| Delaware                                                                                     | 20-2374143                                                         |
|----------------------------------------------------------------------------------------------|--------------------------------------------------------------------|
| (State                or other Jurisdiction of Incorporation                or Organization) | (I.R.S.                Employer Identification                No.) |

| 7                Gush Etzion, 3rd                Floor, Givaat Shmuel, Israel 54030 |
|-------------------------------------------------------------------------------------|
| (Address                of Principal Executive Office)                              |

----

|                                                                                                       | Page   |
|------------------------------------------------------------------------------------------------------------|--------|
| Part                  I: Financial Information:                                                            |   |
|                                                                                                       |   |
| Item                  1 - Financial Statements (Unaudited):                                                |   |
|                                                                                                       |   |
| Condensed                  Balance Sheet                                                                   | 3      |
|                                                                                                       |   |
| Condensed                  Statements of Operations                                                        | 4      |
|                                                                                                       |   |
| Condensed                  Statements of Stockholders’ Equity                                        | 5      |
|                                                                                                       |   |
| Condensed                  Statements of Cash Flows                                                        | 6      |
|                                                                                                       |   |
| Notes                  to Condensed Financial Statements                                                   | 7      |
|                                                                                                       |   |
| Item                  2 - Management’s Discussion and Analysis or Plan of                  Operation | 11     |
|                                                                                                       |   |
| Item                  3 - Controls and Procedures                                                          | 13     |
|                                                                                                       |   |
| Part                  II. Other Information                                                                |   |
|                                                                                                       |   |
| Item                  2 - Unregistered Sales of Equity Securities and Use of                  Proceeds     | 15     |
|                                                                                                       |   |
| Item                  6 - Exhibits                                                                         | 15     |
|                                                                                                       |   |
| Signatures                                                                                                 | 16     |

----

**ISRAEL      TECHNOLOGY ACQUISITION CORP.**

**(A      DEVELOPMENT STAGE ENTERPRISE)**

**CONDENSED      BALANCE SHEET**

|                                                                                                                             |   | **September                  30,** |       | **December                  31,** |   |
|----------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------|------------|-----------------------------------|--------|
|                                                                                                                             |   | **2006**                           |       | **2005**                          |   |
|                                                                                                                             |   | **Unaudited**                      |       | **Audited**                       |   |
| **ASSETS**                                                                                                                       |   |                               |       |                              |   |
|                                                                                                                             |   |                               |       |                              |   |
| CURRENT                  ASSETS                                                                                                  |   |                               |            |                              |   |  |   |
| Cash                  and cash equivalents                                                                                       |   | $                                  | 247,395    |                              | $      | 372,952 |   |
| Short                  term deposit                                                                                              |   |                               | -          |                              |   | 500,000 |   |
| Cash                  held in Trust Fund                                                                                         |   |                               | 34,377,159 |                              |   | 33,472,678 |   |
| Prepaid                  expenses                                                                                                |   |                               | 37,500     |                              |   | 30,000 |   |
|                                                                                                                             |   | $                                  | 34,662,054 |                              | $      | 34,375,630 |   |
| Total                  current assets                                                                                            |   |                               |            |                              |   |  |   |
|                                                                                                                             |   |                               |            |                              |   |  |   |
| **LIABILITIES                  AND STOCKHOLDERS' EQUITY**                                                                        |   |                               |            |                              |   |  |   |
|                                                                                                                             |   |                               |            |                              |   |  |   |
| CURRENT                  LIABILITIES                                                                                             |   |                               |            |                              |   |  |   |
| Accrued                  expenses                                                                                                |   | $                                  | 92,881     |                              | $      | 7,921 |   |
| Income                  tax payable                                                                                              |   |                               | -          |                              |   | 96,000 |   |
|                                                                                                                             |   |                               |            |                              |   |  |   |
|                                                                                                                             |   |                               |            |                              |   |  |   |
| Total                  liabilities                                                                                               |   |                               | 92,881     |                              |   | 103,921 |   |
|                                                                                                                             |   |                               |            |                              |   |  |   |
| Common                  stock , subject to possible conversion,                                                                  |   |                               |            |                              |   |  |   |
| 1,262,968                  shares at conversion value                                                                            |   |                               | 6,871,994  |                              |   | 6,691,188 |   |
|                                                                                                                             |   |                               |            |                              |   |  |   |
| STOCKHOLDERS'                  EQUITY                                                                                            |   |                               |            |                              |   |  |   |
| Share                  capital:                                                                                                  |   |                               |            |                              |   |  |   |
| Preferred                  Stock, $0.0001 par value -authorized:                  1,000,000 shares; none                  issued |   |                               |            |                              |   |  |   |
| Common                  stock, $0.0001 par value-                                                                                |   |                               |            |                              |   |  |   |
| Authorized                  30,000,000 shares, issued and outstanding: 7,818,000                  shares                         |   |                               |            |                              |   |  |   |
| (less                  1,262,968 subject to possible conversion )                                                                |   |                               | 656        |                              |   | 656 |   |
| Additional                  paid-in capital                                                                                 |   |                               | 27,405,347 |                              |   | 27,395,347 |   |
| Accumulated                  earnings during development stage                                                                   |   |                               | 291,176    |                              |   | 184,518 |   |
|                                                                                                                             |   |                               |            |                              |   |  |   |
| Total                  stockholders' equity                                                                                 |   |                               | 27,697,179 |                              |   | 27,580,521 |   |
|                                                                                                                             |   |                               |            |                              |   |  |   |
| Total                  liabilities and stockholders' equity                                                                 |   | $                                  | 34,662,054 |                              | $      | 34,375,630 |   |

----

**ISRAEL      TECHNOLOGY ACQUISITION CORP.**

**(A      DEVELOPMENT STAGE ENERPRISE)**

**CONDENSED      STATEMENTS OF OPERATIONS**

|                                                                                                                                                                                        |   |   **Three                months ended****September                30,** |      |   **Three                months ended****September                30,** |   |   **For                the period of nine months ended****September                30,** |   |  **For                the period February 22, 2005 (inception) to September                30,** |      |  **For                the period February 22, 2005 (inception) to September                30,** |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------|-----------|-----------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------|-----------|-------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                        |   | **2006**                                                                          |      | **2005**                                                                          |   | **2006**                                                                                           |   | **2005**                                                                                              |      | **2006**                                                                                              |   |
|                                                                                                                                                                                        |   | **Unaudited**                                                                     |      | **Unaudited**                                                                     |   | **Unaudited**                                                                                      |   | **Unaudited**                                                                                         |      | **Unaudited**                                                                                         |   |
|                                                                                                                                                                                        |   |                                                                              |      |                                                                              |   |                                                                                               |   |                                                                                                  |      |                                                                                                  |   |
| General                and administrative expenses                                                                                                                                          |   | $                                                                                 | 121,868   |                                                                              | $      | 65,602                                                                                             |   | $                                                                                                     | 555,779   |                                                                                                  | $      | 68,202 |   | $ | 699,566 |   |
|                                                                                                                                                                                        |   |                                                                              |      |                                                                              |   |                                                                                               |   |                                                                                                  |      |                                                                                                  |   |   |   |   |   |   |
| Operating                loss                                                                                                                                                               |   |                                                                              | (121,868  | )                                                                                 |   | (65,602                                                                                            | )      |                                                                                                  | (555,779  | )                                                                                                     |   | (68,202 | ) |   | (699,566 | ) |
|                                                                                                                                                                                        |   |                                                                              |      |                                                                              |   |                                                                                               |   |                                                                                                  |      |                                                                                                  |   |   |   |   |   |   |
| Financial                income, net                                                                                                                                                        |   |                                                                              | 232,321   |                                                                              |   | 187,617                                                                                            |   |                                                                                                  | 731,142   |                                                                                                  |   | 187,617 |   |   | 1,155,447 |   |
|                                                                                                                                                                                        |   |                                                                              |      |                                                                              |   |                                                                                               |   |                                                                                                  |      |                                                                                                  |   |   |   |   |   |   |
| Net                income before income taxes                                                                                                                                               |   |                                                                              | 110,453   |                                                                              |   | 122,015                                                                                            |   |                                                                                                  | 175,363   |                                                                                                  |   | 119,415 |   |   | 455,881 |   |
|                                                                                                                                                                                        |   |                                                                              |      |                                                                              |   |                                                                                               |   |                                                                                                  |      |                                                                                                  |   |   |   |   |   |   |
| Income                taxes                                                                                                                                                                 |   |                                                                              | (39,309   | )                                                                                 |   | -                                                                                                  |   |                                                                                                  | (68,705   | )                                                                                                     |   | - |   |   | (164,705 | ) |
|                                                                                                                                                                                        |   |                                                                              |      |                                                                              |   |                                                                                               |   |                                                                                                  |      |                                                                                                  |   |   |   |   |   |   |
| Net                income                                                                                                                                                                   |   | $                                                                                 | 71,144    |                                                                              | $      | 122,015                                                                                            |   | $                                                                                                     | 106,658   |                                                                                                  | $      | 119,415 |   | $ | 291,176 |   |
|                                                                                                                                                                                        |   |                                                                              |      |                                                                              |   |                                                                                               |   |                                                                                                  |      |                                                                                                  |   |   |   |   |   |   |
| Basic                and diluted net income per                share                                                                                                                        |   | $                                                                                 | 0.01      |                                                                              | $      | 0.02                                                                                               |   | $                                                                                                     | 0.02      |                                                                                                  | $      | 0.03 |   | $ | 0.05 |   |
|                                                                                                                                                                                        |   |                                                                              |      |                                                                              |   |                                                                                               |   |                                                                                                  |      |                                                                                                  |   |   |   |   |   |   |
| Weighted                average number of                common                shares used in                computing basic                and diluted Net                income per share |   |                                                                              | 6,555,032 |                                                                              |   | 6,450,522                                                                                          |   |                                                                                                  | 6,555,032 |                                                                                                  |   | 3,629,944 |   |   | 6,270,083 |   |

----

**ISRAEL      TECHNOLOGY ACQUISITION CORP.**

**(A      DEVELOPMENT STAGE ENTERPRISE)**

**STATEMENT      OF STOCKHOLDERS’ EQUITY**

|                                                          |   |                              |       |        |   |                   |   | **Accumulated**                 |       |       |   |
|---------------------------------------------------------------|--------|-----------------------------------|------------|-------------|--------|------------------------|--------|---------------------------------|------------|------------|--------|
|                                                          |   |                              |       |        |   |                   |   | **earnings**                    |       |       |   |
|                                                          |   |                              |       |        |   | **Additional**         |   | **during                  the** |       | **Total**  |   |
|                                                          |   | **Common                  Stock** |       | **paid-in** |   | **development**        |   | **stockholders'**               |       |
|                                                          |   | **Shares                  (1)**   |       | **Amount**  |   | **capital**            |   | **stage**                       |       | **equity** |   |
|                                                          |   |                              |       |        |   |                   |   |                            |       |       |   |
|                                                          |   |                              |       |        |   |                   |   |                            |       |       |   |
| Common                  shares issued February 22,            |   |                              | 1,500,000  |        | $      | 150                    |   | $                               | 24,850     |       | $      | - |   | $ | 25,000 |   |
| 2005                  at $0.0167                              |   |                              |       |        |   |                   |   |                            |       |       |   |   |   |   |   |   |
|                                                          |   |                              |       |        |   |                   |   |                            |       |       |   |   |   |   |   |   |
| Sale                  of 6,000,000 units , net of             |   |                              |       |        |   |                   |   |                            |       |       |   |   |   |   |   |   |
| underwriters’                  discount and offering    |   |                              |       |        |   |                   |   |                            |       |       |   |   |   |   |   |   |
| expenses                  (include 1,199,400 shares           |   |                              |       |        |   |                   |   |                            |       |       |   |   |   |   |   |   |
| subject                  to possible conversion )             |   |                              | 6,000,000  |        |   | 600                    |   |                            | 32,238,542 |       |   | - |   |   | 32,239,142 |   |
|                                                          |   |                              |       |        |   |                   |   |                            |       |       |   |   |   |   |   |   |
| Proceeds                  from issuance of option             |   |                              | -          |        |   | -                      |   |                            | 100        |       |   | - |   |   | 100 |   |
| compensation                                                  |   |                              |       |        |   |                   |   |                            |       |       |   |   |   |   |   |   |
|                                                          |   |                              |       |        |   |                   |   |                            |       |       |   |   |   |   |   |   |
| Allotment                  of 318,000 units , net of          |   |                              |       |        |   |                   |   |                            |       |       |   |   |   |   |   |   |
| underwriters’                  discount and offering    |   |                              |       |        |   |                   |   |                            |       |       |   |   |   |   |   |   |
| expenses                                                      |   |                              | 318,000    |        |   | 32                     |   |                            | 1,719,505  |       |   | - |   |   | 1,719,537 |   |
|                                                          |   |                              |       |        |   |                   |   |                            |       |       |   |   |   |   |   |   |
| Proceeds                  subject to possible conversion      |   |                              |       |        |   |                   |   |                            |       |       |   |   |   |   |   |   |
| of                  1,262,968 shares                          |   |                              | (1,262,968 | )           |   | (126                   | )      |                            | (6,587,650 | )          |   | - |   |   | (6,587,776 | ) |
|                                                          |   |                              |       |        |   |                   |   |                            |       |       |   |   |   |   |   |   |
| Net                  income                                   |   |                              | -          |        |   | -                      |   |                            | -          |       |   | 184,518 |   |   | 184,518 |   |
|                                                          |   |                              |       |        |   |                   |   |                            |       |       |   |   |   |   |   |   |
| Balance                  as of December 31, 2005              |   |                              | 6,555,032  |        |   | 656                    |   |                            | 27,395,347 |       |   | 184,518 |   | $ | 27,580,521 |   |
|                                                          |   |                              |       |        |   |                   |   |                            |       |       |   |   |   |   |   |   |
| Reimbursement                  of issuance costs              |   |                              | -          |        |   | -                      |   |                            | 10,000     |       |   | - |   |   | 10,000 |   |
|                                                          |   |                              |       |        |   |                   |   |                            |       |       |   |   |   |   |   |   |
| Net                  income                                   |   |                              | -          |        |   | -                      |   |                            | -          |       |   | 106,658 |   |   | 106,658 |   |
|                                                          |   |                              |       |        |   |                   |   |                            |       |       |   |   |   |   |   |   |
| Balance                  as of September 30, 2006 (Unaudited) |   |                              | 6,555,032  |        |   | 656                  $ |   | $                               | 27,405,347 |       | $      | 291,176 |   | $ | 27,697,179 |   |
|                                                          |   |                              |       |        |   |                   |   |                            |       |       |   |   |   |   |   |   |

| (1)                Share amounts have been restated to reflect a stock dividend of one                share                of common stock for each outstanding share of common stock affected                on                April 14, 2005. |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**ISRAEL      TECHNOLOGY ACQUISITION CORP.**

**(A      DEVELOPMENT STAGE ENTERPRISE)**

**CONDENSED      STATEMENTS OF CASH FLOWS**

|                                                        |   |   **For                the period of Nine months ended****September                30,** |     |   **For                the period February 22, 2005 (inception) to****September                30,** |   | **For                the period February 22, 2005 (inception) to****September                30,** |   |
|-------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------|----------|----------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------|--------|
|                                                        |   | **2006**                                                                                           |     | **2005**                                                                                                       |   | **2006**                                                                                           |   |
|                                                        |   | **Unaudited**                                                                                      |     | **Unaudited**                                                                                                  |   | **Unaudited**                                                                                      |   |
| Cash                flows from operating activities:        |   |                                                                                               |     |                                                                                                           |   |                                                                                               |   |
| Net                income                                   |   | $                                                                                                  | 106,658  |                                                                                                           | $      | 119,415                                                                                            |   | $ | 291,176 |   |
| Decrease                in other accounts                   |   |                                                                                               |     |                                                                                                           |   |                                                                                               |   |   |   |   |
| receivable                and prepaid expenses              |   |                                                                                               | (7,500   | )                                                                                                              |   | (55,237                                                                                            | )      |   | (37,500 | ) |
| Increase                (decrease) in accrued expenses      |   |                                                                                               | (11,040  | )                                                                                                              |   | 8,694                                                                                              |   |   | 92,881 |   |
| Accumulated                interest on cash held in trust   |   |                                                                                               | (723,675 | )                                                                                                              |   | (183,610                                                                                           | )      |   | (1,137,581 | ) |
| Net                cash used in operating activities        |   |                                                                                               | (635,557 | )                                                                                                              |   | (110,738                                                                                           | )      |   | (791,024 | ) |
|                                                        |   |                                                                                               |     |                                                                                                           |   |                                                                                               |   |   |   |   |
| Cash                flows from investing activities:        |   |                                                                                               |     |                                                                                                           |   |                                                                                               |   |   |   |   |
| Decrease                long term deposit                   |   |                                                                                               | 500,000  |                                                                                                           |   | (500,000                                                                                           | )      |   | - |   |
| Cash                held in trust fund                      |   |                                                                                               | -        |                                                                                                           |   | (32,955,360                                                                                        | )      |   | (32,955,360 | ) |
| Net                cash used in investing activities        |   |                                                                                               | 500,000  |                                                                                                           |   | (33,455,360                                                                                        | )      |   | (32,955,360 | ) |
|                                                        |   |                                                                                               |     |                                                                                                           |   |                                                                                               |   |   |   |   |
| Cash                flows from financing activities:        |   |                                                                                               |     |                                                                                                           |   |                                                                                               |   |   |   |   |
| Gross                proceeds                               |   |                                                                                               |     |                                                                                                           |   | 37,908,056                                                                                         |   |   | 37,908,056 |   |
| Proceeds                from notes payable, stockholders    |   |                                                                                               | -        |                                                                                                           |   | 83,000                                                                                             |   |   | 83,000 |   |
| Payment                of notes payable, stockholders       |   |                                                                                               |     |                                                                                                           |   | (83,000                                                                                            | )      |   | (83,000 | ) |
| Proceeds                from sale of shares of common stock |   |                                                                                               |     |                                                                                                           |   | 25,000                                                                                             |   |   | 25,000 |   |
| Proceeds                from issuance of option             |   |                                                                                               | -        |                                                                                                           |   | 100                                                                                                |   |   | 100 |   |
| Reimbursement                of issuance costs              |   |                                                                                               | 10,000   |                                                                                                           |   | -                                                                                                  |   |   | 10,000 |   |
| Payment                of deferred offering costs           |   |                                                                                               | -        |                                                                                                           |   | (3,949,377                                                                                         | )      |   | (3,949,377 | ) |
| Net                cash provided by financing activities    |   |                                                                                               | 10,000   |                                                                                                           |   | 33,983,779                                                                                         |   |   | 33,993,779 |   |
|                                                        |   |                                                                                               |     |                                                                                                           |   |                                                                                               |   |   |   |   |
|                                                        |   |                                                                                               |     |                                                                                                           |   |                                                                                               |   |   |   |   |
|                                                        |   |                                                                                               |     |                                                                                                           |   |                                                                                               |   |   |   |   |
| Net                change in cash and cash equivalents      |   |                                                                                               | (125,557 | )                                                                                                              |   | 417,681                                                                                            |   |   | 247,395 |   |
| Cash                and cash equivalents at the beginning   |   |                                                                                               |     |                                                                                                           |   |                                                                                               |   |   |   |   |
| of                the period                                |   |                                                                                               | 372,952  |                                                                                                           |   | -                                                                                                  |   |   | - |   |
| Cash                and cash equivalents at the end         |   |                                                                                               |     |                                                                                                           |   |                                                                                               |   |   |   |   |
| of                the period                                |   | $                                                                                                  | 247,395  |                                                                                                           | $      | 417,681                                                                                            |   | $ | 247,395 |   |

----

| **1.  ** | **BASIS                OF PRESENTATION** |
|--------------------|------------------------------------------|

| **2.  ** | **ORGANIZATION                AND BUSINESS OPERATIONS** |
|--------------------|---------------------------------------------------------|

----

| **2.  ** | **COMMITMENTS** |
|--------------------|-----------------|

----

| **3.  ** | **NOTES                PAYABLE, STOCKHOLDER** |
|--------------------|-----------------------------------------------|

| **4.  ** | **COMMON                STOCK** |
|--------------------|---------------------------------|

| **5.  ** | **INITIAL                PUBLIC OFFERING** |
|--------------------|--------------------------------------------|

----

**.      **

| **6.  ** | **PROPOSED                BUSINESS COMBINATION** |
|--------------------|--------------------------------------------------|

----

**ITEM      2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF      OPERATION**

**Forward      Looking Statements**

**Overview**

**Recent      Development**

----

**Results      of Operations**

**Financial      Condition and Liquidity**

----

**ITEM      3. CONTROLS AND PROCEDURES.**

----

----

**PART      II. **

**OTHER      INFORMATION**

**ITEM      2: UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF      PROCEEDS**

**ITEM      6: EXHIBITS**

|  | (a) | Exhibits: |
|--|-----|-----------|
|   |   |   |
|--------|--------|--------|
|   |   | 31.1 - Section 302 Certification by              CEO |
|--------|--------|------------------------------------------------------|
|   |   |   |
|--------|--------|--------|
|   |   | 31.2 - Section 302 Certification by              CFO |
|--------|--------|------------------------------------------------------|
|   |   |   |
|--------|--------|--------|
|   |   | 32.1 - Section 906 Certification by              CEO |
|--------|--------|------------------------------------------------------|
|   |   |   |
|--------|--------|--------|
|   |   | 32.2 - Section 906 Certification by              CFO |
|--------|--------|------------------------------------------------------|

----

**SIGNATURES**

|                     |                                                                            |                                                                   |
|--------------------------|---------------------------------------------------------------------------------|------------------------------------------------------------------------|
|                     |                                                                            | **ISRAEL              TECHNOLOGY****ACQUISITION                CORP.** |
|                |                                                                       |                                                              |
| Dated: November 14, 2006 |                                                                            |                                                                   |
|                     |                                                                       | /s/ Israel              Frieder                                   |
|                     | Israel              Frieder                                                     |
|                     | Chairman                of the                Board and Chief Executive Officer |
|   |                                 |                             |
|--------|--------------------------------------|----------------------------------|
|   |                                 | /s/ Glen              Shear |
|   | Glen              Shear              |
|   | Chief              Financial Officer |

----