20-F issued 2005-JUN-21	20-F/A issued 2006-FEB-09 "in response to comments from the SEC"
Audited Financial Statements, Note 2G	During 2003 and 2004, approximately $6,133 and $5,595, respectively of inventory previously written-off had been utilized.	In 2003 and 2004, approximately $6,133 and $5,595, respectively, of inventory previously written-off was used as products' components in the Company's regular production course and were sold as finished goods to end users. The sales of these related manufactured products were reflected in the Company's revenues without additional cost in the cost of sales in the period the inventory was utilized.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS; Critical Accounting Principles, page 38	[Nothing]	In addition, changes in demand, which result in increased demand for our products may lead to utilization of our previously written-off products. Note 2g to our financial statements describes the effect of the utilization of the related products of our prior years' written-off components, which are reflected in our revenues without additional cost in the cost of sales in the period the inventory was utilized. In addition, if the demand for our products increases beyond our expectations following a write-off of inventory, we may need to further utilize our previously written-down inventory. Such utilization may contribute to our gross margin in future periods.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS; Results of Operations, page 42	Cost of sales as a percentage of sales decreased to approximately 50.8% in 2004 from approximately 53.9% in 2003, primarily attributable to the continued implementation of operational efficiency measures and cost reduction programs, which we implemented during 2004.	Cost of sales as a percentage of sales decreased to approximately 50.8% in 2004 from approximately 53.9% in 2003, primarily attributable to the continued implementation of operational efficiency measures and cost reduction programs, which we implemented during 2004, and due to the utilization of previously written-off inventory, as described in "Inventory utilization" below.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS; Results of Operations, page 43	Such utilization contributed to our gross margins. [out-of-the-blue vague sentence]	Inventory utilization. In 2000, we built significant inventories to sell equipment to customers, primarily in the United States, to provide fast Internet access utilizing unlicensed bandwidth. During that year we estimated that the historical growth rate would continue. However, the sudden and unexpected slowdown in the telecommunication industry started in 2001 curtailed the ability of existing and prospective carriers and service providers to finance purchases of products such as ours. Many carriers and service providers had stopped deploying new networks or had ceased operations completely and were no longer potential users of our products. Accordingly, in response to these market condition changes and after evaluating industry trends, we performed an inventory evaluation model designed to better align our inventory levels to the new market conditions and anticipated customer demand. At that point, we determined, based on the low market visibility, that it was unlikely that we would be able to utilize or market our entire inventory. As a result, during the second and third quarter of 2001, we wrote off certain components of our products, that were deemed to be excess inventory, in the amount of $45.3 million. On April 1, 2003, as part of InnoWave's acquisition, we also acquired its inventory, which was recorded at fair value on the date of acquisition. As a result of the change in trends and the increase in 2003 of the overall worldwide demand for broadband access solutions, the demand for our broadband wireless products increased as well. Consequently, the demand for part of the related products of our prior years' written-off components increased significantly and we began utilizing part of them. Most of our utilized inventory in 2003 and 2004 was related to the write-offs of excess inventory made in 2001 and to certain components of InnoWave's acquired inventory. Hence, approximately $6 million and $5.5 million of previously written-off inventory was used in 2003 and 2004, respectively, as product components in our regular production course and were sold as finished goods to end-users. The sales of these related manufactured products were reflected in our revenues without additional cost in the cost of sales in the period that the inventory was utilized in accordance with ARB 43, Chapter 4 footnote 2. This inventory utilization increased our gross profit in 2003 and 2004 by 4.8% and 2.7% of sales, respectively. ... if the demand for our products increases beyond our expectations following a write-down of inventory we may further utilize our written-down inventory. Such utilization may contribute to our gross margin in future periods.We cannot predict the likelihood of utilizing previously written-off inventory in future operations.