================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   ----------

                                    FORM 10-Q

                   Quarterly Report Under Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

(Mark One)

   [X]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
          EXCHANGE ACT OF 1934.

          For the quarterly period ended June 30, 2000
                                         -------------

                                       OR

   [ ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
          EXCHANGE ACT OF 1934.

          For the transition period from               to
                                         -------------     -------------

                         Commission file number 0-30828


                         PRECISE SOFTWARE SOLUTIONS LTD.
             ------------------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)


         Israel                                               Not Applicable
         ------                                               --------------
(State or Other Jurisdiction                                 (I.R.S. Employer
     of Organization)                                       Identification No.)

                                1 Hashikma Street
                        P.O. Box 88 Savyon, 56518 Israel
               ---------------------------------------------------
               (Address of Principal Executive Offices) (Zip Code)


Registrant's Telephone Number, Including Area Code  972-(3)-635-2566


         Indicate by check |X| 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.
Yes            No  |X|
    -----         -----

         At August 11, 2000, 21,903,803 of the registrant's ordinary shares (par
value, 0.03 NIS per share) were outstanding.
================================================================================
<PAGE>
                                    FORM 10-Q

                   FOR THE QUARTERLY PERIOD ENDED June 30,2000

                                TABLE OF CONTENTS


                                                                            PAGE
PART I:  FINANCIAL INFORMATION

         ITEM 1. Consolidated Financial Statements:

                 Condensed Consolidated Balance Sheets as of June 30,
                 2000 (unaudited) and December 31, 1999...................... 5

                 Condensed Consolidated Statements of Operations
                 (unaudited) for the three months and six months ended
                 June 30, 2000 and 1999...................................... 7

                 Consolidated Statements of Cash Flows (unaudited) for
                 the six months ended June 30, 2000 and 1999................. 8

                 Notes to Consolidated Financial Statements (unaudited)......10

         ITEM 2. Management's Discussion and Analysis of Financial
                 Condition and Results of Operations.........................15

         ITEM 3. Quantitative and Qualitative Disclosures
                 About Market Risk...........................................18

PART II. OTHER INFORMATION

         ITEM 1. Legal Proceedings........................................... *

         ITEM 2. Changes in Securities and Use of Proceeds...................19

         ITEM 3. Defaults Upon Senior Securities............................. *

         ITEM 4. Matters submitted to a vote of Security Holders.............19

         ITEM 5. Other Information........................................... *

         ITEM 6. Exhibits and Reports on Form 8-K............................27
                 Exhibit 27.1 Financial Data Schedule (EDGAR only)

SIGNATURES...................................................................28



*No information provided due to inapplicability of item.

                                       -2-
<PAGE>


                         PRECISE SOFTWARE SOLUTIONS LTD.

                                    FORM 10-Q

                           QUARTER ENDED JUNE 30, 2000


                          PART I. FINANCIAL INFORMATION




ITEM 1.   FINANCIAL STATEMENTS.






























                                       -3-
<PAGE>



                PRECISE SOFTWARE SOLUTIONS LTD. AND SUBSIDIARIES


                   CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


     AS OF AND FOR THE THREE-MONTH AND SIX-MONTH PERIODS ENDED JUNE 30, 2000


                                 IN U.S. DOLLARS


                                    UNAUDITED























                                       -4-
<PAGE>
                                PRECISE SOFTWARE SOLUTIONS LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS
--------------------------------------------------------------------------------
U.S. DOLLARS IN THOUSANDS

<TABLE><CAPTION>

                                         DECEMBER 31,     JUNE 30,
                                             1999           2000
                                         -----------    -----------
                                                         UNAUDITED
                                                        -----------
<S>                                      <C>            <C>
                      ASSETS

CURRENT ASSETS:
  Cash and cash equivalents              $     6,693    $     6,099
  Short-term deposits                            888             --
  Trade receivables, net                       3,767          2,736
  Other accounts receivable                      358            745
                                         -----------    -----------

         Total current assets                 11,706          9,580
                                         -----------    -----------

SEVERANCE PAY FUND                               308            390
                                         -----------    -----------

PROPERTY AND EQUPIMENT, NET                      972          1,285
                                         -----------    -----------

OTHER ASSETS, NET                                 --          1,167
                                         -----------    -----------

                                         $    12,986    $    12,422
                                         ===========    ===========

</TABLE>




                 The accompanying notes are an integral part of
                the condensed consolidated financial statements.

                                       -5-
<PAGE>
                                PRECISE SOFTWARE SOLUTIONS LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS
--------------------------------------------------------------------------------
U.S. DOLLARS IN THOUSANDS


<TABLE><CAPTION>

                                         DECEMBER 31,     JUNE 30,
                                             1999           2000
                                         -----------    -----------
                                                         UNAUDITED
                                                        -----------
<S>                                      <C>            <C>
               LIABILITIES AND SHAREHOLDERS' EQUITY


CURRENT LIABILITIES:
Current maturities of long-term debt     $        --    $       235
Trade payables                                   628            757
Deferred revenues                              1,535          1,964
Employees and payroll accruals                   921          1,365
Accrued expenses                                 835            998
Other accounts payable                            78            103
                                         -----------    -----------

         Total current liabilities             3,997          5,422
                                         -----------    -----------

LONG-TERM LIABILITIES:
Long-term debt                                   199             --
Accrued severance pay                            497            680
                                         -----------    -----------

         Total long-term liabilities             696            680
                                         -----------    -----------

SHAREHOLDERS' EQUITY
Preferred shares, common shares and
  additional paid-in capital                  25,400         33,802
Deferred compensation                           (665)        (4,954)
Accumulated deficit                          (16,442)       (22,528)
                                         -----------    -----------

         Total shareholders' equity            8,293          6,320
                                         -----------    -----------

                                         $    12,986    $    12,422
                                         ===========    ===========
</TABLE>


                 The accompanying notes are an integral part of
                the condensed consolidated financial statements.

                                       -6-
<PAGE>
                                PRECISE SOFTWARE SOLUTIONS LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
--------------------------------------------------------------------------------
U.S. DOLLARS IN THOUSANDS (EXCEPT PER SHARE DATA)

<TABLE><CAPTION>
                                                 THREE MONTHS ENDED              SIX MONTHS ENDED
                                                      JUNE 30,                        JUNE 30,
                                            ----------------------------    ----------------------------
                                                1999            2000            1999            2000
                                            ------------    ------------    ------------    ------------
                                                                     UNAUDITED
                                            ------------------------------------------------------------
<S>                                         <C>             <C>             <C>             <C>
Revenues:
  Software licenses                         $      2,072    $      4,875    $      4,013    $      8,463
  Services                                           396             870             686           1,824
                                            ------------    ------------    ------------    ------------
                                                   2,468           5,745           4,699          10,287
                                            ------------    ------------    ------------    ------------
Cost of revenues:
  Software licenses                                  167             181             323             297
  Services                                           139             411             226             767
                                            ------------    ------------    ------------    ------------
                                                     306             592             549           1,064
                                            ------------    ------------    ------------    ------------
Gross profit                                       2,162           5,153           4,150           9,223
                                            ------------    ------------    ------------    ------------
Operating expenses:
  Research and development, net                      690           1,032           1,422           2,051
  Selling and marketing, net                       1,628           4,555           3,148           8,309
  General and administrative                         343             758             740           1,367
  Amortization of deferred
  stock-based compensation to employees
   and others                                         42           2,938              72           3,718
                                            ------------    ------------    ------------    ------------
Total operating expenses                           2,703           9,283           5,382          15,445
                                            ------------    ------------    ------------    ------------
Operating loss                                       541           4,130           1,232          (6,222)
Financial income (expenses), net                     (14)             99             (17)            136
                                            ------------    ------------    ------------    ------------
Net loss                                    $       (555)   $     (4,031)   $     (1,249)   $     (6,086)
                                            ============    ============    ============    ============
Net loss per share:
  Basic and diluted net loss per share      $      (0.17)   $      (1.20)   $      (0.38)   $      (1.84)
                                            ============    ============    ============    ============
  Weighted average number of shares
  used in computing basic and diluted
  net loss per share                           3,298,749       3,336,369       3,298,749       3,317,568
                                            ============    ============    ============    ============
  Pro forma basic and diluted net loss
  per share                                 $      (0.05)   $      (0.26)   $      (0.12)   $      (0.40)
                                            ============    ============    ============    ============
  Pro forma weighted average number of
  shares used in computing proforma basic
  and diluted net loss per share              10,417,688      15,331,091      10,417,688      15,312,290
                                            ============    ============    ============    ============
</TABLE>

                 The accompanying notes are an integral part of
                the condensed consolidated financial statements.

                                       -7-
<PAGE>
                                PRECISE SOFTWARE SOLUTIONS LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
--------------------------------------------------------------------------------
U.S. DOLLARS IN THOUSANDS

<TABLE><CAPTION>
                                                                    SIX MONTHS ENDED
                                                                         JUNE 30,
                                                                ------------------------
                                                                 1999             2000
                                                                -------          -------
                                                                        UNAUDITED
                                                                ------------------------
<S>                                                             <C>              <C>
Cash flows from operating activities:

  Net loss                                                      $(1,249)         $(6,086)
  Adjustments to reconcile net loss to net cash
    used in operating activities:
    Depreciation and amortization                                   197              263
    Amortization of deferred compensation                            72            3,718
    Decrease (increase) in trade receivables, net                  (655)           1,489
    Increase in other accounts receivable                          (129)            (321)
    Increase (decrease) in trade payables                            33              (38)
    Increase in other accounts payable                              587              726
    Increase in accrued severance pay, net                           48              101
    Other                                                            58                8
                                                                -------          -------

Net cash used in operating activities                            (1,038)            (140)
                                                                -------          -------

Cash flows used in investing activities:

    Purchase of property and equipment                             (219)            (508)
    Purchase of short-term deposits                                 (41)              --
    Proceeds from sale of short-term deposits                        --              888
    Prepaid issuance expenses                                        --             (479)
    Payment for acquisition of consolidated subsidiary (1)           --             (507)
                                                                -------          -------

Net cash used in investing activities                              (260)            (606)
                                                                -------          -------
</TABLE>


                 The accompanying notes are an integral part of
                the condensed consolidated financial statements.


                                       -8-
<PAGE>
                                PRECISE SOFTWARE SOLUTIONS LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
--------------------------------------------------------------------------------
U.S. DOLLARS IN THOUSANDS

<TABLE><CAPTION>
                                                                     SIX MONTHS ENDED
                                                                         JUNE 30,
                                                                 ------------------------
                                                                  1999             2000
                                                                 -------          -------
                                                                        UNAUDITED
                                                                 ------------------------
<S>                                                              <C>              <C>
Cash flows from financing activities:

  Short-term bank credit, net                                        573              (27)
  Proceeds from issuance of shares, net                               --              196
  Repayment of long-term debt                                         (9)             (17)
                                                                 -------          -------

Net cash provided by financing activities                            564              152
                                                                 -------          -------

Decrease in cash and cash equivalents                               (734)            (594)
Cash and cash equivalents at the beginning of the period             844            6,693
                                                                 -------          -------

Cash and cash equivalents at the end of the period               $   110          $ 6,099
                                                                 =======          =======


(1)   Payment for acquisition of consolidated subsidiary:

      In February 2000, the Company acquired all of the
      outstanding shares of Knight Fisk Software Ltd.
      The net fair value of the assets acquired was as
      follows:

      Working capital                                                             $    (8)
      Fixed assets                                                                     41
      Long-term loans and other                                                       (45)
      Goodwill                                                                        718
                                                                                  -------

                                                                                      706
      Options granted                                                                (199)
                                                                                  -------
                                                                                  $   507
                                                                                  =======
Supplemental disclosure of cash flows information:

      Cash paid during the period for:
      Interest                                                   $     9          $     1
                                                                 =======          =======
</TABLE>

                 The accompanying notes are an integral part of
                the condensed consolidated financial statements.

                                       -9-
<PAGE>

NOTE 1:   BASIS OF PRESENTATION

          The condensed consolidated financial statements have been prepared by
          Precise Software Solutions Ltd., pursuant to the rules and regulations
          of the Securities and Exchange Commission and include the accounts of
          Precise Software Solutions Ltd. and its wholly-owned subsidiaries
          collectively the "Company"). Certain information and footnote
          disclosures, normally included in financial statements prepared in
          accordance with generally accepted accounting principles, have been
          condensed or omitted pursuant to such rules and regulations. While in
          the opinion of the Company, the unaudited financial statements reflect
          all adjustments (consisting only of normal recurring adjustments)
          necessary for a fair presentation of the financial position at June
          30, 2000 and the operating results and cash flows for the three and
          six months ended June 30, 2000 and 1999, these financial statements
          and notes should be read in conjunction with the Company's audited
          consolidated financial statements and notes thereto, included in the
          Company's Registration Statement on Form F-1 filed with the Securities
          and Exchange Commission.

          The results of operations for the three months and six months ended
          June 30, 2000 are not necessarily indicative of results that may be
          expected for any other interim period or for the full fiscal year
          ending December 31, 2000.


NOTE 2:   ACQUISITION OF KNIGHT FISK SOFTWARE LTD.

          In February 2000, the Company acquired all the outstanding shares of
          Knight Fisk Software Ltd. ("Knight Fisk"), a U.K. - based company and
          the distributor of the Company's products in the United Kingdom.

          The consideration for the shares acquired was $ 684,000 in cash and
          stock options, which were valued as of the date of the purchase. The
          acquisition was accounted for under the purchase method. The excess of
          the purchase price over the fair value of net liabilities acquired was
          allocated to goodwill.

          PRO FORMA FINANCIAL INFORMATION:

          The operations of Knight Fisk are included in the Company's
          consolidated operating results from February 1, 2000. The following
          unaudited pro forma information presents the results of operations for
          the Company and Knight Fisk for the six months ended June 30, 2000,
          1999 and for the year ended December 31, 1999, as if the acquisition
          had been consummated as of January 1, 2000 and January 1, 1999,
          respectively. This pro forma information does not purport to be
          indicative of what may occur in the future (in thousands):


                                  Page 10 of 28
<PAGE>
<TABLE><CAPTION>
                                                                SIX MONTHS ENDED
                                                YEAR ENDED           JUNE 30,
                                                DECEMBER 31, ------------------------
                                                   1999         1999         2000
                                                -----------  -----------  -----------
                                                                     UNAUDITED
                                                             ------------------------
          <S>                                   <C>          <C>          <C>
          Total revenues                        $    12,100  $     4,950  $    10,469
                                                ===========  ===========  ===========
          Net loss                              $    (3,027) $    (1,439) $    (6,011)
                                                ===========  ===========  ===========
          Basic and diluted net loss per share  $     (0.92) $     (0.44) $     (1.81)
                                                ===========  ===========  ===========
</TABLE>

NOTE 3:   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

          A.     CASH, CASH EQUIVALENTS AND SHORT-TERM DEPOSITS:

                 The Company considers all highly liquid investment securities
                 with maturities from date of purchase of three months or less
                 to be cash equivalents. As well as short-term deposits with
                 maturities of more than three months but less than one year.

          B.     REVENUE RECOGNITION:

                 Revenues from software sales are recognized in accordance with
                 SOP 97-2, as amended. License revenues are comprised of
                 perpetual license fees which are derived from contracts with
                 end-customers, distributors and an original equipment
                 manufactures ("OEMs"). The Company generally does not grant
                 rights of return. When right of return exists, the Company
                 defers the revenues until such right expires. The Company is
                 entitled to royalties from the OEM upon the sublicensing of the
                 Company's products to end users. Royalties due from this OEM
                 are recognized when such royalties are reported to the Company
                 by the OEM. License revenues from sales to distributors and
                 end-customers are recognized upon delivery of the software when
                 collection is probable; all license payments are due within one
                 year; the license fee is otherwise fixed or determinable;
                 vendor-specific objective evidence exists and persuasive
                 evidence of an arrangement exists.

                 Service revenues are comprised of revenues from maintenance and
                 support arrangements, consulting fees, and training, none of
                 which are considered essential to the functionality of the
                 software license. Revenues from support arrangements are
                 deferred and recognized on a straight-line basis as service
                 revenues over the life of the related agreement. Consulting and
                 training revenues are recognized at the time the services are
                 rendered. Customer advances and billed amounts due from
                 customers in excess of revenue recognized are recorded as
                 deferred revenues.




                                  Page 11 of 28
<PAGE>
                 Where software arrangements involve multiple elements, revenue
                 is allocated to each element based on vendor specific objective
                 evidence ("VSOE") of the relative fair values of each element
                 in the arrangement. The Company's VSOE used to allocate the
                 sales price to consulting, training and maintenance is based on
                 the price charged when these elements are sold separately.
                 License revenues are recorded based on the residual method.
                 Under the residual method, revenue is recognized for the
                 delivered elements when (1) there is vendor-specific objective
                 evidence of the fair values of all the undelivered elements
                 other than those accounted for using long-term contract
                 accounting, and (2) all revenue recognition criteria of SOP
                 97-2, as amended, are satisfied.

          C.     BASIC AND DILUTED NET LOSS PER SHARE:

                 Basic net loss per share is computed based on the weighted
                 average number of Ordinary shares outstanding during each
                 period. Diluted net loss per share is computed based on the
                 weighted average number of Ordinary shares outstanding during
                 each period, plus dilutive potential Ordinary shares considered
                 outstanding during the period, in accordance with FASB
                 Statement No. 128, "Earnings per Share".

                 All convertible Preferred shares, outstanding stock options,
                 and warrants have been excluded from the calculation of the
                 diluted net loss per share as their inclusion would be
                 anti-dilutive for all periods presented.

                 Pro forma basic and diluted shares outstanding include the
                 automatic conversion of the convertible Preferred Shares into
                 Ordinary shares that will occur upon the closing of the initial
                 public offering using the if-converted method from the original
                 date.

                 The following table presents the calculation of unaudited pro
                 forma basic and diluted net loss per share (in thousands,
                 except share and per share data):
<TABLE><CAPTION>
                                                         THREE MONTHS ENDED               SIX MONTHS ENDED
                                                              JUNE 30,                        JUNE 30,
                                                    ----------------------------    ----------------------------
                                                        1999            2000            1999            2000
                                                    ------------    ------------    ------------    ------------
                                                                              UNAUDITED
                                                    ------------------------------------------------------------
                 <S>                                <C>             <C>             <C>             <C>
                 Net loss                           $       (555)   $     (4,033)   $     (1,249)   $     (6,088)
                                                    ============    ============    ============    ============
                 Pro forma:
                 Shares used in computing basic
                 and diluted net loss per share        3,298,766       3,336,369       3,298,766       3,317,568

                 Effect of assumed conversion of
                 convertible Preferred shares          7,118,922      11,994,722       7,118,922      11,994,722
                                                    ------------    ------------    ------------    ------------
                 Shares used in computing pro
                 forma basic and diluted net loss
                 per share                            10,417,688      15,331,091      10,417,688      15,312,290
                                                    ============    ============    ============    ============
                 Pro forma basic and diluted net
                 loss per share                     $      (0.05)   $      (0.26)   $      (0.12)   $      (0.40)
                                                    ============    ============    ============    ============
</TABLE>
                                  Page 12 of 28
<PAGE>

          D.     SHAREHOLDERS' EQUITY:

                 1.     Reverse split:

                        On April 12, 2000, the Company's shareholders approved a
                        two for three reverse share split. All share and per
                        share data have been retroactively adjusted to reflect
                        this split.

                 2.     Stock options plans:

                        The following table summarized information about stock
                        options outstanding as of June 30, 2000:
<TABLE><CAPTION>
                                                            NUMBER OF   WEIGHTED AVERAGE
                                                             OPTIONS     EXERCISE PRICE
                                                           -----------    -----------
                        <S>                                <C>            <C>
                        Outstanding at December 31, 1999     3,681,044    $      1.04
                        Granted                              1,345,444    $      9.70
                        Exercised                              (65,167)   $      0.60
                        Forfeited                              (97,502)   $      1.49
                                                           -----------    -----------
                        Outstanding at June 30, 2000         4,863,819    $      3.43
                                                           ===========    ===========
</TABLE>

          E.     SEGMENT, CUSTOMERS AND GEOGRAPHIC INFORMATION:

                 1.     Summary information about geographical areas
                        (in thousands):

                        The Company operates in one industry segment, the
                        development and marketing of performance software
                        products. Operations in Israel include research and
                        development, selling and marketing. Operations in the
                        United States include selling and marketing. The
                        following is a summary of operations within geographic
                        areas based on customer's location.

<TABLE><CAPTION>
                                                         THREE MONTHS ENDED               SIX MONTHS ENDED
                                                              JUNE 30,                        JUNE 30,
                                                    ----------------------------    ----------------------------
                                                        1999            2000            1999            2000
                                                    ------------    ------------    ------------    ------------
                                                                              UNAUDITED
                                                    ------------------------------------------------------------
                        <S>                         <C>             <C>             <C>             <C>
                        Revenues from sales to
                          unaffiliated customers:
                          U.S.A.                    $      1,448    $      4,065    $      2,809    $      7,353
                          North and South America
                          (except U.S.A)                      80             142             290             249
                          Japan                               50             159             137             433
                          Far East (except Japan)            139             220             173             269
                          Europe and others                  751           1,159           1,290           1,983
                                                    ------------    ------------    ------------    ------------
                                                    $      2,468    $      5,745    $      4,699    $     10,287
                                                    ============    ============    ============    ============
</TABLE>

                                  Page 13 of 28
<PAGE>
<TABLE><CAPTION>
                                                              JUNE 30,
                                                    ----------------------------
                                                        1999            2000
                                                    ------------    ------------
                                                              UNAUDITED
                                                    ----------------------------
                        <S>                         <C>             <C>
                        Long-lived assets, by
                        geographic region:
                          Israel                    $        434    $        566
                          United States                      456             640
                          Europe                              --              79
                                                    ------------    ------------
                                                    $        890    $      1,285
                                                    ============    ============
</TABLE>

                 2.     Major customer data as a percentage of total revenues:

<TABLE><CAPTION>
                                                         THREE MONTHS ENDED               SIX MONTHS ENDED
                                                              JUNE 30,                        JUNE 30,
                                                    ----------------------------    ----------------------------
                                                        1999            2000            1999            2000
                                                    ------------    ------------    ------------    ------------
                                                                              UNAUDITED
                                                    ------------------------------------------------------------
                        <S>                                <C>             <C>             <C>             <C>
                        Customer A                         25.8%            5.7%           21.4%            6.3%
                        Customer B                            --           27.0%              --           23.3%
</TABLE>

          F.     IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS:

                 In June 1998, the Financial Accounting Standards Board issued
                 SFAS No. 133, "Accounting for Derivative Instruments and
                 Hedging Activities", which will be effective for fiscal years
                 beginning after June 15, 2000. This Statement establishes
                 accounting and reporting standards requiring that every
                 derivative instrument, including certain derivative instruments
                 embedded in other contracts, be recorded in the balance sheet
                 as either an asset or liability measured at its fair value. The
                 Statement also requires that changes in the derivative's fair
                 value be recognized in earnings unless specific hedge
                 accounting criteria are met. The Company does not expect the
                 impact of this new Statement on the Company's consolidated
                 balance sheet or results of operations to be material.

                 In December 1999, the Securities and Exchange Commission issued
                 Staff Accounting Bulletin No. 101 - Revenue Recognition in
                 Financial Statements ("SAB 101"), which among other things
                 clarifies certain conditions to be met in order to recognize
                 revenue. The Company is currently in the process of assessing
                 the impact of SAB 101.

          G.     SUBSEQUENT EVENTS:

                 On July 6, 2000, the Company completed an initial public
                 offering in which it sold 4,887,500 Ordinary Shares (including
                 the over-allotted option for 637,500 shares). The Company also
                 issued 312,500 shares to EMC Corporation in a concurrent
                 offering at $16 per share. The aggregate proceeds received by
                 the Company from these offerings was approximately $83 million.

                                  Page 14 of 28
<PAGE>
ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS

          This Form 10-Q contains certain statements of a forward-looking nature
relating to future events or the future financial performance of Precise
Software Solutions Ltd. ("Precise"). Precise's actual future results may differ
significantly from these statements. In evaluating these statements, the various
factors identified in the caption "Factors Affecting Future Operating Results"
should be considered.

OVERVIEW

          Precise is a provider of software that assists organizations in
monitoring and optimizing the performance of their complex Information
Technology infrastructure. We were incorporated in Israel in November 1990.
Initially, we focused on developing and marketing performance management
software for mainframe computer systems. In 1995, we shifted our focus from
performance management software for mainframe systems to Information Technology
infrastructure performance management software for Oracle database environments.
In 1996, we released the initial version of our Precise/SQL software for
database monitoring. In 1998, we released several new products, including our
Precise/Pulse! software for proactive monitoring, Precise/Presto for EMC
software for monitoring database along with EMC storage systems and
Precise/Interpoint software for monitoring ERP applications. In 1999, we
introduced our Precise/SWIFT-E software for IT infrastructure performance
management in e-business environments and in April 2000, we introduced
Precise/Insight.

REVENUES

          We derive our revenues from the sale of software licenses and from
services consisting primarily of maintenance fees, and, to a lesser extent,
professional services. Total revenues were $5.7 million for the three months
ended June 30, 2000 and $2.5 million for the comparable quarter of 1999,
representing an increase of $3.2 million, or 133%, and were $10.3 million for
the six months ended June 30, 2000 and $4.7 million for the comparable period of
1999, representing an increase of $5.6 million, or 119% .

          Revenues from sales of software licenses were $4.9 million for the
three months ended June 30, 2000 and $2.1 million for comparable quarter of
1999, representing an increase of $2.8 million, or 135% and were $8.5 million
for the six months ended June 30, 2000 and $4 million for the comparable period
of 1999, representing an increase of 4.5 million, or 111%. The increase in
software license revenues during the period is attributable to the expansion of
our direct sales force and indirect sales channels, and recurring sales to our
installed customer base.

          Revenues from services were $0.9 million for the three months ended
June 30, 2000 and $0.4 million for the comparable quarter of 1999, representing
an increase of $0.5 million, or 119% and were $1.8 million for the six months
ended June 30, 2000 and $0.7 million for the comparable period of 1999
representing an increase of $1.1 million, or 166%. The increase in service
revenues during this period is attributable to maintenance agreements resulting
from new sales of software licenses, renewals of annual maintenance agreements
with existing customers and to sales of our new professional services.

COST OF REVENUES

          Cost of revenues consists of costs associated with generating software
license and service revenues. Cost of revenues was $0.6 million for the three
months ended June 30, 2000 and $0.3 million for the comparable quarter of 1999,
representing an increase of $0.3 million, or 93%, and were $1.1 million for the
six months ended June 30, 2000 and $0.5 million for the comparable period of
1999. Cost of revenues as a percentage of total revenues was 10% for the three
months ended June
                                  Page 15 of 28
<PAGE>

30, 2000 and 12% for the comparable quarter of 1999 and was 10% for the six
months ended June 30, 2000 and 12% for the comparable period of 1999.

          Cost of software license revenues consists of royalties to the
government of Israel as consideration for royalty-bearing research and
development grants received in previous years and, to a lesser extent,
production costs. Cost of software license revenues was $180,000 for the three
months ended June 30, 2000 and $170,000 for the comparable quarter of 1999,
representing an increase of $10,000, or 5%. The increase is due to an increase
in production costs and a smaller decrease in royalties accrued in connection to
royalty-bearing marketing grants, as these grants were fully repaid. Cost of
license revenue was $0.3 million for both the six months ended June 30, 2000 and
for the comparable period of 1999. Cost of software license revenues as a
percentage of total software license revenues was 4% for the three months ended
June 30, 2000 and 8.0% for the comparable quarter in 1999, and was 3% for the
six months ended June 30, 2000 and 8% for the comparable period of 1999.

          Cost of service revenues consists primarily of costs related to
personnel providing customer support and professional services. Cost of service
revenues was $0.4 million for the three months ended June 30, 2000 and $0.1
million for the comparable quarter of 1999, representing an increase of $0.3
million, or 196%, and was $0.8 million for the six months ended June 30, 2000
and $0.2 million for the comparable period of 1999 representing an increase of
$0.6 million or 239%. Cost of service revenues as a percentage of service
revenues was 47% in the three months ended June 30, 2000 and 35% in the
comparable quarter of 1999 and was 42% in the six months ended June 30, 2000 and
33% in the comparable period of 1999. The increases are due to personnel costs
of our professional services organization, established in the later half of
1999, and to a lesser extent to the increase in the number of customer support
personnel hired to service our growing customer base.

RESEARCH AND DEVELOPMENT

          Research and development expenses consist primarily of costs related
to research and development personnel, including salaries and other
personnel-related expenses, sub-contracting fees, facilities and computer
equipment used in our product and technology development. Research and
development expenses were $1.0 for the three months ended June 30, 2000 and $0.7
million for the comparable period of 1999, representing an increase of $0.3
million, or 50%, and were $2.1 million for the six months ended June 30, 2000
and $1.4 million for the comparable period of 1999 representing an increase of
$0.7 million, or 44%. The increases were primarily related to the increase in
the number of software developers and quality assurance personnel engaged in the
continuing enhancement of our software suite. Research and development expenses
as a percentage of total revenues were 18% in the three months ended June 30,
2000 and 28% in the comparable quarter of 1999, and were 20% for the six months
ended June 30, 2000 and 30% for the comparable period of 1999. We expect
research and development expenses to increase as we extend the functionality of
our software and as we hire additional personnel.

SALES AND MARKETING

          Sales and marketing expenses consist primarily of salaries and other
personnel-related expenses, commissions and other costs associated with our
sales and marketing efforts. Sales and marketing expenses were $4.6 million for
the three months ended June 30, 2000 and $1.6 million for the comparable quarter
of 1999, representing an increase of $3.0 million, or 180%, and were $8.3
million in the six months ended June 30, 2000 and $3.1 million in the comparable
period of 1999, representing an increase of $5.2 million, or 164%. This increase
is attributable to the increase in commission expenses attributable to the
increase in software license revenues, increased expenditures on marketing
programs to support new and existing products and to penetrate new markets, and
the increase in the number of people comprising our direct sales force. Sales
and marketing expenses as a percentage of total revenues were 79% for the three
months ended June 30, 2000 and 67% for the comparable period of 1999 and were
81% for the six months ended June 30, 2000 and 67% for the comparable period of
1999. We expect sales and marketing expenses to increase as we expand our
geographic reach and hire additional personnel.

                                  Page 16 of 28
<PAGE>

GENERAL AND ADMINISTRATIVE

          General and administrative expenses consist primarily of salaries and
other personnel-related expenses for our administrative and finance personnel,
facilities, computer equipment and professional services fees. General and
administrative expenses were $0.8 million for the three months ended June 30,
2000 and $0.3 million for the comparable quarter of 1999, representing an
increase of $0.5 million, or 121%, and were $1.4 million for the six months
ended June 30, 2000 and $0.7 million for the comparable period of 1999,
representing an increase of $0.7 million, or 85%. This increase is attributable
to the increased personnel in our financing department. General and
administrative expenses as a percentage of total revenues were 13% for the three
months ended June 30, 2000 and 14% for the comparable quarter in 1999, and were
13% for the six months ended June 30, 2000 and 16% for the comparable period of
1999. We expect general and administrative expenses to increase for the
foreseeable future as we expand our administrative staff and incur expenses
associated with being a public company, including the costs of annual and
periodic reporting and investor relations programs.

AMORTIZATION OF STOCK-BASED COMPENSATION

          Our stock-based compensation expenses increased from $42,000 for the
three months ended June 30, 1999 to $2.9 million for the three months ended June
30, 2000, and from $72,000 for the six months ended June 30, 1999 to $3.7
million in the comparable period in 2000 due to additional amortization of
deferred compensation recorded during the three months and the six months ended
June 30, 2000. The deferred compensation is amortized over the vesting schedule,
generally four years. We had $8 million of deferred compensation at June 30,
2000.

LIQUIDITY AND CAPITAL RESOURCES

          Since our inception, we have funded our operations primarily through
private placements of our equity securities, the issuance of convertible notes
to shareholders and, to a lesser extent, borrowings from financial institutions.
Through June 30, 2000, our sales of securities resulted in net proceeds of
approximately $24 million. On July 6, 2000 we completed our initial public
offering of ordinary shares in which we sold 4,887,500 shares (including the
exercise of the over allotment option) at a price of $16.00 per share. We also
sold 312,500 ordinary shares to EMC Corporation on July 6, 2000 at $16.00 per
share. Since proceeds from these offerings were received during July 2000, these
amounts are not included in the financial results described herein. Total
proceeds, before offering expenses, were approximately $83 million.

          As of June 30, 2000 our principal source of liquidity was $6.1 million
of cash and cash equivalents. As of June 30, 2000 we had an outstanding
obligation of $0.2 million payable to two of our former shareholders, which we
repaid upon the consummation of the public offering in July 2000.

          As of June 30, 2000 our accumulated net deficit was $22.5 million.

          Net cash used in operating activities for the six months ended June
30, 2000 and 1999 was $0.1 million and $1 million, respectively. Net cash used
in operating activities in the six months ended June 30, 2000 was primarily the
result of net losses that were offset by the amortization of deferred
compensation and by the decrease in trade receivables. Net cash used in
operating activities in the six months ended June 30,1999 was primarily the
result of net losses and the increase in trade receivables that was in part
offset by the increase of payables.

          Net cash used in investing activities was $0.6 million and $0.3
million in the six months ended June 30, 2000 and 1999, respectively. Investing
activities in the six months ended June 30, 2000 consisted of capital
expenditures, the payment for the acquisition of Knight Fisk, and purchases of
short-term investments, partially offset by the sale of short-term deposits.
Investing activities in the six months ended June 30, 1999 consisted of capital
expenditures.

                                  Page 17 of 28
<PAGE>

          Net cash provided by financing activities was $0.2 million, and $0.6
million in the six months ended June 2000 and 1999 , respectively. Cash provided
by financing activities in the six months ended June 30, 2000 resulted primarily
from net proceeds from the exercise of certain warrants held by our
shareholders. Cash provided by financing activities in the six months ended June
30, 1999 resulted from the use of a short term line of credit.

          We believe that the net proceeds from the offering, together with our
existing cash equivalents, and short-term investments will be sufficient to meet
our anticipated cash needs for working capital and capital expenditures for at
least the next 12 months. Thereafter, if we do not have available sufficient
cash to finance our operations, we may be required to obtain additional debt or
equity financing. We cannot be certain that we will be able to obtain, if
required, additional financing on acceptable terms or at all.

FACTORS AFFECTING FUTURE OPERATING RESULTS

          This Form 10-Q contains forward-looking statements that involve risks
and uncertainties. These forward-looking statements include management's plans
and objectives for future operations, as well as statements regarding the
strategy and plans of Precise. Precise's actual experience may differ materially
from those discussed in the forward-looking statements. Factors that might cause
such a difference include the size, timing and recognition of revenue from major
customers; the status of Precise's continuing relationship with Oracle; the
continued development of the market for Oracle databases and related
applications software; market acceptance of new product offerings and Precise's
ability to predict and respond to market developments; the failure to keep pace
with the rapidly changing requirements of its customers; Precise's ability to
attract and retain key personnel; the development and expansion of Precise's
direct sales force; risks associated with management of growth; Precise being
held liable for defects or errors in its products; political, economic and
business fluctuations in Israel and Precise's international markets; as well as
risks of downturns in economic conditions generally, and in the information
technology and software industries specifically, and risks associated with
competition, and competitive pricing pressures. For a more detailed description
of the risk factors associated with Precise, please refer to Precise's
Registration Statement on Form F-1 on file with the Securities and Exchange
Commission.

ITEM 3.   QUALITATIVE AND QUANTITATIVE DISCLOSURE ABOUT MARKET RISK

          As of June 30, 2000, our investments in securities subject to equity
market risks and other income producing assets subject to interest rate risks
are not material in amount. We do not hold such assets for trading purposes. In
addition, we do not engage in currency hedging activities and hold no foreign
currency related derivative instruments that would subject our financial
condition or results of operations to risks associated with foreign currency
exchange rate fluctuations. We do, however, incur a portion of our expenditures
in foreign currencies, such as NIS and British pound sterling, that could cause
our results of operations to fluctuate.



                           PART II. OTHER INFORMATION





                                  Page 18 of 28
<PAGE>

ITEM 2.   CHANGES IN SECURITIES AND USE OF PROCEEDS

          On June 20, 2000, options to purchase a total of 65,168 ordinary
shares were exercised under the Company's stock option plans, of which 43,084
were issued pursuant to the 1995 Stock Option plan and 22,084 were issued
pursuant to the 1998 Share Option and Incentive Plan.

          On June 29, 2000, we commenced our initial public offering of
4,250,000 ordinary shares, 0.03 NIS par value per share, pursuant to a final
prospectus dated June 29, 2000. The prospectus was contained in the Company's
registration statement on Form F-1 (SEC File No. 333-11992), covering 4,250,000
ordinary shares plus an additional 637,500 ordinary shares to cover
over-allotments by the underwriters. The registration statement was declared
effective by the Securities and Exchange Commission on June 29, 2000. The
aggregate offering price of the offering to the public was $68.0 million. As of
June 30, 2000, Precise had not received any proceeds in connection with this
offering, which closed on July 6, 2000. The underwriting discount in connection
with the initial public offering was $971,429. None of the expenses incurred by
Precise in connection with the offering represented payments, direct or
indirect, to directors, officers, persons owning 10% or more of the equity
securities of Precise, or affiliates of Precise. No direct or indirect payments
were made during this period. Merrill Lynch & Co., CIBC World Markets and Wit
SoundView acted as underwriters for the initial public offering.

          In a private placement consummated on June 29, 2000, Precise issued to
EMC Corporation 312,500 ordinary shares at a price of $5,000,000.

          On June 29, 2000, all outstanding 7,118,922 Preferred A shares and all
outstanding 4,875,800 Preferred B shares were converted into the same number of
ordinary shares.

          On June 29, 2000, warrants to acquire 1,195,256 ordinary shares were
exercised.

          Other than our initial public offering, all such issuances of
securities of Precise during the quarter ending June 30, 2000 were made in
reliance on Section 4(2), Rule 701 and/or Regulation D under the Securities Act
of 1933, as amended.


ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

          Precise's General Meeting of Shareholders was held on April 12, 2000.
Holders of an aggregate of 15,293,488 shares were entitled to vote at the
meeting. At this meeting, Precise's shareholders voted as follows:

Resolution 1. To approve the financial statements of Precise for the year ending
December 31, 1999.

<TABLE><CAPTION>
<S>                              <C>                          <C>                     <C>

Total Votes for Resolution 1     Total Votes Against          Abstentions             Broker Non-Votes
----------------------------     --------------------         -----------             ----------------
                                 Resolution 1
                                 ------------

15,045,266                       None                         None                    Not Applicable



Resolution 2. To re-appoint Kost, Forer & Gabay as the auditor for Precise, and
to authorize the Board of Directors to set the auditor's compensation.


Total Votes for Resolution 2     Total Votes Against          Abstentions             Broker Non-Votes
----------------------------     --------------------         -----------             ----------------
                                 Resolution 2
                                 ------------

15,045,266                       None                         None                    Not Applicable


</TABLE>

                                  Page 19 of 28
<PAGE>
<TABLE><CAPTION>
<S>                              <C>                          <C>                     <C>

Resolution 3. To appoint or re-appoint six members to the Board of Directors.


Director Name                    Total Votes for              Total Votes Withheld    Abstentions           Broker Non-Votes
-------------                    ----------------             ---------------------   -----------           ----------------
                                 Each Nominee                 from Each Nominee
                                 ------------                 -----------------

Yuval Cohen                      15,045,266                   None                    None                  Not Applicable

Yoseph Sela                      15,045,266                   None                    None                  Not Applicable

Ron Zuckerman                    15,045,266                   None                    None                  Not Applicable

Erel Margalit                    15,045,266                   None                    None                  Not Applicable

Shimon Alon                      15,045,266                   None                    None                  Not Applicable

Anton Simunovic                  15,045,266                   None                    None                  Not Applicable


No other persons were nominated or received votes for election as directors of
Precise at this General Meeting of Shareholders.


Resolution 4. To classify the Board of Directors into three classes upon
Precise's Initial Public Offering. Yuval Cohen and Yoseph Sela will be in Class
I; Ron Zuckerman and Erel Margalit will be in Class II; and Shimon Alon and
Anton Simunovic will be in Class III.


Total Votes for Resolution 4     Total Votes Against          Abstentions             Broker Non-Votes
----------------------------     --------------------         -----------             ----------------
                                 Resolution 4
                                 ------------

15,045,266                       None                         None                    Not Applicable















</TABLE>

                                  Page 20 of 28
<PAGE>
<TABLE><CAPTION>
<S>                              <C>                          <C>                     <C>
Resolution 5. To reaffirm all previous Board of Director resolutions increasing
the number of shares that may be granted as options under the Company's 1998
Share Option and Incentive Plan.


Total Votes for Resolution 5     Total Votes Against          Abstentions             Broker Non-Votes
----------------------------     --------------------         -----------             ----------------
                                 Resolution 5
                                 ------------

15,045,266                       None                         None                    Not Applicable


Resolution 6. To declare that the total number of shares granted or reserved for
future granting under the Company's 1998 Share Option and Incentive Plan shall
be 12 million. This includes all options granted under the various Share Option
and Incentive Plans, any options granted thereunder, and all shares to be
purchased under Precise's 2000 Employee Stock Purchase Plan.


Total Votes for Resolution 6     Total Votes Against          Abstentions             Broker Non-Votes
----------------------------     --------------------         -----------             ----------------
                                 Resolution 6
                                 ------------

15,045,266                       None                         None                    Not Applicable


Resolution 7. To approve the amendment of the first sentence of Section 5 of the
Company's 1998 Share Option and Incentive Plan changing the aggregate number of
shares which may be granted to 12 million, subject to adjustment.


Total Votes for Resolution 7     Total Votes Against          Abstentions             Broker Non-Votes
----------------------------     --------------------         -----------             ----------------
                                 Resolution 7
                                 ------------

15,045,266                       None                         None                    Not Applicable


Resolution 8. To approve the amendment of Section 9.3 of the Company's 1998
Share Option and Incentive Plan, converting all shares and options into ordinary
shares, upon the closing of Precise's Initial Public Offering.


Total Votes for Resolution 8     Total Votes Against          Abstentions             Broker Non-Votes
----------------------------     --------------------         -----------             ----------------
                                 Resolution 8
                                 ------------

15,045,266                       None                         None                    Not Applicable



Resolution 9. To approve the adjustment of the total number of shares from 12
million to 8 million, in accordance with the revision of Precise's share
capital.


Total Votes for Resolution 9     Total Votes Against          Abstentions             Broker Non-Votes
----------------------------     --------------------         -----------             ----------------
                                 Resolution 9
                                 ------------

15,045,266                       None                         None                    Not Applicable


</TABLE>
                                  Page 21 of 28
<PAGE>
<TABLE><CAPTION>
<S>                              <C>                          <C>                     <C>
     Precise held a meeting of its Preferred A Shareholders on April 12, 2000.
Holders of an aggregate of 7,118,992 Preferred A shares were entitled to vote at
the meeting. At this meeting, Precise's Preferred A Shareholders voted as
follows:


Resolution 1. To increase Precise's authorized share capital from 790,000 NIS to
2,100,000 NIS.


Total Votes for Resolution 1     Total Votes Against          Abstentions             Broker Non-Votes
----------------------------     --------------------         -----------             ----------------
                                 Resolution 1
                                 ------------

6,897,760                        None                         None                    Not Applicable


Resolution 2. To revise the par value of Precise's shares to 0.03 NIS,
authorizing 9,410,257 Preferred A Shares, 6,666,667 Preferred B Shares,
49,523,898 Ordinary Shares and 4,399,178 Ordinary A Shares.


Total Votes for Resolution 2     Total Votes Against          Abstentions             Broker Non-Votes
----------------------------     --------------------         -----------             ----------------
                                 Resolution 2
                                 ------------

6,897,760                        None                         None                    Not Applicable


Resolution 3. To substitute two shares of 0.03 NIS par value for every three
shares of 0.02 NIS par value.


Total Votes for Resolution 3     Total Votes Against          Abstentions             Broker Non-Votes
----------------------------     --------------------         -----------             ----------------
                                 Resolution 3
                                 ------------

6,897,760                        None                         None                    Not Applicable


Resolution 4. To amend Precise's Memorandum of Association requiring an ordinary
majority to amend said Memorandum.


Total Votes for Resolution 4     Total Votes Against          Abstentions             Broker Non-Votes
----------------------------     --------------------         -----------             ----------------
                                 Resolution 4
                                 ------------

6,897,760                        None                         None                    Not Applicable


Resolution 5. To restate the Company's Articles of Association contingent upon
consummation of Precise's Initial Public Offering.


Total Votes for Resolution 5     Total Votes Against          Abstentions             Broker Non-Votes
----------------------------     --------------------         -----------             ----------------
                                 Resolution 5
                                 ------------

6,897,760                        None                         None                    Not Applicable


Resolution 6. To convert all shares of Precise into Ordinary Shares, carrying
equal rights and privileges contingent upon consummation of Precise's Initial
Public Offering.


Total Votes for Resolution 6     Total Votes Against          Abstentions             Broker Non-Votes
----------------------------     --------------------         -----------             ----------------
                                 Resolution 6
                                 ------------

6,897,760                        None                         None                    Not Applicable


</TABLE>
                                  Page 22 of 28
<PAGE>
<TABLE><CAPTION>
<S>                              <C>                          <C>                     <C>
     Precise held a meeting of its Preferred B Shareholders on April 12, 2000.
Holders of an aggregate of 4,875,800 Preferred B Shares were entitled to vote at
the meeting. At this meeting, the Company's Preferred B Shareholders voted as
follows:


Resolution 1. To increase Precise's authorized share capital from 790,000 NIS to
2,100,000.


Total Votes for Resolution 1     Total Votes Against          Abstentions             Broker Non-Votes
----------------------------     --------------------         -----------             ----------------
                                 Resolution 1
                                 ------------

4,875,636                        None                         None                    Not Applicable


Resolution 2. To revise the par value of Precise's shares to 0.03 NIS,
authorizing 9,410,257 Preferred A Shares, 6,666,667 Preferred B Shares,
49,523,898 Ordinary Shares and 4,399,178 Ordinary A Shares.


Total Votes for Resolution 2     Total Votes Against          Abstentions             Broker Non-Votes
----------------------------     --------------------         -----------             ----------------
                                 Resolution 2
                                 ------------

4,875,636                        None                         None                    Not Applicable


Resolution 3. To substitute two shares of 0.03 NIS par value for every three
shares of 0.02 NIS par value.


Total Votes for Resolution 3     Total Votes Against          Abstentions             Broker Non-Votes
----------------------------     --------------------         -----------             ----------------
                                 Resolution 3
                                 ------------

4,875,636                        None                         None                    Not Applicable


Resolution 4. To amend Precise's Memorandum of Association requiring an ordinary
majority to amend said Memorandum.


Total Votes for Resolution 4     Total Votes Against          Abstentions             Broker Non-Votes
----------------------------     --------------------         -----------             ----------------
                                 Resolution 4
                                 ------------

4,875,636                        None                         None                    Not Applicable


Resolution 5. To restate Precise's Articles of Association contingent upon
consummation of Precise's Initial Public Offering.


Total Votes for Resolution 5     Total Votes Against          Abstentions             Broker Non-Votes
----------------------------     --------------------         -----------             ----------------
                                 Resolution 5
                                 ------------

4,875,636                        None                         None                    Not Applicable


Resolution 6. To convert all shares of Precise into Ordinary Shares, carrying
equal rights and privileges upon consummation of Precise's Initial Public
Offering.



Total Votes for Resolution 6     Total Votes Against          Abstentions             Broker Non-Votes
----------------------------     --------------------         -----------             ----------------
                                 Resolution 6
                                 ------------

4,875,636                        None                         None                    Not Applicable


     Precise held an Extraordinary Meeting of ordinary Shareholders on April 12,
2000. Holders of an aggregate of 15,293,488 shares were entitled to vote at the
meeting. At this meeting, Precise's shareholders voted as follows:

</TABLE>
                                  Page 23 of 28
<PAGE>
<TABLE><CAPTION>
<S>                              <C>                          <C>                     <C>
Resolution 1. To increase Precise's authorized share capital from 790,000 NIS to
2,100,000 NIS.


Total Votes for Resolution 1     Total Votes Against          Abstentions             Broker Non-Votes
----------------------------     --------------------         -----------             ----------------
                                 Resolution 1
                                 ------------

13,994,312                       None                         None                    Not Applicable


Resolution 2. To revise the par value of Precise's shares to 0.03 NIS,
authorizing 9,410,257 Preferred A Shares, 6,666,667 Preferred B Shares,
49,523,898 Ordinary Shares and 4,399,178 Ordinary A Shares.


Total Votes for Resolution 2     Total Votes Against          Abstentions             Broker Non-Votes
----------------------------     --------------------         -----------             ----------------
                                 Resolution 2
                                 ------------

13,994,312                       None                         None                    Not Applicable


Resolution 3. To substitute two shares of 0.03 NIS par value for every three
shares of 0.02 NIS par value.


Total Votes for Resolution 3     Total Votes Against          Abstentions             Broker Non-Votes
----------------------------     --------------------         -----------             ----------------
                                 Resolution 3
                                 ------------

13,994,312                       None                         None                    Not Applicable


Resolution 4. To amend Precise's Memorandum of Association requiring an ordinary
majority to amend said Memorandum.


Total Votes for Resolution 4     Total Votes Against          Abstentions             Broker Non-Votes
----------------------------     --------------------         -----------             ----------------
                                 Resolution 4
                                 ------------

13,994,312                       None                         None                    Not Applicable


Resolution 5. To restate Precise's Articles of Association contingent upon
consummation of Precise's Initial Public Offering.


Total Votes for Resolution 5     Total Votes Against          Abstentions             Broker Non-Votes
----------------------------     --------------------         -----------             ----------------
                                 Resolution 5
                                 ------------

13,994,312                       None                         None                    Not Applicable


Resolution 6. To convert all shares of Precise into Ordinary Shares, carrying
equal rights and privileges upon consummation of Precise's Initial Public
Offering.


Total Votes for Resolution 6     Total Votes Against          Abstentions             Broker Non-Votes
----------------------------     --------------------         -----------             ----------------
                                 Resolution 6
                                 ------------

13,994,312                       None                         None                    Not Applicable



     Precise held an Extraordinary Meeting of Shareholders on April 13, 2000.
Holders of an aggregate of 15,293,448 shares were entitled to vote at the
meeting. At this meeting, Precise's shareholders voted as follows:


Resolution 1. To declare that all participation rights of Precise's shareholders
shall not apply to any round of financing of up to $30 million, prior to
Precise's Initial Public Offering.
</TABLE>
                                  Page 24 of 28
<PAGE>
<TABLE><CAPTION>
<S>                              <C>                          <C>                     <C>
Total Votes for Resolution 1     Total Votes Against          Abstentions             Broker Non-Votes
----------------------------     --------------------         -----------             ----------------
                                 Resolution 1
                                 ------------

11,905,768                       None                         None                    Not Applicable


     Precise held an Extraordinary Meeting of Shareholders on April 20, 2000.
Holders of an aggregate of 15,293,448 shares were entitled to vote at the
meeting. At this meeting, Precise's shareholders voted as follows:


Resolution 1.  To approve Amendments to Article 60 of Precise's Articles of Association.
------------

Total Votes for Resolution 1     Total Votes Against          Abstentions             Broker Non-Votes
----------------------------     --------------------         -----------             ----------------
                                 Resolution 1
                                 ------------

13,991,238                       None                         None                    Not Applicable


     Precise held an Extraordinary Meeting of Shareholders on June 26, 2000.
Holders of an aggregate of 15,358,656 shares were entitled to vote at the
meeting. At this meeting, Precise's shareholders voted as follows:


Resolution 1. To amend Article 9(a) of Precise's post-IPO Articles of
Association approved at the April 12, 2000 Preferred A, Preferred B and
Extraordinary Shareholders Meetings.


Total Votes for Resolution 1     Total Votes Against          Abstentions             Broker Non-Votes
----------------------------     --------------------         -----------             ----------------
                                 Resolution 1
                                 ------------

13,822,764                       None                         None                    Not Applicable


Resolution 2. To appoint two members as External Directors on the Company's
Board of Directors, effective upon the date of the Company's Initial Public
Offering, to serve for a three year term.


Director Name                    Total Votes for     Total Votes Withheld         Abstentions     Broker Non-Votes
-------------                    ----------------    ---------------------        -----------     ----------------
                                 Each Nominee        from Each Nominee
                                 ------------        -----------------

Robert J. Dolan                  13,822,764               None                    None            Not Applicable

Mary A. Palermo                  13,822,764               None                    None            Not Applicable

No other persons were nominated, or received votes, for election as directors of
Precise at this Extraordinary Meeting of Shareholders. The other director(s) of
Precise whose term of office continued after this Extraordinary Meeting were
Yuval Cohen, Yoseph Sela, Ron Zuckerman, Erel Margalit, Shimon Alon, and Anton
Simunovic.
</TABLE>
                                  Page 25 of 28
<PAGE>
<TABLE><CAPTION>
<S>                              <C>                          <C>                     <C>
Resolution 3. To approve amendments to Precise's classification of its Board of
Directors effecting the transfer of Shimon Alon from Class III to Class I, Ron
Zuckerman from Class II to Class III, and Yoseph Sela from Class I to Class II.


Total Votes for Resolution 3     Total Votes Against          Abstentions             Broker Non-Votes
----------------------------     --------------------         -----------             ----------------
                                 Resolution 3
                                 ------------

13,822,764                       None                         None                    Not Applicable


Resolution 4. To grant options to purchase Precise's Ordinary Shares to each
newly appointed External Director.


Total Votes for Resolution 4     Total Votes Against          Abstentions             Broker Non-Votes
----------------------------     --------------------         -----------             ----------------
                                 Resolution 4
                                 ------------

13,822,764                       None                         None                    Not Applicable


Resolution 5. To approve the offer and sale to the newly appointed External
Directors of Ordinary Shares of Precise reserved by the underwriters of
Precise's Initial Public Offering for sale to persons affiliated with Precise.


Total Votes for Resolution 5     Total Votes Against          Abstentions             Broker Non-Votes
----------------------------     --------------------         -----------             ----------------
                                 Resolution 5
                                 ------------

13,822,764                       None                         None                    Not Applicable


Resolution 6.  To approve Precise's 2000 Employee Share Purchase Plan.
------------


Total Votes for Resolution 6     Total Votes Against          Abstentions             Broker Non-Votes
----------------------------     --------------------         -----------             ----------------
                                 Resolution 6
                                 ------------

13,822,764                       None                         None                    Not Applicable


Resolution 7. To authorize Precise's Board of Directors to approve amendments to
Precise's 2000 Employee Share Purchase Plan.


Total Votes for Resolution 7     Total Votes Against          Abstentions             Broker Non-Votes
----------------------------     --------------------         -----------             ----------------
                                 Resolution 7
                                 ------------

13,822,764                       None                         None                    Not Applicable


     Precise held an Extraordinary Meeting of Shareholders on June 26, 2000.
Holders of an aggregate of 15,358,656 shares were entitled to vote at the
meeting. At this meeting, Precise's shareholders voted as follows:


Resolution 1. To approve an amendment to Article 60.5 of Precise's Articles of
Association.


Total Votes for Resolution 1     Total Votes Against          Abstentions             Broker Non-Votes
----------------------------     --------------------         -----------             ----------------
                                 Resolution 1
                                 ------------

13,721,128                       None                         None                    Not Applicable

</TABLE>
                                  Page 26 of 28
<PAGE>




ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         Exhibit 27.1           Financial Data Schedule (EDGAR filing only)



         Precise did not file any current reports on Form 8-K during the quarter
ended June 30, 2000.





























                                  Page 27 of 28
<PAGE>


                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                                            PRECISE SOFTWARE SOLUTIONS LTD.


Date     August 14, 2000                    By /s/ Shimon Alon
         ---------------                       ---------------------------------
                                               Shimon Alon, Chief Executive
                                               Officer and President


Date     August 14, 2000                    By  /s/ J. Benjamin H. Nye
         ---------------                        --------------------------------
                                                J. Benjamin H. Nye, Chief
                                                Financial Officer


Date     August 14, 2000                    By  /s/ Dror Elkayam
         ---------------                        --------------------------------
                                                Dror Elkayam, Chief Accounting
                                                Officer






















                                  Page 28 of 28