Metalink Ltd. announced that on September 29, 2009, it received a letter from The NASDAQ Stock Market notifying the Company that, based on its Form 6-K for the period ended June 30, 2009, the Company's stockholders' equity does not comply with the minimum $2.5 million stockholders' equity requirement for continued listing on The NASDAQ Capital Market as required by NASDAQ Marketplace Rule 5550(b)(1) nor meet alternative criteria for continued listing on the Capital Market. In accordance with the NASDAQ Marketplace Rules, the Company has the opportunity to submit to NASDAQ, by October 14, 2009, a specific plan and timeline to achieve and sustain compliance. The Company intends to timely submit such a plan to NASDAQ. Under NASDAQ Marketplace Rules, if the plan is accepted, the Company will then be given up to 105 calendar days from the date of the September 29, 2009 letter to regain compliance. If NASDAQ determines that the Company's plan is not sufficient, the Company's shares would be subject to delisting from The NASDAQ Capital Market. At such time, the Company would have the right to appeal the determination to a NASDAQ Listing Qualifications Panel, which appeal would stay the delisting pending a final determination by the panel. There can be no assurance that the Company will be able to regain compliance with the criteria for continued listing on the NASDAQ Capital Market.

Metalink Ltd. announced unaudited consolidated financial results for the second quarter and six months ended June 30, 2009. For the quarter, the company's revenues were $1.9 million, the majority of which consisted of legacy DSL sales, compared to $2.7 million for the second quarter of 2008. Net loss was $4.4 million or $0.18 per basic and diluted share, compared to net loss of $6.6 million or $0.28 per basic and diluted share, for the second quarter of 2008. Net loss for the second quarters of 2009 and 2008 includes stock-based compensation expenses of $0.2 million and $0.5 million, respectively. Operating loss was $2.9 million compared to $6.8 million a year ago. For the six months, the company's revenues were $3.7 million, the majority of which consisted of legacy DSL sales, compared to $3.3 million for the first half of 2008. Net loss was $7.9 million or $0.33 per basic and diluted share, compared to net loss of $16.4 million or $0.70 per basic and diluted share, for the first six months of 2008. Operating loss was $5.4 million compared to $16.8 million a year ago.

On September 6, 2009, Metalink Ltd. entered into a second amendment to the loan agreement, whereby the maturity date was extended from September 9, 2009 to March 9, 2010. As part of the second amendment, the company will immediately repay the Lender $2 million out of the outstanding $5.75 million. Metalink also agreed that the repayment amount will be between 105% and 115% of the $3.75 million balance of the loan amount, depending on the timing of the repayment (interest at the annual rate of 10% will continue to accrue on the original amount outstanding). Pursuant to the second amendment, the exercise price of 1,165,000 warrants that were previously issued to the lender was adjusted from $0.50 to $0.03 per share.