Sunday August 12, 3:00 am Eastern Time

Forsoft Ltd. to Become Publicly Traded on the Tel Aviv Stock Exchange Through Transaction with Public Company

HERZLIYA, Israel, Aug. 12 /PRNewswire/ - Israel's Formula Systems Ltd (Nasdaq: FORTY - news) a leading provider of information technology products, solutions and services, today announced that its wholly owned subsidiary, ForSoft Ltd., will become publicly traded on the Tel Aviv Stock Exchange (TASE), through the transaction described below. ForSoft designs, develops, markets and implements high quality, innovative software solutions, with complimentary services, for large corporations in the Israeli and international markets. Following the closing of the transaction described below, Formula will own 85% of the publicly traded company, which will hold ForSoft's operations as a wholly-owned subsidiary.

In order to cause ForSoft to be publicly traded on the TASE, Formula has entered into an agreement with Romtec Ltd., an Israeli corporation traded on the TASE. Under the agreement, Formula will transfer to Romtec all of the issued and outstanding ordinary shares of ForSoft held by Formula. In consideration therefor, Romtec will issue ordinary shares to Formula in an amount such that, following the closing of the transaction, Formula will own 85% of the issued and outstanding ordinary shares of Romtec. As a condition to the closing of the transaction, Romtec's principal shareholders will acquire substantially all of the assets of Romtec such that, upon the closing of the transaction, Romtec's assets will consist solely of cash and cash equivalents in the amount of $8 million. As a result, the activities of ForSoft will constitute all of the operations of Romtec following the closing. In connection with the transaction, Formula has also agreed to provide credit support to the principal shareholders of Romtec for a loan in the amount of $8.34 million.

Commenting on the transaction, Mr. Dan Goldstein, Formula's chairman, stated: "ForSoft, as recently restructured, will focus primarily on the Israeli market. As such, it is appropriate that ForSoft, one of Israel's largest software firms, be publicly traded on the TASE. Additionally, since ForSoft is one of Formula's principal assets, placing a public valuation on ForSoft enhances the ability of our investors to analyze our holdings."

The closing of this transaction is subject to the approval of the shareholders of Romtec, as well as the approval of the Israeli securities commission, the Tel Aviv Stock Exchange and other customary regulatory approvals and closing conditions.

Formula Systems (1985) Ltd. (Nasdaq: FORTY - news):
Formula Systems (1985) Ltd. is a global information technology company principally engaged, through its subsidiaries and affiliates, in providing software consulting services, developing proprietary software products and providing computer-based business solutions.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:

Statements contained in this press release that are not historical facts are forward-looking statements. Such statements involve various risks that may cause actual results to differ materially. These risks and uncertainties include, but are not limited to: changes in the market price of the companies' ordinary shares, the consummation by the companies of the proposed transaction, market demand for the companies' products, dependence on strategic partners, integration of new business, successful implementation of the companies' products, economic and competitive factors, international market conditions, management of growth, technological developments, the ability to finance operations and other factors which are detailed in Formula's U.S. Securities and Exchange Commission filings, including its most recent annual report on Form 20-F. Formula undertakes no obligation to publicly release any revision to any forward-looking statement.