As filed with the Securities and Exchange Commission on February 10, 2003
Registration No. 333-100979
================================================================================

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------
PRE-EFFECTIVE AMENDMENT NUMBER 1
TO
FORM SB-2
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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LAPIS TECHNOLOGIES, INC.
(Name of small business issuer in its charter)

Delaware 3629 27-0016420
(State or jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)

-------------
19 W. 34th Street, Suite 1008
New York, NY, 10001
(212) 937-3580
(Address and telephone number of principal executive offices and principal place
of business)
-------------
Harry Mund
Lapis Technologies, Inc.
19 W. 34th Street, Suite 1008
New York, NY, 10001
(212) 937-3580
(Name, address and telephone number of agent for service)
-------------
With copies to:
Adam S. Gottbetter, Esq.
Salvatore A. Fichera, Esq.
Kaplan Gottbetter & Levenson, LLP
630 Third Avenue
New York, New York 10017-6705
(212) 983-6900

Approximate date of commencement of proposed sale to public: As soon as
practicable after the effective date of this registration statement.

If any of the securities being registered on this Form are offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act, check
the following box: [X]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: [ ] _________________

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [ ] ________________

If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [ ] _________________

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [ ]

CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------
Tile of Each Amount Proposed Proposed Amount of
Class of to Maximum Maximum Registration
Securities to be Offering Aggregate fee
be Registered Registered Price per Offering
Security(1) Price(1)
- --------------------------------------------------------------------

Common Stock, 733,000 $.15 $109,950 $10.12
$.001 Par
Value
- --------------------------------------------------------------------
TOTAL 733,000 $.15 $109,950 $10.12 (2)
- --------------------------------------------------------------------

(1) Estimated solely for purposes of calculating the registration fee.

(2) Registration fee was paid when Form SB-2 was filed on November 4, 2002.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF
1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY DETERMINE.

THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE
SELLING STOCKHOLDERS MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN
OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT
PERMITTED.

PROSPECTUS

SUBJECT TO COMPLETION DATED ___________, 2003

LAPIS TECHNOLOGIES, INC.

733,000 Shares of Common Stock

This prospectus relates to the sale of up to 733,000 shares of our common
stock by some of our stockholders.

This is the initial registration of our shares, and no public market
presently exists. The selling stockholders will sell the shares from time to
time at $.15 per share. If our shares become quoted on the OTC Bulletin Board,
sales will be made at prevailing market prices or privately negotiated prices.

We will not receive any proceeds from any sales made by the selling
stockholders, but will pay the expenses of this offering.

Investing in our common stock involves risks. You should carefully consider
the matters described in Risk Factors beginning on page 3.

Neither the securities and exchange commission nor any state securities
Commission has approved or disapproved of these securities or determined if this
Prospectus is truthful or complete. Any representation to the contrary is a
Criminal offense.

The date of this prospectus is ____________, 2003.

TABLE OF CONTENTS

PROSPECTUS SUMMARY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Our Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
The Offering. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Selected Historical Financial Data. . . . . . . . . . . . . . . . . . . . . . . 1

WHERE YOU CAN GET MORE INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . 2

RISK FACTORS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS. . . . . . . . . . . . . . . . . 7

USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

CAPITALIZATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

DESCRIPTION OF BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Our Subsidiary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Electronics Division. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Systems Division. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
New Products. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Marketing Strategies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Market Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Backlog . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Supplies and Suppliers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Research and Development Expenditures . . . . . . . . . . . . . . . . . . . . . 17
Seasonal Aspects. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Patents and Trademarks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Government Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

PROPERTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 19
Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Liquidity And Capital Resources . . . . . . . . . . . . . . . . . . . . . . . . 20
Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Financing Needs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Financings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Results Of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

MANAGEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Directors and Executive Officers. . . . . . . . . . . . . . . . . . . . . . . . 22
Significant Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Executive Compensation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2002 Stock Option Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. . . . . . . . . . . . . . . . . . . . 26

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. . . . . . . . . . . . 26

SELLING STOCKHOLDERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

DESCRIPTION OF SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Common Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Penny Stock Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Delaware Anti-Takeover Law. . . . . . . . . . . . . . . . . . . . . . . . . . . 34

DIVIDEND POLICY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

MARKET FOR OUR COMMON STOCK AND RELATED STOCKHOLDER MATTERS . . . . . . . . . . . . . 35

TRANSFER AGENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

PLAN OF DISTRIBUTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

SHARES ELIGIBLE FOR FUTURE SALE . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

COMMISSION POSITION ON INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . 37

LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

ADDITIONAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

INDEX TO FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

PROSPECTUS SUMMARY

This summary highlights important information about our business and about
this offering. Since it is a summary, it does not contain all the information
you should consider before purchasing our common stock. In this prospectus,
unless the context requires otherwise, "we" and "us" refer to Lapis
Technologies, Inc. ("Lapis") and its wholly owned subsidiary, Enertec
Electronics Limited.

OUR BUSINESS

We were formed in January 2002. Our operations are conducted in Israel
through our wholly owned subsidiary, Enertec Electronics Limited, an Israeli
corporation that has been in business since December 1991. Our business is to
manufacture, market and distribute electronic components and products relating
to power supplies, converters and related power conversion products, automatic
test equipment (ATE), simulators and various military and airborne electronic
systems. We are a distributor of our own products as well as products
manufactured by other companies that we represent.

Our executive offices are located at 19 W. 34th Street, Suite 1008, New
York, NY, 10001, Telephone: (212) 937-3580.

THE OFFERING

Common Stock Offered By The
Selling Stockholders . . . . . . . . .The selling stockholders are offering up
to 733,000 shares of our common stock.

Use of Proceeds. . . . . . . . . . . .We will not receive any of the proceeds
from the sale of the shares offered by
the selling stockholders.

SELECTED HISTORICAL FINANCIAL DATA

The following table sets forth selected financial information regarding
Lapis for the years ended December 31, 2001 and 2000 (audited) and the nine
months ended September 30, 2002 and 2001 (unaudited). All of this information
was derived from our financial statements appearing elsewhere in this
prospectus. However, only the financial information through December 31, 2001 is
audited; the financial information for the period ended September 30, 2002 is
unaudited. In the opinion of management, the financial information for the
period ended September 30, 2002 contains all adjustments, consisting only of
normal recurring accruals, necessary for the fair presentation of the results of
operations and financial position for such period. You should read this selected
financial information in conjunction with our management's discussion and
analysis, financial statements and related notes to the financial statements,
each appearing elsewhere in this prospectus.

LAPIS TECHNOLOGIES, INC. AND SUBSIDIARY
SELECTED HISTORICAL FINANCIAL DATA
($ in thousands, except share and per share information)

Nine-Month Periods
Years Ended December 31, Ended September 30,
------------------------------------- -----------------------
2001 2000 1999 2002 2001
----------- ----------- ----------- ---------- -----------
(unaudited)

Consolidated Statements of Income Data:

Net Sales. . . . . . . . . . . . . . . . . . . . $ 4,254 $ 5,813 $ 4,481 $ 3,491 $ 3,446
Cost of goods sold . . . . . . . . . . . . . . . 3,124 3,975 3,537 1,962 1,800
----------- ----------- ----------- ----------- -----------

Gross profit. . . . . . . . . . . . . . . . . . 1,130 1,838 944 1,529 1,646

Selling, general and administrative expenses . . 962 930 566 858 1,399
----------- ----------- ----------- ----------- -----------

Operating income. . . . . . . . . . . . . . . . 168 908 378 671 247
----------- ----------- ----------- ----------- -----------
Other income (expense)
Interest expense, net . . . . . . . . . . . . . (141) (113) (94) (180) (84)
Other income. . . . . . . . . . . . . . . . . . 2 3 3 57 2
----------- ----------- ----------- ----------- -----------

Total other income (expense). . . . . . . . . . (139) (110) (91) (123) (82)
----------- ----------- ----------- ----------- -----------

Income before provision for income taxes . . . . 29 798 287 548 165

Provision for income taxes . . . . . . . . . . . 10 293 100 162 -
----------- ----------- ----------- ----------- -----------

Net Income . . . . . . . . . . . . . . . . . . . $ 19 $ 505 $ 187 $ 386 $ 165
=========== =========== =========== =========== ===========

Earnings per share (basic and diluted) . . . . . * $ 0.11 $ 0.04 $ 0.08 $ 0.03
=========== =========== =========== =========== ===========

Weighted average common shares outstanding . . . 4,750,000 4,750,000 4,750,000 5,145,549 4,750,000
=========== =========== =========== =========== ===========
Consolidated Balance Sheet Data:
December 31, December 31, September 30, September 30,
2001 2000 2002 2001
(unaudited) (unaudited)
Total current assets . . . . . . . . . . . . . . $ 3,119 $ 2,750 $ 1,703 $ 2,777
=========== =========== =========== ===========
Total other assets . . . . . . . . . . . . . . . $ 286 $ 448 $ 372 $ 811
=========== =========== =========== ===========
Total assets . . . . . . . . . . . . . . . . . . $ 3,405 $ 3,198 $ 2,075 $ 3,588
=========== =========== =========== ===========
Notes payable. . . . . . . . . . . . . . . . . . $ 1,262 $ 1,023 $ 308 $ 2,061
=========== =========== =========== ===========
Total current liabilities. . . . . . . . . . . . $ 2,760 $ 2,681 $ 1,747 $ 2,126
=========== =========== =========== ===========
Total stockholders' equity . . . . . . . . . . . $ 396 $ 424 $ 241 $ 432
=========== =========== =========== ===========
Total liabilities and stockholder's equity . . . $ 3,405 $ 3,198 $ 2,075 $ 3,588
=========== =========== =========== ===========
* Per share amount is less than $0.01.

WHERE YOU CAN GET MORE INFORMATION

At your request, we will provide you, without charge, with a copy of any
information incorporated by reference in this prospectus. If you want more
information, write or call us at our executive offices.

Our fiscal year ends on December 31. We intend to furnish our shareholders
annual reports containing audited financial statements and other appropriate
reports.

RISK FACTORS

YOU SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS AND ALL OTHER
INFORMATION CONTAINED IN THIS PROSPECTUS BEFORE INVESTING IN OUR COMMON STOCK.
WE BELIEVE THIS SECTION ADDRESSES ALL MATERIAL RISKS SPECIFIC TO US. INVESTING
IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. ANY OF THE FOLLOWING RISKS
COULD ADVERSELY AFFECT OUR BUSINESS, FINANCIAL CONDITION AND RESULTS OF
OPERATIONS AND COULD RESULT IN A COMPLETE LOSS OF YOUR INVESTMENT.

Our success is dependent on our ability to anticipate and respond to rapid
Changes involving the electronic components and telecommunications industries.
Many of our competitors have greater resources than us and may be more efficient
In addressing these issues.

Our ability to achieve continued commercial acceptance of our products and
to obtain and maintain a significant market share is dependent on the
advancement of our existing technology, our ability to respond to the growth in
the electronic components markets in which we compete, our ability to encompass
evolving customer requirements, and our ability to provide a broad range of
products. Many of our existing and potential competitors have larger technical
staffs, more established and larger marketing and sales organizations, and
significantly greater financial resources than we do. Our lack of resources
relative to our competitors may cause us to fail to anticipate or respond
adequately to technological developments and customer requirements or to
experience significant delays in developing or introducing new products and
services. These failures or delays could cause reductions in our
competitiveness, revenues, profit margins or market share.

Our inability to obtain components of our products from outside suppliers
Due to adverse industry changes or price increases, may cause us to eliminate
Product lines in whole or in part, or cause delays in our product shipments.

If our existing suppliers are unable to meet our requirements, we would be
required to obtain other suppliers whose terms may not be satisfactory to us. If
we are unable to obtain other suppliers or receive satisfactory terms, we could
be required to alter product designs to use alternative components. Such
alterations may not be accepted by our customers. If alterations are not
feasible, we could be required to eliminate products from our product line.

Shortages of components could not only limit our product line and
production capacity, but also could result in higher costs due to the components
being in short supply or the need to use higher cost substitute components.
Significant increases in the prices of components could have a material adverse
effect on our results of operations because our products compete on price, and
we may not be able to adjust product pricing to reflect increases in component
costs. Also, an extended interruption in the supply of components or a reduction
in their quality or reliability would have a material adverse effect by
impairing our ability to deliver quality products to our customers in a timely
fashion. Delays in deliveries due to shortages of components or other factors
may result in cancellation by our customers of all or part of their orders.

A key element of our growth will be our ability to enhance our sales and
Marketing team. If we fail to build this team, we may not achieve our sales
Targets, which may affect our revenues, profit margins and market share.

We will need to expand our sales and marketing team significantly over the
next several years to achieve our sales targets. We will face significant
challenges and risks in building and managing our sales and marketing team,
including managing geographically dispersed sales efforts and adequately
training our sales people in the use and benefits of our products. To succeed in
the implementation of our business strategy, our management team must rapidly
execute our sales and marketing strategy. Our systems, procedures and controls
may not be adequate to support our needed growth in our sales and marketing
department.

We may need to raise additional capital in the future and may be unable to
Do so on acceptable terms. This could limit our ability to grow and carry out
Our business plan.

Based on our current business plan, we anticipate that our existing cash
balances and cash flow from our operations will be sufficient to permit us to
conduct our operations and to carry out our contemplated business plan through
the next twelve months. After that time, we may require additional capital.
Alternatively, we may need to raise additional funds sooner if our estimates of
revenues or capital requirements change or are inaccurate. We may also need to
raise additional funds sooner than expected to finance our expansion plans,
develop new products, enhance our existing products or respond to competitive
pressures. We cannot be certain that we will be able to obtain additional
financing on commercially reasonable terms or at all, which could limit our
ability to grow.

Our international operations will expose us to the risk of fluctuations in
Currency exchange rates.

We have established and acquired an international subsidiary that prepares
its balance sheets in the relevant foreign currency. In order to be included in
our consolidated financial statements, these balance sheets are converted, at
the then current exchange rate, into United States dollars, and the statements
of operations are converted using weighted average exchange rates for the
applicable period. Accordingly, fluctuations of the foreign currencies relative
to the United States dollar could have an effect on our consolidated financial
statements. Our exposure to fluctuations in currency exchange rates has
increased as a result of the operations of our international subsidiary.
However, because historically the majority of our currency exposure has related
to financial statement translation rather than to particular transactions, we do
not intend to enter into, nor have we historically entered into, forward
currency contracts or hedging arrangements in an effort to mitigate our currency
exposure.

Further, we expect that our receivables will be denominated primarily in
new Israeli shekels, as well as other currencies including the Euro, while our
payables will be denominated in a different mix of currencies. For example, 35%
of our expenses for the year ended December 31, 2001 were denominated in new
Israeli shekels. Our shekel denominated expenses consist principally of salaries
and related personnel expenses. We anticipate that for the foreseeable future a
portion of our expenses will continue to be denominated in shekels. As we expand
our sales and marketing efforts in different regions, we also expect to incur

increasing amounts of our expenses in the Euro, as well as other local
currencies. If the value of a currency in which our receivables are denominated
weakens against the value of a currency in which our expenses are denominated,
there will be a negative impact on our profit margin for sales of our products.

We will direct all of our customized military related business to enertec
Systems 2001 ltd., an entity in which we hold a 25% equity interest. The effects
of this redirection of business may be adverse to our revenues, profit margins
and market share.

A substantial portion of our revenues is generated through the sales of
customized military related systems. Sales in this sector have been steadily
increasing in light of the current worldwide political situation and the demand
for military products. However, we are not financially or operationally equipped
to handle the growth rate, and therefore, have decided to direct all of our
customized military related business to Enertec Systems 2001 Ltd ("Enertec
Systems"). By foregoing this portion of our business, we may experience a
material drop in our revenues, profit margins and market share. Although we
currently maintain a 25% equity interest in Enertec Systems through our
wholly-owned subsidiary Enertec Management Limited, this interest may not be
significant enough to offset the loss we may experience from redirecting this
business. We currently do not plan to acquire more shares in Enertec Systems.

Conditions in israel affect our operations and may limit our ability to
Produce and sell our product, which could decrease our revenues.

All of our operating and manufacturing facilities, as well as our executive
offices and back-office functions, are located in the State of Israel. We are,
therefore, directly affected by the political, economic and military conditions
in Israel. Since the establishment of the State of Israel in 1948, a number of
armed conflicts have taken place between Israel and its Arab neighbors. A state
of hostility with these Arab neighbors, varying in degree and intensity, has led
to security and economic problems for Israel. Since October 2000, there has
been a significant increase in violence, primarily in the West Bank and Gaza
Strip, and negotiations between Israel and Palestinian representatives have
ceased. In addition, in February 2001, a new prime minister was elected in
Israel and a new government was formed. Any future armed conflict, political
instability or continued violence in the region would likely have a negative
effect on our business condition and harm our results of operations.
Furthermore, several countries still restrict trade with Israeli companies and
that may limit our ability to make sales in those countries. These restrictions
may have an adverse impact on our operating results, financial condition or the
expansion of our business. In addition, any major hostilities involving Israel,
the United States or Europe, including military activities in defense against
terrorist activities, could have a material adverse effect on our business and
financial condition. Any interruption or curtailment of trade between Israel
and any other country in which we have strategic relationships could adversely
affect such relationships.

Our operations could be disrupted as a result of the obligation of key
Personnel in israel to perform military service.

Generally, all male adult citizens and permanent residents of Israel under
the age of 54 are, unless exempt, obligated to perform up to 36 days of military
reserve duty annually. Additionally, all Israeli residents of this age are

subject to being called to active duty at any time under emergency
circumstances. Many of our officers and employees are currently obligated to
perform annual reserve duty. Our operations could be disrupted by the absence
for a significant period of one or more of our officers or employees due to
military service. Any disruption to our operations as a result of our
personnel being called to military duty could materially adversely affect the
development of our business and our financial condition.

Inflation and the Israeli economy may substantially impact our revenue and
Profit.

Historically Israel has suffered from high inflation and the devaluation of
its currency, the new Israeli shekel, as compared to the U.S. dollar. Future
inflation or further devaluations of the new Israeli shekel may have a negative
impact on our revenues and profits. If inflation causes substantial price
increases or if the shekel devalues, we will be required to spend more shekels
to obtain the same product. In addition, the Israeli economy is currently in
the midst of a recession, which further devalues the shekel as compared to the
U.S. dollar, the Euro and other currencies. The longer this recession
continues, the more substantially our business and profit will be negatively
impacted. The Israeli economy may not improve. If it does improve, it may take
an extended period of time to do so.

It may be difficult to serve process on or enforce a judgment against our
Israeli officers and directors, making it difficult to bring a successful
Lawsuit against our officers and directors, individually or in the aggregate.

Service of process upon our directors and officers, who reside outside the
United States, may be difficult to obtain within the United States. This could
limit the ability of our stockholders to sue our directors and officers based
upon an alleged breach of duty or other cause of action. However, subject to
limitation, Israeli courts may enforce United States final executory judgments
for liquidated amounts in civil matters, obtained after a trial before a court
of competent jurisdiction, according to the rules of private international law
currently prevailing in Israel, which enforce similar Israeli judgments,
provided that:

- - Due service of process has been effected and the defendant was given a
reasonable opportunity to defend;

- - the obligation imposed by the judgment is executionable according to the
laws relating to the enforceability of judgments in Israel and such
judgment is not contrary to public policy, security or sovereignty of
Israel;

- - such judgments were not obtained by fraud and do not conflict with any
other valid judgments in the same matter between the same parties; and

- - an action between the same parties in the same matter is not pending in any
Israeli court at the time the lawsuit is instituted in the foreign court.

Foreign judgments enforced by Israeli courts generally will be payable in
Israeli currency, which can then be converted into United States dollars and
transferred out of Israel. The judgment debtor may also pay in dollars.
Judgment creditors must bear the risk of unfavorable exchange rates.

Under current Israeli law, we may not be able to enforce covenants not to
Compete and may be unable to prevent our competition from benefiting from the
Expertise of some of our former employees.

We currently have non-competition agreements with all of our employees.
These agreements prohibit our employees, if they cease working for us, from
directly competing with us or working for our competitors. Recently, Israeli
courts have required employers seeking to enforce non-compete undertakings of a
former employee to demonstrate that the competitive activities of the former
employee will harm one of a limited number of material interests of the
employer, such as the secrecy of a company's confidential commercial information
or its intellectual property. If we cannot demonstrate that harm would be caused
to us, we may be unable to prevent our competitors from hiring and benefiting
from the expertise of our former employees.

There has been no prior public market for our common stock. A public
Market for our common stock may not develop upon the completion of this
Offering. Unless a public market develops at some future time, you may not be
Able to sell your shares.

Prior to this offering, there has been no public market for our common
stock and a public market for our common stock may not develop upon completion
of this offering. Failure to develop or maintain an active trading market could
negatively affect the value of our shares and make it difficult for you to sell
your shares or recover any part of your investment in us. Even if a market for
our common stock does develop, the market price of our common stock may be
highly volatile. In addition to the uncertainties relating to our future
operating performance and the profitability of our operations, factors such as
variations in our interim financial results, or various, as yet unpredictable
factors, many of which are beyond our control, may have a negative effect on the
market price of our common stock.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This registration statement contains certain financial and other
information and statements regarding our operations and financial prospects of a
forward-looking nature. Although these statements accurately reflect
management's current understanding and beliefs, we caution you that certain

important factors may affect our actual results and could cause such results to
differ materially from any forward-looking statements which may be deemed to be
made in this registration statement. Statements in this registration statement,
including without limitation those contained in the sections entitled "Risk
Factors" and "Description of Business" describe factors, among others, that
could contribute to or cause such differences. For this purpose, any statements
contained in this registration statement which are not statements of historical
fact may be deemed to be forward-looking statements. Without limiting the
generality of the foregoing, words such as, "may", "will", "intend",
"expect", "believe", "anticipate", "could", "estimate", "plan" or "continue" or
the negative variations of those words or comparable terminology are intended to
identify forward-looking statements. Such forward-looking information and
statements may not be reflective in any way of our actual future operations or
financial results, and such information and statements should not be relied upon
either in whole or in part in connection with any decision to invest in the
shares.

USE OF PROCEEDS

The selling stockholders are selling their shares covered by this
prospectus for their own accounts. Accordingly, we will not receive any
proceeds from the sale of the shares.

CAPITALIZATION

The following table sets forth the capitalization of Lapis as at December
31, 2001 and September 30, 2002.

December 31, September 30,
2001 2002
(unaudited)
-------------- ---------------
($ in thousands)

Total liabilities . . . . . . . . . . . . . . . . . $ 3,009 $ 3,156

Stockholders' equity:

Preferred stock, $.001 par value, 5,000,000 shares. - -
authorized; none outstanding

Common stock, $.25 par value; 100,000,000 shares. . 1,188 1,371
authorized; 4,750,000 and 5,483,000 issued and
outstanding, respectively

Additional paid in capital. . . . . . . . . . . . . (1,188) (1,242)

Retained earnings . . . . . . . . . . . . . . . . . 472 449

Accumulated other comprehensive loss. . . . . . . . (76) (112)

Subscription receivable . . . . . . . . . . . . . . - (34)
-------------- ---------------

Total stockholders' equity. . . . . . . . . . . . . 396 432
-------------- ---------------

Total capitalization. . . . . . . . . . . . . . . . $ 3,405 $ 3,588
============== ===============

DESCRIPTION OF BUSINESS

GENERAL

We were formed in Delaware on January 31, 2002 under the name Enertec
Electronics, Inc. and have filed two Certificates of Amendment changing our name
to Opal Technologies, Inc. and then to Lapis Technologies, Inc. We conduct
operations in Israel through our wholly owned subsidiary, Enertec Electronics
Limited ("Enertec Electronics"), an Israeli corporation formed on December
31, 1991, to manufacture and distribute electronic components and products
relating to power supplies, converters and related power conversion products,
automatic test equipment (ATE), simulators and various military and airborne
systems. Where the context requires, references to "we" or "us" throughout this
document include reference to Enertec Electronics.

Enertec Electronics maintains two divisions, the Systems Division and the
Electronics Division. The Systems Division designs, develops and manufactures
test systems for electronics manufacturers in accordance with their
specifications. The Electronics Division markets and distributes the test
systems, power supplies and other electronic components manufactured by us, and
by other manufacturers who engage us to distribute their products. We have
entered into representative and distribution agreements with seven such
manufacturers, four of which have been reduced to written contacts.

Test systems and testing solutions are used to examine systems, electrical
devices or products, during their final stages of production. Such systems are
tested to ensure their integrity and to foster quality control. The process
involves analyzing the product to determine which of its functions are
vulnerable to error, and to determine which type of testing equipment would best
discover and solve the potential problems.

OUR SUBSIDIARY

In April 2002, we acquired all of the outstanding capital stock of Enertec
Electronics, making it our wholly-owned subsidiary. In this transaction, we
acquired 99 ordinary shares of Enertec Electronics from Harry Mund, our
President and Chief Executive Officer, in exchange for 4,750,000 shares of our
common stock. The common stock issued to Mr. Mund represented approximately
86.6% of our outstanding common stock after the transaction.

Enertec Management Limited, f/k/a Elcomtech Ltd., a private Israeli
company, is a wholly-owned subsidiary of Enertec Electronics. It manages the
importing of raw materials, and our engineering and electronic design services.

Enertec Systems 2001 Ltd. ("Enertec Systems"), a private Israeli company,
is owned by Enertec Management Limited (25%), Harry Mund (27%), our President
and Chief Executive Officer, and Zvi Avni (48%), a former employee of Enertec
Electronics Limited. The President and Chief Executive Officer of Enertec
Systems is Harry Mund, and the Chief Operating Officer is Zvi Avni. Enertec
Systems commenced operations on January 1, 2002.

As of December 31, 2002, Enertec Systems was making 36% of our customized
military related systems, and is expected to make approximately 80% of these
systems by year-end 2003. Military related products are divided into two
sub-sections, the customized systems and the standard (off-the-shelf) systems.
It is our intention to eventually direct all of our customized military related
systems business to Enertec Systems, while retaining the standard military
related systems business within our Systems Division. The reason for the
implementation of this business plan is twofold. First, it will allow Enertec
Electronics to focus on its primary business, manufacturing and distributing
standard and customized power supplies in the non-military arena, as well as the
distribution of standard military related power supplies. Second, it will save
Enertec the expense of becoming compliant with the stringent security clearance
standards required by military customers who demand customized systems. As a
whole, Enertec Electronics does not meet these high standards and the cost to
become compliant is not justifiable. All the employees of Enertec Systems meet
these standards. There is no formal arrangement or agreement between us and
Enertec Systems.

ELECTRONICS DIVISION

This division is responsible for:

- the marketing and distribution of power supplies manufactured by us
and third-party firms that engage us to distribute their products; and

- the marketing and distribution of power testing equipment we
manufacture to our customers.

Our customers have products that require power supplies. We are contacted
by them with their specifications, and based on that data, we provide a
standard, or if necessary, a semi-custom or custom, power supply solution. Our
technical sales staff in Israel has a comprehensive understanding of our
customers' product base, which allows us to provide the most efficient power
supply solution to our customers. Our professional marketing and sales teams
include engineers who provide support to customers from the early stages of
product definition and first sampling, through the production stages and up to
after-sales support. Examples of products that require power supplies are
computers, modems, printers, faxes, telephones, transmitter/receivers for
commercial and military communications, radar, airborne infra-red cameras,
surveillance equipment, telecom network routers, video-conference routers,
cellular telephone transmitters/receivers, television on-routers,
internet-routers, medical MRI scanners, x-ray equipment, robots, drivers for
electric motors, and industrial control systems.

We have also entered into representative contracts or distribution contacts
with various power supply manufacturers. These manufacturers granted us
exclusive rights to sell their products in particular territories, entitling us
to commissions for each sale.

We are also a major local Israeli distributor of power testing equipment.
This includes DC and AC electronic loads, that is, equipment used for the
testing of power supplies which utilize alternate current (AC) and direct
current (DC) technology. We also provide various measurement devices that
measure factors such as electrical values, voltage, current, power, resistance,
and simulators, that is, pieces of equipment used during the testing process to
simulate different input/output conditions while monitoring the responses of the
unit to determine whether the equipment is functioning correctly. Additionally,

we provide complete ATE Systems, that is automatic test systems, which are
complete systems typically built to automatically test electronic systems in
their entirety. Examples of such systems are power supplies, computers, modems,
telecom systems, electronic motors, communication equipment, and various
military systems used on aircrafts, ships or tanks.

SYSTEMS DIVISION

This division is responsible for designing, developing and manufacturing
test systems for electronics manufacturers based on their specifications. Our
systems are highly sophisticated and we have achieved recognition as a major
local manufacturer of ATE Systems. We also design and manufacture various
airborne military systems, for example, electronic systems used in aircrafts
such as a power supply, mission computer or a control system for a motor or a
pump, a radio transceiver, an altitude measuring device, and sub-assemblies,
which are parts of a system developed with the customer's specifications.

We are an ISO9001 approved company. The International Organization of
Standardization (ISO) has created this model designation to apply to
organizations that design, develop, produce, install, and service products. ISO
expects organizations to apply this model, and to meet certain requirements, by
developing a quality control system. ISO9001 is the international standard for
quality assurance and quality design. This is the most common worldwide standard
and is implemented across all kinds of organizations, including manufacturers,
schools and shops. Most customers in the industry insist on doing business with
companies that are least ISO9002 approved, a standard that is less demanding
than IS9001. The ISO9002 standard is related mainly to the quality assurance of
the manufacturing process, while the higher ISO9001 standard includes both the
quality assurance of the manufacturing process component as well as the quality
of the design. The ISO9001 standard is important for customers who are placing
orders for custom made products.

ISO9001 quality assurance model is made up of 20 sets of quality system
requirements. The key requirements are that an organization should:

- - Determine the needs and expectations of customers and other interested
parties.
- - Establish policies, objectives and a work environment necessary to motivate
the organization to satisfy these needs.
- - Design, resource and manage a system of interconnected processes necessary
to implement the policy and attain the objectives.
- - Measure and analyze the adequacy, efficiency and effectiveness of each
process in fulfilling its purpose and objectives.
- - Pursue the continual improvement of the system from an objective evaluation
of its performance.

A typical process for design, planning and implementing a quality system is
likely to involve:

- - Planning the quality initiative and obtaining executive sponsorship.
- - Establishing the quality policy for the organization.
- - Designing and planning the Quality Management System (QMS), usually based
on international standards.

- - Establishing the quality organization, and developing the quality manual
and structure of quality records.
- - Determining the scope of implementation.
- - Assuring quality plans.
- - Reviewing deliverables and determining any actions.
- - Auditing quality records.
- - Defining areas for process improvement.
- - Managing the improvement program.

NEW PRODUCTS

In the third quarter of 2001, we introduced into the market an ATE for
unmanned aircraft priced at approximately $90,000. This system is designed to
test the datalink, or the communication channels, between the ground station and
the unmanned aircraft. The market has responded well to this ATE. As of
September, 2002, we have sold 8 units to Tadrian Spectralink, generating
revenues of approximately $720,000. These products will be delivered in the
first quarter of 2003.

We have recently been approved for sales into the United States by the
Underwriters Laboratories, that is, approved to carry the UL sign, for a low
cost line of power supplies for the ADSL (fast internet) market. This product
line is estimated to cost approximately $10,000 to develop, with an expected
price to our customers of $6 per unit. Although approved, we have not
aggressively marketed this product due to the slowdown in ADSL sales.

In the fourth quarter of 2002, we launched a handheld pre-loadline tester.
This device is intended to test the proper functioning of the communication
between the aircraft and the payload, which payload could be bombs or missiles.
This product is estimated to cost in research and development approximately
$100,000, with an expected price per unit to our customers of $30,000. As of
December 31, 2002, we had received an order from Elbit Systems for five units,
for a total of $150,000.

MARKETING STRATEGIES

We market our products to a diverse group of manufacturers. Our products
serve the various needs of local Israeli manufacturers of electronic systems in
the following fields:

- - Telecommunications
- - Medical
- - Military
- - Industrial

We currently sell only to Israeli companies who, in turn, incorporate our
components into their products for resale to the global markets. We advertise
in all the local Israeli technical magazines and participate in electronic shows
three to five times a year. A substantial part of the business is from
"captive" customers who have been working with us for years. Many companies
have engaged us from their inception, and have implemented our custom designed
solutions. Many of our customers use us exclusively, and have become

dependent on us for technical services, products and support, and consider us to
be their own "power supply department".

Word-of-mouth also drives our business. Our reputation is backed by many
years of providing quality products and services. Our marketing strategy has
been based on our brand name and reputation, which has grown substantially over
the last eighteen years, including eight years prior to the formation of Enertec
Electronics, when Mr. Mund conducted business under the name "Enertec
International". Interest in our business has also been generated at seminars and
exhibitions.

Over the next 24 months, we plan to be more aggressive in our marketing
efforts by introducing an array of new advertisements, a web-site and new
catalogs, as well as offering free samples of our products to
new customers. We intend to provide to new customers for free, custom designed
samples, or prototypes, in accordance with each of their specifications. For
instance, a potential customer in the process of designing a new electronic
product will require a power supply. We may provide a free sample power supply
to the customer to incorporate into its design. When the product enters the
production stage, our power supply will already be an intricate part of the
product, generating orders for us. Free sampling, or prototypes, will allow
potential customers to compare our products with those of our competition and
discover our product specialization and competitive pricing.

Within the Power Supply/Electronics Division, the main competitive
advantage of the standard units is price. The main competitive factor for the
custom units is sophistication and application results. Our Electronics Division
has maintained pricing at a level approximately 50% lower than that of our
competitors for customized products and approximately 15% to 20% lower for our
standard products.

Our Systems Division does not use pricing as a competitive component
because each application is unique and proprietary. The System Division relies
on detailed customization, innovative state of the art solutions using cutting
edge technology, and its capacity to provide optimal and cost effective
solutions based on technological specialization in all areas of military and
avionics systems.

We have also increased the technical staff for our Systems Division to
maintain our technological edge and increase the variety of our products, and in
particular, products relating to the avionics and defense systems.

MARKET CONDITIONS

Worldwide recession in high-tech, telecommunications, and Internet related
products has affected the Electronics Division's power supplies' sales. The
overall market dropped by about 50% during 2001. Our power supplies' sales
during 2001 are lower by only approximately 25%. This can be explained by the
sale of our military related products. The military related business has
increased significantly in light of the current worldwide political situation
and the demand for military products. Local manufacturers of military equipment
have received increased orders from local and international markets.

Additionally, manufacturers who sell end products such as missiles,
aircrafts or computers, also provide a support system (e.g., an ATE) to the
end-user. The end-user uses this support system for maintenance of the end
product. Historically, support systems were made by manufacturers selling the
end products. Recently, however, manufacturers have been focusing their
resources on the end products rather than on support systems. This has opened
up a market for us to develop these systems.

The local Israeli market for ATE and simulators is estimated at $100 to
$200 million annually. We have about 4% of this market, approximately the same
level of market penetration as our competitors. This market is largely
controlled by big defense manufacturers such as Elbit, El-Op , Rafael, Israeli
Aircraft Industry and Tadiran. However, there has been a noticeable trend by
these and other defense manufacturers to outsource test systems to specialized
firms so that large manufacturers can focus their resources on designing their
core products.

The eligible bidders for military contracts need to be "approved
companies," which are companies that a specific customer has pre-approved to
design and manufacture for it. Few of our competitors fall within this
category.

The Systems Division sales have increased by approximately 30% during 2001
and increased approximately 50% during 2002. These results are the direct
product of our work ethic, technical superiority, innovations in testing
solutions, and cost efficient productions. At the present time, our plant is
working at near full capacity.

Our stable growth is largely due to our diversified client base. Increases
in sales in the telecommunications, industrial control, medical and the military
core business sectors, have made up for the decrease in sales in our commercial
products. However, our commercial market related business decreased less than
the overall market for two reasons. First, our sales force pays greater
attention to our customer relations, providing more consultation than our
competition does. Second, we offer more customized power supplies, which
makes it more difficult for our competitors to bid successfully on the same
projects.

CUSTOMERS

Our customers are most of the local Israeli manufacturers of electronic
systems from different segments of the electronics industry, representing such
fields as military, commercial, medical, and telecommunications industries. Due
to the high level of diversification of our customers, we are not dependent on
any one specific market segment, so overall performance is less affected by
fluctuation in the markets.

Israeli Aircraft Industry (IAI) accounts for approximately 57% of our
sales. Although the loss of this account is unlikely, we have made an effort to
decrease this percentage by increasing our sales to Elbit, Rafael and several
other new customers.

We currently are engaged in fulfilling long-term (1-2 years) purchase
orders with various customers for power supplies. Below is a table listing the
names of the customers and, if the orders are completely satisfied, the revenue
that will be generated from each:

CUSTOMER AMOUNT

Kollmorgen-Servotronics Ltd. . $ 56,000
Synel Systems Ltd. . . . . . . 20,000
Orex Computed Radiography Ltd. 20,000
Big Band Networks Ltd. . . . . 108,000
Camtek Ltd- AQI Systems. . . . 10,000
Rom-Phone Ltd. . . . . . . . . 10,000
RAD Data Communications Ltd. . 110,000

We also are engaged in fulfilling purchase orders for testing equipment
with various customers. Below is a table listing the names of the customers and
again, if the orders are completely satisfied, the revenue that will be
generated from each:

CUSTOMER AMOUNT

Israeli Aircraft Industry . . . . . . $880,000
Tadiran Spectralink Ltd.. . . . . . . 430,000
Elbit Systems Ltd.. . . . . . . . . . 740,000
El-Op-Electrooptics Industries Ltd. . 460,000
Rafael-Armament Development Authority 740,000

BACKLOG

As of December 31, 2002 we had a backlog of written firm orders for our
products and services in the amount of approximately $ 1,964,000, as compared to
a backlog of approximately $2,300,000 as of December 31, 2001.

During the years 2001 and 2002, there was a significant increase in orders
for military ATE systems, and a decrease in orders for
commercial/telecommunications power supplies. The delivery lead-time of ATE
systems is six to twelve months, which gives rise to a significant backlog. The
delivery time for commercial products, such as power supplies, is from one to
two weeks to one to two months, so that our backlog is generally small for this
kind of product.

The amounts of orders included in the December 31, 2002 backlog figure are
as follows:

- - $386,000 representing test systems for arrow missiles for Israel Aircraft
Industry;

- - $205,000 representing airborne power supplies and test systems for
infra-red payload for El-Op;

- - $288,000 representing test systems for pilot helmet and other ATE for
Elbit;

- - $27,000 representing airebourne power supplies for Rafael Armament
Development Authority; and

- - $598,000 representing data link test equipment for Tadrian Spectralink.

The backlog of firm orders for commercial products is approximately
$420,000.

A typical order size for test systems is $30,000 to $250,000 depending on
the nature of the products for which the system is required.

Our backlog is bigger and our lead-time is shorter than almost all of our
competitors. The backlog and lead-time is also a function of the economy. That
is, in tougher economic times, companies tend to order what they need
immediately, rather than carrying an inventory. In turn, we also do not carry
much excess inventory, and thus the lead-time is slightly longer. We anticipate
lowering lead-time by 50% by keeping standard units in stock and by hiring more
production staff. Currently, we have a 4-week lead-time with our standardized
products, and a 4-month lead-time with our customized products.

COMPETITION

We face intense competition from the existing manufacturers and
distributors of electronic components and products. Presently, several competing
companies that have greater resources than we do, such as financial,
operational, sales, marketing, and research and development resources, are
actively engaged in the manufacture and distribution of electronic components
and products. However, we have been able to compete effectively with these
companies for the following reasons:

- Our power supplies are high quality, low cost, and are backed by a
large number of experienced technicians, a unique combination in this
industry. Most of our sales people are engineers, who have an
understanding of our customer's requirements, allowing us to provide
cost-effective solutions.

- We have comprehensive experience in test systems, which enables our
sales people to propose the most cost-effective testing solutions,
incorporating the highest grade of software and the most sophisticated
hardware.

- We maintain a strong technical team that provides solutions to our
customer's needs within our target niche.

- Our products are sold in diversified activity fields, namely,
commercial, industrial, military, medical, systems and components. Our
products have been incorporated into many high volume production
projects with long-term purchasing agreements of up to two years. That
is, our customers' products are sold in high volume intervals, and to
ensure delivery in a timely fashion, our customers place long-term
orders with us to cover their production needs over a period of
several months to up to a year. For example, we have backlog orders to
December, 2003 from Tadiran Spectralink, which uses our ATE for
unmanned aircrafts, and Kolmorgen, which incorporates our control
systems into three of their robot models. Additionally, we
mass-produce power supplies for Synel Systems' entry control system.
Moreover, we are the sole manufacturer of power supplies for Big Band
Networks, a Video On Demand provider. We currently have an order for
five hundred (500) power supplies that is incorporated into their
switchboard wideband network. There are three (3) separate power
supply components in Big Band Networks' switchboard.

SUPPLIES AND SUPPLIERS

Our suppliers are diversified and we are not dependent upon a limited
number of suppliers for essential raw materials, energy or other items. The
manufacturers that supply to us are all established companies with facilities
and products in compliance with all relevant international standards. However,
while we are not dependent on any one supplier, disruptions in normal business
arrangements by the loss of a supplier could cause possible short-term losses.
These losses would not have an adverse effect on our long-term business goals.

Our principal suppliers are Emco High Voltage and Hitron Electronics Corp.

The raw materials we use are either electronic components or mechanical
components. The electronic components are purchased from suppliers and the
mechanical components are mainly manufactured by local subcontractors.

EMPLOYEES

FUNCTION NUMBER OF NUMBER OF
CURRENT ENERTEC EMPLOYEES EXPECTED
ELECTRONICS LIMITED IN 2003
EMPLOYEES

Management & Administration 4 3
Engineering . . . . . . . . 3 4
Production. . . . . . . . . 4 1
Quality Assurance . . . . . 1 1
Buyer . . . . . . . . . . . 1 1
Marketing and Sales . . . . 2 7
Programmers . . . . . . . . 1 1
------------------- ------------------
Total . . . . . . . . . . . 16 18

All technical employees must sign a two-year confidentiality agreement and
a two-year non-compete agreement, which prohibits our employees, if they cease
working for us, from directly competing with us or working for our competitors.
However, Israeli courts have required employers seeking to enforce non-compete
undertakings of a former employee to demonstrate that the competitive activities
of the former employee will harm one of a limited number of material interests
of the employer, such as the secrecy of a company's confidential commercial
information or its intellectual property. We may not be able to demonstrate that
harm would be caused to us, and therefore, may be unable to prevent our
competitors from hiring and benefiting from the expertise of our former
employees. None of our employees are subject to a collective bargaining
agreement. We do not employ any supplemental benefits or incentive arrangements
for our officers or employees. All of our employees are full-time. Management
considers its employee relations to be good.

RESEARCH AND DEVELOPMENT EXPENDITURES

We spent $100,000 (or 2% of revenues), $200,000 (or 4% of revenues), and
$220,000 for research and development in the years 2000, 2001, and 2002
respectively.

These expenditures have adequately satisfied our research and development
requirements.

SEASONAL ASPECTS

We do not experience seasonal variations in our operating results.

PATENTS AND TRADEMARKS

We are not dependent on patents or trademark protection with regard to the
operation of our business and do not expect to be at any time in the future.

GOVERNMENT REGULATION

Every electronic product must comply with the UL standards of the USA and
CE standards of Europe to be eligible for sale in the respective countries
subject to these standards. Every system must be tested, qualified and
labeled under the relevant standards. This is a complicated and expensive
process and once completed, the approved product may not be altered for sale.
The power supply system has the most stringent approval standards

PROPERTIES

We currently maintain plants in both Haifa and Carmiel. We have no plans
to secure more space, as we believe both locations are suitable for our needs.

Our Haifa plant is 400 square meters and includes a production hall and
management offices. The Haifa property is leased at $19,200 per annum. We
entered into this lease in January 2001. The Haifa plant houses the headquarters
and accounting offices, the imports department, sales and administration
employees, application engineers, and a service laboratory. This plant is
suitable for our present and near future needs. There is enough space to
accommodate an additional two to four sales engineers, if needed. This space is
also used to sell standard power supplies products.

Our Carmiel plant is 800 square meters and also includes a production hall,
with a research and development and engineering facility for our Systems
Division. The Carmiel property is leased at $38,400 per annum. We use the
Carmiel plant for manufacturing. It houses engineers, software programmers,
electronic hardware designers, mechanical designers, and electronic and
mechanical assembly personnel. It consists of office rooms for one to three
people, and contains one room for electronics assembly, one for mechanical
assembly, and two for final testing of finished products. The Systems Division
manufacturers its customized products in this facility, and accordingly, it is
not a plant for high volume production. It is located in the Carmiel industrial
area, and is in close proximity to many of our Systems Division clients. Every
engineer has individual workstations, which contain computers that are
inter-connected by our own local network for fast communication. The plant has
been updated to satisfy all our present and near future needs. In this
facility, there is space for five additional offices, which would accommodate
approximately 15 more people, and the existing assembly rooms could accommodate
three to eight additional workers.

LEGAL PROCEEDINGS

We are not subject to any pending or threatened legal proceedings, except
for the lawsuit described below.

Orckit Communications brought an action in the Tel Aviv District Court
against Gaia Converter, a company for which we act as sales representatives,
Alcyon Production Systems, a subcontractor of Gaia Converter, and Enertec
Electronics, alleging that the DC converters supplied to it by Gaia Converter
were defective and caused Orckit to replace the converters at a substantial
financial expense. Gaia Converter has advised us that the converters in issue
were free from any and all defects and were in good working order and that it
was the faulty performance of Orckit's product into which the converters were
incorporated that caused them to fail at a greater rate than anticipated by
Orckit. Enertec Electronics filed a defense to this claim on the basis that
there is no cause of action against it, as among other things, Enertec
Electronics is merely the local Israeli sales representative of Gaia Converter
and did not make any implied or express representations or warranties to Orckit
regarding the suitability of the converters or otherwise, nor was Enertec
Electronics required to do so by law. Technical specifications required by
Orckit for the converters were determined and communicated directly by Orckit to
Gaia Converter and all other communications regarding the converters were
directly between Orckit and Gaia Converter. Moreover, Orckit conducted a
qualification test of the converters and confirmed to Gaia Converter that the
converters complied with their requirements subsequent to such testing. Enertec
Electronics has had initial informal discussions with Orkit Communications about
removing Enertec Electronics as a Defendant in the action. Neither Gaia
Converter nor Alcyon Production Systems have filed a defense to this action, and
consequently Orkit Communications requested and obtained default judgments from
the Tel Aviv District Court against both Gaia Converter and Alcyon Production
Systems. The granting of these judgments render the continuation of the action
against Enertec Electronics highly improbable. However, if the proceedings are
continued, Enertec Electronics intends to defend this action vigorously and we
do not believe that it will have a material adverse impact on our business.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

OVERVIEW

The following discussion should be read in conjunction with our financial
statements and the accompanying notes appearing subsequently under the caption
"Financial Statements", along with other financial and operating information
included elsewhere in this prospectus. Certain statements under this caption
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" constitute "forward-looking statements" under the Reform Act. See
"Cautionary Note Regarding Forward Looking Statements". For a more complete
understanding of our operations see "Risk Factors" and "Description of
Business".

LIQUIDITY AND CAPITAL RESOURCES

OVERVIEW

As of September 30, 2002, our cash balance was $82,000 as compared to
$86,000 at December 31, 2001. Our accounts receivable at September 30, 2002
were $1,428,000, as compared to $739,000 at December 31, 2001. The increase in
accounts receivable is a result of increasing the period of credit granted to
our customers from 60 to 90 days. Total current assets at September 30, 2002
were $2,777,000, as compared to $2,233,000 at December 31, 2001.

We do not expect any effect on our net profitability due to the increased
period of credit granted to our customers from 60 to 90 days. This increased
period has become an industry standard in Isreal, and accordingly, financial
institutions have also increased their periods of credit, alieviating pressures
on us. We currently do not have material balances of accounts receivables, and
therefore, are not concerned with collectibility issues as a result of this
change of payment terms. Although, this action will minimize the overall
cash-flow to us, our tight control will enable us to detect adverse situations
immediately.

FINANCING NEEDS

We expect our capital requirements to increase significantly over the next
several years as we continue to develop and test our suite of products, increase
marketing and administration infrastructure, and embark on developing in-house
business capabilities and facilities. Our future liquidity and capital funding
requirements will depend on numerous factors, including, but not limited to, the
levels and costs of our research and development initiatives, the cost of hiring
and training additional sales and marketing personnel to promote our products
and the cost and timing of the expansion of our marketing efforts.

FINANCINGS

During the period June 2002 through September 2002, we entered into 31
subscription agreements with private investors, pursuant to which we issued an
aggregate of 233,000 shares of our common stock at $.15 per share. These private
investments generated total proceeds to us of $34,950.

RESULTS OF OPERATIONS

NINE MONTHS ENDED SEPTEMBER 30, 2002 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
2001.

For the nine months ended September 30, 2002, we had total revenue of
$3,491,000 as compared to $3,446,000 for the nine month period ended September
30, 2001, an increase of $45,000 or 1.3%. Of our revenues during the nine months
ended September 30, 2002, $1,536,000 or 44% were from third party distribution
and $1,955,000 or 56% were from sales of products that we manufacture. This
increase is due to increase in sales within the systems division of Enertec
Electronics.

Gross profit totaled $1,529,000 for the nine months ending September 30,
2002, as compared to $1,646,000 for the nine months ended September 30, 2001, a
decrease of $117,000 or 7.1%. The gross profit as a percentage of sales for the
nine months ended September 30, 2002 was 43.8% as compared to 47.8% for the nine
months ended September 30, 2001. The decrease in our gross profit overall is due
to the reclassification of wages. For the period ended September 30, 2002, wages
were a component of costs of goods sold, whereas, for the period ended September
30, 2001, wages were a component of general and administrative expenses.

Total operating expenses in each of the nine month periods ended September
30, 2002 and September 30, 2001 were comprised of selling, general and
administrative expenses. Operating expenses for the nine month periods ended
September 30, 2002 and September 30, 2001 were $858,000 and $1,399,000,
respectively, a decrease of $541,000, or 38.7%. The decrease in operating
expenses is attributable to the reclassification of our import expense. For the
period ended September 30, 2001, import expenses were included as an operating
expense. For the period ended September 30, 2002, import expenses were
redirected to Enertec Systems 2001.

Our net income was $386,000 in the nine months ended September 30, 2002 as
compared to $165,000 in the nine months ended September 30, 2001. This increase
is a direct result of the import expense reclassification.

FISCAL YEAR ENDED DECEMBER 31, 2001 COMPARED TO FISCAL YEAR ENDED DECEMBER 31,
2000.

For the fiscal year ended December 31, 2001, we had total revenue of
$4,254,000. Revenue was $5,813,000 for the fiscal year ended December 31, 2000.
This decrease in revenue of $1,559,000, or 26.8%, is due to a worldwide
recession and its effects on the sale of our high-tech,
telecommunications, and Internet related products.

Gross profit totaled $1,130,000 for the fiscal year ended December 31, 2001
as compared to $1,838,000 for the fiscal year ended December 31, 2000, a
decrease of $708,000 or 38.5%. Gross profit as a percentage of sales for the
fiscal year ended December 31, 2001 was 26.6% as compared to 31.6% for the
fiscal year ended December 31, 2000. The decrease in our gross profit was due to
higher than anticipated production costs as a result of the increase in the
dollar rate.

Total operating expenses in each of the fiscal years ended December 31,
2001 and 2000 were comprised of selling, general and administrative expenses.
Operating expenses for the fiscal years ended December 31, 2001 and 2000 were
$962,000 and $930,000, respectively, an increase of $32,000, or 3.4%. The
increase in operating expenses is attributable to the general increase in
overhead which accompanied the expansion of our business.

Our net income was $10,000 in the fiscal year ended December 31, 2001
compared to $505,000 in the fiscal year ended December 31, 2000. This decrease
was due to the decrease in our revenues, the decrease in our margins and the
slight increase in our operating expenses.

The non-military related division of our business is down approximately 50%
due to the downturn in the technology industry, coupled with the effects of the
events of September 11th. However, this downturn is offset by the dramatic rise
of in excess of 100% in the military sector as a result of the rise in global
political unrest, as exacerbated by the events of September 11th. The increase
of the local and international military related business created a

much larger demand for military products. Local manufacturers of
military equipment have received increased orders for the local and
international markets. Consequently, our growth has not be affected.

As of December 31, 2002, Enertec Systems was making 36% of our customized
military related systems, and is expected to make approximately 80% of these
systems by year-end 2003. Military related products are divided into two
sub-sections, the customized systems and the standard (off-the-shelf) systems.
It is our intention to eventually direct all of our customized military related
systems business to Enertec Systems, while retaining the standard military
related systems business within our Systems Division. This will allow Enertec
Electronics to focus on its primary business and will not require Enertec
Electronic to hire employees to comply with stringent security clearance
standards. This reallocation of business will have minimal affects on our future
operations and cash flow. Enertec Systems has doubled its revenues and profits
since its inception. It is better suited to focus on this sector and has
aggressively set bids for various projects. It is building critical mass and
economies of scale within this specialized arena.

During the years ended December 31, 2001 and 2000 approximately 85% and
50%, respectively, of our sales were to three and two customers, respectively.
For the nine month period ended September 30, 2002 approximately 77% of our
sales were to Isreali Aircraft Industry (57%), Rafael-Armament Development
Authority (11%) and Elbit Systems Ltd. (9%). For the nine month period ended
September 30, 2001 Isreali Aircraft Industry and Rafael-Armament Development
Authority accounted for 65% and 15% our sales, respectively.

MANAGEMENT

DIRECTORS, OFFICERS, KEY EMPLOYEES AND CONSULTANTS

DIRECTORS AND EXECUTIVE OFFICERS

The members of our board of directors and our executive officers, together
with their respective ages and certain biographical information are set forth
below. Our directors receive no compensation for their services as board
members but are reimbursed for expenses incurred by them in connection with
attending board meetings. All directors hold office until the next annual
meeting of our stockholders and until their successors have been duly elected
and qualified. Our executive officers are elected by, and serve at the
designation and appointment of, the board of directors. There are no family

relationships among any of our directors or executive officers.

Name Age Position
---- --- --------
Harry Mund 54 Chairman of the Board, Chief Executive
Officer, President and Secretary

Miron Markovitz 54 Director and Chief Financial Officer

The following is a brief account of the business experience of each of our
directors and executive officers during the past five years or more.

HARRY MUND, our Chairman of the Board, Chief Executive Officer, President
and Secretary since our inception, and has been the Chief Executive Officer and
President of our subsidiary, Enertec Electronics Limited, since 1987. Mr. Mund
is also the Chief Executive Officer and managing director of Enertec Management
Limited (f/k/a Elcomtech Limited), a wholly-owned subsidiary of Enertec
Electronics Limited. From 1983 to 1987, Mr. Mund was the President and Chief
Executive Officer of Enercon International, a marketing and sales firm of
military and commercial power supplies and test equipment. Enercon International
activities were transferred to Enertec International in 1987, which subsequently
became Enertec Electronics Limited in 1992. From 1975 to 1983, Mr. Mund worked
for Elbit Systems as a design engineer of advanced test systems and as the head
of the ATE engineering group. Mr. Mund attended Ben-Gurion University from 1970
to 1974 and earned a Bachelor of Science as an Electronic Engineer.

MIRON MARKOVITZ, a Director and our Chief Financial Officer since our
inception, and has been the Chief Financial Officer of our subsidiary, Enertec
Electronics Limited, since 1992, responsible for its accounting and financial
management. He attended Haifa University from 1975 to 1978 and earned a BA in
economics and accounting.

SIGNIFICANT EMPLOYEES

The following is a brief description of the business experience of each of
our significant employees:

ZVI AVNI, 40, was the System Division Manager for our subsidiary, Enertec
Electronics Limited, from February 1997 to January 2002. His responsibilities
included the design and manufacture of automatic test systems. Mr. Avni has 18
years of experience with ATE systems for the military market and worked at Elbit
Systems for 12 years as an ATE group leader. Since January 2002, Mr. Avni has
worked for Enertec Systems 2001 Ltd., which is owned by Enertec Management
Limited (25%), Harry Mund (27%) and Mr. Avni (48%), and continues to be
responsible for the design and manufacture of the Automatic Test Systems. Mr.
Avni graduated from Haifa Technion Institute of Technology in 1982 and
earned a degree as a Practical Electronic Engineer.

YAAKOV OLECH, 51, has been employed by our subsidiary, Enertec Electronics
Limited, since March 1991. Mr. Olech is head of our customer service electronic

lab and technical support, providing after-sales customer support and repair
services for products under warranty or by utilizing service contracts for
repair of power supplies. He attended Radiotechnical Institute, Minsk, USSR from
1976 to 1979 and has earned a Master in Science in electronic
engineering.

DR. ALEXANDER VELICHKO, 55, has 28 years of experience as leading research
and development engineer and head of the research and development group at
several companies. From 1981 to 1990, he was a lecturer of electronics and
automation at the Engineering Institute, Karatau, Kazahtan. From 1990 to 1999,
Dr. Velichko was chief engineer of the Laboratory of Electronics and
Automatization Karatau, Kazakhtan, responsible for development of compact
analog/digital measurement devices. Since February 2000 he has been Enertec
Electronics Limited's chief scientist and head of research and development. Dr
Velichko is responsible for the design of custom made power supplies. He earned
a PhD in Automatic Control at the Moscow Institute of Mining, which he attended
from 1964 to 1969, and earned a Master in Science at Tomsk Institute of
Electronic Engineering.

Our future success depends, in significant part, on the continued service
of Mr. Mund, and certain other key executive officers, managers, and sales and
technical personnel, who possess extensive expertise in various aspects of the
our business, including Mr. Markovitz, Mr. Avni, Mr. Olech, and Dr. Velichko. We
may not be able to find an appropriate replacement for any of our key personnel.
Any loss or interruption of our key personnel's services could adversely affect
our ability to implement our business plan. It could also result in our failure
to create and maintain relationships with strategic partners that are critical
to our success. We do not presently maintain key-man life insurance policies on
any of our officers.

EXECUTIVE COMPENSATION

The following table shows compensation earned by our Chief Executive
Officer and President during fiscal 2001, 2000 and 1999. Since Lapis
Technologies, Inc. did not compensate any executive during fiscal 2001, 2000 and
1999, the information in the table includes compensation paid or awarded by
Enertec Electronics Limited only. No executive officer other than Mr. Mund
received total annual compensation in excess of $100,000 during fiscal 2001,
2000 and 1999.

Summary Compensation Table

Long Term Compensation
---------------------------------------------------
Annual Compensation Awards Payouts
----------------------------- -------------------------- ----------------------
Other Restricted Securities
Annual Stock Underlying LTIP All Other
Name And Compen- Awards Options Payouts Compen-
Principal Positions Year Salary ($) Bonus ($) sation ($) ($) SARs (#) ($) sation ($)
- - ------------------- ------- ---------- --------- ------- ------------ ------------ --------- -----------

Harry Mund, 2001 405,900 330,000 0 0 0 0 0
President and Chief 2000 450,000 330,000 0 0 0 0 0
Executive Officer. 1999 255,000 330,000 0 0 0 0 0

2002 STOCK OPTION PLAN

We adopted our 2002 Stock Option Plan on October 16, 2002. The plan
provides for the grant of options intended to qualify as "incentive stock
options", options that are not intended to so qualify or "nonstatutory stock
options" and stock appreciation rights. The total number of shares of common
stock reserved for issuance under the plan is 500,000, subject to adjustment in
the event of a stock split, stock dividend, recapitalization or similar capital
change, plus an indeterminate number of shares of common stock issuable upon the
exercise of "reload options" described below. We have not yet granted any
options or stock appreciation rights under the plan.

The plan is presently administered by our board of directors, which selects
the eligible persons to whom options shall be granted, determines the number of
common shares subject to each option, the exercise price therefore and
the periods during which options are exercisable, interprets the provisions of
the plan and, subject to certain limitations, may amend the plan. Each option
granted under the plan shall be evidenced by a written agreement between us and
the optionee.

Options may be granted to our employees (including officers) and directors
and certain of our consultants and advisors. Incentive stock options can be
issued to all employees (including officers). Nonstatutory stock options can be
issued to employees, non-employee directors, or consultants and advisors.

The exercise price for incentive stock options granted under the plan may
not be less than the fair market value of the common stock on the date the
option is granted, except for options granted to 10% stockholders which must
have an exercise price of not less than 110% of the fair market value of the
common stock on the date the option is granted. The exercise price for
nonstatutory stock options is determined by the board of directors, in its sole
discretion, but may not be less than 85% of the fair market value of the
Company's common stock at the date of grant. Incentive stock options granted
under the plan have a maximum term of ten years, except for 10% stockholders who
are subject to a maximum term of five years. The term of nonstatutory stock
options is determined by the Board of Directors. Options granted under the plan
are not transferable, except by will and the laws of descent and distribution.

The board of directors may grant options with a reload feature. Optionees
granted a reload feature shall receive, contemporaneously with the payment of
the option price in common stock, a right to purchase that number of common
shares equal to the sum of (i) the number of shares of common stock used to
exercise the option, and (ii) with respect to nonstatutory stock options, the
number of shares of common stock used to satisfy any tax withholding requirement
incident to the exercise of such nonstatutory stock option.

Also, the plan allows the board of directors to award to an optionee for
each share of common stock covered by an option, a related alternate stock
appreciation right, permitting the optionee to be paid the appreciation on the
option in lieu of exercising the option. The amount of payment to which an
optionee shall be entitled upon the exercise of each stock appreciation right
shall be the amount, if any, by which the fair market value of a share of common
stock on the exercise date exceeds the exercise price per share of the option.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

On April 26, 2002, we issued 4,750,000 shares of our common stock to Harry
Mund in exchange for his 99 shares of Enertec Electronics Limited, our wholly
owned subsidiary, which constituted all of its issued and outstanding shares.
The 4,750,000 shares were valued at a price of $.10 per share or a total of
$475,000.

At December 31, 2001, our subsidiary Enertec Electronics Limited had a loan
receivable from Harry Mund, our Chief Executive Officer and President, in the
amount of $250,000 bearing interest at a rate of 4% per annum. This loan was
extended to Mr. Mund in October, 2001 and was repaid in full in June, 2002.

On December 31, 2000, Enertec Management Limited (f/k/a Elcomtech Limited),
a wholly-owned subsidiary of Enertec Electronics Limited, and of which Harry
Mund is the Chief Executive Officer and managing director, loaned an aggregate
amount of $23,000 to Enertec Electronics Limited at an interest rate of 4% per
annum due December 31, 2002. This loan was repaid on December 31, 2002.

Enertec Systems 2001 Ltd. ("Enertec Systems"), an Israeli company, is owned
by Enertec Management Limited (25%), Harry Mund (27%) and Zvi Avni (48%), an
employee of Enertec Systems. Enertec Systems commenced operations on January 1,
2002, and will make part of our military related systems in conjunction with our
Systems Division. As of December 31, 2002, Enertec Systems was making 36% of
our military related systems, and is expected to make approximately 80% by
year-end 2003. All other systems are made by us.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information regarding the beneficial
ownership of our common stock as of December 31, 2002 . The information in
this table provides the ownership information for:

- each person known by us to be the beneficial owner of more than 5% of
our common stock;

- each of our directors;

- each of our executive officers; and

- our executive officers and directors as a group.

The percentages in the table have been calculated on the basis of treating
as outstanding for a particular person, all shares of our common stock
outstanding on December 31, 2002 and all shares of our common stock issuable to
that person in the event of the exercise of outstanding options and other
derivative securities owned by that person which are exercisable within 60 days
of December 31, 2002. Presently, there are no options or derivative securities
outstanding. Except as otherwise indicated, the persons listed below have sole

voting and investment power with respect to all shares of our common stock owned
by them, except to the extent such power may be shared with a spouse.

Unless otherwise indicated, the address of each beneficial owner is c/o
Enertec Electronics Limited, 27 Rechov Ha'Mapilim, Kiriat Ata, Israel, P.O. BOX
497, Kiriat Motzkin 26104, Israel.

Name and Address of . . . . . . . . . Number of Shares Percentage
Beneficial Owner . . . . . . . . . . Beneficially Owned Outstanding
- ------------------------------------- ------------------ ------------
Harry Mund 4,750,000 86.63%

Miron Markovitz 9,000 .16%

All directors and executive
officers as a group (2 persons) 4,759,000 86.79%

SELLING STOCKHOLDERS

The following table provides certain information with respect to the
beneficial ownership of our common stock known by us as of December 31, 2002 by
each selling shareholder. None of the selling stockholders are broker-dealers.
The percentages in the table have been calculated on the basis of treating as
outstanding for a particular person, all shares of our common stock outstanding
on December 31, 2002 and all shares of our common stock issuable to that person
in the event of the exercise of outstanding options and other derivative
securities owned by that person at December 31, 2002 which are exercisable
within 60 days of December 31, 2002. Presently, there are no options or
derivative securities outstanding. Except as otherwise indicated, the persons
listed below have sole voting and investment power with respect to all shares of
our common stock owned by them, except to the extent such power may be shared
with a spouse. Amounts shown assume the maximum number of shares being offered
are all sold. The shares being offered by the selling stockholders are being
registered to permit public secondary trading, and the stockholders may offer
all or part of their registered shares for resale from time to time. However,
the selling stockholders are under no obligation to sell all or any portion of
their shares. The table below assumes that all shares offered by the selling
stockholders will be sold. See "Plan of Distribution".

SHARES OF
COMMON STOCK
BENEFICIALLY OWNED PERCENTAGE OWNERSHIP
------------------- --------------------
NAME AND ADDRESS OF NUMBER OF BEFORE AFTER BEFORE AFTER
BENEFICIAL OWNER SHARES OFFERED OFFERING OFFERING OFFERING OFFERING

Claudia Ben-Dor 6,000 6,000 0 * 0
Mitzpe Tel - El
House No. 408
P.O Oshrat
P.O. Box 25167
Israel

Israel Ben-Dor 6,000 6,000 0 * 0
Mitzpe Tel - El
House No. 408
P.O Oshrat
P.O. Box 25167

Eliaz Bilik 3,200 3,200 0 * 0
Moria Ave. 101/A
Haifa 34616
Israel

Snir Eitan 1,400 1,400 0 * 0
Parcel 140
Hosen
Israel

Yael Elipaz 1,400 1,400 0 * 0
25 Shoham Pts.
Haifa
Israel

Olga Gross 6,000 6,000 0 * 0
Gedaliahy Street 1517
Neveshaanon 32587
Israel

Shoshy Inbal 1,400 1,400 0 * 0
Hachzav Street 16/21
Nesher 19234
Israel

Barak Koren (12) 1,000 1,000 0 * 0
BAZ 14 Street
Karmiel 20100
Israel

Eitan Koren (11) 7,000 7,000 0 * 0
BAZ 14 Street
Karmiel 20100
Israel

Sasson Koren (10) 12,000 12,000 0 * 0
BAZ 14 Street
Karmiel 20100
Israel

Shoshana Koren (9) 18,000 18,000 0 * 0
BAZ 14 Street
Karmiel 20100
Israel

Elliot Kretzmer 35,000 35,000 0 * 0
3 Chanita Street
Kfar Sava
Israel

Amir Marcovitz (2) 6,000 6,000 0 * 0
77 Moshe Gorken Street
K. Motykin
Israel

Editha Marcovitz (1) 9,000 9,000 0 * 0
77 Moshe Gorken Street
K. Motykin
Israel

Miron Marcovitz (1)(2)(3)(4) 9,000 9,000 0 * 0
(5)(6)
77 Moshe Gorken Street
K. Motykin
Israel

Revital Marcovitz-Mizrachi (6) 6,000 6,000 0 * 0
16/3 Hativet Hauegev Street
Modiin
Israel

Bracha Meirav 2,600 2,600 0 * 0
64 Haalie Street
Haifa
Israel

Yigal Meirav 2,600 2,600 0 * 0
64 Haalia Street
Haifa
Israel

Sasson Mizrachi (5) 6,000 6,000 0 * 0
16/3 Hativet Hauegev Street
Modiin
Israel

Helena Mund (8) 16,000 16,000 0 * 0
25 Sinai Street
Haifa
Israel

Simon Mund (7) 16,000 16,000 0 * 0
25 Sinai Street
Haifa
Israel

Alexander Osztreicher (14) 14,000 14,000 0 * 0
15/7, Ghedaliahu
Haifa 32587
Israel

Barak Osztreicher (17) 4,000 4,000 0 * 0
P.O.B. 240
Moledet 19130
Israel

Einat Osztreicher (15) 4,000 4,000 0 * 0
P.O.B. 79
Elyashiu
Israel

Haim Osztreicher (18) 6,600 6,600 0 * 0
P.O.B. 33658
Haifa
Israel

Klara Osztreicher (13) 14,000 14,000 0 * 0
15/7, Ghedaliahu
Haifa 32587
Israel

Lior Osztreicher (16) 4,000 4,000 0 * 0
7, Hashitim
Q. Tivon 36000
Israel

Shimon Tregerman 1,400 1,400 0 * 0
Broshim 205
Tal-El 25167
Israel

Svetlana Tregerman 1,400 1,400 0 * 0
Broshim 205
Tal-El 25167
Israel

Margareta Weissman (4) 6,000 6,000 0 * 0
2/7 Eshkol Street
K. Motykin
Israel

Martin Weissman (3) 6,000 6,000 0 * 0
2/7 Eshkol Street
K. Motykin
Israel

Fairbain Trading (20) 150,000 150,000 0 * 0
c/o A.P.T. Associates,
19 W. 34th Street, 11th Floor,
New York, NY, 10001

Global Exploration Equities Inc. (19) 200,000 200,000 0 * 0
c/o A.P.T. Associates,
19 W. 34th Street, 11th Floor,
New York, NY, 10001

KGL Investments, Ltd. (22) 50,000 50,000 0 * 0
c/o Kaplan Gottbetter & Levenson, LLP
630 Third Avenue, Floor 5
New York, New York 10017

Foremost Securities, Ltd (21) 100,000 100,000 0 * 0
c/o A.P.T. Associates,
19 W. 34th Street, 11th Floor,
New York, NY, 10001

*Indicates less than one percent of total outstanding common stock

(1) Miron Marcovitz is married to Edith Marcovitz.
(2) Amir Marcovitz is the son of Miron Marcovitz.
(3) Martin Weissman is Miron Marcovitz's father-in-law.
(4) Margareta Weissman is Miron Marcovitz's mother-in-law.
(5) Sasson Mizrachi is Miron Marcovitz's son-in-law.
(6) Revital Mizrachi is Miron Marcovitz's daughter.
(7) Simon Mund is Harry Mund's father.
(8) Helena Mund is Harry Mund mother.
(9) Shoshana Koren is Harry Mund's sister.
(10) Sasson Koren is Harry Mund's brother-in-law.
(11) Eitan Koren is Harry Mund's nephew.
(12) Barak Koren is Harry Mund's nephew.
(13) Klara Ostreicher is Harry Mund's mother-in-law.
(14) Alexander Osztreicher is Harry Mund's father-in-law.
(15) Einat Osztreicher is Harry Mund's niece.
(16) Lior Osztreicher is Harry Mund's nephew.

(17) Barak Osztreicher is Harry Mund's nephew.
(18) Haim Osztreicher is Harry Mund's brother-in-law.
(19) Sole beneficial owner of which is David Kretzmer.
(20) Sole beneficial owner of which is Solomon Krok.
(21) Sole beneficial owner of which is Samantha Topola Family Trust.
(22) Beneficial owners of which are Adam S. Gottbetter, Steven Kaplan, and
Paul Levenson. Mr. Gottbetter, Mr. Kaplan and Mr. Levenson are
partners of Kaplan Gottbetter & Levenson, LLP, counsel to the Company.

DESCRIPTION OF SECURITIES

GENERAL

Our authorized capital stock currently consists of 100,000,000 shares of
common stock, par value $0.001 per share, and 5,000,000 shares of preferred
stock, par value $0.001 per share, the rights and preferences of which may be
established from time to time by our Board of Directors. As at December
31, 2002 there are 5,483,000 shares of our common stock issued and
outstanding. No other securities, including without limitation any preferred
stock, convertible securities, options, warrants, promissory notes or debentures
are outstanding.

All material rights of common and preferred shareholders are discussed
below.

COMMON STOCK

Holders of our common stock are entitled to one vote for each share held on
all matters submitted to a vote of stockholders and do not have cumulative
voting rights. Accordingly, holders of a majority of the shares of our common
stock entitled to vote in any election of directors may elect all of the
directors standing for election. Subject to preferences that may be applicable
to any shares of preferred stock outstanding at the time, holders of our common
stock are entitled to receive dividends ratably, if any, as may be declared from
time to time by our board of directors out of funds legally available therefor.

Upon our liquidation, dissolution or winding up, the holders of our common
stock are entitled to receive ratably, our net assets available after the
payment of:

- all secured liabilities, including any then outstanding secured debt
securities which we may have issued as of such time;

- all unsecured liabilities, including any then outstanding unsecured
debt securities which we may have issued as of such time; and

- all liquidation preferences on any then outstanding preferred stock.

Holders of our common stock have no preemptive, subscription, redemption or
conversion rights, and there are no redemption or sinking fund provisions
applicable to the common stock. The rights, preferences and privileges of
holders of common stock are subject to, and may be adversely affected by, the
rights of the holders of shares of any series of preferred stock which we may
designate and issue in the future.

As of the date of this prospectus, 94,517,000 shares of our common stock
remain unissued. Our board of directors has the power to issue any or all of
the remaining common shares for general corporate purposes, without shareholder
approval. While we presently have no commitments, contracts or intentions to
issue any additional common shares except as otherwise disclosed in this
prospectus, potential investors should be aware that any such stock issuances
may result in a reduction of the book value of the outstanding common shares.
If we issue any additional common shares, such issuance will reduce the
proportionate ownership and voting power of each other common shareholder.

PREFERRED STOCK

Our board of directors is authorized, without further stockholder approval,
to issue up to 5,000,000 shares of preferred stock in one or more series and to
fix the rights, preferences, privileges and restrictions of these shares,
including dividend rights, conversion rights, voting rights, terms of redemption
and liquidation preferences, and to fix the number of shares constituting any
series and the designations of these series. These shares will have rights
senior to our common stock. The issuance of preferred stock may have the effect
of delaying or preventing a change in our control. The issuance of preferred
stock could decrease the amount of earnings and assets available for
distribution to the holders of common stock or could adversely affect the rights
and powers, including voting rights, of the holders of our common stock. At
present, we have no plans to issue any shares of our preferred stock.

PENNY STOCK RULES

At the present time, there is no public market for our stock. However,
Vfinance, a broker-dealer, filed a Form 211 in November 2002, with the National
Association of Securities Dealers, Inc. in order to allow for the quotation of
our common stock on the OTC Bulletin Board. The quotation of our common stock,
however, may not occur.

The Securities Enforcement and Penny Stock Reform Act of 1990 requires
special disclosure relating to the trading of any stock defined as a penny
stock. Commission regulations generally define a penny stock to be an equity
security that has a market price of less than $5.00 per share and is not listed
on The Nasdaq Small Cap Stock Market or a major stock exchange. These
regulations subject all broker-dealer transactions involving such securities to
special Penny Stock Rules. Following the completion of this offering, the
commencement of trading of our common stock, and the foreseeable future
thereafter, the market price of our common stock is expected to be substantially
less than $5 per share. Accordingly, should anyone wish to sell any of our
shares through a broker-dealer, such sale will be subject to the Penny Stock
Rules. These Rules will affect the ability of broker-dealers to sell our shares
and will therefore also affect the ability of purchasers in this offering to
resell their shares in the secondary market, if such a market should ever
develop.

The Penny Stock Rules impose special sales practice requirements on
broker-dealers who sell shares defined as a penny stock to persons other than
their established customers or accredited investors. Among other things, the
Penny Stock Rules require that a broker-dealer make a special suitability
determination respecting the purchaser and receive the purchaser's written
agreement to the transaction prior to the sale. In addition, the Penny Stock

Rules require that a broker-dealer deliver, prior to any transaction, a
disclosure schedule prepared in accordance with the requirements of the
Commission relating to the penny stock market. Disclosure also has to be made
about commissions payable to both the broker-dealer and the registered
representative and the current quotations for the securities. Finally, monthly
statements have to be sent to any holder of such penny stocks disclosing recent
price information for the penny stock held in the account and information on the
limited market in penny stocks. Consequently, the rule may affect the ability of
broker-dealers to sell our shares and may affect the ability of holders to sell
our shares in the secondary market. Accordingly, for so long as the Penny Stock
Rules are applicable to our common stock, it may be difficult to trade such
stock because compliance with the Penny Stock Rules can delay or preclude
certain trading transactions. This could have an adverse effect on the liquidity
and price of our common stock.

DELAWARE ANTI-TAKEOVER LAW

We are not presently subject to Section 203 of the DGCL and will not become
subject to Section 203 in the future unless, among other things, our common
stock is (i) listed on a national securities exchange; (ii) authorized for
quotation on the NASDAQ Stock Market; or (iii) held of record by more than 2,000
stockholders. If Section 203 should become applicable to us in the future, it
could prohibit or delay a merger, takeover or other change in control of our
Company and therefore could discourage attempts to acquire us. Section 203
restricts certain transactions between a corporation organized under Delaware
law and any person holding 15% or more of the corporation's outstanding voting
stock, together with the affiliates or associates of such person (an Interested
Stockholder). Section 203 prevents, for a period of three years following the
date that a person became an Interested Stockholder, the following types of
transactions between the corporation and the Interested Stockholder (unless
certain conditions, described below, are met): (a) mergers or consolidations,
(b) sales, leases, exchanges or other transfers of 10% or more of the aggregate
assets of the corporation, (c) issuances or transfers by the corporation of any
stock of the corporation which would have the effect of increasing the
Interested Stockholder's proportionate share of the stock of any class or series
of the corporation, (d) any other transaction which has the effect of increasing
the proportionate share of the stock of any class or series of the corporation
which is owned by the Interested Stockholder and (e) receipt by the Interested
Stockholder of the benefit (except proportionately as a stockholder) of loans,
advances, guarantees, pledges or other financial benefits provided by the
corporation.

The three-year ban does not apply if either the proposed transaction or the
transaction by which the Interested Stockholder became an Interested Stockholder
is approved by the board of directors of the corporation prior to the time such
stockholder becomes an Interested Stockholder. Additionally, an Interested
Stockholder may avoid the statutory restriction if, upon the consummation of the
transaction whereby such stockholder becomes an Interested Stockholder, the
stockholder owns at least 85% of the outstanding voting stock of the corporation
without regard to those shares owned by the corporation's officers and directors
or certain employee stock plans. Business combinations are also permitted within
the three-year period if approved by the board of directors and authorized at an
annual or special meeting of stockholders by the holders of at least two-thirds
of the outstanding voting stock not owned by the Interested Stockholder. In
addition, any transaction is exempt from the statutory ban if it is proposed at
a time when the corporation has proposed, and a majority of certain continuing
directors of the corporation have approved, a transaction with a party who is

not an Interested Stockholder (or who becomes such with approval of the board of
directors) if the proposed transaction involves (a) certain mergers or
consolidations involving the corporation, (b) a sale or other transfer of over
50% of the aggregate assets of the corporation, or (c) a tender or exchange
offer for 50% or more of the outstanding voting stock of the corporation.

DIVIDEND POLICY

We have never paid any dividends on our common stock. We do not intend to
declare or pay dividends on our common stock, but to retain our earnings for the
operation and expansion of our business. Dividends will be subject to the
discretion of our board of directors and will be contingent on future earnings,
our financial condition, capital requirements, general business conditions and
other factors as our board of directors deem relevant.

MARKET FOR OUR COMMON STOCK AND RELATED STOCKHOLDER MATTERS

Before this offering, there has been no public market for our common stock
and a public market for our common stock may not develop after this offering. We
anticipate that our common stock will be traded on the OTC Bulletin Board, but
this may not occur. VFinance, a broker-dealer, filed a Form 211 in November
2002, with the National Association of Securities Dealers, Inc. in order to
allow for the quotation of our common stock on the OTC Bulletin Board. There is
no arrangement between us and VFinance.

Prior to this offering, we have 5,483,000 shares of common stock issued and
outstanding held by approximately 36 persons. A total of 733,000 shares will be
offered by the Selling Stockholders.

TRANSFER AGENT

Continental Stock Transfer & Trust Company, 17 Battery Place, New York, NY
10004, will act as the Transfer Agent for our common stock.

PLAN OF DISTRIBUTION

The selling stockholders may, from time to time, sell any or all of their
shares of common stock covered by this prospectus on any stock exchange, market
or trading facility on which the shares are then traded or in private
transactions at a price of $.15 per share until our shares are quoted on the
Over the Counter Bulletin Board ("OTCBB") and thereafter at prevailing market
prices or privately negotiated prices. The term "selling stockholders" includes
donees, pledgees, transferees or other successors-in-interest selling shares
received after the date of this prospectus from a selling stockholder as a gift,
pledge, partnership distribution or other non-sale related transfer. We will
pay the expense incurred to register the shares being offered by the selling
stockholders for resale, but the selling stockholders will pay any underwriting
discounts and brokerage commissions associated with these sales. The commission
or discount which may be received by any member of the National Association of
Securities Dealers, Inc. in connection with these sales will not be greater than
8%. The selling stockholders may use any one or more of the following methods
when selling shares:

a. ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;

b. block trades in which the broker-dealer will attempt to sell the
shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction;

c. purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;

d. privately negotiated transactions; and

e. a combination of any such methods of sale.

In addition, any shares that qualify for sale under Rule 144 may be sold
under Rule 144 rather than through this prospectus.

The $.15 per share offering price of the common stock being sold under this
prospectus has been arbitrarily set. The price does not bear any relationship
to our assets, book value, earnings or net worth and it is not an indication of
actual value. Additionally, the offering price of our shares is higher than the
price paid by our founder, and exceeds the per share value of our net tangible
assets. Therefore, if you purchase shares in this offering, you will experience
immediate and substantial dilution. You may also suffer additional dilution in
the future from the sale of additional shares of common stock or other
securities, if the need for additional financing forces us to make such sales.
Investors should be aware of the risk of judging the real or potential future
market value, if any, of our common stock by comparison to the offering price.

In offering the shares covered by this prospectus, the selling stockholders
and any broker-dealers who execute sales for the selling stockholders may be
deemed to be an "underwriter" within the meaning of the Securities Act in
connection with such sales. Any profits realized by the selling stockholders
and the compensation of any broker-dealer may be deemed to be underwriting
discounts and commissions.

Selling shareholders will be able to sell their shares in all 50 states in
the U.S. We will apply to the Standard and Poor's Editorial Board to be listed
in its corporation records. The Standard and Poor's Corporation Records is a
recognized securities manual for "blue sky" or "manual exemption" trading in
approximately 35 states. The remaining states have self-executing securities
registration exemptions. The listing should assist the brokerage community in
making a market for the Company's stock. It is recommended, however, that
brokers check with the blue sky laws in their particular state.

Each selling stockholder and any other person participating in a
distribution of securities will be subject to applicable provisions of the
Exchange Act and the rules and regulations thereunder, including, without
limitation, Regulation M, which may restrict certain activities of, and limit
the timing of purchases and sales of securities by, selling stockholders and
other persons participating in a distribution of securities. Furthermore, under
Regulation M, persons engaged in a distribution of securities are prohibited
from simultaneously engaging in market making and certain other activities with
respect to such securities for a specified period of time prior to the

commencement of such distributions, subject to specified exceptions or
exemptions. All of the foregoing may affect the marketability of the securities
offered hereby.

Any securities covered by this prospectus that qualify for sale pursuant to
Rule 144 under the Securities Act may be sold under that rule rather than
pursuant to this prospectus.

This offering will terminate on the earlier of (i) the date that all shares
offered by this prospectus have been sold by the selling shareholders, (ii)
twenty-four (24) months from the effective date of the Registration Statement on
Form SB-2 that we have filed with the SEC, or (iii) the date all of the selling
shareholders may sell all of the shares described herein without restriction
pursuant to Rule 144 of the Securities Act.

SHARES ELIGIBLE FOR FUTURE SALE

As of December 31, 2002 we had 5,483,000 shares of common stock
issued and outstanding. Of these shares, the 733,000 shares that can be sold in
this offering by the Selling Stockholders will be freely tradable without
restriction or further registration under the Securities Act.

In general, under Rule 144, a person or persons whose shares are required
to be aggregated, who has beneficially owned shares of common stock for a period
of one year, including a person who may be deemed an affiliate, is entitled to
sell, within any three-month period, a number of shares not exceeding 1% of the
total number of outstanding shares of such class. A person who is not an
affiliate of ours and who has beneficially owned shares for at least two years
is entitled to sell such shares under Rule 144 without regard to the volume
limitations described above. Under Rule 144, an affiliate of an issuer is a
person that directly or indirectly through the use of one or more intermediaries
controls, is controlled by, or is under common control with, such issuer.

If a public market develops for our common stock, we are unable to predict
the effect that sales made under Rule 144 or other sales may have on the then
prevailing market price of our common stock. None of our presently outstanding
shares of Common Stock will be eligible for sale under Rule 144 prior to April,
2003.

COMMISSION POSITION ON INDEMNIFICATION

Our Certificate of Incorporation limits, to the maximum extent permitted
under Delaware law, the personal liability of our directors and officers for
monetary damages for breach of their fiduciary duties as directors and officers,
except in certain circumstances involving certain wrongful acts, such as a
breach of the director's duty of loyalty or acts of omission which involve
intentional misconduct or a knowing violation of law.

Section 145(a) of the General Corporation Law of Delaware ("GCL") permits a
corporation to indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of the corporation), by reason of the fact that he or she is
or was a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred in connection with
such action, suit or proceeding if he or she acted in good faith and in a manner
he or she reasonably believed to be in, or not opposed to, the best interests of
the corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful.

Under Section 145(b) of the GCL, a corporation also may indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that he or
she is or was a director, officer, employee or agent of the corporation, or is
or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise against expenses (including attorneys' fees) actually and
reasonably incurred by him or her in connection with the defense or settlement
of such action or suit if he or she acted in good faith and in a manner he or
she reasonably believed to be in, or not opposed to the best interests of the
corporation. However, in such an action by or on behalf of a corporation, no
indemnification may be in respect of any claim, issue or matter as to which the
person is adjudged liable to the corporation unless and only to the extent that
the court determines that, despite the adjudication of liability but in view of
all the circumstances, the person is fairly and reasonably entitled to indemnity
for such expenses which the court shall deem proper.

In addition, under Section 145(f) of the GCL, the indemnification provided
by Section 145 shall not be deemed exclusive of any other rights to which those
seeking indemnification may be entitled under any by-law, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in his
or her official capacity and as to action in another capacity while holding such
office.

We will not indemnify our directors and officers (a) for any breach of
loyalty to us or our stockholders; (b) if a director or officer does not act in
good faith; (c) for acts involving intentional misconduct; (d) for acts or
omissions falling under Section 174 of the DGCL; or (e) for any transaction for
which the director or officer derives an improper personal benefit. We will
indemnify our directors and officers for expenses related to indemnifiable
events, and will pay for these expenses in advance. Our obligation to indemnify
and to provide advances for expenses are subject to the approval of a review
process with a reviewer to be determined by the Board. The rights of our
directors and officers will not exclude any rights to indemnification otherwise
available under law or under our Certificate of Incorporation.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to our directors, officers and controlling persons pursuant to
the foregoing provisions, or otherwise, we have been advised that in the opinion
of the Commission such indemnification is against public policy as expressed in
the Securities Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by us of
expenses incurred or paid by a director, officer or controlling person of ours
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, we will, unless in the opinion of our counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.

Article X of our By-laws, on indemnification provides as follows:

"Any person who at any time serves or has served as a director or
officer of the Corporation, or in such capacity at the request of the

Corporation for any other foreign or domestic corporation, partnership,
joint venture, trust or other enterprise, or as trustee or administrator
under an employee benefit plan, shall have a right to be indemnified by the
Corporation to the fullest extent permitted by law against (a) reasonable
expenses, including attorneys' fees, actually and necessarily incurred by
him in connection with any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, and
whether or not brought by or on behalf of the Corporation, seeking to hold
him liable by reason of the fact that he is or was acting in such capacity,
and (b) reasonable payments made by him in satisfaction of any judgment,
money decree, fine, penalty or settlement for which he may have become
liable in any such action, suit or proceeding.

To the extent permitted by law, expenses incurred by a director or
officer in defending a civil or criminal action, suit or proceeding shall
be paid by the Corporation in advance of the final disposition of such
action, suit or proceeding, upon receipt of an undertaking by or on behalf
of such director or officer to repay such amount unless it shall ultimately
be determined that he is entitled to be indemnified hereunder by the
Corporation.

If a person claiming a right to indemnification under this Section
obtains a non-appealable judgment against the Corporation requiring it to
pay substantially all of the amount claimed, the claimant shall be entitled
to recover from the Corporation the reasonable expense (including
reasonable legal fees) of prosecuting the action against the Corporation to
collect the claim.

Notwithstanding the foregoing provisions, the Corporation shall
indemnify or agree to indemnify any person against liability or litigation
expense he may incur if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and with respect to any criminal action or proceeding, if he
had no reasonable cause to believe his action was unlawful.

The Board of Directors of the Corporation shall take all such action
as may be necessary and appropriate to authorize the Corporation to pay the
indemnification required by this Bylaw, including without limitation, to
the extent needed, making a good faith evaluation of the manner in which
the claimant for indemnity acted and of the reasonable amount of indemnity
due him and giving notice to, and obtaining approval by, the stockholders
of the Corporation.

Any person who at any time after the adoption of this Bylaw serves or
has served in any of the aforesaid capacities for or on behalf of the
Corporation shall be deemed to be doing or to have done so in reliance
upon, and as consideration for, the right of indemnification provided
herein. Such right shall inure to the benefit of the legal representatives
of any such person and shall not be exclusive of any other rights to which
such person may be entitled apart from the provision of this Bylaw.

Unless otherwise provided herein, the indemnification extended to a
person that has qualified for indemnification under the provisions of this
Article X shall not be terminated when the person has ceased to be a
director, officer, employee or agent for all causes of action against the
indemnified party based on acts and events occurring prior to the
termination of the relationship with the Corporation and shall inure to the
benefit of the heirs, executors and administrators of such person."

LEGAL MATTERS

Kaplan Gottbetter & Levenson, LLP has rendered an opinion as our counsel,
that the shares offered hereby will be legally issued, fully paid and
nonassessable. The partners of Kaplan Gottbetter & Levenson, LLP own 50,000
shares of our common stock through KGL Investments, Ltd.

EXPERTS

The financial statements included in this prospectus, and elsewhere in the
registration statement as of December 31, 2000 and 2001 have been audited by
Gvilli and Co., certified public accountants, as indicated in their report with
respect thereto, and are included in this prospectus in reliance upon the
authority of said firm as experts in accounting and auditing in giving said
report.

ADDITIONAL INFORMATION

We have not previously been required to comply with the reporting
requirements of the Securities Exchange Act. We have filed with the SEC a
registration statement on Form SB-2 to register the securities offered by this
prospectus. The prospectus is part of the registration statement, and, as
permitted by the SEC's rules, does not contain all of the information in the
registration statement. For future information about us and the securities
offered under this prospectus, you may refer to the registration statement and
to the exhibits and schedules filed as a part of the registration statement.

In addition, after the effective date of this prospectus, we will be
required to file annual, quarterly, and current reports, or other information
with the SEC as provided by the Securities Exchange Act. You may read and copy
any reports, statements or other information we file at the SEC's public
reference facility maintained by the SEC at Judiciary Plaza, Room 1024, 450
Fifth Street, N.W., Washington, D.C. 20549. You can request copies of these
documents, upon payment of a duplicating fee, by writing to the SEC. Please
call the SEC at 1-800-SEC-0330 for further information on the operation of the
public reference room. Our SEC filings are also available to the public through
the SEC Internet site at http\\www.sec.gov.

INDEX TO FINANCIAL STATEMENTS
LAPIS TECHNOLOGIES, INC. AND SUBSIDIARY

PAGE

Auditors' Report. . . . . . . . . . . . . . . . . . . . . . F-1

Consolidated Balance Sheets as of December 31, 2001, and
September 30, 2002 (unaudited). . . . . . . . . . . . . . . F-2

Consolidated Statements of Income for the years ended
December 31, 2001 and 2000 and the nine month periods
ending September 30, 2002 and 2001 (unaudited). . . . . . . F-3

Consolidated Statement of Stockholders' Equity for the
years ended December 31, 2000 and 2001, and the nine month
period ending September 30, 2002 (unaudited). . . . . . . . F-4

Consolidated Statements of Cash Flows for the years ended
December 31, 2001 and 2000, and the nine month periods
ending September 30, 2002 and 2001 (unaudited). . . . . . . F-5

Notes to Consolidated Financial Statements. . . . . . . . . F-7

Independent Auditors' Report

To the Board of Directors and
Stockholders of Lapis Technologies, Inc.

We have audited the accompanying consolidated balance sheet of Lapis
Technologies, Inc. as of December 31, 2001, and the related consolidated
statements of income, stockholders' equity, and cash flows for the two years
then ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provided a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Lapis
Technologies, Inc. and Subsidiary as of December 31, 2000, and the results of
its operations and its cash flows for the two years then ended in conformity
with accounting principles generally accepted in the United States of America.

/s/ Gvilli & Co.

April 29, 2002
Tel Aviv, Israel

F-1

LAPIS TECHNOLOGIES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share Amounts)

ASSETS

December 31, September 30,
2001 2002
---- ----
(Unaudited)

Current Assets:
Cash and cash equivalents. . . . . . . . . . $ 86 $ 82
Accounts receivable. . . . . . . . . . . . . 739 1,428
Inventory. . . . . . . . . . . . . . . . . . 1,111 1,151
Prepaid expenses and other current assets. . 297 116
------------ --------
Total current assets . . . . . . . . . . . 2,233 2,777

Property and equipment, net of accumulated
depreciation and amortization of $162
and $164, respectively . . . . . . . . . . . 256 72
Investment, at equity. . . . . . . . . . . . . - 8
Due from shareholder . . . . . . . . . . . . . 687 222
Due from affiliates. . . . . . . . . . . . . . 199 385
Deferred offering costs. . . . . . . . . . . . - 94
Deferred income taxes. . . . . . . . . . . . . 30 30
------------ --------
$ 3,405 $ 3,588
============ ========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
Current portion of long-term debt. . . . . . $ 1,421 $ 1,112
Accounts payable and accrued liabilities . . 1,339 1,014
------------ --------
Total current liabilities. . . . . . . . . 2,760 2,126

Long-term debt, net of current portion . . . . 159 949
Severance payable. . . . . . . . . . . . . . . 90 81
------------ --------
3,009 3,156
------------ --------
Commitments and contingencies (See Note 11)

Stockholders' Equity:
Preferred stock, $.001 par value, 5,000,000
shares authorized; none outstanding. . . . - -
Common stock, $.001 par value; 100,000,000
shares authorized; 4,750,000 and
5,483,000 shares issued and outstanding,
respectively . . . . . . . . . . . . . . . 5 5
Additional paid in capital . . . . . . . . . (5) (124)
Retained earnings. . . . . . . . . . . . . . 472 449
Accumulated other comprehensive loss . . . . (76) (112)
Subscription receivable. . . . . . . . . . . - (34)
------------ --------
Total stockholders' equity . . . . . . . . 396 432
------------ --------

$ 3,405 $ 3,588
============ ========

<FN>
See Notes to Consolidated Financial Statements.

F-2

LAPIS TECHNOLOGIES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Earnings Per Share and Share Amounts)

Years Ended Nine-Months Ended
December 31, September 30,
------------------------ ------------------------
2001 2000 2002 2001
----------- ----------- ----------- -----------
(Unaudited)

Sales . . . . . . . . . . . . . . $ 4,254 $ 5,813 $ 3,491 $ 3,446
Cost of sales . . . . . . . . . . 2,924 3,875 1,962 1,800
----------- ----------- ----------- -----------

Gross profit. . . . . . . . . . . 1,330 1,938 1,529 1,646
----------- ----------- ----------- -----------

Operating Expenses:
Selling expenses. . . . . . . . 94 42 47 31
General and administrative. . . 1,068 988 811 1,368
----------- ----------- ----------- -----------

Total Operating Expenses. . . 1,162 1,030 858 1,399
----------- ----------- ----------- -----------

Operating Income. . . . . . . . . 168 908 671 247
----------- ----------- ----------- -----------

Other Income (Expense):
Interest expenses, net. . . . . (141) (113) (180) (84)
Other income. . . . . . . . . . 2 3 49 2
Equity in operations of investee. - - 8 -
----------- ----------- ----------- -----------

Total other income (expense). (139) (110) (123) (82)
----------- ----------- ----------- -----------

Income before provision for
income taxes. . . . . . . . . . 29 798 548 165

Provision for income taxes. . . . 19 293 162 -
----------- ----------- ----------- -----------

Net income. . . . . . . . . . . . $ 10 $ 505 $ 386 $ 165
=========== =========== =========== ===========

Earnings per share. . . . . . . . * $ .11 $ .08 $ .03
=========== =========== =========== ===========

Weighted average common shares
outstanding. . . . . . . . . . . 4,750,000 4,750,000 5,128,868 4,750,000
=========== =========== =========== ===========
<FN>

* Per share amount is less than $.01.

See Notes to Consolidated Financial Statements.

F-3

LAPIS TECHNOLOGIES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME (LOSS)
DECEMBER 31, 1999 To SEPTEMBER 30, 2002
(In Thousands, Except Share Amounts)

Common Stock Additional Other Total
------------------ Paid In Retained Comprehensive Subscription Stockholders's Comprehensive
Shares Amount Capital Earnings Loss Receivable Equity Income (Loss)
--------- ------- ----------- ---------- ------------ ------------ ------------ -------------

Balance, December 31, 1999 . .4,750,000 $ 5 $ (5) $ 288 $ (47) $ - $ 241

Dividend paid. . . . . . . . . - - - (331) - - (331)
Comprehensive income . . . . . - - - - 9 - 9 $ 9
Net income . . . . . . . . . . - - - 505 - - 505 505
--------- ------- ----------- ---------- ------------ ------------ ---------- --------------

Balance, December 31, 2000 . .4,750,000 5 (5) 462 (38) - 424 $ 514
==============

Comprehensive loss . . . . . . - - - - (38) - (38) $ (38)
Net income . . . . . . . . . . - - - 10 - - 10 10
--------- ------- ----------- ---------- ------------ ------------ ---------- --------------

Balance, December 31, 2001 . .4,750,000 5 (5) 472 (76) - 396 $ (28)
==============

Common stock for services
(Unaudited) . . . . . . . . . 500,000 - (50) - - - 50
Common stock issued in
connection with the private
placement
(Unaudited) . . . . . . . . . 233,000 - (35) - - (34) 1
Recapitalization(Unaudited). . - - 44 - - - 44
Dividend paid(Unaudited) . . . - - - (409) - - (409)
Comprehensive(loss)(Unaudited) - - - - (36) - (36) $ (36)
Net income(Unaudited). . . . . - - - 386 - - 386 386
--------- ------- ----------- ---------- ------------ ------------ ---------- --------------

Balance, September 30, 2002
(Unaudited) . . . . . . . . .5,483,000 $ 5 $ (124) $ 449 $ (112) $ (34) $ 432 $ 350
========= ======= =========== ========== ============ ============ ========== ==============

<FN>

See Notes to Consolidated Financial Statements.

F-4

LAPIS TECHNOLOGIES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)

Years Ended Nine-Months Ended
December 31, September 30,
-------------- --------------
2001 2000 2002 2001
------ ------ ------ ------
(Unaudited)

Cash flows from operating activities:

Net income. . . . . . . . . . . . . . . . . . $ 10 $ 505 $ 386 $ 165
Adjustments to reconcile net income
to net cash used in operating activities:
Depreciation and amortization . . . . . . . 55 47 30 -
Common stock issued for services. . . . . . - - 50 -
Recapitalization. . . . . . . . . . . . . . - - 44 -
(Gain) loss on sale of property
and equipment. . . . . . . . . . . . . . . - - (24) 59
Equity in operations of investee. . . . . . - - (8) -
Change in operating assets and liabilities:
Accounts receivable . . . . . . . . . . . . 891 (728) (689) 286
Inventory . . . . . . . . . . . . . . . . . (506) (309) (40) (159)
Prepaid and other current assets. . . . . . (343) 54 181 (267)
Due from shareholder. . . . . . . . . . . . (419) (87) 465 (244)
Due from affiliates . . . . . . . . . . . . (179) 3 (186) 20
Deferred offering costs . . . . . . . . . . - - (94) -
Deferred income tax . . . . . . . . . . . . - (20) - -
Accounts payable and accrued expenses . . . (214) 151 (324) (276)
Severance payable 32 30 (9) (4)
------ ------ ------ ------

Net cash used in operating activities . . . . (673) (354) (218) (420)
------ ------ ------ ------

Cash flows from investing activities:
Proceeds from sale of property
and equipment . . . . . . . . . . . . . . . 83 - 177 -
Purchases of property and equipment . . . . - (101) - (68)
------ ------ ------ ------

Net cash provided by (used in)
investing activities . . . . . . . . . . . . 83 (101) 177 (68)
------ ------ ------ ------

Cash flows from financing activities:
Proceeds from the issuance of
Common stock. . . . . . . . . . . . . . . - - 1 -
Proceeds of long-term debt. . . . . . . . . 70 100 481 -
Repayment of long-term debt . . . . . . . . - (73) - (91)
Revolving line of credit, net . . . . . . . 603 673 - 615
Dividends paid. . . . . . . . . . . . . . . - (331) (409) -
------ ------ ------ ------

Net cash provided by
financing activities . . . . . . . . . . . . 673 369 73 524
------ ------ ------ ------

Effect of exchange rate changes on
cash and cash equivalents . . . . . . . . . (4) 2 (36) (38)
------ ------ ------ ------

Increase (decrease) in cash and
cash equivalents. . . . . . . . . . . . . . 79 (84) (4) (2)

Cash and cash equivalents, beginning
of period . . . . . . . . . . . . . . . . . 7 91 86 7
------ ------ ------ ------

Cash and cash equivalents, end
of period . . . . . . . . . . . . . . . . . $ 86 $ 7 $ 82 $ 5
====== ====== ====== ======
See Notes Consolidated Financial Statements.

F-5

LAPIS TECHNOLOGIES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)

Years Ended Nine-Months Ended
December 31, September 30,
-------------- --------------
2001 2000 2002 2001
------ ------ ------ ------
(Unaudited)

Supplemental disclosure of cash
flow information:
Cash paid during the period for
Interest . . . . . . . . . . . . . . . . $ 144 $ 113 $ 81 $ 85
====== ====== ====== ======

Income taxes . . . . . . . . . . . . . . $ 193 $ 231 $ 364 $ 154
====== ====== ====== ======

Supplemental disclosure of non-cash
financing activity:
Common stock issued for services . . $ - $ - $ 50 $ -
====== ====== ====== ======

Common stock issued by subscription. $ - $ - $ 35 $ -
====== ====== ====== ======

<FN>

See Notes Consolidated Financial Statements.

F-6

LAPIS TECHNOLOGIES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(All information pertaining to the Nine-Months Ended
September 30, 2002 and 2001 is Unaudited)
(In Thousands, Except Share and Per Share Amounts)

NOTE 1 -DESCRIPTION OF BUSINESS, ACQUISITION AND CONTINUING OPERATIONS

Lapis Technologies, Inc. (the "Company" or "Lapis") was incorporated in the
State of Delaware on January 31, 2002. On April 23, 2002, the Company
changed its name from Enertec Electronics, Inc. to Opal Technologies, Inc.
and on October 17, 2002, changed its name to Lapis Technologies, Inc. The
Company's operations are conducted through Enertec Electronics Ltd.
("Enertec"). Enertec is engaged in the manufacturing and distribution of
electronic components and products relating to power supplies, converters
and related power conversion products, automatic test equipment, simulators
and various military and airborne systems, within the state of Israel.

On April 26, 2002 Opal (now Lapis) acquired 100% of the outstanding common
stock of Enertec (the "Merger"). Although Lapis is the legal survivor in
the Merger, under accounting principles generally accepted in the United
States of America the Merger was accounted for as a reverse acquisition,
whereby Enertec is considered the "acquirer" of Lapis for financial
reporting purposes as Enertec's stockholder's controlled more than 50% of
the post Merger combined entity. Among other matters, this requires Lapis
to present in all financial statements and other public information
filings, from the date of completion of the Merger, prior historical
financial statements and other information of Enertec. It also requires a
retroactive restatement of Enertec's historical stockholders' equity to
reflect the equivalent number of shares of common stock received in the
Merger.

The accompanying consolidated financial statements present the results of
operations of Enertec for the nine-months ended September 30, 2002 and 2001
and reflect the acquisition of Lapis on April 26, 2002 under the purchase
method of accounting. Subsequent to April 26, 2002 the operations of the
Company reflect the combined operations of Enertec and Lapis. The
consolidated financial statements include the accounts of Enertec since
inception. All material intercompany accounts and transactions have been
eliminated in consolidation.

The financial information included herein as of September 30, 2002 and for
the nine-months ended September 30, 2002 and 2001 is unaudited. Such
information reflects all adjustments (consisting of only normal recurring
adjustments) which are, in the opinion of management, necessary for a fair
presentation of the financial position, results of operations and cash
flows of the interim periods. The results of operations for the nine-months
ended September 30, 2002 and 2001 are not necessarily indicative of the
results for the full year.

F-7

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash and Cash Equivalents

For the purpose of the statement of cash flows the Company considers all
highly liquid investments with an original maturity of three months or less
at the time of purchases to be cash equivalents.

Inventory

Inventory is stated at the lower of cost (first-in, first-out basis) or
market.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation and
amortization. Routine maintenance and repairs and minor replacement costs
are charged to expense as incurred, while expenditures that extend the life
of these assets are capitalized. Depreciation and amortization are provided
for in amounts sufficient to relate the cost of depreciable assets to
operations over their estimated service lives. The Company uses the same
depreciation method for both financial reporting and tax purposes. Upon the
sale or retirement of property and equipment, the cost and related
accumulated depreciation and amortization will be removed from the accounts
and resulting profit or loss will be reflected in the statement of income.
The estimated lives used to determine depreciation and amortization are:

Leasehold improvements 10 years
Machinery and equipment 10 years
Furniture and fixtures 14 years
Transportation equipment 7 years
Computer equipment 3 years

Investment

An investment where the Company owns 20% or more but 50% or less of the
voting stock of another entity are recorded using the equity method. Under
this method the initial investment is recorded at cost. Subsequently, the
investment is increased or decreased to reflect the Company's share of
income, losses and dividends actually paid.

F-8

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

Deferred offering costs

Deferred offering costs represent costs attributable to a private
placement. The Company intends to offset these costs against the proceeds
from this transaction. In the event that such transaction is not completed,
these costs will be charged to operations.

Income Taxes

The Company uses the liability method for income taxes as required by
Statement of Financial Accounting Standards ("SFAS") No. 109 "Accounting
for Income Taxes." Under this method, deferred tax assets and liabilities
are determined based on differences between financial reporting and tax
basis of assets and liabilities. Deferred tax assets and liabilities are
measured using enacted tax rates and laws that will be in effect when the
differences are expected to reverse. Valuation allowances are established
when necessary to reduce deferred tax assets to the amount expected to be
realized.

Revenue Recognition

Revenue is recorded as product is shipped, the price has been fixed or
determined, collectability is reasonable assured and all material specific
performance obligations have been completed. The Company provides a one
year warranty on all products sold. The cost is charged to operations when
the warranty is exercised. The product sold by the Company is made to the
specifications of each customer; sales returns and allowances are allowed
on a case by case basis, are not material to financial statements and are
recorded as an adjustment to sales.

Revenue relating to product service contracts is recognized ratably over
the life of the agreement, generally one year.

Shipping and Handling Costs

Shipping and handling costs are included in cost of sales in accordance
with guidance established by the Emerging Issues Task Force, issue No.
00-10, "Accounting for Shipping and Handling Costs."

Research and Development Costs

Research and development costs are charged to general and administrative
expense when incurred in the accompanying statement of income and consists
of salaries. For the years ended December 31, 2001 and 2000 research and
development costs were approximately $200 and $100, respectively. For the
nine-months ended September 30, 2002 and 2001 research and development
costs were approximately $145 and $88, respectively.

F-9

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

Earnings Per Share

The Company presents basic earnings (loss) per share and, if appropriate,
diluted earnings per share in accordance with the provisions of SFAS No.
128 "Earnings per Share" ("SFAS 128").

Under SFAS 128 basic net earnings (loss) per share is computed by dividing
the net earnings (loss) for the period by the weighted average number of
shares outstanding during the period. Diluted net earnings per share is
computed by dividing the net earnings for the period by the weighted
average number of common share equivalents during the period. Common stock
equivalents would arise from the exercise of stock options. Through
September 30, 2002 the Company has not issued any stock options.

Impairment of Long-Lived Assets

The Company reviews long-lived assets for impairment whenever circumstances
and situations change such that there is an indication that the carrying
amounts may not be recovered. In such circumstances, the Company will
estimate the future cash flows expected to result from the use of the asset
and its eventual disposition. Future cash flows are the future cash inflows
expected to be generated by an asset less the future outflows expected to
be necessary to obtain those inflows. If the sum of the expected future
cash flows (undiscounted and without interest charges) is less than the
carrying amount of the asset, the Company will recognize an impairment loss
to adjust to the fair value of the asset. At December 31, 2001 and
September 30, 2002, the Company believes that there has been no impairment
of its long-lived assets.

In August 2001, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived
Assets". This statement is effective for fiscal years beginning after
December 15, 2001. This supersedes SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and Long-Lived Assets to Be Disposed Of,"
while retaining many of the requirements of such statement. The Company has
adopted this Statement as of January 1, 2002.

Financial Instruments

The carrying amounts of financial instruments, including cash and cash
equivalents, approximate fair value at December 31, 2001 and September 30,
2002 because of the relatively short maturity of the instruments. The
Investment is recorded using the equity method and is considered at fair
value because there is no prevailing market value for this investment and
it is not practical to estimate without incurring excessive cost. The
carrying value of the long-term debt approximate fair value as of December
31, 2001 and September 30, 2002 based upon debt terms available for
companies under similar terms.

F-10

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

Comprehensive Income (Loss)

Comprehensive income (loss) consists of net income for the period and
foreign currency translation adjustments.

Foreign Currency Translation and Transactions

Assets and liabilities of Enertec are translated at current exchange rates
and related revenues and expenses are translated at average exchange rates
in effect during the period. Resulting translation adjustments, if
material, are recorded as accumulated other comprehensive income (loss) in
stockholders' equity. Foreign currency transaction gains and losses are
included in operations.

Use of Estimates

In preparing financial statements in conformity with accounting principles
generally accepted in the United States of America, management is required
to make estimates and assumptions that affect the reported amounts of
assets and liabilities and the disclosure of contingent assets and
liabilities at the date of the financial statements and revenues and
expenses during the reporting period. Actual results could differ from
those estimates.

Reclassification

Certain reclassifications have been made to the prior year's financial
statements in order to conform to the current year presentation.

F-11

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

New Accounting Pronouncements

In July 2001 the FASB issued SFAS No. 141, "Business Combinations" ("SFAS
141"). SFAS 141 requires the purchase method of accounting for all business
combinations initiated after June 30, 2001 and eliminates the
pooling-of-interest method. SFAS 141 further clarifies the criteria for
recognition of intangible assets separately from goodwill.

In July 2001 the FASB issued SFAS No. 142, "Goodwill and Other Intangible
Assets," ("SFAS 142"). SFAS 142 eliminates the amortization of goodwill and
indefinite lived intangible assets and initiates an annual review for
impairment. Identifiable intangible assets with determinable useful lives
will continue to be amortized. The Company adopted this Statement as of
January 1, 2002 and management does not believe that this Statement will
have a material impact on the financial statements.

In June 2001 the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations," which addresses the financial accounting and reporting for
obligations associated with the retirement of tangible long-lived assets
and the associated asset retirement costs. The Company will adopt this
Statement effective January 1, 2003 and management does not believe that
this Statement will have a material impact on the financial statements.

In July 2002 the FASB issued SFAS No. 146, "Accounting for Costs Associated
with Exit or Disposal Activities," ("SFAS 146"). SFAS 146 is effective for
exit and disposal activities that are initiated after December 31, 2002 and
requires these costs to be recognized when the liability is incurred and
not at project initiation. The Company does not expect this Statement to
have a material impact on the financial statements.

Management does not believe that recently issued, but not yet effective
accounting pronouncements if currently adopted would have a material effect
on the accompanying financial statements.

F-12

NOTE 3 - INVENTORY

Inventory consisted of the following:

December 31, September 30,
2001 2002
---------- ------------
(Unaudited)

Raw materials . . . . . . . . . . . . . . . . . . . $ 363 $ 260
Finished goods. . . . . . . . . . . . . . . . . . . 748 891
---------- ------------

$ 1,111 $1,151
========== ============

NOTE 4 - PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

December 31, September 30,
2001 2002
---------- ------------
(Unaudited)

Leasehold improvements. . . . . . . . . . . . . . . $ 55 $ 21
Machinery and equipment . . . . . . . . . . . . . . 22 22
Furniture and fixtures. . . . . . . . . . . . . . . 109 49
Transportation equipment. . . . . . . . . . . . . . 144 76
Computer equipment. . . . . . . . . . . . . . . . . 88 68
---------- ------------
418 236

Accumulated depreciation
and amortization . . . . . . . . . . . . . . . . . (162) (164)
---------- ------------

$ 256 $ 72
========== ============

NOTE 5 - INVESTMENT

As of January 1, 2002 Enertec, through a wholly owned subsidiary,
established a 25% investment in Enertec Systems 2001 LTD ("Systems").
Systems is engaged in test equipment and simulators for electronic plants.
This investment is being accounted for under the equity method. An officer
and majority stockholder of the Company owns 27% of Systems. As of
September 30, 2002 Systems had total assets of $1,535 and for the nine
months then ended had revenues of $1,214 and net income of $31. All of this
entity's activities are conducted in the State of Israel. This entity was
not in operations prior to 2002.

F-13

NOTE 6 - INCOME TAXES

The provision for income taxes consisted of the following:

Year Ended Nine-Months Ended
December 31, September 30,
------------- -------------

2001 2000 2002 2001
------ ------ ------ ------
(Unaudited)

Current:
Federal . $ - $ - $ - $ -
State . . - - - -
Foreign . 19 313 162 -
----- ------ ----- -----

19 313 162 -
----- ------ ----- -----

Deferred:
Federal . - - - -
State . . - - - -
Foreign . - (20) - -
----- ------ ----- -----

- (20) - -
----- ------ ----- -----

$ 19 $ 293 $ 162 $ -
===== ====== ===== =====

Deferred tax assets are classified as current or non-current, according to
the classification of the related asset or liability for financial
reporting. The deferred tax asset consists of timing differences relating
to severance payable. The Company has not recorded a valuation allowance as
it is more likely than not that the timing differences will be utilized.

The deferred income tax asset and income tax expense for all periods shown
is a result of the operations of Enertec, which operates in the State of
Israel.

NOTE 7 - LONG-TERM DEBT

Long-term debt consisted of the following:

December 31, September 30,
2001 2002
---------- ----------
(Unaudited)

Bank line of credit $1,421 $1,112
Term loan. . . . . . . 159 949
------ ------
Total long-term debt . 1,580 2,061
Less: current portion. 1,421 1,112
------ ------

$ 159 $ 949
====== ======

F-14

NOTE 8 - SEVERANCE PAYABLE, NET

Severance payable represents amounts computed on employees' most recent
salary and the number of years working in Israel. The Company's liability
is partially offset by amounts deposited to insurance policies, which are
under the company's control.

NOTE 9 - EQUITY TRANSACTIONS

During April 2002, the Company issued 4,750,000 shares of its common stock
to Harry Mund in exchange for the transfer of 100% of the common stock of
Enertec Electronics LTD.

On April 26, 2002 the Company issued 150,000, 200,000, and 100,000 shares
of its common stock to Fairbain Trading S.A., Global Exploration Equities,
Inc. and Foremost Securities Limited, respectively, in exchange for
services provided in connection with the Company's corporate organization.
The Company valued these shares at $.10 per share.

On April 26, 2002 the Company issued 50,000 shares of its common stock to
KGL Investments, Ltd., the beneficial owner of which is the partners of
Kaplan Gottbetter & Levenson, council to the Company. The shares were
issued for legal services and valued at $.10 per share.

NOTE 10 - PRIVATE PLACEMENT

On June 4, 2002 the Company offered investors up to 233,000 shares of its
common stock at a price of $.15 per share. The Company recorded a
subscription receivable of $35 and as of September 30, 2002 the Company had
collected $1. The balance of the subscription receivable was collected
during October 2002.

F-15

NOTE 11 - COMMITMENTS AND CONTINGENCIES

The Company has several supply agreements with various customers totaling
approximately $3,800. The agreements are from one to two years in duration.

Orckit Communications, a customer, has brought an action in the Tel Aviv
District Court for an unspecified monetary amount against Gaia Converter,
one of the Company's suppliers, Alcyon Production System, a subcontractor
of Gaia Converter, and Enertec, alleging that the DC converters supplied to
it by Gaia Converter were defective and caused Orckit to replace the
converters at a substantial financial expense. Enertec filed a defense
claim that there is no cause of action against them as Enertec is only the
local Israeli sales representative and did not make any implied or express
representation or warranty to Orckit regarding the suitability of its
converters. Management believes that the chance of losing this suit is
remote, intends to defend this action vigorously and does not believe that
it will have a materially adverse impact on the Company's operations and
liquidity.

NOTE 12 - SEGMENT AND GEOGRAPHIC INFORMATION

The Company operates in one business segment which includes the
distribution of power supplies, converters and related power conversion
products and the manufacture of automatic test equipment and simulators.
The Company conducts operations primarily in Israel, which is the location
of all of the Company's sales. Information about the Company's assets in
different geographic locations as of December 31, 2001 and September 30,
2002 is shown below pursuant to the provisions of SFAS 131, "Disclosures
About Segments of an Enterprise and Related Information."

December 31, September 30,
2001 2002
------ ------
(Unaudited)

Total assets:
Israel . . . . $3,405 $3,493
United States. - 95
------ ------

$3,405 $3,588
====== ======

F-16

NOTE 13 - CONCENTRATIONS

The Company had deposits with commercial financial institutions which, at
times, may exceed the FDIC insured limits of $100,000. Management has
placed these funds in high quality institutions in order to minimize the
risk. Cash held in Israel as of December 31, 2001 and September 30, 2002
was $86 and $81, respectively.

As of December 31, 2001, the Company had two customers that accounted for
approximately 20% of the accounts receivable. As of September 30, 2002 the
Company had one customer that accounted for 54% of accounts receivable.
During the years ended December 31, 2001 and 2000 approximately 85% and
50%, respectively, of the Company's sales were to three and two customers,
respectively. For the nine-months ended September 30, 2002 and 2001
approximately 80% of the Company's sales were to three and two customers,
respectively.

NOTE 14 - SUBSEQUENT EVENTS

Stock Option Plan

The Company adopted a 2002 Stock Option Plan (the "Plan") during October
2002. The Plan provides for the granting of incentive stock options,
non-statutory stock options and stock appreciation rights. The incentive
stock options can be granted to all employees and officers of the Company
or any subsidiary of the Company. The non-statutory stock options can be
granted to all employees, non-employee directors, and consultants of the
Company. The number of shares of common stock reserved for issuance under
the Plan is 500,000, subject and adjustment in the event of a stock split,
stock dividend, recapitalization or similar change in the Company's capital
structure.

The option price for shares issued as incentive stock options shall not be
less than the fair market value of the Company's common stock at the date
of grant unless the option is granted to an individual who, at the date of
the grant, owns more than 10% of the total combined voting power of all
classes of the Company's stock (the "Principal Stockholder"). Then the
option price shall be at least 110% of the fair market value at the date
the option is granted. The option price for shares issued under the
non-statutory stock options shall be determined at the sole discretion of
the Board of Directors, but may not be less than 85% of the fair market
value of the Company's common stock at the date of grant.

F-17

NOTE 14 - SUBSEQUENT EVENTS - continued

The Board of Directors may grant options with a reload feature ("Reload
Options"). Option holders granted a Reload Option shall receive
contemporaneously with the payment of the option price in shares of common
stock a right to purchase that number of shares of the Company's common
stock equal to the sum of (i) the number of shares of the Company's common
stock used to exercise the option and (ii) with respect to non-statutory
stock options the number of shares of the Company's common stock used to
satisfy any tax withholding requirement incident to the exercise of such
non-statutory stock options. The option price for Reload Options shall be
the fair market value of a share of the Company's common stock at the date
of grant. For Principal Stockholders the option price for Reload Options
shall be 110% of the fair market value of a share of the Company's common
stock at the date of grant. The Company has not issued any options under
this plan.

F-18

No dealer, salesman or other person has been authorized to give any
information or to make any representation not contained in this prospectus in
connection with the offer made hereby. If given or made, such information or
representation must not be relied upon as having been authorized by us. This
prospectus does not constitute an offer to any person in any jurisdiction in
which such an offer would be unlawful. Neither the delivery of this prospectus
nor any sale made hereunder shall under any circumstances create any implication
that the information contained throughout this prospectus is correct as of any
time subsequent to the date hereof.

733,000 Shares

LAPIS TECHNOLOGIES, INC.

PROSPECTUS

_________, 2003

Until __________________, 2003 (__days from the date of this prospectus), all
dealers effecting transactions in the registered securities, whether or not
participating in this distribution, may be required to deliver a prospectus.
This is in addition to the obligation of dealers to deliver a prospectus when
acting as underwriter and with respect to their unsold allotments or
subscriptions.

PART II
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Our Certificate of Incorporation limits the liability of our directors and
officers to the maximum extent permitted by Delaware law. Delaware law provides
that directors of a corporation will not be personally liable for monetary
damages for breach of their fiduciary duties as directors, except liability for:
(i) breach of the directors' duty of loyalty; (ii) acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of the law,
(iii) the unlawful payment of a dividend or unlawful stock purchase or
redemption, and (iv) any transaction from which the director derives an improper
personal benefit. Delaware law does not permit a corporation to eliminate a
director's duty of care, and this provision of our Certificate of Incorporation
has no effect on the availability of equitable remedies, such as injunction or
rescission, based upon a director's breach of the duty of care.

The effect of the foregoing is to require us to indemnify our officers and
directors for any claim arising against our directors and officers in their
official capacities if such person acted in good faith and in a manner that he
or she reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful.

INSOFAR AS INDEMNIFICATION FOR LIABILITIES MAY BE PERMITTED TO OUR DIRECTORS,
OFFICERS AND CONTROLLING PERSONS PURSUANT TO THE FOREGOING PROVISIONS, OR
OTHERWISE, WE HAVE BEEN ADVISED THAT IN THE OPINION OF THE SECURITIES AND
EXCHANGE COMMISSION THIS TYPE OF INDEMNIFICATION IS AGAINST PUBLIC POLICY AND
IS, THEREFORE, UNENFORCEABLE.

CORPORATE TAKEOVER PROVISIONS

Section 203 of the Delaware General Corporation Law

We are not presently subject to the provisions of Section 203 of the
Delaware General Corporation Law (Section 203). Under Section 203, certain
business combinations between a Delaware corporation whose stock generally is
publicly traded or held of record by more than 2,000 stockholders and an
interested stockholder are prohibited for a three-year period following the date
that such stockholder became an interested stockholder, unless (i) the
corporation has elected in its original certificate of incorporation not to be
governed by Section 203 (we did not make such an election) (ii) the business
combination was approved by the Board of Directors of the corporation before the
other party to the business combination became an interested stockholder (iii)
upon consummation of the transaction that made it an interested stockholder, the
interested stockholder owned at least 85% of the voting stock of the corporation
outstanding at the commencement of the transaction (excluding voting stock owned
by directors who are also officers or held in employee benefit plans in which
the employees do not have a confidential right to render or vote stock held by
the plan) or, (iv) the business combination was approved by the Board of
Directors of the corporation and ratified by two-thirds of the voting stock

II-1

which the interested stockholder did not own. The three-year prohibition also
does not apply to certain business combinations proposed by an interested
stockholder following the announcement or notification of certain extraordinary
transactions involving the corporation and a person who had not been an
interested stockholder during the previous three years or who became an
interested stockholder with the approval of the majority of the corporation's
directors. The term business combination is defined generally to include mergers
or consolidations between a Delaware corporation and an interested stockholder,
transactions with an interested stockholder involving the assets or stock of the
corporation or its majority-owned subsidiaries and transactions which increase
an interested stockholder's percentage ownership of stock. The term interested
stockholder is defined generally as a stockholder who, together with affiliates
and associates, owns (or, within three years prior, did own) 15% or more of a
Delaware corporation's voting stock. If it should become applicable to us in the
future, Section 203 could prohibit or delay a merger, takeover or other change
in control of our company and therefore could discourage attempts to acquire us.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following is a statement of estimated expenses in connection with the
issuance and distribution of the securities being registered.

SEC Registration Fee $ 11
Printing and Engraving Expenses $ 2,500
Legal Fees $ 60,000
Accounting Fees $ 5,000
Transfer Agent Fees $ 2,000
Miscellaneous Expenses $ 2,000

TOTAL ESTIMATED EXPENSES $ 71,511

All such expenses will be borne by us.

ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES

On April 26, 2002, we issued 4,750,000 shares of our common stock to Harry
Mund in exchange for his 99 shares of Enertec Electronics Limited, our wholly
owned subsidiary, which constitutes all of its issued and outstanding shares.
The 4,750,000 shares were valued at $.10 a share.

On April 26, 2002, we issued 200,000 shares of our common stock to Global
Exploration Equities Inc. in exchange for consulting and legal services provided
by it in connection with our corporate organization. These shares were valued
at $.10 a share.

On April 26, 2002, we issued 150,000 of our common stock to Fairbain
Trading S.A. in exchange for accounting services provided by it in connection
with our corporate organization. These shares were valued at $.10 a share. On
April 26, 2002, we issued 100,000 shares of our common stock to Foremost
Securities Limited in exchange for consulting services provided by it in
connection with our corporate organization. These shares were valued at $.10 a
share.

II-2

On April 26, 2002 we issued 50,000 shares of our common stock to KGL
Investments, Ltd., the shareholders of which are Adam S. Gottbetter, Steven
Kaplan, and Paul Levenson. Mr. Gottbetter, Mr. Kaplan and Mr. Levenson are the
partners of Kaplan Gottbetter & Levenson, LLP, counsel to the Company. This
issuance was in consideration for non-legal services including business and
financial consulting. These shares were valued at $.10 a share.

All of the foregoing securities were sold under the exemption from
registration provided by Section 4(2) of the Securities Act. Neither we nor any
person acting on our behalf offered or sold the securities by means of any form
of general solicitation or general advertising. All purchasers of theses
securities represented in writing that they acquired the securities for their
own accounts. A legend was placed on the stock certificates stating that the
securities have not been registered under the Securities Act and cannot be sold
or otherwise transferred without registration or an exemption therefrom.

During the period June 2002 through September 2002 we issued an aggregate
of 233,000 shares to offshore persons at a price of $.15 per share or an
aggregate of $34,950. The offering was made in compliance with Regulation S of
the General Rules and Regulations under the Securities Act of 1933, as amended.

The following table indicates the names and addresses of those individuals
who purchased their shares in connection with the Regulation S offering, as well
as the number of shares purchased by each, the price paid per share, and the
date of each sale.

NAME OF NUMBER OF DATE SHARES SOLD PURCHASE PRICE
SHAREHOLDER SHARES
- ------------------------------------- --------- ------------------ ----------------

Claudia Ben-Dor . . . . . . . . . . . 6,000 August 28, 2002 $ .15
Mitzpe Tel - El
House No. 408
P.O Oshrat
P.O. Box 25167
- -------------------------------------
Israel Ben-Dor. . . . . . . . . . . . 6,000 August 28, 2002 $ .15
Mitzpe Tel - El
House No. 408
P.O Oshrat
P.O. Box 25167
- -------------------------------------
Eliaz Bilik . . . . . . . . . . . . . 3,200 September 3, 2002 $ .15
Moria Ave. 101/A
Haifa 34616
Israel
- -------------------------------------
Snir Eitan. . . . . . . . . . . . . . 1,400 August 28, 2002 $ .15
Parcel 140
Hosen
Israel
- -------------------------------------
Yael Elipaz . . . . . . . . . . . . . 1,400 September 5, 2002 $ .15
25 Shoham Pts.
Haifa
Israel
- -------------------------------------
Olga Gross. . . . . . . . . . . . . . 6,000 August 28, 2002 $ .15
Gedaliahy Street 1517
Neveshaanon 32587
Israel
- -------------------------------------
Shoshy Inbal. . . . . . . . . . . . . 1,400 August 28, 2002 $ .15
Hachzav Street 16/21
Nesher 19234
Israel
- -------------------------------------

II-3

NAME OF NUMBER OF DATE SHARES SOLD PURCHASE PRICE
SHAREHOLDER SHARES
- ------------------------------------- --------- ------------------ ----------------

Barak Koren . . . . . . . . . . . . . 1,000 September 11, 2002 $ .15
BAZ 14 Street
Karmiel 20100
Israel
- -------------------------------------
Eitan Koren . . . . . . . . . . . . . 7,000 August 30, 2002 $ .15
BAZ 14 Street
Karmiel 20100
Israel
- -------------------------------------
Sasson Koren. . . . . . . . . . . . . 12,000 August 28, 2002 $ .15
BAZ 14 Street
Karmiel 20100
Israel
- -------------------------------------
Shoshana Koren. . . . . . . . . . . . 18,000 August 28, 2002 $ .15
BAZ 14 Street
Karmiel 20100
Israel
- -------------------------------------
Elliot Kretzmer . . . . . . . . . . . 35,000 July 31, 2002 $ .15
3 Chanita Street
Kfar Sava
Israel
- -------------------------------------
Amir Marcovitz. . . . . . . . . . . . 6,000 September 6, 2002 $ .15
77 Moshe Gorken Street
K. Motykin
Israel
- -------------------------------------
Editha Marcovitz. . . . . . . . . . . 9,000 September 6, 2002 $ .15
77 Moshe Gorken Street
K. Motykin
Israel
- -------------------------------------
Miron Marcovitz . . . . . . . . . . . 9,000 September 6, 2002 $ .15
77 Moshe Gorken Street
K. Motykin
Israel
- -------------------------------------
Revital Marcovitz-Mizrachi. . . . . . 6,000 September 6, 2002 $ .15
16/3 Hativet Hauegev Street
Modiin
Israel
- -------------------------------------
Bracha Meirav . . . . . . . . . . . . 2,600 September 6, 2002 $ .15
64 Haalie Street
Haifa
Israel
- -------------------------------------
Yigal Meirav. . . . . . . . . . . . . 2,600 September 6, 2002 $ .15
64 Haalia Street
Haifa
Israel
- -------------------------------------

II-4

NAME OF NUMBER OF DATE SHARES SOLD PURCHASE PRICE
SHAREHOLDER SHARES
- ------------------------------------- --------- ------------------ ----------------

Sasson Mizrachi . . . . . . . . . . . 6,000 September 5, 2002 $ .15
16/3 Hativet Hauegev Street
Modiin
Israel
- -------------------------------------
Helena Mund . . . . . . . . . . . . . 16,000 August 27, 2002 $ .15
25 Sinai Street
Haifa
Israel
- -------------------------------------
Simon Mund. . . . . . . . . . . . . . 16,000 August 28, 2002 $ .15
25 Sinai Street
Haifa
Israel
- -------------------------------------
Alexander Osztreicher . . . . . . . . 14,000 August 28, 2002 $ .15
15/7, Ghedaliahu
Haifa 32587
Israel
- -------------------------------------
Barak Osztreicher . . . . . . . . . . 4,000 September 25, 2002 $ .15
P.O.B. 240
Moledet 19130
Israel
- -------------------------------------
Einat Osztreicher . . . . . . . . . . 4,000 September 24, 2002 $ .15
P.O.B. 79
Elyashiu
Israel
- -------------------------------------
Haim Osztreicher. . . . . . . . . . . 6,600 August 29, 2002 $ .15
P.O.B. 33658
Haifa
Israel
- -------------------------------------
Klara Osztreicher . . . . . . . . . . 14,000 August 28, 2002 $ .15
15/7, Ghedaliahu
Haifa 32587
Israel
- -------------------------------------
Lior Osztreicher. . . . . . . . . . . 4,000 September 3, 2002 $ .15
7, Hashitim
Q. Tivon 36000
Israel
- -------------------------------------
Shimon Tregerman. . . . . . . . . . . 1,400 August 28, 2002 $ .15
Broshim 205
Tal-El 25167
Israel
- -------------------------------------
Svetlana Tregerman. . . . . . . . . . 1,400 August 28, 2002 $ .15
Broshim 205
Tal-El 25167
Israel
- -------------------------------------

II-5

NAME OF NUMBER OF DATE SHARES SOLD PURCHASE PRICE
SHAREHOLDER SHARES
- ------------------------------------- --------- ------------------ ----------------

Margareta Weissman. . . . . . . . . . 6,000 September 26, 2002 $ .15
2/7 Eshkol Street
K. Motykin
Israel
- -------------------------------------
Martin Weissman . . . . . . . . . . . 6,000 September 26, 2002 $ .15
2/7 Eshkol Street
K. Motykin
Israel
- -------------------------------------
Harry Mund. . . . . . . . . . . . . . 4,750,000 April 26, 2002 $ .15
27 Rechov Ha'Mapilim,
Kiriat Ata, Israel, P.O. BOX
497, Kiriat Motzkin 26104,
Israel
- -------------------------------------
Fairbain Trading (1). . . . . . . . . . . 150,000 April 26, 2002 $ .15
c/o A.P.T. Associates
19 W. 34th Street, 11th Floor
New York, NY, 10001
- -------------------------------------
Global Exploration Equities Inc (2).. . . 200,000 April 26, 2002 $ .15
c/o A.P.T. Associates
19 W. 34th Street, 11th Floor
New York, NY 10001
- -------------------------------------
KGL Investments, Ltd. (3) . . . . . . . . 50,000 April 26, 2002 $ .15
c/o Kaplan Gottbetter & Levenson, LLP
630 Third Avenue, 5th Floor
New York, NY 10017
- -------------------------------------
Foremost Securities, Ltd. (4) . . . . . . 100,000 April 26, 2002 $ .15
c/o A.P.T. Associates
19 W. 34th Street, 11th Floor
New York, NY 10001
- -------------------------------------

(1) Sole beneficial owner of which is Solomon Krok.
(2) Sole beneficial owner of which is David Kretzmer.
(3) Beneficial owners of which are Adam S. Gottbetter, Steven Kaplan, and
Paul Levenson. Mr. Gottbetter, Mr. Kaplan and Mr. Levenson are
partners of Kaplan Gottbetter & Levenson, LLP, counsel to the Company.
(4) Sole beneficial owner of which is Samantha Topola Family Trust.

The shareholders who purchased their shares in connection with the
Regulation S offering each represented in writing that 1) they were not U.S.
persons and were not acquiring the shares for the account of any U.S. person; 2)
if they were not an individual, they was not formed specifically for the purpose
of acquiring the shares purchased pursuant to the subscription agreement; 3)
they purchased the shares for their own accounts and risks, and not for the
account or benefit of a U.S. Person as defined in Regulation S, and that no
other person had any interest in or participation in the shares or any right,
option, security interest, pledge or other interest in or to the shares; 4)
they, any of their affiliates, or any person acting on their behalf, have made

II-6

or are aware of any "directed selling efforts" in the United States; and 5)
during the Restricted Period set forth under Rule 903(b)(iii)(A), they will not
act as distributors, either directly or though any affiliate, nor will they
sell, transfer, hypothecate or otherwise convey the shares other than to a
non-U.S. Person. A legend was placed on the stock certificates stating that the
securities have not been registered under the Securities Act and cannot be sold
or otherwise transferred without registration or an exemption therefrom.

ITEM 27. EXHIBITS

EXHIBIT NO. ITEM
- -----------------------------------------------------------------------------------------------------------------------------------

3.1 Certificate of Incorporation of Enertec Electronics, Inc. filed January 31, 31, 2002*

3.2 Certificate of Amendment of Enertec Electronics, Inc. filed April 23, 2002*

3.3 Certificate of Amendment of Opal Technologies, Inc. filed October 17, 2002*

3.4 By-Laws of Lapis Technologies, Inc.*

4.1 Specimen Common Stock Certificate

5.1 Opinion and Consent of Counsel

10.1 Stock Option Plan of 2002*

10.2 An Agreement for an Unprotected Tenancy, dated in June 2002 between Amnoni
Brothers - Carmiel Transporters Ltd. and Enertec Systems Ltd.

10.3 Lease Agreement dated October 31, 2002 between Mond Holdings Ltd., and Enertec Electronics Ltd.

10.4 Manufacturer's Representative Agreement dated December 20, 1988 between Cytec Corporation and Enertec International.

10.5 Exclusive Distribution Agreement dated June 26, 2002 between Gaia Converter
by the Company Enertec (Israel) Gaia Converter and Enertec Electronics Ltd.

10.6 Annual Agreement dated February 05, 2001 between BigBand Networks Ltd. and Enertec Electronics Ltd.

10.7 Supply Agreement between Enertec Ltd. and The Israeli Aeronautical Industries Ltd.

10.8 Distributor Agreement dated January 1, 1998 between Christie Electric Corp. and Enertec Electronics Ltd.

10.9 Sale Representative Agreement dated July 6, 1998 between EMCO High Voltage Co. and Enertec International.

II-7

EXHIBIT NO. ITEM
- -----------------------------------------------------------------------------------------------------------------------------------

21 List of Subsidiaries*

23 Consent of Gvilli & Co., independent certified public accountants

*Previously filed with Form SB-2 registration statement filed November 4, 2002

ITEM 28. UNDERTAKINGS.

(a) Rule 415 Offering.

The undersigned issuer hereby undertakes that it will:

(1) File, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:

(i) Include any prospectus required by Section 10(a)(3) of the
Securities Act;

(ii) Reflect in the prospectus any facts or events which, individually
or together, represent a fundamental change in the information in
the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the
total dollar value of the securities offered would not exceed
that which was registered) and any deviation from the low or high
end of the estimated maximum offering range may be reflected in
the form of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
and

(iii) Include any additional or changed material information on the
plan of distribution.

(2) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the
securities offered, and the offering of the securities at that time to
be the initial bona fide offering.

(3) File a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the offering.

(b) Indemnification

Insofar as indemnification for liabilities arising under the Securities
Act, may be permitted to directors, officers and controlling persons of the
small business issuer pursuant to the foregoing provisions, or otherwise, the
issuer has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the issuer
of expenses incurred or paid by a director, officer or controlling person of the

II-8

issuer in the successful defense of any action, suit or proceedings) is asserted
by such director, officer or controlling person in connection with the
securities being registered, the issuer will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such court.

II-9

SIGNATURES

In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing on this Form SB-2 and authorizes this registration
statement to be signed on its behalf by the undersigned, in Kiriat Motzkin,
Israel on 9th day of February, 2003.

LAPIS TECHNOLOGIES, INC.

By: /s/ Harry Mund
----------------
Harry Mund,
President and Chief Executive Officer

By: /s/ Miron Markovitz
---------------------
Miron Markovitz
Chief Financial and Accounting Officer and Director

Pursuant to the requirements of the Securities Act of 1933, this registration
statement on Form SB-2 has been signed by the following persons in their
respective capacities with Lapis Technologies, Inc. and on the dates indicated.

SIGNATURE TITLE DATE

/s/ Harry Mund President, Chief Executive Officer, February 9, 2003
- ---------------- Secretary and Chairman of the Board
Harry Mund of Directors

/s/ Miron Markovitz Chief Financial and Accounting Officer February 9, 2003
- --------------------- and Director
Miron Markovitz