6-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 6-K

Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934

For the month of January, 2006

Commission File Number 001-14552

Top Image Systems Ltd.
(Translation of registrant’s name into English)

2 Habarzel Street, Ramat Hahayal, Israel 69710
(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F x Form 40-F o

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes o No x

CONTENTS

        The Registrant is filing herewith a copy of the Registrant’s press release dated November 17, 2005, reporting results for the third quarter of 2005.

SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


Date: January 25, 2006		 Top Image Systems Ltd.


BY: /S/ Ido Schechter
——————————————
Ido Schechter
Chief Executive Officer



FOR IMMEDIATERE LEASE EARNINGS RELEASE

Top Image Systems Revenues Up by 57% in
the Third Quarter of 2005

Company Meets Revenue Goals and Increases Profit Compared With
Previous Quarter

TEL AVIV, ISRAEL – (MARKET WIRE) – Nov 17, 2005 – Top Image Systems, Ltd. (NasdaqSC:TISA – News), a leading innovator of Data Capture solutions, announced today the financial results for its third quarter, which ended September 30, 2005.

Revenues for the third quarter of 2005 were a record $4.11 million, 57% more than the $2.60 million revenues for the third quarter of 2004, and 2% more than the $4.04 million revenues for the second quarter of 2005. TIS’ net income for the third quarter was $101.7 thousand, compared with a net income of $35.1 thousand in the third quarter of 2004, and a net income of $56.7 thousand in the second quarter of 2005. The net income per share in this quarter was $0.012 compared with a net income per share of $0.006 in the third quarter of 2004, and a net income per share of $0.007 in the second quarter of 2005.

Third quarter highlights:

— First nine months of 2005 revenues increased to $12.11 million, up 63% from $7.41 million in first nine months of 2004.

— Total quarterly revenues in the third quarter this year increased to $4.11 million, up 57% from $2.60 million in the third quarter of 2004.

— The year-on-year increase in revenues is attributed to:

  š Steady organic growth;

  š Success in Europe, generating 60% of company’s revenues;

  š Revenues in the UK exceed $1 million;

  š Growing success for eFLOW Ability, the new integrated connector into SAP systems. Officially launched only a few weeks ago, eFLOW Ability is already being implemented in two projects, and is generating interest from additional existing as well as new customers;

  š Increased demand for eFLOW3, the latest version of the Company’s leading software. Several existing large customers chose to upgrade their systems to the new version, including SNT, BKK and Bertelsmann, while new customers are in the latest stages of evaluation of the innovative solution.

— TIS Japan reinforced its position in the local market, generating a great deal of interest with eFLOW, and mainly with its Freedom application for semi-structured documents. At the end of the third quarter, eFLOW operates at the premises of 20 customers in Japan; eight of them are new customers. More than 30% of the revenues of TIS Japan are generated by new customers, and 80% of the product sales are generated by eFLOW.

— Additionally, TIS Japan strengthened cooperation with Nagase, a longtime partner, and with TOM, which established a division dedicated to TIS’ solution.

— The company extended its agreement with Xerox. TIS and Xerox have been cooperating successfully for the last 8 years on projects in France, Germany and Latin America. During the third quarter, the cooperation agreement was extend across 13 more countries in Europe, bringing the collaboration between the companies to a new level. This agreement represents TIS’ strategy to strengthen its position in the market through collaboration with major global partners.

— The company deepened relationships with Accenture and 170 Systems, two of its global leading partners, jointly winning and implementing several new projects.

“Though the third quarter has been seasonally a weak quarter, for the market as well as for TIS, we are delighted to announce our record third-quarter and nine-month 2005 results. We are particularly pleased with our significant year-over-year growth,” commented Dr. Ido Schechter, Chief Executive Officer of Top Image Systems.

“We maintained the level of our operating expenses while increasing our revenues, and as a result, almost doubled our quarterly profit compared to previous quarter. We are enjoying a growing level of sales activity, and we are seeing an increased interest in our newest products and the solutions that we are bringing to the market,” added Dr. Schechter. “Our activity in Japan, which generated only 5% of TIS’ revenues in 2004, is responsible for 20% of the company’s revenues in the first nine months of 2005. Our solution is the only localized solution that can perfectly meet the specific challenges of automated processing for financial functions; therefore, this subsidiary greatly contributes to our growth. Given our achievements in the first nine months of 2005, we remain confident in our long-term outlook.”

Conference Call
TIS management will host a conference call today, November 17, at 10:00am EST (7:00 am. PST, 3:00pm UK Time, 5:00pm Israel Time) to review the third quarter financial results and other corporate events. Dr. Ido Schechter, CEO, and Arie Rand, CFO, will be on-line to discuss these results and take part in a question and answer session.

The call can be accessed by dialing:
US Dial-in Number: 1 866 229 7198
UK Dial-in Number: 0 800 917 4613
ISRAEL Dial-in Number: 03 918 0600
INTERNATIONAL Dial-in Number: +972 3 918 0600

Participants are asked to call the number approximately 10 minutes before the conference call begins.

For those unable to listen to the live call, a replay of the call will be available for three months from the day after the call in the investor relations section of Top Image Systems’ website, at: www.topimagesystems.com

About Top Image Systems
Top Image Systems is a leading innovator of enterprise solutions for managing and validating content entering organizations from various sources. Whether originating from mobile, electronic, paper or other sources, TIS solutions deliver the content to applications that drive the organization. TIS’ eFLOW Unified Content Platform is a common platform for the company’s solutions. TIS markets its platform in more than 30 countries through a multi-tier network of distributors, system integrators, value added resellers as well as strategic partners. Visit the company’s website www.TopImageSystems.com for more information.

Caution Concerning Forward-Looking Statements
Certain matters discussed in this news release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations or beliefs and are subject to a number of risks and uncertainties that could cause actual results to differ materially 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, proprietary rights of the Company and its competitors, risk of operations in Israel, government regulation, dependence on third parties to manufacture products, quarterly fluctuations in sales of products in the Data Capture market (where in general the fourth quarter is the strongest and the first quarter is the weakest), the Company’s ability to successfully integrate TIS Japan, litigation (including litigation over intellectual property rights), general economic conditions and other risk factors detailed in the Company’s most recent annual report on Form 20-F and other subsequent filings with the United States Securities and Exchange Commission. We are under no obligation to, and expressly disclaim any obligation to, update or alter our forward-looking statements, whether as a result of new information, future events or otherwise.

Contacts:
Adi Granot
Investor and Public Relations Manager
Top Image Systems Ltd.
+972 3 7679114
ad@iTopImageSystems.com

FINANCIAL TABLES FOLLOW

Top Image Systems Ltd.
Consolidated Statements of Operations for the period of

Three months ended
 Three months ended
 Nine months ended
 Nine months ended
 Year ended
September 30
 September 30
 September 30
 September 30
 December 31
2005
 2004
 2005
 2004
 2004
$
 $
 $
 $
 $
 
Product sales      2,288,835    1,446,133    6,759,931    4,531,758    6,964,418  
Service revenues    1,820,907    1,161,892    5,350,182    2,879,700    4,214,030  
   
Total revenues    4,109,742    2,608,025    12,110,113    7,411,458    11,178,448  
   
Product costs    695,410    420,394    2,142,248    1,174,230    1,970,670  
Service costs    869,438    414,676    2,624,750    949,384    1,501,429  
   
Total cost of revenues    1,564,848    835,070    4,766,998    2,123,614    3,472,099  
   
Gross profit    2,544,894    1,772,955    7,343,115    5,287,844    7,706,349  
   
   
   
   
Research and development    341,038    236,776    1,070,471    638,759    929,432  
Selling and marketing    1,284,429    1,035,142    3,828,299    3,095,480    4,546,695  
Genaral and administrative    832,208    474,109    2,556,161    1,472,944    2,588,014  
Annual Marketing Conference expenses    -    -    211,048    -    -  
Liquidated damages related to September PIPE    -    -    163,670    -    -  
   
     2,457,675    1,509,251    7,829,649    4,568,424    7,134,709  
   
Operating profit (loss)    87,219    26,928    (486,534 )  80,661    (357,792 )
   
Financing income (expenses), net    14,535    8,221    (125,861 )  (8,816 )  179,400  
   
Net income (loss) for the period    101,754    35,149    (612,395 )  71,845    (178,392 )
   
Net income (loss) per share    0.012    0.006    (0.069 )  0.012    (0.025 )
   
Weighted average number of shares    8,958,263    6,481,889    8,949,167    6,408,804    7,092,434  

Top Image Systems Ltd.
Consolidated Balance Sheet as at
September 30
 December 31
2005
 2004
$
 $
 
Assets            
         
Current assets:   
Cash and cash equivalents    7,449,663    10,136,141  
Marketable securities    1,804,746    278,635  
Trade receivables, net    6,625,435    5,541,006  
Other current assets    697,338    566,258  
         
Total current assets    16,577,182    16,522,040  
         
Property and equipment   
         
Cost    2,316,398    2,194,509  
Less / accumulated depreciation    (1,734,880 )  (1,576,285 )
         
Net property and equipment    581,518    618,224  
         
Goodwill     418,694    453,584  
         
Net intangible assets     1,179,682    1,418,750  
         
Other long-term assets, net     153,461    147,065  
 
Total assets     18,910,537    19,159,663  
         
Liabilities and Shareholders' Equity   
         
Current liabilities:   
Short-term bank loans    2,357,675    1,707,151  
Trade payables    388,359    404,522  
Accrued liabilities and other payables    1,965,263    2,177,951  
         
Total current liabilities    4,711,297    4,289,624  
         
Long-term liabilities:   
Liability for severance pay, net    190,306    186,514  
         
Total liabilities    4,901,603    4,476,138  
         
Shareholders' equity   
Share capital - Ordinary share of NIS 0.04 par value    96,974    96,767  
Surplus capital    29,516,578    29,578,980  
Accumulated deficit    (15,604,618 )  (14,992,222 )
         
Total shareholders' equity    14,008,934    14,683,525  
 
Total liabilities and shareholders' equity     18,910,537    19,159,663