Revenues for the first 6 months up 28% over same period of 2003

Herzliya, Israel – August 16, 2004 – VCON (Euronext- Nouveau Marché -ISIN CODE: IL 00 108 30540), a worldwide leader in audio and videoconferencing solutions, today reports financial results for the second quarter of 2004.

Revenues for the second quarter of 2004 were $4.3 million (3.5 million EUR), representing an increase of 11% over $3.9 million (3.2 million EUR) reported in Q2 2003 and an increase of 2% compared to $4.2 million (3.5 million EUR) reported for Q1 2004. The company reports a net loss of $2.1 million (1.8 million EUR) for the second quarter of 2004 compared to a loss of $1.5 million (1.2 million EUR) for the second quarter of 2003. (All EUR amounts in this press release are translated for convenience from US Dollars based on the exchange rate of 1 EUR = 1.215 US Dollars.)

Referring to the company’s second quarter activities, Yair Shamir, CEO, commented, “The 28% increase in revenues over the same period of 2003 is a positive indication, yet remains below our expectations.” He added “Our Q2 results were impacted by weaknesses in our far-east sales territories. In July we took significant measures in these regions which we expect will show positive results in the upcoming quarters.”

Elaborating on the financial results, Jack Wakileh, VCON’s CFO explained, “Our decision to invest in marketing and product development has raised our operating expense levels for the first six months of 2004 compared to last year.” He added “The return on the increased investment is expected to come from our HD product line.”

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About VCON

VCON develops and manufactures a variety of conferencing solutions that enable seamless communication and collaboration using all forms of interactive media. The company’s award-winning technology ensures the highest audio and video performance for organizations worldwide. VCON’s meeting and collaboration solutions include desktop and group videoconferencing products, audio conferencing products, data conferencing products and management systems. The company markets its products and services through a network of reseller partners, OEMS and value-added resellers around the world. VCON has worldwide headquarters in Israel and regional headquarters in Munich, Austin and Beijing. VCON is publicly traded on Euronext (Euronext- Nouveau Marché -ISIN CODE: IL 00 108 30540).