Edgar Filing: RADCOM LTD

Filed Pursuant to Rule 424b(3)
Registration No. 333-115475

PROSPECTUS

RADCOM LTD.

Up to 4,814,427 Ordinary Shares

_________________

This prospectus relates to the resale, from time to time, by the selling
shareholders identified in this prospectus of up to 4,814,427 of our ordinary
shares, 3,851,540 of which were issued by us on March 29, 2004 in a private
placement transaction. The remainder of these ordinary shares are issuable upon
the exercise of warrants to purchase up to 962,887 of our ordinary shares which
were issued by us in the private placement transaction.

We will not receive any of the proceeds from the sale of the ordinary
shares by the selling shareholders, but we will receive the proceeds from the
exercise of the warrants.

You should read both this prospectus and any prospectus supplement,
together with the additional information described under the heading
"Incorporation of Certain Documents by Reference" before you decide to invest in
our ordinary shares.

Our ordinary shares are quoted on the Nasdaq National Market under the
symbol "RDCM." The last reported sale price of our ordinary shares on the Nasdaq
National Market on December 9, 2004 was $2.28 per share.

Investing in our ordinary shares involves a high degree of risk. See "Risk
Factors" beginning on page 5 of this prospectus to read about factors you should
consider before purchasing our ordinary shares.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.

_________________

The date of this prospectus is December 9, 2004

TABLE OF CONTENTS

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ABOUT THIS PROSPECTUS 3
THE COMPANY 3
THE OFFERING 4
RISK FACTORS 5
WHERE YOU CAN FIND MORE INFORMATION 15
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE 15
FORWARD-LOOKING STATEMENTS 16
USE OF PROCEEDS 16
SELLING SHAREHOLDERS 17
PLAN OF DISTRIBUTION 20
VALIDITY OF SECURITIES 22
EXPERTS 22
ENFORCEABILITY OF CIVIL LIABILITIES 22

You should rely only on the information contained or incorporated by
reference in this prospectus or any supplement. We have not authorized any other
person to provide you with different information. If anyone provides you with
different or inconsistent information, you should not rely on it. We are not,
and any underwriter or agent is not, making an offer to sell these securities in
any jurisdiction where the offer or sale is not permitted. You should assume
that the information appearing in this prospectus is accurate only as of the
date on the front cover of this prospectus. Our business, financial condition,
results of operations and prospects may have changed since that date.

ABOUT THIS PROSPECTUS

This prospectus is part of a registration statement that we filed with the
United States Securities and Exchange Commission, or the SEC, utilizing a
"shelf" registration process. Under this shelf process, the selling shareholders
may offer up to a total of 4,814,427 ordinary shares, from time to time, in one
or more offerings in any manner described under the section in this prospectus
entitled "Plan of Distribution."

Unless the context otherwise requires, all references in this prospectus
to "RADCOM," "we," "our," "our company, "us" and the "Company" refer to RADCOM
Ltd. and its consolidated subsidiaries.

All references in this prospectus to "ordinary shares" refer to our
ordinary shares, par value 0.05 NIS per share.

All references in this prospectus to "dollars" or "$" are to United States
dollars.

All references in this prospectus to "shekels" or "NIS" are to New Israeli
Shekels.

THE COMPANY

RADCOM Ltd. was incorporated in 1985 under the laws of the State of
Israel. Our principal executive offices are located at 24 Raoul Wallenberg
Street, Tel Aviv 69719, Israel, and our telephone and fax numbers are
972-3-645-5055 and 972-3-647-4681, respectively. In 1993, we established a
wholly-owned subsidiary in the United States, RADCOM Equipment, Inc., a New
Jersey corporation. RADCOM Equipment, Inc. is located at 6 Forest Avenue,
Paramus, New Jersey 07652 and its telephone number is (201) 518-0033. In 1996,
we incorporated a wholly-owned subsidiary in Israel, Radcom Investments (1996)
Ltd., located at our office in Tel Aviv Israel. In 2001, we established a
wholly-owned subsidiary in the United Kingdom, RADCOM (UK) Ltd., a United
Kingdom corporation. RADCOM (UK) Ltd. is located at 2440 The Quadrant Aztec
West, Almondsbury Bristol, BS32 4AQ England, and its telephone number is
1454-878827. Our website is www.radcom.com. The information contained on, or
linked from, our website is not a part of this prospectus.

We develop, manufacture, market and support innovative, network test and
quality management solutions for data communications and telecommunications
networks. Our products are used in the development and manufacturing of network
equipment, the installation of networks, and the ongoing maintenance of
operational networks to facilitate real-time identification, diagnosis,
isolation and resolution of network problems. We introduced our first test
equipment solution in 1993 and currently offer the following product lines:

o The Performer family consists of solutions for both Voice-over-Data
, or VoD, and cellular networks. For VoD, we provide a comprehensive
solution for pre/post-deployment stages, research and development
verification, stress testing and recurring VoD system performance
testing. We also provide a comprehensive cellular network analyzer
for 2.5 and third generation networks. It is designed for vendor
research and development, Quality Assurance (or QA) and integration
labs, as well as for operators during network setup and operation.

o Prism family of WAN/LAN/ATM protocol analyzers, consisting of the
PrismLite and Prism UltraLite suite of high quality, integrated
multitechnology test equipment. These analyzers are also suited for
cellular converged network testing and VoD (e.g. ATM, IP), testing.

o Omni-Q. A voice quality management system which service providers
use to perform quality testing on their live networks, which better
enables them to deliver reliable, high-quality packet telephony
services and to optimize network resources.

Our objective is to become a leader in the market for performance analysis
and quality management. We seek to achieve this position by delivering customer
oriented, technically advanced and cost-effective products together with
customer support. Key elements of our strategy include:

o capitalizing upon our technology position in the area of converged
networks and our technology platforms to produce comprehensive
testing and analysis solutions for Voice-over-IP, or VoIP, and data
over cellular networks;

o capitalizing upon our customer base and distribution channels to
gain understanding into the emerging needs of the marketplace;

o broadening market penetration by expanding our traditional customer
base to include convergence market segments; and

o continuing to enhance our distribution channels.

Our sales network includes 10 manufacturer's representatives in North
America, a sales office in China and, in the rest of the world, a network of
more than 55 distributors selling in over 45 countries. Our test and analysis
equipment has been sold to a number of international companies and government
agencies including AT&T, AT&T Wireless, British Telecom, Telstra, Deutsche
Telekom, Verizon, Vodafon, KPN, Nortel Networks, Lucent, Siemens, Cisco NTT,
NEC, Nokia, Alcatel and Ericsson.

THE OFFERING

On March 29, 2004, we completed a private placement transaction in which
we issued 3,851,540 of our ordinary shares at $1.428 per share, for an aggregate
purchase price of approximately $5.5 million before expenses, and warrants to
purchase up to 962,887 of our ordinary shares. The warrants are exercisable
until March 28, 2006 at an exercise price of $2.253 per ordinary share. We
agreed with the recipients of our ordinary shares and warrants to register for
public resale the 3,851,540 ordinary shares issued to them in the private
placement and the 962,887 ordinary shares issuable to them upon exercise of the
warrants. This prospectus has been prepared, and the registration statement of
which this prospectus is a part has been filed with the SEC, to satisfy our
obligations to the recipients of our ordinary shares and warrants.

Accordingly, this prospectus covers:

o the resale by selling shareholders of our ordinary shares issued in
the private placement; and

o the resale by selling shareholders of our ordinary shares issuable
upon exercise of the warrants issued in the private placement.

Investing in our ordinary shares involves risks. You should carefully
consider the information under "Risk Factors" beginning on page 5 and the other
information included or incorporated by reference in this prospectus before
investing in our ordinary shares.

RISK FACTORS

You should carefully consider the risks described below and all the
information contained or incorporated by reference into this prospectus before
making an investment decision regarding our ordinary shares. The risks described
below are not the only risks facing our company. Our business, financial
condition or results of operations could be materially adversely affected by any
of these risks. The trading price of our ordinary shares could decline due to
any of these risks, and you may lose all or part of your investment.

Risks Related to our Business and our Industry

We incurred losses for the years ended December 31, 2001, 2002 and 2003, and we
may incur losses again in the future.

In each of the fiscal years ended December 31, 2001, 2002 and 2003, we
incurred losses of approximately $11.4 million, $4.7 million, and $6.2 million,
respectively. We may continue to incur losses in the future, which could
materially affect our cash and adversely affect the value and market price of
our shares.

From time to time we may need to raise financing. If adequate funds are not
available on terms favorable to us, our operations and growth strategy will be
materially adversely affected.

As a result of the net losses during the year ended December 31, 2003, we
used approximately $4.6 million in cash during that period. We continue to
streamline our operations with the objective of aligning our business and cost
structure with the changing marketplace. Nevertheless, from time to time we are
required to raise financing in connection with our operations and growth
strategy. In March 2004, we raised $5.5 million in a private placement of
3,851,540 of our ordinary shares and warrants to purchase 962,887 of our
ordinary shares. This equity financing enabled us, among other things, to
sustain near-term compliance with certain continued listing requirements of the
Nasdaq National Market. Depending upon our level of revenues in the future and
the strategies which we adopt, we may need to raise additional debt or equity
capital to meet our working capital needs in the future. We do not know whether
additional financing will be available when needed, or whether it will be
available on terms favorable to us. If adequate funds are not available on terms
favorable to us, our operations and growth strategy will be materially adversely
affected.

We have a history of quarterly fluctuations in our results of operations and
expect these fluctuations to continue. This may cause our stock price to
decline.

We have experienced and expect to experience in the future significant
fluctuations in our quarterly results of operations. Factors that may contribute
to fluctuations in our quarterly results of operations include:

o the size, timing and shipment of orders;

o customer deferral of orders in anticipation of new products, product
upgrades or price enhancements;

o the purchasing patterns and budget cycles of our customers;

o seasonality, including the relatively low level of general business
activity during the summer months in Europe and during the winter
months in South America;

o lengthening sales cycles and sales and marketing expenses associated
with any deferred or lost sales;

o the mix of product sales;

o expenses, such as rent and salaries, that are largely fixed in
nature constituting a significant portion of our operating expenses;
and

o the size and timing of approval of grants from the Government of
Israel.

Our customers ordinarily require the delivery of products promptly after
we accept their orders. We usually do not have a significant backlog of accepted
orders. Consequently, revenues in any quarter depend on orders received and
accepted in that quarter. The deferral of the placing and acceptance of any
large order from one quarter to another could materially adversely affect
results of operations for a given quarter. If our revenues in any quarter remain
level or decline in comparison to any prior quarter, our financial results could
be materially adversely affected. In addition, if we do not reduce our expenses
in a timely manner in response to level or declining revenues, our financial
results for that quarter could be materially adversely affected. Any quarterly
fluctuations in our results of operations may have a material adverse effect on
the market price of our ordinary shares.

We might not satisfy all the requirements for continued listing on the Nasdaq
National Market, and our shares may be delisted.

The Nasdaq Stock Market has a number of requirements for the continued
listing of shares on the Nasdaq National Market. For example, the company is
required to maintain minimum shareholders' equity of $10 million, a minimum
market value of publicly held shares of $5 million and the company's shares must
have a minimum bid price of $1.00 per share. From time to time in the past year,
our share price decreased below the required minimum bid price, and we did not
maintain the required minimum market value of publicly held shares. In addition,
in 2003, we fell below the minimum $10 million shareholders' equity requirement.

In October 2003, we received a notice from Nasdaq that our shares would be
delisted from the Nasdaq National Market if we did not demonstrate a plan to
achieve and sustain compliance with all of the continued listing requirements.
We submitted a plan of compliance to Nasdaq and subsequently appeared before a
Nasdaq Listing Qualifications Panel to present an updated plan to achieve and
maintain compliance with all of the Nasdaq National Market continued listing
requirements. Our plan included, among other things, a recently completed $5.5
million private placement of ordinary shares and warrants. As a result of the
private placement, we are in compliance with the $10 million shareholders'
equity requirement. We cannot assure you, however, that we will maintain such
compliance over the long term or that we will be able to maintain compliance
with all of the continued listing requirements for the Nasdaq National Market.
If we fail to comply with any of the continued listing requirements, we could be
delisted from the Nasdaq National Market. Our shares would then be quoted on the
Nasdaq SmallCap Market (if we satisfy the continued listing requirements for
such market) or the Over-The-Counter Bulletin Board.

A continuation of the slowdown in the telecommunications industry could
materially adversely affect our revenues and results of operations.

Telecommunications and data communications equipment developers,
manufacturers and carriers are the principal end-users of a large percentage of
our products. From 2001 through the first half of 2003, the telecommunications
industry in much of the world, including in our principal geographic

markets, experienced a slowdown, resulting in decreases and delays in the
procurement and deployment of new telecommunications equipment. In the second
half of 2003 we perceived an improvement in the general market for
telecommunications equipment, particularly in the cellular segment of the
market. However, we are unable to predict the duration of this trend or the
extent of any impact that it may have on our revenues or results of operations.
Any return to a prolonged and substantial curtailment of growth in the
telecommunications industry will likely have a material adverse effect upon us,
and may result from circumstances unrelated to us or our product offerings.

The market for our products is characterized by changing technology,
requirements, standards and products, and we may be materially adversely
affected if we do not respond promptly and effectively to such changes.

The market for our products is characterized by rapidly changing
technology, changing customer requirements, evolving industry standards and
frequent new product introductions, certain of which changes could reduce the
market for our products or require us to develop new products. For example, the
sharp reduction in demand for our ATM and frame relay products during 2003
resulted in significantly reduced revenues for the year. We continue to be
affected by the pre-2003 slowdown in the general telecommunications market and
by changing market demands for different technologies.

New or enhanced telecommunications and data communications-related
products developed by other companies could be incompatible with our products.
Therefore, our timely access to information concerning, and our ability to
anticipate, changes in technology and customer requirements and the emergence of
new industry standards, as well as our ability to develop, manufacture and
market new and enhanced products successfully and on a timely basis, will be
significant factors in our ability to remain competitive.

In addition, as a result of the need to develop new and enhanced products,
we expect to continue making investments in research and development before or
after product introductions. Some of our research and development activities
relate to long-term projects, and these activities may fail to achieve their
technical or business targets and may be terminated at any point, and revenues
expected from these activities may not be received for a substantial time, if at
all.

Our inventory may become obsolete or unusable.

We make advance purchases of various component parts in relatively large
quantities to ensure that we have an adequate and readily available supply. Our
failure to accurately project our needs for these components and the demand for
our products that incorporate them, or changes in our business strategy or
technology that reduce our need for these components, could result in these
components becoming obsolete prior to their intended use or otherwise unusable
in our business. For example, in 2003 we wrote-off $960,000 of inventory which
we determined to be obsolete.

We are dependent on our key personnel, in particular Arnon Toussia-Cohen, our
President and Chief Executive Officer, the loss of whom could negatively affect
our business.

Our future success depends in large part on the continued services of our
senior management and key personnel. In particular, we are highly dependent on
the services of Arnon Toussia-Cohen, our President and Chief Executive Officer.
Any loss of the services of Arnon Toussia-Cohen, other members of senior
management or other key personnel could negatively affect our business.

We may lose significant market share as a result of intense competition in the
markets for our existing and future products.

Many companies compete with us in the market for internetworking test and
analysis solutions and voice quality management. We expect that competition will
increase in the future, both with respect to products that we currently offer
and products that we are developing. Moreover, manufacturers of data
communications and telecommunications equipment, which are current and potential
customers of ours, may in the future incorporate into their products
capabilities similar to ours, which would reduce the demand for our products. In
addition, affiliates of ours that currently provide services to us may, in the
future, compete with us.

Many of our existing and potential competitors have substantially greater
resources including financial, technological, engineering, manufacturing and
marketing and distribution capabilities, and several of them may enjoy greater
market recognition than us. We may not be able to compete effectively with our
competitors. A failure to do so could adversely affect our revenues and
profitability.

We are dependent upon the success of distributors and manufacturer's
representatives who are under no obligation to distribute our products.

We are highly dependent upon our distributors and manufacturer's
representatives for their active marketing and sales efforts and for the
distribution of our products. Many of our manufacturer's representatives in
North America and several of our distributors outside of North America are the
only entities engaged in the distribution of our products in their respective
geographical areas. Typically, our arrangements with them do not prevent our
distributors from distributing competitive products, or require them to
distribute our products in the future. Our distributors may not give a high
priority to marketing and supporting our products. Our results of operations
could be materially adversely affected by changes in the financial condition,
business or marketing strategies of our distributors. Any such changes could
occur suddenly and rapidly.

We may lose distributors or manufacturer's representatives on which we currently
depend and we may not succeed in developing new distribution channels.

Our seven largest distributors in Europe and Asia accounted for a total of
approximately 31.3% of our sales in 2001, 22.4% of our sales in 2002, and 30.1%
of our sales in 2003. Our six largest manufacturer's representatives in North
America accounted for a total of approximately 31% of our sales in 2001, 30.5%
of our sales in 2002, and 34.7% of our sales in 2003. If we terminate or lose
any of our distributors or manufacturer's representatives, or if they downsize
significantly, we may not be successful in replacing them on a timely basis, or
at all. Any changes in our distribution and sales channels, particularly the
loss of a major distributor or our inability to establish effective distribution
and sales channels for new products, will impact our ability to sell our
products and result in a loss of revenues.

We could be subject to warranty claims and product recalls, which could be very
expensive and harm our financial condition.

Products as complex as ours sometimes contain undetected errors. These
errors can cause delays in product introductions or require design
modifications. In addition, we are dependent on other suppliers for key
components incorporated in our products. Defects in systems in which our
products are deployed, whether resulting from faults in our products or products
supplied by others, from faulty installation or from any other cause may result
in customer dissatisfaction, product return and, potentially, product liability
claims filed against us. Our warranties permit customers to return defective
products for repair. The warranty period is typically one to two years. Any
failure of a system in which our products are

deployed (whether or not our products are the cause), product recall, product
liability claim and any associated negative publicity could result in the loss
of, or delay in, market acceptance of our products and harm our business.

We depend on limited sources for key components and if we are unable to obtain
these components when needed we will experience delays in manufacturing our
products.

We currently obtain key components for our products from either a single
supplier or a limited number of suppliers. We do not have long-term supply
contracts with any of our existing suppliers. This presents the following risks:

o Delays in delivery or shortages in components could interrupt and
delay manufacturing and result in cancellations of orders for our
products.

o Suppliers could increase component prices significantly and with
immediate effect.

o We may not be able to develop alternative sources for product
components.

o Suppliers could discontinue the manufacture or supply of components
used in our products. This may require us to modify our products,
which may cause delays in product shipments, increased manufacturing
costs and increased product prices.

o We may be required to hold more inventory than would be immediately
required in order to avoid problems from shortages or
discontinuance.

We have experienced delays and shortages in the supply of components on
more than one occasion in the past. This resulted in delays in our delivering
products to our customers.

Our proprietary technology is difficult to protect and unauthorized use of our
proprietary technology by third parties may impair our ability to compete
effectively.

Our success and ability to compete depend in large part upon protecting
our proprietary technology. We rely upon a combination of contractual rights,
software licenses, trade secrets, copyrights, nondisclosure agreements and
technical measures to establish and protect our intellectual property rights in
our products and technologies. In addition, we sometimes enter into
non-disclosure and confidentiality agreements with our employees, distributors
and manufacturers representatives and with certain suppliers with access to
sensitive information. However, we have no registered patents, and these
measures may not be adequate to protect our technology from third-party
infringement. Moreover, pursuant to current U.S. and Israeli laws, we may not be
able to enforce existing non-competition agreements. Additionally, effective
trademark, patent and trade secret protection may not be available in every
country in which we offer, or intend to offer, our products.

We are subject to litigation regarding intellectual property rights which could
seriously harm our business.

Third parties may from time to time assert against us infringement claims
or claims that we have violated a patent or infringed a copyright, trademark or
other proprietary right belonging to them. If such infringement were found to
exist, we may be required to modify our products or intellectual property or
obtain a license or right to use such technology or intellectual property. Any
infringement claim, even if not meritorious, could result in the expenditure of
significant financial and managerial resources.

On January 13, 2004, we were served with a complaint, in the United States
District Court for the District of New Jersey, by Acterna, LLC, alleging that
certain of our products infringed one or more claims of a patent allegedly owned
by Acterna. No precise amount of damages has been asserted to date. We filed an
answer to the complaint denying the allegations in the complaint and served a
counterclaim for a declaratory judgment, attacking the patent being asserted on
the basis of non-infringement, invalidity due to prior existing technology, and
unenforceability due to certain alleged improper actions taken by Acterna in
obtaining the patent. We believe that our defenses are meritorious and we intend
to vigorously defend our right to sell the products. Should it ever become
necessary to do so, we believe that we can continue to sell the accused products
using alternative technologies. At this stage, it is not possible to estimate
the amount of the potential damages or the chances of success relating to this
lawsuit.

Yehuda Zisapel and Zohar Zisapel, beneficially own approximately 34.9% of our
ordinary shares, including 255,602 shares which may be issued upon exercise of
the warrants, and therefore have significant influence over the outcome of
matters requiring shareholder approval, including the election of directors.

As of September 30, 2004, Yehuda Zisapel and Zohar Zisapel (our Chairman
of the Board of Directors), who are brothers, beneficially owned an aggregate of
5,146,562 ordinary shares, including 255,602 shares which may be issued upon
exercise of the warrants, representing approximately 34.9% of the ordinary
shares outstanding following the private placement. As a result, Yehuda Zisapel
and Zohar Zisapel have significant influence over the outcome of various actions
that require shareholder approval, including the election of our directors. In
addition, Yehuda Zisapel and Zohar Zisapel may be able to delay or prevent a
transaction in which shareholders might receive a premium over the prevailing
market price for their shares and prevent changes in control of management.

We engage in transactions with companies controlled by Yehuda Zisapel and Zohar
Zisapel, which may result in potential conflicts.

As more fully described below, we are engaged in and expect to continue to
be engaged in numerous transactions with companies controlled by Yehuda Zisapel
and Zohar Zisapel. We believe that such transactions are beneficial to us and
are generally conducted upon terms which are no less favorable to us than would
be available from unaffiliated third parties. Several products of such
affiliated companies may be used in place of our products, and it is possible
that direct competition between us and one or more of such affiliated companies
may develop in the future. Moreover, opportunities to develop, manufacture, or
sell new products (or otherwise enter new fields) may arise in the future and be
pursued by one or more affiliated companies instead of or in competition with
us. This could materially adversely affect our business and results of
operations.

We may encounter difficulties with our international operations and sales which
could affect our results of operations.

While we are headquartered in Israel, approximately 98.4% of our sales in
2002 and 99.2% of our sales in 2003 were generated outside of Israel, including
in North America, Europe, Asia, South America and Australia. This subjects us to
many risks inherent in international business activities, including:

o national standardization and certification requirements and changes
in tax law and regulatory requirements;

o longer sales cycles, especially upon entry into a new geographical
market;

o export license requirements;

o trade restrictions;

o changes in tariffs;

o currency fluctuations;

o economic or political instability;

o greater difficulty in safeguarding intellectual property; and

o difficulties in managing overseas subsidiaries and international
operations.

We may encounter significant difficulties in connection with the sale of
our products in international markets as a result of one or more of these
factors.

The ordinary shares issued to investors in the PIPE transaction, ordinary shares
underlying the warrants issued in the PIPE transaction, and ordinary shares
underlying our options, may be sold in the public market, which could materially
adversely affect the market price of our ordinary shares and our ability to
raise capital through an offering of securities.

In connection with the PIPE investment, we issued 3,851,540 ordinary
shares and warrants to purchase 962,887 ordinary shares. We are registering the
ordinary shares, and the shares issuable upon the exercise of the warrants, for
resale by filing a resale registration statement of which this prospectus forms
a part and we will keep the registration statement effective for a period of two
(2) years. In addition, as of March 31, 2004, options to purchase a total of
2,859,827 ordinary shares were outstanding, and an additional 801,197 ordinary
shares issuable pursuant to options which may be granted under our stock option
plans were reserved for issuance. All shares issued upon the exercise of these
options will be immediately available for sale in the public market, subject to
the terms of grant of the options. Sales of the ordinary shares issued in the
PIPE, sales of the ordinary shares issuable upon exercise of the warrants or
options, or even the prospect of such sales, could materially adversely affect
the market price of our ordinary shares and our ability to raise capital through
our offering of securities.

If we are characterized as a passive foreign investment company, our U.S.
shareholders may suffer adverse tax consequences.

If for any taxable year our passive income, or our assets which produce
(or are held for the production of) passive income, exceed specified levels, we
may be characterized as a passive foreign investment company for U.S. federal
income tax purposes. This characterization could result in adverse U.S. tax
consequences to our U.S. shareholders. U.S. shareholders should consult with
their own U.S. tax advisors with respect to the U.S. tax consequences of
investing in our ordinary shares.

Volatility of the market price of our ordinary shares could adversely affect us
and our shareholders.

The market price of our ordinary shares has been and is likely to continue
to be highly volatile and could be subject to wide fluctuations in response to
numerous factors, including the following:

o market conditions or trends in our industry;

o political, economic and other developments in the State of Israel
and world-wide;

o actual or anticipated variations in our quarterly operating results
or those of our competitors;

o announcements by us or our competitors of technological innovations
or new and enhanced products;

o changes in the market valuations of our competitors;

o announcements by us or our competitors of significant acquisitions;

o entry into strategic partnerships or joint ventures by us or our
competitors; and

o additions or departures of key personnel.

In addition, the stock market in general, and the market for Israeli and
technology companies in particular, has been highly volatile. Many of these
factors are beyond our control and may materially adversely affect the market
price of our ordinary shares, regardless of our performance. Shareholders may
not be able to resell their ordinary shares following periods of volatility
because of the market's adverse reaction to such volatility and we may not be
able to raise capital through an offering of securities.

Any reversal or slowdown in deregulation of telecommunications markets could
materially harm the markets for our products.

Future growth in the markets for our products will depend, in part, on the
continued privatization, deregulation and the restructuring of
telecommunications markets worldwide, as the demand for our products is
generally higher when a competitive environment exists. Any reversal or slowdown
in the pace of this privatization, deregulation or restructuring could
materially harm the markets for our products. Moreover, the consequences of
deregulation are subject to many uncertainties, including judicial and
administrative proceedings that affect the pace at which the changes
contemplated by deregulation occur, and other regulatory, economic and political
factors. Furthermore, the uncertainties associated with deregulation have in the
past, and could in the future, cause our customers to delay purchasing decisions
pending the resolution of these uncertainties.

We do not intend to pay dividends.

We have never declared or paid any cash dividends on our ordinary shares.
We currently intend to retain any future earnings to finance operations and to
expand our business and, therefore, do not expect to pay any cash dividends in
the foreseeable future.

Risks Relating to Our Location in Israel

Conditions in Israel affect our operations and may limit our ability to produce
and sell our products.

We are incorporated under Israeli law and our principal offices and
manufacturing and research and development facilities are located in the State
of Israel. Political, economic and military conditions in Israel directly affect
our operations. Since the establishment of the State of Israel in 1948, a number
of armed conflicts have taken place between Israel and its Arab neighbors and a
state of hostility, varying in degree and intensity, has led to security and
economic problems for Israel. We could be adversely

affected by hostilities involving Israel, the interruption or curtailment of
trade between Israel and its trading partners, a significant increase in
inflation, or a significant downturn in the economic or financial condition of
Israel. Since October 2000, there has been a marked increase in hostilities
between Israel and the Palestinians, which has adversely affected the peace
process and has negatively influenced Israel's relationship with several Arab
countries. Furthermore, certain parties with whom we do business have declined
to travel to Israel during this period, forcing us to make alternative
arrangements where necessary, and the United States Department of State and
other countries have issued an advisory regarding travel to Israel, impeding the
ability of travelers to attain travel insurance. Also, the political and
security situation in Israel may result in certain parties with whom we have
contracts claiming that they are not obligated to perform their commitments
pursuant to force majeure provisions of those contracts.

Since our manufacturing facilities are located exclusively in Israel, we
could experience disruption of our manufacturing due to acts of terrorism or any
other hostilities involving or threatening Israel. If an attack were to occur,
any Israeli military response that results in the call to duty of the country's
reservists (as further discussed below) could affect the performance of our
Israeli facilities for the short term. Our business interruption insurance may
not adequately compensate us for losses that may occur and any losses or damages
incurred by us could have a material adverse effect on our business. We do not
believe that the political and security situation has had any material impact on
our business to date; however, we can give no assurance that it will have no
such effect in the future.

Some neighboring countries, as well as certain companies and
organizations, continue to participate in a boycott of Israeli firms and others
doing business with Israel or with Israeli companies. We are also precluded from
marketing our products to certain of these countries due to U.S. and Israeli
regulatory restrictions. Because none of our revenue is currently derived from
sales to these countries, we believe that the boycott has not had a material
adverse effect on us. However, restrictive laws, policies or practices directed
towards Israel or Israeli businesses could have an adverse impact on the
expansion of our business.

All male adult citizens and permanent residents of Israel under the age of
51 are, unless exempt, obligated to perform up to approximately 31 days of
military reserve duty annually. Additionally, these residents are subject to
being called to active duty at any time under emergency circumstances. Many of
our officers and employees are currently obligated to perform annual reserve
duty. While we believe that we have operated relatively efficiently given these
requirements since we began operations and during the period of the increase in
hostilities with the Palestinians since October 2000, we cannot assess what the
full impact of these requirements on our workforce or business would be if the
situation with the Palestinians would change, and we cannot predict the effect
on our business operations of any expansion or reduction of these requirements.

We may be adversely affected if the rate of inflation in Israel exceeds the rate
of devaluation of the New Israeli Shekel against the dollar.

A portion of our expenses, primarily labor expenses, is incurred in New
Israeli Shekels, or NIS. As a result, we are exposed to the risk that the rate
of inflation in Israel will exceed the rate of devaluation of the NIS in
relation to the dollar or that the timing of this devaluation will lag behind
inflation in Israel. Although in recent years the rate of devaluation of the NIS
against the dollar exceeded the rate of inflation in Israel (a reversal from
prior years, which reversal benefited us), we cannot predict any future trends.
If the dollar costs of our operations in Israel increase, our dollar-measured
results of operations will be adversely affected.

We currently benefit from government programs and tax benefits which may be
discontinued or reduced.

We currently receive grants and tax benefits under Government of Israel
programs. In order to maintain our eligibility for these programs and benefits,
we must continue to meet specified conditions, including making specified
investments in fixed assets and paying royalties with respect to grants
received. In addition, some of these programs restrict our ability to
manufacture particular products outside of Israel or transfer particular
technology. If we fail to comply with these conditions in the future, the
benefits received could be canceled and we could be required to refund any
payments previously received under these programs or pay increased taxes. The
Government of Israel has reduced the benefits available under these programs in
recent years and these programs and tax benefits may be discontinued or
curtailed in the future. If we do not receive these grants in the future, we
will have to allocate other funds to product development at the expense of other
operational costs. The amount, if any, by which our taxes will be increased
depends upon the rate of any tax increase, the amount of any tax benefit
reduction and the amount of any taxable income that we may earn in the future.
If the Government of Israel ends these programs and tax benefits, our business,
financial condition and results of operations could be materially adversely
affected.

Provisions of Israeli law may delay, prevent or make difficult a merger or
acquisition of us, which could prevent a change of control and depress the
market price of our shares.

The Israeli Companies Law generally requires that a merger be approved by
a company's board of directors and by a majority of the shares voting on the
proposed merger. Unless a court rules otherwise, the statutory merger will not
be deemed approved if a majority of the ordinary shares held by shareholders
other than the potential merger partner (or by any person who holds 25% or more
of the shares of capital stock or the right to appoint 25% or more of the
directors of the potential merger partner) vote against the merger. Upon the
request of any creditor of a party to the proposed merger, a court may delay or
prevent the merger if it concludes that there is a reasonable concern that, as a
result of the merger, the surviving company will be unable to satisfy its
obligations. In addition, a merger may not be completed unless at least 70 days
have passed since the filing of the merger proposal with the Israeli Registrar
of Companies by each of the merging companies.

Finally, Israeli tax law treats some acquisitions, such as stock-for-stock
exchanges between an Israeli company and a foreign company less favorably than
U.S. tax laws. For example, Israeli tax law may, under certain circumstances,
subject a shareholder who exchanges his ordinary shares for shares in another
corporation to taxation prior to the sale of the shares received in such
stock-for-stock swap.

These provisions of Israeli corporate and tax law and the uncertainties
surrounding such law may have the effect of delaying, preventing or making more
difficult a merger with us or acquisition of us. This could prevent a change of
control over us and depress the market price of our ordinary shares which
otherwise might rise as a result of such a change of control.

It may be difficult to (i) effect service of process, (ii) assert U.S.
securities laws claims and (iii) enforce U.S. judgments in Israel against
directors, officers and experts named in this prospectus.

We are incorporated in Israel. All of our executive officers and directors
named in this prospectus are nonresidents of the United States, and a
substantial portion of our assets and the assets of such persons are located
outside the United States. Therefore, it may be difficult to enforce a judgment
obtained in the United States against us or any of those persons or to effect
service of process upon those

persons. It may also be difficult to enforce civil liabilities under U.S.
federal securities laws in original actions instituted in Israel.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC a registration statement on Form F-3 under the
Securities Act, with respect to the securities offered by this prospectus.
However, as is permitted by the rules and regulations of the SEC, this
prospectus, which is part of our registration statement on Form F-3, omits
certain non-material information, exhibits, schedules and undertakings set forth
in the registration statement. For further information about us, and the
securities offered by this prospectus, please refer to the registration
statement.

We are subject to the reporting requirements of the Securities Exchange
Act of 1934, as amended, or the Exchange Act, that are applicable to a foreign
private issuer. In accordance with the Exchange Act, we file reports, including
annual reports on Form 20-F by June 30 of each year. We also furnish to the SEC
under cover of Form 6-K material information required to be made public in
Israel, filed with and made public by any stock exchange or distributed by us to
our shareholders.

The registration statement on Form F-3 of which this prospectus forms a
part, including the exhibits and schedules thereto, and reports and other
information filed by us with the SEC may be inspected without charge and copied
at prescribed rates at the SEC's Public Reference Room at 450 Fifth Street, NW.,
Washington, D.C. 20549. Copies of this material are also available by mail from
the Public Reference Section of the SEC, at 450 Fifth Street, N.W., Washington
D.C. 20549, at prescribed rates. The public may obtain information on the
operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The
SEC maintains an Internet site that contains reports, proxy and information
statements, and other information regarding issuers, such as us, that file
electronically with the SEC (http://www.sec.gov). You can find additional
information about us at our website, www.radcom.com. The information contained
on, or linked from, our website is not a part of this prospectus.

As a foreign private issuer, we are exempt from the rules under the
Exchange Act prescribing the furnishing and content of proxy statements to
shareholders. In addition, our officers, directors and principal shareholders
are exempt from the "short-swing profits" reporting and liability provisions
contained in Section 16 of the Exchange Act and related Exchange Act rules.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The SEC allows us to "incorporate by reference" the information we file
with or submit to it, which means that we can disclose important information to
you by referring to those documents. The information incorporated by reference
is considered to be part of this prospectus, and later information filed with or
submitted to the SEC will update and supersede this information. We incorporate
by reference into this prospectus the documents listed below:

(a) Our annual report on Form 20-F for the fiscal year ended December
31, 2003, filed with the SEC on May 6, 2004, as amended (SEC File
No. 0-29452);

(b) The description of our ordinary shares contained in our registration
statement on Form 8-A (SEC File No. 0-29452), filed with the SEC on
September 19, 1997, and any amendment or report filed for the
purpose of updating such description; and

(c) Our reports of foreign private issuer on Form 6-K filed with the SEC
on May 7, 2004, July 20, 2004, October 25, 2004 and November 26,
2004.

In addition, all subsequent annual reports on Form 20-F, and all of our
subsequent filings on Form 8-K filed by us pursuant to the Exchange Act, prior
to the termination of the offering, and any reports on Form 6-K subsequently
submitted to the SEC or portions thereof that we specifically identify in such
forms as being incorporated by reference into the registration statement of
which this prospectus forms a part, shall be considered to be incorporated into
this prospectus by reference and shall be considered a part of this prospectus
from the date of filing or submission of such documents.

As you read the above documents, you may find inconsistencies in
information from one document to another. If you find inconsistencies between
the documents and this prospectus, you should rely on the statements made in the
most recent document.

We will deliver to each person (including any beneficial owner) to whom
this prospectus has been delivered a copy of any or all of the information that
has been incorporated by reference into this prospectus but not delivered with
this prospectus. We will provide this information upon written or oral request,
and at no cost to the requester. Requests should be directed to:

RADCOM Ltd.
24 Raoul Wallenberg Street, Tel Aviv 61719, Israel
Tel.: (+972) 3-645-5004
Fax: (+972) 3-647-4681
Attn.: Chief Financial Officer

FORWARD-LOOKING STATEMENTS

This prospectus contains or incorporates historical information and
forward-looking statements within the meaning of the federal securities laws.
Statements looking forward in time are included in this prospectus pursuant to
the "safe harbor" provision of the Private Securities Litigation Reform Act of
1995. They involve known and unknown risks and uncertainties that may cause our
actual results in future periods to be materially different from any future
performance suggested herein, including all of the risks and uncertainties
discussed under "Risk Factors" and elsewhere in this prospectus, as well as in
the documents we have incorporated by reference. Future events and actual
results could differ materially from those set forth in, contemplated by or
underlying the forward-looking statements and you should therefore not rely on
these forward-looking statements, which are applicable only as of the date
hereof.

We urge you to consider that statements that use the terms "believe," "do
not believe," "expect," "plan," "intend," "estimate," "anticipate," "project"
and similar expressions are intended to identify forward-looking statements.
These statements reflect our current views with respect to future events and are
based on assumptions and are subject to risks and uncertainties. Our actual
results may differ materially from the results discussed in forward-looking
statements. Factors that could cause our actual results to differ materially
include, but are not limited to, those discussed above under "Risk Factors",
elsewhere in this prospectus and in the documents we have incorporated by
reference.

Except as required by applicable law, including the securities laws of the
U.S., we do not intend to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise and we
disclaim any obligation to publicly revise any such statements to reflect any
change in expectations or in events, conditions, or circumstances on which any
such statements may be based.

USE OF PROCEEDS

We will not receive any proceeds from the sale of the ordinary shares by
the selling shareholders in this offering. If the warrants are exercised in
full, we would realize proceeds, before expenses in the

amount of $2,169,384. The net proceeds of the exercise of the warrants will be
used for working capital and general corporate purposes, and in accordance with
our budget, as it is approved by our board of directors from time to time.

SELLING SHAREHOLDERS

The selling shareholders and any of their pledgees, assignees and
successors-in-interest may, from time to time, sell any or all of their ordinary
shares on any stock exchange, market or trading facility on which the shares are
traded or in private transactions. The ordinary shares and the warrants to
purchase ordinary shares were issued to the selling shareholders pursuant to the
transaction described above under "The Offering."

On March 29, 2004, we completed a private placement transaction in which
we issued 3,851,540 of our ordinary shares at an aggregate purchase price of
$5.5 million ($5.3 million net of expenses), or $1.428 per ordinary share, as
well as warrants to purchase up to 962,887 of our ordinary shares at an exercise
price of $2.253 per ordinary share. The warrants are exercisable until March 28,
2006.

Pursuant to the terms of the share and warrant purchase agreement, we
agreed to prepare and file with the SEC, not later than May 13, 2004, a
registration statement on Form F-3, to enable the resale by the selling
shareholders from time to time of the shares issued to the selling shareholders
and the sale of the shares underlying the warrants issued to the selling
shareholders as described above. We also agreed to use best efforts to cause
such registration statement, among other things, to remain continuously
effective until the earlier of (i) the second anniversary of the effective date
of the registration statement, (ii) the date on which all of the shares issued
and shares underlying warrants issued to the selling shareholders as described
above have been sold hereunder or (iii) the date on which all of the shares
issued and shares underlying warrants issued to the selling shareholders as
described above can be sold by holders thereof pursuant to Rule 144(k)
promulgated under the Securities Act.

The selling shareholders agreed that they will not sell or otherwise
transfer the shares issued and the shares underlying warrants issued to the
selling shareholders as described above that would constitute a sale within the
meaning of the Securities Act, except pursuant to either (i) an effective
registration statement, or (ii) a transaction which, in the opinion of counsel
reasonably satisfactory to Radcom, qualifies as a transaction that is exempt
from registration under the Securities Act and the rules and regulations
promulgated thereunder, and, if such sale is made in Israel, under the Israeli
Securities Law, 5728-1968 and the rules and regulations promulgated thereunder.

The following table presents information with respect to the beneficial
ownership of our ordinary shares by each selling shareholder and the number of
shares that may be offered for sale pursuant to this prospectus by each such
selling shareholder. This information was compiled from information provided to
us by or on behalf of the selling shareholders with respect to their holdings as
of September 30, 2004. The amounts set forth may have increased or decreased
since the date such information was provided. Our registration of these shares
does not necessarily mean that the selling shareholders will sell any or all of
the registered shares. Since the selling shareholders may sell all or part of
their shares and such offerings are not being underwritten on a firm commitment
basis, no estimate can be given as to the number of shares that will be held by
any selling shareholder upon termination of any offering made hereby.

-----------------------------------------------------------------------------------------------------------------------------
Name and Address of Shares Beneficially Shares to
Selling Shareholder Owned Prior to the Offering Be Offered(2)
-----------------------------------------------------------------------------------------------------------------------------
Percent of Percent of
Number Outstanding Shares (1) Number Outstanding
Shares (1)
-----------------------------------------------------------------------------------------------------------------------------

Star Growth Enterprise, (3) 1,137,955 7.8% 1,137,955 7.8%
a German Civil Law Partnership,
(with limitation of liability)
Possartstr. 9
D-81679 Munich, Germany
-----------------------------------------------------------------------------------------------------------------------------
SVM Star Ventures (3) 87,535 0.6% 87,535 0.6%
Managementgesellschaft mbH Nr. 3
Possartstr. 9
D-81679 Munich, Germany
-----------------------------------------------------------------------------------------------------------------------------
Zohar Zisapel (4) 3,119,401 21.3% 646,884 4.4%
24 Raoul Wallenberg Street
Tel Aviv 69719, Israel
-----------------------------------------------------------------------------------------------------------------------------
Rachel Samsonov 448,025 3.1% 437,675 3.0%
3 Aya Street
Ramat Hasharon 47226, Israel
-----------------------------------------------------------------------------------------------------------------------------
Rad Data Communications Ltd. (4) 177,841 1.2% 49,895 0.3%
24 Raoul Wallenberg Street
Tel Aviv 69719, Israel
-----------------------------------------------------------------------------------------------------------------------------
Yehuda Zisapel (4) 1,849,320 12.7% 581,232 4.0%
24 Raoul Wallenberg Street
Tel Aviv 69719, Israel
-----------------------------------------------------------------------------------------------------------------------------
Peter Freedberger 78,768 0.5% 43,768 0.3%
544 West 111th Street #6L
New York, NY 10025
-----------------------------------------------------------------------------------------------------------------------------
Victor Halpert 43,768 0.3% 43,768 0.3%
4 Peachtree Drive
Montville, NJ 07045
-----------------------------------------------------------------------------------------------------------------------------
B.C.S. Growth Fund (Israel) LP (5) 350,140 2.4% 350,140 2.4%
3 Daniel Frisch Street
Tel Aviv 64731, Israel
-----------------------------------------------------------------------------------------------------------------------------
GMM Capital LLC (6) 218,838 1.5% 218,838 1.5%
100 W. 33rd Street
Suite #923
New York, NY 10001
-----------------------------------------------------------------------------------------------------------------------------

Benny Bergman 214,654 1.4% 196,954 1.4%
3 Daniel Frisch Street
Tel Aviv 64731, Israel
-----------------------------------------------------------------------------------------------------------------------------
Porto Invest and Finance s.a. (7) 196,954 1.4% 196,954 1.4%
Edificio Rocamar
Calle 26 Apt. 301
Punta Del Este, Uruguay
-----------------------------------------------------------------------------------------------------------------------------
Adigar Technologies Ltd. (8) 113,795 0.8% 113,795 0.8%
20 Lincoln Street
Tel Aviv 67314, Israel
-----------------------------------------------------------------------------------------------------------------------------
Guy Caspi 52,521 0.4% 52,521 0.4%
33 Yavetz Street
Tel Aviv 65258, Israel
-----------------------------------------------------------------------------------------------------------------------------
Yariv Caspi 52,521 0.4% 52,521 0.4%
73 Weitzman Street
Tel Aviv 62155, Israel
-----------------------------------------------------------------------------------------------------------------------------
Wertheimer Ventures LP (9) 218,838 1.5% 218,838 1.5%
4 Hashalom Road
Tel Aviv 69892, Israel
-----------------------------------------------------------------------------------------------------------------------------
Medistart LTD.(10) 271,359 1.9% 271,359 1.9%
50 Town Range
Suites 7B & 8B
Gibraltar
-----------------------------------------------------------------------------------------------------------------------------
Amos and Daughter Investments and 113,795 0.8% 113,795 0.8%
Properties Ltd. (11)
and Properties Ltd.
11 Ha Kison Street
Bnei Barak, Israel
-----------------------------------------------------------------------------------------------------------------------------

(1) Based on 14,400,680 ordinary shares outstanding as of September 30, 2004.

(2) Includes the 962,887 ordinary shares issuable upon the exercise of the
warrants issued to the selling shareholders in the private placement
transaction.

(3) SVM Star Ventures Managementgesellschaft mbH Nr. 3 ("SVM 3") manages the
investments of Star Growth Enterprise, a German Civil Law Partnership
(with limitation of liability) ("Growth"). Dr. Meir Barel is the sole
director and primary owner of SVM 3. Dr. Barel has the sole power to vote
or direct the vote, and the sole power to dispose or direct the
disposition of, the shares beneficially owned by SVM 3 and by Growth. SVM
3 has the sole power to vote or

direct the vote, and the sole power to dispose or direct the disposition
of, the shares beneficially owned by Growth. Dr. Barel disclaims
beneficial ownership of the shares held by Growth (including the shares
issuable upon exercise of the warrants) except to the extent of any
pecuniary interest therein.

(4) Messrs. Zohar and Yehudah Zisapel have shared voting and dispositive power
with respect to the shares offered for resale by Rad Data Communications
Ltd. The shares offered for resale by Rad Data Communications Ltd. are not
reflected under Zohar Zisapel and Yehuda Zisapel's names in the table.

(5) Messrs. Benny Bergman, Itschak Shrem, Ram Caspi, and Yitzhak Swary are all
directors of the General Partner of B.C.S. Growth Fund (Israel) LP and all
have shared voting and dispositive power with repect to the shares offered
for resale by B.C.S. Growth Fund (Israel) LP. In addition, Mr. Bergman has
beneficial ownership of 175,263 ordinary shares and warrants to purchase
39,391 ordinary shares of the Company. These shares are not reflected in
the table. Mr. Swary may be deemed to have beneficial ownership of
ordinary shares held by Adigar Technologies Ltd This deemed beneficial
ownership is not reflected in the table.

(6) Isaac Dabah and Ivette Dabah are trustees of GMM Capital LLC and have
shared voting and dispositive power with respect to the shares offered for
resale by GMM Capital LLC.

(7) Javier Tenenbaum is the director of Porto Invest and Finance s.a. Mr.
Tenenbaum has sole voting and dispositive power with respect to the shares
offered for resale by Porto Invest and Finance s.a.

(8) Itzhak Swary, Ran Ben-Or and Haim Cohen are directors of Adigar
Technologies Ltd. and have shared voting and dispositive power with repect
to the shares offered for resale by Adigar Technologies Ltd.

(9) Ruth Werthheimer is the general manager of 88 Management (Investments)
Ltd. which is the general partner of Wertheimer Ventures LP. Ms.
Wertheimer has sole voting and dispositive power with respect to the
shares offered for resale by Wertheimer Ventures LP.

(10) James David Hassan, David Dennis, Subash Ram Malkani, Amanda Joy Marsh and
Maurice Albert Perera are directors of Finsbury Corporate Services
limited, which is the sole director of Valdir Managers Ltd. which is the
sole director of Medistart LTD. Messrs. Hassan, Dennis, Malkani, Marsh and
Perera have shared voting and dispositive power with repect to the shares
offered for resale by Medistart LTD. through their relationship with
Valdir Managers Ltd.

(11) Eri M. Steimatzky and Rachel Steimatzky are the only shareholders of Amos
and Daughter Investments and Properties Ltd. and have shared voting and
dispositive power with respect to the shares offered for resale by Amos
and Daughter Investments and Properties Ltd.

PLAN OF DISTRIBUTION

The selling shareholders and any of their pledgees, assignees and
successors-in-interest may, from time to time, sell any or all of their ordinary
shares on any stock exchange, market or trading facility on which the shares are
traded or in private transactions. These sales may be at fixed or negotiated
prices. The selling shareholders may use any one or more of the following
methods when selling shares:

o ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;

o block trades in which the broker-dealer will attempt to sell the
shares as agent but may position and resell a portion of the block
as principal to facilitate the transaction;

o purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;

o an exchange distribution in accordance with the rules of the
applicable exchange;

o privately negotiated transactions;

o short sales;

o broker-dealers may agree with the selling shareholders to sell a
specified number of such shares at a stipulated price per share;

o a combination of any such methods of sale; and

o any other method permitted pursuant to applicable law.

The selling shareholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.

Broker-dealers engaged by the selling shareholders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the selling shareholders (or, if any broker-dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. The selling shareholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.

The selling shareholders may from time to time pledge or grant a security
interest in some or all of the ordinary shares owned by them and, if they
default in the performance of their secured obligations, the pledgees or secured
parties may offer and sell the ordinary shares from time to time under this
prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or
other applicable provision of the Securities Act of 1933 amending the list of
selling shareholders to include the pledgee, transferee or other successors in
interest as selling shareholders under this prospectus.

The selling shareholders also may transfer the ordinary shares in other
circumstances, in which case the transferees, pledgees or other successors in
interest will be the selling beneficial owners for purposes of this prospectus.

The selling shareholders and any broker-dealers or agents that are
involved in selling the ordinary shares may be deemed to be "underwriters"
within the meaning of the Securities Act in connection with such sales. In such
event, any commissions received by such broker-dealers or agents and any profit
on the resale of the ordinary shares purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act. The selling
shareholders have informed us that they do not have any agreement or
understanding, directly or indirectly, with any person to distribute the
ordinary shares.

The selling shareholders and we have agreed to indemnify each other and
our respective controlling persons against, and in certain circumstances to
provide contribution with respect to, specific liabilities in connection with
the offer and sale of the ordinary shares, including liabilities under the
Securities Act. We will pay the expenses incident to the registration of the
ordinary shares, except that the selling shareholders will pay all underwriting
discounts, commissions or fees attributable to the sale of the securities and
will pay the costs of their own counsel.

Each selling shareholder and any other persons participating in a
distribution of securities will be subject to applicable provisions of the
Exchange Act and the rules and regulations thereunder, including, without
limitation, Regulation M, which may restrict certain activities of, and limit
the timing of purchases and sales of securities by, the selling shareholders and
other persons participating in a distribution of securities. Furthermore, under
Regulation M, persons engaged in a distribution of securities are prohibited
from simultaneously engaging in market making and certain other activities with
respect to such securities for a specified period of time prior to the
commencement of such distribution,

subject to specified exceptions or exemptions. All of the foregoing may affect
the marketability of the securities offered hereby.

VALIDITY OF SECURITIES

The validity of the ordinary shares, including the ordinary shares
issuable upon exercise of the warrants, will be passed upon for us by Goldfarb,
Levy, Eran & Co., our Israeli counsel.

EXPERTS

The consolidated financial statements of the Company as of December 31,
2003 and 2002, and for each of the years in the three-year period ended December
31, 2003, included in the Company's Annual Report on Form 20-F for the year
ended December 31, 2003 have been incorporated by reference herein and in the
Registration Statement, in reliance upon the report of Somekh Chaikin, a member
of KPMG International and Blick Rothenberg Certified Public Accountants (UK),
independent accountants, incorporated by reference herein, and upon the
authority of said firms as experts in accounting and auditing.

ENFORCEABILITY OF CIVIL LIABILITIES

Service of process upon us and upon our directors and officers and the
Israeli experts named in this prospectus, a substantial number of whom reside
outside the United States, may be difficult to obtain within the United States.
Furthermore, because our principal assets and a substantial number of our
directors and officers are located outside the United States, any judgment
obtained in the United States against us or any of our directors and officers
may not be collectible within the United States.

We have been informed by our legal counsel in Israel, Goldfarb, Levy, Eran
& Co., that there is doubt concerning the enforceability of civil liabilities
under the Securities Act and the Exchange Act in original actions instituted in
Israel. However, subject to specified time limitations, Israeli courts may
enforce a United States final executory judgment in a civil matter, including a
monetary or compensatory judgment in a non-civil matter, obtained after due
process before a court of competent jurisdiction according to the laws of the
state in which the judgment is given and the rules of private international law
currently prevailing in Israel. The rules of private international law currently
prevailing in Israel do not prohibit the enforcement of a judgment by Israeli
courts provided that:

o the judgment is enforceable in the state in which it was given;

o adequate service of process has been effected and the defendant has
had a reasonable opportunity to present his arguments and evidence;

o the judgment and the enforcement of the judgment are not contrary to
the law, public policy, security or sovereignty of the state of
Israel;

o the judgment was not obtained by fraud and does not conflict with
any other valid judgment in the same matter between the same
parties; and

o an action between the same parties in the same matter is not pending
in any Israeli court at the time the lawsuit is instituted in the
foreign court.

We have irrevocably appointed RADCOM Equipment, Inc. as our agent to
receive service of process in any action against us in any competent court of
the United States arising out of this offering or any purchase or sale of
securities in connection with this offering.

If a foreign judgment is enforced by an Israeli court, it generally will
be payable in Israeli currency, which can then be converted into non-Israeli
currency and transferred out of Israel. The usual practice in an action before
an Israeli court to recover an amount in a non-Israeli currency is for the
Israeli court to issue a judgment for the equivalent amount in Israeli currency
at the rate of exchange in force on the date of the judgment, but the judgment
debtor may make payment in foreign currency. Pending collection, the amount of
the judgment of an Israeli court stated in Israeli currency ordinarily will be
linked to the Israeli consumer price index plus interest at an annual statutory
rate set by Israeli regulations prevailing at the time. Judgment creditors must
bear the risk of unfavorable exchange rates.

RADCOM LTD.

Up to 4,814,427 Ordinary Shares

PROSPECTUS