880984--4/11/2006--DATA_SYSTEMS_&_SOFTWARE

related topics

{operation, international, foreign}

{personnel, key, retain}

{investment, property, distribution}

{control, financial, internal}

{operation, natural, condition}

{product, market, service}

{customer, product, revenue}

{tax, income, asset}

{acquisition, growth, future}

We have a history of operating losses and decreasing cash available for operations. Loss of the services of a few key employees could harm our operations. A failure to integrate our new management may adversely affect us. Failure to accurately forecast costs of fixed-priced contracts could reduce our margins. Hostilities in the Middle East region may slow down the Israeli hi-tech market and may harm our Israeli operations; our Israeli operations may be negatively affected by the obligations of our personnel to perform military service. Exchange rate fluctuations could increase the cost of our Israeli operations One of our major customers has a history of operating deficits and may implement cost-cutting measures that may have a material adverse effect on us. We have sold our outsourcing business, which in the past provided our Israeli operations with a steady cash flow; our Israeli operations may be hindered by future cash flow problems. If we are unable to keep pace with rapid technological change, our results of operations, financial condition and cash flows may suffer. We may need to invest additional funds in Comverge in order to avoid dilution of our holdings.

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880984--4/11/2006--DATA_SYSTEMS_&_SOFTWARE_INC