Daily High-Tech Security News

Saturday, August 27, 2005

Trend Micro Responds to Comments on Today's Media Reports

Trend Micro Responds to Comments on Today's Media Reports

TOKYO, Aug. 27 /PRNewswire-FirstCall/ -- Today, there was a media report mentioning the forecast of the financial result and dividend of fiscal year 2005.

This is completely false and groundless.

About Trend Micro

Trend Micro, Inc. (NASDAQ:TMIC) is a leader in network antivirus and Internet content security software and services. The Tokyo-based corporation has business units worldwide. Trend Micro products are sold through corporate and value-added resellers. For additional information and evaluation copies of all Trend Micro products, visit our website at http://www.trendmicro.com/ .

For additional Information
Mr. Mahendra Negi
Chief Financial Officer / IR Officer
Phone: +81-3-5334-4899
Fax: +81-3-5334-4874
ir@trendmicro.co.jp

Source: Trend Micro, Inc.

CONTACT: Mr. Mahendra Negi, Chief Financial Officer and IR Officer of
Trend Micro, Inc., +81-3-5334-4899, Fax: +81-3-5334-4874, ir@trendmicro.co.jp

Web site: http://www.trendmicro.com/

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Friday, August 26, 2005

Microsoft Commends Turkish and Moroccan Authorities and the FBI on the Arrest of the Alleged Authors of the Recent Zotob and Mytob Worms

Microsoft Commends Turkish and Moroccan Authorities and the FBI on the Arrest of the Alleged Authors of the Recent Zotob and Mytob Worms

Company's Internet Crime Investigations Team supported law-enforcement investigation.

REDMOND, Wash., Aug. 26 /PRNewswire-FirstCall/ -- Microsoft Corp. today commended Turkish and Moroccan law-enforcement authorities and the FBI for their prompt arrest of the individuals believed to be responsible for the creation and distribution of the recent Zotob and Mytob worms. Microsoft worked closely with law-enforcement agencies in the U.S. and overseas to provide investigative and technical support in the investigation.

(Logo: http://www.newscom.com/cgi-bin/prnh/20000822/MSFTLOGO)

On Thursday, Aug. 25, law-enforcement authorities in Morocco and Turkey arrested the individuals believed to be the authors and distributors of the worms, less than two weeks after the worms were unleashed.

Brad Smith, senior vice president and general counsel at Microsoft, said the company's ongoing partnerships with global law-enforcement authorities help ensure that when malicious code such as Zotob and Mytob is released, that information is shared rapidly to help law enforcement identify and hold cybercriminals accountable for their actions and help protect customers.

"We congratulate the Turkish and Moroccan authorities and the FBI for finding and apprehending the alleged authors and distributors of the Zotob and Mytob worms so quickly," Smith said. "This arrest demonstrates the value of public-private collaboration -- the first-class investigative work by the authorities and round-the-clock technical and investigative support provided by our Internet Crime Investigations Team here at Microsoft. The results show clearly that cybercriminals will be identified, apprehended and held accountable for their actions."

Microsoft's Internet Crime Investigations Team supported the investigation with law enforcement immediately following the release of the two worms. Microsoft provided technical information and analytical support to the FBI on this case, which was then shared with Moroccan and Turkish authorities.

The most visible aspect of the Zotob worm is that it caused some computers running Windows(R) 2000, which did not have security update MS05-039 installed, to automatically restart. More important, the Zotob and Mytob worms infected unprotected computers, making it possible for them to be taken over or hijacked by an unauthorized person. Computers infected in this manner are commonly referred to as "bots" or "infected" or "zombie" computers. "Botnets" are groups of hijacked computers that all connect to a central control computer and await instructions, such as conducting a distributed denial of service attack, stealing personal information or sending spam.

Microsoft officials said the Zotob and Mytob worms have been less damaging than other network worms, in part because more customers have adopted a maintenance mindset to keep their devices safe, such as practicing good security behaviors, including using an Internet firewall, diligently installing security updates, using up-to-date anti-virus software, and using newer and more secure software.

Microsoft's security and Internet safety efforts are focused in three primary areas. Technology investments improve the security of its products, improve the updating process, and provide new features and products that improve safety. Industry partnerships with business partners, customers, governments and law-enforcement agencies assist the development of policies and actions that can be enforced against cybercriminals. And prescriptive guidance and education provide broadly distributed, timely information to help customers make their systems more secure and protected from emerging threats.

About Microsoft

Founded in 1975, Microsoft (Nasdaq "MSFT") is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

Microsoft and Windows are either registered trademarks or trademarks of Microsoft Corp. in the United States and/or other countries.

The names of actual companies and products mentioned herein may be the trademarks of their respective owners.

Photo: NewsCom: http://www.newscom.com/cgi-bin/prnh/20000822/MSFTLOGO
AP Archive: http://photoarchive.ap.org/
PRN Photo Desk photodesk@prnewswire.com
Source: Microsoft Corp.

CONTACT: press only: In Europe: Microsoft EMEA Response Center,
+44-870-243-0515 or emearesponse@wagged.com; or In the United States: Paige
Young of WCTV, +1-425-442-3981 (broadcast inquiries), or Rapid Response Team,
Waggener Edstrom, +1-503-443-7070 or rrt@wagged.com

Web site: http://www.microsoft.com/

NOTE TO EDITORS: If you are interested in viewing additional information on Microsoft, please visit the Microsoft Web page at http://www.microsoft.com/presspass on Microsoft's corporate information pages. Web links, telephone numbers and titles were correct at time of publication, but may since have changed. For additional assistance, journalists and analysts may contact Microsoft's Rapid Response Team or other appropriate contacts listed at http://www.microsoft.com/presspass/contactpr.mspx.

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FBI and Microsoft Comment on Arrest of Alleged Zotob Worm Distributors

FBI and Microsoft Comment on Arrest of Alleged Zotob Worm Distributors

Microsoft general counsel and FBI representative commend Turkish and Moroccan

law enforcement for prompt arrest.

What: Turkish and Moroccan law enforcement and the FBI today announced
the arrest of the individuals believed to be responsible for the
creation and distribution of the recent Zotob worm.

Louis M. Reigel III, FBI Cyber Division Assistant Director, and
Microsoft Senior Vice President and General Counsel Brad Smith will
be available to discuss Microsoft's role in the investigation
leading to the arrest.

Who: Louis M. Reigel III, FBI Cyber Division Assistant Director
Brad Smith, Senior Vice President and Microsoft General Counsel

When: Friday, Aug. 26, 2005, 2:45 p.m. EDT/11:45 a.m. PDT

Call-in Information:
-- U.S. Toll-Free Number: (800) 857-9781
-- U.S. Toll Number/ International: 1 (630)395-0023
-- Passcode: 2391275

Microsoft is a registered trademark of Microsoft Corp. in the United States and/or other countries.

The names of actual companies and products mentioned herein may be the trademarks of their respective owners.

For interviews contact:

Rapid Response Team, Waggener Edstrom for Microsoft Corp., +1 (503) 443-7070, rrt@wagged.com

Note to editors: If you are interested in viewing additional information on Microsoft, please visit the Microsoft(R) Web page at http://www.microsoft.com/presspass on Microsoft's corporate information pages. Web links, telephone numbers and titles were correct at time of publication, but may since have changed. For additional assistance, journalists and analysts may contact Microsoft's Rapid Response Team or other appropriate contacts listed at http://www.microsoft.com/presspass/contactpr.mspx.

(Logo: http://www.newscom.com/cgi-bin/prnh/20000822/MSFTLOGO )

PRNewswire -- Aug. 26

Photo: NewsCom: http://www.newscom.com/cgi-bin/prnh/20000822/MSFTLOGO
AP Archive: http://photoarchive.ap.org/
PRN Photo Desk photodesk@prnewswire.com
Source: Microsoft Corp.

Web site: http://www.microsoft.com/

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Patron Systems, Inc. Comments on Continuity of Business Operations

Patron Systems, Inc. Comments on Continuity of Business Operations

CHICAGO, Aug. 26 /PRNewswire-FirstCall/ -- Patron Systems, Inc. ("Patron") , a provider of proprietary information security solutions offering homeland security and legislative compliance to corporations, municipalities, counties and states, today commented on the continuity of its business operations.

Commenting on the recent decline in the publicly quoted share price, Robert Cross, Chief Executive Officer of Patron stated, "The current operations of the company are on track, and the company is operating according to its business plan. The company's management is not aware of any information that warrants the share price decline."

Forward-Looking Statements

This release may contain statements that are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current estimates and projections about Patron Systems' business, which are derived in part on assumptions of its management, and are not guarantees of future performance, as such performance is difficult to predict. Actual outcomes and results may differ materially from what is expressed or forecasted in forward-looking statements due to numerous factors. Such factors include, but are not limited to, the Company's ability to execute effectively its business plan and acquisition strategy, changes in the market for information security solutions, changes in market activity, the development of new products and services, the enhancement of existing products and services, competitive pressures (including price competition), system failures, economic and political conditions, changes in consumer behavior and the introduction of competing products having technological and/or other advantages. These and other risks are described in the Company's filings with the Securities and Exchange Commission, which should be read in conjunction herewith for a further discussion of important factors that could cause actual results to differ materially from those in the forward-looking statements. The Company assumes no obligation to update information concerning its expectations.

Source: Patron Systems, Inc.

CONTACT: Robert Cross, CEO, of Patron Systems, +1-267-614-2890

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Cavium Networks and Cypress to Provide Joint Solutions for Next-Generation Networking Systems

Cavium Networks and Cypress to Provide Joint Solutions for Next-Generation Networking Systems

Cypress's network search engines to interoperate with Cavium Networks' OCTEON EXP Multi-core MIPS64(TM) processor family

MOUNTAIN VIEW, Calif., Aug. 26 /PRNewswire-FirstCall/ -- Cavium Networks, a worldwide leader in security, network services and embedded processor solutions, today announced that it will provide joint solutions for next- generation networking systems with Cypress Semiconductor Corporation (NYSE:CY), a leader in search solutions. The two companies will provide joint reference designs illustrating how Cypress's Ayama(TM) network search engines (NSEs) interoperate with Cavium's OCTEON EXP integrated control and data plane processor family to provide solutions for the access, edge and core networking markets. Cypress's NSE products and the OCTEON EXP processors are employed by networking, storage and wireless infrastructure equipment vendors building routers, intelligent switches, multi-service access equipment, multi-protocol storage switches, border session gateways and other related networking infrastructure equipment.

"The need for deep-packet classification for next-generation routers and intelligent content aware switches is increasing with the advent of application layer processing," said RK Parthasarathy, senior product marketing manager at Cypress. "By partnering with Cavium Networks' broad range of processors spanning multiple price and performance points, Cypress is expanding its leadership position by providing network search solutions targeted for the next generation of integrated control and data plane applications."

"Cavium Networks is pleased to work with Cypress to offer proven and widely used ternary CAM and algorithmic based look-up solutions," said Amer Haider, Director of Marketing, OCTEON Product Line at Cavium Networks. "By adding look-up acceleration to OCTEON EXP we are providing OEM vendors a new level of packet processing performance with general-purpose processor cores programmable using C / C++."

The two companies will work together to supply reference designs, application notes, and developer's kits that customers can use to quickly and inexpensively deploy leading-edge networking equipment. These reference designs will be available from both companies, with applications engineers from both Cypress and Cavium working together to offer complete application- level solutions.

The OCTEON EXP processor family is a scalable Multi-core MIPS64 based processor family with 4 to 16 cores on a single chip with integrated Ethernet and/or SPI4.2 networking interfaces, 144bit DRAM memory controller, RLDRAM memory controller, NSE connectivity and internal hardware acceleration for packet processing, TCP, compression / decompression and string matching.

Cypress's search solution includes a comprehensive portfolio of products to address all segments of the search market. In addition to its highly successful TCAM-based solutions (Ayama((TM)) 10000 and Ayama 20000 NSEs), Cypress is the only vendor to also offer an algorithmic SRAM-based forwarding search engine (Sahasra(TM) 50000) to address the search needs of systems requiring large forwarding tables of more than 1 million table entries. The Ayama 20000 NSEs are the first of their kind to offer a FastLink(TM) cascaded interface -- a heterogeneous interface for optimized search subsystems which, when combined with Cypress's easy-to-use Cynapse(TM) software, enables seamless interworking of Cypress TCAM-based and algorithmic-based NSE families. Cypress's comprehensive NSE portfolio has been adopted by leading vendors in the router, L2/L3 switch, CMTS, DSLAM and storage area network (SAN) segments.

Availability

The Cypress Ayama NSE and Cavium OCTEON EXP joint solution will be available in early 2006. The two companies are also working together on next- generation solutions based on the Sahasra algorithmic search engine.

About Cypress

Cypress solutions are at the heart of any system that is built to perform: consumer, computation, data communications, automotive, industrial, and solar power. Leveraging a strong commitment to customer service and performance- based process and manufacturing expertise, Cypress's product portfolio includes a broad selection of wired and wireless USB devices, CMOS image sensors, timing solutions, network search engines, specialty memories, high- bandwidth synchronous and micropower memory products, optical solutions, and reconfigurable mixed-signal arrays. Cypress stock is traded on the New York Stock Exchange under the ticker symbol CY. More information about the company is available online at http://www.cypress.com/ .

About Cavium Networks

Cavium Networks is a worldwide leader in security, network services and embedded processor solutions. Cavium Networks' award-winning NITROX and MIPS64-based OCTEON families of processors and accelerator boards offer flexible, scalable and highly integrated solutions delivering 50Mbps to 10Gbps performance. The company's products are integrated into a wide range of networking equipment that include routers, gateways, network appliances, content switches, wireless LAN access/aggregation points, servers and storage networking devices. Cavium Networks is headquartered in the heart of Silicon Valley in Mountain View, CA with development centers in Marlboro, MA and Hyderabad, India. For more information, please visit: http://www.caviumnetworks.com/

Cypress and the Cypress logo are registered trademarks of Cypress Semiconductor Corporation. Ayama, Sahasra, FastLink and Cynapse are trademarks of Cypress. All other trademarks are the property of their respective owners.

OCTEON(TM) and NITROX(TM) are trademarks of Cavium Networks, Inc. All other trademarks are the property of their respective owners. Product photos and datasheets are available upon request. All rights reserved.

Source: Cavium Networks

CONTACT: Don Parkman, Public Relations Director of Cypress,
+1-408-943-4885, or dsp@cypress.com; or Angel Atondo, of Cavium Networks, +1-
650-623-7033, or angel.atondo@caviumnetworks.com

Web site: http://www.cavium.com/

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Shaun Wolfe, Former WRQ President & CEO, Takes Helm at MessageGate

Shaun Wolfe, Former WRQ President & CEO, Takes Helm at MessageGate

Wolfe Joins Growing Executive Team of Other Northwest Tech Veterans

BELLEVUE, Wash., Aug. 26 /PRNewswire-FirstCall/ -- MessageGate, Inc., the leader in email compliance and categorization solutions, today announced that Shaun Wolfe, formerly the president and CEO for WRQ, has joined the company as president and CEO. Wolfe will also join the board of directors as a vice chairman. David Weld, MessageGate's founder and current president and CEO, will remain as a vice chairman of the board of directors and as an executive of the company; he will continue to focus on strategy, business development and corporate development.

"We have a great set of products, great market and customer traction. We are very excited about having Shaun join us to help shepherd the future growth of the company," said Weld. "Shaun has an exceptional background and proven history of success and we look forward to having him on board."

Wolfe is a 20-year veteran of the enterprise software industry. A founder of two start up companies, he most recently was president and CEO at WRQ, Inc -- a $100 million enterprise software company. Wolfe has experience building businesses from the ground up and scaling complex go-to-market strategies and channels worldwide. He has extensive and direct experience in research and development, marketing, sales, executive management, and international strategies & operations. Wolfe also serves on the board of several organizations including the past chair and current board member of the WSA (formerly Washington Software Association), the Treasurer of Artsfund, the board of advisors at Western Washington University, and the board at Vigilos Inc.

"MessageGate has steadily positioned itself to capitalize on the exploding need for compliance and security in the corporate messaging environment," said Wolfe. "Between the physical costs of infrastructure, and the legal liability cost of non-compliance, email monitoring and categorization software is no longer a 'nice to have' but rather a 'must have.' MessageGate has a complete solution to save enterprises money and reduce risk, and I am very excited about the opportunity for us moving forward into a world-class company."

MessageGate Technology

MessageGate's technology provides both the means to identify and measure current email and archival activity through its Messaging Activity Profile (MAP) Service as well as control what is released and archived with its Email Compliance System (ECS). The MessageGate(R) MAP produces a roadmap of both operational inefficiencies and business risks present in email activity. MessageGate(R) ECS uses this roadmap as the foundation for policies to be smarter about what is stored, how it is stored, what is released, and what is reviewed. User friendly features like Sender Confirmation allow employees to double check their work by confirming a message is acceptable before it is released.

"The evolution of MessageGate from its roots as an inbound email filtering company to its current focus on outbound email monitoring and categorization is the result of David's vision and execution," said Wolfe. "He has positioned MessageGate for success, and will continue to be an important part of our future."

MessageGate has been building a "dream team" of senior executives with local roots. Earlier this month, MessageGate announced the appointment of Jamie Marra as chief technology officer. Marra held similar positions with EDS, T-Mobile Wireless, Microsoft, and Amazon.com. Bill Bunker, MessageGate's vice president of marketing and business development joined the company from his executive-level post at Bellevue-based Onyx Software.

About MessageGate

MessageGate is the leader in enterprise-class messaging compliance and archive categorization solutions for large organizations. The MessageGate technology has been deployed by some of the largest companies in the world helping them to monitor and control their messaging with respect to corporate policies and regulatory compliance. MessageGate empowers large, complex organizations to proactively monitor, understand, and control the risks and exposures created by the pervasive use of email and other types of messaging. www.messagegate.com

Contact:
John Williams, Scoville PR
jwilliams@scovillepr.com
206.829.1392

Source: MessageGate, Inc.

CONTACT: John Williams of Scoville PR. +1-206.829.1392, or
jwilliams@scovillepr.com, for MessageGate, Inc.

Web site: http://www.messagegate.com/

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Delaware Department of Safety and Homeland Security Chooses Visual Analytics Information Sharing Technologies for Statewide Project

Delaware Department of Safety and Homeland Security Chooses Visual Analytics Information Sharing Technologies for Statewide Project

VAI Team to Deliver Capability to Integrate and Securely Share Disparate Information Sets across the State

POOLESVILLE, Md., Aug. 26 /PRNewswire-FirstCall/ -- Visual Analytics Inc. (VAI), with partner Project Performance Corporation (PPC), has been awarded a contract from the Delaware Department of Safety and Homeland Security, Division of State Police to support an information sharing demonstration project to facilitate the fusion of data from several separate and remote data repositories from across the state. The project will demonstrate the ability to query and analyze state repositories without having to restructure and relocate data into a central data warehouse.

The solution will be housed at the Delaware Information Analysis Center (DIAC), currently being completed in Dover, and will allow users, both at the DIAC and at remote facilities in Delaware, to search and analyze information from a variety of disparate data repositories. VAI's Data Clarity Suite of tools will connect, index, and analyze disparate repositories of both structured and unstructured data

According to Bennett McPhatter, COO of VAI, "Using our Data Clarity Suite guarantees the Delaware State Police a cost-effective and low-risk solution that has been proven extensively in other law enforcement operations. We are proud to support Delaware in this initiative because they are one of the first states to truly implement a distributed, state-wide information sharing and analytical fusion center capability."

"Our unique server-to-server capability creates a secure and selective, federated, information sharing network" stated Mr. McPhatter. "This enables participating agencies to share data with one another while maintaining security and control over their data. This capability also allows Delaware to quickly expand its offering as more sites and data sources are introduced."

Under this contract, VAI and PPC will couple to several critical data sources and deliver the system to a number of pre-selected sites. PPC is responsible for the installation, configuration, training, and support of the technologies. PPC is a premium certified reseller of VAI's technologies.

About Visual Analytics

Founded in 1998, Visual Analytics Inc. (VAI) is a privately-held company, based in the Washington, DC metropolitan area, focused on Superior Pattern Discovery and Data Sharing Solutions. VAI serves markets requiring sophisticated data sharing and high-end analytics. VAI has created a suite of tools, collectively called "The Data Clarity Suite," based on the VisuaLinks(R), Digital Information Gateway (DIG(TM)), and DIG Symphony technologies that are used to search, structure, and present data for analysis and discovery. More information on VAI can be found at http://www.visualanalytics.com/ .

About Project Performance Corporation

Founded in 1991, Project Performance Corporation is a management and technology consulting firm in the business of simplifying complex problems for top government and Fortune 500 decision makers with specialization in environment, energy, transportation and information technology solutions. Committed to total quality management, PPC has been externally assessed to CMMI Level 2 and is ISO 9001:2000-compliant. PPC is privately held, supporting a culture of personal and shared success for every employee. Headquartered in McLean, Virginia, PPC has offices in Alexandria, Virginia; Germantown, Maryland; Washington, DC; and Dallas, Texas. More information on PCC can be found at http://www.ppc.com/ .

Source: Visual Analytics Inc.

CONTACT: Christopher Westphal, CEO, Visual Analytics Inc.,
+1-301-407-2200 ext. 101, westphal@visualanalytics.com

Web site: http://www.visualanalytics.com/
http://www.ppc.com/

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SuperCom Announces Appointment of Director and Increase in Authorized Share Capital

SuperCom Announces Appointment of Director and Increase in Authorized Share Capital

NEW YORK and RA'ANANA, Israel, August 26/PRNewswire-FirstCall/ -- SuperCom Ltd. (OTCBB: SPCBF.OB; Euronext: SUP), a leading
provider of smart card and electronic identification (e-ID) solutions, today
announced the appointment of Mr. Daniel Spira as a Director and an increase
in the authorized share capital of the Company following an Extraordinary
General Meeting of Shareholders held at the offices of the Company in
Ra'anana, Israel on Tuesday, August 23, 2005.

Mr. Spira is the founder and managing partner of a Tel
Aviv-based accounting firm, Daniel Spira, Certified Public Accountants. The
firm, which Spira founded in 1985, provides Internal auditing and
professional services to numerous publicly traded and privately held
technology firms based in Israel. "Daniel brings considerable financial
experience and a strong background advising high technology companies to
SuperCom's Board of Directors and we are delighted that he has joined the
Board, commented Mr. Eli Rozen, Chairman of the Board.

At the meeting, shareholders also approved an increase in the
Company's authorized share capital by NIS 135,000 (one hundred thirty five
thousand New Israeli Shekels) divided into 13,350,000 (thirteen million three
hundred fifty thousand) Ordinary Shares, nominal value NIS 0.01 each.
Following the increase, the aggregate authorized share capital of the Company
is NIS 400,000 (four hundred thousand New Israeli Shekels), divided into
40,000,000 (forty million) Ordinary Shares, nominal value NIS 0.01 each.

About SuperCom:

SuperCom, Ltd. provides innovative solutions in smart-card and
e-ID technologies to the commercial and government sectors. The Company
offers a wide range of standard and customized smart-card-based solutions for
physical and logical security, education, corrections facilities and air &
seaports. It is also a leader in the manufacturing of secure and durable
documents such as national identity cards, passports, visas, drivers'
licenses and vehicle registration to improve homeland security, governmental
efficiency and document ease of use. Headquartered in Israel, SuperCom has
subsidiaries in the US and Hong Kong. For more information, visit our website
at www.supercomgroup.com.

Safe Harbor

This press release contains forward-looking statements. Such
statements are subject to certain risks and uncertainties, such as market
acceptance of new products and our ability to execute production on orders,
which could cause actual results to differ materially from those in the
statements included in this press release. Although SuperCom believes that
the expectations reflected in such forward-looking statements are based on
reasonable assumptions, it can give no assurance that its expectations will
be achieved. SuperCom disclaims any intention or obligation to update or
revise any forward-looking statements, which speak only as of the date
hereof, whether as a result of new information, future events or otherwise.
SuperCom undertakes no obligation to update forward-looking statements to
reflect subsequently occurring events or circumstances.

This press release and other releases are available on
www.supercomgroup.com.


Contact:
Eyal Tuchman, CFO
SuperCom, Ltd.
+972-9-775-0800
eyalt@supercomgroup.com

Source: SuperCom Ltd

Eyal Tuchman, CFO, SuperCom, Ltd., +972-9-775-0800, eyalt@supercomgroup.com

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What Viruses and Worms Are Your Children Picking Up From Their Friends?

What Viruses and Worms Are Your Children Picking Up From Their Friends?

Back-To-School Advice From an Expert on Protecting Your Family From Emails, Spam, Hackers and Other Home Cyber Intruders

JERSEY CITY, N.J., Aug. 26 /PRNewswire/ -- Back to school means back to the Internet in many households. With computer-based research and homework assignments due daily, home computers can become contaminated with viruses and spyware that damage home computers. In addition, many children surf the Internet without the supervision of their parents, which can also lead to personal as well as PC threats. It is essential for parents -- the home IT managers -- to keep their computers -- and more importantly, their children -- safe while on-line.

"Internet use among children is staggering, but parental involvement in this activity can be virtually absent," said M. Fahim Siddiqui, Chief Executive Officer, Sereniti, Inc., a next generation home networking solution provider. "Eighty-seven percent of kids ages 12-17 use the Internet and more than half of them go online daily. Pre-school children are actually one of the fastest growing groups of website visitors. Parents, and I am one myself, need a simple and secure way to protect children, home computers and personal data. That was a primary consideration in the development of our Sereniti Smart Home Network Service."

Fahim explained that the Sereniti Smart Home Network Service is a subscription-based service that provides the latest parental controls, anti- virus, anti-spyware, firewalls and pop-up blockers for home computers with broadband Internet access. The advanced parental controls can be remotely accessed and revised by parents from any online PC, enabling parents to restrict or allow access at any time. Combined with Sereniti's 24-hour technical support and automatic security suite updates, parents can breathe easier knowing they can control when and where their children go on the Internet and that viruses, worms and other threats are being stopped by Sereniti's Smart Home Network Service.

"Recent research shows that teens use email almost as much as adults, and the kids use instant messaging far more. Surprisingly, only about half the adults polled said they use any type of filtering software to protect their kids online," said Fahim.

Tips for Keeping Kids Safe Online

As an information technology professional and a devoted parent, Fahim offers these tips to help keep children safe online:

* Utilize parental controls and establish access guidelines for your
children, such as limiting the times they can go online and controlling
which sites they may visit. Establish times that your children can
and can't access the Internet.

* Keep the "family pc" in a visible and widely used part of the home so
you can see what your children are doing online.

* Instruct children never to provide any identifying information such
home address, age, photos, school name, email address or telephone
numbers to an unknown web site or in a public message such as chat or
bulletin boards or over email. Do not share that information via email
unless you recognize and know the person.

* Teach your children safe Internet habits. Spend time with them while
they are searching online and discuss possible dangers that are on the
Internet. The Internet can provide needed family time and be used as a
wonderful learning tool.

* If children make friends on-line, become just as familiar with them as
you are with the friends they make at school or in the neighborhood.

* Teach children not to open emails from addresses you do not recognize
or subjects that do not make sense or are suggestive. Never respond to
email, chat comments, instant messages or other messages that are
hostile, belligerent, inappropriate or in any way make you feel
uncomfortable.

* Keep an open line of communication between you and your children.
Establish rules for on-line habits and talk to your children about what
they are viewing on-line. Create a list of rules and post them next to
the computer.

"The Internet is a wonderful resource for families, but it must be used safely and securely, with appropriate parental involvement," added Fahim.

For additional information about the Sereniti Smart Home Network System, including special back-to-school plans for families, visit: www.sereniti.com or phone 1-800-697-3736.

About Sereniti, Inc.

Sereniti, Inc. makes wireless networking safe and easy, and provides unlimited remote technical support to the home. Its subscription-based service combines networking hardware, software and 24/7 technical support. Headquartered in Jersey City, NJ, Sereniti is a privately held technology company funded by leading venture capital firms Sevin Rosen and Rho Ventures. For more information on Sereniti's home network solutions and services, please visit http://www.sereniti.com/

Contacts:
Alysia Lew/Rick Pendrick
G.S. Schwartz & Co. Inc.
(212) 725-4500
alew@schwartz.com

Source: Sereniti, Inc.

CONTACT: Alysia Lew or Rick Pendrick, both of G.S. Schwartz & Co. Inc.,
+1-212-725-4500, alew@schwartz.com, both for Sereniti, Inc.

Web site: http://www.sereniti.com/

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Thursday, August 25, 2005

HTCIA 2005 International Conference Keynote Speaker Announced, Event Sells Out

HTCIA 2005 International Conference Keynote Speaker Announced, Event Sells Out

Registration Closed, With More Than 650 Investigators Attending the HTCIA 2005 International Conference & Expo Set for Aug 29-31

AMISSVILLE, Va., Aug. 25 /PRNewswire/ -- HTCIA (High Technology Crime Investigation Association), the world's largest organization for high technology crime investigators, today announced that Louis Reigel, assistant director of the Cyber Division for the Federal Bureau of Investigation will serve as the keynote speaker for the HTCIA 2005 International Conference & Expo to be held August 29-31, 2005 at the Hyatt Regency Monterey Resort in Monterey, California.

Registration has closed for the event, with more than 650 government and corporate investigators scheduled to attend. Hosted by the Silicon Valley Chapter of HTCIA, the International Conference & Expo offers law enforcement, corporate security investigators and homeland security administrators a unique opportunity to address issues surrounding investigations, apprehension and preventative methodologies associated with the newest breed of high technology criminals.

Hands-on labs and informative, nationally and internationally-recognized speakers provide an array of learning experiences while visiting the beautiful California coast. The HTCIA International Conference stands as a unique, non- profit conference, with all registration funds dedicated to running the conference, not a profit-driven enterprise.

The conference is considered one of the premier training opportunities for members of law enforcement and private industry involved in the field of high tech investigations. The conference features three days of lectures and break-out sessions where attendees will have the opportunity to select from many topics of general and special interests such as: Internet Crime / Cybercrime, Legal Updates, Network Security, Terrorism and Homeland Security.

"We're pleased to announce Louis Reigel as our keynote speaker for this year's conference," said Warren Kruse, International President of HTCIA. "The entire event, offering numerous classes and lectures, is always a one-of-a- kind opportunity for professionals in the field."

About HTCIA

HTCIA (High Technology Crime Investigation Association) is designed to encourage, promote, aid and affect the voluntary interchange of data, information, experience, ideas and knowledge about methods, processes, and techniques relating to investigations and security in advanced technologies among its membership. Based in Amissville, Virginia, HTCIA includes 37 active local chapters. For more information, visit http://www.htcia.org/ or call the HTCIA headquarters at (540) 937-5019.

Source: High Technology Crime Investigation Association

CONTACT: Matthew Zintel of Zintel Public Relations, +1-310-574-8888,
matthew@zintelpr.com, for High Technology Crime Investigation Association

Web site: http://www.htcia.org/

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Profile: jene30

Sun Microsystems Announces Availability of Java Integration Suite, the Sixth Suite in the Java Enterprise System

Sun Microsystems Announces Availability of Java Integration Suite, the Sixth Suite in the Java Enterprise System

Additional Suite Positions Java Enterprise System as the Leading Platform for Developing and Deploying SOA and Composite Enterprise Applications

SANTA CLARA, Calif., Aug. 25 /PRNewswire-FirstCall/ -- Sun Microsystems, Inc. (NASDAQ:SUNW), the creator and leading advocate of Java(TM) technology, today announced the immediate availability of the Sun Java Integration Suite, the sixth suite in Sun's Java Enterprise System (Java ES). The new technology suite is a result of the company's acquisition of SeeBeyond, announced today in a separate release. With nearly 1 million Java ES subscribers to date, this addition will build upon Java ES's proven success and position it as the most complete software platform for building Service Oriented Architectures (SOA), Web services and composite applications.

"With the announcement today, Sun is making an early move to capture the growing integration market with a complete and affordable Java ES stack to address both security and integration, two of the leading concerns for IT managers today," said John Loiacono, executive vice president of Software, Sun Microsystems. "Adding the premier suite for integration and composite application development to the Java ES and then combining with Solaris 10 further establishes Sun as a mainstream, end-to-end provider of software for the development and deployment of enterprise applications. And we're just warming up."

Sun plans to deliver the next version of the Sun Java Integration Suite in-line with the release schedule of Q1 2006, as previously outlined by SeeBeyond, with support for a number of platforms, including Solaris(TM) 10, Microsoft Windows, HP-UX, IBM AIX, Red Hat, SuSe, IBM ZOS, IBM WebSphere, and BEA WebLogic. Additionally, Sun intends to detail the future roadmap within 90 days, including plans to add the Java Integration Suite to Java ES.

The Sun Java Integration Suite is now available with both perpetual license and subscription pricing. Subscription pricing will be available upon customer request.

Sun will continue support for SeeBeyond's current customer installed base by maintaining current support levels of previous SeeBeyond releases in order to protect customers' investments. In addition, Sun plans to hold the next Horizon's user conference, details of which will be communicated at a later date.

"With Sun Java Integration Suite, we now have the ability to create this new breed of process-driven applications with customized end-user interfaces at a fraction of what it would cost to use standard development tools or to purchase packaged, off-the-shelf applications," said David Dart, Managing Director and CIO, HVB Americas. "Business value is no longer about packaged applications, it's about the business-user services those applications can be orchestrated to provide."

"Blue Cross Blue Shield of Massachusetts is consistently recognized for standards of service that are among the highest in the nation. It only makes sense that we partner with providers of world-class technology to support the infrastructure that provides that service," said Steve Edens, Enterprise Integration Architect, Blue Cross Blue Shield of Massachusetts. "Sun's acquisition of SeeBeyond will surely benefit BCBSMA as we continue to build upon our foundation in the future."

"BT's Spine is a key enabler in connecting up the UK National Health Service and lies at the heart of the NHS National Program for IT," said Jerry Allen, Spine Program Manager, BT Global Services. "The Spine itself relies upon both Sun and SeeBeyond technologies and as these two technologies are brought closer together it can only be good news for Sun customers."

"Deploying a centralized integration infrastructure with SeeBeyond technology has had a significant impact at Emerson, allowing us to eliminate redundancy and enable partner connectivity to drive out cost and increase visibility throughout our global supply chain," said Steve Hassell, CIO of Emerson. "As a long-standing customer and supporter of SeeBeyond, we believe the acquisition by Sun brings a unique opportunity to take its vision and technology leadership to a new level. As an enterprise customer, we look forward to witnessing first hand the benefits this acquisition can bring to customers including added market leadership, scale, technology breadth and global reach."

About Java Enterprise System

The Java Enterprise System is an open, standards-based software system that delivers a core set of industry-leading shared enterprise network services as a single, integrated entity on a predictable release cycle. It serves as the strategic underpinning of Sun's software strategy. Java ES is the software companies use to build their web based applications, ensure the identities of people who access their services and enable them to quickly and securely develop and deploy applications and services. The other Sun Java System Suites included in Java ES are: Sun Java Availability Suite, Sun Java Identity Management Suite, Sun Java Web Infrastructure Suite, Sun Java Application Platform Suite and Sun Java Communications Suite.

For more information on the Java Enterprise System please visit: http://www.sun.com/software/javaenterprisesystem .

This press release contains forward-looking statements that involve risks and uncertainties. These forward-looking statements include statements regarding the expected financial performance of Sun Microsystems, Inc. following the consummation of the acquisition, Sun's ability to position the Java ES as the most comprehensive software platform, Sun's ability to deliver the next version of the Sun Java Integration Suite, Sun's ability to maintain current support levels and Sun's ability to create a new breed of process- driven applications at a fraction of the cost of other solutions. Such statements are just predictions and involve risks and uncertainties such that actual results and performance may differ materially. Factors that might cause such a difference include the failure to successfully integrate SeeBeyond and its employees into Sun and achieve expected synergies, compete successfully in this highly competitive and rapidly changing marketplace, and retain key employees. These and other risks are detailed from time to time in Sun's periodic reports that are filed with the Securities and Exchange Commission, including Sun's annual report on Form 10-K for the fiscal year ended June 30, 2004 and its quarterly reports on Form 10-Q for the fiscal quarters ended September 26, 2004, December 26, 2004 and March 27, 2005.

About Sun Microsystems, Inc.

A singular vision -- "The Network Is The Computer"(TM) -- guides Sun in the development of technologies that power the world's most important markets. Sun's philosophy of sharing innovation and building communities is at the forefront of the next wave of computing: the Participation Age. Sun can be found in more than 100 countries and on the Web at sun.com. Subscribe to Sun newswire at http://sun.com/news .

FOR MORE INFORMATION

Carrie Kasten
Sun Microsystems, Inc.
347-534-2093
carrie.kasten@sun.com

NOTE: Sun, Sun Microsystems, the Sun Logo, Java, Solaris, and The Network Is The Computer are trademarks or registered trademarks of Sun Microsystems, Inc. in the United States and other countries.

Source: Sun Microsystems, Inc.

CONTACT: Carrie Kasten of Sun Microsystems, Inc., +1-347-534-2093, or
carrie.kasten@sun.com

Web site: http://sun.com/

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Profile: jene30

Novell Reports Financial Results for Third Fiscal Quarter 2005

Novell Reports Financial Results for Third Fiscal Quarter 2005

WALTHAM, Mass., Aug. 25 /PRNewswire-FirstCall/ -- Novell, Inc. (NASDAQ:NOVL) today announced financial results for its third fiscal quarter ended July 31, 2005. For the quarter, Novell reported revenues of $290 million, compared to revenues of $305 million for the third fiscal quarter 2004. Net income available to common stockholders in the third fiscal quarter 2005 was $2 million or $0.00 earnings per diluted common share. This compared to a net income available to common stockholders of $24 million, or $0.06 per diluted common share, for the third fiscal quarter 2004.

On a non-GAAP basis, adjusted net income available to common stockholders for the third fiscal quarter 2005 was $14 million, or $0.03 per diluted common share, excluding restructuring charges of $9 million and excluding a net gain of $1 million on the sale of previously impaired long-term investments. This compares to non-GAAP adjusted net income available to common stockholders for the third fiscal quarter 2004 of $14 million, or $0.03 per diluted common share, which excluded the effect of the payment from Canopy of $19 million as a result of a legal judgment in favor of Novell, restructuring charges of $9 million, and long-term investment impairments of $1 million. In the third fiscal quarter of 2004, $14 million of the Canopy payment was recorded as revenue and the remaining $5 million as interest income. Full details on Novell's reported results, including a reconciliation of the non-GAAP adjusted results, are included in the financial schedules that are a part of this release.

In the third fiscal quarter 2005 as compared to the prior year's period, foreign currency exchange rates favorably impacted total revenue by approximately $4 million and did not have a material impact on net income.

During the third fiscal quarter 2005, Novell recognized Linux-related product revenue of $44 million, including $31 million from sales of Novell Open Enterprise Server (OES) and $8 million from subscriptions to SUSE(TM) LINUX Enterprise Server (SLES). OES revenue of $31 million reflects the first full quarter that OES was available. Sales of stand-alone subscriptions to SLES totaled 28,000 subscriptions in the quarter.

For the first nine months of fiscal 2005, Novell reported revenue of $877 million and net income available to common stockholders of $382 million, or $0.88 per diluted common share, including a $448 million net legal settlement with Microsoft. For the first nine months of fiscal 2004, which includes the Canopy payment, the company reported revenue of $865 million and net income available to common stockholders of $18 million, or $0.05 per diluted common share.

"Customers continue to embrace Novell's Linux and identity solutions," said Jack Messman, Chairman and CEO of Novell. "We were particularly pleased with our initial penetration of the Chinese market where Linux is an attractive technology for government and commercial users. Our increasingly customer-focused, go-to-market approach is leading to a stronger Novell as evidenced by our positive operating cash flow and growth in deferred revenue in the quarter. While we were profitable this quarter, we still have improvements to make in our business which will lead to cost reductions."

On the balance sheet, cash and short-term investments were $1.6 billion at July 31, 2005, consistent with $1.6 billion at April 30, 2005. Days sales outstanding (DSO) in accounts receivable was 77 days at the end of the third fiscal quarter 2005, consistent with the year ago quarter. Deferred revenue was $365 million at the end of the third fiscal quarter 2005, up $28 million or 8% from the prior year. Cash flow from operations was a positive $15 million for the third fiscal quarter 2005, down from $65 million in the third fiscal quarter 2004, which included the $19 million payment from Canopy.

A summary of Novell's vision, mission and strategy can be accessed on the Novell(R) Web site at: http://www.novell.com/company/ir/qresults/ .

Conference call notification and Web access detail

A live Webcast of a Novell conference call to discuss the quarter will be broadcast at 5PM ET August 25, 2005, from Novell's Investor Relations Web page: http://www.novell.com/company/ir/qresults/ . The domestic conference call dial-in number is 866-335-5255, password "Novell", and the international dial-in number is +1-706-679-2263, password "Novell".

The call will be archived on the Web site approximately 15 minutes after its conclusion, and will be available for telephone playback through midnight, September 7. The domestic toll-free replay number is 800-642-1687, and the international replay number is +1-706-645-9291. Replay listeners must enter conference ID number 8265930.

A copy of this press release is posted on Novell's Web site at: http://www.novell.com/company/ir/qresults/ .

Legal notice regarding forward-looking statements

This press release includes statements that are not historical in nature and that may be characterized as "forward-looking statements," including those related to future financial and operating results, benefits and synergies of the company's brands and strategies, future opportunities and the growth of the market for open source and identity management solutions. You should be aware that Novell's actual results could differ materially from those contained in the forward-looking statements, which are based on current expectations of Novell management and are subject to a number of risks and uncertainties, including, but not limited to, Novell's ability to integrate acquired operations and employees, Novell's success in executing its Linux* and identity management strategies, Novell's ability to take a competitive position in the Linux and identity management industries, business conditions and the general economy, market opportunities, potential new business strategies, competitive factors, sales and marketing execution, shifts in technologies or market demand and the other factors described in Novell's Annual Report on Form 10-K filed with the Securities and Exchange Commission on January 13, 2005. Novell disclaims any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this press release.

About Novell

Novell, Inc. is a leading provider of infrastructure software and services to over 50,000 customers in 43 countries. With more than 20 years of experience in data center, workgroup and desktop solutions, Novell's 6,000 employees, 5,000 partners and support centers around the world are meeting customer requirements for identity-driven computing and Linux solutions. By providing enterprise-class software and support for commercial and open source software, Novell delivers increased operating flexibility and choice at a lower total cost of ownership. More information about Novell can be found at http://www.novell.com/.

NOTE: Novell is a registered trademark of Novell, Inc.; and SUSE is a trademark of Novell, Inc. in the United States and other countries. * Linux is a registered trademark of Linus Torvalds. All other third-party trademarks are the property of their respective owners.

Novell, Inc.
Consolidated Unaudited Condensed Statements of Operations
(In thousands, except per share data)

Fiscal Quarter Ended Fiscal Year-to-Date
Jul 31, Jul 31, Jul 31, Jul 31,
2005 2004 2005 2004
Net revenue
New software licenses $45,628 $57,024 $135,692 $172,043
Maintenance and services 244,586 247,573 741,701 693,217
Total net revenue 290,214 304,597 877,393 865,260

Cost of revenue
New software licenses 4,475 5,613 13,970 16,621
Maintenance and services 101,534 98,343 321,431 288,653
Total cost of revenue 106,009 103,956 335,401 305,274

Gross profit 184,205 200,641 541,992 559,986

Operating (income) expenses
Sales and marketing 93,464 91,660 288,420 268,534
Product development 48,655 48,390 146,832 149,161
General and administrative 31,788 28,729 90,168 79,201
Restructuring expenses 9,375 9,250 21,155 13,987
Acquired in-process research
and development -- -- 480 --
Gain on sale of property,
plant and equipment -- -- (1,589) (1,977)
Gain on settlement of
potential litigation -- -- (447,560) --
Total operating (income) expenses 183,282 178,029 97,906 508,906

Income from operations 923 22,612 444,086 51,080

Other income (expense), net 9,258 6,182 21,748 9,034

Income before income taxes 10,181 28,794 465,834 60,114

Income tax expense 8,041 5,389 84,160 16,191

Net income $2,140 $23,405 $381,674 $43,923

Deemed dividend related to
beneficial conversion feature of
preferred stock -- -- -- (25,680)
Preferred stock dividends (125) (189) (375) (291)
Allocation of earnings to
preferred stockholders (21) -- (3,987) --

Net income available to
common stockholders - basic $1,994 $23,216 $377,312 $17,952

Net income available to
common stockholders - diluted $1,910 $23,886 $381,539 $17,952

Net income per common share:
Basic $0.01 $0.06 $1.00 $0.05
Diluted $0.00 $0.06 $0.88 $0.05

Weighted average shares:
Basic 380,242 383,400 378,573 382,678
Diluted 385,377 414,191 435,820 * 393,758

Certain reclassifications, none of which affected net income, were made to the prior period amounts in order to conform to the current period's presentation.

* Year-to-date fiscal 2005 diluted weighted average shares includes 52 million potential common shares related to convertible debt which are not included in the current quarter calculation because they are anti-dilutive.

Novell, Inc.
Consolidated Unaudited Condensed Balance Sheets
(In thousands)

ASSETS Jul 31, 2005 Oct 31, 2004

Current assets
Cash and cash equivalents $985,830 $434,404
Short-term investments 618,461 777,063
Receivables, net 255,426 269,431
Prepaid expenses 33,399 25,190
Other current assets 25,095 28,846
Total current assets 1,918,211 1,534,934

Property, plant and equipment, net 211,729 231,468
Long-term investments 56,490 55,986
Goodwill 395,379 391,088
Intangible assets, net 61,715 48,616
Deferred income taxes 630 --
Other assets 27,098 29,456

Total assets $2,671,252 $2,291,548

LIABILITIES & STOCKHOLDERS' EQUITY

Current liabilities
Accounts payable $48,660 $55,956
Accrued compensation 101,195 126,612
Other accrued liabilities 96,360 98,983
Income taxes payable 52,855 37,077
Deferred revenue 365,365 374,186
Total current liabilities 664,435 692,814

Deferred income taxes 4,065 3,855
Senior convertible debentures 600,000 600,000

Total liabilities 1,268,500 1,296,669

Minority interests 6,308 6,515

Preferred stock 25,000 25,000

Stockholders' equity 1,371,444 963,364

Total liabilities and stockholders' equity $2,671,252 $2,291,548

Certain reclassifications, none of which affected net income, were made to the prior period amounts in order to conform to the current period's presentation.

Novell, Inc.
Consolidated Unaudited Condensed Statements of Cash Flows
(In thousands)

Fiscal Quarter Ended Fiscal Year-to-Date
Jul 31, Jul 31, Jul 31, Jul 31,
2005 2004 2005 2004

Cash flows from operating activities:
Net income $2,140 $23,405 $381,674 $43,923
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and
amortization 11,107 11,854 42,308 38,956
Change in accounts
receivable allowances (3,563) 81 (9,352) (1,843)
Income tax benefits related
to stock plans 2,906 -- 16,166 --
Utilization of previously
reserved acquired net
operating losses -- -- 29,600 --
(Gain) loss on sale of
property, plant and
equipment -- 10 (1,589) (1,977)
(Gain) loss on impaired
investments (822) 552 1,108 2,448
Acquired in-process research
and development -- -- 480 --
Changes in current assets
and liabilities, excluding
the effect of acquisitions 3,527 28,955 (18,247) (13,913)

Net cash provided by operating
activities 15,295 64,857 442,148 67,594

Cash flows from financing
activities:
Issuance of common stock, net 3,056 1,364 16,035 47,983
Issuance of convertible
preferred stock -- -- -- 50,000
Issuance of senior
convertible debentures -- 600,000 -- 600,000
Payment of issuance costs on
senior convertible
debentures -- (14,850) -- (14,850)
Payment of cash dividends on
preferred stock (125) (190) (375) (291)
Repurchase of common stock,
held in treasury -- (125,000) -- (125,000)

Net cash provided by financing
activities 2,931 461,324 15,660 557,842

Cash flows from investing
activities:
Purchases of property, plant
and equipment (8,484) (7,511) (20,168) (19,524)
Proceeds from the sale of
property, plant and equipment -- 163 10,421 2,140
Proceeds from the sale of
long-term investments 2,405 -- 2,405 --
Short-term investment activity (8,583) (193,567) 153,792 (193,514)
Cash paid for acquisition of
Salmon, net of cash acquired -- (5,322) -- (5,322)
Cash paid for acquisition of
SUSE, net of cash acquired -- -- -- (200,298)
Cash paid for acquisition of
Tally and Immunix, net of
cash acquired -- -- (33,829) --
Other (4,613) 222 (19,003) (2,212)

Net cash (used in) provided by
investing activities (19,275) (206,015) 93,618 (418,730)

Increase in cash and cash
equivalents (1,049) 320,166 551,426 206,706

Cash and cash equivalents -
beginning of period 986,879 253,472 434,404 366,932

Cash and cash equivalents - end of
period $985,830 $573,638 $985,830 $573,638

Certain reclassifications, none of which affected net income, were made to the prior period amounts in order to conform to the current period's presentation.

Novell, Inc.
Unaudited Non-GAAP Adjusted Earnings Information
(In thousands, except per share data)

GAAP Non-GAAP
As Reported Adjustments Adjusted

Fiscal quarter ended July 31, 2005
Net revenue $290,214 $-- $290,214
Gross profit 184,205 -- 184,205
Income from operations 923 9,375 (a) 10,298
Income before income taxes 10,181 8,553 (b) 18,734
Net income 2,140 11,194 (c) 13,334
Diluted net income available to
common stockholders 1,910 12,577 (d) 14,487
Diluted net income per common share $0.00 $0.03 (d) $0.03
Diluted weighted average shares 385,377 52,075 (e) 437,452

Fiscal quarter ended April 30, 2005
Net revenue $297,051 $-- $297,051
Gross profit 179,710 -- 179,710
Income (loss) from operations (6,402) 5,841 (f) (561)
Income before income taxes 1,053 6,758 (g) 7,811
Net income (loss) (15,627) 17,092 (h) 1,465
Diluted net income (loss) available
to common stockholders (15,752) 17,078 (i) 1,326
Diluted net income (loss) per common
share $(0.04) $0.04 (i) $0.00
Diluted weighted average shares 378,219 4,384 (j) 382,603

Fiscal quarter ended July 31, 2004
Net revenue $304,597 $(13,500) (k) $291,097
Gross profit 200,641 (13,500) (k) 187,141
Income from operations 22,612 (4,070) (l) 18,542
Income before income taxes 28,794 (8,561) (m) 20,233
Net income 23,405 (9,453) (n) 13,952
Diluted net income available to
common stockholders 23,886 (9,453) (n) 14,433
Diluted net income per common share $0.06 $(0.03) (n) $0.03
Diluted weighted average shares 414,191 -- 414,191

Footnotes related to adjustments:

(a) Reflects restructuring expenses of $9.4 million.
(b) Reflects the item in footnote (a) and a net gain on the sale of
previously impaired long-term investments of $0.8 million.
(c) Reflects the items in footnotes (a) and (b), and the related tax
adjustments, including a $2.9 million adjustment related to the
cumulative tax effect of a settlement of potential litigation.
(d) Reflects the items in footnotes (a), (b) and (c), and the related
adjustments for preferred stock dividends and the allocation of
earnings to preferred stockholders.
(e) Reflects potential common shares related to convertible debt that are
added to weighted average shares in computing non-GAAP diluted net
income per common share.
(f) Reflects restructuring expenses of $5.4 million and acquired in-
process research and development expense of $0.5 million.
(g) Reflects the items in footnote (f) and long-term investment
impairments of $0.9 million.
(h) Reflects the items in footnotes (f) and (g), and the related tax
adjustments, including a $12.1 million adjustment related to the
cumulative tax effect of a settlement of potential litigation.
(i) Reflects the items in footnotes (f), (g) and (h), and the related
adjustments for preferred stock dividends and the allocation of
earnings to preferred stockholders.
(j) Reflects potential common shares related to stock options and
unvested restricted stock that are added to weighted average shares
in computing non-GAAP diluted net income per common share.
(k) Reflects satisfaction of judgment against The Canopy Group, Inc.
recorded as revenue of $13.5 million.
(l) Reflects the item in footnote (k), restructuring charges of $9.3
million and integration costs related to SUSE of $0.2 million.
(m) Reflects the items in footnotes (k) and (l), satisfaction of judgment
against The Canopy Group, Inc. recorded as interest income of $5
million and long-term investment impairments of $0.6 million.
(n) Reflects the items in footnotes (k), (l) and (m), and the necessary
related tax adjustments.

Source: Novell, Inc.

CONTACT: press, Bruce Lowry, +1-415-383-8408, or blowry@novell.com, or
investor relations, Bill Smith, 1-800-317-3195, or wsmith@novell.com, both of
Novell, Inc.

Web site: http://www.novell.com/

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Profile: jene30

C I Host's Faulkner Warns of Malicious Worm Attacking Internet, Jumping to Microsoft Windows XP - Home Users

C I Host's Faulkner Warns of Malicious Worm Attacking Internet, Jumping to Microsoft Windows XP - Home Users

Who: Christopher Faulkner is CEO and founder of C I Host, the largest
privately held Web hosting firm, serving 220,000 clients in
192 countries.

What: The malicious zotob worm is jumping from the business world to
home computers too. Originally it was thought to affect only
Windows 2000 operating systems, but it is also hitting Windows
XP systems. This is the same worm that shut down computers
at CNN, and ABC television networks last week.

Topics: Known vulnerability in Windows 2000 and Windows XP
A security patch was publicized and available for download
W32.Randex.EUS worm spreads to via weak passwords, Aug. 16
rbot.ebq attacks computers repeatedly shutting down and
rebooting
zotob virus also suspected in attack
Millions of computers may be vulnerable with operating system

Where: C I Host is centrally located and accessible to both coasts via
the DFW Airport, just a few miles away. Faulkner is available
for in-studio interviews, given advance notice.

When: August 25, 2005

PRNewswire -- Aug. 25

Source: C I Host

CONTACT: D. Kent Pingel, VP, Corporate Communications, PR of C I Host,
+1-888-868-9931, ext. 7006, kentp@cihost.com

Web site: http://www.cihost.com/

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Profile: jene30

Web United Readies South Florida Companies for Hurricane Season With Collocation Services

Web United Readies South Florida Companies for Hurricane Season With Collocation Services

DEERFIELD BEACH, Fla., Aug. 25 /PRNewswire/ -- Web United, a full-service managed network services company, is helping South Florida businesses ready for hurricane season by upgrading its equipment to remain cutting edge in South Florida's business solutions market.

"Business owners are beginning to think of their data like their home and personal belongings," said company President Michael Spiegel. "Most business owners now realize that they must be prepared for data disaster, they know they can't gamble with their data."

Spiegel notes that "the resources of our parent company, Landmark Communications, have enabled us to purchase and install a new 312 KVA Back Up Generator which operates on a 500 gallon diesel fuel tank and ensures automatic "failover" upon utility outage. The unit can fully power our facility and keep our customers online for five days."

Landmark is an 80-year-old private company, which owns media properties including television stations, newspapers, The Weather Channel and Weather.com.

Collocation services consist of mirroring a company's data platform at a separate, secure location such as Web United headquarters in Deerfield Beach, Florida. As part of Landmark's Continental Broadband group of companies, Web United can also offer to its customers similar backup services in other parts of the country. Web United offers access to multiple Tier 1 providers and consistent power and cooling for network equipment. On site personnel ensure 24x7x365 secured access. Companies working with Web United to protect their data include Fox Network/Channel 7 television, TRACI Communications, and Think Technologies.

Web United is a full-service Managed Network Services company specializing in business solutions, including Internet connectivity, collocation, managed security and VoIP. Web United provides services to some of the largest businesses in South Florida.

For more information: Contact Stan Smith
Smith Penn Public Relations
(954) 462-8600/ 614-5005 cell
Stan@SmithPenn.com

Contact Michael Spiegel,
President of Web United
(954) 270-0711 cell

Michael Spiegel, President of Web United is available for media interviews to explain what SLFA businesses can do to protect their data during Hurricane Weather.

Source: Web United

CONTACT: Michael Spiegel, President of Web United, +1-954-270-0711 cell;
or Stan Smith of Smith Penn Public Relations for Web United, +1-954-462-8600,
+1-954-614-5005 cell, Stan@SmithPenn.com

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Profile: jene30

FaceTime Provides Industry's First IM Security and Compliance Solutions for New Google Talk Service

FaceTime Provides Industry's First IM Security and Compliance Solutions for New Google Talk Service

FaceTime Announces Support for Google Talk IM Across Entire Product Line

FOSTER CITY, Calif., Aug. 25 /PRNewswire/ -- FaceTime Communications today announced the first and only IM security and compliance solution for Google's new instant messaging (IM) service, Google Talk. Google Talk, unveiled yesterday, enables Google Gmail users to talk or IM with their friends for free. FaceTime customers with RTGuardian or IMAuditor products can be confident in their proven capabilities to secure, manage and archive all IM conversations -- including Google Talk -- within the enterprise.

"We've been inundated with calls from our customers who are very interested in enabling Google Talk IM for their employees," said Jonathan Christensen, CTO, at FaceTime Communications. "FaceTime provides the only solution that already supports the XMPP protocol and FaceTime customers can rest assured that we will immediately manage and secure Google Talk."

FaceTime IMAuditor addresses the needs of all businesses for comprehensive IM security and management. IM networks are an increasingly common channel for the spread of malware such as viruses, worms, and now spyware. Furthermore, many organizations must adhere to stringent corporate and regulatory compliance regulations. IMAuditor includes comprehensive features needed to meet both security and compliance requirements for instant messaging in the enterprise.

Key capabilities of IMAuditor for Google Talk and other IM services include:

* Centralized management and control - provides organizations a single,
Web based solution for setting and enforcing policy on all IM usage in
the enterprise
* Content Hygiene and Security - enables virus scanning of file
attachments, worm blocking, spIM protection and keyword content
filtering for public IM
* Regulatory Compliance Archiving and Workflow - 100% guaranteed logging
of all communications, tamper resistant storage of messages, and robust
review and audit capabilities
* Enterprise Integration and Extensions - seamlessly integrates with
existing directories and corporate database applications and provides
APIs for extending real-time event management capabilities to other
applications

The FaceTime Real-Time Guardian(TM) (RTG 3.0) is the most advanced perimeter security solution for securing unauthorized public IM and P2P usage and blocking the spread of spyware and adware. RTG can be deployed as a stand-alone appliance or in conjunction with IMAuditor to enable a defense-in- depth strategy for security, management and compliance of IM in the enterprise.

FaceTime Security Labs will immediately add Google Talk IM as part of its IMPact research program. This security research team is the only focused and specialized intelligence and response organization addressing the proliferation of new IM and P2P threats and provides an aggregate risk level of the day's threats with the IMPact Index. The team is comprised of security experts working from FaceTime's U.S. and India locations to monitor, analyze, and report on all malicious IM and P2P-related activity. The team delivers documented countermeasures to the IT community at large to instantly defend against the latest attacks.

Availability

FaceTime support for Google Talk in IMAuditor will be available at the end of this month. Existing FaceTime customers can contact FaceTime customer support for more information.

About FaceTime Communications

Founded in 1998, FaceTime Communications is the leading provider of security solutions for the management and control of greynet applications such as adware/spyware, instant messaging, webmail, P2P file sharing, web conferencing and instant voice. FaceTime Security Labs delivers the industry's first IMPact Index, which assesses "point-in-time" risks posed by viruses, worms and other malware propagating through greynet applications. FaceTime's award-winning solutions are used by over 500 customers, among them seven of the eight largest U.S. financial institutions. FaceTime also has strategic partnerships with all leading public and private IM network providers, including AOL, Microsoft, Yahoo!, IBM, Bloomberg, Jabber and Reuters. For more information, visit www.facetime.com.

Source: FaceTime Communications

CONTACT: Bridgett Coates of Edelman, +1-650-429-2748, or
bridgett.coates@edelman.com, for FaceTime Communications

Web site: http://www.facetime.com/

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Profile: jene30

SteelCloud to Unveil Its Enhanced Audit Compliance System (ACS) at Cyber Security Summit in New York City

SteelCloud to Unveil Its Enhanced Audit Compliance System (ACS) at Cyber Security Summit in New York City

Proprietary Turn-Key Appliance Now Includes Four Audit Applications With Full Data Encryption

HERNDON, Va., Aug. 25 /PRNewswire-FirstCall/ -- SteelCloud, Inc., (NASDAQ:SCLD), a leading supplier of ready-to-deploy server appliances, security solutions and professional IT services, today announced it will be demonstrating its new, enhanced Audit Compliance System (ACS) at the Cyber Security Executive Summit at the Metropolitan Pavilion in New York City on September 22-23, 2005. The Summit is for large enterprises in the financial services sector. At the Summit, SteelCloud will exhibit its enhanced ACS. The Company has also been asked to speak in meeting sessions on "Response to Attack & Incident Management" and "Network Security Strategies."

Most audit tools in the market today transfer sensitive data in clear text across the network, thereby putting the data at risk. ACS mitigates this risk through 128-bit AES encryption of audit data. With ACS, Chief Technology Officers, Security Officers and Internal Auditors gain direct control over the audit process without being reliant on their already overburdened IT staff for their compliance auditing needs.

Featuring SteelCloud patent-pending technology, ACS incorporates four audit applications in one:

* Compliance Auditing -- Generates automatic reports on compliance
deviations and on any changes between audits. Query templates can be
constructed to match any standards policy.

* Security Monitoring -- Identifies who has what rights and permissions to
critical financial and customer data. Includes search capability for
unacceptable applications and files.

* Incident Response -- An enterprise-wide process and service inventory
capability enables rapid searching for unauthorized rogue applications
or malware. Includes file search capability for "interesting" files.

* Network Forensics -- Provides for filtered event log capture, USB drive
tracking and ability to search for alternative data streams.

"Over the past two years, SteelCloud has been heavily involved helping organizations meet their IT compliance objectives," said Thomas P. Dunne, SteelCloud Chairman and CEO. "These companies needed our help because half of the query tools available to them were too sparse or 'ad-hoc' to meet auditor requirements while the rest cost too much and added too much overhead for the auditing function. ACS combines the best engineering tools with a systematic, sustainable methodology -- all at a sensible price. With ACS, organizations can easily produce documented evidence that their 'internal controls' are effective, intact and in-line with corporate security policies."

ACS is ideal for any size organization needing to demonstrate compliance with government legislation such as Sarbanes-Oxley, Gramm-Bliley-Leach, HIPAA, FISMA, etc. ACS is available for delivery in October and can be ordered directly from SteelCloud. Prices start at about $10,000 for a pre-loaded, optimized, ready-to-deploy SteelCloud ACS appliance. For more information call SteelCloud at 703-674-5500.

About SteelCloud

SteelCloud is a leading provider of network security solutions, custom integration and professional IT services. The Company's ISO 9001:2000 certified Appliance Server Group designs and manufactures specialized servers and network appliances for volume users, large integrators and OEM customers. SteelCloud's Security Solutions Group delivers network security solutions in the form of security products, professional services and regulatory compliance solutions. In addition, the Company's Advanced Technology Group designs and develops proprietary SteelCloud software products. Over its 17-year history, SteelCloud has won numerous awards for technical excellence and outstanding customer service. SteelCloud can be reached at 703-674-5500. Additional information is available at http://www.steelcloud.com/. E-mail: info@steelcloud.com.

"Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995: Except for historical information, all of the statements, expectations and assumptions contained in the foregoing are forward looking statements that involve a number of risks and uncertainties. It is possible that the assumptions made by management are not necessarily the most likely and may not materialize. In addition, other important factors that could cause actual results to differ materially include the following: business conditions and the amount of growth in the computer industry and general economy; competitive factors; ability to attract and retain personnel, including key sales and management personnel; the price of the Company's stock; and the risk factors set forth from time to time in the Company's SEC reports, including but not limited to its annual report on Form 10-K and its quarterly reports on Forms 10-Q; and any reports on Form 8K. SteelCloud takes no obligation to update or correct forward-looking statements.

Source: SteelCloud, Inc.

CONTACT: William D. Hughes of SteelCloud, Inc., +1-703-674-5560, or
whughes@steelcloud.com

Web site: http://www.steelcloud.com/

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Profile: jene30

North American Video Awarded Security System Installation Contract For New Wynn Resorts In Macau

North American Video Awarded Security System Installation Contract For New Wynn Resorts In Macau

Follows Implementation of Massive Video Surveillance & Security System at Wynn LV

BRICK, N.J., Aug. 25 /PRNewswire/ -- Following completion of the massive video surveillance and security system installation at the Wynn Resort in Las Vegas, North American Video has been awarded the contract for the security and surveillance systems at the new Wynn Resorts in Macau presently under construction. The announcement was made by North American Video President, Cynthia Freschi from the company's headquarters in New Jersey. The initial video surveillance and security system installation is valued at approximately $7 million.

"The Wynn Las Vegas installation is believed to be the largest, fully digital video surveillance and security system ever implemented, and certainly the first 100% digitally recorded system ever approved by the Las Vegas Gaming Control Board. The system sets a new benchmark for networked systems and integration," said Ms. Freschi. "We are extremely pleased to have been selected by Wynn Resorts to install a sister system at their newest location -- the Wynn Resort in Macau."

North American Video has been retained by Wynn Resorts to implement a state of the art security and surveillance system manufactured by Honeywell Video Systems, which was designed by M. Malia & Associates located in Northfield, NJ. Honeywell and M. Malia & Associates also worked hand in hand with North American Video on the recently completed Wynn Resort in Las Vegas.

The video surveillance and security system slated for the Wynn Resort in Macau will feature close to 2000 cameras recorded on a state of the art networked digital recording system. The Macau system will also feature integration with the resort's POS (point of sale) systems in food, beverage and retail areas, as well as cashiers in cage and coin exchange areas in the gaming area.

North American Video is the premier supplier of security systems design and installation services for the gaming industry with clients that include: Wynn Resorts, the Borgata Casino, Isle of Capri Casinos, the Seminole's Hard Rock Casinos, Tropicana, Harrah's, Showboat Casino, Resorts Casino Hotel, MGM Grand, Golden Nugget, Caesars, and Boyd Gaming to name a few.

For more information, North American Video can be reached by contacting any of the following:

E-mail address: info@navcctv.com
Toll Free Phone: 1-800-714-0717
Web Address: http://www.navcctv.com/

North American Video is one of the premier security systems integrators in the country. From system design through equipment installation and training, North American Video provides the highest levels of customer service and support. With offices located in New Jersey, New York and Las Vegas, North American Video has built an extensive client list over the years, including numerous casinos, schools, corporations, retail, banking and financial institutions.

Source: North American Video

CONTACT: Vince Galdi of LRG Marketing, +1-845-358-1801, or fax:
+1-845-358-1899, vgaldi@lrgon-line.com, for North American Video

Web site: http://www.navcctv.com/

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Profile: jene30

SuperCom Reports Financial Results for the Second Quarter of 2005

SuperCom Reports Financial Results for the Second Quarter of 2005

Revenues up 84% YOY for 3rd Consecutive Quarter of Substantial YOY Growth

1st Homeland Security Deployment Complete

NEW YORK and RA'ANANA, Israel, August 25/PRNewswire-FirstCall/ -- SuperCom Ltd. (OTCBB: SPCBF.OB ; Euronext: SUP), a leading
provider of smart card and electronic identification (e-ID) solutions, today
announced unaudited financial results for the second quarter ended June 30,
2005.

Financial Results

Revenues for the second quarter of 2005 increased by 84% to
$2,160,000 compared to $1,173,000 in the second quarter of 2004, marking the
Company's third consecutive quarter of substantial YOY quarterly revenue
growth. Net loss for the period according to U.S. GAAP was ($1,545,000), or
($0.08) per diluted share, compared to ($880,000), or ($0.07) per diluted
share, for the second quarter of 2004. The higher loss resulted primarily
from $496,000 in one-time expenses related to cost-cutting measures
implemented by the Company. Excluding these expenses, the Company's non-U.S.
GAAP net loss for the second quarter of 2005 was ($1,049,000), or ($0.06) per
diluted share. Management believes that it is useful to investors to present
net loss excluding the $496,000 of expenses related to the cost-cutting
measures because of the one-time nature of these expenses.

Revenues for the first half of 2005 increased by 93% to
$4,788,000 compared with $2,484,000 for the first half of 2004. Net loss for
the period according to U.S. GAAP was ($2,135,000), or ($0.12) per diluted
share, compared to ($1,660,000), or ($0.13) per diluted share, for the first
half of 2004. Excluding the aforementioned expenses, the Company's non-U.S.
GAAP net loss for the first half of 2005 was ($1,639,000), or ($0.09) per
diluted share.

Use of Non-GAAP Financial Measures

This press release contains certain financial measures related to
one-time expenses totaling $496,000 that are associated with cost-cutting
measures implemented by the Company which are not calculated in accordance
with generally accepted accounting principles in the United States (GAAP).
Management believes that it is useful to investors to present net loss
excluding the $496,000 of expenses because of their one-time, non-recurring
nature. A reconciliation of the Company's results is presented through the
two Consolidated Statements of Operations provided with this press release:
the first Condensed Consolidated Statements of Operations includes the effect
of the one-time $496,000 in expenses related to the Company's cost-cutting
measures and was prepared in accordance with GAAP, and the second Pro Forma
Condensed Consolidated Statements of Operations excludes the effect of these
expenses on all reported periods and was not prepared in accordance with
GAAP. These non-GAAP financial measures should not be viewed as a substitute
for comparable GAAP financial measures.

Primary Business Developments

- National Registry/e-ID: continued growth in demand for National
Registry and e-ID solutions as demonstrated by multi-year agreements and
extensions signed recently with government customers.

- Homeland Security: implementation complete of the Company's Smart DSMS
(Disaster Site Management System) "First Responder" Homeland Security
solution in Columbus, Ohio. Smart DSMS is the industry's first disaster
recovery system to meet the requirements of Homeland Security Presidential
Directives (HSPD) 5 and 8 for management of domestic incidents and national
preparedness.

- Cashless payment environment/e-living: first sale of Supercom's
pioneering e-Living Secure Access solution to major land developer in Macao,
China for use in high-rise residential towers.

Comments of Management

Commenting on the results, Mr. Avi Schechter, CEO of SuperCom,
said, "We are pleased to deliver a third consecutive quarter of strong
year-over-year revenue growth, reflecting the continued ramp-up of long-term
e-ID and National Registry deals and initial revenues from our first Homeland
Security project. Significant new agreements and follow-on orders have built
the total of our revenues over the past three quarters to a record $8.2
million, more than double the revenues achieved in the previous three
quarters.

"We have recently adopted a strategic reorganization plan with
the goal of expanding our leadership in our three key markets: Homeland
Security, e-ID and the cashless payment environment. These are all
early-stage markets with exciting growth potential, and we believe that
Supercom, with its superior products and a proven implementation track
record, is ideally positioned to benefit. With rising demand in our markets
and a strong backlog of recurring revenues, we remain optimistic regarding
our growth prospects."

Guidance

With expected recurring revenues of $7-8 million associated
with existing contracts, the Company expects total 2005 revenues at least as
high as those recorded in 2004, with similar operating margins.

About SuperCom:

SuperCom, Ltd. provides innovative solutions in smart-card and
e-ID technologies to the commercial and government sectors. The Company
offers a wide range of standard and customized smart-card-based solutions for
physical and logical security, education, corrections facilities and air &
seaports. It is also a leader in the manufacturing of secure and durable
documents such as national identity cards, passports, visas, drivers'
licenses and vehicle registration to improve homeland security, governmental
efficiency and document ease of use. Headquartered in Israel, SuperCom has
subsidiaries in the US and Hong Kong. For more information, visit our website
at www.supercomgroup.com.

Safe Harbor:

This press release contains 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. These
statements are subject to known and unknown risks, uncertainties and other
factors that may cause our actual results, performance or achievements to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Statements preceded
or followed by or that otherwise include the words "believes", "expects",
"anticipates", "intends", "projects", "estimates", "plans", and similar
expressions or future or conditional verbs such as "will", "should", "would",
"may" and "could" are generally forward-looking in nature and not historical
facts. For example, Mr. Schecter's statements regarding our strategic
reorganization plan and our statements as to guidance for 2005 are
forward-looking statements. Forward-looking statements in this release also
include statements about business and economic trends.

You should consider the areas of risk described under the
heading "Forward Looking Statements" and those factors captioned as "Risk
Factors" in our periodic reports under the Securities Exchange Act of 1934,
as amended, or in connection with any forward-looking statements that may be
made by us and our businesses generally.

All information in this release is as of August 25, 2005.
Except for our ongoing obligation to disclose material information under the
federal securities laws, the Company undertakes no duty to update any
forward-looking statement to reflect subsequent events, actual results or
changes in the Company's expectations. The Company also disclaims any duty to
comment upon or correct information that may be contained in reports
published by the investment community.

This press release and other releases are available on
www.supercomgroup.com.


Contact:

Eyal Tuchman, CFO
SuperCom, Ltd.
+972-9-775-0800
eyalt@supercomgroup.com


CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands

December 31, June 30,
2004 2005
Unaudited
ASSETS

CURRENT ASSETS:
Cash and cash $ 2,894 $ 1,344
equivalents
Short-term deposit 1,482 1,070
Trade receivables 1,463 1,435
Other accounts 1,250 885
receivable and
prepaid expenses
Inventories 2,165 2,359

Total current assets 9,254 7,093

LONG-TERM
INVESTMENTS:
Long term trade 247 185
receivables
Investment in an 275 275
affiliate
Severance pay fund 428 477

Total long-term 950 937
Investments

PROPERTY AND 3,641 3,252
EQUIPMENT, NET

OTHER ASSETS 93 81

$ 13,938 $ 11,363


CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands

December 31, June 30,
2004 2005
Unaudited

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT
LIABILITIES:
Short-term bank $ 1,022 $ 859
credit and
current
maturities of
long-term loan
Trade payables 1,135 778
Employees and 357 401
payroll accruals
Accrued expenses 1,745 1,106
and other
liabilities

Total current 4,259 3,144
Liabilities

LONG-TERM LIABILITIES:
Long-term loan, - 277
net of current
maturities
Accrued severance 564 606
pay

Total long-term 564 883
Liabilities

Shareholders' 9,115 7,336
equity

$ 13,938 $ 11,363


CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except share data)

Six months ended Three months ended
June 30, June 30,
2004 2005 2004 2005

Unaudited

Revenues $ 2,484 $ 4,788 $ 1,173 $ 2,160
Cost of 1,564 2,462 738 1,211
Revenues

Gross profit 920 2,326 435 949

Operating expenses:
Research and 377 726 183 378
development
Selling and 1,129 1,739 572 779
marketing
General and 944 1,500 441 858
administrative
Restructuring - 496 - 496
Expenses

Total 2,450 4,461 1,196 2,511
operating
expenses

Operating loss 1,530 2,135 761 1,562
Financial 77 -6 70 -23
expenses
(income), net
Other 53 6 49 6
expenses, net

Net loss $ 1,660 $ 2,135 $ 880 $ 1,545

Basic and $ (0.13) $ (0.12) $ (0.07) $ (0.08)
diluted net
loss per share

Weighted 12,949,070 18,260,150 12,966,872 18,346,140
average number
of Ordinary
shares used in
computing
basic and
diluted net
loss per share


* PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands (except share data)

Six months ended Three months ended
June 30, June 30,
2004 2005 2004 2005
Unaudited

Revenues $ 2,484 $ 4,788 $ 1,173 $ 2,160
Cost of 1,564 2,462 738 1,211
Revenues

Gross profit 920 2,326 435 949

Operating
expenses:
Research and 377 726 183 378
development
Selling and 1,129 1,739 572 779
marketing
General and 944 1,500 441 858
Administrative

Total operating 2,450 3,965 1,196 2,015
Expenses

Operating loss 1,530 1,639 761 1,066
Financial 77 (6) 70 (23)
expenses
(income), net
Other expenses, 53 6 49 6
Net

Net loss $ 1,660 $ 1,639 $ 880 $ 1,049

Basic and $ (0.13) $ (0.09) $ (0.07) $ (0.06)
diluted net
loss per share

Weighted 12,949,070 18,260,150 12,966,872 18,346,140
average number
of Ordinary
shares used in
computing basic
and diluted net
loss per share

The Pro-Forma Consolidated Statements of Operations for the periods ended
June 30, 2005 exclude restructuring expenses totaling $496,000.

To supplement our condensed consolidated financial statements presented
in accordance with accounting principles generally accepted in the United
States (GAAP), the Company is providing an additional measure of operating
results excluding certain expenses. The above Pro-Forma information is for
informational purposes only. The Company believes that this non-GAAP
financial measure is useful to investors because of the one-time,
non-recurring nature of the expenses. It is not prepared in accordance with
Generally Accepted Accounting Principles in the United States (US GAAP) and
should not be considered as a substitute for our historical financial
information prepared in accordance with GAAP.


CONSOLIDATED STATEMENTS OF CASH FLOWS
U.S. dollars in thousands

Six months ended Three months ended
June 30, June 30,
2004 2005 2004 2005
Unaudited

Cash flows from operating
activities:
Net loss $ (1,660) $ (2,135) $ (880) $ (1,545)
Adjustments to reconcile
net loss to net cash used
in operating activities:
Depreciation and 167 654 81 567
amortization
Accrued severance 6 (7) (3) (5)
pay, net
Amortization of 5 38 1 5
deferred stock
compensation
Decrease 69 90 (126) -
(increase) in
trade receivables
Decrease (199) 365 (314) 325
(increase) in
other accounts
receivable and
prepaid expenses
Decrease 330 (194) 50 (34)
(increase) in
inventories
Increase (52) (357) 187 (363)
(decrease) in
trade payables
Increase 56 44 (15) (118)
(decrease) in
employees and
payroll accruals
Increase (162) (516) 207 222
(decrease) in
accrued expenses
and other
liabilities
Loss from sale of 7 - 7 -
Marketable
Securities
Others - - 2 -

Net cash used in (1,433) (2,018) (803) (946)
operating
activities

Cash flows from investing
activities:
Purchase of (257) (253) (100) (84)
property and
equipment
Purchase of other (28) - (28) -
asset
Investment in 842 412 541 281
short-term
deposit
Proceeds from 110 - 2 -
redemption of
marketable debt
securities

Net cash provided 667 159 415 197
by (used in)
investing
activities

Cash flows from financing
activities:
Short-term bank (555) (16) (212) (24)
credit, net
Proceeds from 400 500 400 -
long-term loan
Issuance expenses (1) - - -
related to
conversion of
loan into shares
Proceeds from 775 - 775 -
payable on
account of shares
Proceed from - 195 - (98)
exercise of
warrant and
options, net
Principal payment (237) (370) (119) (221)
of long-term loan

Net cash provided 382 309 844 (343)
by (used in)
financing
activities

Decrease in cash (384) (1,550) 456 (1,092)
and cash
equivalents
Cash and cash 1,912 2,894 1,072 2,436
equivalents at
the beginning of
the period

Cash and cash $ 1,528 $ 1,344 $ 1,528 $ 1,344
equivalents at
the end of the
period

Supplemental disclosure of cash flows
information:
Cash paid during the period
for:
Interest $ 69 $ 50 $ 29 $ 27
Supplemental disclosure of non-cash investing
activities:
Transfer of $ 70 $ - $ - $ -
inventory to
property and
equipment
Conversion of $ 25 $ - $ - $ -
loan to ordinary
shares

Source: SuperCom Ltd

Contact: Eyal Tuchman, CFO, SuperCom, Ltd., +972-9-775-0800, eyalt@supercomgroup.com

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Profile: jene30