[August 21, 2008]

VocalTec Announces Results for the First Six-Months of 2008

HERZLIA, Israel --(Business Wire)-- VocalTec Communications Ltd. (Nasdaq: VOCL) (the "Company" or "VocalTec"), a global provider of carrier-class multimedia and voice-over-IP solutions for communication service providers, today reported results for the first half ended June 30, 2008.

Revenues for the first half of 2008 were $3.2 million. Gross margin, excluding the effect of amortization of intangible assets, was 55% in the first half of 2008.

Operating expenses for the first half of 2008 were $5.2 million, including $2.1 million for research and development and $1.7 million for sales and marketing. Excluding the effect of share-based compensation expense and amortization of intangible assets, operating expenses in the first six months of 2008 were $4.4 million.

Net loss for the first six months of 2008 was $3.8 million, or $0.51 per share. Excluding the effect of share-based compensation expense and amortization of intangible assets, net loss for the first six months of 2008 was $2.8 million, or $0.38 per share.

As of June 30, 2008, the Company had cash and cash equivalents in the amount of $2.0 million. The cash position reported as of June 30 does not include the proceeds received on July 18, 2008 from the sale of 11 patents, as announced in a press release on July 21, 2008.

About VocalTec

VocalTec Communications (Nasdaq: VOCL) is a global provider of carrier-class multimedia and voice-over-IP solutions for communication service providers. A pioneer in VoIP technology since 1994, VocalTec provides proven trunking, peering and residential/enterprise VoIP application solutions that enable flexible deployment of next-generation networks (NGNs). Partnering with prominent system integrators and equipment manufacturers, VocalTec serves an installed base of dozens of leading carriers including Deutsche Telekom , Telecom Italia San Marino and Mobifon. VocalTec is led by a management team comprised of respected industry veterans.

www.vocaltec.com


          VOCALTEC COMMUNICATIONS LTD.
        CONSOLIDATED STATEMENT OF OPERATIONS
               Unaudited
        All data in thousands of U.S. dollars
                           Six months ended
                             June 30
                           ----------------
                              2008
                           ----------------
Sales
 Product                            2,026
 Services                           1,142
                           ----------------
                                3,168
                           ----------------
Cost of sales
 Product                            1,115
 Services                            299
                           ----------------
                                1,415
 Amortization of intangible assets                188
                           ----------------
                                1,603
                           ----------------
Gross profit                           1,565
                           ----------------
Operating Expenses
 Research and development, net.                2,146
 Selling and marketing                     1,706
 General and administrative                  1,261
 Amortization of acquired intangibles               90
                           ----------------
 Total Operating Expenses                   5,203
                           ----------------
Operating Loss                         (3,638)
                           ----------------
Other Income (expense), net
Financial Income (expense), net                 (139)
                           ----------------
Net Loss                            (3,777)
                           ----------------
                           ----------------


          VOCALTEC COMMUNICATIONS LTD.
        CONSOLIDATED STATEMENT OF OPERATIONS
               Unaudited
        All data in thousands of U.S. dollars
                             June 30
                              2008
                           ---------------
Current Assets
 Cash and Cash equivalents                   1,956
 Short term deposit                        0
 Restricted cash                         547
 Trade receivables, net                     317
 Other receivables                        808
 Severance pay funds                       287
 Inventories                           282
                           ---------------
  Total Current Assets                    4,197
Severance pay funds                        996
                           ---------------
Equipment, net                           531
                           ---------------
Intangible assets, net                      2,203
                           ---------------
Goodwill                             2,297
                           ---------------
  Total Assets                        10,224
                           ---------------
                           ---------------
Current Liabilities
 Trade payable                          755
 Accrued expenses                       3,332
 Accrued severance pay                      484
 Deferred revenues                       1,809
                           ---------------
  Total Current Liabilities                  6,380
                           ---------------
Long Term Liabilities
 Long-term other liabilities                    -
 Accrued severance pay                     1,236
                           ---------------
  Total Long Term                       1,236
                           ---------------
Total Liabilities                        7,616
                           ---------------
Shareholders Equity
 Share capital                          213
 Additional paid-in capital                  94,289
 Accumulated deficit                    (91,894)
                           ---------------
  Total Shareholders Equity                  2,608
                           ---------------
Total Liabilities and Shareholders Equity            10,224
                           ---------------
                           ---------------

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