Beeio Honey Ltd. — Interim / Quarterly Report 2007

Aug 15, 2007

ORCKIT

Orckit Communications Reports 2007 Second Quarter Results

TEL AVIV, Israel, August 15 -- Orckit Communications Ltd. (NASDAQ: ORCT) today reported results for the second quarter and six months ended June 30, 2007.

Revenues in the second quarter of 2007 were $1.9 million compared to $14.7 million in the quarter ended June 30, 2006 and $4.5 million in the previous quarter ended March 31, 2007.

Net loss for the quarter ended June 30, 2007 was $6.4 million, or $(0.40) per share, compared to net income of $294,000, or $0.02 per diluted share, for the quarter ended June 30, 2006 and a net loss of $5.6 million, or $(0.36) per share, for the previous quarter ended March 31, 2007. Results for the quarter ended June 30, 2007 included financial income of $1.6 million resulting from adjustments due to the conversion terms of our convertible notes that were issued in March 2007.

Revenues for the six months ended June 30, 2007 were $6.4 million compared to $39.7 million for the six months ended June 30, 2006. Net loss for the six months ended June 30, 2007 was $12.0 million, or $(0.76) per share, compared to net income of $6.1 million, or $0.36 per diluted share, for the six months ended June 30, 2006.

Izhak Tamir, President of Orckit, commented, "This quarter we maintained our R&D efforts to enhance the capabilities of the CM-4000, our high capacity Packet Transport Switch. We remain on track to begin customer evaluations of the CM-4000 in late 2007, with commercial availability expected in early 2008. As recognition of the need for ultra-wide bandwidth converged metro architecture grows within the telecom industry, we continue to see increasing interest from telecom carriers in the CM-4000. This interest is driven by the emergence of high capacity video transmissions services."

Mr. Tamir added, "The CM-4000 complements our CM-100 platform, broadening and enhancing our product line, and allowing telecom carriers to provide bandwidth-intensive services such as High-Definition IPTV and TDM-based 3.5G wireless video services, as well as other video applications, in a converging transport environment."

---

Mr. Tamir concluded, “In 2008, we expect to see additional evaluation and product selection processes by leading telecom carriers for both cellular and fixed line networks. We expect to begin shipping the CM-4000 product line in 2008 and are encouraged by the opportunities this line is expected to generate for us going forward.”

Outlook and Guidance

For the quarter ending September 30, 2007, we expect revenues to be approximately $1.5 million, net loss to be approximately $8.4 million and net loss per share to be approximately $(0.53). This guidance does not take into account income or losses due to valuation of conversion terms included in our $25.8 million principal amount of convertible subordinated notes that were issued in March 2007. Such income or losses are subject to certain factors, including our share price, and cannot be estimated.

Conference Call

Orckit Communications will host a conference call on August 15, 2007, at 11 a.m. EST. The call can be accessed by dialing 1-888-200-4690 in the United States and 1-973-935-8767 internationally. A replay of the call will be available at http://www.orckit.com. A replay of the call will be also available through August 22, 2007 at 11:59 p.m. at 1-877-519-4471 in the United States and 1-973-341-3080 internationally. To access this replay, enter the following code: 8987354.

About Orckit Communications

Orckit Communications Ltd. is a leading provider of advanced telecom equipment targeting high capacity broadband services. Our products include Corrigent's CM product line of metro optical transport solutions, based on RPR and MPLS technologies, delivering packet transmission services in the metro area. For more information on Orckit see www.orckit.com

Certain matters discussed in this news release are forward-looking statements that involve a number of risks and uncertainties including, but not limited to, risks in product development plans and schedules, rapid technological change, changes and delays in product approval and introduction, customer acceptance of new products, the impact of competitive products and pricing, market acceptance, the lengthy sales cycle, exchange rate fluctuations, fluctuation in order size, proprietary rights of the Company and its competitors, need for additional financing, the ability to repay the convertible notes, risk of operations in Israel, government regulation, dependence on third parties to manufacture products, general economic conditions and other risk factors detailed in the Company's United States Securities and Exchange Commission filings. Orckit assumes no obligation to update the information in this release.

TABLES TO FOLLOW

---

ORCKIT COMMUNICATIONS LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

	Three Months Ended June 30		Six months Ended June 30
	2007	2006	2007	2006
Revenues	$ 1,900	$ 14,706	$ 6,426	$ 39,665
Cost of revenues	978	7,357	3,022	19,385
Gross profit	922	7,349	3,404	20,280
Research and development expenses, net	4,897	3,982	9,871	8,222
Selling, marketing general and administrative expenses	4,094	3,662	8,105	7,565
Total operating expenses	8,991	7,644	17,976	15,787
Operating income (loss)	(8,069)	(295)	(14,572)	4,493
Financial income, net	97	589	987	1,621
Adjustments due to convertible notes conversion terms	1,609	0	1,609	0
Total financial income, net	1,706	589	2,596	1,621
Net income (loss)	$ (6,363)	$ 294	$ (11,976)	$ 6,114
Net income (loss) per share - basic	$ (0.40)	$ 0.02	$ (0.76)	$ 0.40
Net income (loss) per share - diluted	$ (0.40)	$ 0.02	$ (0.76)	$ 0.36
Weighted average number of shares outstanding - basic	15,776	15,513	15,742	15,218
Weighted average number of shares outstanding - diluted	15,776	16,685	15,742	17,020

---

(US$ in thousands) ORCKIT COMMUNICATIONS LTD. CONSOLIDATED BALANCE SHEETS

| | June 30 2007 | December 31 2006 | | --- | --- | --- | | ASSETS | | | | Current assets: | | | | Cash and short term marketable securities | $ 60,808 | $ 46,011 | | Restricted cash | 25,885 | 0 | | Trade receivables | 344 | 1,581 | | Other receivables | 1,915 | 2,077 | | Inventories | 1,996 | 3,464 | | Total current assets | 90,948 | 53,133 | | Long term marketable securities | 33,166 | 40,561 | | Severance pay fund | 3,147 | 3,173 | | Property and equipment, net | 1,839 | 2,490 | | Deferred issuance costs, net | 858 | 0 | | Total assets | $ 129,958 | $ 99,357 | | LIABILITIES AND SHAREHOLDERS' EQUITY | | | | Current liabilities: | | | | Bank loans | $ 20,796 | $ 0 | | Trade payables | 4,687 | 4,907 | | Accrued expenses and other payables | 8,559 | 10,134 | | Deferred income | 1,830 | 3,196 | | Total current liabilities | 35,872 | 18,237 | | Long term liabilities : | | | | Convertible subordinated notes | 25,328 | 0 | | Adjustments due to convertible notes conversion terms | (1,609) | 0 | | Convertible subordinated notes, net | 23,719 | 0 | | Accrued severance pay and other | 4,559 | 4,257 | | | 28,278 | 4,257 | | Total liabilities | 64,150 | 22,494 | | Shareholders' equity | 65,808 | 76,863 | | Total liabilities and shareholders' equity | $ 129,958 | $ 99,357 |