---

---

# UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, DC 20549

FORM 20-F/A(Amendment No. 1)

(Mark One)

|o | Registration statement pursuant to Section 12(b) or (g) of the Securities Exchange Act of
1934
|- | ----------------------------------------------------------------------------------------------

or

|x | Annual
report pursuant to Section 13 or 15(d) of the Securities Exchange Act of           1934
|- | ----------------------------------------------------------------------------------------------

For the fiscal year ended December
31, 2006

or

|o | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|- | ----------------------------------------------------------------------------------------

or

Shell Company pursuant
to Section 13 or is (d) of the Securities Exchange Act of 1934 \ Date of event requiring
this shall Company report ___________

For the transition period
from ________ to ________

Commission file number
000-30664

Camtek Ltd.(Exact name of Registrant as specified in its charter)

Israel(Jurisdiction of incorporation or organization)

Ramat Gavriel
Industrial Zone, P.O. BOX 544, Migdal HaEmek, Israel(Address of principal executive offices)

Securities registered or to be registered pursuant to Section 12(b) of the Act:Ordinary Shares, nominal value 0.01 New Israeli Shekel per share (Title of each Class)

Nasdaq Global Market(Name of each Exchange on which registered)

Securities registered or to be registered pursuant to Section 12(g) of the Act:None

Securities for
which there is a reporting obligation pursuant to Section 15(d) of the Act:None



---

---

Indicate the number of outstanding
shares of each of the issuers classes of capital or common stock as of the close of
the period covered by the annual report:

30,040,855 Ordinary
Shares, par value NIS 0.01

Indicate by check mark if the
registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

o Yes              x No

If this report is an annual or
transition report, indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

o Yes              x No

Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

x Yes     o No

Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.
See definition of accelerated filer and large accelerated filer in
Rule 12b-2 of the Exchange Act.

o Large Accelerated Filer               o Accelerated Filer      x Non-Accelerated Filer

Indicate by check mark which
financial statements the registrant has elected to follow.

Item 17 o Item 18 x

If this is an annual report, indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act).

o Yes              x No



---

---

# EXPLANATORY NOTE

This
Amendment No. 1 to the Annual Report on Form 20-F for the fiscal year ended December 31,
2006 (the Annual Report) is being filed by Camtek Ltd. (the
Registrant) with the Securities and Exchange Commission for the sole purpose
of filing the audit report of Brightman Almagor & Co. and Goldstein Sabo Tevet in Item
18 of the Annual Report.

This
Amendment No. 1 consists of a cover page, this explanatory note, the financial statements,
as amended, required by Item 18, the exhibit index, the signature page and the required
certifications of the principal executive officer and principal financial officer of the
Registrant.

Other
than expressly set forth herein, this Amendment No. 1 does not, and does not purport to,
amend or restate any other information contained in the Annual Report nor does this
Amendment No. 1 reflect any events that have occurred after the Annual Report was filed.



---

---

|Item 18. |  | Consolidated Financial Statements.
|-------- |  | ----------------------------------

CAMTEK LTD.

Consolidated Financial Statements
December 31, 2006 and 2005

---

---

CAMTEK LTD.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

|                                                                                  |                
|--------------------------------------------------------------------------------- | ---------------
|                                                                                  | Page           
|                                                                                  |                
|                                                                                 
|Report of Independent Registered Public
  Accounting Firm                         | F  2          
|                                                                                  |                
|Consolidated Balance Sheets                                                       | F  3          
|                                                                                  |                
|Consolidated Statements of Operations                                             | F  4          
|                                                                                  |                
|Consolidated
  Statements of Comprehensive Income                                 | F  5          
|                                                                                  |                
|Consolidated Statements of Shareholders
  Equity And Comprehensive Income (Loss) | F  6          
|                                                                                  |                
|Consolidated Statements of Cash Flows                                             | F  7          
|                                                                                  |                
|Notes to Consolidated Financial Statements
  as of December 31, 2006              | F  8 to F  29

---

---

Report
of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of
Camtek Ltd.

We have
audited the accompanying consolidated balance sheet of Camtek Ltd. and
subsidiaries (the Company) as of December 31, 2006 and the related
consolidated statements of operations, comprehensive income, shareholders
equity and comprehensive income and cash flows for the year then ended. These
consolidated financial statements are the responsibility of the Companys
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audit.

We conducted
our audit in accordance with the standards of the Public Company Accounting
Oversight Board (United States). 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 audit provides a
reasonable basis for our opinion.

In our
opinion, the 2006 consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Camtek Ltd. and
subsidiaries as of December 31, 2006 and the results of their operations and
their cash flows for the year then ended in conformity with U.S. generally
accepted accounting principles.

As discussed
in Note 2Q to the consolidated financial statements, effective January 1, 2006,
the Company adopted the fair value method of accounting for stock-based
compensation as required by Statement of Financial Accounting Standard No. 123R
 Share Based Payment.

/s/ Somekh Chaikin
Somekh ChaikinCertified Public Accountants (Israel)
Member firm of KPMG International

Tel Aviv, June
28, 2007

---

---

# REPORT OF INDEPENDENT
REGISTRATED PUBLIC ACCOUNTING FIRMS

To the Shareholders of 
Camtek Ltd.

We have audited the accompanying
consolidated balance sheets of Camtek Ltd. (the Company) and its
subsidiaries as of December 31, 2005 and 2004, and the related consolidated
statements of operations, shareholders equity and comprehensive income (loss) and
cash flows for each of the three 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 audits.

We conducted our audits in accordance
with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. The Company is not
required to have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the Companys internal control over financial reporting. Accordingly, we express no
such opinion. An audit also includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements, 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 provide a reasonable basis
for our opinion.

In our opinion, the consolidated
financial statements present fairly, in all material respects, the consolidated financial
position of the Company and its subsidiaries as of December 31, 2005 and 2004 and the
consolidated results of their operations, and their cash flows for each of the three years
then ended, in conformity with U.S. generally accepted accounting principles.

|                                          |                             
|----------------------------------------- | ----------------------------
|
|
|
|
|                                          |                             
|Brightman Almagor & Co.                   | Goldstein Sabo Tevet        
|                                         
|Certified Public Accountants              | Certified Public Accountants
|A member firm of Deloitte Touche Tohmatsu

Tel Aviv, Israel
March 12, 2006.

F - 2

---

---

|                           
|---------------------------
|CAMTEK LTD.                
|                           
|Consolidated Balance Sheets
|                           
|                           
|(In thousands)             

|                                                                                                                                                                               |  |              |         |      |  |        |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------ | ------- | ---- |  | ------ | -
|                                                                                                                                                                               |  | December 31, |        
|                                                                                                                                                                               |  |              |        
|                                                                                                                                                                               |  | 2006         |         | 2005 | 
|                                                                                                                                                                               |  |              |         |      | 
|                                                                                                                                                                               |  | U.S. Dollars |        
|                                                                                                                                                                               |  |              |        
|ASSETS                                                                                                                                                                         |  |              |         |      |  |        |  
|CURRENT ASSETS                                                                                                                                                                 |  |              |         |      |  |        |  
|Cash and cash equivalents                                                                                                                                                      |  |              | 23,358  |      |  | 8,714  |  
|Marketable securities (Note 3)                                                                                                                                                 |  |              | 2,099   |      |  | 2,101  |  
|Accounts receivable, net (Note 11b,c)                                                                                                                                          |  |              | 29,434  |      |  | 26,412 |  
|Inventories (Note 4)                                                                                                                                                           |  |              | 41,414  |      |  | 24,942 |  
|Due from affiliates                                                                                                                                                            |  |              | 180     |      |  | 290    |  
|Other current assets (Note 5)                                                                                                                                                  |  |              | 2,372   |      |  | 2,817  |  
|Deferred tax (Note 17)                                                                                                                                                         |  |              | 65      |      |  | -      |  
|                                                                                                                                                                               |  |              |         |      |  |        |  
|Total current assets                                                                                                                                                           |  |              | 98,922  |      |  | 65,276 |  
|                                                                                                                                                                               |  |              |         |      |  |        |  
|FIXED ASSETS (Note 6)                                                                                                                                                          |  |              |         |      |  |        |  
|Cost                                                                                                                                                                           |  |              | 15,927  |      |  | 14,405 |  
|Less - Accumulated depreciation                                                                                                                                                |  |              | 5,198   |      |  | 4,442  |  
|                                                                                                                                                                               |  |              |         |      |  |        |  
|Fixed assets, net                                                                                                                                                              |  |              | 10,729  |      |  | 9,963  |  
|                                                                                                                                                                               |  |              |         |      |  |        |  
|                                                                                                                                                                               |  |              |         |      |  |        |  
|Deferred tax (Note 17)                                                                                                                                                         |  |              | 369     |      |  | -      |  
|                                                                                                                                                                               |  |              |         |      |  |        |  
|                                                                                                                                                                               |  |              |         |      |  |        |  
|Other assets, net (Note 7)                                                                                                                                                     |  |              | 786     |      |  | -      |  
|                                                                                                                                                                               |  |              |         |      |  |        |  
|                                                                                                                                                                               |  |              |         |      |  |        |  
|Total assets                                                                                                                                                                   |  |              | 110,806 |      |  | 75,239 |  
|                                                                                                                                                                               |  |              |         |      |  |        |  
|                                                                                                                                                                               |  |              |         |      |  |        |  
|LIABILITIES                                                                                                                                                                    |  |              |         |      |  |        |  
|CURRENT LIABILITIES                                                                                                                                                            |  |              |         |      |  |        |  
|Accounts payable trade                                                                                                                                                        |  |              | 11,801  |      |  | 8,678  |  
|Due to affiliates                                                                                                                                                              |  |              | 814     |      |  | -      |  
|Other current liabilities (Note 8)                                                                                                                                             |  |              | 12,831  |      |  | 8,721  |  
|                                                                                                                                                                               |  |              |         |      |  |        |  
|Total current liabilities                                                                                                                                                      |  |              | 25,446  |      |  | 17,399 |  
|Convertible loan (Note 9)                                                                                                                                                      |  |              | 5,000   |      |  | 5,000  |  
|Liability for employee severance benefits
  (Note 10)                                                                                                                          |  |              | 222     |      |  | 222    |  
|                                                                                                                                                                               |  |              |         |      |  |        |  
|Total liabilities                                                                                                                                                              |  |              | 30,668  |      |  | 22,621 |  
|                                                                                                                                                                               |  |              |         |      |  |        |  
|SHAREHOLDERS EQUITY (Note 13)                                                                                                                                                 |  |              |         |      |  |        |  
|Ordinary shares NIS 0.01 par value,
  authorized 100,000,000 shares, issued 31,052,474 in 2006 and 28,095,516 in
  2005, outstanding 30,040,855 in 2006 and 27,083,897 in 2005 |  |              | 132     |      |  | 125    |  
|Additional paid-in capital                                                                                                                                                     |  |              | 59,420  |      |  | 43,732 |  
|Deferred stock-based compensation                                                                                                                                              |  |              | -       |      |  | (221   | )
|Accumulated other comprehensive loss
  Unrealized loss on marketable securities                                                                                                |  |              | (1      | )    |  | (2     | )
|Retained earnings                                                                                                                                                              |  |              | 21,580  |      |  | 9,977  |  
|                                                                                                                                                                               |  |              |         |      |  |        |  
|                                                                                                                                                                               |  |              | 81,131  |      |  | 53,611 |  
|Treasury stock, at cost (1,011,619 shares
  in 2006 and 2005)                                                                                                                  |  |              | (993    | )    |  | (993   | )
|                                                                                                                                                                               |  |              |         |      |  |        |  
|Total shareholders equity                                                                                                                                                     |  |              | 80,138  |      |  | 52,618 |  
|                                                                                                                                                                               |  |              |         |      |  |        |  
|COMMITMENTS AND CONTINGENT LIABILITIES (Note 11)                                                                                                                               |  |              |         |      |  |        |  
|Total liabilities and
  shareholders equity                                                                                                                                   |  |              | 110,806 |      |  | 75,239 |  
|                                                                                                                                                                               |  |              |         |      |  |        |  

See
accompanying notes to consolidated financial statements

F  3

---

---

|                                     
|-------------------------------------
|CAMTEK LTD.                          
|                                     
|Consolidated Statements of Operations
|                                     
|                                     
|(In
  thousands)                     

|                                                          |  |                         |         |      |  |        |   |  |        |  
|--------------------------------------------------------- |  | ----------------------- | ------- | ---- |  | ------ | - |  | ------ | -
|                                                          |  | Year Ended December 31, |        
|                                                          |  |                         |        
|                                                          |  | 2006                    |         | 2005 |  | 2004   |  
|                                                          |  |                         |         |      |  |        |  
|                                                          |  | U.S. Dollars            |        
|                                                          |  |                         |        
|                                                          |  |                         |         |      |  |        |   |  |        |  
|Revenues:                                                 |  |                         |         |      |  |        |   |  |        |  
|Sales of
  products                                       |  |                         | 92,470  |      |  | 56,987 |   |  | 63,353 |  
|Service fees                                              |  |                         | 7,585   |      |  | 6,045  |   |  | 4,066  |  
|                                                          |  |                         |         |      |  |        |   |  |        |  
|                                                          |  |                         |         |      |  |        |   |  |        |  
|Total
  revenues (Note 15)                                |  |                         | 100,055 |      |  | 63,032 |   |  | 67,419 |  
|                                                          |  |                         |         |      |  |        |   |  |        |  
|                                                          |  |                         |         |      |  |        |   |  |        |  
|Cost of
  revenues:                                       |  |                         |         |      |  |        |   |  |        |  
|Cost of
  products sold                                   |  |                         | 42,600  |      |  | 28,262 |   |  | 28,193 |  
|Cost of
  services                                        |  |                         | 5,842   |      |  | 4,519  |   |  | 3,168  |  
|                                                          |  |                         |         |      |  |        |   |  |        |  
|                                                          |  |                         |         |      |  |        |   |  |        |  
|Total cost
  of revenues                                  |  |                         | 48,442  |      |  | 32,781 |   |  | 31,361 |  
|                                                          |  |                         |         |      |  |        |   |  |        |  
|                                                          |  |                         |         |      |  |        |   |  |        |  
|Gross profit                                              |  |                         | 51,613  |      |  | 30,251 |   |  | 36,058 |  
|                                                          |  |                         |         |      |  |        |   |  |        |  
|                                                          |  |                         |         |      |  |        |   |  |        |  
|Research and
  development costs                          |  |                         | 11,831  |      |  | 8,469  |   |  | 7,328  |  
|Selling,
  general and administrative expenses (Note 16a) |  |                         | 27,850  |      |  | 18,760 |   |  | 15,953 |  
|Aborted
  share issuance expenses (Note 16c)              |  |                         | -       |      |  | -      |   |  | 1,122  |  
|                                                          |  |                         |         |      |  |        |   |  |        |  
|                                                          |  |                         |         |      |  |        |   |  |        |  
|Total
  operating expenses                                |  |                         | 39,681  |      |  | 27,229 |   |  | 24,403 |  
|                                                          |  |                         |         |      |  |        |   |  |        |  
|                                                          |  |                         |         |      |  |        |   |  |        |  
|Operating
  income                                        |  |                         | 11,932  |      |  | 3,022  |   |  | 11,655 |  
|                                                          |  |                         |         |      |  |        |   |  |        |  
|                                                          |  |                         |         |      |  |        |   |  |        |  
|Financial
  expenses, net (Note 16b)                      |  |                         | (288    | )    |  | (320   | ) |  | (359   | )
|                                                          |  |                         |         |      |  |        |   |  |        |  
|                                                          |  |                         |         |      |  |        |   |  |        |  
|Income
  before income taxes                              |  |                         | 11,644  |      |  | 2,702  |   |  | 11,296 |  
|Income taxes
  (Note 17)                                  |  |                         | (41     | )    |  | -      |   |  | (499   | )
|                                                          |  |                         |         |      |  |        |   |  |        |  
|                                                          |  |                         |         |      |  |        |   |  |        |  
|Net income                                                |  |                         | 11,603  |      |  | 2,702  |   |  | 10,797 |  
|                                                          |  |                         |         |      |  |        |   |  |        |  
|                                                          |  |                         |         |      |  |        |   |  |        |  
|Net income
  per ordinary share:                          |  |                         |         |      |  |        |   |  |        |  
|                                                          |  |                         |         |      |  |        |   |  |        |  
|Basic                                                     |  |                         | 0.40    |      |  | 0.10   |   |  | 0.40   |  
|                                                          |  |                         |         |      |  |        |   |  |        |  
|Diluted                                                   |  |                         | 0.39    |      |  | 0.10   |   |  | 0.39   |  
|                                                          |  |                         |         |      |  |        |   |  |        |  
|                                                          |  |                         |         |      |  |        |   |  |        |  
|Weighted
  average number of ordinary shares outstanding: |  |                         |         |      |  |        |   |  |        |  
|                                                          |  |                         |         |      |  |        |   |  |        |  
|Basic                                                     |  |                         | 29,176  |      |  | 27,253 |   |  | 27,114 |  
|                                                          |  |                         |         |      |  |        |   |  |        |  
|Diluted                                                   |  |                         | 29,553  |      |  | 27,586 |   |  | 27,800 |  
|                                                          |  |                         |         |      |  |        |   |  |        |  

See
accompanying notes to consolidated financial statements

F  4

---

---

|                                                 
|-------------------------------------------------
|CAMTEK LTD.                                      
|                                                 
|Consolidated
  Statements of Comprehensive Income
|                                                 
|                                                 
|(In thousands)                                   

|                                                                                                       |  |                         |        |      |  |       |   |  |        | 
|------------------------------------------------------------------------------------------------------ |  | ----------------------- | ------ | ---- |  | ----- | - |  | ------ | 
|                                                                                                       |  | Year Ended December 31, |       
|                                                                                                       |  |                         |       
|                                                                                                       |  | 2006                    |        | 2005 |  | 2004  |  
|                                                                                                       |  |                         |        |      |  |       |  
|                                                                                                       |  | U.S. Dollars            |       
|                                                                                                       |  |                         |       
|                                                                                                       |  |                         |        |      |  |       |   |  |        | 
|Net income                                                                                             |  |                         | 11,603 |      |  | 2,702 |   |  | 10,797 | 
|                                                                                                       |  |                         |        |      |  |       |   |  |        | 
|Other comprehensive income:                                                                            |  |                         |        |      |  |       |   |  |        | 
|                                                                                                       |  |                         |        |      |  |       |   |  |        | 
|Realization of loss on available for sale securities, net of taxes
  (nil)                             |  |                         | 2      |      |  | -     |   |  | -      | 
|                                                                                                       |  |                         |        |      |  |       |   |  |        | 
|Unrealized holding loss on available for sale securities arising
  during the year, net of taxes (nil) |  |                         | (1     | )    |  | (2    | ) |  | -      | 
|                                                                                                       |  |                         |        |      |  |       |   |  |        | 
|                                                                                                       |  |                         |        |      |  |       |   |  |        | 
|Comprehensive income                                                                                   |  |                         | 11,604 |      |  | 2,700 |   |  | 10,797 | 
|                                                                                                       |  |                         |        |      |  |       |   |  |        | 

See
accompanying notes to consolidated financial statements

F  5

---

---

|                                                                                 
|---------------------------------------------------------------------------------
|CAMTEK LTD.                                                                      
|                                                                                 
|Consolidated Statements of Shareholders Equity And Comprehensive
  Income (Loss)
|                                                                                 
|                                                                                 
|(In
  thousands, except share data)                                              

|                                             |  |                                       |            |                               |  |                                |  |                                         |            |                                                     |  |                                               |   |                  |      |                                |  |    |   |  |        |   |  |      |   |  |        |  
|-------------------------------------------- |  | ------------------------------------- | ---------- | ----------------------------- |  | ------------------------------ |  | --------------------------------------- | ---------- | --------------------------------------------------- |  | --------------------------------------------- | - | ---------------- | ---- | ------------------------------ |  | -- | - |  | ------ | - |  | ---- | - |  | ------ | -
|                                             |  | Ordinary Shares 
  NIS 0.01 par value |            | Number of
  treasury
  shares |  | Additional
  paid-in
  capital |  | Deferred
  stock
  based
  compensation |            | Accumulated
  other
  comprehensive
  income (loss) |  | Retained
  earnings
  (accumulated
  deficit) |   | Treasury
  stock |      | Total
  shareholders
  equity | 
|                                             |  |                                       |            |                               |  |                                |  |                                         |            |                                                     |  |                                               |   |                  |      |                                | 
|                                             |  | Shares                                |            | U.S. Dollars                  |  | Shares                         |  | U.S. Dollars                            |           
|                                             |  |                                       |            |                               |  |                                |  |                                         |           
|Balances at January 1, 2004                  |  |                                       | 28,065,038 |                               |  | 125                            |  |                                         | (1,011,619 | )                                                   |  | 43,801                                        |   |                  | (560 | )                              |  | -  |   |  | (3,522 | ) |  | (993 | ) |  | 38,851 |  
|Exercise of share options                    |  |                                       | 20,728     |                               |  | -                              |  |                                         | -          |                                                     |  | -                                             |   |                  | -    |                                |  | -  |   |  | -      |   |  | -    |   |  | -      |  
|Cancellation of share options                |  |                                       | -          |                               |  | -                              |  |                                         | -          |                                                     |  | (69                                           | ) |                  | 69   |                                |  | -  |   |  | -      |   |  | -    |   |  | -      |  
|Amortization of share options                |  |                                       | -          |                               |  | -                              |  |                                         | -          |                                                     |  | -                                             |   |                  | 128  |                                |  | -  |   |  | -      |   |  | -    |   |  | 128    |  
|Net income                                   |  |                                       | -          |                               |  | -                              |  |                                         | -          |                                                     |  | -                                             |   |                  | -    |                                |  | -  |   |  | 10,797 |   |  | -    |   |  | 10,797 |  
|                                             |  |                                       |            |                               |  |                                |  |                                         |            |                                                     |  |                                               |   |                  |      |                                |  |    |   |  |        |   |  |      |   |  |        |  
|Balances at December 31, 2004                |  |                                       | 28,085,766 |                               |  | 125                            |  |                                         | (1,011,619 | )                                                   |  | 43,732                                        |   |                  | (363 | )                              |  | -  |   |  | 7,275  |   |  | (993 | ) |  | 49,776 |  
|Exercise of share options                    |  |                                       | 9,750      |                               |  | -                              |  |                                         | -          |                                                     |  | 15                                            |   |                  | -    |                                |  | -  |   |  | -      |   |  | -    |   |  | 15     |  
|Cancellation of share options                |  |                                       | -          |                               |  | -                              |  |                                         | -          |                                                     |  | (15                                           | ) |                  | 15   |                                |  | -  |   |  | -      |   |  | -    |   |  | -      |  
|Amortization of share options                |  |                                       | -          |                               |  | -                              |  |                                         | -          |                                                     |  | -                                             |   |                  | 127  |                                |  | -  |   |  | -      |   |  | -    |   |  | 127    |  
|Unrealized loss on marketable Securities     |  |                                       | -          |                               |  | -                              |  |                                         | -          |                                                     |  | -                                             |   |                  | -    |                                |  | (2 | ) |  | -      |   |  | -    |   |  | (2     | )
|Net income                                   |  |                                       | -          |                               |  | -                              |  |                                         | -          |                                                     |  | -                                             |   |                  | -    |                                |  | -  |   |  | 2,702  |   |  | -    |   |  | 2,702  |  
|                                             |  |                                       |            |                               |  |                                |  |                                         |            |                                                     |  |                                               |   |                  |      |                                |  |    |   |  |        |   |  |      |   |  |        |  
|Balances at December 31, 2005                |  |                                       | 28,095,516 |                               |  | 125                            |  |                                         | (1,011,619 | )                                                   |  | 43,732                                        |   |                  | (221 | )                              |  | (2 | ) |  | 9,977  |   |  | (993 | ) |  | 52,618 |  
|                                             |  |                                       |            |                               |  |                                |  |                                         |            |                                                     |  |                                               |   |                  |      |                                |  |    |   |  |        |   |  |      |   |  |        |  
|Application of new accounting Standard 123R  |  |                                       | -          |                               |  | -                              |  |                                         | -          |                                                     |  | (221                                          | ) |                  | 221  |                                |  | -  |   |  | -      |   |  | -    |   |  | -      |  
|Share issuance, net of issuance expenses*    |  |                                       | 2,525,252  |                               |  | 6                              |  |                                         | -          |                                                     |  | 14,442                                        |   |                  | -    |                                |  | -  |   |  | -      |   |  | -    |   |  | 14,448 |  
|Exercise of share options                    |  |                                       | 431,706    |                               |  | 1                              |  |                                         | -          |                                                     |  | 701                                           |   |                  | -    |                                |  | -  |   |  | -      |   |  | -    |   |  | 702    |  
|Share based compensation expense             |  |                                       | -          |                               |  | -                              |  |                                         | -          |                                                     |  | 766                                           |   |                  | -    |                                |  | -  |   |  | -      |   |  | -    |   |  | 766    |  
|Realization of loss on marketable securities |  |                                       | -          |                               |  | -                              |  |                                         | -          |                                                     |  | -                                             |   |                  | -    |                                |  | 2  |   |  | -      |   |  | -    |   |  | 2      |  
|Unrealized loss on marketable securities     |  |                                       | -          |                               |  | -                              |  |                                         | -          |                                                     |  | -                                             |   |                  | -    |                                |  | (1 | ) |  | -      |   |  | -    |   |  | (1     | )
|Net income                                   |  |                                       | -          |                               |  | -                              |  |                                         | -          |                                                     |  | -                                             |   |                  | -    |                                |  | -  |   |  | 11,603 |   |  | -    |   |  | 11,603 |  
|                                             |  |                                       |            |                               |  |                                |  |                                         |            |                                                     |  |                                               |   |                  |      |                                |  |    |   |  |        |   |  |      |   |  |        |  
|Balances at December 31, 2006                |  |                                       | 31,052,474 |                               |  | 132                            |  |                                         | (1,011,619 | )                                                   |  | 59,420                                        |   |                  | -    |                                |  | (1 | ) |  | 21,580 |   |  | (993 | ) |  | 80,138 |  
|                                             |  |                                       |            |                               |  |                                |  |                                         |            |                                                     |  |                                               |   |                  |      |                                |  |    |   |  |        |   |  |      |   |  |        |  

|  |                                                           
|- | ----------------------------------------------------------
|* | Net of
  issuance expenses at the amount of $560 thousand.

See
accompanying notes to consolidated financial statements

F  6

---

---

|                                     
|-------------------------------------
|CAMTEK LTD.                          
|                                     
|Consolidated Statements of Cash Flows
|                                     
|                                     
|(In
  thousands)                     

|                                                                                              |  |                         |         |      |  |        |   |  |         |  
|--------------------------------------------------------------------------------------------- |  | ----------------------- | ------- | ---- |  | ------ | - |  | ------- | -
|                                                                                              |  | Year Ended December 31, |        
|                                                                                              |  |                         |        
|                                                                                              |  | 2006                    |         | 2005 |  | 2004   |  
|                                                                                              |  |                         |         |      |  |        |  
|                                                                                              |  | U.S. Dollars            |        
|                                                                                              |  |                         |        
|                                                                                             
|Cash flows from operating activities:                                                         |  |                         |         |      |  |        |   |  |         |  
|Net income                                                                                    |  |                         | 11,603  |      |  | 2,702  |   |  | 10,797  |  
|Adjustments to reconcile net income to net
  cash provided by (used in) operating activities: |  |                         |         |      |  |        |   |  |         |  
|Depreciation and amortization                                                                 |  |                         | 794     |      |  | 658    |   |  | 747     |  
|Loss (gain) on disposal of fixed assets                                                       |  |                         | 24      |      |  | (6     | ) |  | (4      | )
|Gain from marketable securities, net                                                          |  |                         | (6      | )    |  | -      |   |  | -       |  
|Amortization of unearned compensation                                                         |  |                         | 766     |      |  | 127    |   |  | 128     |  
|Provision for bad debts, net                                                                  |  |                         | 647     |      |  | (30    | ) |  | 146     |  
|Accrued severance pay                                                                         |  |                         | -       |      |  | -      |   |  | (190    | )
|                                                                                              |  |                         |         |      |  |        |   |  |         |  
|Changes in operating assets and
  liabilities:                                                |  |                         |         |      |  |        |   |  |         |  
|Accounts receivable                                                                           |  |                         | (4,099  | )    |  | (4,154 | ) |  | (8,958  | )
|Inventories                                                                                   |  |                         | (16,472 | )    |  | (50    | ) |  | (11,205 | )
|Deferred tax                                                                                  |  |                         | (434    | )    |  | -      |   |  | -       |  
|Due to affiliates, net                                                                        |  |                         | 924     |      |  | 189    |   |  | 2,173   |  
|Other current assets and deferred expenses                                                    |  |                         | (229    | )    |  | (724   | ) |  | 823     |  
|Accounts payable - trade                                                                      |  |                         | 3,123   |      |  | 463    |   |  | 1,230   |  
|Other current liabilities                                                                     |  |                         | 4,110   |      |  | 626    |   |  | 2,457   |  
|                                                                                              |  |                         |         |      |  |        |   |  |         |  
|Net cash provided by (used in) operating
  activities                                         |  |                         | 751     |      |  | (199   | ) |  | (1,856  | )
|                                                                                              |  |                         |         |      |  |        |   |  |         |  
|Cash flows from investing activities:                                                         |  |                         |         |      |  |        |   |  |         |  
|Purchase of marketable securities                                                             |  |                         | (3,891  | )    |  | (2,103 | ) |  | -       |  
|Proceeds from sale of marketable securities
  available for sale                              |  |                         | 3,900   |      |  | -      |   |  | -       |  
|Purchase of fixed assets                                                                      |  |                         | (1,582  | )    |  | (673   | ) |  | (829    | )
|Purchase of intangible assets                                                                 |  |                         | (114    | )    |  | -      |   |  | -       |  
|Proceeds from disposal of fixed assets                                                        |  |                         | -       |      |  | 18     |   |  | 25      |  
|                                                                                              |  |                         |         |      |  |        |   |  |         |  
|Net cash used in investing activities                                                         |  |                         | (1,687  | )    |  | (2,758 | ) |  | (804    | )
|                                                                                              |  |                         |         |      |  |        |   |  |         |  
|Cash flows from financing activities:                                                         |  |                         |         |      |  |        |   |  |         |  
|(Decrease) increase in short-term bank
  credit                                               |  |                         | -       |      |  | (2,335 | ) |  | 35      |  
|Net proceeds from issuance of ordinary
  shares                                               |  |                         | 14,448  |      |  | -      |   |  | -       |  
|Exercise of share options                                                                     |  |                         | 702     |      |  | 15     |   |  | -       |  
|Long-term convertible loan                                                                    |  |                         | -       |      |  | 5,000  |   |  | -       |  
|Aborted share issuance expenses                                                               |  |                         | -       |      |  | -      |   |  | (1,122  | )
|                                                                                              |  |                         |         |      |  |        |   |  |         |  
|Net cash provided by (used in) financing
  activities                                         |  |                         | 15,150  |      |  | 2,680  |   |  | (1,087  | )
|                                                                                              |  |                         |         |      |  |        |   |  |         |  
|Effect of exchange rate changes on cash                                                       |  |                         | 430     |      |  | (150   | ) |  | 51      |  
|                                                                                              |  |                         |         |      |  |        |   |  |         |  
|                                                                                              |  |                         |         |      |  |        |   |  |         |  
|Net increase (decrease) in cash and cash
  equivalents                                        |  |                         | 14,644  |      |  | (427   | ) |  | (3,696  | )
|Cash and cash equivalents at beginning of
  the year                                          |  |                         | 8,714   |      |  | 9,141  |   |  | 12,837  |  
|                                                                                              |  |                         |         |      |  |        |   |  |         |  
|Cash and cash equivalents at end of the
  year                                                |  |                         | 23,358  |      |  | 8,714  |   |  | 9,141   |  
|                                                                                              |  |                         |         |      |  |        |   |  |         |  
|Supplemental disclosure of cash flow
  information:                                           |  |                         |         |      |  |        |   |  |         |  
|Cash paid during the year for:                                                                |  |                         |         |      |  |        |   |  |         |  
|Interest                                                                                      |  |                         | 422     |      |  | 405    |   |  | 450     |  
|Income taxes                                                                                  |  |                         | 27      |      |  | 216    |   |  | 479     |  

See
accompanying notes to consolidated financial statements

F  7

---

---

|                                                                             
|-----------------------------------------------------------------------------
|CAMTEK LTD.                                                                  
|                                                                             
|Notes to Consolidated Financial Statements as of December 31, 2006
  and 2005
|                                                                             

NOTE 1  BUSINESS

Camtek Ltd.
(Camtek), an Israeli corporation, is a majority owned (61.9%) subsidiary of
Priortech Ltd., an Israeli corporation listed on the Tel-Aviv Stock Exchange.
Camtek designs, develops manufactures and markets automatic optical inspection
systems (AOI systems) and related products. Camteks AOI systems are used for
yield enhancement for various applications in the electronic supply chain
industry. The main applications along this supply chain are the production of
Microelectronics, Printed Circuit Boards (PCB) and Electronic packaging. Camteks activities are conducted in one
reportable business segment.

NOTE 2
 SIGNIFICANT ACCOUNTING POLICIES

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|A. | Principles of Consolidation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | The accompanying consolidated financial statements, which include the
  accounts of Camtek and its subsidiaries (collectively the Company), are
  prepared in accordance with U.S. generally accepted accounting principles.
  All material intercompany balances and transactions have been eliminated in
  consolidation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|B. | Use of Estimates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | The
  preparation of the consolidated financial statements in conformity with U.S.
  generally accepted accounting principles requires management to make
  estimates and assumptions that affect the reported amounts of assets and
  liabilities and disclosure of contingent assets and liabilities at the date
  of the financial statements and the reported amounts of revenues and expenses
  during the reporting period. Actual results may differ from those estimates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|C. | Foreign currency transactions:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | The
  functional currency of the Company is the U.S. Dollar. Most of the revenue
  generated by the Company is from outside of Israel and a majority thereof are
  received in U.S. Dollars. In addition, materials and components purchased and
  marketing expenses incurred are either paid for in U.S. Dollars or in New
  Israeli Shekels (NIS) linked to changes in the U.S. Dollar/NIS exchange
  rate. A significant portion of the Companys expenses are incurred in Israel
  and paid for in NIS. Transactions not denominated in U.S. Dollar are
  recorded upon their initial recognition according to the exchange rate in
  effect on the date of the transaction. Exchange rate differences arising upon
  the settlement of monetary items or upon reporting the Companys monetary
  items at exchange rates different from that by which they were initially
  recorded during the period, or reported in previous financial statements, are
  charged to financial income or expense. Foreign currency income
  (expenses) included in financial income (expenses), net, resulting from
  transactions not denominated in U.S. Dollars amounted to $(435), $(238) and
  $89 thousand in 2006, 2005 and 2004, respectively.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|D. | Cash equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | All highly
  liquid investments purchased with maturity of three months or less are
  considered to be cash equivalents.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|E. | Marketable securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | The Company
  accounts for its investments in marketable securities in accordance with
  Statement of Financial Accounting Standard (SFAS) No. 115 Accounting for
  Certain Investments in Debt and Equity Securities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | As of
  December 31, 2006 all marketable securities are designated as
  available-for-sale and accordingly are recorded at fair value. Unrealized
  holding gains and losses, net of the related tax effect, on
  available-for-sale securities are excluded from earnings and are reported as
  a separate component of other comprehensive income until realized.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

F  8

---

---

|                                                                             
|-----------------------------------------------------------------------------
|CAMTEK LTD.                                                                  
|                                                                             
|Notes to Consolidated Financial Statements as of December 31, 2006
  and 2005
|                                                                             

NOTE 2
  SIGNIFICANT ACCOUNTING POLICIES
(Contd)

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|F. | Allowance for doubtful accounts                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | The allowance for doubtful accounts is Managements best estimate of
  the probable loss inherent to existing accounts receivable. In the
  appropriate allowance, Management bases its estimate on information at hand
  about specific debtors, including aging of the balance, assessment of the
  underlying security received, the history of write-offs, relationships with
  the customers and the overall credit worthiness of the customers.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|G. | Inventories                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Inventories consist of completed AOI systems, AOI systems partially
  completed and components, and are recorded at the lower of cost, determined
  by the moving - average basis, or market.                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|H. | Fixed assets                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Fixed assets
  are stated at cost less accumulated depreciation, and are depreciated over
  their estimated useful lives on a straight-line basis.                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Annual rates
  of depreciation are as follows:                                                                                                                                                                                                                                                                                                                                                                                                       

|                               |  |  |            | 
|------------------------------ |  |  | ---------- | 
|Building                       |  |  | 2%         | 
|Machinery and equipment        |  |  | 10
  - 33% | 
|Office furniture and equipment |  |  | 6
  - 20%  | 
|Automobiles                    |  |  | 15%        | 

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | Leasehold
  improvements are amortized by the straight-line method over the lower of the
  lease term or the estimated useful economic life.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|I. | Other assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Other
  assets, comprised of intellectual property, are capitalized at cost and
  amortized, beginning with the first year of utilization, over its expected
  life of ten years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|J. | Long-lived assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The Company
  applies SFAS No. 144, Accounting for the Impairment or Disposal of
  Long-Lived Assets. This Statement requires that long-lived assets be
  reviewed for impairment whenever events or changes in circumstances indicate
  that the carrying amount of an asset may not be recoverable. Recoverability
  of assets to be held and used is measured by a comparison of the carrying
  amount of an asset to undiscounted future cash flows expected to be generated
  by the asset or used in its disposal. If the carrying amount of the long
  lived asset exceeds its estimated undiscounted future cash flows, an
  impairment charge is recognized as computed by subtracting the fair market
  value of the asset from its carrying value.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|K. | Fair values of financial instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The carrying
  amounts for cash and cash equivalents, accounts receivable, accounts payable,
  accrued expenses and amounts due from affiliates approximate fair value
  because of the short-term duration of those items. Marketable securities are
  carried at quoted market prices, which represent fair value. The carrying
  amounts of short-term bank credit, convertible loan and amounts due to or
  from Priortech Ltd. approximate fair value because the interest rates on such
  debt approximate the market rate.                                                                                                                                                                                                                              

F  9

---

---

|                                                                             
|-----------------------------------------------------------------------------
|CAMTEK LTD.                                                                  
|                                                                             
|Notes to Consolidated Financial Statements as of December 31, 2006
  and 2005
|                                                                             

NOTE 2
 SIGNIFICANT ACCOUNTING POLICIES (Contd)

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|L. | Revenue recognition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The Company
  recognizes revenue from sales in accordance with Securities and Exchange
  Commission Staff Accounting Bulletin No. 104 SAB 104 and Financial
  Accounting Standard Boards Emerging Issues Task Force (EITF) Issue No.
  00-21, Revenue Arrangements with Multiple Deliverables. Accordingly, the
  Company recognizes revenue from sales of its products when the products are
  installed at the customers premises and are operating in accordance with its
  specifications, signed documentation of the arrangement, such as a signed
  contract or purchase order, has been received, the price is fixed or
  determinable, and collectibility is reasonably assured.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Service
  revenues consist mainly of revenues from maintenance contracts and are
  recognized ratably over the contract period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Non-standard
  warranty is deferred as unearned revenue and is recognized ratably as revenue
  when the applicable warranty term period commences.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|M. | Warranty                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The Company
  records a liability for product warranty obligations at the time of sale
  based upon historical warranty experience. The term of the warranty is
  generally twelve months.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Changes in
  the product warranty obligations are as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

|                    |  |                             |        |      |  |        |  
|------------------- |  | --------------------------- | ------ | ---- |  | ------ | -
|                    |  | December 31,                |       
|                    |  |                             |       
|                    |  | 2006                        |        | 2005 | 
|                    |  |                             |        |      | 
|                    |  | U.S. Dollars (In thousands) |       
|                    |  |                             |       
|                    |  |                             |       
|Beginning of year   |  |                             | 1,162  |      |  | 1,703  |  
|Change in estimates |  |                             | (442   | )    |  | -      |  
|New warranties      |  |                             | 2,020  |      |  | 2,003  |  
|Reductions          |  |                             | (1,683 | )    |  | (2,544 | )
|                    |  |                             |        |      |  |        |  
|End of year         |  |                             | 1,057  |      |  | 1,162  |  
|                    |  |                             |        |      |  |        |  

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|N. | Income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | The Company
  accounts for income taxes in accordance with SFAS No. 109, Accounting for
  Income Taxes (SFAS No. 109). This Statement prescribes the use of the
  liability method whereby deferred tax asset and liability account balances
  are determined based on differences between financial reporting and tax bases
  of assets and liabilities and are measured using the enacted tax rates and
  laws that will be in effect when the differences are expected to reverse. The
  Company provides a valuation allowance, if necessary, to reduce deferred tax
  assets to their estimated realizable value.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|O. | Research and development                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Research and
  development costs are expensed as incurred.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|P. | Earnings
  per ordinary share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | Basic earnings per
  ordinary share is calculated using only weighted average ordinary shares
  outstanding. Diluted earnings per share, if relevant, gives effect to
  dilutive potential ordinary shares outstanding during the year. Such dilutive
  shares consist of incremental shares, using the treasury stock method, from
  the assumed exercise of share options.                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | In the years ended
  December 31, 2006 ,2005 and 2004, the effect of the exercise of
  outstanding share options is dilutive, and was included in computing diluted
  earning per ordinary share.                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   | In
  the year ended December 31, 2006 and 2005, the effect of warrants and
  conversion of convertible loan is anti-dilutive, and has not been included in
  computing dilutive earning per ordinary share.                                                                                                                                                                                                                                                                                                                                                                                                               

F  10

---

---

|                                                                             
|-----------------------------------------------------------------------------
|CAMTEK LTD.                                                                  
|                                                                             
|Notes to Consolidated Financial Statements as of December 31, 2006
  and 2005
|                                                                             

NOTE 2
 SIGNIFICANT ACCOUNTING POLICIES (Contd)

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Q. | Stock Option Plan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Prior to fiscal 2006, the Company applied the intrinsic value method
  as prescribed in Accounting Principles Board Opinion No. 25, Accounting
  for Stock Issued to Employees (APB No. 25), and related
  interpretations, in accounting for stock options granted under the stock
  option plan. Under the intrinsic value method, compensation cost is
  recognized if the exercise price of the Companys employee stock options was
  less than the market price of the underlying stock on the date of the grant.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | Effective January 1, 2006, the Company adopted
  FASB Statement No. 123(R), Share-Based Payment (Statement
  123(R)). This statement replaces FASB Statement No. 123, Accounting for
  Stock-Based Compensation (Statement 123) and supersedes APB No. 25.
  Statement 123(R) requires that all stock-based compensation be recognized as
  an expense in the financial statements and that such cost be measured at the
  fair value of the award. This statement was adopted using the modified prospective
  method of application, which requires the Company to recognize compensation
  cost on a prospective basis. Therefore, prior years financial statements
  have not been restated. Under this method, the Company recorded stock-based
  compensation expense for awards granted prior to, but not yet vested as of
  January 1, 2006, using the fair value amounts determined for pro forma
  disclosures under Statement 123. For stock-based awards granted after
  January 1, 2006, the Company recognizes compensation expense based on
  estimated grant date fair value using the Black-Scholes option-pricing model.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   | The following table illustrates the effect on net income for the
  years ended December 31, 2005 and 2004 as if the Company had applied the
  fair value recognition provisions of Statement 123(R) to options granted
  under the Companys stock plans prior to adoption of Statement 123(R) on
  January 1, 2006. No pro forma disclosure has been made for periods
  subsequent to January 1, 2006 as all stock-based compensation has been
  recognized in net income. For purposes of this pro forma disclosure, the
  value of the options is estimated using a Black-Scholes option-pricing model
  and amortized to expense over the options service periods with forfeitures
  recognized as they occurred.                                                                                                                                                                                                                                                                                                                                                                                                                         

|                                                                                 |  |                             |       |      |  |        |  
|-------------------------------------------------------------------------------- |  | --------------------------- | ----- | ---- |  | ------ | -
|                                                                                 |  | 2005                        |       | 2004 | 
|                                                                                 |  |                             |       |      | 
|                                                                                 |  | U.S. Dollars (In thousands) |      
|                                                                                 |  |                             |      
|                                                                                 |  |                             |       |      |  |        |  
|Net income, as reported                                                          |  |                             | 2,702 |      |  | 10,797 |  
|                                                                                 |  |                             |       |      |  |        |  
|Stock-based employee compensation expense included in reported net
  income      |  |                             | 127   |      |  | 128    |  
|Stock-based employee compensation determined under the fair value
  based method |  |                             | (560  | )    |  | (688   | )
|                                                                                 |  |                             |       |      |  |        |  
|Pro forma net income                                                             |  |                             | 2,269 |      |  | 10,237 |  
|                                                                                 |  |                             |       |      |  |        |  
|                                                                                 |  |                             |       |      |  |        |  
|Income per share:                                                                |  |                             |       |      |  |        |  
|Basic - as reported                                                              |  |                             | 0.10  |      |  | 0.40   |  
|                                                                                 |  |                             |       |      |  |        |  
|Basic - pro forma                                                                |  |                             | 0.08  |      |  | 0.38   |  
|                                                                                 |  |                             |       |      |  |        |  
|Diluted - as reported                                                            |  |                             | 0.10  |      |  | 0.39   |  
|                                                                                 |  |                             |       |      |  |        |  
|Diluted - pro forma                                                              |  |                             | 0.08  |      |  | 0.37   |  
|                                                                                 |  |                             |       |      |  |        |  

F  11

---

---

|                                                                             
|-----------------------------------------------------------------------------
|CAMTEK LTD.                                                                  
|                                                                             
|Notes to Consolidated Financial Statements as of December 31, 2006 and
  2005
|                                                                             

NOTE 2
 SIGNIFICANT ACCOUNTING POLICIES (Contd)

|   |                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-- | ------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|R. | Reclassification                                                                                                               
|   |                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | Certain
  prior years amounts have been reclassified in conformity with the current
  years financial statements presentation.
|   |                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|S. | Recently Issued Accounting Standards                                                                                           
|   |                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | 1.                                                                                                                              | In June
  2006, the FASB issued Interpretation No. 48, Accounting for Uncertainty in
  Income Taxes-an Interpretation of FASB Statement No. 109 (FIN 48). FIN 48
  clarifies the accounting for uncertainty in income taxes recognized in an
  enterprises financial statements in accordance with SFAS No. 109,
  Accounting for Income Taxes. FIN 48 prescribes a recognition threshold and
  measurement attribute for the financial statement recognition and measurement
  of a tax position taken or expected to be taken in a tax return. FIN 48 is
  effective for fiscal years beginning after December 15, 2006. The Company is
  currently reviewing this new standard to determine its effects, if any, on
  its results of operations or financial position.                                                                                                                                       
|   |                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | 2.                                                                                                                              | In September
  2006, the SEC issued Staff Accounting Bulletin No. 108 (SAB No. 108). SAB
  No. 108 addresses the process and diversity in practice of quantifying
  financial statement misstatements resulting in the potential build up of
  improper amounts on the balance sheet. The Company will be required to adopt
  the provisions of SAB No.108 in fiscal year 2007. The adoption of SAB No. 108
  did not have an impact on its consolidated financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | 3.                                                                                                                              | In September 2006, the FASB issued SFAS No. 157, Fair Value
  Measurements, (SFAS No. 157). SFAS No. 157 defines fair value, establishes
  a framework for measuring fair value and expands disclosures about fair value
  measurements. The changes to current practice resulting from the application
  of this Statement relate to the definition of fair value, the methods used to
  measure fair value, and the expanded disclosures about fair value
  measurements. The Statement is effective for fiscal years beginning after
  November 15, 2007 and interim periods within those fiscal years. The Company
  does not anticipate that the adoption of the provisions of SFAS No. 157 will
  materially impact its financial position and results of operations.                                                                                                                                        
|   |                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | 4.                                                                                                                              | In February
  2007, the FASB issued FASB Statement No. 159, The Fair Value Option for
  Financial Assets and Financial Liabilities  Including an amendment of FASB
  Statement No. 115, which permits entities to choose to measure many financial
  instruments at fair value. The Statement allows entities to achieve an offset
  accounting effect for certain changes in fair value of certain related assets
  and liabilities without having to apply complex hedge accounting provisions,
  and is expected to expand the use of fair value measurement consistent with
  the Boards long-term objectives for financial instruments. This Statement is
  effective as of the beginning of an entitys first fiscal year that begins
  after November 15, 2007. The Company is currently reviewing this new standard
  to determine its effects, if any, on its results of operations or financial
  position.
|   |                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|T. | Recently Adopted Accounting Standards                                                                                          
|   |                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | 1.                                                                                                                              | Effective
  January 1, 2006, the Company adopted the fair value recognition provisions of
  Statement 123(R) using the modified-prospective-transition method (refer to
  note 2Q).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | 2.                                                                                                                              | Effective
  January 1, 2006, the Company adopted FASB Statement No. 151, Inventory Costs
   an Amendment of ARB No. 43, Chapter 4 (Statement 151). Statement 151
  clarifies the accounting for abnormal amounts of idle facility expense,
  freight, handling costs, and wasted material (spoilage) requiring that those
  items be recognized as current-period charges. In addition, Statement 151
  requires that allocation of fixed production overheads be based on the normal
  capacity of the production facilities. The Companys current procedures
  follow these guidelines and therefore the adoption of Statement 151 had no
  impact on the valuation of inventory or charges to cost of sales.                                                                                                                                                                                                    

F  12

---

---

|                                                                             
|-----------------------------------------------------------------------------
|CAMTEK LTD.                                                                  
|                                                                             
|Notes to Consolidated Financial Statements as of December 31, 2006 and
  2005
|                                                                             

NOTE 2  SIGNIFICANT ACCOUNTING POLICIES
(Contd)

|   |                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|-- | ---------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|T. | Recently Adopted Accounting Standards (contd)
|   |                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | 3.                                             | Effective
  January 1, 2006, the Company adopted the disclosure requirements of EITF
  Issue No. 06-3, How Taxes Collected from Customers and Remitted to
  Governmental Authorities Should be Presented in the Income Statement (that
  is, gross versus net presentation) for tax receipts on the face of their
  income statements. The scope of this guidance includes any tax assessed by a
  governmental authority that is directly imposed on a revenue-producing
  transaction between a seller and a customer and may include, but is not
  limited to, sales, use, value added, and some excise taxes (gross receipts
  taxes are excluded). The Company has historically presented such taxes on a
  net basis.                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | 4.                                             | In September
  2006, the FASB issued SFAS No. 158, Employers Accounting for Defined Benefit
  Pension and Other Postretirement Plans  an amendment of FASB Statements
  No.87, 88, 106, and 132(R), (SFAS No. 158). SFAS No. 158 requires an
  employer to recognize the over-funded or under-funded status of a defined
  benefit postretirement plan (other than a multiemployer plan) as an asset or
  liability in its statement of financial position. To recognize changes in
  that funded status in the year in which the changes occur through
  comprehensive income of a business entity or changes in unrestricted net
  assets of a not-for-profit organization. The provisions of this Statement are
  effective for an employer with publicly traded equity securities are required
  to recognize the funded status of a defined benefit postretirement plan and
  to provide the required disclosures as of the end of the fiscal year ending
  after December 15, 2006. The adoption of Statement 158 had no impact on the
  valuation of inventory or charges to cost of sales.

NOTE 3  MARKETABLE SECURITIES

|                          |  |                             |       |      |  |       | 
|------------------------- |  | --------------------------- | ----- | ---- |  | ----- | 
|                          |  | 2006                        |       | 2005 | 
|                          |  |                             |       |      | 
|                          |  | U.S. Dollars (In thousands) |      
|                          |  |                             |      
|Available for sale:       |  |                             |       |      |  |       | 
|Corporate debt securities |  |                             | 599   |      |  | 601   | 
|Auction rate securities   |  |                             | 1,500 |      |  | 1,500 | 
|                          |  |                             |       |      |  |       | 
|                         
|                          |  |                             | 2,099 |      |  | 2,101 | 
|                          |  |                             |       |      |  |       | 

The carrying
amount, gross unrealized holding losses, and fair value of available-for-sale
debt securities by major security type and class of security at December 31,
2006 and 2005 were as follows:

|                          |  |                             |       |                                     |  |            |   |  |       | 
|------------------------- |  | --------------------------- | ----- | ----------------------------------- |  | ---------- | - |  | ----- | 
|                          |  | Carrying
  amount           |       | Gross unrealized
  Holding (losses) |  | Fair value |  
|                          |  |                             |       |                                     |  |            |  
|                          |  | U.S. Dollars (In thousands) |      
|                          |  |                             |      
|                         
|At
  December 31, 2006:   |  |                             |       |                                     |  |            |   |  |       | 
|Available
  for sale:     |  |                             |       |                                     |  |            |   |  |       | 
|Corporate debt securities |  |                             | 600   |                                     |  | (1         | ) |  | 599   | 
|Auction rate securities   |  |                             | 1,500 |                                     |  | -          |   |  | 1,500 | 
|                          |  |                             |       |                                     |  |            |   |  |       | 
|                          |  |                             | 2,100 |                                     |  | (1         | ) |  | 2,099 | 
|                          |  |                             |       |                                     |  |            |   |  |       | 
|At
  December 31, 2005:   |  |                             |       |                                     |  |            |   |  |       | 
|Available
  for sale:     |  |                             |       |                                     |  |            |   |  |       | 
|Corporate debt securities |  |                             | 603   |                                     |  | (2         | ) |  | 601   | 
|Auction rate securities   |  |                             | 1,500 |                                     |  | -          |   |  | 1,500 | 
|                          |  |                             |       |                                     |  |            |   |  |       | 
|                          |  |                             | 2,103 |                                     |  | (2         | ) |  | 2,101 | 
|                          |  |                             |       |                                     |  |            |   |  |       | 

F  13

---

---

|                                                                             
|-----------------------------------------------------------------------------
|CAMTEK LTD.                                                                  
|                                                                             
|Notes to Consolidated Financial Statements as of December 31, 2006 and
  2005
|                                                                             

NOTE 3  MARKETABLE SECURITIES (Contd)

Maturities of
debt securities classified as available-for-sale were as follows at December
31, 2006:

|                                         |  |                             |       |            |  |       | 
|---------------------------------------- |  | --------------------------- | ----- | ---------- |  | ----- | 
|                                         |  | Carrying amount             |       | Fair value | 
|                                         |  |                             |       |            | 
|                                         |  | U.S. Dollars (In thousands) |      
|                                         |  |                             |      
|Available
  for sale:                    |  |                             |       |            |  |       | 
|First year                               |  |                             | 600   |            |  | 599   | 
|Due after five years
  through ten years |  |                             | 1,500 |            |  | 1,500 | 
|                                         |  |                             |       |            |  |       | 
|                                         |  |                             | 2,100 |            |  | 2,099 | 
|                                         |  |                             |       |            |  |       | 

Proceeds from
the sale of investment securities available for sale were $3,900 and nil in
2006 and 2005, respectively; gross realized gains included in other finance
income in 2006 and 2005 were $6 and nil, respectively.

Gross
unrealized losses on investment securities and the fair value of the related
securities, aggregated by investment category have been in a continuous
unrealized loss position for less than 12 months, at December 31, 2006 were as
follow:

|                            |  |                             |    |            |  |       | 
|--------------------------- |  | --------------------------- | -- | ---------- |  | ----- | 
|                            |  | Unrealized losses           |    | Fair value | 
|                            |  |                             |    |            | 
|                            |  | U.S. Dollars (In thousands) |   
|                            |  |                             |   
|Corporate
  debt securities |  |                             | (1 | )          |  | 599   | 
|Action
  rate securities    |  |                             | -  |            |  | 1,500 | 
|                            |  |                             |    |            |  |       | 
|                            |  |                             | (1 | )          |  | 2,099 | 
|                            |  |                             |    |            |  |       | 

NOTE 4  INVENTORIES

|                                                                                |  |                             |        |      |  |        | 
|------------------------------------------------------------------------------- |  | --------------------------- | ------ | ---- |  | ------ | 
|                                                                                |  | December 31,                |       
|                                                                                |  |                             |       
|                                                                                |  | 2006                        |        | 2005 | 
|                                                                                |  |                             |        |      | 
|                                                                                |  | U.S. Dollars (In thousands) |       
|                                                                                |  |                             |       
|                                                                               
|Components                                                                      |  |                             | 17,702 |      |  | 9,020  | 
|Systems partially
  completed                                                   |  |                             | 5,340  |      |  | 4,392  | 
|Completed systems, including
  systems not yet purchased, at customer locations |  |                             | 18,372 |      |  | 11,530 | 
|                                                                                |  |                             |        |      |  |        | 
|                                                                                |  |                             |        |      |  |        | 
|                                                                                |  |                             | 41,414 |      |  | 24,942 | 
|                                                                                |  |                             |        |      |  |        | 

F  14

---

---

|                                                                             
|-----------------------------------------------------------------------------
|CAMTEK LTD.                                                                  
|                                                                             
|Notes to Consolidated Financial Statements as of December 31, 2006 and
  2005
|                                                                             

NOTE 5  OTHER CURRENT ASSETS

|                                  |  |                             |       |      |  |       | 
|--------------------------------- |  | --------------------------- | ----- | ---- |  | ----- | 
|                                  |  | December 31,                |      
|                                  |  |                             |      
|                                  |  | 2006                        |       | 2005 | 
|                                  |  |                             |       |      | 
|                                  |  | U.S. Dollars (In thousands) |      
|                                  |  |                             |      
|                                 
|Due from Government
  institution |  |                             | 743   |      |  | 846   | 
|Due from employees                |  |                             | 196   |      |  | 184   | 
|Prepaid expenses                  |  |                             | 480   |      |  | 482   | 
|Advances to suppliers             |  |                             | 519   |      |  | 461   | 
|Deposits to leaseholders          |  |                             | 110   |      |  | 562   | 
|Other                             |  |                             | 324   |      |  | 282   | 
|                                  |  |                             |       |      |  |       | 
|                                  |  |                             |       |      |  |       | 
|                                  |  |                             | 2,372 |      |  | 2,817 | 
|                                  |  |                             |       |      |  |       | 

NOTE 6  FIXED ASSETS

|                                 |  |                             |        |      |  |        | 
|-------------------------------- |  | --------------------------- | ------ | ---- |  | ------ | 
|                                 |  | December 31,                |       
|                                 |  |                             |       
|                                 |  | 2006                        |        | 2005 | 
|                                 |  |                             |        |      | 
|                                 |  | U.S. Dollars (In thousands) |       
|                                 |  |                             |       
|                                
|Land                             |  |                             | 815    |      |  | 815    | 
|Building                         |  |                             | 7,998  |      |  | 7,636  | 
|Machinery and equipment          |  |                             | 4,048  |      |  | 3,170  | 
|Office furniture and
  equipment |  |                             | 2,385  |      |  | 2,223  | 
|Automobiles                      |  |                             | 295    |      |  | 222    | 
|Leasehold improvements           |  |                             | 386    |      |  | 339    | 
|                                 |  |                             |        |      |  |        | 
|                                 |  |                             |        |      |  |        | 
|                                 |  |                             | 15,927 |      |  | 14,405 | 
|Less accumulated
  depreciation  |  |                             | 5,198  |      |  | 4,442  | 
|                                 |  |                             |        |      |  |        | 
|                                 |  |                             |        |      |  |        | 
|                                 |  |                             | 10,729 |      |  | 9,963  | 
|                                 |  |                             |        |      |  |        | 

Depreciation
expenses for the years ended December 31, 2006, 2005 and 2004 are summarized to
$792, $658 and $747 thousand, respectively.

NOTE 7  OTHER ASSETS

|                          |  |                             |     |      |  |   | 
|------------------------- |  | --------------------------- | --- | ---- |  | - | 
|                          |  | December 31,                |    
|                          |  |                             |    
|                          |  | 2006                        |     | 2005 | 
|                          |  |                             |     |      | 
|                          |  | U.S. Dollars (In thousands) |    
|                          |  |                             |    
|                         
|Deferred expenses         |  |                             | 215 |      |  | - | 
|Deposits to lease holders |  |                             | 459 |      |  | - | 
|Intangible assets (A)     |  |                             | 112 |      |  | - | 
|                          |  |                             |     |      |  |   | 
|                          |  |                             |     |      |  |   | 
|                          |  |                             | 786 |      |  | - | 
|                          |  |                             |     |      |  |   | 

F  15

---

---

|                                                                             
|-----------------------------------------------------------------------------
|CAMTEK LTD.                                                                  
|                                                                             
|Notes to Consolidated Financial Statements as of December 31, 2006
  and 2005
|                                                                             

NOTE 7  OTHER ASSETS (Contd)

|   |                           
|-- | --------------------------
|A. | Patents registration costs

|                             |  |                             |     |                             |  |                          |  |                       |     |  |  |    | 
|---------------------------- |  | --------------------------- | --- | --------------------------- |  | ------------------------ |  | --------------------- | --- |  |  | -- | 
|                             |  | December 31, 2006           |    
|                             |  |                             |    
|                             |  | Gross carrying
  amount     |     | Accumulated 
  amortization |  | Intangible
  Assets, net |  | Amortization
  period |    
|                             |  |                             |     |                             |  |                          |  |                       |    
|                             |  | U.S. Dollars (In thousands) |     | Years                       | 
|                             |  |                             |     |                             | 
|Patents
  registration costs |  |                             | 114 |                             |  | 2                        |  |                       | 112 |  |  | 10 | 
|                             |  |                             |     |                             |  |                          |  |                       |     |  |  |    | 

Amortization
expense for the years ended December 31, 2006, 2005 and 2004 are summarized to
$2, nil and nil thousand, respectively.

NOTE 8  OTHER CURRENT LIABILITIES

|                                                |  |                             |        |      |  |       | 
|----------------------------------------------- |  | --------------------------- | ------ | ---- |  | ----- | 
|                                                |  | December 31,                |       
|                                                |  |                             |       
|                                                |  | 2006                        |        | 2005 | 
|                                                |  |                             |        |      | 
|                                                |  | U.S. Dollars (In thousands) |       
|                                                |  |                             |       
|Accrued
  compensation and related benefits     |  |                             | 4,825  |      |  | 3,786 | 
|Government
  institutions                       |  |                             | 843    |      |  | 156   | 
|Accrued
  warranty costs                        |  |                             | 1,057  |      |  | 1,162 | 
|Commissions                                     |  |                             | 2,077  |      |  | 794   | 
|Advances
  from customers and deferred revenues |  |                             | 3,125  |      |  | 2,195 | 
|Other                                           |  |                             | 904    |      |  | 628   | 
|                                                |  |                             |        |      |  |       | 
|                                                |  |                             |        |      |  |       | 
|                                                |  |                             | 12,831 |      |  | 8,721 | 
|                                                |  |                             |        |      |  |       | 

NOTE 9  CONVERTIBLE LOAN

|                                                                    |  |                             |       |      |  |       | 
|------------------------------------------------------------------- |  | --------------------------- | ----- | ---- |  | ----- | 
|                                                                    |  | December 31,                |      
|                                                                    |  |                             |      
|                                                                    |  | 2006                        |       | 2005 | 
|                                                                    |  |                             |       |      | 
|                                                                    |  | U.S. Dollars (In thousands) |      
|                                                                    |  |                             |      
|                                                                    |  |                             |      
|U.S. Dollar denominated loan, bearing annual interest of Libor+2.1% |  |                             | 5,000 |      |  | 5,000 | 
|                                                                    |  |                             |       |      |  |       | 

On August 23,
2005 (the closing date) the Company raised $5 million as a convertible loan
from FIMI Opportunity Fund L.P and FIMI Israel Opportunity Fund, Limited
Partnership (Fimi). The loan is payable in three equal annual payments
starting at the third anniversary of the closing date. The lenders have the right
to postpone the repayments to the end of the fifth anniversary from the closing
date. The loan bears annual interest of Libor + 2.1%. The interest is payable
every three months. Conversion of the loan, in a whole or in part, is optional
at any given business day after the closing date. Conversion price per one
ordinary share is $5.50, however, in the event that the average closing price
of the Companys shares as reported on Nasdaq for the sixty consecutive trading
days immediately preceding the first and second anniversary of the loan
agreement closing date, is lower than the conversion price in effect on such
date, the conversion price in effect on such date shall be reduced to equal the
higher of the average closing price and $2.00. As of December 31, 2006 the
conversion price per one ordinary share is $5.50.

F  16

---

---

|                                                                             
|-----------------------------------------------------------------------------
|CAMTEK LTD.                                                                  
|                                                                             
|Notes to Consolidated Financial Statements as of December 31, 2006
  and 2005
|                                                                             

NOTE 9  CONVERTIBLE
LOAN (Contd)

The Company is
subject to the main following covenants in connection to the loan:

|   |                                                                                                                                                                                                                                                                                                                                                        
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. | The
  shareholders equity should not decrease to below $45 million, or, $40
  million as a result of dividend distributions. Shareholders equity may not
  decrease by more then 10%, unless such deviation is cured within three
  consecutive financial quarters immediately following the financial quarter in
  which such decrease had occurred.
|   |                                                                                                                                                                                                                                                                                                                                                        
|2. | The
  shareholders equity shall represent at least 55% of the total assets of the
  Company.                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                        
|3. | The net loss shall not exceed an aggregate of $10 million in any
  single financial quarter or any year.                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                        
|4. | Not to take
  any further loans which exceeds the aggregate amount of $15 million (other
  than the loans and credit lines which were in effect at the closing date) and
  not to enter into new transactions with its affiliates.                                                                                                                     

As of December
31, 2006 the Company was in compliance with the aforementioned terms.

NOTE 10  SEVERANCE PAY

Under Israeli
law and labor agreements, the Israeli companies are required to make severance
and pension payments to their retired or dismissed employees and to employees
leaving employment in certain other circumstances.

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. | The
  liability in respect of most of its employees is discharged by participating
  in a defined contribution pension plan and making regular deposits with a
  pension fund. The liability deposited with the pension fund is based on
  salary components as prescribed in the existing labor agreement. The custody
  and management of the amounts so deposited are independent of the companies
  and accordingly such amounts funded (included in expenses on an accrual
  basis) and related liabilities are not reflected in the balance sheet.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|2. | In respect
  of the liability to other employees, individual insurance policies are
  purchased and deposits are made with recognized severance pay funds.                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   | The
  liability for severance pay is calculated on the basis of the latest salary
  paid to each employee multiplied by the number of years of employment. The
  liability is covered by the amounts deposited including accumulated income
  thereon as well as by the unfunded provision, which amounted to $222 thousand
  as of December 31, 2006 and 2005.                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|3. | Severance pay expenses were $750, $544 and $529 thousand in 2006,
  2005 and 2004, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                        

F  17

---

---

|                                                                             
|-----------------------------------------------------------------------------
|CAMTEK LTD.                                                                  
|                                                                             
|Notes to Consolidated Financial Statements as of December 31, 2006
  and 2005
|                                                                             

NOTE 11  COMMITMENTS AND
CONTINGENT LIABILITIES

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|A. | Operating leases                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | The
  Companys subsidiaries have entered into various nonconancelable operating
  lease agreements, principally for office space. As of December 31, 2006,
  minimum future rental payments under these leases amounted to $1,438
  thousand. In May 2004, the Company entered into a noncancelable operating
  lease for vehicles for a period of 36 months. As of December 31, 2006,
  the minimum future rental payments were approximately $1,367 thousand.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | As of
  December 31, 2006, minimum future rental payments under such
  noncancelable operating leases are as follows:                                                                                                                                                                                                                                                                                                                                           

|                              |  |                            |       | 
|----------------------------- |  | -------------------------- | ----- | 
|Year
  Ending 
  December 31, |  | U.S. Dollars(In thousands) |      
|                              |  |                            |      
|2007                          |  |                            | 1,524 | 
|2008                          |  |                            | 792   | 
|2009                          |  |                            | 364   | 
|2010                          |  |                            | 63    | 
|Thereafter                    |  |                            | 62    | 
|                              |  |                            |       | 
|                              |  |                            | 2,805 | 
|                              |  |                            |       | 

|   |                                                                                                                                      
|-- | -------------------------------------------------------------------------------------------------------------------------------------
|   | Aggregate
  office rent expenses amounted to $572, $546 and $529 thousand in 2006, 2005
  and 2004, respectively.                    
|   |                                                                                                                                      
|B. | Valuation and qualifying accounts                                                                                                    
|   |                                                                                                                                      
|   | The
  following is a summary of the allowance for doubtful accounts related to
  accounts receivable for the years ended December 31:

|     |  |                                     |       |           |  |          |  |                              |        |   |  |       | 
|---- |  | ----------------------------------- | ----- | --------- |  | -------- |  | ---------------------------- | ------ | - |  | ----- | 
|     |  | Balance at
  beginning 
  of period |       | Provision |  | Recovery |  | Balance at
  end of
  period |       
|     |  |                                     |       |           |  |          |  |                              |       
|     |  | U.S. Dollars (In thousands)         |      
|     |  |                                     |      
|2004 |  |                                     | 2,090 |           |  | 1,229    |  |                              | (1,083 | ) |  | 2,236 | 
|2005 |  |                                     | 2,236 |           |  | 680      |  |                              | (710   | ) |  | 2,206 | 
|2006 |  |                                     | 2,206 |           |  | 778      |  |                              | (131   | ) |  | 2,853 | 

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|C. | Factoring of financial assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The Company
  entered into accounts receivable factoring agreements with two financial
  institutions (the banks). Under the terms of the agreements, the Company
  has the option to factor receivables, with the banks on a non-recourse basis,
  provided that the banks approve the receivables in advance. In some cases,
  the Company continues to be obligated in the event of commercial disputes,
  (such as product defects) which are not covered under the credit insurance
  policy, unrelated to the credit worthiness of the customer. The Company
  accounts for the factoring of its financial assets in accordance with the
  provisions of SFAS 140. The Company does not expect any
  reimbursements to take place in the foreseeable future.
|   | The
  factoring fees of the above mentioned agreements sums to $ 51 thousands in
  2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | As of
  December 31, 2006 trade receivables amounting to approximately $2.5 million,
  were factored.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

F  18

---

---

|                                                                             
|-----------------------------------------------------------------------------
|CAMTEK LTD.                                                                  
|                                                                             
|Notes to Consolidated Financial Statements as of December 31, 2006
  and 2005
|                                                                             
|                                                                             
|NOTE 11  COMMITMENTS AND CONTINGENT LIABILITIES (Contd)                    

|   |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | ----------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|D. | Litigations
|   |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | 1.          | On May 10,
  2004, a lawsuit was filed against the Company in the District Court in
  Nazareth, Israel, by a competitor, Orbotech Ltd., alleging that an optional
  component in the Dragon and Falcon systems infringe upon a patent held by
  Orbotech Ltd. and requesting an injunctive relief and damages. Currently, the
  issue dealt with by the court is the validity of the asserted patent. The
  Company believes that it has substantial defenses against the validity of
  Orbotechs patent and substantial defenses against Orbotechs claims.
  Therefore no provision was recorded by the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | 2.          | On February
  23, 2005, a lawsuit was filed against the Company in the District Court in
  Jerusalem by Orbotech Ltd., alleging infringement of patent held by Orbotech
  Ltd. regarding a specific illumination block, seeking injunctive relief and
  damages. The court ruled, based on a courts expert opinion, that the Company
  allegedly infringed the patent, and granted Orbotech a provisional remedy.
  Following the grant of the provisional remedy by the District Court, the
  Company filed a motion for leave to appeal. The Supreme Court rejected the
  Companys request since the provisional remedy was granted on the basis of
  prime facie evidence only. The claim is currently in the preliminary stage of
  discovery and only after evidence is presented and cross examinations are
  conducted will a final judgment be rendered by the District Court, subject to
  the right to appeal. The particular illumination block was at the time of the
  preliminary ruling still in a development stage. The Companys temporary
  inability to manufacture and sell the specific illumination block, does not
  affect its ability to manufacture and sell products incorporating other
  illumination blocks; the Company manufactures its products with several other
  illumination blocks. In February 2007 the patent referring to the specific
  illumination block expired. The Company has filed two requests for the
  lawsuit to be dismissed. . The Company believes that it has good defenses in
  the infringement aspect of the claim. The Company further believes that it
  has claims with respect to the validity of the asserted patent, as well as
  other defenses such as estoppel and lack of good faith on the part of
  Orbotech. Therefore no provision was recorded by the Company.
|   |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | 3.          | On July 14,
  2005, a lawsuit was filed against the Company in the United States District
  Court for the District of Minnesota by one of the Companys competitors in
  the field of semiconductor manufacturing and packaging, August Technology
  Corporation (today Rudolph Technologies Inc. together with August Technology
  Corporation), alleging infringement of a patent and seeking injunctive relief
  and damages. The Company has filed an answer and counterclaims alleging,
  inter-alia, non-infringement, invalidity and unenforceability of the patent.
  The case is currently approaching the end of the discovery phase and is
  expected to be trial ready by October 2007. The Company believes that it has
  substantial defenses to Augusts allegations. Therefore no provision was
  recorded by the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

F  19

---

---

|                                                                           
|---------------------------------------------------------------------------
|CAMTEK LTD.                                                                
|                                                                           
|Notes to Consolidated Financial Statements as of December 31, 2006 and 2005
|                                                                           

NOTE 12  CONCENTRATION OF
RISK

Financial
instruments that potentially subject the Company to concentrations of credit
risk consist of cash equivalents, short-term bank deposits, marketable
securities and trade receivables. The Companys cash equivalents and marketable
securities are maintained with high-quality institutions and the composition
and maturities of investments are regularly monitored by management. Generally,
these securities and deposits are traded in a highly liquid market, may be
redeemed upon demand and bear minimal risk.

The Companys
marketable securities include auction rate securities and highly rated
corporate bonds. The trade receivables of the Company are derived from sales to
a large number of customers, mainly large industrial corporations located
mainly in Asia, the United States and Europe. The Company generally does not
require collateral: however, in certain circumstances, the Company may require
letter of credit, other collateral or additional guarantees. An allowance for
doubtful accounts is determined with respect to those amounts that the Company
has determined to be doubtful of collection. The Company performs ongoing
credit evaluations of its customers.

NOTE 13  SHAREHOLDERS
EQUITY

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|A. | Initial Public Offering                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The Company
  shares are traded on the NASDAQ National Market under the symbol of CAMT.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | In December
  2005 the Company registered its shares to be listed and traded in the Tel-Aviv
  stock exchange.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|B. | Private Placement                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | In April 2006, the Company raised $14.5 million, net of issuance
  expenses, by issuing 2,525,252 ordinary shares at a price of $5.94 per share
  in a private placement to Israeli institutional investors. The private
  placement also included warrants that are exercisable into 1,262,626 ordinary
  shares at a price of $6.83 per share during a period of four years. The
  warrants issued in April 2006 have been classified in equity.                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|C. | Stock Option Plan                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | As of
  December 31, 2006, the Company has five share option plans for employees and
  directors. Future options will be granted only pursuant to the 2003 Share
  Option Plan described below.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | In October
  2003, the Company adopted a stock option plan (the Plan) pursuant to
  which the Companys board of directors may grant stock options to officers
  and key employees. The total number of options, which may be granted to directors,
  officers, employees and consultants under this plan, is limited to 998,800
  options. Stock options can be granted with an exercise price equal to
  or less than the stocks fair market value at the date of grant. All stock
  options have 10-year terms and vest and become fully exercisable after
  4 years from the date of grant with 30% to vest at the end of each of
  the first three years and remaining 10% to vest at the end of the fourth year
  following the grant day.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | As of
  December 31, 2006, there were 38,000 additional shares available for the
  Company grant under the Plan. The fair value of each option award is
  estimated on the date of grant using the Black-Scholes option-pricing model
  that used the weighted average assumptions in the following table. The
  risk-free rate for the expected term of the option is based on the
  U.S. Treasury yield curve in effect at the time of grant.                                                                                                                                                                                                                                                                                                  

F  20

---

---

|                                                                           
|---------------------------------------------------------------------------
|CAMTEK LTD.                                                                
|                                                                           
|Notes to Consolidated Financial Statements as of December 31, 2006 and 2005
|                                                                           

NOTE 13  SHAREHOLDERS
EQUITY (Contd)

|   |                           
|-- | --------------------------
|C. | Stock Option Plan (Contd)

|                           |  |  |            |  |  |            | 
|-------------------------- |  |  | ---------- |  |  | ---------- | 
|                           |  |  | 2006 Grant |  |  | 2005 Grant | 
|                           |  |  |            |  |  |            | 
|Dividend
  yield           |  |  | 0          |  |  | 0          | 
|Expected
  volatility *    |  |  | 86%-87%    |  |  | 90%        | 
|Risk-free
  interest rate  |  |  | 5%         |  |  | 4.2%       | 
|Expected
  life (years) ** |  |  | 6          |  |  | 6          | 

| |    |                                                                      
| | -- | ---------------------------------------------------------------------
| | *  | Historical volatility                                                
| |    |                                                                      
| | ** | The company used the simplified method to estimate the expected life.

The weighted average grant date fair value of options granted during
the years ended 2006 and 2005 was $5.38 and $2.30 respectively. The total
intrinsic value of options exercised during the years ended December 31,
2006, 2005 and 2004 was $246,756, $5,859 and $23,058 respectively. The total
intrinsic value of options vested at December 31, 2006 is $236,589.

As of December
31, 2006, there was $679,354 of total unrecognized compensation cost related to
nonvested share-based compensation arrangements. That cost is expected to be
recognized over a weighted-average period of 1.6 years.

Share option
activity during the past three years is as follows:

|                         |  |                         |           |                                           |  |                      |  |                                           |           |                      |  |                                           |  |  |           |   |  |      |  | 
|------------------------ |  | ----------------------- | --------- | ----------------------------------------- |  | -------------------- |  | ----------------------------------------- | --------- | -------------------- |  | ----------------------------------------- |  |  | --------- | - |  | ---- |  | 
|                         |  | Year Ended December 31, |          
|                         |  |                         |          
|                         |  | 2006                    |           | 2005                                      |  | 2004                 | 
|                         |  |                         |           |                                           |  |                      | 
|                         |  | Number
  of
  shares    |           | Weighted
  average
  exercise
  price US$ |  | Number
  of
  shares |  | Weighted
  average
  exercise
  price US$ |           | Number
  of
  shares |  | Weighted
  average
  exercise
  price US$ | 
|                         |  |                         |           |                                           |  |                      |  |                                           |           |                      |  |                                           | 
|Outstanding at January 1 |  |                         | 1,315,650 |                                           |  | 2.06                 |  |                                           | 1,250,000 |                      |  | 1.98                                      |  |  | 1,353,056 |   |  | 1.90 |  | 
|Granted                  |  |                         | 60,000    |                                           |  | 5.19                 |  |                                           | 144,000   |                      |  | 3.00                                      |  |  | -         |   |  | -    |  | 
|Forfeited                |  |                         | (13,980   | )                                         |  | 2.37                 |  |                                           | (68,600   | )                    |  | 2.59                                      |  |  | (82,328   | ) |  | 1.16 |  | 
|Exercised                |  |                         | (431,706  | )                                         |  | 1.63                 |  |                                           | (9,750    | )                    |  | 1.56                                      |  |  | (20,728   | ) |  | 0.00 |  | 
|                         |  |                         |           |                                           |  |                      |  |                                           |           |                      |  |                                           |  |  |           |   |  |      |  | 
|                         |  |                         |           |                                           |  |                      |  |                                           |           |                      |  |                                           |  |  |           |   |  |      |  | 
|Outstanding at year end  |  |                         | 929,964   |                                           |  | 2.46                 |  |                                           | 1,315,650 |                      |  | 2.06                                      |  |  | 1,250,000 |   |  | 1.98 |  | 
|                         |  |                         |           |                                           |  |                      |  |                                           |           |                      |  |                                           |  |  |           |   |  |      |  | 
|                         |  |                         |           |                                           |  |                      |  |                                           |           |                      |  |                                           |  |  |           |   |  |      |  | 
|Vested at year end       |  |                         | 665,729   |                                           |  | 2.22                 |  |                                           | 702,990   |                      |  | 1.95                                      |  |  | 375,300   |   |  | 1.98 |  | 
|                         |  |                         |           |                                           |  |                      |  |                                           |           |                      |  |                                           |  |  |           |   |  |      |  | 

F  21

---

---

|                                                                           
|---------------------------------------------------------------------------
|CAMTEK LTD.                                                                
|                                                                           
|Notes to Consolidated Financial Statements as of December 31, 2006 and 2005
|                                                                           

NOTE 13  SHAREHOLDERS
EQUITY (Contd)

| |                                                                                         
| | ----------------------------------------------------------------------------------------
| | The
  following table summarizes information about share options at
  December 31, 2006:

|                              |  |                      |         |                                                              |  |                                           |  |                      |      |                                           |  |         |  |  |      | 
|----------------------------- |  | -------------------- | ------- | ------------------------------------------------------------ |  | ----------------------------------------- |  | -------------------- | ---- | ----------------------------------------- |  | ------- |  |  | ---- | 
|Range of
  exercise price US$ |  | Number
  outstanding |         | Weighted
  average
  remaining
  contractual
  life in years |  | Weighted
  average
  exercise
  price US$ |  | Number
  exercisable |      | Weighted
  average
  exercise
  price US$ | 
|                              |  |                      |         |                                                              |  |                                           |  |                      |      |                                           | 
|                             
|0.00                          |  |                      | 208,632 |                                                              |  | 6.56                                      |  |                      | 0.00 |                                           |  | 169,877 |  |  | 0.00 | 
|2.98-3.29                     |  |                      | 520,832 |                                                              |  | 6.98                                      |  |                      | 2.98 |                                           |  | 453,952 |  |  | 2.98 | 
|3.00                          |  |                      | 140,500 |                                                              |  | 8.74                                      |  |                      | 3.00 |                                           |  | 41,900  |  |  | 3.00 | 
|5.00                          |  |                      | 50,000  |                                                              |  | 9.38                                      |  |                      | 5.00 |                                           |  | -       |  |  | 5.00 | 
|6.15                          |  |                      | 10,000  |                                                              |  | 9.58                                      |  |                      | 6.15 |                                           |  | -       |  |  | 6.15 | 
|                              |  |                      |         |                                                              |  |                                           |  |                      |      |                                           |  |         |  |  |      | 
|                              |  |                      | 929,964 |                                                              |  | 7.31                                      |  |                      | 2.46 |                                           |  | 665,729 |  |  | 2.22 | 
|                              |  |                      |         |                                                              |  |                                           |  |                      |      |                                           |  |         |  |  |      | 

| |                                                                                             
| | --------------------------------------------------------------------------------------------
| | The following
  table summarizes information about nonvested options at December 31,
  2006:

|                               |  |         |          |   |                                           |      | 
|------------------------------ |  | ------- | -------- | - | ----------------------------------------- | ---- | 
|                               |  | Options |          |   | Weighted average
  grant- date fair value |     
|                               |  |         |          |   |                                           |     
|                              
|Balance at
  January 1, 2006   |  |         | 612,660  |   |                                           | 2.07 | 
|Granted                        |  |         | 60,000   |   |                                           | 5.38 | 
|Vested                         |  |         | (394,445 | ) |                                           | 2.04 | 
|Forfeited                      |  |         | (13,980  | ) |                                           | 2.16 | 
|                               |  |         |          |   |                                           |      | 
|Balance at
  December 31, 2006 |  |         | 264,235  |   |                                           | 2.87 | 
|                               |  |         |          |   |                                           |      | 

NOTE 14  EARNINGS PER
ORDINARY SHARE

The following table
summarizes information related to the computation of basic and diluted profit
per Ordinary Share for the years indicated:

|                                                                                                                 |  |                         |        |      |   |        |  |   |        | 
|---------------------------------------------------------------------------------------------------------------- |  | ----------------------- | ------ | ---- | - | ------ |  | - | ------ | 
|                                                                                                                 |  | Year ended December 31, |       
|                                                                                                                 |  |                         |       
|                                                                                                                 |  | 2006                    |        | 2005 |   | 2004   | 
|                                                                                                                 |  |                         |        |      |   |        | 
|                                                                                                                 |  | (In thousands)          |       
|                                                                                                                 |  |                         |       
|Net income attributable to Ordinary
Shares                                                                       |  | $                       | 11,603 |      | $ | 2,702  |  | $ | 10,797 | 
|                                                                                                                 |  |                         |        |      |   |        |  |   |        | 
|Weighted average number of
  Ordinary Shares outstanding used
  in basic profit per Ordinary Share calculation   |  |                         | 29,176 |      |   | 27,253 |  |   | 27,114 | 
|                                                                                                                 |  |                         |        |      |   |        |  |   |        | 
|Add assumed exercise of outstanding
  dilutive potential Ordinary Shares                                         |  |                         | 377    |      |   | 333    |  |   | 686    | 
|                                                                                                                 |  |                         |        |      |   |        |  |   |        | 
|Weighted average number of
  Ordinary Shares outstanding
  used in diluted profit per Ordinary Share calculation |  |                         | 29,553 |      |   | 27,586 |  |   | 27,800 | 
|                                                                                                                 |  |                         |        |      |   |        |  |   |        | 
|                                                                                                                 |  |                         |        |      |   |        |  |   |        | 
|Basic earnings per Ordinary Share                                                                                |  | $                       | 0.40   |      | $ | 0.10   |  | $ | 0.40   | 
|                                                                                                                 |  |                         |        |      |   |        |  |   |        | 
|Diluted earnings per Ordinary Share                                                                              |  | $                       | 0.39   |      | $ | 0.10   |  | $ | 0.39   | 
|                                                                                                                 |  |                         |        |      |   |        |  |   |        | 

F  22

---

---

|                                                                             
|-----------------------------------------------------------------------------
|CAMTEK LTD.                                                                  
|                                                                             
|Notes to Consolidated Financial Statements as of December 31, 2006
  and 2005
|                                                                             

NOTE 15  GEOGRAPHIC INFORMATION

Substantially
all fixed assets are located in Israel and substantially all revenues are
derived from shipments to other countries. Revenues are attributable to
geographic areas/countries based upon the destination of shipment of products
and related services as follows:

|                    |  |                            |         |      |  |        |  |  |        | 
|------------------- |  | -------------------------- | ------- | ---- |  | ------ |  |  | ------ | 
|                    |  | Year Ended December 31,    |        
|                    |  |                            |        
|                    |  | 2006                       |         | 2005 |  | 2004   | 
|                    |  |                            |         |      |  |        | 
|                    |  | U.S. Dollars(In thousands) |        
|                    |  |                            |        
|China and Hong Kong |  |                            | 33,713  |      |  | 24,665 |  |  | 29,576 | 
|Other Asia          |  |                            | 20,413  |      |  | 5,036  |  |  | 5,341  | 
|United States       |  |                            | 15,622  |      |  | 11,484 |  |  | 8,116  | 
|Taiwan              |  |                            | 12,895  |      |  | 12,258 |  |  | 14,574 | 
|Western Europe      |  |                            | 9,170   |      |  | 6,597  |  |  | 4,780  | 
|Japan               |  |                            | 6,716   |      |  | 2,065  |  |  | 3,533  | 
|Rest of the world   |  |                            | 1,526   |      |  | 927    |  |  | 1,499  | 
|                    |  |                            |         |      |  |        |  |  |        | 
|                    |  |                            | 100,055 |      |  | 63,032 |  |  | 67,419 | 
|                    |  |                            |         |      |  |        |  |  |        | 

NOTE 16  SELECTED INCOME STATEMENT DATA

|   |                                             
|-- | --------------------------------------------
|A. | Selling, general and administrative expenses

|                                             |  |                            |        |      |  |        |  |  |        | 
|-------------------------------------------- |  | -------------------------- | ------ | ---- |  | ------ |  |  | ------ | 
|                                             |  | Year Ended December 31,    |       
|                                             |  |                            |       
|                                             |  | 2006                       |        | 2005 |  | 2004   | 
|                                             |  |                            |        |      |  |        | 
|                                             |  | U.S. Dollars(In thousands) |       
|                                             |  |                            |       
|                                            
|Selling (a1)                                 |  |                            | 21,000 |      |  | 14,559 |  |  | 12,819 | 
|General and administrative                   |  |                            | 6,850  |      |  | 4,201  |  |  | 3,134  | 
|                                             |  |                            |        |      |  |        |  |  |        | 
|                                             |  |                            | 27,850 |      |  | 18,760 |  |  | 15,953 | 
|                                             |  |                            |        |      |  |        |  |  |        | 
|(a1) Including shipping
  and handling costs |  |                            | 2,626  |      |  | 1,890  |  |  | 2,066  | 
|                                             |  |                            |        |      |  |        |  |  |        | 

|   |                        
|-- | -----------------------
|B. | Financial expenses, net

|                 |  |                            |      |      |  |      |   |  |      |  
|---------------- |  | -------------------------- | ---- | ---- |  | ---- | - |  | ---- | -
|                 |  | Year Ended December 31,    |     
|                 |  |                            |     
|                 |  | 2006                       |      | 2005 |  | 2004 |  
|                 |  |                            |      |      |  |      |  
|                 |  | U.S. Dollars(In thousands) |     
|                 |  |                            |     
|                
|Interest expense |  |                            | 422  |      |  | 405  |   |  | 450  |  
|Interest income  |  |                            | (795 | )    |  | (336 | ) |  | (142 | )
|Other, net       |  |                            | 661  |      |  | 251  |   |  | 51   |  
|                 |  |                            |      |      |  |      |   |  |      |  
|                 |  |                            | 288  |      |  | 320  |   |  | 359  |  
|                 |  |                            |      |      |  |      |   |  |      |  

|   |                                                                                                                                                                                                               
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|C. | Aborted share issuance expenses                                                                                                                                                                               
|   |                                                                                                                                                                                                               
|   | During 2004,
  the Company decided to abandon its plan for a secondary share offering to the
  public. The total accrued expenses related to this offering were $1,122
  thousand which were expensed in 2004.

F  23

---

---

|                                                                             
|-----------------------------------------------------------------------------
|CAMTEK LTD.                                                                  
|                                                                             
|Notes to Consolidated Financial Statements as of December 31, 2006
  and 2005
|                                                                             

NOTE 17  INCOME TAXES

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|A. | Tax under various laws                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The Company
  and its subsidiaries are assessed for tax purposes on an unconsolidated
  basis. The Company is assessed under the provisions of the Income Tax Law
  (Inflationary Adjustments), 1985, pursuant to which the results for tax
  purposes are measured in Israeli currency in real terms in accordance with
  changes in the Israeli Consumer Price Index (CPI). Each of the subsidiaries
  is subject to the tax rules prevailing in the country of incorporation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|B. | Tax benefits under the Law for Encouragement of Capital Investments,
  1959 (the Investment Law)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The
  Companys production facilities have been granted Approved Enterprise
  status under the Investment Law. The Company participates in the Alternative
  Benefits Program and, accordingly, income from its approved enterprises will
  be tax exempt for a period of 10 years, commencing in the first year in which
  the approved enterprise first generates taxable income due to the fact that
  the Company operates in Zone A in Israel.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | On April 1, 2005, an amendment
  to the Investment Law came into effect (the Amendment) and has
  significantly changed the provisions of the Investment Law. The Amendment
  limits the scope of enterprises which may be approved by the Investment
  Center by setting criteria for the approval of a facility as a Beneficiating
  Enterprise, such as provisions generally requiring that at least 25% of the
  Beneficiating Enterprises income will be derived from export. Additionally,
  the Amendment enacted major changes in the manner in which tax benefits are
  awarded under the Investment Law so that companies no longer require
  Investment Center approval in order to qualify for tax benefits.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | In addition, the
  Investment Law provides that terms and benefits included in any certificate
  of approval already granted will remain subject to the provisions of the law
  as they were on the date of such approval. Therefore, the Companys existing
  Approved Enterprise will generally not be subject to the provisions of the
  Amendment. As a result of the amendment, tax-exempt income generated under
  the provisions of the new law, as part of a new Beneficiating enterprise,
  will subject the Company to taxes upon distribution or liquidation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | The
  Company has been granted the status of Approved Enterprises, under the Law,
  for an investments programs for the periods ending in 2007 and 2010, and the
  status of Beneficiating Enterprise according to the Amendment to the Law, for
  the period ending in 2015 (Programs).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Out of the
  Companys retained earnings as of December 31, 2006 approximately $17 million
  are tax-exempt earnings attributable to its Approved Enterprise programs and
  approximately $2 million are tax-exempt earnings attributable to its
  Beneficiating Enterprise program. The tax-exempt income attributable to the
  Approved and Beneficiating Enterprise cannot be distributed to shareholders
  without subjecting the Company to taxes. If these retained tax-exempt profits
  are distributed, the Company would be taxed at the reduced corporate tax rate
  applicable to such profits (currently - 25% According to the implementation
  of the Law; effectively 33%). According to the Amendment, tax-exempt income
  generated under the Beneficiating Enterprise status will be taxed upon
  dividend distribution or complete liquidation, whereas tax exempt income
  generated under the Approved Enterprise status will be taxed only upon
  dividend distribution (and not upon complete liquidation, where the tax
  liability will be incurred by the shareholders). As of December 31, 2006, if
  the income attributed to the Approved Enterprise were distributed as
  dividend, the Company would incur a tax liability of approximately $4
  million. If income attributed to the Beneficiating Enterprise were
  distributed as dividend, including upon liquidation, the Company would incur
  a tax liability in the amount of approximately $ 0.5 million.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | These
  amounts will be recorded as an income tax expense in the period in which the
  Company declares the dividend.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

F  24

---

---

|                                                                             
|-----------------------------------------------------------------------------
|CAMTEK LTD.                                                                  
|                                                                             
|Notes to Consolidated Financial Statements as of December 31, 2006
  and 2005
|                                                                             

NOTE 17  INCOME TAXES (Contd)

|   |                                                                                                                                                                                                                                                                                                                                                                                                   
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|B. | Tax benefits under the Law for Encouragement of Capital Investments,
  1959 (the Investments Law) (contd)                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The Company intends to
  reinvest the amount of its tax-exempt income and not distribute any amounts
  of its undistributed tax exempt income as dividend. Accordingly, no deferred
  income taxes have been provided on income attributable to the Companys
  Approved and Beneficiating Enterprise programs as the undistributed tax
  exempt income is essentially permanent in duration.     
|   |                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The entitlement to the
  above benefits is conditional upon the Companys fulfilling the conditions
  stipulated by the Law, regulations published there under and the certificates
  of approval for the specific investments in approved enterprises.                                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                   
|   | Should the Company fail to
  meet such requirements in the future, income attributable to its programs
  could be subject to the statutory Israeli corporate tax rate and the Company
  could be required to refund a portion of the tax benefits already received,
  with respect to such program. The Companys management believes that the
  Company is meeting the aforementioned conditions.
|   |                                                                                                                                                                                                                                                                                                                                                                                                   
|C. | Tax benefits under the Law for the Encouragement of Industry (Taxes),
  1969                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                   
|   | The Company
  is an industrial company as defined by this law and as such is entitled to
  certain tax benefits, mainly accelerated depreciation as prescribed by
  regulations published under the Inflationary Adjustments Law and the right to
  deduct issuance costs as an expense for tax purposes.                                                                                       

F  25

---

---

|                                                                             
|-----------------------------------------------------------------------------
|CAMTEK LTD.                                                                  
|                                                                             
|Notes to Consolidated Financial Statements as of December 31, 2006
  and 2005
|                                                                             

NOTE 17  INCOME TAXES (Contd)

|   |                                    
|-- | -----------------------------------
|D. | Composition of income tax provision

|                                     |  |                             |        |      |  |       |  |  |        |  
|------------------------------------ |  | --------------------------- | ------ | ---- |  | ----- |  |  | ------ | -
|                                     |  | Year Ended December 31,     |       
|                                     |  |                             |       
|                                     |  | 2006                        |        | 2005 |  | 2004  | 
|                                     |  |                             |        |      |  |       | 
|                                     |  | U.S. Dollars (In thousands) |       
|                                     |  |                             |       
|Income
  (loss) before income taxes: |  |                             |        |      |  |       |  |  |        |  
|Israel                               |  |                             | 10,256 |      |  | 2,399 |  |  | 12,710 |  
|Non-Israeli                          |  |                             | 1,388  |      |  | 303   |  |  | (1,414 | )
|                                     |  |                             |        |      |  |       |  |  |        |  
|                                     |  |                             | 11,644 |      |  | 2,702 |  |  | 11,296 |  
|                                     |  |                             |        |      |  |       |  |  |        |  
|                                     |  |                             |        |      |  |       |  |  |        |  
|Income tax
  (benefit) provision:    |  |                             |        |      |  |       |  |  |        |  
|Current:                             |  |                             |        |      |  |       |  |  |        |  
|Israel                               |  |                             | -      |      |  | -     |  |  | -      |  
|Non-Israeli                          |  |                             | 414    |      |  | -     |  |  | -      |  
|                                     |  |                             |        |      |  |       |  |  |        |  
|                                     |  |                             | 414    |      |  | -     |  |  | -      |  
|                                     |  |                             |        |      |  |       |  |  |        |  
|Deferred:                            |  |                             |        |      |  |       |  |  |        |  
|Israel                               |  |                             | (160   | )    |  | -     |  |  | -      |  
|Non-Israeli                          |  |                             | (274   | )    |  | -     |  |  | -      |  
|                                     |  |                             |        |      |  |       |  |  |        |  
|                                     |  |                             | (434   | )    |  | -     |  |  | -      |  
|                                     |  |                             |        |      |  |       |  |  |        |  
|                                     |  |                             |        |      |  |       |  |  |        |  
|Previous
  years:                    |  |                             |        |      |  |       |  |  |        |  
|                                     |  |                             |        |      |  |       |  |  |        |  
|Israel (d1)                          |  |                             | -      |      |  | -     |  |  | 533    |  
|Non 
  Israeli                      |  |                             | 61     |      |  | -     |  |  | (34    | )
|                                     |  |                             |        |      |  |       |  |  |        |  
|                                     |  |                             | 61     |      |  | -     |  |  | 499    |  
|                                     |  |                             |        |      |  |       |  |  |        |  
|                                     |  |                             | 41     |      |  | -     |  |  | 499    |  
|                                     |  |                             |        |      |  |       |  |  |        |  

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(d1) | On March 31,
  2004, a settlement was reached between the Company and the Israeli tax
  authorities over disputed assessments for the 1999, 2000 and 2001 tax years.
  Under the settlement reached, the Company paid a total of $695 thousand to
  settle approximately $6.7 million in assessments previously demanded by the
  Israeli tax authorities with respect to the 1999-2001 tax years. In addition,
  the Company will continue to calculate its applicable tax benefits for the
  subsequent years of the Israeli tax benefits program in which it currently participates
  (2002-2007) at the rates previously disputed by the Israeli tax authorities.
  The settlement amount resulted in a one-time provision for income taxes of
  $460 thousand in the first quarter of 2004, in addition to the $225 thousand
  that was reserved for this purpose in the fourth quarter of 2003.

F  26

---

---

|                                                                             
|-----------------------------------------------------------------------------
|CAMTEK LTD.                                                                  
|                                                                             
|Notes to Consolidated Financial Statements as of December 31, 2006
  and 2005
|                                                                             

NOTE 17  INCOME TAXES (Contd)

|   |                                                                                                                                                                                                           
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|E. | Income taxes included in the income statements:                                                                                                                                                           
|   |                                                                                                                                                                                                           
|   | The
  following is a reconciliation of the theoretical tax expense (benefit),
  assuming all income is taxed at the regular tax rate applicable to Israeli
  companies, and the actual income tax expense:

|                                                                                                                                                                                     |  |                             |        |      |   |        |   |   |        |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | --------------------------- | ------ | ---- | - | ------ | - | - | ------ | -
|                                                                                                                                                                                     |  | Year Ended December 31,     |       
|                                                                                                                                                                                     |  |                             |       
|                                                                                                                                                                                     |  | 2006                        |        | 2005 |   | 2004   |  
|                                                                                                                                                                                     |  |                             |        |      |   |        |  
|                                                                                                                                                                                     |  | U.S. Dollars (In thousands) |       
|                                                                                                                                                                                     |  |                             |       
|                                                                                                                                                                                    
|Income before income taxes                                                                                                                                                           |  |                             | 11,644 |      |   | 2,702  |   |   | 11,296 |  
|                                                                                                                                                                                     |  |                             |        |      |   |        |   |   |        |  
|                                                                                                                                                                                    
|Statutory tax rate                                                                                                                                                                   |  |                             | 31     | %    |   | 34     | % |   | 35     | %
|                                                                                                                                                                                     |  |                             |        |      |   |        |   |   |        |  
|                                                                                                                                                                                    
|Theoretical tax on the above amount                                                                                                                                                  |  |                             | 3,610  |      |   | 918    |   |   | 3,954  |  
|                                                                                                                                                                                     |  |                             |        |      |   |        |   |   |        |  
|Increase (decrease) in taxes resulting
  from:                                                                                                                                       |  |                             |        |      |   |        |   |   |        |  
|                                                                                                                                                                                     |  |                             |        |      |   |        |   |   |        |  
|Tax benefits arising from Approved and
  Beneficiating Enterprises                                                                                                                 |  |                             | (1,641 | )    |   | (281   | ) |   | (238   | )
|                                                                                                                                                                                     |  |                             |        |      |   |        |   |   |        |  
|Decrease in taxes resulting from
  utilization of carryforward tax losses and deductible temporary differences
  for which deferred tax benefits were not provided in previous years |  |                             | (1,337 | )    |   | (2,066 | ) |   | (4,790 | )
|                                                                                                                                                                                     |  |                             |        |      |   |        |   |   |        |  
|Tax losses and deductible temporary
  differences for which no tax benefit has been recorded                                                                                         |  |                             | 351    |      |   | 371    |   |   | 1,029  |  
|                                                                                                                                                                                     |  |                             |        |      |   |        |   |   |        |  
|Permanent differences and nondeductible
  expenses, including difference between Israeli CPI-adjusted tax returns and
  dollar-adjusted financial statements-net                     |  |                             | (1,318 | )    |   | 970    |   |   | (34    | )
|                                                                                                                                                                                     |  |                             |        |      |   |        |   |   |        |  
|Nondeductible stock based compensation                                                                                                                                               |  |                             | 237    |      |   | 43     |   |   | 45     |  
|                                                                                                                                                                                     |  |                             |        |      |   |        |   |   |        |  
|Tax expenses due to previous years                                                                                                                                                   |  |                             | 61     |      |   | -      |   |   | 499    |  
|                                                                                                                                                                                     |  |                             |        |      |   |        |   |   |        |  
|Other                                                                                                                                                                                |  |                             | 78     |      |   | 45     |   |   | 34     |  
|                                                                                                                                                                                     |  |                             |        |      |   |        |   |   |        |  
|                                                                                                                                                                                    
|Actual income tax expense                                                                                                                                                            |  |                             | 41     |      |   | -      |   |   | 499    |  
|                                                                                                                                                                                     |  |                             |        |      |   |        |   |   |        |  
|                                                                                                                                                                                    
|Per share effect of the benefits arising
  from Approved and Beneficiating Enterprise:                                                                                             |  |                             |        |      |   |        |   |   |        |  
|                                                                                                                                                                                     |  |                             |        |      |   |        |   |   |        |  
|Basic                                                                                                                                                                                |  | $                           | 0.06   |      | $ | 0.01   |   | $ | 0.01   |  
|                                                                                                                                                                                     |  |                             |        |      |   |        |   |   |        |  
|                                                                                                                                                                                    
|Diluted                                                                                                                                                                              |  | $                           | 0.06   |      | $ | 0.01   |   | $ | 0.01   |  
|                                                                                                                                                                                     |  |                             |        |      |   |        |   |   |        |  

F  27

---

---

|                                                                             
|-----------------------------------------------------------------------------
|CAMTEK LTD.                                                                  
|                                                                             
|Notes to Consolidated Financial Statements as of December 31, 2006
  and 2005
|                                                                             

NOTE 17
 INCOME TAXES (Contd)

|   |                                                               
|-- | --------------------------------------------------------------
|F. | Income taxes included in the balance sheet                    
|   |                                                               
|   | Deferred tax
  assets consist of the following at December 31:

|                                                 |  |                             |        |      |  |        |  
|------------------------------------------------ |  | --------------------------- | ------ | ---- |  | ------ | -
|                                                 |  | December 31                 |       
|                                                 |  |                             |       
|                                                 |  | 2006                        |        | 2005 | 
|                                                 |  |                             |        |      | 
|                                                 |  | U.S. Dollars (In thousands) |       
|                                                 |  |                             |       
|Current:                                         |  |                             |        |      |  |        |  
|Provision
  for doubtful accounts                |  |                             | 194    |      |  | 198    |  
|Accrued
  warranty                               |  |                             | 97     |      |  | 80     |  
|Unearned
  revenue                               |  |                             | 185    |      |  | -      |  
|Net
  operating losses carryforwards             |  |                             | 91     |      |  | -      |  
|Accrued
  expenses                               |  |                             | 134    |      |  | 50     |  
|Other                                            |  |                             | -      |      |  | 24     |  
|                                                 |  |                             |        |      |  |        |  
|                                                 |  |                             | 701    |      |  | 352    |  
|Valuation
  allowance                            |  |                             | (636   | )    |  | (352   | )
|                                                 |  |                             |        |      |  |        |  
|Current
  deferred tax asset, net of allowance   |  |                             | 65     |      |  | -      |  
|                                                 |  |                             |        |      |  |        |  
|Long-term:                                       |  |                             |        |      |  |        |  
|Net
  operating losses carryforwards             |  |                             | 1,759  |      |  | 2,334  |  
|Severance
  pay                                  |  |                             | 14     |      |  | -      |  
|Fixed assets                                     |  |                             | (53    | )    |  | -      |  
|Other                                            |  |                             | 198    |      |  | -      |  
|                                                 |  |                             |        |      |  |        |  
|                                                 |  |                             | 1,918  |      |  | 2,334  |  
|Valuation
  allowance                            |  |                             | (1,549 | )    |  | (2,334 | )
|                                                 |  |                             |        |      |  |        |  
|Long-term
  deferred tax asset, net of allowance |  |                             | 369    |      |  | -      |  
|                                                 |  |                             |        |      |  |        |  
|Net deferred
  tax assets                        |  |                             | 434    |      |  | -      |  
|                                                 |  |                             |        |      |  |        |  

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | Under SFAS
  No. 109, deferred tax assets are to be recognized for the anticipated tax
  benefits associated with net operating loss carryforwards and deductible
  temporary differences, unless it is more likely than not that some or all of
  the deferred tax assets will not be realized. The adjustment is made by a
  valuation allowance.                                                                                                                           
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | Since the
  realization of the net operating loss carryforwards and deductible temporary
  differences is uncertain and not considered more likely than not, a valuation
  allowance has been established to reduce deferred tax assets to their
  estimated realizable value. The net change in the total valuation allowance
  was a decrease of $ 501 thousand, $ 1,548 thousand and $ 2,232 thousand for the
  years ended December 31, 2006, 2005 and 2004, respectively.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | As of
  December 31, 2006, major foreign subsidiaries have NOL carryforwards
  aggregating approximately $5,863 thousand, of which approximately $3,049
  thousand expires from 2009 to 2023 and approximately $2,814 thousand has no
  expiration date.                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|G. | Reduction in corporate income tax rate in Israel                                                                                                                                                                                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   | On July 25,
  2005 an amendment to the Israeli tax law was approved by the Israeli
  parliament, which reduces the tax rates imposed on Israeli companies to 31%
  for 2006, This amendment states that the corporate tax rate will be further
  reduced in subsequent tax years as follows: in 2007 29%, in 2008 27%, in 2009
  26% and thereafter 25%. This change does not have a material effect on the
  Companys financial statements.                                 

F  28

---

---

|                                                                             
|-----------------------------------------------------------------------------
|CAMTEK LTD.                                                                  
|                                                                             
|Notes to Consolidated Financial Statements as of December 31, 2006
  and 2005
|                                                                             

NOTE 18  TRANSACTIONS WITH RELATED PARTIES

|                                                       |  |                             |       |      |  |      |  |  |       | 
|------------------------------------------------------ |  | --------------------------- | ----- | ---- |  | ---- |  |  | ----- | 
|                                                       |  | Year Ended December 31,     |      
|                                                       |  |                             |      
|                                                       |  | 2006                        |       | 2005 |  | 2004 | 
|                                                       |  |                             |       |      |  |      | 
|                                                       |  | U.S. Dollars (In thousands) |      
|                                                       |  |                             |      
|Purchases
  from Priortech Ltd. (including affiliates) |  |                             | 3,244 |      |  | 597  |  |  | 1,122 | 
|Interest
  income from Priortech Ltd.                  |  |                             | 16    |      |  | 19   |  |  | 30    | 
|Sales to
  Priortech Ltd. (including affiliates)       |  |                             | 240   |      |  | 1    |  |  | 230   | 

NOTE 19  SUBSEQUENT EVENTS

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|A. | Subsequent
  to balance sheet date, the Companys liabilities to banks were secured by
  negative pledge. Pursuant to the terms of the negative pledge the Company
  committed to comply with certain financial and other covenants which include,
  inter alia, a minimum amount of shareholders equity, a minimum ratio of
  shareholders equity to total balance sheet, as such are defined in the
  agreement, a minimum amount of sales and annual earnings. In addition,
  certain restrictions have been imposed on the Company regarding creating
  floating liens, execute a change in control over the Company and execute a
  merger.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   | If the Company will not comply with all or part of the financial
  covenants, or if certain events specified in the agreement should occur, the
  bank will have the right to demand the immediate repayment of the credit. In
  Managements opinion, the Company will comply with those covenants over the
  credit period.                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|B. | Subsequent
  to balance sheet date the
  company granted 45,000 share options at an exercise price of $4.50 per share and 8,000 share options were
  exercised at a weighted average exercise price of $2.86.                                                                                                                                                                                                                                                                                                                                                                                                                                     

F  29

---

---

|Item 19. |  | Exhibits.
|-------- |  | ---------

|Exhibit No. |  | Exhibit
|----------- |  | -------

|1.1 |  | Memorandum
of Association of Registrant (incorporated herein by reference to Exhibit 3.1 to
Amendment No. 1 to the Registrants Registration Statement on Form F-1, File No. 333-12292,
filed with the Securities and Exchange Commission on July 21, 2000).
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|1.2 |  | Articles
of Registrant (incorporated herein by reference to Exhibit 3.2 to Amendment No. 1 to the
Registrants Registration Statement on Form F-1, File No. 333-113208, filed with the
Securities and Exchange Commission on April 5, 2004).
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.1 |  | Amended
and Restated Employee Share Option Plan (incorporated herein by reference to Exhibit 10.1
to the Registrants Registration Statement on Form S-8, File No. 333-84476, filed
with the Securities and Exchange Commission on March 18, 2002).
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.2 |  | Amended
and Restated Subsidiary Employee Option Plan (incorporated herein by reference to Exhibit
10.2 to the Registrants Registration Statement on Form S-8, File No. 333-84476,
filed with the Securities and Exchange Commission on March 18, 2002).
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.3 |  | Employee
Share Option Plan  Europe (incorporated herein by reference to Exhibit 10.3 to the
Registrants Registration Statement on Form S-8, File No. 333-49982, filed with the
Securities and Exchange Commission on November 15, 2000).
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.4 |  | Executive
Share Option Plan (incorporated herein by reference to Exhibit 10.4 to the Registrants
Registration Statement on Form S-8, File No. 333-60704, filed with the Securities and
Exchange Commission on May 11, 2001).
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.5 |  | 2003
Share Option Plan (incorporated herein by reference to Exhibit 10.1 to the Registrants
Registration Statement on Form S-8, File No. 333- 113139, filed with the Securities and
Exchange Commission on February 27, 2004).
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.6 |  | Sub-Plan
for Grantees Subject to United States Taxation (incorporated herein by reference to
Exhibit 10.2 to the Registrants Registration Statement on Form S-8, File No.
333-113139, filed with the Securities and Exchange Commission on February 27, 2004).
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.7 |  | Sub-Plan
for Grantees Subject to Israeli Taxation (incorporated herein by reference to Exhibit
10.3 to the Registrants Registration Statement on Form S- 8, File No. 333-113139,
filed with the Securities and Exchange Commission on February 27, 2004).
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.8 |  | Form
of Indemnification Agreement (incorporated herein by reference to Exhibit 10.10 to
Amendment No. 1 to the Registrants Registration Statement on Form F-1, File No.
333-12292, filed with the Securities and Exchange Commission on July 21, 2000).
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.9 |  | Registration
Rights Agreement, by and between the Registrant and Priortech Ltd., dated March 1,
2004 (incorporated herein by reference to Exhibit 10.9 to Amendment No. 1 to the
Registrants Registration Statement on Form F-1, File No. 333-113208, filed with the
Securities and Exchange Commission on April 5, 2004).
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.10 |  | Registration
Rights Amended and Restated Agreement by and between the Registrant and Priortech Ltd.,
dated December 30, 2004. (incorporated herein by reference to Exhibit 4.10 to the
Registrants Registration Statement on Form 20-F File No.000-30664 filed with the
Securities and Exchange Commission on June 30, 2005).
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.11 |  | Convertible
Loan Agreement, by and between the Registrant and FIMI Opportunity Fund, L.P., and FIMI
Israel Opportunity Fund, dated August 8, 2005 (incorporated herein by reference to
Exhibit 4.11 to the Registrants Registration Statement on Form 20-F File
No.000-30664 filed with the Securities and Exchange Commission on June 29, 2006).
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.12 |  | Press
Release announcing the Companys completion of $15,000,000 Private Placement dated
April 28, 2006; Press Release announcing Priortech Ltd. Sale of Camtek shares to Israeli
Institutional Investors dated June 21, 2006 (incorporated herein by reference to Exhibit
4.12 to the Registrants Registration Statement on Form 20-F File No.000-30664 filed
with the Securities and Exchange Commission on June 29, 2006).
|---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



---

---

|8.1 |  | Subsidiaries
of the Registrant (incorporated herein by reference to Exhibit 21.1 to Amendment No. 1 to
the Registrants Registration Statement on Form F- 1, File No. 333-12292, filed with
the Securities and Exchange Commission on July 21, 2000).
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|12.1 |  | Certification
of Chief Executive Officer required by Rules 13a-14(a) and Rule 15d-14(a) under the
Securities Exchange Act of 1934, as amended.*
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------

|12.2 |  | Certification
of Chief Financial Officer required by Rules 13a-14(a) and Rule 15d-14(a) under the
Securities Exchange Act of 1934, as amended.*
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------

|13.1 |  | Certification
of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|15.1 |  | Consent
of Somekh Chaikin, a member firm of KPMG International (attached to the original filing).
|---- |  | -------------------------------------------------------------------------------------------------

|15.2 |  | Consent
of Brightman Almagor & Co., a member firm of Deliotte, Touche Tohmatsu, and Goldstein
Sabo               Tevet (attached to the original filing).
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------

---

| | English
translations from Hebrew original.
|- | ------------------------------------------

|* | Filed
herewith.
|- | ---------------



---

---

# SIGNATURES

The
Company hereby certifies that it meets all of the requirements for filing on Form 20-F/A
and that it has duly caused and authorized the undersigned to sign this Annual Report on
its behalf.

| |  | CAMTEK LTD.By: /s/ Rafi Amit
Rafi AmitChief Executive Officer
| |  | ---------------------------------------------------------------------------

Date: November 9, 2009



---

---