial statements.

                                      F-12

<PAGE>


                                 RADVISION LTD.

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                          In thousands of U.S. dollars

Note 2 - Significant Accounting Policies (Cont.)

          R.   Recently Issued Accounting Pronouncements (Cont.)

               In August 2001, the Financial  Accounting  Standards Board issued
               Statement of  Financial  Accounting  Standards  ("SFAS") No. 144,
               "Accounting for the Impairment or Disposal of Long-Lived Assets".
               Although   SFAS  144   supersedes   SFAS  121,   it  retains  the
               requirements of SFAS 121 regarding recognition of impairment loss
               for long-lived  assets to be held and used (based on undiscounted
               cash flows) and resolves certain implementation issues. Also, the
               accounting  model  used in SFAS 121 for  long-lived  assets to be
               disposed of by sale (lower of carrying  amount or fair value less
               cost to sell) is  broadened  by SFAS 144 to include  discontinued
               operations  and   supersedes  APB  Opinion  No.  30.   Therefore,
               discontinued  operations  will no  longer  be  measured  on a net
               realizable value basis and future operating losses will no longer
               be  recognized  before they  occur.  SFAS 144 also  broadens  the
               presentation of discontinued operations to include a component of
               an entity  (rather than a segment of a business).  The provisions
               of SFAS 144 are  effective for  financial  statements  issued for
               fiscal years  beginning  after  December  15,  2001,  and interim
               periods  within  those  years.  The  Company  believes  that  the
               adoption  of SFAS 144 will not have an  effect  on its  financial
               statements.


Note 3 - Cash and Cash Equivalents

                                                                 December 31,
                                                             ------------------
                                                               2000       2001
                                                             -------     ------

         Cash in banks, primarily in U.S. dollars            $ 5,004     $1,835
         Bank deposits in U.S. dollars, bearing
           annual interest rate of approximately 2.0%         36,151     $4,882
         Bank deposits in NIS                                    462          -
                                                             -------     ------
                                                             $41,617     $6,717
                                                             =======     ======

         The interest rates are as of December 31, 2001.

                                      F-13
<PAGE>

                                 RADVISION LTD.

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                          In thousands of U.S. dollars


Note 4 - Short-Term and Long-Term Investments

                                                              December 31,
                                                          ---------------------
                                                           2000           2001
                                                          -------       -------

         Bank deposits in U.S. dollars bearing            $12,208       $28,396
           annual interest rate of approximately 3.4%
         Marketable debentures, bearing annual
           interest of approximately 5.8%                  27,342        24,389
                                                           ------        ------
                                                          $39,550       $52,785
                                                          =======       =======

          Marketable  debentures in the amount of $24,304 that mature later than
          December 31, 2002,  bearing annual interest of 4.7%, as well as a bank
          deposit in the amount of $2,022 bearing  annual  interest of 3.9%, are
          presented as long-term investments.

          The interest rates are as of December 31, 2001.


Note 5 - Trade Receivables, Net

          Trade receivables are presented net of allowance for doubtful accounts
          in the amount of $577 and  $1,126 as of  December  31,  2000 and 2001,
          respectively.  The Company generally  provides customers with a thirty
          to sixty day post-sale  acceptance period,  during which customers can
          return products for a full refund.  Historically,  returns during this
          period have been negligible.


Note 6 - Inventories

                                                   December 31,
                                               -------------------
                                                2000          2001
                                               ------       ------

           Materials and components            $2,377       $  991
           Work-in-process                        610          391
           Finished products                    1,969          502
                                                -----        -----
                                               $4,956       $1,884
                                               ======       ======



                                      F-14

<PAGE>


                                 RADVISION LTD.

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                          In thousands of U.S. dollars


Note 7 - Property and Equipment, net

                                                             December 31,
                                                          ------------------
                                                          2000          2001
                                                         ------       -------

           COST
             Research and development equipment          $2,695       $3,250
             Motor vehicles                               1,090        1,001
             Manufacturing equipment                        280          401
             Office furniture, equipment and
              leasehold improvements                      4,288        5,268
                                                          -----        -----
                                                         $8,353       $9,920
                                                         ------       ------
           ACCUMULATED DEPRECIATION
             Research and development equipment          $1,232       $2,024
             Motor vehicles                                 242          371
             Manufacturing equipment                        169          190
             Office furniture, equipment and
              leasehold improvements                      1,510        2,817
                                                          -----        -----
                                                          3,153        5,402
                                                          -----        -----
           NET BOOK VALUE                                $5,200       $4,518
                                                         ======       ======


          For the years ended  December  31, 1999,  2000 and 2001,  depreciation
          expense was $718, $1,843 and $2,407, respectively.

          The Company's property and equipment are primarily located in Israel.

                                      F-15
<PAGE>

                                 RADVISION LTD.

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                          In thousands of U.S. dollars


Note 8 - Other Payables and Accrued Expenses

                                                            December 31,
                                                       ---------------------
                                                         2000          2001
                                                       -------       -------

           Deferred income                             $10,298       $ 3,491
           Employees and employee institutions (*)       2,345         2,369
           Accrued royalties                               411           670
           Tax withholding payable                         310           284
           Accrued expenses                              3,413         6,748
                                                         -----         -----
                                                       $16,777       $13,562
                                                       =======       =======


          (*)  Employees and employee institutions include salaries, bonuses and
               employee  institutions payable. The employee institutions include
               amounts  deducted  from  employees  payroll for December 2000 and
               2001,  respectively for educational funds and insurance  policies
               funds.  For the years  ended  December  31,  1999,  2000 and 2001
               educational funds expenses were $233, $547 and $703 and insurance
               policies funds expenses were $410, $375 and $469.


Note 9 - Long-term Bank Loans

                                                         December 31,
                                                         ------------
                                                         2000    2001
                                                         ----    ----

           Loans linked to the U.S. dollar               $65     $19
           Less - current maturities                      46      19
                                                          --      --
                                                         $19     $ -
                                                         ===     ===

          The loans bear an annual interest rate of LIBOR plus 1%.

          As of December 31,  2001,  the company had an unused line of credit in
          the amount of $2,500.


                                      F-16
<PAGE>

                                 RADVISION LTD.

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                          In thousands of U.S. dollars


Note 10 - Accrued Severance Pay

          Under  Israeli  law and labor  agreements,  the Company is required to
          make  severance  payments to its  dismissed  employees  and  employees
          leaving its employment in certain other  circumstances.  The Company's
          severance pay liability to its  employees,  which is calculated on the
          basis  of the  salary  of each  employee  for the  last  month  of the
          reported period multiplied by the years of the employee's  employment,
          is reflected in the Company's  balance sheet on the accrual basis, and
          is partially  funded by purchase of insurance  policies in the name of
          the Company.  The severance  pay expense for the years ended  December
          31, 1999, 2000 and 2001 amounted to $365, $606 and $840, respectively.

Note 11 - Commitments and Contingencies

          A.   In connection with its marketing activities, the Company received
               in prior years  participation  payments  from the  Government  of
               Israel - Fund for the  Encouragement  of Marketing  Activities in
               the  total  amount  of  approximately  $686.  In  return  for the
               participation payments, the Company is committed to pay royalties
               at a rate of 3% of the Company's  total increase in export sales,
               from  the  end  of  the  second  year  of  implementation  of the
               marketing plan until the date at which the participation has been
               fully  repaid.  The  Company's  total  commitment  for  royalties
               payable  with respect to future  sales,  based on  Government  of
               Israel participations  received or accrued, net of royalties paid
               or accrued, totaled approximately $15 as of December 31, 2001.

          B.   In  connection  with its  research and  development,  the Company
               received and accrued participation  payments from the Israel U.S.
               Binational   Industrial   Research  and  Development   Foundation
               (BIRDF), in the total amount of approximately $188. In return for
               the participation, the Company is committed to pay royalties at a
               rate of 2.5% of proceeds  from the first  year's  sales and 5% of
               the proceeds from the succeeding  years' sales,  up to the amount
               of the  grant.  Once the  amount of the  grant  has been  repaid,
               royalties will be payable at the rate of 2.5% of proceeds,  until
               additional  royalties  equal to one half of the grant amount have
               been repaid. The Company's total commitment for royalties payable
               with  respect  to  future  sales,  based on BIRDF  participations
               received or accrued,  net of royalties  paid or accrued,  totaled
               approximately $276 as of December 31, 2001.

                                      F-17
<PAGE>

                                 RADVISION LTD.

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                          In thousands of U.S. dollars


Note 11 - Commitments and Contingencies (Cont.)

          C.   The Company and its subsidiaries  operate from leased premises in
               Israel, United States, China, United Kingdom and Hong Kong. Lease
               agreements  expire  in May 2002  through  June  2005  (some  with
               renewal options). Annual minimum future rental payments due under
               the above agreements,  at the exchange rate in effect on December
               31, 2001, are approximately as follows:

                2002                                      $1,544
                2003                                       1,366
                2004                                       1,356
                2005                                         678
                                                           -----
                                                          $4,944
                                                          ======


               For the years ended  December  31,  1999,  2000 and 2001,  rental
               expense was $528, $1,015 and $1,424, respectively.


          D.   The Company is  committed to pay  royalties to two third  parties
               for the integration of these third parties' technologies into the
               Company's  products.  Royalties  are  payable  based on the sales
               volume of these  products,  for as long as the Company uses these
               technologies, without limit on the amount of royalties payable.

               The rates of royalties to one of the third parties are based on a
               fixed  amount  per  product  sold by the  Company in the range of
               $1.00 to $5.00 per unit sold.  The  agreements  pursuant to which
               the royalties are payable have no expiration date. Annual minimum
               future royalty payments are approximately as follows:

                 2002                                       $25
                 2003                                        25
                 2004                                        25
                                                             --
                                                            $75
                                                            ===


               The rates of royalties to the other third party are comprised of:

               (i)  royalties  based on a fixed amount per certain  product sold
                    by the  Company  in the range of  $20.00 to $48.00  per unit
                    sold, and;

               (ii) a minimum  royalty  payment  in the amount of $85 to be paid
                    until the  earlier of May,  2005,  or the  completion  of an
                    aggregate sales volume of 600 units of another product.


                                      F-18
<PAGE>

                                 RADVISION LTD.

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
          In thousands of U.S. dollars, except share and per share data

Note 11 - Commitments and Contingencies (Cont.)

          E.   In 1998,  a third  party  sent  correspondence  to the  Company's
               affiliate alleging that some products manufactured by the Company
               infringe  upon  patents  held by the third  party and  offered to
               license   these   patents   to   the   Company.   In   subsequent
               correspondence,  the Company's affiliate requested that the third
               party  specifically  substantiate each allegation of infringement
               before the  Company's  affiliate  would be prepared to enter into
               any  licensing  arrangements.  The Company  does not believe that
               these  allegations  will have a material  adverse effect upon its
               business, financial position, results of operations or liquidity.
               The Company's affiliate has received further  correspondence from
               the third  party,  in which  the third  party  has,  among  other
               things,  reiterated its claims. The Company's  affiliate does not
               believe  the third  party has  substantiated  its  claims and has
               communicated  this  belief  to the  third  party.  The  Company's
               affiliate  has advised the Company that the alleged  infringement
               claims are unresolved.

          F.   In January  2001,  the Company  entered  into an  agreement  with
               related  parties,  to lease  approximately  24,000 square feet of
               office  space in  Paramus,  New  Jersey  for a period of 5 years,
               which space the  Company  subsequently  surrendered.  The parties
               have a dispute in respect to damages  caused by this  action,  if
               any.  The  Company  cannot  predict  the  final  outcome  of this
               dispute.


Note 12 - Shareholders' Equity

          The Ordinary  shares of the Company are traded on the NASDAQ  National
          Market.  The Ordinary  shares  confer upon their  holders the right to
          receive  notice to  participate  and vote in general  meetings  of the
          Company, and the right to receive dividends, if declared.

          A.   In January 2000, the Company  increased its  authorized  Ordinary
               Share Capital to 24,984,470  Ordinary  Shares and 15,530 deferred
               shares  of NIS 0.1  par  value  per  share  and  all  outstanding
               preferred  shares  were  converted  into an  identical  number of
               ordinary shares. In January 2000, the Company effected a 211 to 1
               share split in the form of a share  dividend.  All  references to
               per share  amounts  and the  number of shares in these  financial
               statements  have been  restated  to  reflect  the  abovementioned
               changes.

                                      F-19
<PAGE>


                                 RADVISION LTD.

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
          In thousands of U.S. dollars, except share and per share data

Note 12 - Shareholders' Equity (Cont.)

          B.   The Company has an authorized  share  capital of 15,530  deferred
               shares of par value NIS 0.1 each.  The deferred  shares confer no
               rights or  privileges  on their  holders  except for the right to
               receive  upon  dissolution  or  liquidation  the par value of the
               deferred shares.

          C.   In March 2000, the Company issued  590,822  ordinary  shares in a
               private   placement   to  Siemens   Aktiengesellschaft,   Samsung
               Electro-Mechanics   Co.  Ltd.  and  Samsung  Venture   Investment
               Corporation for an aggregate  consideration of approximately  $10
               million.

          D.   In March 2000, the Company issued 4,370,000 ordinary shares in an
               initial public offering for $87 million, or $20 per share.

          E.   In  February  2001,  the  Company  announced  that  its  Board of
               Directors   authorized  the  repurchase  of  up  to  10%  of  its
               outstanding  ordinary  shares  in the open  market,  from time to
               time, at prevailing  market prices.  No time limit was given with
               respect to the duration of the share  repurchase  program.  As of
               December 31, 2001, the Company had repurchased 1,585,446 ordinary
               shares at a cost of $9,903.

          F.   The Company  adopted a key employee  share  incentive  plan which
               provides  for the  grant  by the  Company  of  option  awards  to
               purchase  up to an  aggregate  of  5,284,945  ordinary  shares to
               officers,  employees,  directors and  consultants of the Company,
               its  subsidiaries  and affiliates.  The options vest ratably over
               vesting  periods  ranging  from three to five years.  The options
               expire 62 to 120 months from the date of  issuance.  The exercise
               price of the options under the plan is at varying  prices ranging
               from $0.95 to $28. The  incentive  plan provides for the grant of
               options  equal in the amount of up to 4% of the  Company's  share
               capital on a diluted basis.


                                      F-20
<PAGE>

                                 RADVISION LTD.

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
          In thousands of U.S. dollars, except share and per share data


Note 12 - Shareholders' Equity (Cont.)

          F.   (Cont.)

               Transactions related to the share incentive plan during the years
               ended December 31, 1999,  2000 and 2001 and the weighted  average
               exercise prices per share and weighted  average fair value of the
               options at the date of grant are summarized as follows:

                                           Number of    Weighted      Weighted
                                            options     average     average fair
                                                        exercise      value of
                                                        price per     options
                                                          share       granted
                                           ---------    ---------   ------------

 Outstanding as of January 1, 1999         1,430,580     $1.28
 Options granted                           1,421,296      1.18        $1.14
 Options forfeited                          (184,625)     1.18
                                            --------      ----
 Outstanding as of December 31, 1999       2,667,251     $1.23
                                           =========     =====
 Options exercisable at
   December 31, 1999                         542,903     $1.31
                                           =========     =====
 Options outstanding as of
   January 1, 2000                         2,667,251     $1.23
 Options granted                           1,390,795      6.68        $7.72
 Options exercised                          (599,138)     1.46
 Options forfeited                          (230,252)     7.30
                                            --------      ----
 Outstanding as of December 31, 2000       3,228,656     $7.48
                                           =========     =====
 Options exercisable at
   December 31, 2000                         749,225     $1.69
                                           =========     =====
 Options outstanding as of
   January 1, 2001                         3,228,656     $7.48
 Options granted                           2,284,095      5.65        $3.29
 Options exercised                          (744,706)     1.31
 Options forfeited                          (882,173)     8.74
                                            --------      ----
 Outstanding as of December 31, 2001       3,885,872     $7.29
                                           =========     =====
 Options exercisable at
   December 31, 2001                         698,842     $8.01
                                           =========     =====

                                      F-21
<PAGE>

                                 RADVISION LTD.

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
          In thousands of U.S. dollars, except share and per share data


Note 12 - Shareholders' Equity (Cont.)

          F.   (Cont.)

               A summary of the options  outstanding and exercisable at December
               31, 2001 is as follows:

<TABLE>
<CAPTION>
                               Options outstanding                     Options exercisable
                  --------------------------------------------   ----------------------------
 Exercise             Number         Weighted -     Weighted -        Number       Weighted -
  price           outstanding at      average        average     outstanding at     average
                   December 31,      remaining      exercise      December 31,      exercise
                       2001         contractual      prices           2001           prices
                                      life
-------------     --------------    -----------     ----------   --------------    -----------
 <S>               <C>                 <C>           <C>            <C>              <C>
 $ 0.95-1.74         890,259           2.19          $ 1.25         334,351          $ 1.24
   4.70-7.62       2,064,470           9.38            5.61          40,000            6.57
  10.20-12.94        454,418           8.26           11.92         204,810           11.71
 $17.00-28.00        476,725           8.50          $21.06         119,681          $21.06
                   ---------                                        -------
                   3,885,872                                        698,842
                   =========                                        =======

</TABLE>
               A summary of the options  granted  whose  exercise  prices differ
               from the  market  price  of the date of the  stock on the date of
               grant as follows:
<TABLE>
<CAPTION>
                                                        For the years ended December 31,
                                        -------------------------------------------------------------------------
                                                  1999                      2000                      2001
                                        ---------------------     ---------------------     ---------------------
                                                     Weighted                  Weighted                  Weighted
                                                     average                   average                  average
                                                     exercise                  exercise                  exercise
                                         Options      price        Options      price       Options       price
                                        ---------    --------     ---------    --------    ----------   ---------
   <S>                                  <C>          <C>          <C>            <C>        <C>           <C>
   Weighted average exercise
     prices less than fair value
     at date of grant                   1,421,296    $1.18          121,114      $10.20             -     $   -
   Weighted average exercise
     prices equal to fair value
     at date of grant                           -    $   -        1,269,681      $17.52     2,284,095     $5.65


</TABLE>

                                      F-22

<PAGE>

                                 RADVISION LTD.

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
          In thousands of U.S. dollars, except share and per share data

Note 12 - Shareholders' Equity (Cont.)

          F.   (Cont.)

               The amounts of deferred compensation  recognized arising from the
               difference  between the exercise  price and the fair market value
               on the date of the  grant  of  $1,466,  $218  and $0 for  options
               granted in the years ended December 31, 1999,  2000 and 2001, are
               included  in  shareholders'  equity  and are  amortized  over the
               vesting periods of the options according to APB 25. Under APB 25,
               the deferred  compensation  expense for the years ended  December
               31,1999,  2000 and  2001  amounted  to $477  and  $597 and  $328,
               respectively.

               If  deferred   compensation   had  been   determined   under  the
               alternative fair value accounting  method provided for under SFAS
               Statement No. 123, "Accounting for Stock-Based Compensation," the
               Company's  net  loss  and net  loss per  share  would  have  been
               increased to the following pro forma amounts:

                                          For the year ended December 31,
                                          --------------------------------
                                            1999       2000         2001
                                          --------   --------     --------
                Net income (loss):
                  As reported             $(2,696)   $   249      $(1,612)
                  Pro forma                (2,750)    (3,197)      (7,971)

                Net earnings (loss)
                  per share:
                   Basic                    (0.26)      0.014       (0.09)
                   Diluted                  (0.26)      0.013       (0.09)
                  Pro forma
                   Basic                    (0.26)     (0.19)       (0.42)
                   Diluted                $ (0.26)   $ (0.19)     $ (0.42)


               Under  SFAS No.  123,  the fair  value  of each  option  grant is
               estimated   on  the  date  of  grant   using  the   Black-Scholes
               option-pricing  model  with no  expected  dividends  and with the
               following  weighted-average  assumptions used for grants in 1999,
               2000 and 2001:

                                               1999        2000       2001
                                               ----        ----       ----
                Expected life of
                   the option (years)          2.84         2.5        2.63
                Volatility                     0%          80%        98%
                Risk free interest rate        5%           5%         2.5%


                                      F-23

<PAGE>


                                 RADVISION LTD.

             NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
                          In thousands of U.S. dollars


Note 13 - Segment Reporting and Geographical Information

          A.   Beginning  in the year  2001,  the  Company  operates  under  two
               reportable  segments based on its revised  internal  organization
               structure,  management of operations and performance  evaluation.
               These  segments are: The  Technology  Business Unit (TBU) and the
               Networking  Business  Unit  (NBU).   Discrete  segment  financial
               information  was not  available or reviewed by senior  management
               during  the  years`  2000  and  1999.   Therefore   corresponding
               information for prior years is not available.

               The Technology  Business Unit is responsible  for the development
               of enabling  technologies  for real-time voice and video over IP.
               The  Networking  Business  Unit  is  responsible  for  developing
               networking   products  for  IP-centric  voice,   video  and  data
               conferencing  services.  There  are no  significant  transactions
               between the TBU and the NBU.

               The Company evaluates  segment  performance based on revenues and
               operating  income (loss) of each segment.  As such,  there are no
               separately   identifiable   segment  assets  nor  are  there  any
               separately  identifiable  statements  of  operations  data  below
               operating loss.

               Business segment revenues are as follows:

                                                                    For the year
                                                                       ended
                                                                    December 31,
                                                                        2001
                                                                    ------------

               Technology Business Unit                               $16,545
               Networking Business Unit                                29,682
                                                                       ------
                     Total revenues                                   $46,227
                                                                      =======

               Business segment operating loss is as follows:

                                                                    For the year
                                                                       ended
                                                                    December 31,
                                                                        2001
                                                                    ------------

               Technology Business Unit                               $(3,122)
               Networking Business Unit                                (3,142)
                                                                       ------
                     Total operating loss                             $(6,264)
                                                                      =======



                                      F-24
<PAGE>


                                 RADVISION LTD.

             NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
                          In thousands of U.S. dollars

Note 13 - Segment Reporting and Geographical Information (Cont.)

          B.   The Company's sales by geographic area are as follows:

                                                 For the year ended December 31,
                                                 -------------------------------
                                                   1999       2000        2001
                                                 -------    -------    ---------
                 North America, principally
                   the United States             $ 9,531    $28,830    $29,245
                 Europe                            4,046      7,328      8,096
                 Far East                          2,663      5,287      6,940
                 Israel                            1,310      4,466      1,946
                                                   -----      -----      -----
                                                 $17,550    $45,911    $46,227
                                                 =======    =======    =======


                  For the year  ended  December  31,  1999,  no single  customer
                  represented  more  than  10% of  sales.  For the  years  ended
                  December  31,  2000  and  2001,  one  customer  accounted  for
                  approximately  22% and 35%,  respectively,  of sales  for that
                  period.


Note 14  -  Marketing and Selling Expenses, Net

                                                 For the year ended December 31,
                                                 -------------------------------
                                                   1999       2000        2001
                                                 -------    -------    ---------

Marketing and selling expenses                   $9,700     $17,492     $16,735
Participation by the Government of Israel           198         134           -
                                                  -----       -----       -----
Marketing and selling expenses, net              $9,502     $17,358     $16,735
                                                 ======     =======     =======

Marketing and selling expenses include:
  Royalties to the Government of Israel          $  896     $   750     $    80
                                                 ======     =======     =======



Note 15 - Restructuring Costs

          In the  second  quarter  of 2001,  the  Company  recorded  a charge of
          approximately  $3.0  million  primarily  relating to  severance  costs
          associated  with a 13%  workforce  reduction  as part  of its  plan to
          reduce  operating  expenses.  As of December 31, 2001,  the  remaining
          reserve balance of  approximately  $1.8 million is included with other
          payables and accrued expenses on the balance sheet.

                                      F-25
<PAGE>


                                 RADVISION LTD.

             NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
                          In thousands of U.S. dollars

Note 16 - Concentration of Credit Risk

          As of December 31, 2000,  current balances of two customers  accounted
          for 22% and 20% of the Company's trade  receivables,  or approximately
          $3,000 in total.  As of December  31,  2001,  current  balances of two
          customers   accounted  for  15%  and  11%  of  the   Company's   trade
          receivables,  or  approximately  $1,300 in total. The Company does not
          generally require  collateral to support credit sales.  Allowances are
          maintained for potential credit losses.


Note 17 - Related Party Balances and Transactions

          A.   Balances with Related Parties

                                                                 December 31,
                                                              ------------------
                                                              2000          2001
                                                              ----          ----

                Receivables                                   $ 73          $  2
                Trade payables                                $197          $148


          B.   Transactions with Related Parties

                                                         For the year ended
                                                             December 31,
                                                    ---------------------------
                                                    1999        2000      2001
                                                    ----      ------      -----

                 Revenues (1)                       $167      $  251       $108
                 Cost of revenues (3)                385         842        188
                 Research and development
                   expenses (2)                      363         622        184
                 Marketing, selling, general
                   and administrative expenses (2)   344       1,210        116
                 Purchase of property and
                   equipment (4)                    $284      $  722       $263


                                      F-26
<PAGE>

                                 RADVISION LTD.

             NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
                          In thousands of U.S. dollars

Note 17 - Related Party Balances and Transactions (Cont.)

          B.   Transactions with Related Parties (Cont.)

               (1)  Includes   revenues   from  the   Company's   products   and
                    maintenance sold to affiliated companies.

               (2)  Includes  administrative services provided to the Company by
                    affiliated  companies  which the Company  reimburses for the
                    costs incurred in providing these services.

               (3)  Includes  the  purchase  of   components   from   affiliated
                    companies.

               (4)  Includes  property and equipment  that were  purchased  from
                    affiliated companies.

          C.   Dispute with related parties - see note 11F.

Note 18 - Taxes on Income

          A.   The Company's  investment  program totaling $122 has been granted
               Approved  Enterprise  status under the Law for  Encouragement  of
               Capital Investments,  1959. In addition,  the Company was granted
               Approved Enterprise status for an expansion of a previous program
               totaling $375. The Company is entitled to a tax benefit period of
               seven years, on income derived from these programs, as follows: a
               full income tax  exemption  for the first two years and a reduced
               income tax rate of 25%  (instead of the regular  rate of 36%) for
               the remaining five year period.  If foreign  shareholdings in the
               Company  exceed 25%, the period for which the Company is entitled
               to a reduced  income tax is  extended  to eight years and the tax
               rates may be reduced to 10%.

               If the  Company  distributes  a  cash  dividend  out of  retained
               earnings  which were tax exempt  due to its  approved  enterprise
               status,  the Company would have to pay a 25% corporate tax on the
               amount  distributed,  and a further 15%  withholding tax would be
               deducted from the amounts distributed to the recipients.

               Should the  Company  derive  income from  sources  other than the
               approved  enterprise  programs  during  the  relevant  period  of
               benefits,  this income  will be taxable at the regular  corporate
               tax rate, which is currently 36%.


                                      F-27
<PAGE>

                                 RADVISION LTD.

             NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
                          In thousands of U.S. dollars

Note 18 - Taxes on Income (Cont.)

          A.   (Cont.)

               The benefits from the Company's approved  enterprise programs are
               dependent upon the Company  fulfilling the conditions  stipulated
               by the Law for Encouragement of Capital Investments, 1959 and the
               regulations  published under this law, as well as the criteria in
               the  approval  for  the  specific  investment  in  the  Company's
               approved enterprise programs. If the Company does not comply with
               these  conditions,  the tax  benefits  may be  canceled,  and the
               Company  may be  required  to refund the  amount of the  canceled
               benefits,  with the addition of linkage differences and interest.
               As of  the  date  of  these  financial  statements,  the  Company
               believes that it has complied with these conditions.

          B.   The  Company  is  subject  to the  Income  Tax Law  (Inflationary
               Adjustments),  1985,  measuring income on the basis of changes in
               the Israeli Consumer Price Index.

          C.   The  Company  is  an  "Industrial  Company"  under  the  Law  for
               Encouragement of Industry (Taxes), 1969 and is therefore entitled
               to certain  tax  benefits,  mainly  accelerated  depreciation  of
               machinery and  equipment  and  deduction of expenses  incurred in
               connection with a public offering.

          D.   Through  December 31, 1994, the Company's losses for tax purposes
               were  assigned to a  shareholder,  and are not  available  to the
               Company.

          E.   As of  December  31,  2001,  the  Company's  net  operating  loss
               carryforwards  for tax purposes  amounted to approximately  $22.7
               million.  These  net  operating  losses  may be  carried  forward
               indefinitely  and  offset  against  future  taxable  income.  The
               Company  expects that during the period in which these tax losses
               are  utilized  its  income  would be  substantially  tax  exempt.
               Accordingly,  the income tax rate of the  Company  during the tax
               exempt  period  will be zero,  and there  will be no tax  benefit
               available  from these  losses and no deferred  tax asset has been
               included in these financial statements. Deferred taxes in respect
               of other temporary differences are immaterial.

                                      F-28
<PAGE>

                                 RADVISION LTD.

             NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
                          In thousands of U.S. dollars


Note 18 - Taxes on Income (Cont.)

          F.   The U.S.  subsidiary's  carryforward  tax losses through December
               31, 2001 amounted to approximately $9.0 million. These losses are
               available  to offset any future U.S.  taxable  income of the U.S.
               subsidiary  and will expire in the years 2010 - 2014. In light of
               the Subsidiary's  recent history of operating losses, the Company
               has  recorded a  valuation  allowance  for all its  deferred  tax
               assets.

          G.   The  components  of the  Company's  total  income  (loss)  before
               provision for income taxes are as follows:

                                                        December 31,
                                               -------------------------------
                                                 1999       2000        2001
                                               --------     ----      --------

                 Israel                        $(1,327)     $ 72      $  (965)
                 Foreign                        (1,369)      177         (647)
                                                ------       ---         ----
                                               $(2,696)     $249      $(1,612)
                                               =======      ====      =======


               A  reconciliation  between the theoretical tax benefit,  assuming
               all income is taxed at the statutory  tax rate  applicable to the
               income of the  Company  and the actual tax expense as reported in
               the statements of operations, is as follows:

                                              For the year ended December 31,
                                              -------------------------------
                                                 1999      2000        2001
                                              --------    -----     ---------

                Theoretical tax expense
                  (benefit) computed at the
                  statutory rate (36%)          $(970)    $  90     $(580)
                Loss and other items for
                  which deferred taxes were
                  not provided, net               936      (182)      418
                Non-deductible expenses            34        92       162
                                                -----     -----     -----
                Income tax benefit              $   -     $   -     $   -
                                                =====     =====     =====


          H.   The Company has been  assessed for tax purposes  through the year
               1996.


                                      F-29
<PAGE>



                                 RADVISION LTD.

             NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
          In thousands of U.S. dollars, except share and per share data

Note 18 - Taxes on Income (Cont.)

          I.   For  U.S.  Federal  income  tax  purposes,  the  Company  will be
               classified as a passive foreign  investment  company ("PFIC") for
               any taxable year in which either (i) 75% or more of the Company's
               gross  income  is  passive  income,  or (ii) at least  50% of the
               average  value of all of the assets for the taxable  year produce
               or are held for the production of passive income.  As of December
               31, 2001 the Company believes,  based on an independent  expert's
               opinion,  that it is not a PFIC for United  States tax  purposes.
               However,  there  is no  certainty  that  the  United  States  tax
               authorities will accept the Company's standpoint in this regard.

Note 19 - Quarterly information

               The  Company's  quarterly  consolidated  financial  position  and
               statements  of  operations  as of and for  each of the  quarterly
               periods in the years ended  December  31,  2000,  and 2001 are as
               follows:


<TABLE>
<CAPTION>

                                                                       For the three months ended
                                    ------------------------------------------------------------------------------------------------
                                      Mar. 31,    June 30,   Sept. 30,    Dec. 31,    Mar. 31,    June 30,   Sept. 30,    Dec. 31,
                                        2000        2000        2000        2000        2001        2001        2001        2001
                                    ----------- ----------- ------------ ----------- ----------- ----------- ----------- -----------
<S>                                 <C>         <C>         <C>          <C>         <C>         <C>         <C>         <C>
Revenues                            $    7,827  $   10,201  $   12,707   $   15,176  $   14,895  $   10,430  $   10,208  $   10,694
Cost of revenues                        (1,944)     (2,579)     (3,101)      (3,822)     (3,725)     (2,240)     (2,099)     (2,298)
                                    ----------  ----------  ----------   ----------  ----------  ----------  ----------  ----------
Gross profit                             5,883       7,622       9,606       11,354      11,170       8,190       8,109       8,396
Operating expenses
   Research and development
     expenses                            2,529       3,332       3,749        4,653       4,757       4,563       4,319       4,294
   Less - participation by the
     Chief Scientist                       236         365        (248)           -           -           -           -           -
                                    ----------  ----------  ----------   ----------  ----------  ----------  ----------  ----------
   Research and development
     expenses, net                       2,293       2,967       3,997        4,653       4,757       4,563       4,319       4,294
   Marketing and selling
     expenses, net                       3,611       4,523       4,470        4,754       4,840       4,365       3,690       3,840
   General and administrative
     expenses                              615         670         780        1,393       1,169       1,308       1,057         904
Restructuring costs                          -           -           -            -           -       3,023           -           -
 Repayment of future royalties
  to the Chief Scientist of the
  Government of Israel                       -           -           -        3,666           -           -           -           -
                                    ----------  ----------  ----------   ----------  ----------  ----------  ----------  ----------
Total operating expenses                 6,519       8,160       9,247       14,466      10,766      13,259       9,066       9,038
                                    ----------  ----------  ----------   ----------  ----------  ----------  ----------  ----------
Operating income (loss)                   (636)       (538)        359       (3,112)        404      (5,069)       (957)       (642)
Financial income, net                      115       1,279       1,292        1,490       1,404       1,264       1,118         866
                                    ----------  ----------  ----------   ----------  ----------  ----------  ----------  ----------
        Net income (loss)           $     (521) $      741  $    1,651   $   (1,622) $    1,808  $   (3,805) $      161  $      224
                                    ==========  ==========  ==========   ==========  ==========  ==========  ==========  ==========
Basic earnings (loss)
  Per ordinary share                $    (0.04) $     0.04  $     0.09   $    (0.09) $     0.09  $     (0.2) $     0.01  $     0.01
                                    ==========  ==========  ==========   ==========  ==========  ==========  ==========  ==========
Weighted average number
  of ordinary shares
  outstanding                       14,626,504  18,598,596  18,661,155   19,020,592  19,196,316  19,199,771  18,995,041  18,431,559
                                    ==========  ==========  ==========   ==========  ==========  ==========  ==========  ==========
Diluted  earnings (loss) per
  ordinary share                    $    (0.04) $     0.03  $     0.08   $    (0.09) $     0.09  $     (0.2) $     0.01  $     0.01
                                    ==========  ==========  ==========   ==========  ==========  ==========  ==========  ==========
Weighted average number of
  shares                            14,626,504  21,705,623  21,835,771   19,020,592  20,750,146  19,199,771  20,226,819  19,601,742
                                    ==========  ==========  ==========   ==========  ==========  ==========  ==========  ==========

</TABLE>
                                      F-30

<PAGE>

                                 RADVISION LTD.

             NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Cont.)
                          In thousands of U.S. dollars


Note 19 - Quarterly information (Cont.)

<TABLE>
<CAPTION>
                                      31.3.2000   30.6.2000  30.9.2000   31.12.2000   31.3.2001    30.6.2001   30.9.2001  31.12.2001
                                      ---------   ---------  ---------   ----------   ---------    ---------   ---------  ----------
<S>                                   <C>         <C>        <C>         <C>          <C>          <C>         <C>         <C>
Current assets
  Cash and cash equivalents           $ 64,245    $ 25,754   $ 35,278    $ 41,617     $ 39,269     $ 42,368    $ 31,181    $  6,717
  Short-term investments                21,000      26,218     32,164      39,550       44,132       22,967      21,546      52,785
  Trade receivables, net                 3,700       5,731      5,982       7,025        7,294        5,332       5,403       5,078
  Other receivables and
    prepaid expenses                     1,620       2,021      1,279       1,051        1,128          876       1,122       1,259
  Inventories                            4,071       4,766      4,997       4,956        3,352        2,003       1,672       1,884
                                      --------    --------   --------    --------     --------     --------    --------    --------
         Total current assets           94,636      64,490     79,700      94,199       95,175       73,546      60,924      67,723
                                      --------    --------   --------    --------     --------     --------    --------    --------
Long-term investments                    7,096      43,278     29,660      15,897       10,310       26,490      35,831      26,326
                                      --------    --------   --------    --------     --------     --------    --------    --------
Property and equipment, net              3,288       3,625      4,557       5,200        5,284        5,399       4,794       4,518
                                      --------    --------   --------    --------     --------     --------    --------    --------
Deposit with insurance companies           554         654        834       1,055        1,082        1,239       1,244       1,200
                                      --------    --------   --------    --------     --------     --------    --------    --------
       Total assets                    105,574     112,047    114,751     116,351      111,851      106,674     102,793      99,767
                                      ========    ========   ========    ========     ========     ========    ========    ========
Current liabilities
  Current maturities of long-term
   bank loans                               63          63         55          46           38           38          26          19
  Trade payables                         2,432       1,073        989       3,716        2,012        1,531       1,574         765
  Other payables and accrued
    expenses                             9,847      16,456     16,873      16,777       12,344       13,529      12,773      13,562
                                      --------    --------   --------    --------     --------     --------    --------    --------
       Total current liabilities        12,342      17,592     17,917      20,539       14,394       15,098      14,373      14,346
                                      --------    --------   --------    --------     --------     --------    --------    --------
Long-term liabilities
  Bank loans, net of current
    maturities                              52          33         25          19           13            -           -           -
  Accrued severance pay                    900       1,149      1,279       1,448        1,649        1,877       1,845       1,872
                                      --------    --------   --------    --------     --------     --------    --------    --------
                                           952       1,182      1,304       1,467        1,662        1,877       1,845       1,872
                                      --------    --------   --------    --------     --------     --------    --------    --------
         Total liabilities              13,294      18,774     19,221      22,006       16,056       16,975      16,218      16,218
                                      --------    --------   --------    --------     --------     --------    --------    --------
Shareholders' equity
Ordinary shares of NIS 0.1 par value       147         147        154         165          167          176         174         182
Additional paid-in capital             103,036     103,151    103,576     103,849      103,402      103,688     103,832     104,209
Deferred compensation                   (1,106)       (967)      (795)       (641)        (554)        (463)       (381)       (299)
Accumulated deficit                     (9,797)     (9,058)    (7,405)     (9,028)      (7,220)     (11,025)    (10,864)    (10,640)
Less cost of treasury stock                  -           -          -           -            -       (2,677)     (6,186)     (9,903)
                                      --------    --------   --------    --------     --------     --------    --------    --------
       Total shareholders' equity       92,280      93,273     95,530      94,345       95,795       89,699      86,575      83,549
                                      --------    --------   --------    --------     --------     --------    --------    --------
       Total                          $105,574    $112,047   $114,751    $116,351     $111,851     $106,674    $102,793    $ 99,767
                                      ========    ========   ========    ========     ========     ========    ========    ========

</TABLE>


                                      F-31




<PAGE>





                                 RADVISION LTD.

                                  Exhibit Index

    Exhibit    Description
    -------    -----------

     *3.1      Memorandum of Association of the Registrant

     *3.2      Articles of Association of the Registrant

     *4.1      Form of Ordinary Share Certificate

     *4.2      Agreement,  dated as of April 14, 1995, by and among  Registrant,
               RAD Data Communications Ltd. and Yehuda Zisapel and Zohar Zisapel

     *4.3      Agreement,  dated as of April 18, 1995, by and among  Registrant,
               Clal Venture Capital Fund LP and Yehuda Zisapel and Zohar Zisapel

     *4.4      Agreement,  dated as of April 18, 1995, by and among  Registrant,
               Lannet  Data  Communications  Ltd.  and Yehuda  Zisapel and Zohar
               Zisapel

     *4.5      Agreement,  dated as of April 19, 1995, by and among  Registrant,
               ECI Telecom Ltd. and Yehuda Zisapel and Zohar Zisapel

     *4.6      Agreement,  dated as of April 24, 1995, by and among  Registrant,
               Zohar  Gilon,  Avraham  Neuman,  Yair  Tauman and W.S.P.  Capital
               Investment Ltd., and Yehuda Zisapel and Zohar Zisapel

     *4.7      Agreement,  dated as of April 26, 1995, by and among  Registrant,
               Lerosh Investments Ltd., Gevahim  Investments House Limited Ltd.,
               Yoav Chelouche,  Permal  Emerging Growth V Ltd.,  Maritime--Julex
               Investment Ltd., Shraga Blazer and Eli Luz and Yehuda Zisapel and
               Zohar Zisapel

     *4.8      Agreement,  dated as of April 27, 1995, by and among  Registrant,
               Finovelec,  Factory Systemes,  Houston Venture Partners, Ltd. and
               Yehuda Zisapel and Zohar Zisapel

     *4.9      Agreement,  dated September 12, 1996, by and among Registrant and
               Intel Corporation, as amended

     *4.10     Agreement,  dated  May  12,  1998,  by  and  among   Registrant,
               Evergreen Canada Israel  Management Ltd., IJT Technologies  Ltd.,
               Periscope I Fund Israeli Partnership,  Dovrat Shrem Trust Company
               Ltd., Rubin Gruber, C.E.  Unterberg,  Towbin LLC, C.E. Unterberg,
               Towbin Private Equity Partners LP, C.E. Unterberg, Towbin Private
               Equity Partners CV, C.E.  Unterberg,  Private Profit Sharing Plan
               FBO Alex Bernstein and Steimatzsky Ltd.



<PAGE>


     10.1      Form of 2000 Employee Stock Option Plan

    *10.2      Key Employee Share Incentive Plan, as amended

    *10.3      Consultant Option Plan, as amended

    *10.4      License  Agreement,  dated January 13, 1999,  between  Registrant
               and RADCOM Ltd.

    *10.5      Lease Agreement,  dated May 12, 1997,  between RADVISION Inc. and
               RAD Data Communications Inc., as amended

   **10.6      Lease Agreement,  dated January 19, 2001, between Zohar Zisapel
               Properties,  Inc., Yehuda Zisapel Properties,  Inc. and RADVISION
               Inc.

     11        Statements re computation of Per Share Earnings.

     21        Subsidiaries of RADVISION Ltd.

     23        Consent of Luboshitz Kasierer,  Arthur Andersen,  with respect to
               the Registration Statements on Form S-8.

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

*    Incorporated by reference to our registration statement on Form F-1,
registration number 333-30916, as amended, filed with the Securities and
Exchange Commission.

**   Incorporated by reference to our Annual Report on Form 20-F for the
fiscal year ended December 31, 2000, filed with the Securities and
Exchange Commission.