8-K

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549


                                    FORM 8-K


                             CURRENT REPORT Pursuant
                          to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934


     Date of report (Date of earliest event reported) January 27, 2005

                              Neoware Systems, Inc.
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             (Exact Name of Registrant as Specified in Its Charter)

                                    Delaware
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                 (State or Other Jurisdiction of Incorporation)


         000-21240                                      23-2705700
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  (Commission File Number)                   (IRS Employer Identification No.)


400 Feheley Drive, King of Prussia, Pennsylvania                      19406
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   (Address of Principal Executive Offices)                        (Zip Code)

                                 (610) 277-8300
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              (Registrant's Telephone Number, Including Area Code)


- --------------------------------------------------------------------------------
          (Former Name or Former Address, if Changed Since Last Report)

     Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):

     |_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)

     |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)

     |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))

     |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))



Page 2

Item 8.01 Other Events.

         On January 27, 2005, Neoware Systems, Inc. (the "Company") announced
that on January 27, 2005 it entered into an Share Purchase Agreement
("Agreement") with the shareholders of Mangrove Systems SAS, a French company,
to acquire all of the outstanding shares of the company and that, pursuant to
the Agreement, completed the acquisition. The Agreement contained customary
representations and warranties. Mangrove Systems provides embedded Linux
solutions for OEMs, systems integrators and corporate customers. The
consideration paid by the Company was EUR 2,000,000 in cash, EUR 300,000 of
which will be held in an escrow account for six months for indemnification
claims, and 153,682 shares of Neoware common stock, plus a potential earn out
based upon performance.

Item 9.01 Financial Statements and Exhibits.

(c) Exhibits. The following document is filed as an exhibit to this report.

99.1 Press Release dated January 27, 2005.




Page 3

                                   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 hereunto duly authorized.

Dated: February 2, 2005                Neoware Systems, Inc.
                                       ---------------------
                                       (Registrant)

                                       /s/ Keith D. Schneck
                                       --------------------
                                       Keith D. Schneck
                                       Executive Vice President and
                                       Chief Financial Officer

EX-99

[GRAPHIC OMITTED] neoware                         [GRAPHIC OMITTED] Mangrove
                                                                     systems

PRESS RELEASE


              NEOWARE ACQUIRES MANGROVE SYSTEMS, EXPANDS SOLUTIONS
                       IN GROWING LINUX THIN CLIENT MARKET

  Acquisition Bolsters Neoware's Thin Client Leadership with New Linux Software
                         Technology and European Reach


         KING OF PRUSSIA, PA AND GRANVILLE, FRANCE, JANUARY 27, 2005 - Neoware
Systems (Nasdaq: NWRE) today announced that it has acquired privately-held
Mangrove Systems to bolster its Linux software solutions and provide enhanced
support and services in the European market.

         Mangrove Systems provides embedded Linux solutions for OEMs, systems
integrators and corporate customers. Mangrove's products include Linux thin
client software, software to convert PCs into Linux thin clients, and a software
development environment that enables systems integrators to quickly build robust
Linux-based thin client solutions.

         Neoware is the global leader in Linux thin clients with more than 40%
market share of this segment of the PC market - nearly four times its nearest
competitor, according to industry analysts. Acquiring Mangrove further expands
Neoware's leadership in the Linux thin client market by enhancing Neoware's
software portfolio and providing Neoware with a European development center with
Linux expertise.

         "Mangrove has developed innovative Linux software solutions that will
enhance Neoware's leadership in the fast-growing Linux market," stated Michael
Kantrowitz, Chairman and CEO of Neoware. "By adding Mangrove's people and
products, we can enhance our solutions with new software for OEM and corporate
customers and with new support offerings in the European market."




         Neoware has acquired all of the shares of Mangrove Systems for
(euro)2.0 million in cash and 153,682 shares of Neoware common stock, plus a
potential earn out based upon performance. Neoware will operate the business as
a wholly owned subsidiary based in Granville, France. Neoware has retained the
executive management and all of Mangrove's current staff. Mangrove will continue
to be led by Laurent Texier, who will be Mangrove's Managing Director.

          "We are very excited by the opportunity to continue to develop and
support our customers, products and services, now with the financial strength
and backing of a global leader in the thin client business," commented Laurent
Texier, Managing Director of Mangrove Systems. "Mangrove has grown our business
by providing innovative software and excellent support to both corporate and OEM
customers. Joining forces with Neoware provides us with global reach and a
strong partner with whom we can continue to grow our business."

ABOUT NEOWARE
         Recently ranked America's eighth fastest-growing company by Fortune
Magazine, Neoware is a leading provider of software, services, and thin client
appliances that make computing more open, secure, reliable, affordable and
manageable. By leveraging open technologies and eliminating the obsolescence
that is built into standard PC architectures, Neoware enables enterprises to
leverage server-based computing to provide increased flexibility and choice, as
well as lower up-front and total costs.

         Neoware's software products enable enterprises to gain control of their
desktops, and to integrate mainframe, midrange, UNIX and Linux applications with
Windows(R) and the web. Neoware's thin client appliances and software enable
enterprises to run applications on servers, and display them across wired or
wireless networks on secure, managed, reliable appliances that cost as little as
one fourth the price of today's typical business PC.

         Neoware's products are available worldwide from IBM, as well as from
select, knowledgeable resellers. More information about Neoware can be found on
the Web at http://www.neoware.com or via email at info@neoware.com. Neoware is
based in King of Prussia, PA.




ABOUT MANGROVE
     Established in early 2001, Mangrove Systems is a leader in embedded Linux
solutions for OEMs, corporate customers and systems integrators in the
server-based computing market. In 2002, Mangrove was named a laureate of the 3rd
French National Contest of Innovative Technology organized by the French
Ministry of Research and Technology. With extensive experience in developing
information appliances, Mangrove delivers a feature rich, turnkey Linux solution
to OEMs and corporate customers. Mangrove has developed an innovative software
development environment that enables systems integrators to quickly build
Linux-based information appliances that can be easily integrated into specific
vertical applications. More information about Mangrove can be found on the Web
at http://www.mangrove-systems.com.

         Neoware is a registered trademark of Neoware Systems, Inc. All other
names products and services are trademarks or registered trademarks of their
respective holders.


This press release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, including statements regarding
our new software product and support offerings; the addition of the new Mangrove
employees, including Laurent Texier; our leadership position in the fast-growing
Linux thin client market; and the continued growth of Mangrove's business. These
forward-looking statements involve risks and uncertainties. Factors that could
cause actual results to differ materially from those predicted in any such
forward-looking statement include: our ability to successfully integrate the
Mangrove acquisition, including the retention of Mangrove's existing customers;
our timely development and customers' acceptance of our products, including the
former Mangrove products; our ability to continue to lower our costs; pricing
pressures; rapid technological changes in the industry; growth of the Appliance
Computing and host access software market; increased competition; our ability to
attract and retain qualified personnel, including the former Mangrove employees;
our ability to identify and successfully consummate and integrate future
acquisitions; adverse changes in customer order patterns; adverse changes in
general economic conditions in the U.S. and internationally, risks associated
with foreign operations and political and economic uncertainties associated with
current world events. These and other risks are detailed from time to time in
Neoware's periodic reports filed with the Securities and Exchange Commission,
including, but not limited to, its report on Form 10-K for its fiscal year ended
June 30, 2004 and Form 10-Q for the quarter ended September 30, 2004.

                                      # # #






FOR:                                        FOR:
Neoware Systems, Inc.                       Mangrove Systems
400 Feheley Drive
King of Prussia, PA  19406


CONTACT:                                    CONTACT:
Keith Schneck                               Laurent Texier
Chief Financial Officer                     Managing Director, Mangrove Systems.
(610) 277-8300, ext. 1072                   phone: 33 2 33 91 0620
EMAIL: ltexier@mangrove-systems.com         EMAIL: kschneck@neoware.com

Sharon O'Shea
V.P. Marketing Communications
(610) 277-8300, ext. 1743
EMAIL: sharon.oshea@neoware.com